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Advancing Austrian Economics, Liberty, and Peace

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IF THE STATE, THEN, is a vast engine of institutionalized crime and aggression, the “organization of the political means” to wealth, then this means that the State is a criminal organization, and that therefore its moral status is radically different from any of the just property-owners that we have been discussing in this volume. And this means that the moral status of contracts with the State, promises to it and by it, differs radically as well. It means, for example, that no one is morally required to obey the State (except insofar as the State simply affirms the right of just private property against aggression). For, as a criminal organization with all of its income and assets derived from the crime of taxation, the State cannot possess any just property. This means that it cannot be unjust or immoral to fail to pay taxes to the State, to appropriate the property of the State (which is in the hands of aggressors), to refuse to obey State orders, or to break contracts with the State (since it cannot be unjust to break contracts with criminals). Morally, from the point of view of proper political philosophy, “stealing” from the State, for example, is removing property from criminal hands, is, in a sense, “homesteading” property, except that instead of homesteading unused land, the person is removing property from the criminal sector of society—a positive good.

     Here a partial exception can be made where the State has clearly stolen the property of a specific person. Suppose, for example, that the State confiscates jewels belonging to Brown. If Green then steals the jewels from the State, he is not committing a criminal offense from the point of view of libertarian theory. However, the jewels are still not his, and Brown would be justified in using force to repossess the jewels from Green. In most cases, of course, the State’s confiscations, taking place in the form of taxation, are mixed into a common pot, and it is impossible to point to specific owners of its specific property. Who, for example, properly owns a TVA dam or a post-office building? In these majority cases, then, Green’s theft or “homesteading” from the State would be legitimate as well as noncriminal, and would confer a just homesteading property title upon Green.

     Lying to the State, then, also becomes a fortiori morally legitimate. Just as no one is morally required to answer a robber truthfully when he asks if there are any valuables in one’s house, so no one can be morally required to answer truthfully similar questions asked by the State, e.g., when filling out income tax returns.

     All this does not mean, of course, that we must counsel or require civil disobedience, nonpayment of taxes, or lying to or theft from the State, for these may well be prudentially unwise, considering the force majeure possessed by the State apparatus. But what we are saying is that these actions are just and morally licit. Relations with the State, then, become purely prudential and pragmatic considerations for the particular individuals involved, who must treat the State as an enemy with currently prevailing power.

     Many libertarians fall into confusion on specific relations with the State, even when they concede the general immorality or criminality of State actions or interventions. Thus, there is the question of default, or more widely, repudiation of government debt. Many libertarians assert that the government is morally bound to pay its debts, and that therefore default or repudiation must be avoided. The problem here is that these libertarians are analogizing from the perfectly proper thesis that private persons or institutions should keep their contracts and pay their debts. But government has no money of its own, and payment of its debt means that the taxpayers are further coerced into paying bondholders. Such coercion can never be licit from the libertarian point of view. For not only does increased taxation mean increased coercion and aggression against private property, but the seemingly innocent bondholder appears in a very different light when we consider that the purchase of a government bond is simply making an investment in the future loot from the robbery of taxation. As an eager investor in future robbery, then, the bondholder appears in a very different moral light from what is usually assumed.1

     Another question to be placed in a new light is the problem of breaking contracts with the State. We have explained above our contention that since enforceable contracts are properly title-transfers and not promises, that therefore it would be legitimate in the free society to resign from an army despite the signing of a voluntary contract for a longer term of enlistment. But regardless of which theory of contract we adopt, such considerations apply only to private armies in the free market. Since State armies are criminal aggressors—both in their actions as well as their means of revenue—it would be morally licit to leave the State’s army at any time, regardless of the terms of enlistment. It is morally the individual’s right to do so, although again whether such an action is prudential or not is another matter entirely.

     Let us consider in this light the question of bribery of government officials. We saw above, that, in a free society or free market, the briber is acting legitimately, whereas it is the bribee who is defrauding someone (e.g., an employer) and therefore deserves prosecution. What of bribery of government officials? Here a distinction must be made between “aggressive” and “defensive” bribery; the first should be considered improper and aggressive, whereas the latter should be considered proper and legitimate. Consider a typical “aggressive bribe”: a Mafia leader bribes police officials to exclude other, competing operators of gambling casinos from a certain territorial area. Here, the Mafioso acts in collaboration with the government to coerce competing gambling proprietors. The Mafioso is, in this case, an initiator, and accessory, to governmental aggression against his competitors. On the other hand, a “defensive bribe” has a radically different moral status. In such a case, for example, Robinson, seeing that gambling casinos are outlawed in a certain area, bribes policemen to allow his casino to operate—a perfectly legitimate response to an unfortunate situation.

     Defensive bribery, in fact, performs an important social function throughout the world. For, in many countries, business could not be transacted at all without the lubricant of bribery; in this way crippling and destructive regulations and exactions can be avoided. A “corrupt government,” then, is not necessarily a bad thing; compared to an “incorruptible government” whose officials enforce the laws with great severity, “corruption” can at least allow a partial flowering of voluntary transactions and actions in a society. Of course, in neither case are either the regulations or prohibitions, or the enforcement officials themselves, justified, since neither they nor the exactions should be in existence at all.2

     In some areas, a radical distinction between private persons and government officials is acknowledged in existing law and opinion. Thus, a private individual’s “right to privacy” or right to keep silent does not and should not apply to government officials, whose records and operations should be open to public knowledge and evaluation. There are two democratic arguments for denying the right to privacy to government officials, which, while not strictly libertarian, are valuable as far as they go: namely (1) that in a democracy, the public can only decide on public issues and vote for public officials if they have complete knowledge of government operations; and (2) that since the taxpayers pay the bill for government, they should have the right to know what government is doing. The libertarian argument would add that, since government is an aggressor organization against the rights and persons of its citizens, then full disclosure of its operations is at least one right that its subjects might wrest from the State, and which they may be able to use to resist or whittle down State power.

