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Voluntarily funded government

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Miles White

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A simple method of funding government would be fees for the enforcement of contracts.
Here are some other simple ways to fund government. 1: depend on voluntary contributions. 2: Confiscating the property of any rights-violating person or nation.
A similar mechanism already exists today where a variety of filing fees are paid to the government when legal proceedings are initiated.
It's not sufficiently similar, because those fees are structured to cover expenses incurred by the user, and not to fully underwrite the function of government (e.g. the police). So to be clear, contract fees should only pay for contract enforcement costs. In addition, the party in breach should be held wholely responsible for the cost of the procedings, which negates the motivation for contract enforcement fees (except as a form of up-front money).
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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.

Very well then, if Scrooge and Daffy need “exactly the same armed forces,” why should Scrooge have to shoulder a greater burden in financing those forces? Why not charge every citizen-beneficiary of national defense the same flat fee? I could see that Scrooge might need additional personnel and equipment deployed on his behalf if he inhabited a tiny island far removed from the mainland and its defenses. But if Scrooge and Daffy live in the same mainland city, they will require precisely the same allotment of military services. Charging Scrooge more because he "needs" it more would be like pricing padlocks on the basis of what you intend to keep locked up.

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

I think I answered your question. I don’t mind spending money to keep my own street illuminated, even if non-payers visiting my street benefit from the streetlights. However, I would object to having to cover the cost of lighting the streets of those who pay little or nothing to the power company. And the same objection would apply to police services.

Why indeed should Scrooge subsidize Daffy’s police services?

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I'm trying to identify the essential principle regarding the proper means of government financing. Obvious being voluntary is a sine qua non.

I'm not convinced this is completely true. The principle governing application of laws is not one of voluntarism, which would imply that we could choose whether or not we wanted to have laws enforced against us. The principle governing application of laws is a priori consent, based on agreement of principles of justice.

I believe the same principle may apply to government financing, that is, that a priori consent, as opposed to voluntarism, could be the basis of proper financing. I don't know what mechanisms could be used to implement safeguards against improper gov't functions, but I believe we could reach a fundamental agreement as to the objective value of government that would make a taxation feasible, within Objectivist philosophical standards.

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The principle governing application of laws is not one of voluntarism, which would imply that we could choose whether or not we wanted to have laws enforced against us.
Because you do not have the right to violate another person's rights. But you do have the right to your own property. Keeping your own money is not a violation of anybody's rights.
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Because you do not have the right to violate another person's rights. But you do have the right to your own property. Keeping your own money is not a violation of anybody's rights.

True, the principle of rejection of force should be inviolable. But there are always disputes as to whether a violation has occurred, and the only way to address these disputes is through an a priori consent to the government's judicial process. In other cases, the application of justice may be against a person's will and against his beliefs as to what is and isn't his rightful property. In addition, the adjudication of a particular situation may be seen as out of proportion to the violation, in the perp's view, but he would still be bound, by a priori consent, to abide by the judgment of the court. In the same way, the value of a properly run government could be agreed and consented to by all citizens, with the establishment of a rational and fair tax on market exchanges across the society.

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Very well then, if Scrooge and Daffy need “exactly the same armed forces,” why should Scrooge have to shoulder a greater burden in financing those forces?

Scrooge always has more to loose in the event of war.

Why not charge every citizen-beneficiary of national defense the same flat fee?

I could live with that.

But if Scrooge and Daffy live in the same mainland city, they will require precisely the same allotment of military services. Charging Scrooge more because he "needs" it more would be like pricing padlocks on the basis of what you intend to keep locked up.

But government isn't only the military. there's the police and the courts (and the cost of the three branches that mannage and oversee it all). If Scrooge benefits more than Daffy from the prescence of an effective police force, shouldn't he pay more? If he makes more use of the courts than daffy does, shouldn't he pay more?

