The world is a complex place and any simple description of it will be incomplete, but I think it is fair to say we are the subjects of an artificial system of theft and oppression that continues to make the world harder to live in.
Look at the sources of power in the world. Look at government, corporations and the media. Laws written for rich people have created a system where it is necessary for us all to sell our labour to the owners of businesses. They own the land, the factories, the offices, the infrastructure. We need to earn money to survive and the best and sometimes only way to make money is to work for a large corporation. We make money for the people who own and run the corporation and they give us back some of it. Next, the government takes its share, claiming it needs it for roads, schools, hospitals, pensions and security, and gives as much as it can (for example through contracts) to corporations. It does not give people a choice to keep that money, decide what to do with it themselves and get what they need through mutual aid (helping each other) like they used to. Some people work their whole lives making others rich and still end up penniless. Why? Because they didn’t work hard enough? Because they were evil in a past life?
The media tell us to consume. The remaining money we have earned, the last bones we have been thrown, we are encouraged to spend on things that make us feel rich: nice houses, cars, furniture, decorations, restaurants, two-week vacations and fancy coffee. Consumers spend their lives working for corporations and giving most of their money back to them. Instead of pursuing their dreams, they work hard in order to spend hard.
I understand people who do not do anything about it. Politics can be pretty boring. I disagree with people who say you should pay attention to politics even if you are not interested in it. You should not be compelled to pay attention to the news and what it tells you the people in power are doing. If they do not have your consent, they should not spend your money or pass laws over you. Moreover, most of the people who expect you to follow politics pay attention to the wrong things. They watch party nominations and election results and contribute to political parties and candidates who never make any real changes. But the media tell us those are the important things. That is how we can make a difference. There are no alternatives, except competing warlords or some USSR/North Korea nightmare. The system works. Stop questioning the system.
Enormous power is thus concentrated in the hands of only a few thousand people, most of whose names you and I have never heard before. A few million or so more wield power on the national level in different parts of the world with some autonomy (think the generals in Egypt) but they have mutually beneficial relationships with members of the upper ranks of the global elite. Look at what the elite do with their power. In the old days, a king would send soldiers somewhere and thousands of people would die. They had power over small parts of the world. Nowadays, power has become global, and as such the crises it leads to have gone global as well. Look at all the (supposedly unintended) consequences of all the wars the US government has been leading, all the people who have been tortured and killed, or who lost their homes and their livelihoods, and continue to do so even after the foreign militaries have left. And yet, consider who has got rich from those wars. Look at the economic carnage from the last financial crisis. Look how many people lost their jobs, homes and all their money, all around the world. And yet, the people who caused it actually made more money from it. And they tell you not to worry, because there will be an economic recovery. Do you believe them? Where is the justice?
Finally, “education” tells us what to think. I’m sure you can think of reasons why the system we live under is the best possible system. You learned it in school, and if you learned it in university like I did (political science major), you have even more reasons why it works best. We need leaders because without people making our decisions for us, society would collapse. We need rich people because without them, who would start businesses for us to work in? We need police to protect us from all the bad people around us. We need hierarchy: all societies have hierarchy, right? All other ways of living go against human nature. Don’t think too much about it: watch TV instead.
As far as I can tell, most people are neither interested in understanding the system nor willing to take the risk of fighting it. Again, I understand and I don’t judge. I just think they should understand it better than they do. If they choose to do something to change it or to change their circumstances, that is their choice and I will support them. I warn you, however, if we do not fight back, one day it will be too late.
The second edition of the Rule of Freedom: the Manifesto of the Sovereign Community has been published. The full volume is now available for free here.
Egypt’s planning minister, Ashraf El Arabi, said this week Egypt only had enough foreign exchange reserves for another three months. Given how dependent Egypt is on imports, that means the economy will collapse soon if drastic changes are not made.
I hope Egyptians understand when the economy collapses whose fault it is. It’s not Egypt’s fault. It’s not your fault. It’s the state’s fault. It takes your money and spends it without asking. It borrows money and forces you to pay for it. You are the economy. When you pay for the state’s actions, which you do every day, it’s the economy that suffers.
The economy as a whole would not be on the point of collapse if not for all these ridiculous economic policies. Gas would cost more but there would not be shortages, except for individuals who could not afford it. Business would be free to operate and create wealth for everyone. And you would not have to worry if the central bank has enough money to cover what you want to buy. But that is not the way the “national economy” works. When the state screws up, the people suffer.
