Tag Archives: libertarianism

Is Taxation Theft?

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Will Wilkinson has an article in The New Republic that’s ostensibly about what’s wrong with Ron Paul. But I don’t think that’s what it’s really about. Call me a Straussian if you must; what Will really wanted to write about, on my reading, is why taxation is not theft. He got such an article into TNR by cleverly wrapping it in a timely political article about a specific politician. So, since I am an unpaid blogger and have no editor to please, let’s talk about it openly. Is taxation theft?

Property rights are not absolute

Most libertarians who make the taxation-is-theft argument consider themselves property-rights absolutists. Property rights, however, are not and could not plausibly be absolute. Suppose I own a parcel of land. What would an absolute property right to that land entail? Would I have a right to prevent people from sending stray photons onto my property as they drove by at night? How about from flying across my property on a hoverboard or sailing over it in a hot air balloon? Is there some “correct” height to which my “absolute” property right extends? Infinitely high? How long is the outline of my property? Have you read Mandelbrot?

What property rights are in a positive sense are Schelling points. They are bundles of rights that people expect each other to defend. The content of the rights—the particular sticks in the bundle—depend in a very real way on economic efficiency. It would not be efficient for me to have the right to exclude stray photons from my property. Lo and behold, I do not and cannot assert that right. This limitation on property rights has nothing to do with state intervention. It is not as if, in the state of nature, we asserted property rights that included excluding stray photons, and now the law says stray photons must be allowed, so we allow them. Property rights existed before anything like the modern state existed, and they were never absolute. Nor should they be.

Property rights enforcement is coercive

Will writes,

But, of course, a system of property is itself a system of coercion. If I cannot waltz into your home, raid your fridge, and make myself a hoagie, it is because you might shoot at me or call the cops to drag me off at gunpoint. If you’re like me, you think the enforcement of property rights through the use of violence, or the treat [sic] thereof, is justified. But it does need to be justified.

Now, I dabble in pacifism from time to time—sometimes I wonder if enforcement of property rights is really justified—but I’ve never been able to…err…pull the trigger. There is no doubt in my mind that property rights enforcement is coercive and that ought to be justified. Will offers about as good a justification as I’ve heard, that property rights are an ingredient to a more important end of peaceful cooperation and flourishing.

Centralized coercion v. decentralized coercion

Given that we have a system of property, is it better for the source of the enforcement to be centralized or decentralized? To me, this is a no-brainer with a big if. If decentralized enforcement is stable, then it is clearly preferable. The reason is that centralized coercion results in expansions and abuses of power. It’s not like there’s a choice on the menu of “centralized property rights enforcement with zero abuse of power.” You have to take the bad with the good. My preference, conditional on stability, is decentralized coercion.

Is decentralized enforcement stable? This is an active line of research for me, and my best answer so far is “sometimes.” There are a lot of people in armchairs who argue that of course decentralized enforcement is unstable. I find them rather unimaginative and non-rigorous.

Philosophical anarchism

A couple days ago, reading something else that Will wrote made me wonder if Will affirms philosophical anarchism. I asked, and he was noncommittal. I think it is an important issue. Not only do I believe that philosophical anarchism is true, I think that when you remember to push the philosophical anarchism button before thinking about politics it raises your IQ by a standard deviation or more. We all need all the help we can get.

Will writes:

And there are other legitimate public goods beyond the police protection of property rights. The need to finance the provision of these goods can justifiably limit our property rights, just as a system of property can justifiably limit our right to free movement. The use of official coercion to collect necessary taxes is no more or less problematic than the use of official coercion to enforce claims to legitimate property.

Since I have primed you to think in terms of philosophical anarchism, you should be asking the same question that I am: what makes some coercion official? Is it because the coercion is used to provide public goods? If that is the case, then I am justified if I take money from Will and spend it on public goods. Anyone is. When I reflect that a number of institutions—including street gangs—supply public goods, it makes me skeptical that this alone constitutes a good grounds for taxation.

