Pakistan’s & India’s Illusions of Power (Psychosis vs Vanity)

Preface: This paper culminates my line of argument since our University of Hawaii Pakistan book in the mid 1980s, through my work on the Kashmir problem in the 1990s, published in The Statesman in 2005/2006 etc and  in my undelivered Lahore lectures of 2011.  https://independentindian.com/2011/10/13/my-seventy-one-notes-at-facebook-etc-on-kashmir-pakistan-and-of-course-india-listed-thanks-to-jd/ The paper has faced resistance from both Indian and Pakistani newspapers for obvious reasons.  I would like to especially thank Beena Sarwar and Gita Sahgal in recent weeks for helpful comments.  (And Frank Hahn, immediately saw when I mentioned it to him in 2004 that my solution was Pareto-improving…etc)

 

The *Bulletin of Atomic Scientists* recently reported an Urdu book *Taqat ka Sarab* (‘*Illusion of Power*) published in Pakistan in December 2014 edited by the physicist Dr AH Nayyar. The book “aims to educate Pakistanis about the attitudes of their leadership toward nuclear weapons”. It says “Pakistan’s people have come to believe that the successful acquisition of nuclear capability means that their nation’s security is forever ensured”. Pakistani politicians, scientists and officials who created these weapons have used them to justify a “right to unlimited authority for ruling over Pakistan”. “Consequently, free discussion and honest opinion about nuclear weapons have been nearly prohibited, under the premise that any such talk poses a basic threat to national security.”

Prime Minister Lal Bahadur Shastri’s order to Indian forces to cross the Punjab border towards Lahore in 1965 in response to President Ayub Khan’s attack in Kashmir genuinely shocked Pakistan’s political and military establishment at the time. It may have continued to do so ever since. Everyone in Lahore for those few days in September 1965 was ready to battle the invasion of infidel India considered imminent when Indian forces reached the Ichogil canal.

“Hindu-dominated India wants to occupy us and destroy the Pakistan Principle for which our martyrs died” has been the constantly heard Pakistani refrain. After 1965 it did not take long for Pakistan, via the ignominy of the 1971 surrender in Dhaka, to acquire by any means the technology to develop its own nuclear weapons, even under the noses of its American friends.

Now Pakistan is said to have some 110 nuclear warheads, mostly in a disassembled state but with a few on fighter-jets in hidden air-bases in Balochistan (made by the USA decades ago) always at the ready, waiting for that Indian attack that will never come. It may all have been psychotic delusion.

India has never initiated hostilities against Pakistan. Not once. Not in 1947, 1965, 1971, 1999, 2008.

In 1971 India undoubtedly supported the Mukti Bahini, and I myself, as a schoolboy distributing supplies to refugees from East Pakistan/Bangladesh, was personally witness to Indian military involvement as of August 1971. Even so, hostilities between the countries formally began on 3 December 1971 with the surprise Pakistani air attack on Indian bases in Punjab and UP.

Though India has never attacked first, the myth continues in Pakistan that wicked Hindu-dominated India wants to attack and suppress their country. What is closer to the truth is that the New Delhi elite is barely able to run New Delhi, and the last place on earth they would want to run is Pakistan.

On our Indian side, the Indian military has been allowed a budgetary carte blanche for decades, especially with foreign exchange resources. (Finance Minister Arun Jaitley on 28 February 2015 has allocated some 2,467 billion INR to the military.)

Despite our vast spending, a band of Lashkar-e-Tayyaba terrorists tyrannized Mumbai for days on end while we seem perpetually without strategy against the People’s Republic of China’s recurrent provocations.

The two world powers with traditional interests in India — Russia and Britain — place their long-term agents in Delhi’s high politics and places with impunity, getting done all they need to in particular cases. The USA, France, Israel and others follow suit – all mainly to do with selling India very expensive military weapons, aircraft etc. that they have in excess inventory.  India now has the notorious distinction of being the world’s largest weapons’ importer.

weaponsimportsfinal

Yet we are hardly a trading or monetary superpower.  We have large current account and budgetary deficits, and we are essentially buying whatever weapons, aircraft, shopping malls etc. that we do on foreign credit that we may or may not have. (Pakistan does the same.)

India’s illusions of power have to do with boasting a very large military that can take on the imperialists. We do not realize the New Imperialism that may control Delhi is not of a Clive or Dupleix but of clandestine or open foreign lobbyists and agents who get done what their masters need to have done on a case-by-case basis. The result is a corrosion of Indian power, sovereignty, and credit, little by little, and may lead to a collapse or grave crisis in the future. Even the BJP/RSS Government of Mr Modi (let aside the Sonia-Manmohan Congress and official Communists) may not realize how it all came about.

The way forward for both Pakistan and India is to seek to break the impasse between ourselves.

And there is no doubt the root problem remains Kashmir, and the hysteria and terrorism it has spawned over the years.  A resolution of these fundamental issues calls for some hard scholarship, political vision and guts. The vapid gassing of stray bureaucrats, journalists, diplomats or generals has gotten everyone precisely nowhere thus far.

I have argued at length in previous publications that the *de facto* boundary that was the Ceasefire Line in 1949, and was later renamed the Line of Control in 1972, is indeed also the *de jure* boundary between India and Pakistan.

Jammu & Kashmir came into existence as a legal entity on 16 March 1846 under the Dogra Gulab Singh, friend of the British during the Sikh wars, and a protégé earlier of the great Sikh Ranjit Singh.

Dogra J&K ended its existence as an entity recognized in international law on 15 August 1947. (Hari Singh, the fourth and last Dogra ruler where Gulab Singh had been the first, desperately sought Clement Attlee’s recognition but did not get it.)  Thanks to British legal confusion, negligence or cunning, the territory of what had been known as Dogra Jammu & Kashmir became sovereign-less or ownerless territory in international law on that date, with the creation of the new Pakistan and new India.

The new Pakistan as of August-September 1947 immediately started to plan to take the territory by force, and sought to implement that plan as of 22 October. Had the Pakistani attackers not stopped to indulge in the Rape of Baramullah, they would have taken Srinagar airport by 26 October, and there would have been no Indian defence of the territory possible. As matters turned out, the ownerless territory of what had been Dogra Jammu & Kashmir came to be divided by “military decision” (to use the UN’s term) between the new Pakistan and new India. Kargil and Drass were taken by Pakistan and then lost. Skardu was held by India and later lost. Neither military ever since is going to permit the other to take an inch from itself either by war or by diplomacy.

The *de facto* boundary over ownerless territory divided by military force is the *de jure* boundary in the Roman law that underlies all international law. Once both sides recognize that properly, we may proceed to the next stages. 

On the Pakistani side, recognizing Indian sovereignty over Indian territory in what had been J&K requires stamping out the LeT etc – perhaps not so much by force as by explaining to them that the fight is over, permanently. There is no jihad against India now or ever. Indian territory is not dar-ul-harb but dar-ul-aman: where more than one hundred million Muslim citizens of India freely and peacefully practice their faith.

On the Indian side, if, say, SAS Geelani and friends, under conditions of individual privacy, security and full information, wish to renounce Indian nationality, become stateless, and apply for some other nationality (like Pakistani or Afghan or Iranian) while continuing to live lawfully and law-abidingly on Indian territory, do we have a problem with that? We can’t really. The expatriate children of the Indian elite have renounced Indian nationality in America, Britain, Australia etc upon far weaker principles or beliefs. India has many foreign nationals living permanently on its territory peacefully and law-abidingly (Sir Mark Tully perhaps the most notable) and can add a few more.

The road would be gradually opened for an exchange of consulates between India and Pakistan in Srinagar and Muzaffarabad (leave aside vice-consulates or tourist offices in Jammu, Gilgit, Skardu, Leh). And the remaining Hurriyat, as new Pakistani nationals living in India, can visit the Pakistani consul in Srinagar for tea every day if they wish, to discuss Pakistani matters like Afridi’s cricket or Bilawal’s politics or whatever. 

The militaries and potentially powerful economies on both sides could then proceed towards real strength and cooperation, having dispelled their current illusions of power.

Viz  https://independentindian.com/2011/10/13/my-seventy-one-notes-at-facebook-etc-on-kashmir-pakistan-and-of-course-india-listed-thanks-to-jd/

 

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Advice from Rajiv Gandhi’s Adviser to Narendra Modi: Do not populate the “Planning Commission” with worthies, scrap it, integrate its assets with the Treasury. And get the nationalised banks & RBI out of the Treasury. Tell them to read my 3 Dec 2012 Delhi lecture with care. Clean Government Accounting & Audit is the Key to Clean Public Finances & a Proper Indian Currency for the First Time Ever

16 May 2014

Mr Modi’s victory is more amazing and bigger than Reagan’s in 1980 or 1984, or Thatcher’s in 1979 or 1984…One hopes one does not have to make comparisons with any earlier times… The interviews he gave in recent days were excellent in their sobriety, quite unlike his sneering rabble-rousing mass speeches… I have said I do not doubt his commitment to India’s national interest, and I add I do not doubt his managerial competence. What does concern me is the vacuum of commonsense as well as expert reasoning around him although that around Sonia-Manmohan was as bad as well as being more pretentious. If Mr Modi can do anything like what I said in Delhi on 3 December 2012, which Manmohan was too incompetent and bureaucratic to even try, he has my applause. The first task is to ****not**** fill up the so-called Planning Commission with BJP worthies and cronies, and instead ***to declare he is closing it down and integrating its assets with the Finance Ministry***… The second is to remove control of the banks and the RBI from the Finance Ministry and create a different agency or department or even Ministry for Money & Banking. Finance (with Planning under it) does the fiscal budgets and government accounting, for Union and States. Money & Banking seeks to bring some slight semblance of integrity to the currency for the first time ever, both at home and abroad. Don’t ask Montek Ahluwalia, don’t ask Rangarajan, for heavens’ sake don’t ask Manmohan Singh or even his young man Raghuram Rajan… Just do it…

18 May 2014
Mr Modi has a unique chance to change the face of Indian governance for the better — and the chance is now, **before** he announces a Cabinet. Essentially, he is beholden to no one in making his choices, he can bring in the maximum amount of commonsense and expert reasoning right at the start.

My first recommendation has been to *scrap the so-called Planning Commission* rather than populate it with BJP cronies and worthies where it was populated by Congress worthies and cronies before. If you start populating it with your cronies then you have lost the plot immediately, as you are needlessly creating vested interests once more, impossible to get rid of later. Vajpayee-Advani lacked the guts and vision to do this. Modi can do it easily. Montek Ahluwalia and Manmohan Singh got the so-called Deputy Chairman to have a higher rank in the Order of Precedence than elected Chief Ministers of States! Ahluwalia attended Union Cabinet meetings and “GOM” meetings as a member without being elected to anything at all. The Planning Commission’s physical assets should be merged under the Finance Ministry immediately with a one-line Executive Order. At the same time, the RBI and the nationalised banks should be removed from the Finance Ministry’s control completely, if necessary into a new Ministry of Money & Banking.