In this way, we can see the state is, among other things, a vehicle for eliminating responsibility from the powerful and passing costs on to the weak. They will never tell you that, of course. Look at how former finance minister Hazem El Beblawi put it. “[T]he real problem is that Egypt lacks the domestic resources that would allow the government to deal with anticipated shortfalls.” Egypt does not lack domestic resources. It is being strangled by economic policies. Why would we want the government to deal with “shortfalls”? When an individual makes a mistake, he or she pays the price. If the government takes control over something and it goes wrong, the entire country suffers.
But that is the system we live under. The state confiscates and destroys wealth, and you pay.
The only hope for the economy is to secure more loans and raise taxes, which will simply suck more money out of the pockets of the people. But ideally, the economy will die and be replaced by freedom. Let black markets and mutual aid reign. Secede from this system like the people in Mahalla El Kobra. End your dependency on the state and stop paying for the elites’ crisis.
The Rule of Freedom: The Manifesto of the Sovereign Community (the book) is now available as an ebook from Amazon here.
The book discusses all the subjects dealt with on this blog but in greater detail, with more examples and full references. Any feedback you have please write on this post or on the book’s Facebook page here. Enjoy!
“I’ve never let schooling interfere with my education.” – Mark Twain
“The aim of public education is not to spread enlightenment at all. It is simply to reduce as many individuals as possible to the same safe level, to breed and train a standardised citizenry, to put down dissent and originality.” – H. L. Mencken
“Education is a weapon, whose effect depends on who holds it in his hands and at whom it is aimed.” – Joseph Stalin
Well, we do need a lot of education, but we could do without the thought control. Instead, we are getting the latter while hoping for the former.
Public education systems everywhere in the world do a poor job of educating us. We are entering the 21st century, a time that proves to be full of unforseen risks, challenges and opportunities. We are getting schooled with a curriculum for the 20th century in a system created for the 19th century. A good education can bring out one’s true potential, but we are being held back by a lack of accountability to students and parents.
I was once asked, how would you organise education or health care without a government? I find it unfortunate that people think that I or a few people, whoever they are, are qualified to answer that question. A free market achieves the best outcomes precisely because there is not someone at the top organising and directing it, and everyone’s ideas can be put to the test. A free market for education would mean families and communities and schools working together to decide what is right for their children, learning from different schools and teachers what works and what does not, and letting education evolve with society. State education does not offer that freedom. Parents and teachers do not have those choices.
I also find it hard to understand why people believe others to be so disorganised or uncaring that they would not want to take a more active role in what government does. At the moment, they have no role. All they can do is vote for the politician who promises the kind of thing that they want. What if their politician does not win? What if he or she has some policies the person likes but some others that are bad? What if he or she does not implement any of the policies promised on the campaign trail? What if he or she tries to implement the policies but they get stymied by pressure groups or watered down by the bureaucracy? What is the voter’s recourse? And yet, we are talking about education, health care, security and where millions of dollars of a family’s money is going over the course of their lives. Do you really not think they want to be or should be involved?
The ironic tragedy of modern schooling is that the state does such a poor job of educating people that the people believe they need the state to educate them. And education is not getting any better. Accepting the New York Teacher of the Year Award in 1990, John Taylor Gatto said
The truth is that schools don’t really teach anything except how to obey orders. This is a great mystery to me because thousands of humane, caring people work in schools as teachers and aides and administrators, but the abstract logic of the institution overwhelms their individual contributions.
He might as well have been talking about 99% of schools around the world. Totalitarian regimes knew that education was the key to teaching obedience, nationalism and state ideology. Today’s democracies may not teach children to run a cultural revolution, but they are not helping the children become wise, critical-thinking masters of themselves. When governments get their hands on education policy, it becomes a tool for indoctrinating obedience. And even in sciences or physical education, government schools are failing your children. In fact, things were better off before them. Now that we have the wealth and knowledge of the 21st century (including advances in teaching methods), many, many schools can help students understand the world around them and learn the skills for navigating that world. So why do we not have them yet? Like all problems the state causes, the root is a moral one. The initiation of force is the reason Johnny can’t read.
