Death and/or Taxes

Sperry UNIVAC

Prologue by Ankapan-tyan
We have a new author’s column on our channel, here we will butcher the sacred cows of libertarianism. Because readers complain that it’s boring to comment on me, Bitarkha is tired of it, well, here’s food for discussion.

Yesterday I had a dispute that prompted me to write this post. I ironically described that the Viking warriors were not a professional army because they didn’t live off salaries but from what they could plunder, which elicited an ironic comment about how our modern professional army lives off what it plunders – so the difference is zero. Basically, soldiers on government service get paid a salary, the salary comes from the budget, the budget comes from taxes, and taxes are essentially theft. That’s exactly the sacred cow I want to poke around at a little.

A libertarian’s understanding of taxation is usually like this. I started working for Uncle Joe, bent my back, Uncle Joe gave me $100 for my efforts, then this left-wing (in every sense of the word) guy comes along with a stick, whacks me over the spine, takes $20, and runs off to give them to a sneering bum on the corner who didn’t work a day in his life. SOCIALISM IS THEFT! In this framing of the question, of course, it’s theft. The standard arguments defending taxes – that they will build roads – we all know, and there’s no need to discuss them. I want to approach things from another angle and show that, in some sense, any corporation steals the same $20 from every salary, and thus performs exactly the same governmental role. And so, “fair,” i.e., theft-free distribution of earned money – is much more similar to socialism than state taxation, and you don’t need to automatically shudder when you hear that word. The fact that they take our money always, everywhere – it’s inevitability; they take it with communism and with the Ancap – there isn’t really any difference between state taxes and corporate extortion.

Как это работает на практике? Возьмем случайного человека, который где-то добыл $10к и организовал, скажем, завод стульев. Он нанял 2 квалифицированных сотрудника (допустим, юриста и бухгалтера) и 8 неквалифицированных, которые клепают стулья, купил станки, помещение, доски и работа закипела. Пока все идет по плану. Допустим, все хорошо, и фирма принесла сходу чистую прибыль в $11к. Вопрос, как ее делить? Социалист сказал бы: на 11 частей, каждому по $1к, все справедливо. Но мы не социалисты и учтем, что рабочий не квалифицирован и является бурерожденным (и не вложил в то, чтобы перестать быть бурерожденным, ни копейки), а значит, легко заменяем любым бурерожденным. Значит, он заработал меньше всех, хоть и пахал с утра до ночи. Бухгалтер и юрист — не бурерожденные, их заменить сложнее, и они вложились в свое образование, возвысившись над бурерожденным, значит, им платим больше. Ну и, наконец, босс, его заслуга в том, что он выцыганил у кого-то $10к на бизнес, не каждый на такое способен, значит, ему платим больше всех. В итоге рабочие получили, условно, по $100, белые воротнички — по $500, а все прочее боссу в карман.

На практике, однако, наш эталонный план не взлетит. Почему? А потому что быть бурерожденным никому не нравится, как и видеть, что ты сорвал спину, таская доски и занозил руки, пиля их, и так 30 дней, а получил за это в 10 раз меньше того, чья работа сделать пару звонков корешам-богатеям и пару раз подмахнуть ручку. Так что работать такая схема будет только при условии того, что рабочим вообще больше податься некуда — все работодатели вокруг такие же гниды, а на заводе дежурит ЧВК, всегда готовая вломить дубинкой по почкам тем, кто заикнулся о ереси социализма, то есть о профсоюзе, праве на забастовку, праве на защиту труда и хотя бы на один выходной в неделю.

Были ли такие примеры в истории? Неоднократно, в основном в эпоху дикого капитализма 1880 – 1920х. Union Stock Yard & Transit Co — Чикагские скотобойни; United Fruit Company, устроившая натуральный ГУЛАГ на плантациях в Гватемале и Колумбии; угольные титаны США, дубинками полицейских забивавшие под землю рабочих. Я уже вижу, как анкапы торжествующе потирают руки: так их, давить этих комми-паразитов, расстреливать из пулеметов, чтобы неповадно было воровать у босса честно заработанный навар. В общем, да, ровно так это и было, Банановая бойня в Колумбии закончилась тем, что UFCo попросила правительство послать солдат с пулеметами и расстрелять нахер всех бастующих и требующих человеческих условий труда, что и было проделано. И это не единственный случай. Но постойте… попросила… э-э, кого? Правительство? Разгоняли демонстрации у нас кто? Полицейские и армия…? Компании, при этом, налоги-то щедро отстегивали (а кроме налогов, еще и на лапу президентам банановых республик и их государственным генералам и солдатикам, чтобы веселее стрелялось в народ).

