In the past I have fallen into the habit of talking about the problems society faces, mostly from coercive government. These are real problems of which most of us are aware, and there is copious discussion on these topics in older posts on this blog. But at some point, we need to stop identifying the problems with society, and start formulating solutions. Continue reading
My second major work of fiction has been published! A fast paced dystopian thriller, Flight Grounded follows a Vermont man named Jake Evans as he flees from agents of the state in an attempt to escape to Canada after being accused of carrying out a terrorist attack. Continue reading
I often argue that people would be better off without a coercive state. During these arguments, I am put in the position of explaining how the absence of government would lead to utopia. I am asked how this new system would be perfect, while the other party defends an imperfect system. Continue reading
This is a discussion I had with a vehement statist on Facebook. I shared it here in its entirety, adding a little commentary along the way. I was happy to have this discussion since it stayed on point, and no one was too rude. Most people, I have found, won’t engage if you disagree with them (except with insults), so this was a unique perspective to get.
Interestingly enough, the liberal engaged me on Facebook much more than the conservative who was posting pro-torture memes and articles (the conservative did not respond to my questions of whether stooping to the low of torture would make the US safer, or if using medieval means can justify the ends). It makes me think, “Am I the only one who feels like a conservative when arguing with liberals, and a liberal when arguing with conservatives?”
Anyway I commented on an article the liberal statist shared. He was angry (and rightfully so) that the FDA instituted a lifetime ban on gays donating blood. I already knew the FDA was as terrible as any other federal bureaucracy, so I thought I might take the opportunity to point that out. I’m Joe Jarvis for anyone unaware.
The sarcastic person obscured with red was not the same person (represented with blue) who continued to engage me politely for the rest of the discussion. I found it interesting that despite a sweeping negative decision by the FDA, Mr. Red would still prefer the government to institute across the board decisions, instead of allowing individuals control over their own experiences.
The philosophy seems to be that individuals are weak and powerless, too stupid or at least too oppressed (not by the government though) to educate themselves or figure our how to get quality healthcare. And that individuals are too greedy to help their fellow man (by patronizing charitable businesses) unless they are forced to by the government. (The contradiction is that the government is made up of people, so if it is the case that people are greedy, so will the government be greedy).
If we don’t give the government more power to control education and healthcare, we will end up living in Panem, controlled by an oppressive government who denies education and healthcare to the poor? Woah that made me dizzy. How is it that taking power from the government and giving it to the individual will bring us closer to the distopian fascist state depicted in The Hunger Games? Even Katniss educated herself (with the help of her father in earlier life) to hunt and provide for the family. And Katniss’s mother educates Prim on natural medicine. In the end, the education these girls obtained on their own, despite the government’s obstruction, helped to free them from the oppression of Panem.
Also, how is people “intelligently elect[ing] their leaders” working out? And does that not suggest those in power will design education so as to remain in power?
I assumed Mr. Green was talking about the original post? Notice that Mr. Blue does not defend or acknowledge the subsidies, grants, and bailouts, even though he made reference to cheap unhealthy food. He does not respond to my assertion that the government caused these problems, and thus should not be trusted to solve them. Instead he shows that he believes workers to be like slaves, bringing back the helpless individual philosophy.
And has he not noticed that public police forces are currently murdering the poor? As always, all the evils created by government are blamed on the free market. The dire predictions about an unrestrained market are already unfolding in a controlled market, with the government carrying out the worst violations.
He believes those who willingly work for a company in exchange for pay are more like slaves than a tax payer, who has some percentage of what he earns or creates taken by force. Supposedly what the government takes will be returned (education, healthcare, roads), yet it is not an agreement. I cannot choose to forgo the “benefits” of government and not pay my taxes. I can do exactly that in regards to a company’s services and products.
Somehow a government has more incentive to educate the citizens than an individual has to become educated? Again, people are not helpless, especially in a world with the internet, where it is easy to pursue your own education. And history tells us governments have an incentive to create a population of sheep (Hitler youth, Soviet propaganda, suppression in China, the lists goes on and on). Currently our government sees innovators as more of a threat to their power structure than a boon to America’s position in the world (look at the regulatory trouble Tesla is having selling their efficient cars direct to the consumer, while the bailed out company GM is having market trouble with their electric cars).
Mr. Blue stated that it is better to have an educated and healthy society, but never argues how the government will do this. As it stands, the government is failing on both accounts. So he points to the government as a means to achieve an end, yet does not explain why that end has not been achieved, nor how it will be achieved moving forward. In fact the decline in quality American education since the federal Department of Education was created would suggest the government cannot improve education, or at least has not in the modern era.
I thought perhaps I’d get a “like” as a gesture of good will on my polite departure. Perhaps he did not enjoy the discussion as much as I did.
High tech companies benefit from educated workers, and benefit from not being racist or classist (bigger pool of workers to choose from, and market pressure to not be racist assholes). Public schools disadvantage the same people he claims private schooling would disadvantage. Parents are most to credit for any well educated children in today’s society. In a freed market, companies would need to work harder to attract employees, and thus offer more: education, healthcare, charity.
