Proportional Tax – A New Method of Corporate Taxation

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Note by

Dr. Ashok Malhotra, Ph. D. UBC Canada, B. Tech., M. Tech. IIT Delhi

Abstract:

A new method of corporate taxation termed proportional tax is described. It is simpler than existing methods of taxation yet it appears to be powerful in implementing economic policy and directing corporate behavior in desirable directions. Proportional tax for corporations is different from proportional tax for individuals. While proportional tax for individual implies that they pay the same proportion of income as their tax, whatever is the level of income, for corporations it implies that they pay a tax at a rate that is proportional to their net profits.

Introduction:

While communism appears to have failed in most countries, capitalism has been more successful in meeting human needs and improving the quality of life of humans. However, it has not been an unblemished victory for capitalism. Problems have occurred because of an excess of greed or because of use of unethical practices to satisfy that greed. It may be pointed out that unethical practices are frequently more insidious than illegal ones. Illegal practices can be dealt with by law but it is impossible to deal with unethical practices until new laws are created to cover them. The huge compensations, bonuses and severance packages that senior executives of some corporation draw fall in the realm of unethical practices. It has led to the financial crisis of 2008. Unfettered greed of corporations have also led to rising inequalities that have forced some to homelessness while the wealth of the world has been captured by fewer and fewer individuals.

Various mixed models that combine elements of both, communism with capitalism, have also been attempted in parts of the world. Some of these have failed such as those employed in the period between 1950 and 1990 in India while some have done fairly well as in Scandinavian countries.

Whereas communism depends upon the state to provide goods and services, capitalism depends upon individual initiative to meet the same needs. Except for minor goods and services on a small scale that can be produced by an individual or an individual family most goods and services require that humans get together to create organizations for the purpose. Such organizations as legal entities are corporations and they are the main stay of a capitalistic economy.

It has been recognized that capitalism cannot function without regulation, for example preventing the development of monopolies that eliminate competition. If national economies have to continue with capitalism they must continuously evolve new practices, laws and regulations. It must be pointed out that whatever the economic model used, it is a tool to serve humans and wherever that purpose is defeated, resulting in inhumane consequences then economic activity degenerates into a tool for exploiting humans rather than serving them. While regulations control undesirable behavior of corporations, they also make life difficult for other corporations that may be behaving perfectly well. Thereby regulation also hampers economic activity. Therefore, in designing regulations care must be exercised towards simplicity and ease of application of the regulatory regime. In the present connected world, it is a wise course to study best practices of other countries and adapt these to suit one’s needs rather than inventing new practices that may turn out to be unsuccessful in the long run. However, this does not mean that new regulations need not be explored. Human innovation is an ongoing process just as human evolution is. It is with this in view that a new way of implementing corporate taxes is introduced briefly in this note. The simplicity of this new idea is such that it neither requires a lengthy explanation nor support by several other studies and references.

The new method termed Proportional Tax is simple to apply; in fact it is simpler than existing methods that have graduated discrete slabs. Aside from being a way to tax, the new proposal may also be used as powerful tool to discourage some of the worst practices of capitalism while encouraging the best ones. This new method was born out of a somewhat informal note by this author elsewhere called the ‘Rule of Ninety’ and it may also be referred with this latter name. It may be pointed out that the new proportional tax is specific for corporate taxes. Analogous methods do not apply to individual taxes.

Corporate taxes

Most countries impose corporate tax, also called corporation tax or company tax. Generally corporate taxes are charged as a percentage of net profits after allowing for certain deductions. Rates may vary between ten and fifty percent in most cases. While corporate taxes are an important source of revenue they are also used as policy measures, for example, exempting a certain industry such as the renewable industry from taxes or charging a graduated rate of tax to encourage new small businesses. However, existing methods of taxation are a limited tool in implementing policy. For example, they cannot prevent development of huge corporate monopolies on their own nor can they prevent excess profiteering. The new method called proportional tax can do all that existing methodologies of corporate taxation do, while doing much more to control corporate behavior in desirable directions in a straight forward and simple manner.

New Proportional Tax:

Proportional Tax implies that rate of corporate tax is proportional to net profits, NP, in a continuous manner rather than in discrete slabs. A constant of proportionality is required to determine the tax rate. Aside from the proportionality constant the new method may also prescribe a minimum threshold rate of corporate tax to prevent near zero rates of taxation for companies making small profits. It will be shown that this simple method has powerful mathematical properties that make it a powerful tool in the hands of policy makers and the public.

Consider,

Rate of Corporate Tax = 100 (Net Profits/M)

The constant of proportionality, M, here is shown as an inverse constant in order to give it a physical meaning. M may be visualized as the net profit of a reference virtual mega corporation that has a very large profit, larger than the expected profit of any other corporations in the country. Thus if a company makes one fourth the amount of net profit as M then its corporate tax rate shall be 25 percent as per the given formula.

Image

Figure 1 illustrates how corporate tax rates vary with net profits in billions of dollars. In this illustration, M has been selected as ten billion dollars. If a minimum threshold tax, T is selected as 20 percent and if M has been chosen at the outset as a suitably high number e.g. two and a half times the maximum net profit of any company, then tax rates for all companies in this example shall vary within a narrow band of twenty and forty percent. Different rates of tax can be promulgated depending upon choice of M and T. The variation of rates is a simple linear one but its ultimate effect on corporations is far from linear as shown next.

Proportional tax for corporations is different from proportional tax for individuals. While proportional tax for individual implies that they pay the same proportion of income as their tax, whatever is the level of income, for corporations it implies that they pay a tax at a rate that is proportional to their net profits.

Profits after Tax

Image

 

Profit after Tax termed as P here as different from the net profit, NP before tax is

P = NP – NP (NP/M)

Figure 2 shows how residual profit after tax, P varies with net profit, NP, if M= 10 billion and T = 0. The unique feature of this variation is that beyond a certain level of net profits, residual profit of a company begins to fall and in extreme cases becomes negative. This very feature of the new proposal is a powerful controlling mechanism that may be used if a country wishes to reduce the size of certain corporations e.g. banks that might become too big to fail.

All companies would like to make the highest possible residual profits. However, they will be obliged not to charge such a high price for their products, even if they can, so that net profits increase beyond the point that their actual profit reduces or even results in a loss for the company.

Choice of constants M and T

Constants M and T can be chosen for the economy as a whole or they may chosen as different for different sectors of the economy. Thus if a country feels that a monopoly has developed in the automobile sector and other players need to be encouraged, it may set M as a value equal to the expected profit of the particular monopolistic automobile company. That company would then end up paying near hundred percent taxes while newer smaller players will be encouraged to develop with lower rates of taxes.

It must be noted that since tax rate depends on net profits, the single large automobile company can still keep new players out by bringing down its prices and reducing its net profit in order to maintain a high residual profit. But that is something that will benefit consumers. It is good corporate behavior in the interest of all. This type of monopoly needs to be encouraged rather than discouraged since it has become self regulated from within rather than from competition.

Conclusions:

A new way of applying corporate taxes called proportional tax is described. An appropriate choice of parameters, M and T, is required in the new method of proportional tax, for different sectors of the economy or the economy as a whole. The new method appears to be a powerful tool to manage corporate behavior so as to bring out its best its best while discouraging practices that are detrimental to society at large. It merits further study by economists and policy makers in order to explore its full implications before implementing as a new corporate taxation method, if desired.

Symbols

NP, Net Profit
P, Residual Net Profit profit after tax
M, An inverse constant of proportionality
T, Minimum threshold tax rate

References

1.Steven A. Bank (2011). Anglo-American Corporate Taxation: Tracing the Common Roots of Divergent Approaches. Cambridge University Press.

2. The Corporate Income Tax System: Overview and Options for Reform, Mark P. Keightley and Molly F. Sherlock (2014), CRS Report for Congress, Prepared for Members and Committees of Congress ( Report available as an online Pdf document)

How to control Global Warming and Climate Extremes

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Even if climate changes are a part of a natural cycle, if climate can be improved, why not? Most certainly mankind has done a lot to damage the planet in the modern industrial age and it can certainly do a lot to reverse that damage too, provided first of all, it knows what is the right thing to do.

by
Ashok Malhotra, Ph.D. UBC Canada, B.Tech, M. Tech. IIT Delhi

Climate Change

A widespread belief prevails in the modern world that the planet is becoming warmer and that more climate extremes are taking place. This belief spreads from the scientific community to the ordinary inhabitant of the planet who is regularly informed by media. A climate extreme happens, for example, when a hundred year record of rainfall, drought, heat or cold is broken in some region or other of the world. While some maintain that all this is a natural part of solar system changes, others hold that it is because of human activity. There is no doubt that the planet has seen unprecedented changes over the previous century and a half as human population has sky rocketed to its highest level ever. Technological changes have swept across the world and resources gathered by the planet for millions of years such as fossil fuels are being exhausted over a brief period of a few centuries while their use adds previously buried carbon to the atmosphere. While some parts of the world such as Canada would welcome the warming trend, few would welcome climate extremes because in a large number of cases it plays havoc with human lives and orderly planning.

