Discussion With a Defender of the State

by Angelo Mike 

Exclusive to STR

November 20, 2006

Below is part of an online discussion I’ve had with my Ethics and Public Policy teacher (Professor Kirsch) and her objections to anarchy. It first went online on the class’ online discussion forum so that anyone could participate. Her first comments that I quote were directed at my previous posting about how taxation is theft and thus illegitimate.

(I have responded to individual points with the same format as my first post--"Kirsch:" will be before Professor Kirsch's comments, and "Angelo:" will be before mine.)

Kirsch: Not every crime can be justified on utilitarian grounds. I surmise that committing random crimes against people is not the best way to maximize the general happiness. But perhaps an organized and consistent system of stealing, by way of the state (and in the form of taxation), would be in the interests of the people. To be sure, any form of government can become corrupt and inefficient. But I don't think that it follows from this that all forms of government must be corrupt.

Angelo: Then one of the questions we must address is, is taxation (along with organized crime) utilitarian, and is it even unjust in the first place if there is this dichotomy by what may be deontologically just and what is expedient and utilitarian?

First, how does taxation and the state even develop? On a purely historical level, no state in history, including the United States , has ever arisen except out of conquest and domination.

The very first states, which were monarchies, developed out of the natural order of societies in which natural elites and aristocrats rose to the top ranks of society who people deferred to in matters of disputes, law, and order, such as tribal chiefs.

In a natural order, people are free to patronize the chiefs they want for arbitration of disputes such as over theft or fraud. States developed when the natural aristocrats, who had the favor of the public, simply wanted to stop the entry of anyone else who wanted to provide law and order. He became a monopolist, and an aggressive one who could violently prevent others from providing law and order. This alone is not conducive towards serving the interests of citizens best.

But, monarchs historically have often had favor of the people, and still were restrained by cultural and religious laws, and he had to run his country more akin to his private property, though he was still a monopolist and an aggressor. But such states historically have been redistributionist states only from society to itself. They were consumer states, and were moderated in power because their subjects tended to have an awareness or class consciousness in which they realized that the king taxed only to take money from them and to his private gain. There wasn't much in the way of redistribution of wealth within society, but only from society to the state.

Secondly, if stealing is a crime, and the state is guilty of it, then the very existence of states is a corruption and an abuse. The only reason stealing is wrong is because it is a violation of property rights, which are an extension of one's rights of ownership over his or herself. The problem with taxation is that it is inherently a corruption. It is to take someone's money over their objections with the threat of violence.

Kirsch: My worry is that if people were not taxed, then poverty and suffering would grow and expand. Would it be impermissible to steal from someone living in indecent and nearly incomprehensible luxury to save the lives of hundreds who would otherwise starve to death? And might there not be a way of organizing this system so that all people would assent to it? (I am thinking here of Rawls’ original position.) My concern is that human beings can be very greedy and selfish creatures when nothing is encouraging them to act otherwise. How would we deal with this problem in the absence of government and taxation? Can the market assist those who are without money and means? If what people value drives the market, what will happen to the unlovable, the lonely, and the poor? From what you have said to me, I am assuming that your theory is motivated by considerations of justice. What form would these considerations take if the world were as you would have it?

Angelo: Several arbitrary value judgments are asserted here, which have not been substantiated. Some of them are: The state reduces poverty, the state exists to reduce poverty, the state is generous and philanthropic, the state is capable of producing wealth, the well being of the state is compatible with the well being of everyone else, and a state will be driven by motives totally unlike the rest of society, which is greedy and selfish.

First of all, historically, have states been apparatuses of wealth creation and generosity? Because if people are as greedy as you say they are, why would giving them states, in which they may take our money against our will, make their motives good? Or will not only the worst plunderers and demagogues get to the top of states, because they wish to expropriate people’s money against their wishes?  

The century of statism, the 20^th Century, has been the most deadly as far as state wars are in history. A conservative estimate of deaths from state wars in the 20^th Century is 170 million, as cited in John V. Denson's book, A Century of War. I've seen estimates as high as 210 million. History has shown us nothing worse than this. So should we keep giving the state the benefit of the doubt as far as impugning to it good motives and the ability to enrich people? Or have they not already hurt us enough?  