All said and done, it seems the worst case scenario for getting government out of the market would be… ending up exactly where we are now. And in reality, most societal ills that currently exist, yet are blamed on a free market (which doesn’t currently exist) are caused by the government, and their unbridled force.
I can’t help myself. Every time I see an article headline smugly bragging to have debunked libertarianism, I have to click! I have to see, is this an argument I haven’t heard before, or is it the tired old, “look how evil capitalism is, here are my references from crony capitalism”.
So far, that is all I have found. Writers list everything wrong with “free markets”, and then give examples from a government regulated market about how bad business is when left to their own devices. It is exhausting. I can’t tell who is honestly too stupid to see the difference, and who is willfully deceiving people.
A free market is when all economic transactions in a given area happen without coercion. Only mutually beneficial transactions and trade take place.
The American market is one plagued by coercion, from taxes, regulations, and laws. It also sees its fair share of intervention in the form of bailouts, subsidies, and grants.
The former is met with scoffs. They say, “Well when has there ever been a free market? They don’t exist”. Uhh yeah, that’s why we are trying to create one. Markets have existed however that were close to free, and these consistently perform better in moving all of the society forward.
This is not conjecture, it is economics. Somehow anti-libertarians become science haters when it comes to economics. Supply and demand is considered not proven; economic incentives and disincentives to them sound like talking points, but reality shows they are closer to mathematical principles.
Here’s how a free market helps people. It allows some people to amass great wealth through providing the masses with something in demand. Part of this wealth will be used to demand another product or service in turn. This demand provides others with economic opportunity to supply the demand. This supplier then amasses wealth, and can likewise use the excess to demand another product or service, etc. until the entire society is riding around on hover-boards.
Here’s how a controlled market ends us up exactly where anti-libertarians think the free market lands us. The middle class is taxed the most, because the rich can pay off the right people to get tax loopholes, and the poor are exempt below a certain income, or net a positive cash flow (they pay taxes, but receive more in housing, welfare etc.).
These tax dollars are then redistributed by the government to corporations in the form of bailouts, subsidies, and grants. Despite market disapproval, certain companies persist because they are funded by our stolen tax dollars. Sometimes the government even gives favorable court rulings to a company which had bought them off, such as with Monsanto. Sometimes the government regulates a favored company’s competitor to non-existence, such as using the FCC to crush cable and media alternatives.
Yet anti-libertarians will say, “look, we have only a small handful of people controlling media! Free markets don’t work”. And that is when I bash my head against the wall because it cannot get any clearer that government intervention into the market caused all these things.
Pollution, sketchy bank dealings, fraud, ponzi schemes, cover-ups: they are all either facilitated by the government, or kept from the public view by government. That means the market cannot properly respond in order to regulate these businesses. People mistake this inability for self regulation in a government controlled market as the inability for a free market to regulate itself.
No not magically. That’s what they all say, we think the market will magically regulate itself. They forget the market is us, consumers, individuals who will choose where to shop and what to buy. If people think the FDA, USDA, FCC, EPA and so on and so forth will regulate business properly in their place, they get what we have now, crony capitalism.
And yes, crony capitalism does indeed lead to inequality. Use all the examples from the regulated American market you want, they all prove this. Most of the “free market doesn’t work” myth relies on people mistaking the American economy for a free market. But it should be quite blatantly obvious that it is not a free market, and has not been for over a century at least.
Could This Article Be Different?
So when I saw the article, How Piketty’s Bombshell Book Blows Up Libertarian Fantasies, part of me hoped that it in fact did. When you are after truth, it is not so scary to find out you are wrong.
It starts with some Milton Friedman quotes about how focusing on freedom will lead to liberty and equality, while focusing on equality will lead to neither. But alas, the bombshell?
Well, that turns out to be spectacularly, jaw-droppingly, head-scratchingly wrong. The U.S. is now a stunningly unequal society, with wealth piling up at the top so fast that an entire movement, Occupy Wall Street, sprung up to decry it with the catchphrase “We are the 99%.”
How do I reach these kiiiiiids! What a bombshell! You mean a regulated market has not performed the way libertarians say an unregulated market would perform!?! I say sir, quite the academic conclusion!
And you know, zoologists once thought that horses ate hay, but it turns out pandas eat bamboo. How can people keep claiming that horses eat hay when every single panda we observe eats bamboo!!!
Well they’re both mammals, and the claim that the mammal horses eat hay has long been a rallying call for zootarians. We have blown up these zootarian fantasies by proving that the mammal panda only eats bamboo.
See what I did there? I pretended the operative word was mammal, when the entire distinction was in the type of mammal. Anti-libertarians pretend the operative word is market, but “free” is the important part, versus “regulated”. You cannot disprove the merits of a free market by exclusively using examples from a regulated market.
Libertarians do not use America as an example of a free market. So pointing out wealth inequality in America says nothing about a free market. This market is not even close to free! Why don’t they just use GM or Solyndra as examples of the free market?
“See people didn’t want GM cars, but GM still exists, evil free market!” Oh wait, the government bailed out the big bad corporation with money stolen from the middle class. The taxpayers provided the now bankrupt Solyndra’s billionaire founder a taxpayer backed loan that will never be recovered. So the “rich get richer” precisely because the market is not free.
