Posted on 02/20/2006 6:24:40 AM PST by Shalom Israel
In a recent article, Carl Milsted uses Rothbard to argue it would be permissible to use force to make people pay for a service of which their benefit is at least double its cost. His conclusion is that it is reasonable, and even preferable, to establish a minimalist state if it is to people's advantage.
As has already been argued by N. Stephan Kinsella, he totally misses Rothbard's point. Furthermore, he fails to show why people would not choose to voluntarily pay for services which would benefit them double, as has been pointed out by Bob Kaercher.
Even so, I wish to offer another analysis of Milsted's reasoning. His article is a good example of why statists always seem to get it wrong — and why they always fail to understand what we're talking about. The bottom line is that they fail to realize the costs of force due to their unwillingness to see the state for what it is. I will therefore use Milsted's own example to shed light on his fundamental mistake.
Milsted takes the case of national defense, which is commonly considered an institution that would face the free rider problem if supplied on the market. Argues Milsted: "suppose the majority assesses a tax on everyone to spread the burden of supporting the new defense system. This is theft of the minority. However, suppose that the economies of scale are such that this tax is less than half of what people would have had to pay for defense on their own."
That's the argument, plain and simple. If it is morally permissible to steal when the victim is compensated double, the equation seems to fit. Well, let's look into this in more detail and see if it really does.
First, consider a situation where everybody benefits, say, $10,000 on a yearly basis from being protected by a national defense. That would mean, if the premise is correct, that it would be morally permissible to force costs of no more than $5,000 on everybody.
Were it a company supplying a service worth $10,000 to each of its customers paying only $5,000 for it, this would be easy. Anyone willing to pay the $5,000 would get the service, and the costs associated with administration and so forth would have to be covered by the $5,000 paid. But Milsted argues the $5,000 should be taxed, and that makes it much more difficult.
First of all, we know state-run businesses and authorities (especially if they are monopolies) tend to be much less efficient than private enterprises. That means people in Milstedistan would get less than they would in a free market society. But even so, there is still the cost of coercion totally neglected by Milsted in his article.
Forcing people to pay for a service means there will always be someone who tries to avoid paying or even refuses to pay. So "we" (i.e., the state) need to invest in collection services to get the money. Now, let's say Murray, who is one of the people we're trying to coerce, goes out to buy a rifle and then declares that he's "anti-government, so get the hell off my property." Perhaps he even threatens to kill the collection agents. Dealing with him would take a whole lot more out of the budget, meaning there is even less to provide for the defense (which is the reason we're in business in the first place).
But that's not all. Let's say Murray won't give us the money no matter how much we ask or threaten him. We will simply have to take it by force, so we need to invest in the necessary tools and we go out to hire a dozen brutes to do the forcing. (More money down the drain … ) It is already pretty obvious we're in a very expensive business; there will not be much defense left if there are a lot of Murrays in our society.
Now imagine our hired brutes go down the street to Murray's house and knock on his door. He sticks his rifle out the window and shouts something about having the right to his property and that he will shoot to kill. Anyway, the brutes try to open his door only to find it is locked and barred. They will have to break in to finally get their hands on Murray's cash.
Our small army goes back to their van to get their tools, then returns to break down Murray's door. Going inside, they manage to avoid all the bullets Murray is firing and they tie him up and put him in the closet. They eventually find that he does not have any valuables and that he keeps his cash in a locked safe. So they have to break it to get the money.
Now we have a problem. To make this operation morally permissible, the benefit to Murray, which we know is $10,000, must be at least double the cost forced on him. The cost is now a whole lot more than the cost of the national defense; it includes administration and collection costs, hiring the brutes and their tools, as well as the broken door and safe, and the time and suffering (and perhaps medical expenses) Murray has lost while we were stealing from him. How much do you think is left from the original $5,000 to invest in a national defense? Not much.
What if Murray suffers from paranoia and therefore had invested $1,500 in an advanced special security door and $2,000 in an extra security safe? Then the total cost of simply getting into Murray's safe would probably exceed the $5,000 we are "allowed" to steal. What then? Should we break in anyway since it is a mandatory tax, only to give him a check to cover what's above the $5,000 mark? That doesn't sound right.
But on the other hand, if we just let him be, more people would do the same as Murray only to get off, and we would have a huge problem on our hands. This is a typical state dilemma: it costs too much to force money from some people, but it would probably be much more "expensive" in the long run not to. It's a lose-lose situation.
