David R. Henderson  

The Psychology of Theft

Questions at a Conference on F... James Surowiecki on Medical To...

One of my favorite passages from a novel, Assault on a Queen, seems a propos on the weekend during which a lot of people are doing their taxes. For those of you who haven't read it, it's about a small group of people who hold up the great Queen Mary on the high seas and steal money from the first-class passengers. It's told in the first person. Here's the passage. The previous pages leading up to this quote are excellent too.

These people, Moreno and Lauffnauer had told me long ago sitting on the sand at Fire Island, were rich or close to it; or they had incomes twenty times bigger than the most I could ever hope to earn; otherwise they wouldn't have been here. We'd be taking only the cash they had on them, and they could all afford that, and easily, Frank and Moreno had said. No one would miss a meal or a Cadillac.
It had sounded obviously true. I'd believed it. Now I wasn't so sure. There'd been a man in a gray suit, wearing a vest with a gold watch chain stretched across it, and when I'd taken his money he'd said nothing, like most of the others, and passed on. But his eyes, as he moved past me, were sick, and for the first time it occurred to me that in robbing some of these people, I could be doing them a terrible harm.
He was the first, but there were others. There came one now, stepping up before me, a woman in her middle thirties, and unmarried, I somehow felt certain. She was frightened, she'd hung back till among the last, and she had her money in her hand, a roll of bills, and as I reached for it, her eyes went bleak. And I knew suddenly that this was a vacation trip she'd been saving years for, and that in my hand was all the money she had to spend on her trip. I glanced at Vic; he was busy, his hands running down the sides of a man's coat. Then I thrust the bills back into the woman's hands, and waved her on abruptly.
I understand very well how absurd this sounds; but nearly finished, with only forty or fifty passengers still on the side of the room facing us, I suddenly understood that I was a thief. But of course that doesn't explain what I mean. Of course I'd known from the beginning that I was going to steal; and when you steal, you are a thief. Yet I hadn't really known that at all. Now I'd actually done it; was nearly finished, in fact. There on the thick rug of the Queen Mary's lounge actually lay three gray-and-blue canvas sacks stuffed and lumpy with paper money. And behind me, their eyes on me, stood hundreds of living people from whom I'd helped steal it. I'd taken actual creased, soiled, and crisp new bills from leather wallets, from sweating hands, and from pockets whose cloth had brushed against my skin as my hand entered and left them; and my fingers were blackened from the dirt of those bills. There is a difference between knowing that stealing is wrong, and actually doing it; and the difference is enormous.
Let every man and women [sic] I robbed be rich, I was understanding. Let every one of them be easily able to afford every cent we'd taken. And let each of them be utterly undeserving of the money we'd taken from them. It was still true--and the words spke themselves in my brain again--the money still wasn't mine.

Comments and Sharing

COMMENTS (28 to date)
Thucydides writes:

These are sentiments which never occur to people who use the government as a cloak of legitimacy when they steal other people's money in our system of predatory interest group democracy.

Ken B writes:

It shows a highly developed sense of irony David to cite a passage about a repentant thief at tax time!

Andrew writes:

Don't worry. The tax collectors promise to use it for a really good cause.

Saturos writes:

Should be required reading for all liberals. Of course, most liberals would never want to take money out of the hands of you and me - it's only "the other guy" that needs to be taxed. 'Tis the cognitive dissonance that our society is built on.

Saturos writes:

I see your views haven't changed much over the millenia, @ Thucydides.

rpl writes:

David, I'm curious as to how public goods would be provided in your hypothetical world with no "theft" (i.e., taxes). Do you envision wealthy people providing them voluntarily out of a sense of civic duty, or do you think they simply aren't all that important, and we can do without them? (Or do you deny the existence of such goods altogether?)

What about things like police and courts? How would those work? Presumably people would subscribe voluntarily to a system of law enforcement. I can't imagine that nonsubscribers would get equivalent treatment to subscribers under such a system. Is due process just not that important either? I'd imagine that people who couldn't afford the subscription would have no avenue to seek redress for crimes perpetrated against them, right? What do you say to such a person in that society? "Look at the bright side, at least the government isn't 'stealing' your stuff, even if everybody else is"?

