[Eran]

Then you agree that most people think differently than you do, and that characterising taxes as theft is a fringe minority view of yours.

Absolutely. As most people used to believe slavery was perfectly legitimate, and women ought not have any independent legal rights, with abolitionists or feminists being a "fringe minority".

The masses have proven themselves to be wrong time and time again. Why should today be any different?

Taxes are a forced payment as you say. Respect for property rights are similarly enforced and for the same reason: because we have decided that is how society should operate. By choosing to operate in the society, you are accepting the terms of the social contract.

At the positive level, you are absolutely right. As a matter of fact, there is a wide agreement in democracies regarding the legitimacy of the democratic process, and the taxation that emerge from it. You can call this broad agreement "social contract" if you wish, but you would still have to show why it is morally binding, especially as historic examples of "social contracts" in action have proven, from a modern perspective, to be highly immoral.

Put differently, Kman and I (and all too few others) are working hard to change the terms of the current "social contract" because we believe it is illegitimate, immoral and inefficient. We see ourselves as standing in the shoes of 18th and 19th century abolitionists who also faced (at least initially) the scorn of the vast majority of their respective societies.

[Kman]

Absolutely. As most people used to believe slavery was perfectly legitimate, and women ought not have any independent legal rights, with abolitionists or feminists being a "fringe minority".

The masses have proven themselves to be wrong time and time again. Why should today be any different?

Yes I remember seeing a meme on the Mises forums which said that apparently during the age of slavery only a minority of slaves actually wanted to be set free because they were scared of losing the security that their plantation owner was providing them, if that is not proof of how irrationally the masses can think I do not know what is.

[Pants-of-dog]

Absolutely. As most people used to believe slavery was perfectly legitimate, and women ought not have any independent legal rights, with abolitionists or feminists being a "fringe minority".

The masses have proven themselves to be wrong time and time again. Why should today be any different?

Yes, in a post-scarcity economy, the concept of taxes may eventually go the way of slavery. But that does not somehow magically make taxes into theft today.

At the positive level, you are absolutely right. As a matter of fact, there is a wide agreement in democracies regarding the legitimacy of the democratic process, and the taxation that emerge from it. You can call this broad agreement "social contract" if you wish, but you would still have to show why it is morally binding, especially as historic examples of "social contracts" in action have proven, from a modern perspective, to be highly immoral.

I see your point in that this huge social inertia that supports taxes does so because it sees taxes as morally good rather than morally bad, and I can even see why you think it is morally better to find a way to have roads and health care and respect for property rights all realised in some way that does not involve any coercion, including taxes.

But now I have to drag this back to my original point. Peter feels no more coerced into paying taxes for Paul's benefit than he does about respecting Paul's property rights by not breaking into his house. And part of that is the moral paradigm of which you speak. However, when it comes to changing the moral views of modern society, I believe Buckminster Fuller put it best when he said that it is easier to change the human environment than it is to change human nature.

Put differently, Kman and I (and all too few others) are working hard to change the terms of the current "social contract" because we believe it is illegitimate, immoral and inefficient. We see ourselves as standing in the shoes of 18th and 19th century abolitionists who also faced (at least initially) the scorn of the vast majority of their respective societies.

Eran, I believe that you are honestly supporting your ideology because you believe it really is the best thing for everyone, just as I am. I think that Kman honestly believes everything he writes.

[Eran]

Yes, in a post-scarcity economy, the concept of taxes may eventually go the way of slavery. But that does not somehow magically make taxes into theft today.

My contention is that it is illegitimate for the majority to use its superior force against the minority (even a minority of one) by forcing them to hand over some of their otherwise-legitimate property, property which they acquired peacefully. What does post-scarcity have to do with this?

Peter feels no more coerced into paying taxes for Paul's benefit than he does about respecting Paul's property rights by not breaking into his house.

That fact that many tax-payers believe having to pay taxes is not a violation of their rights doesn't mean they are correct. I bet some African slaves also believed their station in life was natural, if unfortunate. It is definitely the case that most women in the past believed their legal subjugation to their husbands was right.

Be that as it may, even a minority of one (me!) is enough to discredit the consensus theory of democratic justification. If even one person objects, that is enough to make the system, as a matter of principle, coercive and thus illegitimate.

I understand that honest people believe that taxes are necessary for modern life. You are probably one of those people. We can logically divorce the moral and the practical aspects of the debate. There are circumstances, for example, in which I believe theft is moral. But I still acknowledge it for what it is, namely theft.

