OK, so I had an idea!
As a “third side of the coin” alternative to the Voluntary Funding of Government ideal. I propose that there could be public casinos set up that generated revenue for the proper functions of government (police, military, law courts) and would exist right along side of private casinos (that would be completely unregulated, of course). This would be the most fun way side by side with the other ways to voluntarily fund government (lottos???, donations, etc) What do you think?
There are two related questions that must be addressed. Logically first is whether government may use force to obtain its funding: the answer is “No”. Given that background, it is still a question what the proper function of government is. The answer is that its proper function is to protect individual rights from infringement by force. More explicitly, the function of government is not to explore outer space, sell shoes or potatoes, take out the trash, pave roads or any number of other things. The function of government, its purpose, then determines its means.
The provision that there is, of course, a free market in product or service X and the government would be just another provider of that product or service is not a sufficient basis for expanding the scope of government actions to include gambling, where the government would compete with private companies. The logic which says “as long as the government doesn’t regulate it, the government can enter the free market as a business competitor” will lead to expansion of the government into many other arenas, for example providing gasoline, computers, and groceries. After all, if it is okay for the government to compete with a private casino, then it is okay for the government to compete with private grocery stores and gas stations. Just as it would be proper from one grocery chain to aggressively compete with another by cutting prices to the bone in order to secure a greater portion of the grocery market, it would be proper for the government to aggressively slash food prices, regardless of the effect on private companies.
Government should not compete with private business. That is the principle which I think is missing in most discussions of government funding.
Government should not compete with private business. That is the principle which I think is missing in most discussions of government funding.
In general I agree with this principle. On purely practical grounds it would always be more difficult for a government business to succeed. Consider that if it were run with equal efficiency to its private competitors, the private companies would always be better able to fund expansion and the hiring of top-quality employees because they wouldn’t have their profits skimmed off to fund unrelated government operations. Because of that, over the long run one would expect the government operations to be driven out of business.
Unless people deliberately patronized those businesses, in spite of lower payoffs, as a way to contribute. It’d be analogous to playing bingo or buying a raffle ticket as a fundraiser.
This isn’t a topic I’ve done much thinking about, but how about this: People who want to be defended by the government pay a tax. Other people don’t pay, and aren’t able to vote, take a case to court, or call the police. However, the police still have authority over them as they do now. They are subject to being arrested, tried, imprisoned, fined, etc.
There’s the possibility of opting out of receiving the advantages of the police and courts, etc., and everyone actually receives the benefits of defending the nation, but only tax-payers vote and are entitled to call police, and bring law suits, etc.
I’m sure there are many practical problems…for people who aren’t tax-payers, but who call 911, etc., a fee is charged after the fact.
What do you think?
Mindy
People who want to be defended by the government pay a tax. Other people don’t pay, and aren’t able to vote, take a case to court, or call the police.
That means they must exercise their right to retaliatory force themselves. But that contradicts the principle that government must have a monopoly on the use of retaliatory force. In other words, this is just repackaging taxation.
That means they must exercise their right to retaliatory force themselves. But that contradicts the principle that government must have a monopoly on the use of retaliatory force. In other words, this is just repackaging taxation.
Non-payers forfeit the “right” to retaliative force.
The principle I’m working from is that civilization and justice are man-made. People who are unwilling to contribute to the project of subordinating might to right–to government–position themselves as potential victims, which is exactly the situation of all men outside civilization. Still, they are not forced to pay a tax, and they are not exempt from the “long arm of the law” in any sense.
Non-payers forfeit the “right” to retaliative force.
Man’s rights a not “forfeited” except by in retribution for violating the rights of another, which means initiating force. Non-payment of taxes is not the initiation of force.
Still, they are not forced to pay a tax, and they are not exempt from the “long arm of the law” in any sense.
But they are forced to sacrifice their lives when they are the victim of the initiation of force. They are forced to, because the government will use force to prevent them from exercising that right which is theirs – the right to their life – and which the government refuses to exercise on their behalf.
In TVOS Rand did suggest the use of Lotteries as a way of generating voluntary income for the Government, but she did not go into details unfortunately.