Finance (& Accounts and Planning) are then tasked to get the budgets right, both Union *and* States — *and including the military and the railways*! That is all they do, that should be their full-time year long occupation, nothing more, not listening to or yielding to lobby groups, not allowing anyone to get even faintly close to them, just getting all the Budgets right. Money & Banking would run the nationalised banks on commercial lines (and that means being ready to battle their fat cat unions), plus there is the RBI with its usual banking supervisory and money creation and balance of payments management roles.

Secondly, change the name of the Defence Ministry to the War Ministry or Forces Ministry, Raksha Mantralaya to Yudh Mantralaya or Fauj Mantralaya. India has never fought an aggressive war and is not going to do so now. Every war it has fought has been defensive, so calling it the Defence Ministry is superfluous and even perverse. Calling it the War Ministry tells it what to do, namely, win any war that is thrust on you, any which way you can and at least cost all around. Simple as that. Why it is perverse to talk of a Defence Ministry is because of its fiscal implications. Fat cat peacetime generals, air marshalls and admirals are prevailed upon by foreign weapons’ salesmen acting through ex-servicemen Noida brokers to waste public moneys endlessly on innumerable things which are utterly unrelated to war-fighting capabilities. And there can be no fiscal responsibility ever in India until the military budgets are brought under control. I have called the military budget the Black Hole of Indian public finance, no one knows what goes in or what comes out. And the preparedness for war itself is unknown as well — as the Mumbai massacres showed. Mr Modi and his putative War Minister should simply get the generals, air marshalls and admirals to tell them what plans they have to win different wars thrust upon them in different scenarios; what are their strategies to win those wars, and what resources do they need for those strategies to prevail; that is how you figure out the military budget. All the rest is fat, which only causes corruption and inflation too.

Thirdly, design a better cabinet on the lines, for example, I would have given to Rajiv Gandhi if he had not been assassinated. Manmohan Singh had 79 Ministers! You only need a dozen senior ones and a dozen junior ones, really…

Don’t set up a committee of worthies to examine all this… Just do it… I will applaud and so will everyone else…

See especially this…

3dec

 

No magic wand, Professor Rajan? Oh but there is…2013 (Plus: 7 Jan 2016 “Professor Rajan stays or goes? My answer to a query”)

7 January 2016
rajan

3 June 2014

from World Economy & Central Banking Seminar at Facebook

Professor Rajan’s statement “I determine the monetary policy. I say what it is….ultimately the interest rate that is set is set by me” equates Indian monetary policy with the money interest rate; but monetary policy in India has always involved far more than that, namely, the bulk of Indian banking and insurance has been in government hands for decades, all these institutions have been willy-nilly compelled to hold vast stocks of government debt, both Union and State, on their asset-sides…and unlimited unending deficit finance has led to vast expansion of money supply, making it all rather fragile. My “India’s Money” in 2012 might be found useful. http://tinyurl.com/o9dhe8d

11 April 2014

from World Economy & Central Banking Seminar at Facebook

I have to wonder, What is Professor Rajan on about? Growth in an individual country is affected by the world monetary system? Everyone for almost a century has seen it being a real phenomenon affected by other real factors like savings propensities, capital accumulation, learning and productivity changes, innovation, and, broadly, technological progress… A “source country” needs to consult “recipient” countries before it starts or stops Quantitative Easing? Since when? The latter can always match policy such as to be more or less unaffected… unless of course it wants to ride along for free when the going is good and complain loudly when it is not…. Monetary policy may affect the real economy but as a general rule we may expect growth (a real phenomenon) to be affected by other real factors like savings propensities, capital accumulation, learning and productivity changes, innovation, and, broadly, technological progress..

22 September 2013

“Let us remember that the postponement of tapering is only that, a postponement. We must use this time to create a bullet proof national balance sheet and growth agenda, which creates confidence in citizens and investors alike…”

I will say the statement above is the first sensible thing I have heard Dr Rajan utter anywhere, cutting through all the hype…I should also think he may be underestimating the task at hand, so here’s some help as to what needs to be done from my 19 Aug 2013 Mint article “A wand for Raghuram Rajan” and my 3 Dec 2012 Delhi lecture:

“Rajan has apparently said, “We do not have a magic wand to make the problems disappear instantaneously, but I have absolutely no doubt we will deal with them.” Of course there are no magic wands but there is a scientific path forward. It involves system-wide improvements in public finance and accounting using modern information technology to comprehend government liabilities and expenditures and raise their productivity. It also involves institutional changes in public decision-making like separating banking and central banking from the treasury while making the planning function serve the treasury function rather than pretend to be above it. It is a road long and arduous but at its end both corruption and inflation will have been reduced to minimal levels. The rupee will have acquired sufficient integrity to become a hard currency of the world in the sense the average resident of, say, rural Madhya Pradesh or Mizoram may freely convert rupees and hold or trade foreign currencies or precious metals as he/she pleases. India signed the treaty of Versailles as a victor and was an original member of the League of Nations, the United Nations and the IMF. Yet sovereign India has failed to develop a currency universally acceptable as freely convertible world money. It is necessary and possible for India to aim to do so because without such a national aim, the integrity of the currency continues to be damaged regularly by governmental abuse. An RBI governor’s single overriding goal should be to try to bring a semblance of integrity to India’s money both domestically and worldwide.”

 

 

19 August 2013

A wand for Raghuram Rajan

9 August 2013

No magic wand, Professor Rajan? Oh but there is… read up all this over some hours and you will find it… (Of course it’s not from magic really,  just hard economic science & politics)

Professor Raghuram Govind Rajan of the University of Chicago Business School deserves everyone’s congratulations on his elevation to the Reserve Bank of India’s Governorship.  But I am afraid I cannot share the wild optimism in India’s business media over this.  Of course there are several positives to the appointment.  First, having a genuine PhD and that too from a top school is a rarity among India’s policy-makers; Rajan earned a 1991 PhD in finance at MIT’s management school for a thesis titled “Essays on banking” (having to do we are told “with the downside to cozy bank-firm relationships”).   Secondly, and related,  he has not been a career bureaucrat as almost all RBI Governors have been in recent decades.  Thirdly, he has been President of the American Finance Association, he won the first Fischer Black prize in finance of that Association, and during Anne Krueger’s 2001-2006 reign as First Deputy MD at the IMF, he was given the research role made well-known by the late Michael Mussa, that of “Economic Counselor” of the IMF.

Hence, altogether, Professor Rajan has come to be well-known over the last decade in the West’s financial media. Given the dismal state of India’s credit in world capital markets, that is an asset for a new RBI Governor to have.

On the negatives, first and foremost, if Professor Rajan has renounced at any time his Indian nationality, surrendered his Indian passport and sworn the naturalization oath of the USA, then he is a US citizen with a US passport and loyalty owed to that country, and by US law he will have to enter the USA using that and no other nationality.  If that happens to be the factual case, it will be something that comes out in India’s political cauldron for sure, and there will arise legal issues and court orders  barring him from heading the RBI or representing India officially, e.g. when standing in for India’s Finance Minister at the IMF in Washington or the BIS in Basle etc.   Was he an Indian national as Economic Counselor at the IMF?   The IMF has a tradition of only European MDs and at least one American First Deputy MD.   The Economic Counselor was always American too; did Rajan break that by having remained Indian, or conform to it by having become American?  It is a simple question of fact which needs to come out clearly.   Even if Rajan is an American, he and the Government of India could perhaps try to cite to the Indian courts the new precedent set by the venerable Bank of England which recently appointed a Canadian as Governor.

Secondly, does Professor Rajan know enough (or “have enough domain knowledge” in the modern term) to comprehend let aside confront India’s myriad monetary and public finance problems?  Much of his academic experience in the USA and his approach to Western financial markets may be quite simply divorced from the reality of Indian credit markets and India’s peculiar monetary and banking system as these have evolved over decades and centuries.  Mathematical finance is a relatively new, small specialised American sub-field of economic theory, and not a part of general economics. Rajan’s academic path of engineering and management in India followed by a finance thesis in the management department of a US engineering school may have exposed him to relatively little formal textbook micro- and macroeconomics, monetary economics, public finance, international economics, economic development etc, especially as these relate to Indian circumstances  “Growing up in India, I had seen poverty all around me. I had read about John Maynard Keynes and thought, wow, here’s a guy who managed to have an enormous influence on the world. Economics must be very important.”… He ran across Robert Merton’s paper on rational option pricing, and something clicked that set him on his own intellectual path. “It all came together. You didn’t have these touchy-feely ways of describing human behavior; there were neat arbitrage ways of pricing things. It just seemed so clever and sophisticated,” he said. “And I could use the math skills that I fancied I had, so I decided to get my PhD.”

Let me take two examples.  Does Rajan realise how the important Bottomley-Chandavarkar debates of the 1960s about India’s rural credit markets influenced George Akerlof’s “Market for Lemons” theory and prompted much work on “asymmetric information”, 325.extract signalling etc in credit-markets, insurance-markets, labour-markets and markets in general, as acknowledged in the awards of several Bank of Sweden prizes?  Or will he need a tutorial on the facts of rural India’s financial and credit markets, and their relationship with the formal sector?  What the Bottomley-Chandavarkar debate referred to half a century ago still continues in rural India insofar as large arbitrage profits are still made by trading across the artificially low rates of money interest caused by financial repression of India’s “formal” monetised sector with its soft inconvertible currency against the very high real rates of return on capital in the “informal” sector.   It is obvious to the naked eye that India is a relatively labour-abundant country.  It follows the relative price of labour will be low and relative price of capital high compared to, e.g. the Western or Middle Eastern economies, with mobile factors of production like labour and capital expected to flow accordingly across national boundaries.   Indian nominal interest-rates in organized credit markets have been for decades tightly controlled, making it necessary to go back to Irving Fisher’s data to obtain benchmark interest-rates, which, as expected, are at least 2%-3% higher in India than in Western capital markets. Joan Robinson once explained “the difference between 30% in an Indian village and 3% in London” saying “side by side with the industrial revolution went great technical progress in the provision of credit and the reduction of lender’s risk.”

What is logically certain is no country can have both relatively low world prices for labour and relatively low world prices for capital!  Yet that impossibility seems to have been what India’s purported economic “planners” have planned to engineer!  The effect of financial repression over decades may have been to artificially “reverse” or “switch” the risk-premium — making it lucrative for there to be capital flight out of India, with real rates of return on capital within India being made artificially lower than those in world markets!   Just as enough export subsidies and tariffs can make a country artificially “reverse” its comparative advantage with its structure of exports and imports becoming inverted, so a labour-rich capital-scarce country may, with enough financial repression, end up causing a capital flight.  The Indian elite’s capital flight out of India exporting their adult children and savings overseas may be explained as having been induced by government policy itself.

