Why Statists Always Get it Wrong

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.

You obviously don't know what you're talking about.

You have conceded the debate by failing to find any quote from anything, written by Heinlein or anyone else, that contradicts my fairly extensive quote from Heinlein, not to mention my earlier quotes from his obituary, and from material whose source was Heinlein's wife.

I here and now decree a law, that shall stand alongside Godwin's law for all time, and that shall, in honor of my pseudonym, be named "Israel's Law":

In any Internet debate, the probability approaches 1 that the at least one party will abandon any semblence of argument, and reply, effectively, "yo mamma." When that happens, the debate is over, and the first one to call "yo mamma" is the loser.
Corollary: Any statement which admits no logical reply is deemed equivalent to "yo mamma." Examples include: you're stupid; you don't know what you're talking about; go back to kindergarten; ROTFL; etc.
Corollary: If one party calls "yo mamma" but does continue to offer rational arguments, then Israel's Law is not yet satisfied.

Phaser must have got in your eyes.

To quote Robert Heinlein:

All societies are based on rules to protect pregnant women and young children. All else is surplusage, excrescence, adornment, luxury, or folly, which can—and must—be dumped in emergency to preserve this prime function. As racial survival is the only universal morality, no other basic is possible. Attempts to formulate a "perfect society" on any foundation other than "Women and children first!" is not only witless, it is automatically genocidal. Nevertheless, starry-eyed idealists (all of them male) have tried endlessly—and no doubt will keep on trying.

It's no strawman at all.

Is govt too big, too small, or just right for you?

You obviously are deluded into thinking what we have is constitutional. It is far from it. It is not a free market. And the Gen'l Welfare, Equal Protection and Commerce clauses are abused beyond anything remotely like founding intent. Their abuse has resulted in a SS system cum campaign and spending slush fund - what if every dime had been invested to compound at T-bill rates? What instead if people just kept the money they earned, a right they empowered govt to protect? The concept of SS is Marxist. And IIRC Bismark, Stalin, Hitler, Mao & Saddam were all fans.

So is the redistribution of incomes. The strongly self interested public educator's biased agenda towards the larger state they and most all Fed'l employee votes for, has a grave and direct impact on society - to normalize it and herd favor for it - a task they've succeeded accomplishing. With the power to tax learnt from the euro-dictators, the progressives and New Dealers built govt and expanded their voting base in one shot and a forty four year rule and leftist judicial appointments. Have you ever whinced when Leno asks a college grad a question fifties 10th graders could rattle off in a NY sec - and they can't? Iraq has better voter turnout than we do! We're a country of elite conned mushheads. Way to distracted to pay attention - just the way elites like it. Ignore Able Danger and the Saddam tapes that implicate WJC & the Chicoms - treasobable offenses. The shooting stole the real show - dupes in a dupeland, oblivious. When mainstream America is as misled as much as it is, that they are too harried to pay attention, then Govt has gotten too big. Had the SCOTUS done it job under FDR, instead of "his" job, we'd be running surpluses as far as the eye can see. Most all of the last 25 years of growth and low inflation comes from RWR's tax cuts from 70% top rate which kept capital rat-holed. Newt's cuts did even more despite Clinton, and so did W's. Our spending problem is one of judiacial fiat enabling congress to spend beyond constititonal limits. This isn't conjecture - I'll take the words of Judge Robert Borck and Ted Olson anyday as my guide.

Corruption and favoritism on the taxpayer's right to happiness dime can and should be drastically reduced. Only an informed citizenry can do it. I'm guessing you decline.

To quote Robert Heinlein:

Give the citation, numbskull. Lack of citation hinders response, and obscures context. Anyway, the quote doesn't prove what you want it to:

All societies are based on rules to protect pregnant women and young children. All else is surplusage, excrescence, adornment, luxury, or folly, which can—and must—be dumped in emergency to preserve this prime function. As racial survival is the only universal morality, no other basic is possible...

This statement has no bearing whatsoever on Heinlein's preferred government (or lack thereof). His high regard for women, as the scarcer resource for propogation of the species, is also well attested. More to the point, here is another quote from the same source, "Time Enough for Love":

Be wary of strong drink. It can make you shoot at tax collectors - and miss.

Give the citation, numbskull.

Your Google broken?

The Notebooks of Lazarus Long. Anyone you was even marginally familiar with Heinlein would recognized the quote instantly.

Anyway, the quote doesn't prove what you want it to:

Attempts to formulate a "perfect society" on any foundation other than "Women and children first!" is not only witless, it is automatically genocidal.

Put some ice on it.

"You use it specifically to imply that I'm a welsher if I reject some aspect of this "contract" I'm supposedly party to."

What we've got here is a failure to communicate. I did not mean to nor do I see where I implied anything about being a welsher.

I clearly stated "...you can always ignore it and be an outlaw."

And if you know enough to talk about Hobbes and Social Contract Theory the way you did you know enough to not state '...the other party to this "social contract" is presumably government.' But for some reason you stated it anyway.

But it doesn't matter. I'm done with this for the day at least.

"Without a National Defense some of your concerns will go away, but you'll also have a new set of problems. And I'm not entirely convinced that the new problems won't be worse than the old ones."

The "new problems" are the problems that were there before the old "solutions" were enacted, and are still there today. Which "new problems" did you think would suddenly crop up? Weak national defense? Americans complaining about harassment and unfair trading practices abroad? How would that be different from today?