Frankly, that all sounds like a recipe for a dystopian hellhole. It's a great setting for a sci-fi story, but I wouldn't want to live there. Can you honestly say you would like to live your life as a character in a cyberpunk novel?

Finally, I wonder what you were hoping to accomplish with this post. You managed to elicit a bunch of self-righteous cheerleading from some fellow travelers, but I can't see you convincing anyone else with it. Suppose someone protests, "Hey, I'm not a 'thief'! I'm all for getting rid of wasteful government, but I think there are a few basic governmental functions we can't do without, and realistically the only way to do that is through taxes." What is your response to that? Is it just, "Screw you, buddy, you are too a thief. If the shoe fits, wear it"? If so, then why wouldn't that person be justified in dismissing you as a crank?

Methinks writes:

You see? THIS is why the multi-millionaire Simon Shama puts himself in steerage when he writes about the Titanic.

Jeremy, Alabama writes:

It's just a bit like an Ayn Rand monolog, and it struck me that perhaps someone ought to write a first person "Shrugged At" from the perspective of Wesley Mooch.

jc writes:

Isn't taking something that belongs to someone else without their consent, via force or threats of force, robbery (as opposed to theft or fraud)? Regardless, claiming that the government robs is not the same thing as saying the govt. *shouldn't* take things from people against their express wishes. Maybe the govt. should do this.

Most probably agree that we do need a government that performs the most basic functions, and that it will not be adequately funded without taking money from people who don't freely give enough on their own. However, this is simply an explanation for *why* this money should be taken. In other words, it is justification for the robbery, not a claim that robbery never happened.

The problem many have with admitting this is that once you are honest about what is happening, and especially if you are not allowed to outsource the act, it is a harder thing to do, and the bar of when it is justified has just been raised to a level most people find uncomfortable. At the end of the day, we like the proceeds of robbery, but do not like to think of ourselves as robbers or the beneficiaries of robbers.

Basic govt functions, such as the provision of rule of law, are pretty important, and, yes, many rich folks would not be rich w/o its provision. But most people, imho, do not want to stop taking from them once we've collected enough to fund cops and courts and what not. We want to collect 5 times as much as that, or more, and doing that is easier when we are allowed to call it something besides robbery, and when we are allowed to outsource this function and, thus, pretend it doesn't actually happen.

(Addressing other common responses to accusations of robbery... No matter how many middlemen b/w us and the person we take from, it still happens. And whether it's one person or a group doing that taking, regardless of what we call ourselves - e.g., "I didn't do it, our democracy based, majority ruled govt. did" - doesn't change the fact it happened either. It may or may not be the right thing to do, but that's irrelevant w/ respect to whether or not something was taken from someone via threats of violence. It's perfectly relevant when discussing *whether* we should do this, but that's a different discussion; a related discussion sure, but one that has no bearing on whether the taking happened or not. If 'robbery' means to take w/o consent via threats of force, then our govt. robs, whether it is justified or even desirable to do so or not.)

John Roccia writes:

You know, regardless of the arguments that taxation is or is not theft, as well as the arguments that it is or is not justified, I reject the notion that it's the only means the government has to collect revenue.

As my first example, consider the Lottery. While some people do call this a hidden "tax" on the poor, it is, in fact, voluntary. It also raises a bunch of revenue. Is there any reason to believe that this couldn't be done on a larger scale?

Also, the government has the same capabilities as any organization - they can sell goods and services. Even if our idealized Libertarian government allows private companies to create roads, there's no reason they can't ALSO create roads in the same way - by gathering investors, paying employees and for resources, and then charging tolls in the competitive market. The government, if run like a company, could simply turn a profit on the services they provide, and then use this profit, instead of paying dividends to shareholders, to create public goods.

The government can also issue stocks to raise revenue, which people will buy if they perceive that the government is profitable in the services it sells. This is further incentive for the government to run itself efficiently.

I'm not saying any of those ideas are perfect or anything. I'm just pointing out that the government does have ways to raise revenue without that revenue coming in the form of theft.

