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Source link: http://archive.mises.org/15768/empirical-evidence-that-brad-delong-is-completely-obtuse/

Empirical Evidence That Brad DeLong Is Completely Obtuse

February 22, 2011 by

DeLong misunderstood Volokh’s nuanced position — which is not surprising, because he was prepared to declare Volokh insane. FULL ARTICLE by Robert P. Murphy

{ 110 comments }

Todd Gibson February 22, 2011 at 10:06 am

Not to defend DeLong here, but Volokh’s position really is kind of crazy. Taxing to blow up an asteroid is not permissible. OK. But if the asteroid had been intentionally hurled at earth by an alien race bent on our destruction, then that is going to violate rights…so tax away???

El Tonno February 22, 2011 at 11:05 am

Not necessarily. It might well be that humanity might be violating alien property rights, and they lawfully want to get rid of us… what then?

scineram February 22, 2011 at 12:24 pm

Get rid of them first!

Daniel February 22, 2011 at 3:48 pm

We go to space and fight them over there so we don’t fight them over here

http://www.instantrimshot.com

JFF February 22, 2011 at 11:10 pm

Why would a truly “alien” race do such a thing? Why would anyone presuppose that a truly “alien” anything would resemble, be organized, or behave in any way similarly to humans?

iya February 23, 2011 at 9:05 am

There are indications that, if alien life exists, it will be similar to life on earth:
Laws of nature are, per definition, true for the whole universe. Physics, chemistry, evolution and sound economics are based on universal laws for which no counterexamples have been found.
Evolution is optimization and always leads to similar results, for example consider Tuna, Penguins and Dolphins, which took vastly different evolutionary “paths” and yet became so similar. In other words evolution will always reinvent what is useful. Other forms of life are theoretically possible, e.g. self replicating robots, but these will not be the default because of a too high activation energy.

nazgulnarsil February 22, 2011 at 11:13 am

Brad DeLong is just doing his job: high status insults hurled at competing ideologies. It’s what much of the academic economy is based upon.

darjen February 22, 2011 at 11:35 am

Does anyone honestly think the government would have the ability to stop an asteroid from hitting the earth? Even if we did grant them this taxing power to do so?

El Tonno February 22, 2011 at 12:42 pm

We have Bruce Willis and two Space Shuttles! Go!!

Michael J. Green February 22, 2011 at 9:31 pm

Is it moral to sacrifice Bruce Willis for the rest of the world?

Jesse Forgione February 22, 2011 at 1:23 pm

Exactly. You might as well ask “would I have the right to punch someone in the face if it would cure everyone who has AIDS?” The question barely makes sense in the first place.

StLreflections February 23, 2011 at 12:50 am

Just to be clear, even though the question doesn’t make sense, the answer is still yes. If the situation arises when you can cure AIDS by punching someone in the face, don’t hold back.

Jesse Forgione February 23, 2011 at 11:12 am

Fine. And if it comes to that, I’m sure the punchee will understand.

But the point is that believing that taxation can stop an asteroid, or a punch in the face will cure AIDS, borders on magical thinking.
There’s no reason to assume either causal relationship, and in both cases you harm someone for no justifiable reason.

Matt Stiles February 22, 2011 at 12:54 pm

I love the smell of burnt Keynesians in the morning!

Bob Rooney February 23, 2011 at 10:25 am

…smells like free-market victory!

Walt D. February 22, 2011 at 1:17 pm

This is the old canard that there are some things that only government can do. I’m sure that Bill Gates and Richard Branson have enough money to put together a consortium to destroy an asteroid. (However, we would have to forgo spin-offs, such as non-stick frying pans (although I have already been told that this is an urban myth)).
Even if you give the government the power to tax to deal with an Earth threatening catastrophe, what is to stop them making up a bogus one as a pretext? Do I hear Global Warming, no Global Climate Change, no Global Climate Disruption, no Global the next lie?

Daniel Hewitt February 22, 2011 at 2:17 pm

That’s all good Bob, but Brad is probably the most uncivil economics blogger out there (calls people stupid, insane, dumb, etc.), and aren’t you just sinking to his level by calling him “completely obtuse”? Someone who agrees with DeLong might not even read this based on the title…..if you are trying to persuade them, consider a more professional article title.

This assumes, of course, that you were the one that chose this title.

Ben February 22, 2011 at 8:20 pm

I think Bob Murphy’s title is a play on DeLong’s blog post title, and if anything, one that is far more civil. Given this context, I think Murphy is on firm ground here.

Matt Robare February 22, 2011 at 2:21 pm

I doubt that an extraterrestrial species would waste the resources neccesarry to travel thousands of light years to hurl an asteroid at us. Even a Keynesian government would balk at that kind of expenditure. Paul Glister, who runs the great Centuari Dreams blog, has estimated that it would take twice the world’s current GDP to build an unmanned probe capable of reaching a solar system a few light years away within the lifetime of human civilization.

“Presumably the answer is that the incoming asteroid presents a ‘public-goods problem’ par excellence. To wit, if a private company pays for the research to destroy the asteroid, then the company can’t restrict the services of ‘enjoying life on earth’ to its paying customers. Either everybody dies, or everybody lives.”

I burst out laughing when I read that part and I think it perfectly illustrates the ridiculous nature of the “free-rider problem.” A firm with that kind of thinking is clearly run by sociopaths, played by Donald Pleasance and they need to be stopped by Sean Connery.

I suspect that developing the technology for asteroid deflection will have numerous side-benefits, such as asteroid mining: according to Wikipedia, a nickel-iron asteroid 1 mile in diameter conains $20 trillion worth of industrial metals (at 1997 prices). Another good benefit is space-based solar power, which could provide all the planet’s energy needs until the Sun explodes.

JFF February 22, 2011 at 11:14 pm

This presupposes that humans have reached the absolute pinnacle of scientific and technological development and that defines the upper bound on achievement for the entire universe. I’m somehow reminded of the silly notion of “American exceptionalism.”

Tim February 22, 2011 at 2:33 pm

The classic extreme case fallacy: unless we have authority force our greedy, selfish, inept, incompetent, blind asses to hand over money for the sake of the greater good, the asteroid will blow up the planet. But when does the argument end? If it assumes people are inherently immoral, viceful and selfish to the point of self destruction, then there’s absolutely no reason to allow us the right to pursue our self-initiative towards anything…right? If we take this line of thinking to its logical conclusion every freedom becomes nothing but a privilege granted by a panel of bureaucrats who carefully weigh it against their vague criterion of common good. It completely ignores the fact that mere survival would be pretty high up on every person’s commodity list. But never mind that, it’s not like the market can ever produce anything of value. If we concede defeat this clearly undeniable argument, then any and all coercive intervention is acceptable, as far as our overlords declare fitting. But if we dare, oh dare to voice an objection, we’re branded morally bankrupt intellectual crooks. How dare we question the fact that colossal trillion dollar government cannons designed to avert us from a vague threat in the unforeseeable future are the only feasible solutions to this problem? Oh dear, look at those cooky freedom junkies, they would have the planet destroyed rather violate their precious non-aggression principle. That means they are for the destruction of all life on earth. OH HO HO I’ve just disproved libertarianism, where’s mah nobel?

Jim P. February 22, 2011 at 2:47 pm

In all seriousness, I think Groupon could destroy an asteroid.

Joe February 22, 2011 at 5:26 pm

@Jim P,
Not only could Groupon destroy the asteroid, but you would money left over for a pizza.
You made me laugh. Thanks.

Boyfromworld February 22, 2011 at 2:56 pm

Correct me if I’m wrong, I’m not native english-speaker so I may have misunderstood something.

Didn’t Mises, Rothbard, Hoppe and others show us, that natural rights/NAP and economics are deduced from the same a prioiri truths? So if someone is saying that state has right to force protection, he’s in contradiction with the whole economic theory which same time proves that markets can do it better. And if someone says that state doesn’t have that right, he “admits” the existence of same economic theory. So conclusion would be that if state doesn’t have right to try to save people everyone would be better off in moraly AND economicaly..

hard to explain………….

Anthony February 22, 2011 at 7:59 pm

The economic part can be separated from the natural rights part… Mises did not believe in natural rights the way Rothbard did.

Your last sentence seems about right to me, though.

ABR February 22, 2011 at 3:47 pm

The asteroid example only shows that a free market does not, in all cases, prevent free-riders. But we knew that already. The alternative to allowing free-riders is tyranny.

Dave Albin February 22, 2011 at 11:49 pm

There is no way to prevent all free-riders from coasting on. In tyranny, the tyrants are the free riders, and everyone else is supporting them. In a libertarian world, there may be a few free-riders, but they could always be ejected from society at any moment. So, free-riding would be greatly minimized.

Ryan Vann February 25, 2011 at 2:04 pm

Right, but the free rider argument bromide is a red herring. Governments don’t fix the problem, which can be evidenced by consulting tax revenue demographics. Furthermore, in the hypothetical, what if other countries don’t get on board the rocket ship to the asteroid? There is still a free rider issue in that circumstance.

It is possible the existence of governments actually would exacerbated the free rider “problem” because there is political incentive to minimize (like zero) contributions, but reap all the benefits.

yahya February 22, 2011 at 3:48 pm

Tell me if this is wrong, but it seems to me that from Volokh’s perspective, if an asteroid is coming to the earth, then it is impermissible to tax people to destroy it. But then suppose someone or some alien goes up into a space shuttle and homesteads the asteroid by building something on it, then all of a sudden it then becomes permissible to start taxing people to destroy it, because the asteroid is now someone’s property, thus when it crashes into the earth, it is now a rights violation.

iawai February 22, 2011 at 10:30 pm

Very nice hypo. I’d raise the issue that by homesteading the surface of the asteroid, you have not altered the trajectory, and thus are not liable for the resulting damage.

Anthony February 22, 2011 at 10:55 pm

Regardless of your liability, however, people on earth would be justified in using force to prevent your property from damaging theirs.

iawai February 23, 2011 at 12:01 am

Do I have the right to use force to prevent their property from harming mine? The Earth is going to do much more damage to my asteroid than vice-versa.

Dan February 23, 2011 at 7:45 am

destroying it might be considered as an act of self-defence. If there is a car going straight at me and the only way of saving myself is to fire away from a rocket launcher, I think it would be justify act of self-defence

Anthony February 24, 2011 at 10:28 pm

Ah, but give that motion is relative it would be as accurate to say that the earth is flying towards the meteor as it would be to say the reverse…

AG February 22, 2011 at 4:54 pm

I realize that this is an economics site and from an economic point of view everything is monitizable, but do any non-economists really think that taxing people is somehow morally equivalent to “torturing 1000 infants to death”? Do we really have to engage in hyperbole and not realize there are shades of gray.

Let’s turn the tables on DeLong and his fans by changing the example. Apparently those folks don’t think much of property rights. Fine. What about bodily integrity? Suppose Martians showed up and announced, “Unless you earthlings torture 1,000 infants to death, we will blow up the earth.”

Seattle February 22, 2011 at 6:03 pm

The point is, torturing babies doesn’t suddenly become a good thing when you’re otherwise threatened by extinction. Whoever gets stuck with that decision is morally blamable no matter what they do. There’s a difference between choices of right and wrong, and of wrong and less wrong. Never confuse the two.

