No, it’s not your bleedin’ money

Money and property rights are both creations of the state. If the state were abolished, neither would exist. The ‘money’ point is obvious, but the same applies to property: the fact that you happened to own a nice house would be irrelevant, because someone bigger than you would come along and tell you to get out of it or he’d kill you [*].

In other words, when people complain about the money that the state takes off them in taxes, comparing it to their pre-tax paycheque, they’re talking complete and utter nonsense. The correct figure for comparison is the amount of money that they’d have in Hobbes-world. Which, apart from musclebound psychotic thugs, would be vastly less than they’d have under any plausible liberal-ish-democratic-ish society.

Now, I’ve met a fair few right-libertarians, and I can’t help notice that they generally fit better into the “amiable geek” mould than the “musclebound psychotic thug” mould. So, all things considered, their take on life is a bit weird.

I wonder if the popularity of the belief “I’d do better in a world with no state”, despite its falsehood for the vast majority of people who believe it, is down to the same kind of overestimation of personal ability that makes people on modest incomes oppose taxes on the rich because, against all evidence, they believe that one day they’ll be in that group?

Or perhaps it’s even more primal than that, going back to playground fantasies of ninjas and sword-battles. Which could possibly explain why libertarianism is rather more popular among men than it is among women…

Probably worth signing off with the obligatory disclaimer that I’m arguing against a specific ideological position about property and taxation, not for a society where the most extreme counter-position holds. Obviously, I don’t think it’d be a good idea for the government to levy tax at a level that left people at [the same level of income they'd have in Hobbes-world + delta], because that would be a terrible idea from the point of view of maximising overall welfare.

[*] what would actually happen, based on historical evidence from all eras, is that eventually people would get pissed off with Hobbes-world and support whichever appalling violent thug was willing to enforce some basic rules that meant they wouldn’t just be murdered and robbed at will – i.e. a hugely authoritarian government. But let’s assume that Hobbes-world is some kind of sustainable equilibrium, for argument’s stake.

15 thoughts on “No, it’s not your bleedin’ money”

  1. I like to do the thought experiment of starting from the basics of what a state needs (some form of money exchange system people trust plus property right enforcement people trust) and working out what other state institutions must exist (police training colleges, courts, universities with law professors etc.) in order for this to work. It rapidly gets well beyond the most moderate libertarian ideal state and thus I conclude that their problem is not tolerating too much reality with their Ayn Rand.

    Trivia: I once went to a party at a bloke's flat where the only books were Rand and IT manuals. His sister was quite nice.

  2. "Money and property rights are both creations of the state."

    Rather depends on what you mean by both those terms. If by "money" you mean some form of transferable value backed by the state then rather ontologically yes, otherwise no. Similar for property rights.

    However, some mechanism is needed and the above are things that tend to be best done by the state, hence my being a minarchist. This does not require the "piss everyone's earnings up against the wall" sort of state that you seem so keen on.

  3. I'm confused about what your conception of non-state "money" and non-state "property" might be (given that once a group of people start compulsorily enforcing rules, you've got something conceptually indistinguishable from a state, and I can't see how "money" or "property" of any sort could exist without some kind of compulsory enforcement of rules).

  4. So a private security force is conceptually indistinguishable from a state? This is drivel. Both money and property rights existed in societies that would delight any "right-libertarian".

    Actually, it's a common and intellectually negligible trick of the contemporary left: take something the state does now, however imperfectly, but that predates the modern state by millennia, and say it can only be done by a modern state, despite the many and obvious antecedents.

    Even then, in this case it's a straw man: most Libertarians actually insist that the protection of property is one of the few legitimate roles for the state.

    Libertarians aren't anarchists, you have to look for those on, er… Well, on the left.

    (I am not a libertarian, but prefer to discuss what they actually say, rather than some sort of strange fantasy opponent).

  5. Scotland has three banks that issue currency. They are licensed to do so by the government, but that's not to say they couldn't do so if it were a free for all. Money started long before there was anything resembling a modern state. (The system that predated the modern state lasted into the 19thC with the Hapsburgs but money came into being in societies several generations of structural development prior to that one).

    More: it's perfectly possible for a bank to issue currency of its own denomination – if the state didn't prevent it from doing so. Local currencies aside (like the Brixton dollar or whatever it is), the state does prevent this. What you're doing is saying that because the modern state prevents people from issuing currency, people money can only come from the state. It's ridiculous.