431314_10150617690307285_69226771_n

Secondly, Professor Rajan as a finance and banking specialist, will see at once the import of this graph above that has never been produced let aside comprehended by the RBI, yet which uses the purest RBI data.  It shows India’s mostly nationalised banks have decade after decade gotten weaker and weaker financially, being kept afloat by continually pumping in of new “capital” via “recapitalisation” from the government that owns them, using more and more of the soft inconvertible currency that has been debauched merrily by government planners.  The nationalised banks with their powerful pampered employee unions, like other powerful pampered employee unions in the government sector, have been the bane of India, where a mere 30 million privileged people in a vast population work with either the government or the organised private sector.  The RBI’s own workforce at last count was perhaps 75,000… the largest central bank staff in the world by far!

Will Rajan know how to bring some system out of the institutional chaos that prevails in Indian banking and central banking?  If not, he should start with the work of James Hanson “Indian Banking: Market Liberalization and the Pressures for Institutional and Market Framework Reform”, contained in the book created by Anne Krueger who brought him into the IMF, and mentioned in my 2012 article “India’s Money” linked below.

The central question for any 21st century RBI Governor worth the name really becomes whether he or she can stand up to the Finance Ministry and insist that the RBI stop being a mere department of it — even perhaps insisting on constitutional status for its head to fulfill the one over-riding aim of trying to bring a semblance of integrity to India’s currency both domestically and worldwide.  Instead it is the so-called “Planning Commission” which has been dominating the Treasury that needs to be made a mere department of the Finance Ministry, while the RBI comes to be hived off to independence!  

Professor Rajan has apparently said “We do not have a magic wand to make the problems disappear instantaneously, but I have absolutely no doubt we will deal with them.”  Of course there are no magic wands but my 3 December 2012 talk in Delhi  has described the right path forward, complex and difficult as this may be.

The path forward involves system-wide improvements in public finance and accounting using modern information technology to comprehend government liabilities and expenditures and raise their productivity, plus institutional changes in public decision-making like separating banking and central banking from the Treasury while making the planning function serve the Treasury function rather than pretend to be above it.  The road described is long and arduous but at its end both corruption and inflation will have been reduced to minimal levels, and the rupee would have acquired integrity enough to become a hard currency of the world in the sense the average resident of, say, rural Madhya Pradesh or Mizoram may freely convert rupees and hold or trade foreign currencies or precious metals as he/she pleases.

3dec

India signed the Treaty of Versailles as a victor and was an original member of the League of Nations, UN and IMF.  Yet sovereign India has failed to develop a currency universally acceptable as a freely convertible world money. It is necessary and possible for India to do so. Without such a national aim, the integrity of the currency continues to be damaged regularly by governmental abuse. 

Professor Rajan will not want to be merely an adornment for the GoI in world capital markets for a few  years, waiting to get back to his American career and life and perhaps to the IMF again.  As RBI Governor, he can find his magic wand if he reads and reflects hard enough using his undoubted academic acumen, and then acts to lead India accordingly.  Here is the basic reading list:

“India’s Money” (2012)

“Monetary Integrity and the Rupee” (2008)

“India’s Macroeconomics” (2007)

“Fiscal Instability” (2007)

“Fallacious Finance” (2007)

“Growth and Government Delusion” (2008)

“India in World Trade & Payments” (2007)

“Path of the Indian Rupee 1947-1993” (1993)

“Our Policy Process” (2007)

“Indian Money and Credit” (2006)

“Indian Money and Banking” (2006)

Indian Inflation

“Growth of Real Income, Money & Prices in India 1869-2004” (2005)

“How to Budget” (2008)

“Waffle but No Models of Monetary Policy: The RBI and Financial Repression (2005)”

“The Dream Team: A Critique” (2006)

“Against Quackery” (2007)

“Mistaken Macroeconomics” (2009)

“The Indian Revolution (2008)”

https://independentindian.com/2013/11/23/coverage-of-my-delhi-talk-on-3-dec-2012/

Enjoy!

Posted in Academic economics, Academic research, Asia and the West, asymmetric information, Banking, Big Business and Big Labour, Bretton Woods institutions, Britain in India, Capital and labour, Deposit multiplication, Economic Policy, Economic quackery, Economic Theory, Economic Theory of Growth, Economic Theory of Interest, Economic Theory of Value, Economics of exchange controls, Economics of Exchange Rates, Economics of Public Finance, Financial Management, Financial markets, Financial Repression, Foreign exchange controls, Governance, Government accounting, Government Budget Constraint, India's Big Business, India's credit markets, India's Government economists, India's interest rates, India's savings rate, India's stock and debt markets, India's 1991 Economic Reform, India's agriculture, India's balance of payments, India's Banking, India's Budget, India's bureaucracy, India's Capital Markets, India's currency history, India's Foreign Exchange Reserves, India's Foreign Trade, India's Government Budget Constraint, India's Government Expenditure, India's Macroeconomics, India's Monetary & Fiscal Policy, India's nomenclatura, India's Polity, India's poverty, India's Public Finance, India's Reserve Bank, India's State Finances, India's Union-State relations, Inflation, Inflation targeting, Interest group politics, Interest rates, International economics, International monetary economics, International Monetary Fund IMF, Land and political economy, Microeconomic foundations of macroeconomics, Monetary Theory, Money and banking, Paper money and deposits, Power-elites and nomenclatura, Public Choice/Public Finance, Public property waste fraud, Raghuram Govind Rajan, Raghuram Rajan, Rajiv Gandhi, Rajiv Gandhi's assassination, Statesmanship, Unorganised capital markets. Leave a Comment »

Cambridge Economics & the Disputation in India’s Economic Policy, Revised 15 July 2013

19 May 2013

“Manmohan and Sonia have violated Rajiv Gandhi’s intended reforms; the Communists have been appeased or bought; the BJP is incompetent”

is what I said in Sep 2007 in an op-ed in The Statesman. I have to say it again, adding Amartya Sen too for his backing of the so-called “Food Security Bill”…

But taking Sonia and Rajiv out of it all, we are left with a battle from within Cambridge economics, viz,

Sen and Singh (disciples of Joan Robinson, Kaldor, Dobb et al in the 1950s)
vs
myself … in my PhD thesis of 1981 under Frank Hahn...

PhD

 15 July 2013

I am afraid I cannot remember a cogent coherent book authored by Amartya Sen since his 1972 *On Economic Inequality*, which had nice surveys of the Gini coefficient and related concepts…

My 2006 conversation with him about his book *Identity and Violence* is hereI now see he and a co-author seem to have produced yet one more piece of extended undergraduate waffle…E.g. “If development is about the expansion of freedom, it has to embrace the removal of poverty as well as paying attention to ecology as integral parts of a unified concern, aimed ultimately at the security and advancement of human freedom. Indeed, important components of human freedoms — and crucial ingredients of our quality of life — are thoroughly dependent on the integrity of the environment, involving the air we breathe, the water we drink, and the epidemiological surroundings in which we live….”

 

15 July 2013

Where is Amartya’s reply to this?

scan0001

And where is Manmohan’s reply to this?

ppp19842

And where is Manmohan’s reply to this?

602593_10151152229307285_27628359_n

And Manmohan was given a copy of this

indvol

by me at a luncheon at the Indian Embassy Residence in Washington in September 1993 when the Ambassador, the late Barrister SS Ray, told him in the presence of all his senior aides including Montek Ahluwalia and C. Rangarajan, that I had authored the 1991 reform for the then-dead Rajiv Gandhi… on my laptop…

So, to cut to the chase, I have not and do not accept that either Amartya Sen or Manmohan Singh have been leaders of economic thought about India at least (US and British economists can judge for themselves the impact of the former on their own economics). The Sonia Congress has misled itself on the basis of their advocacy and the pity is the BJP, Communists et al in India seem to be even worse…

See also https://independentindian.com/2013/08/23/did-jagdish-bhagwati-originate-pioneer-intellectually-father-indias-1991-economic-reform-did-manmohan-singh-or-did-i-through-my-encounter-with-rajiv-gandhi-just-as-siddhartha-shan/

“I have a student called Suby Roy…”: Reflections on Frank Hahn (1925-2013), my master in economic theory

hahn

1. “What was relatively weak at LSE was general economic theory. We were good at deriving the Best Linear Unbiased Estimator but left unsatisfied with our grasp of the theory of value that constituted the roots of our discipline. I managed a First and was admitted to Cambridge as a Research Student in 1976, where fortune had Frank Hahn choose me as a student. That at the outset was protection from the communist cabal that ran “development economics” with whom almost all the Indians ended up. I was wholly impecunious in my first year as a Research Student, and had to, for example, proof-read Arrow and Hahn’s General Competitive Analysis for its second edition to receive 50 pounds sterling from Hahn which kept me going for a short time. My exposure to Hahn’s subtle, refined and depthless thought as an economist of the first rank led to fascination and wonderment, and I read and re-read his “On the notion of equilibrium in economics”, “On the foundations of monetary theory”, “Keynesian economics and general equilibrium theory” and other clear-headed attempts to integrate the theory of value with the theory of money — a project Wicksell and Marshall had (perhaps wisely) not attempted and Keynes, Hicks and Patinkin had failed at.

 

 

Hahn insisted a central question was to ask how money, which is intrinsically worthless, can have any value, why anyone should want to hold it. The practical relevance of this question is manifest. India today in 2007 has an inconvertible currency, vast and growing public debt financed by money-creation, and more than two dozen fiscally irresponsible State governments without money-creating powers. While pondering, over the last decade, whether India’s governance could be made more responsible if States were given money-creating powers, I have constantly had Hahn’s seemingly abstruse question from decades ago in mind, as to why anyone will want to hold State currencies in India, as to whether the equilibrium price of those monies would be positive. (Lerner in fact gave an answer in 1945 when he suggested that any money would have value if its issuer agreed to collect liabilities in it — as a State collects taxes – and that may be the simplest road that bridges the real/monetary divide.)

 

 

Though we were never personal friends and I did not ingratiate myself with Hahn as did many others, my respect for him only grew when I saw how he had protected my inchoate classical liberal arguments for India from the most vicious attacks that they were open to from the communists. My doctoral thesis, initially titled “A monetary theory for India”, had to be altered due to paucity of monetary data at the time, as well as the fact India’s problems of political economy and allocation of real resources were more pressing, and so the thesis became “On liberty and economic growth: preface to a philosophy for India”. When no internal examiner could be found, the University of Cambridge, at Hahn’s insistence, showed its greatness by appointing two externals: C. J. Bliss at Oxford and T. W. Hutchison at Birmingham, former students of Hahn and Joan Robinson respectively. My thesis received the most rigorous and fairest imaginable evaluation from them…”

 

 

2. “Frank Hahn believed in throwing students in at the deep end — or so it seemed to me when, within weeks of my arrival at Cambridge as a 21 year old Research Student, he insisted I present my initial ideas on the foundations of monetary theory at his weekly seminar.

