Is tax-free minarchism possible, where the state earns only from government services?

Anal Magician

This was again a very long question, but it seems I managed to compress it into a single sentence without any significant loss of meaning.

In general, the idea of transitioning to financing the state budget through payment for government services is good because the government thereby declares its intention to be useful—taking money only for what is in demand, and in the volume for which there is demand for its activity. Such a line of thinking among government officials, of course, should be encouraged. Let’s figure out what this might look like.

Purely theoretically, the sale of any services by the state can be either a monopoly or carried out within the framework of free competition with private companies.

Let’s start with services that are a natural monopoly of the state. Yes, such things really exist, and they are linked to the exploitation of the state as a unique brand. For example, a quite significant source of income for young Pacific states in the 20th century was the issuance and sale of postage stamps. Here, private entities cannot compete with the state in any way, because it is precisely the fact that the stamps are issued by the state that gives them collectible rarity. Any fool can color a piece of adhesive paper, but obtaining UN recognition as a state and then coloring a piece of adhesive paper is a completely different matter. I don’t know how much this business flourishes now with the advent of the internet, but stamps aren’t the only thing. The state can sell noble titles, tickets to military parades, and other market-demanded perks. Any such activity of a minarchist government can only be welcomed, even if the money earned is squandered on some harmless nonsense, like maintaining a royal court, rather than on what, according to minarchist myths, should be the exclusive prerogative of the state. What was it—courts, the army, and the police?

Besides government services that are natural monopolies, there is a much broader class of monopolies achieved by the forced exclusion of competitors. For example, a government service such as the sale of entry (or, even more so, exit) visas. While in the case of natural monopolies the buyer themselves wishes to purchase the service specifically from the state, in this case, they would gladly buy this service from a competitor if it were cheaper, and even more gladly prefer not to pay for this service at all—but simply enter the country without any visa. I presume you have already realized that we, the ancaps, cannot approve of dubious services of this sort, unlike corruption, which allows one to avoid their imposition.

Finally, there are services that the state could provide while competing with private entities. State clinics, schools, insurance companies, pension funds, television, and many, many other services. How, properly speaking, do they differ from private ones? In that their nominal owner turns out to be society as a whole, and in theory, all their profits should be spent exclusively on improving the services themselves, rather than being siphoned into the pockets of private owners. Theoretically, this could provide a new quality of service that would be difficult to achieve in the case of a private enterprise. For example, public television could sell only the absolute minimum of advertising, just to cover the channel’s costs. In practice, state companies of this sort will fall victim to the principal-agent problem and will act more in the interests of management than in the interests of society.

To summarize. The only type of government service that remains unconditionally legitimate in the eyes of ancaps is the market exploitation of the state as a brand. Other organizations with rich cultural traditions, such as churches, knightly orders, football clubs, or festivals, can operate on the same principles.

The state provides an exclusive market-demanded good, and that is wonderful!

Will contractual jurisdictions, each of which involves only individuals with similar views, lead to the eternal conservation of all social institutions and the cessation of the development of philosophical thought?

Siberian Extremist

This question had been pending for a while, and it came back to me in connection with the publication of Farid Khusainov’s review of Rodion Belkovich’s book on the history of American radicalism. The main point of the review (though not necessarily the reviewed book itself) is that individual freedom must be defended both from the central government and from enthusiasts of cozy conservative communities. I agree with this general conclusion, but now I want to understand how real the danger is that philosophical thought in a world of closed communities will cease to develop.

Indeed, isolated communities—as far as we can judge by the isolated communities we can observe—are not prone to a riot of ideas. This could be the Amazonian Indians, the aboriginals of the Andaman Islands, or the Amish beloved by Mikhail Svetov. These are very stable societies, capable of existing for centuries without any changes at all.

The example of ancient Hellas is quite telling in this regard. It consisted of many compact poleis, meaning territorial jurisdictions, united into leagues, which were contractual jurisdictions of a higher level; within the polis, there were phyles, demes, and other heteriai, which turned out to be extraterritorial jurisdictions, some contractual and some not. We know ancient Hellas as an example of a society with an exemplary explosion of philosophical thought. But even there, there was an island of stability: Lacedaemon.

It is well known what protected the Spartans from the corrupting influence of outsiders: a radical reduction of external trade contacts. You cannot trade much when your obols—monetary units with a value roughly equal to “one snack”—consist of hefty iron bars. Other poleis traded actively, and through this, they were open to mutual cultural influence. It is easy to see that the same characteristic is observed in modern stable communities: their external trade turnover is extremely low.