StLreflections February 23, 2011 at 12:37 am

Two things. First, in the lesser of two wrongs framework there is still a right and wrong answer. In your two examples, ‘should we tax people or let the asteroid destroy the earth’ is an easy question, and only insane people answer it in favor of property rights, whereas ‘should we torture babies to appease the martians’ is a difficult moral question because life is somewhere on the order of infinitely more important than the right to property. Second, of course, believing that taxation is immoral is also crazy. Property rights don’t exist outside of the state, the state doesn’t exist outside of taxation.
I do think Murphy’s larger argument (this could be handled by private actors) is probably true, but that doesn’t have anything to do with the moral argument, which is obviously it is worth taking your stuff against your will if it will save humanity.

Seattle February 23, 2011 at 1:32 am

First, in the lesser of two wrongs framework there is still a right and wrong answer.

It is good practice to consider your imperfect solutions as wholly separate things from your ideals. In the best case, confusing them will lead you to errors like the very silly idea that self-sacrifice is always honorable, regardless of what it accomplishes. In the worst case, you lose your sense of morality altogether. If the choice is between new taxes and the extinction of humanity, and there is no third option, new taxes do not become morally acceptable.

In your two examples, ‘should we tax people or let the asteroid destroy the earth’ is an easy question, and only insane people answer it in favor of property rights, whereas ‘should we torture babies to appease the martians’ is a difficult moral question because life is somewhere on the order of infinitely more important than the right to property.

We here at the LvMI argue all human rights are merely a part of the larger property right. You have the right to live because you own your body.

Second, of course, believing that taxation is immoral is also crazy. Property rights don’t exist outside of the state, the state doesn’t exist outside of taxation.

We here at the LvMI also argue human rights (that is, property rights) are not granted by an outside authority, but are ethical propositions. It’s wrong to murder someone whether you’ll go to jail for it or not. The existence of the state is incompatible with the upkeeping of human rights. We have rights in spite of, not because of, government.

StLreflections February 23, 2011 at 11:31 am

I guess ideally, the richest 1% or so of Americans will voluntarily give 80 to 95% of their assets to a collective effort to divert the asteroid, develop non-carbon intensive energy sources, end preventable diseases, and feed hungry people, or at least follow Gates and Buffet and give half. My ideal is that people act morally in regard to their property.
If they don’t, taxation seems like a perfectly reasonable and moral response to the problem.

It seems odd to think of the right to life as an extension of property rights-I care a lot more about my life than about my property, and care a lot more if you kill someone than if you steal from them. Also, property is so much more complicated than life. I think of my own property-I own a little house in St. Louis because the government of the US bought the Louisiana Territory from France, because the Native Americans were killed, because my parents and grandparents had government protected property that they passed on to me, because of an entire social system of taxes, deeds, laws, etc. exists in this country. Property is a right in relationship to society and other people. I have life because I was born.
I can sort of understand anarchism-that the state shouldn’t exist from a philosophical perspective. But in the state of anarchy, people join behind strong military leaders and take stuff from one another, refusing to recognize property rights. See: Somalia. Hobbes is right, as it were. There is a reason that all the richest countries in the world are free market systems with a medium to high level of taxation and strong social safety nets. It works best.
Also, all property in our current world is unconditionally corrupted by state action. No one has clean title to anything, because every ounce of stuff on our planet is a result of a complicated history of violence, taxation, warfare, theft, and other property rights violent. So while you could say ‘in a perfect world, the state would never have existed, and everyone will respect each other’s rights’ in our current world, the government already exists, and no one on the planet has property that hasn’t been corrupted by history, so there’s no reason to morally privilege this corrupted property. I could see having a great leveling, where all the world’s assets were divided up equally among all currently living people, and say, starting now, property is sacrosanct. But beginning to ‘respect property rights’ at this exact minute by ending taxation and the state just entrenches currently rich and powerful people in their current status when they are the beneficiaries of other rights violations in their favor.

A. Viirlaid February 23, 2011 at 12:54 pm

Yes, StLreflections, you are indeed the beneficiary of past violations of human rights and of other rights, including property rights. But why does your personal guilt (if that is the right word) or your understanding of history, force you into supporting bad and evil practices and ideologies? Why should we ‘fix’ whatever it is you want to fix, by engaging in the very practices that you abhor from history?

But beginning to ‘respect property rights’ at this exact minute by ending taxation and the state just entrenches currently rich and powerful people in their current status when they are the beneficiaries of other rights violations in their favor.

Yes, you may be partly right, if the wealth of those rich people was obtained illegally.

You might even suggest that America was founded on violating the ‘rights’ of the overseers of the British Imperium. But was it immoral to rise up against what was perceived as tyranny?

Where you can show that someone obtained their wealth illegally you have a moral case. Otherwise you do not.

But in the state of anarchy, people join behind strong military leaders and take stuff from one another, refusing to recognize property rights.

I don’t think anyone is suggesting “anarchy”.

I could see having a great leveling, where all the world’s assets were divided up equally among all currently living people, and say, starting now, property is sacrosanct.

Why do we have to start with some “Great Leveling”?

You have to ask yourself whether you believe Life is Zero-Sum Game, or not.

People, who think we cannot make the pie larger, will always try to find ways to take (and redistribute) FROM others, because they cannot conceive that the pie will get bigger and better when they let people freely contribute to making that pie GROW.

By the way, the Leveling has been tried, and human nature being what it is, there will always be those in the resulting ‘Nomenclatura’ who are more equal than the others. History has just too many examples of this failing to help anyone (other than the ‘leaders’) for us to go down that road again.

I know you don’t want some Muammar al-Gaddafi, or any such group of people to run your nation, but that is what you risk with such an approach.

StLreflections February 23, 2011 at 2:14 pm

I guess we’re at the maximum length of going down the rabbit hole on this question, I’m not allowed to ‘reply’ to your comment anymore.
My feeling is, we can make the pie bigger and redistribute the pie at the same time, they are not in conflict. As everyone is getting richer, those who are poor for whatever reason can be better supported by society over time. Letting handicapped people die in the streets makes sense when you’re in a Malthusian trap. Its evil in the United States in the 21st century. Leveling works GREAT in history-progressive taxation with a strong social safety net has lead to the richest, happiest societies the world has ever known.
In terms of immoral actions, my feeling is first best moral society is anarchist, where everyone respects each other, works hard, and contributes to the well being of those in need and public goods as necessary, such that no one has less than enough of the pie which is always growing as people become more productive (my utopia, as it were). My second best moral society has a government to protect against coercion, provide safe space for the exchange of goods and services, set up social insurance against misfortune, and provide public goods and protections against the pollution of the commons. E.G., Norway. And honestly, obviously the first best vision for society requires a different species of humans.

A. Viirlaid February 23, 2011 at 7:18 pm

StLreflections, there is no rabbit hole, and you are smart enough to not get caught in it even if there were one.

By the way, don’t give up on the human species —— we are a lot smarter than the doomsters and Malthusians would have you believe. The Climate Doomsters and free market bashers on the Left are just “nattering nabobs of negativism” and can only sell their depressing snake oil to you if you buy into their message of hopelessness —— in fact they are counting on you to do so. Our species did not get here by luck —— what is happening in North Africa should give us all hope for our common future.

Just FYI, StLreflections, in order to manage to REPLY right below the last entry that you actually want to reply TO, go up to the very last REPLY-box that you can see (above that desired location)and click on that box.

While it will initially appear that your entry will be going to the wrong place, it will actually drop down, at entry time, to the location right at that last entry you want your message to appear below.

As to your entry, I think you are overly-enamored by government because you know no other condition. You’ve always lived in a Western so-called Liberal Democracy.

Look at the youth in eastern Libya, currently with no national government presence, cleaning the streets and squares, starting to self-organize, and apparently having no problem of it.

We are so used to having government look after us, organize our thinking, set up our welfare ‘safety nets’, etc. that we can barely think for ourselves.

You need to have a bit more faith. Not everything has to be ‘farmed out’ to Uncle Sam.

No one is suggesting getting rid of government, but simply putting everything that we have ‘grown accustomed’ to governments ‘doing for us’ under the microscope for examination and review (and possible reassignment) —— this is going on all the time today (for example with charter schools since you mentioned education earlier). So nothing has to remain the way it is.

From WIKI for Charter Schools:

Chile has a long history of private subsidized schooling, akin to charter schooling in the United States. Before the 1980s, most private subsidized schools were religious and owned by churches or other private parties, but they received support from the central government. In the 1980s, the dictatorial government of Augusto Pinochet promoted neoliberal reforms in the country. In 1981 a competitive voucher system in education was adopted. These vouchers could be used in public schools or private subsidized schools (which can be run for profit). After this reform, the number of private subsidized schools, many of them secular, grew from 18.5% of schools in 1980 to 32.7% of schools in 2001.

By the way, we don’t actually have to plan for this reexamination (although that would be the better course) because this will be forced upon us.

Government itself will soon be unable to deliver all that it has promised to us as part of the social contract under which we pay taxes and the Government delivers the services.

Why?

If you stick around long enough on this site, to not only read the Comments sections, but also the main articles contributed by the Mises community, you will see just why governments and their money systems are designed for failure —— in other words, this process is inevitable. So just stick around long enough in America, and you will see a lot of government downsizing. This will be true elsewhere as well.

There is no way that reform will not come.

This reform may come later, and it may not be planned for (not the most ideal way, I admit) —— but it will come.

This site promotes a view that in the minds of its adherents is consistent with human values —— of all humans. While you may not even agree, and you may initially see some of the views as being ‘extreme’ I predict that once you examine enough of the thinking that resides here, you will actually see how liberal it really is (in the classical liberal sense).

It is government that is reactionary and is conservative, not the views that are generally expressed here.

If I could convince you only of that last idea then I could already say “Welcome Home!”

As it is, I will say “Welcome Home” knowing that one day you will know what that denotes.

A. Viirlaid February 24, 2011 at 11:07 am

The restructuring and reform are ongoing of course (see Wisconsin), but here is another sad example of “forced reform”.

Please see http://money.cnn.com/2011/02/23/news/economy/Providence_teachers_layoff_notices/index.htm

The Providence Public School Department sent layoff notices Tuesday to every one of its 1,926 teachers, warning them they could lose their jobs at the end of this school year.

Dagnytg February 22, 2011 at 5:21 pm

Observations:

The scenario presented by Volokh is another example of the contradiction that faces most minarchist’s. At some point, you have to justify violating someone’s rights and property to satisfy a utility.

More important, DeLong makes the mistake, so many others make, of reading a comment or article and filtering their intellect through their emotions.

Eric February 22, 2011 at 6:52 pm

What was not mentioned was the fact that PREDICTIONS of asteroids hitting the earth is not an exact science. In addition, any large asteroid would need to be diverted many years, if not decades before it got to the earth.

So, now we have what amounts to the situation that EXISTS TODAY. Some scientists claim that in order to avoid a climate catastrophe, that will hit us in 50-100 years, we must tax people today to prepare for this event and stop it.

I think both situations are actually quite similar. Anything we do today, might actually make things worse. Suppose the asteroid is ACTUALLY on a NEAR MISS trajectory, and if we divert it, we might actually change it so it DOES hit the earth. Or we blow it up and instead of one collision, we are rained down with many collisions (I’ve heard this would be more destructive).

How are we to judge? Do we believe all the computer models? No doubt there would be space corporations in bed with the government that would insist that the Asteroid threat is real, while labeling all others whose calculations predict a near miss as BELT DENIERS.

