Friday, July 29, 2016

Legislating middleman’s ouster

The middleman tends to be eliminated . . . He can only be safely eliminated by natural processes. Sometimes he is of real use and helps production; sometimes he is not; but this cannot be decided by a blind strike, but only by allowing the forces of competition to act upon him.
[Hon. Auberon Herbert]

Every time Pakistan Muslim League (N) comes to govern in Punjab, it tries its hands at innovative approaches to solve some of the crucial problems facing ordinary citizens. But unfortunately all of them prove unproductive, consume resources wastefully, and leave the ‘attempted problem’ in a greater mess. An important case in point is the problem of public transport - requiring resolution since long. In this regard, every new innovation can be cited as evidence for its previous failure. It seems the Party is fond of focusing on public transport, and whenever it is in power, unsparingly goes for a newer innovation to solve it, and in the end when fails miserably, comes with another innovation. Ironically, the problem remains intact, rather gets complicated.

Other examples include Sasti Roti (cheaper loaf) Scheme, Danish Schools, and the latest innovation, the removal of the middleman from markets. Last month, it was reported in the newspapers that ‘the government is preparing a Punjab Agricultural Produce Marketing Act to ban middleman from fruit and vegetable markets and allow the purchasers and sellers to interact directly with one another.’ The official further disclosed government’s ‘comprehensive plan to establish modern markets in collaboration with the United States Agency for International Development (USAID).’

The details of the plan envisage: that ‘sellers and purchasers would be registered in their respective markets. Market committees would be authorized to charge a registration fee from them. Special Agricultural Marketing Boards would be formulated to control and regulate the affairs of the market. Market Committee’s fee ratio, which currently stands at 0.1 per cent, would be doubled, and the administrators of these committees would be elected by the stakeholders.’

This new innovation derives its inspiration from the age-old prejudice against the middleman. The prejudice declares middleman as an un-necessary link in the production-consumption chain. The product should come from the producer directly to the consumer, it fancies. Anyone putting himself anywhere between the producer and the consumer factually increases the cost and thence price of the product also. The innovative legislation meant to oust the middleman from the fruit and vegetable markets tries to do the same: bringing down the price of fruits and vegetables.

Let’s raise some pertinent questions to analyze the ‘scheme’ aiming at reducing the prices of fruits and vegetables. Does this venture (rather adventure! Wasn’t Sasti Roti an adventure?) require USAID to jump in with its Dollars? Yeah, but really it might have provided the cue to this project! Here is a pack of dollars, do you have a project to claim it, seems to be the motivation behind this venture. Assume it’s not the case. Assume the proposed legislation sincerely aims at price reduction. But has this legislation given thought to other ways of reducing prices? Has it done a cost-benefit analysis of the whole scheme?

Usually minds in any government are not mindful of such things. They never take into account unintended consequences of their actions. They think like gods: the day we enforce it, this is going to take place as we planned. Before this legislation comes into force, representatives of the Kissan Board have registered their objection. They have ‘pressed upon the government to continue with the current system since the new policy would affect thousands who were earning their livelihood by working as middlemen.’

Again, by this proposal, government’s own agenda stands defeated. Most of the governments, and almost all the political parties, which declare themselves as the self-proclaimed defenders of the poor use this argument, this time Kissan Board is making against this PML (N)’s provincial government. Why by this ouster leave thousands of families without their livelihood? Instead, the PML (N) government should promote the cause of the middleman and facilitate them. Aren’t they poor? But the ways of those who come to be in government are strange, devoid of logic and common sense as well. Aim at reducing the prices of fruits and vegetables and snatch livelihood from thousands of poor citizens!

However, the argument this writer wants to put forward is different. He considers middlemen a necessary link in the production-consumption chain. They are by default an indispensable part of the process of economic growth.

