The Most Important Question of Our Time
by Jacob G. Hornberger
The question that U.S. presidential candidates should be discussing and debating is this one: What should be the role of government in a free society? In fact, that’s the question that every American should also be discussing and debating.
Should government have the power to:
1. Force people to submit to religious indoctrination?
2. Determine what people should read and watch?
3. Decide what people ingest?
4. Provide schooling for people’s children?
5. Provide charity to people?
6. Provide retirement money and healthcare services to people?
7. Provide subsidies and bailouts?
8. Regulate and control economic activity?
9. Police the world?
10. Force people to pay for its “services.”
11. Tax people?
12. Deliver the mail?
13. Impose border controls?
14. Assassinate people?
15. Torture people?
16. Have a standing army and permanent secret intelligence force?
17. Have a secretive agency that conducts secret surveillance on people?
18. Support dictatorships?
19. Initiate coups?
20. Confiscate guns?
21. Incarcerate people indefinitely without trial?
22. Maintain a welfare state?
23. Maintain a national-security state apparatus.
It is answers to those questions that separate libertarians from conservatives and liberals.
Libertarians oppose all those governmental powers. We say that a welfare-warfare state system, which entails a government with those types of powers, is the very antithesis of a free society. That’s why we hold that the American people of our time, who honestly believe they are a free people, perfectly exemplify the words of Johann Goethe: “None are more hopelessly enslaved than those who falsely believe they are free.”
Oftentimes, liberals and conservatives confuse democracy with freedom. They say, for example, that since the majority favors a welfare state — that is, an economic system in which government takes money from people to whom it belongs in order to give it to people to whom it does not belong — that makes it morally okay. Moreover, they say, a democratic system shows that people are “free” in the sense that they have the right to participate in the majoritarian process.
Libertarians, on the other hand, say that no government — not even a democratically elected government — has the legitimate authority to infringe on fundamental, God-given, natural rights of people — rights that preexist government itself. There are certain rights that are simply not subject to majority vote, even if the majority consists of 95 percent of the citizenry.
Thus, even if 95 percent of the American people favored things like forcing people to send their children to church, rounding up, torturing, and incarcerating Muslims, or prohibiting people from reading libertarian literature, laws that implement such policies would be morally illegitimate.
The two big differences between libertarians and statists are with respect to the welfare state and the national-security/warfare state, which are both statist apparatuses that were grafted onto America’s original governmental structure by 20th-century Americans.
We libertarians would dismantle every law, regulation, department, and agency of the welfare state, including the income tax, IRS, and Federal Reserve. We hold, for example, that charity is no business of the government but rather should be an entirely private decision as to what a person does with his own money. Indeed, we believe that what a person does with his own money is as important a part of freedom as the decisions he makes with respect to religion. Ideally, there would be constitutional amendments that would separate things like healthcare, charity, and economy from the state, much as our ancestors separated church and state.
The same with the Cold War-era national-security state apparatus, including the Pentagon, the empire of military bases, the CIA, the NSA, and foreign interventions and wars. The entire apparatus is nothing more than a gigantic totalitarian structure, one with totalitarian-like powers (e.g., assassination, torture, indefinite detention, and secret mass surveillance) that was originally justified in the name of opposing communist totalitarianism. The warfare-state apparatus constitutes a much graver infringement on liberty than the welfare-state apparatus.
Hearing all this, many Americans might say, “Oh my gosh, Jacob. That would be anarchy!”
Actually not. Anarchy means the absence of government. Just because the federal government would lack all those powers, it would nonetheless continue to exist, albeit in a radically downsized mode. The problem is that since Americans have been born and raised under a welfare-warfare state governmental structure — and since they’ve been indoctrinated into believing that such a structure is compatible with a free society — their minds do not permit them to envision a government without extremely limited powers.
That is, for many people, government is public schooling, education grants, Social Security, Medicare, immigration controls, welfare, the Pentagon, the CIA, the NSA, foreign aid, wars of aggression, secret prisons, military tribunals, secret surveillance, and all the rest. Thus, when they hear libertarians calling for the dismantling of such things, they automatically believe that there would no longer be any government at all.
What many Americans fail to realize is that throughout the first 100 years of America’s history, the nation didn’t have a welfare state or a warfare state. No, I’m not saying that America was a libertarian paradise. Clearly it wasn’t. There was slavery, tariffs, the Civil War, corporatism, land grants to the railroads, and other violations of libertarian principles.
