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Forum : Article Discussions : Free Riders versus Forced Riders

Wednesday
October 3, 2007

Free Riders versus Forced Riders by William Scott Dwyer

If voluntary government financing permits free riders -- those who refuse to pay for something they value at the price they are being charged -- then taxation requires forced riders -- those who are forced to pay for something they don't value at the price they are being charged. Are forced riders an acceptable solution to the problem of free riders? Read the article and find out! (Read more...)
Discuss this Article (45 messages)

Wednesday, October 3, 2007 - 7:45am

To play devil's advocate here, paying taxes for national defense isn't forced ridership, it's forced payership. We can't choose to get off the national defense train. I can't say, Army, just protect these other people against invasion, I'll fend for myself. I'm going to benefit from the Army's protection whether I opt in or not. Therefore, paying taxes for the legitimate functions of government doesn't bother me too much. It's all those illegitimate functions, where I could choose to get off the train, that I think we should focus on. Also, with today's technology, we could move toward more voluntary funding of government services. As a first step, people could be allowed to earmark some of their taxes to go towards the programs they wish to fund.

Wednesday, October 3, 2007 - 9:21am

To play devil's advocate here, paying taxes for national defense isn't forced ridership, it's forced payership. We can't choose to get off the national defense train.

But if you can't choose to get off the national defense train, even when you don't value it at the fare that you're being charged, then aren't you forced to ride the national defense train? And if so, aren't you then a "forced rider"?

I can't say, Army, just protect these other people against invasion, I'll fend for myself. I'm going to benefit from the Army's protection whether I opt in or not.

That depends on whether you consider the protection worth the price that you're forced to pay for it. if you don't, then how can one say that you're benefiting? In order to "benefit," the value to you of the service has to exceed the cost. If it doesn't, then the net result is a sacrifice, not a benefit.

For example, consider another public good -- smog protection. You might say that since you "benefit" from the protection, there is no forced ridership. But suppose the price the city is charging to enforce the laws against pollution exceeds the value, to you, of the smog protection -- that if you have to pay that price, you'd rather not have the protection. If you are taxed to fund the service, are you not, under those circumstances, a forced rider? You can't opt out, because the protection covers everybody, but you also don't value the protection at the price you're being charged. In that case, you're not simply a forced payer; you're a forced rider, because you're not a true beneficiary.

- Bill

Wednesday, October 3, 2007 - 11:34am

[P]aying taxes for the legitimate functions of government doesn't bother me too much. It's all those illegitimate functions, where I could choose to get off the train, that I think we should focus on. -Laure

I would suggest that those who object to paying taxes for legitimate services under our current situation look at the Ayn Rand Lexicon entries under taxation where there are 5 paragraphs discussing the future desirability of a voluntary system and under anarchism for the entries about "competing governments" where Rand voices her strong disdain for those who mistake the services of a government for the services of a business.

So far the debate on these topics has proceeded without any reference to Rand's own words on the matter.

Those quotations, and the fact that Rand voted Republican and did not call for tax protests should make it quite clear, as I keep repeating, that this is a very premature issue at best.

And, no, I don't have the time to type out those quotes myself now - but I'm sure looking in the ARL will not be to big a sacrifice.

Ted Keer

Wednesday, October 3, 2007 - 12:28pm

So far the debate on these topics has proceeded without any reference to Rand's own words on the matter.

So? (Ted, I'm surprised at you, implying that we need to "quote scripture" in our debate! ;-) )

But, I totally agree with Ted that advocating a 100% voluntary system of funding government is premature right now.

Bill, you make a good point with the smog protection example. You are one of the few people who can actually change my mind about anything! I think you are right that I would find the "free rider" problem easier to live with than the "forced rider/payer" problem.

I think there's been discussion of Alan Greenspan's criticism of the voluntary taxation idea, "what if people choose not to pay". The Objectivist answer is, "enough people will find it in their self-interest to pay." But, it seems to me that this assumption needs to be tested empirically. I think a neat idea would be to have a survey attached to our income tax returns, so that we could indicate what our preferred allocation of our taxes would be, divided up into some manageable number of categories. Then, the GAO (or whoever) could compare the actual current allocation of spending with people's desired allocation, and see how it comes out. Would the military and the courts be put out of business? Or would the Department of Education bite the dust? We would have to gather the data in order to know. But I think that if we really allowed people to allocate their tax dollars, and allowed them to adjust allocations as conditions change, we'd end up with the important functions of government being funded - sort of a "free-market" solution; let people directly choose where to spend their tax money. Then, ultimately, let people choose the total dollar amount of their taxes, and then we've arrived at the utopia we all desire!

