Hazlitt - Public works mean taxes

[Steven Douglas]

Did I understand you here correctly.

Because the private sector might not have built the bridge, less people would be working, therefore less people buying both in the construction sector (materials for the bridge) and workers who could spend their wages to buy food, petrol etc?

But because the government decides to build a bridge, money is spent back into the private sector, creating this "artificial demand" that perhaps might not have existed had people not been taxed?

Do you mean artificial demand because public programs were not perhaps the choice of the consumers?

Yes, that last sentence, choice being the operative word. Anything funded by forced extraction (mandatory taxes) is a fundamental shift of one thing at the expense of another (even if private capital formation alone), and therefore an artificial market distortion.

It doesn't matter if there was some choice in allocation so long as "ZERO ALLOCATION TO ANYTHING" is not offered as a choice, and likewise, whether or not the fruits of a forced extraction are deemed valuable by anyone at all is wholly irrelevant to the fact that a fundamental SHIFT has occurred, and by force within the economy (as one thing is artificially mandated at the expense of others). This shift would not have otherwise occurred in the absence of that force.

If the private sector builds a bridge, similar dynamics could occur, but only with 100% willing participants on the finance/demand side, so no artificial distortion. All of that occurs in a free market that is fair game to any and all willing participants, supply and demand side.

Also, no assumptions are made with regard to the number of people working, or even where they came from. If I own a large private firm, and set up shop and put locals to work, I might also end up bringing new locals into the local economy. I might import all the labor, and put no locals to work. Whatever the case, my objective is only to offer goods or services at a profit, not to provide employment to anyone, which is wholly incidental. I may well cause competition to suffer, and I might even cause commonly used goods and services to be bid up before it is corrected with more competition for the supply of those goods and services. None of that matters, because as long as I am responsible for all the funding, all of the risks and rewards are mine, and the effects on various people's economies, beneficial or adverse, are mine to bestow or inflict, as the case may be, as a matter of right.

In the case of a work project, like a bridge, the element of choice (from whatever portion of the market would have made different choices, had the option to abstain been present) is DESTROYED--at the expense of something else that will not exist as capital in some other form.

[Steven Douglas]

Now, I didn't have much success explaining to you what the outcome would be of implementing tax choice. So please go right on ahead and do my job for me instead, as you explain exactly what would happen if taxpayers could consider the opportunity costs of their tax allocation decisions.

There, I fixed it for you.

Your proposal will be meaningless without the inclusion of "None of the above" as an option. Even if you had the option, "Government must save this money, which many NOT be spent, but will be allocated by me at some later date," then there would still be a market distortion, as funding that is EXTRACTED BY FORCE may no longer go to what is unseen. However, if there was a portion that could theoretically be accrued indefinitely, never allocated to anything at all, then you might be onto something, as the public sector would then more resemble what actually happens in the private sector, since SAVING WITHOUT SPENDING is a VERY IMPORTANT OPTION.

[Henry Rogue]

Compared to the current tax system, positive. Can't wait till we get to "Thr Curse of Machinery". By the way mohassan you have started some great threads in the short time you've been here.

[Xerographica]

There, I fixed it for you.

Your proposal will be meaningless without the inclusion of "None of the above" as an option. Even if you had the option, "Government must save this money, which many NOT be spent, but will be allocated by me at some later date," then there would still be a market distortion, as funding that is EXTRACTED BY FORCE may no longer go to what is unseen. However, if there was a portion that could theoretically be accrued indefinitely, never allocated to anything at all, then you might be onto something, as the public sector would then more resemble what actually happens in the private sector, since SAVING WITHOUT SPENDING is a VERY IMPORTANT OPTION.

There is no "unseen" for each individual taxpayer...you can't spend your money on something that you aren't aware of. If somebody chooses to save their money it's simply because their future spending is a more urgent priority than their present spending is. In other words...you save up for a rainy day...unless it's raining today.

In a pragmatarian system...taxpayers will have far more spending opportunities in the private sector than they will in the public sector. As you love to point out...they won't have the option to save their tax money. But neither will they have the option to spend their taxes on booze, hookers, or whatever inputs they need to eliminate bottlenecks from their businesses.

Does the fact that a baker can't save his taxes or spend his taxes on a new oven or more baker racks or a new employee diminish the positive impact of tax choice? Not even in the least bit. Because we really really really really really want Mr. Baker to understand what he is being forced to sacrifice. The point of pragmatarianism is to open taxpayers' eyes.

