These principles are deemed to be a part of the FTI Rules. They clarify Clause 20 of the FTI Trust Deed in relation to “policies of governance that arise from the philosophy of classical liberalism as commonly understood”.
Preamble
Clause 20 of the Trust Deed of the Freedom Team of India asks FTI to accept as members only those who are “desirous of promoting policies of governance that arise from the philosophy of classical liberalism as commonly understood.” The principles stated in this document represent the official (and summary) FTI views about what this means, although, as with all documents produced by FTI, these principles are subject to review and improvement. Where the word ‘liberal’ is used in this document, it should be taken to imply ‘classical liberal’.
1. Freedom
1.1 Definition
Freedom is essentially linked to accountability and self-restraint. As Adam Ferguson said, “Liberty or Freedom is not, as the origin of the name may seem to imply, an exemption from all restraints, but rather the most effectual applications of every just restraint to all members of a free society whether they be magistrates or subjects”.[1]
A more comprehensive view of freedom is expressed below:
“Freedom is a state of independent, self-directed thought and self-determined but self-restrained voluntary action of adults whose behaviour, such as the ability to trade, demonstrates strategic capability and thus at least a modest level of rational thought. Where this state of freedom impacts on others, it is limited by countervailing accountabilities informed both by moral law as variously understood and relevant empirical evidence; and agreed upon either through implicit or explicit bilateral understandings of negotiation or, where potential claims can be made on a society’s resources, through social consent usually evinced through laws.” (Sanjeev Sabhlok, The Discovery of Freedom, manuscript, 2011).
The various definitions of freedom in the literature of political philosophy are to be considered, for purposes of the Freedom Team of India, with reference to principles outlined in this document.
1.2 The empirical benefits of freedom
The requirement for freedom and justice is innate and not related to material benefits, if any, that may arise from this requirement. However, there are significant synergies between policies of freedom and peace, security, and prosperity. The free society is invariably rich, powerful, and successful with its citizens enabled to achieve their highest potential through their hard work (subject to usual vagaries of chance), secure in the knowledge that the state will firmly protect them and their property.
2. Principles of the free society
2.1 Human nature and free will
The design of the free society cannot be understood without first understanding human nature. We have evolved over millions of years into highly complex beings with a wide range of personality traits and characteristics of mind and body. Each of us is capable of good and evil through the exercise of our free will. There are two key differences between us and animals: (a) that we are self-conscious (and hence capable of evaluating the impacts of our actions) and (b) that, as adults, we are fully responsible for the choices we make. The concept of a free society exists only where responsible citizenship exists.
2.2 Life is a thing of ultimate value
The liberal believes that human life is of ultimate value and should be vigorously protected – subject to the limitation that those who take human life (such as murderers) are stringently held to account. It may be noted that proposition is not a claim to a ‘right to life’, and even if the state agrees to a ‘right to life’ that ‘right to life is not a right to whatever one needs to live’[2] The fact that human life is of value does not impose any obligation on the state or society to spoon-feed us.
2.3 Equal freedom
The liberal demands to be left free, and insists that everyone must be equally free to make his or her choices and face the consequences thereof, for better or for worse. This includes freedom of association, noting that the liberal is not asocial but an active participant in the communitarian project of a good society. Equal freedom has implications for equal treatment and for reasonable equal opportunity, some of which we shall outline below.
2.4 Justice and accountability
No one is free to cheat, libel, or kill. A free society must ensure justice. Everyone must be held to account for their actions. Accountabilities must be determined with through reference to a range of moral and scientific principles agreed through general laws that apply equally to everyone. It is important to note that justice relates to the actions of individuals, not of entire societies.
2.5 Society is subordinate to the individual
A society is an aggregation of individuals – who are the reason for its existence. The society does not exist over and above any individual Since social accountability cannot exist (it being individual), the concept of social justice does not exist.
3. Examples of freedoms to be protected by the state
The raison d‘etre for the state is, as suggested above, the protection of our life and liberty. Freedom is comprehensive and complete: no listing of freedoms can therefore claim to do justice to this concept. A few illustrative freedoms are therefore mentioned below, noting that those freedoms not mentioned explicitly either in a constitution (or below) are not to be ruled out merely on that account.
3.1 Property rights
One of the most basic of all freedoms is the freedom of attribution and ownership of the results of one’s actions – or property rights. Property accrues to people through their actions (including actions of their parents). The history of freedom is at its heart the history of property rights. Property arises from justice, equally as there is no justice without certainty in property rights. Without property there can be no trade, and hence no civilisation; only theft. The role of the state is to define the precise scope and extent of these rights, and how these are to be attributed and defended.
3.2 Freedom of occupation and trade (free markets).
Markets, where free citizens can voluntarily trade and barter or undertake an occupation of their choice, are the natural platform to determine the economic worth of the services and goods we produce. No government is capable of determining such economic worth as it can never have access to the local information relevant to each transaction. Markets, through the free and voluntary interactions of their participants, lead to Pareto optimal outcomes whereby no person is made worse off, while almost certainly becoming better off. Each transaction in the marketplace therefore adds to the society’s wealth, while noting that the liberal is not concerned with such utilitarian aggregations, but that, in general, wealth and prosperity is the happy consequence of freedom of occupation and trade.
