31 August 2011

Is the state a criminal conspiracy?

Murray Rothbard famously called the state "a bandit gang writ large", or as it is more commonly rephrased, "a gang of thieves writ large". I have to admit that the first time I read this I was quite taken aback. I think I was first exposed to this idea early on after becoming a libertarian, and I wrote it off, in large part, to fiery rhetoric intended to get readers' attentions. Fortunately, it didn't scare me off, and as I read more and more, I came to understand the logic behind the assertion. As it usually goes for me, I have trouble seeing the forest for the trees right away.

This assertion -- government as a criminal gang -- often accompanies, or occurs during, a discussion of taxes. In fact, I had a discussion with someone just this past weekend during which I said that taxes were theft because I had never consented to them. Invariably, this leads (as it did in this case) into discussion about helping the poor, benefits of services paid for by tax revenue, and "civic duty" and what it means to be a "good citizen". The argument goes: taxes are fine and good as long as we put them to "good" use; to be against taxes is to be against the good that taxes provide. Don't get me wrong. I believe in helping the poor; I drive my car on roads; and I'm all for peaceful cooperation and being a productive member of society. I simply differ from the bulk of the population on how these ends should be achieved.

Since I'm likely in agreement with most about what can be achieved with the proper use of tax revenue (assuming the "proper" use could really be known), let's back up a bit and look at taxes themselves. A tax is simply a financial charge imposed by a state (or functionally equivalent "legal" entity), the payment of which is enforced under penalty of law. This is a somewhat euphemistic definition, though. A tax "is not a voluntary payment or donation, but an enforced contribution, exacted pursuant to legislative authority" according to Black's Law Dictionary. With that definition in mind, we begin to see now the shape of the criminal gang metaphor. The state imposes a financial charge on its subjects and enforces the payment of said charge with force. In less civilized societies, failure to pay may be immediately met with the state's armed enforcers stopping by to collect the charges. In more civilized societies, one might first be given a trial in a state-run court, after which failure to pay will be met by the state's armed enforcers. The result is always the same, though. Taxes are ultimately, always collected by force be it through property confiscation or (the threat of) incarceration. (A discussion of the equality of the threat and actual use of force is omitted.)

When a criminal gang takes money by force, it is theft. When the state does it, it is taxation. The difference is curious, to say the least. Looking back at Black's definition of taxation, note that taxes are "exacted pursuant to legislative authority". So, despite all outward appearances, taking money from someone against their will is not always a crime; the legality of the act depends on who is doing the taking. The state is empowered by "legislative authority" while the "criminal" gang has no such authority. So, let's step further back and examine from where the state derives this authority.

Imagine, for a second, a person living alone on an island. For all intents and purposes, this person owns the island and everything on it, if for no other reason than there is no one else contending for ownership. Now let's add a second person into the mix. There are myriad ways for the two to decide how to divide up the land and coexist, but they all begin with the question of the proper ownership of each person's body. The simplest, most common sense solution to this question is that each person is the exclusive owner of his or her body. After all, it doesn't make sense for each person to own the other's body but not his or her own. Nor does it make any sense for the two to own both bodies jointly. These latter solutions would only produce conflict as the two would never be able to agree on how best to use their bodies. Indeed, the only viable solution is for each person to be the exclusive owner of his or her own body.

If we accept this premise, then it follows that the initiation of force/violence against another (without this other's consent) is never justified as it constitutes a violation of the person's ownership of his or her body and sole discretion as to how that body should be used. It further follows that if a person does not have the authority to initiate violence against another, he or she cannot contract this authority out to a third party, namely, the state. That is, one cannot grant power or authority to another that one does not have in the first place. Thus, we arrive at the conclusion that the initiation of force/violence by the state is never justified, and since all state actions are predicated on the use of force, we must further conclude that all state actions are without proper authority, at a minimum, with respect to those who do not consent to violence against them.

