Property Taxes are NOT the answer!

The no-longer-Budding Economist suggests that real property is what should be taxed. Like all taxes, the resultant problems are not minor, nor is it clear that anyone has any right to tax another. She writes:

I prefer real property taxes to other kinds of taxes for a variety of reasons:

1. You can't have property without government. I distinguish here between property and possession. Property is knowing that when you come home, your house is still your house. Possession is having to worry about armed thugs taking it over while you're out and not being able to do anything about it. I get into arguments with my anarchist friends about where property comes from, but as I've studied development economics and institutions its clear that the functions of property very much rest on the legal institutions created to define and support property rights.

It is not clear that anglosphere property rights institutions arose from government. In fact, Anglo-Saxon customary law seems to have been outside of the purview of anything we would associate with a government. Nor is property rights in Middle Ages Iceland dependent or derived from government - there was not anything we would recognize as a government in existence. Early American West settlements existed prior to the active managent of the U.S. government, and had a thorough set of property rights institutions independent of federal law. The Law Merchant developed in spite of the existence of governments. While the Law Merchant did not usually deal with real estate, I think it would be unwise to ignore it in context of institutions for protecting property rights.

Yes, many social institutions must exist in order to have any meaningful ownership of anything, but these institutions do not need to be provided by coercive monopoly, or provided for by taxes.

There are unintended and detrimental consequences with all taxes, and property taxes are no exception. In most states, real property is taxed according to assessed value. The assessment is done periodically based on sales of property in the area. Thus, if you buy a piece of land with a house for $100k, and some time in the future your neighbor sells his nearly identical house for $500k, you will be re-assessed and have to pay taxes on the new value - $500k. So what is the unintended consequence? Suppose you bought that property while you were young and working, have paid off the mortgage, and you have since retired with just enough to get by on. How do you pay these taxes? Between the ever increasing demands of government and the rise in property value, the tax bill is most likely more than the original mortgage.

This very thing has occurred frequently. In the Carolinas, the descendents of slaves, who had been given small plots of land during Reconstruction, lost their family homesteads because of large corporations developing on nearby land. These same corporations would then buy up the land at sherriff sale prices (i.e. just enough to pay the back taxes). Talk about concentrating land in the hands of the few at the expense of the many!

Too be fair, California changed their tax code to only tax at the value of the land and the time of purchase. But this creates other awkward incentives, leading to housing shortages and even higher prices. Even though the older couple no longer needs a four bedroom house and might prefer a smaller house, they may not be able to afford selling their existing house and moving into another. Existing landlords gain further competitive advantages over new landlords. Above all, the tax rates must be higher, leading to further disincentives.

The last example of why property taxes are bad: Iceland rejoined the Danes after 300 years of 'anarchy' because the Church's tithe ended up concentrating all the land into a few families. Property taxes can only be an answer to the question "what is a good way for a person to concentrate his power?"

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Jacqueline: "So you think

Jacqueline:

"So you think only people who can afford to pay for private protection deserve the right to life, liberty, and property?"

That, so far as I can tell, is another strawman. A simple counterargument would be: so you, believing the aforementioned services should be politically provided, believe that only those people with political clout deserve the right to life, liberty, and property?

Utopia is not an option.

Jacqueline: "I agree. And if

Jacqueline:

"I agree. And if you read my post that he linked to yet only selectively quoted, one of the reasons I favored property taxes is I see it as a lesser of evils – I would rather discourage the accumulation of large amounts of property than working or buying and selling things. I also think it would be less costly to administer."

Which is irrelevant, since David never spoke to the issue of whether or not property taxes were superior or inferior to some alternative, only pointed out that they too have negative effects that are not insignificant. You set up a strawman, by implying David was arguing for abolition of all taxes, which so far as I can tell, he was not. You then attacked that strawman.

"David Friedman is arguing for anarchy, which I think is inherently unstable. Even if it is possible to achieve it will last about 5 minutes until someone raises and army, conquers some territory, and sets himself or herself up as a dictator. So I think discussing how things would work under a system of anarchy is rather pointless."

This passage is internally inconsistent. You are simultaneously opining that discussing how things would work in anarchy is pointless, and yet you are drawing conclusions as to how things would work under anarchy, by presuming it would be inherently unstable. This smacks of: "I think the world is flat, therefore it is pointless to argue about whether or not the world is flat." One reason many people, including Friedman and several contributors to this blog, discuss "how things would work under a system of anarchy" is precisely to determine whether or not your claim about its inherent instability is true. By simply waving your hand and saying such discussions are pointless you not only devalue many intelligent arguments made on either side, you also undercut your very premise of anarchy being "inherently unstable."

So you think only people who

So you think only people who can afford to pay for private protection deserve the right to life, liberty, and property?

David Friedman is arguing

David Friedman is arguing for anarchy, which I think is inherently unstable.

DF also discusses in depth the stability issue and argues that a system of competing for-profit protection agencies, each with contracts with third party arbitration companies, would be stable.

Since there is no world government (yet), is the anarchy of nations inherently unstable? Or do they get along for the most part (at least in the West?) Should we support a world government?

David Friedman is arguing

David Friedman is arguing for anarchy, which I think is inherently unstable. Even if it is possible to achieve it will last about 5 minutes until someone raises and army, conquers some territory, and sets himself or herself up as a dictator. So I think discussing how things would work under a system of anarchy is rather pointless.

