Ayn Rand, in The Virtues of Selfishness, on Pages 135and 136, writes essay 15, Government Financing in a Free Society: “’What would be the proper method of financing the government in a totally free society?’
This question is usually asked in connection with the Objectivist principle that the government of a free society may not initiate the use of physical force and may use force only in retaliation against those who initiate its use. Since the imposition of taxes does represent an initiation of force, how, it is asked, would the government of a free society raise the money needed to finance its proper services?
In a fully free society, taxation—or, to be exact, payment for governmental services, would be voluntary. Since the proper services of the government, the police, the armed forces, the law courts—are demonstrably needed by individual citizens and affect their interests directly, the citizens would (and should) be willing to pay for such services, as they pay for insurance.
The question of how to implement the principle of voluntary government financing—how to determine the best means of applying it in practice—is a very complex one and belongs to the field of the philosophy of law. The task of political philosophy is only to establish the nature of the principle and to demonstrate that it is practicable. The choice of a specific method of implementation is more than premature today—since the principle will only be practicable in a full free society, a society whose government has been constitutionally reduced to its proper, basic functions-- . . . Page 137 and 138: . . . The program of voluntary government financing would be amply sufficient to pay for the legitimate functions of a proper government. It would not be sufficient unearned support for the entire globe . . . “
My response: Voluntary taxation for funding the local, state. and federal government? she may be correct, but how to implement this without the whole system collapsing like it is close to do anyway with our 33-trillion dollar national debt. It may work in a fully free society, but short of such a non-compromising stance taken, we could settle for a 3% flat tax and much more limited government on all levels.
Rand: “Just as the growth of controls, taxes and ‘government obligations’ in this country was not accomplished overnight—so the process of liberation cannot be accomplished overnight. But a gradual process is required—and any program of voluntary government financing is required—and any voluntary government financing has to be regarded as a goal for a distant future.”
My response: She is correct, but only a free market constitutional republic run from the bottom up by 120 million organized and united anarchist-individuator supercitizens would be first-handers running a pretty darn if not totally free society (Rand’s perfect world here on earth is not achievable.). Supercitizens would pay their fair share, consistently and voluntarily for they are honest and give their word and will keep a strong but streamlined government financially flush and afloat—it could work if the average citizen was of such great integrity, honor, and strong will, once the word from each of them was pledged to support the system.
Rand: “What the advocates of a fully free society have to know, at present, is the principle by which that goal can be achieved.
The principle of voluntary government financing rests on the following premises: that that government is not the owner of the citizens’ income and therefore, cannot hold a blank check on that income—that the nature of the proper governmental services must be constitutionally defined and delimited, leaving the government no power to enlarge the scope of its services at its own arbitrary discretion. Consequently, the principle of voluntary government financing regards the government as the servant not the ruler, of the citizens—as an agent who must be paid for his services, not as a benefactor whose services are gratuitous, who dispenses something for nothing.”
My response: Amen, she is for a federal government, but she is about as anti-statist as they come, and I admire her for this stance.
Rand on Pages 138 and 139: “This last, along with the notion of compulsory taxation, is a remnant of the time when the government was regarded as the omnipotent ruler of the citizens. An absolute monarch, who owned the work, income, property and lives of his subjects, had to be an unpaid ‘benefactor,’ protector and dispenser of favors. Such a monarch would have considered it demeaning to be paid for his services—just as the atavistic mentalities of his descendants-in-spirit (the remnant of Europe’s ancient feudal aristocracy, and the modern welfare statists) still consider an earned, commercial income as demeaning and as morally inferior to an unearned one which acquired by mooching or looting, by charitable donations or government force.
When a government, being it monarch or a ‘democratic’ parliament, is regarded as a provider of gratuitous services, it is only a question of time before it begins to enlarge its services and the sphere of the gratuitous (today, this process is called the growth of ‘the public sector of the economy’) until it becomes, and has to become, the instrument of pressure-group warfare—of economic groups looting each other.
The premise to check (and to challenge) in this context is the primordial notion that any government services (even the legitimate ones) should be given to the citizens gratuitously. In order to full translate into practice the American concept of the government as a servant of the citizens, one has to regard the government as a paid servant. Then, on that basis, one can proceed to devise the appropriate means of tying government revenues directly to the government services rendered.
It may be observed, in the example given above, that the cost of such voluntary government financing would be automatically proportionate to the scale of an individual’s economic activity; those on the lowest economic levels (who seldom if ever, engage in credit transactions) would be virtually exempt—though they would still enjoy the benefits of legal protection, such as that offered by the armed forces, by the police and by the courts dealing with criminal offenses. These benefits may be regarded as a bonus to the men of lesser economic ability, made possible by men of greater economic ability—without any sacrifice of the latter to the former.”
My response: I like it.
Rand on Pages 139 and 140: “It is in their own interest that the men of greater ability have to pay for the maintenance of the armed forces, for the protection of their country against invasion; their expenses are not increased by the fact that a marginal part of the population is unable to contribute to these costs. Economically, that marginal group is nonexistent as far as the costs of war are concerned.
The same if true for maintaining the cost of a police force: it is in their own interests that the abler men have to pay for the apprehension of criminals, regardless of whether the specific victim of a given crime is rich or poor.”
My response: those less economically able, if most were maverizing, would not be that considerably less than those of greater economic ability, so all would have to volunteer to support the government financially.
Rand: “It is important to note that this type of free protection for the noncontributors represents an indirect benefit and is merely a marginal consequence of the contributors’ own interest and expenses. This type of bonus cannot be stretched to cover direct benefits, or to claim—as the welfare statists are claiming—that direct handouts to the nonproducers are in the producers’ own interests.
The difference, briefly, is as follows: if the railroad were running a train and allowed to poor to ride without payment in the seats left empty, it would not be the same thing (nor the same principle) as providing the poor with first-class carriages and special trains.
Any type of nonsacrificial assistance of social bonus, gratuitous benefit or gift value possible among men, is possible only in a free society, and is proper as long as it is nonsacrificial. But, in a free society, under a system of voluntary government financing, there would be no legal loophole, no legal possibility, for an ‘redistribution of wealth—for the unearned support of some men by the forced labor and extorted income of others—for the draining, exploitation and destruction of those who are able to pay the costs of maintaining a civilized society, in favor of those who are unable or unwilling to pay the cost of maintaining their own existence.”
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