Brainpolice : Taxation, Anarchism

A Left-Rothbardian Approach To "Privatization"

Brainpolice — Fri, 04 Apr 2008 17:29:00 GMT

What exactly does it mean to "privatize" a service or industry? As I have argued before, there is a lot of confusion over the precise meaning of the terms "public" and "private" to begin with. The fact that state-controled property is called "public" is misleading because it obviously is not actually controled by the public in any real sense. The public bears the costs for its maintance, but they do not actually have any control over it in a way that a real owner would. The public is of course nothing but a term representing the accumulation of private individuals. Fundamentally, the purpose of "privatization" is to transfer ownership or control over a given piece of property or service from the state to private individuals.

The question inevitably arises over how exactly to go about doing this. The typical proposal for privatization is more or less to sell it to the highest bidder, which predictably is going to be a large corporation, probably one that already is in bed with the state to begin with. From a libertarian perspective, this is problematic for a number of reasons. First and foremost, the state is not a legitimate owner of the property to begin with, so how can it sell "its" property? The state, at least by Rothbardian standards of property ownership, is a criminal organization because state controlled property is stolen property. Proposing that the state sell off the property it controls would be no different than proposing that a thief sell off the property that they stole. But this would be to propose that the thief deserves compensation rather than their victims. To ignore this analogy would be to treat the state as if it were a legitimate private property owner, which it isn’t according to any sensible libertarian understanding of the institution.

Furthermore, the ability to buy property off of the state in this scenario would be quite an exclusive privilege only available to a select set of private interests that already are in patronage with the state. The masses at large do not have the ability to be in patronage with the state in this way, nor could they afford it even if they had such access to the institution. This could be seen as constituting a barrier to entry for most people, as only a handful of private elites are allowed to have access to such patronage. In selling an entire industry or swath of property to one particular private group or corporation, power has merely been transfered from one singular central institution to another. While this might not necessarily qualify as a monopoly under the Austrian definition of a monopoly, it most certainly is centralized and the institution or private group in question most certainly is privileged.

That wild eyed communist Murray Rothbard once suggested a very radical alternative to this method. While Rothbard grew more conservative as he aged, in my view he was in his prime in the late 60’s and early 70’s. It is well known that he was more closely allied with the libertarian "left" during this period. It is also well known that he later abandoned this alliance due to the increasingly irrationalist tendencies in organizations such as Students For A Democratic Society. Nonetheless, the position he advocated at the time amounts to the idea that state controlled property and state run services are homesteadable as if they currently have no legitimate owner. In particular, Rothbard outlined this position in a 1969 issue of "The Libertarian Forum" titled "Confiscation and the Homestead Principle". In the article, Rothbard states the following:

"Let us now apply our libertarian theory of property to the case of property in the hands of, or derived from, the State apparatus. The libertarian sees the State as a giant gang of organized criminals, who live off the theft called "taxation" and use the proceeds to kill, enslave, and generally push people around. Therefore, any property in the hands of the State is in the hands of thieves, and should be liberated as quickly as possible. Any person or group who liberates such property, who confiscates or appropriates it from the State, is performing a virtuous act and a signal service to the cause of liberty. In the case of the State, furthermore, the victim is not readily identifiable as B, the horse-owner. All taxpayers, all draftees, all victims of the State have been mulcted. How to go about returning all this property to the taxpayers? What proportions should be used in this terrific tangle of robbery and injustice that we have all suffered at the hands of the State? Often, the most practical method of de-statizing is simply to grant the moral right of ownership on the person or group who seizes the property from the State. Of this group, the most morally deserving are the ones who are already using the property but who have no moral complicity in the State’s act of aggression. These people then become the homesteaders of the stolen property and hence the rightful owners."

It is no wonder why he was red baited by conservatives. Rothbard goes on to illustrate an example in the case of state run universities:

"Take, for example, the State universities. This is property built on funds stolen from the taxpayers. Since the State has not found or put into effect a way of returning ownership of this property to the taxpaying public, the proper owners of this university are the "homesteaders", those who have already been using and therefore "mixing their labor" with the facilities. The prime consideration is to deprive the thief, in this case the State, as quickly as possible of the ownership and control of its ill-gotten gains, to return the property to the innocent, private sector. This means student and/or faculty ownership of the universities. As between the two groups, the students have a prior claim, for the students have been paying at least some amount to support the university whereas the faculty suffer from the moral taint of living off State funds and thereby becoming to some extent a part of the State apparatus."