Over time billionaire George Kaiser’s wealth would fade in a free market unless he, say, built solar panels that worked and helped people. He actually built terrible solar panels that would not sell. This still made him richer, because the government redistributed tax dollars to him. In the free market, no one would have bought his shoddy product, and his investment would be lost.
People got mad that GM CEO pay was still high after the taxpayer bailout. The free market did not pay the CEO millions of dollars; in fact the free market dictated that the CEO should get exactly zero dollars. But the government stepped in and said our regulated market will redistribute wealth to the incompetent CEO of GM, who provides no one with an in demand product.
Oil subsidies, sugar subsidies, gas taxes, sugar taxes, media regulation, pharmaceutical regulation, the revolving door of lobbyists, bailouts, loans, redistribution, government contracts, high taxes, low taxes, tax incentives, tax loopholes, Justice Department of former Wall Street defenders, judges on Board’s of Directors, zoning laws, IRS targeting, media intimidation: these are just some of the not free things about the American market.
Rinse and Repeat
I would dissect the rest of the article, but it literally just repeats the same fallacy with different examples from America.
This phenomenon really got going after 1980, when wealth started flowing in vast quantities from the bottom 90 percent of the population to the top 10 percent… John Galt, the hero of Atlas Shrugged (1957), captured the imaginations of young students like Paul Ryan, who worshipped Galt as a superman who could rise to the top through his vision, merit and heroic efforts.
No, Reagan did not make the market free. Anti-libertarians love to point this out when they talk about how much the “right’s savior” spent and increased the debt… but Reagan magically transforms back into a free market de-regulator when it fits their narrative.
Not since before the Federal Reserve was created in 1913 could anyone even pretend anything resembling a free market existed in America. Perhaps some had amassed great wealth before then, but they could not keep that wealth in a free market, due to competition. They had to appeal to the government (like George Kaiser and the CEO of GM) to rig the system in the rich’s favor, to eliminate competitors–something that will only happen in a free market by outcompeting them (better prices, better quality, innovation, etc.).
Oh and maybe the author never read Atlas Shrugged. John Galt had not risen to the top of society. He was working as a janitor, despite having the intellect capable of building and maintaining a device that harnessed practically free energy. Yes, Ayn Rand wrote fiction. But her entire point was that the government in Atlas Shrugged prevented a free market, such that even skilled people like Galt could not (or did not see the point to) rise to a reward level appropriate for their skill, based on the benefits to society their skills could confer.
Which brings us back to Friedman’s view that people naturally get what they deserve, that reward is based on talent.
No, no. This is our panda versus horse problem. Friedman did not say that in any market people naturally get what they deserve, just like zoologists do not say that any mammal can survive on hay alone. Friedman says that in a free market people naturally are rewarded based on their talent.
If the market is free, then people will be rewarded based on skill. If the mammal is a horse, then it will survive on hay.
If the market is regulated, then people will not necessarily be rewarded based on skill. If the mammal is a panda, then it cannot necessarily survive on hay.
If you want to disagree fine, but don’t make your argument against a free market using negative examples from a regulated market. A zoologist wouldn’t argue that horses can’t survive on hay based on examples of pandas not surviving on hay, even though they are both mammals.
There’s no magic involved in a free market, just non coercive mutually beneficial transactions. When that is all that is acceptable, you will not end up with how things have ended up in America, and other regulated markets.
Now I started this off by saying that if you actually care about truth, it really isn’t that bad to be wrong from time to time. Yet every attempt to exit society and form a free market–without even forcing others to participate–is met with more force, regulation, taxation, and intervention.
Why not let us give it a try? After all, if all the dire predictions come true, anti-libertarians would finally have an example of a FREE market with which to make their points, instead of relying on fallacies.
Part of the point of freedom is that there are no rules, as long as no one has been victimized. When someone becomes a victim can be a point of contention, but I trust the parties involved to solve these issues better than an entity whose only tool is force. In anarchy, things would not be centralized unless the market demanded it, and as such it is impossible to imagine the many countless ways that anarchy could manifest itself. But it is natural to desire an example of how things would play out without the state. So let me give you my vision, which is certainly not the only vision, but one that I would create with the likeminded, to realize in a society without government.
But part of the point is that there is not one way for things to happen. You can choose from hundreds of restaurants with dozens of types of food, and various methods of service, wait times, and quality of food, all within a half hour of where you live right now. We don’t have to understand how each restaurant came to be, who their main cliental is, and where their supplies come from to understand that the market has shown a demand for these restaurants. And magically the market has supplied that demand.
My Anarchist “Utopia”
Personally, my idea of an anarchist utopia would include enough people to have safety in numbers. It would start as a group of very like minded friends and family, so that there would be agreement on how to run things, and there would not be a struggle for power from the beginning. Some people would want to establish a governing structure immediately, but that would not be necessary for the market solution types I associate with.
We would want either one large tract of land to all buy into, or many individual pieces that are adjacent: probably the latter to avoid any issues. Then each with our own little area, we would begin to specialize and trade amongst ourselves. In the initial group of, say ten families, there would be vegetable gardeners, fruit growers, craftsmen, builders, soap makers, hunters, brewers, foragers, and medical personnel. Every able bodied man and woman would be happy to own a gun, meaning most likely at very least two guns per household in order to protect ourselves and our neighbors. With a group that size of like minded people, the community could come together to solve any disputes—accusations of force being initiated.
