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.

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 prevention of famine and disease can be a legitimate function of government, but there is no reason the it can only be done by government, or that it must be a central 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.

Then you are drawing conclusions based on flawed logic, easily demonstrated by the simple obseravation that there are many cases of millions of deaths having been caused by disease and famine created by a central government.

KrisKrinkle:

When tpaine used the word "sign" I infer he meant: The subscription of one's name; signature.

Izzy responds:

I know he did, but he's wrong.
Contracts are created all the time with a word or a handshake. If you read up on contract law, you'll be surprised to learn that the signature is not in fact what creates a contract. A contract is made when a party makes an offer, and another party accepts the offer. A signature is optional, and does not play an integral role. Rather, the signature constitutes evidence that you accepted the offer.
--- you don't understand the actual role of signature in contracts.
--- if you understand contract law: an implied contract is an agreement which, although not explcitly stated, nevertheless exists between the two parties.
To prove that it exists, you must prove that there's an agreement between us. To prove that, you look at whatever explicit agreements we've made, and at our interactions.
--- you can't select two people at random and claim that they have an "implicit contract" between them. There must be evidence of the existence of an agreement.
-407- Shalom Israel

tpaine here:
Izzy, -- anyone could pick two people, at random, off the streets of the USA, and establish with two questions whether they have an "implicit Constitutional contract" between them.

-- The first question: -- Have you ever pledged allegiance to the flag of the USA, and to the Republic for which it stands?

The second: -- Did your pledge mean or imply that you agree with the principles of our Constitution?

The response would overwhelmingly prove that there's an agreement between most ALL of us.

Granted, a few, like you, would answer no. -- Which is fine, - rational people learn to ignore aberrations.

KrisKrinkle comments on #407:

If we can ever agree on the existence of the Social Contract (or Compact as they used to say) perhaps someday we can discuss its nature.

Izzy riposts:

Um, yes: that's exactly the subject under debate.
The founders were quite mistaken in that they did believe in this notion.
I can prove that no actual contract was involved, though!
When the Constitutional convention was over, Mrs. Powel approached Benjie Franklin and asked, "Well Doctor, what have we got, a republic or a monarchy?" In other words, she didn't even know what the new government was--and yet, inside the convention, the founders glibly spoke of a "compact" to which Mrs. Powel was supposedly a signatory.
-411-

Kris, when izzy presents definitive smash down proof like Mrs Powells words, -- what more need be said?

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

-- Duties under the Social Contract --

While a constitution prescribes the legal rights of individuals and the powers of government, the social contract also includes certain duties which members assume upon entry.

Those duties include the duty to avoid infringing on the rights of other members, to obey just laws, to comply with and help enforce just contracts, to serve on juries, and to defend the community.

It is important to recognize that although individuals have a right of self-defense in the state of nature, when they enter into society under the social contract, the pooling of that right transforms it into a duty to defend the community, and therefore to risk or sacrifice one's life, liberty, or property if such defense should require it.
The right of self-defense is no longer supreme, although it survives the transition to society as a duty to defend oneself as part of the community.
Pacifism in the face of mortal danger to oneself or others is therefore not consistent with the social contract, and persons who insist on that position must be considered not to be members of society or entitled to its benefits, and if they live in the same country, have the status of resident aliens.

This duty implies not only individual action to defend the community, but the duty to do so in concert with others as an organized and trained militia.
Since public officials may themselves pose a threat to the community, such militias may be subject to call-up by officials, but may not be subject to their control except insofar as they are acting in accordance with the constitution and laws pursuant thereto, and in defense of the community. Since any official designated to call up the militia may be an enemy of the constitution and laws, and may fail to issue a call-up when appropriate, militias must remain able to be called up by any credible person and independent of official control.

Another important duty is jury duty. Since officials may be corrupt or abusive or their power, grand jurors have the duty not only to bring an indictment upon evidence presented to it by a prosecutor, but to conduct their own investigations and if necessary, to appoint their own prosecutors to conduct a trial on the evidence.
Petit jurors have the duty to not only follow the instructions of the judge to bring a verdict on the "facts" in a case, but to rule on all issues before the court, overriding the judge if necessary.
No matter how despicable an accused defendant might be or how heinous his acts, they have the duty to find that accused not guilty if the court lacks jurisdiction, if the rights of the accused were seriously violated in the course of the investigation or trial, or if the law under which the accused is charged is misapplied to the case or is unconstitutional; and to find the law unconstitutional if it is in violation of the constitutional rights of the accused, if it is not based on any power delegated to the government, if it is unequally enforced, or if it is so vague that honest persons could disagree on how to obey or enforce it.

the pejorative assumption being used [primarily by izzy], that the word 'social' somehow implies condoning socialism.