I would be willing to play a government lottery in a free society but I don’t think of it as being 100% Government run. It would/could be administered by a private company which derives a small profit from advertising and sales. I also think that when you choose your numbers you could also select where you want the money to go should you win. A simple tick box for Military, Police or Legal support. Then when your number is called the % of the take that goes to Government is ear-marked according to your wishes.
Government should not compete with private business. That is the principle which I think is missing in most discussions of government funding.
But if Government is constitutionally forbidden from regulating business, and Government is established so that it can be self-policed (such as with the current court system that is able to overrule the legislature and executive branches), then that seems to provide protections such that Government can engage in competitive business without posing risk of expansion into the use of force against its competitors.
Example - our New World Objectivist Government (NWOG) opens a Casino in Vegas and all profits go to the general operating fund. If Government Brand Casino beats out the competition fair and square, no problem. But if NWOG-Casino starts trying to tell other Casino’s how to operate, then those Casinos can go to court against NWOG and get a ruling in their favor.
You’re making the “because something bad can happen, it shouldn’t be allowed” - but if that argument isn’t justification for Gov’t to create new regulations, it’s also not justification for Gov’t to be forbidden from raising money by any non coercive means.
But if Government is constitutionally forbidden from regulating business, and Government is established so that it can be self-policed (such as with the current court system that is able to overrule the legislature and executive branches), then that seems to provide protections such that Government can engage in competitive business without posing risk of expansion into the use of force against its competitors.
I don’t think you can deduce the principle “Government should never compete with private business” from the general principle of the separation of state and economics. But as a purely practical matter I think such government enterprises would tend to be systematically out-competed by their purely private rivals. They wouldn’t be able to afford to hire the best employees, they wouldn’t be able to reinvest profits in growth, etc. And in the face of such private-sector competition directed against their revenue sources the temptation to violate the separation of state and economics would be omnipresent and increasingly powerful. The incentive structures are all wrong.
Man’s rights a not “forfeited” except by in retribution for violating the rights of another, which means initiating force. Non-payment of taxes is not the initiation of force.But they are forced to sacrifice their lives when they are the victim of the initiation of force. They are forced to, because the government will use force to prevent them from exercising that right which is theirs – the right to their life – and which the government refuses to exercise on their behalf.
In the state of nature, might makes right. Unless men organize under laws that put the combined force of the whole group towards defending each person’s rights, they live in a “might-makes-right” world.
Anarchists want to have their cake and eat it, too. They want might subdued, but they aren’t willing to join the group–the gov., which is what is necessary to create a might that could, in fact, subdue any individual or gang that tries to practice might-makes-right. That is why I emphasize that justice is man-made. You can’t claim it if you are unwilling to produce it.
Your statement that rights are only forfeited in reaction to IOF presumes that rights are other than man-made. Respect for human life is an idea, and ideas are man-made. Morality is ideas, man-made. Man has to build shelter, produce food, discover medicine, learn to navigate, and develop laws that foster civilized social interactions. He has to make all these things. If he doesn’t make them, he is left in a state in which might wins out.
In my hypothesized arrangement, the problem of enforced taxation is solved by allowing individuals who are unwilling to pay for the goods of civilized society to remain in the group, but doesn’t require others to (entirely) foot the bill for the costs of protecting those individuals. The non-payers are still subject to all laws, but they cannot call on the law. Their declining to produce civilized society leaves them without the protections of civilized society. They get robbed and have no recourse. That is the state of affairs nature puts them in; it is not the government that puts them there.
As I said, I haven’t thought it through, but I don’t see that your objections are an actual problem for it.
Mindy
You’re making the “because something bad can happen, it shouldn’t be allowed” - but if that argument isn’t justification for Gov’t to create new regulations, it’s also not justification for Gov’t to be forbidden from raising money by any non coercive means.
No, I did not make that argument. The government is, by nature, prohibited from doing anything besides that which it must. The asymmetry between government and individuals is summarized in “The Nature of Government” p. 128: “A private individual may do anything except that which is legally forbidden; a government official may do nothing except that which is legally permitted”. What the government is permitted to do derives from the nature of the government, so a few lines about that (emphasis added):
If physical force is to be barred from social relationships, men need an institution charged with the task of protecting their rights under an objective code of rules.
