Coercion and the “Taxation is Theft” Argument

I see one of the latest responses to one of my previous posts is this:

“You statists simply refuse to analyze human activity as voluntary on the one hand or the result of hostile force and/or fraud on the other, the Rothbardian test. That is because unsophisticated people understand the difference quite well and would see what a nest of theft and fraud the Keynesian program is.”

I am well aware of the difference between forced and voluntary behaviour, and the simple truth is that you cannot live in a world without some degree of reasonable force and coercion (the operative word being “reasonable”). For example, your wife or child is about to walk in front of a speeding car, and there is no time to yell a warning. Do you:

(1) Use coercion to stop them from being killed or injured by grabbing them, or

(2) Do nothing because coercion is always wrong.

If you do what any normal, moral human being does, you do (1), and that course of action can be defended as a moral and right thing to do on many ethical theories. If you choose (2), on the grounds that nobody can be subject to involuntary coercion at any time, you are revealed as an utterly immoral idiot, to my mind. The crucial point is that when coercion occurs it must be justifiable. To say that coercion is reasonable is to say that it is justifiable in a convincing way, on some grounds.

We are told by some Austrians (perhaps not the more intellectually sophisticated ones) that nobody should be subject to involuntary coercion at all, and usually they appeal to natural rights arguments and nature. But I doubt whether such libertarian concepts really are consistent with nature. Take this libertarian insistence that we must be free from any coercive authority, done without our consent. This is a radical violation of one fundamental part of human nature: the relationship of parents to children. How can you raise children without using coercion without their consent? You can’t. The alternative is letting children run wild. Reasonable coercion is necessary, in so far as it does not conflict with the legal rights that all human beings are given under the law.

But to return to the comment above, it is a typical version of the “taxation is theft” argument.

First of all, how would Austrians know that all people who pay taxes regard this as theft? It is natural to dislike paying taxes, but evidence suggests that many people – a majority – think it is the moral thing to do:

“The IRS Oversight Board conducted an independent poll in 2005 that found 96 percent of the respondents agreed ‘it is every American’s civic duty to pay their fair share of taxes.’

The Pew Research Center in a similar study in 2006 found 79 percent of the respondents said that cheating Uncle Sam was ‘morally objectionable.’

Certainly, Americans pay they taxes because they have to: ever since 1945, taxes have been automatically withdrawn from pay-checks. But people also comply because they think it is fair. Polls show that most Americans think only ‘a few’ people cheat on their taxes. Paying taxes, just like leaving a tip, is a social norm” (Maxwell 2000: 146).

Yes, Americans might dislike paying tax, but it appears a majority think it is both fair and right, just as you might dislike looking after a troublesome, obnoxious teenage child, even though you recognise that this is the right thing to do and the law says you must do so as a parent.

With regard to modern taxes which pay for public goods, it appears to me that it is the Austrians/libertarians who are in the minority. But, of course, just because a majority of people think something is moral, this does not necessarily make it so. You need a defensible moral theory to justify some action as right. This issue cuts right to questions about philosophy of ethics.

If two people (a libertarian and Keynesian, say) wanted to seriously debate, they would have to ask:

(1) Is there an objective theory of ethics?

If one person does not believe in objective ethics, then the debate collapses into whether ethics is objective or subjective. Also, anyone who believes that morality is subjective can just appeal to David Gauthier’s Morals by Agreement and come up with some contractarian theory in which, if a majority of people assent to living by certain rules, then this is perfectly defensible ethics. If one takes David Gauthier’s Morals by Agreement as a method for ethics, then modern social democratic states already have a majority that supports basic principles like progressive taxation, so it appears to have ample justification.

But the statement “taxation is theft” seems to require that some objective ethical theory is true, however, so:

(2) If both people agree that ethics is objective, then what ethical system is true?

Our morality cannot be justified by an appeal to nature: that is why most natural rights/natural law based ethics collapse, and why natural rights ethics in the Rothbardian or Randian tradition won’t fly.

In my opinion, the workable objective theories of ethics that are not obviously flawed are Rawl’s human rights ethics, or rule consequentialism/utilitarianism (as in Brad Hooker, 2000, Ideal Code, Real World, Oxford University Press, Oxford). Some claim that a modern form of Kantian ethics is defensive, though I have my doubts.

Since taxes are levied to provide public goods and services (e.g., universal health care in all industrializied nations except the US), it is not difficult to justify them morally under Rawl’s human rights ethics or rule consequentialism.

Also, since in every ethical system some values will conflict, where does human life and the preservation of human life rank in these systems?

The belief that taxation is theft obviously implies that property rights are absolute or at least high in value. But why on earth should property rights rank above human life? Under rule consequentialism even the initiation of force involved in taking wealth might be perfectly justified, e.g.,

(1) If a village of 100 people has one well which is in the possession of one man, who suddenly refuses to give water to anyone else, and there is no rain or any other water and people are dying of thirst, can the dying people use force against the man (but not kill or wound him) to take what water they need just to survive? (leaving him of course with his proper share).

If a person said “no,” I would conclude that the person is morally bankrupt (since I regard rule consequentialism as defensible theory). If “yes,” then it is obvious that rule utilitarianism allows the use of reasonable force to take some reasonable amount of property, if people's lives or welfare are at stake.

In fact, utilitarianism as a moral theory was also held by Ludwig von Mises, who rejected natural rights, and used utilitarianism to justify a minimal state and limited interventions like fire regulations:

“There is, however, no such thing as natural law and a perennial standard of what is just and what is unjust. Nature is alien to the idea of right and wrong. “Thou shalt not kill” is certainly not part of natural law. The characteristic feature of natural conditions is that one animal is intent upon killing other animals and that many species cannot preserve their own life except by killing others. The notion of right and wrong is a human device, a utilitarian precept designed to make social cooperation under the division of labor possible. All moral rules and human laws are means for the realization of definite ends. There is no method available for the appreciation of their goodness or badness other than to scrutinize their usefulness for the attainment of the ends chosen and aimed at” (Mises 1998 [1949]: 716).

“Economics neither approves nor disapproves of government measures restricting production and output. It merely considers it its duty to clarify the consequences of such measures. The choice of policies to be adopted devolves upon the people. But in choosing they must not disregard the teachings of economics if they want to attain the ends sought. There are certainly cases in which people may consider definite restrictive measures as justified. Regulations concerning fire prevention are restrictive and raise the cost of production. But the curtailment of total output they bring about is the price to be paid for avoidance of greater disaster. The decision about each restrictive measure is to be made on the ground of a meticulous weighing of the costs to be incurred and the prize to be obtained. No reasonable man could possibly question this rule” (Mises 1998 [1949]: 741).

Perhaps is time for Austrians to attack Mises as an “evil” statist who advocated using coercion to enforce fire codes?

Progressive taxes and Keynesian macroeconomic management of an economy are justifiable on utilitarian grounds. As for the libertarian minority who disagree, there is no reason why a minority of people with a debased sense of morality should not pay their share.


BIBLIOGRAPHY

Maxwell, S. 2000. The Price is Wrong: Understanding What Makes a Price Seem Fair and the True Cost of Unfair Pricing, John Wiley & Sons, Hoboken, N.J.

Mises, L. 1998 [1949]. Human Action: A Treatise on Economics, Ludwig von Mises Institute, Auburn.