The Tax Anomaly
Tibor R. Machan
Since the American revolution, when monarchy was rejected on this continent and sovereignty was finally legally established for individual human beings, not governments, there has been a problem with taxation. The institution is an anomaly, plain and simple, in a genuinely free society. In such a society one has unalienable—meaning, never justifiably violable—rights to life, liberty and the pursuit of happiness, among other rights. But instead of transforming public finance from a coercive to a voluntary system, the framers left intact taxation, albeit changed so that at least there’d be representation along with it.
Those who kept loving government more than individual sovereignty have made use of this anomalous feature of our legal system to expand the state. It is quite natural that this should have occurred—whenever one compromises a principle, eventually the compromise devours the principle altogether. (This is why ethics counsels even against little white lies—it corrupts character.)
By now the tax system in the USA doesn’t even adhere to the principle, “No taxation without representation.” (It was the famous pre-Revolutionary patriot James Otis who said, “Taxation without representation is tyranny.”) Government actually taxes members of future generations, ones certainly not represented in Congress. And taxes are imposed on travelers all over the place by politicians who do not represent them. What is far worse, but to be expected, given the logic of such processes, is that instead of confining taxation to financing the only proper function of government, which is “to secure [our] rights,” taxation is now used to fund every project in society that the human imagination can conceive.
But, isn’t it the case that, to quote Justice Oliver Wendell Holmes, Jr., “Taxation is the price we pay for civilization”? That is a ruse! It comes from one of America’s legal giants who had no sympathy at all for limited government, quite the opposite.
In fact, taxation is extortion. The government tells us, “You may work for a living only if you hand over roughly forty percent of your earnings to us to fund goals we have decided need funding.” This is not what citizens of a free society deserve from their agents, ones who are entrusted with protecting not attacking their rights.
But, didn’t “we” enter into a social compact that resulted in the tax system we have? No we didn’t, not if we indeed have unalienable rights—no contract can give up anyone’s rights. I certainly may not contract so that you lose your rights. A contract can only be entered into voluntarily—unwilling third parties may not be conscripted to it. If, as in the case of the USA, the society is grounded on unalienable individual rights, the only way government can come about is through “the consent of the governed.” And while this had been understood too loosely in the past, even by the American founders, its meaning is clear: you and I must consent to be governed.
Now we do consent to being governed if we remain within the legal jurisdiction of a certain sphere, but only to the extent that is just—it is the just powers of government only to which we can consent, and to tax isn’t one of the just powers of government. To be properly funded, some other, but in any case voluntary, means must be found. Since, however, this is a very novel idea—about as novel even in the USA as free markets are in the for former Soviet bloc countries or freedom of religion in Iran—studies as to how to bring it off are in short supply. (Remember, most universities are tax funded, so they aren’t likely to encourage alternative ways of funding government!)
Still, there has been some progress in the study of funding government without any coercive means. One method proposed is to charge for all contracts which are, ultimately, backed by the courts. Sure, one can just shake a hand and proceed, but this isn’t likely when multimillions are at stake and legal recourse is wanted in case of some kind of mishap. There is also the possibility of funding government via lotteries. And at the beginning, governments could make a bundle and fund plenty of their proper undertakings by selling off all the properties that they should not own in the first place.
No, I am not expert in the field of public finance for a government of a free society. Still, I can say confidently that if the idea were not dismissed so readily by those who just love to tax their fellows for projects of their own, human beings could put their minds to the task profitably enough and find a way to eliminate this anomaly from our midst.
Friday, May 09, 2003
"Looting" in Iraq
By TIBOR R. MACHAN
Freedom News Service
This idea that Iraqis are criminals for looting is full of problems. To begin with, can you loot from a dictator? What about from a dictator who isn’t even in power any longer? After the dictatorship collapses, whose stuff is being looted anyway? To whom does the money in those government banks belong? To whom do the artifacts in museums belong?
Well, they belong to no one — or to everyone. If they do not belong to no one, then there is no looting going on, only some grabbing of stuff that’s lying about, left there by, well, the original looters who accumulated this stuff with the money they stole from the people who are supposedly doing the most recent looting.
If the stuff belongs to everyone, it’s like public property and everyone who is part of the public has a claim to it. Sure, in modern societies, public stuff is usually controlled by the government. The government, in turn, hands it out to people who have jumped through various bureaucratic hoops to obtain it. But when the bureaucracy itself is in shambles, the public stuff is obtained mostly by random, disorderly pickings.
Think of it for a moment: The Iraqi "looters" now dubbed criminals, sometimes even being shot for engaging in "looting," had been systematically looted for decades. So, now that they realized that their original looters -- dictator Saddam Hussein and his gang -- are no longer in power, they decided to go scavenger hunting.
Sure, the American officials in charge there now may have wanted to have it all left to be sorted out by them or their newly appointed bureaucrats. But that may — or even need — not be much of an incentive to all the previously victimized Iraqis to abstain from grabbing some valuables while the picking was possible.
