Jump to content
Objectivism Online Forum

Voluntarily funded government

Rate this topic


Miles White

Recommended Posts

I can't see how a gov't lottery isn't a contradiction to the separation of state and economics. That is a principle you accept, isn't it?
Yes, I accept it as a principle at some level, though not as the most fundamental principle of government. I don't intend to get drawn in further, because (as I've said above) I think government funding discussion at that level of detail are too speculative for my taste.
Link to comment
Share on other sites

  • Replies 125
  • Created
  • Last Reply

Top Posters In This Topic

Yes, I accept it as a principle at some level, though not as the most fundamental principle of government. I don't intend to get drawn in further, because (as I've said above) I think government funding discussion at that level of detail are too speculative for my taste.

In that case, I'll understand if you don't respond any further, but I want to try to milk everything out of you anyways.

The more fundamental principle I assume you mean is: no initiation of force. Is this right? You think a gov't lottery is fine because it wouldn't initiate force on anybody?

Link to comment
Share on other sites

  • 4 weeks later...

Funding a government by lottery makes no sense. A private lottery can offer bigger payout for the same cost. If anyone buys the government lottery despite that - they might as well buy the private one and donate the difference.

Funding a government by "contract insurance" makes no sense. A private insurance company can offer the same coverage for a lower premium. If anyone buys the government insurance, they might as well buy the private one and donate the difference.

These ideas are only seriously debated because they were contemplated by Ayn Rand herself, but there is really no moral way to fund a government that does not boil down to donations.

One exception: for matters of justice, a "loser pays" system could work well. In that case the person who caused the need for government involvement (and thus expense) is identifiable, and the cost can be objectively determined. But in many cases, most criminal cases for instance, the culprit can't pay, because he destroyed more wealth than he has or could ever produce. So an "external" source of funding will always be necessary. Donations it is.

Edited by mrocktor
Link to comment
Share on other sites

Funding a government by "contract insurance" makes no sense. A private insurance company can offer the same coverage for a lower premium. If anyone buys the government insurance, they might as well buy the private one and donate the difference.

I'll say this again because arguments tend to get lost in the clutter of large threads. I say that government ought to insure contracts only as refers to the need for arbitration. That is, if you don't pay the insurance fee, then the government won't arbitrate any disputes arising from that contract, or it will charge a fee for doing so.

Ok, a private firm could do that, too, setting itself up as neutral third party to solve disputes, either with insurance or with a fee for arbitration services. But such arbitration wouldn't be legally enforceable.

Link to comment
Share on other sites

  • 1 month later...

I beleive that the government should be funded like insurence. For example, the police and local courts can be entirly privitized, but those people that pay a premium to the government will be free to choose what ever private police or court service they want completly free of charge because the government will sub-contract the service on behave of the donater. This system eliminates the free rider problem and gaurantees competative service maintained under objective law. The military would be a little more complex to fund, but that should be able to maintain revenue from the donations.

Link to comment
Share on other sites

I'll also say this again, in the same iterest of clarity.

I say that government ought to insure contracts only as refers to the need for arbitration. That is, if you don't pay the insurance fee, then the government won't arbitrate any disputes arising from that contract, or it will charge a fee for doing so.

In other words, your rights (to property in this case, which is the basis for contracts) are conditional to paying the government. In other words, an innocent man who is the victim of a crime will not be protected unless he pays some arbitrary fee.

Whether you charge this fee before the fact or after it is immaterial. The fact remains that this fee can be set to any arbitrary value, and if it is not paid the innocent man has no rights. This is, in fact, a tax. The only distinction is that the government doesn't send its goons to rob you. It lets common criminals rob you instead. More of a protection racket than robbery, I suppose.

Ok, a private firm could do that, too, setting itself up as neutral third party to solve disputes, either with insurance or with a fee for arbitration services. But such arbitration wouldn't be legally enforceable.

It could simply sell insurance, not arbitrate the dispute. Instead of buying the "insurance" from the government, you buy it from the private company. If you need arbitration, the private company pays the governments fees. No one would buy the governments "insurance", since it would be more expensive (since it has to produce extra funds to pay for the rest of the government).