 

 

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I was petrified but somehow managed to give a half-decent lecture before a standing-room only audience in what used to be called the “Keynes Room” in the Cambridge Economics Department. (It helped that a few months earlier, as a final year undergraduate at the LSE, I had been required to give a lecture at ACL Day’s Seminar on international monetary economics. It is a practice I came to follow with my students in due course, as there may be no substitute in learning how to think while standing up.) I shall try to publish exactly what I said at my Hahn-seminar when I find the document; broadly, it had to do with the crucial problem Hahn had identified a dozen years earlier in Patinkin’s work by asking what was required for the price of money to be positive in a general equilibrium, i.e. why do people everywhere hold and use money when it is intrinsically worthless. Patinkin’s utility function had real money balances appearing along with other goods; Hahn’s “On Some Problems of Proving the Existence of an Equilibrium in a Monetary Economy” in Theory of Interest Rates (1965), was the decisive criticism of this, where he showed that Patinkin’s formulation could not ensure a non-zero price for money in equilibrium. Hence Patinkin’s was a model in which money might not be held and therefore failed a vital requirement of a monetary economy. The announcement of my seminar was scribbled by a young Cambridge lecturer named Oliver Hart, later a distinguished member of MIT and Harvard University.”

 

 

3.   Then there was Sraffa…I saw him many a time, in the Marshall Library… He would smile very broadly at me and without saying anything  indicate with his hand to invite me to his office.. I fled in some fear… It was very stupid of me of course… Joan Robinson cornered me once and took me into the office she shared with EAG… She came at me for an hour or so wishing to supervise me, I kept declining politely… saying I was with Frank Hahn and wished to work on money… “What does Frankie know about India?” she said… I said I did not know but he did know about monetary theory and that was what I needed for India;  I also said I did not think much about the Indian Marxists she had supervised… and mentioned a prominent name… she said about him, “Yes most of what he does can go straight into the dustbin”…

 

 

4.   “I had been attracted to Cambridge partly by its old reputation for philosophy, especially that of Wittgenstein. But I met no worthwhile philosophers there until a few months before I was to leave for the United States in 1980, when I chanced upon the work of Renford Bambrough. Hahn had challenged me with the question, “how are you so sure your value judgements promoting liberty blah-blah are better than those of Chenery and the development economists?” It was a question that led inevitably to ethics and its epistemology — when I chanced upon Bambrough’s work, and that of his philosophical master, John Wisdom, the immense expanse of metaphysics (or ontology) opened up as well. “Then felt I like some watcher of the skies, When a new planet swims into his ken; Or like stout Cortez when with eagle eyes, He star’d at the Pacific…””

 

 

5. “I went to Virginia because James M. Buchanan was there, and he, along with FA Hayek, were whom Hahn decided to write on my behalf. Hayek said he was too old to accept me but wrote me kind and generous letters praising and hence encouraging my inchoate liberal thoughts and arguments. Buchanan was welcoming and I learnt much from him and his colleagues about the realities of public finance and democratic politics, which I quickly applied in my work on India…” Hahn told me he did not know Buchanan but he did know Hayek well and that his wife Dorothy had been an original member of the Mont Pelerin Society in 1947 or 1948. Hence I am amused reading a prominent NYU “American Austrian” say about Frank’s passing “I do think economics would have been better off if the Arrow-Debreu-Hahn approach had not been taken so seriously by the profession. I think it turned out to be an intellectual straight-jacket that prevented the discussion of valuable outside-the-box ideas”, and am tempted to paraphrase the closing lines of Tractatus — “Whereof one cannot speak, thereof one must be silent/About what one can not speak, one must remain silent” — to read “Of that of which we are ignorant, we should at least try not to gas about…” Hahn and Hayek were friends, from when Hayek taught at the London School of Economics in Robbins’ seminar, and Hahn was Robbins’ doctoral student.

 

 

6. “The Hawaii project manuscript contained inter alia a memorandum by Milton Friedman done at the request of the Government of India in November 1955, which had been suppressed for 34 years until I published it in May 1989. Milton and Rose Friedman refer to this in their memoirs Two Lucky People (Chicago 1998). Peter Bauer had told me of the existence of Friedman’s document during my doctoral work at Cambridge under Frank Hahn in the late 1970s, as did N. Georgescu-Roegen in America. Those were years in which Brezhnev still ruled in the Kremlin, Gorbachev was yet to emerge, Indira Gandhi and her pro-Moscow advisers were ensconced in New Delhi, and not even the CIA had imagined the Berlin Wall would fall and the Cold War would be over within a decade. It was academic suicide at the time to argue in favour of classical liberal economics even in the West. As a 22-year-old Visiting Assistant Professor at the Delhi School of Economics in 1977, I was greeted with uproarious laughter of senior professors when I spoke of a possible free market in foreign exchange. Cambridge was a place where Indian economists went to study the exploitation of peasants in Indian agriculture before returning to their friends in the well-known bastions of such matters in Delhi and Calcutta. It was not a place where Indian (let alone Bengali) doctoral students in economics mentioned the unmentionable names of Hayek or Friedman or Buchanan, and insisted upon giving their works a hearing. My original doctoral topic in 1976 “A monetary theory for India” had to be altered not only due to paucity of monetary data at the time but because the problems of India’s political economy and allocation of resources in the real economy were far more pressing. The thesis that emerged in 1982 “On liberty and economic growth: preface to a philosophy for India” was a full frontal assault from the point of view of microeconomic theory on the “development planning” to which everyone routinely declared their fidelity, from New Delhi’s bureaucrats and Oxford’s “development” school to McNamara’s World Bank with its Indian staffers. Frank Hahn protected my inchoate liberal arguments for India; and when no internal examiner could be found, Cambridge showed its greatness by appointing two externals, Bliss at Oxford and Hutchison at Birmingham, both Cambridge men.”

 

 

7. “I have a student called Suby Roy…”  Frank sends me to America in 1980 to work with Jim Buchanan… One letter from him was all it took…

 

 

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And then five years later in 1985 he calls me “probably the outstanding young Hayekian”, says I had brought “a good knowledge of economics and of philosophy to bear on the literature on economic planning”, had “a good knowledge of economic theory” and that my “critique of Development Economics was powerful not only on methodological but also on economic theory grounds” — all that to me has been a special source of delight.

 

 

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We did not meet often after I left Cambridge but he wrote very kindly always, and finally said, hearing of my travails and troubles and adventures, “well you are having an interesting life…”…

 

 

In America, I once met Robert M Solow in a hotel elevator as we were on a  panel at a conference together; I  introduced myself as Hahn’s student… “Aren’t you lucky?” said Solow with a smile…and he was right… I was lucky…

 

 

I said of Milton Friedman that he had been “the greatest economist after John Maynard Keynes”;  Milton’s critic, Frank Hahn, may have been the greatest economic theorist of modern times.

 

 

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                                                                      Frank Hahn (1925-2013)

Pakistan’s Point of View (Or Points of View) on Kashmir: My As Yet Undelivered Lahore Lecture–Part I

Preface

27 April 2015 from Twitter: “My Pakistani hosts never managed to go thru w their 2010/11 invitation I speak in Lahore on Kashmir. After ‪#‎SabeenMahmud‬ s murder, I decline”

October 2015 from Twitter: I have started a quite thorough critique under #kasuri etc at Twitter of the extremely peculiar free publicity given in Delhi and  Mumbai power circles to the dressed up (and false) ISI/Hurriyat narrative of KM Kasuri; the Musharraf “demilitarisation/borderless idea that Mr Kasuri promotes is originally mine from our Pakistan book in America in the 1980s, which I brought to the attention of both sides (and the USA) in Washington in 1993 but which I myself later rejected as naive and ignorant  after the Pakistani aggression in Kargil in 1999, especially the murder of Lt Kalia and his platoon as POWs. https://independentindian.com/2006/12/15/what-to-tell-musharraf-peace-is-impossible-without-non-aggressive-pakistani-intentions/  https://independentindian.com/2008/11/15/of-a-new-new-delhi-myth-and-the-success-of-the-university-of-hawaii-1986-1992-pakistan-project/  I have also now made clear how and why my Lahore lecture (confirmed by the Pakistani envoy to Delhi personally phoning me of his own accord at home) came to be sabotaged by two Pakistanis and two Indian politicians associated with them.

Original Preface  22 November 2011: Exactly a year ago, in late October-November 2010, I received a very kind invitation from the Lahore Oxford and Cambridge Society to speak there on this subject.  Mid March 2011 was a tentative date for this lecture from which the text below is dated.  The lecture has yet to take place for various reasons but as there is demand for its content, I am releasing the part which was due to be released in any case to my Pakistani hosts ahead of time — after all, it would have been presumptuous of me to seek to speak in Lahore on Pakistan’s viewpoint on Kashmir, hence I instead  planned to release my understanding of that point of view ahead of time and open it to the criticism of my hosts.  The structure of the remainder of the talk may be surmised too from the Contents.  The text and argument are mine entirely, the subject of more than 25 years of research and reflection,  and are under consideration of publication as a book by Continuum of London and New York.  If you would like to comment, please feel free to do so, if you would like to refer to it in an online publication, please give this link, if you would like to refer to it in a paper-publication, please   email me.  Like other material at my site, it is open to the Fair Use rule of normal scholarship.

 

On the Alternative Theories of Pakistan and India about Jammu & Kashmir (And the One and Only Way These May Be Peacefully Reconciled): An Exercise in Economics, Politics, Moral Philosophy & Jurisprudence

 by

Subroto (Suby) Roy

Lecture to the Oxford and Cambridge Society of Lahore

March 14, 2011 (tentative)

“What is the use of studying philosophy if all that does for you is to enable you to talk with some plausibility about some abstruse questions of logic, etc., & if it does not improve your thinking about the important questions of everyday life?”  Wittgenstein, letter to Malcolm, 1944

“India is the greatest Muslim country in the world.”

Sir Muhammad Iqbal, 1930, Presidential Address to the Muslim League, Allahabad

 “Where be these enemies?… See, what a scourge is laid upon your hate,… all are punish’d.” Shakespeare

Dr Roy’s published works include Philosophy of Economics: On the Scope of Reason in Economic Inquiry (London & New York: Routledge, 1989, 1991); Pricing, Planning & Politics: A Study of Economic Distortions in India (London: Institute of Economic Affairs, 1984); and, edited with WE James, Foundations of India’s Political Economy: Towards an Agenda for the 1990s (Hawaii MS 1989, Sage 1992)  &  Foundations of Pakistan’s Political Economy: Towards an Agenda for the 1990s (Hawaii MS 1989, Sage 1992, OUP Karachi 1993); and, edited with John Clarke, Margaret Thatcher’s Revolution: How it Happened and What it Meant (London & New York: Continuum 2005).  He graduated in 1976 with a first from the London School of Economics in mathematical economics, and received the PhD in economics at Cambridge in 1982 under Professor Frank Hahn for the thesis “On liberty & economic growth: preface to a philosophy for India”. In the United States for 16 years he was privileged to count as friends Professors James Buchanan, Milton Friedman, TW Schultz, Max Black and Sidney Alexander.  From September 18 1990 he was an adviser to Rajiv Gandhi and contributed to the origins of India’s 1991 economic reform.  He blogs at http://www.independentindian.com.