What we must do then is kill all the ASTEROID CRIMINALS.

noah February 22, 2011 at 9:15 pm

Just as with global-warming “prevention”, given an indefinite time frame these asteroid prevention schemes would certainly ferment into pungent, complex systems of taxation that would allow the political and financial elites to profit (at least until we’re all blown to bits). We could see an Asteroid Security Trust Fund (that could conveniently be borrowed from and bankrupted to pay for more pressing needs, like, say, Social Security).

I also expect an Ast-And-Trade program (Goldman Sachs will work out the details when they write the 3000-page legislation for us). A new insurance mandate for asteroid coverage will be enacted. And the IRS will deploy a special force of heavily armed collection agents: the Ast-holes.

AG February 23, 2011 at 2:41 pm

What you are ignoring is that the issue at hand is a made up scenario to help examine morality. We can just assume that there is 100% certainty that the asteroid will hit for the sake of the argument.

As for your specific point, so your solution is to do nothing and ignore the best scientific evidence that exists? This is like staying in New Orleans when Katrina was heading in because you don’t believe the computer models of the trajectory of the hurricane. Sure it could be wrong, but the costs to ignoring the science are just so great.

Ben February 22, 2011 at 8:38 pm

Check out DeLong’s pathetic attempt at a “rejoinder” The best he can do is flummox around and feign amazement. No argument against Murphy’s position is offered at all, and he cannot bring himself to even mention Murphy’s argument that private enterprise could more effectively destroy the asteroid. The best he can do is keep saying that his opponents are “unbalanced” and keep saying wow, wow, wow!

DeLong: Ad homenim, bald assertion, faux outrage, and repetition until it fires up the masses.
Murphy: Logical argument, examination of positions, appeal to analogies, philosophy, etc.

A. Viirlaid February 22, 2011 at 9:00 pm

The example that got the ‘obtuse guy’ to label the other guy ‘insane’ is a good example of at least one thing IMO.

What thing?

That thing is called a Protection Racket.

So where the hypothetical example of the asteroid is a little unreal, the protection racket that any government runs (whether here or in Libya) is very real.

The actual ‘insanity’ is that most of us (especially the ‘obtuse’ ones amongst us) really believe and TRUST governments to, in good faith, provide us with real value-driven protection with the hard-earned resources we turn over to those governments.

That is the real insanity. Most times these governments will stop no crime, and you will have not even a modicum of protection. You are on your own. The cops will show up after the crime has been committed. Yes, they may catch the offender, but no protection will be available to you, while the crime is being committed.

I would much rather trust “free markets to outperform monopoly governments” whether it comes to local protection, or national protection, in such a manner that it will make a real difference to me —— and I know that the ‘protection fees’ I pay will be not turned over to people who are just making revenue for themselves via that scam.

This is especially true now, when many of those governments, through their own fiscal and broken-money-system ineptitude, can no longer properly fund even the modest policing services they used to implement into the field.

noah February 22, 2011 at 9:23 pm

Think SEC and Bernie Madoff. They were handed that guy on a silver platter about a hundred times, over a decade. He basically had to put the handcuffs on himself in order to get arrested.
The victims depended on the government for protection; the survivors depended upon themselves to do their own due diligence.

Walt D. February 22, 2011 at 11:05 pm

So are you implying that the Government employees working on the asteroid would be so busy looking at porn on the internet, that they would not complete the task in hand before the asteroid hit?

StLreflections February 23, 2011 at 12:49 am

But this is a completely different point! Its possible to have a rational discussion about the usefulness of government-that is, whether the government does in fact function to reduce crime, protect the nation, provide health care, etc. in a more or less efficient manner than the private sector. DeLong would happily agree that there are things the government is doing that it shouldn’t do, because the private sector does them better, and he seems to agree that in general, the government is less efficient than the private sector. Though most people have decided the government has a useful function to serve in our modern global economy, this discussion is not insane.
What is insane, is that, presuming we have to have Bill Gate’s stuff in order to save the world from an asteroid, we shouldn’t take his stuff against his will. His right to stuff does not supersede everyone else’s right to be alive.

A. Viirlaid February 23, 2011 at 10:49 am

His right to stuff does not supersede everyone else’s right to be alive.

That is a slippery slope, my friend, dear StLreflections, that you are teetering on top of, IMO.

It kind of depends on what you mean by “right to stuff”.

The same argument was used by the thief who stole a loaf of bread or a horse from someone else, back in the day when the loss of that bread, or the loss of that horse, could indeed mean the difference between surviving and dying of starvation for the victim of that particular crime.

That is why, in the past, the thief could have a limb amputated or could even forfeit his precious existence, for committing so-called ‘property crimes’ against others.

I remember a movie I saw about Japan set in a time period a mere 100 years ago —— the name was “The Ballad of Narayama”. In that movie, a certain family that makes a habit of stealing food from other farmers’ plots, and is caught, is buried alive by the rest of the villagers. Harsh? Most certainly. But consider the times. People who did not have enough to eat, left their own newborns in the winter snow to die, so that others in their families could live.

The severity of crimes was dealt with by equally or more severe punishments — in those days, it was a matter of survival.

Utilitarianism as a philosophy is very attractive, until you personally become the victim of others, who have decided that they have a greater “right to your stuff” than you do.

How “right” are you prepared to let those others be? How much do you trust their judgment? Who is the one who can see so clearly so as to always make such judgments without error?

The idea behind our laws is that we are ALL protected, even those who are accused of some horrible crime.

The idea in the judicial system is not to protect the criminal (if found guilty) but all of us, who might find ourselves standing before the law, before we are found guilty.

The same should be true of how we proceed with this issue of the “obviousness” of the greater good. Because in reality the so-called Greater Good is always, ALWAYS, just a macro concept in the eye of some social engineer (Lenin etc.) —— it always fails at the level of the individual because at that level “the Greater Good” is meaningless. Read it in the American Constitution.

If you personally do not fit into the idea of what some other person or persons perceive to be the “Greater Good” then you will be broken like an egg that is used to make an omelette — after all “one cannot make an omelette without breaking a few eggs” can one?

StLreflections February 23, 2011 at 11:46 am

I guess, to play the game, I am more than rich enough to survive a little theft. Having been a victim of theft on a number of occasions, I don’t like it, but I certainly don’t want to chop the hands off of people who have stolen from me. If I heard of modern Americans proposing the mutilation of criminals, I would say they were greater monsters than the thieves. So, in a world of scarcity, I can excuse people who are living on the edge for their greed and selfishness, since it is a survival trait. In a world of massive wealth, those same character traits are less ethical.
In terms of the greater good, it makes sense to me to set up some deontological restrictions on collective action. I’m all for a bill of rights. Our current one is generally pretty good. Working from scratch, things that come to mind include ‘the greater good can’t include killing people (we might have to carve out an exception for war)’ ‘don’t torture anyone’ ‘laws should be in general, not aimed at specific people’ ‘when other people aren’t suffering harm, lean towards permissiveness,’ things of that nature, but I like the constitution we have now, other than wishing that we could abolish the US senate.
But I am glad the government serves the greater good, and works to preserve the enjoyment of the commons. I am happy to be taxed for national parks, social security and medicare, food stamps, low income housing, environmental protection, roads, railroads, sewer and water. In fact, the vast majority of government functions seem like things worth supporting through collective action, and I’d be willing to pay higher taxes to support our current level of government services. I’m content to let ‘the greater good’ be decided on by majority vote, as in our current system, even if I’m not interested in a socialist system.

A. Viirlaid February 23, 2011 at 12:14 pm

StLreflections you are a good person and your heart is in the right place.

The issue we have is in the implementation of “improving the lives of others”.

Personally I don’t condone torture in any form, at any time, under any circumstances.
Why? Because of personal interest. I don’t wish to be tortured.
Of course I also put myself in the place of those who are being, or have been, tortured. And I would not wish on others what I don’t wish on myself.

There is a role for government. Because of this ‘necessary evil’ I believe that the role of the rest of us is “eternal vigilance”.
If we are not careful, we could end up with someone like that daffy-madman Gaddafi.

I want to minimize the role of government. There are very few roles that government is really suited for. I believe that we should have decadal National Congresses of The People (how constructed, I don’t clearly yet know) to review the past performance of our representatives. Something like the Second Continental Congress.

http://en.wikipedia.org/wiki/Second_Continental_Congress

Once governments get entrenched, and their bureaucracies start to swell, we all have to pay (big time, and forever). IMO we need some kind of perennial review of what balance is appropriate. We cannot all work for the government. And yet there is no apparent control on the size and role of governments.

I am not as sanguine about the efficiency of government expenditures as you seem to be.

I would prefer to have someone like Ron Paul overseeing some of the shenanigans in Washington —— someone who is a Strict Constructionist on the Constitution. That should lead to less foreign involvement, and more of a focus on at-home problems.

StLreflections February 23, 2011 at 1:01 pm

A.-
I guess I’d be fine with a 2nd continental congress, and I definitely agree that we need constant vigilance, since people are self interested and evil, and will generally do evil self interested things if not checked. Thus the system of checks and balances, which I’m all for in our system (the Ron Paul dictatorship seems like a weird check, however). In fact, I’d like some more checks and balances-wealthy individuals and corporations clearly have too much power in this country, and I’d like to reduce their influence through some more checks on their power, like campaign finance reform of some sort, or conflict of interest laws around government contracts. I’d love less foreign involvement, and a focus on at home problems. I’m not interested in more strict constructionists, mainly because I think that our system of 50 independent state governments is fairly arbitrary, and unfairly benefits people who live in small states, but the constitution is an impressive document, even if I’d love to abolish the Senate.

But where it looks like we differ most is the efficiency of government. I agree that the government is somewhat less efficient than the private sector-the profit motive matters. However, it seems to me that Social security is a really efficient system-its administrative costs are minimal, and it helps many people’s lives. Food stamps do a great job of feeding poor people. The national parks are great. The education system in inner cities is broken, but nationally we do pretty well. The National Institute of health does great research, the Smithsonian is a world class museum, these are all things the government does well. My Canadian friends all tell me that government health care rocks, and considering how bad private care is here, I’d love to see if government can’t do a better job through a medicare for all plan of some sort.

A. Viirlaid February 23, 2011 at 1:16 pm

I was not suggesting a Ron Paul ‘dictatorship’ so maybe my wording was poor.
BTW, Ron Paul would not agree to it either.

No place in the world is perfect, and it never will be — all we can do is to strive to make things better everywhere.

You found me out, I am Canadian.
Even here health care is not perfect. I won’t knock it either, but it will never be perfect. And many of the medical advances we make use of were created in America, so don’t knock your own system either.

You might be interested to read “Does Canada really rank 30th in world in terms of health care?” — btw, America is 37th on this ranking.

http://www.cmaj.ca/cgi/content/full/164/1/84-a
http://www.photius.com/rankings/healthranks.html

Matthew February 22, 2011 at 10:08 pm

Please, if you feel the same pain in the pit of your stomach as do I when you observe barren, unwavering close-mindedness, don’t go to DeLong’s rejoinder, and don’t *dare* read the comments…

Anthony February 22, 2011 at 11:20 pm

It’s pretty disgusting, eh?

Oh well, maybe a couple people will actually click the link to mises.org and learn something.

StLreflections February 23, 2011 at 1:28 am

Just a confession, I’m a DeLong reader who discovered the site through the link. I’m not sure what I’ve learned yet, but I’m interested in discussing.