Keep in mind that there is plenty of uninhabited land owned by the USA, so any inequality in land ownership could be righted by simply allowing people to settle and maintain uninhabited land in order to claim ownership.
This would be a good start, but obviously we would need more protection to be secure, and cannot sustain an advanced economy with only dozens of people.
If our own land was vast enough, we could sell off little lots on the outskirts to similarly likeminded people, possibly writing into the deeds any rules which we find necessary for people living in close proximity to us. Remember, they do not have to buy the land, and therefore do not have to agree to the rules, if we felt any were necessary.
But even if we did not have enough land, we could alert people to the type of community we imagine. The incentive to settle nearby would be a community of people already working and creating many necessities.
Once our land was exhausted, we would have enough people to have developed some type of economy in the area. People who are attracted to the type of structure that springs up would be drawn to the area to start their own businesses, or get a job with an existing business, and join the community. They could settle on the outskirts of the land owned by the original group, and do their thing.
In the end I imagine a group of a few thousand people living within a town sized area. We could still trade with outside groups. Perhaps 30 miles away there is a group of mostly scientists. They make advanced medicine and technology, and trade this for necessities like food. And since they create so much value, they also trade some of their medicine for security from a different group of people whose main expertise lay in protection. They have found another group which finds and processes the raw materials they need, and this group likewise trades for protection from yet another group.
Our area is safe because of our militia style protection. The scientists’ area is safe because they can buy protection. The routes in and out are also safe, in order to allow safe trading among the groups the scientists wish to trade with. (And the scientists trade to another group who maintains roads so that trade with the scientists will be easy). The security group is happy because they trade their services for medicine, which they can also trade for other necessities. The security group cannot become too powerful, because they do not have a monopoly over protection: there is a militia in our neck of the woods, and another security company protecting the manufacturers who trade with the scientists.
Since trading is not always efficient, a guy with an empty barn near the road comes up with a great idea for a business. He begins by offering a farmers’ market style clearing house for goods and products. People can come to this location to trade, and a percentage goes to the man who started the business, provides the location, and organizes the trading.
With his portion, he sets up his own trading station. Due to the amount of activity, he can trade for many different things, and not necessarily need the thing he is trading for himself. Say one person had tons of extra apples, and needs some ammo for hunting. Not needing the apples himself, the trader still takes them and gives away the ammo, knowing that many different families will want a few apples, and possibly one food preserver would want a lot of apples. So now his booth has apples to trade, and someone takes a few apples and gives a gallon of whiskey. A portion of the whiskey is traded for some baby chickens, etcetera.
The value created is that now there is a streamlined process for trading, so one person does not have to go around to all 100 of his neighbors, and waste 2 weeks trying to sell all his apples. It is a one stop shop to sell the apples, and due to the convenience and time saved, he can sell the apples for a lower price. Due to the lower price of the apples, the trader can profit on these when trading for things of more value. His value is that of a middle-man, organizing and streamlining the process. People see this work, and imitate the same business model in other areas. He cannot “gouge” his customers because they have other options for trading facilities.
But even that can become more efficient. The tradesman decides to start issuing credits in case he doesn’t have anything on hand that someone wants to trade. For transparency to keep his customers happy, he publicly states how many credits are in circulation at any given time, and creates a small accounting department to keep track of the credits, and inventory his warehouse of goods. Now he has created even more jobs, and a currency that people can use in place of tangible goods. If someone has a dozen eggs to trade but doesn’t need anything at the moment, he issues them 5 credits. He charges 5 credits for 3 pounds of root vegetables, or a small jar of honey. Other traders see the benefit in a credit system, create their own, and compete for whoever offers the best currency—most transparent, highest value, holds its value, not easily forged etcetera. The currency is backed by the value of the business and goods the trading house has.
From there the society would continue to advance, due to the extra goods created from the system which rewards production. An arbitration company may offer their services to the security companies, so that if they need to arrest someone, there is a third party system for determining guilt or innocence. There would soon be a market for education, so that your kids could be trained while you bring home the bacon. As the quality of life rises, more skilled people come to the area to enjoy it, and inject their expertise into the economy.
It grows and grows, due to competition, and the absence of one overarching group that would take a percentage of production by force, or favor some business at the detriment to others. People stay peaceful because everyone still likes to carry their gun, and because the quality of life is high enough so that there is no desperation. People moved to the area in the first place because of the high quality of life, and they will maintain it, or a market demand for peace will be supplied.
Competing Anarchist “Towns”
But that would just be one little society. Although they certainly would trade and associate with others, it is hard to put a number on the society, since they are so interconnected through trade with all those around them. Maybe about a million people all live within the area, but since someone imports citrus fruits from another area, you can’t really say it is just the million people. And isn’t that what we are after now? Not excluding people based on arbitrary borders.
Everyone may not agree on how a society should be run, but they don’t have to. They just need to agree on their business transactions, and the rest is organic. They can influence their own society by choosing where to live and who to do business with, but they cannot force others hundreds of miles away to live their life a certain way.
