Voluntarily funded government

[Miles White]

I don't mean this as a critique, but I was just wondering wether statistically speaking is it realistically possible for a monopoly of coercion to be purely voluntarily funded? I mean even government limited to police courts and military would still have allot of people working under it who need paychecks. I guess what I'm asking is wether anyone can show me how much money the government actually takes in and spends and how much can be voluntarily obtained.

Edited December 4, 2007 by Miles White

[Tenure]

You're thinking in reverse.

How much does it cost to keep all those employees under Microsoft running? How many people are willing to voluntarily support these people? How much are they willing to pay?

One simply pays as much as one thinks a service is worth. If one doesn't think a service of any worth, they won't pay. If few people find the service worthy, few will fund it and it will eventually wither away. If this happened with, say, the police force, then that country deserves what follows.

[DavidOdden]

I don't mean this as a critique, but I was just wondering wether statistically speaking is it realistically possible for a monopoly of coercion to be purely voluntarily funded?

First off, the monopoly on the use of force doesn't properly constitute coercion. Anyhow, no problem. The cost of paying for just the proper functions of government would be a tiny fraction of current costs. No money would be spend on welfare queens, public housing, medical treatments, sewer, roads etc. Second, the police would not be issuing traffic and jaywalking tickets, would not be paid to watch manhole covers, and would not be arresting people for engaging in sex for profit or possession of strange powders, so the manpower requirements would be significantly lower. In the latter case, that would have a substantial effect on violent crime because in a free market economy, drug sales would be vastly less profitable and would attract a better class of customer and businessmen so that those mofos wouldn't be always bustin a cap on they asses.

I think the way you should approch the question is to first determine what the actual manpower needs would be. For example, 1 policeman per 5,000 citizens? Per 10,000? A DA, judge and clerk per 25,000? Then work up plausible salary figures (assume that salaries would be the same as now). Based just on cost recovrey through contributions, a justice system could run around $25 per person annually. There is also no reason for not assessing funancial penalties (court costs) against convicted rights violators, which could reduce that figure.

[aequalsa]

I heard an estimate in a speech by(I think) Craig Biddle that it would be between 1-3% of current expenditures. So to pay your "fair share" on $40,000/year, instead of the $18,000 they take now, you'd need to pay $200-$500 a year. So it should cost less then most people's water bill.

[D'kian]

A proper government would also provide mediation in disputes between private parties, such as contract disputes which would mean the government could act to enforce private contracts (when asked to do so by at least one party involved).

So ponder this question: Woudl you rather deal with, say, Visa or AmEx with an enforceable contract or without one?

Ayn Rand propposed private parties could voluntarily pay a kind fo "dispute insurance" when entering into contracts. Thos who chose not to do it would find their agreements not subject to government mediation or enforcement. Now, every transaction involving a credit or debit card implies a contract between you and the card issuer (two, actually, because the card issuer pays the business from whom you purchased something). A small percentage of the value of each transaction would be paid as insurance tot he government, voluntarily, and that might just suffice to fund all proper government activities.

[DavidOdden]

A small percentage of the value of each transaction would be paid as insurance tot he government, voluntarily, and that might just suffice to fund all proper government activities.

That would not, IMO, be a proper funding scheme. Like any insurance plan, premiums should be related to actual risk, where higher payoffs entail higher premiums as does riskier behavior. Within reasonable limits, the insurance cost for any contract should be a function of the risk of that particular contract, and not the overall cost of providing protection against murder within a society.

Generally speaking, there is no reason why credit card users should have to underwrite murder and theft prosecutions.

[DragonMaci]

According to my estimates, proper government here in New Zealand could be funded by an average of NZ$800 per citizen annually. This figure is based on looking at the figures for current expenditure on legitimate government spending, dropping the court and police costs to a small fraction of what they are now, increasing spending on the military (we currently underspend their (out air force has no fighter vehicles, our navy has few ships, and our army is technologically out of date)), and dividing the new total expenditure by the number of taxpayers in New Zealand.

That NZ$1,000 would equate to about US$611 a year. But the US government could no doubt save money by buying in much larger bulk than the New Zealand government does. Also with a lot more taxpayers in hte US than in New Zealand the average would probably go down. So I'd guess that the average cost to US citizens would be more like the US$500 a year aequalsa guessed, maybe slightly more. Both the figures for New Zealand and the US are very low. I'd be willing to pay NZ$800 a year or US$500 a year for the protection of the law, courts, police, and army. It is a minuscule price to pay for protection from the initiation of force.

