An attempt to justify taxation

Hi Loftin.

Welcome to the Mises forums. It looks like your getting the hang of the quoting system. Try to “edit” previous posts instead of making new ones.

Can you clarify the following statement?

And to clarify the following

It has to do with the formation of meaningful prices. By socialized goods I mean coercively distributed and funded goods.

Regarding the welcome -very kind. I don’t expect to be a very long-term contributor (my interest attaches to this particular topic more than anything), although the conversations are pretty interesting and lively - discussion is good when people keep it substantive.

Regarding the fact that I am forum-challenged (an assertion I would not deny), I kept getting messages saying that there had been an error and that it hadn’t been posted … so I kept submitting … as you can see.

Regarding the first request for clarification, I want to be clear that the quoted selections are not my own so I cannot claim to have the last word (or the first, for that matter) on what the original intended meaning is/was. I provided the relevant reference information for those interested.

With that disclaimer out of the way, I believe (i.e. my opinion regarding) what he is saying requires the rest of the sentence. Here it is:

“It is not self-evident that each has the right to the product of his labor since that product is not independent of the economic structure or of the initial distribution of endowments that individuals bring with them to the market.” (p.75)

He later says the following:

“Private rights require the support of a collective body.” (p. 79)

What I take away from his article is that the products of our labors as individuals are often not entirely free of input from collective productive factors and that as such we should be careful about making absolute declarations of ownership on that account. Here are a couple more excerpts:

“Introducing a collective agent with the power to define private rights over property leads to greater production by the community. Such collective action can realistically be thought of as a productive factor and thus -as generating a rightful claim to a share of the output. Indeed, the rent accruing to those scarce factors, now privately held, cannot be thought of as naturally theirs-it exists as a joint product of the scarce factor and the (equally important and equally scarce) collective factor.” (p. 79)

“Thus, Nozick’s notion of full rights to the fruits of a factor’s own input is ambiguous and surely cannot be equated with the untaxed payment the factor actually receives. This payment is not independent of the collective agent’s factor input. However, the state cannot claim all of the output - output increased because a private agent, using the collective factor, husbanded the scarce resource, which had been commonly held. It is the joint employment of a multiplicity of factors that generates the flow of output to which these factors, in turn, lay claim.” (p. 79)

I don’t agree with a number of the things the author says in the article; but what I do believe is that effective property rights are a consequence of the institutions, laws, etc. that we collectively have put in place; and that their production is a costly activity that self-interested individuals have reasons to want and to be willing to pay for. Bringing it back to what we own - the labor of our “own” efforts, I think what this author is suggesting (and which I believe ultimately has implications for the choice of tax base) is that our property rights, when they exist, do so in some sense in virtue of the social frameworks/structures within which we live, that there are good reasons for collectively defining and enforcing property rights, and that value is added as a result of this collective action that can render attribution of ownership of individuals’ productive efforts more complicated than is typically admitted. I don’t know if this helps, or just confuses people more.

My apologies for being so long. Some things cannot be adequately explained in one-liners - or even in 3- or 4-liners.

On a related point, it is important (it seems to me at least) to recognize the fact that to the extent that people are able to move to other nations where the property-rights/tax obligation mix (a sort of quality/price variability across producers) differ; they cannot, strictly speaking, be described as being “coerced”. If I don’t like the price that one grocer is charging for a gallon of milk, I am free to go elsewhere. If I don’t want to pay for property rights, maybe I should move to Venezuela where I won’t get much in the way of that benefit - it’s a trade-off.

In the end, what I have tried to point out is that we can put government goods/services in a market framework by realizing that as people are more and more able to “shop around” for the mix of attributes and price that they desire, the kinds of disconnects that currently exist between what consumers (economically) gain from government and what they pay for it should result in a greater alignment of the two (benefit and “price”). There are reasons to believe that people should value property rights in a manner that is roughly speaking proportional to their net wealths; so, I suggest that wealth should be the basis (e.g. rather than income) for taxation since property rights are the most fundamental economic product characteristic of “government”.

No problem. Most of the article read as a clever way of justifying socialism.

So to summarize private property is only legitimate because of positive law. To keep the concept of private property legitimate we must pay our dues in upkeep of that positive law.

It’s a chicken and egg argument though. The idea that the concept of property was realized only by positive law is most definitely a fallacious one. Man’s behavior which exhibits protection of his own objects can be found back to times before governments even existed or had large influence. Man’s concept of property predates formal positive law.

If property is not axiomatic this may be a conclusion many come to. IT sounds like that is what Scineram is getting at. I beleive it is more evident however that private property exists as a natural phenomena, it is a desireable phenomena of man. Protection, property, and rights are a part of human action. It is nearly axiomatic that man creates property, not because of positive law but because of his nature. He is inclined to homestead objects and bring them into productive use by his own merits. All his actions are employing objects he owns or objects that others own of which he has agreed to assist in employment.

This can easily be proven by eliminating the coercively distributed security services that exist today and allowing the market to fill the gap. Without a doubt insurance agency’s and PDA’s would form up probably over night offering such a service. The argument above however stipulates though that without positive law and a social apparatus of coercion the concept of private property would be lost, and un-protected. It is non-sequitur at best.

The concept of property predates positive law and widespread government. Man’s actions alone, without government interference, shows behavior of having property and preferring to have property.

There is also the economic issue. There is no calculation in coercively distributed services.

This is a common mistake. The above statement is ONLY true if we assume that the State owns all property in the entire nation. And that we are only paying rent to occupy that property. It has yet been proven however that the state has a legitimate claim over all the land in an entire region.

It is entirely coercive. People are forced to do things violently against their will, or suffer the violent consequences.