Remember, force is the only no no, and since it requires a victim, this means the victim or an advocate of the victim would necessarily accuse the suspected wrongdoer. This does not preclude the possibility of agreeing to other rules. For instance, many people want benefits to be bundled for a low price. It is appealing to send off one check to the government, and get all these goodies in return! Now in reality, the goodies are not worth the money. But in a for profit town, you would get incredible bang for your buck.
But it might require agreeing to some rules. This is not force; you don’t have to live there if you don’t want to, and all the land was private in the first place. So whoever owns the private land would be able to rent or sell this land with stipulations included in the contract, such as speed limits on the “town” owned roads.
And what you agree to is paying a certain price for trash pickup, plowing, and schooling. Some towns would even let you choose which services you want, and only pay for those ones. Don’t have kids? That’s fine, you don’t have to pay for the schooling portion. Or a town may offer a type of insurance structure, and sell you health, life, home, or whatever insurance in your package. Perhaps a town offers a set of benefits that you cannot opt out of; you benefit from the police keeping the town safe, and even though your house never burns down, others benefit from the fire department.
And to get back to the restaurant example, this would create some quality towns! Because what do you do when a restaurant gives you bad service? You stop going there, and write a nasty review online. I don’t know about you, but I check out the reviews before going places. And think of all the options! Want a fast food, bad but cheap, sort of town? That’s fine, maybe that’s all you need! But I think I will stay out of that town…
I prefer a steakhouse type town. A little more expensive, but better quality. Perhaps you do like quality, but can’t quite afford the best steakhouse. Well there just so happens to be chain restaurants (towns) that are not quite as good as a single steakhouse, but a hell of a lot better than fast food! Seriously, there are so many choices for restaurants because they must compete to attract customers! Friendly’s always made me feel sick. The government says their food is fine, but my stomach says it is crap. I don’t go to Friendly’s anymore. And luckily, the government has not yet mandated that I patronize Friendly’s, though they claim the authority to do so.
You want Mexican food, Chinese, sushi, fish, burgers, Indian cuisine, steak, Italian, hot dogs from a cart, subs, pizza, a breakfast cafe, a diner, five courses, a dollar menu, tapas, fondue, ice cream, or baked goods? I bet most people could find every single one of those within an hour of where they live. I don’t have to know the intricacies of the restaurant business to know that the food I want is going to be available, as long as no one forces them not to be (i.e. government).
(And on a side not, this is not an unregulated market: there would be even more restaurant and food choices if the government did not regulate them. For instance, an ordinance in one town shut down a young boy’s hotdog cart because surrounding restaurants had paid off the government to create a food monopoly on the block.)
Freedom of Association
Why are we all forced into groups that we may or may not want to be a part of? There is no conceivable reason that 300 million people need to agree on the best type of healthcare, or on one person to make executive decisions for the group, or even to protect themselves from outside threats. It is unnecessary! There is strength in numbers, and there is a point to being apart of groups, but those groups need to be of our own choosing to leave and join. We should have the freedom to associate with who we want, and the freedom to cut ties with those whom we do not wish to associate.
It is insane that I am forced to join 300 million other people in deciding if we will fund the next round of bombings in the middle east, or be forced to pay for contraceptives for someone I don’t know, and can’t possible know if they “need” or are just lazy. But when I can choose to join a group or not, I can decide whether or not I agree with the decisions the group makes. If there is someone that we all know who needs financial assistance, I can decide if they actually need it, or are just leeching. Then I can act accordingly if I want to stay in the group, fund this enterprise, and be afforded the same safety net, or leave the group in favor of saving my money, and not have the social insurance.
So great, if 300 million people all get together and have the same exact ideas about everything, let them! But it will not happen; there are so many different interests, alternatives, life styles, and world views. And that is fine! In the end the world would be united by trade, not by force.
As long as one group is not hurting another, people need to be free to associate or disassociate with whoever they want. And refusing to be forced to provide for another group is not hurting them. But that is the attitude of our government right now, that if you refuse to be a slave to your fellow man, it is the same as aggressing on him.
This is why we can’t have nice things:
-because the government takes them. The U.S.A. has practically the worst tax system in the industrialized world. According to the Wall Street Journal, the Tax Foundation has ranked the U.S.A. 32 out of 34 countries in terms of “competitiveness and neutrality” in tax laws. In fact of the two countries worse than the United States in their taxing policies, one of them, France, has an actual Socialist as President.
A competitive tax code is one that limits the taxation of businesses and investment. Since capital is mobile and businesses can choose where to invest, tax rates that are too high “drive investment elsewhere, leading to slower economic growth,” as the Tax Foundation puts it.
By neutrality the foundation means “a tax code that seeks to raise the most revenue with the fewest economic distortions. This means that it doesn’t favor consumption over saving, as happens with capital gains and dividends taxes, estate taxes, and high progressive income taxes. This also means no targeted tax breaks for businesses for specific business activities.” Crony capitalism that rewards the likes of green energy with lower tax bills while imposing higher bills on other firms is political arbitrage that misallocates capital and reduces economic growth.
