Arnold Kling  

Virtual Secession

A Closer Look at Adverse Selec... Great Questions, Matt...

Patri Friedman launches secession week, a discussion of secession.

In one of my forthcoming books, Unchecked and Unbalanced, I discuss a number of mechanisms for limiting the power of government. You can think of these as mechanisms for achieving virtual secession, although I do not use that term.

The problem with physical secession is that it is very difficult to achieve critical mass. There is probably not much overlap between the people you want to live with and the people who want to choose your particular form of government. The vast majority of us put up with government we dislike in order to live in proximity to people with whom we want to work and play.

With virtual secession, you could still live in San Francisco or Manhattan or Silver Spring while seceding from much of the government at the city, state, and Federal level. You and your next-door neighbor might belong to very different governmental units.

Suppose, for example, that instead of having your taxes allocated for you by legislators, you were given a list of programs and could choose how to allocate your taxes. What percent of your taxes should go to TARP? What percent should go to fund the mohair subsidy? What percent should fund DC school vouchers? What percent should go to Barney Frank's affordable housing initiatives?

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CATEGORIES: Political Economy

COMMENTS (10 to date)
John writes:

Ah, what a sweet, sweet dream that would be Arnold. It would be tremendously entertaining to me to have the dispersed costs and concentrated benefits paradigm turned on it's head as taxpayers 'vote' to de-fund thousands/millions of worthless (to all but a few) programs. Sugar subsidy? Buh-bye! I wonder if funding for the IRS could survive this sort of concept, how many people would elect to fund that agency?

Steven Shaw writes:

Sounds like panarchy

Granite26 writes:

How many people would fund unsexy programs like roads?

My gut reaction was 100% NASA, which has me walking through a crime infested swamp to watch the shiny rockets that my kids don't understand.

Perhaps allow people to apply funds within a category, or have their percentages be from a baseline. (from +50% to -50% 'normal' support, so that the worst that could happen in a given year is a total 50% budget cut, but the default action '0%' is what would normally happen.)

MrDan242 writes:

To Granite26:
I presume there would be a limited list (albeit a large list) of options that differ based on the Fed/State/Local levels of government.
Whereas NASA would be on the Fed list it would not be on the local list, where you could allocate your property and local sales/income tax to law enforcement and education or parks and community centers.

Would a concept like this kill government bonds? (is that a bad thing?).
How would the levels of government handle it if allocated funds to debt repayment/service was short of funding needs? What rules would be in place to make sure government officials didn't just borrow massively(i.e. current and prior Fed administrations) to spend on pet projects and say we will let future taxpayers worry about how to repay it.

Gary Chartier writes:

Virtual secession is the only kind that makes sense. We need to move past a territory-based understanding of legal authority and the provision of public services.

The Hobbesian notion of a large state with territorial sovereignty blends seamlessly into the notion of non-territorial voluntary protection agencies--or so I've just tried to argue:

Granite26: the simple solution to your question about roads is, surely, to privatize them.

Tom B. writes:

I'm sympathetic, but I don't understand how virtual secession could possibly work. The core functions of government (collective defense and law/policing) rely on state control of a reasonably unified land area. How do you suggest the state defend/police a heavily non-contiguous and dynamic territory (let alone provide physical infrastructure like roads and sewers)?

Adam writes:

Won't we simply see rent-seeking in reverse? I envision governments, or particular agencies courting individuals with large tax burdens in the hopes of receiving a windfall.

ThomasL writes:

The main problem with such a concept is that it does nothing to address the entire reason why any one would want out in the first place: they won't let you.

8 writes:

We could have 100% taxes and then allocate them individually. I wouldn't call that an improvement. I'm not sure virtual secession would actually work as advertised, though it may work because most people would end up gravitating geographically. It would be a political sorting policy.

And I definitely don't want to pay for this:
To help borrowers who have seen significant home price declines refinance their existing loans, the Obama Administration today announced the availability of loan-to-value (LTV) ratios up to 125 percent for Home Affordable Refinance mortgages, including Freddie Mac’s Relief Refinance MortgageSM. The previous maximum LTV ratio for Relief Refinance Mortgages had been 105 percent.

Christian Prophet writes:

The "Designate how your taxes can be used" idea is mine, floated years and years ago. I'm glad to see someone else mentioning it. I'd like to see some politicians push the idea.

The trouble with the idea is maybe everyone would become happy to pay taxes, when in reality taxation itself is extortion (or theft, or slavery). So the idea would have to be accompanied by the rule that government must opperate solely on VOLUNTARY donations used as specified. See:

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