Now, what if Murray is very poor and doesn't have the $5,000? Then we would have to take whatever he's got and make him work off the rest. We need to get the $5,000 to cover our expenses of the national defense, and we have the right to take that amount from him. It could, of course, be argued he couldn't possibly benefit $10,000 from a national defense if he has no money and no property. If we trust Austrian economics, that might very well be correct; the benefit of national defense would, like any other product or service, be valued subjectively and thus the benefit would be different for each and every individual.
If this is true, it means we have an even greater problem: the state can rightfully levy costs of a maximum of half the subjective benefit enjoyed. Well, that's a task that would keep an army of Nobel Prize winners busy for a while. If possible, I wonder how much that would cost in the end.
This is the problem statists face on an everyday basis when discussing philosophy and politics. It is easy to make nice equations and formulas, and theorize on great systems and cheap solutions neatly enforced by the state. But when consistently failing to realize the costs of coercion it makes their reasoning fundamentally flawed. Just scratching the surface reveals they really have no clue whatsoever.
Per Bylund works as a business consultant in Sweden, in preparation for PhD studies. He is the founder of Anarchism.net. Send him mail. Visit his website. Comment on the blog.
"They do seem to have the attitude that excessive government is a threat to liberty, and that any expansion of government authority should be viewed skeptically and examined critically. I can't say I disagree with that assesment."
I'm unable to remember a single instance where any form of government was not considered 'excessive'.
"I don't always agree with their arguments, and the conclusions they draw from them. I do agree that debate needs to take place, and I am suspicious of any arguments that look like an attempt to short circuit such debate with generalizations and absolutes.'
I'm not attempting to short circuit debate with generalizations. I've been quite clear to state that it was my impression that they (VMI) believed that almost all government was excessive and that government was the biggest threat to liberty that existed. Now, stating an opinion is a form of debate is it not?
(You might also wish to consider that VMI is closely linked to the Lew Rockwell website and that Lew Rockwell is closely affiliated with antiwar.com).
By 'dream' I meant that all fire fighting would be privitized just like they dream that all police and courts and roads would be privitized.
"You appear to be implying that the fire company has a positive obligation in this regard."
Depends upon whether it's a private or a public fire company doesn't it?
"However, there are multiple available options:"
In theory, any of those might work but why prefer such complicated solutions to the very workable solution of public fire companies?
Ahhh, so the desires of the majority, voting in free and fair elections, becomes an expression of "statism?"
One need not dispute that voters did indeed ask for what we've got today -- but the roots of the problem are far more subtle than the "propagandists made 'em do it" argument you've advanced here.
Is it coincidence that the Fed'l Reserve and Income tax were started just in time to finance WWI?
Why, yes it is. It's utterly preposterous to blame WWI on the U.S. Federal Reserve System and/or the 16th Amendment.
"I think his point is that the US has contracted out a lot of the functions of national defense."
That is not my point at all. The American people have contracted out the job of national defense. Instead of everyone having a stake in defending what is theirs, and what they have worked to achieve, they have handed this job to the government.
I'll give you an example. Lets say I have a ranch in Texas, right on the border. Every day I see my property being destroyed and the land invaded by a foreign people. Can I defend my property myself? Not legally. I have to go to the organization responsible, through contractual obligation, for the defense of "my" property. If I am unable to defend my property, is it really mine? Now expand this to a national level. If my whole stake in "national defense" is simply writing a check to pay for it, I have contracted it out. If that bill gets so high that I feel I'm not getting my money's worth but I can't stop paying under penalty of imprisonment (or worse), well,that's what we have here now.
You are dead wrong - take a long read at mises.org and re-educate yourself, much to learn.
What you say removes freedom from being job #1.
I don't think he said national defense was subcontractable.
Libertarians are more aligned with the founders than Dems or Reps have been for going on 119 years now. With the exceptions of RWR and Newt, Coburn and few others. It's been big govt business as usual.
Exactly--that's why my head hurts. The State is the people who believe that what's theirs is theirs, and what's mine is up for grabs. So will this "State" thing of yours protect me from itself? Sigh. I didn't think so.
(By the way, I read a fascinating piece today on the law of Bitur-Camember, which relates to this issue. It states that the amount of resources "up for grabs" is almost exactly equalled by the resources spent lobbying to get your hands on it.)
That's a fairly simple problem because a train can only be on one track at a time and there was only one person (centralized system) responsible for that segment of track... Railroads didn't overlap, air defenses do. It's just not the same problem.
The overall point, though, is that coordination isn't nearly as hard as you were suggesting. As for "overlapping", they overlapped wildly! A train making a long trip would carry goods for many railroad companies on the same train, using cars belonging to many railroad companies, over roads belonging to many railroad companies. The car might belong to a different company than its load, which was different from that of the road, which was different from that of the crew. The coordination issues are much snarlier than you appear to think. Many different models were tried for allocating the cost fairly between the owner of the cars, rails, crews and cargo, and for making sure that everyone eventually got their money, and their property, where it belonged.