The most relevant question at hand is: if climate extremes or global warming is taking place what can humans do about it?

Carbon Emissions

When fossil fuels are burnt carbon dioxide is produced and added to the atmosphere. Over the past century its levels have risen from around 200 ppm in the atmosphere to the current 400 ppm. International efforts are on to limit the increase of carbon emissions in the atmosphere by a variety of measures that include use of alternative energy to carbon caps and taxes. Whenever a carbon cap is considered the question also arises if it should be on a per-country basis or a per-capita basis. The obvious answer is that it has to be on a per capita basis because it takes a certain amount of energy to feed a mouth and a certain amount of energy to house and clothe a human. Any other basis of capping carbon would only be interpreted as an unjust domination of the powerful on the poor.

However, before such economy crippling measures are considered it is more important to consider the question, if carbon dioxide is really responsible for climatic woes. To the layperson it seems obvious that it is, because carbon dioxide is a greenhouse gas. However, there is more to the story than seems obvious.

What is the Best level of Carbon Dioxide in the atmosphere?

Do we need more carbon dioxide or less on the planet? In order to answer that question properly, it would be useful to ascertain what is the best level of this gas in the atmosphere as regards the long term well being of all life on the planet – plants, animals, and humans. The present level in the atmosphere is around 400 ppm. Studies have shown that a level of around 1000 ppm is best for plants. Therefore it seems that at least from the point of view of the green side of life, we need around two and a half times our present levels. At a time when most evolution of life took place on the planet, the carbon dioxide levels were much higher. During the Cambrian period that saw an explosion of new life forms, it was around fifteen times as high. Most of that evolution took place in the oceans that prospered hugely by the increased dissolved carbon dioxide even though the oceans may have had fewer coral reefs. The higher ph levels were a breeding ground for life and that is expected as both carbon dioxide breathing life forms and oxygen breathing ones prospers in cooperation. Some 200 million years ago when carbon dioxide levels were 4-5 times present levels earth became a virtual Garden of Eden. The period saw the rise of giant fern forests.

Some scientists have ascertained that mineral and protein percentage of some vegetables and fruits is lower if the carbon dioxide ppm goes up although plants grow healthier and faster. But that is obvious, a skinny chicken has a higher percentage of bone as compared to a healthy chicken but one would still prefer a healthy one.

Therefore should we look for ways to increase carbon dioxide levels to around 1000 ppm from the present 400 ppm? It has been rising in any case on the planet because of burning of fossil fuels but it does not look like the planet has enough fossil fuels to burn to reach that level and burning forests to achieve the same end would be counter productive. Further as we run out of fossil fuels a point would be reached when alternative energy will become cheaper. That is the point when humans would stop using any remaining fossil fuels irrespective of what others say.

However it must be recorded that the full impact of a higher level of carbon dioxide i.e. 1000 ppm on the full global ecology including the oceans needs further study.

Certainly when a fossil fuel is burnt much more than carbon dioxide is released and air pollution occurs. However, that air pollution is localized in time and space. The present discussion is as regards long term global issues. The local issues have to be dealt with primarily at the local level. The gap between renewable energy and conventional energy costs is closing rapidly and it is costs that ultimately dictate what form of energy humans use. One cannot prevent humans from using the cheapest available source of energy especially in the developing world where because of lack of development malnutrition still prevails. Therefore it does not look like the planet can reach ideal levels of 1000 ppm of carbon dioxide in the atmosphere anytime soon. Mankind would just have to learn to manage with less.

But critics argue that carbon dioxide is a green house gas and this would lead to global warming. Let us consider that next.

Would more Carbon Dioxide lead to Global Warming?

Critics argue that carbon dioxide is a green house gas and this would lead to global warming. However, before we decide if this amount would lead to global warming. Let us become more precise. It is no use saying that Atlantic Ocean will become more salty if we add a pinch of salt to it. No doubt the Atlantic Ocean will become saltier but if the additional saltiness has any practical significance or not can only be determined through further calculations. 400 ppm is around .04 percent in the atmosphere. A rough calculation carried out by this author several years ago showed that if we increase carbon dioxide by 1% in the atmosphere it could lead to a one degree centigrade rise in the worst case scenario that includes other chain effects due to increased absorption of heat. Therefore, if the present 0.04 percent level became two and a half times to 0.1 percent or a 1000 ppm the rise in temperature because of this effect would be less than 0.1 degree centigrade, an insignificant amount compared to other natural temperature changes. This author would like a recheck of these calculations by atmospheric heat transfer scientists and would like to hear of it as a comment to this post.

It may also be mentioned for a lay person that when carbon dioxide is talked of as a greenhouse gas one should not conjure a vision of a greenhouse made of glass, a dramatic vision inspired by popular fiction on the topic, that traps in much more heat radiation from low temperature sources while letting the suns heat pass in while also limiting convective current losses, but even if one insisted on thinking of it as something similar, than think of it as a green house that has only 0.04 percent (the amount of carbon dioxide in the atmosphere) of its roof installed.

But what about the heuristic correlations that have been made by scientists and some politicians like Al Gore on a statistical basis without having to calculate? These are estimates that are obtained by statistical analysis and by drawing a graph between increases of CO2 over the last 100 year against temperature rise. It shows a much greater correlation than the calculated one degree rise for one percent rise in carbon dioxide. However statistical correlations can mislead. For example, if one correlated how many times the nursery rhyme Humpty Dumpty was sung in kindergarten schools and correlated that with temperature rise one might end up with a correlation too. While nursery rhymes are not a relevant parameter here, the numbers of trees on the planet are. Let us consider that fact now.

Deforestation

Aside from an increase of carbon dioxide over the last 150 years an unprecedented amount of deforestation has also taken place on the planet during the same period as forests have been cleared for agriculture and urbanization to feed and house a growing population.

If we correlated the amount of green tree cover on the planet with temperature rise it appears that one gets a much better inverse correlation with global warming, i.e. the lesser the trees the warmer the planet. On the whole, global temperatures appear to have gone up as the green tree cover on the planet has reduced for urbanization and agriculture over the last 165 years.

Global warming does seem to be taking place (even if it is only one degree in a century), it does appear to be because of human activity and the most likely human activity causing it appears to be a depletion of tree cover on the planet rather than increased carbon dioxide levels. But if that is the case then why are the scientists silent? Why do many stop at saying that there does appear to be global warming due to human activity but stopping short of elaborating what that activity is, leaving the public to jump to a conclusion of the greenhouse effect of popular fiction? Well the emperor has new clothes that everyone is going ga-ga over, as the emperor moves proudly through the streets strutting his stuff and the dress makers sit in a corner smiling silently not willing to let out the secret so as not to spoil the fun.

A growing population does need more food and land for agriculture but if an emphasis on growing food producing trees is now made, the pressure on increasing agricultural lands would decrease. Besides, there is a still a lot of barren and saline land on the planet that is being used neither for forests nor agriculture. It is a myth that trees cannot be grown on saline lands provided the right trees are selected (check out an online reference at the end of this note). Within our cities too we can do with less concrete and more trees. Every additional tree helps.

Climate Extremes

An even more serious concern than global warming is climate extremes. It plays havoc with human, animal and plant lives in many cases though not all a previously desert region in the north-west India (Barmer) suddenly developed lakes and reservoirs of fresh water when a five hundred year record of rainfall was broken. Here it seems that while miniscule amounts of carbon dioxide in the atmosphere have no significant role to play, forests and tree covers appear to be an agent of stability. Forests appear to play the same role for climate on earth as vibration dampeners play in mechanical machinery. A barren planet or another consisting of largely rock and sand land masses (with concrete and paving materials falling in the same category) is more likely to see climate extremes rather than one covered by trees and forests. It would also tend to create more dust storms. The depletion of forests could be the cause of climate extremes.

A statement has been made that small amounts of carbon dioxide cannot play the same role in climate extremes as trees on land can. To explain how that might happen require a deep knowledge of fluid mechanics, heat transfer and thermodynamics. For example it is a known fact in fluid mechanics that rough surfaces (such as those created by trees on the surface of the earth) offer little resistance to smooth laminar flows while resisting swift turbulent flows such as those that would lead to dust storms vigorously. This has something to do with the eddy structures that exist in turbulent flows and not in laminar ones. Also the roots of tress draw moisture from within the earth while releasing it through their leaves. In that process, when leaves dry out, some surrounding heat is absorbed. The resulting water vapor eventually accumulates high above the earth where it condenses at lower temperatures returning that heat high above the earth. Simultaneously trees shade the ground or constructed spaces in urban settings and prevent the direct rays of the sun from being absorbed in it. A portion of the heat that would have reached the earth is converted in combination with carbon dioxide into plant matter, some absorbed by evaporation and some reflected back into space from whence it came. In the colder part of the planets where the ground would benefit from such heat, trees shed their leaves in winter or leaves become needle like as in conifers. The entire process results in moderating temperature gradients from land to sky.

