Want to Rip Off Your Neighbor? Form a GovernmentRobert Higgs • Sunday May 6, 2012 4:59 PM PDT •
Facts of the case: My wife and I live in an area with one neighbor nearby. One day, I knock on my neighbor’s door and demand that he give me $10,000. He wants to know what the devil I am talking about.
I explain that the people—most of them, in any event—in our area have seceded from St. Tammany Parish, the state of Louisiana, and the United States of America and formed a new government whose territory comprises his property and ours. We have also written and ratified, with our own votes of approval, a constitution for the new country, which we have decided to call Southland. We have also conducted elections in which a 2/3 majority of the eligible voters elected Elizabeth and me to fill all of the new government’s offices, including tax collector (I won this vote myself).
My neighbor protests that he has never heard of any of these developments and wants nothing to do with them, to which I reply that he has no choice in the matter because the constitution of Southland gives its government the power to tax, I am the duly elected tax collector, and he is at fault for not following the news more closely and not participating in public affairs. Moreover, the constitution provides for an army to enforce Southland’s laws (I have been duly appointed chief of staff), and if he refuses to pay his tax, the authorities will have no choice but to use violence against him to compel payment.
He protests that this whole scheme is madness, that I have gone mad, too, and that he will not give us a dime. Elizabeth and I then form up the ranks of Southland’s army: I constitute the infantry, armed with my trusty shotgun, and she leads the army band, which consists of herself with her flute. We march to our neighbor’s house and threaten to kill him if he does not give us the $10,000 tax (authorized in a statute enacted by Southland’s new government). When he decides that a $10,000 loss is better than being killed by violent maniacs, we march home to the Treasury (it’s at our house) with our revenue—a sum whose use will be determined by the Southland legislature, in which Elizabeth and I are the duly elected lawmakers.
Question for the student: Except with regard to scale (and voting by a woman), how does the preceding account differ in any essential way from the situation brought about by the formation of the United States of America? (Hint: look up Whiskey Rebellion or read something that challenges the orthodox history of taxation.)