There is a reticence (perfectly understandable) about having your money used to benefit someone else. Today a great deal of your tax money is simply given away to someone else. That's vile. But we're not talking about that. the issue is whether you'd pay what's needed to maintain a propper government, which is to your benefit, even if some pay less than you do and get the same basic benefits.

I think I answered your question. I don’t mind spending money to keep my own street illuminated, even if non-payers visiting my street benefit from the streetlights. However, I would object to having to cover the cost of lighting the streets of those who pay little or nothing to the power company. And the same objection would apply to police services.

Let's say the people in Billybotton don't pay for either street lamps or police. Then they shouldn't have their streets illuminated or their neighborhood policed. Is that right?

Well, then, think of the consequences. One is Billybotton would become a safe-haven for all criminals. Another is Billybottoners would passionately hate the police (what with all the criminals living there and preying on them as much as on outsiders). Finally let's see the police department brave enough to go there without a small army to watch their backs.

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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.

This is the essential point. If your rights are not protected, a voluntary agreement is impossible. Literally. This is why there can be no relation between government funding and the availability of rights protection. And contract enforcement is rights protection - not some "extra" that can be sold sepparately.

Funding the government has to be a free choice, not something you weigh against the threat of force - be it a threat from the government itself (as happens today) or the threat of being victimized by others when the government refuses to protect you because you didn't pay "enough".

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This is the essential point. If your rights are not protected, a voluntary agreement is impossible. Literally. This is why there can be no relation between government funding and the availability of rights protection. And contract enforcement is rights protection - not some "extra" that can be sold sepparately.

Funding the government has to be a free choice, not something you weigh against the threat of force - be it a threat from the government itself (as happens today) or the threat of being victimized by others when the government refuses to protect you because you didn't pay "enough".

Government's role in protecting rights is a service that the government performs. It is different than private services in that it is a legal monopoly, and that the service involves the use of force. But it is a service, nevertheless. As such, users of that service ought to pay for it. In the case of contracts, one may choose not to have government enforce it and not pay a fee. I can envision that many, if not most, agreements, would work that way, leaving the larger and more complicated contracts for enforcement by government, after payment of a fee.

In terms of the free rider problem, if I engage in a complex transaction with a business associate, one that will require expensive services of the courts and the police to enforce, why shouldn't I pay for that? In fact, to say that I should get that service at no explicit cost because government should be solely funded through donations is to make me into a sort of free rider.

I see nothing wrong with paying for enforcement of contracts.

Police protection is different for practical reasons. This involves responding to emergencies and there is no way for government to distinguish between who paid and who did not. So, it is provided to everyone. As I pointed out in an earlier post, everyone will pay for this, either directly or indirectly, because they cannot help but purchase services that are provided by businesses that paid for contract enforcement. (Also, I can see the police raising money by charging for extra services, as they do today when they provide policemen at concerts, etc. Obviously, if this were to happen, it would have to be monitored carefully to avoid the "protection racket" risk. Nevertheless, I see no reason why it could not be viable in principle.)

However, even if that were not the case, and you could think of some people as getting a "free ride" in police protection (which really isn't the case for the reason I already mentioned), so what? If I were a rich businessman, and government were, say, less than 2% of GDP, why would I care? The benefit to me of laissez-faire and a police force that protects everyone is well worth what I pay in nominal fees to the government.

This alleged free rider problem appears to use an unreal standard. It says, what if someone could be receiving services they didn't explicitly pay for? If that occurs, the whole system of voluntary financing of government is invalid. That is not true if no one's rights are violated. A system of fees + donations does not violate anyone's rights.

In a different context, consider the alleged "free rider" problem that every poor person already gets from the achievements of entrepreneurs and inventors. Ayn Rand has made that point clearly, that the likes of Henry Ford, Bill Gates and Thomas Edison only received a small fraction of the value they created, with the bulk of that value inuring to the benefit of everyone in society. Does that "free rider" problem make capitalism unjust? No, because all of those transactions are voluntary. Bill Gates, et al., are voluntarily trading with the public. The same argument applies to those who fund government in a laissez-faire society. They are doing it voluntarily. There is no free rider problem.

