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.
Just think how inefficient it is to have people going out looking for thier own jobs. Surely there must be a better way.
How far we've come from the days of Teddy Roosevelt, who demanded the return of an American, alive, or the man who grabbed him, dead.
Unless you believe that they were mainly afraid of Sweden, and didn't give a rat's patoot about the US... (chuckle)
Oh, I don't know -- they might have been a bit concerned about stuff arriving from such far-flung British locations as Canada (chuckle), South Africa (chuckle), Rhodesia (chuckle); not to mention South America (chuckle), and various other ports of call from where British and other non-American merchant shipping were wont to visit. The British merchant fleet was very large, after all, and they went everywhere.
Of course, the issue for American shipping, as far as Germany was concerned, is that they were part of the neutral shipping that was helping to supply its enemy, Britain. In a sense, their dedication to free trade with Britain made all Britain-bound "neutral" shipping a military enemy of Germany.
Any blockade of Britain would have to prevent such shipping from reaching British ports, obviously. And since Britain had control of the surface, Germany's only choice was to use submarines.
As for Woodrow Wilson, his was a choice between allowing American ships to ply the waves at will, without government protection against German submarine warfare; or to apply government force to prevent shipping from entering the battle area; to protect American shipping and become a de facto combatant; or to dispense with the pretense of neutrality altogether, and acknowledge that Germany had crossed the line.
On the contrary, skilled interrogators are trained carefully to convince you that your partner has defected, or is about to. It's virtually certain that one of them will defect almost every time. However, that doesn't apply to the problem of defense payments, unless skilled interrogators plan to lock everyone up and convince them to withhold their payments...
Penalizing the non-payers? Well, we can certainly be grateful that coercion is a thing of the past. Oh, I know, we'd like to define "coercion" as the exclusive province of the state...
This is a good line of discussion, so I'm glad you raised it. It's important to be clear what "coercion" is. If I say, "pay up, or I'll break all your windows," that's coercion. If your wife says, "Pay up, or I'll never sleep with you again," you may feel like you're over a barrel, but it isn't coercion. Why not? Because your wife isn't obligated to sleep with you; if she was, then nothing you did to her could ever be called "rape". You can respond by threatening to divorce her, and if she really loves you, she'll then feel like she's over a barrel--but again, that isn't "coercion," because you do have every right to leave her, if you really insist on doing so.
So a perfectly "libertarian" society will be full of pressures. Your neighbors can talk to you or not--in a free country, you certainly can't force them to talk to you! So your neighbors can tell you to pay up, or they won't talk to you. The boy with the lawnmower can decide to charge you triple for his services because he doesn't like the cut of your jib--or because he wants you to join a defense service.
The only thing that's out of bounds is physical aggression against your self or property, or the theat of physical aggression.
Anyway, how will the neighbors know?
For one thing, they won't see the prominently displayed "Hagana" defense-agency sticker on your door. And they won't see you at civil-preparedness training meetings. Your wife will gossip to the neighbors that you're too stingy to sign up. Or, for that matter, the defense agency can circulate a flier that says, "Most of your street is protected by Hagana!" It will show a map with lots of properties marked in green, but yours and one or two others in red. The neighbors will wander by to ask what's up. You'll reply by angrily ordering them off your yard, and suddenly you won't be invited to any local barbecues...
Sure, like lynch mobs.
Physical aggression of any kind is out of bounds. If a mob comes after you in that bave new world, you'll either call your defense organization, flee, or grab your shotgun and go down in a blaze of glory--in other words, exactly what you'd do today if a mob came after you.
But that's not spontaneous organization; that's spontaenous disorganization. I'm talking about mutual aid societies, which provided the bulk of insurance against illness and disability before the government got involved. Or about Amish communities, in which all manner of projects are performed by the group, without any physical coercion (in fact, Amish are pacifists). Shunning, BTW, is a great model for a perfectly libertarian form of punishment.
Sure, and you, as a subscriber to the services of whomever they are delivering to, will pay the cost of that car and those guards.
Voluntarily.
Why, because they're nice people?
No, because millions of dollars of their own resources are trapped in occupied Connecticut. Warehouses, airfields, planes--Oy! How that self-interest does kick in at such a time!
Randian Express isn't supposed to behave in any manner except that which is in accord with their own rational self-interest...
Rational self-interest can be surprisingly civic-spirited! Did you know that in the 19th century, companies were buying clean-burning coal without any legal compulsion? They worked hard inventing smokestack scrubbers?
