Milton Friedman - Other People's Money

"Professor Friedman explains the dynamics of "doing good" with other people's money " [/yt]
NetRunnersays...

In case someone (read: blankfist) is too lazy to look at the FAQ for the cookie-cutter response to Friedman, here's the section on this "coercion" nonsense:

Taxation is theft.

Two simple rebuttals to this take widely different approaches.

The first is that property is theft. The notion behind property is that A declares something to be property, and threatens anybody who still wants to use it. Where does A get the right to forcibly stop others from using it? Arguments about "mixing of labor" with the resource as a basis for ownership boil down to "first-come-first-served". This criticism is even accepted by some libertarians, and is favorably viewed by David Friedman. This justifies property taxes or extraction taxes on land or extractable resources if you presume that the government is a holder in trust for natural resources. (However, most people who question the creation of property would agree that after the creation of property, a person is entitled to his earnings. Thus the second argument)

The second is that taxation is part of a social contract. Essentially, tax is payment in exchange for services from government. This kind of argument is suitable for defending almost any tax as part of a contract. Many libertarians accept social contract (for example, essentially all minarchists must to insist on a monopoly of government.) Of course they differ as to what should be IN the contract.

If you don't pay your taxes, men with guns will show up at your house, initiate force and put you in jail.

This is not initiation of force. It is enforcement of contract, in this case an explicit social contract. Many libertarians make a big deal of "men with guns" enforcing laws, yet try to overlook the fact that "men with guns" are the basis of enforcement of any complete social system. Even if libertarians reduced all law to "don't commit fraud or initiate force", they would still enforce with guns.

The other two points Friedman makes are more defensible; I agree that rent control doesn't help provide more abundant, affordable housing, and should be discontinued.

I disagree with the assertion that the only way to make people care about how money is spent is to make sure they're only spending their own money.

For example, if you manage a department's budget at a company, the money you manage isn't yours, and you don't get to keep the "wealth" created by your department. You might get a percentage of it, or you just might have a bonus based on meeting/exceeding an expected target...or you might just get your salary.

However, your own personal fate gets tied to how you manage that budget -- you might be fired for misallocating it, or at least demoted.

Government officials likewise either report to, or are themselves elected by the people, and can lose their job if they screw things up.

There are people who care deeply about making government work, and people who could give a flying fuck in private companies, and vice versa. Neither has a monopoly on finding properly motivated people, and both have means of tying people's fates to their success or failure.

blankfistsays...

"The second is that taxation is part of a social contract. Essentially, tax is payment in exchange for services from government."

Yes. Payment in exchange for services. And, if you voluntarily choose to use those service, then, yes, you should pay for it. But, income tax is a compulsory tax where you are forced to pay for services whether you choose or don't choose to use them. This isn't a willful exchange.

What if I went around my neighborhood cleaning everyone's car windshields and forced them to pay for it? Technically, wouldn't that, too, be an exchange for services? Would it make it right? But, what if instead I went around asking if anyone wanted to have their windshields washed and all that willfully agreed to my price then paid for that service? Wouldn't that be better?



"If you don't pay your taxes, men with guns will show up at your house, initiate force and put you in jail.

This is not initiation of force. It is enforcement of contract, in this case an explicit social contract.
"

Who wrote this social contract? Let me see your special "social contract" you have with your government. Because last I checked the Constitution was my contract with the government. So, if the Constitution is our "social contract", then you show me wherein it says we have to pay a compulsory income tax? Here's your chance to prove me wrong.

burdturglersays...

I don't know if you've heard about this .. but other laws have been made since the Constitution was written. Just because a law isn't specifically written in the Constitution doesn't mean it isn't Constitutional.

blankfistsays...

^I was expecting someone to cite the 16th Amendment. Oh well.

Burdy, the Constitution is a specific blueprint for federal government, and any powers not granted to them in the Constitution goes to the State to determine. So, if it's not in the Constitution and the Federal Gov't chooses to do it, then there's certainly grounds to argue whether its constitutional or not.

Anyhow, like I said, I was expecting someone to bring up the 16th Amendment, which would appear to make this a clear open and shut case, no?


qualmsays...

More good fun from the Libertarian-Debunk-Generator above:

Social Contract? I never signed no steenking social contract.

That argument and some of the following libertarian arguments are commonly quoted from Lysander Spooner.

The constitution and the laws are our written contracts with the government.

