Abstract
We provide a survey of significant libertarian contributions to the discussion surrounding ethics and taxation. By significant contributions, we mean those which have exerted a strong influence both on libertarianism, popular and academic, and on political and ethical discourse more broadly. Our discussion centers on the work of three prominent libertarians: Robert Nozick, Ayn Rand, and Murray Rothbard. For each, we present his or her position concerning some ethical aspect of taxation and evaluate objections to it. Section 4.2 discusses Nozick’s analogy between taxation of labor from earnings and forced labor and applies his argument against the fairness principle to fairness-based justifications of such taxation. Section 4.3 focuses on Rand’s view that compulsory taxation as such is unjust and considers her proposed scheme of voluntarily-funded minimal government. We argue that she failed to convincingly argue for either the feasibility or desirability of the latter. Section 4.4 addresses Rothbard’s similar position concerning the injustice of taxation per se and defends his view against possible justifications of that institution.
This is a preview of subscription content, log in via an institution.
Buying options
Tax calculation will be finalised at checkout
Purchases are for personal use only
Learn about institutional subscriptionsNotes
- 1.
Nozick acknowledges that his use of the ambiguous phrase “on a par with” suggests multiple interpretations. Do his arguments establish that taxation of earnings from labor is identical with forced labor? Or do they merely highlight similarities between the two to “show it is plausible and illuminating to view such taxation in the light of forced labor” (1974, 169)? Determining the precise nature of the parity between taxation of earnings from labor and forced labor established by his arguments would go far in determining their force. However, consistent with his treatment of similar interpretive difficulties, the author offers his reader material for consideration, but does not conclude which of these views is correct. To fully make such an interpretive determination lies outside the scope of the present essay; nor is it entirely clear that a definitive conclusion could be reached. Nevertheless, it is important to highlight the challenges inherent in interpreting the arguments we consider. However, in our view, taxes on labor is far more akin to plain, old, ordinary, theft, rather than slavery.
- 2.
The amount of penury would of course depend upon the point at which the tax kicks in.
- 3.
This is not necessarily so. Perhaps this person satisfies his preferences by volunteering at an animal shelter, cleaning up highways, or performing some other socially valuable service.
- 4.
That is, in any way which does not violate the rights of others.
- 5.
Natural talents relevant to our discussion include any which allow their possessors to more easily develop skills property owners seeking hired labor are willing to pay for.
- 6.
- 7.
Feser (2000) offers an illuminating commentary on Cohen’s rejection of self-ownership in the latter’s argument against Nozickian libertarianism. He points out that Cohen, despite identifying as a Marxist of sorts, “is convinced that it is futile to attempt to show that taxation, despite appearances, does not amount to forced labor and therefore does not really conflict with self-ownership” (225).
- 8.
For a critique of the public goods fallacy, see (Barnett and Block 2007; Block 1983a, b, c, 2000, 2003; Cowen 1988; De Jasay 1989; Holcombe 1997; Hoppe 1989; Hummel 1990; Osterfeld 1989; Pasour 1981; Rothbard 1997; Schmidtz 1991; Sechrest 2003, 2004a, b, 2007; Tinsley 1999).
Rothbard’s (1997, 178) reductio ad absurdum of the standard view on public goods is as follows: “A and B often benefit, it is held, if they can force C into doing something … [A]ny argument proclaiming the right and goodness of, say, three neighbors, who yearn to form a string quartet, forcing a fourth neighbor at bayonet point to learn and play the viola, is hardly deserving of sober comment.”.
- 9.
“Appears to” is inserted to indicate our doubts in light of criticisms of Nozick’s characterization of the fairness principle discussed below.
- 10.
Whether the obligation is assumed by the student or parents is immaterial to the present discussion.
- 11.
There is also the point that, to the extent that the government is considered a thief, it would be justified not to “steal” services from it, but, to liberate them from this entity. On the former, see Spooner (1966[1870]). On the latter: (Block 1972, 2002a, b, c, 2004a, b, 2006, 2007, 2008, 2009a, b, 2010, 2011a, b, c; Block and Arakaky 2008).
- 12.
Her novels have not received much if any scholarly attention, either. Literary reviewers tend to be on the left, and they revile her and her works. However, they, particularly Atlas Shrugged (1957), have all been best sellers.
- 13.
Chapter in Rand (1964).
- 14.
She does, however, propose a government lottery as one possible method for government funding (135–136). This hypothetical solution prompts the difficult question of how government in a free society would fund the initial investment required of such an undertaking. It could not fund the production of lottery tickets, billboards announcing the lottery, etc. by imposing a compulsive tax on its citizens, nor could these expenses be covered by revenue from a previous lottery—this would require an infinite regress of lotteries. Rand’s neglecting this puzzling problem has no bearing on her general argument about the illegitimacy of coercive taxation.
