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Sunday, March 15, 2009

The Free Rider Fallacy

There's a common pro-State troll counter-argument to tax resistance. It's the "free rider" fallacy.

"I pay taxes to support State police, roads, national defense, etc. If you don't pay taxes, then you're using these services without paying for them."

Another variation is

"I have to pay taxes. Therefore, you should also have to pay taxes."

This second version is more like "My spouse abuses me. Therefore, your spouse should abuse you." or "Criminals break into my apartment and steal from me. Therefore, you shouldn't mind if criminals break into your apartment and steal from you."

A counter-argument to the second version is "You're free to practice agorism and tax resistance just like me. I like it if other people copy my methods, because that decreases the resources available to the bad guys!"

The first version is known in pro-State troll economics as the "Free Rider Problem". Everyone pays for a mandatory State service, such as roads, schools, national defense, police, etc. People who evade taxes are benefiting from these services without paying for them. Therefore, State enforcers are justified using violence to force people to pay taxes. A tax evader is "stealing" police protection, roads, national defense, police, etc.

The Free Rider Problem also is quoted in union negotiations, justifying closed shops. The theory is that all employees benefit from the union contract, and therefore all employees should be forced to pay union dues. In practice, the closed shop law prevents each worker from negotiating an individual contract with the employer. The union bureaucrats become State employees rather than workers' advocates, because the workers have no choice but to pay union dues. Like most State restrictions of the market, the restriction benefits workers of below-average ability at the expense of workers of above-average ability.

In reality, the Free Rider Problem becomes the Forced Rider Problem. State bureaucrats are providing police protection, but charge a higher price and provide lower quality service than in a true free market. All State services always cost a higher price and have lower quality than would exist in a true free market. Even if State bureaucrats do a lousy job, they are guaranteed their salary via taxes/violence/theft.

Perversely, the incentive is for inefficiency rather than efficiency. That is the "Problem! Reaction! Solution!" paradigm. State public schools are lousy. The mainstream media says "OMFG!! The public school system is failing!! Spend more money on public schools!!" More resources are spent/wasted on public schools. The net effect is that the State bureaucrats who did a lousy job get a raise! Since the State has a monopoly, the only "solution" when the State is doing a lousy job is to give State bureaucrats more power and resources!

Similarly, "The financial system in the USA is nearly insolvent. Therefore, we must give the bankers more money!" The parasite must be saved, lest the host die.

Via taxes, I am a Forced Rider on expensive lousy quality services provided by State bureaucrats. Tax resistance/evasion is the only means to refuse to pay for a lousy quality product. Pro-State trolls say "If you don't like it, vote for someone else!", but voting is pointless. Voting merely provides the illusion of accountability for State bureaucrats.

Pro-State trolls say "Tax evaders are free-riding off the services provided by the State." The reality is that, via taxes, I am a Forced Rider for State services. Pro-State troll economists say that certain services can only be provided by a monopolistic State, such as national defense, police, and justice. That is false.


fritz said...

Maybe if all the forced riders drag something out of the vehicle. It could cause enough friction to stop the ride completely. I personally have my foot out the door, trying to provide as much friction as I can.


Anonymous said...

Thanks for going over this topic in particular.

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