"I feel I should point out

"I feel I should point out that he doesn’t advocate ending taxation, simply points out that taxes have some negative consequences, which is economically true. Taxes cause dead weight losses."

I agree. And if you read my post that he linked to yet only selectively quoted, one of the reasons I favored property taxes is I see it as a lesser of evils -- I would rather discourage the accumulation of large amounts of property than working or buying and selling things. I also think it would be less costly to administer.

"OK so if you don’t like

"OK so if you don’t like taxes then how do you fund the necessary, legtimate functions of government like defense, police, courts?"

I'll leave David to defend his own views; he's perfectly capable of doing so. But reading over the article, I feel I should point out that he doesn't advocate ending taxation, simply points out that taxes have some negative consequences, which is economically true. Taxes cause dead weight losses.

OK so if you don’t like

OK so if you don’t like taxes then how do you fund the necessary, legtimate functions of government like defense, police, courts?

Setting aside the use of your word "legitimate" for a description of monopolized provision of certain economic goods that most people desire including personal defense, arbitration, and legal enforcement, the best answer and description is given by David Friedman:

POLICE, COURTS, AND LAWS—ON THE MARKET

So you think only people who

So you think only people who can afford to pay for private protection deserve the right to life, liberty, and property?

Where in the world did you get that idea? No. I believe that protection would be better afforded by the poor if provided privately, just as food and shelter are better afforded by the poor through markets.

Monopolistic law does not remove markets; it only makes them... monopolistic. The entire monopoly has to be captured to be controlled. The poor are in the worst position to do this because the rich can outbid them to control monopolies. They do it all the time today - via tariffs, subsidies, special interest groups, etc. What poor people need is to be able to take their marginal dollars to competing vendors. That is what markets provide and why they empower the poor.

I hate to repeat myself, but

I hate to repeat myself, but I think this idea is valid.

It is true that anarchists presume, after a fashion, some kind of background property rights.

But it is just as true that non-anarchists presume a set of background rights: in particular, the right for a government to "define and support property rights."

This is really just Micha's turtle fallacy once again. To say a government is required to define rights presumes that a government has the right to define property.

The question presented: "Why are there property rights?"

Answer: "The government created them."

Follow-up: "From whence did the government get the right to create property rights?"

This should sound familiar.

The question presented: "Why is the universe here?"

Answer: "Because God created it."

Follow-up: "Who created God?"

Or, in Mr. Ghertner's memorable analogy.

"What is the world resting on?"

"A giant turtle."

"What is the turtle resting on?"

And so on.

OK so if you don't like

OK so if you don't like taxes then how *do* you fund the necessary, legtimate functions of government like defense, police, courts?

Or are you an anarchist?

"You are simultaneously

"You are simultaneously opining that discussing how things would work in anarchy as pointless, and yet you are drawing conclusions as to how things would work under anarchy, by presuming it would be inherently unstable."

No, we're talking about two different things. There's how things would work under anarchy, and then there's whether or not anarchy could ever exist. We could also have detailed theoretical discussions about how the world would work if people were immortal or had telekinetic or telepathic powers or magic was real or whatever, but unless we're working on the plot for a science fiction novel what's the point?

I'm sure we share the same libertopian ideals. But I'm a pragmatist who has given up on ever seeing that libertopian world, and would rather work on making the real world we live in now better.

David attacks the idea of property taxes, without offering up any other sort of tax system that he thinks would work better, so he doesn't seem to share my goal of trying to make what we have now better. Also by selectively quoting my post he implies that I did not acknowledge the detrimental consequences of property taxes, when I quite clearly did in reason #3. I see the detrimental consequences of property taxes as a lesser evil compared to the detrimental consequences of income or sales taxes. The post was inspired by a discussion of the relative merits of different types of taxes in the comments of another post on my blog, and I wanted to go into greater detail as to why I preferred property taxes over other types.

"Where in the world did you

"Where in the world did you get that idea? No. I believe that protection would be better afforded by the poor if provided privately, just as food and shelter are better afforded by the poor through markets."

Even if it were more affordable, there would still be some people who couldn't afford it at all. Or who made foolish budgeting decisions and chose to spend their money on something else. Should we just let people kill them and take their stuff because they didn't pay up their protection money?

OK so if you don’t like

OK so if you don’t like taxes then how do you fund the necessary, legtimate functions of government like defense, police, courts?

Or are you an anarchist?

1. user fees.

2. I only care that no person has rights or privileges that another does not have. Most (every?) tax scheme requires that some have privileges that others do not have. If you can come up with something that does not violate this principle, you can call me a statist.

Even if it were more

Even if it were more affordable, there would still be some people who couldn’t afford it at all. Or who made foolish budgeting decisions and chose to spend their money on something else. Should we just let people kill them and take their stuff because they didn’t pay up their protection money?

Again, where in the world did you get the idea that I want people to die? I want people to be happy and live long, prosperous lives. Have you ever seen the kind of protection people in inner city ghettoes get? I could ask you the same strawmen questions - "Why are you letting all those people die with socialist protection?"

The issue is whether people, including the poor, would be better of with monopolistic protection or with private protection. I have good reasons to believe the latter.

I assure you - I am a pragmatist. Libertarians call me names when I say this, yelling out, "What about your principles, man???" It is for pragmatic reasons that I believe that private law would work better than monopolized law. In fact, I believe it is people who believe that the poor are better off under monopolized governments that are the utopians. They fail to see how the same problems of rent-seeking, agency capture, focal benefits and dispersed costs, etc that plague democratic governments apply to legal services too.