Any producer or grower would aim at earning more and more profit. If he is not a cheat, he would try to bring forth quality products at competitive prices to his respective market. To achieve this, he would try to keep the cost of his products lower, and most of the times producers and growers do not invest in making their products reach end-point consumers. They appoint agents or sole agents or distributors, or whatever arrangement is feasible. However, sometimes they do distribute their products but still not to the end-point consumers. That increases cost and requires specialization, at the least. It is only for the small producers, such as bakeries, who have their distribution in their hands, but again they just deliver their products to another link in the chain, the shopkeepers doing business in the vicinity of end-point consumers. When these businesses grow, they do have services of specialized distributors.

Not only comes the middleman in between the two points of production and consumption, but he is an essential part of various stages of both production and consumption also. Vendor industries, specialized importers, general order suppliers, etc, are necessary to facilitate the process of production. Who can ignore all important sectors providing various specialized research, consultancy and technical services to producers, traders, and distributors!

In view of this, the proposed legislation is but an attempt ‘to bomb the fruit and vegetable market to stone age.’ There is a producer and there is a consumer – bring them not closer, but face to face, and that will minimize or at best wipe out the cost of inputs by the middleman and margin of his profit also. That’s the fancy economics! But what about the cost of regulating this or that market? In this case, fruit and vegetable market, for which sellers and purchasers will be registered; they will be charged a registration fee; Special Agricultural Marketing Boards will be formed to control and regulate the affairs of the markets; market committee’s fee ratio will be doubled from 0.1 % to 2 %; and the administrators of these market committees will be elected by the stakeholders.

May one ask who will bear the cost of all this regulatory arrangement? No doubt, the end-point consumers in the name of whom and for the benefit of whom this very arrangement is going to be erected. Whether the middleman who is the target of this proposed legislation will be ousted or not is yet to be seen till this arrangement comes into force!

Before concluding, it is important to take up the issue from another angle. Let’s try to understand how fruit and vegetable markets work. These are specific, known places where sellers and buyers come to trade. Otherwise, they would be trying their luck here and there – sellers looking for buyers, and buyers for sellers. Those who own Addas (shops) in these markets, and are known as Thariyas (sort of platform for sellers and buyers to negotiate the deal), provide various services both to the sellers and buyers, but basically to sellers, and for this they charge in kind or a percentage of the proceeds from the sellers. These Thariyas fulfill a necessary function. Should sellers have no place to do their trade in a specific market, they will not be able to sell their products on competitive prices. Thariyas help them sell their produce. Sure, not every grower or one who brings fruits and vegetables to market can own an Adda in the market, or won’t find it beneficial to his business.

The second entity working in the market is Arhti – one who purchases quantities of fruits and vegetables in bulk either directly from the farmers or from other agents or traders who bring them to the market from far off places. Then, in turn, he using the services of the Thariya for keeping, storing and putting his items to sale, sells his purchases in smaller quantities to small vendors and shopkeepers. Why this link in this chain? What purpose does he serve? Thariya may or may not be an Arhti, but usually he is not, since this may increase his cost of doing business. The Arhti performs certain functions which Thariya would not like to. He sells smaller quantities to small vendors usually not on cash payment but through deferred payment which needs to be made on the next purchase or as agreed upon. The Arhti takes risk on two counts: first, he purchases perishable items in bulk; and second, he deals in deferred payments which may not be made at all or in due time. But he has to fulfill his responsibilities in the market regarding promises and payments.

In principle, these markets are open, there is no ban (but which the PML (N)) government proposes to put) on anyone not to purchase or sell this much or that much quantity of fruits and vegetables, and it is a genuine trade and rightful trading. It seems it is this link in this chain, the Arhti, (the explicit target of the government) which the proposed legislation aims at removing. Is government justified in this middleman’s ouster?

In point of fact, no link in any production-consumption chain is purposeless, unless it is created or imposed from without. Argument has this that it does serve certain function, otherwise other chain links would not allow it to remain there. The Arhti, the middleman, in the fruit and vegetable market connects the chain since he performs certain functions by investing and taking risks, and thus in his own position of middleman facilitates the efficient movement of fruits and vegetables to the end-point consumers.