Everything the state does is subject to politics—force, as opposed to markets. Harry Browne explains. “Whenever you turn over to the government a financial, social, medical, military, or commercial matter, it’s automatically transformed into a political issue — to be decided by those with the most political influence. And that will never be you or I. Politicians don’t weigh their votes on the basis of ideology or social good. They think in terms of political power.” (Politics in this sense has little to with elections. Election campaigns rarely hinge on issues related to education and the election goes to the one who best exploits the far more important issues of gay marriage, gays in the military and gay terrorism.) Education policy is subject to all the same lobbying as other policies. Public sector unions and business associations spend millions to induce policymakers to shape education policy the way they think it should be. These are the people who have convinced everyone that we always need more money for schools. Schools that spend more do not necessarily teach better and more important things. Schools that spend less sometimes do better by the students. And why not? Any economist or private-sector manager could tell you that competition among firms and employees generally increases everyone’s performance and improves efficiency. Why would the education sector be different? In fact, it is not. The lack of incentive in highly-regulated public and private schools to do better makes improvement almost impossible. Of course, we could ask parents and even students what they think is right, but they do not have a lobby.
Good teachers have nothing to fear from a free market in education services. They may well get paid better. It is the poor teachers, the ones paid more than they are worth, and who cannot get fired, who benefit from the status quo. At present, there is no correlation between teacher performance and teacher pay. That means the good teachers are being treated the same as the bad, there is little incentive to be a great teacher (beyond the spiritual rewards) and teachers’ unions have an incentive to fight against merit-based pay. There is no market mechanism to offer consumers (in this case, students and parents) the choice to find new and better suppliers.
Teachers’ lobbies are also vehemently opposed to closing schools. But businesses close when they do not serve their customers (or cannot afford to comply with the tens of thousands of pages of government regulations). Let schools close when they do not serve their students. Let the students go to other schools that are actually performing. Or let neighbourhoods and communities start their own learning centres and teach their own children what they think is right. Let them have full control over hiring and firing of teachers. Or do you think some bureaucrat knows and will do what is best for your children?
Then there is the university. One argument often made in favour of subsidising higher education is that education has positive knock-on effects. If you are better educated, you will contribute more to society. Well, maybe. Engineers usually contribute more to society, which is why I would consider giving money to scholarship funds for engineers. (That said, I would like to have a contract stipulating that I get that money back if they end up working for a weapons manufacturer.) But how does society benefit from having someone with tens of thousands of dollars of education in gender studies or acting class? What if I feel that a particular business programme merely reproduces the elite and does not benefit society? Shouldn’t I be allowed to withhold my funding of that programme? But if there is demand for it, the classes will exist.
What happens when we subsidise something? Consumption of it goes up. Subsidise corn, and we find high-fructose corn syrup in many of the foods we eat. It means more corn fed to animals, making animals cheaper, making meat cheaper, when we should be eating more vegetables (not just corn). Subsidise universities and guarantee student loans, and more people will attend university. But not everyone needs to go to university. The more people have a degree, the lower the value of a degree becomes. Just ask thousands of Occupiers if their degrees and average $25,250 of student loan debts have helped them find meaningful careers. The unemployment rate for college graduates is higher than it has been since 1992, when records date back to. The alternative is to return people the millions they have paid in taxes to subsidise education and let them decide what to do with it.
“How will we educate the poor?” Are we educating them so well now? Are schools in poor neighbourhoods just as good as schools in rich neighbourhoods? But even in poor places, for-profit schools have educated people. (See here and here for examples.) The same people who worry about the poor tend to think we cannot afford schools that are not run by government. But as I do not tire of pointing out, if governments did not take your money and give it to schools (and keep some for their retirement funds, and give some to their friends), we would have that much more to spend on education. There is nothing efficient about the tax-and-spend system under which we live, so any claim that government does efficiently what the private sector can do is nonsense.
It also brings up the question of why people are poor to begin with. Sticking people in bad schools and taxing them for it will not help. Poverty is not inevitable. If schools taught financial literacy, we would almost certainly have less poverty. At present the poor, who are taxed on income, consumption and savings, just like everyone else, are paying for everyone’s education (and roads). If they would prefer to become an apprentice or go to a private school; in other words, if they do not want a university education, well, they still have to pay for one. Should they not be allowed to keep their money if they do not want to get a degree? No, says the socialised-education statist, they should not. I would wager that all the money even poor people pay in income taxes, sales taxes and central bank-induced inflation would easily pay for an education for their children. And what do they think they should learn? Should they be charged to learn Latin, algebra and European history? What if they would rather learn metal shop and mechanics? They can make a better living that way than in a career as, well, whatever one does with Latin, algebra and European history.
The state’s takeover of education was, like all state ventures, clothed in language of the public good. State education would improve access and improve quality of education. It hasn’t. And yet, the unions say they need more money. What do schools need more public money for? Where would it go? Is all we need more computers in the classroom? Do teachers need more money? Why can we not let the market decide? Surely, if parents like their kids’ teachers enough to want to keep them, they will pay them well; if they think their kids are not learning, let the parents stop paying for them. Or do I not understand education?
