When a businessman lacks sufficient capital, he seeks investors and promises or otherwise pledges them a return on their investment. Depending on the risk, and the probable rate of return, investors give him money, or they do not. And although this might be a rather simplified model, nobody is forced to contribute in order that the Bill Gateses and Warren Buffets of the world make their fortunes. The investors’ contributions are voluntary, and their returns are proportional, both to their initial investment, and to the risk they are willing to bear.

The political arena, however, is markedly different. When an interest group wants a certain project undertaken, it need only rouse a significant number of “squeaky weels,” promise influential politicians their votes, and make some campaign contributions. Politicians accordingly, need to convince people to vote along their party lines, and they do this by promising a great many things to a great many people, most of which promises go unfulfilled, and none of which are free. Through such channels, majorities may easily impose their desires and choices upon minorities, and in cases, minorities are capable of leveraging their views over the majority. The power of taxation, enforced by violence and aggression (or the threats and promises thereof) is thus used to compel the unwilling to make contributions in the form of taxes, which support ideas and projects that many contributors didn’t want, and to which they are often vehemently opposed. (Try not paying for the war in Iraq, or bridges to nowhere, or a new subway line in New York City…)

On the market, one’s actions are voluntary and one’s returns are proportional to his contributions. Contrarily, taxation is often involuntary, and the results thereof are quite often disproportionate. Those who did not want, or did not approve of projects are lumped together with the rest, and forced to suffer them, so that those people who truly did desire the projects may afford them at a lower price than they could’ve collectively negotiated absent the use of force. “Benefits” from such projects and policies, thus may frequently bear an inverse relationship to the contributions one has made to support them. (i.e., public schools, social security, the war on drugs…)

The “social contract” is not so much a contract, at all. It’s more of a decision made under duress, based on the assumption that on balance, people prefer some freedom to no freedom, and oppression to death or imprisonment.