In the first place, justice always suffers from it somewhat. Since James Goodfellow has sweated to earn his hundred-sou piece with some satisfaction in view, he is irritated, to say the least, that the tax intervenes to take this satisfaction away from him and give it to someone else. Now, certainly it is up to those who levy the tax to give some good reasons for it. We have seen that the state gives a detestable reason when it says: "With these hundred sous I am going to put some men to work," for James Goodfellow (as soon as he has seen the light) will not fail to respond: "Good Lord! With a hundred sous I could have put them to work myself." - Bastiat

[Steven Douglas]

There is no "unseen" for each individual taxpayer...you can't spend your money on something that you aren't aware of.

Well, since you obviously lack even the most rudimentary understanding of Bastiat's Broken Window parable, let me take this opportunity to share it with you. Pay attention to the part I put in bold, and special attention to the part I put in red.

Have you ever witnessed the anger of the good shopkeeper, James Goodfellow, when his careless son has happened to break a pane of glass? If you have been present at such a scene, you will most assuredly bear witness to the fact that every one of the spectators, were there even thirty of them, by common consent apparently, offered the unfortunate owner this invariable consolation—"It is an ill wind that blows nobody good. Everybody must live, and what would become of the glaziers if panes of glass were never broken?"

Now, this form of condolence contains an entire theory, which it will be well to show up in this simple case, seeing that it is precisely the same as that which, unhappily, regulates the greater part of our economical institutions.

Suppose it cost six francs to repair the damage, and you say that the accident brings six francs to the glazier's trade—that it encourages that trade to the amount of six francs—I grant it; I have not a word to say against it; you reason justly. The glazier comes, performs his task, receives his six francs, rubs his hands, and, in his heart, blesses the careless child. All this is that which is seen.

But if, on the other hand, you come to the conclusion, as is too often the case, that it is a good thing to break windows, that it causes money to circulate, and that the encouragement of industry in general will be the result of it, you will oblige me to call out, "Stop there! Your theory is confined to that which is seen; it takes no account of that which is not seen."

It is not seen that as our shopkeeper has spent six francs upon one thing, he cannot spend them upon another. It is not seen that if he had not had a window to replace, he would, perhaps, have replaced his old shoes, or added another book to his library. In short, he would have employed his six francs in some way, which this accident has prevented.

Note that at the end of Bastiat's broken window fallacy parable, there is no more than a speculative attempt to describe what the shopkeeper would/could have spent his money on had it not gone toward fixing the broken window. As an individual shopkeeper, he is very much analogous to an individual taxpayer, who does indeed have the "unseen" element of a six francs taken from him, which would have gone to something else--something which not even the shopkeeper need be aware of.

For EVERY individual taxpayer there is something "unseen", which does not even have to be identified, nor does the individual have to a specific awareness for that "unseen" (EVEN TO HIM) to exist. It does not matter where the money would have been spent, or even IF IT WOULD HAVE BEEN SPENT. It is "unseen" precisely because it can no longer happen using that particular money that went for something else.

In a pragmatarian system...taxpayers will have far more spending opportunities in the private sector than they will in the public sector.

RUBBISH. False on its face. Far less money for spending in the private sector automatically equates to far less spending opportunities in that same sector.

As you love to point out...they won't have the option to save their tax money.

And as you are loathe to point out, not even the option to make the choice for government to save.

But neither will they have the option to spend their taxes on booze, hookers, or whatever inputs they need to eliminate bottlenecks from their businesses.

Oh, how "it's-for-their-own-good" of you. So you're saving people from themselves, eh?

"See folks, taxing you eliminates bottlenecks from your businesses!"

Well, why didn't you say so before?! That should resonate nicely with libertarians, who, as we all know, are just clamoring for a government to save them from themselves.

Does the fact that a baker can't save his taxes or spend his taxes on a new oven or more baker racks or a new employee diminish the positive impact of tax choice?

Compound question fallacy. If you get to choose between would-be thieves, does the fact that you were stolen from, and can no longer spend that money as you see fitting, diminish whatever positive impact there might be of being able to choose which thief your money goes to? Which of course, is an attempt to slippery-ooze past the fact that there would be a far more positive impact had no theft occurred in the first place.

That's like telling me that a mafia don who promises to protect me from other thieves is preferable to a thug on the street. How about we throw that stinking false choice into the sewer where it belongs, and all thieves--good/bad/value-returning/non-value-returning--can all go fuck themselves?

The point of pragmatarianism is to open taxpayers' eyes.

You misspelled purses, wallets and bank accounts. The entire proposed system is BLIND to those taxpayers whose eyes are indeed opened--to the fact that NOTHING that they would ever freely choose even exists.