This is the task of a government—of a proper government —its basic task, is only moral justification and the reason why men do need a government
. A government is the means of placing the retaliatory use of physical force under objective control—i.e., under objectively defined laws.
And below that, “Since the protection of individual rights is the only proper purpose of a government, it is the only proper subject of legislation”.
Establishing government as a business “as well” goes beyond the proper purpose of government, and therefore unless it proves impossible to maintain the necessary level of government funding through voluntary contributions – meaning that society is so generally irrational that it does not actually support a free society organized on Objectivist principles – government should not be in the business of making cars, selling shoes, groceries, or providing healthcare in order to make enough profit to also protect individual rights. On practical grounds, as Khaight points out, government simply cannot be profitable in competing with private business.
No, I did not make that argument. The government is, by nature, prohibited from doing anything besides that which it must. The asymmetry between government and individuals is summarized in “The Nature of Government” p. 128: “A private individual may do anything except that which is legally forbidden; a government official may do nothing except that which is legally permitted”. What the government is permitted to do derives from the nature of the government, so a few lines about that (emphasis added):
By “prohibited” I presume you mean morally prohibited - since Government’s certainly are not physically prohibited.
But let us examine:
If physical force is to be barred from social relationships, men need an institution charged with the task of protecting their rights under an objective code of rules.
This is the task of a government—of a proper government —its basic task, is only moral justification and the reason why men do need a government
. A government is the means of placing the retaliatory use of physical force under objective control—i.e., under objectively defined laws.
And below that, “Since the protection of individual rights is the only proper purpose of a government, it is the only proper subject of legislation”.
Yes - protection of individual rights is the only proper subject of legislation. I agree 100%. But the above does not say Government can’t do anything *BUT* protect individual rights - rather that Individual right protection is it’s fundamental task and it’s only *justification*. The above does not say Government CANNOT do anything else.
IF Government:
Exerts no force in it’s collection of revenue
Creates no legislation affecting the operation of casinos
Uses only money voluntarily given to establish a casino
Does not use it’s power to infringe upon the freedoms of any of it’s competitors
Receives approval to do so from the population’s representatives
Then how can you conclude that Government cannot run a Casino? No force is initiated, no rights are violated, nothing done is immoral, and the money earned by the Government Casino goes to support the Government.
Further - Rand herself suggested Lotteries as a method of raising income. Lotteries do nothing to protect individual freedom - and not only Government can run a lottery - so obviously Government CAN compete with private enterprise to generate revenue, IF it does so without violating man’s rights!
On practical grounds, as Khaight points out, government simply cannot be profitable in competing with private business.
First, you’re changing Khaight’s argument. He says they probably can’t compete. He *may* be right, but you are distorting his supposition into an absolute without justification. You’re making his speculation into an assertion.
So - Prove that assertion. That argument is right up there with “Government can’t be efficient/do anything right/etc” - which is a bogus claim. Government can do quite a lot of things effectively and efficiently. They just generally don’t do them MORALLY.
First, you’re changing Khaight’s argument. He says they probably can’t compete. He *may* be right, but you are distorting his supposition into an absolute without justification. You’re making his speculation into an assertion. So - Prove that assertion.
What would you take as proof? Obviously this is an empirical question, not something to which an answer can be deduced from abstract principles. But there are some points to be made.
First, it should be obvious that a government could not derive all of its revenue from a single business enterprise. Putting all of its eggs in a single basket like that would be irresponsible, given that any specific sector of the economy can falter or be rendered obsolete by technological advances. So a government that financed itself by running businesses competing with the private sector, to ensure that its revenues were resilient in the face of economic uncertainty, would need to diversify. It would need to own a variety of such enterprises, doing widely different things in different areas. Geographic diversification would also be needed. This causes a knowledge problem. If the government owns a bank, it needs to know how to run a financial institution well. If it owns a steel mill, it needs to know how to make steel efficiently. If it owns a coal mine, it needs to know how to prospect for and mine coal. If it owns a haberdashery it needs to know how to sell hats. Etc. And since the government would need diverse business enterprises it would need a similarly diverse range of knowledge and skills to be able to produce effectively in those diverse areas.