By now, it should be clear that there is little difference between the actions of a "criminal gang" and the state in terms of their authority to commit those actions. The only place where the two may differ is in the fact that, occasionally, the state may use its ill-gotten gains to help the public in the form of welfare, roads, etc. But the state is no Robin Hood. It steals from the rich, the middle class, and the poor, alike. Not only that, but it pays its bureaucrats first and then uses what's left to pay for these services. So, even when the state does good, the taxpayers are forced to overpay for these services since they can be provided by and found in the private sector -- often the state ends up contracting with private sector businesses -- with less bureaucracy and the added benefit of market competition to keep prices down. We must also note that money left, after paying bureaucrats, is further reduced by the state's spending on warfare and all that that entails. Taxpayers really aren't getting a good bang, no pun intended, for their buck.

All of this talk about how the state spends money, though, is simply a giant misdirection intended to confuse the issue. After all, we don't tolerate crime when the proceeds are used for ostensibly "good" purposes. Nor would we tolerate it if the criminal offered to give us a partial say -- a vote if you will -- in how he or she might use the proceeds. The criminal act must be addressed first and foremost, and this should be no different when it applies to the state. When there are different rules for the state and for the subject/citizen, what we have is most definitely not the rule of law.

The state is indeed criminal in its actions; the next step is to establish conspiracy. Strictly speaking, a conspiracy is "an agreement by two or more persons to commit a crime, fraud,or other wrongful act". Under this definition, a conviction of the state is all but certain. This isn't exactly what I have in mind, when I say conspiracy, however. Conspiracy, in reference to the state, implies to me some larger goal: not only to keep power but to further and further enhance and centralize it. It also implies that the state is always working toward this goal as an end unto itself. Now, I won't argue that this isn't what happens, in practice; however, I have a hard time believing that the state, at all levels, is always and everywhere conspiring toward this end for one simple reason. Again, Murray Rothbard:
[I]n a profound sense, no social system, whether anarchist or statist, can work at all unless most people are "good" in the sense that they are not all hell-bent upon assaulting and robbing their neighbors. If everyone were so disposed, no amount of protection, whether state or private, could succeed in staving off chaos.
If Mr. Rothbard is correct, which I believe him to be, that most people are "good", then we must conclude that either a significant number of people working for the state are "good" or that by some sort of social malfunction the state exclusively employs the "bad" people in society. There is certainly a good argument to be made for the latter possibility, but I'm a believer in the former.

If I am correct in that belief, then there only remains the question of why the state continues to exist. I believe there are two, related reasons: 1.) people do not understand the nature of the state, and 2.) people believe that they are not responsible for the actions of the state. I've addressed the former in this post; I'll try to address the latter in the next.

19 August 2011

Pardon the dust, centralization in progress

A couple of weeks ago, California became the 8th state, joined by the District of Columbia, to pass a law that will give all of its electoral votes to the winner of the nationwide, popular vote. In order for this law to take effect, however, a number of states whose combined electoral votes total 270 (enough to win in the electoral college) must all pass similar legislation. If that happens, then the electoral college, while (likely) still in place, would be rendered moot.

Disturbingly, this change seems to have broad appeal and public support. According to Gallup surveys in 2001 and in 2004, about 60% of the population supports electing the president by popular vote. Editorial writings seem to hold an especially dim view of the federal government's presidential election process, stating that "[i]n a country that purports to be the world's greatest democracy, the Electoral College is an undemocratic embarrassment." Politico says that the bill signed by (California's) governor Jerry Brown is "designed to fix our broken presidential election system." And according to nationalpopularvote.com, 2,110 state legislators have endorsed the change.

I say disturbingly because this represents a serious misunderstanding of the nature of the design and history of the federal government. There is evidence for this in Ali Velshi's comments on Jon Stewart's show from earlier this week (starting at about 4:50, specifically 5:18) in which he complains that members of congress are representing their constituents instead of the "entire country":

In his comments, he explicitly states that he believes that there is some solution to our problem(s) that benefits everyone. For someone who reports on business and markets, this is a surprising position. It has a very "central planning" ring to it. That is, if we would all just trust the government, they'll do what's best for us because they know best. But a discussion of (the evils of) central planning is for another article. More to my current point, who should representatives represent if not their constituents -- the very people who elected them? Representatives are not sent to congress to do what's best for the country. They're sent to represent the interests of their constituents -- apparently much to the chagrin of Mr. Velshi -- and in doing so, the ideas that move forward are the ones shared by a majority of the people. (Don't get me wrong; I'm no fan of democracy or what has become of our republic.)