It appears that to establish an ideal benchmark Ankap—where the boss takes 99% of the profits and the commoner works from dawn till dusk for UFCo brass tokens, not even receiving a penny (when previously they exchanged tokens for a bowl of porridge in the cafeteria – and continued working)—we would require the most powerful repressive apparatus to instill fear of Henry Ford in those unconverted to capitalism. This would ultimately result in something suspiciously similar—like that very socialist Gulag which capitalists frighten us with—while simultaneously having precedents for constructing even worse projects, such as rubber plantations in the Amazon. We would need to divert enormous sums from this apparatus, otherwise we’d have to sleep with a saber by our bed and a pistol under our pillow, awaiting the arrival of slaves. It is preferable to use a state that we want to eliminate, which feeds its army through taxes.

Let’s remove these horrors and consider it from another angle: we are good and principled Ankapists; we don’t desire a repressive state apparatus nor do we wish to decimate our workers weekly with police force and feed them plastic porridge. We believe that in an ideal Ankap world consisting entirely of corporations, suppressing worker unrest would cost us more than creating human working conditions—it’s a debatable point, let’s just ignore it for now. And there are so many companies that if we offer miserable work for pennies, even the last bum will be hustled by a neighbor-corporat who splashed out on gloves for him to avoid scratching his hands from logs. Consequently, we would find ourselves without workers. This is the main point of those who argue that the state with its leftist unions, taxes and laws about an 8-hour workday spoils everything; in Ankap each worker will live like a king. Let’s assume this is true, okay.

But what does that mean then? It appears we would need to invest in a safe lathe, goggles from sawdust, gloves from cuts, a respirator from the smell of glue; and if we are building a complex company with complex labor, it’s desirable for our workers to have everything, including a fitness center, free psychotherapist and dentist for their son—otherwise smart people won’t come to us, they’ll go to those with better conditions. We see that Apple and various other IT giants actually compete to offer their expensive employees even more bonuses (let’s not discuss the fact that workers in Amazon warehouses will be fined half their salary if they went to the bathroom longer than once a day). But these same bonuses for employees—medicine, vacation, even education—they come from somewhere? Yes, they come from profit, that very profit which could be spent, for example, on the same wages.

So it turns out that, taxes…? Well, basically yes, a corporation can, let’s say, add +10% to everyone’s salary, or not, but open a fitness center for everyone. And yes, maybe I’m a lazy bum and don’t want a fitness center; I want to blow my 10% salary at the bar instead of jogging on a treadmill. But nothing was asked of me – let Vasya handle it, we’ve decided for him, he contributes from his salary to cookies for everyone in the office, we’re creating positive vibes of kindness, don’t be stingy. But, forgive me, what’s the difference between this and a state sports complex built on my taxes? I just wanted a state tavern, didn’t I?! The only objection here is that if you don’t like it when a corporation deducts your salary for a fitness center – well, go to whoever deducts salaries for bars. Okay, but:

1. They’re deducting anyway, and maybe I want industrial cleaner!

2. They deduct +/- equally: on medicine, education, sport – yes, in general, the same as with the state, i.e., it’s all the same.

3. If you don’t like the tax policy of a super-socialist state – okay, bug out to another one where it’s different, like Argentina, which got rid of all social benefits completely, and that’s just the way it is, paradise! The truth is, taxes now go to Milei in his pocket, as well as funding the state police and security services to suppress criminal plots dreaming of state medicine – thieves, scum!

And people dream of living somewhere like Scandinavia, and their happiness index is practically the highest on the planet.

Therefore, we come to the conclusion: it’s not so important what kind of regime we have. They will steal everyone and always, if stealing means distributing money that doesn’t suit you personally, dear reader. The other thing is that all libertarians believe they will manage to get into a future where their (!) distribution will suit them. For example, if they have a child and want a good dentist for him, a therapist for his wife, and themselves – a weightlifter after work – all free of charge – then it’s reasonable to complain about the corporation that provides all this for their efforts. But this doesn’t cancel out the principle: not everyone in the world wants exactly what you want. In any case, someone will take money from someone (no matter how they are called: contributions, taxes, insurance, etc.) for something that is useless to them personally (or they prefer to take it and deal with it themselves, but they don’t let them). So, my dears, don’t panic over the word “tax,” it’s just one form of extortion that will always be with us, under any regime and any economic formation. Because the alternative to such soft power through fitness centers and free cookies – is a soldier with an M1919 Browning, a barbed wire fence, and a brass token for porridge from sawdust in the cafeteria. Inevitably, they’ll get to us forcibly—the difference is only whether it’s on a fist or a velvet glove.

Among the left, there is a certain prevalence of the idea that rights to the so-called means of production should belong to the workers

Imagine an economy where the property of all or most enterprises producing goods and providing services is under the shared ownership of the workers, who gain and lose it upon joining or leaving the collective, decisions are made through the expression of the workers’ will,
and the net profit of the enterprise is divided equally among everyone.