But of course, revenue isn't the point of taxes - that's a convenient fiction. If revenue was the point of taxes, they would probably listen to everyone that tells them that the only real way to raise revenue is raise GDP, which is done through lower taxes and less regulation. But the real purpose of taxation is social engineering. A series of non-coercive methods of revenue generation might more than adequately fund the federal government, but they wouldn't allow that government to CONTROL people. Which is, of course, the point.

Taxes aren't theft. They're extortion.

rpl writes:

jc writes:

Isn't taking something that belongs to someone else without their consent, via force or threats of force, robbery.

Clearly not. One counterexample: if somebody pledges something that belongs to them as collateral for a loan and then doesn't make payments on the loan, the lender might repossess the collateral, probably using force or threats of force. Yet, we would hardly call that "robbery."

If 'robbery' means to take w/o consent via threats of force, then our govt. robs, whether it is justified or even desirable to do so or not.
The idea of a "justified robbery" is incoherent. The fact that it is unjustified is what makes it robbery in the first place. That is why we react to the word so viscerally. Or, to put it another way, if "robbery" is sometimes justified, then we shouldn't automatically assume that "robbery" is bad (which would in turn strip the word of its rhetorical power in these discussions).

In my opinion, once you've conceded that some level of taxation is legitimate, you've given up the game. At that point the whole discussion becomes an argument over the proper level of taxation, and the robbery rhetoric becomes superfluous name-calling.

rpl writes:

John Roccia,

If government acts entirely without coercion, then it isn't government in any meaningful sense; it's just another private actor. As such, we would expect it to have the same problematic incentives for providing public goods (to say nothing of goods that inherently involve the use of force, like crime and punishment) that any other private actor would have. Merely labeling it as "government" doesn't do anything to mitigate those incentives.

John Roccia writes:


But can't we separate the force needed to enforce the rule of law from the collection of revenue? Just because a government needs to use force to do certain things doesn't mean that one of those things has to be (or should be) collecting revenue.

They can be a "government" in the sense that they can be the only agency that can write laws, and in the sense that even as a profit-making entity it has rules for what it does with those profits. Just like how non-profit-organizations aren't forbidden from making a profit; they just have rules dictating how they can use it.

A "government non-profit organization" could do things like run a lottery, sell services, sell bonds, and even take donations to raise revenue, and then use that revenue to provide the public good necessary for a country to function. This organization would be unique both in its priveledges as well as its responsibilities - for example, I wouldn't consider it especially coercive in this scenario to say that only the government could hold Lotteries (though that probably wouldn't even be necessary; I doubt another organization could hold a lottery with the scale of the federal government anyway).

This could be an incredibly populist movement, as well. Imagine a president running on a platform of "I will end ALL taxes and hold a weekly lottery with a 50 Billion Dollar Jackpot!" He'd win in a landslide! Best of all, statistically speaking the VAST majority of winners would be people of lower income (not only are there many more of them, but they tend to be the ones to play the lottery), so with the televised appearance of each weekly winner, the government can be publicly shown to "help the little guy" with this system. Thus it might solve one of Libertarianism's classic problems - convincing the majority that our way is actually better for them than the current one.

So anyway, again - I didn't mean to make this a discussion about the actual details of the proposed system. I simply mean to say this - if one person, in 10 minutes, could come up with even a half-baked idea for how to raise revenue without taxes, then SURELY an entire profession of professional economists could come up with a good one. Taxes don't have to be the answer.

ThomasL writes:

What is so bad about being a thief?

It seems nothing at first, when the loss is small to the victim. Then he wonders if the loss isn't always as small as he imagined it would be. Then he concludes whether or not the loss is large or small, he is a thief and that is a bad thing.

So, what is so bad about being a thief? That you hurt people? What if they aren't hurt [much]? That seemed adequate in the original formulation; but does not in the last formulation. It was the realization of actual hurt that prompted the move from the former to the latter, but in itself it is insufficient to explain it.

Methinks writes:

There's a lot of talk in the comments about whether or not taxation is theft. Maybe that's the conversation David Henderson intended to ignite. That's not what I got from the passage.

What struck me is the justification for the theft in the passage is exactly the justification we are provided now by Obama and his ilk to use the coercive force of government to take from "the rich".