The state has a major role in establishing and facilitating free markets (with appropriate regulation(s) against fraud and other forms of cheating or abuse) but has absolutely no role in planning the economy (through quotas on production, for instance) or otherwise forcing people to work in cooperatives or collective ventures. This does not preclude the state, through local government(s), in helping plan urban spaces and common infrastructure if that is mutually agreed to by citizens, to facilitate their commerce and economic opportunity.
3.3 Equal treatment
The state, and its laws, must necessarily be blind to differences amongst its citizens. The state must ensure equal treatment of all its citizens. This is a part of equal freedom – being the principle of non-discrimination. However, this principle does not apply to private transactions amongst citizens: it only imposes such limits on the actions of the state.
3.4 Religious freedom
The principle of non-discrimination by the state implies that the state shall not discriminate amongst its citizens on grounds of their religious belief. Indeed, the state and religion are radically different domains of human endeavour and aspiration, being created for different purposes. This implies a complete and total separation between the state and religion. This does require the state to be so-called ‘secular’ but purely non-denominational, with no law-making capacity in relation to religion. The state cannot ask anyone about their religion (except, possibly in a criminal inquiry why? Not clear) nor discriminate (positively or otherwise) on the basis of religion.
3.5 Reasonable equal opportunity
In addition to ensuring non-discrimination in public office on grounds of religion, caste, occupation or political affiliation, freedom and the defence of our life requires the state (after its first order functions are fulfilled well) to put in place a system of equal access to education for all children, and a scheme of social insurance that insures all citizens against significantly adverse events through the tax system, noting that the social minimum should be enough to eliminate dire poverty but not to provide comfort, so as to avoid without hampering the incentives to work. Should it be necessary, economic and feasible alternatives such as retraining of workers could be considered at minimal cost.
Discrimination within the education system for reason other than merit undermines the foundation of reasonable equality of opportunity and must be severely dealt with through appropriate laws and enforcement.
4. The role and functions of a government
This section elaborates on the main principles of the liberal state and some key roles of government. Some overlaps may exist between these principles.
4.1 The basis of the liberal nation state
We need a nation state purely to defend our life and liberty. Without a physical territory that is jointly defended by its citizens, human society is racked by aggression from without, and anarchy from within, making peace and prosperity a distant dream. The liberal also requires that the institutions of the nation, such as its government, not degenerate into a tyranny. This is ensured by ensuring that the government is based on mutual content through a social contract (not necessarily written). The goal of the social contract is to maximise our equal freedoms subject to accountability, and its institutions are designed to protect our sovereignty, not to give the state a role higher than that of the individual. From this basis, various functions of a government arise (Box A).
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BOX A: The functions of a government 4.1.1 First order functionsConsistent with the basic reason for existence of the state, the following four principles constitute the first order functions of the government: 4.1.1.1 DefenceThe protection of our life is the primary role of a government. The defence of the nation state from external enemies: the function of the army, navy and air force, as well as the function of intentional espionage, is the first function of government. A very strong and effective defence of the nation is required before any other function is considered. It is equally the responsibility of citizens to step forward to take up an appropriate role in the defence of their nation, when needed. 4.1.1.2 Law and OrderThe second major function of the government is the protection of its citizens from crime and internal violence, being the role of internal security. This is generally ensured through a strong and effective police system. 4.1.1.3 JusticeThe defence of freedom requires a strong system of justice and establishment of the rule of law. This is the next function of the government in order of importance. The rule of law is a system of governance dictated by a set of rules that apply equally to everyone by which every citizen can be held to account and is responsible for her actions. The system of justice upholds this rule of law, and punishes transgressors through due process. 4.1.1.4 Free marketsA government has a very limited role beyond the first three functions. However, it is important that it frame rules for the effective functioning of markets, and act as an enabler of our economic freedoms. This role is limited largely to regulation that prevents and punishes fraud, and is in some ways related to the system of the rule of law in 4.1.1.3 above. 4.1.2 Second order functionsSecond order functions are to be considered by a government only after first order functions are fully and effectively discharged. These second order primarily relate to the provision of infrastructure and reasonable equal opportunity. In both cases the government can act as a coordinator or facilitator, without directly getting involved in the delivery of these goods. DISPUTED FUNCTIONSSome members of FTI currently dispute the following (third order) functions. While these are being published, they do not necessarily represent the final FTI position, and will be re-visited and voted upon when at least 1500 members, who are ready to contest Lok Sabha elections within three years, have assembled. Till then, these additional functions will be treated as disputed functions and attempts made over the next few years to resolve them through discussion. 4.1.3 Third order functionsThese are functions that can be performed after the first two orders of functions have been fully and effectively discharged. These primarily include the consideration of the natural environment and plant and animal life, or enacting legislation to protect ancient monuments and the like, noting that some aspects of these functions form a part of the justice function. |
4.2 Constitutional restrictions on powers of government
The liberal nation state imposes constitutional restrictions on the use of power by its governments. Constitutionally declared ‘rights’ – being guarantees of freedom – are established as a bare minimum requirement for the state, noting that no freedom is to be denied merely because it is not specifically mentioned in a written constitution. The requirement of laws to be made democratically and in compliance with this overarching constitution therefore reduce the possibility of governments being dictated by majority opinion to transgress the liberties of any citizen. This implies that the state should have only those powers which are clearly defined in the Constitution, and thus we need a limited government, rather than a state that is presumed to have all powers except those delegated to the individual. The key point thus becomes that the individual is the owner (legatee) of all residual powers, after a few specific powers have been delegated to the state.