There is much more on this that is not fully understood even by this author despite the fact that he is doctorate in thermal sciences from one of the finest universities in the world and has made scientific contributions that can be found cited by a search as a Google scholar. Therefore it is too much to expect that the general public would benefit here from scientific evidence. On the other hand the public is easily swayed by lay reports in the media including popular fiction. While doing so, the public must keep in mind that media campaigns are generated not merely out of scientific knowledge but also out of economic and political agendas that may serve the short or medium term interests of some. Long term interests of all can be served by nothing but the truth.

Conclusion

The present conclusions do not imply in the least that efforts at development of renewable energy must be slowed down in any manner. Fossil fuels are a limited resource and they are becoming increasingly expensive. Further, their use does cause local pollution if not a global one. Instead what the present conclusions imply is that ignoring the real cause of climate changes and global warming i.e. deforestation and not doing anything substantial about it could be devastating for the planet.

A large section of even the educated thinkers of the world have been influenced by prevailing thinking that leads them to conclude that use of fossil fuels is causing damage to the planet.It does cause localized pollution over brief periods of time but this note presents an opposite view that in fact it is a good thing over the long term. The burning of fossil fuels is not doing any global harm. it is merely returning carbon that once belonged to life and got buried due to geological phenomenon back to life while improving the overall health of the planet over the long term. That happens because when fossil fuels are burnt carbon dioxide, the very life breath of the green side of life is produced and absorbed during the generation of green matter and food. In this the fossil fuel industry is inadvertently helping the planet. The harm to the planet is from another source – deforestation. In case there is an error in the present arguments the author would like to hear of it and will gladly revise his stand if countered with evidence based in science and not assumptions. It can be posted as a comment in this blog to begin with. So far for over seven years, when this author posted his ideas briefly elsewhere, scientists have not been able to offer any.

It may be mentioned that this author too was once influenced by mainstream thinking on the subject and was one of the first to propose carbon taxes on the fossil fuel industry several years ago in a different somewhat informal blog (http://steamcenter.blogspot.com) However, fundamental scientific arguments and data have compelled him to revise his stance, that presently still appears to be in the minority. He is extremely apologetic about the earlier erroneous view.

 

Trying to cap carbon dioxide emissions looks like a lose-lose situation for all. It could lead the world into increased nuclear dangers and the poor malnourished of the world into greater malnutrition or starvation. It appears to be waste of time and effort because time and costs will do that on their own as we exhaust our limited fossil fuel resources while improving the planet for the green side. On the other hand putting all efforts into restoring forests and trees is a win-win situation. It even appeases those who are worried about carbon dioxide increase because trees are a carbon dioxide sink.

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The author with godson and god-grandson in the Himalayas

UPDATE JULY 12, 2014

New studies support the conclusion here.

Separating signal and noise in atmospheric temperature changes: The importance of timescale, by Santer B. D. et al, Journal of Geophysical Research, 2011, view online at:  http://onlinelibrary.wiley.com/doi/10.1029/2011JD016263/abstract

Please  also see for a discussion on this:
http://www.cafeconlecherepublicans.com/satellite-data-show-co2-almost-effect-global-warming/

A quote from the linked article: “ The bottom line of the abstract says: “Our results show that temperature records of at least 17 years in length are required for identifying human effects on global-mean tropospheric temperature.” and “As of June, 2014, it has been 17 years since the super El Nino of 1997/1998 and there is no obvious signal that increasing CO2 emissions have had any effect on global lower troposphere temperatures. In fact, over the last 17 years, temperatures show a slight cooling trend.”

However, if the temperature trend is correlated to deforestation a good correlation is produced since this has slowed down globally in the same period, with brief periods of regrowth of forests.

 

References

1. Interagency Working Group on Social Cost of Carbon. Technical Update of the Social Cost of Carbon for Regulatory Impact Analysis (US Government, 2013); available at http://go.nature.com/vzpkkb

2. Kopp, R. E. & Mignone, B. K. Economics 6, 2012–2015 (2012).

3. Schlenker, W. & Roberts, M. J. Proc. Natl Acad. Sci. USA 106, 15594–15598 (2009).

4. Tol, R. S. J. Annu. Rev. Resour. Econ. 3, 419–443 (2011).

5. Hsiang, S. M., Burke, M. & Miguel, E. Science 341, 1235367 (2013).

6. Sterner, T. & Persson, U. M. Rev. Environ. Econ. Pol. 2, 61–76 (2008).

7. Sherwood, S. C. & Huber, M. Proc. Natl Acad. Sci. USA 107, 9552–9555 (2010).

8. Knorr, W. Is the airborne fraction of anthropogenic CO2 emissions increasing? Geophysical Research Letters, 2009; 36 (21): L21710 DOI: 10.1029/2009GL040613

Useful Online:

1. http://www.naturalnews.com/039720_carbon_dioxide_myths_plant_nutrition.htm
2. http://someitemshave.blogspot.in/2011/02/myth-that-fruits-flowers-and-trees-do.html.
3. Intergovernmental Panel on Climate Change: Fifth Assessment Report
4. White House: Social Cost of Carbon (PDF)
5. Scientific American: Infrastructure Threatened by Climate Change Poses a National Crisis
6. http://earthguide.ucsd.edu/virtualmuseum/climatechange2/07_1.shtml
7. http://notrickszone.com/2013/05/17/atmospheric-co2-concentrations-at-400-ppm-are-still-dangerously-low-for-life-on-earth/#sthash.OPZILJ5y.dpuf”
8. http://wattsupwiththat.com/2009/11/10/bombshell-from-bristol-is-the-airborne-fraction-of-anthropogenic-co2-emissions-increasing-study-says-no/
9. http://whatreallyhappened.com/WRHARTICLES/globalwarming.html

10. http://whatreallyhappened.com/WRHARTICLES/Rick%20Yanda.pdf

11.
http://wattsupwiththat.com/2009/11/10/bombshell-from-bristol-is-the-airborne-fraction-of-anthropogenic-co2-emissions-increasing-study-says-no/

Vote for more trees on the planet

https://yourevolution.ubc.ca/projects/140/more-trees-on-the-planet#.U0Kb6vt3CYe
twenty trees

A Brief Introduction to the Economics of Greed and Exploitation

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Ever since the financial crisis of 2008,  economic news from around the world has revealed much of the state of affairs in our world today. From time to time my reaction to some of the reports have appeared as blog posts. Recently I combined some of the more important ones into a single document. After editing, what emerged was a brief booklet of fifty pages entitled ‘A Brief Introduction to the Economics of Greed and Exploitation’.

 I tend to regard anything under 75 pages as a booklet rather than a book although the publishers tend to classify it as the latter. The booklet is published in full color so that some of the associated color graphics could be included from earlier blog posts that seem to have inspired changes from Japan to Switzerland and also perhaps USA and parts of Europe. The contents consist of seven chapters:

 

 

Chapter

Page

1

When to Tax the Rich and when not to

5

2

Inflation is like stealing from the Poor

11

3

The Rule of Ten

21

4

The Paradox of Modern Life and Economy

27

5

Fixing the Banks

33

6

Future of World Economies

37

7

A Spiritual view of Economy and Recession

43

 

 

 

 

Driven by insatiable greed, modern economic practices have developed in a manner so that while some executives and bankers walk away with millions of compensation, others are driven out of their homes to the street. At the same time, governments who had freely incurred massive debts with an eye on the next election and a fond hope that economies would continue to grow forever are now staring at mountains of debt. Nations that seek solace in a money printing press are producing inflation that is snatching away bread from the poor man’s table, while the rich laugh all the way to the bank and luxury destinations. As inequalities hit the roof, national economies teeter on the verge of collapse. The ensuing outrage has given rise to phenomenon such as the occupy movement.

This booklet has now been published (ISBN-13: 978-1495448195) and is available on Amazon at http://www.amazon.com/dp/1495448193

Over the next few days and weeks it should be available with major online retailers around the world. While highlighting problems that have crept into modern economies, the author has also suggested solutions. The entire discourse is in an informal style free of scholarly notes and referencing so that it may be appreciated by an ordinary person, not just academics and scholars. This brief introduction to the economics of greed and exploitation should be of interest to any concerned citizen of the world.  While publishing this book let I could not forget the zesty economic news reporters who have covered economic stories in the media and the initial pages of the book has the  acknowledgement:

Acknowledgement

This author is grateful to Aaron Heslehurst of BBC World News and other economic news correspondents from around the world for having kept him abreast of international economic news

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A Brief Introduction to the Economics of Greed and Exploitation

When to Tax the Rich and when not to

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There was a time when some humans developed the notion that all humans are created equal and that it is unjust for some to amass huge amounts of wealth while others grind their butts out. This notion gave birth to the idea of communism. However, the communists forgot that the trees in a nearby forest are not all of equal height and that many humans are inherently lazy. Sans incentives and the need to grind their butts out, many humans would rather sit and fatten that area of their anatomy. The result was that bread lines became longer and longer until they became longer than the communist manifesto. It was therefore soon discarded into the trash can. Some political parties still call themselves communist but that is simply out of nostalgia. They neither mean it nor live by the philosophy any longer.

