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What forms of taxation is promoted by the Austrian School?

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Sasquatch posted on Tue, Oct 28 2008 11:08 PM | Locked

I understand that government has an important, but limited role in a free society.  That role being primarily to protect the rights of individuals from foreign invasion, criminals, and also for the establishment of courts for the settlement of disputes.  My question is: how do the followers of the Austrian School of Economics propose to fund these functions of government?  Thanks.

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liberty student replied on Thu, Oct 30 2008 11:12 PM | Locked

MacFall:

Sasquatch:

Government is the monopoly of the lawful use of coercion.  Anarchy promotes the abolishment of government.  Therefore anarchy promotes competition for the power of coercion.

That's not accurate. Anarchy makes the right of self-defense - the ability to resist coercion - available to everyone. Defense is not coercion.

Not picking on you MacFall, but I disagree.  We always have our rights.  We can always resist coercion.  We choose not to based upon our perception of the consequences of resistance.

In a sense, sasquatch is right.  Anarchy just means there is no monopoly on violence.

 

If you find something evil that wobbles, push it. - Gary North

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Answered (Not Verified) Sasquatch replied on Thu, Oct 30 2008 11:20 PM | Locked
Suggested by Rubén

MacFall:
Justice exists entirely in the payment of debts. When an injustice (that is, an initiation of force or an infringement of self-ownership, such as prohibiting a person from defending himself from aggression as he sees fit) occurs, justice means that whatever damage is done is repaid. The lack of injustice is a neutral state.

You summed up the problem with anarchy in a nutshell right here when you said "as I see fit."  There are nearly as many opinions on what "fit" is as there are individuals, and therein lies the problem with anarchy.  So a disagreement arises on whether an infringement occurs and to what extent.  Your contention is that the parties involved in every such disagreement will somehow always come to an agreement on which of the seemingly endless arbiters to decide the case?  What if in your example organization A has little respect for the life of individuals, zero tolerance for those accused of breaking their rules, assumes you are guilty until proven innocent (but doesn't feel like being bothered by giving you that opportunity), and doesn't give a shit about what outsiders think since maybe they are well-armed plunderers.

Again I'm not talking about using the government to actually protect people or to protect property; you are correct in saying that those functions can be handled by the market.  My contention is that the protection of the rights of individuals is a legitimate role of government.  That is to say there is a fundamental difference between having your property or your life protected and having your rights protected.  In the absence of government, the definition of rights become arbitrary and are the whim of adversaries.

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nje5019 replied on Thu, Oct 30 2008 11:26 PM | Locked

liberty student:

Not picking on you MacFall, but I disagree.  We always have our rights.  We can always resist coercion.  We choose not to based upon our perception of the consequences of resistance.

In a sense, sasquatch is right.  Anarchy just means there is no monopoly on violence.

I've seen you post this idea a few times so i'd like to throw in my two cents and see what you think.

From my perspective, coercion is 'use of force or intimidation to obtain compliance.' I completely agree with you, we always have a choice, we can resist coercion.  I think this is just a semantic difference though, because when i sort of have 'without coercion' built into the definition of 'acting freely'. So sure, you can always act even against the threat of coercion, but you're not really acting freely. I feel like the debates you start with people on this topic are based on the fact that they assume a lack of coercion when they talk about free action and you don't.


Anarchy is the lack of institutionalized coercion. Sure, we can always fight against coercion, even when it's institutionalized, but anarchy puts us in a setting where we can choose between competing agencies to act to protect our rights for us, and its in their best interest to minimize coercion so people can act freely to a greater extent.

 

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Rubén replied on Fri, Oct 31 2008 1:32 AM | Locked

I went today to pay taxes for Chacao municipality in Caracas, Venezuela, required for the business I work for.

You might have read the poll stating that Chacao is considered by an international organization whose name I do not remember at this time as the best run municipality in the Americas, and the third best run municipality in the world. Maybe they are exagerating, but definitely the taxes are transformed into services for the people. I saw everybody really happy (including myself) forming their line to pay their taxes. Schools and hospitals are being built, police is courteous, there are no rumours of corruption in Chacao.

So sometimes governments work and sometimes people like paying their taxes voluntarily because those taxes functions similarly as privately delivered services. Especially when local governments compete against neighboring municipalities to attract competing businesses or neighbors.

Art transcends ideology.

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hayekianxyz replied on Fri, Oct 31 2008 7:09 AM | Locked

Sasquatch:
There are nearly as many opinions on what "fit" is as there are individuals, and therein lies the problem with anarchy. 

So you're saying that because there are a large number of different opinions this constitutes a reason to limit choice? Sounds a bit odd to me.