This is a bad analogy. When you are in a grocery store you are occupying someone else’s property, they are not occupying yours. A more acurate analogy would be as follows.

Lets say you move to a neighborhood. The first day there a man shows up to your new house and tells you he will occupy your house for free and rape your daughter every Friday. He will also extract 30% of whatever income you derive. If you don’t like it you can choose to move else where.

Given my example you can see that it is a clear invasion of property. The argument “Like it or leave it” is inherently flawed. If the land is mine there is nothing to like, they are stealing it’s wealth from me. It is entirely coercive. If this is not the case it must be proven how the land is not mine.

If you don’t like me raping your daughter your free to move to another neighborhood.

See why the argument does not hold up well?

The stockholm syndrome would describe a situation where you may not recognize state violence when you see it. Ironic though that if wealth is stolen from man to man you see plainly that it is theft. Though if wealth is stolen from man to the state you say that it is ok. The view is inconsistent. You seem to have become apathetic to the violent actions of the state, to the point that you do not even see that when you are kicked off your own property you don’t realize that it is done by coercion, force, and violence.

The only way meaningful prices can form, and as such correct economic calculation, is by collective valuation done at an individual level subjectively from person to person. Consumers create market prices. Without consumer sovereignty there is no economic calculation. The state would have to somehow reconcile this with taxation which is in direct conflict with the formation of market prices.

So we should punish and stifle the productive portions of our economy and squelch the profit motive. If you happen to be blessed with the ability of being highly productive we will punish you, steal your wealth, and distribute amongst the less deserving masses. Not the kind of solution I had envisioned.

You act as if property is not backed by coercion and threat of violence.

It is, but what of it? You’re in the habit of making silly questions, to be frank, that are not unknown or even unanswered in libertarian circles.

That’s not true. Some individuals may abstain from crime because they fear retaliation, but that’s not the case of the majority of civilized people. So scineram, as usual, you are wrong.

[Y]

And If anything securty is an accessory to property.

No, and you just admitted it. Two contradictory sentences after another.

I read three sentences, no two of which are necessarily contradictory, so help me out a little here…

Here he conceded my point. So I was right. Then he said I was wrong.

you made a statement that category A is necessary for category B.

A coercion/violence

B property rights.

he said this was not so as property rights may function through understanding and respect. thereby undercutting your ‘necessary’ connection between the whole category of A and that of B.

disagree?

Yes. How many people are in jail for theft or trespass?

There must be thousands, I do not know any personally. the point being?

As I said, I don't agree with much of what the article says – I mean I don't believe the reasoning is air-tight. But it would seem better to identify and expose the errors in reasoning than to characterize the piece as you have above. Anyways, my apologies if you found it not worth reading. While I don't know anyone here well enough to label them as dogmatic; I would suggest that dogmatism breeds certain kinds of extremism and generally encumbers the learning process. If you start out with the axiom that collective action is always bad, you will of course find little value in the article.

This said, what I found of interest in that article (what I take away from it) is that there are ways in which value can be added by allowing for the existence of a collective dynamic. Indeed, one is left wondering (if collective actions are to be seen as inherently “bad”) why governments so often come into being through the interactions of self-interested individual human beings.

I don't think I would use the words “only legitimate” as you have above. Clearly, as you point out, we can conceive of a notion of property that exists independent of the kinds of formal government forms that we see in the world today. (For example, the complete absence of formal government would seem to induce a notion of property characterized by the “law of the jungle”.) But the existence of a “lowest common denominator” notion of property or ownership does not preclude the existence of alternative conceptions of property induced by more sophisticated systems of law (forms of governments).

I've already explained why the above is not an accurate characterization of what I've written: I have nowhere claimed that there is no concept of property or ownership that exists independent of human law or government. But existence does not imply uniqueness, even less optimality. If other notions of ownership exist (e.g. associated with differing systems of law – governments) then it seems like it would make sense to consider their various properties with the purpose of identifying the conditions under which each is most sensible.

I'm not sure what it means for property to be axiomatic. Nor what it means that “man creates property” – unless lions and hippos also create property as they act in self-interested ways. While the desire to define (potentially different) notions of ownership naturally results from the self-interest of interacting individuals, as the article reference suggests (the example provided there motivates a desire to shape the definition of ownership in a way that benefits the group in a potentially pareto-improving manner, if I remember correctly) collective action may mediate the self-interest of individuals in ways that result in property rights that are more complicated than simple analogies to the animal kingdom (or for that matter to the early, unobserved, and largely hypothesized organizational forms of humankind) might suggest.

It's an interesting form of proof to be sure – basically a thought experiment. I think it's quite likely (probably even certain) that the market would indeed fill in the gap as you suggest. I guess the unstated assumption is that markets will be more efficient and therefore the outcome is better. Is that right?

I've already explained why this argument is not convincing to me (which doesn't mean it shouldn't be to you - or to anyone else). The matter of efficiency of markets over government is more convincing; but I guess I have generally taken for granted the “need” for government as I explained in an earlier comment. For example, I wonder why governments exist if they are so much less efficient. Why is it that time after time, century across century, we associate and form governments? The fact that this is what has happened in the past is no proof that it is in any sense optimal (for the same reason that I cite above), but it does seem that it requires some explaining.

I'm not sure I understand what the second sentence means.

It is the high regard for the market mechanism that I applaud (i.e. that "isn't in my opinion a bad thing), not the more extreme conclusion regarding the value or eventual demise of government (e.g. nation-states) as we know it.

This is where it falls apart. The caste/class system begins to take shape. Taxation will just expand until it consumes everything. It always has it always will. Then we begin again.

Wow sorry, It only showed the first three replies when I clicked it.