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.

Izzy at #356:

Try something you've never tried before. Try saying what a contract is, what a "social" contract is, and how the Constitution is one. You'll find it eye opening.
-- you've never tried to define "social contract,"

Izzy not that long ago:

So far, you haven't actually said what a social contract is, so it's hard to attack your definition.
-- When you do, I'll smash your definition, sending you back to square one.

--- Here's a pretty good preamble to & definition of a social contract:

We, the people of the United States, in order to form a more perfect Union, establish justice, insure domestic tranquility, provide for the common defense, promote the general welfare, and secure the blessings of liberty to ourselves and our posterity, do ordain and establish this Constitution for the United States of America.
Posted at #343.

You made no effort to attack my definition then. -- And I doubt you can now.
#357

Kris comments:

For tpaine: If he declines to "smash" for me because his post was to you, I respectfully request you cut and paste the above definitions and send them to him.

As we see Kris, - Izzy cannot "smash" our Constitution, so he chose to 'answer' your post with another of his rambling diatribes.. -- In which he simply denies that he is bound by Constitutional law.

He's a Lysander Spooner type anarchist.

In his essay 'The Constitution of No Authority' Spooner opens:
"The Constitution has no inherent authority or obligation." - "It purports, at most, to be only a contract between persons living eighty years ago."

Spooner concludes:
"-- Inasmuch as the Constitution was never signed, nor agreed to, by anybody, as a contract, and therefore never bound anybody, and is now binding upon nobody; and is, moreover, such an one as no people can ever hereafter be expected to consent to, except as they may be forced to do so at the point of the bayonet, ... it is unfit to exist. --"

--- Here's a pretty good preamble to & definition of a social contract: We, the people of the United States, in order to form a more perfect Union...

Thanks for reminding me. I meant to reply to that, before I saw a flood from KrisKrinkle. To sum up your argument:

You want to prove: The Constitution is a social contract.
Your definition of social contract: The Constitution

Circular reasoning at its finest. Do you do bar mitzvahs?

Wow, any attempt at logical discourse with you seems like such a waste of time. But I'll use small words, so you can keep up.

Our Constitution is a social contract. It's preamble is a definition of that social contract.

You claim it's a social contract. You want to prove it. You need to do more than repeat the claim over and over. If you say the constitution is a social contract, and then you say a social contract is the constitution, you are going around in a circle.

If you want to prove that the Constitution has legitimate force over me, then there's another thing you can't do. You can't point out that the Constitution says it does. The question is, where does it get the authority to go saying it's got that authority?

If you try to use that argument, I'll answer that the Bible has authority over you. I'll prove it by quoting the Bible verses that say so. Then I'll force you to adopt my religion. Salt to taste. Serve with red wine.

Our Constitution is a social contract.

It's preamble is a definition of that social contract.

You want to prove: The Constitution is not a social contract.

You claimed that :

"-- I'll smash your definition, sending you back to square one. --"

Smash away Izzy.

You claim it's a social contract. You want to prove it. You need to do more than repeat the claim over and over.

You need to "smash" my definition. You haven't with that line.

If you say the constitution is a social contract, and then you say a social contract is the constitution, you are going around in a circle.

You need to "smash" my definition. You haven't with that line.

If you want to prove that the Constitution has legitimate force over me, then there's another thing you can't do.

You need to "smash" my definition. You haven't with that line.

You can't point out that the Constitution says it does.

You need to "smash" my definition. You haven't with that line.

The question is, where does it get the authority to go saying it's got that authority?

You need to "smash" my definition. You haven't with that question.

You need to "smash" my definition. You haven't with that comment.

Izzy, it's apparent you can't "smash" my definition. -- Instead you're attempting to divert attention from that fact.

Face it; you aren't very good at arguing libertarian & Constitutional logic. - I've called your bluff on "smashing".

The Constitutions preamble is a definition of the social contract embodied in that document. - You cannot refute that fact, [much less smash it] and you haven't even tried..