- 15.
Rand also suggested another voluntary means of financing the state: it could sell tags, or tickets, to those engaged in commercial activities. Then, in a case of a dispute, the government would serve as an intermediary, or judge. This, scheme, too, is problematic. First of all, contracting parties could ignore this service, leaving the state high and dry. Second, private parties could offer their competing services. Rand neglects to offer any reason why the government would outdo groups like the Better Business Bureau, or the American Arbitration Association, or private courts such as the Bet Din for Jews, or the ecclesiastical court for Catholics in terms of comparative advantage.
- 16.
Strictly speaking, the law of demand states that, ceteris paribus, price and quantity vary inversely.
- 17.
Further, it is difficult to reconcile her concern that violence not be initiated against innocents with the suppression of private security provision. Surely, firms in this industry would not necessarily violate the non-aggression principle.
- 18.
His three alternatives melt down into two, but his three objections remain.
- 19.
- 20.
We will not be summarizing Rothbard’s brilliant insights into this matter. Instead, we will move in a different direction, one that will, we hope, retain the spirit of his analysis.
- 21.
This is done, usually, explicitly, with a signature on the dotted line. Sometimes it is only a verbal agreement, but this, too, is explicit, as in the case of virtually all contracts.
- 22.
There were also non-voters, who either refused to participate, or, quite possibly, did not even know anything about these plebiscites. This is all too likely, given the lack of communication in the 18th century.
- 23.
This is a redundancy.
- 24.
If a commercial interaction is not unanimous, it is not part of the free market, strictly speaking.
- 25.
That is to say, destructive to the intellectual coherence of this school of thought.
- 26.
All sides, in the case of more complex contracts.
- 27.
For a critique of public choice in general, and of this concept in particular, see DiLorenzo and Block (2017).
- 28.
Either you are pregnant or you are not pregnant; either you are alive or dead; either you have two feet or you do not have two feet. Voluntariness and non-voluntariness are binary in this sense. Either your contract is unanimous, or it is not a voluntary contract. Of course, it cannot be denied, that in virtually all human affairs, there are indeed gray areas.
- 29.
Rather, the very issue on the basis of which the archists (statists) have lost.
References
Barnett, William, and Walter Block. 2007. Coase and Van Zandt on lighthouses. Public Finance Review 35 (6): 710–733.
Bell, Nora K. 1978. Nozick and the Principle of Fairness. Social Theory and Practice 5 (1): 65–73. JSTOR, JSTOR, www.jstor.org/stable/23557710.
Block, Walter E. 1972. The Polish Ham Question. In The Libertarian Forum, vol. 4, no. 6–7, p. 5.
Block, Walter. 1983. Public Goods and Externalities: The Case of Roads. The Journal of Libertarian Studies: An Interdisciplinary Review VII (1): 1–34 (Spring).
Block, Walter E. 1983a. How Immigrants CREATE Jobs. In North Shore News, p. A6, January 30. http://tinyurl.com/2xklvn.
Block, Walter E. 1983b. Protect Canadian Jobs From Immigrants? Dollars and Sense. January 2.
Block, Walter E. 2000. Word Watch, April 20. http://www.mises.org/fullstory.asp?control=414&FS=Word+Watch.
Block, Walter E. 2001. The Moral Dimensions of Poverty, Entitlements and Theft. The Journal of Markets and Morality 4 (1): 83–93. http://www.acton.org/publicat/m_and_m/2001_spring/block.html.
Block, Walter E. 2002a. Accepting Government Subsidies, Fraser Forum, February 27.
Block, Walter E. 2002b. Homesteading City Streets; An Exercise in Managerial Theory. Planning and Markets 5 (1): 18–23. September. http://www-pam.usc.edu/volume5/v5i1a2s1.html; http://www-pam.usc.edu/.
Block, Walter E. 2002c. On Reparations to Blacks for Slavery. Human Rights Review 3 (4): 53–73.
Block, Walter E. 2003. National Defense and the Theory of Externalities, Public Goods and Clubs. In The Myth of National Defense: Essays on the Theory and History of Security Production, ed. Hans-Hermann Hoppe, 301–334. Auburn: Mises Institute.
Block, Walter E. 2004a. The State Was a Mistake. In Democracy, The God that Failed: The Economics and Politics of Monarchy, Democracy and Natural Order, ed. Hoppe, Hans-Hermann, 2001 May 25. http://www.mises.org/fullstory.asp?control=1522.