Capitalism thus marched across the world gloriously with the fond notion that if some individuals are allowed to grow exceptionally rich, it is good for business, and prosperity for all would trickle down, bit by bit, as water does from a leaky jug. This gave birth to the notion of trickle down capitalism.

But, alas, humans, those blinded by greed, can be extremely exploitative given the opportunity and have now invented a trickle up version of capitalism They have invented systems so that it is not the case of water leaking down a jug but rather a case of a vampire sucking up the blood of the poor until they are snuffed out on homeless street.

How does one distinguish a trickle down version of capitalism from the trickle up version? It is not all that difficult really. If the average income of the top one percent or ten percent (depending on choice of criterion) of the population is rising while that of the bottom one or ten percent falls in real terms (adjusted for inflation) then it is the case of a trickle up economy. It happens when the income of those at the top keeps rising while average incomes do not. How can a trickle up economy come about? It is quite simple really when the taxation system, salary structure and printing of currency are in the hands of a few.

How does one know if a government is printing more money than necessary? Well is there inflation of more than one or two percent around in your area? If it is then be sure that is what is happening although the guy controller up there called it something exotic like quantitative easing; and if a free floating currency is devaluing  with respect to other countries.

Taxation: Whenever the issue of raising taxes on rich is considered in any country, arguments emerge that are for and against it. The fact of the matter is that there are times and countries where it is a good idea to do it as well as times and countries where it is detrimental. How does one determine which is which?

In order to ascertain if increasing or decreasing taxes of rich is called for one needs to understand  trickle-up and trickle-down phenomenon. If it is found that the average income of top five percent in society has been increasing or decreasing over the past seven years (a reasonable time period to rule out temporary fluctuations) at the same rate as the overall average income in society then the tax structure need not be changed. In case the income of top earners is falling at a faster rate than the average then a reduction in taxes of the rich may be called for rather than an increase. However, in case the income of  top earners is rising at a rate that is faster than average income then an increase in  taxes of the rich seems just, appropriate and useful for overall economic stability of a nation.

Welfare: Welfare measures including subsidies that help the poor are directed at the bottom earners of society, the bottom ten percent or at least the bottom five percent. Here too, whenever the question of increasing welfare spending in any country is considered arguments emerge for and against it. Increasing such spending could cause an increase of debt or fiscal deficits and thus hurt the economy in both the short and long term. In order to understand when increasing or decreasing welfare spending is called for one only need to look at the change of income of the bottom five percent over a seven year window and compare it to the change in average income over the same period. Incase the income of the poor (adjusted for inflation of goods that matter to the poor such as food) is decreasing at a rate faster than the overall average there is a desperate need to increase welfare spending. However, if the income of the poor is rising then perhaps a decrease in welfare spending may be considered.

If the income of  poorer sections of society has been reducing over the past  years while that of  richer sections rising, this could be because of one of two reasons. Either the poor are becoming stupider and lazier than before while the rich cleverer and more hardworking or, the system is becoming more exploitative of the poor. It does not require more than common sense to realize that the reason for this imbalance can only be the latter. The exploitation and imbalance needs to be addressed on an urgent basis because whereas it may mean choice of  home furnishing or  size of the home for the rich, it implies the very life and death of  poor and their children who are just as sweet as children of others or the choice of  which homeless street to sleep on. The quickest way to address this imbalance and injustice is to increase taxes on richer sections of society and then using this revenue to assist the poor.

In conclusion, the world does not need communism but it does need justice and a move away from unfair inequalities, because it is the latter that has led to such extreme responses through human history as communism or severing the head of the queen from her torso when she suggested that people could eat cake when they ran out of bread.

 

Some more blog Posts by author on similar topics

  1. On Inflation: http://someitemshave.blogspot.in/2012/11/inflation-stealing-from-poor-for-rich.html
  2. On High Banker and Corporate salaries: http://someitemshave.blogspot.in/2012/02/rule-of-ten-way-to-strengthen-democracy.html

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The Twenty-twenty Tree Initiative

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twenty treesSince I began blogging seven years ago on Word press and Blogger some of the ideas have caught the fancy of many on far off shores. Encouraged by such responses, this blogger is encouraged now to put forth a new idea that is concerned directly with the health and beauty of our lovely planet. It is called the 1:20 Green earth Initiative here, or one may call it the Twenty-Twenty Tree Initiative.

Very simply put the idea is that it may be prescribed by law that every person who possesses or controls land of one acre or more shall ensure that he or she plants a least twenty trees per acre on his land. This law, wherever implemented in a region, province or country would apply to all individual land owners as well as organizations such as farms, homes, schools, universities, industries, trusts etc. if they own or control a piece of land of one acre or more through lease or grant. Actually a far larger number of trees can be planted on an acre of land. This law merely prescribes the minimum. In his home this author presently has more than twenty trees and a home on less than one tenth of an acre and there is a driveway and two lawns besides.

While many initiatives are afoot around the planet to increase tree cover such initiatives have lagged behind the deforestation that has been taking place on the planet over the last century. The present initiative would add oomph to such attempts and help improve climate stabilization efforts. The law briefly put would be something as follows:

Every person or organization that possesses an acre or more of land shall ensure that at least twenty trees of a height of at least ten feet from the ground grow on this land. Those following short of this prescribed minimum shall pay an annual tree deficit tax proportional to the number of trees that are short of twenty. In the first five years after this act is promulgated the height of the counted tree may be less than ten feet.

It is not necessary that the trees be distributed evenly on land. Thus a farmer with a ten acre lot can plant an orchard of 200 fruit trees in a corner of his farm to satisfy the requirement. The location of trees and the choice of trees are up to the owner and farmers may prefer timber or fruit trees. In case they wish to harvest the timber at some later stage they may, provided they have planted or otherwise have more than twenty trees to begin with on their land. Some thought has to be given to the appropriate and simple implementation of this law because a law that is not implemented is only a piece of paper. An easy implementation is possible through a voluntary counting and submission of number of trees on their plot in January of every year. They should retain a receipt of this submission because if a surprise random check is made and the submission found to be incorrect there would be a penalty. Half the penalty would be a reward for the person who reports them. Certainly there would be several details of this law that would need to be worked out but that can be done quickly by a group of experts assembled for the purpose, once the idea is accepted. This blogger shall volunteer to be a part of such a group, if necessary, if called to do so by any region within feasible traveling distance.

Orchards

If farm owners may be obliged to reserve a portion of their farms for trees that could well be fruit orchards. One disadvantage of orchards as compared to natural forests is that they are low on bio-diversity and as a result they do not contribute as much to improvements in environment as natural forests. However there is a very simple way to improve both the environment as well as fruit yield from orchards by introducing bio-diversity. If twenty per cent of evenly distributed trees are different from the primary crop in an orchard then both the yield and the environment improves. Such orchards may yield up to one and half times the normal yield over the life of the orchard as per the author’s estimate just because of improved bio diversity and soil health despite the fact that there are fewer trees of the primary crop. In addition there is the joy of a different fruit for the personal consumption and distribution by the owner if not the market. All that has to be ensured is that the other trees are not taller or wider in girth than the primary orchard tree. If some or all of the other 20 percent trees are nitrogen fixing trees the gain is likely to be greater (read this http://permaculturenews.org/2008/09/29/nitrogen-fixing-trees-the-multipurpose-pioneers/).

Quite frequently, seeded by animal, bird or breeze a wild tree will come up naturally within an orchard. It is a good idea to leave it in and nurture it as one of the fifth trees. Being natural to the area it will contribute most to bio-diversity. Allowing or introducing wild flowers, berry bushes and mushrooms through the orchard would be even better. The bees will love the flowers and multiply faster. In orchard spaces exceeding ten acres in area do consider a pond with a stream leading to it meandering through the orchard with some fish of an edible variety in it to create the ideal ecology and ground water table as befits our wonderful planet.

Trees that can attract bees to nest are an additional bonus for pollination and that occasional jar of honey to brighten up breakfast and the after dinner desert and health of the farmer and his family. It may be mentioned that neither the fruit nor the honey from single source orchards has the same health benefits as that from a bio-diverse source. The same strategy is recommended for palm and olive oil plantations. Farmers into organic farming may label their produce as organic and ‘from a bio-diverse orchard’ for that additional oomph in their marketing.

To create such an orchard, just plant every fifth tree in a row of a different fruit or timber. In an existing orchard selected trees may be removed to be replaced by others and when a forest is cleared for a plantation just leave in some original trees so that in the end one fifth the trees are the original ones.