Wednesday, October 3, 2007 - 4:17pm

Bill,

Thanks for the article. I thought it was crystal clear and made a powerful point. Those arguing against Free Riders are suggesting Forced Riding is appropriate. Let's see how they make that case. Now that the alternatives are clear, we can hear the respective arguments, instead of accepting the Forced Riding position as the default. I agree with your own position that Forced Riding is worse, as it is a violation of rights.

Laure, I don't agree that the topic is premature right now. I consider this a methodological issue. How do we approach the topic? What standards do we use to determine which position is right or wrong?

Deciding exactly how a voluntary system of government might work may be premature, as we are far from that. Even then, I tend to agree with Bill that the topic is important because people think it can't happen. But there's a lot we can do even without that.

But the part that isn't premature is deciding on the standards of good government, and the methods by which we'll judge a policy as moral or immoral. We can't put these off until we have a more libertarian government, because there's no way to approach that day without some standards for deciding what's better or worse. How do you get closer to freedom without a measure of what is closer to freedom?

Again, Bill and I keep hammering the issue of individual rights and liberty, because that is the method of deciding this. This isn't simply an argument over a single isolated issue. It's a question of what standards or methods do we use to make our decisions.

What other methods are being offered to decide this? One is convenience, saying that the government might not be able to get the money it wants without some amount of force. But that standard would just as easily be used to argue for eminent domain, military draft, the post office, public roads, or even nationalized healthcare.

Another method focuses on the free rider "problem", which suggests we can enact Forced Riding as a solution. But again, it can be used for anything, including military draft, subsidizing art, broadcast TV or radio stations, etc.

There may be disagreements on whether it is premature to fully formulate a voluntary method of financing government, especially when it's difficult to even imagine a culture that would accept that. But it's certainly not premature to discuss these standards of evaluation.

Wednesday, October 3, 2007 - 5:15pm

A bit off topic, but if we are resigned to operate within our taxation model for the time being, how would people feel about allowing the taxpayer to allocate his money according to the programs he feels should receive it? 20% to police, 30% to military etc. A bit of a zany idea, I'd agree, but I don't feel it's any more screwy than what's currently in place.

Wednesday, October 3, 2007 - 8:27pm

There already exists a mechanism for deciding how much should be spent on courts versus police versus military: the vote. For mayor, city council, state reps, federal reps and senators, president, etc. This is the mechanism that determines what rights are and are not for the purpose of government recognition�what�s wrong with it for the purpose of deciding how and with how much money they will be enforced/protected?

(Edited by Jon Letendre on 10/03, 9:03pm)

(Edited by Jon Letendre on 10/03, 9:15pm)

Wednesday, October 3, 2007 - 10:40pm

Jon,

What Pete and Laure are saying is that allowing you, the taxpayer, to determine where your money goes would at least give you some control over its disposition. It's bad enough that society should determine how much of your money is given to the government. What's even worse is that society should, in addition, determine how your money is to be spent. If we're going to have our money taken from us against our will, then at least let us decide what government functions it is to be used for!

Laure, you wrote, "But, I totally agree with Ted that advocating a 100% voluntary system of funding government is premature right now."

Would you say that advocating Objectivism is premature right now? After all, a 100% voluntary system is an integral part of it. And if advocating Objectivism isn't premature, then neither is advocating voluntary government financing.

Contrary to Ted, Rand did not say that advocating voluntary financing is premature. What she said is this:

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 [emphasis added] -- since the principle will be practicable only in a fully free society, a society whose government has been constitutionally reduced to its proper, basic functions. Got that? Rand did not say that advocating voluntary financing is premature; she said that advocating a specific method of implementing it is premature. In fact, she stated that the task of political philosophy is to establish the nature of the principle and to demonstrate that it is practical.

Any program of voluntary government financing has to be regarded as a goal for a distant future. What the advocates of a fully free society have to know, at present, is only the principle by which that goal can be achieved. (Emphasis added)

The principle of voluntary government financing rests on the following premises: that the 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. (Ibid., p. 160) Any advocate of Objectivism must make the point that taxation is theft and that voluntary financing is the only proper way to fund a government. Obviously, a program of completely voluntary funding is not politically feasible today, so it is pointless to advocate it as something that has any reasonable chance of success, but that doesn't mean that it shouldn't be defended as the only system consistent with a respect for individual rights.