Secondly, no state, even the most despotic in history, cannot last without the consent and support of a majority of people, even in the most tacit way. This includes the Soviet Union , who had millions of people willing to carry out the premiere's orders, and Mao's China (Mao Tse Tung was the biggest mass murderer in history, having killed 70 million people. Who would he have been able to kill without a state, and why do states keep attracting men like him?)  

So, if people are as greedy as you say they are, how will they form states which are any good? Will not the greediest and most cold hearted members of it want control of states, because it is the only institution which is immune from the law? And if people cannot be trusted to use their money and property in a way that is in the interests of others, how will they direct governments towards these ends?  

You say that people cannot be trusted to be generous and help the poor. Even if we accept that states must exist for this reason--though historically, no state has ever been created towards this end, except perhaps in the rhetoric that Lenin used to form the Soviet Union --how would it work? Is it even possible to tax away wealth to create it? Because taxation, economically, has the same effects as any theft, but in fact even more magnified ones.  

When people are victims of theft on a market, they have legal recourse against thieves. It’s also profitable for security and insurance agencies to provide defense against thieves. So, on a market, people’s rate of time preference will go up as a result of crime, because they will forego more future goods in order to desire present goods of security.  

Under a state, though, since people know there is no recourse against the theft taking place from a state, they do not attempt to defend themselves, but instead can only attempt to be one of the lucky “have nots” that receive tax subsidies, such as welfare recipients or politicians, or they will have a systematic shift in their time preference schedule, which will reduce their desire to work for providing their future needs better in the first place, because more and more of the labor they do ends up not being for themselves, but for the state.  

Because taxation is coerced from unwilling taxpayers, there must be a police force to punish those who violate tax laws. The state must always expand their efforts to catch tax evaders, because they need to tax more in order to apprehend more of them by producing more roads which provide access to your house for the police to drive on, more jails, tax laws, lawyers, judges, and tax experts.  

More and more of the resources that a philanthropist desires to have produced in the private sector and expropriated by the state must be confiscated only to the end of maintaining that very system of taxation in the first place. It's a mutually reinforcing system.  

Furthermore, in order to prevent tax evasion, you still must have public will in your favor. It is not sufficient to merely control roads so that you have forced integration over them, and the tax collectors and police can apprehend anyone they want. You must have a public which at least gives some kind of tacit consent to taxation, who recognizes, at the very least, that taxation and the state is a necessary evil, or that it is better than whatever is the next alternative.  

In order to ensure this, the state increasingly must take over schools to teach that paying taxes is a civic duty, and prevent free entry into the provision of education. This requires even more taxes, teachers, unions, bureaucrats, licensing boards, and schools to train the teachers.  

This has the additional effect of taking the traditional role of education from the family and appropriating it for the state. Not only must state morality in taxation be taught, but the state, if it gives any approval to teach outside the government school system, must attempt to control who can, such as by licensing home school teachers and private schools, and providing government accreditation of university professors.  

Should anyone violate the government's rules, public opinion needs to be strong enough to approve of police action against innocent people who provide education without the state’s permission, making people more and more anti-social. And when the state punishes and imprisons tax evaders or other law breakers (since it must demand compulsory unification; if you were free to secede or withdraw, it would not be a state), everyone else in society must be taxed to pay for the convict’s incarceration, three meals a day, and re-education.  

Taxes need to be increased even more only to the end that the state may perpetuate itself, disorganize society, and benefit itself at the expense of everyone else.  

Who would join such a system? We see only the worst, most power hungry, manipulative, and demagogic will, who can promise to solve the problems of poverty that the state creates by confiscating wealth, destroys incentives to work and aid the state, only by further intervening into the private sector for its alleged excesses.  

If you don’t advocate monarchy or dictatorship, then democracy is an alternative system of government. If people are as greedy and selfish as you say they are, and the laws cannot trust them to use their money how they wish, this means that you want politicians to be able to appeal and sway the heartless masses towards their will. What kind of people will the masses choose, and only choose every few years?  