Thus, the conclusion may not be far from truth that the intention of the PML (N)’s provincial government is mala fide and solely based on a prejudice. Also, it is no different from, and part of governmental traditions to plan and impose things on the market from without. May it be submitted to the PML (N) and its government that leave the fruit and vegetable market to work it on its own, and it will exclude any link which proves to be un-necessary to its working. Better the PML (N) and its government in Punjab focus on its duty of maintaining law and order, protecting person and property of its citizens, curbing the terrorists influence. And, finally if it is too fond of benefiting the ordinary citizens, it should put its energies to ensure competition in the market. In short, it should mind its own business, and let the fruit and vegetable market mind its own.

Note: This article was completed in February, 2011.

Tuesday, June 7, 2016

How to Privatize Successfully - Part II

How to Privatize Successfully - Part I

If privatisation needs to be done, it has to be done because it is the decisive step in transforming the economic system. Regarding foreign help Dr Klaus is very blunt: I think that the typical foreign help was sending would-be advisors and consultants. It became one of the most profitable businesses in the 1990s - to become a consultant and advisor in the transforming societies.

Their recommendations weren't useful and not very good. You have had some experience with troubles in South East Asia in the second half of the 1990s - it seems to me that it has become an accepted truth that it was a tragic mistake of IMF policies for all of what happened in countries like Indonesia, Malaysia and elsewhere.

And, he goes on: I remember I made a well-known statement that was repeated many times, and Milton Friedman called it 'Klaus Law.' I was forced some eight or nine years ago in the World Bank in Washington to accept, when I was still the Minister for Finance, a foreign assistance loan, a technical assistance loan. I said we are not interested in a loan for inviting consultants and advisors.

If you are ready to give us a loan to build something, some infrastructure project we can discuss it, but a technical assistance loan? I am not interested.

THE STORY CONTINUES: They were absolutely shocked because this was exactly what they wanted to organise - technical assistance, sending experts, entertained in the best hotels in Prague and spending most of their time in the lobby bars of those hotels discussing transformation. And I quite innocently made a statement, which became quite well known. I said, "No, I am not ready to pay hard money for soft advice." And Milton Friedman called it the 'Klaus Law,' which I like very much!

As to the objections on the mechanism of privatisation from its own protagonists, Dr Klaus speaks from the point of view of a government (but sure a limited government): We were confronted with an enormous naivety with regard to the formation of legislation, its enforcement and the relationship between formal legislation and informal rules, etc.

And we have been especially criticised for our inability to create perfect legislation. I have to argue that there is no perfect legislation. You have parliaments just for the fact that you need to make changes to and add new legislation to improve it - to fill some of the gaps and holes in the legislation - it's a permanent evolutionary process in any country in the world.

He further states that the formation of legislation is and must be slow. It can't be just a quick process. I must say that what I consider to be very important is that legislation is the outcome of the process of evolution; it is not of anyone's dictate (and if it is dictate, it plays havoc as has been the case in Pakistan. Khalil).

As you know very well, legislation is not the outcome of abstract rationalism. Legislation is the result of a very complicated political process, a very very human political process. You don't create legislation by picking the five best lawyers from the best universities and asking them to "Please be so kind as to give us legislation." It is discussed. Every sentence is discussed, in your and our parliament.

And, he admits: I'm sure you know very well that legislation is influenced not only by political or ideological arguments, but by vested interests, by lobbying, by what we economists call 'rent-seeking' activities. So there is nothing quite like a body of legislation, which you can simply transfer from one country to another and decide that this is true. There is just one example of such a transfer of legislation in modern history, and you probably know what I have in mind - the reunification of Germany.

It was even the identical language. Even to translate the legislation, I can tell you is difficult. And it was the same language, so it was easy just to announce that the next morning the old legislation is no longer valid and the new legislation is valid.