Competition works in education, just like it works in every other market. This is not some libertarian hypothesis; it is well-documented fact. End the monopoly and give the consumers (the parents and students) the power, and quality of education rises.
What do parents think should be taught in schools? Wait, never mind: they are not consulted. It does not matter what parents think. Government mandarins will decide what should be taught. Shouldn’t we teach students their legal rights, how to manage their money, the scientific method, how to think critically, how to start a business, how to defend themselves and maybe even how to be happy? Teachers exist for all those subjects. But the political will does not. The initiation of force, with its pressure group-written laws, fails us all.
When, after many battles past,
Both, tired with blows, make peace at last,
What is it, after all, the people get?
Why! Taxes, widows, wooden legs and debt. — Samuel B. Pettengill
Your money is going toward killing people you do not know. The War on Terror, Operation Enduring Freedom, Operation Iraqi Freedom, the War on Drugs, the drone wars… Can we awaken from this nightmare yet? Can we at least stop paying for wars that are bankrupting us? Unfortunately, as with everything governments do, we do not have a choice.
The full costs are hard to count. Modern governments finance wars with debt, which means we will be paying for many years to come. When we are shown the costs of wars, we usually only see the direct budgetary costs. As such, it is widely reported that the wars in Iraq and Afghanistan have cost about $1 trillion. Though a truly enormous figure in itself, the one trillion statistic obscures the money the warmakers cannot account for, the costs of treatment and pensions for soldiers, compensation to the families of the over 6000 US troops killed (not much compensation for Iraqi or Afghani families, though) and debt financing. The war in Iraq almost definitely made oil prices rise by at least $10 a barrel. The actual figure for the costs of the war may well be over $3 trillion. Three trillion dollars. Barack’s first defense budget came to $685.1b, which means it grew, and hit $708.3b for 2011, which means it is growing. Oh, and $20b has been spent just on air conditioning, but wars in the desert will require that. It is also going toward military bands, but only to the tune of a billion dollars a year.
A keynesian might say that this money has been well spent because it has stimulated the economy. No, it hasn’t. It can’t. It has dragged down the economy with higher debt, higher oil prices, higher costs to veterans, fewer jobs, higher interest rates and trillions of dollars diverted from the productive sector of the economy to the destructive government sector. The wars exacerbated the economic crisis in which the US is still entangled. But if even keynesianism worked, how do we account for the money that is missing?
In October 2009, the Inspector General of the US Department of Defense released a report that exposed various “significant deficiencies” in Pentagon balance sheets from fiscal years 2004 to 2008. The Department of Defense has never been audited. But by examining the various internal audits that have been carried out, along with the opaque system of contracting, the report uncovered more than $1 trillion in unsupported account entries.The Senate Finance Committee wrote a report a year later that took the Pentagon to task for its “total lack of fiscal accountability” for “leaving huge sums of the taxpayers’ money vulnerable to fraud and outright theft.” Fraud and theft are typical of all governments; but not all governments can raise and waste a trillion dollars and not have to face the guillotine. And since a democracy’s only real way to hold anyone at all to account is elections, the unelected bureaucrats at the departments have little to fear.
One example of this wastage is the $6.6b in cash the Pentagon for some reason thought it wise to fly in a plane over to Iraq. It has presumably been stolen, but who knows? How could any organisation, especially one that is barely accountable to anyone, account for all the trillions of dollars it goes through? It is too big and too opaque to audit. The role of special interests in taking your money to spread war is well documented. (Here is a primer.) If you need an example of profligate handouts to war contractors, consider this: even after the scandal of the missing trillion dollars, the Pentagon requested another trillion to operate the fleet of Lockheed F-35s. Where do they get all this money from? They steal it from the private sector through taxation. Do you know how many hospitals that money could build for war victims? How many people we could educate with that money? Can the government ever stop spending and let us try?
In War Is a Racket, Major General Smedley Butler begins “[War] is possibly the oldest, easily the most profitable, surely the most vicious. It is the only one international in scope. It is the only one in which the profits are reckoned in dollars and the losses in lives.”
Only insiders benefit, of course, and they make big money. As such, they have a major interest in keeping wars going and lying to everyone about why they must. According to Butler, at least 21,000 new millionaires and billionaires were made in the United States during the first World War.