Will a world of many ECUs exist without trade relations between members of different ECUs? Highly doubtful, except perhaps as an exception. The extraterritoriality of jurisdictions further facilitates various connections with participants of other communities. And where there is trade, there is a search for profit. Where there is a search for profit, there is entrepreneurship. Where there is entrepreneurship, there is a constant readiness to observe and adapt others’ ideas. Rest assured, philosophical development will not disappear under panarchy.

Philosophers in search of new ideas

Why do minarchists prefer direct taxes to indirect ones?

Anal Magician

The question was very long, and it described in detail that indirect taxes should supposedly irritate people less, so why then do these strange libertarians prefer to deal with what irritates people more.

There are three aspects here.

First, it is easier to evade direct taxes. Once I decide not to pay taxes, in the case of direct taxes, I can achieve success relatively easily because it depends largely on me. Indirect taxes are harder to evade because paying them depends more on the activities of third parties. It is one thing to earn only “under the table,” and quite another to manage to buy all necessary goods “under the table.” The level of hassle is incomparable.

Second, the more direct the taxes, the easier it is to understand exactly how much you are paying. And the lower the uncertainty, the further the planning horizon. The ability for long-term planning increases labor productivity in the long run. In other words, it is easier for people to get rich. The more indirect a tax is, the harder it is to say exactly how much you are paying and, accordingly, how profitable a particular activity is, especially in the long term.

Third, the more direct the tax, the less information about your activities you disclose to the tax authorities. The most direct tax is the poll tax. All that is known about you as a taxpayer is the fact of your existence. If you pay a sales tax, you report the amount you sold. If it is a profit tax, you report your profit, how much you bought for, and how much you sold for. But if it is an indirect tax like VAT, you already have to report in detail from whom and at what price you bought, and then to whom and at what price you sold. The more information about your activities is known, the easier it is for the state to plan how much more they can shave off you.

There is, however, one very indirect tax, which, by paying, tells the state even less than paying a poll tax. This is monetary emission. Therefore, some minarchists allow precisely such a model for constructing the state budget: there is no redistribution of money by the state, there is simply an annual emission of money by the state in a small fixed amount, comparable to economic growth. From this money, a certain extremely narrow list of state expenditures is funded, and if for some reason the money is not enough, the state takes off its hat and goes to beg for donations, or performs a budget sequestration.

The only indirect tax acceptable to minarchists

Mechanics of Freedom, Chapter 61

I’ve received another donation for the Friedman translation project, as well as a question: will the translated Mechanics of Freedom be available in fb2 format? Actually, I planned to stick with epub, but since that’s the case, there will be an fb2 as well. And since money has come in, it’s a great excuse to post a new chapter.

Chapter 61 has a grand title: A Bet I Lost: Where My Moral Philosophy Begins. Friedman shares memories from half a century ago about how he bet with philosopher Isaiah Berlin and failed to prove to him that moral judgments are more a matter of taste than objective facts.

The venerable philosopher explained to the student David, as simply as two plus two, that as long as we rely on the testimony of our sense organs, the objectivity of any facts is extremely conditional. He then developed the idea that mutually consistent impressions are perhaps useful enough to be considered facts, since they align well with each other and with the impressions of other people. In the same way, mutually consistent moral judgments can boldly be considered moral facts, and those incapable of perceiving them can be considered insane.

As a result, Friedman largely changed his position on morality and is now much more inclined to perceive basic moral statements as akin to facts of physical reality. However, he is aware that he lacks a decent argument against moral nihilism, and it is unlikely that one will emerge.

Liability of the solicitor of a crime

While recently answering a series of questions in a blitz format, I touched upon the topic of the responsibility of the person who orders a crime, and this sparked a discussion in the Facebook comments. So, I will try to reason through this in more detail.

Let’s consider a sequence of situations.

1. The client demands that the perpetrator commit a crime, threatening sanctions in case of refusal: causing harm to the perpetrator themselves or to some hostages. The perpetrator does as required, thereby avoiding the threat.

2. The client demands that the perpetrator commit a crime, threatening sanctions for non-compliance and promising a reward for completion. The perpetrator does as required and receives the reward.

3. The client asks the perpetrator to commit a crime, offering a reward in return. The perpetrator carries out the request and receives the promised reward.

4. There is a highly competitive market for crimes where many perpetrators compete to offer their services. The buyer chooses the perpetrator who offers the service that is optimal in terms of price and quality, and purchases it.

5. The perpetrator commits a crime, reports it, after which interested parties pay them donations for it.

I have tried to arrange the situations in descending order of the client’s degree of responsibility and ascending order of the perpetrator’s degree of responsibility—from the full responsibility of the former to the full responsibility of the latter.