But What about Sweden, Finland, and Norway with their Safety Nets and Universal Healthcare?
All those countries liberals talk about as being way better than the U.S. in terms of what “the government provides” for the citizens; yea they have better tax systems. You see, in those countries their tax systems do not seek to “punish the rich”, so they can collect more tax revenue, without discouraging business. This in no way negates other arguments about why it is bad to have centralized and socialized government programs, but it does however show that America is essentially immature in their taxing policies.
America has an almost 40% corporate tax rate, and a progressive income tax. This means people who earn more money pay not only a higher amount of money, but a higher percentage of their income to the government. It should be obvious why this limits growth, and gives incentive to move money to better tax regions outside of the United states. The poster children of socialized nations however—Sweden, Norway, Finland–do no “punish the rich”. They are far less likely to tax an estate when a person has died, or capital gains: money made from investment.
Keeping estate taxes at bay means people save more money, knowing they will be able to pass it on, leading to more capital for banks to give out housing loans for instance. And taxing investment income less means people are more likely to invest, since the reward is greater. That type of tax code therefore rewards saving, fiscal responsibility, and economic investment, while deterring frivolous spending through consumption taxes, like a higher sales tax. The rich still pay more if they spend more, but not just for simply earning the money.
Newsflash: The U.S. is Corrupt
I know, we like to think of the U.S. as pretty good when it comes to governing. But the United States government uses its tax code to punish their “enemies” and reward their “friends”. This is crony capitalism: different companies and individuals play by different rules depending on who they know. Capital generally flows to the most successful prospective investment, but the government can change that by making one investment more risky, due to a higher tax burden. In turn, capital flows to companies who will not be as successful in general because they were chosen based on the tax breaks the government gives them, versus the quality of the product or service.
So here’s the recipe for a successful crony capitalist economy, where the government gets to pick the winners and the losers. 1) Set the corporate tax rate the highest in the world:
The accounting firm KPMG maintains a corporate tax table that includes more than 130 countries and only one has a higher overall corporate tax rate than the U.S. The United Arab Emirates’ 55% rate is an exception, however, because it usually applies only to foreign oil companies.
Check. 2) Now retain the ability to arbitrarily lower said tax rate on an individual basis, so that companies you favor have an economic advantage over companies who play by the rules you set. And there you have an economic dictatorship, or “Fascist” State. (Working definition of Fascism: Complete economic control by the government of a country; the system of government characterized by total control over the means of production, versus ownership of the means of production, as in Socialism).
But we could also take it one step forward and implement oppression over the proletariat using our high corporate taxes. You see, there is a misconception that somehow taxing businesses at a higher rate will be better for workers. This is absurd; if companies pay higher taxes this leaves less money for paying employees. While some of the difference is made up through higher prices for the consumer, workers’ pay also takes a hit.
Abundant economic research, by Kevin Hassett and Aparna Mathur among others, has shown that higher corporate taxes lead to lower wages.
Lower wages mean people must work longer hours, giving them less free time, and therefore a lower quality of life. But the cycle does not end there. Less free time means more dependence on government institutions to tell us which products are safe through the FDA, USDA, EPA, CFPB, etcetera, thus giving even more control to the government to pick the economic winners and losers. Diminished free time also means fewer people have the time to pay attention to politics, and must rely again on government controlled media to tell them who to vote for.
These are not the only factors, but some key economic methods used by government to control a population. Therefore based on the evidence, it would seem countries like Sweden, Norway, and Finland care less about controlling their population than the U.S., despite having arguably more socialist tendencies.
I read three hit pieces on libertarianism the other day, which was interesting. It was interesting because it made me realize how little these publications care about consistency. The authors did not get the difference between what the philosophy would “allow” for, and what would actually happen. They do not understand that believing a free market will sort everything out does not preclude the possibility of businesses doing bad things, it simply allows mechanisms other than force to define the outcome. They don’t get that men with guns forcing us to do what is “right”, is worse than the possibility that people will do something “wrong”, albeit, something that does not initiate force on another person.
So the authors are all hating on Uber (the unregulated cab service) because of unethical business practices towards competitors. “See, it’s not a free market if they are trying to dishonestly disadvantage their competitors”. Uhh… no, it would still be a free market. It is the responsibility of the consumer to choose what business tactics they will put up with; that’s what a free market means. A business can do anything that does not initiate force, and the consumers can choose which businesses to keep alive. Does this mean it is possible for assholes to own successful businesses? Yep.
But what a non-libertarian philosophy says is, if 51% of people agree, we can use force to outlaw being an asshole, or get rid of a business we have convinced 51% of the population is mean…even if they aren’t really. Libertarians say, we don’t have to use force, as long as Uber didn’t use force. You don’t like what they do? Don’t buy from them, and support the other guy. Boycott, and raise awareness about how bad the company is. Don’t resort to violence to force a company or person to “be nice”, unless they are aggressing on someone else.
Apparently Uber employees were calling up a rival taxi service, then canceling, causing delays for real customers. I don’t like that they did that, it seems dishonest. But there are ways to fight back without abandoning free interaction, throwing your hands up and being like, “oh, damn, I guess we need thugs with guns to make sure businesses play nice”.