They can afford it. They won't miss it. They deserve to have their earnings confiscated. After all, we're not taking ALL of it. They can afford it. We know. We're not really hurting anyone and they are so much richer than we are. We deserve it.

We can violate them.

It's easy to justify violating people we don't like, people we resent or those of whom we are jealous or those whom we don't understand or are simply indifferent to. "The rich" feel so easy (maybe even good) to violate. They can afford it. They won't miss it.

The first violations are easy and always against the widely disliked. After that, we are all violated in turn.

jc writes:


Pledging collateral is giving consent. If one tries to prevent repossession that was justified according to terms of a contract one voluntarily signs, one is not trying to avoid theft or robbery, but trying to avoid fulfilling their end of a contract.

I believe Krugman has actually said that taxation is justified on the grounds that earned income doesn't actually belong to you in the first place (probably a much milder form of that argument), i.e., when you don't voluntarily return money in the form of taxes to its rightful owner, we send legitimate repo men after you.

Still, point taken. Especially if "unjustified" is a part of the definition of "robbery" in the first place. That's fine, to define it that way. One could say to 'kill' is to take life, but to 'murder' is to do so when unjustified. We can use any word we all agree upon that roughly means "to take something that belongs to someone else via force", whether it's justified or not.

In other words, it wasn't so much the label attached to the act that I cared about - though you are absolutely right, of course, that word choice does affect things, often in a visceral way (e.g., 'cleansing' versus 'mass murder' or 'genocide', at least until the words become synonymous in people's minds).

Imho, the act of threatening or actually performing violent acts against others (whatever we call it, justified or not), is an unpleasant thing that many people, under ordinary circumstances, would find hard to do.

Even in the repo example, while I'm sure many would feel justified using force to take property under those circumstances, I'm not sure many would enjoy doing it (though some would), and afterwards, I think most would agree that the bar for using violence should be quite high...much higher than it probably is when one pretends that there is no violence, doesn't have to commit violence themselves, and makes up all sorts of reasons as to why it's ok to do (or threaten to do) these violent things that we often pretend are not actually done.

You could be right that once you sanction any form of taxation it's all legitimate and off we go down the slippery slope. I think that if people had to commit (or credibly threaten to commit) the violence themselves, an equilibrium of sorts might eventually be achieved, whereby taxation does occur, but at vastly lower levels than today (maybe 10% of what we currently collect?), because they'd realize the bar of justification has to be a high one. For example, folks do seem to realize that just because it's justified to kill for one reason (e.g., self defense), that doesn't legitimize all, or even much, killing.

In the real world, of course, I think the end result (whatever country or era) will almost always be high taxes. That initial justification - e.g., to fund war - will always come, and yes, we will commence down the slope. Folks will never have to confront what it is they're getting others to do for them, and off we go... Then again, mobs do actually attack the rich from time to time, knowing full well what they do, and doing it themselves...so maybe I'm just completely wrong. :)

jc writes:


Yes, he could have been writing about our propensity to make up justifications. Our species is very good at justifying just about anything (paging Robin Hanson or Steven Pinker).

I thought his point was that thinking about something (or having others do it for you) is not the same thing as actually doing it yourself.

War came to mind. A young man thinks it's glorious and enlists. When he is actually killing and sees death all around him, it's no longer glorious. He's not as quick to justify going to war as he was; the bar has been raised once he's been confronted with the reality of the thing. Those that deny the reality of it, and those who don't have to bear the direct costs (of killing and perhaps being killed), are quicker to justify it and more eager to do it.

Bomber Pilot Syndrome also comes to mind. It's probably easier for a pilot to drop a bomb on what looks like ants than it is for a man to slowly plunge a knife into another's chest while looking him in the eyes. Doing and seeing something up close is like taking a 'truth pill'; there's no denying what's actually being done (well, it's a harder thing to do, anyway).

Methinks writes:


I agree.

It's easy to demonize from a distance. That's the point I was trying (maybe unsuccessfully) to make at the end of my comment.

We dehumanize people we don't know and about whom we have a negative opinion. The justification process in the passage was just a method of dehumanization of "the rich".