Sasquatch:
What if in your example organization A has little respect for the life of individuals, zero tolerance for those accused of breaking their rules, assumes you are guilty until proven innocent (but doesn't feel like being bothered by giving you that opportunity), and doesn't give a shit about what outsiders think since maybe they are well-armed plunderers.

Then they'd quickly go out of buisness.

Although, "little respect for individuals", "guilty until proven innocent" and "well - armed plunderers" that sounds somewhat familiar to me, any idea where I've heard that before?

Sasquatch:
  My contention is that the protection of the rights of individuals is a legitimate role of government. 

So you're saying that the role of an institution that by it's very nature violates property rights, is to protect property rights? How strange.

Sasquatch:
That is to say there is a fundamental difference between having your property or your life protected and having your rights protected. 

And remind me again, what rights are these? Property rights perhaps?

"You don't need a weatherman to know which way the wind blows"

Bob Dylan

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duffmann808 replied on Fri, Oct 31 2008 9:27 AM | Locked

Rubén:

I went today to pay taxes for Chacao municipality in Caracas, Venezuela, required for the business I work for.

You might have read the poll stating that Chacao is considered by an international organization whose name I do not remember at this time as the best run municipality in the Americas, and the third best run municipality in the world. Maybe they are exagerating, but definitely the taxes are transformed into services for the people. I saw everybody really happy (including myself) forming their line to pay their taxes. Schools and hospitals are being built, police is courteous, there are no rumours of corruption in Chacao.

So sometimes governments work and sometimes people like paying their taxes voluntarily because those taxes functions similarly as privately delivered services. Especially when local governments compete against neighboring municipalities to attract competing businesses or neighbors.

This perfectly explains why municipal governments should bear a larger responsibility, and the federal government can be smaller.  That way, those of us with a brain can move to a municipality with virtually no taxes and actually be RESPONSIBLE for ourselves and spend our money the best way we see fit.  This would only work because we actually believe that we know best what to do with our money, not some higher government authority.

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Answered (Not Verified) Jamescart replied on Sat, Nov 1 2008 6:53 PM | Locked
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the school seems to cut government spending so much that a simple revenue tariff can fund those things

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Rubén replied on Sat, Nov 1 2008 9:43 PM | Locked

Natalie:

Ruben, I suggest you read R.A. Heinlein. He had some fun ideas on how to fund a government without taxation. I believe, a lottery was one of them.

I do not find it ethical to fund a government solely through the expenditures on vice (gambling, alcohol and cigarette taxes, etc) of citizens who would then be persuaded by the rest of "virtuous" citizens to indulge further in their vice so that the government earns more revenue. It might be funny, but it does not sound ethical or compassionate.

Art transcends ideology.

http://mises.org/Community/blogs/ruben

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Rubén replied on Sat, Nov 1 2008 9:53 PM | Locked

Jonathan:

This perfectly explains why municipal governments should bear a larger responsibility, and the federal government can be smaller.  That way, those of us with a brain can move to a municipality with virtually no taxes and actually be RESPONSIBLE for ourselves and spend our money the best way we see fit.  This would only work because we actually believe that we know best what to do with our money, not some higher government authority.

Jonathan,

I am glad we finally agree on something! In a previous post you asserted that Venezuela is a socialist country that deserves to be sanctioned. There are many other municipalities within the country besides Chacao that at the local level, and against the huge opposition of the red federal regime, are trying with different degrees of success to achieve exactly what you are proposing. It is for that reason that I am asking for understanding from abroad on the challenges that those of us who want freedom and prosperity are faced with.

In late November there are nationwide elections to renew municipalities and state governments. Chávez is scared because the polls are predicting that the progressive opposition will get back significant jurisdictions, which should hopefully force him to limit his obscene red rethoric. I hope you become interested in following this process of change and see if there is a way that you can ideologically support us in this fight for freedom. Thank you in advance.

Art transcends ideology.

http://mises.org/Community/blogs/ruben

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Rubén replied on Sat, Nov 1 2008 9:56 PM | Locked

Anonymous Coward:

Once you admit that some competition is good (to ensure they are able to operate efficiently and derive prices) then where do you draw your line between the 'necessary' compulsory services and the merely 'optional' competiting services?

I honestly do not know. Does anybody know how to draw that line? I just made a guess when I wrote 2 or 3%. I am not even claiming that my guess is an educated one.

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hayekianxyz replied on Sat, Nov 1 2008 10:12 PM | Locked

Rubén:

Natalie:

Ruben, I suggest you read R.A. Heinlein. He had some fun ideas on how to fund a government without taxation. I believe, a lottery was one of them.

I do not find it ethical to fund a government solely through the expenditures on vice (gambling, alcohol and cigarette taxes, etc) of citizens who would then be persuaded by the rest of "virtuous" citizens to indulge further in their vice so that the government earns more revenue. It might be funny, but it does not sound ethical or compassionate.