The way it is now, “official” taxi companies do not need to resort to agressive tactics like Uber, because they already have! What do you think a union is? Literally, damaging another company with the threat of violence if they encroach on your business without jumping through the right hoops, which may preclude a new business because it adds costs which have nothing to do with the sales, safety, or market demands. So somehow Uber is worse for causing their competitors trouble without using force, than state sanctioned cabbies who never allow a competitor in the first place at the threat of violence or theft by the state. Just go and try to pick someone up in NYC and charge them for a ride, and see what happens if you get caught. That is okay?
And in addition to responding with boycott and other market solutions, the rival unregulated taxi business does have recourse. They could explain to their customers what happened, and tell them that is why they are implementing a system where, say, if you reserve a cab, there is a non-refundable $5 fee that pays part of the fare if not cancelled. They could explain to their customers what happened, and encourage the public to do the same to “punish” Uber. But to say because some businesses are run by jerks that all business should be subjected to thug regulators is silly. I’d rather a business be allowed to be a jerk, than have a business that is allowed to use legal thugs with guns who can imprison you. Right now we have the latter.
“Libertarians loooooove discrimination, and are racist”. And here is where people should really see the inconsistencies. Arguing that someone should be allowed to discriminate does not mean you yourself would discriminate, nor support businesses that discriminate. I honestly can’t believe people are serious when they argue this! Do people just go through life being carried by the wind, with no more philosophical grounding than, “that seems good” or “that seems bad”. “Well I know discrimination is bad, so if someone supports it, they must be bad!”
First off, the word discriminate means to tell apart. Would you discriminate against rapists who want to come into your child’s school? I would certainly hope so! People need to realize that no one is forced to patronize a business. What if a noisy motorcycle gang always came into your pizza place, makes a mess, and scares off the usual clientele without buying much? Would it be appropriate to discriminate against bikers if your business would otherwise fail? Or is being non-judgemental more important than your livelihood? Denying someone service is not the same thing as taking something from them, and I don’t think the authors of the various libertarian hit pieces understand that.
It is popular to equate discrimination with force, with stealing. But this necessitates a philosophy that says business owners are there to serve, not to profit. It essentially says, businesses are slaves to the people who must be provided us with things. If I took the time, energy, and money to make a product, that product is not owed to anyone for less of a price than I am willing to part with it. If that willingness to part with the product or service depends on who the customer is, that just means the provider of the product does not see value in the transaction. Should he be enslaved by the state and forced to provide that product or service? That is what anti-discrimiation laws do. They say, since you chose to go into business, and provide something of value, you no longer have the right to choose who to give that thing of value to, and will provide that product or service for the same price you provide it to others.
Again, this does not mean I am pro-discrimination! But to argue that they shouldn’t have the right to deny any customer betrays the intellectual depth of a toddler. I am the one who decided to make, sell, or provide a service, and if those transactions are not free for either party to agree or disagree to, that is literally slave labor. Should airlines go out of business with half full planes because their fat customers cannot be forced to buy 2 tickets, since that would be discrimination? Or should the skinny customer be forced into only half a seat, when he paid for a full seat, because the person next to him is overflowing?
How about gun shops that are currently forced to discriminate, based on who is approved by the government? Say I can’t afford the hundreds of dollars and hours of time and transportation to get my gun license, so I am discriminated against? I mean seriously we talk as if voter ID laws discourage minorities from voting, and we are okay with more hoops, and greater costs being imposed if people want to protect themselves? So to act as if these thugs we allow to have control over our lives (government) will prevent discrimination is absurd, they currently sanction countless types of discrimination. The difference is, since there is no free market, there is nothing we can do about it!
In a free market, am I going to support a business that hangs a sign, “No Irish”? No! Do they have the right to hang the sign? YES! What is so hard to separate about things you shouldn’t do, and things you shouldn’t be allowed to do?
Woof. Anyway this is turning into a rant and I am going to try to wrap this up. The bottom line is, stop pretending libertarians are racist just because their philosophy precludes government backed force. Just because I support the right to free speech, to say WHATEVER you want, does not mean I like or enjoy racist hate rants. It means I understand the philosophical pinnings that say someone is always going to want to silence you, so let’s be consistent in allowing no one to be silenced. Let’s never allow the initiation of force, which means even when you deny a customer service because they are Jewish, men with guns will not come and arrest you, kill you, put you in jail, and put a gun to your head while you make that sandwich.
And you want to talk real world? Fine. What is more democratic than allowing a business to die because they won’t serve Jews? Or are these anti-libertarians afraid that the business would survive while being terribly prejudiced? Yes, that is what they are afraid of. Not being able to initiate force against someone when they disagree with their non-aggressive—though unsavory—actions. And THAT is what being a libertarian is about. Knowing that no matter how rude, selfish, mean, or hateful a person is, force should not be used against them to quell their behavior, until he initiates force against someone else. That is the simple line of when it is okay to use force, when responding to it. Otherwise it is all arbitrary.
For each action there is an equal and opposite reaction. Discrimination by a business does not legitimize locking that person in a cage, or taking their money at gunpoint. It does legitimize a social response of boycott, shunning, and lecturing; it does elicit the response of non-agressively ruining that business, and making sure every decent person knows what a horrible jerk the owner is.