Block, Walter E. 2004b. Radical Libertarianism: Applying Libertarian Principles to Dealing with the Unjust Government, Part I. Reason Papers 27: 117–133.
Block, Walter E. 2006. Radical Libertarianism: Applying Libertarian Principles to Dealing with the Unjust Government, Part II. Reason Papers 28: 85–109.
Block, Walter E. 2007. Ron Paul and Matching Funds, October 1. http://archive.lewrockwell.com/block/block86.html.
Block, Walter E. 2008. Replies to Readers, September 23. http://archive.lewrockwell.com/block/block108.html.
Block, Walter E. 2009a. Libertarian Punishment Theory: Working for, and Donating to, the State. Libertarian Papers 1 (17) http://libertarianpapers.org/2009/17-libertarian-punishment-theory-working-for-and-donating-to-the-state/.
Block, Walter E. 2009b. Toward a Libertarian Theory of Guilt and Punishment for the Crime of Statism. In Property, Freedom and Society: Essays in Honor of Hans-Hermann Hoppe, ed. Jorg G. Hulsmann and Stephan Kinsella, 137–148. Auburn, AL: Ludwig von Mises Institute.
Block, Walter E. 2010. You are a Rotten Kid (Rent Control and Libertarianism). February 27. http://archive.lewrockwell.com/block/block150.html.
Block, Walter E. 2011a. Hoppe, Kinsella and Rothbard II on Immigration: A Critique. Journal of Libertarian Studies 22: 593–623. http://mises.org/journals/jls/22_1/22_1_29.pdf.
Block, Walter E. 2011b. Rejoinder to Hoppe on Immigration. Journal of Libertarian Studies 22: 771–792. https://www.mises.org/library/rejoinder-hoppe-immigration; http://mises.org/journals/jls/22_1/22_1_38.pdf.
Block, Walter E. 2011c. May a Libertarian Take Money From the Government? March 11. http://archive.lewrockwell.com/block/block175.html.
Block, Walter. 2012. James Buchanan on Inheritance: A Critique. Journal of Entrepreneurship and Public Policy 1 (2): 159–165.
Block, Walter E., Chris Arakaky. 2008. Taking Government Money for Grad School? May 23. http://archive.lewrockwell.com/block/block100.html.
Buchanan, James M. 1983. Rent Seeking, Noncompensated Transfers, and Laws of Succession. The Journal of Law and Economics 26 (1): 71–85.
Chodorov, Frank. 1962. Taxation Is Robbery. In Chodorov, Frank. Out of Step: The Autobiography of an Individualist, 216–239. New York: The Devin-Adair Company. http://www.mises.org/etexts/taxrob.asp.
Cohen, G.A. 1995. Self-Ownership, Freedom, and Equality. Cambridge: Cambridge University Press.
Cowen, Tyler (ed.). 1988. The Theory of Market Failure: A Critical Examination. George Mason University Press.
De Jasay, Anthony. 1989. Social Contract, Free Ride: A Study of the Public Goods Problem. London: Oxford University Press.
DiLorenzo, Thomas J. 2012. The Rothbardian Analysis of the State. September 14. https://mises.org/library/rothbardian-analysis-state-0.
DiLorenzo, Thomas J., Walter E. Block. 2017. An Austro-Libertarian Critique of Public Choice. Addleton Academic Publishers.
Feser, Edward. 2000. Taxation, Forced Labor, and Theft. The Independent Review 5 (2): 219–235. JSTOR, JSTOR, www.jstor.org/stable/24562647.
Goldberg, Bruce. 1961. Review of Rand’s ‘For the New Intellectual’. New Individualist Review, November: 17–24. objectivistliving.com/forums/topic/10595-bruce-goldbergs-review-of-for-the-new-intellectual/.
Hart, H. 1955. Are There Any Natural Rights? The Philosophical Review 64 (2): 175–191. https://doi.org/10.2307/2182586.
Holcombe, R.G. 1997. A Theory of the Theory of Public Goods. The Review of Austrian Economics 10 (1): 1–22.
Hoppe, Hans-Hermann. 1989. Fallacies of the Public Goods Theory and the Production of Security. Journal of Libertarian Studies 9 (1): 27–46.
Huemer, Michael. 2002. Is Benevolent Egoism Coherent? The Journal of Ayn Rand Studies 3 (2): 259–288. JSTOR, JSTOR, www.jstor.org/stable/41560189.
Hummel, Jeffrey Rogers. 1990. National Goods Versus Public Goods: Defense, Disarmament, and Free Riders. The Review of Austrian Economics 4 (1): 88–122.
