After banning smoking at Atlantic City Casinos, ostensibly in the name of “the public welfare,” the New Jersey legislature has decided to put profits over people, lifting the ban.
Of course by “profits” I mean “tax revenue.”
Just goes to show that politicians, like the corporations they vilify, will do anything for a buck, and they will sell you out at the drop of a dime.
[root]
I Googled “taxation is theft” the other day, and came across a FAQ page proclaiming to debunk the “myth” that taxation is theft, in which Steve Kangas makes some unoriginal arguments, I’m surprised that it’s at the top of Google’s results.
I try to avoid arguing or otherwise interacting with people who openly and notoriously want to see me shot (or, at the very least, see nothing at all wrong with me being shot) simply for disagreeing with them. The only reason I bother responding to this nonsense, is because Kangas’ page appears as the #1 result to that query.
Taxes are part of an agreement that voters make with government, a contract in which citizens agree to exchange their money for the government’s goods and services. To consume these goods and services without paying for them is itself theft, and is rightly punished as breach of contract. Some may object that they have not agreed to the contract, but if so, then they must not consume the government’s goods and services.
(This is going to take a while. You might want to get yourself a drink, and sit down in a comfortable chair.)
If I donate my old clothes and furniture to the Salvation Army, or to the local Soup Kitchen, I have no right to hunt down the homeless and destitute recipients of my former belongings, and throttle them in exchange for payment. Likewise, if the government decides to give me something, for which I didn’t even ask, no man or group of men has any right to demand that I pay for such a thing.
Due to the States unique monopoly of land and law, in many circumstances, we simply don’t have the option to refrain from consuming the government’s good and services. The very act of refusing to consume many of these things is viewed as a crime in its own right. If I attempt to “not consume” the police services, for instance, by refusing to permit an officer to arrest me, I am the criminal. If I retrofit my car to run on vegetable oil, I run afoul of any number of laws. If I attempt to “not consume” the dollar bills, I’m still forced to reckon taxes in them. If I refuse to do this, I’ve broken many laws. There is no possible way for me to “not consume” the war on drugs which murders and imprisons my neighbors, or the war on terror which murders and imprisons foreigners.
Nonetheless, in support of his thesis, Kangas provides a long list of items provided by TEH GOVERNMENT, for your benefit, some of which I’ve chosen to post here for the sole purpose of ridiculing:
Where should I begin?
Dollar bills were established through force and fraud. National defense is a myth Roads have been and continue to be financed privately. Fire protection, police protection, paramedic protection, education, health and human services have all in the past, been provided without government. There is little to no reason to assume that they couldn’t be similarly provisioned, today. There is a strong argument to be made against Student Loans, which have had the exact opposite effect on the price of higher education; instead of making it more affordable, they’ve put it out of the reach of many without their assistance. The Keynesian policies he lauds failed abysmally in the Post-war era, in the 1970s, in the 1980s, and in case you’ve been living under a fucking rock for the last decade, the current collapse is due primarily to government meddling in the financial markets. FEMA’s ineptitude would be comical if it weren’t so tragic.
“Dollars protected from inflation by the Fed”. The Federal Reserve creates inflation! Inflating the money supply is the Fed’s raison d’être.
But Kangas continues:
Many conservatives and libertarians make the following populist argument:
“If you don’t pay your taxes, men with guns will come to your house, arrest you, and seize your property.”
…[T]he implication that the government is aggressing against you is false, and not a little demagogic.
Taxes are part of a social contract, an agreement between voters and government to exchange money for the government’s goods and services. Even libertarians agree that breach of contract legitimates a police response. So the real question is not whether a crime should be met with “men with guns,” but whether or not the social contract is valid, especially to those who don’t agree with it or devote their allegiance to it.
If you want to hide behind the “Social Contract Fallacy”, I’d be more than happy to have that discussion again. The fact of the matter is that the Social Contract is Not Voluntary, and it’s Not a Contract.
For the time being, however, let’s content ourselves to discuss taxes, independent of the Social Contract. Kangas has the following to say, to those of us who reject the idea of the social contract:
Liberals have two lines of argument… (Ed. NB, he says “two lines of argument” but presents only one) The first is that if they reject it, they should not consume the government’s goods and services. How they can avoid this when the very dollar bills that the economy runs on are printed by the government is a good question.