You could agree with me that taxation is theft, but argue, based on your understanding of economics, that it is an essential kind of theft, a necessary evil.

[Eran]

Yes, in a post-scarcity economy, the concept of taxes may eventually go the way of slavery. But that does not somehow magically make taxes into theft today.

My contention is that it is illegitimate for the majority to use its superior force against the minority (even a minority of one) by forcing them to hand over some of their otherwise-legitimate property, property which they acquired peacefully. What does post-scarcity have to do with this?

Peter feels no more coerced into paying taxes for Paul's benefit than he does about respecting Paul's property rights by not breaking into his house.

That fact that many tax-payers believe having to pay taxes is not a violation of their rights doesn't mean they are correct. I bet some African slaves also believed their station in life was natural, if unfortunate. It is definitely the case that most women in the past believed their legal subjugation to their husbands was right.

Be that as it may, even a minority of one (me!) is enough to discredit the consensus theory of democratic justification. If even one person objects, that is enough to make the system, as a matter of principle, coercive and thus illegitimate.

I understand that honest people believe that taxes are necessary for modern life. You are probably one of those people. We can logically divorce the moral and the practical aspects of the debate. There are circumstances, for example, in which I believe theft is moral. But I still acknowledge it for what it is, namely theft.

You could agree with me that taxation is theft, but argue, based on your understanding of economics, that it is an essential kind of theft, a necessary evil.

[Pants-of-dog]

My contention is that it is illegitimate for the majority to use its superior force against the minority (even a minority of one) by forcing them to hand over some of their otherwise-legitimate property, property which they acquired peacefully. What does post-scarcity have to do with this?

Because the discussion is really about the definition of "private property", and that discussion will not become moot until we arrive at a post-scarcity economy.

That fact that many tax-payers believe having to pay taxes is not a violation of their rights doesn't mean they are correct. I bet some African slaves also believed their station in life was natural, if unfortunate. It is definitely the case that most women in the past believed their legal subjugation to their husbands was right.

Be that as it may, even a minority of one (me!) is enough to discredit the consensus theory of democratic justification. If even one person objects, that is enough to make the system, as a matter of principle, coercive and thus illegitimate.

I understand that honest people believe that taxes are necessary for modern life. You are probably one of those people. We can logically divorce the moral and the practical aspects of the debate. There are circumstances, for example, in which I believe theft is moral. But I still acknowledge it for what it is, namely theft.

You could agree with me that taxation is theft, but argue, based on your understanding of economics, that it is an essential kind of theft, a necessary evil.

I could just as easily make the claim that private property is a violation of rights because respecting private property rights is enforced coercively and is therefore illegitimate. I could also say that the fact that most people believe in property rights does not somehow make it so.

One of the reasons why I don't think of it as theft is because I don't think of that amount of property we call "taxes" as mine. I get a pay stub, and it says my gross income, how much the gov' t takes off, and my net income. I see the net income as my property, but the rest is not mine and never was. So how can anyone steal it from me?

[Ombrageux]

Eran - The concept of "insurance" applies to the entire welfare state: insurance against losing a job (due to capitalism's inherent instability), insurance against retiring in poverty (your investments can collapse due to capitalism's inherent instability), etc. People simply, and quite rationally, want to have a minimum of economic security and as a result virtually all developed democracies have instituted complex systems to that effect.

The 19th Century may have had schemes, but they were ultimately inadequate. Old-age poverty was very common in the U.S. until the advent of social security. The Great Society itself actually massively reduced poverty, although it was eventually eviscerated and America's poor (especially minorities) were faced instead the raw oppression of the police state (Drug War, prison-industrial complex). That's Vietnam and the conservative counter-revolution for you.

This is incidentally an argument for strong redistributive mechanism, and not necessarily for strong government regulation and control of the economy. The Scandinavians tend to be heavily redistributionist but otherwise quite classically liberal economically.

[Eran]

Setting aside my disagreement with your side-contention that capitalism is inherently unstable (I believe government intervention can explain all apparent instabilities), an insurance is a contract whereby the insurer agrees to compensate the insured (in full or in part) for losses due to unexpected, rare and random events such as fire or accident.

One can certainly contemplate an insurance against losing one's job (though the loss would have to be at no fault of the employee, e.g. through mass lay-offs), or a loss in the value of one's retirement savings (through a basket put option, for example). But government policies, while containing an element of insurance, go far beyond the narrow sphere that would qualify them as insurance.