[progressiveman1]

I heard an estimate in a speech by(I think) Craig Biddle that it would be between 1-3% of current expenditures. So to pay your "fair share" on $40,000/year, instead of the $18,000 they take now, you'd need to pay $200-$500 a year. So it should cost less then most people's water bill.

But how much would people actually be saving? A lot of the services the gov't has now people would just transfer their payments to private companies, which means they would still be spending money for those things.

[DarkWaters]

But how much would people actually be saving? A lot of the services the gov't has now people would just transfer their payments to private companies, which means they would still be spending money for those things.

A good question. Most likely, service that is comparable to what is provided by various forms of government (e.g., refuse collection, mail delivery, public libraries, firefighting, road maintenance, et cetera) would cost less under laissez-faire capitalism. In certain cases, citizens would even elect not to use many of the services. Consumer choice will drive down costs, although it is more obvious how it will be done in certain markets than in others.

[aequalsa]

But how much would people actually be saving? A lot of the services the gov't has now people would just transfer their payments to private companies, which means they would still be spending money for those things.

I believe the average cost of government is 93%. So 7% gets to the actual product. Give the businessmen 30% profit on the 7 and they are up to 9%. So realistically, I would guess 90% would be saved

[D'kian]

That would not, IMO, be a proper funding scheme. Like any insurance plan, premiums should be related to actual risk, where higher payoffs entail higher premiums as does riskier behavior. Within reasonable limits, the insurance cost for any contract should be a function of the risk of that particular contract, and not the overall cost of providing protection against murder within a society.

Would that not open the door for govenemtn to asses risk? And once having assesed it, and insured it to an extent, would it not open the way for government to regulate such contracts?

Of course, the risk to the insurer in this case is that it might need to arbitrate a dispute, nothing more. That helps, but it concerns me.

Generally speaking, there is no reason why credit card users should have to underwrite murder and theft prosecutions.

True, but the small arbitration insurance would be easiest to collect. That's convenient and carries a rather low cost. Plus, how much money moves through credit cards each day? I'm willing to bet it's over a trillion dollars a year, especially if we add debit cards and check cards.

Now, this would impact all economic activity. It may be a better idea, for that reason, to keep it low enough to cover only the risk that arbitration will be needed.

[DavidOdden]

But how much would people actually be saving?

I don't think that matters. What matters is whether it is possible to fund government protection of rights by voluntary contributions, and the answer is that there can't be any serious doubt about that. I also expect to get a trash bill (it's a local quirk that I don't already), and would get an annual road pass. I already pay for my postage; there's be fire protection for a few bucks a month.

[aequalsa]

I believe the average cost of government is 93%. So 7% gets to the actual product. Give the businessmen 30% profit on the 7 and they are up to 9%. So realistically, I would guess 90% would be saved

Really though, there is no way to figure it accurately. Generally though, true free enterprise will continue to reduce all costs. So there is no way to accurately calculate the time value of money left in the able hands of those who created it. When they steal it, they destroy it. Because they don't understand the true value of wealth.

[DavidOdden]

Would that not open the door for govenemtn to asses risk?

I would demand that they assess risk!

And once having assesed it, and insured it to an extent, would it not open the way for government to regulate such contracts?

No: but actually, I realized that I no longer support the idea of a govenment contract enforcement fee. There is an actual cost of enforcing a contract; that cost should be borne by the non-innocent parties. They may pay in a lump sum out of their pocket, or they may hand the payment issue over to an insurance company. The government should not be in the business of competing with private insurance companies. The government should be in the business of enforcing contracts, and enforcing payment for the cost of them doing their job, collected from those that cause the expense.

[DavidV]

But how much would people actually be saving? A lot of the services the gov't has now people would just transfer their payments to private companies, which means they would still be spending money for those things.

About 80% of the federal government's budget is transfer payments. That is, 80% of what you pay in taxes is ultimately spent by individuals and companies. Imagine how much more efficient people would be with their own money and how much would be saved in transaction costs.

[progressiveman1]

I don't think that matters. What matters is whether it is possible to fund government protection of rights by voluntary contributions

If there is a significant difference in people's expenses after setting up a proper gov't, that would be a major factor in whether they could afford to voluntarily pay taxes.

