An alternative to war

In the Summer of 2002 a war of enormous proportions seemed a real possibility: relations between India and Pakistan were at their worst for decades. While the immediate crisis has passed, this call for long term solutions still has real merit.

As two of the most populous countries in the world move to the brink of war, how about an alternative?

An alternative to war

By Quentin Langley

Dateline 02 June 2002

The total population of India and Pakistan is over a billion and must almost equal the total population of all combatant countries in the Second World War. This is particularly amazing when it is recalled that India and Pakistan – along with Sri Lanka, Nepal, Bangladesh and Burma – were part of British India during WWII and so they were combatant countries themselves. This is a sobering thought, for any war between two such substantial powers, even if China and other countries do not become involved and even if it is fought entirely with conventional weapons, could still become one of the most destructive conflicts in history. If China is added to the equation the population of the combatants becomes equal to entire population of the planet in 1940.

What then is the right answer for Kashmir? We have already seen that the question is urgent. Is there an answer which Indians, Pakistanis and Kashmiris can all accept?

Possibly not, but can we at least consider two principles that might provide part of the way out?

PRINCIPLE ONE: The less that government does, the less it matters which government is not doing it.

Surely the truth of principle one is self-evident? Sadly, perhaps not. The purpose of some people’s attachment to government is the wish to impose a particular way of life on others. Also, for many, the symbols of government – flags and the like – are more important than the services, if any, that the government supplies. In conflicts where there are different visions of nationhood symbols can be very potent. At the trivial level, it was important to a small sub-breed of Scottish nationalists during the 1970s to knock down post boxes inscribed EIIR (Elizabeth II, Regina) because Queen Elizabeth I was never Queen of Scotland and the current Queen is therefore EIR north of the border. But what if the post was not seen as a government service and did not carry any national symbols on it? The fewer government activities there are the fewer sources of offence will arise and the fewer targets for attack there will be.

What if India and Pakistan were both to agree to cut back on the level of government provision in Kashmir, and of course on the taxation of Kashmiris? Would that go some way to alleviating the tension?

But what law would then apply in Kashmir? Perhaps only basic laws should apply. Prohibitions on violence against the person and property exist, at least theoretically, in all countries, including India and Pakistan. Perhaps the two governments could agree that the only laws that would apply in Kashmir would be those which both governments supported. No religious law, just basic protection for individuals. The complex, and incompatible, systems of licences and business regulations which the two countries impose would simply not apply in Kashmir. Kashmir would have free trade with both India and Pakistan and thereby their trade with each other would be boosted.

This brings us to the second principle:

PRINCIPLE TWO: Businesses don’t fight wars, governments do.

This principle will be controversial only to Marxists, who believe that businesses promote and prosper from wars. The reverse is true. Individual business people may have strong feelings about the issues at stake in the war, and capitalists will always spot a gap in the market caused by any changing circumstance, but business as a whole benefits from the freest movement of land, labour, capital, goods and services. War does more to disrupt this than any other government action – and that is up against some very stiff competition.

If Kashmir, and perhaps all the border regions of India and Pakistan, became a Special Administrative Region such as is Hong Kong within China, with both governments claiming sovereignty but both also agreeing to a special system of administration, then it could become the focus for South Asia’s economic growth. Hong Kong’s special status has been guaranteed by China for 50 years from 1997, but China is, effectively, the only party to the agreement. At least it is the only military power. If a deal between India and Pakistan was brokered, both could stand guarantor for the agreement, perhaps with some external arbitrators. Investors would, of course, require such guarantees as investment requires stability.

Fifty years in which Kashmir and the whole border region – it would be greatly advantageous if the Special Administrative Region extended to the coast – experienced higher economic growth than the rest of the sub-continent would create a barrier to future conflicts. Neither side could possibly afford to choke the engine of its growth.

The Laissez Faire City Trust ( is currently seeking a site for the first Laissez Faire City. If the trustees believed the guarantees of future stability were strong enough then there would be few sites as attractive for their project as within a Special Administrative Region such as the one I have suggested.

Broadly, their concept is for a Third World government – or in this case two – to sign over to 100 sovereign individuals 100 square miles of territory for a period of 50 years. These individuals – all wealthy capitalists – would then establish a new city there operating without law according to the anarcho-capitalist principles of Ayn Rand, as described in her book “Atlas Shrugged”. While the Trustees cite as their model Galt’s Gulch in “Atlas Shrugged”, there is little doubt that Hong Kong is also a persuasive model. As Milton Friedman said “if you want to see capitalism in action, go to Hong Kong”.

And what a lesson it provides! The handover to China coincided with the fiftieth anniversary of the end of the Raj, and the founding, therefore, of both India and Pakistan within their current borders (though Pakistan then included East Pakistan, now Bangladesh). Both Hong Kong and British India began after the war from a period of little or no economic development. India chose the Fabian socialist model (the IngSoc, or English Socialism, of Orwell’s 1984), Pakistan a similar socialist approach, less severe but intertwined with occasional bouts of Islamic fundamentalism. Hong Kong had imposed on it from London a largely uncorrupt administration of basic government, and almost nothing else. Hong Kong has prospered so much that by the time of the 1997 milestone for all three countries Hong Kong’s GDP was, for six million people, half as much as India’s with 900 million. Hong Kong’s GDP is far greater than Pakistan’s, though the latter has 150 million inhabitants.

A new Hong Kong, straddling the border of these two Asian giants would be an economic lifeflow that neither could afford to throttle.

Copyright © Quentin Langley 02 June 2002

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