Please provide a critique of such a model. How should one respond to opponents proposing this model? What points should be highlighted? Thank you.

анонимный вопрос

Before imagining an economy consisting entirely of such enterprises, it makes sense to look at how they might form within a regular economy where ownership of the means of production exists.

So, there is a group of people who want to implement a certain idea and intend to start a business. They need a set of competent workers for several different positions, as well as startup capital. Presumably, the workers are there—they are the founders themselves. Where do they get the capital? In a modern economy, they can chip in in certain proportions, and each will receive a share in the founding enterprise corresponding to the amount contributed. Within the proposed model, shares are strictly equal, meaning they must contribute strictly equal amounts, which reduces the system’s flexibility, as a potentially valuable worker might not have enough savings to join the enterprise, or may not be willing to risk them. When the functions of capitalist and worker are separated, this is not a problem. When they are forcibly combined, not everyone can handle it.

What are the alternatives to chipping in equally? One could take a loan from a credit institution. But for a bare idea, a loan will only be granted at serious interest rates. These could be lowered by providing collateral, but the conditions of the problem assume no collateral, and it is impossible to pledge the shares of the future enterprise, because the enterprise must remain in equal shared ownership of the workers, not some capitalists.

But fine, let’s assume a group of people chipped in a very small amount, opened a micro-business, and gradually grew it by investing most of the profits into expanding production—and now they start lacking manpower. They need to hire someone else and allocate an equal share to them, proportionally reducing the shares of each founder. The larger the starting contribution was, the longer they had to deny themselves the basics to get the enterprise running—the harder it will be to make the decision to simply give away an equal share for free. If they intend to hire a highly valuable specialist, the founders will think it over and decide it’s worth it. But with equal probability, it could be about hiring someone with low qualifications. For example, production has grown, delivering to customers independently is no longer convenient, and a courier is needed. And this courier, a position that literally any random person could handle, becomes an equal shareholder in a successful startup? It is not hard to see that old workers will face such psychological problems every time a new vacancy opens.

Similar difficulties await the person who was there at the start, invested a lot of effort into the enterprise, and now, for one reason or another, would like to leave. They realize that they have no way to monetize their share, and all their merits toward the company are wiped out the second they quit. They must now look for a new place and persuade a new collective to take them as a shareholder. Obviously, under the conditions of a well-functioning institution of reputation, a person who was in good standing in one company will be able to find a place in another without problems, but still, relying on the hope of obtaining a share in a more productive enterprise instead of the individual value of one’s labor is not such a flexible scheme.

The real nightmare begins if, due to changes in market conditions or other reasons, it becomes necessary to reduce staff; otherwise, the company will start incurring losses. That’s it, a scandal is guaranteed. Everyone accuses everyone else of causing the company’s situation to worsen, no one is ready to jump overboard and lose their share, but without this, instead of a regular share of profit, all shareholders must instead regularly contribute to a loss-making enterprise in equal shares. It remains unclear exactly how to decide who to throw out. In a regular company, the management makes the decision based on production necessity. But here, everyone is a shareholder, and everyone has a vote. That is, it will have to be decided democratically at a general meeting, and it may very well turn out that it is not the least necessary employees who have to leave, but the least eloquent.

Thus, such enterprises lose to companies without socialist burdens on labor relations in terms of flexibility, and therefore, they will likely fall behind in the competitive race. In essence, nothing prevents anyone from opening enterprises of this type right now in countries without labor codes, like Georgia. But practice shows that few people need this. Even if people unite in an artel or cooperative, they still prefer to retain the right to a share in the company, and upon leaving, they demand their share in money or equipment, and when accepting a new member, they find it justified to require an entrance fee—again, in monetary or in-kind form.

In essence, the entire toolkit of market manipulations with shares is precisely an additional expansion of possibilities over the limited functionality of equal shared conditional ownership, and if it was evolutionarily developed in the course of humanity’s economic progress, it would be very strange to abandon it on a mass scale. But to each their own; anyone who wishes can start working according to this scheme as early as tomorrow.

So, is it a completely unviable scheme? Not at all. Caribbean pirates operated on almost these very principles. You can read more about this in the recently translated chapter of David Friedman’s book on legal systems that differ greatly from ours. In essence, the only difference between the pirate scheme and the proposed socialist one was that the pirates did choose leadership for themselves and paid them not an equal share of the loot, but an increased one. Pirates were also helped by the fact that the problem of startup capital was not so acute for them: they did not build ships, they captured them. But socialists, in fact, can quite well envision their system as the expropriation of existing enterprises from owners in favor of workers, so they can be just as successful as sea robbers.