What about people who can't

What about people who can't afford the user fees? Should they be denied police protection, access to courts, etc.? How do you solve the free rider problem of national defense?

No, Jonathan, I don't think

No, Jonathan, I don't think you want people to die. But I've yet to here you explain what would happen under your system to someone who couldn't afford to pay their private protection fees. Would anyone stop me if I wanted to just kill those people?

Under our current system, while the poor do receive less protection than the rich, the police do still take an interest if you go around offing them.

What about people who

What about people who can’t afford the user fees? Should they be denied police protection, access to courts, etc.? How do you solve the free rider problem of national defense?

The national defense issue is a tough problem without a monopoly, I agree. I will tactfully avoid the issue for now by stating that it would be the last service I would want privatized.

What about people who can't afford user fees? I give the same answer as I do for all questios in the form of "What about people who can't afford X?" where X = food, clothing, shelter.

- Such people would be far fewer under polycentric law than under monopolistic law
- Voluntary charity is always an option
- The "solution" of monopolistic law results in more bad consequences than good ones

Scott: “You are

Scott: “You are simultaneously opining that discussing how things would work in anarchy as pointless, and yet you are drawing conclusions as to how things would work under anarchy, by presuming it would be inherently unstable.”

Jacqueline: "No, we’re talking about two different things. There’s how things would work under anarchy, and then there’s whether or not anarchy could ever exist."

That was not how you framed the question--you said anarchy would be inherently instable: by saying that, you've already postulated anarchy could exist and made a claim as to its conditions. It is perfectly possible for there to be no government—you admitted as much, though you also suggested it would last no longer than five minutes. You proposed that that system, even in its five minute endurance, would result in a dictator reinstating the state. That is an assumption you’ve made. Anarchists and non-anarchists discuss what the condition of anarchy would be, and whether or not your assumption that a dictator would reinstate government is true or probable. You dismissed such discussion as pointless, but nevertheless drew a conclusion about what would happen under anarchy. You simultaneously dismiss a realm of debate as pointless, and yet somehow—from this supposedly pointless debate—you’ve managed to draw an assumption that you seem fairly confident in. Why should anyone believe that claim, when you yourself said debates as to its merit are pointless?

Jacqueline: “We could also have detailed theoretical discussions about how the world would work if people were immortal or had telekinetic or telepathic powers or magic was real or whatever, but unless we’re working on the plot for a science fiction novel what’s the point?”

That’s quite right, we could. However anarchists, at least the ones you will find in libertarian circles, do not postulate magic or ESP for their system to exist. Rather the questions they ask—pointless, in your words—are whether or not, given what we know of human behavior, economics, and history, anarchy would persist.

“I’m sure we share the same libertopian ideals. But I’m a pragmatist who has given up on ever seeing that libertopian world, and would rather work on making the real world we live in now better.”

To my knowledge, there are no utopians present on this blog. I believe the majority of us would describe ourselves as pragmatic.

“David attacks the idea of property taxes, without offering up any other sort of tax system that he thinks would work better, so he doesn’t seem to share my goal of trying to make what we have now better. Also by selectively quoting my post he implies that I did not acknowledge the detrimental consequences of property taxes, when I quite clearly did in reason #3. “I see the detrimental consequences of property taxes as a lesser evil compared to the detrimental consequences of income or sales taxes.”

He never said property taxes were not the superior option, simply said that they had detrimental baggage that he believes you underestimated in your post. To point out a missing or inaccurate factor in the calculus is a perfectly legitimate point to make, and implies nothing a priori about the end question of what the superior tax is.

"Under our current system,

"Under our current system, while the poor do receive less protection than the rich, the police do still take an interest if you go around offing them."

But they still get offed, no? Does that imply you don't think poor people have a right to life? A system without violence, murder, and theft is not an option. To imply otherwise, is to be a utopian. Anarcho-capitalists simply believe that their system would result in a lesser amount of violence, murder, and theft--and the reason they think such a system is attractive is precisely because they believe people have a right to life, liberty, and property.

No, Jonathan, I don’t

No, Jonathan, I don’t think you want people to die. But I’ve yet to here you explain what would happen under your system to someone who couldn’t afford to pay their private protection fees. Would anyone stop me if I wanted to just kill those people?

Under our current system, while the poor do receive less protection than the rich, the police do still take an interest if you go around offing them.

Do they? What incentive do the police have of going into a crime-ridden gang-infested ghetto to promote peace and order? If they stop for Krispy Kreme along the way, are they punished? If they make a gesture of patrolling at the perimeter and call it a night even while gunshots are going off at the core, do they suffer any loss?

They can do a less than stellar job without suffering much in the way of consequences. If anything, they'll be rewarded when the police chief gets on camera and says, "We need to get tough on crime. We need to fund the Make Our City Safe bill with an additional $50 million."

The poor don't get to replace their cops and hire someone better, just like they don't get to replace their schools.

I agree that people

I agree that people shouldn't just be given everything they can't afford. I do, however, think that everyone has a basic right to have their life, liberty, and property protected against force and fraud, regardless of their ability to protect these rights themselves or pay to have others protect them. My belief in these fundamental rights regardless of ability to pay is a value judgement that perhaps not everyone shares. Given my belief in these rights, I think there is an optimum level of government that maximizes the protection of those rights that is greater than zero but significantly less than what we have now.

