Advocates of a fully free, laissez-faire society are likely familiar with the following scenario. You provide a clear, well-concretized explanation of what capitalism is and why it is moral, only to be met with a question that seemingly wipes out everything you just said: “But if physical force were legally forbidden, taxation would be out; so how would a rights-protecting government be financed?” The implication being: A truly free society might sound great in theory, but it’s impossible in practice.
In addressing this question, it is important to emphasize that the elimination of taxation is not the first but the last step on the road to a fully rights-respecting society.1 The first steps are to educate people about the moral propriety of freedom, to cut government spending on illegitimate programs, and to begin the process of limiting government to the protection of rights. But, here as everywhere, the moral is the practical, and we who advocate a rights-respecting society would do well to understand—and to be able to articulate—how the government in such a society would be funded.
Let’s begin by summarizing the nature of government, the reason we need it, and its legitimate functions and elements. Then we’ll turn to the question of how to fund it.
The Nature, Need, and Proper Functions of Government
A government is an institution with a monopoly on the use of physical force in a given geographic area. The government can legally use force, and no one else can—unless the government permits it. A government makes laws, enforces its laws, and punishes those who break its laws. This is true of all governments, proper and improper.
A proper government is one that protects rights by banning physical force from social relationships, and by using force only in retaliation and only against those who initiate its use.2 A proper government outlaws murder, rape, assault, fraud, extortion, and the like; prosecutes those it has reason to believe have committed crimes; punishes those found guilty of committing crimes; protects citizens from foreign aggressors; and settles rights-oriented disputes among citizens.
Why do we need such an institution? Why can’t we do without government? The answer, in brief, is that we cannot live and prosper if we constantly have to worry about being assaulted by criminals, being attacked by foreign aggressors, or coming to blows or worse with fellow citizens. Let’s elaborate briefly on each point.3
1. Some people don’t respect rights and will use force to get what they want.
Consider Ted Bundy, Bernie Madoff, Bill Ayers, the Mafia, the Ku Klux Klan, and company. If we want to live peaceful, productive, happy lives, warring with such goons is no way to do it. By delegating to a government the task of using retaliatory force against those who initiate force, we can go about living and loving our lives as we morally should. In the absence of a government, we would be constantly consumed with the problem of protecting ourselves from predators and nihilists, gangs of which would roam the cities and countryside seeking to rape, pillage, and plunder; and we would have to form militias or gangs ourselves in order to protect our lives, our property, our loved ones.
A rights-protecting government solves this problem by providing rights-protecting laws, police, courts, and prisons.
2. Foreign aggressors, rogue regimes, and terrorist groups can and do seek to coerce or kill us.
Consider the murderous regimes in Iran, Saudi Arabia, and North Korea; and terrorist groups such as al Qaeda, Hamas, and Hezbollah. When theocratic, fascist, socialist, or other evil regimes or groups threaten our lives or liberties, we need a means of eliminating the threats. A rights-protecting government, equipped with a capable military, serves that purpose. Without such a government, we would have to fend off foreign aggressors ourselves—which would require us to form militias and gangs—which, in turn, would cause the further problem of the threats that such gangs, unhindered by a government of laws, would pose to our rights.
A rights-protecting government solves this problem by providing an objectively controlled military, whose function is limited to dealing with foreign aggressors.
3. Rights disputes can and do arise among rational, honest, rights-respecting people.
Good people can and sometimes do disagree over business contracts, marriage contracts, property lines, rights-of-way, water supplies, and other matters pertaining to their rights—and sometimes they are unable to settle such disputes on their own. In the absence of a government with objectively defined laws and impartial courts, such disputes could and sometimes would turn violent.
A rights-protecting government solves this problem by providing an objective means of adjudication.
In sum, a government dedicated to the protection of rights enables us to live in relative safety from criminals and foreign aggressors, and to peacefully settle disputes concerning rights.
What would be the scope of such a government? And what would it consist of?