Thus, it can be stated that within the framework of relatively simple economic activity, and especially in resource economies with low capital intensity, the socialist scheme can quite well take root, but the more serious the division of labor, the more difficult it will be to adapt it to the needs of the collective members, and the closer it will in fact resemble a regular market scheme with private ownership of the means of production.

Speculation during an emergency

A few days ago, the New York police arrested Baruch Feldheim, who had pre-emptively bought up 192,000 masks and 600,000 gloves (and many other goodies) to later sell them to medical professionals and ordinary citizens with a massive markup (around 700%).
How would anarcho-capitalism deal with such speculation during emergencies?
On one hand, he acted exclusively through market methods and sought to maximize profit; on the other, his actions could very well have cost someone their life.

Slava Mahorkin

So, imagine it is the era of ancap; everything is calm in New York, while there is some local epidemic in China. No one cares about it, no one is panic-buying masks and gloves, no one is closing borders, and at the hour destined by fate, the epidemic breaks out in New York. Suddenly, everyone rushes for PPE, instantly clearing out the small warehouse stocks, and collapse ensues. Later, of course, everything will resolve itself—supplies will be brought in from where there is no epidemic, production will be expanded, and so on. But at first, there will be chaos.

Now let’s consider another scenario. There is some local epidemic in China, no one cares about it, but the vigilant Baruch Feldheim is already buying up masks and gloves. Pharmacies face increased demand, order more, and just in case, raise prices by about ten percent. Blogs write about the price hikes, linking them to the distant Chinese epidemic, and now other anxious people start flocking to pharmacies, just in case. As a result of the increased demand, PPE production begins to increase long before the epidemic reaches the USA. Consequently, when it does happen, it is met fully prepared: output has increased, warehouses are full, and everyone who wanted to protect themselves can do so. Riding the wave of hype even before the arrival of the epidemic, Baruch Feldheim sells most of his stocks at double the price, making a good profit, and keeps the rest for personal use or to sell even higher if the occasion arises.

And finally, let’s consider a third scenario. There is some local epidemic in China, no one cares about it, but the vigilant Baruch Feldheim is already buying up masks and gloves. Pharmacies face increased demand, order more, and just in case, raise prices by about ten percent. Blogs write about the price hikes, linking them to the distant Chinese epidemic, and now other anxious people start flocking to pharmacies, just in case. Meanwhile, the epidemic in China is localized and fizzles out. The vigilant citizens find themselves sitting on a pile of junk, pharmacies are overstocked, PPE prices drop, and gradually the unlucky entrepreneurs sell off their illiquid remains, recording small losses or even breaking even if they manage to maneuver skillfully.

Speculation is an attempt to earn money by predicting the future. If the speculation succeeds, the future turns out better for both the speculator and those who bought from him. If it fails, it is the speculator’s problem. But if a society develops a habit of punishing the speculator for his success, then the second and third scenarios described above will be closed off to him. No one looks to the future; everyone looks warily at their neighbors, fearing they might provoke envy and get punched in the face.

Yesterday I wrote about Somalia and mentioned a lecture by Vladimir Zolotorev, where he talks about Somali law. Capitalism did not happen there precisely because any personal success is considered accidental luck, and its fruits must be shared with the clan. The same nonsense reigned in Melanesia and among North American Indians with their potlatch culture; the same thing happens in today’s USA, although, it would seem, Indians have long since stopped living on Manhattan.

The question of the socialists’ place in the KU

What is the point of rooting for CJ if it’s obvious that the most hardworking and lucky people will choose a CJ that is more pleasant in terms of tax contributions, rather than CJUSSR2.0? Who is going to feed them?

анонимный вопрос

In the article about FCJ recently translated by our team, the approaches to how consumers choose certain jurisdictions are, in my opinion, covered quite well. I want to draw attention to the first two letters of the abbreviation: these are not just contractual jurisdictions, they are also functional and overlapping.

Indeed, a purely socialist jurisdiction providing all types of services simply will not survive in the market, especially if it is contractual, meaning one can freely exit it. A socialist jurisdiction is effective when it provides the service of delivering public goods with a strong positive economy of scale.

Examples of such spontaneously emerging jurisdictions are analyzed in detail in Elinor Ostrom’s book “Governing the Commons”. For instance, mountain pastures are extremely inconvenient to divide into small plots, and they are used for grazing by residents of several surrounding villages. To prevent the predatory exploitation of this rare common resource, they develop their own complex system of norms and enforcement, thereby forming a functional contractual jurisdiction. However, this jurisdiction is responsible for conflict resolution only regarding the pasture and does not interfere at all in matters such as school education. And in this sphere, for example, a network of public schools funded on a parity basis by all CJ members (socialism again!), a private school paid for by students’ parents, and a private school funded by an endowment fund can compete perfectly. This is exactly an example of overlapping jurisdictions.

Ancap-chan

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Тег: Socialism