And he hastily adds: I always say that our critics probably assume that we are still a totalitarian state, where the appropriate legislation can be simply introduced. But we know it is a very complicated political process.

This is how Dr Vaclav Klaus, an economist and politician from the government, sees the whole process of transition including privatisation. But, sure, if we need free markets and do not need over-regulation or a paternalistic welfare state, we will have to go for the three liberalizations knowing well that no single liberalisation can bear fruit.

In the context of privatisation in Pakistan, following points are of utmost importance:

1. Changing the economic system (in Pakistan also) is not an easy task as it involves conflicts of interests, ie it threatens vested interests. Hence, it needs a principled stand and a will to bring it about. It must be taken as a matter of policy.

2. Privatisation is part of an overall economic change, and a very important one; but it will be of no use in the absence of price, trade and business liberalizations.

3. As in other cases, in doing privatisation also, government makes mistakes unintentional as well as deliberate.

4. Government must be criticised for the mistakes it makes; not only criticised but brought to the court as happened recently in the case of Pakistan Steel Mills privatisation; and the functionaries must be made responsible, fined and punished.

5. If privatisation is to be done, do privatise all of the business enterprises, and let there be a competition. Keeping some selected enterprises with the state with a privileged status will hurt the competition.

6. The cost of transition, or say privatisation, must be kept in mind.

7. The privatised units may or may not succeed; as un-protected private sector, in sharp contrast to protected public sector, faces cut-throat competition, and, as happens with such businesses, may meet failures.

8. Like all other legislations, privatisation legislation may be wrong, manipulated, manoeuvred, vested, rent-seeking, etc, and its implementation and execution partial or flawed or skewed, but what is needed: it must be discussed, exposed, brought to the court, and improved.

Finally, (and so far no one has been making this point) it must be demanded that as privatisation is lessening the size and burden of the government; in turn, burden of taxes on people must also be lightened. This will spur both growth and development.

Note: This article was completed in July 2007.

Tuesday, May 24, 2016

How to Privatize Successfully - Part I

Changing the economic system is not an easy task. And, of course, it is more complex when carried out half-heartedly. As privatisation is only a part of this process, it may not succeed if done in an isolated manner. It needs certain other changes and a competitive environment to bear fruit.

A case in point is Czechoslovakia. It provides us with a very good learning experience to see how after the fall of a collectivist state the gigantic task of changing the economic system was handled.

Presently, Dr Vaclav Klaus is President of the Czech Republic. He was Prime Minister from 1992 to 1997. Dr Klaus was one of the key members of a movement, Velvet Revolution, which overthrew communism in Czechoslovakia and one of the founders of the Czechoslovak Civic Forum Movement, the leading political organisation following the Velvet Revolution in 1989.

He was the first non-Communist Finance Minister of Czechoslovakia. He is a highly awarded economist and politician, with many publications and awards, including the Schumpeter Prize for Economy. He is of the opinion that it is much more difficult to change the economic system. The starting point of this change in Czechoslovakia was liberalisation and de-regulation of markets.

This move consisted of three main liberalisation's:

i) price liberalisation, ii) trade liberalisation, and iii) business liberalisation. As to the price liberalisation, he says for others it is difficult to imagine but for 40 years people in Czechoslovakia had totally frozen and administered prices. So liberalising prices was a dramatic shock.

Making a comparison, he says Australians spent years or decades discussing liberalising the price of milk in Australia! But in Czechoslovakia they didn't have just one case of milk! They had hundreds, thousands of prices with possibly the same impact upon individuals in different groups of society.

The second move, trade liberalisation, was also a dramatic one. It meant opening the country after 40 years of semi-autocratic and protected economy. And, the third one was liberalisation of entry into the market for all types of enterprises, both private and foreign.

He says these three liberalisation's represented the first stage of transition, and not only changed the whole society but enormously increased the supply of goods and services also. It effected an equilibrium in the market overnight. It interrupted some of the old, deeply built-in behaviour of citizens; it attacked and endangered various old habits they inherited from the communist past.