Furthermore, public goods constitute a vanishingly small fraction of government spending. Will risks painting himself into the following corner: the 10 percent (generously) of taxation that is used to finance public goods is not theft, and the remaining 90 percent is. When you consider, for instance, that a substantial portion of US revenue is spent killing innocent people living in the wrong countries, you start to wonder if taxation is really about public goods or if it is about power.

The real problem with taxation

I’ve ceded a number of Will’s points already: that property rights are not absolute, that property rights enforcement is coercive, and that coercion is sometimes justified. Nevertheless, on a moral level, taxation continues to make me very uncomfortable. Let me try to sketch out precisely why.

Let’s call an action justified if, all things considered, it is the best action to have taken. Let’s call an action satisfying if we can go further and say that we are glad that it happened. It should be obvious that an action can be justified but not satisfying.

Take statements of the form: I wanted person X to do action Y, so I made X do Y. Y can be a number of things: give me candy, have an abortion, not have an abortion, eat vegetables, stop picking on the other kids, not trespass on my property, stop gunning down innocent victims, pay for Timmy’s leukemia treatment.

The action of making X do Y is sometimes justified (depending on what Y is and the circumstances and, sometimes, on who X is), but it should never be satisfying. If an intruder came into my house and threatened my family, I might (might!) be justified in shooting and killing the intruder. But if I were satisfied that I got to justifiably shoot and kill someone, it would represent serious moral deficiency.

I feel that way about all coercion; it should never be satisfying, even when it is justified. Yet when I observe real-world taxation, I see a lot of satisfaction. People seem glad, for instance, that taxation is progressive. It’s not just a resigned, “Well, this is the most justified level of progressivity.” People are satisfied that those who they want to pay taxes are doing it.

To be clear, I am not accusing Will of being glad when other pay taxes. Nevertheless, I find the whole politics-taxation nexus so deeply morally corrosive. It trains people to think not only that might makes right, but that coercive outcomes are outcomes to celebrate. They’re not.

Smash the New Aristocracy

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My visceral reaction to arguments for less-than-100% open borders is to scream, and call names, and punch in the face. I will not act on these urges. I cannot punch 6 billion people in the face. Many of the people who oppose open borders are my friends; I like them. And intellectually I know that people do the best they can—they do not intentionally hold wrong moral beliefs. Instead, I write, and hope to persuade.

Let me offer an analogy. At the height of, say, the British aristocracy, one’s rights and privileges were determined by the social position of one’s family at birth. Almost all modern commentators will concede that this was deeply wrong. Whatever the barriers to achievement are in our current age, everyone seems to agree that at least the coercive ones should have nothing to do with one’s starting social position.

Today, around the world, one’s rights and privileges are determined by the physical position of one’s family at birth. It is not only the case that there are, in practice, disparities in the opportunities available to people born in different parts of the world; we have raised additional, coercive barriers to achievement that bind especially for those with unfortunate starting physical positions.

It is perhaps unsurprising that those who think they benefit from the current system wish to keep it. They trot out all kinds of practical-sounding excuses for why we cannot completely open the border. All of these reasons have analogs in the system of class-based privilege. Most of us, I imagine, would like to think that if we were aristocrats of centuries past, we would see through the lameness of the arguments for using the state to keep down the lower classes. Yet the widespread opposition to open borders today shows that we are not that good.

Go ahead. Spend some time with the analogy; wrestle with it. Tell me, if you can, where it breaks down. While I await your reply, I will tentatively postulate that there is no morally important sense in which it does. If there is such a thing as moral progress, then history will judge current opponents of open borders just as harshly as those who in the past made excuses for state-sanctioned aristocracy.

Radicals and especially libertarians are often accused, with some justification, of alienating their more-moderate allies. Perhaps that is what I have done today. A number of writers I admire have pointed to the case of Jose Antonio Vargas as indicative of what is wrong with the American immigration system. Vargas is admirable, but he will have little difficulty remaining in the United States. I am far more concerned for the hundreds of millions of potential immigrants, the huddled masses, who will never win a Pulitzer Prize. Must we, the new aristocrats, continue to oppress them?

Why I am not a Liberaltarian

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Will Wilkinson offers what Karl Smith calls “Liberaltarianism in one sentence.”