Colin Phillips February 23, 2011 at 9:54 am

Cool, welcome!

A couple of basic points to get you started.
1. People can be a little bit rude in the comments, don’t take it personally, this site just gets a lot of trolls, so if people think you’re trolling, they tend to be a tad insulting. Try to pick through it and focus on the points of the argument.
2. This site is intended to be about the Austrian school of economics (see here for a short run-down: http://wiki.mises.org/wiki/Austrian_School ). However, many of the articles and comments have a more libertarian (http://wiki.mises.org/wiki/Libertarianism) flavour to them. Some people say that each leads inevitably to the other, some say not. Don’t worry about this for now.
3. Rather than talking abut what governments can or can’t do, discussion here tends to focus on what governments should or should not do, in the general case (for example, starting wars, rather than starting any one specific war). In this way, Austrian economics talk tends to drift towards the morality and the justification of actions.
4. One of the important points Austrian’s talk about is the Economic Calculation Problem (http://wiki.mises.org/wiki/Economic_calculation_problem). It is cited as one of the reasons that taxes are never as appropriate as a free-market solution – when individuals have a choice in determining the best course of action for themselves, this allows all relevant considerations to be reflected in the supply and demand for various solutions, whereas taxes hide some costs/benefits and distort others.

Now, you said:
“What is insane, is that, presuming we have to have Bill Gate’s stuff in order to save the world from an asteroid, we shouldn’t take his stuff against his will. His right to stuff does not supersede everyone else’s right to be alive.”
I think that the libertarian answer to that would be as follows: Bill Gates’ stuff is his “property”, that is, it’s the product of his life and his actions. To claim that you have the right to take the product of his life and his actions is to claim that you own his life and control his actions. Therefore, whenever you are “enough” in danger, he becomes your slave. But, if we apply this principle consistently, then when Bill Gates fears that his life is in danger because people are storming his house, then *you* should become *his slave*. This leads to a contradiction – he’s only in danger when he doesn’t own you, but as soon as he’s in danger, he owns you, and is no longer in danger from you. This contradiction shows that your claim to his stuff was unjustified. (This is a silly example, I know, since the angry mob might want to steal from Bill Gates “peacefully”, so his life is never directly in danger. However, if the mob steals enough, and Bill Gates is starving to death, then whenever he gets hungry enough, you become his slave).

Each free person has choices, and those choices have consequences. Millions of people chose to buy Windows instead of taking out Asteroid Insurance, or pledging to the Groupon Space Defence Shield Laser, or whatever. If, later, it turns out that that was a mistake for them, then that is unfortunate, but it is their own fault, not Bill Gates’. So it’s not Bill Gates that should shoulder the responsibility (and the costs) for that mistake.

Of course, your answer assumes that stealing Bill Gates’ stuff for your own use is the only solution – it’s not. If there truly was this asteroid, then the value of asteroid busting technology would shoot up, but the costs of producing it would stay the same, roughly. So, for the average non-suicidal person, investing whatever scraps they can in the AstroBuster solution of their choice just became an incredibly obviously good idea (note, this probably includes Bill Gates, but even assuming it doesn’t, this still holds).

There, now I’ve provided my input on why stealing is wrong – if I am mistaken, please feel free to show me how stealing is justified.

StLreflections February 23, 2011 at 11:10 am

Thanks for the welcome, and cool, you’ve got me thinking.
I guess what I would say is that I buy the obvious meaning of the Economic Calculation problem, that the free market is the best way to set the price of goods, but I think the challenge of the commons is an equally obvious failure of the market economy. In this case, it seems like looking at the skies for asteroids is a task currently handled by the government because basic science is a public good that is tricky to monetize, and I’m glad the government pays university astronomers to do so, but when the asteroid comes, I’d be happy to see the free market try to handle it.

On the whole Bill Gates mob thing, it seems to me that this is the whole purpose of government-to manage the switch between various moral ‘slave’ statuses (this is language I think is wildly inappropriate, taking some of your stuff in a legal way doesn’t make you a slave, just a member of society, but I get your basic meaning) in a civilized fashion. I am a slave to Bill Gates, in that my tax money goes against my will to protecting his stuff through police protection and intellectual property laws, he is a slave to me, in that I get to use some of his taxed money for health care when I get old.

Allen Weingarten February 23, 2011 at 8:36 am

The purpose of government is to defend our inalienable rights. Yet this necessarily requires certain actions that are immoral (such as war) which violates our rights. *The justification is not that such actions are moral, but that they are necessary*, as when dealing with emergencies. I acknowledge that it is often the case that the government does more harm than good. However, were we to demand that all practices be moral, we would have to take the anarchist position, since as Washington said “Government is not reason; it is not eloquence; it is force. Like fire, it is a dangerous servant and a fearsome master.”

Colin Phillips February 23, 2011 at 10:22 am

No, you can’t claim that something is “immoral but necessary” without showing that it is in fact necessary. (Well, you can, but it’s meaningless). In the asteroid example, it is necessary to get the asteroid blocked, or perturbed, or destroyed, in order to preserve your life and bodily integrity , fine. So, you have a need. A Desire. A problem you need solved. Fine.
But you don’t need to solve that problem by using government thugs to steal at gunpoint on your behalf. You need to deal with the emergency, but you do not need to resort to this single tool of aggression to deal with the emergency.

If your first instinct, when faced with an emergency, is to grab a gun, point it at someone’s head, and tell them to solve the emergency for you (by giving you stuff or doing something for you or whatever), then you are the more pressing emergency for that person. It is necessary for them to “deal with” you first. All you’ve done is make the problem worse.

“A person cannot protect your life by shooting you.
They cannot protect your wealth by stealing half of it.
They cannot protect your freedom by controlling you.” – Stefan Molyneaux, paraphrased.

Claiming that “Government is the only solution we have for problem X” is wrong twice:
First, it assumes that government is actually a solution, and second, it presumes that no other solutions would work (http://wiki.mises.org/wiki/Public_goods)

Allen Weingarten February 23, 2011 at 10:49 am

Colin Phillips:

One example where something immoral is necessary is where there is only room for 6 to survive on a life raft, so 7 are forced to draw straws. Another occurred in the account of escapees from the Warsaw Ghetto, where it was necessary to murder a crying baby or all of them would have died.

I am unaware of what else you have written that pertains to what I wrote.

Colin Phillips February 24, 2011 at 12:37 pm

Allen Weingarten:

Thanks, I think I can see where we differ. Please allow me to try to be more explicit in what I mean, using your examples.

In the lifeboat scenario, everyone has two choices – they can agree to live, or die, by the decision of the shortest straw (which has a 1/7 probability of death, assuming everyone joins), or they can refuse to take part. Each person who refuses to take part makes everyone else’s odds of getting the shortest straw higher, so each remaining person is less likely to be willing to take part also. At the limit, this means that if nobody is willing to take part, everyone dies. This would be a tragic, but not immoral, outcome.

If however, there is at least one person willing to take part (one person only essentially means he is willing to sacrifice himself, any more and his odds improve dramatically), then those who do participate do so willingly, and one of them dies. This would also be a tragic, but not immoral, outcome. It’s unpleasant, and horrible, but people’s actions were not immoral (in my conception of these things – I accept that your understanding of morality may be different, and would actually be very interested in reading about it…). Of course, if you forced people to participate who refuse (such as, say, drawing straws on their behalf, and then throwing them overboard if they lose), that would be immoral. But my point is that the immoral solution is not necessary. (Of course, you can construct ever more elaborate scenarios, with ever more restrictions, but sooner or later you’re going to run into a design where the actors have no choices, at which point morality (being, to me, the study of how choices should be made) is not applicable).

The Ghetto scenario is slightly different, I think. Again, it is deeply tragic, I know, but whether the actions were immoral is a bit tricky. In this specific example, one could argue that the escapees were under duress, being threatened with violence by the Nazis. It’s like asking whether it is wrong to lie when there is a gun pointed at your head – the more important moral question is whether there should be a gun pointed at your head. You could argue that the moral culpability for the murder of the baby lies with the Nazis, since they created the initial threat on the baby’s (and everyone else’s) life.

However, you could get around that by changing the example, so that instead of Nazis it’s some vicious predatory animal hunting the escapees, like sharks or velociraptors. I consider velociraptors to be outside of the scope of moral culpability, since I assume they are acting on instincts, rather than making reasoned choices. But therein lies the rub, the fact that the baby’s life is in danger precisely because it is crying, and this cannot be communicated to the baby in any way, kinda means the baby is not really a moral actor in this situation either. It is not in control of itself, and therefore (in my view, anyway, this is a contentious point, so I fully expect someone to disagree with me here, in fact, I welcome the discussion:) it can’t really be said to own itself – the caretaker is the effective owner. The caretaker’s (horrible, tragic, painful) choice to end the life of her baby is a heart-wrenchingly painful disposal of her own property. So again, this is a tragedy, yes, but I’m not convinced the actions taken were immoral.

This is a sticky subject, and these “lifeboat scenarios” such as above do represent the edge cases of our understanding, so I do understand disagreement with my point of view here. Please do feel free to correct me, I’m willing to change my mind if I am convinced to. These lifeboat scenarios are not really useful to your original point though – that government, in the form of an institution routinely performing immoral actions on a day-to-day basis, is necessary. Life is mostly not like lifeboat scenarios. Getting stuck in the intricacies of working them out is like a convention of doctors, in the middle of an ebola outbreak, discussing the best way to get rid of halitosis – the far more pressing issue than the lifeboat scenario is the false justification of the actions taken by these institutions that is going on right now.

In my opinion, the routinely immoral actions of governments are also unjustified, not because the results they set out to achieve are not necessary to attempt to achieve, but because the specific actions chosen in that attempt are not the only actions available- other, justifiable choices also exist to achieve the same ends (often more effectively/fairly/nicely, but that’s a separate point).

You’re right that not everything I wrote pertains exactly to what you wrote. Sorry.

AG February 23, 2011 at 2:52 pm

Wow, that public goods page is full of logical problems, but here is the one that I see as most glaring. It uses privateering as evidence against “the only way to provide a sufficient level of defense is to have government do it and fund defense with taxes.” However, the exposition ignores how the privateers were actually paid. Governments paid for them, generally by the use of taxes, making the privateers effectively like a government-run defense paid for by taxes, if only temporarily.

Colin Phillips February 24, 2011 at 12:50 pm

AG,

Actually, as I understand it, privateers were not paid for by governments/taxes at all – that’s why they were called “privateers” – they were funded entirely by private investors, hoping to make a profit on the loot that these pirates would capture from enemy vessels. Government’s only involvement was their issue of licences, without which the privateers would be attacked by the government’s own navy. The privateers, or their investors, actually paid the government for these licenses, not the other way around. That’s why they were so popular as a tool for governments to harass their competitors – the more effective they were, the more money they brought in for the government.

It is true that in some cases, the investor that paid for a privateer ship may have been a government, but this was the exception, not the rule.
http://en.wikipedia.org/wiki/Privateer

AG February 24, 2011 at 1:34 pm

Colin,

Ahh, fair enough, thank you for the clarification. Here is another problem: how would that work today exactly? What is the workable equivalent in today’s world? Seeing as we have not had an attack on our shores in over 100 years, other than the few hours of Pearl Harbor. A military of this structure either requires the country to continually remain at war, essentially ignore the legitimacy of other countries, or have the shores remain undefended until the country declares war (and this is unworkable because the time-lag between the declaration and construction of war material would give enough time to the invaders to cause untold devastation). I.E. in the modern world, who would become a privateer and how would they get paid exactly? For that matter, please lay out a way a private national defense force would be funded.