What I am saying is that America was once a nation where there was no Social Security, Medicare, Medicaid, foreign aid, farm subsidies, education grants, Pentagon, CIA, foreign military bases, large standing army, NSA, welfare, immigration controls, income tax, IRS, Federal Reserve, paper (fiat) money, and minimum wage, and relatively few economic regulations. Yet, there was in fact a federal government throughout that period of time, albeit one with very limited powers, one that was funded by indirect taxes.
That raises an important question: What are the legitimate functions of government? There are three: (1) to seek out, arrest, prosecute, and punish people who commit violent crimes, such as murder, assault, rape, theft, and burglary (while according them time-honored procedural rights and guarantees, such as trial by jury and due process of law); (2) to provide a judicial system where people can resolve disputes over such things as contracts, torts, and property; and (3) to defend the nation in the very unlikely event of an invasion of the United States by a foreign power.
Now, imagine a federal government whose powers are limited to those functions. All the federal laws that criminalize peaceful behavior, such as drug laws, income tax violations, insider trading laws, and immigration controls, would be gone. Most criminal offenses would be prosecuted at the state level. There would be few federal criminal prosecutions. Federal prosecutors and judges would have little to do. Federal penitentiaries would be fairly empty.
By the same token, most civil disputes would be litigated at the state level as well. Civil dockets in federal courts would be relatively minimal.
There is no possibility of some foreign state invading the United States any time soon. For one thing, no nation state has the financial or military means — or even the interest — in attempting the virtually impossible feat of mobilizing hundreds of thousands of transport ships and planes, millions of troops, and countless weapons, bullets, and bombs that would be necessary for a successful invasion and occupation of the United States.
The result of dismantling the welfare-warfare state apparatuses would not only be a free nation but also a tremendously prosperous one. When people are free to engage in economic activity and to keep whatever they earn and to operate with sound money, a large portion of wealth goes into savings, which is converted into capital, which increases productivity, which raises real wage rates and increases standards of living. The weaker the government, the more powerful the nation.
Note something important here: A government with these limited powers does not violate the libertarian non-aggression principle. That is, it infringes on no one’s natural, God-given right to live his life the way he chooses so long as his conduct is peaceful. So long as a person isn’t murdering, assaulting, raping, stealing, or burglarizing (or accused of doing so), he’ll never have to deal with a governmental official.
The question arises: But what about taxes? Aren’t taxes a necessary and essential part of a limited-government republic? And don’t taxes violate the libertarian non-aggression principle — the principle that holds that it’s morally wrong to initiate force against another person?
In 1954, the president of The Foundation for Economic Education, Leonard E. Read, wrote a book entitled Government: An Ideal Concept, in which he outlined the limited powers for government that I outlined above. Read went one step further: He supported taxation to fund limited government. Read maintained that since everyone would be receiving the benefits of limited government, there was nothing morally wrong with forcing people to fund it (as compared to welfare-state taxes which take money from people in order to give it to others).
Some of FEE’s supporters took Read to task, pointing out that his tax, like all taxes, necessarily involve the initiation of force, a violation of the libertarian non-aggression principle.
Read’s critics, of course, were right. That is, if someone refuses to pay the tax, force will be imposed on him in the form of fines, levies, garnishments, attachments, and even incarceration.
So, is there another alternative for funding limited government, one that is consistent with libertarian principles? There is — voluntary funding of government, just as people voluntarily fund churches and other things that are important to them.
Of course, the first reaction that someone might have is, “Oh my gosh, Jacob, there can’t be government without taxation. Taxation and government are one and the same.” But that’s just because they’ve been born and raised under a system of government and taxation and, therefore, they are unable to conceive of anything different. Their reaction is no different from a person who first hears about the libertarian idea of abolishing public schooling or Social Security or Medicare. They immediately jump to the conclusion that without those programs, government would cease to exist.
Actually though, how government gets its money doesn’t affect the nature of its powers to punish criminals or operate a judicial system. Consider the following hypothetical. Suppose we have a county whose only laws are ones that criminalize murder, assault, rape, theft, and burglary. No other laws. It also maintains a court system for people to resolve disputes. No one’s rights are being violated by the government in that county. If you don’t murder, assault, rape, steal, or burglarize, you’re free to live your life any way you want.