Increasingly, it will be those who protect the vested interests, the tax receivers, whose efforts are most concentrated in keeping their funds and privileges the state gives them. Not the scattered, ordinary people who only stand to lose incrementally, and do not resist except when a greater feeling of class consciousness makes them aware of the plunder that is being forced onto them.  

Instead, they believe they are part of the government, and that democracy is a tool to serve them. So, by your own measure, who will people vote for, and who will run for office? The same people who can’t be trusted in their private lives are then given a right to vote for politicians who may exercise the police power to regulate the lives of everyone else, at no cost to them! Will they not make even worse and irrevocable decisions, and has not history demonstrated this?  

So to point out the greed and mistakes that people make is not sufficient to object to anarchy. It is necessary to show that, given a certain people, a state society will make them better. To be human is to err. But the question is, do you want recourse against people’s errors? Do you want the market to penalize them for being wrong? Or do you want to hand over to them the reigns to an institution which alone decides what is lawful, interprets its own constitution, may provide more and more destructive forms of "justice" at everyone's expense, and is immune from the law?  

But, as many have objected, perhaps there are circumstances under which a state is voluntary. For one thing, no example of a voluntary state in history exists. Every state, including America and its Constitution, was conceived in by force and domination. The Constitution and its laws were imposed upon everyone who neither signed nor consented to it.  

I will be generous with this argument and assume that it is true, though. Let us say that conceivably, people will put aside their differences over what conceptions of law and justice they have, and vest in a state ultimate jurisdiction in all decision making.  

The problem then is, if most people are willing to peacefully do this, a state wouldn’t be necessary to compel them to do this (and hence, every state has existed and come into existence through domination and force). If this is possible, then people would have no need for recourse to compulsion against themselves, but may simply voluntarily agree, as if through contract, which is how private businesses and landlords operate.  

That way, should inefficient, greedy, or immoral people exist, we have no one compelling us, under the threat of force, to aid and abet them.  

Finally, there is the issue of how to actually deal with poverty itself. Even if we accept that charitable gifts and generosity are the only way to deal with this, for a state to form to this end, a majority of people must consent in some way to this. No minority can impose on the majority a state for very long.  

But if enough people exist to form a state to provide charity, the problem is still that they would be able to even better do so voluntarily. If people are as unwilling and greedy to do this as you say, then there is no question of voluntarism in doing this, and force must be used, systematically escalating a state's need to collect more taxes and have a stronger and more invasive police force and system of law.  

In such a system which is democratic, people who normally forbid of themselves to do the job states do out of their sense of decency are then given a mechanism, that of voting, to outsource the role of the oppressive police power to government, who may then make everyone else suffer under it.  

If people are as bad as they are, why would you want them to have such a terrible and irrevocable authority?  

So even if we believed states should exist, we would have to find some beings other than humans to run them. They would have to be run by angels. But even this is not sufficient, for the problem of economic calculation comes into play.  

Under a government system of redistribution of wealth, cost accounting and output is systematically disordered since it takes place absent the voluntary contributions of patrons who appreciate their services, which is what takes place in a market society.  

To the extent that the masses have opportunities to earn a living and wages in the first place, entrepreneurs must be free to acquire savings and private property in order to put laborers to work in the first place.  

Entrepreneurs employ people because they are far sighted (have a low rate of time preference), save up money, and accumulate capital goods (those goods such as factories and machines which are applied to labor and make it more productive), and employ these capital goods and laborers presently in the expectation of future profits.  

These natural elites forecast the desires of consumers in the expectation that they are capitalizing on an opportunity for profit where other entrepreneurs in their market are undervaluing the desires of consumers for certain goods. They must be free to calculate economically and to employ their wealth and property how they like.  

After all, they do not start up a business in a day. An entrepreneur may save money, borrow capital goods from a lender while paying interest (the wages for capital goods to their owners), and pay wages to employees five years before his business is ready to open.  