Colin Phillips February 24, 2011 at 2:48 pm

AG,

That’s a fairly tall order – you want me to single-handedly solve the problem of defence in the modern world? I’ll give it a shot, but remember, no solution I can come up with is perfect, I’m not at all inclined to this sort of work.

I’m going to draw liberally from my (probably flawed) recollection of these texts: “The private Production of Defense” by Hans-Hermann Hoppe (http://mises.org/journals/jls/14_1/14_1_2.pdf) , and “Private Defense” from Robert Murphy’s “Chaos Theory” (http://mises.org/books/chaostheory.pdf). If you are interested, those texts provide a lot of the answers to the “nagging questions” people have when they first start to consider the possibility of private defence.

Your first question: “how would that work today exactly” – I don’t know. Given that ocean attacks are not very common anymore, due to the effectiveness of guided missiles, I’m not sure that the concept of an ocean-going defence fleet is very relevant. It seems to make more sense to me to defend from the skies than the ocean. However, if there were such a need in the market for ocean-based defensive services, I see no reason why they could not work on a cash basis. Greenpeace and Sea Shepherd are two organisations that have capitalised on a market need for people to feel like they are doing something nice for the whale population. These organisations purchase ships with donor/subscriber money, and harass whaling ships with them. I see no reason why that model could not work for other ships. If you could convince enough people that a) there is an ocean-based threat that requires defence, and b) you and your ship would be capable of providing that defence, for a reasonable subscription fee, then you could easily use the subscriber money to outfit your ship with whatever weaponry you think you require.

“What is the workable equivalent in today’s world?” I may be wrong on this, but I think the Somali pirates started out as a sort of privateer coast guard. I read somewhere that the first Somali pirates were fishermen who got tired of ships dumping waste off the unguarded Somali coast (which was killing off the fish, making Somali fishermen’s life much harder), and so raided a few ships which were caught dumping. Of course, since then, they have blossomed into proper pirates rather than vigilantes providing a defensive service. However, the pirates never attack Somali ships, due to the ingenious legal system the people have built for themselves there. If the ships passing through Somali waters would pre-arrange with the Somali people’s “Xeer” legal system to be granted temporary Somalian-ness, then these ships would also not be attacked, at least in theory. This is an interesting read on the topic: http://www.thefreemanonline.org/featured/somalia-failed-state-economic-success/

“ignore the legitimacy of other countries, or have the shores remain undefended until the country declares war [?]” I don’t see these as the only two options, actually (in fact, I don’t see how your idea of perpetual war helps matters at all). In the same way that you don’t only buy fire insurance just after your house catches fie, because there’s a lag between you buying the insurance and getting the coverage, I think responsible adults who can anticipate a threat will begin to make defensive plans well in advance. In fact, my preferred method of dealing with this is something along the lines of an insurance company – if your house is insured against a wide variety of things, one of which is invasion from the high seas, then, in order to avoid paying out huge claims to your estate in the case where such an invasion occurs,insurance companies will have a direct incentive to patrol the seas on your behalf. For example, if half of the 20 people on your street each feel worried about the threat of the Spanish Armada, or whatever, and each of them takes out a $1 000 000 policy out to mitigate the risk of that happening, then the insurance company stands to lose $10million if they allow the armada to invade. If they can hire a privateer, or Somali pirate fleet, for $1m, to repel invaders, then they are better protected from the possibility of losing the other $9m. $1m can probably buy you a lot of Somali pirates.

“who would become a privateer and how would they get paid exactly?” Again, I’m just guessing here, I’m no ocean-warfare expert. In the absence of a navy, the people who enjoy the concept of being in a navy are the natural recruits for a privateer vessel. In the subscriber model I gave the bare-bones of above, the privateer staff would be paid from the subscriber fees, in the insurance model, the privateer fleet would be paid by the insurance company. I’m sure these are not the only workable models.

“For that matter, please lay out a way a private national defense force would be funded.” – Well, as I’ve been trying to allude, I’m not sure that the concept of a “national” defence force is really required, it seems obsolete to me. The “enhanced insurance” model – where insurance companies try to mitigate their risk by putting structures in place that reduce the probability of them having to pay out, could probably handle all the problems a “national” navy could. I already see things like this starting for life insurance and medical aid companies – they pay gyms and health clubs huge sums of money to give their members “free” gym memberships – this has the general effect of making their clients more healthy, which in general means they claim medical expenses less frequently, but live longer before they claim life insurance. That doesn’t really answer your question though. I think an insurance company that has a fairly large market share over a wide region, like a country, could offer “nationwide” defensive services to their clients. The proceeds from this offering could be used to buy or hire staff and equipment which provide an adequate level of defense against the most likely aggressors.

AG February 24, 2011 at 4:53 pm

Colin,

I greatly appreciate the valiant attempt. I understand the insurance analogy and was guessing that this is what someone would come up with. There is (at least) one major problems with the insurance analogy:

Insurance provides coverage for those who buy the insurance, but not for those who don’t. In the case of national defense, this would mean providing defense for some but not others. How would this work? As long as the spanish armada attacks your house no one defends it, but as soon as it attacks mine, the defense force comes to the rescue? The problem is that once it has reached our port, it is pretty much too late to defend either of us. So, instead we are going to allow the free riders I assume? Well, then this presumes that enough people care about the spanish armada that it is economically feasible to defend against it. What happens when that is not the case? We just let the country get wiped out because not enough people saw the threat and were willing to pay to protect from it? This just insures the viability of the country until the time arrives that a threat that a critical mass of people did not think to insure against arrives. Personally, that society seems to fragile to me. What we have as national defense is an insurance system (more like health insurance than life, property, or fire insurance though) where everyone is required to buy insurance (though the amount it costs is progressive for better-or-worse) to defend against foreign threat regardless of kind. There is huge inefficiency in the fact that it is not well targeted to particular threats and therefore wastes lots of money, but we are trading efficiency for a society that is less fragile to the threat of foreign attack (now I might argue that in the past 40 years we have engaged in a set of wars that were not “defensive” in nature and, thus would be considered illegal and unconstitutional and that the perpetrators of those wars should be in jail).

As for the Somalia, that is actually exactly what I see as the problem with this scheme. I read the article and if the premise is that anarchy/pseudo-libertarianism is better than the oppressive dictatorial regimes that persist in most of Africa, fine, I buy that. That in no way suggests that this is somehow better than the amalgam of socialism, capitalism, and just about everything else that we have in the developed world.

Colin Phillips March 7, 2011 at 6:44 am

AG,

Thanks, I appreciate the feedback. I don’t think the free-rider problem is as big as you seem to think. In the Spanish Armada example, where I (and a critical number of others) have bought insurance and you have not, defensive services will not be turned on and off, no, but they will be more or less successful, in part depending on their level of support. If they are unsuccessful, then there were no free riders, as nobody received the service “protect me from the spanish”, paid or unpaid. If they are successful, then there were free riders, so what? Your enjoyment of your continuing life does not stop me enjoying mine – it’s the defensive service’s responsibility to ensure that their customers are defended, not to prevent non-customers from getting defense. So yes, I have no problem with free riders. Obviously, if a defensive service can find a way to increase its profits or its service levels, in a way which also happens to exclude non-payers (e.g. coating paying subscriber’s houses in missile-resistant steel), then I have no problem with them doing that either. This is not a tragedy of the commons scenario, your “free ride” doesn’t diminish my return.

Your next objection was essentially: What if not enough people care about defense to reach the critical level where defense will be effective? Again, I’m not quite sure why this should be a show-stopper: if people do not care about the Spanish Armada threat, then it is right that they not be forced to pay for it. However, it is in every defense company’s best interests to keep their subscribers alive and paying for as long as possible – this means alerting them to realistic threats, and offering to protect against them. If your defense company cannot motivate why the Spanish Armada being constructed is an imminent threat, but another can, wouldn’t you trust the second company more to defend against this threat? Also, I note you’re assuming that current state militaries *are* effective at realistically and timeously assessing threats, an assumption I’m not comfortable with. To paraphrase you: “This just insures the viability of the country until the time arrives that a threat that a military hegemony did not think to insure against arrives. Personally, that society seems to fragile to me.” The statist strategy of “make the army so big that it can handle any threat” is not the only strategy, and probably not the most effective one. But that’s beside the point, even if we assume that the only way to defend against the panoply of threats faced is to build a force so massive that any one individual threat can be handled (and that this strategy *does* work), then why can this strategy not be equally well implemented by private defensive companies, each amassing the biggest most generic force they can. Nothing stopping them from making alliances as needed to bulk up (I understand the US military has various branches which can, in theory, work in concert, in this manner, but prefer not to, being more focused on glory than cost-effectiveness).

You’re quite right that insurance companies (and their clients) will only ever defend against threats which they can imagine, and they will only defend against them in ways which they can imagine, but it is a mistake to think that statist militaries, having no direct incentives for innovation, but plenty incentives for bloat and corruption, do not suffer from the same problem, only worse.

AG February 24, 2011 at 4:29 pm

Let me quickly explain where I am coming from then throw a couple of things into this discussion that I would love to hear people’s opinion on. I came to this site because of a curiosity about Austrian economic theory. My personal economic beliefs are primarily pragmatic. The foundation that I base my beliefs on is that the ideal economic system is one in which happiness, productivity, and invention are in some proportion maximized. My personal belief is that this is most likely to occur in some kind of hybrid system that takes certain aspects of many economic philosophies, thus I am trying to learn about the different philosophies to understand what might be appealing and less appealing about each.

I have noticed is that there is a running theme that taxation is “theft.” I do not follow the logic here. Theft assumes that the money is taken without your permission (and generally your knowledge, but lets leave that aside). However, you are given a choice of what country you want to live in. Each country has its positives and negatives and its tax rates and all of this information is easily accessible. In most cases, you choose to live in the country you live in (I am assuming you live in the western developed world, if you live under an oppressive regime I am sorry for you and this point may not apply to you), thus have implicitly decided that of all the different options, the balance positives and negatives of the country you live in are the best for you. Thus, you have agreed to live with these positives and negatives and this includes taxation. If you believe that the taxation is theft, you can leave and indeed there are countries with near 0 tax (see United Arab Emirites and there are a lot of countries where you can effectively live “off the grid”). if you believe that taxes should be lower or 0, but still that the benefits of the country outweigh the negatives, then fine, you can work to lower that tax rate, but its not theft as you made a choice to take the good with the bad.

A. Viirlaid February 24, 2011 at 6:52 pm

I have noticed is that there is a running theme that taxation is “theft”. I do not follow the logic here. Theft assumes that the money is taken without your permission (and generally your knowledge, but let’s leave that aside).

Taxation as theft at WIKI at http://en.wikipedia.org/wiki/Taxation_as_theft

AG February 24, 2011 at 9:19 pm

I notice that none of the points on the wikipedia page are my point: that you choose which country to live in. The social contract point is the one closest to mine, but I am arguing that the contract is in fact voluntary since you can always leave.

Richard Moss February 24, 2011 at 9:49 pm

Yes, I voluntarily choose to live in this country.

