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.
Rifles were by far the least of our worries back then -- but even so, you need to have everybody armed with the same rifles in order to be able to efficiently supply your troops. Gosh ... rules and regulations regarding what weapons to bear?
We had almost no artillery, and almost no ammunition to fire from the guns we did have. We had no airplanes. We had no machine guns. We had to borrow or buy all of those from the British and French. We also had to rely on British transports to get our guys over to Europe.
And yet we defeated the British with no government-operated standing army. I'm glad you're coming around to my point of view.
Well, to begin with, Our Lamentable Author said that "Statists always seem to get it wrong...." That little word, "seem," is his little escape hatch. He's a charlatan, our author, and this piece is crap.
You need to read some history, sir.
The state never created property rights - they already existed. WE created the state to enforce those rights - the State's ONLY reason for being, national defense and the rule of law.
If taxation, both the visible and invisible, reaches much over 10-15%, there will rightly be many Murrays who think that ANY Fed'l Govt should make itself subsist on no more. Higher taxation always results in avoidance, legal or not.
Murray says to himself, "What good is a state that takes so much from it's people, where the poorest of them relatively have the most difficulty in accumulating wealth, much less the right to pass it on to their posterity (SS), however small an accumulation they've acheived, - to grow and compound with the next generation and so on?"
Is John Kerry a Murray? How was his 12% tax rate on $5 million in income "fair" when the two lowest rates are 10% & zero, and the highest rate 35%. He's only paid a third of what his income level precribes.
Murray sees those who've reached the low to mid six figure income levels and above, all of a sudden getting all kinds of tax credits, mortgage & business deductions, etc.; by investing in tax frees, creating family trusts, or just plain avoiding taxes by delaying taxable financial transactions that would otherwise free up capital for better opportunities. Poor Murray's income is too small to justify the expense of tax lawyers and accountants to do the same for him, and he therefore justly feels he's being taxed unfairly by comparison.
Those poorer than Murray will do their all to claim only enough income such that they remain below the income level where taxation kicks in. Those whose incomes are untaxable may also qualify for child credits - they actually receive a REVERSE tax. Childless renter Murray who can't itemize, rightfully chafes at the concept, as he's also paying school taxes via his rent.
Mises is a good place to start your study of the human action aspects of economics. You'll find that men seeking their own best interests are the main engines to be incentivized for the raising of living standards for all that state interventionism only hinders.
A bigger example of Govt imbicility couldn't be had right now. That being that some in Congress want to impose so called windfall profits taxes on the oil co's recent record profits - not record profit margins mind you (which are not much higher than when oil sold at $30/barrel). Nor were their margins today higher than those of other industries. Yet Congressmen will use voter stupidity to hype this as if THEY are our good Govt stewards looking out for us little people. If their profits are taxed beyond the norm, R&D will dwindle and fuel prices will rise, which hurts the least most.
The same way minimum wage prices the least skilled out of their jobs first.
Happiness is inversely proportional to the size & cost of the State. However, the State has seen fit to afford elites the means to virtually avoid taxation.
Your posts seem short on argument, and long on ad hominem. However, you seem to have missed my point. If you grant the initial assumption that statism is inherently wrong, then "are statists wrong" is not even a question. The only question is, "where did they go wrong?"
I can see that your intellectual resources are exhausted: if you had a cogent argument to make, you'd make it. That the minutemen, by contrast to the British regulars, were nothing like a trained professional military is not exactly controversial. Rather than exhorting me to "go read a history book," how about actually making an argument?
"The argument is pure buncombe."
Just as are your arguments for privitized defense. You seem to be arguing, as do a lot of libertarians, that you can indidually contract for national defense selecting the contractor that best suits your preferences. This form of national defense is simply not workable because there is nothing to coordinate the actions of the contractors providing that service. If you had any sense of defense matters you'd realize that a fractionated system of defense is easily defeated. 'Unity of Command' is one of the foremost principles of war. Wars cannot be won by committee.
"The founders disagreed with you. Those minutemen at Lexington and Concord were fighting to defend their lives, liberty and property. If every citizen is armed and ready to fight, to the last man, in self defense, then the nation is well protected indeed. The invading Canadian army will run into a solid wall of armed citizenry."
Wars are not won by individuals but by well disciplined units working under a centralized command and control system to achieve a specific objective.
Try this analogy. Just imagine a football team (national defense) formed using your libertarian priciples. One contractor provides a defensive safety and another provides another defensive safety. In all, eleven contractors provide a single player for the defense. Just how effective do you think this defensive team would be with multiple contractors determing the characteristics best suited for player selection or the defensive scheme or the defense to employ on a particular down?
Per Bylund works as a business consultant in Sweden, in preparation for PhD studies. He is the founder of Anarchism.net.Then Anarchism.net is the site for you.
Ah, but the problem comes when you contend that any governmental body is an instance of "statism." And it's compounded by the fact that "statism" is a word without fixed meaning. It's a convenient epithet that allows you to be against government, but simultaneously be for it in certain cases.
The minutemen certainly did defeat the British after Lexington and Concorde in 1775. The war, however, lasted until 1782 -- and we only won it because our troops were trained into an organized army. And because the British government was split on the topic of our independence. And because the British were poorly commanded. And, of course, because the French were helping us out.