Amendment for small plots

While the twenty-twenty tree initiative prescribes minimum growth of trees on large plots of land, the Tweety amendment is the suggested amendment for small plots that are smaller than one acre. Here a minimum requirement of one tree for every two hundred square yards of land may be prescribed under the same initiative with similar fines for not growing them. Thus a person owning 800 square yards of land in an urban, suburban or rural area would be required to grow at least four trees on it that are taller than ten feet in height. Tweety amendment is just the name given here. One can easily choose another if one wishes but it will certainly get tweety birds singing to home owners every morning.

Additional Notes about trees:

1. A brief note on how to select a tree to grow is here http://ezinearticles.com/?How-To-Select-A-Tree-To-Grow&id=7027748

2. The spiritual impact of planting trees is here http://nainitalgoddess.blogspot.in/2013/10/babaji-and-trees.html

3 The influence of planting trees on climate change is here http://steamcenter.blogspot.in/2013/07/one-fact-about-climate-change-most.html

Frequently asked Questions:

Q: I own 1.359 acres of suburban land. If this initiative becomes law in my area, how many trees will I be required to plant?

Ans: 1.359 x 20 = 27.18, the required number of trees is 27

Q: I own a ten acre farm. In case this law comes into force I would hate to shade my farm. Can I just choose small lime and lemon trees and crowd them in a corner of the farm?

Ans: You sure can, provided they all reach at least a height of ten feet. However do not crowd them so much that you can not reach the lemons

Q: I own a commercial plot of 200 square yards in the marketplace and have constructed all of it for my shop. It is permitted in commercial areas of my city. I really have no space for any tree. What should I do?

Ans: If your business is making good money you do not have to do anything, just pay the annual tax for a single tree deficit. If your business is not doing well and you cannot afford to pay even that tax, then pull down the business premises and grow fruit trees on it instead. You will at least get to eat the fruit.

Q: I have a small urban dwelling on 330 square yards and I have paved the entire front portion. What shall I do?

Ans: All you need to do is break a two feet circle in it, pull out the rubble, replace with good soil and compost and plant a tree in it. Your home will look prettier.

The Rule of Ten to manage Inequality

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The Rule of Ten to manage Inequality

Recently there has been a hue and cry about the high salary and bonuses that TENsome corporate executives, especially bankers are drawing. The occupy movement that has erupted in many countries around the world represents this anguish of people. New sources of communication make expressing this anguish possible. There is a simple way to fix the problem. It is called the rule of ten here. If adopted such a rule will not only strengthen capitalism, it will also strengthen democracy. Simply stated this rule states that within any corporate or government organization the cumulative annual benefits (that include salary, bonuses, shares and all other benefits) of any individual within that organization shall not exceed ten times the total benefits of the lowest paid individual. This will immediately put a cap to the high bonuses and perks some individuals are enjoying in various organizations. The rule has to be corporation wide not country wide in order to allow corporations to compete.

The less severe version of this rule replaces the lowest salary in the above rule with median or average salary. Average is a better choice since it reduces chances of exploiting some in a company with very low wages.

The basis of this rule is that no individual is less than ten times as capable, hard working or talented than the most capable individual in any organization. In case one is so, one should be in a care home instead. It is only just that the salary structures reflect this reality. Why ten and not nine or eleven? Well some number has to be chosen and a round number is simple to implement. The real and evident reason for these gross inequalities is that those with advantages have exploited their positions to maintain their advantage since the dawn of human civilization. However, the base has got broader with time, from a single King or dictator to at least around one per cent. With further evolution the trend is bound to accelerate. This author too has belonged to the one per cent for most of his life, but if he speaks against it, it is because of his spiritual leanings that regard exploitation of humans by other humans as unfair.

Countries not used to this sort of rule will find it rather extreme, but they can make a beginning by a rule of 20, 30, 40 or 50 or even 100 in in its place to prevent a few individuals from ripping off the voiceless shareholder and the shirts off the back of the poor.

The rule of ten should be seen as a regulation to fix ratios of maximum to minimum wage within organizations, not necessarily in the ratio of ten is to one but any ratio that has been agreed upon, even 100. It prevents senior managers to run away with unlimited compensations

How will such a rule strengthen democracy? If a referendum is to be called for such a law an overwhelming majority shall support it. Any rule or law that is in accordance with the just aspirations or wishes of the people and is workable strengthens democracy. What about the argument being put by some bankers etc. that this will lead to a flight of talent. That is just nonsense.

Such a rule will not lead to a flight of talent. It shall lead to a flight of greed and exploitation instead.

What will happen to the campaign contributions of political candidates if some individuals and corporations are not allowed to get disproportionately rich? No just human society needs campaign contributions that ride on the back of the homeless and the struggling while the likes of Berlusconi have perhaps taken off to their island spa for another bunga bunga party. Quite likely he has enough room for other leaders to join him as other economies around the world collapse under the burden of debt.

It is the opinion of this author that unless the presently prosperous economies of the world take steps towards limiting high executive rip-offs and take care of national debt they are headed to certain economic doom. Current measures as being adopted around the world only kick the can down the road, a road in which the pits get deeper as one moves further.

A year or so ago when the CEO of a Swiss drug major was walking off with a seven million severance package, as approved by a board of directors whose compensations he had approved (it is the you scratch my back, I scratch yours story in corporations) the Swiss public woke up and forced in a new law to prevent this sort of rip offs by companies. The legislators cried foul and the companies cried foul but the public had their way because of the unique sort of democracy the Swiss have. In other countries the public does not have a similar say.

In India the first baby steps towards such a rule have been taken in a new company law that requires companies to list ratios of peak to median salaries.

The rule of ten is much more effective in permitting struggling businesses to revive through across the board salary cuts, or help new businesses to grow, while a minimum wage regulation can kill them, if they are unable to afford the minimum wage

Concluding Remark: Inspired by the original version of this note, that has been posted by the author in several other places (e.g. http://someitemshave.blogspsot.com) the Swiss moved a slightly modified 1:12 rule. It was narrowly defeated. The Swiss and other countries are working on a somewhat more lenient 1:20 rule presently.

Human Civilization – from the Indus Valley to Buddha and Plato

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Between three and four thousand BC three great river valley civilizations with planned urban areas sprang up in three different parts of the world – Indus Valley, Sumeria and Nile valley in Egypt.

Recent archeological findings at Bhirrana near Delhi push back the origins of the Indus valley civilization to 7500 BC i.e. the oldest of the three. Even Mehrgarh dates to 7000 BC showing the extent of the early Indus valley civilization extended from Mehrgarh in the East to at least Bhirana in the west. Recent excavations in the gulf of Kambhat suggest that in the south the civilization extended up to the ocean coast. By 5500 BC all these sites had a fairly developed urban culture that predates Sumerian civilization by around two thousand years. Therefore it does seem that urban civilization marched from this direction first to Sumeria and later Egypt. This is especially evident because it is well known now that Sumerians were dark people of foreign origin with their own language distinct from the language of surrounding people.

It has also been established now with near certainty that ancient Sumerian belongs to the Austric group of languages of  South Asia and that it is not a linguistic isolate. There is a separate post on that in this blog. Recent highly rigorous scientific DNA studies by Henryk W. Witas et al. support such a migration theory (http://www.plosone.org/article/info:doi/10.1371/journal.pone.0073682) from the Indian Sub-continent to ancient Mesopotamia.

The first known examples of writing may have been unearthed at an archaeological dig in Indus valley. Trident-shaped markings have been found on fragments of pottery dating back 5500 years. According to Dr Richard Meadow of Harvard University, the director of the Harappa Archaeological Research Project, these primitive inscriptions found on pottery appear to pre-date all other known writing. Clay tablets containing primitive words were uncovered in southern Egypt at the tomb of a king named Scorpion. They were carbon-dated to 3300-3200 BC. This is about the same time to the primitive writing developed by the Sumerians of the Mesopotamian civilization around 3100 BC. “It’s a big question as to if we can call what we have found true writing,” he told BBC News Online, “but we have found symbols that have similarities to what became Indus script. (http://news.bbc.co.uk/2/hi/science/nature/334517.stm)

The summary as reported here is based on recent findings and there is a silence about some of the new findings amongst many historians because they upset long held and cherished views on the history of human civilization which in the past was based on presumptions in the absence of evidence.