How many of these war millionaires shouldered a rifle? How many of them dug a trench? How many of them knew what it meant to go hungry in a rat-infested dug-out? How many of them spent sleepless, frightened nights, ducking shells and shrapnel and machine gun bullets? How many of them parried a bayonet thrust of an enemy? How many of them were wounded or killed in battle?
Out of war nations acquire additional territory, if they are victorious. They just take it. This newly acquired territory promptly is exploited by the few — the selfsame few who wrung dollars out of blood in the war. The general public shoulders the bill. And what is this bill? This bill renders a horrible accounting. Newly placed gravestones. Mangled bodies. Shattered minds. Broken hearts and homes. Economic instability. Depression and all its attendant miseries. Back-breaking taxation for generations and generations.
He goes on to outline the financial interests that guided pre-WW2 Allied policy from supporting to opposing Japan, and how the costs of war and expansion are borne by taxpayers. Foreign involvement from 1898 saw the origin of the debt crisis that the US is struggling with today. Smedley details the enormous earnings of various corporations from WW1, some of whom produced things that were never used. Aside from the probable fact that today’s wars are more costly and more groups have their hands out, little has changed.
The main imperialist powers will naturally be the richest ones. States with liberalised economies have strong economies. Oppressive states do not have free economies and thus have trouble sustaining wars. Only a state with a strong economy could afford to keep a powerful military machine going indefinitely. The US went through Vietnam and survived to learn nothing from it; the USSR lost the war in Afghanistan and collapsed.
Military powers continue to spend countless sums developing new weapons that make killing easier and more efficient. The contractors make big money, with Lockheed Martin coming out on top, pocketing $36b from the US government in 2010 alone. Though the government contracting business is a somewhat opaque process, we see big corporations making tens of billions from governments who like war as a way to suck the people’s money from them and enlarge their own budgets. They ostensibly aim at eliminating civilian casualties, but in the wars they fight, insurgents, terrorists or whoever your enemy is blend with civilians, and the proportion of civilian casualties to bad guys has not gone down. Pilots still bomb or gun down people on the ground from thousands of feet in the air and get called brave heroes by the politicians benefiting from the war.
So inside the US, the current imperial power, is very liberal, and as such its economy is strong. However, because it is able to project its power, it does so, to disastrous effect for large parts of the rest of the world. The American people believe in the freedom the US has internally and want the best for others, so they are easily won over to illiberal wars by promises to free the people of their dictator. But the differences between the countries the US (and now NATO) goes to war with are not moral ones. The rich countries simply have the power to project themselves into other people’s affairs, they can get away with it because only voting keeps them in check (and foreign policy does not hold voters’ attention), and the countries they pick on are so weak—Afghanistan, Iraq, Libya, Somalia, Yemen—they could not possibly put up a real fight.
Libya is a case in point. Barack did not ask Congress for permission to go to war, even though he is required to do so according to the Constitution. (I like the US Constitution but it does not seem to be much more than a piece of paper anymore.) Barack’s people said the war would last “days, not weeks”, and it lasted six months. The interveners’ original mandate was a no-fly zone to protect people that was soon expanded without authorisation from the Security Council to picking sides, assassination and regime change. On May 13, after nearly two months of fighting, Defense Secretary Robert Gates announced that the war had cost $750m. It doesn’t seem like a lot for an organisation that spent $3t on Iraq, but then that figure is an official government figure and probably includes only the costs of bullets, missiles and fuel, not the planes themselves, the salaries of the soldiers, the money for the rebels, the post-conflict reconstruction (if there is any), and whatever else we do not know about. And the interveners were quick to recognise the rebel forces as government, which means a) there was no consultation of the people (so at least the decision was democratic), b) the world will be expected to look away when the rebels, now the good guys, commit atrocities, and c) the rebels will be pliable to the demands of foreign governments (which will presumably mean no-bid contracts to their oil friends). Is this self-determination for the Libyan people?
That said, for the sake of fairness, the war is over and Qaddafi is gone, which might be the best outcome we could have expected, and some credit must go to NATO. Even though this post condemns war, it seems to me wise to judge events on their eventual outcomes. If Libya becomes much freer and more prosperous as a result of NATO intervention, it may have been worth it. If history is anything to go by, Libya will not be much better off after Qaddafi.
All these invasions send a clear message to states like North Korea that have or are developing nuclear weapons: keep them. Nuclear weapons are a highly rational statist enterprise. It is fundamentally out of the question to attack a country with a nuclear weapon because it might use it. So North Korea, Iran and whomever else the US and Israel talk tough about, hold on tight to your nukes if you want to hold on to your regime.