He readily admits that realising such changes was socially difficult, politically relatively brave but technically easy because most of the measures required just had to be announced. Again citing the case of milk price, he says that to deregulate or liberalise the price of milk Australians, or for that matter anyone, don't need sophisticated theories.

Don't need the involvement of university professors or experts on micro- or macro- economics. It is sufficient to meet at eight o'clock in the evening and to announce on TV that tomorrow morning at 8am the price of milk is free to move. That is what they did in Czechoslovakia.

However, he says, the second stage of transition was not an easy one. It required more positive and constructive activity from the government. Because, it was necessary not only to introduce such passive transformation measures, but also to implement some active measures. It was necessary to build, establish new, and/or transform old institutions and organisations.

And, of course, he rightly admits, the crucial point in this respect was privatisation. But, it was really impossible to wait for the slow emergence of hundreds and thousands of private enterprises - built starting from nothing - and for the slow disappearance of state-owned enterprises which eleven years ago in former Czechoslovakia represented almost 100% of the whole economy. He emphatically says: So we had to privatise. It's an accepted exercise.

Here it is quite relevant to repeat a story that he tells: in one of the conferences of Mont Pelerin Society, he met one Polish guy who was the second member of the Society following him from the post-communist world.

He wrote a very interesting study suggesting that privatisation was a mistake. He is unique, he is alone in this. But do you know why? His disbelief in the capabilities of the government is so absolute that he even wouldn't let the government privatise - that's really rather revolutionary. But he is alone in this respect.

Dr Klaus's narrative of their privatisation is but immeasurably instructive. He says: We had to privatise, we decided, and it was necessary to privatise the state-owned firms on a massive scale, on a wholesale basis, not just individual firms.

This is something I always have to repeat and to stress because everyone compares privatisation in post-communist countries with privatisation in France, Sweden, the Netherlands. I am not an expert on it, but I always say that the brave Margaret Thatcher privatised three or four firms a year, whereas we had to privatise three or four firms per hour! Because otherwise it would have taken a century to do that job. For that reason, we had to use some non-standard methods of privatisation; we had to do experiments and different exercises.

So privatisation in Czechoslovakia was extremely difficult both politically and technically. Rather he says: I'm sure that in any country as well, whatever the government does, the politicians are accused either of favouritism - of selecting inappropriate owners - or of not getting the best or highest possible price.

In any individual case, in any Western country, this is the case. When I look in Europe at privatising Air France or privatising one firm in Belgium or one in Sweden or the Netherlands, or elsewhere, it is the same story.

So we [the government] were definitely the perfect option for such criticism because in thousands of cases, some were successful and some were not successful. Some of the future owners succeeded fully, some did not. Some immediately tried to get rid of the assets in a rather cheap way and so on.

But, if privatisation needs to be done, it has to be done because it is the decisive step in transforming the economic system. So, in Czechoslovakia too, Dr Klaus says, privatisation was done and it was the decisive step. It was like crossing the Rubicon. The political costs were unavoidable but it had to be done and to be done as quickly as possible.

Relating other aspects of privatisation, he says: The problem is that the people in my country and elsewhere probably assumed, that because of the undisputed efficiency of the private market economy as compared to the command economy or centrally planned economy, that every firm and economic activity had to succeed.

You know very well that it's not true even in a major, stable, developed economy. And of course it is much less true in an economy in transition with a dramatically changing economic environment, in competition with much stronger partners from the rest of the world, and without sufficient experience.

As is said, "There are no free lunches," Dr Vaclav Klaus reminds that there are no 'free' economic transitions. The 'economic transition' is a very costly process. It's an investment and usually, just like any investment has costs and benefits and the business people know that usually when you make an investment, you pay the costs first and you may get the benefits with a considerable delay. The transition from communism to a free society was an investment in some respects, and the costs were really enormous.