Yes, that is a good question, since the State has essentially outlawed any alternative monetary system. But this fallacy skirts the real issue. The economy does not run on dollar bills. No economy runs on dollar bills. Economies run on the production of valuable goods and services.
Try to imagine participating in the economy without using public roads, publicly funded communication infrastructure, publicly educated employees, publicly funded electricity, water, gas, and other utilities, publicly funded information, technology, research and development — it’s absolutely impossible.
Look, if you want to tax gasoline to pay for the roads, you’re not going to get a hell of a lot of arguments from me. That’s the least of my concerns. But, how about instead of resorting to the tired “Who will build the bridges?” argument, you try to imagine a world without state-sponsored mass murder. Without a million market distortions and subsidies that keep people artificially poor.
[T]axes do not go exclusively to public goods and services. They also go for welfare payments to the poor who are allegedly doing nothing and getting a free ride from the system. That, they claim, is theft.
But this argument fails too. Welfare is a form of social insurance. In the private sector we freely accept the validity of life and property insurance. Obviously, the same validity goes for social insurance like unemployment and welfare.
Arguably, in the private sector, the decision to purchase insurance products is a voluntary one. Therein lies a not inconsequential difference. In the private sector, we “freely accept the validity” of goods and services to the extent that they are not financed by the continual threat of violence if we refuse to consume them.
Kangas continues, summarizing the “two wolves and a lamb voting on what’s for dinner” arugment and attempts to debunk it,
How big does this gang have to be before it becomes okay for them to vote to forcibly take your property away without your consent? When, exactly, does the immorality of theft become the alleged morality of taxation?
This argument is based on a faulty premise of ownership. Suppose the gang of ten men had helped you buy the car, pitching in with a loan that covered 29 percent of the sticker price (which is about the percentage of the GDP devoted in the United States to taxes). And suppose they simply wanted return payment. By not returning the favor, it is you who become the thief.
This is really going out on a limb, here. Speaking of “faulty premise of ownership,” where did that 29% come from, in the first place? Oh, right, it came from the taxpayers, didn’t it.
Yes, yes it did.
Why anyone needs a government to “loan” them their own money is beyond me. Paying taxes doesn’t help people buy things, it impoverishes people.
[T]he point is that the government is nonetheless producing [these goods and services]… It doesn’t matter that any given individual thinks some government programs are wasteful and inefficient — so are many private bureaucracies, but their goods still demand payment.
Let’s compare this to its “private sector equivalent”, as the author urges us in conclusion, and see if the fallacy really does “become evident.” The fallacy here is evident, probably much to Kangas’ chagrin: the creation and/or provision of goods and services is not, of itself, sufficient justification for remuneration.
In the private sector, if goods and services are wasteful, they will not be consumed. In the private sector, if goods and services are not wanted and/or not needed, they will not be paid for. The government is the only organization which is permitted to demand payment, essentially from everyone, for everything they produce, no matter the actual demand for such items.
More importantly, I don’t give a damn how “wasteful and inefficient” or how productive and efficient the government is. What I care about is the violence, a point that’s entirely lost on apologists like Kangas, who falls back on the myth of voter sovereignty:
If tax opponents argue that a person doesn’t have to patronize a company he disagrees with, then liberals can argue that a person doesn’t have to vote for a public official he disagrees with.
OK. Again, in the private sector, if I don’t patronize a company, they don’t come and take my money. If I don’t want to buy Coca-cola, I simply don’t buy it. I don’t consume it. With government, on the other hand, I am forced (one way or another) to consume goods and services which I would not buy under any other circumstance. Even if I voted for these public officials, which I don’t (shove that Social Contract where the sun doesn’t shine!), my dissent would either be ignored, or would be interpreted as acceptance of the fictional “contract.”
Let’s give up this silly idea of “the social contract” and the absurd notion that “taxation is payment for goods and services” that you don’t even want to purchase. It doesn’t really matter what you do, government is going to keep on doing whatever it wants, whenever it wants. So,believe whatever lies you want, if it helps you sleep at night. But don’t tell me that I have to believe it, too.
Kangas’ argument, and others like his, ultimately boils down to the fact that taxation is a ransom for permission to live.
