J. C. Lester Responds to Matt Zwolinski, Part 1: The Maximization of Liberty, Defining Coercion, and Voluntary Rights Forfeiture
It was suggested that it might be interesting to have a response from me to Matt Zwolinski’s “Liberty and Property”. However, I see that his post is one of several that form what is more or less one long essay. And so I take the opportunity to reply to them all. I shall try to keep my responses short and avoid repetition except where it strikes me as desirable for clarity or emphasis (though I notice it often does). Consequently, I shall tend to say less as the entries proceed. Where I agree with Zwolinski, or do not significantly disagree, then I shall say nothing. I keep Zwolinski’s titles for each section, and insert my comments below the relevant parts of the original text.
… what else could define a commitment to “libertarianism” other than a belief in liberty? Other political ideologies pay lip service to freedom, and perhaps even hold it as one legitimate value among others to be balanced in the great political calculus. But what sets libertarians apart is their belief that liberty is the highest political value. …
There are several immediate problems with the idea of having a “commitment” to the view that “liberty is the highest political value”. 1) We cannot be committed to any view. We don’t decide what we believe is true or moral: introspection reveals our beliefs. And so a perceived refutation can stop us holding a view at any time. 2) Strictly, liberty is not a “value” (values only exist in people’s minds), but a concept or state of affairs. 3) Libertarianism is, in one sense, not “political” but anti-political in principle (at most, a minimal state is a necessary evil). 4) Libertarianism is not necessarily even the “highest” principle. A libertarian principle might be held to be inviolable. But even that does not entail that it is the “highest” principle. If it is held for modus vivendi reasons, for instance (as I suppose it usually is to some degree, at least), then all participants might have other principles that they would personally rank higher, or value more, than the libertarian principle. However, they realize that liberty is a safer way to promote those other principles than the use of aggression (i.e., flouting interpersonal liberty).
… let’s look at one popular and superficially plausible interpretation. What it means to hold liberty as the highest political value, on this view, is to hold that liberty ought to be maximized. …
Before jumping into issues of maximization, should we not first ask, “what is the best theory of libertarian liberty?” Otherwise, whether or how it can or should be maximized cannot be answered. My own preferred theory of social or interpersonal libertarian liberty is an objective and pre-propertarian “absence of proactive impositions” (on people by people). That is, I take ‘proactive impositions by other people’ to be the relevant aggressive constraints that fit what libertarianism requires to be avoided. Consequently, where an absence is not fully possible—as is often the case—then a minimization will be the most libertarian option. From this formula I have argued that we can derive self-ownership itself and all libertarian property, as well as solving various known paradoxes and newly arising problems. But I can’t go into detailed explanations here. See Escape From Leviathan: Libertarianism Without Justificationism (2012 )
… I am unable to think of a single libertarian philosopher who defends a position like the one I am describing. …
I am inclined to the view that liberty ought to be maximized: why would a libertarian put up with less liberty if more were possible? However, I also incline to a version of what I call ‘rule libertarianism’ (rather than ‘act libertarianism’): as a general rule, don’t violate liberty even where it looks as though greater liberty can thereby be achieved—because it won’t work in the long run.
… The standard libertarian response to such criticisms, of course, is to point out that employment relationships are voluntary, and so whatever restrictions employers impose upon their employees do not actually count as a violation of their freedom in the relevant sense. Personally, I don’t find this response to be all that persuasive. For starters, it simply assumes that what libertarians believe ought to be the case actually is the case – viz., that employment relationships are entirely voluntary. But this ignores the myriad ways in which coercion infests our present system, …
There is considerable confusion about “coercion” among libertarians. Many of them use ‘coercion’ as meaning whatever is unlibertarian. However, libertarians cannot be against ‘coercion’ as such in its plain English sense: roughly, interpersonal force and the threat of force. They can only be against coercion that violates liberty. They cannot be against coercion that enforces liberty or is voluntarily or contractually accepted. And libertarians must also be against plainly non-coercive acts that violate liberty, such as fraud and most theft (some theft also involves coercion).
