how to properly smash the 'high taxes = prosperity" argument

[EmperorNero]

@Rettoper

The US isn’t a resource stealing enterprise, the US military doesn’t make a profit. Profits that are made across the US economy are made with trade and entrepreneurship and farming and whatnot, not stealing resources with the military. Wealth is created in the US despite 4% defense spending, not because of it. (I’m not arguing that we don’t need defense, but economically the military is a money-losing venture.) Holding the net profits of the US economy in contrast to defense spending is a completely meaningless comparison. That’s sort of like saying “I spent 5000 on heroin last year and I earned 50.000 at my job, ergo heroin is worth it.” --nero

the point of my post was that a wasteful, inefficient, and non-profit military establishment within a nominal statist framework only requires 4% of GDP to gain and maintain global hegemony.

my point is that the costs of coercion are not great – indeed they are less then the percentage of GDP that profit consumes.

The costs of coercion may not be great, they may be less than we have, but they still aren’t worthwhile. The costs of heroin in my analogy above were less than income, does that mean that heroin is a good investment? That we have enough money to make a purchase does not mean that it is a worthwhile purchase. Your whole argument is that the use of coercion would be profitable for businesses in a stateless society. Producing military force - buying tanks and paying people to drive them - wouldn’t be profitable.

@Rettoper

moreover,the carrot of profit and stick of coercion are critical elements motivating the owners of valued resources to more effectively utilize resources since:

in the case of profits, they will increase net worth.

or in the case of coercion, they will lose net worth.

both are essential to an efficient functioning capitalist society.

Nobody cares whether capitalist society functions efficiently, and nobody acts to make capitalist society function efficiently. People act to make themselves better off; for profit. That some action is in the interest of capitalism is none of their concern.

@Rettoper

Defense is not the operating cost of the united states. No defense agency with a huge military force would break even, they have no income unless they also run a free market business. And in that case the military expenses of that company would merely be a useless expense.–nero

wrong, what do you call military expenditures if not an operating cost of the US government ?

Maybe the operating cost of the government, not of the US as a whole. The military doesn’t make any profit. If the US was a company, it’s shareholders would eliminate most of the military because it’s a money-losing department. The military isn’t a profitable venture, it’s marginal utility is negative. It’s like a mall cop; the mall might need him to protect profit from other sources, but he doesn’t earn profits for the mall.

@Rettoper

moreover, if the military was used to acquire valued resources or to defend valued resources – then it would result in increased resources or protecting existing resources.

It still wouldn’t be worthwhile. You pay a billion to get half a billion. I’d rather invest in shoe stores. That’s the whole issue. You have to make the case that a business that maintains a force to steal resources could break even. You don’t even have to respond to this post quote-by-quote, just make a case how a resource-stealing-PDA would make a profit. I.e. that the cost of buying military hardware and paying soldiers would be less than the profit from stolen ‘gold mines’.

@Rettoper

by your definition, security, insurance, hedge investing would be useless expenses since they have no income.

By my definition of what? I don’t understand. These investments would be useless to whom, the one making the investment or the one offering it?

@Rettoper

If an attacker blows up an oil platform, he can’t exploit it either. It’s just not a feasible business model to spend billions on military hardware in the hope of recovering that investment by stealing some natural resource. I will look at your other thread, but it seems pretty long, I wouldn’t know where the important part is. — nero

who says they are going to ‘blow it up’ ?

Well, if you’re coming with paratroopers to steal my oil refinery, I’m gonna have it rigged with explosives. If you appear to win, I’ll blow it up and you get nothing. The threat of self-destruction is really the only defense a resource needs, it makes every attempt of making a profit by stealing it unlikely. So nobody will try to steal it.

@Rettoper

who says that 4% or less of societal GDP spent on defense is wasteful or not feasible ?

I am. So far you’ve given me no reason that any kind of large-scale force has positive marginal utility. You can’t consume tanks, they are capital. Capital that produces less profit than it costs is wasteful and not feasible.

@Rettoper

Indeed, profit consumes over 5% of GDP, is that a wasteful or counter-productive percentage ?

Profit does not ‘consume’ any share of GDP. It’s just the name we have given to a particular way of money changing hands. Profit consumes a share of GDP as much as ‘mortgage payments’ consume a share of GDP.

@Rettoper

was it wasteful for the colonists to annex native american land by force ? Then why did they do it ? would the indians have been better served by spending more on defense ?

The colonization of America was an example of the cost of equipment and manpower being less than the value of the resource they wanted to conquer. I don’t see that situation existing anywhere in the modern world. Native Americans didn’t have a propertarian society. And I don’t think a historic example of a situation where coercion was profitable proves that coercion is profitable in general.

[Rettoper]

The costs of coercion may not be great, they may be less than we have, but they still aren’t worthwhile. --Nero

I disagree. The threat of coercion forces negligent owners of valued resources to leverage these resources economically to their most effective use – hence society as a whole benefits with more resources in play. Similarly, the profit motivate does the same thing. It leverages talent to achieve more productive and less costly uses for scarce resources.

both consume approximately 5% of GDP and both are beneficial and critical to societal economic health and well being.

People act to make themselves better off; for profit. That some action is in the interest of capitalism is none of their concern–nero.

I agree. Moreover, if a profit driven actor determines that coercion will ‘make themselves better off’ – then coercion it is.

In sum, you are correct that capitalism doesnt concern itself with the means used to achieve profitable ends.

By my definition of what? I don’t understand. These investments would be useless to whom, the one making the investment or the one offering it?–nero

insurance is an operating expense that protects against loss — similarly security is an operating expense that protects against theft.

I think we both agree that they do not generate income, but they are both essential components in a capitalist system.

Maybe the operating cost of the government, not of the US as a whole.-nero

the operating cost of government is an operating cost of society as a whole, or profligate government spending would be of no concern to private enterprise.

The military doesn’t make any profit. If the US was a company, it’s shareholders would eliminate most of the military because it’s a money-losing department.–nero

True, within a liberal democracy the military has built-in inefficiencies and divisions of power among the disparate military branches, intelligence gathering, funding, oversight, distribution of funds, et al. Hence it is not made for efficiency – it is made to forestall the emergence of absolutism while still providing a credible deterrent to aggression from statist regimes and threats. nonetheless, despite this decentralization and inefficiency the military consumes a paltry 5% or less of GDP.

In addition, you are correct that the military of liberal democracies are not primarily motivated to generate a profit. THeir primary role is the preservation and promotion of life and liberty.

IN contrast, ancap defense agencies would be wholly motivated by profit, hence more efficient and profitable – and definitely more lethality/$$$ than either statist or democratic military machines.

I will answer the balance in a later post.

[EmperorNero]

I’m going to respond to your post in detail in a moment, I just noticed you didn’t address the question of how a resource-stealing-PDA would make a profit. Which is the core question. How would the cost of buying military hardware and paying soldiers add up to less than the profit from stolen ‘gold mines’? Because if it doesn’t then it’s not going to happen. That states spend roughly a twentieth of GDP on military defense does not argue that maintaining a military would be profitable for private entities, what states spend on defense is a non-sequitur argument in this debate. You are suggesting that in a stateless society businesses would engage in a money-losing venture.

[Rettoper]

Nero,

I will respond to your arguments in the following thread:

https://forum.freecapitalists.org/t/why-coercion-is-an-essential-and-beneficial-element-of-maximal-capitalist-society/15066

thanks,