How does this imply I voluntarily choose to pay for anything the government that claims legitimacy in this country does? How about the War on Iraq? Does the fact that I chose to stay here during that war mean that I also supported that war, and therefore had to pay for it? Did the millions of citizens who opposed this war really support it because they chose to stay here, and therefore it was legitimate to tax them to pay for it?

Richard Moss February 25, 2011 at 6:36 am

AG,

Sorry, had another question – what about Egypt? Egyptians who did no approve of Mubarak were free to leave Egypt, correct? Did that mean they ‘voluntarily’ approved of Mubarak’s regime, and therefore could not demand that Mubarak step down?

AG February 25, 2011 at 7:38 am

Richard, I said:

(I am assuming you live in the western developed world, if you live under an oppressive regime I am sorry for you and this point may not apply to you)

To specifically address things like Egypt and Mubarak.

Also, I said:

if you believe that taxes should be lower or 0, but still that the benefits of the country outweigh the negatives, then fine, you can work to lower that tax rate, but its not theft as you made a choice to take the good with the bad.

This addresses the point about the war. If the citizens thought it was so illegitimate that taxing them would be tantamount to theft, then they could have left (or revolt, revolution is another option if the regime is so oppressive as to be completely illegitimate). If, on the other hand, even with the war, they felt the good outweighed the bad, but were opposed to the war, they could behave in such a way as to try to get the country out of the war through legitimate means. However, the taxation would still not be “theft”.

A. Viirlaid February 25, 2011 at 11:09 am

However, the taxation would still not be “theft”.

You have a right to your opinion, AG

At Dictionary.com “theft” is described as:

The act of stealing; the wrongful taking and carrying away of the personal goods or property of another; larceny.

When your property is taken from you, under threat of harm to you and your family, what do you call it?

You have not agreed to this expropriation, and you may (or may not) object to it.

You have been ‘dispossessed’ of ownership of something that was yours.

I guess where you and I can agree to disagree is with the phrase “wrongful taking”.

Presumably in your view, taxation is not “wrongful taking”.

In my opinion, if I have not made an agreement (contract), implied or explicit, then the “taking” is “wrongful”. You may have presumably made that agreement, at least implicitly.

And the fact that we do get goods and services from our governments may argue in favor of the legality of what is happening in your mind.

But we never personally really get a chance to purchase these services from alternate suppliers —— we are just forced to deal with a monopolist.

There should be a mechanism for more choice, not less.

Perhaps in the future, with elections of more (truly) liberal-minded politicians, we can move toward a system that does enhance personal choice when it comes to consumption (of education, of electricity, of health care, of policing services, of transportation services, etc.)

A. Viirlaid February 25, 2011 at 11:43 am

One thing I forgot to add.

AG, in discussing the merits of a government and its taxation policy, it is my suggestion to you, to avoid conflating the issue of Redistribution and the Separate Issue of Government Monopoly on Providing Certain Goods and Services. I am not saying that you are doing this explicitly, but it may help you to separate these concepts when you do discuss social policy.

What many socially-committed people do, is to argue in favor of the government monopoly on say, education, because they are convinced that a “Publically-Funded Non-Private School System” is fairer and will provide the best education for the poorest students in the nation.

The problem is that ‘government’ may not be in a position to offer the best of anything to anyone. If it can be shown that the private sector can do a better job of say, providing education, then it is not valid to argue against that, by saying that poor people will thus be “left behind”. The two issues (of funding, and of provider) are distinct.

In fact, if politicians running for office argue in favor of subsidizing (privately-provided) education so as to truly achieve “No Child Left Behind” then many of us may vote for those politicians with the understanding that our taxes will be used for that purpose —— in such a case, at least some of us will have made an agreement to agree to that part of our tax burden.

But to disallow improvements in those services where the private sector could help, is shortsighted and detrimental to all of us, poor and not poor. And using the phony argument of saying the poor will be left behind, just because the provision of a given good or service is coming from the private sector, is plain silly.

AG February 25, 2011 at 12:59 pm

At Dictionary.com “theft” is described as:

The act of stealing; the wrongful taking and carrying away of the personal goods or property of another; larceny.

According to criminal law:

Theft is the illegal taking of another person’s property without that person’s consent.

As you said:

In my opinion, if I have not made an agreement (contract), implied or explicit, then the “taking” is “wrongful”. You may have presumably made that agreement, at least implicitly.

I agree, that would follow from the “consent” above. However, I have laid out a clear, logical argument of why voluntary egress and choice makes taxation an “agreement”. Please address the point and the logic. This has NOTHING to do with what services are or are not provided nor do they have anything to do with merits of the spending or the taxation. Just because you don’t like what the government is doing with your money does not mean they stole it.

Let me also add (in response to your other point above) I am not discussing the “merits” of the taxation policy, I am discussing the use of the word “theft” to describe taxation.

Richard Moss February 25, 2011 at 7:05 pm

AG,

With respect to my question about Egypt, I don’t understand how you addressed living under an oppressive regime.

If I understood you correctly, you said as long as you had a choice as to whether you lived in a certain country or not, then the taxes that country’s government levied upon you are not theft. It is my understanding that Egyptians were free to leave their country if they wanted. Why then are those that live there now justified in demanding that Mubarak step down? Why would Mubarak not be able to justify his rule by simply saying ‘Look, if you don’t like the way I am running things here, you are free to leave.’

I also take issue with your response wrt war. You say if people opposed to the war stayed here, then they must pay taxes to support it or “they could behave in such a way as to try to get the country out of the war through legitimate means.”

I suppose you would say if people opposed the war refused to pay taxes to fund it would not be behaving legitimately? How so? How is not funding something you don’t support and never made any prior agreement to support illegitimate?

A. Viirlaid February 25, 2011 at 10:40 am

Hi AG,

I cannot agree with you that the existence of my ability to freely leave my homeland ‘A’ and choose another homeland ‘B’ to live in, and then choosing NOT TO DO SO DENOTES Vountary and Implicit acceptance of the social contract under which I agree to be taxed under the current tax regime in my country ‘A’.

In the first place, I may love my homeland ‘A’ and not wish to leave it. That is to say, the Tax Regime in my homeland ‘A’ is not the only determinant of why I choose to live in nation ‘A’.

Secondly, I still retain the right (since you are using “Western developed-economies Liberal Democracies” for your example) to continue living in nation ‘A’ and to continue working toward a Tax Regime that reflects my personal values — as many people at this site are currently agitating for.

Furthermore, all those other nations may have even more oppressive tax regimes (in my personal opinion) and thus the ‘choice’ your example presents, may in reality be ‘No Choice’ at all.

Also, the logic you are using could be used for any number of conditions we may all or individually object to.

If my homeland has a draft for bringing young people into military service, I may object to that, but should I be forced to choose another country to live in, just to ‘object’ to it and avoid its repercussions?

What if my country has fluoridated drinking water as a standard for municipally-supplied tap water? OK for that one, I can buy bottled water if I have the financial means to do so.

To find a place to live that meets all of my particular personally-optimal ‘conditions’ for living would be impossible —— that place exists only in novels like LOST HORIZON (and is named Shangri-La).

So I do not accept your logic —— in fact, with respect, your argument is the weakest in favor of the (forced) acceptance of a given tax regime that I have ever encountered.

But your argument (in reverse) does raise good points in favor of arguing against One World Government —— and that is that if we have NO PLACE to run to, when that one world government becomes dictatorial, then we really are doomed.

AG February 25, 2011 at 11:57 am

Ahh, but A, you are accepting my premise in its entirety. I never claimed that you had to like the negatives, just that you have made a rational decision weighing the positives and negatives and decided that this is the place you want to live. Indeed, exactly what you said is correct:

the existence of my ability to freely leave my homeland ‘A’ and choose another homeland ‘B’ to live in, and then choosing NOT TO DO SO DENOTES Vountary and Implicit acceptance of the social contract under which I agree to be taxed under the current tax regime in my country ‘A’.

In the first place, I may love my homeland ‘A’ and not wish to leave it. That is to say, the Tax Regime in my homeland ‘A’ is not the only determinant of why I choose to live in nation ‘A’.

IE you are saying the positives outweigh the negatives, that is what has driven your choice, which was my point exactly. That is in fact an implicit acceptance of the positives and negatives, but does NOT mean that you have to sit down and shut up about the negatives. IE, the point below does not follow from my argument at all:

Secondly, I still retain the right (since you are using “Western developed-economies Liberal Democracies” for your example) to continue living in nation ‘A’ and to continue working toward a Tax Regime that reflects my personal values.

I am not saying that you have to like taxes, or think that they are at an appropriate level, however you can work within the system to promote change.

Let me provide an analogy: You go into the corner store and have a choice between a number of food items and you choose to buy and consume a cream-filled doughnut (that has all the ingredients and nutritional information listed on the package). This does not mean that you suddenly think that the trans and saturated fats in the doughnut are a good thing, but it does mean that you have made the rational decision that the pleasure you will derive from eating the doughnut outweighs the potential negative health consequences. You still have the right to work with the manufacturer and try to convince them that if they use alternative ingredients they would have a healthier product, while retaining the flavor and enjoyment, that more people would buy.

Now compare that situation to one where you are walking down the street, someone grabs you, ties you down, and shoves the doughnut down your throat. In this case you have no opportunity to make a choice and this is clearly coercion. You are not given the opportunity to decide which positives and negatives you want to accept.

It should be clear that allowing egress turns taxes into the first situation, not the second one.

Finally let me address the argument below (which is another false argument):

all those other nations may have even more oppressive tax regimes (in my personal opinion) and thus the ‘choice’ your example presents, may in reality be ‘No Choice’ at all.

First, there are clearly countries like many in the middle east where taxes are very low (the countries make all their money from oil) and countries like Somalia (I should change the “western developed world” to “any country that does not implicitly or explicitly restrict egress”). Second, not having the “perfect state” does not change the point above. As an analogy, no food is perfect, but rational actors can make decisions based on imperfect choices and this would not be considered coercive (if it would, then any philosophy that requires a “perfect choice” is wholly impractical and irrelevant).

The bottom-line: you may not like taxes and may think there is a better way, but it is NOT theft because you are making a choice.

Sprachethiklich February 25, 2011 at 12:42 pm

TL;DR.

Dumbest definition of theft you probably could have ever contrived, even if you set out to to so. I challenge anyone to come up with dumber one. GO.

AG February 25, 2011 at 1:06 pm

How do you guys put up with trolls like Sprachethiklich? I guess they appear on all boards like this, so you live with them, but still…

A. Viirlaid February 25, 2011 at 1:00 pm

No, AG I cannot agree — for me, “NO CHOICE” is not a choice.

As to your trying to differentiate between the choices with your comment:

Now compare that situation to one where you are walking down the street, someone grabs you, ties you down, and shoves the doughnut down your throat. In this case you have no opportunity to make a choice and this is coercive.

In response, I would encourage you to not pay the taxes that are levied on you. Then you will see what the word “coercive” really means.

You might not have a “doughnut shoved down your throat” but given the threats of alternative “violence” that the government has available to it to impose on you (loss of personal liberty, fines, harassment, wage garnishment), you might just find that a punishment involving only a doughnut being shoved down your throat is rather mild.

AG February 25, 2011 at 1:13 pm

No, AG I cannot agree — for me, “NO CHOICE” is not a choice.

i have no idea what that is referring to. How exactly is having ~203 countries in the world to choose from “no choice”?

