Arnold Kling  

Donations vs. Taxes

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David Welker writes,


Arnold Kling rejects the idea of having any duty to society, even while he has enjoyed countless benefits from society. Including receiving a world-class education of the sort enjoyed by a tiny elite. Basically, what Kling does not appreciate is all of the good things he has gotten as a member of society. Think about all of the people who have paid the ultimate sacrifice in defending this country and protecting our lives, liberty, and freedom to pursue happiness in the armed services. What Kling is saying is he does not owe such people or anyone anything. Kling must actually think he somehow deserves to have lived the life of privilege that he has lived, and that securing the blessings of liberty and peace are free. Basically, what we have here is an entitlement mentality run amok.

I view this as a very good argument for why I should be willing to donate money to fund police, courts, and other social institutions.

In fact, it is such a good argument that it reinforces my view that these institutions do not have to be supported by taxes. Lots of collective institutions are supported by voluntary donations, and the case for supporting critical public institutions is so strong that I think many people would willingly donate to support them.

The argument that these institutions need taxpayer support is that otherwise people would free ride. Perhaps some people would choose to free ride. However, my guess is that the cost of those free riders would be a fraction of the costs of the inefficiencies created by coercion-backed, taxpayer-funded government.

In fact, the idea that I need to show my gratitude to others by expressing support for coercion seems perverse. I would think that voluntary donations would be a much more sincere expression of gratitude than joining in the project of collective coercion.


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CATEGORIES: Political Economy



COMMENTS (33 to date)
Jeff writes:

Somebody discovered fire, and someone else invented the wheel. We can never pay those long-dead unknown individuals the full social value of their discoveries and inventions. But unless you think that ownership of those long-ago innovations has somehow mysteriously passed to whichever politician managed to win the most recent election, that implies absolutely nothing about our "duty" to society.

JPIrving writes:

And the experimental econ literature supports you! Ernst Fehr has a whole slew of experiments in labs and in the real world showing that people punish free riding in a way that homoeconomicus would not.

It is interesting that my mother donates money to a charity for injured police officers and firemen in her city every year, despite the fact that these workers have pensions funded by coercive taxes. It is not hard to imagine an that an equilibrium might exists wherein people paid a relatively trivial amount for protection from other people. Policing and courts would be a cheap if drugs and prostitution were legal.

liberty writes:

"In fact, the idea that I need to show my gratitude to others by expressing support for coercion seems perverse. I would think that voluntary donations would be a much more sincere expression of gratitude than joining in the project of collective coercion."

-- on this topic, see this cute video:
http://www.reason.tv/roughcut/show/george-ought-to-help

rapscallion writes:

The link is wrong.

david writes:

Reminds me of this:

http://www.econlib.org/library/Columns/Jasaydog.html

Randy writes:

So how do I know whether I owe society or society owes me? One clue seems to be that those who most frequently make the argument seem to believe that they are owed.

Julien Couvreur writes:

A common argument to morally justify taxation is that public services (schools, roads, libraries, etc.) enable people to make a living. For instance, Bill Gates benefited from many of those government services.
The problem with this argument is that it has no logical limit, it proves too much. It would justify that government own all your labor and even your life.
Fundamentally, because those tax-funded services are "free" (no price tag), it is impossible to determine what you owe, therefore you can never be done and clear.
Instead you have a pact with the devil, for which you cannot opt-out.

Jacob AG writes:

Maybe you've already done this elsewhere, but can you provide some examples of collective institutions supported by voluntary donations?

Jehu writes:

Jacob,
Your local church is a good example of an institution supported by voluntary donations. Most hospitals, for instance, were started that way. I don't share Kling's optimism though considering the sort of society that we live in today. I'd be much more optimistic on that score if it were a much smaller and more homogeneous polity. In such societies, it is much easier to translate what you donate and offer for public goods into social status.

andrew writes:

I don't see how paying for current wars or redistributing money to other currently living people helps pay back the people spoken of here

Think about all of the people who have paid the ultimate sacrifice in defending this country and protecting our lives, liberty, and freedom to pursue happiness in the armed services.

Michael Wiebe writes:

Welker should consider the distinction between enforceable and unenforceable obligations.

We can have duties to contribute to certain projects and yet may not be legitimately coerced into contributing. This is the idea of an unenforceable obligation.

ThomasL writes:

@Jacob

For large scale institutions supported by donations, the Red Cross and Salvation Army come to mind.

However, I think Arnold is getting at a much larger "voluntary" society, not a point strictly focused on government institutions funded by donation. That is a big part of it, but not the whole of it.

"Voluntary" police don't have to be only government police funded with donations; they can be the security guards hired by stores, apartment complexes, etc. They are not funded by donation, but neither are they funded by coercion.

Many, many libraries across the country were built and stocked through contributions.

There are hospitals and clinics across the nation funded by donations (as well as payments).