Only spending by an organisation with an unlimited budget could have produced the nuclear bomb. North Korea could never have built such a bomb from scratch. Only a democracy could. Only a democracy has the money and the ability for scientific openness, and yet the ability to appropriate billions of dollars (in 1940s money) for secret projects. And for the incalculable sum spent on research and development to gain an advantage in killing others, the advantage often does not even last until the end of the war, because another state can steal secrets or develop its own special killing machines.
You do not benefit from war. You only lose. Imperialists benefit, as they get to control more and more territory; military hardware firms benefit from generous contracts; civilians, soldiers and so on do not benefit. Unfortunately, those people are mostly sheep. Every society has a few “deep thinkers” and a large number of “sheep thinkers”. Sheep thinking not only limits our imagination; it could have enormous consequences. In Nuremberg Diary, Gustave Gilbert recounts a conversation he had with Hermann Goering, Hitler’s second in command, who revealed a deep understanding of the ability of the elites to control the sheeplike masses.
Why, of course the people don’t want war. Why would some poor slob on a farm want to risk his life in a war when the best that he can get out of it is to come back to his farm in one piece?…But after all, it is the leaders of the country who determine the policy and it is always a simple matter to drag the people along, whether it is a democracy or a fascist dictatorship or a parliament or a communist dictatorship…. All you have to do is tell them they are being attacked and denounce the pacifists for lack of patriotism and exposing the country to danger. It works the same way in any country.
History shows innumerable examples of the public’s approval of or even pushing for war. So often the elites throw the war into the open because of some high political squabble and make everyone think they need to go to war. As the idea of war mixes and churns in political discourse, in the media and in the minds of the people, it soon becomes a given that we must go to war. After all, we are under attack.
“What’s ‘just’ has been debated for centuries but let me offer you my definition of social justice: I keep what I earn and you keep what you earn. Do you disagree? Well then tell me how much of what I earn ‘belongs’ to you – and why?” – Walter Williams
My neighbour has far more money than I do. Should I be allowed to go over there with a gun and force him to pay me? No. When I do that, it is called robbery. But why is it okay for the government to do so? Is it no longer robbery? No, because calling it “law” makes it legitimate. Is it altruistic to force others to give someone else their money? Does anyone else deserve that money? Is taking it from people who earned it justified? Is that the only way to help the poor?
The problem with many statist arguments is that they confuse the ideals of government, which vary depending on the person, but which may well include a perfect redistribution of wealth and opportunities, with the reality, which is that government does not make us more free, more wealthy, more educated or more equal. Government is the institutionalisation of thuggery. The desire to redistribute wealth is an excellent example of this flawed thinking. We need to take more from the rich and give it to the poor. But such policies do not make things much better for the poor.
If a man acquired his wealth ethically, which means that he provided goods and services that people were willing to pay for, then any so-called transfer or redistribution of that wealth is theft. It punishes the people who contribute most to the general prosperity and provides a disincentive to do more. Because it makes it harder for those people to do what they do best, which is create jobs, wealth, products and services, the argument that redistribution of wealth adds to social welfare falls on its face. It is giving a man a fish. Letting the captains of industry strengthen the economy raises social welfare. If people want to raise their individual welfare, they can upgrade their education, learn new skills and start their own businesses, provide what people want and get paid for it, relying on themselves rather than on force.
But a redistribution of wealth is not really a redistribution anyway. Even if you believe it is good to use violence to take money from people who have made it legitimately, most of that money does not go to the poor. It goes into the enormous pool of the government revenues, which pay for the generous salaries and pensions of politicians and bureaucrats, subsidies to large farms and airlines, and making war on weaker countries. Does any of it go to the poor? Sure. But not much of it. And the poor are still poor, even after decades of welfare.
Besides, along with their providing jobs, goods and services, wealthy people give to charity. Facts about who gives and how much can be difficult to come by, as many donate anonymously. Nonetheless, we know Bill Gates, who brought the world Windows and innovated the hell out of computer software, has given some $28b to charity. Warren Buffett, who has financed many successful companies, has given about $40b. The Waltons, the Dells and the Rockefellers have all given in the hundreds of millions. And if you get rich, probably making others rich in the process, you can too.
The rich do not want to keep the poor poor. They have not for at least a hundred years, when industrialists like Henry Ford and John D. Rockefeller began paying their employees more, in part so that they could buy from the corporations for which they worked. (Also because if they wanted the best workers, they needed to offer more. That is how the labour market works.) No one who is not simply cruel wants the poor to stay poor. The more buying power the people have, the better off the rich, as well as the poor, are.