In a situation where the perpetrator faces a serious threat for failing to fulfill the order, we can de facto consider them a mere tool. That is why, for example, it is quite logical to completely exempt conscripted soldiers from responsibility for participating in a war if they acted within orders and it is customary in that army to execute for desertion or failure to follow orders.

But in a situation where the perpetrator of a crime has the opportunity to resign, or to stage a work-to-rule strike by demanding written instructions for every unlawful order—but does not do so—they share responsibility with their superiors for all crimes committed. This is the case of the Belarusian OMON, for example. In conditions where those who resign can also count on the support of society, the responsibility of those who did not resign naturally increases.

At what point can we confidently assert that the client should bear no responsibility at all? Clearly, this is only possible in cases where the perpetrator acts entirely voluntarily, but is it so in all such cases?

Any voluntary exchange is based on the division of labor. I do not do everything I need myself; instead, I exchange a part of what I need less for something that is difficult for me to obtain on my own. The purchase of an illegal service is the exact same division of labor. But since the labor is divided, so is the responsibility for the damage that this labor caused to someone. Logical? Logical. And what if we continue to complicate the division of labor?

One studied the target’s daily routine. A second purchased the equipment. A third planted the bomb. A fourth sent a text message at the right moment, and the bomb blew up the victim along with the car and three random passersby. A fifth negotiated with the client and coordinated the group’s work. The sixth is the client himself. The seventh is the primary beneficiary in whose interests the client acted. And let’s add payment schemes. And let’s add explosives suppliers. And someone else bought these guys donuts…

A court in the wonderful Ancapistan of the future will have to assess the level of awareness of each person involved in the offense, the degree of unlawfulness of the actions they were directly involved in, the possibility of backing out, cooperation with the investigation, and so on—everything we already see in our usual boring reality. Except that the idiotic practice of imprisonment for the sake of imprisonment will be mostly replaced by monetary compensation or their in-kind equivalents.

Knowledge of principles will not provide a precise solution for all cases in life. It only allows one to have something to be guided by when evaluating a given situation in all its complexity. Therefore, please do not turn the non-aggression principle into a dogma; it doesn’t work that way.

Here you have the direct perpetrators, the filming of a video for the report to the client, and a whole chain of decision-making behind the scenes. The division of responsibility is the most typical practice in the modern state.

Observation Project GrOb

The “Civil Society” movement, led by Mikhail Svetov, announced an ambitious project to organize exit polls in 13 regions and observation in 123 municipalities.

I have no idea where the movement will get so many volunteers to fulfill its obligations, and I suspect that it will be limited to partial coverage of Moscow. Again, organizing an exit poll is relatively simple: you put a couple of people with tablets at the exit of a few polling stations—and there is your exit poll. To organize observation, you need not only to find volunteers but also to reach an agreement with various candidates and electoral associations so that they issue referrals to these volunteers.

As it happened, I was recently convinced to work as a volunteer for the Novosibirsk-2020 coalition, which nominated more than three dozen single-mandate candidates for the city council of deputies. If I learn that representatives of Civil Society are contacting the coalition headquarters and offering their people for observation, I will certainly report it, but so far I have heard nothing of any such activity.

I looked at the website through which Civil Society attracts people to participate in its project. The text boils down to this: here are the contacts where you can leave a request for observation, and here are the details through which you can support us with money. How many people they plan to attract, how many have already been attracted, how much money is needed, and how much has already been collected—none of this is on the website.

Another funny point. Throughout the text, it is stated that the project is being done by Civil Society, but the logo of the Libertarian Party is also present. What the party’s role is in this endeavor is completely unclear from the text.

But I wouldn’t want this post to look like an indiscriminate bashing of a good initiative. There is one nice feature on the website: if you scroll down and select your city, a map of that city will load, and all the polling stations are marked on it. Even if the organizers completely fuck up everything, the map of polling stations is already useful now. I hope that over time the functionality of the site will develop further. For example, it would be visible which polling stations have already had at least someone apply. Then it would at least be possible to assess the scale of the work done.

Libertarian Band – new video

As I promised in the announcement for the previous video, the new cycle on the Libertarian Band channel will be entirely dedicated to the NAP. While we previously viewed the non-aggression principle as a kind of spontaneous order that characterizes sufficiently viable societies, the new cycle describes the exact opposite approach instead of spontaneous orders: the artificial imposition of the non-aggression principle.

The introductory video explains that leaving social morals to natural selection is too rash, and conscious measures are needed to instill a culture of non-aggression. The next video will be devoted to answering a strange question: what exactly is wrong with aggressive violence, since it is an excellent tool—why be squeamish about it?