At this point the government would have to increase the actual arbitration fees above the actual arbitration costs, and then instead of having people paying for the costs of the government services they consume we are back to people being extorted out of their money, with the threat of not having their rights protected.

The only way to fund a proper government is through donations. What system is used for these donations is debatable. Peer pressure should be the means to combat free riding. No one is forced to pay a cent to the government - and their rights absolutely should be protected even if they don't. No one is forced to sell them bread or hire them, though.

Edited by mrocktor
Link to comment
Share on other sites

I'll also say this again, in the same iterest of clarity.

In other words, your rights (to property in this case, which is the basis for contracts) are conditional to paying the government. In other words, an innocent man who is the victim of a crime will not be protected unless he pays some arbitrary fee.

Whether you charge this fee before the fact or after it is immaterial. The fact remains that this fee can be set to any arbitrary value, and if it is not paid the innocent man has no rights. This is, in fact, a tax. The only distinction is that the government doesn't send its goons to rob you. It lets common criminals rob you instead. More of a protection racket than robbery, I suppose.

It could simply sell insurance, not arbitrate the dispute. Instead of buying the "insurance" from the government, you buy it from the private company. If you need arbitration, the private company pays the governments fees. No one would buy the governments "insurance", since it would be more expensive (since it has to produce extra funds to pay for the rest of the government).

At this point the government would have to increase the actual arbitration fees above the actual arbitration costs, and then instead of having people paying for the costs of the government services they consume we are back to people being extorted out of their money, with the threat of not having their rights protected.

The only way to fund a proper government is through donations. What system is used for these donations is debatable. Peer pressure should be the means to combat free riding. No one is forced to pay a cent to the government - and their rights absolutely should be protected even if they don't. No one is forced to sell them bread or hire them, though.

A simple method of funding government would be fees for the enforcement of contracts. To have the benefit of the legal enforcement powers of government, which includes access to the courts, a fee would have to be paid. A similar mechanism already exists today where a variety of filing fees are paid to the government when legal proceedings are initiated.

Government ought to and does have a monopoly on the use of force, so government sets the fees. However, this is where the principle of "government by consent of the governed" comes in. In a republican government, the people elect its representatives who set the fees and carry out in detail the broad principles established under the Constitution. As long as government's role is constitutionally delimited to the protection of rights, and government itself cannot violate rights, this is not a protection racket.

Police protection should be provided to everyone. There is minimal free rider problem because everyone pays, directly or indirectly, for the enforcement powers of government, which includes police protection. For example, most people buying a house would pay for legal enforcement of the purchase contract. In fact, I suspect that every bank providing a mortgage would mandate that such a fee be paid, just as they require home buyers to purchase insurance. Apartment dwellers pay indirectly through their landlord, who pays similar fees not just when he purchases or builds an apartment house, but also when he contracts for significant services.

In addition to such fees, donations would be important. Is there a risk of corruption? Of course. But the overriding point to bear in mind is that such risk is minimized because government's power to hand out favors is essentially non-existent, pursuant to the Constitution. Corruption in a free society would be de minimus. A free press also serves a vital role, as it does today, to root out those few cases of corruption that emerge.

Incidentally, government in a laissez-faire society, while small, would be far less bureaucratic and more entrepreneurial than today's governments. It would reflect the rich entrepreneurial spirit of the society it existed in. I can envision many creative ways to supplement financing, beyond the fees I describe. For example, people can name all sorts of government buildings and military equipment. As just one example, in today's context, imagine how many Americans would pay to name a missile or an aircraft carrier that might be used to destroy the Islamic threat?

Whether people should be allowed to donate to build police stations or jails or courthouses (which are the only other services government provides), is a policy decision that can be made by voters and their elected representatives.

The fact is, governments are "of the people." The fact that problems *can* emerge is not an argument against the type of government that would exist in a laissez-faire society, any more than the fact that criminals exist is an argument that no criminal justice system is valid. A government structured along the lines I describe, under capitalist political principles, is a good government that protects people's rights.

Link to comment
Share on other sites

In other words, your rights (to property in this case, which is the basis for contracts) are conditional to paying the government. In other words, an innocent man who is the victim of a crime will not be protected unless he pays some arbitrary fee.