Money is fairly commonly donated to colleges to provide future scholarships.

Admittedly, my understanding of the Old West may have been colored by television, but there is every appearance that towns or groups of families used to hire teacher(s) and build schools by raising the money entirely from voluntary contributions.

For that matter, even local PBS stations are funded in part by contributions.

GU writes:
"In fact, it is such a good argument that it reinforces my view that these institutions do not have to be supported by taxes. Lots of collective institutions are supported by voluntary donations, and the case for supporting critical public institutions is so strong that I think many people would willingly donate to support them."

Well, lots of small collective institutions are supported by voluntary donations. I doubt that, for instance, the U.S. military could be funded via voluntary donations. And I don't mean at our current level of military spending which is almost certainly too high, I mean at a minimum "all defense no offense" level of defense spending.

I highly doubt a redistributive transfer payment scheme could be adequately funded (entirely) voluntarily. There are market failures that prevent people from adequately insuring themselves against bad life outcomes; no moral theory of redistribution is needed to realize that gov't transfer payments can fill these gaps (I'm not arguing in favor of any current policy).

The same human nature that causes politicians to enact sub-optimal policy that betters their personal interests would cause people to free-ride in an all-voluntary anarcho-capitalist group.

GU writes:

Shorter version of my above post:

Under the Sowellian dichotomy, your belief in an entirely voluntary society is an "unconstrained vision."

Floccina writes:

@Jacob
Crime watch neighborhoods and volunteer fire departments do exist.

Mark Brady writes:

Jehu writes,

"Your local church is a good example of an institution supported by voluntary donations. Most hospitals, for instance, were started that way. I don't share Kling's optimism though considering the sort of society that we live in today. I'd be much more optimistic on that score if it were a much smaller and more homogeneous polity. In such societies, it is much easier to translate what you donate and offer for public goods into social status."

The inevitable centralization that is attendant on the growth of the nation-state has for centuries fostered its further expansion and created barriers to the emergence and development of non-coercive institutions. It is therefore crucial that advocates of individual liberty communicate visions of how voluntary arrangements can work today. This intellectual exercise rests crucially on a thorough knowledge and understanding of how such arrangements functioned in past times and how the state both deliberately and incidentally crushed them.

Dave writes:

First of all, who is David Welker, and why do we care what he thinks?

Secondly, he so obviously confuses "society" with "government" that it makes his statement unintelligible. Societies can substitute state funded programs with privately funded ones with varying results, but to imply that everything in society is the result of government action isn't even worth debating.

flawed writes:
Dave writes: First of all, who is David Welker, and why do we care what he thinks?

Thats what i was thinking! The first thing to say when responding to such sentiment is always "why confuse society with government?"

Scott Scheule writes:

There are several defenses.

1. Contracts typically get their moral force from the voluntary agreement of both parties. When did Kling ever agree to the social contract someone's trying to collect on?

2. Are we sure Kling rejects all duty to society? My feeling was always that Kling was a minarchist, so he accepts some duties, discounts others.

3. Even if we presume a duty to pay back for entitlement, it must end somewhere.

Brian Clendinen writes:

A lot a neighborhoods in New-York in the 40's and 50's had something called the mob. One was perfectly safe to be out a 3 in the morning in the ghetto run by the mob. If there was any crimes no sanctioned by the mob they took care of it quite well. People felt extremely safe business just had to pay protection money. Granted it was not a choice.

My point is a 100% voluntary society does not work. There has to be some form of government for security and rule of law. As the founders realized government was an evil but an necessary one.

Pandaemoni writes:

The other issue in addition to free riding is transaction costs. If I am making voluntary contributions, I am unlikely to make a separate distribution to the many (currently public) organizations that benefit me. Even if I dutifully research all the organizations, I am unlikely to allocate money in accordance with what they need, but rather with the gratitude I feel, which may not be the same. The military might get more, for example, than the people who maintain the roads and traffic system, and that bias seems to me to be likely to be systematic among most people. I am not sure that the market response would be for the local roadworkers to step up their game so they appear to add more value than soldiers...because I am not sure they could overcome the emotional bias I'd have in favor of soldiers due to the dramatic nature of the risks soldiers face relative to traffic light repairmen and pot hole fillers.

The costs of researching who does what and coming up with an something closer to a fair allocation of donations would be prohibitively expensive if each person in America had to do it more or less independently.

Government takes a stab at it, and while they may not reach the efficient solution either, it does free me from having to think about the issue myself.

Scott Scheule writes:

That may be Brian, but I don't see how your example shows it. Showing that there was once a government like entity at one place at one time hardly proves that government is a necessary ingredient to society.

In my opinion, much of what we can expect from society depends on what people will tolerate. A divine monarchy is a perfectly capable type of government--but it would be all but impossible to impose one in the US. Why? People don't want one.

Could people ever come to cherish and preserve a stateless society? I certainly think it's possible, though there's a lot of distance between here and there.