"It would depend on the circumstances. If the demographics are right, having 10-15% of a population die of old age in a 10-15 year period wouldn't be unusual. What do you think government would do about this, and why don't you answer the original question?"

These people didn't die of old age. They did from famine and disease following the collapse of the central government. So, do you think the prevention of the deaths of a million people from disease and famine is a legitimate function of government?

The original question? By that I presume you mean do I think any central government could have prevented this? Well, it happened after the central government collapsed, not before.

These people didn't die of old age. They did from famine and disease following the collapse of the central government.

Post hoc ergo propter hoc. I bet you didn't know it, but I put a voodoo curse on them, shortly before the government fell and all those people died. So now you know the real cause of all that suffering...

But can you prove that "after this" really means "because of this"? Are you sure that the government itself didn't create the circumstances that led to starvation? In other words, maybe the starvation came because the government didn't fall soon enough.

You claimed that :

"-- I'll smash your definition, sending you back to square one. --"

The Constitutions preamble is a definition of the social contract embodied in that document. - You cannot refute that fact, [much less smash it] and you haven't even tried.

i never tried to "refute the preamble";

Is there an echo in here?

-- indeed there's nothing to refute there.

So your circular argument goes, -- because you can't refute the preamble as a definition.

Rather, I did refute your circular definition of "social contract".

Where? -- I made no such "circular definition". You're simply inventing your refutation to avoid trying to "smash" the one I did tender.

You claimed that

"-- I'll smash your definition, sending you back to square one. --"

The Constitutions preamble is a definition of the social contract embodied in that document. - You cannot refute that fact, [much less smash it] and you haven't even tried.

I never tried to "refute the preamble"; indeed there's nothing to refute there.

So your circular argument goes, -- because you can't refute the preamble as a definition.

Rather, I did refute your circular definition of "social contract".

Where? -- I made no such "circular definition". You're simply inventing your refutation to avoid trying to "smash" the one I did tender.

You can't prove the Constitution is a "social contract" by first defining "social contract" to mean "the Constitituion". The last 50 exchanges with you have been a waste of time; I'm finished.

You never got started..

The preamble to the Constitution is a self evident definition of its intent to establish a social contract between "We the People".

"-- We, the people of the United States, in order to form a more perfect Union, establish justice, insure domestic tranquility, provide for the common defense, promote the general welfare, and secure the blessings of liberty to ourselves and our posterity, do ordain and establish this Constitution for the United States of America. --"

"But can you prove that "after this" really means "because of this"? Are you sure that the government itself didn't create the circumstances that led to starvation? In other words, maybe the starvation came because the government didn't fall soon enough."

Perfect libertarian logic as expressed by the Von Mises Institute. Government is the cause of all evil. If you read the article I posted the link to, you'll notice that VMI argued that the people of Somalia were better off without the central government even if one million deaths due to starvation and disease followed the fall of the government.

But that is beside the point. The question I have posed is this: "Would the prevention of a million deaths from disease and starvation a proper function of a government?"

Perfect libertarian logic as expressed by the Von Mises Institute.

The obvious ad hominem aside, can you in fact prove that the "collapse of government" caused "the death of millions"?

"Would the prevention of a million deaths from disease and starvation a proper function of a government?"

It would be the proper job for anyone, including the wizard of Oz. Asking that question puts the cart before the horse: the real question is, was lack of government directly responsible for those deaths?

“At the beginning, you aren't on his land.”

You have incorrectly assumed an implicit agreement on our part that “…you aren’t on his land” was a condition. I did not willingly enter into any such agreement.

All I said was “It looks like you’re saying that if he wants he can ban the life and liberty of others; that if they are on his property, the owner can kill someone at will or prevent someone from leaving.”

