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On Pushing the Button–the problem with magic

Update:  See Libertarian Button Pushers and Political Compromise, By Patrick McEwen; also also Defend Hoppe (comments); Push the Button? (comments); Stephan Kinsella Ought To Shut His Stupid Cake Hole; Big Government, Thy Name is Privatization (comments).

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Posted by Stephan Kinsella on February 4, 2005 12:40 AM

Some of us “radical” (read: principled) libertarians are sometimes accused of refusing to compromise, refusing to accept incremental movements toward liberty; that we would only accept a magical “push of the button”. Of course, this is not true. I want the income tax abolished, but I would view a reduction in the marginal tax rates as an unambiguous improvement by libertarian standards.

The problem lies in reforms that do not clearly and unambiguosly improve the situation, however minutely; but that might even make things worse, at least for some people. For example, moving to a “flat tax” of 20% (with no deductions at all) would be a good thing for me, and maybe even “overall” (whatever that means), but it would amount to a punitive tax increase on people making, say, $25K a year, who pay almost no income tax now. Such a reform would decrease rights violations for some, and increase it for others.

Likewise, talk about shifting from income to VAT or sales tax is dangerous; the problem is not the form, but the level. A sales tax would not replace the income tax; it would add to it. The voucher system is problematic not because it is not a whole solution, but because it is not even moving in the direction of more liberty; it would actually expand the number of education welfare recipients, and further increase the state’s control over currently private schools.

Similarly, one significant problem with the proposed social security reform is not that it does not go far enough. If it made an incremental, unambiguous improvement in terms of liberty and rights, I would favor it.But both the current system and the proposed new system are going to be terrible. I can’t really rely on receiving benefits from the system, whether it’s reformed or not; and even if I got to invest a paltry 4% of my income up to the new FICA income cap (currently about $90K but likely to increase, as noted below), that would only be at most about $6-7K a year–in a conservative, government limited set of investments. That’s just noise.

However, the the new plan will almost certainly result in an increase in the limit of income subject to FICA. I.e., my taxes will go from 6.2% of $90K to 6.2% of say, $130K at least (for now–probably unlimited thereafter). This means at least an additional $2400 or so of taxes for me, and another $2400K for my employer (which in the end, acts as a tax since it reduces wages). I.e., the cost to anyone earning decent money will be roughly $3-4K a year in extra taxes, just for the privilege of putting $7K of my own money into a government-controlled investment account (you can already put $15K into 401k which has more flexibility, and up to about $40K into a SEP-IRA if you have a business with enough profit, so the $7K in a much less attractive account is not that great a deal).

I would rather they just leave the current FICA tax in place, with no increase; means-test social security benefits, and label it what it is: welfare; and increase the limits on how much you can put into a 401k pre-tax. That way at least the dreadful tax would not increase as much and working people would stop stupidly relying on SS benefits being there when they retire.

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From this thread:

I don’t think the question is meaningful. You are leaving too many means out. You are assuming too many magical things. Clarify it and I can answer it.

For example, what do you mean, end gov’t w/ a push of the button? how does the button do this? Turn poeple into robots? change their mind? blow up go’vt buildings? the only way to get rid of the state really is for most poeple not to believe in it. Are you saying woudl I prefer most poeple not believe in the state’s legitimacy? Or would I push a button that would make them change their minds? If so, how?

As I wrote elsewhere,

I will tell you I have no idea what this means. Magic makes no sense to me. I could only answer such a question if the means by which the end occurs is described. For example, if the magic button destroys all life on earth with a billion hydrogen bombs, that would be one way of achieving your proposed end result. I would not be in favor of that. Presumably you have some other meachanism in mind that achieves some defined result–could you explain the mechanism, and the result? That would allow other libertarians to evaluate whether they believe this action would be consistent with liberty or not.

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From a defunct thread:

Kennedy: “You’ve appeared to say that you would favor open borders now if the state were abolished now, but I note that Hoppe’s argument which you cite here would still stand intact. So would you really favor the immediate abolition of the state, or is that a disingenuous pose?”

Hoppe’s argument would not call for any restriction of immigrants if there were no states. In fact there would be no immigrants, only invitees of particular owners.