"I agree that people

"I agree that people shouldn’t just be given everything they can’t afford. I do, however, think that everyone has a basic right to have their life, liberty, and property protected against force and fraud, regardless of their ability to protect these rights themselves or pay to have others protect them. My belief in these fundamental rights regardless of ability to pay is a value judgement that perhaps not everyone shares. Given my belief in these rights, I think there is an optimum level of government that maximizes the protection of those rights that is greater than zero but significantly less than what we have now."

But you'll pardon me for finding that sentiment somewhat unrealistic. You can postulate all the rights you want, but what really matters is whether or not those rights are protected. You believe such rights will be protected best by a government--a monopolistic entity. That is suspect economics. Governments have throughout time responded to the politically powerful, who tend to be not the poor, but rather the rich. There is no such thing as a free lunch, even when the government is the cafeteria worker.

I agree that people

I agree that people shouldn’t just be given everything they can’t afford.

I don't know if this is in response to me or not, but I have no problem giving people what they can't afford. Charity is a good thing.

I do, however, think that everyone has a basic right to have their life, liberty, and property protected against force and fraud, regardless of their ability to protect these rights themselves or pay to have others protect them. My belief in these fundamental rights regardless of ability to pay is a value judgement that perhaps not everyone shares.

This is a *normative* claim, which I believe you are mixing up with our *positive* claims. It's likely true that both Dave, Scott, and myself agree with your normative claim. We only disagree with the positive claim that monopolistic government best secures these rights.

Given my belief in these rights, I think there is an optimum level of government that maximizes the protection of those rights that is greater than zero but significantly less than what we have now.

So this is the core of our disagreements. I believe that the optimum protection of these rights would best happen when those entities that provide the protection have to compete for each other. This is not a new idea. The original anti-federalists were onto this. The modern day federalists and supporters of states' rights, too.

There is no such thing as a

There is no such thing as a free lunch, even when the government is the cafeteria worker.

I want everyone to admit that that's a damned fine sentence right there.

"That was not how you framed

"That was not how you framed the question–you said anarchy would be inherently instable"

I should have written more clearly then. I meant the existence of anarchy was inherently unstable. I don't think A) it can be achieved and B) even if it is, it will last.

B has already happened. There was a point in human history in which there was no government, now we have it. Why wouldn't it happen again?

"He never said property taxes were not the superior option, simply said that they had detrimental baggage that he believes you underestimated in your post."

He didn't even acknowledge that I had estimated it at all. I think his selective quoting really mischaracterized what I was trying to say, since the entire point of the post was about why I preferred property taxes to other kinds of taxes.

"What incentive do the police have of going into a crime-ridden gang-infested ghetto to promote peace and order?"

What incentive did they have to go after the Green River Killer in my home state of Washington? He was only killing prostitutes and runaways -- the latter would certainly be very unlikely to pay their protection money under your system. Yet under our current system the police investigated, and eventually did catch the guy.

Yup, the core of our disagreements is about whether liberty is maximized by a small amount of government or no government at all. Historically, the "no government" option doesn't have a very good track record.

"Even if it were more

"Even if it were more affordable, there would still be some people who couldn’t afford it at all. Or who made foolish budgeting decisions and chose to spend their money on something else."

In response to your first statement:

Why do you only extend your argument to protection?

"Even if X were more affordable, there would still be some people who couldn't afford X at all."

Insert anything from protection to personal jets and mansions where X is. Once you make a claim to a positive right, even something that is seemingly as innocuous as protection of private property, you now have to explain why other things (or even everything) do not apply to this standard. Otherwise, this reasoning fails to a reductio ad absurdum. This does not even take into account the other absurdities of the concept of positive rights.

This is not to say that I do not believe that private property protection is important. No, I think it is very important, but that does not mean that I have some obligation to pay to defend your property.

In response to your second statement:

This is a common thread among statists.
"We need the government to prevent and correct irrational behavior!"

This line of reasoning is what statists use to justify some coercive government program like social security.

"People are irrational and will choose not to save for retirement, therefore, we must set up social security and force them to save!"

This line of reasoning seems plausible at first. Afterall, I myself frown on behavior that I believe is irrational. Why wouldn't we want to set up some government program to prevent irrational behavior? The problem with this reasoning is that what if the government itself does something irrational? Afterall, it consists of mere humans, who can behave irrationaly as much as anyone else. What's that? We the people can vote them out of office? Well, doing a quick cost/benefit analysis the act of voting is irrational as well. Now you have set up a system in which the irrational behavior of a small group of people can adversely affect the lives of millions of other people, and the so-called mechanism for keeping their power in check (voting or even political activism) is in itself an irrational act.

In any event, you can buy a cheap handgun for $100 or less. Without a monopolistic government confiscating people's weapons, people would be able to defend themselves. Just like any other good or service, protection of private property varies in degree of quality depending on how much one is willing/able to pay for it. A poor person probably wouldn't be able to afford an entire crew of bodyguards, expensive alarm systems or an armed security force (nor are they able to afford that kind of protection even under a government monopoly). But virtually all poor people would be able to afford some kind of protection, even if it was just a cheap handgun or a makeshift club.

"Why do you only extend your

"Why do you only extend your argument to protection?"

Everyone can simultaneously exercise their rights to life, liberty, and property, free from force and fraud. They can't all simultaneously exercise a right to a personal jet.