CONTENTS

Part I

  1. Introduction

  2. Pakistan’s Point of View (or Points of View)

(a)    1930  Sir Muhammad Iqbal

(b)    1933-1948 Chaudhury Rahmat Ali

(c)    1937-1941 Sir Sikander Hayat Khan

(d)    1937-1947 Quad-i-Azam Mohammad Ali Jinnah

(e)    1940s et seq  Maulana Abul Ala Maudoodi

(f)     1947-1950 Prime Minister Liaquat Ali Khan, 1966 President Ayub Khan, 2005 Govt of Pakistan, 2007 President Musharraf, 2008 FM Qureshi, 2011 Kashmir Day

Part II

  1. India’s Point of View: British Negligence/Indifference during the Transfer of Power, A Case of Misgovernance in the Chaotic Aftermath of World War II

(a)    Rhetoric: Whose Pakistan?  Which Kashmir?

(b)    Law: (i) Liaquat-Zafrullah-Abdullah-Nehru United in Error Over the Second Treaty of Amritsar! Dogra J&K subsists Mar 16 1846-Oct 22 1947. Aggression, Anarchy, Annexations: The LOC as De Facto Boundary by Military Decision Since Jan 1 1949.  (ii) Legal Error & Confusion Generated by 12 May 1946 Memorandum. (iii) War: Dogra J&K attacked by Pakistan, defended by India: Invasion, Mutiny, Secession of “Azad Kashmir” & Gilgit, Rape of Baramulla, Siege of Skardu.

  1. Politics: What is to be Done? Towards Truths, Normalisation, Peace in the 21st Century

The Present Situation is Abnormal & Intolerable. There May Be One (and Only One) Peacable Solution that is Feasible: Revealing Individual Choices Privately with Full Information & Security: Indian “Green Cards”/PIO-OCI status for Hurriyat et al: A Choice of Nationality (India, Pakistan, Afghanistan, Iran).  Of Flags and Consulates in Srinagar & Gilgit etc: De Jure Recognition of the Boundary, Diplomatic Normalisation,  Economic & Military Cooperation.

  1. Appendices:

(a)    History of Jammu & Kashmir until the Dogra Native State

(b)    Pakistan’s Allies (including A Brief History of Gilgit)

(c)    India’s Muslim Voices

(d)    Pakistan’s Muslim Voices: An Excerpt from the Munir Report

Part I

1.  Introduction

For a solution to Jammu & Kashmir to be universally acceptable it must be seen by all as being lawful and just. Political opinion across the subcontinent — in Pakistan, in India, among all people and parties in J&K, those loyal to India, those loyal to Pakistan, and any others — will have to agree that, all things considered, such is the right course of action for everyone today in the 21st Century, which means too that the solution must be consistent with the principal known facts of history as well as account reasonably for all moral considerations.

I claim to have found such a solution, indeed I shall even say it is the only such solution (in terms of theoretical economics, it is the unique solution) and plan with your permission to describe its main outlines at this distinguished gathering.  I have not invented it overnight but it is something  developed over a quarter century, milestones along the way being the books emerging from the University of Hawaii “perestroika” projects for India and Pakistan that I and the late WE James led 25 years ago, and a lecture I gave at Washington’s Heritage Foundation in June 1998, as well as sets of newspaper articles published between 2005 and 2008, one in Dawn of Karachi and others in The Statesman of New Delhi and Kolkata.

Before I start, allow me for a moment to remind just how complex and intractable the problem we face has been, and, therefore, quite how large my ambition is in claiming today to be able to resolve it.

“Kashmir is in the Supreme National Interest of Pakistan”, says Pakistan.

“Kashmir is an Integral Part of India”, says India.

“Kashmir is an Integral Part of Pakistan”, says Pakistan.

“Kashmir is in the Supreme National Interest of India”, says India.

And so it goes, in what over the decades has been all too often a Dialogue of the Deaf.  How may such squarely opposed positions be reconciled without draining public resources even further through wasteful weaponry and confrontation of standing armies, or, what is worse, using these weapons and armies in war, plunging the subcontinent into an abyss of chaos and destruction for generations to come?  How is it possible?

I shall suggest a road can be found only when we realize Pakistan, India and J&K each have been and are going to remain integral to one another — in their histories, their geographies, their economies and their societies.  The only place they may need to differ, where we shall want them to differ, is their politics and political systems. We should not underestimate how much mutual hatred and mutual fear has arisen naturally on all sides over the decades as a result of bloodshed and suffering all around, and the fact must also be accounted for that people simply may not be in a calm-enough emotional state to want to be part of processes seeking resolution; at the same time, it bears to be remembered that although Pakistan and India have been at war more than once and war is always a very serious and awful thing, they have never actually declared war against the other nor have they ever broken diplomatic relations – in fact in some ways it has always seemed like some very long and protracted fraternal Civil War between us where we think we know one another so well and yet come to be surprised more by one another’s virtues than by one another’s vices.

Secondly, with any seemingly intractable problem, dialogue can stall or be aborted due to normal human failings of impatience or lack of good will or lack of good humour or lack of a scientific attitude towards finding facts, or plain mutual miscomprehension of one another’s points of view through ignorance or laziness or negligence.  In case of Pakistan and India over J&K, there has been the further critical complication that we of this generation did not cause this problem — it has been something inherited by us from not even our fathers but our grandfathers!  It is two generations old.  Each side must respect the words and deeds of its forebears but also may have to frankly examine in a scientific spirit where errors of fact or judgment may have occurred back then.  The antagonistic positions have changed only slightly over two generations, and one reason dialogue stalls or gets aborted today is because positions have become frozen for more than half a century and merely get repeated endlessly.  On top of such frozen positions have been piled pile upon pile of further vast mortal complications: the 1965 War, the 1971 secession of East Pakistan, the 1999 Kargil War, the 2008 Mumbai massacres.  Only cacophony results if we talk about everything at once, leaving the status quo of a dangerous expensive confrontation to continue.

I propose instead to focus as specifically and precisely as possible on how Jammu & Kashmir became a problem at all during those crucial decades alongside the processes of Indian Independence, World War II, the Pakistan Movement and creation of Pakistan, accompanied by the traumas and bloodshed of Partition.

Having addressed that — and it is only fair to forewarn this eminent Lahore audience that such a survey of words, deeds and events between the 1930s and 1950s tends to emerge in India’s favour — I propose to “fast-forward” to current times, where certain new facts on the ground appear much more adverse to India, and finally seek to ask what can and ought to be done, all things considered, today in the circumstances of the 21st Century.   There are four central facts, let me for now call them Fact A, Fact B, Fact C and Fact D, which have to be accepted by both countries in good faith and a scientific spirit.  Facts A and B are historical in nature; Pakistan has refused to accept them. Facts C and D are contemporary in nature; official political India and much of the Indian media too often have appeared wilfully blind to them. The moment all four facts come to be accepted by all, the way forward becomes clear.  We have inherited this grave mortal problem which has so badly affected the ordinary people of J&K in the most terrible and unacceptable manner, but if we fail to understand and resolve it, our children and grandchildren will surely fail even worse — we may even leave them to cope with the waste and destruction of further needless war or confrontation, indeed with the end of the subcontinent as we have received and known it in our time.

2. Pakistan’s Point of View (Or Points of View)

1930  Sir Muhammad Iqbal

This audience will need no explanation why I start with Sir Muhammad Iqbal (1877-1938), the poetic and spiritual genius who in the 20th Century inspired the notion of a Muslim polity in NorthWestern India, whose seminal 1930 presidential speech to the Muslim League in Allahabad lay the foundation stone of the new country that was yet to be.   He did not live to see Pakistan’s creation yet what may be called the “Pakistan Principle” was captured in his words:

“I would like to see the Punjab, Northwest Frontier Province, Sind and Baluchistan amalgamated into a single state. Self-government within the British Empire or without the British Empire, the formation of a consolidated North West Indian Muslim state appears to me to be the final destiny of the Muslims at least of Northwest India… India is the greatest Muslim country in the world.  The life of Islam as a cultural force in this living country very largely depends on its centralization in a specified territory”.

He did not see such a consolidated Muslim state being theocratic and certainly not one filled with bigotry or “Hate-Hindu” campaigns:

“A community which is inspired by feelings of ill-will towards other communities is low and ignoble. I entertain the highest respect for the customs, laws, religious and social institutions of other communities… Yet I love the communal group which is the source of my life and my behaviour… Nor should the Hindus fear that the creation of autonomous Muslim states will mean the introduction of a kind of religious rule in such states…. I therefore demand the formation of a consolidated Muslim state in the best interests of India and Islam. For India it means security and peace resulting from an internal balance of power, for Islam an opportunity to rid itself of the stamp that Arabian Imperialism was forced to give it, to mobilise its law, its education, its culture, and to bring them into closer contact with its own original spirit and the spirit of modern times.”[1]

Though Kashmiri himself, in fact a founding member of the “All-India Jammu & Kashmir Muslim Conference of Lahore and Simla”, and a hero and role model for the young Sheikh Abdullah (1905-1982), Allama Iqbal was explicitly silent about J&K being part of the new political entity he had come to imagine.  I do not say he would not have wished it to be had he lived longer; what I am saying is that his original vision of the consolidated Muslim state which constitutes Pakistan today (after a Partitioned Punjab) did not include Jammu & Kashmir.  Rather, it was focused on the politics of British India and did not mention the politics of Kashmir or any other of the so-called “Princely States” or “Native States” of “Indian India” who constituted some 1/3rd of the land mass and 1/4th of the population of the subcontinent.  Twenty years ago I called this “The Paradox of Kashmir”, namely, that prior to 1947 J&K hardly seemed to appear in any discussion at all for a century, yet it has consumed almost all discussion and resources ever since.

Secondly, this audience will see better than I can the significance of Dr Iqbal’s saying the Muslim political state of his conception needed

“an opportunity to rid itself of the stamp that Arabian Imperialism was forced to give it”

and instead seek to

“mobilise its law, its education, its culture, and to bring them into closer contact with its own original spirit and the spirit of modern times”.