4.3 The state is not our nanny
The personal happiness of citizens must always depend on their individual initiative, enterprise and energy, and personal choices in life. The state has no role in directly advancing our happiness, although it does so indirectly through the defence of our life and liberty. The state is definitely not our nanny, or our mother or father. It has no capacity, mandate, or role in imposing any moral vision on citizens or exhorting hat they behave in particular ‘moral’ ways. All that the state is obliged to do is to consider all arguments while making its laws, but once these are made, it must blindly impose these laws, not preach nor paternalistically guide us in our choices.
4.4 Democratic institutions of governance
As part of equal freedom and equal treatment of all, the liberal is committed to democratic decision making for the making of society’s laws. The liberal is aware that the precise form and method of a democratic mode of decision making is dependent on many basic design issues, and cannot be determined in advance, for all times. The main goal of democratic institutions should be to attract the best leaders in each generation to becoming people’s representatives. Only by being assured that its best leaders guide its affairs can the liberal state be prevented from decaying into a corrupt mobocracy or tyranny.
4.4.1 Checks and balances
Empowering any single institution in a liberal nation state excessively can risk arbitrary decision making and loss of freedom. Therefore a system of checks and balances must underpin the design of the institutions of the free society. The various branches of government should focus on a single objective (e.g. legislation, justice, executive) and, to the extent possible, no one person or institution empowered with more than one major function.
4.4.2 Subsidiarity
The resolution of issues of governance should be left to the lowest level of government appropriate to a particular form of decision. This will enable those who have the local knowledge of the issue to take spend time and energy to examine the issues in detail and thus take the most appropriate decision. This points to the requirement of strong institutions of local government to manage day-to-day affairs.
4.5 Finding good functionaries for government
In addition to exercising active vigilance, the society must aim to find good representatives (legislators), judges, and public servants. Poorly paid, incompetent, and corrupt legislators, judges or public servants will tend to misuse their power for personal gain, endangering our life and liberty. The liberal does not exhort others to ‘sacrifice’ for their country – a most foolish enterprise. Instead, he understands that everyone is entitled to work in their own self-interest and so he arranges to attract good people to vital public roles, thus helping to generate a good government – which he then monitors actively as a citizen.
4.6 Principles of taxation
Citizen of a liberal nation state must pay for the services they receive from the state in some proportion to their ability to pay. If everyone is asked to pay an absolute equal amount, then the amount charged must necessarily equal what the poorest of the poor can pay, thus making it impossible for any services to be produced by the government. Hence, the level of taxation must be proportionate to the ability of each Citizen (and their economic creations such as partnerships, LLPs, companies, etc) to pay – this is best achieved through a broadly flat percentage tax, which is to be applied to the residual income after deduction of a standard cost of living for each citizen.
Further, given that Indirect taxes such as VAT, excise, import duties, sales taxes, etc usually discriminate against poorer citizens, as a proportion of their incomes, it will be our aim to remove all indirect taxes and replace them with Direct taxes. At the very least, all the different forms of indirect taxation shall be subsumed into a single Value Added Tax (VAT) with one single rate of taxation. In addition, the government must exercise thrift in its expenditures, keeping the level of taxation as low as possible to achieve the level of (life and liberty) services that citizens expect.
4.7 No special dispensations
The liberal government necessarily applies the same yardstick for all citizens in all their activities. This mean there are no subsidies or reservations given to any citizen, organisation or entity on any basis, and no favours to any sector such as small industry or alternative energy.
4.8 Transparency
The government is the board of directors of the institution called nation. Its actions must be as transparent as is reasonably practicable, given the overarching primacy of its obligation to ensure national security. This would generally mean, for instance, that ‘right to information’ laws would err in favour of greater than less disclosure. Also, in general, all cabinet and security documents would need to be made public after 30 years or after the pressing needs of security that may prevent earlier disclosure, have passed.
[1] Cited in F.A. Hayek, The Fatal Conceit, Chicago: The University of Chicago Press, 1991, p.4.
[2] Nozick, Robert, Anarchy, State and Utopia, New York: Basic Books, 1974, p.179n.