Michael, M.A. 1997. Redistributive Taxation, Self-Ownership and the Fruit of Labour. Journal of Applied Philosophy 14: 137–146. https://doi.org/10.1111/1468-5930.00050.
Nozick, Robert. 1974. Anarchy, State and Utopia. New York: Basic Books.
Nozick, Robert. 1971. On the Randian Argument. Pacific Philosophical Quarterly 52 (2): 282.
Osterfeld, David. 1989. Anarchism and the Public Goods Issue: Law, Courts and the Police. The Journal of Libertarian Studies 9 (1): 47–68.
Pasour Jr, and C. Ernest. 1981. The Free Rider as a Basis for Government Intervention. The Journal of Libertarian Studies 5 (4): 453–464.
Rand, Ayn. 1967. Capitalism: The Unknown Ideal. Signet.
Rand, Ayn. 1964. The Virtue of Selfishness. Signet.
Rothbard, Murray N. 1977. Power and Market: Government and the Economy. Menlo Park, CA: Institute for Humane Studies. https://mises.org/library/man-economy-and-state-power-and-market/html.
Rothbard, Murray N. 1978. For a New Liberty. New York: Macmillan.
Rothbard, Murray N. 1981. Taxation: Is It Voluntary? Libertarian Party News, March–April: 13–15.
Rothbard, Murray N. 1997. The Logic of Action: Applications and Criticism from the Austrian School, vol. II. Cheltenham, UK: Edward Elgar.
Rothbard, Murray N. 1998[1982]. The Ethics of Liberty, New York: New York University Press. http://www.mises.org/rothbard/ethics/ethics.asp; https://mises-media.s3.amazonaws.com/The%20Ethics%20of%20Liberty_0.pdf?file=1&type=document.
Rothbard, Murray N. 2007. Can There Be a ‘Just Tax’? http://mises.org/daily/2510.
Schmidtz, David. 1991. The Limits of Government: An Essay on the Public Goods Argument. Boulder, CO: Westview Press.
Sechrest, Larry J. 1999. Rand, Anarchy, and Taxes. The Journal of Ayn Rand Studies 1 (1): 87–105. JSTOR, JSTOR, www.jstor.org/stable/41560112.
Sechrest, Larry. 2003. Privateering and National Defense: Naval Warfare for Private Profit. In The Myth of National Defense: Essays on the Theory and History of Security Production, ed. Hans-Hermann Hoppe. Ludwig von Mises Institute: Auburn, AL.
Sechrest, Larry., 2004a. Private Provision of Public Goods: Theoretical Issues and Some Examples from Maritime History. ICFAI Journal of Public Finance 2 (3): 45–73.
Sechrest, Larry. 2004b. Public Goods and Private Solutions in Maritime History. The Quarterly Journal of Austrian Economics 7 (2) (2004): 3–27.
Sechrest, Larry. 2007. Privately Funded and Built US Warships in the Quasi-war of 1797–1801. The Independent Review 12 (1): 101–113.
Spooner, Lysander. 1966[1870]. No Treason: The Constitution of No Authority and A Letter to Thomas F. Bayard, Larkspur. Colorado: Rampart College. http://jim.com/treason.htm.
Spooner, Lysander. 1886. A Letter to Grover Cleveland, on his false Inaugural Address, the Usurpations and Crimes of Lawmakers and Judges, and the consequent Poverty, Ignorance, and Servitude of the People. http://oll.libertyfund.org/titles/spooner-a-letter-to-grover-cleveland-1886.
Tinsley, Patrick. 1999. Private Police: A Note. Journal of Libertarian Studies 14 (1): 95–100.
Vance, Laurence M. 2006. The Fraudulent Tax. October 9. http://www.mises.org/story/2327.
Vance, Laurence M. 2007. Real Tax Reform. April 16. http://www.mises.org/story/2552.
Author information
Authors and Affiliations
Corresponding author
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2020 Springer Nature Singapore Pte Ltd.
About this chapter
Cite this chapter
Block, W.E., Torsell, C. (2020). Libertarian Perspectives on the Ethics of Taxation. In: van Brederode, R. (eds) Ethics and Taxation. Springer, Singapore. https://doi.org/10.1007/978-981-15-0089-3_4
Download citation
DOI: https://doi.org/10.1007/978-981-15-0089-3_4
Published:
Publisher Name: Springer, Singapore
Print ISBN: 978-981-15-0088-6
Online ISBN: 978-981-15-0089-3
eBook Packages: Law and CriminologyLaw and Criminology (R0)