I don't see taxing property as interfering in the right to property, since property would not exist without government. I distinguish between property and possession -- property is knowing when you come home that your house is still your house, possession is worrying that you might come home to find that armed thugs have taken it over and there is nothing you can do about it. Government establishes and enforces property rights, without it all you have is possession.

"In any event, you can buy a cheap handgun for $100 or less."

I believe in a right to life that is based on more than whoever is the fastest draw.

"I meant the existence of

"I meant the existence of anarchy was inherently unstable. I don’t think A) it can be achieved and B) even if it is, it will last.

"B has already happened. There was a point in human history in which there was no government, now we have it. Why wouldn’t it happen again?"

That is a question anarcho-capitalists discuss, in our "pointless" discussions. David Friedman's answer was that the person who wants to reinstate a government is on the wrong side of a public good problem. Your prior claim, the B clause, is precisely what "pointless" discussion can validate or shed doubt upon.

Moreover, you should realize that the criticism above applies just as strongly to your desire for a smaller government. There was a point in human history in which there was smaller government, now we have large government. Why wouldn't it happen again?

"He didn’t even acknowledge that I had estimated it at all. I think his selective quoting really mischaracterized what I was trying to say, since the entire point of the post was about why I preferred property taxes to other kinds of taxes."

Note how your claim has progressively weakened. You first implied that David had argued all taxes should be abolished. You then said he was arguing that property taxes were not a superior tax compared to the alternatives. Now you are simply arguing he mischaracterized your argument, which is a reasonable opinion, but not one I think is justified.

Johnathan: “What incentive do the police have of going into a crime-ridden gang-infested ghetto to promote peace and order?”

Jacqueline: "What incentive did they have to go after the Green River Killer in my home state of Washington? He was only killing prostitutes and runaways – the latter would certainly be very unlikely to pay their protection money under your system. Yet under our current system the police investigated, and eventually did catch the guy."

So far as I can tell, there are two areas of expertise where people systematically commit fallacies--economics and statistics. One such statistical fallacy is treating anecdotal evidence as having much more weight than it really does.

"Yup, the core of our disagreements is about whether liberty is maximized by a small amount of government or no government at all. Historically, the “no government” option doesn’t have a very good track record."

Nor does the government option. Iceland approximated anarcho-capitalism for 300 years, and its crime rates were comparable to similar nations with governments. There was a period in English history when the police were a private entity, during which crime rates were not radically different from a century later, when such services were publicly provided.

"I don’t see taxing

"I don’t see taxing property as interfering in the right to property, since property would not exist without government."

On what do you base that assertion? The government delivers first class mail in the United States--does it stand to reason that first class mail delivery would not exist without government?

"I believe in a right to life that is based on more than whoever is the fastest draw."

Yes, it seems you believe in a right to life that is based on whoever the police will manage or bother to protect.

Yup, the core of our

Yup, the core of our disagreements is about whether liberty is maximized by a small amount of government or no government at all. Historically, the “no government” option doesn’t have a very good track record.

Yes, it has a poor record, but it does not have a zero mark. As Dave said, protection was supplied privately on the market for 300 years in medieval Iceland. The Law Merchant was beyond the reach of territorial governments and adjudicated conflicts between merchants under even under different political jurisdictions. There is no world government today, and the only types of war that western governments engage in (with each other) are trade wars. The internet and public-key cryptography today protects freedom of speech better than any government ever has. There are anarchic relations all around us.

History is one argument, and a pretty good one, but by itself, it cannot disprove hypothetical legal structures. There was a time when liberal democracy was the wet dream of a prescient Enlightenment thinker. There was a time when abolitionists were decried as "utopians". We have animal roots of tribal warfare, but we have slowly been leaving them behind as the positive-sum worldview enables us to create political structures that best promote peace and prosperity.

You have so far made -

- an argument from history. But as I say in the preceding paragraph, history by itself is insufficient.
- a normative argument - "Everyone ought to have rights". Nobody here disagrees.
- straw-filled, emotionally appealing arguments - "Do you want the poor to die?"

I know you have an interest in economics and was disappointed to see you leave your economic career behind. Yet, I have yet to see you make an economics argument of why the poor would benefit more from monopolistic protection than with private protection.

"Note how your claim has

"Note how your claim has progressively weakened."

Well, his post certainly did seem to imply that he was against all taxes and/or thought property taxes were inferior. I may have misinterpreted him.

"So far as I can tell, there are two areas of expertise where people systematically commit fallacies–economics and statistics. One such statistical fallacy is treating anecdotal evidence as having much more weight than it really does."

Talking about stopping for donuts on the way to the gang neighborhood is anecdotal as well.

"Iceland approximated anarcho-capitalism for 300 years, and its crime rates were comparable to similar nations with governments. There was a period in English history when the police were a private entity, during which crime rates were not radically different from a century later, when such services were publicly provided."

There is no way to know this. What was considered a crime has changed over time (in the days of yore raping and beating your wife weren't considered crimes) and record keeping standards have improved. It could be that crime was actually much higher before government police protection, but that fewer things were considered crimes and fewer crimes were recorded. For example, in the US, marital rape would not even show up in the statistics a couple decades ago. That doesn't mean that there's been a sudden upswing in marital rape, it just wasn't considered a crime before.

"On what do you base that

"On what do you base that assertion?"