No. your rights to have government arbitrate a dispute and enforce its decision would be so conditioned. Nothing more. Your property would still be protected against theft (that is, the government would attempt to capture and prosecute the thieves, which is all it can and should do). And you'd still enjoy such protection as the armed forces provide.

I did not address the free-rider issue. I think Galileo does it quite weel in his post.

The only way to fund a proper government is through donations. What system is used for these donations is debatable.

That might work, too. I'd favor a voluntary long-term contract about such donations, too. say you could agree to donate to the government a percentage of your yearly income, or a fixed yearly ammount, paid monthly for a number of years. Say contracts would be available for 1, 5, 10, 15, 20, 25, etc years. Or by a pledge system, as is done by charities today. the reason for a long term commitment is that most people would slip in their payments without a constant reminder, or even a legal requirement to pay what they've agreed to pay. Ask anyone who's taken or given a lease without a formal contract (usually between family or friends); it's asking for trouble by both sides.

Link to comment
Share on other sites

Incidentally, government in a laissez-faire society, while small, would be far less bureaucratic and more entrepreneurial than today's governments. It would reflect the rich entrepreneurial spirit of the society it existed in. I can envision many creative ways to supplement financing, beyond the fees I describe. For example, people can name all sorts of government buildings and military equipment. As just one example, in today's context, imagine how many Americans would pay to name a missile or an aircraft carrier that might be used to destroy the Islamic threat?

I'd pay to have a message chalked on a bomb or missile, multiple times. I couldn't afford much else. (sample messages "Brother, you asked for it," "If you can read this you're one lucky bastard," and "Give my regards to Allah.") Or I can see groups pooling their resources to name a ship "USS Prometheus."

On the other hand, the Navy has a tradition for naming their ships after presidents, people important to the Navy, distinguished or notorious Navy personnel; and some odd traditions like naming ships for famous land battles (USS Anzio) and for cities and states (sumarine classes like the Los Angeles and the Ohio).

The Army names its weapons after distinguished Soldiers. That is the case of tanks (Sherman, Abrams), armored personnel carriers (Bradley), and assorte weapons systems like the Sgt. York.

I don't think they'll like selling their institutional traditions to the highest bidder.

Link to comment
Share on other sites

I don't think they'll like selling their institutional traditions to the highest bidder.

Why not? In point of fact, they wouldn't be selling their traditions. Rather, the military would be raising money to pay for their equipment and acknowledging those who do provide that money.

In a similar manner, schools have donors name their buildings all the time. At the same time, schools also name some buildings or classrooms after revered deans and professors. I see no reason why the military could not establish similar policies that acknowledge both benefactors and revered figures faithfully.

In any case, the whole topic is a very minor point, although it does serve to make the larger point that there are many ways for a small laissez-faire government to get the revenues it needs. In my opinion, the entire argument against voluntary financing of such a government does not hold up.

Link to comment
Share on other sites

In a republican government, the people elect its representatives who set the fees and carry out in detail the broad principles established under the Constitution. As long as government's role is constitutionally delimited to the protection of rights, and government itself cannot violate rights, this is not a protection racket.

Police protection should be provided to everyone. There is minimal free rider problem because everyone pays, directly or indirectly, for the enforcement powers of government, which includes police protection. For example, most people buying a house would pay for legal enforcement of the purchase contract. In fact, I suspect that every bank providing a mortgage would mandate that such a fee be paid, just as they require home buyers to purchase insurance. Apartment dwellers pay indirectly through their landlord, who pays similar fees not just when he purchases or builds an apartment house, but also when he contracts for significant services.

I'm not sure that everyone pays. For example, do children or the severely disabled pay? More importantly, even with government financing via contract fees, some people would obviously pay more than others. People buying expensive houses would pay more than those buying cheap houses (or boats, TVs, golf clubs).

And there would be others who, perhaps foolishly, would choose to contract for goods and services without paying any fees. Presumably no law would force Jones to get contract insurance and pay a fee when he buys a car from Smith (otherwise, the method of revenue collection would be involuntary).