You might ask why. You might wonder why those things didn't exist in the early 20th-century, if they did in the 19th... The answer is that property rights were protected in the 19th century. If you got soot all over my drying laundry, I could sue you for damages and an injunction to desist, and I'd win. Companies invested in anti-pollution measures because it was cheaper than losing lots of lawsuits.
So what changed? What changed was a new legal doctrine, born with the industrial revolution, that there was a "compelling public interest" in industrialization which trumped the property rights of citizens. Now, if you sued a dirty coal-burning factory, you would undoubtedly lose. Naturally, those plants switched to the cheapest coal they could get, and began polluting with wild abandon.
Exactly! If I were a commie, fascist or some other sort of statist, I would imagine that someone else owes me a job. I realize that nobody owes me a job, so I weighed the pain of job-hunting against the pleasure of quitting a job I didn't like, and decided to stay. Instead I conducted a much lower-paced job hunt, taking almost a year, while keeping the hated job. When a better job came along, I took it--and I've been quite happy in it for a few years now.
How far we've come from the days of Teddy Roosevelt, who demanded the return of an American, alive, or the man who grabbed him, dead.
I certainly agree with this boast in principle: if my day comes to be killed, I certainly hope my kill ratio exceeds 1:1 before I go. However, you are essentially falling back on the child's cry for paternalism: Look out world! Teddy Roosevelt, the Great White Father, will kick your @sses if you touch me! Defend yourself, wuss. Don't hide behind some big bully who, by the way, robs me to pay for your much-vaunted protection.
You didn't read carefully. Hindenberg's statement specifically mentioned military as well as economic use of neutral countries. If you don't think that included the direct risk of the US entering the war on Britain's side, then you've already forgotten about the Zimmerman memo that you yourself posted to this thread.
“...coercion is the antithesis of the founding principles of our Govt, and was limited to no more power than needed to insure the protection of our rights.”
I thought our Government had its roots in coercion in that the people of the time coerced the government of King George III into relinquishing power and subsequently established a new Government for themselves.
I thought the founding principles could be stated as:
a. “We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights…”
b. “That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed,”
That Government should have just power derived from the consent of the governed to secure rights (and therefore coerce those who would put rights at risk or take them away) should not be at issue. However, what the amount of that power should be is at issue frequently and should be.
Also at issue is who gets coerced in favor of what rights.
Don't worry - it won't be. Someone will just drop WMDs on us, secure in the knowledge that market failures have made ballistic missile defense impossible.
However, you are essentially falling back on the child's cry for paternalism
LOL. You'll excuse me if I don't take that especially seriously, coming as it does from someone who's spending a great deal of time explaining to me how delicious his imaginary steak is ;)
This is an important point. Self-defense and agression are not moral equivalents. What is forbidden is the initiation of aggression. Responding to the initiation of force with answering force is acceptable. By equating the two, you're making the same argument as the folks who equated our invading Afghanistan with 9/11.
To the extent that the army acts defensively, there's no moral problem. The problem is elsewhere in the system--namely, over in the IRS, where people initiate aggression for the confiscation of people's own money and property.
Also at issue is who gets coerced in favor of what rights.
The founders didn't see it that way, because they did distinguish defense from attack. They saw government as a necessary evil, because they believed that there was no other way to manage defense. Some people disagree today--almost including me--but if the founders were wrong, they were much closer to right than people are today.
I know, I was backing you up against the history "professori".
The UK cut the submarine cables we, the US, got our comms from the continent directly from. That ruse was so UK would became the filter we got our info thru.
Also, wasn't it because of UK's insistence that post-war their pound be valued vis gold the same as it's pre-war pre-inflated value. And didn't we let them???
I believe, but am still studying, that the post CW - WWII era is the most misunderstood & misrepresented politically -glossed over and lipstick applied by left leaning pro-statist historians and public educators to the extent that most Americans still believe the Great Depression was caused by greedy capitalists - the Nation then saved by hero FDR. When in fact his New Deal policies were the exact reverse of his campaign promises of cutting spending by 25% for example and lowering taxes. His interventionism a la Marx still hangs around our necks like an albatross.
So I accurately represented Hindenburg's strategic point of view on the matter... and your problem with that is what?
You've really got no argument anymore. And of course, we musn't forget that the reason we started down this road was because of Germany's predacious submarine tactics. Are you seriously suggesting that freedom of the seas in such circumstances is a matter for insurance companies?
Chew em up, spit em out - nice!