… often to the benefit of employers and to the detriment of laborers. …
Yes, the state interferes and confuses matters. But the crucial point must be distinguished and not lost: insofar as the state does not impose rules that flout liberty, then “whatever restrictions employers impose upon their employees do not actually count as a violation of their freedom in the relevant sense”. And then it cuts both ways: whatever restrictions employees impose upon their employers do not actually count as a violation of their freedom in the relevant sense. Of course, it would clarify matters to have an explicit libertarian theory of liberty or freedom to apply here, and Zwolinski does not have one.
… Second, the argument assumes that whatever is voluntarily agreed to cannot be a restriction on freedom. But this is either wrong or at least a very strange way of using the word “freedom.” Suppose I ask you to lock me up in your dungeon and throw away the key, perhaps in exchange for your writing a check to my child who I would otherwise be unable to support. However unimpeachable the contract may be on procedural terms, I am, once locked away in your dungeon, less free than I was when I was, well, free. Libertarians might be right in thinking that there is nothing morally wrong with the lack of freedom I now endure. But to infer from this that it must not be a lack of freedom after all is an abuse of language and logic.
This is a mistake that no libertarian ought to make. It comes from having no explicit theory of libertarian liberty. The sense of ‘liberty’ or ‘freedom’ as the absence of mere physical constraint is completely different from the libertarian sense of not being aggressively constrained (or proactively imposed on) by another person. Once voluntarily incarcerated, Zwolinski lacks physical freedom or liberty but he has suffered no loss of interpersonal libertarian freedom or liberty. There is no “abuse of language and logic” in making this clear distinction. The abuse is in conflating two conceptually distinct homonyms.
The fundamental problem with this line of argument is its reliance on what philosophers call a “moralized” conception of liberty.
Some libertarians are indeed confused in just this way. But there is no need to mention morals at all. Libertarian liberty has an objective content both theoretically and in its observance. It is an entirely separate matter whether such liberty or its observance is moral.
… If, as many libertarians assume, violent criminals voluntarily forfeit their rights to liberty when they commit their criminal acts, then punishing them by imprisonment might not be unjust. But, surely, this does not mean that the criminal is, all appearances to the contrary notwithstanding, perfectly free when the policemen handcuff him, throw him in their police car, and lock him away in a cell.
The criminal’s physical liberty has been reduced. But his libertarian liberty has not been infringed to the extent that the judicial system was only engaged in rectifying his infringements of the libertarian liberty of others. That ought not to appear paradoxical or unclear.
Freedom and Justice are both important values, and ones to which libertarians do and should give their allegiance. But we should resist the temptation to suppose that they are the same value. That they are not the same entails that it is possible, in principle at least, that they may in certain circumstances come into conflict. This is a possibility that I will explore in a future post.
Libertarian liberty, and freedom of action, and justice are three distinct concepts and states of affairs. But if what I call the ‘classical liberal compatibility thesis’ is true, then liberty will systematically be compatible with justice and human welfare in their practical applications.
Editor’s note: J. C. Lester’s response to part 2 of Matt Zwolinski’s essay “Libertarianism and Liberty” will be featured in the next post in this series.
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Alex Nowrasteh, an immigration policy analyst at the Cato Institute’s Center for Global Liberty and Prosperity, explains the philosophy behind his position on immigration in about a minute. To put it simply: since, for the most part, immigration involves a series of voluntary exchanges between two consenting parties, the state shouldn’t interfere with it.
Produced by Evan Banks and Aaron Powell.
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Voluntary Servitude Begins With A Debt
Richard (Rick) Mills
Ahead of the Herd
As a general rule, the most successful man in life is the man who has the best information
Should we leave the creation of new money in the hands of bankers or place its creation solely with our government?