Please address my point that taxation is more like the choice to eat something unhealthy because its tasty than having that unhealthy thing shoved down your throat. I have to repeat, you have the choice to leave! You choose your country, we are either rational actors and that is a rational decision, or we are not rational actors and our ability to make free decisions should be taken from us.

A. Viirlaid February 25, 2011 at 1:51 pm

Dear friend AG, you are artificially trying to make the choice (of staying or not) into a 1-variable decision-matrix. As I described to you earlier, that is not reality, or at least that is not MY reality.

You say:

You choose your country, we are either rational actors and that is a rational decision…

IMHO Life is not that simple. I don’t think you are obtuse, but I am trying to understand your personal context, so as to better understand your logic.

Perhaps you are young and inexperienced in making real-life choices and decisions — that is, you do not yet have many personal responsibilities, in which case I would envy your uncluttered and carefree lifestyle.

Alternately, perhaps you have unlimited personal resources?

I am trying to get a better handle on wherefrom your perspective is arising —— I am not trying to insult you here.

Unlike you, I do have other decision-variables to consider (responsibilities) and I am shackled by such constraints —— let’s just say for purposes of our discussion here that I am looking after a sick parent or an ill child who cannot travel.

How exactly does my rationality or irrationality bear on choosing to “freely” bear taxes in this or any other country?

If I stay because I cannot leave (that is, I have “NO CHOICE”), am I then freely, rationally, implicitly, and quiescently accepting the current tax regime? —— I would argue that I am not.

The number of other nations which might accept me as an immigrant is immaterial, especially in my current personal situation.

AG February 25, 2011 at 2:10 pm

A,

First, in terms of me personally, I neither have unlimited means, nor am I so young as to lack responsibilities (in fact I have a wife and child and am in my mid 30s). However, I am trying to express to you, that even given all the constraints you might have, you still have the opportunity to choose. You choose to be responsible and upstanding (and I applaud you for that), but that is still a decision where you weighed the positives and negatives and made a rational choice based on what you felt was the best option for you, your life, and your morals. Not having a choice would mean that there was an external coercive force that physically prevented you from leaving (see North Korea for example).

Now, keep in mind, I am happy to acknowledge many negatives about taxation and how the money is spent, but this is not pertinent to the question of whether or not taxation is “theft”.

A. Viirlaid February 25, 2011 at 2:17 pm

Thanks AG — cheers

AG February 25, 2011 at 2:30 pm

Dear A,

You are welcome… does that mean you buy my argument that it is not “theft” and that the discussion to move on to the relative merits of taxation and not whether or not it is coercive and immoral (I am assuming that theft is immoral and feel pretty good about that assumption).

Also, I did think of another good counter example to why taxes are not “theft” – condo fees. If you want to live in a particular condo complex you are required to pay fees whether or not you use the services that the fees pay for. You do not have the choice not live in that complex and not pay them, but you do have the choice to live elsewhere. Does that make condo fees “theft”?

AG February 25, 2011 at 2:49 pm

wow, that was poorly written, let me try again:

Dear A,

You are welcome… does that mean you buy my argument that it is not “theft” and that the discussion should move on to the relative merits of taxation and not whether or not it is “stealing”.

Also, I did think of another good counter example to why taxes are not “theft” – condo fees. If you want to live in a particular condo complex you are required to pay fees whether or not you use the services that the fees pay for. You do not have the choice to live in that complex and not pay them, but you do have the choice to live elsewhere. Does that make condo fees “theft”?

Dan February 25, 2011 at 3:10 pm

The example with the condo is a good one, but still not good enough. When it comes to living in a condo you sign the contract with the owner and pay him a rent. There is mutual agreement and everything is cool. If taxes were equivalent to the rent, the state would have to be the owner of the land somebody wants to live on.
The simple answer is that the state is not the rightful owner of the land it controls
David J. Heinrich explains it this way:

“Due to the way that states are created, obtain their funding, and obtain their land — fundamentally, due to the nature of the State itself — it is simply impossible for a State to have a property right in anything. There are several ways that States can come to positively control land, none of which gives them a normative private property right in that land:

1. By buying the land from previous owners. Since usually States must be financed by taxes (stolen money), any acquisitions made by States are illegitimate. Even in the States of old that did not tax, they were still coercive monopolies on protection (that is, they violently prevent anyone from competing with them in the rendering of protection). Thus, we cannot claim that the money they obtained was legitimate — they wouldn’t have obtained that much if not for violently preventing competitition.

2. By decree. Unoccupied land is “declared” to belong to the State. This is not a legitimate way to come into ownership of land. To obtain a property right over something, you must first homestead it. Simply pointing around yourself in a 360-degree circle and saying “mine” doesn’t constitute homesteading. Actually working the land does.

3. By conquest. This is outright robbery.

4. By emminent domain. Again, outright robbery, except of the States’ own citizens.

5. By actually “working” the land. Still, this does not give a property right. Working land is one requirement for coming into ownership of it. The other requirement is that the tools you use to work it were rightfully yours in the first place. If I steal your plow to work a plot of land, that plot of land isn’t legitimately mine. If I enslave you to plow a plot of land, that land isn’t legitimately mine. In short, it is impossible for States to homestead land.

Summarily, because no State can ever possibly be legitimate, no State can ever possibly rightfully own (have a property right) in anything. Of course, States positively control things. In the same way, if I hold you up at gunpoint, and steal your money, I positively control it. That doesn’t mean I own it, or have a normative property right in it.”

It is an excerpt from this post: http://blog.mises.org/2502/states-cannot-own-property/
Comments are also worth checking out.

AG February 25, 2011 at 3:17 pm

Dan,

Actually you are misunderstanding what condo fees are, they are not rent. You buy a condo, then you pay the association a fee with which they agree to maintain the common areas (for example, in the case of a condo complex near me, they have a pool and tennis courts in addition to the lobby and hallways). You have to pay this fee whether or not you use the common areas if you want to live in that complex.

Also note that point 1. of the reasoning you lay out as to why states can’t own land assumes that taxation is theft. And the reason that taxation is theft is because the state can’t own land (and thus could not rent or sell it to you). This is circular reasoning.

Dan February 25, 2011 at 3:41 pm

Method number 1 is also the rarest one. Honestly, how many countries have bought the land they own? There are only a few examples such as Louisiana, Alaska and probably a few others. They were bought for the money extorted from the people conquered by the state before. So it isn’t really a circular argument.

AG February 25, 2011 at 3:44 pm

Dan, I am not sure if I agree that the argument is not circular, but leaving that aside, note how condo fees work, they are remarkably like taxation. Considering you agree to pay them as a precondition of buying a piece of property, (and the condo association, whose members are all condo owners, decide how the money gets used and if and when the fees get adjusted), it is not clear to me how this could possibly be considered theft.

A. Viirlaid February 25, 2011 at 4:01 pm

AG, one way (but not the only way) to look at this question is to ask “What is the State?”

If the State is voluntarily formed by all the people who reside in a given area, and those people agree to a set of rules (Constitution, Bill of Rights, rules, roles, and structure of Government) and if those people agree to a form of revenue collection to finance their government (let’s call it Tax for now), then I would be inclined to believe that this form of revenue generation is not theft —- that is, it has been agreed to beforehand and is so documented. Of course, an amending process would have to be established at that ‘starting point in time’ so that any future changes to the tax regime are clear and conform to that process. If such a change requires a referendum, or a super-majority, or a Supreme Court decision, or even the reformation of a new State, then that is what would have to be done.

There are other issues, as to rule of minority by majority —- if the majority considers themselves to be poor, and if the ‘richer’ minority’s property rights are not protected in that initial understanding (at time of State formation) then even ‘democratically’ those poor can steal assets from the ‘rich’. There are many reasons why the rights of minorities are protected —- this is just one of them. Besides, just like in a court of law we all have rights that cannot be (and more importantly, for a moral code, SHOULD NOT BE) abrogated.

The problem with our current taxes is, are they even constitutional? Were Income Taxes not supposed to be ‘temporary’?

My issue is not primarily with taxation or if it is ‘theft’.

The bigger issue for me is whether we can continue as a society as we have for the last 100 years, more or less — which more or less mirrors the time duration of the existence of the American Central Bank (The FED).

I would argue (and have elsewhere on this site) that there is no way that America and the Western World can continue on a path that employs a Broken Money System.

The problem is that our current system is simply not sustainable. It has worked for a variety of reasons, “reasonably well” (if you think that 2 World Wars and the Great Depression are included in that phrase).

But I believe this system cannot continue without severe reform for much longer. It won’t be a CHOICE in this case —— the modifications will be forced upon us by reality.

For one thing, the Debt we have will bring us down and prevent further improvements in living standards until it and the reasons for this Debt Mountain’s creation are dealt with. Nothing short of a System Reboot will do —— a redesign is long overdue.

By the way you might enjoy the post today by Thomas E. Woods, Jr. for ” Life without Our Wise Overlords” at

http://mises.org/daily/5059/Life-without-Our-Wise-Overlords

AG February 25, 2011 at 4:48 pm

Dear A,

I appreciate that sentiment and understand where it is coming from and more-or-less get (if not agree with) the logic of it. For me the key reason I am here is what I mentioned in my initial post, to understand the logic and reasoning behind a set of beliefs. If that set of beliefs has as a central premise that “taxation is theft,” I find it hard to reconcile the logic of that belief system. We can certainly discuss the path this country is going down and why it is the wrong one (and I will agree with you on that). We can then also discuss the potential solutions (though I am guessing we will not totally agree on this). However, in my opinion, we need to get out of the way buzz-phrase-ish ideas like “taxation is theft”.

Just to address the specific point about the constitutionality of taxes, the supreme court, which the constitution says is the final arbitrator on the constitutionality of a law, has declared taxes constitutional based on the 16th amendment.

As for the problems with the fed, my take on the fed is that the problem is that they have been given two, sometimes conflicting, orders: keep inflation stable and keep unemployment low. The problem here is that the fed would be great if it simply printed money such that the money supply increased by exactly say 2-3% every year (or even stayed steady, though there are some arguments for and against having a little inflation). This would keep inflation in a narrow range and be useful for business because it would help reduce uncertainty. To couple this with keeping unemployment low is just insane and leads to stupid policies like QE and QE2, etc.

As for the solvency of the country, I would argue that the case for the debt being a problem is a bit overstated, though fundamentally correct. The problem we have is not current borrowing, the treasury rates are so low that the government could borrow money and just hand it out to people and it would probably be a decent investment. The problem is that one day this is all going to change and interest rates are going to go up and the debt burden is going to be large. We need the political will to make the hard decisions to get us where we need to be, and I just don’t see that existing unfortunately. It is a source of incredible aggravation to me because I can see that this could actually be done with little pain to society, but the will is lacking.

