Home > A Theory of the State > The Temptation of the State

The Temptation of the State

The primary role of the state is to define and protect property rights.  This role requires it to wield coercive power against individuals.  Historically, the most common manifestation of the state is one where an individual or a small group of individuals has control over the state and therefore near complete control over the other members of society.  The emergence of what can be loosely called “democracy” or government by the people, is an attempt by free people to get the benefits of governance without subjecting themselves to serfdom.  This is done by entrusting control of the government to the people it is charged with governing.  But this creates some problems.

If “the people” was a single unified body that made decisions in its own interest then this would work out fine.  Unfortunately “the people” is really just a collection of individual people with different interests.  Each of these individual people will see the state, which is partly under their control, as a potentially very useful tool for achieving their goals.  And this is true, because the state has a special power that individuals lack, namely the power to coerce others with the threat of force. 

To understand the temptation that necessarily comes with this type of power, consider a man who has devoted his life to feeding the poor.  This, of course, is a noble pursuit which would no doubt be commended by almost any free man.  But any free man would not be willing to devote his life to it.  It may, in fact, be the case that most free men wouldn’t devote much energy at all to it.  To the man who does care, this will seem barbarous and mean.  He will see others enjoying plenty and not showing what he considers to be the proper concern for those with less.  He would like to get some of what they have and give it to the poor.  This would make him happy. 

In a free society, this man has a clear path to achieving his goal of getting some food from a rich man and giving it to a poor man.  He can work to produce something of vale and trade it to the rich man for the food that he wants to give to the poor.  On the other hand, if he has access to a coercive enforcer, he may be able to just use that power to make the rich man give it to him.  This process is attractive to him for two reasons.  First, it cuts out the nuisance of having to produce something valuable to trade.  Second, he is able to accomplish far more this way.  Instead of being able to donate the produce of only one man (himself) he is able to donate the produce of many of his fellow men to his cause. 

What is more, he will likely feel no moral reservation about pursuing such a strategy.  On the contrary he will probably feel the exact opposite and he may even develop a sense of righteous indignation toward those who would be so selfish as to resist his attempts to confiscate their property and direct it to what he considers a very worthy cause.  And this moral reproach will be used as a weapon to accomplish his goal.  He will brand those who don’t support using the government to direct peoples’ private property toward ends which they do not condone as enemies of the poor when in fact they are simply indifferent to the poor.  The public at large (who controls the state) will see the issue as one of who should get this wealth, the rich or the poor?  And that is what the issue is.  But this view betrays the fact that the public considers the wealth of every member to be public property which can be disposed of as “the public” sees fit. 

Likely “the public” will prefer the poor to the rich on some sort of moral grounds.  This will especially be the case when the burden of a policy falls on a minority of them.  This might not be very troubling except for the fact that everyone has a cause that they care more about than others.  They will all want to use the state to coerce others to support their cause.  The direction of resources will become a public political decision rather than a decision made individually by the owners of the resources.  Indeed, in this case the public is in fact the owner of all resources because they have the ability to seize any of them at any time and direct them to any cause they see fit.  This fact is illustrated by the current debate in this country over whether we should increase or decrease tax rates in order to increase government revenue.  Notice that this is exactly how a tyrant decides on the tax rate.  The thief-turned-governor in our initial example allows the foragers and hunters to keep some of their produce because it provides an incentive for them to produce more for him to steal.  In a free society the question shouldn’t be what will maximize tax revenues, it should be what is the minimum tax possible to achieve the necessary functions of government? 

The big problem with this situation is not that the poor get fed.  It is that when the objects of wealth become disassociated with the creation of wealth, wealth will not be created.  This can be illustrated with another parable.

Imagine a society made up of three individuals.  The first wants to feed the poor and provide universal healthcare.  The second wants to feed the poor and build roads.  The third wants to provide healthcare and build roads.  They each have $150 and spend $75 on each of their causes.  If they are left alone they end up spending $150 on feeding the poor, $150 on providing healthcare, and $150 on building roads. 

                If they can vote to make the government do things, the first person may propose that the government take $50 from each person and spend it on feeding the poor.  This will pass because two out of three people value feeding the poor.  And in this way those two get the same amount of benefit at a lower cost to themselves ($50) because they make the third person subsidize their efforts.  If only this happened, the society would end up with more feeding of the poor and less healthcare and roads.  However, the second person will probably notice that they could propose a measure to have the government take $50 from everyone and use it to build roads.  This will also pass because two out of three favor it.  And the third person may propose that the government take $50 from everyone and use it to provide healthcare.  After all of this they end up with the same amount spent on each project as they had to begin with ($150).  It is worth mentioning that this is not necessarily always the case.  The example is constructed this way to illustrate that it is not the reallocation of resources that is the main problem here.  The main problem is that now, if any one of these people earns another dollar, only 2/3 of that dollar will go to causes they care about.  This means they will have less of an incentive to produce.  If all three produce less, then every cause receives fewer resources.  The more people and causes you add, the more an individual’s wealth will be diverted away from projects that they care about and the less will be their incentive to create wealth. 

                In addition to this, it is likely that a lot of otherwise productive resources will be used up simply trying to manipulate the actions of government.  Every politician, lobbyist, campaign manager or volunteer, pundit, blogger, and bureaucrat could be employed in the production of some other good.  The cost of all of this together with the waste and corruption which is well known to be common in any government is most likely small however in comparison with the negative effect on incentives described above. 

                There is an important distinction to make here regarding liberty.  It is between the conception of a “free people” in which people is thought of as a single organism and that in which people is considered a collection of individual free people.  The idea that a people is free if its collective actions are chosen by the majority is fundamentally different from the idea that a people is free if they are individually allowed to live and act in a way of their own choosing so long as it does not infringe on the liberties of some other individual.  The fact that a man has some say in the actions of the state which wields complete control over his life does not make him a free man.  The difference between this and a dictatorship is not the degree of freedom, it is only the way in which the oppressing body makes decisions.  People are only free when there is no oppressive body making these decisions at all.

Aside: On the Morality of Government

 One man sees that there are poor people in his community and thinks to himself “I should do something to help.”  So he goes out and gets a part-time job to earn money to buy food for the poor.  Another man sees that there are poor people in his community and thinks to himself “somebody should do something to help.”  So he goes to the government and demands that it use its coercive power to force other people to give food to the poor.  Which man deserves more admiration?

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  1. January 18, 2012 at 1:13 am

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