There are several explicit means by which people make the social contract with government. The commonest is when your parents choose your residency and/or citizenship after your birth. In that case, your parents or guardians are contracting for you, exercising their power of custody. No further explicit action is required on your part to continue the agreement, and you may end it at any time by departing and renouncing your citizenship.

Immigrants, residents, and visitors contract through the oath of citizenship (swearing to uphold the laws and constitution), residency permits, and visas. Citizens reaffirm it in whole or part when they take political office, join the armed forces, etc. This contract has a fairly common form: once entered into, it is implicitly continued until explicitly revoked. Many other contracts have this form: some leases, most utility services (such as phone and electricity), etc.

Some libertarians make a big deal about needing to actually sign a contract. Take them to a restaurant and see if they think it ethical to walk out without paying because they didn't sign anything. Even if it is a restaurant with a minimum charge and they haven't ordered anything. The restaurant gets to set the price and the method of contract so that even your presence creates a debt. What is a libertarian going to do about that? Create a regulation?

# The social contract is like no other because it can be "unilaterally" modified.

Not true. Consider the purchase of a condominium. You have a contract with the condominium association, agreeing to pay the fees they levy for the services they provide and obey the rules that they create. You have an equal vote with the other residents on the budget and the rules. If you don't like the budget or rules that are enacted, you can vote with your feet or persuade everyone to change them.

There are numerous other common sorts of contracts that allow changes by one or both sides without negotiation. Gas, electric, oil, water, phone, and other utility services normally have contracts where at most they need to notify you in advance when they change their rates. Insurance companies raise their rates, and your only input is either pay the new rates or "vote with your feet". (The exception is when rates are supervised by government regulatory agencies.)

# Other misc. claims denying the social contract.

One commonly cited Spooner argument is that the social contract is like no other, and thus not a contract. That's a nonsequitur. A unique feature or combination of features doesn't disqualify something from being a contract.

Some complain that the social contract is fundamentally unjust because it doesn't treat people equally, that people are taxed unequally or receive services unequally. So? Like insurance, rates can vary from individual to individual, and services received may be more or less than premiums paid.

Some complain "Any contract where the enforcing agency is one of the contractors is hardly fair." But the U.S. Constitution is a contract between SEVERAL parties: the three branches of the government, the states, and citizens. It's a multilateral contract where every party is subject to enforcement by one or more of the other parties, and every party is involved in enforcement for at least one other. This pattern of checks and balances was specifically designed to deal with precisely this fairness issue.

blankfistsays...

^He's kind of a loon. I get his points, and I've never argued anything for or against social contracts, to be honest, but what about this one:

"Why should I be coerced to leave if I don't like the social contract?

Why leave an apartment if you change your mind about the lease? You do not own the apartment, just as you do not own the nation. At most, you may own some property within the apartment, just as you may own some property within the nation. "


Aside from him answering a question with a question, he still doesn't answer the question. And, when you enter a lease you have to sign the lease, so that analogy is completely off. I wish these FAQs were better. As they are now I can barely read a handful of them before nodding off.

qualmsays...

Blankfist: "And, when you enter a lease you have to sign the lease, so that analogy is completely off."

Red-herring. The irrelevance of an absence of material signature in the question of social contract has already been addressed.

Some libertarians make a big deal about needing to actually sign a contract. Take them to a restaurant and see if they think it ethical to walk out without paying because they didn't sign anything. Even if it is a restaurant with a minimum charge and they haven't ordered anything. The restaurant gets to set the price and the method of contract so that even your presence creates a debt. What is a libertarian going to do about that? Create a regulation?

blankfistsays...

^That's my point. He's deconstructing elements of arguments, and then using the deconstructions to piece together a rebuttal. It's silly.

I don't really care one way or another. I agree that the Constitution is law.

qualmsays...

^ That is not your point. You were fallacious, salacious and egregious.

Wrong again: 'Silly' would be posting big poop images on someone's profile page, like you have done. The libertarian faq is interesting and fun.

Ron Paul gave up. Get over it.

blankfistsays...

^I noticed you removed your adblocker so you can click on some ads. What a trooper you are. Why'd you try to game the system in the first place? Just like a good social liberal, you want access but want everyone else to work for it. It's called charter. Sometimes it helps to give a little back even if you're not forced to pay for it through your income tax.

qualmsays...

*rolls eyes* I'm way left of liberal and I'm not a USian. And, fwiw, I only had the adblocker enabled for VS since I've returned from my little vacation. I had decided to 'punish'* VS for two weeks of no revenue, but then I saw Jonny's uber-earnest comment and I felt sad.

*Sorta like the way you 'punish' VS with your behavior.

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