Dan writes:

Kudos for responding with civility to a post entitled "Smart People who are Stupid." It looks like he's taken the post down from his site--probably a wise move on his part.

8 writes:

I like the second order effects. People who live in a voluntary society feel more ownership over the system and take a larger role in it. When something goes wrong, they don't shift the blame. As an example, a poor family falls through the cracks of the welfare system. That's the government's problem in a coerced society, but in a voluntary society, more people will genuinely feel bad about it because they know they could have done something. What results is tighter communities and more knowledge at the local level.

Sometimes I wonder if some libertarians really want to live in a voluntary society. Perhaps they would all live together in a town, but my hunch is that a voluntary society is actually more closed in the sense of privacy and ability to free ride. Social coercion can be powerful.

Kurbla writes:

Libertarian criticism of the tax system is usually based on claim that they didn't signed any contract. However, the right of the state to collect taxes is not based on the contract. It is based on the state ownership over territory. One who owns territory - being that private person or organization - has the right to define the rules for those who use the territory - even if he has no contract with them at all. That is - if you believe in property rights.

Libertarian can claim that state property rights are not justified, but criteria that invalidates state property will probably invalidate private property rights as well. For example, typical criticism is that state property is result of the conquest, but private property is result of that same conquest as well. It is just one example.

But, what is more efficient, taxes or donations? Taxes certainly require more administration and enforcement. That's large plus for donation system. However, thesis that people are willing to donate enough is in contradiction with basic libertarian idea that people are predominately (lets say 95%) selfish. If people are really 95% selfish, they'll donate only 5% of income voluntarily, and it is not enough to maintain current level of public spending.

Randy writes:

I agree with Pandaemoni that voluntary donations would result in inefficiencies, and I agree with Kurbla that the political organization is the ultimate property owner. Personally, I favor a fee for service approach. There are very few "services" offered by the political organization that could not be provided as fee for service if they would put their minds to it, But they don't put their minds to it because collecting taxes is easier for them than running a profitable enterprise. And because its easier for them it is unlikely that the situation will ever change. And so I expect to remain comfortable in my disrespect for them.

andy writes:

"Including receiving a world-class education of the sort enjoyed by a tiny elite. Basically, what Kling does not appreciate is all of the good things he has gotten as a member of society"

My parents were forced to finance my education through state bureaucracy. Therefore I should be forced to finance education of my children through state bureaoucracy.

Strong argument, isn't it...

andy writes:

@Kubrla
However, the right of the state to collect taxes is not based on the contract. It is based on the state ownership over territory. ...
Libertarian can claim that state property rights are not justified, but criteria that invalidates state property will probably invalidate private property rights as well.

You don't seem to know the libertarian criticism well. Roderick Long makes this argument, which actually sounds pretty logical:

I think that the person who makes this argument is already assuming that the government has some legitimate jurisdiction over this territory. And then they say, well, now, anyone who is in the territory is therefore agreeing to the prevailing rules. But they’re assuming the very thing they're trying to prove – namely that this jurisdiction over the territory is legitimate. If it's not, then the government is just one more group of people living in this broad general geographical territory. But I've got my property, and exactly what their arrangements are I don't know, but here I am in my property and they don't own it – at least they haven't given me any argument that they do – and so, the fact that I am living in "this country" means I am living in a certain geographical region that they have certain pretensions over – but the question is whether those pretensions are legitimate. You can’t assume it as a means to proving it.
(copied from wikipedia, social contract)

Thomas DeMeo writes:

The rights are determined by whoever can hold a given territory from anyone else who tries to take it. Unfortunately, individuals who share libertarian ideals are unable to commit to group ideals enough to take and hold territory.

Bob Murphy writes:

Good response Arnold. Don't let that guy bully you.

Kurbla writes:

Andy - my second sentence addressed your criticism:

    Libertarian can claim that state property rights are not justified, but criteria that invalidates state property will probably invalidate private property rights as well.

When Roderick Long says that government is "just one group of people living in this broad territory", it is true, but it can be applied against private property as well. Kurbla is "just one man living on the land." How is that my property over land is legitimate and state property isn't? I bought it? It only pushes the question of legitimacy deeper.

(If we push to hypothetical first owner - which is questionable, but frequently tried procedure - we'll find the first owner of the territory was most likely tribe, not individual. )

David W writes:

Here is the correct link to the post. I have made slight but important changes to it that have made it more polite. I originally deleted it because I realized it was not as polite as I would like. But after finding out it was linked to here, I thought it would be better to resurrect it in politer form.

James writes:

Kurbla,

Most governments in most countries would claim that they have some right to rule for reasons like "we deployed superior force on the last owner."

No libertarian accepts this as an argument for private property.

More importantly, even if private claims of property ownership are as suspect as state claims of property ownership, it doesn't follow that state claims of property ownership are anything more than assertions.

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