“The financial system used by all national economies worldwide is actually founded upon debt. To be direct and precise, modern money is created in parallel with debt…
The creation and supply of money is now left almost entirely to banks and other lending institutions. Most people imagine that if they borrow from a bank, they are borrowing other people’s money. In fact, when banks and building societies make any loan, they create new money. Money loaned by a bank is not a loan of pre-existent money; money loaned by a bank is additional money created. The stream of money generated by people, businesses and governments constantly borrowing from banks and other lending institutions is relied upon to supply the economy as a whole. Thus the supply of money depends upon people going into debt, and the level of debt within an economy is no more than a measure of the amount of money that has been created.” Michael Rowbotham, ‘The Grip of Death’
US Federal Reserve – the Fed
On the night of November 22, 1910 a delegation of the nation’s leading financiers, led by Senator Nelson Aldrich, left New Jersey for a very secret ten day meeting on Jekyll Island, Georgia.
Aldrich had previously led the members of the National Monetary Commission on a two year banking tour of Europe. He had yet to write a report regarding the trip, nor had he yet offered any plans for banking reforms.
Accompanying Senator Aldrich to Jekyll Island were:
Frank Vanderlip, president of the National City Bank of New York, associated with the Rockefellers
Henry P. Davison, senior partner of J.P. Morgan Company, regarded as Morgan’s personal emissary
Charles D. Norton, president of the Morgan dominated First National Bank of New York
Col. Edward House, who would later become President Woodrow Wilson’s closest adviser and founder of the Council on Foreign Relations
Benjamin Strong, a lieutenant of J.P. Morgan
Paul Warburg, a recent immigrant from Germany who had joined the banking house of Kuhn, Loeb and Company, New York directed the proceedings and wrote the primary features of what would be called the Aldrich Plan.
After the Jekyll Island visit the National Monetary Commission “wrote” the Aldrich Plan which formed the basis for the Federal Reserve system.
"In 1912 the National Monetary Association, under the chairmanship of the late Senator Nelson W. Aldrich, made a report and presented a vicious bill called the National Reserve Association bill. This bill is usually spoken of as the Aldrich bill. Senator Aldrich did not write the Aldrich bill. He was the tool, if not the accomplice, of the European bankers who for nearly twenty years had been scheming to set up a central bank in this Country and who in 1912 has spent and were continuing to spend vast sums of money to accomplish their purpose." Congressman Louis T. McFadden on the Federal Reserve Corporation: Remarks in Congress, 1934
After several failed attempts to push the Federal Reserve Act through Congress, a group of bankers funded and staffed Woodrow Wilson’s campaign for President. He had committed to sign a slightly different version of the Federal Reserve Act than Aldrich’s Plan.
In 1913, Senator Aldrich pushed the Federal Reserve Act through Congress just before Christmas when much of Congress was on vacation. When elected president Woodrow Wilson passed the FED.
The Federal Reserve Bank (FED) is a privately owned company (Wikipedia describes the Fed as a complex business-government partnership that rules the financial world) that controls, and profits immensely by printing money through the US Treasury and regulating its value.
“Some [most] people think the Federal Reserve Banks are U.S. government institutions. They are not … they are private credit monopolies which prey upon the people of the U.S. for the benefit of themselves and their foreign and domestic swindlers, and rich and predatory money lenders. The sack of the United States by the Fed is the greatest crime in history. Every effort has been made by the Fed to conceal its powers, but the truth is the Fed has usurped the government. It controls everything here and it controls all our foreign relations. It makes and breaks governments at will.” Congressional Record 12595-12603 — Louis T. McFadden, Chairman of the Committee on Banking and Currency (12 years) June 10, 1932
“… we conclude that the [Federal] Reserve Banks are not federal … but are independent, privately owned and locally controlled corporations … without day-to-day direction from the federal government.” 9th Circuit Court in Lewis vs. United States, 680 F. 2d 1239 June 24, 1982
The FED began with approximately 300 people, or banks, that became owners (stockholders purchased stock at $100 per share) of the Federal Reserve Banking System. The Fed is privately owned – 100% of its shareholders are private banks, the stock is not publicly traded and none of its stock is owned by the US government.