Dan February 25, 2011 at 4:51 pm

AG
In a theory the first argument is circular, but in the reality no state have bought the land they own. Usually governments just steal it, or in the best case the land is purchased with illegally obtained means. It is crucial because by the same token I can argue that Mafia is not a criminal gang but an administration of a condominium association picking up its fees every week. This is why legitimacy of the ownership is very crucial here. If Mafia operates in one area for 200 years, their actions don’t suddenly become legitimate because they didn’t have the right to impose those fees in the first place. Even if everybody agreed to their services 200 years ago(what’s very unlikely), the contract cannot apply to the next generation because they’ve never signed any agreement with Mafia.
In order to make it more clear let me improve your analogy of the condominium association. I would use an analogy of a neighbourhood where everybody lives, minding their own business and out of nowhere uncle Sam comes with his cannons and declares that neighbourhood a home association (or a condominium). Since now on everybody has to pay him administration fee for the service nobody asked for. I would consider those fees as a robbery.

ps I am not a native English speaker so I am sorry for the mistakes

AG February 25, 2011 at 5:08 pm

Dan,

I agree with the following:

I would use an analogy of a neighbourhood where everybody lives, minding their own business and out of nowhere uncle Sam comes with his cannons and declares that neighbourhood a home association (or a condominium). Since now on everybody has to pay him administration fee for the service nobody asked for. I would consider those fees as a robbery.

However, this is not the situation in most countries (and certainly not in the US where I live). Taxes were enacted by the 16th amendment and and therefore do not “come out of nowhere”. Furthermore, they were agreed to by the vote of the people of the US, using the process we have in place for amending the constitution, so uncle Sam didn’t “declare” or “use cannons” to bring about taxes either.

A more pertinent question is this one:

Even if everybody agreed to their services 200 years ago, the contract cannot apply to the next generation because they’ve never signed any agreement.

Actually, my understanding of contract law is that if the contract was signed such that it was stated to remain in force even beyond the lives of the people signing the contract, it would indeed apply to the next generation. This is generally to protect all parties involved. For example, by that argument, the US government could decide that they will drop freedom of speech because no one alive signed the bill of rights and so it is no longer valid. For better-or-worse we do indeed agree to live with the commitments our forefathers agreed to.

A. Viirlaid February 25, 2011 at 5:09 pm

To AG,

I would not get overly hung up on “Taxation is Theft” —- it is not a premise that you need to hold on this site —- IMO there is more disagreement among Austrians over issues like this than newcomers might think.

In fact, the reason I dismiss its relative importance is that it is not part of the recipe that will save the system (although if overdone, it has the potential to sink the system —- though we are not at the point, nor is that the current Big Risk to the System).

The reason Austrians and Miseans have a problem with Debt is not the absolute size or even the relative size of this Debt —- It is that that Fractional Reserve Banking System creates Debt that is not backed up by corresponding Saving. And of course The FED’s main job is to backstop this system (as faulty as it is) to ‘provide liquidity’ and to prevent ‘panic’.

We have a system that (as you already know) is very prone to boom and bust, and when it gets as far out of stable-growth alignment (as this last boom which Greenspan nurtured did) so as to cause violent readjustments to many people’s lives and to large parts of the social structure, then we have big problems.

The problem with Saving lagging Debt, is that Saving will not happen in time (catch up) to prevent the Debt from really hurting us, or most of us.

Past improvements in productivity and the harnessing of relatively cheap energy has delayed the Hitting of the Wall. But The FED cannot continue its money-printing madness for long nor can it depend on past historical developments to save its skin each time it employs its mad, money-system destroying, methods.

The FED may not yet know it, but IMO we are a few inches from that proverbial wall. One day even The FED will wake up and realize that its folly will not fly this time.

AG February 25, 2011 at 5:27 pm

Dear A,

I agree with much of what you have stated, though I think the idea that this is almost exclusively a FED issue is missing many other key elements.

I have one small quibble, you said:

The problem with Saving lagging Debt, is that Saving will not happen in time (catch up) to prevent the Debt from really hurting us, or most of us.

Actually, I think the problem is that anytime we have a little savings that could be used to prevent the debt from really hurting us, the politicians decide that they want to use it for their pet idea instead of preventing the pain of the debt. Case in point is the fact that in 2000 we had a budget surplus (or at least a budget that was close to “par”). So what happened, Bush/the government decides we should cut taxes instead of paying down the debt. Then he starts the first war in US history that was not coupled with a tax increase. This is just insane, but the American people reelected him, I bet in part because he did not make us directly sacrifice for getting into the war-on-terror! And now they want his party to take control of our finances again to get us out of the debt hole! The American people clearly like their politicians to tell them that they can have their cake and eat it to. Its not like I think the democrats are much better, but at least they say they want to raise taxes and spend and not lower taxes and spend. That at least shows they have a basic grasp of economics (you know, income and expenditures are the two sides of the balance sheet).

The above is what scares me about this country, not that we couldn’t get ourselves out of the hole we are in, but rather that we clearly show we don’t have the political will. The other thing to look at is the fact that people want to lower the debt, but not to mess with medicare/medicaid, social security, or defense (and will vote against people who try to do that). I am not convinced the American people have any firm grasp of reality and so we are just going to continue down this rabbit hole.

A. Viirlaid February 25, 2011 at 5:53 pm

AG I agree that it is not a “FED issue” entirely.

The FED is a band-aid put into the system to keep it going. And in that sense it magnifies the harm that pre-existing Money System design flaws create. And believe me, this system is truly broken.

The problem starts when we create a system that does not lead to ‘normal’ lending and borrowing, which did occur more ‘normally’ in some past periods (prior to our type of fractional-reserve banking) — whether using a gold standard or not. (Gold has a small benefit in that it is a little more difficult to abuse money in such a system — but money and debt can still be abused in such a system IMO.)

Your observations about political will and the Republicans spending like drunken sailors (apologies to drunken sailors, who could never do this much harm, because they would never get the credit extended to them that could threaten the viability of the entire system, unless they were sub-prime borrowers with houses they took mortgages out on…etc.) — in any case, those of your observations I generally agree with.

We fiscal conservatives certainly hoped for more from the last Bush administration in the economic arena.

If you have time, read my last entry (to William Cleveland-Stevens, KCL History undergrad) at the link below —— explaining my big concerns about losing system viability (soon):

http://blog.mises.org/11247/dont-blame-the-federal-reserve/

And also 2 comments on the same topic (generally) at:

http://blog.mises.org/15757/commerce-is-a-peoples-revolution-daily/comment-page-1/

Cheers

Dan February 25, 2011 at 7:07 pm

AG
It is true that the United States were create by voting, Texas joined voluntary (I wonder how easy it would be for Texas to leave the union) but I am pretty sure that not every single individual (not the states) living on the territory of the USA did agree for that contract. So to made my example clearer: when uncle Sam came to create the housing association, some people decided to accept his services, but those who didn’t agree, were forced to go along with the others. So for some it was just a business transaction and for others it was still extortion. USA should have only its jurisdiction over those who voluntary agreed to it’s creation.
Clearly we have different understanding of contracts
I think it is very clear that contract can bind only those who signed it. It extremely unfair to impose contractual obligation on somebody who hasn’t been even been born yet. (that also applies to the national debt)

Anyway, I agree with A.Viirlaid don’t hung up on “Taxation is Theft” because it is not very burning issue these days. There is a debate on that even between libertarians. I am only telling you my view (and I suppose Murray Rothbard’s view too) The discussion on economics and Austrian insights is much more interesting. Ideological debates don’t usually lead anywhere, where debate on economics can have real impact.

Anthony February 24, 2011 at 11:16 pm

To AG, StLreflections, and any other newcomers,

I happened on this site a couple of years ago, at which point I would absolutely have agreed with DeLong… The biggest thing that changed my mind was the understanding that 90%+ of government activities do NOT provide a net benefit to society. It much easier to justify taking taxes from people when you assume the taxes are going towards a good cause.

Since arriving here I did a lot of reading, a lot of commenting and a lot of thinking. The biggest change for me came from looking at the “unseen” consequences of government actions. When people look at a hike in minimum wage they see some people whose pay goes up, but they don’t see the large group who are excluded from the job market entirely (disproportionately young people, minorities, etc). When people see “stimulus projects” they don’t see all the things that individuals would have bought with that stimulus money had it not been taxed away from them. People also don’t see that stimulating the economy with low interest rates leads inevitably to the destructive “boom and bust” business cycle.

I could go on but there are literally hundreds of pages dedicated to those issues already written here. Do a search of the “Mises Daily” articles and I’m sure you will find some articles on topic that interest you. At the very least they should give you something to think about. Try to keep an open mind… it is worth it.

Anthony

A. Viirlaid February 25, 2011 at 10:05 am

Thank you Anthony.

Great sentiments.

For ‘stimulation’ it never ever hurts to reinforce how wrong this is (and how many ‘smart’ people like Krugman and Bernanke and like the federal government, subscribe to this view).

It never hurts to watch this video, over and over… The Broken Window Fallacy.

http://www.youtube.com/watch?v=gG3AKoL0vEs

A. Viirlaid February 28, 2011 at 4:42 pm

A few more videos below.

Some of these bear on the topic of whether we want the government to do some things for us, that we cannot or do not want to do for ourselves in the private sector, and/or that we value more when those things come FROM the government…

So that we understand that WE the People are ALWAYS paying for these things — as for in example Friedman’s point that corporations DO NOT PAY taxes —- it is ALWAYS the people who pay, please see:

“Milton Friedman – The Free Lunch Myth” at
http://www.youtube.com/watch?v=YmqoCHR14n8&feature=related

“John Stossel’s Broken Window Fallacy” at
http://www.youtube.com/watch?v=UPmo2e-bAMQ&feature=related

“The Most Persistent Economic Fallacy of All Time!” at
http://www.youtube.com/watch?v=Hrg1CArkuNc&feature=related

This next one is good because it does accurately (IMO) illustrate that there is EVEN MORE harm to society then the usual analysis of the Broken Window Fallacy shows — this one is from “GuardOfLiberty”:

“Bastiat Does Not Go Far Enough” at
http://www.youtube.com/watch?v=S18oF_DZ9oY&feature=related

The script for the above entry is at http://mises.org/daily/3860

“Disastrous Economic Fallacies – Terror as Stimulus?” at

http://www.youtube.com/watch?v=SQFhm4s_-Pk&feature=related

Ryan Vann February 25, 2011 at 1:48 pm

Through a series of questions in the comments section over at Volokh, it was revealed some of these people would go as far as to introduce forced labor in order to stop this theoretical planet killer. Such is the ruthlessness of utilitarian morality.

A. Viirlaid February 25, 2011 at 7:43 pm

A few more videos below.

Some of these bear on the topic of whether we want the government to do some things for us, that we cannot or do not want to do for ourselves in the private sector, and/or that we value more when those things come FROM the government…

So that we understand that WE the People are ALWAYS paying for these things — as for in example Friedman’s point that corporations DO NOT PAY taxes —- it is ALWAYS the people who pay, please see:

“Milton Friedman – The Free Lunch Myth” at
http://www.youtube.com/watch?v=YmqoCHR14n8&feature=related

“John Stossel’s Broken Window Fallacy” at
http://www.youtube.com/watch?v=UPmo2e-bAMQ&feature=related

“The Most Persistent Economic Fallacy of All Time!” at
http://www.youtube.com/watch?v=Hrg1CArkuNc&feature=related

This next one is good because it does accurately (IMO) illustrate that there is EVEN MORE harm to society then the usual analysis of the Broken Window Fallacy shows — this one is from “GuardOfLiberty”:

“Bastiat Does Not Go Far Enough” at
http://www.youtube.com/watch?v=S18oF_DZ9oY&feature=related

The script for the above entry is at http://mises.org/daily/3860

“Disastrous Economic Fallacies – Terror as Stimulus?” at

http://www.youtube.com/watch?v=SQFhm4s_-Pk&feature=related

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