     Another area where the law now distinguishes between private citizens and public officials is the law of libel. We have maintained above that libel laws are illegitimate. But, even given laws against libel, it is important to distinguish between libeling a private citizen and a government official or agency. By the nineteenth century, we had fortunately gotten rid of the pernicious common law of “seditious libel,” which had been used as a club to repress almost any criticisms of government. Currently libel laws have now been fortunately weakened when applied, not merely to government per se, but also to politicians or government officials.

     Many anarchist libertarians claim it immoral to vote or to engage in political action–the argument being that by participating in this way in State activity, the libertarian places his moral imprimatur upon the State apparatus itself. But a moral decision must be a free decision, and the State has placed individuals in society in an unfree environment, in a general matrix of coercion. The State—unfortunately—exists, and people must necessarily begin with this matrix to try to remedy their condition. As Lysander Spooner pointed out, in an environment of State coercion, voting does not imply voluntary consent.3 Indeed, if the State allows us a periodic choice of rulers, limited though that choice may be, it surely cannot be considered immoral to make use of that limited choice to try to reduce or get rid of State power.4

     The State, then, is not simply a part of society. The brunt of this part of the present volume, in fact, is to demonstrate that the State is not, as most utilitarian free-market economists like to think, a legitimate social institution that tends to be bumbling and inefficient in most of its activities. On the contrary, the State is an inherently illegitimate institution of organized aggression, of organized and regularized crime against the persons and properties of its subjects. Rather than necessary to society, it is a profoundly antisocial institution which lives parasitically off of the productive activities of private citizens. Morally, it must be considered as illegitimate and outside of the ordinary libertarian legal system (such as adumbrated in Part II above), which delimits and insures the rights and just properties of private citizens. Thus, from the point of view of justice and morality, the State can own no property, require no obedience, enforce no contracts made with it, and indeed, cannot exist at all.

     A common defense of the State holds that man is a “social animal,” that he must live in society, and that individualists and libertarians believe in the existence of “atomistic individuals” uninfluenced by and unrelated to their fellow men. But no libertarians have ever held individuals to be isolated atoms; on the contrary, all libertarians have recognized the necessity and the enormous advantages of living in society, and of participating in the social division of labor. The great non sequitur committed by defenders of the State, including classical Aristotelian and Thomist philosophers, is to leap from the necessity of society to the necessity of the State.5 On the contrary, as we have indicated, the State is an antisocial instrument, crippling voluntary interchange, individual creativity, and the division of labor. “Society” is a convenient label for the voluntary interrelations of individuals, in peaceful exchange and on the market. Here we may point to Albert Jay Nock’s penetrating distinction between “social power”—the fruits of voluntary interchange in the economy and in civilization—and “State power,” the coercive interference and exploitation of those fruits. In that light, Nock showed that human history is basically a race between State power and social power, between the beneficent fruits of peaceful and voluntary production and creativity on the one hand, and the crippling and parasitic blight of State power upon the voluntary and productive social process.6 All of the services commonly thought to require the State—from the coining of money to police protection to the development of law in defense of the rights of person and property—can be and have been supplied far more efficiently and certainly more morally by private persons. The State is in no sense required by the nature of man; quite the contrary.

1On repudiation of government debt, see Frank Chodorov, “Don’t Buy Government Bonds,” in Out of Step (New York: Devin-Adair, 1962), pp. 170–77; and Murray N. Rothbard, Man, Economy, and State (Princeton, N.J.: D. Van Nostrand, 1962), vol. 2, pp. 881–83.

2There is considerable evidence that the Soviet economy only works at all because of the pervasiveness of bribery or “blat”; Margaret Miller calls it “the shadow system of private enterprise within planning.” Margaret Miller, “Markets in Russia,” in M. Miller, T. Piotrowicz, L. Sirc, and H. Smith, Communist Economy Under Change (London: Institute for Economic Affairs, 1963), pp. 23–30.

H.L. Mencken tells a charming and instructive story of the contrast between “corruption” and “reform”:

He [Mencken’s father] believed that political corruption was inevitable under democracy, and even argued, out of his own experience, that it had its uses. One of his favorite anecdotes was about a huge swinging sign that used to hang outside his place of business in Paca Street. When the building was built in 1885, he simply hung out the sign, sent for the city councilman of the district, and gave him $20. This was in full settlement forevermore of all permit and privilege fees, easement taxes, and other such costs and imposts. The city councilman pocketed the money, and in return was supposed to stave off any cops, building inspectors, or other functionaries who had any lawful interest in the matter, or tried to horn in for private profit. Being an honorable man according to his lights, he kept his bargain, and the sign flapped and squeaked in the breeze for ten years. But then, in 1895, Baltimore had a reform wave, the councilman was voted out of office, and the idealists in the City Hall sent word that a license to maintain the sign would cost $62.75 a year. It came down the next day. This was proof to my father that reform was mainly only a conspiracy of prehensile charlatans to mulct taxpayers.

H.L. Mencken, Happy Days: 1880–1892 (New York: Alfred Knopf, 1947), pp. 251–52.

3For the relevant passage from Spooner, see pp. 165–66 above.

4For more on the proper strategy for liberty, see pp. 257–74 below.

5See Murray N. Rothbard, Power and Market, 2nd ed. (Kansas City: Sheed Andrews and McMeel, 1977), p. 237.

6See Albert Jay Nock, Our Enemy, The State (New York: Free Life Editions, 1973), pp. 3ff.

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