I’ve involved myself in a little debate at Anarch.me over the past few days, regarding the viability of digital currency, specifically as it would pertain to an anarchist/agorist’s end-goal of dissolving the State. The message thread is Agora on the Internet: Would Digital Money Kill the State?
The gist of the discussion is that somehow, someone could create an independent digital currency that would eventually erode the State’s monopoly on money. I certainly would like to entertain the idea, and I’m not opposed to it in theory, but IMO, the bulk of the discussion there has consisted of bad economics so excuse me for playing the devil’s advocate. The crux of my replies has been “the market can [not] simply will-to-exist something ‘almost as good’ as specie. Whatever the market creates is going to have to be a money-substitute, backed entirely by some commodity or another.”
I have also characterized (perhaps mis-characterized) this idea as a quasi-fiat money, since it seems pretty much arbitrary to me. As such, I see it like counterfeiting; a counterfeiter need only persuade people that the bills he printed in his basement are actually passable. Jonathan counters thusly:
The digital currency is not fiat, as I have explained. Fixed currency cannot be fiat; this defies the law of non-contradiction.
Yes, it is. You either don’t understand what is “fiat”, or you don’t understand what is “non-contradiction”. All that’s required for me to produce more gold is that I outlay the expenses for mining and extraction and assume the risk that I might not find any. Likewise, I should be able to spend money and hire programmers who can create for me, more digital money. I’m not sure that I understand a distinction between what is essentially an intellectual property barrier to produce more “money” and a state-imposed legal barrier.
This is essentially why people can’t just “create” money. Governments recognize this, and accordingly grant a monopoly privilege on note issuance. Private citizens are not lawfully permitted to “increase the money supply,” because everyone would do it, therefore the value of the currencies collapses. Money simply can’t originate through volition or good intentions. Money, in its purest form represents deferred consumption, which according to Say’s Law has its roots in previous production.
Neither does fiat originate from the spontaneous order of a market. Gold’s historic position as a medium of exchange did not come into being because someone (or some group) was successfully able to market Gold, that is, to actively persuade people that gold was a better medium than silver or rhodium or cigarettes. Gold’s rise to the top of the monetary food chain was a more-or-less natural one.
If we aim to use this digital “currency” as a warehouse receipt of sorts, the underlying commodity is the actual currency being used, with either paper or digital claims to that commodity. I’ve got no serious problems with this, except then your digital accounting units would not be fixed in quantity, but would reflect the actual physical stock. The digital claims would document the ownership and facilitate the exchange of a physical commodity without actually having to take delivery.
But, I don’t think this is what Jonathan is suggesting, when he says:
A single-unit digital currency is even more scarce, yet it is much more convenient than the storage and transport of unwieldy metals.
My principal objection to this digital currency argument (and contrary to your assertion, this is the third time I’ve brought it up) is that it attempts to bypass Mises’ regression theorem.
This theorem, and Menger’s comments on the origin of money, are probably the most important (and often neglected) ideas in monetary theory. For a good to evolve into “money” as a general medium of exchange. Bob Murphy comments on Mises’ regression theorem:
We can trace the purchasing power of money back through time, until we reach the point at which people first emerged from a state of barter. And at that point, the purchasing power of the money commodity can be explained in just the same way that the exchange value of any commodity is explained. People valued gold for its own sake before it became a money, and thus a satisfactory theory of the current market value of gold must trace back its development until the point when gold was not a medium of exchange
The market will never (or very rarely) be satisfied with a single unit of anything which people find valuable, so others will aim to produce that thing. And they will. Sound money needs to be an economic good, and a digital currency with zero marginal cost is unequivocally not an economic good.
Jonathan eventually follows up with five objections to specie in an attempt to validate the “single-unit” digital currency envisioned in the thread.
1) Specie, being a physical item, is not available easily for use online. One could trade digital currency that represents a given amount of specie, but not the specie itself. This is also inherently insecure, as I will explain in item four.
That’s kind of what I’m getting at: whatever digital medium develops, it is going to have to be backed by something tangible and real. I have twice (and this is the third time) I’ve objected to the argument in principle by referring either to Menger’s work on the origins of money as a general medium of exchange, or Mises’ regression theorem, or both. My objections on these grounds have been ignored.