Edited by Galileo Blogs
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I think I answered your question. I don’t mind spending money to keep my own street illuminated, even if non-payers visiting my street benefit from the streetlights. However, I would object to having to cover the cost of lighting the streets of those who pay little or nothing to the power company. And the same objection would apply to police services.

No, there is a significant difference. When you donate money for lighting the streets everyone who use these streets will profit. When you donate money for the police and courts only rational people will profit. A donation to the police is an indirect donation to all rational people.

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Unless the citizen pays the contract fee, he would be unable to recover property he might lose in a breach of contract. Since he has a right to that property and its recovery, requiring him to pay a fee is involuntary.

Your statement is incorrect. You do not have a right to have your property recovered for free. A "right" recognizes that sphere of action where you ought to be left free to act. It does not mean that someone can be compelled to protect your rights without compensation.

Dan

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As such, users of that service ought to pay for it.

Yes, they should. And rational people would - even if you don't force them to.

In the case of contracts, one may choose not to have government enforce it and not pay a fee.

And in the case of your life, you could also choose not to have the government protect it and not pay that fee either. In one case and in the other, you relinquish your rights. The right to property and the right to life are not independent. You can't live if you can't dispose of your property and you can't have property if you are dead.

This distinction you are making between one and the other is fundamentally wrong. Rights must be inconditionally upheld by the government.

I see nothing wrong with paying for enforcement of contracts.

It makes property rights conditional, therefore it is wrong.

Police protection is different for practical reasons. This involves responding to emergencies and there is no way for government to distinguish between who paid and who did not. So, it is provided to everyone.

Police protection is the same, due to the same principle. It would be perfectly feasible for the police to intervene, end the emergency, determine the payment status of the victim and then walk away if he was not up to date on his taxes. And taxes they would be - if your personal safety were contingent on paying them.

Why does this sound completely absurd? Because tolerating the violation of rights, the image of police walking away and letting a crime happen, is so wrong as to be viscerally revolting. Not enforcing a contract is the exact same thing, a right being violated and the government letting it happen.

There is no free rider problem.

I agree. Which is another point in favor of making supporting the government actually voluntary, instead of a poorly disguised racket.

Edited by mrocktor
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Scrooge always has more to loose in the event of war.

You haven’t demonstrated why one’s need should have any bearing on the price one pays for a good. Let's stipulate that Scrooge has a large family and many employees dependent on him. Daffy is a lonely beachcomber. Should Scrooge then have to pay more than Daffy for a sandwich and a Coke?

But government isn't only the military. there's the police and the courts (and the cost of the three branches that mannage and oversee it all). If Scrooge benefits more than Daffy from the prescence of an effective police force, shouldn't he pay more? If he makes more use of the courts than daffy does, shouldn't he pay more?

Sure. But we cannot automatically assume that those who sign a million dollars in contracts each year cost the government more than those who sign only a thousand dollars in contracts. In my city, for example, most crime is in the low rent district, and poorer residents are far more likely to use police services and the court system than wealthier residents. If we applied your rule here, we would have to assess those with low incomes at a much higher rate than the affluent.

There is a reticence (perfectly understandable) about having your money used to benefit someone else. Today a great deal of your tax money is simply given away to someone else. That's vile. But we're not talking about that. the issue is whether you'd pay what's needed to maintain a propper government, which is to your benefit, even if some pay less than you do and get the same basic benefits.

It’s one thing to ask someone if he will voluntarily contribute “what's needed to maintain a proper government.” It’s quite another to charge someone a fee above and beyond what is required to enforce a contract in order to subsidize government services for those who engage in less commercial activity.

Let's say the people in Billybotton don't pay for either street lamps or police. Then they shouldn't have their streets illuminated or their neighborhood policed. Is that right?

Not necessarily. They could ask for a handout from the United Appeal.