Izzy claims:

I'm of course making no such assumption.

Then contradicts himself in his next line.

I've remarked before that the word "social" essentially negates whatever comes next: social security isn't secure; social justice isn't just; social contracts aren't contracts; etc.

The term cognitive dissonance comes to mind.

--- the pejorative assumption being used [primarily by izzy], that the word 'social' somehow implies condoning socialism.

Izzy claims:

I'm of course making no such assumption.

Then contradicts himself in his next line.

I've remarked before that the word "social" essentially negates whatever comes next: social security isn't secure; social justice isn't just; social contracts aren't contracts; etc.

The term cognitive dissonance comes to mind.

Please stop addressing your idiotic replies to me.

Please: NO personal attacks ---- But sure, You quit using & addressing me in your arguments, & I'll reciprocate.

In no post, at no time, did I ever link the word "social" in "social contract" with the political philosophy known as "socialism."

I generalized that a pejorative assumption is being used [primarily by you, izzy], that the word 'social' somehow implies condoning socialism. -- No specific post or 'link' of the word was mentioned.

Go soak your head.

Please; NO personal "yo momma" type attacks.

Privatization of national defense = hiring mercenaries.

Dress it up how you like, hiring a group for pay to defend a nation won't work. When the bullet hits the bone, the hired help can't be trusted. They'll run or worse, change sides. There is no loyalty, they're not fighting for themselves. Its just the $$ and when that runs out, so do the unpaid mercenaries.

Why did the Greeks always post their mercenaries front and center? So they would bear the brunt of the battle and, so they couldn't run away!

Now, if you mean by defense privatization having Halliburton run the mess halls, well, maybe. But you won't find any wing-tipped execu-warriors around when the fit hits the Shan. They'll be running for cover with the Sri Lankan server boys they hire for $3 a day.

While I sympathize with the Libertarian distrust of government, national defense has to stay in gov't hands.

Believe me, I'd love to take my family, the dog, guns, truck, move up to 'Ruby Ridge' and flip Osama a bird and tell him 'come get me you ragheaded motherf'er' but somehow I think the USMC would do a better job.

Privatization of national defense = hiring mercenaries.

That might be true if big central armies are the cornerstone of defence, but that isn't necessarily true. One approach to national defense is to arm everyone in the place, and let foreigners decide for themselves whether they really want a massively bloody confrontation with tens of millions of causalties, or whether they'd rather just engage in free trade.

Another possibility is all-volunteer local militias. This is actually the same as the previous option, with the addition of a few officers.

While I sympathize with the Libertarian distrust of government, national defense has to stay in gov't hands.

As I said before: it's not that I'm so sure defense can be privatized, but rather that I distrust the casual assumption that it can't be. After all, such a thing hasn't been properly tried in the last 10,000 years. We always think there's only one way to do things, when one way is the only one we know.

Believe me, I'd love to take my family, the dog, guns, truck, move up to 'Ruby Ridge' and flip Osama a bird and tell him 'come get me you ragheaded motherf'er' but somehow I think the USMC would do a better job.

I'll grant that no "private army" could beat the USMC, because no private army could convince people to give them hundreds of billions of dollars--which, of course, the US military is given out of the spoils of tax theft. However, it isn't necessary to do the best possible job; a good enough job will do. The down side of the US military's superiority is that it's also the world's best tool for oppressing the populace, and sooner or later the day will come that it's used for that purpose.

While I sympathize with the Libertarian distrust of government, national defense has to stay in gov't hands.

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

Shooter; -- no rational libertarian would try to tell you that the USMC will ever be used to suppress US civilians.

Pacifist's may have such nightmares , but the reality of an armed population and our Constituonal contracts principles, - like Posse Comitatus , -- will serve to prevent such acts.

“No, I'm making an assumption about your location.”

??? That’s what I said but I added that your assumption was incorrect.

“The starting premise is that we're really talking about his land, not a piece of property whose ownership is in dispute. “

Correct, but it doesn’t lead to your following sentence.

“So you didn't "agree" that you weren't on his land; you really, honest-to-goodness weren't standing on his property.

That I didn’t agree that I wasn’t on his land is correct. You assumed it. I didn’t say one way or the other because it was irrelevant at that point.

Remember, what I said was that when you say “…he can ban anything he wants on his property…” “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.”