Scholars differ in their opinion about the race of Indus people and more study is needed in this direction. The picture is complicated due to the presence of a racial mix that varied in time and space over the extent of the civilization. It appears that Indus Valley Civilization had been a combination of diverse racial elements. In fact this peaceful mixing of races is what may have spurred the inventions of early civilization. Certain anthropological investigations and examinations of human remains show that four racial types existed in this civilization namely Proto-Australiod, Mediterranean, Alpinoid and the Mongoloid.  The racial diversity is the precise reason why scholars have not been able to arrive at a definite conclusion about the race of the Indus valley people. The Indus valley region was a fertile civilized land with moderate climate attractive for immigrants from all over the old world to come and settle in. Such immigration into the sub-continent has continued until recent times and the most recent language that has been brought into the sub-continent is English. In early days of low population density and large portions of the country yet to be discovered, immigrants would have been welcome. The Australoid type and Armenoid types appear to be prominent strains in early samples in a ratio exceeding four is to one as in early Sumeria. The earliest contribution to urban human civilization may well have been a contribution spurred by a racial mix of Armenian origin and Australoid races. In fact a racial mix is something that has been asserted to in ancient Sanskrit literature as well such as the Mahabharata and the Vedas, with some persons being described as black and others white. It is a racial mix that continues up to modern times in South Asia.

Indus valley

Indus Valley

It is possible that just as in Sumeria the language gradually changed from Sumerian Austric to Semitic Akkadian, in the Indus valley it gradually changed from an ancient Austric language similar to archaic Tamil to Indo European languages, not because of any invasion as some early western scholars presumed but because of how the numbers fell. Absolutely no archeological evidence of any invasion has been discovered. Some of the early historians had assumed that the advanced Indus valley civilization disintegrated because of an invasion by barbarians from the North West and that was the reason that the region became less civilized and remained so for another thousand years. These early invasion theories have been ruled out as fanciful now although immigration in small batches appears to have been a continuous process in the region.

The disintegration of the civilization and the movement of its people towards the South, North and East appear to have been because of climatic changes and changes in the course of rivers that sustained the earlier urban civilization of Indus valley. Austric languages still continue in southern India and amongst tribal people of central India. An invasion assumption appears to be a part of western heritage, perhaps because of a history of colonization. Even in western science fiction, whenever visits of aliens is envisaged, it is often in the form of an invasion, a concept that is viewed as strange in the East since a  friendly entry is by far the more civilized thing to do as compared to war.

Available evidence as of now in the year 2013 appears to suggest that ancient Indus Valley was the crucible in which people from far away places such as the Armenian Highlands, Catalhouyk, Jericho and other places came together with the local Australoid population as far back as 7500 BC – 3500BC  to pool together their knowledge and develop the earliest innovations of human civilization such as metallurgy, textile clothing, agriculture, animal rearing, trading, irrigation, grain storage, writing, bricked buildings, planned urban areas and a structure for governance of large areas that included urban centers that were the hubs of trading, religion and governance along along with rural areas as hubs of agriculture; on the peaceful ( no evidence of armies, wars and weapons has been discovered in archeological findings) climatically moderate and fertile plains of Indus valley.

The abandonment of Indus valley cities by its people, subsequent to the drying up of the region, carried seeds of civilization to other more fertile parts of the sub-continent so that by the time of Buddha around a thousand years later, Eastern India with its centers at Benares and Patna became the most developed and learned part of the sub-continent. It was near Patna in Nalanda that the first International university came up spreading knowledge, wisdom and the compassion of Buddha throughout the civilized world of the time from the eastern extremities of the orient to ancient Greece. There is a separate article on Nalanda University in this blog.

This is presently speculation, and more scientific evidence is awaited, but the mythical Atlantis story of Plato may have been the ancient submerged coastal city known as Dwarka in ancient Sanskrit literature. It was surrounded on all sides by water and has been described in Sanskrit texts as the most advanced part of the civilization in this region just prior to its submergence. It is on the coastal portion of Indus civilization as shown on the map. It is coastal cities that often develop the most in many parts of the world because of their greater trade interactions by both land and far away sea ports. Detailed discussion of these topics is available in other posts of this blog as well as in:
https://ashokmalhotra.wordpress.com/2013/09/19/atlantis-myth-or-reality/

Buddha and Plato

Buddha and Plato depicted in statues

FAQs on Gurus, Mystics, Babajis and Frauds

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jungle geranium

Jungle Geranium growing in the Author’s Home

Recently while on the topic of Mystics a very dear friend of mine commented,

“Since childhood I have had no use for Babas, swamis or of any kind of mystic. I saw them as parasites taking advantages of well meaning but duped followers. I have always put them in one of two categories – they are either charlatans or they are self-delusional. Nothing in between. In other words, they either knowingly deceive people, or they believe in the bunk they spread. (Sorry, couldn’t control this diatribe – Tourette syndrome)”

My response at the time was a brief one that I agreed with him partly. The response was brief at the time because we were really engaged in a conversation on some other matter. But, the comment does need a more detailed response and I am attempting that now in a sort of question and answer dialogue because this is a difficult topic

Who are Babas, swamis and mystics?

Babas, gurus and swamis are eastern usage for mystics but such like persons exist around the world with different names. These are persons who have made a primary occupation or concern of their life, the spiritual side of life.

Is there a spiritual side to life?

This depends on what you mean by the spiritual side. If it means, flying through the air along with your laptop and mobile phone, there probably is no spiritual side. However if it means things like love, fear, human abilities etc. that living things display as distinct from machines, robots etc. then yes there is a spiritual side to life.

Yes, so who are Babas and swamis?

As mentioned, Babas and swamis are persons who make the spiritual side of life their prime occupation. It is just like an artist makes art his prime occupation and a scientist makes science his occupation and within that science are specializations such as chemistry, physics, astronomy etc.

Do Babas have disciples?

Some do and some others don’t. This is similar to some scientists also being Professors and some who are just scientists who do not teach others (for example a friend of mine Dr. Pimputkar). Babas and Swamis who  teach others about spirituality are also called spiritual gurus. This is similar to a scientist who is called a Professor too if he teaches. A Guru is really, or should be just like a Professor of spiritual knowledge or practice. It is different matter if some claim to be  god because there is no limit to a lie or madness if one was on that path.

Are there Fraud Babas and gurus?

For sure there are, just as there are fraud doctors, lawyers, scientists etc. who may or may not be knowledgeable but use some immoral practice or lies for personal gain. As a matter of fact, the percentage of fraudsters is much larger amongst babas than percentage of fraudsters amongst modern scientists.

The percentage of fraudsters amongst medical practitioners practicing traditional herbal medicine (Ayurveda etc.) is larger than amongst those practicing modern allopathic medicine. The reason is that there are formal degrees, regulations, study, practice and examinations for allopathic doctors while there is not much of that for herbal, traditional medicine etc. Therefore it becomes easier to fudge in the latter case. Greed shows up in any area where human need is acute. That is why doctors and lawyers will at times rip the shirt off your back. Can mystics be far behind when their need becomes acute?

There have been fraudulent Babas from ancient times. An ancient eastern spiritual text, Gita mentions that these are hypocrites who pretend whereas there are others who are more learned and do not flaunt.  Hypocrites have their mind on non-spiritual pursuits while outwardly pretending spirituality. Jesus Christ warned of false teachers 2000 years ago as people who are like wolves in sheep’s clothing.  The religious/spiritual garb has been used as a convenient disguise and cover by criminals and unsocial elements from all parts of the world since ancient times.

Do Fraud Babas exploit and cheat others?

For sure they do and so do fraud doctors, engineers and lawyers. I have met doctors who have even made their patient intentionally sicker to extract more money and  lawyers who intentionally encourage the prolonging or complication of a case to make money out of clients. Last year when a friend of mine was involved with prolonged legal problems, I expressed that fear to another friend (KC) in a long phone conversation. The former friend had the option to conclude the matter with a fine but he chose to challenge the matter on encouragement from lawyers prolonging legal dangers.He has been sentenced to prison now.

Are all Babas fraud?

No there are sincere seekers and teachers too.

Are they self-delusional?

No, not necessarily any more than we all are about life or our primary preoccupation in life. Some are, because just as the tool of a doctor is the stethoscope the tool of the mystic is his own mind and soul, and, just as the stethoscope gets spoilt from use, the mind too get into psychosis at times. The stethoscope can be repaired and so can the mind.

Do all Babas wear ashes, funny clothes or no clothes at all etc?

Many do and many do not. Some never declare their true pursuit and can go about as an ordinary person.  There are schools of spiritual study that require belonging to a sect with its uniform and perhaps living in a place like a monastery. Some require isolation from society into hills and caves, yet there are also schools in which one can pursue spiritual study while appearing and living as an ordinary person pursuing an ordinary profession.

Do Babas have special magical powers?

Yes and no depending on how you look at it. Yes, they do have special powers just as a doctor has special powers to heal, a lawyer to argue in court etc. But no, these powers are not magical. They only appear to be so because they are not common.

In the book – The Babaji Affair – I have written about mystics and Babas because of my personal interest in the spiritual side of life. A friend of mine recently enquired on phone if I too have become a Baba and if I dress funny. My answer is no, because I have another profession besides spiritual pursuit. This last has been an intermittent pursuit for me in life. I dress ordinary most times. However, during a brief intense period of spiritual studies during 2007 in Nainital, I did dress funny as well, for some months and grew a beard etc. It was a really grand and funny dress made out of a single piece of hand woven woolen cloth (just a single piece because my spiritual order dictated a single garment with not even an undergarment, and it did keep slipping off).