I have no idea what it measn to “favor the immediate abolition of the state”. I say the state is illegitimate and not justified. What in the world does it mean for it to be “immediately abolished”? I think of the Genie jokes where the guy wishes for something and all kinds of bizarre changes have to be made in the world to make the outcome happen. does it mean that the state evaporated even though most people remain socialistic? If so, it would soon arise again. Does it mean that all state employees died instantly? I would not oppose this but again, a new state would arise. Does it mean that the vast majority of poeple change their minds and now favor voluntarism and libertarianism? That would do it, but how does such a change of mind occur, espeically “immediately”? These Leonard Read “push the button” hypos are stupid.

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  • Stephan Kinsella

    Some of us “radical” (read: principled) libertarians are sometimes accused of refusing to compromise, refusing to accept incremental movements toward liberty; that we would only accept a magical “push of the button”. Of course, this is not true. I want the income tax abolished, but I would view a reduction in the marginal tax rates as an unambiguous improvement by libertarian standards.

    The problem lies in reforms that do not clearly and unambiguosly improve the situation, however minutely; but that might even make things worse, at least for some people. For example, moving to a “flat tax” of 20% (with no deductions at all) would be a good thing for me, and maybe even “overall” (whatever that means), but it would amount to a punitive tax increase on people making, say, $25K a year, who pay almost no income tax now. Such a reform would decrease rights violations for some, and increase it for others.

    Likewise, talk about shifting from income to VAT or sales tax is dangerous; the problem is not the form, but the level. A sales tax would not replace the income tax; it would add to it. The voucher system is problematic not because it is not a whole solution, but because it is not even moving in the direction of more liberty; it would actually expand the number of education welfare recipients, and further increase the state’s control over currently private schools.

    Similarly, one significant problem with the proposed social security reform is not that it does not go far enough. If it made an incremental, unambiguous improvement in terms of liberty and rights, I would favor it.

    But both the current system and the proposed new system are going to be terrible. I can’t really rely on receiving benefits from the system, whether it’s reformed or not; and even if I got to invest a paltry 4% of my income up to the new FICA income cap (currently about $90K but likely to increase, as noted below), that would only be at most about $6-7K a year–in a conservative, government limited set of investments. That’s just noise.

    However, the the new plan will almost certainly result in an increase in the limit of income subject to FICA. I.e., my taxes will go from 6.2% of $90K to 6.2% of say, $130K at least (for now–probably unlimited thereafter). This means at least an additional $2400 or so of taxes for me, and another $2400K for my employer (which in the end, acts as a tax since it reduces wages). I.e., the cost to anyone earning decent money will be roughly $3-4K a year in extra taxes, just for the privilege of putting $7K of my own money into a government-controlled investment account (you can already put $15K into 401k which has more flexibility, and up to about $40K into a SEP-IRA if you have a business with enough profit, so the $7K in a much less attractive account is not that great a deal).

    I would rather they just leave the current FICA tax in place, with no increase; means-test social security benefits, and label it what it is: welfare; and increase the limits on how much you can put into a 401k pre-tax. That way at least the dreadful tax would not increase as much and working people would stop stupidly relying on SS benefits being there when they retire.

    Published: February 4, 2005 7:52 AM

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I agree of course with Stepp about gradualism and button-pushing, even if button-pushing hypos are notoriously problematic b/c they never specify the means of achieve some specified end, and thus sound like magic. But any principled defense of rights, and the concomitant principled critique of state action, recognizes that any ongoing rights violation must stop as soon as possible, period; and that unjust state laws ought to be abolished immediately, not gradually.A parallel can be seen in the case of the Austrian theory of the business cycle. Once state-induced (via artificially lowered interest rates, inflation of money/credit supply, possible only with a state money system that has commandeered and eviscerated real money, i.e. gold) malinvestment systematically sets in, the liquidating boom that will restore economic health becomes inevitable. It can be delayed by gradualism etc.–but this only extends malinvestments and stimulates more of them, thus making the inevitable correction only more painful and damaging.

[Comment at 09/27/2008 09:32 PM by Stephan Kinsella]

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For Rothbard on this, see Toward a Theory of Strategy for Liberty.

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