The US government pushed through the Sixteenth Amendment (which exempted income taxes from constitutional requirements regarding direct taxes) restarted an income tax on Americans to pay the interest to the FED and reorganized the IRS to collect the monies – the interest – “owed” to the FED from its citizens.
Sir Josiah Stamp, president of the Rothschild Bank of England and the second richest man in Britain in the 1920s, said the following in 1927 at the University of Texas:
“The modern banking system manufactures money out of nothing. The process is perhaps the most astounding piece of sleight of hand that was ever invented. Banking was conceived in inequity and born in sin. Bankers own the Earth. Take it away from them but leave them the power to create money, and with a flick of a pen, they will create enough money to buy it back again. Take this great power away from them and all great fortunes like mine will disappear, for then this would be a better and happier world to live in. But if you want to continue to be the slaves of bankers and pay the cost of your own slavery, then let bankers continue to create money and control credit.”
The FED banking system collects billions of dollars in interest annually and distributes the profits to its shareholders – the interest on bonds acquired with its newly-issued Federal Reserve Notes pays the Fed’s operating expenses plus a guaranteed 6% return to its banker shareholders.
The US Congress gave the FED the right to print money at no interest to the FED. The FED creates money from nothing, loans it out through banks and charges interest. The FED also buys government debt with money from nothing, and charges U.S. taxpayers interest.
The FED is the only for profit corporation in America that is exempt from both federal and state taxes.
The Chicago Plan
In 1933, economists at the University of Chicago put forward confidential proposals to roughly 40 individuals concerning banking reform. After receiving feedback from a number of individuals the proposals were re-written, the supplementary "Long-time Objectives of Monetary Management" was added as well as an appendix, "Banking and Business Cycles."
Collectively, these recommendations have come to be known as the Chicago Plan.
Irving Fisher was a strong advocate.
“The Best Economic Minds In The Country devised a reform plan. Henry Simons from the University of Chicago created the proposal and prominent economists from other universities joined him in what became known as the “Chicago Plan.” Economists like Paul Douglas of the U of C.; Frank Graham and Charles Whittlesley of Princeton; Irving Fisher of Yale; Earl Hamilton of Duke; and Willford King of NYU, to name a few.” The 1930’s Chicago Plan Vs. The American Monetary Act, Stephen Zarlenga
The Chicago Plan called for only the government to be able to issue the currency – banks would no longer be able to create money by making loans.
"The essence of the 100% plan is to make money independent of loans; that is to divorce the process of creating and destroying money from the business of banking. A purely incidental result would be to make banking safer and more profitable; but by far the most important result would be the prevention of great booms and depressions by ending chronic inflations and deflations which have ever been the great economic curse of mankind and which have sprung largely from banking.” Irving Fisher
The Chicago Plan recognized the distinction between money and credit:
The power to create money was to be removed from private banks by abolishing fractional reserves – the mechanism through which the banking system creates money
The loan-making function (banks) was to be separated from the money-creation function (government). Bank lending was to be from deposited long-term savings
Although easily implementable the Chicago Plan was never seriously considered by the day’s government, instead, watered down alternative measures (institutionalized Federal deposit insurance and the separation of commercial and investment banking) were introduced in the Banking Act of 1935 which created the Federal Open Market Committee (FOMC) who were charged with controlling the money supply through open market operations using government securities.
After a mid-1930s recovery from the Great Depression the US again entered Recession in 1937-1938 and the key elements of the Chicago plan resurfaced in the July 1939 draft titled ‘A Program for Monetary Reform’, this document was never published and never resulted in legislation.
“It is time to part with the fallacy that economic growth and employment creation are the main duties of central banks…Economic agony and financial disorder will continue until central banks decide to rehabilitate monetary conditions and restore direct control of the money creation process.” Dust off the Chicago Plan, Hossein Askari and Noureddine Krichene, atimes.com
Milton Friedman wrote “The creation of fiat currency should be a government monopoly.”
Today monetary reform advocates are revisiting the 1933 ‘Chicago Plan’ and the 1939 ‘A Program for Monetary Reform’.