Bill, you make a good point with the smog protection example. You are one of the few people who can actually change my mind about anything! I think you are right that I would find the "free rider" problem easier to live with than the "forced rider/payer" problem.

Thanks, Laure!

- Bill
(Edited by William Dwyer on 10/04, 12:14am)

Thursday, October 4, 2007 - 6:50am

What is interesting in all this - is that these proposals of non-coercive grant money to the central government was the very reason the Articles of Confederation was not liked [by those wanting a strong central government, especially Hamilton]... indeed, those against retifying that new constitution made the point that the kind of government we have today would come about as consequence of this issue.....

Thursday, October 4, 2007 - 7:24am

I think that these threads are crystallizing the positions that the whole Objectivist movement should take in advocating how governments should be funded. I hope that all the Objectivist bloggers, forums and organizations are taking note. There have been a lot of discussions throughout the years but it seems that this basic issue is being resolved.

Sam

Thursday, October 4, 2007 - 8:12am

By all means, advocate away.

But I don't see this change coming any time soon, given the state of the culture - and the geopolitical situation. Again, I am all for a voluntary system if it is workable. But I do deny that a non-voluntary system is theft per se, in so far as the non-voluntary taxation funds proper government functions and no other means is practicable.

As for quoting scripture, I'll thank Bill, since I can type my own words as fast as I think, but am not a good typist for transcriptions. My frustration on this matter was not that scripture wasn't being quoted, but that Rand's arguments seemed beside the point on this and other threads. Bill's post above does quote Rand saying that a fully free society comes first, that's my argument, and I'm sticking with it.

Ted Keer

Thursday, October 4, 2007 - 12:07pm

Bill,

�What Pete and Laure are saying is that allowing you, the taxpayer, to determine where your money goes would at least give you some control over its disposition.�

The vote does give me some control over the money�s disposition.

�It's bad enough that society should determine how much of your money is given to the government. What's even worse is that society should, in addition, determine how your money is to be spent.�

It�s not quite true that �society� determines how much or how to spend. Elected representatives; governors, presidents, etc. do that.

Thursday, October 4, 2007 - 1:11pm

In terms of consistency, I think it's proper for those supporting taxation to not allow individuals to decide how to allocate their money. The whole point seems to be that you can't trust individuals to fund the needs of the government on their own. If you allowed them to allocate their money for whatever programs they agreed with, you'd have the same problem. Once you accept the premise that individuals aren't capable of doing the right thing, there's no room for giving them any choice in the matter. Once the premise that government knows best how to spend your money is accepted, it would be a contradiction to argue for individual choice.

Thursday, October 4, 2007 - 3:03pm

In terms of consistency, I think it's proper for those supporting taxation to not allow individuals to decide how to allocate their money. The whole point seems to be that you can't trust individuals to fund the needs of the government on their own. If you allowed them to allocate their money for whatever programs they agreed with, you'd have the same problem. Once you accept the premise that individuals aren't capable of doing the right thing, there's no room for giving them any choice in the matter. Once the premise that government knows best how to spend your money is accepted, it would be a contradiction to argue for individual choice.

My first problem with this is the false dichotomy that Joe seems to present, that either individuals are capable of doing the right thing or they're not. Some individuals some of the time do the right thing, and some individuals some of the time do the wrong thing. I am shocked to hear this isn't a given fact of human behavior for some here. I'm not concerned about individuals who will do the right thing, I am concerned about individuals who will do the wrong thing.

Secondly, you vaguely state "once the premise that government knows best how to spend your money is accepted" which is simply NOT what I think Jon or Ted has advocated. A proper government that is held accountable to elections, to other branches of government (judicial, executive, legislature) and different levels of government (federal, state, local) DO NOT have carte blanch power on how to spend the taxpayer's money for the purpose of protecting rights. Nor do the taxpayers have carte blanch power on how tax revenues should be spent. This whole false dichotomy argument that you are putting forth Joe ought to be discarded. Our government was designed to function as "shared power" between many individuals and institutions, so as to prevent a possible tyranny, whether that be the tyranny of the majority (voters) a tyranny from the military, a tyranny from judges, and in the case of a total and complete privatization of all means of force that some have advocated here a tyranny of the subjective whims of the irrational and cruel.