Yet under your republican form of government, all of these people, the payers of big contract fees and the payers of small or no fees, would benefit equally from government and have an equal vote, an equal voice in government.

We would then have the same problem as our present majority rule: those voters who are net fee consumers would, through their representatives, allot themselves larger and larger government benefits at the expense of net fee producers.

Let’s say in the Republic of Quack, Donald pays on average $1,000 in contract fees per annum. And Daffy pays only $500. On the other hand, Scrooge pays a yearly average of $10,000. Yet they all receive about $3,800 in police, court and military services.

Since Donald and Daffy can outvote Scrooge, wouldn’t they have an incentive to raise the rate of the fees? Admittedly, their own rates would go up, too, but they would be reaping increased government benefits at the expense of those who pay much more. If the fees are doubled, Daffy pays $500 more in fees but now gets about $3,800 more in benefits. Not a bad trade-off. Scrooge, by contrast, also gets $3,800 more benefits but has to pay $10,000 more in fees.

As you said, “Police protection should be provided to everyone,” and thus net fee consumers would have every incentive to increase government spending since the cost/benefit ratio to them would be favorable. By comparison, Scrooge, a net fee producer, would pay proportionately much more than the average, but would still receive only an average-sized benefit.

What we have just seen is another form of wealth redistribution.

Link to comment
Share on other sites

I'm not sure that everyone pays. For example, do children or the severely disabled pay? More importantly, even with government financing via contract fees, some people would obviously pay more than others. People buying expensive houses would pay more than those buying cheap houses (or boats, TVs, golf clubs).

And there would be others who, perhaps foolishly, would choose to contract for goods and services without paying any fees. Presumably no law would force Jones to get contract insurance and pay a fee when he buys a car from Smith (otherwise, the method of revenue collection would be involuntary).

Yet under your republican form of government, all of these people, the payers of big contract fees and the payers of small or no fees, would benefit equally from government and have an equal vote, an equal voice in government.

We would then have the same problem as our present majority rule: those voters who are net fee consumers would, through their representatives, allot themselves larger and larger government benefits at the expense of net fee producers.

Let’s say in the Republic of Quack, Donald pays on average $1,000 in contract fees per annum. And Daffy pays only $500. On the other hand, Scrooge pays a yearly average of $10,000. Yet they all receive about $3,800 in police, court and military services.

Since Donald and Daffy can outvote Scrooge, wouldn’t they have an incentive to raise the rate of the fees? Admittedly, their own rates would go up, too, but they would be reaping increased government benefits at the expense of those who pay much more. If the fees are doubled, Daffy pays $500 more in fees but now gets about $3,800 more in benefits. Not a bad trade-off. Scrooge, by contrast, also gets $3,800 more benefits but has to pay $10,000 more in fees.

As you said, “Police protection should be provided to everyone,” and thus net fee consumers would have every incentive to increase government spending since the cost/benefit ratio to them would be favorable. By comparison, Scrooge, a net fee producer, would pay proportionately much more than the average, but would still receive only an average-sized benefit.

What we have just seen is another form of wealth redistribution.

If government is small, I am not going to worry too much about this problem.

Moreover, your hypothetical points up the importance of philosophy. Such a government does not emerge in a vacuum. In our present redistributionist world, people may eagerly seek to gain at others' expense when it comes to government. A constitutionally delimited, capitalist government solely devoted to protecting rights could only emerge after rational philosophy has taken hold. If people have accepted the reasons for such a government, and government is exceedingly small, the whole scenario you describe is a minor problem, if it would exist at all.

Link to comment
Share on other sites

I'm not sure that everyone pays. For example, do children or the severely disabled pay?

Children don't have the responsibility to do so. But yes, they do. Or at least their parents do. Likewise the disabled. Even the beggar in the street.

It's like this: You sell, let us say, books through the internet. 99% of your transactions are by credit or debit card. You pay, let's assume, 1% of each transaction voluntarily to the government and your customers another 1%. If a disabled mand buys a book from you, he's paid. If a parent with children does so, the children, included in the parent's sphere of responsibility, also paid. The beggar does not pay directly, but he buys a cup of coffe from a dinner, in cash, that does pay some form of voluntary contribution. the beggar's share is included in the price charged by the dinner.