Well, then, think of the consequences. One is Billybotton would become a safe-haven for all criminals. Another is Billybottoners would passionately hate the police (what with all the criminals living there and preying on them as much as on outsiders). Finally let's see the police department brave enough to go there without a small army to watch their backs.

You might as well ask us to think of the consequences of illiteracy. Yes, I’m opposed to kids growing up stupid. But that doesn’t mean I should have to pay for their schooling in order to have my contracts enforced.

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QUOTE (Galileo Blogs @ Feb 19 2008, 12:37 PM)

I see nothing wrong with paying for enforcement of contracts.

It makes property rights conditional, therefore it is wrong.

Property rights are absolute; protecting that right is conditioned on a great many things. A "right" is not self-executing; men must establish governments to protect the rights. If those who seek the protection offered by a rational government do not pay, who will?

Dan

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No, there is a significant difference. When you donate money for lighting the streets everyone who use these streets will profit. When you donate money for the police and courts only rational people will profit. A donation to the police is an indirect donation to all rational people.

Only rational people will profit? Surely we can imagine a situation in which an irrational person, say, a drug addict, would profit by having his stolen property returned to him.

In any case, I do not in any way object to people freely donating money to police or any other agency that might perform the enforcement of rights. My criticism is of making the protection of my rights contingent on my subsidizing the protection of others’ rights.

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Your statement is incorrect. You do not have a right to have your property recovered for free.

Let’s suppose I hire someone to paint my house. We agree to a total of $5,000, and I pay him half in advance. However, instead of performing the job, he leaves town.

As I see it, not only am I entitled to my $2,500 back, I’m also entitled to whatever costs I must incur in its recovery. Thus, the painter would have to return the down payment but also reimburse me for the private detective I hired to find him and the attorney I hired to sue him. As the losing defendant, he would also have to pay court costs to cover the court building and the salaries of the judge, court officers and jury.

Now it may be that the painter is far too broke to pay any part of the total. However, his penury does not negate my right to full compensation.

A "right" recognizes that sphere of action where you ought to be left free to act. It does not mean that someone can be compelled to protect your rights without compensation.

If someone cannot “be compelled to protect [another’s] rights without compensation,” then I should not be assessed any amount above what is required to protect my rights. I should not have to subsidize the rights protection of others.

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Now it may be that the painter is far too broke to pay any part of the total. However, his penury does not negate my right to full compensation.

I agree; your right to recover does not hinge on whether the guilty is able to pay. The existence of a right however is not synonymous with being successful in being made financially whole.

If someone cannot “be compelled to protect [another’s] rights without compensation,” then I should not be assessed any amount above what is required to protect my rights. I should not have to subsidize the rights protection of others.

Again, I agree. My point still stands: you are not being forced to pay for the protection of your rights when you pay a fee for that protection.

Dan

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Only rational people will profit? Surely we can imagine a situation in which an irrational person, say, a drug addict, would profit by having his stolen property returned to him.

How did that drug addict acquire his property if not by productive work?

Let's put it this way: People profit from a donation to the police in the degree how rational they lead their life. The more productive people are the more they profit from a state that protects their property, the healthier they live the more they profit from the protection of their life by the police. Your donation will never reach those people who commit suicide.

In any case, I do not in any way object to people freely donating money to police or any other agency that might perform the enforcement of rights. My criticism is of making the protection of my rights contingent on my subsidizing the protection of others’ rights.

Let's assume that you have the choice to let the police use your donation only to protect certain people with varying degree of protection according to your choice.

Wouldn't you tell the police to use your money to protect people depending on the amount of productive work they do?

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You haven’t demonstrated why one’s need should have any bearing on the price one pays for a good. Let's stipulate that Scrooge has a large family and many employees dependent on him. Daffy is a lonely beachcomber. Should Scrooge then have to pay more than Daffy for a sandwich and a Coke?

Let's say Daffy's a smoker and Scrooge is a health nut. Should they both pay the same fee for idenatical medical insurance policies?

The answer is no. One is at a higher risk of redeeming hsi policy earlier and more often. That is, he has a greater need of medical care than the other.