Thursday, October 4, 2007 - 3:39pm

John, there's no false dichotomy. It has nothing to do with whether some people willingly do what the government wants (i.e., the "right thing"), and some won't. It's probably true that there is a difference. But the justification for violent force (taxation) is some individuals can't be trusted to do what the government (or at least the promoters of taxation) wants. So force is claimed to be justified. But given that premise, how can you turn around and say individuals should be able to choose which programs to fund? It's the same thing. If you can't trust them to fund what you think is appropriate (whether the government as a whole or any particular program), force is deemed the necessary solution. You can say that violence is only used against those people who disagree with the government, but I don't see that as a useful distinction. It's hardly voluntary for those who do happen to agree.

If you suggest people should be free to fund government and even pick the programs, as long as they happen to pick the amount and programs the government wants, there is no real freedom to choose. It's an illusion. It's like telling slaves that they're free to work the plantation.

Thursday, October 4, 2007 - 7:41pm

How is the content of this discussion different from that on the forum -

Taxation (to protect rights) is a contradiction in terms

???

It seems that we are spinning our wheels here.

Thursday, October 4, 2007 - 8:14pm

Joe,

Thanks for the compliment on my consistency in advocating representative republicanism. I am curious as to the extent of your consistency in discarding it.

Soon the Supreme Court may decide to take on the D.C. case where they would finally rule on whether the second amendment protects an individual right or a state right. Why do we need the Supreme Court, though? Can�t we trust the people to become experts in law and constitutional theory? Can�t we just put the question to a popular vote?

And of what real use are the houses of congress? Some say drug patents should last longer, some say shorter; some say let�s ditch them altogether. Can�t we trust the voters to decide this question? They�ll make themselves experts in the field before voting, surely. They wouldn�t allow their lust for cheap generics to bias their vote, either. Software patentable or only copyrightable or not to be protected at all? Trust the people.

And commander-in-chief�who needs him? It�s a simple series of questions he decides anyway. Shall we attack this or that country to defuse the threat it poses to America, or not? And once the voters make themselves expert in geo-politics and military strategy, surely they could be trusted to make these decisions.

We can trust them to decide whether or not to fund this or that law, this or that missile upgrade, this or that breakthrough high energy beam weapon, this or that submarine technology�so surely we can trust them with just about anything, no?

Thursday, October 4, 2007 - 11:32pm

Jon, I only claimed you were consistent in your proposals to violate rights, not consistent in advocating representative republicanism. I don't have enough information to comment there. But if you're interested in my position, it's simple. Individual rights is the primary, and representative republicanism is simply a means. Not the other way around, as you would have it.

Friday, October 5, 2007 - 12:10pm

The primacy of individual rights, right. Problem is you are not advocating the primacy of protecting individual rights, but the primacy of the right of the individual to declare himself outside of that enterprise. I don�t recognize the latter as a right.

�Sorry Mr. Rearden, stopping Chinese knock-offs of Readen Metal costs money. The line for �Stop Chinese knock-offs of Rearden Metal� is on page 713 of the contribution packet and no one put down any funds for that.�

�I thought government existed to protect my rights. Isn�t that a primary?�

�No, no, no. Government exists to protect those rights and enforce those laws that the people want to see protected and enforced. Aren�t you rich, can�t you contribute the funds?�

�I am not rich. This invention was supposed to make me rich. I can�t get rich unless my rights are protected.�

�Mothers For Safe Streets alone this year raised over $30 billion for the war on drugs. In fact we now have enough funds for that project for the next thirty years. Maybe you could convince them to raise some money for the protection of your rights.�

�Maybe I could convince you to persuade your colleagues in the congress to pass a bill allocating some of those funds to the protection of my rights.�

�No. That would be a violation of the Mother�s rights. You see, Mr. Rearden, it�s primary that no one should have their contribution spent on anything but what they want it spent on. How do feel about campaign contributions? I ask because I have a one pm tee time with the head of the FDA. Why don�t you come along? Maybe we can persuade him to designate Chinese knock-offs of Rearden Metal a class III drug. Those MFSSs are a savvy bunch, they�ll be on to us soon enough, but it might work for a little while, maybe long enough to make you rich and get Warren and I reelected!�

Friday, October 5, 2007 - 1:58pm

Jon, I already know you don't recognize the right of individuals to use their property how they see fit. But that doesn't mean there is no such right. It just means like so many others, you're willing to not recognize those rights that conflict with your wishes.