That dress has been unstitched now and has been converted into a lovely quilt for my adopted grandson – Golu. I have spent other periods of prolonged and intense spiritual studies in ordinary garb during my lifetime whenever I found an opportunity to interrupt a professional career. Presently it is only on some ceremonial occasions I dress different.

Anything more about special powers of Babas?

The sort of powers described for one of the Babas- Neeltal Baba- in the book are special but those that I have experienced of as true. I am certain that there are many more such powers that I have not experienced because there are always aspects of any branch of knowledge that one does not realize until one goes deeper. The last section of the book describes a highly revered Babaji who demonstrated many unusual powers during his brief appearance from 1970 to 1984 as Babaji Haidakhan in the Nainital Himalayas.

One of the powers of  Neeltal Baba was immunity from heat and cold. This fact has been examined and proven scientifically as a power developed by a some Himalayan and Tibetan monks (I do not have references at hand but they are available on the net).

Another power of the Baba was walking over long distances at great unreal speeds without any physical tiredness. This is one power, I have experienced myself although admittedly only on rare occasions. It is effected by a certain type of Jap/ mantra meditation when one’s mind is focused on the mantra or just one other thought while removing all other concerns from the mind. In an incident in the book the character practicing this meditation walks into town nude without realizing that he is nude because his mind was so much removed from worldly concerns. We have an incident from history where the scientist Archimedes was so focused on a scientific principle that when he discovered it, he ran nude into town shouting Eureka.

Yes, scientists, businessmen and all others who perform special and magical things often have special hidden human/mystical powers not possessed by others and are actually powered like Babas without declaring so. That is the reason why some can excel in a miraculous way in their pursuits.

Yet another power Babas often have is the ability to read minds. This too is something I have experienced myself albeit intermittently. My mother possessed that to a surprising degree and perhaps influenced my spiritual inclinations from a young age. This power of thought is not limited to reading a facial expression but also occurs over distance on phone. During the late nineties when I returned to IIT Delhi as a faculty member after a period of isolation and spiritual pursuit, I was telling people on phone without them having uttered a word what they were thinking and then laughing about it. However, after a few years of stay in Delhi about a decade ago, I found that the power of reading thoughts was disappearing. These powers wax and wane with time, practice and environment. There is a nice and detailed description of that in http://someitemshave.blogspot.in/2010/08/from-birds-to-telepathy.html

Another power the Baba of the book has is the power to will events. I am not fully certain about this power because events can happen anyway but I strongly it exists and people like Bill Gates and Warren Buffet have used it.

Do Babas do any good to the world?

They may not over finite periods of time if they by and large stick to their own pursuit just as a scientist may not for long periods if they stick to their labs engaged in God knows what study? Yet just as some scientists have changed the course of human history and civilization, so have some mystics.

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This brings us back to Nainital the Himalayan location in focus in the book, The Babaji Affair. Steve Jobs who is much in the news nowadays was in my view a Baba. He spent time in Nainital in spiritual pursuits during his younger days pursuing Baba Neem Karoli of Nainital and also Baba Hairakhan (Neeltal Baba?). He also suffered because of the disorder and poverty in Indian society and came to the conclusion that many of these Babas were not doing any good for Indian society at the present time. He felt a Baba like scientist or professional makes a better contribution to society and returned to a professional life to do precisely that.

Are Babas Freaks?

No they are not freaks any more than a scientist with a scruffy beard or an artist with funny clothes and paint all over him. Many people do view them with awe but they are ordinary humans with a specialization in mysticism. In the book, the Baba of one of the the stories appreciates the fact that the hero of the story – Fred- treats Babaji like an ordinary guy. The Hero developed that impression because at first he met the Baba at a party where the Baba danced and hopped around like others, had a drink etc. Later when Fred visited him at the monastery he found the Baba very different and wondered what was going on. He wondered if Baba was a fraud and questioned him later about it as a friend.

Why do some people think that all babas are freaks?

Humans tend to do that. When humans note that a large number of gypsies are involved in petty robbery some tend to say all are robbers or if they find in America that the percentage of unemployed or welfare seekers are larger amongst blacks they may say that blacks are bums (in private because there are laws against that) but they cannot be serious because we also have a Martin Luther, Sydney Potier or a Barak Obama amongst the blacks.

One last question, who are Saints?

The very evolved accomplished mystics are saints just as Einstein was a saint amongst Scientists and Steve Jobs amongst Professionals. Incidentally Steve Jobs spent more of his time thinking of Death and Nainital than he did about the Iphone or the Ipad : ).

Who is more popular,  the frauds or the real ones?

That depends on time and space. In a society where greed, lust and immorality is widespread the frauds are far more popular. Birds of a feather after all stick together.

age of lies

Sayings of Baba Haidakhan, Babaji

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Unfortunately the modern world seems to have been overrun by frauds in the guise of saints and babas. Just recently one called Asa Ram Bapoo has been charged for raping his minor female disciples and is lodged in a jail. it would be wrong to call such persons Babas. They are merely crooks and charlatans using the convenient disguise of a mystic. It is not surprising that there are such crooks in society, there must always be a few such. What is surprising is that so many persons allow themselves to get fooled. It is easy to pick out the frauds. If they claim to be  God or if they are into collecting wealth, either in their own name or a trust they control, if they impose secrecy, especially if they practice or justify any sort of violence, watch out. This baba mentioned here did not allow his disciples to pray to any god except himself. There is another thing that criminals do, they try to prevent a free flow of information because then lies are discovered quickly. This baba did not allow newspapers, TV or raidio in his ashrams just as evil dictators and governments or sects do.They also react violently or aggressively to criticism. It disrupts brain washing because after all a house built on lies is a a house of cards ready to fall down anytime. it has to be protected every which way to prolong its life.

Genuine Babas or genuine spiritual schools/sects have no use for any secrecy or brain washing. They welcome transparency, criticism, debate and a free flow of information.

This author has written a book with a focus on the doings of some recent Himalayan Mystics – The Babaji Affairhttp://www.amazon.com/The-Babaji-Affair-Ashok-Malhotra/dp/149232955X 

Atlantis – Myth or Reality

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Atlantis

Map showing possible location of Atlantis

In September 2006 this author published an internet article suggesting that the location of the lost and submerged city of Atlantis may have been around the ancient city of Dwarka in southern coastal portion of ancient Indus valley civilization. Since then the content of the article has become a subject of discussion in several internet forums and also become a part of the excellent comprehensive 500 page book on Atlantis by Tony O’ Connell (Atlantipedia, ISBN: 978-190802046). More than seven years have passed since that article and on reflection some specific statements of that article are in need of revision. However, the main assertion of the Article that Lost city of Atlantis may be identified with Dwarka stands reinforced with further findings since then, in particular the archeological findings at Bhirrana that push back the date of Indus Valley Civilisation by some 2000 years. Specific references are not given here or the article would become too scholarly to be a blog post. They may be located easily by a Google search. For the new reader may I reproduce the original article here without any editing. Two images produced recently have been added.

In Search of Atlantis

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Map showing Atlantis and other prominent ancient civilisations.

Around 355 BC Plato described an ancient, exotic island kingdom catastrophically buried beneath the sea when its once-virtuous people angered the gods with their indulgence in sin and corruption. The city of Atlantis was a marvel of architecture and engineering. The city was composed of a series of concentric walls and canals about 9000 years before the time of Plato. When the people of Atlantis became corrupt and greedy, the gods decided to destroy them. A violent earthquake shook the land, giant waves rolled over the shores, and the island sank into the sea, never to be seen again. In Plato’s book, Timaeus, a character named Kritias describes that an account of Atlantis has been in his family for generations. According to the character, an Egyptian priest told the story to his ancestor, Solon.

The first thing to realize is that it would be surprising if the description of Atlantis by Plato is precise and accurate, not because Plato was not accurate, but because the story had been passed down through thousands of years, initially verbally and not through writing. This description reached Plato through Egyptian Priests. It would be difficult to pin down the exact date of the submergence of Atlantis for the same reason. However there is little doubt that any truth in the story would be prior to 3300 BC. There is no instance of writing of full descriptions prior to 3300 BC. Some evidence of writing brief description with pictorial symbols of consignments is all that exists in the form of writing from a period before 3300 BC. The names, sizes and time spans are possibly inventions or modifications as the story was handed down the centuries.

The essence of the story, that of an ancient well-planned and prosperous city that preceded known civilizations on earth may however be true. In fact archeologists and historians have postulated the existence of such a civilization. Planned cities and other technologies suddenly began to spring up in the Indus valley, Mesopotamia and Egypt in the period 3500-3000 BC as if they had dropped from the sky. Since design and construction of these cities involved engineering skills that take time to develop it has been suspected that they came from an already developed civilization that has not yet been discovered. Various suggestions have been made as to where Atlantis might be located ranging from the Antarctica to South America and even other planets.