Belarus 3

This is already my third post about Belarus. In the first one, I gave obvious recommendations that turned out to be practically a forecast. In the second, I gave non-obvious recommendations, and, naturally, reality diverged from those recommendations. Therefore, instead of giving my own advice now, I want to express my happiness for the recommendations that Belarusians themselves are exchanging.

I am talking about a text on Telegraph with the proud title Victory Plan. It proposes a continuation of Sharp’s non-violent transformation from a dictatorship into a freer society. In brief, the plan includes:

  • organizing the main directions of resistance (fronts): protest actions, economic strangulation of the state, propaganda, political pressure, including at the international level, and moral and legal pressure on specific executors.
  • building parallel coordination structures (ministries): non-state economic services, insurance funds to compensate for the costs of state violence, the collapse of state social services, and strikes.

This is a very good plan because, during its implementation, society will receive a practical course in agorism, and there is a great chance that it will get a taste for it. When it turns out that non-state coordination is more efficient and the dictatorship eventually withers away, there is a chance that the new state, which will inevitably be built in place of the old one, will acquire the best traits of liberal laxity and will avoid meddling in things that are not its business for quite a long time. And if it does start to meddle, people will have ready-made recipes on exactly how to put the state in its place.

Is there a chance that after the old regime leaves, a new one will not be built in its place? It is very small, because libertarian ideas are not yet widely distributed in society, and the thought that everyone is better off without a state does not seem obvious to people. They are more likely to repeat the mistake of thinking, “this was a bad state, it’s gone now, now we will build a good one.”

Mechanics of Freedom, Chapter 60

I published Chapter 59, regarding the problem of deriving the ought from the is in Ayn Rand, about a year ago. In it, Friedman examined the arguments for objectivist ethics in John Galt’s speech, found many logical holes, and stated that they cannot be closed by mere rhetoric.

In Chapter 60, The Economics of Vice and Virtue, the author analyzes moral qualities and actions from the perspective of economic analysis and game theory, thereby proposing his own approach to objectivism—that is, deriving the ought from the is. I have previously stated many times in discussions and answers to readers’ questions that a market society is more affluent and benevolent, and therefore less inclined toward the dominating desire to succeed at the expense of others than a society with strong state intervention. Friedman provided a more rigorous foundation for this empirical observation, for which he deserves thanks.

Blitz on long-considered topics

A series of questions from Yaroslav

Is the client of a hitman responsible for the murder, and did the employer commit an act of aggression from a libertarian perspective?

I have already answered almost exactly this question. In short: if the employer and the executor are linked only by market relations, then all responsibility lies with the executor. To the extent that the executor is in a non-market dependence on the employer, a share of the responsibility falls on the employer, because this very share of dependence is effectively their share of participation in the co-organization of the murder.

Is the unintentional infection of a person with a disease a violation of the NAP?

Legally, it is an accident. I have answered questions on related topics a couple of times: regarding provoking an epileptic seizure and regarding killing in response to an imaginary threat.

The measure of responsibility for the person who infected is determined by how capable they were of preventing the infection and how expected these precautions were on their part. For example, in a situation where an epidemic is occurring, it is expected that people maintain distance, wear masks, and so on. If all this took place but the infection occurred anyway, responsibility is waived. If the infector carelessly led a normal lifestyle, responsibility is not waived. The same criteria apply to the infected person—what they did to avoid being infected. However, if there is no epidemic or nothing is known about it yet, then no particular claims arise against the infector.

Should infection be considered a violation of the NAP? As you wish. A violation of the NAP is a purely theoretical construct, while in real life, what matters is who should bear the property claims.

What is the difference between contractual jurisdiction and a state?

The presence of a contract that clearly specifies the conditions of jurisdiction. The more blurred the range of issues for which a subject is subject to a certain organization is, the more difficult it is for them to actually avoid jurisdiction, and the more implicit the contract is, the smaller the difference between contractual jurisdiction and a state.

For instance, a hypothetical island owner who places a sign on the shore stating that anyone who steps onto the island’s land thereby accepts a contract of indefinite gratuitous employment for an unspecified range of labor duties—has de facto created a state, which will exist exactly as long as he can produce enforcement of the aforementioned oppressive contract, enslaving all accidental tourists and shipwreck survivors.

When does a person reach the age of agency?

It makes sense to read my old answers under the “children” tag; there are reflections on emancipation scattered across several posts. In short: others recognize the guardian’s right to guardianship until the child expresses a clear desire to terminate this relationship. Accordingly, a child has the right to break the connection with current guardians at any moment, and thereafter either live independently or agree on guardianship with someone else. Since a child does not learn to defend their interests immediately, they will likely need the help of adults, and the task of those adults is not only to ensure the child’s rights but also to convince other adults that the child’s rights have been respected.