You and I are both far likelier to die by lightning strike than by WMD attack. And we're even more likely than that to die by the hands of a mugger--though we're overwhilemingly likely to die of natural causes. If you're inteterested in defense against any sort of unnatural death, you'd optimize your expenditure of resources if you buy a handgun and train with it regularly.
market failures have made ballistic missile defense impossible.
Really? I don't know if you've heard of super-catastrophe insurance, but it's an amazingly high-stakes game. General Re, only one carrier of supercat, spent about $2 billion post 9/11. If New York were nuked, they'd spend many times that in settlements. It's certainly in their interests to minimize that risk, commensurate with their investment. So your assertion that such a thing cannot possibly be produced by market forces is not nearly so self-evident as you'd like to think.
And of course I can't resist pointing out that ballistic missiles were invented in Nazi Germany. Government failure created the risk, and now you predict that a market failure prevents any response? What "market failure" stacks up to the V2 in terms of its harmful impact on mankind? I'd take a millennium of market failures over just a few decades of government failures!
...someone who's spending a great deal of time explaining to me how delicious his imaginary steak is ;)
If that's your main charge against me, then we're both guilty. The discussion isn't about how things are now; we both know how things are now. The discussion is whether any other way is possible. You argue no; I argue yes--but we're both arguing about theoretical possibilities, not actual realities.
While I mostly agree with your statement, the cases of Japan and Canada sort of argue against your statement. They haven't specifically contracted out their defense, but they've gotten a mostly free ride from a benevolent protector (us).
Freedom was the issue.
Freedom is the absence of coercion.
And picking nits and semantics is counterproductive.
So you're basically telling us that, in the absence of a national defense, General Re insurance will elect to spend tens of billions of dollars yearly to form its own military to prevent attack by somebody like North Korea, Iran, or the Soviet Union, or Nazi Germany, or Imperial Japan (none of whom would have been stopped by your insurance company army from building up their offensive capabilities), or whomever else might wish to take their chances at plucking a ripe fruit like the US?
You're kidding, right? I remember a Richie Rich comic book with a similar plot, but the cartoonists weren't actually serious about it.....
And don't forget Europe: the formation of the European welfare state was financially possible because we bore the costs of protecting them from the Soviets.
Actually, no. I don't deny that it's possible, I merely point out that it's not particularly practical, insofar as it offers no apparent tangible benefits over the current system, and has several flaws that don't currently exist. I have the luxury of defending something akin to the status quo, meaning that I don't have to demonstrate the impossibility of your proposal - I merely have to show that it's no better than what we have now, which it isn't, and hence there is no incentive to change.
Review of Charles Adam's "THOSE DIRTY ROTTEN TAXES : The Tax Revolts that Built America"
In his dedication to Chairman Bill Archer of the House Ways and Means Committee, Adams (For Good and Evil: The Impact of Taxes on Civilization, 3/1/93), a Washington tax consultant, boldly declares his hostility to the prevailing U.S. income tax system. Adams divides U.S. history into five periods, running from Colonial times through the Cold War, and in every segment he argues that excessive taxation constitutes the root cause of all the wars, rebellions, and social turmoil that have beset the American people. The author laments the passing of the concepts of limited government in favor of a massive federal bureaucracy, governmental paternalism, supposedly high taxes, and runaway deficit spending. Adams scarcely conceals his sympathy for this country's long line of tax dodgers and resisters, and observes with equal satisfaction that today America's affluent evaders employ far less violent and more effective means to confound the IRS. A highly partisan yet provocative history of the U.S. tax system and its influence on the American people; recommended for public and academic libraries.
This guy Adamas and his other book "For Good & Evil" should be read by those here who think our current state of affairs is just hunky dory. He will show you just how misinformed you have been. I saw him on C-Span Booknotes, which I constantly watch weekends.
And yet the Founders formed a government that embodies in its Constitution the principles of state coercion in fundamental ways, such as the authority to levy taxes, create a standing army and navy, eminent domain, search and seizure, and so on.
Their vision was not anarchy, but rather a decent balance between state power and individual freedom. They envisioned a far more limited government than we now have. But as John Adams noted, such government works only if the people under it are otherwise constrained by "moral and religious" principles which would make government redundant. Limited government becomes less and less viable as people begin to lose their moral constraints.
And picking nits and semantics is counterproductive.
Alas, sometimes those nits need to be picked before you discover that they're not nits after all. You seem to have lost sight of the fact that the Founders were not opposed to government per se.
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