The Increasingly Complex Relationship Between Man and State

“Whatever is true in one form of words, is true in every other form of words, which conveys the same meaning.” – John Stewart Mill

Few and confused are the pundits lauding the vitality of the American economy. Worse still, many and confused are those who offer solutions.

More often than not, situations brought about by the wasteful ineptitude of the state are met with calls for more state involvement, as if a double dose of poison will somehow dilute the effects of its initial involvement. We see this everywhere today, as central banks shackle their present and future citizens with more debt in order to treat a problem caused by just that: too much debt.

We offered a broad-brush overview of the nation’s general trajectory in the Weekend Edition:

“According to the official figures, the national debt currently stands at $14.01 trillion dollars. That’s more than $45,000 per citizen, or almost $127,000 per taxpaying American. If you add in debt held by households, state and local governments and financial institutions, that number (the total US debt) blows out to well over $55.5 trillion, or more than $680,000 per average family. How much in savings does the average family have to offset this amount? $7,918.

“Letting these figures run for a few years,” we continued, “based on their current trajectories, we see that, in 2015, the national debt explodes to over $22 trillion. Per citizen, we’re now looking at close on $70,000, or $184,000 per taxpayer. Total debt, as measured above, has now grown to over $63 trillion and the average family’s share of that stands at nearly three-quarters of a million dollars. Average savings per family, by the way, have now fallen to just $2,791.”

Remarkably, the general consensus on how best to overcome this catastrophic trend invariably involves, in some form or another, additional government intervention and, by extension, spending. The debate appears centered on how best to manage this agent of coercion, the state, rather than on whether we need it at all. Indeed, the mere mention of free-market principals invokes fear, uncertainty and, usually, an abrupt end of the discussion. But look at the facts:

Back in 1903, government spending in the US, expressed as a percentage of total GDP (leaving aside for a moment the spurious nature of that measurement), weighed in at a paltry 6.8%, or $25.9 billion dollars. Although the state’s “mission creep” tended steadily higher over the next couple of decades (with an conspicuous spike circa WWI), that percentage remained in or around the low teens until the Great Depression, when the combined efforts of President Hoover and FDR’s New Deal effectively doubled state involvement. By 1940, government spending accounted for one-fifth (20.14%, or just over $100 billion) of the nation’s GDP. Fast-forward to 2010 and spending by the state had rocketed to over 43% of the nation’s total economic output.

We’ll leave it to the reader to decide whether the nation’s star is today rising or setting, whether her future looked brighter at the beginning of the 20th or 21st century.

Of course, arguments from effect tend to be cumbersome and problematic, due in part to the unreliability (not to mention the sheer volume) of statistics supporting this or that outcome. “Lies, damned lies and statistics,” goes the old saw. For every honest, objective, impartial statistician, there are ten million idiots who believe his lies.

It is perhaps more helpful, therefore, to return to basic, first principals. Such is the politico-doublespeak of our time that it seems fit to remind ourselves once in a while, if not constantly, of the true nature of things.

If, as William Shakespeare assures us, “a rose by any other name would smell as sweet,” then the law of identity to which he refers leaves us with more than just springtime aromas and romantic iambic pentameter. If, as that law states, A really is A (and A only), then we must not forget to apply this cornerstone of logic elsewhere – even, and especially, to those things which omit a decidedly less alluring scent.

With this in mind, let’s revisit the relationship between man and the state that governs him.

The state, by its very nature, is an agent of force. Allen Thornton puts it thus is his essay, Laws of the Jungle:

“What do you think ‘govern’ means? It doesn’t mean ‘suggest’ or ‘implore.’ It doesn’t mean two people sitting down, talking it over, and compromising. ‘Govern’ means ‘force’ and ‘force’ means ‘violence.’”

Concludes Thornton: “When you advocate any government action, you must first believe that violence is the best answer to the question at hand.”

While it is true that a great many individuals voluntarily enable it, that fact remains majority rule does not turn fallacy to truth. It does not morph debt into credit, liability into asset, nor wrong into right. A rose is a rose (“is a rose is a rose”) whether the majority believes it to be so or not. Likewise, acts of force are exactly that, regardless of how many people vote for them and whatever name they are so given.

The expropriation of private property – which in any other domain is punishable by the very institution that holds a monopoly on such an action; the state – is commonly known as theft. Of course, when the state commits such an act, on threat of imprisonment, fine or other use of force, we refer to it by a subtler label: tax. Let us not be confused here. There exist only two possible forms of wealth transfer – one voluntary, the other coercive. One can no more be “voluntarily taxed” as one can be “partially pregnant.” A = A, no more, no less and no other.

Might the problem, therefore, be the agent of force itself – the ever-expanding, increasingly costly, over-reaching arm of the state? And, if so, why are we debating how best to manage it instead of working to rid ourselves of its existence?

To paraphrase that long dead poet: What’s in a name? That which we call force, by any other name still robs us of our liberty.

Joel Bowman

for The Daily Reckoning