What we've got here is a failure to communicate. I did not mean to nor do I see where I implied anything about being a welsher. I clearly stated "...you can always ignore it and be an outlaw."

Which renders your assertions about a "social conract" essentially meaningless, since you're using it as a synonym for "law".

And if you know enough to talk about Hobbes and Social Contract Theory the way you did you know enough to not state '...the other party to this "social contract" is presumably government.' But for some reason you stated it anyway.

Right. A real contract is an agreement between consenting parties. If a social contract is, in particular, a contract, and I'm one of the parties, then presumably the other party is the one to whom the contract obligates me, namely the government. Since you (rightly) reject that analysis in toto, you fully concede that a social contract is nothing like a contract.

You're claiming I'm a party to a contract that I never agreed to, that you can't even state with any certain detail, that provides no clear enumeration of responsibilities nor specific provision of penalties for breach... in other words, a "social contract" is nothing like a "contract".

If you believe that society around me has some prior claim over me, then go ahead and say so--but don't bastardize the language itself by calling it a "contract".

The term was coined to give an air of legitimacy to a dubious concept.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Can you agree with the concept that our US Constitution is a 'social contract' worth honoring?

Here's and essay on the subject well worth reading:

The Social Contract and Constitutional Republics
Address:http://www.constitution.org/soclcont.htm

"--- Under the theory of the social contract, those rights which the individual brings with him upon entering the social contract are natural, and those which arise out of the social contract are contractual.

Those contractual rights arising out of the constitution are constitutional rights. However, natural rights are also constitutional rights.

The fundamental natural rights are life, liberty, and property. However, it is necessary to be somewhat more specific as to what these rights include. Therefore, constitution framers usually expand them into such rights as the right of speech and publication, the right to assemble peaceably, the right to keep and bear arms, the right to travel over public roadways, and so forth.

The exercise of such natural rights may be restricted to the extent that they come into conflict with the exercise of the natural rights of other members of society, but only to the minimum degree needed to resolve such conflict.

Such natural rights are inalienable, meaning that a person cannot delegate them or give them away, even if he wants to do so.
That means that no constitutional provision which delegated to government at any level the power to take away such rights would be valid, even if adopted as an amendment through a proper amendment process.

Such rights apply to all levels of government, federal, state, or local.
Their enumeration in the constitution does not establish them, it only recognizes them.

Although they are restrictions on the power of government, the repeal of the provisions recognizing them would not remove the restrictions or allow the delegation of any power to deny them.
The people do not have that power, and therefore cannot delegate it to government. --"

Can you agree with the concept that our US Constitution is a 'social contract' worth honoring?

You keep using that term, even though I've argued that it doesn't stand on Hobbesian grounds, nor w.r.t. the meaning of the term "contract". So it's far from clear what you're trying to get me to affirm. The Constitution is a durn sight better than what we have today, and I'd be mightily relieved to see it followed, if that's any help.

the right to travel over public roadways, and so forth.

The author amusingly cites that as a clarification of "life, liberty and property". The author is confused.

The exercise of such natural rights may be restricted to the extent that they come into conflict with the exercise of the natural rights of other members of society

Again he's confused. My rights never come into conflict with yours. Any purported case of conflict always turns out, on examination, to be an imaginary "right", such as the nonexistent "right to swing my arm [anywhere]." The result is profound-sounding but idiotic statements like, "My right to fling spears willy-nilly ends at the boundary of your cranium."

"I wasn't arguing against paid athletes performing these functions."

DD, I know you weren't. That's why they call `em analogies. 8)

"My analogy addressed how the players were selected. Do you really think the Steelers would let 11 different outside agencies independently select their starting lineup? Do you think such a selection process would produce an effective defense?"

Not for San Francisco. But I do think that you are changing the terms of your analogy a tad. Nonetheless, I don't think it would be any different than a sandlot game initially and would work its way into a team structure based upon the members of the team best suited to it calling plays and picking teams. Think 'The Longest Yard.' And centralization certainly has its drawbacks as well. For example, what happens when the coach is ailing mid-game, or a crappy coach? What happens when the owner decides against investing in new blood? What happens when the owner determines that you don't need any line to protect that QB because he's damned if he'll pay any more than the league minimum and the game is about making money not about winning and...sorry, I started thinking about Hugh Culverhouse again.

"Suppose one contractor thought linebackers should emphasize speed rather than strength? Sure you can build a defensive concept aroung speedy but light linebackers by compensating at the other positions. But without a central coordinating authority, how do you ensure that these compensations are considered by the other contractors?"

Based upon a failure to draft primarily upon the basis of pure speed or pure strength, the entire team would be at a disadvantage? Do you really believe that nobody on the team would align with the rest of the team and say 'I got him, you got him?' In fact, it's usually well-balanced teams that are advantaged on the field, and even sandlot defensive players know to set stunts before the snap. Why insist that 'compensations are considered by other contractors' if the primary goal is to get the best man for the job and the prototype is set, at least to the degree proven by time, in a fashion that makes minor distinctions like the 'hands team' or 'speed team' less relevant? No contractor with that in mind will be drafting Shawn Bradley as a lineman, or Fridge Perry as a wideout.

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Why Statists Always Get it Wrong

by Per Bylund