Dr Iqbal’s Pakistan Principle appears here the polar opposite of Pakistan’s 18th & 19th Century pre-history represented by Shah Waliullah (1703-1762)[2] saying

“We are an Arab people whose fathers have fallen in exile in the country of Hindustan, and Arabic genealogy and Arabic language are our pride”

 or Sayyid Ahmed Barelwi (1786-1831) saying

“We must repudiate all those Indian, Persian and Roman customs which are contrary to the Prophet’s teaching”.[3]

Some 25 years after the Allahabad address, the Munir Report in 1954 echoed Dr Iqbal’s thought when it observed about medieval military conquests

“It is this brilliant achievement of the Arabian nomads …that makes the Musalman of today live in the past and yearn for the return of the glory that was Islam… Little does he understand that the forces which are pitted against him are entirely different from those against which early Islam had to fight… Nothing but a bold reorientation of Islam to separate the vital from the lifeless can preserve it as a World Idea and convert the Musalman into a citizen of the present and the future world from the archaic incongruity that he is today…” [4]

 

1933-1947  Chaudhury Rahmat Ali

Dr Iqbal’s young follower, the radical Cambridge pamphleteer Chaudhury Rahmat Ali (1895-1951) drew a picture not of Muslim tolerance and coexistence with Hindus in a peaceful India but of aggression towards Hindus and domination by Muslims over the subcontinent and Asia itself.  Rahmat Ali had been inspired by Dr Iqbal’s call for a Muslim state in Northwest India but found it vague and was disappointed Iqbal had not pressed it at the Third Round Table Conference.  In 1933, reportedly on the upper floor of a London omnibus, he invented for the then-imagined political entity the name “PAKSTAN”, P for his native Punjab, A for Afghania, K for Kashmir, S for Sind, and STAN for Balochistan.  He sought a meeting with Mr Jinnah in London — “Jinnah disliked Rahmat Ali’s ideas and avoided meeting him”[5] but did meet him.  There is a thesis yet to be written on how Europe’s inter-War ideologies affected political thinking on the subcontinent.  Rahmat Ali’s vituperative views about Hindus were akin to others about Jews (and Muslims too) at the time, all models or counterfoils for one another in the fringes of Nazism.  He referred to the Indian nationalist movement as a “British-Banya alliance”, declined to admit India had ever existed and personally renamed the subcontinent “Dinia” and the seas around it the “Pakian Sea”, the “Osmanian Sea” etc. He urged Sikhs to rise up in a “Sikhistan” and urged all non-Hindus to rise up in war against Hindus. Given the obscurity of his life before his arrival at Cambridge’s Emmanuel College, what experiences may have led him to such views are not known.

All this was anathema to Mr Jinnah, the secular constitutionalist embarrassed by a reactionary Muslim imperialism in that rapidly modernising era that was the middle of the 20th Century.  When Rahmat Ali pressed the ‘Pakstan’ acronym, Mr Jinnah said Bengal was not in it and Muslim minority regions were absent.  At this Chaudhury-Sahib produced a general scheme of Muslim domination all over the subcontinent: there would be “Pakstan” in the northwest including Kashmir, Delhi and Agra; “Bangistan” in Bengal; “Osmanistan” in Hyderabad; “Siddiquistan” in Bundelhand and Malwa; “Faruqistan” in Bihar and Orissa; “Haideristan” in UP; “Muinistan” in Rajasthan; “Maplistan” in Kerala; even “Safiistan” in “Western Ceylon” and “Nasaristan” in “Eastern Ceylon”, etc.  In 1934 he published and widely circulated such a diagram among Muslims in Britain at the time.  He was not invited to the Lahore Resolution which did not refer to Pakistan though came to be called the Pakistan Resolution.  When he landed in the new Pakistan, he was apparently arrested and deported back and was never granted a Pakistan passport.  From England, he turned his wrath upon the new government, condemning Mr Jinnah as treacherous and newly re-interpreting his acronym to refer to Punjab, Afghania, Kashmir, Iran, Sindh, Tukharistan (sic), Afghanistan, and Balochistan.  The word “pak” coincidentally meant pure, so he began to speak of Muslims as “the Pak” i.e. “the pure” people, and of how the national destiny of the new Pakistan was to liberate “Pak” people everywhere, including the new India, and create a “Pak Commonwealth of Nations” stretching from Arabia to the Indies.  The map he now drew placed the word “Punjab” over J&K, and saw an Asia dominated by this “Pak” empire. Shunned by officialdom of the new Pakistan, Chaudhury-Sahib was a tragic figure who died in poverty and obscurity during an influenza epidemic in 1951; the Master of Emmanuel College paid for his funeral and was apparently later reimbursed for this by the Government of Pakistan.  In recent years he has undergone a restoration, and his grave at Cambridge has become a site of pilgrimage for ideologues, while his diagrams and writings have been reprinted in Pakistan’s newspapers as recently as February 2005.

1937-1941 Sir Sikander Hayat Khan

Chaudhary Rahmat Ali’s harshest critic at the time was the eminent statesman and Premier of Punjab Sir Sikander Hayat Khan (1892-1942), partner of the 1937 Sikander-Jinnah Pact, and an author of the Lahore Resolution.  His statement of 11 March 1941 in the Punjab Legislative Assembly Debates is a classic:

“No Pakistan scheme was passed at Lahore… As for Pakistan schemes, Maulana Jamal-ud-Din’s is the earliest…Then there is the scheme which is attributed to the late Allama Iqbal of revered memory.  He, however, never formulated any definite scheme but his writings and poems have given some people ground to think that Allama Iqbal desired the establishment of  some sort of  Pakistan.  But it is not difficult to explode this theory and to prove conclusively that his conception of  Islamic solidarity and universal brotherhood is not in conflict with Indian patriotism and is in fact quite different from the ideology now sought to be attributed to him by some enthusiasts… Then there is Chaudhuri Rahmat Ali’s scheme (*laughter*)…it was widely circulated in this country and… it was also given wide publicity at the time in a section of the British press.  But there is another scheme…it was published in one of the British journals, I think Round Table, and was conceived by an Englishman…..the word Pakistan was not used at the League meeting and this term was not applied to (the League’s Lahore) resolution by anybody until the Hindu press had a brain-wave and dubbed it Pakistan…. The ignorant masses  have now adopted the slogan provided by the short-sighted bigotry of the Hindu and Sikh press…they overlooked the fact that the word Pakistan might have an appeal – a strong appeal – for the Muslim masses.  It is a catching phrase and it has caught popular imagination and has thus made confusion worse confounded…. So far as we in the Punjab are concerned, let me assure you that we will not countenance or accept any proposal that does not secure freedom for all (*cheers*).  We do not desire that Muslims should domineer here, just as we do not want the Hindus to domineer where Muslims are in a minority. Now would we allow anybody or section to thwart us because Muslims happen to be in a majority in this province.  We do not ask for freedom that there may be a Muslim Raj here and Hindu Raj elsewhere.  If that is what Pakistan means I will have nothing to do with it.   If Pakistan means unalloyed Muslim Raj in the Punjab then I will have nothing to do with it (*hear, hear*)…. If you want real freedom for the Punjab, that is to say a Punjab in which every community will have its due share in the economic and administrative fields as partners in a common concern, then that Punjab will not be Pakistan but just Punjab, land of the five rivers; Punjab is Punjab and will always remain Punjab whatever anybody may say (*cheers*).  This, then, briefly is the future which I visualize for my province and for my country under any new constitution.

Intervention (Malik Barkat Ali): The Lahore resolution says the same thing.

Premier: Exactly; then why misinterpret it and try to mislead the  masses?…”

1937-1947  Quad-i-Azam Mohammad Ali Jinnah

During the Third Round Table Conference, Dr Iqbal persuaded Mr Jinnah (1876-1948) to return to India; Mr Jinnah, from being settled again in his London law practice, did so in 1934.  But following the 1935 Govt of India Act, the Muslim League failed badly when British India held its first elections in 1937 not only in Bengal and UP but in Punjab (one seat), NWFP and Sind.

World War II, like World War I a couple of brief decades earlier, then changed the political landscape completely. Germany invaded Poland on 1 September 1939 and Britain and France declared war on Germany on 3 September.  The next day, India’s British Viceroy (Linlithgow) granted Mr Jinnah the political parity with Congress that he had sought.[6]  Professor Francis Robinson suggests that until 4 September 1939 the British

“had had little time for Jinnah and his League.  The Government’s declaration of war on Germany on 3 September, however, transformed the situation. A large part of the army was Muslim, much of the war effort was likely to rest on the two Muslim majority provinces of Punjab and Bengal. The following day, the Viceroy invited Jinnah for talks on an equal footing with Gandhi…. As the Congress began to demand immediate independence, the Viceroy took to reassuring Jinnah that Muslim interests would be safeguarded in any constitutional change. Within a few months, he was urging the League to declare a constructive policy for the future, which was of course presented in the Lahore Resolution[7]…. In their August 1940 offer, the British confirmed for the benefit of Muslims that power would not be transferred against the will of any significant element in Indian life. And much the same confirmation was given in the Cripps offer nearly two years later…. Throughout the years 1940 to 1945, the British made no attempt to tease out the contradictions between the League’s two-nation theory, which asserted that Hindus and Muslims came from two different civilisations and therefore were two different nations, and the Lahore Resolution, which demanded that ‘Independent States’ should be constituted from the Muslim majority provinces of the NE and NW, thereby suggesting that Indian Muslims formed not just one nation but two. When in 1944 the governors of Punjab and Bengal urged such a move on the Viceroy, Wavell ignored them, pressing ahead instead with his own plan for an all-India conference at Simla. The result was to confirm, as never before in the eyes of leading Muslims in the majority provinces, the standing of Jinnah and the League. Thus, because the British found it convenient to take the League seriously, everyone had to as well—Congressmen, Unionists, Bengalis, and so on…”[8]

 Mr Jinnah was himself amazed by the new British attitude towards him:

“(S)uddenly there was a change in the attitude towards me. I was treated on the same basis as Mr Gandhi. I was wonderstruck why all of a sudden I was promoted and given a place side by side with Mr Gandhi.”

Britain, threatened for its survival, faced an obdurate Indian leadership and even British socialists sympathetic to Indian aspirations grew cold (Gandhi dismissing the 1942 Cripps offer as a “post-dated cheque on a failing bank”).  Official Britain’s loyalties had been consistently with those who had been loyal to them, and it was unsurprising there would be a tilt to empower Mr Jinnah soon making credible the real possibility of Pakistan.[9]  By 1946, Britain was exhausted, pre-occupied with rationing, Berlin, refugee resettlement and countless other post-War problems — Britain had not been beaten in war but British imperialism was finished because of the War.  Muslim opinion in British India had changed decisively in the League’s favour.   But the  subcontinent’s political processes were drastically spinning out of everyone’s control towards anarchy and blood-letting.  Implementing a lofty vision of a cultured progressive consolidated Muslim state in India’s NorthWest descended into “Direct Action” with urban mobs  shouting Larke lenge Pakistan; Marke lenge Pakistan; Khun se lenge Pakistan; Dena hoga Pakistan.[10]

We shall return to Mr Jinnah’s view on the legal position of the “Native Princes” of “Indian India” during this critical time, specifically J&K; here it is essential before proceeding only to record his own vision for the new Pakistan as recorded by the profoundly judicious report of Justice Munir and Justice Kayani a mere half dozen years later:

“Before the Partition, the first public picture of Pakistan that the Quaid-i-Azam gave to the world was in the course of an interview in New Delhi with Mr. Doon Campbell, Reuter’s Correspondent. The Quaid-i-Azam said that the new State would be a modern democratic State, with sovereignty resting in the people and the members of the new nation having equal rights of citizenship regardless of their religion, caste or creed.  When Pakistan formally appeared on the map, the Quaid-i-Azam in his memorable speech of 11th August 1947 to the Constituent Assembly of Pakistan, while stating the principle on which the new State was to be founded, said:—‘All the same, in this division it was impossible to avoid the question of minorities being in one Dominion or the other. Now that was unavoidable. There is no other solution. Now what shall we do? Now, if we want to make this great State of Pakistan happy and prosperous we should wholly and solely concentrate on the well-being of the people, and specially of the masses and the poor. If you will work in co-operation, forgetting the past, burying the hatchet, you are bound to succeed. If you change your past and work together in a spirit that every one of you, no matter to what community he belongs, no matter what relations he had with you in the past, no matter what is his colour, caste or creed, is first, second and last a citizen of this State with equal rights, privileges and obligations., there will be no end to the progress you will make.  “I cannot emphasise it too much. We should begin to work in that spirit and in course of time all these angularities of the majority and minority communities—the Hindu community and the Muslim community— because even as regards Muslims you have Pathana, Punjabis, Shias, Sunnis and so on and among the Hindus you have Brahmins, Vashnavas, Khatris, also Bengalis, Madrasis and so on—will vanish. Indeed if you ask me this has been the biggest hindrance in the way of India to attain its freedom and independence and but for this we would have been free peoples long long ago. No power can hold another nation, and specially a nation of 400 million souls in subjection; nobody could have conquered you, and even if it had happened, nobody could have continued its hold on you for any length of time but for this (Applause). Therefore, we must learn a lesson from this. You are free; you are free to go to your temples, you are free to go to your mosques or to any other places of worship in this State of Pakistan. You may belong to any religion or caste or creed— that has nothing to do with the business of the State (Hear, hear). As you know, history shows that in England conditions sometime ago were much worse than those prevailing in India today. The Roman Catholics and the Protestants persecuted each other. Even now there are some States in existence where there are discriminations made and bars imposed against a particular class. Thank God we are not starting in those days. We are starting in the days when there is no discrimination, no distinction between one community and another, no discrimination between one caste or creed and another. We are starting with this fundamental principle that we are all citizens and equal citizens of one State (Loud applause). The people of England in course of time had to face the realities of the situation and had to discharge the responsibilities and burdens placed upon them by the Government of their country and they went through that fire step by step. Today you might say with justice that Roman Catholics and Protestants do not exist: what exists now is that every man is a citizen, an equal citizen, of Great Britain and they are all members of the nation. “Now, I think we should keep that in front of us as our ideal and you will find that in course of time Hindus would cease to be Hindus and Muslims would cease to be Muslims, not in the religious sense, because that is the personal faith of each individual, but in the political sense as citizens of the State’. The Quaid-i-Azam was the founder of Pakistan and the occasion on which he thus spoke was the first landmark in the history of Pakistan. The speech was intended both for his own people including non-Muslims and the world, and its object was to define as clearly as possible the ideal to the attainment of which the new State was to devote all its energies. There are repeated references in this speech to the bitterness of the past and an appeal to forget and change the past and to bury the hatchet. The future subject of the State is to be a citizen with equal rights, privileges and obligations, irrespective of colour, caste, creed or community. The word ‘nation’ is used more than once and religion is stated to have nothing to do with the business of the State and to be merely a matter of personal faith for the individual.”

1940s et seq  Maulana Abul Ala Maudoodi, Amir Jama’at-i-Islami

The eminent theologian Maulana Abul Ala Maudoodi (1903-1979), founder of the Jama’at-i-Islami, had been opposed to the Pakistan Principle but once Pakistan was created he became the most eminent votary of an Islamic State, declaring:

 “That the sovereignty in Pakistan belongs to God Almighty alone and that the Government of Pakistan shall administer the country as His agent”.

 In such a view, Islam becomes

“the very antithesis of secular Western democracy. The philosophical foundation of Western democracy is the sovereignty of the people. Lawmaking is their prerogative and legislation must correspond to the mood and temper of their opinion… Islam… altogether repudiates the philosophy of popular sovereignty and rears its polity on the foundations of the sovereignty of God and the viceregency (Khilafat) of man.”

Maulana Maudoodi was asked by Justice Munir and Justice Kayani:

 “Q.—Is a country on the border of dar-ul-Islam always qua an Islamic State in the position of dar-ul-harb ?

A.—No. In the absence of an agreement to the contrary, the Islamic State will be potentially at war with the non-Muslim neighbouring country. The non-Muslim country acquires the status of dar-ul-harb only after the Islamic State declares a formal war against it”.

“Q.—Is there a law of war in Islam?

A.—Yes.

Q.—Does it differ fundamentally from the modern International Law of war?

A.—These two systems are based on a fundamental difference.

Q.—What rights have non-Muslims who are taken prisoners of war in a jihad?

A.—The Islamic law on the point is that if the country of which these prisoners are nationals pays ransom, they will be released. An exchange of prisoners is also permitted. If neither of these alternatives is possible, the prisoners will be converted into slaves for ever. If any such person makes an offer to pay his ransom out of his own earnings, he will be permitted to collect the money necessary for the fidya (ransom).

Q.—Are you of the view that unless a Government assumes the form of an Islamic Government, any war declared by it is not a jihad?

A.—No. A war may be declared to be a jihad if it is declared by a national Government of Muslims in the legitimate interests of the State. I never expressed the opinion attributed to me in Ex. D. E. 12:— (translation)‘The question remains whether, even if the Government of Pakistan, in its present form and structure, terminates her treaties with the Indian Union and declares war against her, this war would fall under the definition of jihad? The opinion expressed by him in this behalf is quite correct. Until such time as the Government becomes Islamic by adopting the Islamic form of Government, to call any of its wars a jihad would be tantamount to describing the enlistment and fighting of a non-Muslim on the side of the Azad Kashmir forces jihad and his death martyrdom. What the Maulana means is that, in the presence of treaties, it is against Shari’at, if the Government or its people participate in such a war. If the Government terminates the treaties and declares war, even then the war started by Government would not be termed jihad unless the Government becomes Islamic’.

….

“Q.—If we have this form of Islamic Government in Pakistan, will you permit Hindus to base their Constitution on the basis of their own religion?

A—Certainly. I should have no objection even if the Muslims of India are treated in that form of Government as shudras and malishes and Manu’s laws are applied to them, depriving them of all share in the Government and the rights of a citizen. In fact such a state of affairs already exists in India.”

.…

“Q.—What will be the duty of the Muslims in India in case of war between India and Pakistan?

A.—Their duty is obvious, and that is not to fight against Pakistan or to do anything injurious to the safety of Pakistan.”

1947-1950 PM Liaquat Ali Khan, 1966 Gen Ayub Khan, 2005 Govt of Pakistan et seq

In contrast to Maulana Maudoodi saying Islam was “the very antithesis of secular Western democracy”,  Prime Minister Liaquat Ali Khan (1895-1951)[11] during his first official visit in 1950 to North America was to say the new Pakistan, because it was Muslim, held Asia’s greatest democratic potential:

“At present there is no democracy in Asia which is more free and more unified than Pakistan; none so free from moral doubts and from strains between the various sections of the people.”

He told his audiences Pakistan was created because Hindus were people wedded to caste-differences where Pakistanis as Muslims had an egalitarian and democratic disposition:

“The Hindus, for example, believe in the caste system according to which some human beings are born superior to others and cannot have any social relations with those in the lower castes or with those who are not Hindus.   They cannot marry them or eat with them or even touch them without being polluted.   The Muslims abhor the caste system, as they are a democratic people and believe in the equality of men and equal opportunities for all, do not consider a priesthood necessary, and have economic laws and institutions which recognize the right of private ownership and yet are designed to promote the distribution of wealth and to put healthy checks on vast unearned accumulations… so the Hindus and the Muslims decided to part and divide British India into two independent sovereign states… Our demand for a country of our own had, as you see, a strong democratic urge behind it.  The emergence of Pakistan itself was therefore the triumph of a democratic idea.  It enabled at one stroke a democratic nation of eighty million people to find a place of its own in Asia, where now they can worship God in freedom and pursue their own way of life uninhibited by the domination or the influence of ways and beliefs that are alien or antagonistic to their genius.” [12]

President Ayub Khan would state in similar vein on 18 November 1966 at London’s Royal Institute of International Affairs:

“the root of the problem was the conflicting ideologies of India and Pakistan. Muslim Pakistan believed in common brotherhood and giving people equal opportunity.  India and Hinduism are based on inequality and on colour and race.  Their basic concept is the caste system… Hindus and Muslims could never live under one Government, although they might live side by side.”

Regarding J&K, Liaquat Ali Khan on November 4 1947 broadcast from here in Lahore that the 1846 Treaty of Amritsar was “infamous” in having caused an  “immoral and illegal” ownership of Jammu & Kashmir.  He, along with Mr Jinnah, had called Sheikh Abdullah a “goonda” and “hoodlum” and “Quisling” of India, and on February 4 1948 Pakistan formally challenged the sovereignty of the Dogra dynasty in the world system of nations.  In 1950 during his North American visit though, the Prime Minister allowed that J&K was a “princely state” but said

“culturally, economically, geographically and strategically, Kashmir – 80 per cent of whose peoples like the majority of the people in Pakistan are Muslims – is in fact an integral part of Pakistan”;

“(the) bulk of the population (are) under Indian military occupation”.

Pakistan’s official self-image, portrayal of India, and position on J&K may have not changed greatly since her founding Prime Minister’s statements.   For example, in June 2005 the website of the Government of Pakistan’s Permanent Mission at the UN stated:

“Q: How did Hindu Raja (sic) become the ruler of Muslim majority Kashmir?

A: Historically speaking Kashmir had been ruled by the Muslims from the 14th Century onwards.  The Muslim rule continued till early 19th Century when the ruler of Punjab conquered  Kashmir and gave Jammu to a Dogra Gulab Singh who purchased Kashmir from the British in 1846 for a sum of 7.5 million rupees.”

“India’s forcible occupation of the State of Jammu and Kashmir in 1947 is the main cause of the dispute. India claims to have ‘signed’ a controversial document, the Instrument of Accession, on 26 October 1947 with the Maharaja of Kashmir, in which the Maharaja obtained India’s military help against popular insurgency.   The people of Kashmir and Pakistan do not accept the Indian claim.   There are doubts about the very existence of the Instrument of Accession.  The United Nations also does not consider Indian claim as legally valid: it recognises Kashmir as a disputed territory.   Except India, the entire world community recognises Kashmir as a disputed territory. The fact is that all the principles on the basis of which the Indian subcontinent was partitioned by the British in 1947 justify Kashmir becoming a part of Pakistan:  the State had majority Muslim population, and it not only enjoyed geographical proximity with Pakistan but also had essential economic linkages with the territories constituting Pakistan.”

India, a country dominated by the hated-Hindus, has forcibly denied Srinagar Valley’s Muslim majority over the years the freedom to become part of Muslim Pakistan – I stand here to be corrected but, in a nutshell, such has been and remains Pakistan’s official view and projection of the Kashmir problem over more than sixty years.[13]

Part II

  1. India’s Point of View: British Negligence/Indifference during the Transfer of Power, A Case of Misgovernance in the Chaotic Aftermath of World War II

(a)    Rhetoric: Whose Pakistan?  Which Kashmir?

(b)    Law: (i) Liaquat-Zafrullah-Abdullah-Nehru United in Error Over the Second Treaty of Amritsar! Dogra J&K subsists Mar 16 1846-Oct 22 1947. Aggression, Anarchy, Annexations: The LOC as De Facto Boundary by Military Decision Since Jan 1 1949.  (ii) Legal Error & Confusion Generated by 12 May 1946 Memorandum. (iii) War: Dogra J&K attacked by Pakistan, defended by India: Invasion, Mutiny, Secession of “Azad Kashmir” & Gilgit, Rape of Baramulla, Siege of Skardu.