Except for taxes. The county’s annual expenditures total $1 million. Every December 15, people get a tax bill that must be paid within two weeks. On January 1, the county has received $1 million in tax revenue that it puts into the bank and uses to pay the coming year’s annual expenses.
This has been going on for years. Then one day, county officials receive a letter from a local law firm, which advises them that a multimillionaire who recently died established a trust totaling $50 million, with directions that the trust disburse to the county the sum of $1 million every December 1 for the next 50 years. There is one condition, however. To receive the money, the county must formally, by an amendment to the county charter, abolish the power to tax for the next 50 years.
The county agrees and modifies its charter to abolish taxation. On December 1 and every succeeding December 1, the county receives the $1 million disbursed from the trust. It puts the money into the bank and uses it to pay its expenses for the coming year.
Does the nature of the government change? Do its powers change? Does it do anything different? The answer is “no” to all three questions. It doesn’t matter whether the government’s money has come from taxpayers or from a bequest. The government’s powers to punish violent criminals and to run its judicial system remain the same.
I would like to recommend a fascinating and thought-provoking piece entitled “The End of Taxation?” by James L. Payne, research fellow at the Independent Institute and the author of several books on government. Payne received his Ph.D. in political science from the University of California at Berkeley and has taught political science at Yale, Wesleyan, Johns Hopkins, and Texas A&M. Payne writes:
For a people so ready to cast off ancient customs, Americans have been strangely reluctant to question the practice of taxation…. There are signs that this intellectual free ride is coming to an end. Sophisticated new research has begun to document what common sense long suggested, namely that taxation, far from being an efficient money machine, is an extremely wasteful way to raise money.
Have there been many societies in which people relied on voluntary support of government? Not surprisingly, no. Of course, under the Articles of Confederation, which lasted for more than a decade, the federal government had no power to tax, which gives us fairly good idea as to how our American ancestors felt about taxation. Nonetheless, that’s not a perfect example because the federal government relied on contributions from the state governments, which derived their money from taxation.
In his book Power and Market, the Austrian economist Murray Rothbard describes a fascinating example of a real-life story of voluntarily funded government:
A few writers, disturbed by the compulsion necessary to the existence of taxation, have advocated that governments be financed, not by taxation, but by some form of voluntary contribution. Such voluntary contribution systems could take various forms. One was the method relied on by the old city-state of Hamburg and other communities — voluntary gifts to the government. President William F. Warren of Boston University, in his essay, “Tax Exemption the Road to Tax Abolition,” described his experience in one of these communities: For five years it was the good fortune of the present writer to be domiciled in one of these communities. Incredible as it may seem to believers in the necessity of a legal enforcement of taxes by pains and penalties, he was for that period … his own assessor and his own tax-gatherer. In common with the other citizens. he was invited, without sworn statement or declaration, to make such contribution to the public charges as seemed to himself just and equal. That sum, uncounted by any official, unknown to any but himself, he was asked to drop with his own hand into a strong public chest; on doing which his name was checked off the list of contributors…. Every citizen felt a noble pride in such immunity from prying assessors and rude constables. Every annual call of the authorities on that community was honored to the full.82
Rothbard’s footnote states in part as follows:
82Dr. Warren’s article appeared in the Boston University Year Book for 1876. The board of the Council of the University endorsed the essay in these words: In place of the further extent of taxation advocated by many, the essay proposes a far more imposing reform, the general abolition of all compulsory taxes. It is hoped that the comparative novelty of the proposition may not deter practical men from a thoughtful study of the paper. (See the Boston University Year Book III (1876), pp. 17–38).
Rothbard, being an “anarcho-capitalist,” criticized the idea of voluntary support of limited government owing to his favoring no government at all. Nonetheless, the example he provided gives us a glimpse of the practicality of voluntarily funded government.
What relevance does all this have to the plight under which Americans find themselves today? It has all the relevance in the world. Today, people honestly believe that despite decades of continuous failure, disasters, debacles, and crises, a new president or new federal officials can somehow fix or reform the welfare-warfare state apparatuses. They cannot. It’s delusion, a very dangerous delusion. These apparatuses are inherently defective. In fact, every reform or fix just makes the situation worse. More important, their infringements on the liberty and privacy of the American people continue to mount.
Americans need to think at a higher level, just as our Founding Fathers and the Framers did. We need to ask, discuss, and debate the most important question of our time: What is the role of government in a free society?