“Yes, it does, because he can't issue a ban…”

Agreed and that’s the point I was trying to help you think through to: That “…he can ban anything he wants on his property…” is an overbroad, incorrect statement. That there are situations in which he can not “ban anything he wants on his property,” your example of his having waived the right to do so being (ultimately the only?) one of them

In regard to the end of your post:

You wrote: “Yes, it does, because he can't issue a ban if he has already waived the right to issue it."

Then you quoted my words: “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. “ which your saying “…he can’t issue a ban…” appears to validate."

Then you write: “No.” which is a contradiction of the “yes” you wrote before.

And you continue by writing “You merely misunderstand the statement, because you fail to appreciate the fact that every contract is a limited waiver of certain rights.”

Which appears to invalidate your previous statement “…he can ban anything he wants on his property…” which is the point I was trying to help you think through to.

That’s tempting, very tempting.

To rebut your “smash” I don’t have to prove that what you tried to smash was correct. All I have to do is demonstrate your “smash” was incorrect.

As a poor example because you didn’t really smash, in response to: For Hobbes, the contract was an agreement between society and its government.

You said: “Thank you; you stand corrected.”

My rebuttal to your statement is: I merely offered the definitions up for you to smash. I did not say I agreed or disagreed with each, any or all of them therefore such agreement or disagreement is not in evidence and can not be corrected.

See? I didn’t have to do anything but address your smash on its own merits. And you are free to treat my rebuttal the same way.

“I own land. It's mine. If I want to "opt out" of this contract I never opted into in the first place, then I must allow my land to be stolen from me.”

"It is a moot question whether the origin of any kind of property is derived from nature at all... It is agreed by those who have seriously considered the subject that no individual has, of natural right, a separate property in an acre of land, for instance. By an universal law, indeed, whatever, whether fixed or movable, belongs to all men equally and in common is the property for the moment of him who occupies it; but when he relinquishes the occupation, the property goes with it. Stable ownership is the gift of social law, and is given late in the progress of society." --Thomas Jefferson to Isaac McPherson, 1813.

"A right of property in moveable things is admitted before the establishment of government. A separate property in lands, not till after that establishment. The right to moveables is acknowledged by all the hordes of Indians surrounding us. Yet by no one of them has a separate property in lands been yielded to individuals. He who plants a field keeps possession till he has gathered the produce, after which one has as good a right as another to occupy it. Government must be established and laws provided, before lands can be separately appropriated, and their owner protected in his possession. Till then, the property is in the body of the nation, and they, or their chief as trustee, must grant them to individuals, and determine the conditions of the grant." --Thomas Jefferson: Batture at New Orleans, 1812.

Others might say: Your ownership of land is dependant on a Social contract. You “signed” your agreement with it by buying land under its terms. (Those terms are implicit but as someone over the age of 18 you’re expected to know what they are.) If you opt out of the contract it is not stealing if your land is forfeit (if it even is, you said it not me), the forfeiture is a penalty for breaking the contract.

Aside from all that, who besides you said the only way you can opt out is by submitting to a violation of your property rights?

Who besides you said you must allow your land to be stolen from you?

I didn’t say that and you posted to me.

“But if they don't like it, their only choice is to flee Japan. “

No its not. They can become outlaws. Do not some martial arts weapons descend from farm implements because of this? The peasants took a dim view of being denied arms so went outside the law and turned their farm implements into weapons.

They can also force change and “…institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness.

“That's not a "contract"; the peasants in this case most certainly never agreed to anything.”

One could argue they “signed” their agreement by not fleeing, becoming outlaws or revolting.

“So this obviously unjust institution fits your idea of a ‘social contract’…”

Unfounded attribution—at least I don’t recall saying any such thing.

“…and the "social contract" in the US has similarly bad implications--for example, that policemen can break into a house, shoot the occupants, explain that they meant to raid the "crack house" next door, and get away with murder. I can't escape this injustice without fleeing the country.”

Looks like an establishment of imitation and approximation probably for the purpose of having an easy target.

That’s what I said but I added that your assumption was incorrect.

You mean you were always on his property? Since the beginning of time? You're making no sense. If you would like to clearly spell out the scenario you have in mind, I welcome you to do so.

that’s the point I was trying to help you think through to

You cut my sentence right before the most important part: he can't issue such a ban because he already waived the right to do so when he invited you onto his land. If you're on his land uninvited, he can indeed take your life.

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Why Statists Always Get it Wrong

by Per Bylund