Thursday, 4 February 2016

So there’s a Laffer Curve for anarchists

So you’re familiar with the idea of the Laffer Curve, right?


Put in its simplest possible form, the Curve posits the non-intuitive idea that the maximum possible tax revenue does not necessarily come in at the highest tax rates.

The curve suggests that, as taxes increase from low levels, tax revenue collected by the government also increases. It also shows however that increasing tax rates after a certain point (T*) would cause people not to work as hard or not at all, thereby reducing tax revenue. Eventually, if tax rates reached 100% (the far right of the curve), then all people would choose not to work because everything they earned would go to the government.
    Governments would like to be at point T*, because it is the point at which the government collects maximum amount of tax revenue while people continue to work hard.

So there are two places on the curve that would attract zero revenue: those with tax rates of 0% and 100%; and there is one place that attracts the most revenue: and that is some place in between.

Interesting idea.

Let’s call this the Curve for the Taxman – with all that that implies.

Did you know however that you can draw a similar relationship of sorts between the size of government, and our degree of freedom? One that should be a lesson for every anarchist everywhere.

Put in its simplest possible form, the Curve for Anarchists would posit the idea that the maximum possible freedom does not necessarily come about at the lowest possible size of government.

In particular, the curve would recognise that freedom is not the absence of government but the absence of physical coercion -- protecting against physical coercion or fraud being the primary job of any good government, but the initiation of it being many a bad government’s primary activity.

So as we’d expect the curve suggests that, as the size of government decreases from higher levels, our degree of individual freedom from government coercion also increases. It also suggests however that decreasing the size of government after a certain point would cause individual freedom to diminish not by the coercion of government, but from those of whom government is no longer protecting against.




Self-described “protection agencies,” i.e., gangsters, criminals and mobs.

Eventually, if rights-protecting government were snuffed out altogether (the far left of the curve), then all freedom would be snuffed out altogether too. As it was in places like Somalia recently, Beirut in the Eighties, or warlord-era China.

The curve recognises that the idea of competing governments or “protection agencies” is simply a market in force that guarantees freedom from coercion for no-one.

And it recognises that anarchy itself, the total absence of government and law, is in fact only metastable, a system that is rapidly on the way to some other system – probably gangsterism or worse – and not at all one benevolent to the concept or preservation of freedom.

Now, we can certainly argue where our ideal place, F*, might be. Like the original Laffer Curve, it’s just a conceptual notion so it’s only drawn in the middle to make a nice-looking picture.


It would be more accurate, as we know, to move the curve to something more realistic:


So we can argue if we like about where that point might be. But we should also recognise that size might be a good way to judge things after dark, but should not on its own be the primary consideration when judging governments. What is of primary importance is not that government is small, but that it protects individual rights.

That, after all, is what government is for - to protect you from me, and me from you. And there’s no government like no government to ensure the absence of adequate protection.

[Laffer Curve pic by Investopedia]


  • “All that is spoken about by anarcho-capitalist ‘hippies of the right’ about the systems of anarchy amount to no more than wishful thinking about the state of things and the nature of men. Of some men. As James Madison said, ‘If all men were angels no government would be necessary. If angels were to govern men, neither external nor internal controls on government would be necessary.’ But all men ain't angels, hence the need both for goverment and for controls on that government. We call those controls a constitution, just as Madison did.”
    Cue Card Libertarianism – Anarchy – NOT PC
  • “You see, anarchists sincerely believe that they are merely advocating "competition" in the protection of rights. In fact, what their position would necessitate is "competition" in defining what "rights" are.” …
        “Without a philosophical consensus, "competing agencies" (driven to maximize profits by satisfying their paying customers) will offer opposing, rival social factions any interpretations each wants. Definitions of "rights" and "liberty" and "justice" will become as much a matter of "competition" as will the methods, personnel and procedures each agency will offer to provide. And which agency will attract the most customers? Of course, the one that "gets results" by best satisfying consumer demand: i.e., the one which can impose its own definitions of "aggression" and "self-defense" on competitors.”
    The Contradiction in Anarchism – Robert Bidinotto, RED BARN
  • “Anarchy, as a political concept, is a naive floating abstraction: . . . a society without an organized government would be at the mercy of the first criminal who came along and who would precipitate it into the chaos of gang warfare. But the possibility of human immorality is not the only objection to anarchy: even a society whose every member were fully rational and faultlessly moral, could not function in a state of anarchy; it is the need of objective laws and of an arbiter for honest disagreements among men that necessitates the establishment of a government.”
    The Nature of Government – Ayn Rand, AYN RAND LEXICON
  • “’I know of no anarchist,’ [writes an anarchist], ‘who ever proposed that society be constituted without agreed standards, even if these were crystallised into one simple maxim such as 'you are free to do what you like except interfere with someone else's freedom,’ nor have any of them ever suggested that we stand idly by if our rights are abused by others.’
        “This raises a number of questions. What if this ‘simple maxim’ is not the ‘agreed standard’? Why should it be? ‘Why shouldn't the Mongrel Mob's maxims be the ‘agreed standards’? How are "freedom’ and ‘rights’ to be defined? If someone, acting on a different definition from mine, proposes to abuse my rights, who stops him and on what grounds? Of what does ‘not standing idly by’ consist — blowing him away? It is in answering such questions that one encounters the inescapable need for government [and law].”
    Freedom vs. Anarchy – Lindsay Perigo, FREE RADICAL
  • “The anarchists do not object to retaliatory force, only to it being wielded by a government. Why? Because, they say, it excludes ‘competitors.’ It sure does: it excludes vigilantes, lynch mobs, terrorists, and anyone else wanting to use force subjectively.
        “’A government is the means of placing the retaliatory use of physical force under objective control–i.e., under objectively defined laws.’ (Ayn Rand, Capitalism: The Unknown Ideal)
        “There can be only one supreme law of the land and only one government to enforce it. (State and local governments are necessarily subordinate to [a] federal government.)
        “Could conflict among ‘competing governments’ be taken care of by treaties? Treaties?–enforced by whom? I once asked Ayn Rand about the feasibility of such treaties between sovereign ‘competing governments.’ She looked at me grimly and said, ‘You mean like at the U.N.?’”
    Sorry Libertarian Anarchists, Capitalism Requires Government – Harry Binswanger, FORBES
  • “That anarchism is incompatible with the protection of individual rights is obvious from reading the news. Look at what the Mafia Defense Agency does. Look at what the PLO Defense Agency does. Look at what the Al Qaeda Defense Agency does. Such annoyingly obtrusive facts as the chronic conduct of these defense agencies are meaningless, though, we’re told. Anarchists tend to reply, “There you go again. That kind of bloody conflict among power-lusting gangs is not what we mean by defense agencies or an anarcho-capitalist society. What we mean is the smoothly functioning rights-respecting ‘defense agencies’ of our disconnected-from-facts-on-the-ground theoretical books and journal papers …
        “In other words, anarchists merely assume that none of the proposed defense agencies would in fact actually be competing at the most fundamental level—i.e., [with force] …
        “Or would there, after all, be some kind of mutually accepted and enforced ban on the wrongful use of force? If the latter, would there or would there not be enforceable mechanisms in place for adjudicating disputes among the defense agencies, and for declining to renew the license of a defense agency that tries to blow up World Trade Centers in the name of the Allah Defense Code?
        “Problem, though: as soon as any such reasonable, enforceable constraints are imposed on the defense agencies independently of their preferences in a particular dispute, we are talking about an apparatus of limited government, not about anarchism or anarcho-capitalism….”
    Did Roy A. Childs Jr. suffer from ‘Archist Illusions’? – DAVID M. BROWN’S BLOG