In his comment that the state has not found or put into effect a way of returning ownersip of this property to the taxpayers, Rothbard briefly touches on an interesting practical problem. While we have clearly identified some problems with treating the state as if it were the legitimate private property of those who make it up, one could also put foreward the notion that the state is the common property of the tax-payers. But while the taxpayers have clearly been stolen from, there is no sensible way to proportionally redistribute this property back to them, especially considering that it has been redistributed in an endless web so many times over and over such a long period of time that original ownership would be virtually impossible to precisely identify. If anything, the attempt to redistribute in this way would probably end up being a great big welfare scheme, and in practise certain special interests would win out over others.

So we return to the glaring fact that there currently is no discernable just owner of the property. The state obviously must be ruled out as being a just owner because it constitutes nothing more than a band of criminals who stole it to begin with. And while the hapless tax-payers were the original just owners, it is practically impossible to reallocate it back to them in proportion to what was originally stolen from them. So if the state can neither be treated as if it were the private property of its members or as if it were the common property of the tax-payer, it would seem that the only logical option left is to treat it as currently having no legitimate owner and being open to appropriation by either those non-criminals who exercise their labor over it or the first people to appropriate it for themselves.

This has rather profound implications relating to the question of how to transition to a stateless society. At least for the market anarchist, the point is to "privatize" literally everything that the state controls, from the mundane to the fundamentals of the provision of defense and arbitration. But instead of the idea of the state "selling" itself to the highest bidder or a singular private entity, which would seem to be a potential recipe for disaster if not the formation of another state, the idea should be to effectively "homestead the state". This would obviously include government claimed land, and of course the state is defined by its territorial dominion. The portions that are currently entirely unused or vacant would either remain that way or start to be homesteaded by original appropriators, and the portions that are directly controled by the state would be appropriated by those non-criminals who labor upon it and the first users. The state would essentially be absorbed by the economic organism.

Minarchism: Ethically Self-contradictary

Brainpolice — Tue, 27 Nov 2007 23:20:00 GMT

The basic idea of minarchism is that the government should be expressly small and limited to the defense of person and property of those within the territorial dominion of the government. This generally implies that the government's services be limited to the provision of police, courts and defense. Most minarchists accept, or at least claim to accept, the principle of the non-initiation of aggression. They seek to attain a government that functions only for defensive purposes, while completely abstaining from initiating aggression. But if the minarchist sincerely does favor the principle of the non-initiation of aggression, they are contradicting their own ethical premise in supporting the existance of a government in the first place. For how are even these limited defensive services to be payed for? Most minarchists favor some limited form of taxation.

The statement that taxation is theft may be shocking to many people, even libertarian minarchists. But it is undeniable. Would the act of me giving my wallet to a robber be a voluntary act of charity? Clearly not. The only reason the robber's victim hands them the wallet is because they are threatened with force in some way. The robber may have a gun to your head or a knife to your throat. It is an action done under the threat of force, and is therefore coerced. An important point that this brings out is that, while the initiation of force is wrong, the threat of the initiation of force is equally a problem. Taxation works no differently than our robbery scenario. While it is true that members of the government do not initially come to one's home to directly take their money, the money is given under the threat that this will happen if they do not pay up. And if one does not pay up, eventually this very scenario will play out. You will be tracked down and the legal authorities will eventually come to your home expecting payment. And if you continues to resist, down the line you will be shot. So let's not be fooled by the idea that the state merely theatens you with force without actually using it. Force will be used against you at some point down the line if you do not comply.

Therefore, taxation inherently violates the non-aggression principle. It would be nonsensical to claim that a high degree of taxation is bad, but a low degree of taxation is good or necessary. If the initiation of aggression and the threat thereof is ethically unjustifiable, then no level of taxation can be rationally defended. A common objection is that one could simply move. But if I truly have property rights, then I should be able to keep my property and still not pay and not recieve the services. Otherwise, you must initiate force against me, or at least threaten to do so, in order to make me pay the taxes. If I wish to stop patronizing McDonalds, I am not forced to move. I can just stop going there and still keep my home. The fact that my only alternative to paying my taxes is to move merely underscores that the state is claiming control over my home or land property. This shows the state to be a coercive territorial monopoly, which we will address later. In either case, this line of arguement, what may be called the "love it or leave it" arguement in favor of the state, assumes precisely what it is trying to prove: namely, that the state legitimately controls the territory.

Some minarchists may try to get around the ethical problems inherent in taxation by advocating a government funded entirely through tarrifs, but a tarrif is really a form of taxation in itself, only it shifts the tax burden onto foreign people. Yet the non-aggression principle must apply to all people. It has no "American only" caviat. It is not a nationalist principle. If it is wrong to tax people within the territory, it is also wrong to tax people outside of the territory. The initiation of force against people in general is the problem, not what specific group of people that are being aggressed against. Any attempt to forcibly externalize the costs of the state onto people outside of the territorial dominion still presents us with a problem.