I really don't think that 'protecting airports' was the real purpose of those troops. They were there to reassure people...
Exactly! I'm sure you're as disgusted as I am by that! The government spent millions, and wasted thousands of valuable military man-hours, for no purpose whatsoever except to score political points by making people believe the government was "protecting" them, when in fact it was weakening their protection in order to put on this show. Private defense contractors would go out of business doing idiotic things like that.
wink wink nudge nudge smiling
Agreed--it's much more Woody Wilson's fault. His handling of the Lusitania incident was only the tip of the iceberg.
I wouldn't go so far as to say that all national defense is definitely subcontractable. But I would say that most of it definitely is, and all of it probably is. If this were 1938, I'd be saying that all of it definitely is.
As he already said, it wasn't his point at all. But it's also worth pointing out that this subcontracting is not privatization. The market doesn't set prices anywhere in this process; contractors make up numbers, which DoD officials then pull from a hat, and then pay much more than the agreed-upon price using forcibly extorted tax dollars. Even if corruption weren't rampant, which it is, the fact would remain that it isn't possible to allocate resources rationally without market prices.
In case you'd missed it, the Lusitania was sunk in 1915, after WWI had been raging for nearly a year. The start of the war was not Wilson's fault. One does wonder how you would respond to the unrestricted submarine warfare being practiced by the Germans....
We aren't prophets to predict the future. They argue that it could be, not that it ever will be. Their proof? It already has been privatized, successfully.
Depends upon whether it's a private or a public fire company doesn't it?
"Positive obligation" is a moral term, not a contractual one. If your contract says that you put out any and all fires, then I guess that's your job. The question is whether any other contract would be immoral and wrong. You seem to be saying that it would be.
In theory, any of those might work but why prefer such complicated solutions to the very workable solution of public fire companies?
You mean the "very workable solution" in which people who don't own any flammable property are forced to pay, nevertheless, to fund a department to put out the fires they'll never have? Or in which large property owners underpay, and small owners overpay, but in which the decision not to pay at all will get you jailed?
I agree that robbing people, and forcing them to pay your protection money, is a "very workable scheme". At least, it is if you're the guy collecting the protection money.
Hence the newspaper, or the few bucks a month to subscribe to the cable news channel.
If the resulting defense is far superior, a minor free-rider problem might be a small price to pay.
Which is why I strongly encourage you to pay up, for obvious reasons ;)
Anyway, how long can the problem remain minor? How long before the system falls apart, either because everyone wants defense, like me, but nobody wants to pay, like me? Or, alternately, how long before resentment turns into coercion, putting you right back where you started from?
On the contrary, if there were such a thing as a "private army," it wouldn't remotely provide the same services as it does now.
Well, that's fine, but you just got done telling me how a private army would be so much more than just soldiers with guns, so which is it?
The market encourages specialization and division of labor; the government prefers vertically-integrated, state-controlled enterprise. Today the army isn't just solders; it's also FedEx, US Air, IBM, Sysco Food Services, Hilton Hotels, GM, AAMCO, tech school, and a host of other things rolled into one.
Those two propositions seem rather contradictory. Considering how the government "prefers vertically-integrated, state-controlled enterprise", I don't suppose it's worth noting that neither FedEx nor IBM are a part of the government, despite the absence of a libertarian state - they are private actors, contracting to provide the citizenry with necessary services. So the advantage to then versus now is...what, exactly? Other than the increasing complexity of requiring FedEx to negotiate with a dozen domestic armies instead of one, of course.
Instead of sending the Abraham Lincoln to provide tsunami relief, Wal*Mart would ship supplies via FedEx, and it would absolutely, positively, be there overnight.
Riiight. Of course, the reason the military can do those sorts of things, such as providing disaster relief to troubled areas, is because the military has lots of men with guns who are willing and able to impose their collective will upon the uncooperative. Wal Mart and FedEx can do what they do because the existing military currently takes on that task for them - in the absence of that, who will provide for such things? Wal Mart's Special Forces division? FedEx paratroopers?
You're the guy who keeps telling me to go learn history--it's funny you have the nerve, being this ignorant. I was clearly referring to American involvement, which came after the Lusitania.
As for unrestricted submarine warfare, Woody himself forced the Germans into that action, when he issued the unbelievable declaration that the sinking of any vessel, including those of enemy nations, with a single American on board, would be deemed an act of war. The Germans decided, quite rightly, that Wilson was determined to enter the war, and they knew they could not win in that case. They immediately began unrestricted submarine warfare in hopes of bringing Britain to its knees before America entered the war. Which, of course, played into Wilson's hands.