Also, he makes a mention of the size of the costs his country had to go through. And, according to his estimates, in his country they were lower than in other countries. In the first three years of transition they lost one third of their industrial output - one third.

As he says if we take all of the business people, two would succeed and one would collapse. They lost one quarter of their agriculture output - one quarter - and they lost one fifth of their GDP -and it was lower than in most of the countries in transition.

So in Czechoslovakia too, transition and privatisation were connected with many business failures and the one who was blamed was the government, of course, not the individuals owning and managing those firms. He tells that it became fashionable to argue that the failures were caused by unsuccessful privatisation and an insufficient legislative and institutional framework.

And, he admits, there is no doubt that both privatisation and the formation of new legislation of market accompanying institutions was as imperfect as any human activity. But the main problem, in his opinion, was that the citizens were not prepared to accept or to live with the phenomenon of a business failure, both at micro and macro level.

As to foreign help in the process of transition, he tells that sometime back he was asked to give a speech together with German economists to compare the transition and transformation of Germany in the 1950s and the Czech Republic in the 1990s.

He says it was a very interesting exercise; one of the differences was really the fact that there was huge foreign help to Germany. We didn't get it, we have really got nothing in the last ten years, and we didn't ask for it. The role of the rest of the world in this respect was really zero.

Note: This article was completed in July 2007.

Monday, May 2, 2016

Pakistan – victim of a dangerous theory of knowledge

He knows nothing; and he thinks he knows everything. That points clearly to a political career.[George Bernard Shaw, 1856-1950]

People are difficult to govern because they have too much knowledge.
[Lao Tzu, 604 BC - 531 BC]

Underneath our views of everything lies a theory of knowledge.

We have views about the world, and what exists in and beyond the world. We have views about man, his nature, his destiny, and his place in the society and the world. We have views about society, about people and about the things people believe in and do not believe in and about things people do and do not do. We have views about everything. Sometimes we are aware of the implications of our views and sometimes not. But most of the time we are never aware of the theory of knowledge lying behind our views.

We make a cultural conviction: The onslaught of Western media is ruining our values. We express an economic view: Concentration of wealth in a few hands is dangerous for the society. We utter a political statement: People of Pakistan are not fit for democracy; they are worth a dictatorship. All these statements are based on certain theories of knowledge.

Let's analyse the political statement. Just as most of the elder people in Pakistan believe that younger ones must not be allowed freedom, they need to be dictated in everything; because they will make mistakes, harm themselves, and will be misled. Likewise, the intellectual, economic and political stalwarts preach that people need not be given free choice; it will put them in the way of harm, and they will not be able to use this freedom positively and constructively. And the governments in Pakistan practice this philosophy.

The political statement derives its strength from this knowledge: that people are incapable of living life independently and responsibly; so they need to be supervised and controlled in their choices and behavior. Further, this presupposes that some people are endowed with higher reason while most of the lot have no grain of reason. They will harm and kill themselves. Thus making use of this theory the few selected ones seize the freedom of others.

I remember a chat with a graduate student that surprised me to the utmost; but it helps us realise the social stratification embedded in our mindset. Also, it is this thinking that makes us believe and think and practice that this stratification must be kept in place at any cost. This is a sort of intellectual elitism. The student was contending that individual freedom will lead people astray, they need supervision and control. My view was that freedom will ultimately make them learn and behave responsibly. He was sharp enough to derive the conclusion: Then, they all will become wise. The fear he was in was not that all the people will become wiser, but that he, a wise one, will no more be wiser than others.

This is just one aspect of the theory of knowledge in vogue in Pakistan. On one level, this theory states that elders are know-it-all. Sure, by elders are meant those who are older in age. This cliche also helps keep the authoritarian structure intact. Respect and obey the elders! Why only elders? Why not everyone, be he a kid or a young one or an old one? Everybody needs and deserves respect irrespective of his age, gender, status, or any distinction or discrimination.

