Wednesday, November 23, 2016

Taxation: Consensual Theft

The title of this video is The Horrible, Obvious Truth Hidden in Plain Sight...I don't know why it was cut off. I've shared this with several friends and on social media. It shows in current terms what we already fairly well know, that taxation is theft- in the case of contemporary America, by an oligarchy. Having watched it I reread an article by Mancur Olson of the Univ of Maryland, an economist and social scientist (if such a thing exists in reality). It appeared in the American Political Science Review, the publication of the American Political Science Association (APSA) Sept. 1993. I was in college when it came out and had just recently presented a paper on NAFTA at the APSA conference in Washington DC and read it after the conference. It caused me to look at politics in a new light.

It is axiomatic that history is written by the winners and therefore doesn't always provide an accurate account of what happened, or why. Olson's article entitled, Dictatorship, Democracy and Development cites the example of the Chinese warlord Feng Yu-hsiang who began as a roving bandit who went through the countryside taking what he wanted. He decided, for whatever reason, to settle down and begin extracting "loot" from the citizens in the form of taxation. It's, as Olson points out the formation of, the "Stationary Bandit" vs. "Roving Bandit" paradigm. In return for taxation the bandits provide protection from roving bandits. On the surface it seems like a mutually beneficial arrangement. But, roving bandits only come through sporadically, so why is it preferential to the citizens to be constantly "taxed" at the whim of the stationary bandit, who by now has taken on exalted titles such as king etc.?

Olson's answer is that in the human psyche, order is preferable to anarchic violence. In this context, anarchy refers to an absolute absence of order, not anarchy as a form of government that provides individual liberty- it is the "law of the jungle" or survival of the cruelest, I suppose. It is almost unarguable that some form of order is necessary for any civilization to develop, socially and especially economically. How then does this apply to America?

In 1776, the colonists in America rejected a tax rate of approximately 3%. Britain had evolved into a Parliamentary Monarchy and the British citizens in the colonies had almost no say in how they were governed, or taxed. The cry of, "no taxation without representation," rang out. However, after we had gained our independence, the tax rate was at least at pre-war rates. The war then, was about individual rights, in particular the right to help determine how, and how much, we were to be taxed. As Olson argues, individual rights, such as freedom of speech and freedom to enter into contracts, are a necessary condition for lasting democracy and economic development.

Jakob Burckhardt wrote, "beware the effect of creeping socialism." Creeping socialism is exactly what has happened since the beginning of our nation. The implementation of a national bank, tax hikes to expand the country, war expenses have all contributed to the expansion of governmental power. It goes without saying that the power of government cannot expand without the power of the individual diminishing, This culminated (but by no means stopped) with the presidency of the biggest despot in American history, Abraham Lincoln. The history books tell us of how Lincoln fought a war to stop the spread of slavery, but nothing could be further from the truth. The War of Northern Aggression was fought to preserve and expand the union and with it the size and scope of federal power. 675,000 or more Americans died to centralize power in one locus- and with those brave people went our rights as individuals.

After Lincoln the growth of government accelerated to the point where the Founders wouldn't recognize it. We are no longer a Democratic Republic, but an oligarchy run by corporations that can afford to buy access to power. It has become, literally, the best government money can buy. We are "allowed" by our rulers to elect someone from a group of oppressors that we have no say in selecting. Multi-national corporations run the media outlets and the flow of information. It is they who select the oppressors that we choose from- it is merely the illusion of choice. Whether or not Donald Trump is outside the mold remains to be seen. He speaks as though he opposes the global elites, we can only hope this is so.

The problem with oligarchies is that there is never a shortage of oligarchs. As Olson writes, dictatorships usually last only as long as the dictator is alive. If Trump turns out to just be another oligarch, our downfall is imminent.

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