Inequality of wealth is only a problem because of jealousy. It does indeed cause serious problems, such as, to an extent, the current riots in the UK. But taking from others is not the way to solve those problems. Government is not making the poor any richer. The poor are taxed, just like the rest of us; not necessarily through their income, but through taxes on food, housing, and cell phone plan activation fees to name a few. They are taxed by central bank policies that encourage inflation. Sometimes you need to save to buy assets. Inflation eats away at savings. People with weak skills are kept out of the labour market by minimum wages, which discourage hiring. They cannot start art stands at the side of the road without a permit and government stamps.
Instead of resenting the rich and using violence to take their property, we could either learn how to become rich ourselves, which would benefit everyone, or we could learn to move beyond our base emotion of envy and be content.
Protect us from the rich?
A lot of people believe that we need government to protect us from the rich and powerful. I think people who think that way do not understand the nature of government very well, and they have it backwards. The rich and powerful use government to become more rich and more powerful. Whatever party you vote for will be the powerful people of your country. They will have control of a big chunk of the money and the ability to make whatever laws they want. The rich will ally with them, they will take their share, as they always do, and the government will continue to protect them, as it always does; or else a new elite will emerge, as it did under communism. If you really believe that getting more people out to vote, or getting the right person in power is going to fundamentally change that, I think you are naïve. There is no reason to believe that the powerful become any less powerful for any meaningful length of time when there is a new government. And to think that the rich would be more powerful in an anarchic state I believe is wrong, because in fact they wouldn’t have any political power, and they wouldn’t have state protection. That means no more riot police protecting world government-G8-WTO-IMF-whatever-you-don’t-like meetings—there could be security guards, but the people at the meetings would have to pay for them out of their own pockets. In fact, no more of those billion-dollar photo ops at all. No government means no more lucrative insider no-bid government contracts. It means no subsidies for the well-connected, just the people deciding whom to give their money to. It means no government protection and bailouts for the corporations no one likes, only the whims of the market. It means no more police breaking into the wrong house and shooting the wrong man for suspecting him of selling drugs (the war on the poor). It means no more soldiers going to fight for private control of resources overseas (the war on Islam) and coming back in body bags, or coming back as nervous wrecks who do not get treatment. It means more money for the productive sector, which means more and better-paying jobs. And sure, it might mean the rich go to better schools and get better health care, but I think it is fair to say they already do now.
The rich would have the most to lose from an anarchic society, because they would no longer receive all the various handouts they get in the form of bailouts, subsidies, government contracts, and laws that create barriers to entry and monopolies. There would be no limited liability, so people would be accountable for what they do, rather than hiding behind a legal corporation. And though it’s a bit simplistic, it is basically true that managers of public corporations are legally bound to pursue profit. If there were no laws, that would not be necessary. If there is someone with power, which by definition is unaccountable, and he has the power to tax and pass laws, he will pass laws that favour rich people so that he can get some of that wealth for himself. The very existence of government is why the elites can concentrate both money and power in their hands and not have to listen to the voters on the bottom. If you are afraid of the rich, let us start cutting off by cutting off the money they make from taxpayers. How about eliminating bailouts and stimuluses that take trillions of dollars from the productive sector and hand it to any lobby group from failed banks to the wives of failed bankers?
The more wealth is concentrated in the hands of one person, the more others will attempt to rob that person. As such, he or she needs greater and greater security. At the moment, the rich outsource their security to the state, which means they get the taxpayers to pay for the defense of their property. (Find a more robust discussion of this topic here.) The police protect the rich and beat the poor, and yet everyone is paying for them.
Then there is this perpetual fear that anarchy would mean that the rich would have their own private militias to take from everyone else. Well, what do you think the government is? It is a tool of the elites to take from everyone else. But it is also a professional salesteam, selling the illusion that it works, or maybe that it can work, for the people, so that people keep showing up on election day, and the elites keep going to the bank. At least in a free market, rich people would need to pay for their own militias, instead of making you pay for them like now. But I do not know why they would want their own militias. Everyone can pay private security firms for protection, but obviously rich people would not need to use militias to steal from others if they already have money. Of course, voting for a party promising to redistribute wealth is similar to using a militia to steal from others. Left-wing government is a tool of the well-meaning but ignorant.