It’s best to just maximize growth rates, pre-tax distribution be damned, and then fund wicked-good social insurance with huge revenues from an optimal tax scheme.

Karl muses, “A core hope of my engagement with the blogosphere is to determine why there is so much resistance to this idea.”

My resistance to this idea is not aesthetic. Max g sounds good to me, and fair, non-distortionary social insurance would be a great improvement over what we have now. Nor is it based on a priori taxation-is-theft libertarian dogma. I don’t believe in natural rights. My opposition, if you can call it that, to one-sentence liberaltarianism is practical, intellectual, and moral.

My practical objection is, simply stated, “You can’t get there from here.” If you study public choice, the economics of politics, you learn that there is a logic to why we have the institutions and policies that we have. To invert a title from Buchanan and Congleton, we have politics by interest, not principle. Or if you’re a Caplanian, majority rule means irrational rule.

Public choice issues are unavoidable. The interests that influence the government cannot be eliminated without eliminating the government, and possibly not even then. And if we eliminated democracy and therefore irrational voters, they would simply be replaced by irrational subjects, whose irrationality would constrain the dictator as surely as voters constrain democracy. There’s no way around public choice.

Liberaltarians sometimes point to Denmark (or wherever the example du jour is) and say, “If they can do it, why can’t we?” Leaving aside the question of whether Denmark actually achieves the liberaltarian ideal, most of the world is not Denmark. Certainly America will never be Denmark. It is too big and diverse. We could eliminate the federal government and divide into 50 states or an even greater number of city-states, matching Denmark’s size, but the people of most of these polities would still possess broader divergence of interests than Scandinavians do. In practice, the US will never get anywhere near a fair and efficient social insurance system (or max g for that matter), and the sooner we can all accept this, the better.

Intellectually, one-sentence liberaltarianism is better than pure leftism because it acknowledges some parts of economic reality. To maximize growth means to adopt free trade and low marginal tax rates and to drop the preoccupation with all forms of inequality. But it also adopts one of the worst features of leftism, the idea that there is a we that can choose how society should operate (conservatives and some libertarians think this too). Society is not designed. It emerges from our interactions. I can’t fully support any ideological statement that treats growth or goodness of social insurance as knobs on a dial that we can turn.

What troubles me the most, though, about one-sentence liberaltarianism is the moral poverty of the statement as the intersection of libertarianism and liberalism. I support Will’s and Brink Lindsey’s project of bringing modern liberals and classical liberals together for dialog. I think there is something very important that libertarians can learn from the left. Leftism, at its best, draws attention to the fact that there are people who are vulnerable and can be taken from. There is a caricature of libertarianism that avoids this and should not. What I wish would emerge from the dialog is an acceptance by liberals of economic reality—all of it, including public choice and the idea that society is a spontaneous order and cannot be designed—and an appreciation among libertarians that sometimes this vulnerability is a greater threat to well-being than bad economic policy is.

I think the liberaltarian coalition that I would like to see would come out strongly in favor of prison reform and of changes in criminal law. According to a friend of mine who studies these things, if you are sent to a medium- or high-security prison these days, the guards tell you on arrival that you must join the gang of your race because they, the guards, cannot protect you in there. Victimless crimes are prosecuted with discretion that inevitably gets used against the poor and vulnerable. I would like to see discussion of why in the world there should be criminal law in the first place. If all offenses were handled through the tort system, and tort claims were tradable so that the poor could always afford to prosecute, there would be no offense where there is no harm, and justice would be less discretionary.

Liberaltarians should come out strongly for open borders. Few people are more vulnerable than those who are born, by accident, in crappy places. They should be allowed to leave and live peacefully wherever they wish, including next door to me, by both liberal and libertarian principle.

Children are highly vulnerable in our society. Liberaltarians should oppose compulsory schooling, which in many places is hard to distinguish from incarceration. This is not to say that fewer children should attend school (though they should), but that giving them the right to leave would ensure that the worst abuses are avoided.