You know, stealing from wage earners, that's very ethical.

"You don't need a weatherman to know which way the wind blows"

Bob Dylan

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Sasquatch replied on Sun, Nov 2 2008 6:48 PM | Locked

GilesStratton, If you wish to pretend that my denouncement of anarchy is in any way a promotion of the current state of government, then there is no point in me wasting my time on you.  Individuals have the right to their life, liberty, and property.  Under anarchy, the definition of rights become arbitrary.  Please explain the reason why plunderers will "quickly go out of business," under anarchy, as you have stated. 

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MacFall replied on Sun, Nov 2 2008 8:06 PM | Locked

Sasquatch:

Individuals have the right to their life, liberty, and property.

And states violate them by their very existence, no matter how they are arranged. If states are required to protect rights, then rights are impossible.

Under anarchy, the definition of rights become arbitrary.

No they don't. Why do you think we need a state to tell us what rights are? If rights exist, then they preexist governments, and are superior to them. If you believe in instituting a compulsory monopoly over coercion - whose income is made through taxation (legalized theft) for the protection of rights - then I suggest it is your idea of rights which is arbitrary.

Please explain the reason why plunderers will "quickly go out of business," under anarchy, as you have stated. 

Because nobody will be assumed to have the right to plunder, as the state is assumed to have. All acts of theft will be resisted. Nobody will be prohibited by law from defending themselves. When there is no institution of legal plunder available, all but the very worst pathological cases will find that cooperation and peaceful trade is more profitable than theft, and those few criminally parasitic or violent individuals who remain will be removed from society by one means or another.

Pro Christo et Libertate integre!

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Answered (Not Verified) Sasquatch replied on Sun, Nov 2 2008 10:32 PM | Locked
Suggested by Goldenboy219

Am I correct that the Austrian School advocates free-market capitalism?  Is it not true that under a system of free-market capitalism, a natural monopoly can emerge where a business is offering the best product for best price in a market, and therefore has no competition?  If the product that this business is selling is the ability to coerce, then by default it becomes government.  Is it impossible for an anarchist to consider the possibility that under a system of anarchy, one business could eventually emerge as gaining the monopoly on the power to coerce, and therefore become government by default?  Would you necessarily be against this government, and if so what makes the market for the ability to coerce so unique that capitalism would be declared a failure?

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MacFall replied on Mon, Nov 3 2008 7:36 PM | Locked

Sasquatch:

Am I correct that the Austrian School advocates free-market capitalism?

Yes.

Is it not true that under a system of free-market capitalism, a natural monopoly can emerge where a business is offering the best product for best price in a market

That is theoretically possible, in the same way that it is theoretically possible for a tornado to rip through a junkyard and accidentally assemble a working lawnmower. But in reality, it is extremely unrealistic to expect a monopoly to provide a quality product at a low price. A monopoly, whether "natural" or political, suffers from the same calculation problem as a socialist commonwealth.

and therefore has no competition?

That would be the definition of a "monopoly", yep. But because a free market, by definition, entails unlimited competition, such a thing cannot exist in a free market. It is true that a single company can gain a lot of control in a particular area, for a while. But their peers in other areas will always be in competition with them, and if they ever begin to act like a monopoly (which, if they get big enough, they will because of the calculation problem), they will also have to deal with innumerable smaller, more efficient firms popping up in their own "territory".

If the product that this business is selling is the ability to coerce, then by default it becomes government.

You keep making assertions, but haven't yet bothered to prove one of them.

Is it impossible for an anarchist to consider the possibility that under a system of anarchy, one business could eventually emerge as gaining the monopoly on the power to coerce, and therefore become government by default?

A person, having become an anarchist, will have already considered this problem and realized that it's not at all likely.

First, your ideas about natural monopolies are erroneous, as I explained above. Second, would a people, after living in a society in which they are able to choose the most efficient, polite, inexpensive, and unobtrusive protectors from a roster of - who knows, hundreds? - faced with a company who would abolish such free choice and establish a compulsory monopoly, just throw up their hands and say "well golly gee damn, I guess we're slaves again. Pity."

No, such an institution would be fought bitterly. And since in such a society there would be no restrictions on private arms ownership, it wouldn't last long.

Would you necessarily be against this government

Will they tax, regulate, pass laws against non-aggressive activities, and/or forbid people from opting out of their "service"? If so, you're damn right I would.

and if so what makes the market for the ability to coerce so unique that capitalism would be declared a failure?

Because it wouldn't be "capitalism" (as you call it) that would bring about such a situation. It would happen through a widespread, simultaneous, successful violation of everyone's rights - by definintion, the opposite of a market process. And such a successful violation in a completely free market, in the absence of a political apparatus already in existence, is pretty much an economic impossiblity.

Pro Christo et Libertate integre!

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