Read the rest of my comment, I went on to explain the distinction I make between property and possession.

"Yes, it seems you believe in a right to life that is based on whoever the police will manage or bother to protect."

As a backup to self-protection, yes.

"straw-filled, emotionally appealing arguments - “Do you want the poor to die?”"

Please be pointing to where I said that. Since I didn't, don't put that in quotes and claim that I did.

"Yet, I have yet to see you make an economics argument of why the poor would benefit more from monopolistic protection than with private protection."

Private protection relies on ability to pay. Government protection is available, on some level at least, to everyone.

"Talking about stopping for

"Talking about stopping for donuts on the way to the gang neighborhood is anecdotal as well."

No, it's illustrative. If Johnathan had said, "I once saw officers stop for donuts on the way to a gang neighborhood, therefore I believe police overall are lousy," that would indeed be anecdotal. What I think Johnathan's point was, was an illustration that the interests of people who want to be protected and the public officials who are supposed to protect them diverge.

If your point was simply that sometimes the police protect poor people, then that's doubtlessly true, but that does little to further the argument one way or the other.

"What was considered a crime has changed over time (in the days of yore raping and beating your wife weren’t considered crimes) and record keeping standards have improved."

But note that objection does not bear on the comparison of medieval Iceland to contemporaneous societies.

You can find articles on both topics:

England

Iceland

Regardless, if your point is true--that there's no way to compare crime rates of one century to another--then you're also out of luck when you try and justify government as being the best protector of freedoms, since, from your premise, we can't know whether or not governments have truly been protecting freedoms or not.

What about people who

What about people who can’t afford the user fees?

I view justice as the victim being made whole again, or as whole as possible. The economically efficient means for dispensing justice is for the victim to receive from the criminal sufficient recompense to pay for bringing them justice plus damages.

The method in Iceland was that a crime created a title of property for the compensation claim. If the poor person can't afford to go chasing down the criminal, he can sell the claim against the criminal to anyone else. Two types of people step forward - altruists who just want to help bring justice to the victim, and profiteers happy to give the guy money for the claim, and prosecute the criminal for a profit.

How do you solve the free rider problem of national defense?

I don't. There is no need to. We already have a huge portion of the populace free-riding on defense production. The only issue is does each person who values such defense value that defense more than not - is it sufficient to provide a defense. There are free-rider problems in most every area of our life, and they are also solved problems.

"we can’t know whether or

"we can’t know whether or not governments have truly been protecting freedoms or not."

We certainly know that it has been crucial to the advancement and protection of equal rights for women. It's only been in the last couple decades, and only in a few areas of the world, that women have gained power equal to that of men, and only as the result of a heck of a lot of government action.

"The method in Iceland was

"The method in Iceland was that a crime created a title of property for the compensation claim."

And who decided whether a crime had actually been committed, and what was an appropriate compensation claim?

"Read the rest of my

"Read the rest of my comment, I went on to explain the distinction I make between property and possession."

That does little to clear up the issue. You state that only government can recognize and protect property--on what do you base that assertion?

If I've properly understood your claim, it is a false one.

"Private protection relies on ability to pay. Government protection is available, on some level at least, to everyone."

It is available in theory. That says very little about how prevalent said protection is, who benefits and does not benefit from it, and how it would compare to a competitive market in protection.

Dreamy hopes of what the government says it's going to do are little solace to those who are left unprotected and suffer from the coercive monopoly with its corresponding deadweight losses.

"What you are doing is

"What you are doing is imagining what things would be like if laws were different. We are doing the same thing."

You're imagining if there were no laws at all.

"Do you seriously believe this is how it worked?"

Well, why didn't it? Why did people listen to one person calling themself an arbitrator and not to another?

"However, there are a limitless number of other goods/services which fit your criteria of being able to simultaneously exercise their “rights to X, Y & Z” under any coercive tax & spend scheme you could think of (from fish aquariums to bubblegum)."

No, because tangible things like fish and aquariums would have to be taken from someone.

I can exercise my right to life without denying anyone else the right to live.

I can exercise my liberty without denying anyone else his or her liberty.

I can exercise my right to own property without denying anyone else his or her right to own property.

But if I have a "right" to bubblegum, well, someone has to give it to me, and then what about their right to keeping their bubblegum?

"Why do we need some kind of special “third party” to declare who owns what?"

You guys are the ones arguing for Icelandic arbitrators to solve everything! They are third parties too.

"Property is ultimately what society has agreed is yours, such an agreement does not need a “government""

Then why are societies where people all agree on who owns what, but do not have government defined and enforced legal titles, so very poor? Why won't banks lend to people on the basis of social norms saying they own something?

Since y'all want to give me reading assignments, yours is _The Mystery of Capital_ by Hernando de Soto.

"We do not need an artificial institution to enforce social norms that are understood by just about everybody."

Social norms that are understood by just about everybody do not exist. Different cultures around the world have different social norms, and in an increasingly globalized world, people from different cultures are living together more and more.

That's why the Iceland example doesn't work. You can't take a system that worked for a very homogeneous culture and apply it to a world where no such homogeneity exists.

"but your original complaint was that poor people would not be able to afford any protection. This is empirically false."

Not everyone can afford even a $100 gun. Also, not everyone has the strength, dexterity, or eyesight to use a gun or any other sort of weapon. What do you do about the poor, frail, blind old woman?