How are the government’s enterprises to acquire employees with the knowledge and skills they need to produce efficiently? Since ex hypothesi the economy is private, it will need to hire them. And because it is hiring from a competitive labor market, it will have to offer compensation sufficient to attract the talent it needs. Where is that compensation to come from? Again, ex hypothesi, the government’s only source of revenue is the profit from the companies it runs. In this sense it is no different from any other business owner. But the kinds of men who are capable of leading large companies effectively, particularly in a free society, are far more likely to found their own companies than they are to agree to run someone elses’. Can anyone imagine Hank Rearden or Francisco D’Anconia choosing to manage a government-owned enterprise if they were free instead to compete against it? People with that kind of talent, even if you can hire them, usually demand significant equity stakes in the businesses they run, and that kind of equity is exactly what the government cannot grant them, lest they lose control of their businesses and the associated revenue on which their rights-protecting operations depend.
Government enterprises would have to be run conservatively, because the government’s first obligation is to protect the rights of its citizens. So government companies would be very unlikely to fund blue-sky research, risky ventures or start-ups. But conservatively-run businesses in mature industries have low profit margins as a consequence of their low risk. The need of the government to skim off the profits from its enterprises exacerbates this. It would be far more difficult for such enterprises to raise capital in the marketplace, because their expected rates of growth would be lower.
The more one tries to concretize what a government financed by businesses it runs in competition with private citizens, the more apparent it becomes that the very factors that lead a business to success – talented people passionately working for their own profit in pursuit of their own values – are the ones the government enterprises will not be able to sustain over the long term. Conclusion: the idea isn’t workable.
Here’s a different suggestion for a way to finance the government voluntarily: establish an endowment fund. Constitutionally restrict the endowment so that it can only be invested in a broad-based stock index fund, and prohibit the government from voting its shares to influence the policies of the corporations in which it owns shares. Run the government using the profits. The economic productivity of an unfettered economy should be sufficient that, once a sufficient endowment is obtained, the government could be run over the long term based purely on the investment income with no need for detailed knowledge of how to actually run the businesses in which it invests.
If I ran a casino, and the government opened one for revenue, I would be competing with myself. Catch 22. But bakers wouldn’t be competing with themselves…
Mindy
OK, so I had an idea!
As a “third side of the coin” alternative to the Voluntary Funding of Government ideal. I propose that there could be public casinos set up that generated revenue for the proper functions of government (police, military, law courts) and would exist right along side of private casinos (that would be completely unregulated, of course). This would be the most fun way side by side with the other ways to voluntarily fund government (lottos???, donations, etc) What do you think?
I think casinos (and lotteries) can be set up by private individuals (same as all other charities which rely on fun and games to attract donors), who can donate the profits to the government.
Since that private alternative has no drawbacks whatsoever, the government involvement with managing such ventures would amount to an unnecessary risk of corruption (corruption that is inevitable when the same entity is managing and policing a venture).
I think casinos (and lotteries) can be set up by private individuals (same as all other charities which rely on fun and games to attract donors), who can donate the profits to the government.
And, for that matter, a regular private grocery store could be established which has a bucket for donations to the Rights Protection Fund that customers could decide, no their own, to contribute to. Just like the Sal(i)vation Army, only this time, for an actually good cause, without the Jeebus.
What would you take as proof? Obviously this is an empirical question, not something to which an answer can be deduced from abstract principles. But there are some points to be made.
My challenge was not to you, who made only a supposition, but to DO, who made it an absolute.
I await his response - both to my challenge and to the points I raised about the supposed immorality of a Legitimate Government doing anything but protecting rights so long as it did them while maintaining that protection without compromise.