Sure. But we cannot automatically assume that those who sign a million dollars in contracts each year cost the government more than those who sign only a thousand dollars in contracts. In my city, for example, most crime is in the low rent district, and poorer residents are far more likely to use police services and the court system than wealthier residents. If we applied your rule here, we would have to assess those with low incomes at a much higher rate than the affluent.

Crime rates per neighborhood depend on many factors. It's not a hard and fast rule that crime concentrates in low-income areas. the only really hard rule is that crime concentrates in areas neglected by the police. Where I live crime hits hardest in middle class areas. Some types of crime, specifically kidnapping for ransom, hits rich people the most.

You might as well ask us to think of the consequences of illiteracy. Yes, I’m opposed to kids growing up stupid. But that doesn’t mean I should have to pay for their schooling in order to have my contracts enforced.

But schooling isn't a proper government function while the police, courts and military are. That's the objection to 1) having ogvernment provide schooling at all and, 2) taking your money to do it with.

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Property rights are absolute; protecting that right is conditioned on a great many things. A "right" is not self-executing; men must establish governments to protect the rights.

While the distinction between the right (which is a fact) and its protection (which may or may not happen) is valid, it does not support your argument. Since the government forbids one from protecting oneself (except in emergencies), if the government refuses to protect someone's individual rights - for whatever reason - it has become an agent of their violation.

There is only one consistent position on this matter. The government must have a monopoly on the use of retaliatory force and must defend everyone's rights unconditionally.

Of course no one should expect to be protected for free, and if too many people do expect it a free government will collapse - leading to something much worse for everyone. This does not justify tolerating the violation of people's rights in the name of practicality. A government that resorted to denying rights protection in order to get money would have ceased to be legitimate.

If those who seek the protection offered by a rational government do not pay, who will?

They will pay. And you don't have to threaten them with the denial of their rights' protection for them to do so. There is no "free rider problem".

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I agree; your right to recover does not hinge on whether the guilty is able to pay. The existence of a right however is not synonymous with being successful in being made financially whole.

Again, I agree. My point still stands: you are not being forced to pay for the protection of your rights when you pay a fee for that protection.

Yes, I am if the fee exceeds what it actually costs to enforce my contractual rights. Again, let’s return to my example of the citizens of the laissez-faire Republic of Quack. Scrooge is assessed about $10,000 in contract fees per year. Yet only a tiny portion of that amount is used to deal out justice to the few who renege on Scrooge’s contracts. Most of the $10,000 is used to finance the country’s police, courts and military. Furthermore, Scrooge does not receive police-court-military benefits proportionate to what he puts in. At $3,800 in public services provided to the average citizen, Scrooge gets little more than a third of his contribution back.

Since Scrooge is not permitted to enforce his contracts (property rights) by any means other than government, the high premium he pays on his contractual fees amounts to an involuntary tax.

Mrocktor makes a similar point directly above.

Edited by Gary Brenner
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Let's say Daffy's a smoker and Scrooge is a health nut. Should they both pay the same fee for idenatical medical insurance policies?

The answer is no. One is at a higher risk of redeeming hsi policy earlier and more often. That is, he has a greater need of medical care than the other.

Fine. By the same token, those who use police and court services more often should pay a higher cost for law enforcement. However, it makes no sense to charge a citizen like Scrooge a high contract fee when it costs the government very little to enforce his contracts – or even to keep criminals out of Scrooge’s high security home.

Crime rates per neighborhood depend on many factors. It's not a hard and fast rule that crime concentrates in low-income areas. the only really hard rule is that crime concentrates in areas neglected by the police. Where I live crime hits hardest in middle class areas. Some types of crime, specifically kidnapping for ransom, hits rich people the most.

Since we’re on the subject of looking skeptically at hard and fast rules, why must we assume that those who would pay the most in contract fees would use the police and courts the most? A just government would allow those who use less in police-court services to pay less for them. Now if Scrooge and his nephews are in the habit of getting kidnapped regularly, they should certainly have to underwrite the full cost of having law enforcement come to their rescue. But if they are anything like the wealthy people I know, they rarely speak to a police officer and appear in criminal court once in a lifetime.