If you really resent the rich that much, don’t give them your business. It’s as simple as that. If Sam Walton is a bad person, don’t shop at Walmart. If Ray Kroc spends money to finance wars in South America, stop going to McDonald’s, and shame those who do.
Having no state, no concentrated political power, would mean a more egalitarian society, not less.
Save the poor?
“If there were no government, what would be done about poverty?” First, what is the government doing about poverty now? Governments have had anti-poverty policies for decades and poverty has not gone away. If anything, it has become entrenched. (Some data: most money going to welfare programs is wasted; most charitable giving is not.)
Second, welfare has existed before and beyond the welfare state. The welfare state as we know it emerged in the wake of World War Two. Governments wanted to maintain the massive spending they had begun, as reducing spending means reducing government power, and governments hate relinquishing an inch of territory they have grabbed. (A case in point: even after the wave of privatisation in the late 1990s, government spending continued to increase rather than decrease.)
Third, there are ways in which government can alleviate poverty, but simply channeling tax money to the poor is not one of them. Property rights and legal contracts help, though those things are part of the reciprocal nature of normal human trade and interaction, and a state that takes away your property through taxation and imprisonment is not a guarantor of it. (Does the state confiscate property and give it to the rich? Yes.) Businesses operating in a free market end poverty. Look at China, or any of the middle income Asian economies. Walmart alone has brought millions of people out of poverty. People complain about sweatshop labour, but how else do they think hundreds of millions of people could have sent their children to school? Conditions are terrible, but if they were better, they would be more expensive and the corporations would hire fewer workers, be less productive and have less profit to invest back into their operations.
Poverty is beaten with economic growth. That was true during Europe’s development, America’s development, the development of the Asian tigers, and it will hold anywhere. Economic growth means clean drinking water, better nutrition, reduced child mortality, more access to electricity (which replaces burning much dirtier coal, wood and dung), and the freedom to take care of yourself and do what you want with your life. But economic growth takes time. It is not something that the government can fix in a few months with stimulus packages, regulations, makework projects and redistribution of wealth. People need to be able to start their own businesses and operate them without knowing thousands of pages of regulations and tax codes. It takes many years of free enterprise for people to understand, adjust to and plan according to a set of rules, which cannot happen when the government keeps adding to and changing them.
Who are the poorest people in North America? Native North Americans. The indigenous people. Why is that? It is obviously not for lack of government assistance. In fact, it is because of government assistance, and other regulations (like Canada’s “Indian Act”), that they are poor. It is because handouts called “help” are not actually help. The US government spends an average of $7000 per native on healthcare, in contrast to $2000 for other Americans; and yet natives still do not get good healthcare. The problem is with the incentives. Natives who pull themselves up by their bootstraps do just as well as anyone else; those who remain under government stewardship are crippled by dependence. They do not own their resources, meaning they do not have property rights. As Hernando de Soto explains in The Mystery of Capital, property rights is a major factor in enabling people to increase their earning power, because if they own their land and house and other property, they can put it up as collateral for a loan, which means they have credit, which enables them to expand their farms or businesses and make more money off them. It is the same principle as that of microloans. Government bones do not help; property rights just might.
Poor people are simply better off where they have more economic freedom, not more government. In the US, poor people can start businesses (though they might be hampered by fees, forms and other red tape), they can use their property as collateral, they can provide goods and services on a relatively free market and end up surviving and sometimes prospering. We do not need laws for ownership. As Frederic Bastiat once said, “Life, liberty, and property do not exist because men have made laws. On the contrary, it was the fact that life, liberty, and property existed beforehand that caused men to make laws in the first place.” Government, like religion, expropriated the laws of human nature and added to them unnecessarily, and has come to make everyone believe those laws could not exist without it. Let the poor climb out of poverty and many of them will.
If the people think something is a good idea, it will get done. And if they are not willing to pay for it, how could it be all right (or democratic) to force them to? That one is lost on me. But let’s say for the sake of argument that it is okay to force people to pay for schools, hospitals, roads and the fire department. I can understand that, although I still think people would pay for those things themselves, and save money by purchasing from a competitive market rather than a sclerotic public sector. I really do not see why they would not. We help those in need because we are sympathetic, we take time and money to improve our neighbourhoods because everybody gains, especially people who are recognised as putting their time and effort into doing so.
Why do you think that every culture and every religion has some tradition and institution for dealing with poverty? It is because the desire to help others is universal. Try it out some time: if you feel bad, do not try to get more for yourself; do something for others. Give something of yours away. Spread love to other people. As you shed your selfishness, you will feel better. It is a universal truth of human nature.