First, it should be obvious that a government could not derive all of its revenue from a single business enterprise. Putting all of its eggs in a single basket like that would be irresponsible, given that any specific sector of the economy can falter or be rendered obsolete by technological advances. So a government that financed itself by running businesses competing with the private sector, to ensure that its revenues were resilient in the face of economic uncertainty, would need to diversify. It would need to own a variety of such enterprises, doing widely different things in different areas. Geographic diversification would also be needed. This causes a knowledge problem. If the government owns a bank, it needs to know how to run a financial institution well. If it owns a steel mill, it needs to know how to make steel efficiently. If it owns a coal mine, it needs to know how to prospect for and mine coal. If it owns a haberdashery it needs to know how to sell hats. Etc. And since the government would need diverse business enterprises it would need a similarly diverse range of knowledge and skills to be able to produce effectively in those diverse areas.
How are the government’s enterprises to acquire employees with the knowledge and skills they need to produce efficiently? Since ex hypothesi the economy is private, it will need to hire them. And because it is hiring from a competitive labor market, it will have to offer compensation sufficient to attract the talent it needs. Where is that compensation to come from? Again, ex hypothesi, the government’s only source of revenue is the profit from the companies it runs. In this sense it is no different from any other business owner.
Until this point, we are in agreement.
But the kinds of men who are capable of leading large companies effectively, particularly in a free society, are far more likely to found their own companies than they are to agree to run someone elses’. Can anyone imagine Hank Rearden or Francisco D’Anconia choosing to manage a government-owned enterprise if they were free instead to compete against it? People with that kind of talent, even if you can hire them, usually demand significant equity stakes in the businesses they run, and that kind of equity is exactly what the government cannot grant them, lest they lose control of their businesses and the associated revenue on which their rights-protecting operations depend.
Here, however, I take issue.
Corporations consist of large bodies of investors who know nothing about the specific business beyond the surface knowledge. Corporations, like our hypothetical Government, thus hire experts to run their businesses - the much maligned CEOs of today. These are people very talented in their field but who (presumably) have little or no desire to have complete ownership of the company they run. Warren Buffetts, Steve Jobs, Bill Gates - those are modern day names in the corporate world that come close to the Hank Reardons and Francisco Danconias and Howard Roarks - and they are equally rare. If you peruse the NYSE or AMEX you’ll see hundreds of companies who hire CEOs that are only fractional owners, or not owners at all.
So therefore it does not follow that the only talent capable of running a business successfully and profitably would not want to run one for someone else.
Government enterprises would have to be run conservatively, because the government’s first obligation is to protect the rights of its citizens. So government companies would be very unlikely to fund blue-sky research, risky ventures or start-ups. But conservatively-run businesses in mature industries have low profit margins as a consequence of their low risk. The need of the government to skim off the profits from its enterprises exacerbates this. It would be far more difficult for such enterprises to raise capital in the marketplace, because their expected rates of growth would be lower.
Where Corporations would pay their profits out to their investors as Dividends - Government Casino would have one investor, and would pay it’s profits out to the obvious recipient. I’m also not in agreement with the alleged need to run conservatively - no more so than any other business, that is.
My challenge was not to you, who made only a supposition, but to DO, who made it an absolute.
I await his response - both to my challenge and to the points I raised about the supposed immorality of a Legitimate Government doing anything but protecting rights so long as it did them while maintaining that protection without compromise.
There is no point in my responding to your false and baseless assertion about me making something an absolute. I will ignore your ramblings in that direction.
As to your other assertions, you haven’t offered anything for me to respond to, other than a denial. You say “But the above does not say Government can’t do anything *BUT* protect individual rights” – this is the kind of literalist, rationalist counterargument that I expect from non-Objectivists. You’re saying “Ayn Rand did not utter the sentence ‘Government can’t do anything but protect individual rights’, and until she does, I say that government can do anything it wants as long as it doesn’t initiate force”. There is no merit to that assertion, and you are ignoring everything that Rand wrote on the matter of the nature of proper government. You are ignoring the fundamental question of the relationship between purpose and morality – that morality is a judgment of the relationship between a choice and a purpose. You are substituting a list of arbitrary preconditions (which in fact are flawed on numerous grounds) for reference to purpose. You have not even offered a pragmatic argument that having government be a public business is a good thing.