2) Specie is not convenient and accessible. It is in the hands of a few elite at the moment (not only inaccessible, but also dangerous). Specie happens to be very heavy, and therefore requires expensive shipping, which also requires protection and insurance from bandits. If it is all stored in one place and digital currency merely represents a portion of gold in a given place, this is a huge security threat as well.
The fact that States may currently control much of the world’s supply of gold is a valid objection. The fact that it is heavy, however, is not. Until and unless delivery is requested, there is no reason to ship the product, transference of title/ownership claims is and has been sufficient in the past. Furthermore, there is no reason that it would all need to be stored in a single place and the ability for any individual to cash out his digital claims to specie and hold them in his own right, is an additional safeguard.
3) It has no clear advantage over digitally traded fiat that would attract laymen. Perhaps it is more stable, and could make us all freer, but these are not things the laymen think about when deciding upon what currency to use – they do not consider ideals, because they have very few (if any) genuine convictions of their own, and they certainly won’t sacrifice extra effort or money towards ideals they don’t have. The average person would rather slide a credit or debit card across a scanner, or type a password into PayPal rather than deal with ownership of a physical item – directly or indirectly (either way is still less convenient).
Again, there is no reason to assume that the bulk of transactions would make use of actual delivery of physical specie. Ownership could certainly be transferred by electronic means. With this in mind, an arbitrarily defined digital currency has no clear advantage over anything else. Its ability to “attract” people is inconsequential, since people are essentially motivated by incentives. If the incentive exists to use some form of payment over another then that currency will gain favor. Currency doesn’t need a PR/Marketing campaign.
4) Specie is extremely insecure.
- It is largely in the hands of the statist elite. Thus, basing an Agorist currency off of specie would only benefit these same elites, thus undermining the Agorist movement as a whole.
- Because it is in the hands of the elite, basing an Agorist currency off of specie would subject the currency to manipulation because the elites are able to tamper with the price of specie already (and do, extensively).
- Being a physical item, whether specie is represented digitally or specie is the currency itself, the value is concentrated in obtainable physical items – making it easier for this currency to be stolen, whether by petty thieves or the State.
- Because it is a physical item, it is easier for the State to shut down. It is much easier for the State to find out who has gold and for what purpose (as the gold must first be purchased through the white market, as the people that hold it are – largely – statist elites and states themselves), and it can seize gold much more easily and kill all of the Agorists that were possessing it.
- Unlike a fixed digital currency (especially a one unit currency), it is much more difficult for the market to ascertain how much of a specie there really is and where/with whom, so it is therefore much more susceptible to inflation (by sudden introduction of previously unknown supply) and is also, again, subject to manipulation.
5) Because valuable specie is largely in the hands of the few, it is thus subject to arbitrary manipulation, thus undermining its subjection to market forces.
Repeating the same objections over and over again doesn’t make them any more valid.
Specie’s value can only be manipulated by those willing to reckon the sales and purchases of goods and services in fiat. If you operate in a grey- or black-market (assuming the risks inherent therein) you can circumvent most of the manipulation. Specie would quite probably be valued differently on this black market than it would be in otherwise “legal” transactions.
I choose not to respond to the conspiracy-theory “they’ll kill us all” objections. This is a “27 Ninjas” argument. If this is really the case, then it doesn’t matter what you do.
The weakest objection by far is the comment about inflation. Inflation is never the result of productivity. The introduction of more commodity (e.g., gold) in the economy suggests that real productivity has increased, that real trade-offs of risk and reward were made. This is not inflation.
Stop thinking of “money” as a be-all, end-all! Commodity money is an economic good, therefore the production of commodity money signifies the production of real wealth, therefore inflation (which destroys wealth) is not occurring.
Defeating Statism can’t begin with money. Money in its purest form is based on production and exchange. Money, in its purest form bends to Says law, and unlike fiat money, real money is the reward for productivity and a savings for the future.
To the several objections against the current state of affairs, in which the States hold a great deal of gold, yes, this is somewhat of a problem. But if people can ween themselves generally from the State in the first place, their productivity could certainly effect greater change, and reduce the supply of gold in State coffers to a level no longer credibly manipulable, and the black market will eventually consume the white market.