In short, maybe what we had and still have in Iraq in the aftermath of the dictatorship’s demise is a version of the tragedy of the commons. That tragedy goes on in most countries, only in more orderly fashion. All those lobbyists flocking to centers of government holding out their hands for what the public servants might hand to them from the loot they have taken from nature or the pockets of the citizenry are but organized looters, actually. And as it has been so well shown by economists and others, since the time of Aristotle to Garrett Hardin, when stuff is owned in common, there is a problem environmentalists should be very concerned about. As Aristotle put it, "that which is common to the greatest number has the least care bestowed upon it. Every one thinks chiefly of his own, hardly at all of the common interest; and only when he is himself concerned as an individual. For besides other considerations, everybody is more inclined to neglect the duty which he expects another to fulfill; as in families many attendants are often less useful than a few."
What might help in restoring a civilized approach to the treatment of valuables in Iraq? It is something with which they aren’t very familiar, namely the institution of private property rights. But since such an idea has meant the encouragement of greed, avarice and similar sins, rather than what it actually does, namely promote responsibility and care for things, it isn’t likely that Iraqis will see much of it very soon. Not even American officials who may try to assist the Iraqis in restoring order have much of a clue about the merits of full privatization.
So, perhaps the "looting" Iraqis ought to be viewed with more understanding and even compassion. The main difference between their looting and that done by others around the globe is but a detail: the rest follow some sham rules, while the Iraqis made no pretense at having any such rules where public "ownership" is concerned.
Tibor Machan is a professor of business ethics and Western Civilization at Chapman University in Orange, Calif., and co-author of "A Primer on Business Ethics." He advises Freedom Communications, parent company of this newspaper. E-mail him at Machan@chapman.edu
By TIBOR R. MACHAN
Freedom News Service
This idea that Iraqis are criminals for looting is full of problems. To begin with, can you loot from a dictator? What about from a dictator who isn’t even in power any longer? After the dictatorship collapses, whose stuff is being looted anyway? To whom does the money in those government banks belong? To whom do the artifacts in museums belong?
Well, they belong to no one — or to everyone. If they do not belong to no one, then there is no looting going on, only some grabbing of stuff that’s lying about, left there by, well, the original looters who accumulated this stuff with the money they stole from the people who are supposedly doing the most recent looting.
If the stuff belongs to everyone, it’s like public property and everyone who is part of the public has a claim to it. Sure, in modern societies, public stuff is usually controlled by the government. The government, in turn, hands it out to people who have jumped through various bureaucratic hoops to obtain it. But when the bureaucracy itself is in shambles, the public stuff is obtained mostly by random, disorderly pickings.
Think of it for a moment: The Iraqi "looters" now dubbed criminals, sometimes even being shot for engaging in "looting," had been systematically looted for decades. So, now that they realized that their original looters -- dictator Saddam Hussein and his gang -- are no longer in power, they decided to go scavenger hunting.
Sure, the American officials in charge there now may have wanted to have it all left to be sorted out by them or their newly appointed bureaucrats. But that may — or even need — not be much of an incentive to all the previously victimized Iraqis to abstain from grabbing some valuables while the picking was possible.
In short, maybe what we had and still have in Iraq in the aftermath of the dictatorship’s demise is a version of the tragedy of the commons. That tragedy goes on in most countries, only in more orderly fashion. All those lobbyists flocking to centers of government holding out their hands for what the public servants might hand to them from the loot they have taken from nature or the pockets of the citizenry are but organized looters, actually. And as it has been so well shown by economists and others, since the time of Aristotle to Garrett Hardin, when stuff is owned in common, there is a problem environmentalists should be very concerned about. As Aristotle put it, "that which is common to the greatest number has the least care bestowed upon it. Every one thinks chiefly of his own, hardly at all of the common interest; and only when he is himself concerned as an individual. For besides other considerations, everybody is more inclined to neglect the duty which he expects another to fulfill; as in families many attendants are often less useful than a few."
What might help in restoring a civilized approach to the treatment of valuables in Iraq? It is something with which they aren’t very familiar, namely the institution of private property rights. But since such an idea has meant the encouragement of greed, avarice and similar sins, rather than what it actually does, namely promote responsibility and care for things, it isn’t likely that Iraqis will see much of it very soon. Not even American officials who may try to assist the Iraqis in restoring order have much of a clue about the merits of full privatization.
So, perhaps the "looting" Iraqis ought to be viewed with more understanding and even compassion. The main difference between their looting and that done by others around the globe is but a detail: the rest follow some sham rules, while the Iraqis made no pretense at having any such rules where public "ownership" is concerned.
Tibor Machan is a professor of business ethics and Western Civilization at Chapman University in Orange, Calif., and co-author of "A Primer on Business Ethics." He advises Freedom Communications, parent company of this newspaper. E-mail him at Machan@chapman.edu
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