While I am gratified that liberals are learning about the enormous benefits of free trade and the very real harms caused by occupational licensing, my libertarianism is not primarily about max g. Rather, it’s mostly a moral judgment about how we should treat each other. Neoliberalism and one-sentence liberaltarianism obscure that to the point that I can’t really identify with either, though I’d be delighted for liberaltarians to meet me where I stand.

The Lonely Radicals

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Freddie de Boer, in a widely read post, laments that there isn’t much of a far-left blogosphere. I’ll take the premise for granted; Freddie lists a lot of people, some of whom I’ve heard of, few of whom I’ve read, who are not left-wing enough. Have lefty bloggers sold out to gain respectability, or is this phenomenon an indicator of the advance of libertarian ideas?

Maybe some of both, but I think it’s also the case that true political radicals are just more reluctant to talk about politics than moderates are.

I speak from my own experience as a radical. As my regular readers know, I’m a PhD student in the most libertarian department of the most libertarian discipline there is. I don’t know everyone in the libertarian movement, but I’d be willing to bet that there is no more than one degree of separation between me and any prominent libertarian. I’m not the most libertarian person I know, but unless you are similarly situated, I am probably the most libertarian person you know.

I’ve been a libertarian for a long time, but I started out as a moderate one. One thing I’ve noticed is that as I got more radical, I became less interested in having fully honest political conversations with people with mainstream political views. In part this may reflect poorly on me personally; perhaps I am too elitist or impatient to engage people with strongly-held mainstream views. In part this may reflect poorly on mainstream types, who often display way more smugness and confidence than intelligence in political discourse.

My radicalism influences how I blog. I write an occasional policy post, but typically a) I don’t offer my first-best solution to the problem, or b) I am way more interested in discussing the economics than the politics. I have no more interest in writing 30 posts about ObamaCare than I do in reading 30 posts about ObamaCare. And truthfully, no offense to the authors involved, there are many forms of punishment I would prefer to being forced to read any of the center-left policy-wonk blogs that Freddie laments.

We often think of people with extreme views as more passionate about them than people with moderate views. But we make a mistake when we assume that this passion translates into an eagerness to discuss. People who study radicalization of, say, terrorists note that as the subject becomes more radical in ideology, his evangelical zeal diminishes. Radicals turn inward.

I suspect, therefore, that the truly thoughtful far-left bloggers out there are probably not blogging about politics or policy. They’re blogging about other interests and slipping in occasional political tidbits. It is perhaps apropos that all we need for a thriving far-left political blogosphere is changes in human nature.

It's Still OK to Hate the Government

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William D. Eggers and John O’Leary have an article in Reason to support the release of their book, If We Can Put a Man on the Moon: Getting Big Things Done in Government. The premise of the article is clear from its title: “Five Reasons Why Libertarians Shouldn’t Hate Government.” The article has attracted a lot of positive attention in the libertarian corners of the internet in which I lurk, but I think this positive sentiment is unwarranted. Most of the arguments presented in the Reason piece are overstated or unsound.

To justify and introduce their position, Eggers and O’Leary appeal to the Founding Fathers:

Our Founding Fathers, fondly quoted by limited-government advocates, didn’t view government as evil, but as a flawed institution with some important jobs to do. They studied how government worked and they served in office, not because they viewed government with disdain, but because they knew the importance of good government.

All of this is true. While the Founding Fathers eloquently express many libertarian sentiments, it is nevertheless puzzling to me why they should be so fondly quoted, at least by libertarians. The project of the Founding Fathers was this: to constrain the state by writing down rules for its constraint. I think that any candid assessment of the results, at least from a libertarian perspective, would conclude that the project was an abject failure. Today, policy in the US is decided by some combination of majority rule and special interests with little regard to any written rules of constraint. When a Constitutional provision begins to cause problems, it is generally reinterpreted to support the proposed intervention. Libertarians should not seek to naïvely imitate the Founders unless they wish to experience a failure similar to theirs.