  6. Octogenarian Peer – Hoy you Oik get off my estates
    Huge Thug- I `ll do what the fuck I like ta
    Octogenarian Peer – Why why you young bounder my ancestors fought for this land …

    Huge Thug- Got it . Lets fight for it then .

    You have a redundant case for the rule of law and the maintenance of order even if that order is clearly far from perfect . In other words you have made the classic Conservative case. Your Libertarian is a very straw man indeed . The King’s peace , delivered by whatever means was much valued fior centuries before the invention of income tax when the game keeper became the robber .
    The Classical Liberals like Tom Paine argued that the rule of law was an essential to freedom and the only people who set up utopias were religiose loons like the Owenites , ie left wingers whose efforts were of course doomed .

    I often have cause to say to Libertarians soi disant that in fact their utopia once existed and the funny thing was that all this freedom consisted of outright slavery for most people.

    The first English Parliament was a court and its function was the ritual enactment of the shared will of the people taken to be god given . Justice was natural and the process of law making one of “ discovery” rather than imposition . It is not true that private property exists only because of massed ranks of police , it exists because of the general acceptance of it as a natural right . When that acceptance has ceased so has private property . Libertarianism is of coursed only a useful tool for fighting the cultural attack on freedoms we have evolved . Margaret Thatcher did not agree with Hayek , nor visa versa and I agree with Margaret Thatcher .

    You are out of your depth philosophically here but the insight is a step in the right direction

  7. "The first English Parliament was a court and its function…"

    I don't think that's true, at least not the way most historians write about it. The first regular Parliaments were places where Lords and Commoners gathered to hear proposals for taxes, approve them (or not) and present petitions to the monarch. This is 14thC to 17thC.

    The modern legal system evolved entirely separately and a couple of centuries earlier, mainly to resolve issues that arose from the "anarchy" of Stephen's reign. These issues generally did involve property (land) but the remedy offered by the King's Circuit was to revert to the status under Henry I, and a jury of locals would be summoned to figure out just what that status was. This has everything to do with hard politics and nothing to do with natural justice or God. Courts prior to that were weird, Ordeal was still used.

  8. @Peter Risdon
    Scotland has three banks that issue currency. They are licensed to do so by the government, but that’s not to say they couldn’t do so if it were a free for all.

    This is not quite true. The three Scottish banks can only issue currency notes if they hold the same value of Bank of England currency notes in their vaults. Effectively, all they are doing is relabelling already-issued currency.

  9. @ajay – thanks for the correction. But it didn't start like that:

    "The Bank of Scotland was the first bank in Europe to successfully issue paper currency redeemable for cash on demand (which was an extremely useful facility given the poor state of the Scottish coinage at the end of the seventeenth century). Following the Acts of Union in 1707, the bank supervised the reminting of the old Scottish coinage into Sterling.
    The right to issue banknotes was extended to other banks after 1716 when the Bank of Scotland's monopoly was allowed to lapse.[citation needed] Up until the middle of the nineteenth century, privately owned banks in Great Britain and Ireland were permitted to issue their own banknotes, and money issued by provincial Scottish,[17] English, Welsh and Irish banking companies circulated freely as a means of payment.[18] While the Bank of England eventually gained a monopoly for issuing banknotes in England and Wales, attempts to restrict Scottish banks from issuing notes were met with popular opposition."

  10. Yes, I know. All of that happened in the long-gone days of metal-backed currency, and is thus of merely historical interest.

    The point about currency is that people are only really going to use it if it's widely useful. The state is a great organisation for issuing currency because it can announce that it'll take it in payment of taxes, and almost everyone has to pay taxes. The state is such a big and omnipresent economic actor that its acceptance alone makes a currency viable.

    But it's difficult to think of another economic actor that has that sort of clout. Maybe Tesco. If Tesco priced all its goods in a made-up currency and started paying all its employees in that currency, that might be enough to tip it into acceptability.

    Banks are actually the worst possible organisations to issue a modern currency, because their whole reason for existence is to handle streams of other people's money.

  11. Peter I was inadvisedly refering to something I came across by Roger Scruton but I cannot trace the reference. I imagine it was tracing the development to the "Court" of the King , the Star Chamber to the "Court" of legal judgment.The link is preserved in the Spanish Cortes but basically you have caught me out on courts …eeek.
    I still think it is valid to disgree that the basic laws of the Nation are 'imposed' on the people by the State. I was trying to draw out the older idea of laws being "discoverable" and drawn from shared assumptions.Disputes arise as to their application and from these difficult cases implicit principles are rendered explicit

    Can`t say I did a very good job of it

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