It's easy to become vicarious thieves by laundering our theft through government. Not only does one get to dehumanize the people one is violating, but one also has the luxury of never getting close enough to become conscious of the pain one is inflicting. One has the luxury of a sociopath.

jc writes:
Not only does one get to dehumanize the people one is violating,
Yep. Is taxation here really about taxes? Or is this the true goal?

(The counter might be that "fairness is the goal", and maybe it is. That doesn't mean there's not also a healthy serving of envy and hate and, since we're good people, dehumanization first. What are the proportions of each, i.e., fairness versus less noble motives? I don't know.)

Methinks writes:

If "fairness" is the goal then, in this case, we are defining "fairness" as the use of one person for the benefit of another. We are, in effect, providing justification for slavery. Which, as it happens, also requires a process of dehumanization.

This is ultimately what is at the heart of "from each according to his ability, to each according to his need". It is fair to force those who are judged able to provide of those who are not. Interestingly, the able are always a declining minority. And to accurately judge need and ability, we need to find a person with the omniscience of God.

So, we have a human god who will dehumanize some in the name of others.

Something tells me humanity has been down that path more than once in the twentieth century alone. Is this the culture we want to breed in America?

rpl writes:

John Roccia:

If you have a government that has to raise all of its revenue through trade, donations, or other noncoercive means, then it will face all of the same incentives that a private organization would. If we think that there are certain services that can't be provided by the private sector, then a government that is a private actor in everything but name won't be able to provide them either.

Now, if you gave your government a monopoly on certain lucrative lines of business, then perhaps that changes things a bit. However, I'm not sure I'd call it less coercive than taxation, as you are still using force to prohibit the peaceful trade that would otherwise exist. Neither am I convinced that it would be less harmful to citizens. We put a lot of effort into preventing monopolies precisely because we think they are generally harmful to consumers.

I think it's interesting that proponents of such schemes always turn to lotteries as their example. I strongly suspect that such people do not regularly play lotteries and have no intention of ever doing so. Therefore, turning that market over to the government doesn't seem like much of a loss. However, I doubt you would so readily offer up the market for, say, grocery stores to government monopoly.

if one person, in 10 minutes, could come up with even a half-baked idea for how to raise revenue without taxes, then SURELY an entire profession of professional economists could come up with a good one.
This is a very strange line of reasoning. The existence of half-baked realizations of an idea does not in any way imply the existence of sound realizations. It could be that the idea is essentially flawed.

As to what the point of the post was, do we really need blog posts exhorting us not to demonize people? That sounds like the sort of thing that would be fairly self-evident to habitual readers of economics blogs, if not necessarily to politicians and demagogues.

On the other hand, if you accept that some level of taxation is necessary, then the very next question to arise is who should pay and how much. Such a debate must inevitably consider who can afford to pay. Characterizing all such discussions as "demonizing" someone seems like a bit of a straw man. Should we really not talk about who can afford to pay when designing a tax system? Such a project seems destined to fail.

Methinks writes:


Such a debate must inevitably consider who can afford to pay.

No, it doesn't. Such a debate belongs only in the private sector and the answer is always "those who want the product must pay the market price."

Government supposedly benefits all by providing services for the entire population that it prevents the private sector from providing. There is no justification for preferential pricing in the public sector - which is, in part, what progressive taxation is.

There is no moral justification for using some people for the benefit of others.

Characterizing all such discussions as "demonizing" someone seems like a bit of a straw man

No, that's the straw man. Nobody characterized the discussion about violating certain people that you deem moral to violate as demonizing them. It is necessary to dehumanize the people you seek to violate to allow you to sleep at night as you violate our own moral principles. Demonizing them is a useful tool (but not the only one) and unless you've lived under a rock your entire life and are completely ignorant of modern history, examples abound.

The Kulaks were demonized. The Bourgeoisie were/are demonized. The Jews were demonized. Wall Streeters are demonized. The "1%" is demonized. Etc. All in an effort to dehumanize them at least to a point where most people find it acceptable to violate them in increasingly vile ways.

And why do we find it necessary to find justifications for our violation of these people? Because we all know it's immoral.

We know it's immoral to force, upon pain of imprisonment, someone else to provide us with goods we desire. We understand it's theft. We understand it's violence.