Perhaps it’s time some kind of monetary reform was on all our radar screens. Is it on yours?
If not, maybe it should be.
Statistics: Posted by yoda — Tue Oct 30, 2012 9:53 am
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Authorities in Athens are ready to enforce the controversial collective action clauses, or CACs, to impose the restructuring deal on all bondholders as the number of voluntary agreements look set to fall short of the required amount.
Credit rating agencies have warned they will declare Athens to be in default if the CACs are triggered which would be a dramatic culmination to a three-year rollercoaster ride for Athens, the eurozone and global markets.
While the markets have been ready for a Greek default for months, the move could leave Greece and its banks barred from funding from the European Central Bank (ECB). On Monday, Standard & Poor’s declared Greece to be in a state of “selective default” which led to the ECB announcing it would no longer accept Greek government bonds as security for new loans.
The rating agency said its decision had been prompted by the threat of the CACs and the actual use of them is likely to tip Greece into actual default. The agency said it regarded the process as a “distressed debt restructuring”.
Raoul Ruparel of Open Europe, the London-based think-tank, said: “Greece is likely to struggle to reach the targets for a voluntary agreement so the credit rating agencies are almost certainly going to see this as a default.
"Greek banks will probably be barred from normal ECB funding and have to turn to the Emergency Liquidity Assistance [provided by the ECB] instead but for how long, we don’t know.”
Greece needs around 95pc of its private creditors to accept the deal by the deadline on Thursday in order to secure its €130bn international bail-out package and avert imminent bankruptcy.
Greek politicians back the use of CACs – which allow the deal to be imposed on all bondholders if 66pc agree to it – being inserted retrospectively if the voluntary agreement falls short.
The uncertainty over the deal on Greek debt put further pressure on the euro last week. The single currency fell sharply against the dollar and other major currencies.
Uncertainty over Spanish willingness to stick to its austerity programme also put pressure on the currency.
Last week, the International Swaps and Derivatives Association (ISDA) declared that there had not yet been a credit event in Greece so there was no need for the credit default insurance instruments to be triggered.
If the CACs are triggered this week, the committee will almost certainly reconsider its decision.
Statistics: Posted by yoda — Sat Mar 03, 2012 4:13 pm
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Is Taxation Voluntary?
Have you ever heard the claim that paying income tax is voluntary? The term “voluntary” is variously used in government documents, including the 1040 form itself, and some very naive people have actually taken this to mean that they don’t have to pay if they don’t want to. They think that “voluntary” actually means voluntary, as in the free exercise of human volition.
It’s an odd position that seems not to comprehend the meaning of the word “tax.” What makes a tax different from a contribution or a trade is that the revenue is extracted by force. You can choose not to comply just as you can choose to resist arrest. But then you must face the consequences. A truly voluntary tax is like a friendly insult, a peaceful war or a healthy cancer. The two words just don’t go together.
By the way, this point doesn’t apply to just the income tax. It is true for all taxes. You sometimes hear that excise taxes are voluntary because no one is forcing you to buy the taxed good or service. This is false. The point is that if you buy gasoline, cigarettes or anything else that is taxed at the point of sale, you have no choice but to fund the government with part of your purchase price. That is not voluntary.
Yet many people, convinced that they should take the government at its word, persist in believing otherwise. The courts have been dealing with these people for decades. They file what the government calls “frivolous lawsuits.” In fact, the IRS has heard this claim enough to actually address it on a special webpage it has created to address these and other far-flung claims made by people who imagine that they have a right to keep what they earn.
The agency writes:
“The word ‘voluntary,’ as used in Flora and in IRS publications, refers to our system of allowing taxpayers initially to determine the correct amount of tax and complete the appropriate returns, rather than have the government determine tax for them from the outset. The requirement to file an income tax return is not voluntary and is clearly set forth in Internal Revenue Code 6011(a), 6012(a), et seq. and 6072(a). See also Treas. Reg. § 1.6011-1(a).