It's well know that when taxes go up so do prices. Business ahving to recover the extra expenditures if they're able (and if regulations permit, as things stand right now). The same principle would apply to contract insurance or coluntary contributions.

As you said, “Police protection should be provided to everyone,” and thus net fee consumers would have every incentive to increase government spending since the cost/benefit ratio to them would be favorable. By comparison, Scrooge, a net fee producer, would pay proportionately much more than the average, but would still receive only an average-sized benefit.

Ah, but Scrooge being richer than Donald and Daffy, he has more need of an effective police and army. He has more to loose and criminal have a bigger incentive to rob him. In fact, Scrooge would likely hire additional private security for his businesses (such as banks).

consider street lighting. Suppose the electric company charges you a fee for it to pay for power consumption and upkeep. You don't want to do without streetlights, right? Well, a tourist from out of town does not pay a penny to the utility company, yet he gets the same light while driving through your street. Would you stop paying fro street lamps on account of that?

Link to comment
Share on other sites

If government is small, I am not going to worry too much about this problem.

Moreover, your hypothetical points up the importance of philosophy. Such a government does not emerge in a vacuum. In our present redistributionist world, people may eagerly seek to gain at others' expense when it comes to government. A constitutionally delimited, capitalist government solely devoted to protecting rights could only emerge after rational philosophy has taken hold. If people have accepted the reasons for such a government, and government is exceedingly small, the whole scenario you describe is a minor problem, if it would exist at all.

If philosophy teaches us to eschew redistributionism, then we would have to conclude that it is unjust for Daffy and Donald to receive $3,800 in government services while paying on average only $1,000 in fees. Similarly, we should recognize that Scrooge is overcharged if he pays $10,000 in fees but receives only $3,800 in services.

Moreover, we would have to say that any system that routinely assesses a citizen an amount that has nothing to do with what he actually receives in services is unjust. And since justice is a matter of principle not quantity, the issue is not resolved by making the government “exceedingly small.” Indeed, the scenario I described above presumed a “constitutionally delimited, capitalist” government.

But how to avoid redistributionism? It is hard to conceive of any large, functioning capitalist society where there would not exist a wide variation in the number and size of contracts its citizens sign each year, from the captains of industry to the denizens of Skid Row.

Inevitably, if the amount one pays for government in a year is based on the total value of contracts one signs in a year, some citizens will have to pay far more than others to support the government without receiving a proportionately greater return in services rendered.

Yet even if we suppose that a "rational philosophy has taken hold," how would principled but impoverished citizens avoid partaking in wealth transfer? Would they have to consistently vote for lower and lower contract fees -- even at the peril of cutting the nation's police, courts and the military to ineffective levels? Would they have to avoid picking up the phone whenever they suspected an intruder was in the attic?

Conversely, wouldn’t net fee producers be justified in demanding more and more services specific to them? A police station in every wealthy neighborhood? A government guard at every private gate?

It seems that the only way to avoid such dilemmas is not to link contributions to government to the activity that one conducts as a buyer and consumer in the marketplace.

Link to comment
Share on other sites

Ah, but Scrooge being richer than Donald and Daffy, he has more need of an effective police and army. He has more to loose and criminal have a bigger incentive to rob him.

Let me get this straight. A man who makes $1 million/year has more need of a big national defense to protect his life and home from a foreign invading army than a man who makes only $10,000?

In fact, Scrooge would likely hire additional private security for his businesses (such as banks).

Does that mean that the government will give him a rebate for not having to deploy government cops to defend his business?

consider street lighting. Suppose the electric company charges you a fee for it to pay for power consumption and upkeep. You don't want to do without streetlights, right? Well, a tourist from out of town does not pay a penny to the utility company, yet he gets the same light while driving through your street. Would you stop paying fro street lamps on account of that?

I would want my electric bill to pay for the power consumption and upkeep of the lights on my street. That does not mean I want my bill to pay for installing and maintaining lights on the street of someone who has no means or intention of paying for such lights.