Like I said, if the option for individuals to save (not be forced to pay anything or make any false choice at gunpoint) does not exist, but the option to force government to save did, the very existence of a NO CONFIDENCE TO ANY GOVERNMENT AGENCY vote would be at least a beginning of the effect you're looking for, but would would not exist in the regime you propose. There is ABSOLUTELY NOTHING FREE MARKET about a "Favorites Take All" Idiocy regime, wherein the absolute lunacy of a constant flood of revenue that is absolutely guaranteed in the aggregate, the only question being who the lucky pandering favorites are going to be. That's not pragmatic, and it's not a free market. It's absolute rubbish.

[Xerographica]

Well, since you obviously lack even the most rudimentary understanding of Bastiat's Broken Window parable, let me take this opportunity to share it with you. Pay attention to the part I put in bold, and special attention to the part I put in red.

Yeah, you completely misread my post. Let me try again. Mr. Baker depends on numerous inputs for the successful operation of his bakery...flour, salt, sugar, butter, ovens, baker racks, employees and so on. As all liberals and libertarians will argue...he also depends on inputs from the public sector as well. As a side note...for the sake of facilitating communication...I don't lump anarcho-capitalists under the libertarian umbrella.

Here's what Ms. Congresslady had to say about the importance of public sector inputs...

I hear all this, you know, “Well, this is class warfare, this is whatever.”—No! There is nobody in this country who got rich on his own. Nobody. You built a factory out there—good for you! But I want to be clear. You moved your goods to market on the roads the rest of us paid for. You hired workers the rest of us paid to educate. You were safe in your factory because of police forces and fire forces that the rest of us paid for. You didn’t have to worry that marauding bands would come and seize everything at your factory, and hire someone to protect against this, because of the work the rest of us did. Now look, you built a factory and it turned into something terrific, or a great idea—God bless. Keep a big hunk of it. But part of the underlying social contract is you take a hunk of that and pay forward for the next kid who comes along. - Elizabeth Warren

As a pragmatarian my argument has two parts...1. Mr. Baker knows far better than Ms. Congresslady which public sector inputs he needs and 2. he has a far greater incentive than she does to eliminate public sector bottlenecks. Why? Because his bottom line depends on it.

The fact of the matter is...there's absolutely no need for me to try and dissuade people of their belief that Mr. Baker depends on public sector inputs. Can Mr. Baker utilize private roads to transport his goods? Yes? Great...he won't see any need to give his taxes to public roads. Can Mr. Baker teach new employees all the skills they need to work for him? Yes? Great...he won't see any need to give his taxes to public education. Can Mr. Baker hire private security people to prevent theft and fight fires? Yes? Great...he won't see any need to give his taxes to police and firemen.

This is why there's absolutely no need for anarcho-capitalism...or even libertarianism or liberalism. There's simply people who understand how and why markets work...aka pragmatarians...and then there's everybody else.

[Steven Douglas]

Yeah, you completely misread my post. Let me try again.

I know, as attacks on the very legitimacy and premise of your question have distracted you from the meat of the "pragmatarian" sales pitch you'd like to get on with.

Mr. Baker depends on numerous inputs for the successful operation of his bakery...flour, salt, sugar, butter, ovens, baker racks, employees and so on. As all liberals and libertarians will argue...he also depends on inputs from the public sector as well.

"inputs" - what a convenient choice of words, and how very appealing to all fact-obfuscating, reality-jumbling, aggregate-thinking collectivists everywhere.

FedEx to China is one of the "inputs" to my business, just as a fire and police departments are also "inputs" to my business? Great...now that we've jumbled everything up nicely, and are firmly prepped for the leftist "YOU DIDN'T MAKE THAT ALONE! YOU DEPENDED ON HELP!" slippery slope, let's allow Ms. Congresslady to blow smoke up our collective asses as we go down that ride:

Here's what Ms. Congresslady had to say about the importance of public sector inputs...

You moved your goods to market on the roads the rest of us paid for.
You hired workers the rest of us paid to educate.
You were safe in your factory because of police forces and fire forces that the rest of us paid for.
You didn’t have to worry [about blah blah blah] because of the work the rest of us did.