There's no moral difference between forcing someone else to provide you with the government services you desire and holding up a man at gunpoint tonight to provide you your dinner. Even if you justify your theft by citing the Ferrari your victim was driving.

By laundering our immoral acts through government, we absolve ourselves of responsibility and we give rise to a sociopathic culture where we violate each other with a clear conscience and without empathy.

Robert Evans writes:

I see some of the wealthier people as illegitimately taking certain decision making power from me and fellows. They then demand extravagant salaries (anything over about 10x poverty level, the top ~6%, is extravagant to me) for managing this illegitimately grabbed power.

This speaks to me as immorality. I can't respect that sort of paternalism, and I can't respect their "right" to the salaries gained from that sort of paternalism. And if they've become accustomed to that level of income, and would feel harmed by a reduction in that level of income, then at some point that's just too bad.

There are things that can be done to minimize the harm done to them, and that's fine; but I want my power back, and I want a reduction in the funds they've collected from me and my fellows for the privilege of managing that power.

EH writes:

In a response to rpl, jc writes “Pledging collateral is giving consent. If one tries to prevent repossession that was justified according to terms of a contract one voluntarily signs, one is not trying to avoid theft or robbery, but trying to avoid fulfilling their end of a contract.”

While your example is of a specific consent in an explicit contract, have we not implicitly given our government the consent of the governed and therefore allowed it to legitimately tax us as long we continue to give it consent?

EH writes:

Methinks writes, “Government supposedly benefits all by providing services for the entire population that it prevents the private sector from providing. There is no justification for preferential pricing in the public sector - which is, in part, what progressive taxation is. There is no moral justification for using some people for the benefit of others.”

I have seen this argument before and as I understand it, it translates to: the rich are taxed more than the poor, but the rich don’t benefit from government as much as the poor.

I am curious if there are any studies of this. Transfer payments such as welfare obviously go from rich to poor. But don’t the rich also get more tax breaks? And don’t they have more protected by the government than the poor do? For instance, according to “A Rolling Tide: Changes in the Distribution of Wealth in the U.S., 1989-2001” from the Federal Reserve, “The survey indicates that in the period considered, roughly a third of total wealth was held by each of the following: the highest 1 percent of the wealth distribution, the next-highest 9 percent, and the remaining 90 percent” (pages 5-6).

EH writes:

rpl responded to a post by John Roccia that begins, "If you have a government..." I don't see John Roccia's post. Was it removed?

[It's still there. Keep scrolling up. --Econlib Ed.]

EH writes:

Would it change anyone's mind about taxing the rich if (in aggregate) they became wealthy through chance? See "Entrepreneurs, Chance, and the Deterministic Concentration of Wealth" by Joseph E. Fargione, Clarence Lehman, and Stephen Polasky.

The abstract reads in full:

In many economies, wealth is strikingly concentrated. Entrepreneurs–individuals with ownership in for-profit enterprises–comprise a large portion of the wealthiest individuals, and their behavior may help explain patterns in the national distribution of wealth. Entrepreneurs are less diversified and more heavily invested in their own companies than is commonly assumed in economic models. We present an intentionally simplified individual-based model of wealth generation among entrepreneurs to assess the role of chance and determinism in the distribution of wealth. We demonstrate that chance alone, combined with the deterministic effects of compounding returns, can lead to unlimited concentration of wealth, such that the percentage of all wealth owned by a few entrepreneurs eventually approaches 100%. Specifically, concentration of wealth results when the rate of return on investment varies by entrepreneur and by time. This result is robust to inclusion of realities such as differing skill among entrepreneurs. The most likely overall growth rate of the economy decreases as businesses become less diverse, suggesting that high concentrations of wealth may adversely affect a country's economic growth. We show that a tax on large inherited fortunes, applied to a small portion of the most fortunate in the population, can efficiently arrest the concentration of wealth at intermediate levels.

Robert Evans writes:

EH writes:
"And don’t they have more protected by the government than the poor do?"

It is also a question how the odds of both victimization by crime, and achieving justice for said victimization vary by wealth in nations with differing social structures and wealth distributions.

Comments for this entry have been closed
Return to top