I said that because to me it looks like you’re saying that when you say “…he can ban anything he wants on his property…”

I put no conditions on “he can ban.” Without conditions it doesn’t matter if one is on his property in the beginning or not. Your assertion is that “he can ban” therefore absent anything else (and there was nothing else) he can do so at anytime, even if he extended an invitation. And if the property owner decides to ban someone’s life, for being a trespasser after he withdrew the invitation without allowing time to leave or anything else, the property owner would not have allow time to leave before effecting the ban.

The rest of the mess came from your attributing things to me (or to an implied agreement I didn’t willingly enter).

But I already understand that you regard your statement “…he can ban anything he wants on his property…” as a little too broad and all encompassing.

“If he allowed you on it, then by doing so he has made a contract not to shoot you (unless you attack him).”

Ok, I’ll stipulate that nobody ever allowed someone else on their property with the intent of shooting them, or if they did do so they were thwarted from their intent by remembering the implicit contract they made to not shoot them even though they had forgotten about this contract at the time they allowed the someone on their property (and thus did not enter it willingly) because the whole purpose of allowing them on the property was to shoot them.

“Doesn't work: you're saying that I entered into a contract, even though I didn't, with other citizens, who also didn't enter into any contract. To enter a contract, you must do something that creates the contract.”

No.

You wrote: “You (or someone in this thread) denied that the government is the "other party" to the "social contract," which leaves no adhesing party at all.”

I wrote: “But that doesn’t leave “no adhesing party at all.” The other adhesing party or parties would be other citizens.”

I meant to do no more than refute your assertion that there was only one possible adhesing party for you to deny entering a contract with.

“You didn't explain where that someone, whoever they're supposed to be, got the right to give me such an ultimatum.”

Perhaps they think they have a right to free association and they don’t want to allow you into their society except under their conditions.

Perhaps they think they have some property right in the society in which they have invested time and money and are unwilling to grant you an ownership right if you are unwilling to grant acceptance of the rules of their society in exchange.

Perhaps.

However, it seems to me that discussing all that is pointless (as is too much of this thread) without coming to some agreement on the concept of the Social Contract.

“So the only conclusion is that I entered into a contractual relationship the minute I was born.”

As I said: “In any case, some of the privileges of the social contract accrue to minors because we can allow that if we choose and we have so chosen. We have also chosen not to require all the obligations of the contract from minors till they have reached a stage of maturity and understanding at which we can reasonably expect them to fulfill those obligations, which we may have arbitrarily declared to be at the age of 18. To do otherwise would not be just. And we’d have to put too many of them in prison.”

“I do sign implied contracts. I do it by, for example, granting you permission to enter my land.”

I almost didn’t recognize that as a play on words—humor.

When tpaine used the word “sign” I infer he meant: The subscription of one's name; signature. To mark with characters or one's name. To sign a paper, note, deed, &c. is to write one's name at the foot, or underneath the declaration, promise, covenant, grant, &c., by which the person makes it his own act, To sign one's name, is to write or subscribe it on the paper. Like when you take pen in hand and write your name on a check.

When you used the word “sign” I infer you meant: To signify. To make known something, either by signs or words; to express or communicate to another any idea, thought, wish, by a nod, wink, gesture, signal or other sign. A man signifies his mind by his voice or by written characters; he may signify his mind by a nod or other motion, provided the person to whom he directs it, understands what is intend by it.

But what I wrote was “If our Constitutions contract doesn't need signing and therefore is not a contract for that reason, then neither an implied contract or an adhesive contract are contracts because they don't need signing.”

Responding to that by attributing one meaning of the word sign to the first part and another to the second part may be humorous but it is not truly responsive.

“Thank you; you stand corrected. “

Where do I stand corrected? Where did I say I agreed with each, any or all of these definitions? I merely offered them up for you to smash. I tried to scan them for relevance but not for agreement.

“Did you know when you posted them, that you were regurgitating multiple versions of the two definitions I'd already debunked? Or did you honestly think these were different in some way?”

Neither thing was a consideration. You offered to smash and I tried to give you an opportunity. But I might offer rebuttal to your attempts at another time.

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Why Statists Always Get it Wrong

by Per Bylund