This theory of knowledge, on the one hand, implies that age and particularly life-experience make older people wiser, they must be respected and obeyed; on the other hand, it defies the facts of experience of humanity that reason, understanding, wisdom, knowledge are not characteristic of age or life-experience. These faculties may be attained in any age (of course, not in childhood) and with little or no experience at all. Or, it may be added that, as almost all of the elder people are not wise or knowledgeable, only a fraction of them could be counted as such.

Another aspect of this theory of knowledge, and the most dangerous one, is that the one who is powerful is right. It is fatally implicative. That the powerful is the wisest one! That the powerful is the most knowledgeable one! That the powerful is the omniscient one! That the powerful is the Truth!

Be it known here that powerful is not only the one who is the mightiest, but he is one also who happens to exercise any authority, rightfully or wrongfully. This authority may be derived from age, or claim to life-experience, or social or monetary status, or degreed knowledge, or power, be it military or physical, or any such things, or even to claimed honesty and piety.

As political leaders and dictators issue declarations that they honestly want to help the poor; or as generally people opine in Pakistan that our country needs some honest leaders and rulers; I am forced to thinking that as 'with fine sentiments bad literature is made,' with fine feelings bad government is made. This is yet another aspect of the theory of knowledge under discussion: that the honest and the pious one is right; he is knowledgeable; he is wise; and, he is the possessor of Truth.

Actually, all these and other theories like these try to base knowledge on the source from where it is issuing, emanating, and endow the source a status of authority. Its argument goes thus: because the authority says so, it is right. In political arena, the most glaring example from the recent history of Pakistan is the doctrine of necessity. Since a powerful one has done the act X, the act X is not only right, but it must needs be righted. This opens the way to a life of might is right. What we are experiencing today in the form of rule of the influential elites is this life of unreason and un-freedom.

The implications and consequences of such a theory of knowledge are far reaching and most destructive. In the first instance, this blocks the search for Truth in every domain of life and learning. This confines knowledge to some individuals and to some cliches. This kills the urge to a happy life. This sows in people an unyielding appetite to live the life of others and not their own; and as a result, they are intent upon controlling and dictating other people. This creates an oppressive state inside every individual within an oppressive state. They become a reflection of the state they live under. This is the most dangerous state of affairs since this turns every individual at war with other individuals.

The theory of knowledge that can bring us out of this inhuman situation is actually no theory of knowledge. This is a better option because that theory will be competing with the other theory and basing one's ideas and behavior on such a theory the status of which is yet to be determined is dangerous too. This no-theory-of-knowledge is just a way of living; or it may be termed a theory of conduct. This is like agreeing upon some initial code of doing something before setting out to doing that something as a learning experience.

American pragmatist, John Dewey, was right when he said that the 'most pressing problem of humanity is living together'. Unless one renounces social life, he is bound to live among people very unlike him. Personally, I think that the most difficult learning we obtain the most difficult way is that people are different from our own selves. To reconcile with these differences and accommodate with these people with these differences is what we need to learn to live a happy life.

All this entails a theory of conduct: that we ought to behave in a manner that does not interfere with other persons' freedoms. In other words, this amounts to saying that every individual is endowed in himself with certain freedoms that no other person can lay claim to other than he himself alone. For sure, every one of us has a claim but to his own life; that no person owns life of other person/s unless they authorise him to do so. Likewise, everyone is free to live as he wishes and do as he likes provided he does not intrude into such freedoms of other persons. This theory of conduct holds true in every domain of life, be it social, political, economic or any other. Indeed, this leaves undisturbed the state of other theories of knowledge, lets them compete with one another, and to be discussed, debated, refuted and adhered to by its proponents and opponents alike. But one thing it does not submit to is encroachment upon these freedoms of any person irrespective of his age, gender, beliefs, status, and distinction or discrimination.