As I said -- you need to learn some history.
And for what it's worth, my comment about artillery, etc., referred to our military position in 1917.
"Probably not very well, but the article doesn't seem to be limited to consideration of what is required to provide for the national defense, and I don't think there's a case to be made that any action that is justified in the name of national defense is equally justifiable for any other reason."
Of course not. But the author falls into a similar trap when he argues that if something is not justified in the name of national defense it cannot be justified for any other purpose.
But since you bring that up, libertarians from the Von Mises Institute like to argue that all functions of government can be better performed by the private sector quite commonly pointing to the use of privitized police and courts. I have similar problems with those arguments as well.
Suppose all police and courts are privitized. Let us further suppose that you and I are neighbors and have a dispute over say our property boundary. I go to my court and get an injuction against you. You go to yours and get an injuction against me. We both call in our separate police forces and try to enforce these injuctions. I think there is a problem there that illustrates why some functions must be public and why they must be compulsory in the sense that all must abide by them.
So the US government is a 'contractor'? Just exactly how do you contract, in a voluntary manner, with the US Government?
I'm sure your historical studies will also have reminded you that the Minute Men were so-named because they were training as an organized military body who were supposed to be in formation within a minute of the alarm being sounded.
I think his point is that the US has contracted out a lot of the functions of national defense. This is somewhat true, in the case of support functions and security (as opposed to fighting).
Just exactly how do you contract, in a voluntary manner, with the US Government?
Doesn't an all-volunteer military fit that description?
Actually not--but it sounded like it, because I referred to a "Contractor". My point was to argue that defense is both excludable and rivalrous, and hence doesn't meet the definition of a public good. For the sake of that argument, there has to be a hypothetical provider, which I referred to as a contractor. I did not intend to imply that the ideal national defense would involve rival "private army" companies, for example.
This form of national defense is simply not workable because there is nothing to coordinate the actions of the contractors providing that service.
You're sneaking in a notion of "coordination", which naturally enough implies centralization, which implies government... but Lexington and Concord were fought by all volunteers, who trained voluntarily, and whose unit of organization was local rather than central. The foundation of any rational defense without government would have to be a heavily-armed populace.
If we posit a well-armed militia with no commanders, and no other defense measures, we still get a surprisingly robust picture: any would-be invader faces the reality that victory will be incomplete until the last man is killed. This raises the cost of invasion prohibitively high in any rational scenario. (There's room for discussion of the doomsday scenario in which Iran gets a sun-killer bomb; but that problem already exists today, and doesn't change very much regardless of the model of national defense.)
Not that private armament is all we would have. Your critique of the libertarian position assumes that we're dealing with armies, and the only interesting question is who commands them. Under privatization, aspects of defense would become separate specialties with their own markets. Rather than taxing Illinoisans to protect the shoreline from air-raids, for example, some sort of early-warning system would be maintained and paid for by those defended. It would probably have dual-use, and raise some revenue by subcontracting to meteorologists, for example.
Anti-terrorist measures would be handled less by the military and more by domestic security agencies. For example, today many utilities are vulnerable to attack. A combination of insurance carriers and security contractors would mitigate those risks for their own purposes, and the results would be better than today. Airport security would be very different than today, and 9/11 style attacks would be considerably less likely. Various "military" functions would be assumed instead by plain-old security guards, insurance companies, and other providers.
The one thing we almost certainly wouldn't have, though, is an expeditionary force. Kind of a shame, really; we'd have difficulty invading foreign nations without an expeditionary force...
One contractor provides a defensive safety and another provides another defensive safety. In all, eleven contractors provide a single player for the defense.
As I illustrated above, a football team is a bad analogy. We aren't dealing with such a monoculture. More realistically, we'll have many separate industries: one providing protection from lone gunmen or suicide bombers; another protecting from fire (and incidentally, incendiary attacks); another selling arms to citizens; another providing personnel screening; etc.
It's unclear to me who would handle heavy-lifting such as aircraft or missiles, but that's for the market to figure out--I'm not in charge. The likeliest scenario I can see is that many security companies will pool their resources to hire a missile-defense company, in exactly the same way that most insurance companies today actually insure their insurance policies with reinsurers. General Re, owned by Berkshire Hathaway, carries billions in "super-catastrophe" policies today. It would be in their interests to maintain early-warning and defense installations to protect their assets. 9/11 cost them something like $2 billion. A nuke in NY would cost them much, much more.
That is not the actual claim. Many, perhaps most, libertarians are minarchists, not anarchists.
And it's compounded by the fact that "statism" is a word without fixed meaning.
All words in every language suffer from that defect to some extent.
Another reason WHY the fact that there are oodles of planets out there, does NOT mean that there is life on them - just because there are lots of them.
"I think his point is that the US has contracted out a lot of the functions of national defense. This is somewhat true, in the case of support functions and security (as opposed to fighting)."
I suspect that but wanted to give him the opportunity to make that case.
"Doesn't an all-volunteer military fit that description?"
That would depend upon your definition of a contract. The problem is the ability of the government to modify the contract at will. Take for example, extending the period of service in times of a national emergency. Remember when you 'contract' with the government, you are contracting with a "Sovereign Power'. By definition, that is not two equals entering into a contract.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.