The authors list five specific reasons why libertarians should not hate government. The first reason, based on a single NBER working paper, is that “the worse government performs, the more citizens demand greater government intervention.” This is a gross oversimplification and misrepresentation of the paper, which develops a mathematical model in which investments in social capital lead to lower regulation, and vice versa. The model produces two equilibria: one in which investments in social capital are low and regulation is high, and another in which investments in social capital are high and regulation is low. The study authors explicitly state that “[c]ulture shapes institutions, and institutions shape culture. The causality runs in both directions.” Furthermore, they admit that omitted variable bias makes it very difficult to empirically untangle the relative magnitudes of causal influence: “Unfortunately, it is very difficult to test this prediction of the model using instrumental variables, since many exogenous factors that influence trust might also directly influence regulation, and vice versa.” Their argument for causation running from distrust to regulation is especially flimsy: all evidence presented to support this claim is based on simple regressions with no discernible identification strategy. In other words, they show that causation in this direction is at best plausible, and by no means necessarily true. Furthermore, the data for the relevant portion of the paper is cross-sectional; it simply does not test the hypothesis that if people in one country begin to distrust government more, they will demand more regulation.

Second, Eggers and O’Leary argue that “[t]o shrink government, you need to love government.”

Until small-government types better master the nuts and bolts of the public sector—how to design policies that work in the real world and how to execute on large public undertakings—their initiatives to downsize government will continue to disappoint.

There are a number of possible responses to this. First, it does not follow that to know the intricacies of government, you must love it. Second, there is certainly no need for all libertarians to master the nuts and bolts of the public sector. Specialization. Third, the fact that one needs to “know which bureaucratic levels to pull” is in fact one of the problems with government and a further reason for hating it.

The third reason cited by the authors is that “[m]arket-based reforms are not self-executing.” They cite the botched deregulation of electricity markets in California to support this claim. There is a bit of irony in Eggers and O’Leary counseling moderation and citing an example in which the principal problem was insufficient radicalism. Putting this irony aside, it is instructive to consider what proportion of the libertarian agenda relies on careful execution of a complex transitional mechanism and what proportion really is self-executing. A partial list of policies on the self-executing side of the continuum includes privatization of education, legalization of drugs, legalization of organ sales, abolition of occupational licensing, privatization of marriage, elimination of trade barriers, and elimination of immigration restrictions. Of greater complexity we might cite liberalization of financial regulations. While it is useful to have a few libertarian policy wonks, it seems to me that the majority of truly market-based reforms are at least somewhat self-executing. The remaining reforms hardly constitute a reason for fostering a love of government.

Fourth, the authors argue that government-bashing alienates ordinary people.

According to many libertarians, politicians are corrupt, bureaucrats are lazy, and public unions are a collection of thugs…

Incessant government-bashing may make you feel good, but alienates most everybody who knows and loves a police officer, firefighter, teacher, social worker, anyone who has ever collected an unemployment check, and anyone who saw NASA put a man on the moon.

I agree that libertarians should not bash politicians, bureaucrats, or unions. Their corruption, laziness, and thuggery, to whatever extent it exists, is not the result of markedly lower character than the rest of us, but of the institutional environment in which they find themselves. But how is it then alienating to deplore that institutional environment?

Lastly, the authors quaintly argue that “[n]obody will care what you know until they know you care.” But libertarian policy proposal are often cited as evidence that libertarians do not care. “Many voters today may indeed want smaller government, but what they want most of all is competent government.” I don’t think this is true. First, as Bryan Caplan argues, voters are interested in indulging their irrational beliefs. Second, as Robin Hanson argues, voters are interested in participating in status competition.

The ultimate goal is the pursuit of happiness, and when a properly limited government does its job well, it fosters freedom, peace, and prosperity. That is a noble goal. Why not embrace it?

I agree that enabling people to flourish is a noble goal, and I do embrace it. I am merely skeptical that government can be properly limited and that improperly limited government contributes much, on net, to human flourishing. This may sound pessimistic or cynical to some, and in some ways it is, but I find great comfort in knowing that I needn’t bother waiting on government to get better in order to pursue happiness.

None of the above is to suggest that libertarians must hate government. Certainly, libertarians should feel free to love government if they wish to do so, and there may be good reasons not to get emotionally involved in the first place. But to my libertarian friends who do hate government, it’s OK; do not be ashamed.