Rational is not the same as legitimate. It is rational for me to want my government to rob you to pay for my retirement. That doesn't make it legitimate. It is decidedly irrational for young people to support Social Security, as the system will demonstrably be unable to pay them when they actually reach old age. Those who do support it are manifestly irrational.

I know of no evidence that 19th century mutual aid schemes were inadequate. The first social security scheme, the brain-child of Bismarck, was enacted to increase the power of the state, not to solve some social problem. The same holds with respect to the American Social Security scheme.

Old-age poverty was very common in the U.S., as was young-age poverty. The U.S. was, by modern standards, a much poorer society than it is today.

Finally, here is a diagram showing poverty rates in the U.S. over time:


The Great Society decidedly did NOT reduce poverty. In fact, it stopped the long-term trend in reduction of poverty. And we shouldn't be surprised - the Great Society subsidised poverty. When you subsidies something, you encourage it and get more of it than you would otherwise.

We shouldn't confuse the good intentions (or declared intentions) of government programs, with their actual consequences, much more rarely considered, let alone measured.

[Jay Ranger]

All that shows is that social inequality is linked with neoliberalism.

[Ombrageux]

Eran - We disagree on the right to tax and spend. That's a difference we're not going to get past.

However, I think you have to recognize that capitalism is inherently on unstable. It is a constant movement of creative destruction: innovations and international competition are constantly destroying old industries and creating news ones. That's progress. But it's also intensely unstable and can destroy people's livelihood, often unfairly. That's why in my view capitalism and its negative side-effects need to be controlled and remedied.

PS: What definition of poverty is that using? I am basing my assessment on this data: http://www.washingtonpost.com/blogs/ezr ... ve-charts/

[Eran]

It is true that free-market capitalism tends to be dynamic, ever-changing, with a strong creative-destruction process.

I don't see why you feel that makes it unstable. Why can we not have stable growth, stable turnover of industries and occupations, stable change?

When people are aware of potential risks, they can take intelligent steps to avoid or mitigate them. Workers will learn, for example, that life-long employment is unlikely, and prepare for a life of learning and acquiring skills. They can insure themselves against lay-offs, save for a rainy day, and volunteer to help their less-fortunate neighbours.

When people talk about capitalism's instability, they normally think of the boom-bust cycle. There is a growing understanding of the pivotal role government intervention plays in that cycle, which throws doubts as to its inherent nature.

But you seem to be talking about something else. In my lifetime I saw transition from type-writers to word-processors to personal computers to laptops to tablet computers. From VCRs to recordable DVDs to Tivo. From LPs to CDs to MP3s. None of those transitions was particularly destabilising in any material way.

Looking back further, the last couple of centuries saw major transitions from agriculture to industry to knowledge economies. Sure, there was short-term displacement of some people, but, overall, an incredibly rapid growth in standards of living. Why do you consider short-term dislocations to be destabilising to the point of requiring intervention?

And do you have any evidence to show that government intervention is a net good? You'd think that a massive program of diverse interventions in the freedom of choice of your population would, at the very least, require good evidence. Anything?

[oppose_obama]

Singapore has 0 capital gains tax. That gives me a tingle in my pants. Can't wait to visit one day when I'm a lawyer.

[Ombrageux]

The displacement can be pretty brutal and long-lasting. And I don't think you can blame everything on government. Why is it so hard to imagine incompetence or negative actions in the private sector? (Especially when large companies become de facto oligopolies.)

But I can speak very simply for media and the impact of information technology: The Internet killed media. Locals newspapers are dead. Even big media like the Guardian, one of the most-visited websites in the world, can't turn a profit. The only way is to go Daily Mail (emulate Rotten.com) or go Huffington Post (just stop paying people). Sure people can retrain, it typically means lower wages, a period of unemployment, having to move geographically etc. These are problems that can be partially addressed by the "insurance" of the welfare state.

(Same principles apply, in the past and if anything more brutally, to farming, industry, mining, etc. All human labor is going to be increasingly worthless in the face of technology.)

[Baff]

ITT: A whole bunch of wannabe anarchists who don't understand the difference between taxation and theft. It's akin to the difference between someone locking you in their basement and the government sending you to jail for murder. Yes, the fact that society at large has it as part of the social contract does, in fact, change the nature of the action.

From the end users point of view, locked up is locked up.
One jailor is much the same as another.

That you personally happen to prefer one to another makes little difference to the man in a cage.