[D'kian]

I would demand that they assess risk!No: but actually, I realized that I no longer support the idea of a govenment contract enforcement fee. There is an actual cost of enforcing a contract; that cost should be borne by the non-innocent parties. They may pay in a lump sum out of their pocket, or they may hand the payment issue over to an insurance company. The government should not be in the business of competing with private insurance companies. The government should be in the business of enforcing contracts, and enforcing payment for the cost of them doing their job, collected from those that cause the expense.

I agree. As I said before, the government would insure the risk that the parties toa contract would enter into a dispute and require arbitration. Essentially the government would insure you against paying court costs later on. The payment would also mean the parties agree to abide by such arbitration.

Let's say even without insurance the parties can agree to resort to the government. Fine. But either one or both would have to pay for the judge, the clerk, etc. That's it. Any award resulting from the judge's ruling would be paid by the party found to be liable or at fault (the term guilty does not apply to civil matters) however it can or wants to, be it out of pocket or through its insurance company.

[aequalsa]

If there is a significant difference in people's expenses after setting up a proper gov't, that would be a major factor in whether they could afford to voluntarily pay taxes.

Do you honestly think that there is anything the government does(outside of force issues) that could not be done more efficiently by the free market?

[progressiveman1]

Do you honestly think that there is anything the government does(outside of force issues) that could not be done more efficiently by the free market?

Not that I can think of. I think expenses in general would be a lot lower if our society changed to laissez-faire because of increased competition and innovations. That's why society would be able to afford and choose to pay for taxes at that point.

[Miles White]

Oregon's biennial state budget, $42.4 billion as of 2007, comprises General Funds, Federal Funds, Lottery Funds, and Other Funds. Personal income taxes account for 88% of the General Fund's projected funds. The Lottery Fund, which has grown steadily since the lottery was approved in 1984, exceeded expectations in the 2007 fiscal years, at $604 million.

This is an interesting bit of information from wikipedia, it says that the oregon state government generated $604 million dollars through lottery alone. Maybe Rand was right about funding the government entirely off of lottery, heres the link. http://en.wikipedia.org/wiki/Oregon

Edited December 6, 2007 by Miles White

[Clawg]

This is an interesting bit of information from wikipedia, it says that the oregon state government generated $604 million dollars through lottery alone. Maybe Rand was right about funding the government entirely off of lottery, heres the link. <a href="http://en.wikipedia.org/wiki/Oregon" target="_blank">http://en.wikipedia.org/wiki/Oregon</a>

No, not without force. A private lottery which keeps a smaller part of the money will drive the government's lottery from the market.

[DragonMaci]

I don't support the idea of a government lottery. I don't see why the government has any more business competing with private lottery companies than they do with other private businesses.

[DarkWaters]

I don't support the idea of a government lottery. I don't see why the government has any more business competing with private lottery companies than they do with other private businesses.

I think a government lottery is perfectly fine so long as participation is voluntary and it is done on a not-for-profit basis for the sake of fund raising. No force is initiated in this context, not even against privately owned and operated lotteries.

Edited December 8, 2007 by DarkWaters

[DavidOdden]

I think a government lottery is perfectly fine so long as participation is voluntary and it is done on a not-for-profit basis for the sake of fund raising.

Okay, let's pursue this. What about govenment-run TV and radio; water, gas, electric; groceries, hardware, shoes? In general, is it okay for government to engage in business as long as participation is voluntary and all profits are limited to whatever is necessary to run the government?

[DarkWaters]

Okay, let's pursue this. What about govenment-run TV and radio; water, gas, electric; groceries, hardware, shoes? In general, is it okay for government to engage in business as long as participation is voluntary and all profits are limited to whatever is necessary to run the government?

Fair enough question. Let me preface my response with that permitting government financing through a voluntary lottery is not a conviction of mine but just a mechanism that seems to be acceptable.

After cursory contemplation, my answer to your questions is no, primarily because the examples you have cited are not great vehicles for government fund raising. All of these entrepreneurial ventures would involve significant investments in infrastructure, personnel and resource procurement. Unlike a lottery, there is a considerable chance that these pursuits would not even generate a positive income. On the other hand, a lottery, if I am not mistaken, should be easy to run, low risk for the government and the accounting should be very transparent.

Needless to say, I see the principle you are driving towards.

What do you think?