“Any taxpayer who has received more than a statutorily determined amount of gross income is obligated to file a return. Failure to file a tax return could subject the noncomplying individual to criminal penalties, including fines and imprisonment, as well as civil penalties. “[A]lthough Treasury regulations establish voluntary compliance as the general method of income tax collection, Congress gave the secretary of the Treasury the power to enforce the income tax laws through involuntary collection…The IRS’ efforts to obtain compliance with the tax laws are entirely proper.” United States v. Tedder, 787 F.2d 540, 542 (10th Cir. 1986).”
In other words, you are free to comply. If you choose not to comply, you could go to prison. As proof that this is law, the agency cites court cases from 1938-88. Guess what? The courts, as creations of the government, have sided with the government’s right to collect taxes from your income. But you say that this is not fair. This is not just. This is un-American. This contradicts the government’s own claim that its system is voluntary.
Well, if you are writing the dictionary, you get to define words however you want to define them. However the government uses language, the reality is that the money is being taken from you without your consent. The only real difference between the robber (such as what was once called a “highwayman”) and the government, as Lysander Spooner said, is that the robber doesn’t claim to be doing this for your own good:
“The highwayman takes solely upon himself the responsibility, danger and crime of his own act. He does not pretend that he has any rightful claim to your money, or that he intends to use it for your own benefit. He does not pretend to be anything but a robber. He has not acquired impudence enough to profess to be merely a ‘protector,’ and that he takes men’s money against their will, merely to enable him to ‘protect’ those infatuated travelers who feel perfectly able to protect themselves, or do not appreciate his peculiar system of protection. He is too sensible a man to make such professions as these. Furthermore, having taken your money, he leaves you, as you wish him to do. He does not persist in following you on the road against your will, assuming to be your rightful ‘sovereign’ on account of the ‘protection’ he affords you. He does not keep ‘protecting’ you by commanding you to bow down and serve him; by requiring you to do this, and forbidding you to do that; by robbing you of more money as often as he finds it for his interest or pleasure to do so; and by branding you as a rebel, a traitor and an enemy to your country, and shooting you down without mercy if you dispute his authority or resist his demands. He is too much of a gentleman to be guilty of such impostures and insults and villainies as these. In short, he does not, in addition to robbing you, attempt to make you either his dupe or his slave.”
What strikes me about the legions of marginalized people who file “frivolous” lawsuits is not that they hate the government, as people often believe. It is not that they have lost confidence in the system or otherwise treat their public servants as their enemies.
My impression is exactly the opposite. They have actually underestimated the depth of the problem with the system. They believe that the courts really are independent and will side against the interests of the government. They imagine that the system is surely and fundamentally just and fair, and once challenged, it will take their side. They imagine that agencies of the government will stick to their word. They imagine that the system is not so corrupt as to not give them a fair hearing.
Keep in mind that there was no income tax in this country for the 126 years after the Constitution was ratified, except for a brief period during the Civil War. Even after the Constitution was amended to make income taxes possible, only a few actually paid. It was much later before it hit most every American. Before that, your income was your own, period. Imagine! Most people can’t.
The 16th Amendment represented a fundamental change in the nature of the American regime. From that point forward, there was a shift in ownership over national wealth. It belonged first to the government, and then to you only as the administrative apparatus permits.
These “frivolous” people who claim taxes are voluntary are doing what good citizens do. They are reading founding documents. They study the American Revolution. They contemplate the words of Jefferson, Paine, Madison and all the others. They take their words and ideas seriously. They look at the current system and see that it resembles the founding vision only in the most superficial ways. And they imagine that it is their right, as Americans and as human beings, to stand up to the powers that be.
What they lack is that critical intelligence to comprehend that the present regime does not agree. There is no real consent of the governed. There is no authentic social contract. The government isn’t really of, by and for the people. To realize this is the beginning of true political wisdom. On this core point, it appears that both libertarians and the tax police are in full agreement.
Statistics: Posted by yoda — Fri Feb 17, 2012 9:58 pm
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