A relevant line of enquiry is to find where the Egyptian priests got the story of Atlantis. The most probable direction is Sumer or Ancient Mesopotamia. There is also the possibility that the first dynastic priests of Egypt were in fact Sumerian-Akkadians. The first dynastic Pharaoh of Egypt – Menes united upper and lower Egypt, and constructed a new capital at Memphis by diverting a part of the Nile. The engineering skills required for all this appears to be from Mesopotamia as well. It takes considerable time and apprenticeship to develop the required engineering skills even if one is very brilliant. There is no evidence of these skills existing in Egypt prior to Menes (or Manas, the Egyptians did not write vowels and these have to be guessed). Menes as well as his priests and engineers were probably all Mesopotamians although of the work force was local. In any case, even if it is contested that Menes and his engineers were not from Mesopotamia, it cannot be contested that ancient Egypt had several links with ancient Mesopotamia that went beyond just trade.

Further, the likelihood of the Atlantis stories being of Sumer origin is strengthened by the fact that the submergence of ancient cities was a strong part of the Sumerian mythology. It dominates their historical tradition. The destruction of the ancient city as a result of sin was also a part of their beliefs. Therefore, there is a strong probability that the ancient city of Atlantis is an ancient submerged city of the Sumerians.

If one traces the origin of the story of Atlantis to Sumerians one may enquire as to who the Sumerians were and where they came from? They were not local people because they spoke a language foreign to the parts. For a long time it was thought that their language was an isolated one, unrelated to other languages. However, the picture has now changed as a result of further studies. The study of their language along with anthropological examination of Sumerian skeletons helps to trace out their origins.

It has been found that the Sumerian language is an Austric language spoken by a group of ancient Australoid people found in India, South East Asia and Australia (The Austric Origin of the Sumerian Language, Language Form, vol. 22, no.1-2, Jan.-Dec. 1996.). An examination of ancient Sumerian skulls has further confirmed that the ancient Sumerians indeed belonged to the Australoid race. An evolved branch of the same tribe appears to have established the Indus civilization as well as the Sumerian one after the submergence of their coastal cities. In North-western India they would have encountered Neolithic people of Indo-European origin with which manpower they established the Indus cities. An analysis of skeletal remains from Indus valley confirms this mixture. The Sumerian language persisted side by side with local languages as with the official language of the rulers being Sumerian. In the Indus valley, Sumerian would have persisted along with local Aryan languages. So far scholars have been trying to decipher the Indus script based on a comparison with Dravidian and Aryan languages, and failed. A more fruitful attempt may be made if they used Austric for this purpose. Just as in Mesopotamia, ancient Sumerian was eventually replaced by the language of the majority (Akkadians) in the Indus valley it would have been replaced eventually by an Indo-Aryan language.

If we assume for the moment that the Sumerians originated on the west coast of India and that their ancient capital city was submerged then we have to enquire if any such evidence has been found. The recent discovery made in the Gulf of Cambay, made some sit up and watch with interest. It clearly established the existence of an ancient civilization that was submerged in the sea. The methodologies adopted to study this find, were novel and different, wherein advanced marine technologies and the most modern scientific applications of various disciplines were put to use. Most of the structures that were discovered in the Gulf of Cambay had many similarities to the Citadel, Great Bath, grid pattern habitation, granary, etc. of the Harappan civilization. But many of the artifacts and typology were different and distinctive and with the presence of many micro tools appeared to be much older than the Harappan. The northern metropolis has well made pottery pieces, wattle daub etc. from about 7506 BP onwards. It indicates well-organized city living. Hence it is possible that this metropolis came up after 8450 BP but much before 7506 BP. After the submergence of the southern metropolis, the ancients appear to have shifted and founded the northern metropolis. This wonderful twin prehistoric metropolis of Cambay lasted from about 13000 BP to about 3000 BP making it the most ancient and largest city civilization not only in Asia but also in the entire world. Scientists described, in a manner similar to Plato, the submergence of the city due to violent earthquakes and ensuing floods. The existence of a submerged circular harbor as described by Plato has also been found in a neighboring site. What is more the area has gold, elephants and coconuts just as in Plato’s Atlantis. The existence of other cities in the region may yet be discovered through further undersea explorations.

An important question to ask is if Atlantis indeed existed in the Indian Sub-continent then there should be some records of it in India itself since India has had a written literature from ancient times. In Mahabharata, an ancient and well know Hindu Scripture there is a specific account about the submerging of a city by the sea which reads thus:

Indus valley

Estimated extent of Indus Valley Civilisation

“The sea, which had been beating against the shores, suddenly broke the boundary that was imposed on it by nature. The sea rushed into the city. It coursed through the streets of the beautiful city. The sea covered up everything in the city. Even as they were all looking, Arjuna saw the beautiful buildings becoming submerged one by one. Arjuna took a last look at the mansion of Krishna. The sea soon covered it. In a matter of a few moments it was all over. The sea had now become as placid as a lake. There was no trace of the beautiful city that had been the favorite haunt of all the Pandavas. Dwaraka was just a name; just a memory.”

The significant thing to note here is that the city is described by Arjuna of Aryan origin as a city of Krishna who was dark like the dark Sumerians. Thus based on this study the author feels that ancient Atlantis is a city submerged of the west coast of India. Not all the evidence and arguments for this analysis could be presented here because of the brevity of this article. The actual capital city of Atlantis is probably not yet discovered and may require further exploration of the coastal region.

References:

1. An ancient Harbour at Dwarka – Study based on recent underwater explorations, by Gaur A.S. et al, Current Science, Vol. 86, No 9-10, May 2004

Link: http://ezinearticles.com/?In-Search-of-Atlantis—-Getting-Closer&id=313482

 

Why did the Ancient Catalhoyuk people make doors in the roof?

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Catalhoyuk was a very large Neolithic proto-city settlement in southern Anatolia. It is a remarkable example of one of the few the earliest known cities in the world that  which existed from approximately 7500 BC to 5700 BC. The city was abandoned for unknown reasons before the Bronze age commenced.

The inhabitants lived in mud-brick houses that were crammed together in an agglutinative manner. No footpaths or streets were used between the dwellings, which were clustered in a honeycomb-like maze. Most were accessed by holes in the ceiling, with doors reached by ladders and stairs. The rooftops were effectively streets. The ceiling openings also served as the only source of ventilation, allowing smoke from the houses’ open hearths and ovens to escape. Houses had plaster interiors characterized by squared-off timber ladders or steep stairs. Each main room served for cooking and daily activities. The main rooms contained raised platforms that may have been used for a range of domestic activities. Side rooms were used as storage, and were accessed through low openings from main rooms. Although no identifiable temples have been found, the graves, murals, and figurines suggest that the people of Catalhoyuk had a religion rich in symbols. Rooms with concentrations of these items may have been temples. The inhabitants were worshippers of the mother goddess. In upper levels of the site, it becomes apparent that the people gaining skills in agriculture and the domestication of animals and fruit were harvested from trees in the surrounding hills. However, hunting continued to be a major source of food for the community. Pottery and tools appear to have been major industries Tools were probably both used and also traded. This is where the oldest pottery known from Anatolia has been found. The oldest pottery was fired, unpainted and unglazed and had a very simple bag shaped form.

A question that shall trouble a modern thinker about this civilization is the use of a home with a very difficult door opening in the roof rather than on the side that is far more convenient, safer from the elements and intruders and easier to construct. What could be the reason for such an opening?

Catal_Hüyük_home

A Catalhuyuk home with a door in the roof

One possibility is that these dwelling were made by a people who lived in pits dug inside the earth prior to making such homes. In pit homes, precisely this type of roof opening are required. The question then arises – are there any examples of pit dwelling from around the time? The answer is yes and this takes us to the Pre Harappan civilization in North-west India. Bhirrana is a small village located in in the Indian state of Haryana. It belongs to the Indus Valley Civilisation dating from around 7500 BC too. The site is situated about 220 km to the northwest of New Delhi

The excavation has revealed the remains of the Harappan culture right from its nascent stage, i.e. Hakra Wares Culture to a full-fledged Mature Harappan city. Prior to the excavation of Bhirrana, no Hakra Wares culture, predating the Early Harappan had been exposed in any Indian site. For the first time, the remains of this culture have been exposed at Bhirrana. This culture is characterised by structures in the form of subterranean dwelling pits, cut into the natural soil. The walls and floor of these pits were plastered with the yellowish alluvium of the Saraswati valley. The artefacts of this period comprised a copper bangle, a copper arrowhead, bangles of terracotta, beads of carnelian, lapis lazuli and steatite, bone point, stone saddle and quern. The pottery repertoire is very rich and like their Anatolian contemporaries these early pre Harappans too were worshippers of Mother Goddess. A connection between and a common root of both these ancient people is very possible.

Image from: http://en.wikipedia.org/wiki/File:Catal_H%C3%BCy%C3%BCk_Restoration_B.jpg