The Ethics Of Liberty - The Internal Contradictions Of The State

 

The Ethics Of Liberty by Murray Rothbard

The state can only exist if people believe it is legitimate.  In order to construct such faith, intellectuals associated with the state concoct philosophies and narratives to teach the public.  There are a variety of narratives, but they all revolve around a couple of basic ideas.  The first is that government is necessary to protect people's rights.  It is simply inevitable as a part of human nature.  The second is that people themselves created the government for their own benefit, based on unanimous or very close to unanimous agreement.  Society as a whole gave the prerogative to use protective violence over to one organization and only one organization.  The third idea within these narratives is that because protecting people is its core function, the state can be trusted to carry out that function.

However once you dig a little deeper, you will expose logical inconsistencies in those narratives.  I don't know if I would say that the existence of the state violates logic as Rothbard suggests.  But I will say that he gives good reason to be skeptical about governmental legitimacy.  He starts by explaining that people haven't always believed that the state was inevitable.   That belief had to be manufactured.  It just so happens that our culture has taught that narrative for hundreds of years, at least as far back as "the sixteenth-century writings of de la Boetie." 

That means to see the inconsistencies you have to take yourself out of your current context and compare it to theoretical ideals like the "state of nature", a totally "free society" or a minimal "limited government".  To do that, Rothbard imagines a group of explorers from another planet starting a new society on Earth.  Would it be sensible to grant all decision making power to one family and also rely on them to protect everyone else's rights?  Once you hand over all weapons over to the "royal" family, how long do you think it would take for them to start using them to force everyone else to follow their will?

The hypothetical situation is a good analogy for a limited government otherwise know as laissez faire.  From the beginning of such a construct, there exists two different groups of people.  You started with one group of immigrants who all had the same incentives, but then separated them into two groups.

                    "the 'ruling' classes who gain by and live off taxation, and the 'ruled' classes

                    who pay the taxes.  In short, conflicting classes of net tax payers and net

                    tax consumers."

Once you set up that situation, conflict is inevitable.  Even if the creators of the government imposed limitations on that government, the incentives of the situation undermine those limitations.  The rulers will benefit from receiving more taxes and imposing its will more and more.  As that happens the people have less and less ability to maintain the remaining limitations.

                "the effect is to place them in antagonistic relations in reference to the fiscal

                action of the government... every increase is to enrich and strengthen the one,

                and impoverish and weaken the other."

We can see over the history of the United States how these incentives have played out.  It is strong evidence that constitutions don't restrain governments because they rely on the government to restrain itself to its own disadvantage.  Those who believe in the state narrative will point to courts as the means of restraining government.  But courts, even the Supreme Court, are a part of the ruling, tax consuming class.  Over time they will rule in favor of government expansion and justify new violations of the constitution.  The first inconsistency is that the state is supposed to be created to be by the people, for the people, and of the people, when in fact it splits the people into two groups and pits them against one another.  

The next inconsistency in the narrative is the claim that governments are needed in order to create laws.  History once again shows this to be false.

                "most law..., emerged not from the State, but out of non-State institutions:

                tribal custom, common-law judges and courts, the merchant in mercantile

                courts, or admiralty law in tribunals set up by shippers themselves."

The fact that laws pre-exist states follows from the observation that markets also existed before states.  History shows that humans organize themselves, set up rules of engagement, and settle disputes on their own.  It is a part of natural law which Rothbard described at the very beginning of the book.  Several other examples of things societies have created without state involvement are languages, commodity money systems, schools, and militias.

                "The same was true in Roman private law.  Moreover, in ancient Ireland,

                a society existing for a thousand years until the conquest by Cromwell,

                'there was no trace of State-administered justice' "

Moreover, governments are incapable of abiding by the very laws they claim to administer. Governments claim that people should not steal from each other.  Yet, they are supported by funds that are taken by force (i.e., taxes).  Also, governments enact laws against monopolies while enforcing their own monopoly for providing things like laws, courts, legal tender, and the use of violence.  In order to justify the existence of states, positivist legal scholars redefined law as something which is only "vertical".  That means the state has no obligation to treat people a certain way.  It can prohibit its subjects from behavior that it claims the right to perform.  It also means that people have no right or ability to organize themselves "horizontally", meaning to set up rules for themselves that everyone in a private organization must abide by.  Since we have seen that "horizontal" law arises before and outside of the state, we know that law truly is both "horizontal" and "vertical".  With that reality in mind, we reach an important conclusion about the state.

                "Therefore, 'to the degree that it [the state] does not and cannot do this

                [operate horizontally and vertically] it is not and cannot be a legal

                system and its acts are outside the law.  The State qua state, therefore,

                is an illegal system.'"

So not only are states not necessary to enact laws and administer a legal system, they are in fact lawless entities themselves.

Another claim in the state narrative is that the state is necessary to provide physical security to its citizens.  The government protects them from crime internally and invasion externally.  Yet again this claim doesn't stand up to scrutiny. It relies on the belief that a public good can be centrally planned, but Ludwig Von Mises proved with his "calculation problem" that people's needs can't be satisfied without a market and prices.  A military or police department run by the government faces the same problems as a steel company run by socialists, which amounts to under-production or over-production.

The first problem is that the state has no way to calculate the quantity of resources needed to keep the nation secure.  To determine that, the government has to understand objectively how manpower should be distributed across many different functions:  police officers, soldiers, detectives, sailors, pilots, mechanics, etc.  The government also has to determine what equipment and how much of each to purchase: cars, helicopters, jeeps, tanks, cargo planes, fighter jets, bombers, battle ships, air craft carriers, tanks, etc.  Then they have to determine how much weaponry to buy: pistols, rifles, bullets, artillery, missiles, bombs, etc.  The only way to understand what amounts of each variable are truly needed to provide security is to have consumers purchasing defense services through a market.  

Without that market information the armed services will not know what kind of defense is needed and how to provide it.  It also takes market information to understand what level of defense different individuals or groups need.  Different people, neighborhoods, or cities need different things from a security service.  Central planning simply can't do this.

Add to that the fact that police and military are purchased using taxes, which means that the government has no idea how much money it needs in order to provide security services.  Government budgets are determined by the wants and desires of the ruling class not the needs of the ruled class.  Because of this whether taxation is flat, progressive, or regressive misallocation is inevitable.  See how the different inconsistencies work together to cause chaos?  The worst part is that taxation is based on the principle of robbery.  It is a direct contradiction to say that the state must rob the people in order to protect them from robbery.

I think we can all agree that a limited, laissez faire government is much more desirable than a totalitarian socialistic state.  Laissez faire is far better politically, economically, and morally.  I would much rather live under a laissez faire government surely, but the argument for limited government is also the argument for socialism.

                "if it is legitimate for a government to tax [for protection of person and property],

                why not tax its subjects to provide other goods and services that may be

                useful to consumers: why shouldn't the government... build steel plants, 

                provide shoes, dams, postal services, etc?"

The same argument against providing consumer goods and services through central planning, applies to defense, security, and criminal punishment as well.  In order to side step this problem, advocates for limited governments make a distinction between private (or consumer) goods and public goods.  They say governments should provide for goods which are non-rivalrous and non-excludable and include defense within the public good category.  The idea does reasonably explain why governments should be limited in what goods they supply.  However, it isn't anything more than reshuffling the deck chairs on a sinking ship.  The central planning of public goods faces the same problems as central planning the military and police.  It should be clear from this chapter of the book that the argument for limited government sinks for the same reasons as the argument for totalitarian government.