But schooling isn't a proper government function while the police, courts and military are. That's the objection to 1) having ogvernment provide schooling at all and, 2) taking your money to do it with.

In Post #108, you wrote, “Let's say the people in Billybotton don't pay for either street lamps or police. Then they shouldn't have their streets illuminated or their neighborhood policed. Is that right? Well, then, think of the consequences. One is Billybotton would become a safe-haven for all criminals.”

If you can invite me to think of the consequences of failing to provide streetlights in a slum, why can’t I ask about what happens when the poor go without schooling? After all, neither streetlights nor schools are the province of a government devoted to protecting rights.

But to return to the central question, I am not opposed to a police presence in poor neighborhoods. What I am criticizing is the notion that those members of society who engage in the greatest number of commercial transactions should be required to be the chief financiers of law enforcement for all strata of society.

Maybe a poor man will just have to forgo that widescreen TV in order to pay this month’s police bill.

Edited by Gary Brenner
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How did that drug addict acquire his property if not by productive work?

Perhaps. Or through inheritance or even through the state-run lottery that Ayn Rand said could be used to fund government. The important point is that an irrational person can acquire wealth through rational means.

Let's put it this way: People profit from a donation to the police in the degree how rational they lead their life. The more productive people are the more they profit from a state that protects their property, the healthier they live the more they profit from the protection of their life by the police. Your donation will never reach those people who commit suicide.

The operating factor in one’s standard of living is productivity. Under capitalism, generally the more one provides the marketplace with what it demands, the more one’s material wealth grows. But productive and non-productive people benefit equally from the protection of their property from thieves. If the entrepreneur Scrooge and the idler Daffy are both successfully guarded from predators, they both keep 100% of their property. It is true that Scrooge’s property is worth more, but Daffy’s property is just as essential to him as Scrooge’s property is to Scrooge.

Let's assume that you have the choice to let the police use your donation only to protect certain people with varying degree of protection according to your choice.

Wouldn't you tell the police to use your money to protect people depending on the amount of productive work they do?

No. If I could determine the hierarchy of how my donation was allocated, I would specify 1. myself, 2. my family, 3. the customer base for my business, and 4. the supplier base for my business. I’m far more interested in protecting the wealth of those people who buy from me than those who don’t, regardless of how rational they are.

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Perhaps. Or through inheritance or even through the state-run lottery that Ayn Rand said could be used to fund government. The important point is that an irrational person can acquire wealth through rational means.

Did you mean "... through irrational means..."? Otherwise this doesn't make sense.

The operating factor in one’s standard of living is productivity. Under capitalism, generally the more one provides the marketplace with what it demands, the more one’s material wealth grows. But productive and non-productive people benefit equally from the protection of their property from thieves. If the entrepreneur Scrooge and the idler Daffy are both successfully guarded from predators, they both keep 100% of their property. It is true that Scrooge’s property is worth more, but Daffy’s property is just as essential to him as Scrooge’s property is to Scrooge.

If person A earns twice as much as person B he deserves twice as much protection as person B.

If person A owns two houses and person B one house the police should put assign three officers, one on each of the three houses. Then your donation to the police would be distributed according to each person's productivity. Wouldn't you agree on that?

No. If I could determine the hierarchy of how my donation was allocated, I would specify 1. myself, 2. my family, 3. the customer base for my business, and 4. the supplier base for my business. I’m far more interested in protecting the wealth of those people who buy from me than those who don’t, regardless of how rational they are.

The question is if this is the optimal allocation (for you) in the long run. I have serious doubts about that because such a donation doesn't simply return in form of a welfare check (in which case you were absolutely right). For example it is beneficial to you if a thief is caught, even if he didn't rob you but your neighbor (because you could be next). I have to think this through again, though.

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