Plus, $100 guns tend to be pieces of shit. You really need to spend $500-$700 to get a decent piece. :)

I don't have time to get

I don't have time to get into the anarchy debate again today, although I will first make one comment tangentially related before focusing on the Georgist issues. Jacqueline wrote,

I do, however, think that everyone has a basic right to have their life, liberty, and property protected against force and fraud, regardless of their ability to protect these rights themselves or pay to have others protect them.

Putting aside the strict libertarian arguments against public provision of these services, I've always wondered this about minarchists (even when I used to be one), so maybe someone can help me out.

Jacqueline shares the common minarchist position that American citizens have a positive right to "life, liberty, and property protected against force and fraud," that is, to police, courts, and military defense paid for with tax dollars, whether they can afford to pay for these things or not. Note that these positive rights are only extended to American citizens and not foreigners (else the American government would provide police, legal and military protection to all people in the world who cannot afford it, as we seem to be moving towards doing).

But why should we assume that police, courts, and militaries are sufficient to satisfy these positive rights? Surely a person doesn't care much about police protection when he is starving to death, cannot pay for adequate health care and cannot pay for shelter or clothing. Why should we ignore these other values? What makes police, courts and military protection so much more important to poor people than education, healthcare, food, and housing? Further, it might actually be in many cases more efficient for the government to provide these latter goods than the former goods. For example, if the government pays for a poor child's education, he may be much less likely to become a criminal later in life, costing the taxpayers much more in jail and legal expenses then they would have paid just for education alone. And these same sorts of arguments can be extended to things like healthcare, food and housing.

So to sum up my two arguments: 1) Why do we have the obligation to satisfy the positive rights of Americans but not non-Americans? 2) Why are police, courts, and military defense the only legitimate positive rights, while rights to food, clothing, healthcare and shelter are not?

Okay, now back to Georgism. I'm somewhat sympathetic to Georgist claims, at least in relation to other forms of taxation. Jacqueline has no less than Milton Friedman to back her up:

Objections aside, Henry George may have been arguing for what is really the least offensive tax. As Milton Friedman said almost a century after George's death: "In my opinion, the least bad tax is the property tax on the unimproved value of land, the Henry George argument of many, many years ago."

On the other hand, David Friedman is a bit more skeptical:

Professor Tideman has proposed elsewhere elaborate and ingenious versions of the Georgeian single tax scheme. As theoretical curiosities they are interesting and admirable. As practical legal and political proposals they are neither, since they require the legislature and the courts to engage in complicated calculations, using mechanisms that could easily be subverted to serve the private interests of those controlling them.

Consider a much simpler version, and one that might have seemed practical early in American history, when most of the country belonged to the Federal government. Let all public lands be auctioned off to the highest bidder. The result will be to transfer to the public purse the ex ante estimate of the site value--including any future increases thereof. This does not provide the side benefits of more elaborate schemes, but it does achieve the core purpose, and it does so in as simple a way as one could reasonably hope for.

It has been tried. For the first sixty years of the nineteenth century, the Federal government attempted to raise revenue by auctioning off the public lands. The result was a massive failure, with de jure auctions converted to de facto homesteading through a mixture of political pressure, rigged bidding, and threats of physical injury to any "speculator" rash enough to bid against an (illegal) settler for "his" land.

A full account of that particular episode in American history would take me far beyond the bounds of this paper. But the failure of the government to apply the simplest possible version of site value taxation does not leave me optimistic about the prospects for more elaborate versions.

The krispy kreme statement

The krispy kreme statement was about incentives. It was an economic argument, not an anecdote.

Please be pointing to where I said that. Since I didn’t, don’t put that in quotes and claim that I did.

Your actual quote was - "Should we just let people kill them and take their stuff because they didn’t pay up their protection money?" and before that, "So you think only people who can afford to pay for private protection deserve the right to life, liberty, and property?" I view both of these as strawmen arguments that appeal to emotion. Obviously, none of us believe the poor shouldn't die.

Private protection relies on ability to pay. Government protection is available, on some level at least, to everyone.

Please don't use the word "libertopian" to describe me. Your second sentence above is a great example of utopian beliefs. Government protection does not extend to everyone. There are people in the inner cities of America who have ZERO effective protection. There is no incentive for anyone to provide it. Similarly utopian would be the belief that "education is affordable to everyone at least at some level." Note: I am not saying you said this, only drawing an analogy.

Again, the issue is - in which system would the poor be better off? The economic incentives are aligned against the poor under monopolies.

And who decided whether a

And who decided whether a crime had actually been committed, and what was an appropriate compensation claim?

3rd party arbitrators who themselves often worked for profit, usually settled at the yearly Althing.

"You state that only

"You state that only government can recognize and protect property–on what do you base that assertion?"

Because government exercises a monopoly on the legitimate use of force. Thus they will enforce a *right* to property, whereas without government we just have bands of armed thugs fighting over possession.

"We certainly know that it

"We certainly know that it has been crucial to the advancement and protection of equal rights for women. It’s only been in the last couple decades, and only in a few areas of the world, that women have gained power equal to that of men, and only as the result of a heck of a lot of government action."

That's tangential. But furthermore, it is also the government that produced the laws under which women were subjugated and abused. And it is not as if the government simply decided one day to recognize equal protection in women--it was rather the work of a lot of private lobbying and work. As I said before, government protection does not fall like manna from heaven--it must be purchased with political clout, something poor people have very little of.