This misunderstanding extends beyond the punditocracy, though. I found this comment (repeated in a blog by an author who took issue with it for a different reason):
...no federal protections for us is just a wee bit troublesome too; we're either one country or fifty different ones. You can't have one State treating minorities as equals while another treats them like dirt.
The fact is that the United States are (or were intended to be) fifty different countries. Because these countries are small and share a common geography, they decided to form a federal government that would allow them to act together for mutual benefit in areas like defense and economics. This federal government was never intended to regulate individuals so much is its function was to govern the states. The states would in turn govern their individual populations. (I've written previously about the sovereignty of the states.)

If the federal government were kept small and limited to its original intent, then
dysfuctional state policies are constrained by the possibility of "voting with your feet." If a state imposes overly high taxes, adopts flawed regulations, or provides poor public services, people and businesses will tend to migrate elsewhere, thereby incentivizing the state government to clean up its act in order to preserve its tax base.
Instead, as the federal government grows and the states weaken, this ability to vote with one's feet will be no more. If you think that the taxes, regulations, or public services of a particular state are bad, wait until they are uniform nationwide. Make no mistake, giving the presidential election to the winner of the popular vote has nothing to do with furthering democracy or preventing what happened to Al Gore in 2000 (something that has happened only 3 other times in the 200+ year history of the U.S. federal government). It's ultimate effect will be to push state power and sovereignty further and further into obscurity until all political power is fully centralized at the federal level.

* * *

I didn't have the space to delve more deeply into the evils of central planning or other problems with the proposal to elect the president by popular vote. Some of those are addressed in an editorial by the Las Vegas Review-Journal. In that editorial, I found a reference to a doctrine often (incorrectly, it would seem) attributed to Alexander Fraser Tytler. It reads:
A democracy cannot exist as a permanent form of government. It can only exist until the majority discovers it can vote itself largess out of the public treasury. After that, the majority always votes for the candidate promising the most benefits with the result the democracy collapses because of the loose fiscal policy ensuing, always to be followed by a dictatorship, then a monarchy.
It sounded very apropos and also reminded me of this quote, attributed to George Washington:
The last official act of any government is to loot the treasury.
* * *

Wikipedia also summarizes some of the theory behind indirect election of the president.

02 August 2011

That triple-A credit rating

Despite a debt deal, the US federal government still faces a downgrade of its credit rating. In my opinion, rating the creditworthiness of a government is all political theater. However, during the course of discussion, I've noticed a curious argument being made with regard to the possible downgrade:
Behind all too many of market moves in government debt of late has been a report from one of the major credit ratings agencies. S&P is the biggest and arguably the most influential, fast followed by Moody's Investor Service and then their smaller rival, Fitch Ratings. In national capitals, they are alternately vilified by politicians or held out as just arbiters for denouncing government profligacy. 
Yet there is an overwhelming irony in their new-found prominence. These are the same firms that many blame as prime instigators of the 2007-2008 credit crisis for freely giving out top ratings to ultimately worthless structured mortgage products, allowing the credit bubble to form. Now they sit in judgment of the countries that had to ruin their public balance sheets to prevent financial collapse by saving the banks shattered by those bad instruments once blessed by the agencies. 
"The ratings agencies failed the world economy in spades in the past," said Lord Peter Levene, chairman of the Lloyd's of London insurance market and a former senior adviser to the British finance ministry. 
"Their track record has not exactly been stellar."
The argument seems to be that because the ratings agencies all "missed" the financial collapse in rating junk financial instruments as AAA, then their credibility in this matter is nil. I don't follow this line of reasoning for a couple of reasons:
  1. The main issue that people seem to have with the credit rating agencies is that they waited too long to warn the investing public about the looming financial catastrophe that struck in 2007-2008 and issue downgrades. Shouldn't those people now be applauding these same agencies for trying to correct their failures by getting out ahead of possible new problems?
  2. If credit rating agencies tend to overrate financial instruments, an assumption that seems to underlie the argument, then shouldn't people take it very seriously when an agency actually does issue a downgrade?
You can't have it both ways. You can't simultaneously decry the agencies for missing the financial collapse in 2007-2008 and then point at that incompetence as a criticism for downgrading a financial instrument that everyone agrees is in trouble.