I understand that government has an important, but limited role in a free society. That role being primarily to protect the rights of individuals from foreign invasion, criminals, and also for the establishment of courts for the settlement of disputes. My question is: how do the followers of the Austrian School of Economics propose to fund these functions of government? Thanks.
Many of them don’t propose using government at all. Rather, they prefer free market solutions to problems such as the ones listed. See: For a New Liberty by Murray Rothbard, The Myth of National Defense edited by Hans-Hermann Hoppe, and Chaos Theory by Robert Murphy (among many others, these are just the ones I’ve read) for ideas on how this might work. All of them are available online for free through the Mises Institute website. Also, you might want to check out The Market for Liberty by Linda and Morris Tannehill, which you can get a free audiobook version of at http://freekeene.com/free-audiobook/
Others, the georgists, support a land tax, based on the unimproved value of the land I think. Look up Henry George on that.
Yet others support a purely voluntarily funded government. Most notably the majority of objectivists belong to this group.
I haven’t finished reading “Human Action” yet but I have yet to see what form of taxation Mises favoured. He must have presumably favoured some form of taxation since he advocated some degree of government.
True.
In fact in TEOL Rothbard points out that the minimal government advocates have yet to come up with a cogent theory of taxation.
If natural rate of unemployment of 2% is considered fine, and 2% of interest rate is considered as a low interest rate (well, nowadays central banks are going to extremes and are going much lower than that, but 2% used to be reasoinably low until recently), couldn’t we say that a 2% rate of taxation would be small enough not to be perceived by those governed, and high enough to meet funding requirements of a properly managed, limited government?
I work for a company where there is a lot wasted funds by upper management. I have little by little identified the unnecessary areas. By the same token, I am sure a similar job could be done for government. It would only require officials not interested in corruption. Such people should exist somewhere even if they haven’t been found yet. Couldn’t a government budget with limited functions be prepared counting with revenues of only 2% of national income?
Rubén: they’d spend more than that just finding the incorruptible people to serve…and then they’d have to force them into service against their will…
(And why should people pay a percentage of their income, anyway; why not a fixed price?)
Why would you succeed where every generation of men has failed since the dawn of civilization?
How about 2.1%? 2.25%? 2.7%? 3.1%? 5%? 10%? 50%? 100%?
Where’s the arbitrary line going to be drawn?
Any amount taxation is theft and is therefore too high, I daresay if you were to be robbed and the thief’s defence was that he only took 2% of what you had you wouldn’t be convinced, now what if we give said thief a name, the state.
That’s the problem.
In a realy free society a State cannot exist.
State is ,by it’s nature, against freedom.
I believe that Miseans will always speak for freedom and will never fight for something as a just amount of money or freedom that can be robbed by anyone.
I’m pretty sure that the Georgists couldn’t be described as ‘Austrians’ by any stretch of the imagination.
The whole theory is based on a negative right to land possession where the ‘collective’ gets to tax the land owners in order to keep them from absorbing all the productive gains of the society because, as they claim, the only place for the profits from any technological improvements to go is to the ‘rent seeking’ landlords.
They also seem to use ‘rent’ (the charging for the exclusive use of land) and ‘rent seeking’ interchangeably with the assumption that renting land = rent seeking.
It is my belief that in a free market you would have usage fees.
Exactly. Every generation has failed in such an ambitious goal. That is why I do not considr seriously the assertions of a no-government world. Why not settle on a minimum government possible? Perhaps I went too far by suggesting 2%. Perhaps 3% is still too ambitious. Economics & Statistics are in a highly developed stage such as a proper figure can be calculated to draw the line, as long as people in office have the morals AND THE GUTS to live by the standards they boast for.
May I introduce you to the problem of economic calculation in the socialist commonwealth?
By the way, the people in office will never have the morals and the guts to live by the standards they boast for. They are just people. Unless you can find some superpeople, your plan is as doomed as any other socialist plan.
Thank you for suggesting me to read the article, with which I am in agreement. Entrepreneurship works best privately, financial markets must be advanced, and the other topics outlines in section 1. I also agree with part 2, that states that implementation of central planning decision poses problems.
The article, however, is stating nowhere to get rid completely of the government. Therefore it is safe to assume that the authors favor a small, limited role of government. Such a limited government needs modest funding. I was proposing on an earlier post to calculate a symbolic tax rate of 2 or 3% in order to finance such a small government. Comparing to the 30% or beyond that lots of people pay in taxes everywhere, I believe my proposal is as close as No-Government as anything can be.
Can you back this assertion at all? Mises’ work on the socialist calculation problem shows that no central planning agency can synthesize all the information of society to set a number like 2%. Any number they set will be arbitrary. That’s what the market is for.
You don’t know that. Maybe it really does take 30% of people’s income to properly govern them. And where do you get the idea that government should be limited? Maybe people are better off getting a cup of coffee along with their government.
I started reading Chaos Theory as suggested by Morty, but I quickly remembered that anarchy promotes tribalism with competing warlords. Since the right to life is unalienable, I believe no market for rights or the protection of those rights can therefore exist. This is seperate from the market that can and does exist for the protection of actual life and property. My original question is now reworded as such, “How is the protection of rights funded in a free society?” Katja328 (or someone else), can you please explain the idea of usage fees? I like the idea that all individuals would owe an equal dues for the protection these rights. I wonder, as others have pointed out, how these dues would be assessed?
Really? Can you back up this claim? I can’t say I agree at all.
How does that follow?
Ruben, I suggest you read R.A. Heinlein. He had some fun ideas on how to fund a government without taxation. I believe, a lottery was one of them.