I did not say it was to blame - trade wars and protectionism played the largest part.
Do you know who the Fed's proponents were, and how long they spent building a coalition to get it?? Way before Wilson. Don't impute meanings that are not there.
Like FDR, Woodrow was a bought pol, on the strings of the Rockefeller/Morgan cabal just as were their opponents. The Rockefeller created CFR has it's members in both parties, industry and media - they win no matter who gets elected - and even in RWR's case, his cabinet was full of them too, as is W's. It is also no secret that JFK was rocking the CFR boat.
Just as JF'nKerry is CFR, so is W.
You were clearly changing the subject, too.
As for unrestricted submarine warfare, Woody himself forced the Germans into that action...
Oh, for crying out loud. You have GOT to be kidding.
And I suppose the Zimmerman telegram was likewise a plot of the nefarious Wilson?
I'm done with you.
Political debate tends to focus more on what is currently wrong than what is historically right.
I'm not attempting to short circuit debate with generalizations. I've been quite clear to state that it was my impression that they (VMI) believed that almost all government was excessive and that government was the biggest threat to liberty that existed. Now, stating an opinion is a form of debate is it not?
"But since you bring that up, libertarians from the Von Mises Institute like to argue that all functions of government can be better performed by the private sector quite commonly pointing to the use of privitized police and courts. I have similar problems with those arguments as well."
That looked to be a statement of fact, rather than an expression of opinion. My apologies if I misunderstood.
(You might also wish to consider that VMI is closely linked to the Lew Rockwell website and that Lew Rockwell is closely affiliated with antiwar.com).
I'm aware of the affiliation, but I believe that rejecting any arguments they present based on it falls into the trap of generalizations and absolutes. I think the arguments they present on any given subject need to be considered on their own merits. In this particular instance, while I don't agree with all of their arguments, I do believe they are closer to being right than the over-simplified cost/benefit arguments Milsted is pushing.
If enough people don't pay, that the various suppliers go out of business, then nobody gets any defense. People, not being stupid, won't permit this to happen. Free riders will undoubtedly exist, but to suggest that everyone would stop paying is silly. Rather, various market pressures would be brought to bear on the free riders. For example, you seem to have missed the part where I told you that you and your free-rider ilk will be paying hellacious homeowner's premiums, unless you provide proof of a valid defense contract.
Well, that's fine, but you just got done telling me how a private army would be so much more than just soldiers with guns, so which is it?
No, emphatically not. I said "private defense," not "private army". There's a big difference. Today, the military maintains a separate delivery infrastructure at tremendous cost; tomorrow, FedEx and UPS will play an important role in defense. Namely, they'll deliver supplies, weapons, and all sorts of other things, intact and on time. That alone would cut "defense" expenses by a couple billion every year.
Similarly, instead of military transport, folks would travel commercially. "Defense" workers would go to the same hospitals as anyone else--which, if you've ever seen the average VA hospital, is nothing short of divine mercy. Training would be provided from independent educational facilities--the same ones used by Pinkertons and ordinary citizens interested in self-defense. Not only would ordinary citizens be better trained, but "defense" training would be done more cheaply and more effectively. And so on.
Riiight. Of course, the reason the military can do those sorts of things, such as providing disaster relief to troubled areas, is because the military has lots of men with guns
*Cough*! (New Orleans!) *cough*! The national guard accomplished little or nothing. Most of the aid that was delivered, was delivered by Wal*Mart. That's why I pulled their name out of a hat.
As for "troubled areas," I was hoping you'd make that point, which is why I baited you repeatedly in hopes of provoking it. The answer is that various sercurity agencies would provide escorts, but only when really needed. Today the army expends almost as much resources delivering things to Kentucky as it does to Korea. The beauty of private security, you see, is that anyone can hire some if they want to.
Your handle isn't familiar but your debate style is. You have made few or no cogent arguments, and the weaker your position became, the more stridently you engaged in ad hominem. Since you're through with me, it can hardly matter, but I'll point out that you still don't know anything about history:
And I suppose the Zimmerman telegram was likewise a plot of the nefarious Wilson?
The Zimmerman telegram stated that Germany wanted the US to remain neutral, rather than entering the war on England's behalf, and it proposed an alliance with Mexico that, IF the US entered the war, then Germany would back Mexico, promise them Texas, yadda yadda. It was a response to Wilson's clear intent to enter the war, Mr. History Student.
I ain't arguing with you; only our historically illiterate friend.
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