Tuesday, May 12, 2009

Government Without Taxation: Final Thoughts

The Freeloader Issue
A common objection to voluntary support for government is that some individuals will not pay. Such individuals will still receive the benefits of the police, the courts, and the military, but will contribute nothing financially. This is the so-called “freeloader issue” or “free rider problem”.

The fact that some individuals will not voluntarily support government is hardly an argument against government without taxation. All it demonstrates is that some individuals will be freeloaders.

The number of individuals who will freeload is irrelevant. We have already seen that millions of Americans voluntarily pay to protect their rights and their property. They will continue to do so whether others contribute or not. In other words, individuals pay to protect their rights because it is in their self-interest, and this fact does not change simply because others do not recognize that their self-interest includes supporting legitimate government functions. Those with the most to lose—e.g., businesses and the wealthy—will not subject themselves to anarchy merely because a neighbor refuses to contribute to the police department.

In addition, it is in the self-interest of all citizens to protect the rights of all citizens. A threat to the rights of one individual is a threat to the rights of all.

But the fundamental answer to the freeloader issue lies in morality. Morally, each individual has a right to act according to his own judgment, so long as he respects the mutual rights of others. This precludes the use of force, even when that compulsion would be used in an individual’s “self-interest”. Each individual has a moral right to choose for himself what constitutes his self-interest, and others have no right to compel him to act otherwise. To compel an individual to act in his “self-interest” is a contradiction.

It is important to remember that the culture would be much, much different if the idea of government without taxation could be a reality. Rational self-interest would be more widely accepted and individuals would understand that their self-interest includes voluntary support for legitimate government functions.

As we have seen, the legitimate functions of government provide necessary and substantive values to individuals—that is, the protection of individual rights. And we have also seen that individuals will voluntarily pay for these values, just as they voluntarily pay for bread, gasoline, and internet service. Even in a culture in which taxation and regulations rob citizens of a significant percentage of their income, individuals and businesses continue to voluntarily pay to protect their rights.

The time is too soon to actively advocate government without taxation as a political goal. However, it is not too soon to demonstrate that, not only is government without taxation moral, it is also practical.

Updated on April 8, 2010 with links to all of the posts in this series:
Government Without Taxation: Introduction
Government Without Taxation: The Size of Government

Government Without Taxation:  The Police and Military

Government Without Taxation: The Courts

Government Without Taxation:  Other Revenue Sources

Government Without Taxation: Final Thoughts


Raman Gupta said...

I used to think that voluntary taxation was a pipe dream, for two main reasons a) the freeloader issue you mention here, and more importantly b) that it was more desirable to objectively measure government expenditure and then simply divide that by the population and send everyone a bill -- since everyone benefits from having police, military, and law courts (restricted to their proper function of course).

However, I've changed my opinion on this in favor of voluntary taxation, for a few reasons:

1) Sending everyone a bill requires the government to keep track of all individuals, whether they pose a threat to other individuals or to the nation or not. This naturally leads to government abuse of this information.

2) Voluntary taxation provides an excellent method to control the growth of government, outside of the voting booth. Don't like how government is expanding? Vote with your wallet and stop giving them money. In fact, I might go so far as to say that individuals should be able to specify the government functions on which their money will be spent.

And finally, you're right that in a truly free and rationally egoistic society people will naturally recognize the self-interest of contributing to core government functions.


Brian Phillips said...

I agree with both of your points. I really don't like the idea of getting billed for something I didn't agree to.

Anonymous said...

I no longer think government without taxation is far off in the distant future. The Tea Party is getting ready to give government a severe makeover, and it is going to make sure the economy is deregulated so that it can return to supergrowth. After that is accomplished, expenses will drop off a cliff, people will have more capital available, and a voluntary system will be feasible.

Brian Phillips said...

I wish I could agree with you, but I can't. I don't see the Tea Party dramatically reducing government--they currently lack a principled defense of individual rights.

Further, I don't see the American people as being ready for government without taxation. Too much has to change, particularly in the realm of ethics.