Link to comment
Share on other sites

If philosophy teaches us to eschew redistributionism,

If the philosophy you are referring to is Objectivism, it teaches us to eschew rights violations, not necessarily redistributionism among voluntary participants. Money being redistributed as a result of voluntary and willful participants is different from money redistributed at the point of a gun or by the force of law.

Link to comment
Share on other sites

I have not read through every page of this thread, so I don't know if this has been said yet, but here is my very quickly thrown together system for a lottery that funds the government.

Let's say private enterprise takes over the business of running a lottery. People put their money into the lottery pot, the winnings are given out and the private business gives a percentage to the government and keeps the rest. Different businesses could compete for which Private Lottery the customers will purchase tickets from, just like any other business. Perhaps cheaper tickets, a bigger pot, more percentages going to the government or to the winners could be incentives to goto different Private Lottery comapnies..

Link to comment
Share on other sites

Since Donald and Daffy can outvote Scrooge, wouldn’t they have an incentive to raise the rate of the fees? Admittedly, their own rates would go up, too, but they would be reaping increased government benefits at the expense of those who pay much more. If the fees are doubled, Daffy pays $500 more in fees but now gets about $3,800 more in benefits. Not a bad trade-off. Scrooge, by contrast, also gets $3,800 more benefits but has to pay $10,000 more in fees.

The only way to determine who "gets . . . more benefits" is how many man-hours/use of equipment, etc is used on behalf of each person. It is possible that the fellow who only pays $1,500 in fees gets more benefits because of the number of times he calls the police. If that is the case, there is nothing wrong with assessing a usage fee.

The protection of liberty, like every other value, must be paid for.

Dan

Edited by dbc
Link to comment
Share on other sites

If the philosophy you are referring to is Objectivism, it teaches us to eschew rights violations, not necessarily redistributionism among voluntary participants. Money being redistributed as a result of voluntary and willful participants is different from money redistributed at the point of a gun or by the force of law.

I was under the impression that Objectivism also teaches value for value: "Money is the material shape of the principle that men who wish to deal with one another must deal by trade and give value for value." (Atlas Shrugged)

As for the participants being voluntary, if government is the only permitted means of enforcing a contract, then paying for government contract insurance is not entirely voluntary.

Link to comment
Share on other sites

As for the participants being voluntary, if government is the only permitted means of enforcing a contract, then paying for government contract insurance is not entirely voluntary.

What part of the transaction is not voluntary?

Dan

Link to comment
Share on other sites

I was under the impression that Objectivism also teaches value for value: "Money is the material shape of the principle that men who wish to deal with one another must deal by trade and give value for value." (Atlas Shrugged)

Yes, by trade, voluntarily, not coerced. That is a key element to the quote you just provided.

Link to comment
Share on other sites

Let me get this straight. A man who makes $1 million/year has more need of a big national defense to protect his life and home from a foreign invading army than a man who makes only $10,000?

He has more need of police because he is a more tempting target. He needs exactly the same armed forces, because they will protect the whole country impartially, or at least according to military criteria. But he does have more to loose in the event of an invasion or any kid of attack.

I would want my electric bill to pay for the power consumption and upkeep of the lights on my street. That does not mean I want my bill to pay for installing and maintaining lights on the street of someone who has no means or intention of paying for such lights.

Quite. And you shoulnd't pay taxes to maintain the army of another country, either. But that's not what I asked.

Link to comment
Share on other sites

He has more need of police because he is a more tempting target. He needs exactly the same armed forces, because they will protect the whole country impartially, or at least according to military criteria. But he does have more to loose in the event of an invasion or any kid of attack.

Quite. And you shoulnd't pay taxes to maintain the army of another country, either. But that's not what I asked.

The same holds true for large corporations. There is a good chance that many of us will never use large parts of the legal system, but a large corporation has multiple issues that come up every day that may need to be resolved in court if there's no other way to handle it, so they have a much bigger interest in making sure that there is an objective and sufficiently funded legal system available to arbitrate between differences. I think in that context it makes sense that they pay more; they also receive more.

Link to comment
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
  • Recently Browsing   0 members

    • No registered users viewing this page.

×
×
  • Create New...