  1. Politics: What is to be Done? Towards Truths, Normalisation, Peace in the 21st Century

The Present Situation is Abnormal & Intolerable. There May Be One (and Only One) Peacable Solution that is Feasible: Revealing Individual Choices Privately with Full Information & Security: Indian “Green Cards”/PIO-OCI status for Hurriyat et al: A Choice of Nationality (India, Pakistan, Afghanistan, Iran).  Of Flags and Consulates in Srinagar & Gilgit etc: De Jure Recognition of the Boundary, Diplomatic Normalisation,  Economic & Military Cooperation.

  1. Appendices:

(a)    History of Jammu & Kashmir until the Dogra Native State

(b)    Pakistan’s Allies (including A Brief History of Gilgit)

(c)    India’s Muslim Voices

(d)    Pakistan’s Muslim Voices: An Excerpt from the Munir Report



[1] EIJ Rosenthal, Islam in the Modern National State, 1965, pp.196-197.

[2] A contemporary of Mohammad Ibn Abdal Wahhab of Nejd.

[3] Francis Robinson in  WE James & Subroto Roy, Foundations of Pakistan’s Political Economy: Towards an Agenda for the 1990s, 1993, p. 36.  Indeed Barelwi had created a proto-Pakistan in NorthWest India one hundred years before the Pakistan Movement. “In the later 1820s the movement became militant, regarding jihad as one of the basic tenets of faith.  Possibly encouraged by the British, with whom the movement did not feel powerful enough to come to grips at the outset, it chose as the venue of jihad the NW frontier of the subcontinent, where it was directed against the Sikhs.  Barelwi temporarily succeeded in carving out a small theocratic principality which collapsed owing to the friction between his Pathan and North Indian followers; and he was finally defeated and slain by the Sikhs in 1831″ (Aziz Ahmed, in  AL Basham (ed) A Cultural History of India 1976, p. 384).   Professor Robinson answered a query of mine in an email of 8 August 2005: “the fullest description of this is in Mohiuddin Ahmad, Saiyid Ahmad Shahid (Lucknow, 1975), although practically everyone who deals with the period covers it in some way. Barelwi was the Amir al-Muminin of a jihadi community which based itself north of Peshawar and for a time controlled Peshawar.  He called his fellowship the Tariqa-yi Muhammadiya.  Barelwi corresponded with local rulers about him.  After his death at the battle of Balakot, it survived in the region, at Sittana I think, down to World War One.”

[4] Rosenthal, ibid., p 235

[5] Germans

[6] Events remote from India’s history and geography, namely, the rise of Hitler and the Second World War, had contributed between 1937 and 1947 to the change of fortunes of the Muslim League and hence of all the people of the subcontinent.  The British had long discovered that mutual antipathy between Muslims and Hindus could be utilised in fashioning their rule; specifically that organisation and mobilisation of Muslim communal opinion was a useful counterweight to any pan-Indian nationalism emerging to compete with British authority. As early as 1874, long before Allan Octavian Hume ICS conceived the Indian National Congress, John Strachey ICS observed “The existence side by side of these (Hindu and Muslim) hostile creeds is one of the strong points in our political position in India. The better classes of Mohammedans are a source of strength to us and not of weakness. They constitute a comparatively small but an energetic minority of the population whose political interests are identical with ours.” By 1906, when a deputation of Muslims headed by the Aga Khan first approached the British pleading for communal representation, Minto the Viceroy replied: “I am as firmly convinced as I believe you to be that any electoral representation in India would be doomed to mischievous failure which aimed at granting a personal enfranchisement, regardless of the beliefs and traditions of the communities composing the population of this Continent.” Minto’s wife wrote in her diary the effect was “nothing less than the pulling back of sixty two millions of (Muslims) from joining the ranks of the seditious opposition.” (The true significance of Maulana Azad may have been that he, precisely at the same time, did indeed feel within himself the nationalist’s desire for freedom strongly enough to want to join the ranks of that seditious opposition.)

[7] “That geographically contiguous units are demarcated into regions which should be so constituted, with such territorial readjustments as may be necessary, that the areas in which the Muslims are numerically in a majority, as in the North-Western and Eastern zones of India should be grouped to constitute Independent States in which the constituent units shall be autonomous and sovereign”.

[8] Robinson ibid, pp. 43-44.

[9] In the “Indian India” of the Native Princes, Hari Singh and others who sent troops to fight as part of British armies (and who were nominal members of Churchill’s War Cabinet) would have their vanities flattered, while Sheikh Abdullah’s rebellion against Dogra rule would be ignored. See seq. And in British India, Mr Jinnah the conservative Anglophile and his elitist Muslim League would be backed, while the radicalised masses of the Gandhi-Bose-Nehru Congress suppressed as a nuisance.

[10] An anthology about Lahore reports memories of a murderous mob arriving at a wealthy man’s home to be placated  with words like  “They are Parsis not Hindus, no need to kill them…”

[11] An exact contemporary of Chaudhury Rahmat Ali.

[12] Pakistan, Harvard University Press, 1950.

[13] It is not far from this to a certain body of sentiments frequently found, for example, as recently as February 5 2011: “To observe the Kashmir Solidarity Day, various programs, rallies and protests will be held on Saturday (today) across the city to support the people of Kashmir in their struggle against the Indian occupation of their land.  Various religious, political, social and other organizations have arranged different programs to highlight the atrocities of Indian occupant army in held Jammu and Kashmir where about 800,000 Indian soldiers have been committing atrocities against innocent civilians; killing, wounding and maiming tens of thousands of people; raping thousands of women and setting houses, shops and crops on fire to break the Kashmiris’ will to fight for their freedom…Jamat-ud-Dawah…leaders warned that a ‘jihad’ would be launched if Kashmir was not liberated through civil agitation…the JuD leaders said first the former President, Pervez Musharraf, and now the current dispensation were extending the olive branch to New Delhi despite the atrocities on the Kashmiri people….the Pakistani nation would (never compromise on the issue of Kashmir and) would continue to provide political, moral and diplomatic support to the Kashmiri people.”

On the rot of institutions (and what an Academy might be like in the Facebook/Internet Age): Listening to the ladies….

From Facebook Aug 31 2011:

Subroto Roy has really done what he can, just about, for his country, & has been rewarded by his country’s government and its “institution of national importance” with the most despicable evil. It is a toss-up between whether my personal experience of Indian corruption and vicious state-tyranny is worse than my personal experience of bribery and perjury in the federal court system in America.

Andrea Kent Your bitterness is understandable. Patriotism is rising above appropriate anger toward individuals and continuing to love and serve the nation, even if it is infected by wicked individuals.

Subroto Roy Yes it is indeed, you are right…

Andrea Kent The history of most great nations contains examples of individuals who, though later acknowledged as heroes, were treated shabbily by their respective homelands. It is sad that you are being treated badly, but surely it is just by one institution and its envious employees, rather than by the entire country? At least, I hope this is caused by a small number of wickedly envious people rather than by an established policy of the government.;

Subroto Roy Corruption is endemic in India… the matters I exposed some years ago had to do with (a) apparent siphoning off money in building (and purchase) contracts; and (b) apparently abusing the fiduciary interest of students by stealing from their fees to pay for round the world business-class travel, etc.. No, I am not bitter, either about India or about America but yes, as I have said it is a toss-up between whether my personal experience of Indian corruption and vicious state-tyranny is worse than my personal experience of bribery and perjury in the federal court system in America.

Aletha Kuschan Andrea is right, though, that you were affected by individual actions more, I think, than by the nation as a whole in both instances. I wish that your fine work was getting the lion’s share of attention and not causing you troubles at all. But ideas have their natural audiences and all too often that audience is located in the future — as Andrea noted. Keep the faith, Suby. Truth does win out in time. And that really does matter too. Listen to the ladies, Suby …

Subroto Roy Thanks Aletha, Andrea. Aletha, re “Andrea is right, though, that you were affected by individual actions”, Individualism is of course something I know much about since my Hayek days (Frank Hahn called me 26 years ago “probably the outstanding young Hayekian”) but my experience has been mixed.

I have had quite long associations with three academic institutions, two in America, one in India. At the first, my academic work was attacked by a gang of what I have called “inert game theorists”, game theory being the prevalent fashion at the time, there was an academic freedom issue and I let it be; but on top of that arose the open and blatant sexual harassment of a woman graduate student by the department head, and my helping her, in a very minimal but essential way, contributed to the conflict. I did not fight it more than a bit and left (for BYU, where the Mormons gave me refuge and allowed me to complete my book, almost).

The second case, also in America, was one of outrageous collective targeting of my work as an academic and an economist by my national origin, even my purported race and religion, and when I did battle that, having immense faith in the American system, my adversary responded by demonstrated perjury, buying out my attorney (and getting caught doing it), and compromising the federal judge. Not good. Certainly my faith in the American system was shaken but *not* in America herself — why? because two of the greatest 20th C American economists, Milton Friedman and TW Schultz — gladly stood for me, and their testimony (ignored by the compromised judge) was far more important than anything else to me. I.e., it was these two American *individuals* (as well as several others less eminent but equally heroic) who allowed my faith in America to continue unshaken even though the personal experience of the institutions had been ghastly.

The Indian case is wholly different as it is a wholly different political culture for the most part. The issues are cheap and pathetic — fraudulent academic credentials, stealing money from the government, stealing money from students, stealing others’ property wherever possible in the knowledge you can get away with it, etc.

There is hardly anything of deep significance involved except it gives the lie to all the government and elite propaganda about how well India is doing — and in that context becomes relevant too what I did in America which came to Rajiv Gandhi through my advice to him in his last months:

Aletha Kuschan meanwhile, it was Abigail Adams’s sage advice to “remember the ladies”

Subroto Roy Indeed I do, and follow it; my best buddy, an old lady almost 86, is usually full of sage wisdom these days.

Subroto Roy What is the solution? It is, in my case. what I have said here: “A friend has been kind enough to call me an Academician, which I probably am, though one who really needs his own Academy because the incompetence, greed and mendacity encountered too often in the modern professoriat is dispiriting.”

Subroto Roy And what does such an Academy consist of in the Internet/Facebook Age? Big buildings? Naaaa…

Aletha Kuschan What would Socrates do???? WWSD — for short

Subroto Roy Quite so, what would Socrates do? His Academy today would be his Facebook profile and his blog. 🙂

Aletha Kuschan I get to be Plato — called it first!!

Subroto Roy LOL… Platoletha has a nice ancient ring about it…

Andrea Kent I think Aletha would be Πλάτωνίσ, and I would then be Ἀριστοτέλά, your devoted acolytes.

Subroto Roy LOL… 🙂 I actually was given the Roman name Subius Maximus myself by my buddy Bobbus Fluhartius, aka Bob Fluharty in Charleston WVa..