I want to live in a world where people are decent because they want to be (or economic opportunity forces them to be nice out of self interest), not because there is a gun to their head. And guess what, if that world doesn’t exist without a gun to our heads, then it doesn’t actually exist with a gun to our heads either!
Here’s some statist logic: we continually raise taxes on businesses which burdens both the consumer and the business. The company cannot expand as quickly, nor hire as many employees due to the tax rate. When that company decides to move out of our tax jurisdiction in order to better provide for their customers, employees, and investors, we accuse them of being selfish, corrupt, and unpatriotic. Even though the money taken through taxes by force is often wasted, given to friends of the elite, used to benefit cronies, or spent on jobs and handouts to boost reelection chances of politicians, it is the companies who earned the money, and created the wealth who are the “greedy” ones.
I am talking of course about Burger King’s plan to move its base to Canada in order to take advantage of the 26% tax rate, instead of the 40% rate it pays in America. Hey, maybe they can afford to pay more than minimum wage with all the money they save? But that still wouldn’t make the state lovers happy. Unless businesses and people submit 100% to the government overlords, the state will demonize them.
Obama has called companies that engage in inversions “corporate deserters.” And Treasury Secretary Jack Lew has criticized the companies for failing to practice “economic patriotism.”
“I don’t care if it’s legal. It’s wrong,” Obama told a crowd last month.
But stealing 40% of the company’s wealth each year is not wrong? Why do we allow the government to posture as benevolent public servants, when it is so obviously not true. They are selfish thieves and public slave-masters. The government adds nothing of value to the economy, except by restricting private businesses from supplying particular consumer demands, at which point the government provides a worse product/ service for a higher cost.
The easiest examples of this are the post office, versus private shipping, or the failure of government backed green energy companies to produce alternative energy. The argument can also be made that government roads are more expensive and more shoddy than private roads, though the examples are few due to the government force exerted to complete the projects. And I would certainly argue that the police pose more of a danger to the public since they do not have to compete to deliver a better product for a lower price, as would be required in the private market.
But back to taxes: the Burger King Tim Hortons merger in Canada is one of these examples that leaves me exasperated saying “I feel like I’m taking crazy pills!” Warren Buffet is a main financial backer of BK’s move to a slightly less oppressive tax jurisdiction. Warren Buffet, you may recall, is the billionaire who inspired Obama to call for a minimum 30% tax rate on everyone earning $1 million per year or more… Because making a million dollars each year, and making a billion per year is like, the same thing, right?
But I don’t get it. What happened to the selfless Warren Buffet? Hasn’t he earned enough already? Why would he abandon funding the glorious U.S. government and all the philanthropic work it does? It seems Mr. Buffet understands quite well the detriments an excessive tax rate can have on business. Why would he advocate taxing millionaires more, when he himself will not pay higher taxes? Does he not think millionaire would likewise relocate to friendlier tax regions in the event that the government tried to rob them at a higher percentage than it robs most people?
You want businesses to stay in the USA? Repeal the 16th Amendment authorizing the income tax, abolish the IRS, and get rid of all corporate taxes. Defund the federal government, all the “good” they do is a myth. Let the states compete, and we will see what policies create economic opportunities, and which ones stifle growth by killing the individual freedom to keep the wealth you have created, and retain what is rightfully yours.
The classic government-creates-problem-government-propses-solution-that-causes-more-problems paradigm is hard at work. How will we ever solve obesity in the USA?! Let’s ban what can be sold at bake sales, and force kids to take food at school that they will throw away.
Almost $85 billion has been handed out in corn subsidies just in the past 20 years. And what is the highly concentrated sugar syrup packed into drinks and snacks partially blamed for the obesity epidemic? Corn syrup. And why is corn syrup so “cheap” to use? Because we already paid for it up front by force with tax dollars, dropping the shelf price, making corn syrup infused products cheaper by comparison to healthier options.
Yet somehow we never talk about the fact that simply removing corn subsidies would be a great first step towards combatting this weight issue, and would save taxpayers dollars at the same time. There is no negative; unless of course you are one of the cronies who receives the corn subsidy. Bon Jovi is reportedly one of the “struggling farmers” receiving a corn subsidy from the federal government.
And now, congress is talking about raising taxes on sugar in order to raise the price of sugary products to serve as a disincentive to buy them. But guess what, the price of sugary products would rise on there own if the government would stop subsidizing sugar producers as well!
Rep. Rosa DeLauro (D-Conn.) introduced this week the Sugar-Sweetened Beverages Tax (SWEET Act), which aims to institute a tax of one cent per teaspoon – 4.2 grams – of sugar, high fructose corn syrup or caloric sweetener.
…the text of the bill itself notes that the goal is to reduce public consumption through a price increase.
There is a net transfer of at least $1 billion annually from taxpayers to sugar producers, lowering the shelf price of sugary products. If the government would just get out of the economy, we would pay fewer taxes, and have an incentive to buy healthier foods, because they would be more reasonably priced than the unhealthy, government subsidized foods. This is what government solutions look like.