  1. Talk about a preposterous straw man argument! haha!

    What frightens the average not-PC reader more:

    1. Seeing some halfwit wearing a Mongrel Mob gang patch? (minding his own business)
    2. A Police car in the rear view mirror? (minding your business)

    At present 'gangs' and 'criminals' are not a problem; few people have been bothered by them today, those that have went looking for trouble (and found it).

    The Police have been busy giving speeding tickets to elderly women driving at 52 in a 50 zone than bother with gangs or criminals (the cops may get hurt, or break a fingernail, so avoid gangs like the plague).

    Therefore why would gangs and criminals be a problem just because government reduced in size?

    This idea that if you didn't have government then marauding gangs of criminals would have you at their mercy is ridiculous; rather akin to the bizarre notion that 20 seconds after banning abortions vast numbers of pregnant women would start shoving dirty knitting needles into their waterworks and die from 'backstreet abortions'.

    Whether government exists at all makes no difference to the gangs or criminals; they are not a problem for ordinary people because gangs and criminals are, generally speaking, selling a product or service and have customers falling over themselves to buy such products or services - of their own free will.

    No government simply legalises these products, in many cases, and the notion you would get some gun toting Tony Soprano going house to house demanding people buy stolen goods from him is a bit odd.

    The only gangsters and criminals you need to worry about, who are demanding anyone buy their product or service, work for the Inland Revenue or DOC or the Council or MAF......not Black Power.

    Personally I would prefer zero government - and take my chances! haha!

    1. Mr Lineberry neatly demonstrates the fallacy of and the errors attendant upon dropping context. For which we should all be grateful, I guess.

  2. The curve accurate in as far as it shows a principle is too simplistic in the real world. What bugs me most about taxes is the manner of collection as that allows a lot of govt excess because they just take what they want. That people bitch about discretionary taxes like fuel and GST while accepting intrusive income taxes without a a second thought astonishes me.


  3. That, after all, is what government is for - to protect you from me, and me from you

    And that is why at heart you are a communist. Not a libertarian at all, but a communist. Your argument leads directly to Malheur, to WACO, to Beslan, to the Gulag and to Auschwitz.

    I take personal responsibility for myself and my family. I don't want anyone at all to protect me from you: certainly no-one I haven't taken responsibility for making personal arrangements myself. In NZ today, the only effective "protection" and "court systems" are already privatised. Why have less freedom than we do today?

    1. Mr Angry neatly demonstrates what we might call The NoTrue Liberarian Fallacy -- along within object lesson in being an effective troll.
      For both of which I guess we should thank him.

    2. Why would we need to be protected from you? or to put it another way - what makes you think you are a danger to other people?

      (Is the reason you have never committed a murder because you are not 'murderous', or merely because murder is illegal?)

      Nobody requires any protection from me, violence isn't in my nature haha! and I have been sitting here for a couple of minutes trying to think of anyone I have ever met whom I would need 'protecting' from. No one springs to mind.

    3. Creswell - troll, sure, although I doubt effective. But if libertarian is to mean anything it must mean starting from the point of view that the ideal is no government. Give that away - once you have government, you have to pay for it, you have taxes, you have rules, you have people (police) who must enforce the rules, you have rules about what the can do: we know where that leads, and whether in the John Key or Josef Stalin varieties, it's communism.

    4. Angry, you said, "if libertarian is to mean anything it must mean starting from the point of view that the ideal is no government."

      Well, no, that would be to have your starting point as anarchy. Which is something different.
      You can argue that one thing is a better thing, or try to, but you cannot accurately argue that one thing *is* another thing.

      Just for reference: Libertarianism is not essentially anti-government; it is pro-liberty.

  4. Great post and interesting concept.

  5. Lineberry - because it's illegal (even though at the illegality is unconscionable and unconstitutional).


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