Of course, now to protect these freedoms of every individual we need an authority. This authority is nothing but Law. This law provides for these basic and inalienable freedoms to all equally. The law that curtails or limits these freedoms in any way is repugnant to its own purpose. This kills its own spirit. The people who are invested with the authority of using these laws are bound by the same laws. They are not free to act and behave as they choose. They are not kings, or rulers; they are simply in a contract with the people whose freedoms they are supposed to protect. This makes them responsible and liable to the lawful authority instituted by the law of the land. In case of any violation, they are to be tried by the same laws like everyone else. Sure, they are not accountable to the people they have been obligated to serve. They are the offender of the law and it is only law that can put them to any trial.

Now it is these laws that provide for the establishment of various institutions and see to it that these institutions run independently and within their mandated jurisdiction, and that no outside influence intervenes with their functioning. Actually, these institutions form and determine the life and soul of a society, its overall health. If the institutions are made to bow down before the rulers, be they dictators or democrats or any other individuals or groups, or if the institutions play to the whims of the powerful, this is definitely symptom of a sick society where a happy life is not possible. Probably, it is this context that helps explain why an individual cannot live happily even in isolation under such circumstances.

Till this March 09, Pakistan has been a chronically sick society produced unseemingly by a dangerous theory of knowledge discussed briefly in the above paragraphs. But after this March 09, Pakistan is a patient with the hope of a fast recovery. I say hope, because if this hope dies, the patient will lie dormant for a long time to come. Isn't it the clearest silver lining that sixty years' history could not cite an instance of 'NO' to the rulers from the most important institution of Pakistani society, the Judiciary; and now there is a 'NO', the first ever 'NO' from the judiciary of Pakistan and lo that has been taken up like a symbolic flag first and foremost by the community of lawyers and mediamen secondly? As it is beyond the pale of power politics that is why political parties are in the process of being exposed on this issue of 'NO'. They know very well they too cannot afford this 'NO' from the judiciary, and sure they do need a subservient judiciary.

But there are other lessons also: first of all, people have forsaken the fear of saying NO; they have come to know that there is a community clad in black coats and another community with pens and mics in hands and cameras on shoulders that can face the powerful elites ruling over Pakistan exclusively; they have come to realise that it is the emancipation of the judiciary from where the process of rebirth of a new Pakistan may set in motion; they have come to feel the importance of the moment as has been phrased as the 'defining moment'. It may be noted here that these lessons kindle another hope that will survive the death of the judiciary in Pakistan if it happens.

So, if the judiciary emerges triumphant out of this battle, it will have to take up many tasks to help a new and truly free Pakistan to be reborn. The first task is to ensure rule of law in Pakistan. The second is to ensure to the people of Pakistan their fundamental rights provided in the constitution of Pakistan. This is what people in return expect from the judiciary: it must protect their life, their property, and their basic inalienable freedoms both in the first instance from the encroaching state, and then from encroaching groups and individuals.

Not only this, people also unknowingly want such changes in the constitution which will ensure to them their inalienable freedoms such as freedom to think and express themselves, freedom to earn and spend as they wish, freedom to pursue happiness as they choose, and freedom to live freely. It will be an uphill task for the judiciary to protect people from elite groups of various sorts: social, cultural, intellectual, religious, political, and economic.

In fact, the judiciary will have to show clearly that it is no part of any theory of knowledge, this one or that one; or it is no accomplice in the promotion or pursuance of any theory of knowledge whatsoever. If it happens to be a party to any theory of knowledge, it will be a fatal blow to the spirit of humanity our society is already short of because since 1947 Pakistan has been a victim of above-discussed dangerous theory of knowledge that deprived its people of all what was human in human beings, and made them a people with no values at all. This means that the Judiciary will have to stick to the theory of conduct instead. It will have to make sure that this theory is taken and implemented in letter and spirit fairly and strictly. In other words, it will have to protect the inalienable freedoms of the people of Pakistan. It should get ready and prepare for the same!

Note: This article was completed in March 2007.