- Blithering Fallacious Collectivist Excerpts from Elizabeth Warren

News Flashes to Elizabeth (and Zero):

1) There is no You VS. The Rest of Us - that is a fiction. You cannot separate a single "You" from "The Rest of Us", as if one was taking benefit from what "The Rest of Us" paid for.
2) Equal opportunity does not equate to equal benefits or entitlements. Opportunities to access to common goods and services DOES NOT, NOR SHOULD IT EVER, equate to equal benefits derived. If the state provides a common exercise facility - with track, gym, weights, showers you name it (common road, common police, common utilities, common defense, or anything at all) with equal access OPPORTUNITY to EVERYONE, and someone uses that facility to gain extra health, or run a mile in under four minutes, while another only sits back, but is still forced to pay for the track but NEVER uses it -- TOUGH SHIT. S/he is owed NOTHING. To point to another athlete and say, "I HELPED YOU WITH YOUR HEALTH!" does not entitle you to any of their health. Only vampires and blood-sucking parasites even think with that mindset.
3) Common Goods and Services ARE NOT FOR STATE PROFIT. Stop putting the government into a CORPORATE framework as though we were all shareholders in a FOR PROFIT firm. WE ARE NOT COMMUNISTS OR FASCISTS, and THE STATE IS NOT A FIRM.
4) IF we are stupid enough to view the state as a firm, then let the state operate in a STRICTLY PERFECTLY COMPETITIVE FREE MARKET. That means ZERO SUBSIDIES, ZERO REVENUE GUARANTEES, ZERO BAILOUTS. If you can't hang with your competition -- YOU CAN DIE. You want to talk pragmatic? There it is. Take the protectionist diaper off of the public sector. There is no guaranteed PIE that is gathered in by force for them to all compete for, but is guaranteed to exist. Let each part of them sink or swim, and if none of them can hang, let them all die a well-deserved death.

As a pragmatarian my argument has two parts...
1. Mr. Baker knows far better than Ms. Congresslady which public sector inputs he needs and

Bullshit, and all because you did not acknowledge the most pragmatic fact of all and that is that Mr. Baker "knows far better than Ms. Congresslady" (or you) that he may indeed have EXTREMELY LIMITED needs for anything at all from the public sector.

2. he has a far greater incentive than she does to eliminate public sector bottlenecks. Why? Because his bottom line depends on it.

Bottlenecks FOR WHAT, exactly? If your entire public sector shopping mall menu sucks complete ass, and offers NOTHING desirable, that information is Very Important. Why would I want to reward the lesser of many Sucks Total Ass Evils, and turn that into some creepy behemoth? If I go to a beauty pageant, and it is full of nothing but beasties, the fact that one was crowned at the end is MEANINGLESS.

The fact of the matter is...there's absolutely no need for me to try and dissuade people of their belief that Mr. Baker depends on public sector inputs.

Why would you try to dissuade anyone of that belief, since it is your belief--the very premise from which you are arguing--which goes hand in hand with your treatment of the state as if it was a firm.

Can Mr. Baker utilize private roads to transport his goods? Yes? Great...he won't see any need to give his taxes to public roads. Can Mr. Baker teach new employees all the skills they need to work for him? Yes? Great...he won't see any need to give his taxes to public education. Can Mr. Baker hire private security people to prevent theft and fight fires? Yes? Great...he won't see any need to give his taxes to police and firemen.

Great...now add to that:

Can Mr. Baker, upon looking at all the public sector menu items, see no need to give ANY taxes to anything at all? Great...because now "his taxes" remain truly his, and nobody knows better than Mr. Baker how to allocate those more efficiently than does Mr. Baker himself. No need for any kind of forced false choice, and all of the MISINFORMATION that entails.

[Henry Rogue]

As all liberals and libertarians will argue......I don't lump anarcho-capitalists under the libertarian umbrella.

Probably shouldn't lump liberals under the libertarian umbrella either since they're commu-fascist socialist, unless you mean Classical Liberalism.

[VBRonPaulFan]

tax choice

what an interesting, and completely ridiculous phrase given the context in which you use it.

choice implies the ability to make ones own decision. you are not promoting a true 'choice', as your options are very fixed and very limited. choice would imply i could pay the taxes, not pay the taxes, pay only a portion, pay the full amount with reservations, or any other number of things of my own volition.

what you're really promoting is some sort of 'tax preference' in which YOU decided my options ahead of time, and I am forced to agree with one of them.

[Xerographica]

Can Mr. Baker, upon looking at all the public sector menu items, see no need to give ANY taxes to anything at all? Great...because now "his taxes" remain truly his, and nobody knows better than Mr. Baker how to allocate those more efficiently than does Mr. Baker himself. No need for any kind of forced false choice, and all of the MISINFORMATION that entails.

If Mr. Baker is not happy with the return on his tax investment...and Mr. Baker is not alone...then what happens? You haven't even thought it through that far. Can you? Give it a try. If taxpayers are allowed to shop for themselves in the public sector...and they all feel like they are getting ripped off...then what happens?