This system is systematically eroded by taxation and the police power. Those marginal entrepreneurs (marginal meaning literally "the next over," or "at the cut off point") who under a system of taxation will not achieve profits will not put people to work. Others will, but they can only pay wage earners less, in part because they cannot afford to make their efforts more productive (and thus give a higher rate of return, enabling the entrepreneur to pay higher wages) by applying as much and as high quality capital goods to their labor, which in turn diminishes the satisfaction of consumers, who will not patronize their business and buy as much from them, further diminishing profits.  

So, people are poorer specifically because of taxation, and the state will further intervene to fix this alleged problem of greedy capitalists who refuse to pay their poor employees more. They may mandate a minimum wage, which only further creates unemployment.  

A minimum wage is a price control on labor which bans from employment anyone whose labor is worth less than that specified wage. These people are the most sub-marginal, the most unskilled, uneducated, youngest, and vulnerable, who need these jobs most and compete for them by asking for low wages so that they may learn skills and acquire a good reputation, thus enabling them to climb up the job ladder. The minimum wage just ensures that they won’t get into it at all.  

For those whose wages are raised by the minimum wage, the nature of the business must change to accommodate them by either employing them at more select or peak hours, combining more machines with their labor, or replacing their labor entirely with capital goods, which the minimum wage now makes artificially profitable.  

The minimum wage also causes those marginal workers who otherwise would not find it in their interest to work for these low skilled jobs to try to work for them. It makes these low skilled jobs artificially more profitable while at the same time businesses will not hire more of these unproductive workers, creating a de facto surplus of supply (unskilled laborers such as teenagers) and a de facto shortage of supply (jobs). This is compulsory unemployment.  

Of course, it's easy for such a state society to blame this situation on greedy capitalists, and not on the complex workings of economic law, from which the consequences of violating them the state is not immune. So they may demand further help for the poor, such as affirmative action, public housing, food stamps, and welfare checks.  

In addition to all the enforcement programs mentioned above, these create de facto shortages of supply on the part of the state and a de facto surplus of demand on the part of the "have nots," the marginal of whom find it increasingly more and more profitable to expropriate from other taxpayers through government subsidy checks now what they would otherwise have to work and sacrifice for in the future.  

It’s also extremely important to note that it’s not the capitalists and entrepreneurs who benefit at the expense of the poor, but the consumers who direct the actions of the capitalists to their own satisfaction. It is very hard to predict the future of your own desires, let alone those of others, so most businesses on an unhampered market either fail or change constantly in order to meet the demands of consumers.  

If more poor people are not employed on a free market, it's actually because of the will of the heartless consumers, whom the entrepreneurs are beholden to. Consumers have no concern for the vested interests who wish they could insulate themselves from their will, which businesses do by getting government protection. Increasingly, business does this because of the increasing interventions that the government makes to hinder the workings of a free market.  

Consumers direct the activity of entrepreneurs on a free market, which entrepreneurs must constantly forecast. If they do not best satisfy the most urgent desires of consumers, they will soon go out of business. That is, if they do not have government insulation from competition, which regulatory action does, whether through anti-trust, minimum wage laws and price controls (which protects those firms which can afford to comply with them from those sub-marginal and potential firms which either are no longer profitable or will never enter the market because they will not be profitable in the first place), quality control and environmental regulations, affirmative action laws, and so on.  

If capitalists do not employ more of the poor, it's because consumers are unwilling to foot the bill. It makes more sense to demand that consumers be generous and charitable, but charity is not even the best way the vulnerable and poor benefit. It’s through the actions of capitalists and entrepreneurs and the unencumbered price system.  

After all, it's only from the production of wealth in the private sector which gives a base of tax revenues for governments to give, and from which charitable contributions flow. Instead of subsidizing the unemployment, poverty, single parenting, etc., the most expedient way of dealing with these are often an attitude of "shape up or ship out," making it increasingly more and more profitable for the vulnerable and stragglers in society to take advantage of the opportunities capitalism affords them.  

Government isn't directed by such a system. It perpetuates itself and increases its own well being by perpetually creating victims, vested interests, and crises.  

I could go on. I think it suffices to say, I cannot think of any defense of the state, whether on historical, utilitarian, or theoretical grounds.