Another arguement that some minarchists may make is that the real problem is income taxation and that a sales tax is truly voluntary because you can always abstain from buying those products. But this is fallicious and is similar to the "love it or leave it" arguement. For as soon as you do decide to buy the product, you are made to pay a surplus on top of the actual price that the product is being sold for. In short, a 3rd party, the state, is claiming a chunk of transactions that one takes part in. One should be able to buy the product at the actual market price - which is the price without the tax. In either case, if one wants to survive at all in the world, one is going to have to buy some products at some point. Sales taxation presents a false choice between not buying things and paying a tax on top of the price that those things initially are being sold for. You are still ultimately bound by law under the threat of force to pay the sales tax, lest you be hauled off to jail. One most certainly cannot haggle with the store owner to deduct the tax from the price. The store owners in themselves are likewise coerced under the threat of force to add the tax on top of their initial price.

Objectivists advocate something a bit different than what most libertarian minarchists support. They oppose taxation and advocate what may be called "subscribed government" or voluntary donations to the government. But if this is the case it ceases to be a state can may as well be called a "private protection agency". For if it is truly patronized just like a buisiness, then it has market prices, and instead of saying "donations" we may as well call it "investment". However, if this institution still maintains a coercive monopoly by initiating force or threatening to do so in order to stop people from forming or patronizing any other protection agency within the territory, then it is not truly voluntary either and it still is a state. So even if taxation were abolished, states would still be involuntary if they still tried to maintain a coercive territorial monopoly. This is the underlying problem in the ideal of the Objectivist state (despite the fact that they eliminate taxation from the picture).

Another more pragmatic point is that in the abscence of competition, there is no genuine market prices due to the calculation problem. There really would be no rational indicators as to wether the service is efficient or not. In short, the economic problems involved in a monopoly apply to states in general. A further point is that if they were logically consistant in their opposition to competition in these fields, Objectivists would have to advocate a one world government, for if their ideals apply to all human beings, then all human beings must be subjected to the same territorial dominion. The mere existance of multiple jurisdictions with laws that vary in their content, wether that be multiple county governments or multiple national governments, defies the Objectivist's desire for legal uniformity. Of course, no Objectivist to my knowledge has ever advocated a single unified global government. But this is indeed the logical implication of their own political doctrine.

In a sense, all Objectivists have to do is remove the territorial monopoly aspect of their ideal form of government and they would be free market anarchists. But they refuse to do this. Yet they are contradicting their own ethical principles in supporting a state in the first place. No Objectivist to my knowledge has ever been able to explain how their Objectivist government obtains its territorial monopoly in the first place without initiating force against competition within the given territory, and further continually initiating force in order to maintain that monopoly. Supposing that an Objectivist government already is in place, what if I wish to start up my own private protection agency or dispute resolution organization within the territory? Or what if I wish to patronize such an agency instead of the Objectivist government? The Objectivist government has only two options: initiate force against me or cease to be a government in any rational sense of the word.

It would be wise for minarchists to take heed of the methods by which states have historically gained and maintained their territorial dominions. For the state ultimately hinges on its exercise of control over land, both directly and indirectly. In the most obvious and direct sense, the government buildings rely on control over the land that it resides on by the state. But the state inherently also claims and indirectly excersises control over the entire territory that makes up its so-called "borders". How do these dominions come about? The most obvious answer is plain old land theft, which has been watered down in legal terms to be known as "imminent domain". The most cursory glance at history shows land theft to be at the heart of the formation and expansion of states. But even in cases where the state "bought" land from willing sellers, the funds that they bought it with initially came from some form of taxation. Surely a robber is not justified in their theft because they went on to buy things from willing sellers with the stolen money. The state would still be peddling stolen funds in order to achieve land in this way. No good can follow from an initially evil act.

In summary, it should be quite obvious that advocating a minimal state of any kind while simultaneously claiming that the initiation of force and the threat thereof is wrong is self-contradictary. The minarchist's own logic works against them. If it is wrong for the government to steal people's money to provide for healthcare or retirement money or scools, then why would it be any better for these very same means to be used towards any other ends such as the provision of police, courts and a military? And even in the abscence of mechanisms such as taxation, if it is wrong to initiate force, then how can the state legitimately stop people who have not initiated force themselves from forming and patronizing alternative defensive and dispute resolving organizations? The minarchist, in order to remain consistant with their own stated ethical axoims, should become a market anarchist. Anarchy is the logical result of their own principles. They should not be scared to ditch their cognitive dissonance and embrace anarchy.