By the same logic, you would excuse a murderer as protecting freedoms simply because he eventually decided not to murder people anymore. The government held women to be lesser citizens, then eventually decided to hold them as equals--and you would say it has protected freedom.

"And who decided whether a crime had actually been committed, and what was an appropriate compensation claim?"

Answering questions like that is why Friedman wrote the article, and why I posted it.

"Because government

"Because government exercises a monopoly on the legitimate use of force. Thus they will enforce a right to property, whereas without government we just have bands of armed thugs fighting over possession."

And now you have once again entered that region of discussion you described as "pointless." Your are making claims about what the structure of anarchy would be, and what's more, a claim that is contradictory to your previous assertion. Before you stated that a lack of government would instantly lead to a dictator reinstating the government: now you are saying it would consist of bands of armed thugs.

Anarcho-capitalists, such as Friedman, believe neither to be the case. The reason we enter this arena of discussion is to determine whether or not the claims you, and many non-anarchists make, are true. If that area of discussion is pointless, it is unclear why you keep making so many arguments within it.

"1) Why do we have the

"1) Why do we have the obligation to satisfy the positive rights of Americans but not non-Americans?"

I think each local government has the obligation to protect these rights in the jurisdiction of the territory they control. So it is the duty of the US government to protect these rights in the US, the Costa Rican government to protect these rights in Costa Rica, etc.

"2) Why are police, courts, and military defense the only legitimate positive rights, while rights to food, clothing, healthcare and shelter are not?"

I can have my right to life, liberty, and property without taking away anyone else's right to life, liberty, and property. I can't have a "right" to tangible things like food, clothing, etc. without taking those things from someone else. The first set can be simultaneously exercised by everybody, the second set can't.

"Jacqueline has no less than Milton Friedman to back her up"

Go, Milty, it's your birthday, go, Milty, it's your birthday! :)

"Your actual quote was - “Should we just let people kill them and take their stuff because they didn’t pay up their protection money?” and before that, “So you think only people who can afford to pay for private protection deserve the right to life, liberty, and property?” I view both of these as strawmen arguments that appeal to emotion. Obviously, none of us believe the poor shouldn’t die."

Nope, wasn't intended as an appeal to emotion. I am known as the cold heartless bitch in most of my circles. It was a sincere request for information on how your system would work. I've had similar conversations on this topic with people who responded, "Yeah, if they can't pay for their own protection, then fuck 'em and good riddance." I wanted to know if you were from the "fuck 'em" school of thought or not, since if we have wildly different goals of what sort of results we're trying to achieve it's best to figure that out before we start discussing details on how to get there.

"There are people in the inner cities of America who have ZERO effective protection. There is no incentive for anyone to provide it."

So you're claiming that I could go to an inner city and begin systematically murdering every single resident there and the police and government would do absolutely nothing to stop me?

"3rd party arbitrators who themselves often worked for profit, usually settled at the yearly Althing."

Any why would anyone listen to them?

So you’re claiming that I

So you’re claiming that I could go to an inner city and begin systematically murdering every single resident there and the police and government would do absolutely nothing to stop me?

No, but if you got a bunch of your friends together with enough guns, you could take over the place. That's what the bloods and crips do.

Any why would anyone listen to them?

Again, there is a link above that Scott posted where David Friedman explains all this. People who did not pay restitution were declared outlaws who had a set amount of time to leave Iceland. If they didn't leave, they could be killed without remorse. Poor victims who couldn't afford to chase after them sold their tort claims to others. These others had an incentives to seek restitution because of their own self-interest.

“3rd party arbitrators who

“3rd party arbitrators who themselves often worked for profit, usually settled at the yearly Althing.”

"Any why would anyone listen to them?"

That's answered in the Friedman chapter. The answer was nobody wants a reputation for disregarding verdicts--otherwise few would want to deal with them. Dishonesty is bad business.

"That’s

"That’s tangential."

Tangential?! Maybe to you. I consider whether a system is going to allow me to be beaten, raped, killed, and/or treated like property because I am a woman to be very, very relevant.

"The government held women to be lesser citizens, then eventually decided to hold them as equals–and you would say it has protected freedom."

*A* government held women to be lesser citizens. The laws and office holders have since changed, it is not the same government anymore.

"Before you stated that a lack of government would instantly lead to a dictator reinstating the government: now you are saying it would consist of bands of armed thugs."

Those armed thugs would get in a lot of action in during their five minutes. :)

Look, I really don't consider anarchy to be a plausible solution to anything. And I say this as someone who seriously considered it and was once nearly an anarcho-capitalist. After a lot of thinking and learning I've come to the conclusion that it is a fantasy, and I'm interested in reality. So if all your arguments are based on how great things would theoretically be under anarchy, we probably don't have much left to discuss. My interests these days are in the realm of the possible, ie, given that we will have taxes, which taxes should we have? Or, given that we will have social welfare programs, how to get the incentives right? Etc.

"I can have my right to

"I can have my right to life, liberty, and property without taking away anyone else’s right to life, liberty, and property."

But you can't have a right to protection of your life, liberty, and property without taking away someone else's right to life, liberty, and property. It is the right to that protection you seem to be in favor of, and hence, you are also in favor of violation of others' rights, in order to provide such protection.

“Jacqueline has no less than Milton Friedman to back her up”

Milton's dinner table arguments with David are something of a fond libertarian legend. I'm sure we all wish we could have been flies on the wall.