[Baff]

When a customer buys something in a store, there is an implicit contract: I give you money, and this thing becomes mine. Sometimes you get a formal contract, eg, the receipt. But even if you threw the receipt away or lost it, the intuitive "social contract" would mean the store-owner would not take back what he sold you, even though you have lost the proof that you own it. Etc..

Which is why the contract of sale is explicit. Not implicit.
When you purchase something in a shop, if you don't explicitly agree to the purchase conditions, you don't hand over your cash.
The shopper keeper doesn't just implicitly assume you wanted to buy something and take the money out of your wallet or send you a bill for it.
You ask to purchase something you explicitly want and directly ask him for, he tells you the price, if you explicitly agree to it, the transaction is completed when you hand over the money.


If he refuses to refund you, you call the police and they arrest him.
We have these explicit consumer laws because an implicit contract is not a "contract" at all. It does not protect the purchaser of goods and services from being ripped off.

You could agree with me that taxation is theft, but argue, based on your understanding of economics, that it is an essential kind of theft, a necessary evil.

This is along lines of how I feel about it.

I know of no evidence that 19th century mutual aid schemes were inadequate. .

I think I've raised before with you my fathers recollections to me of the times before state provided social security in the UK.
The only stories he has to tell of it are about people getting ripped off. An insurance scheme that you can't rely on to pay out is not a very good one.

As you rightly pointed out, young people today should not expect their contributions to a ponsi scheme to be repaid.
But that does not in anyway change that up until now under our state run scheme, everyone has been paid and that this is a big improvement on what came before.
In this case the government run rip off scheme was simply less of a rip off than what came before. (Although in the future it has my expectation of insurance failure on a hitherto unseen scale). Another case of choosing the lesser evil as opposed to choosing something that is actually good.

[Baff]

All that shows is that social inequality is linked with neoliberalism.

Also, geography, genetics, the mass media, religious faction, the specific quality of individual teachers, personal attitudes to fitness, eating habits, the weather, what starsign you were born under...

The displacement can be pretty brutal and long-lasting. And I don't think you can blame everything on government. Why is it so hard to imagine incompetence or negative actions in the private sector? (Especially when large companies become de facto oligopolies.)

It's not, it's just that we extend those same concerns to the larger organisations such as governments too.
The larger the organistation we are discussing, the greater our concerns over this are.
The lesser the direct accountability of those organisations to us on an indivdual basis, the less we expect them to behave in our intrests.

So even with the very biggest of companies, (still smaller than our governments), we have the very bare minimum direct accountability of being able to choose whether or not to transact with them.
But not with our governments. Over them, we have no such obvious and easy to operate controls.

So the difference here is not one of principle, it's one of scale.
All those same problems you see as inherant to a large corporation are far more inherant to a large(r) government and we have far less available methods of recompense/self defence against them should they inevitably fail us in some way.

[harlyd]

Absolutely. As most people used to believe slavery was perfectly legitimate, and women ought not have any independent legal rights, with abolitionists or feminists being a "fringe minority".

The masses have proven themselves to be wrong time and time again. Why should today be any different?

What is the evidence to support that they were wrong? All we see as that the majority opinion changed.
Which basically means that right and wrong is decided by a majority vote. In that case since you are in the minority you are wrong until the majority opinion changes.

[Maas]

The Great Society decidedly did NOT reduce poverty. In fact, it stopped the long-term trend in reduction of poverty. And we shouldn't be surprised - the Great Society subsidised poverty. When you subsidies something, you encourage it and get more of it than you would otherwise.

The % of people who live in poverty is much lower in my country, yet we subsidise it far more. They are most probably way better of here with big healthcare and pension plans. Our unemploymentrate is even better (margianal but still)

[Eran]

It makes no sense to compare American and Dutch societies. The Dutch society is much more homogeneous, ethnically and geographically (as are most other European societies).

The political culture in the two countries is also very different.

Yet despite its many advantages, Dutch society is, on average, over 10% poorer than American society. If we focused on a comparable cross-section of American society by excluding African Americans and recent immigrants, I am sure the difference would be much greater.

[layman]

Yet despite its many advantages, Dutch society is, on average, over 10% poorer than American society. If we focused on a comparable cross-section of American society by excluding African Americans and recent immigrants, I am sure the difference would be much greater.

What about the American advantages in land (Holland is very crowded), energy, natural resources, historical isolation, the dollar.

The “ethnic” differences are also becoming far less pronounced as the dutch import labour on mass too now. Also, what about scandanavia, which always breaks the rules of libertarians when it comes to success. The recent "ease of doing business" survey but them ahead of America.