Binary Intervention: Taxation II

0:00Before I get into the topic for today, I had a few preliminary remarks. I know that there'll be formal thank yous, but I just wanted to express my thanks to Lou and Christy and the Mises Institute staff, to Alice Lilly and all the donors, especially to Floyd Lilly, who gave a speech on, you know, three seconds notice. That was magnificent. I want to talk about errors. I'm a big believer in rooting out all errors. I think that this is good for its own sake because we want to build a beautiful edifice, we want to build a Rembrandt or whatever, and also I think that the stronger the austro-libertarian edifice is, the better the implications for liberty. When speakers give speeches extemporaneously based on notes, you get errors, slips of the tongue, what have you.

0:52Joe made one, I discussed this with him. He said that the weather is an uncontrollable thing, and in our view, Joe certainly agrees with me this, the weather is really government's fault. Look, they take half the GDP, roughly, and they've done it for decades. If they hadn't taken half the GDP, the cloud seeding and all that technology would have been progressed a little bit more than it is now. You know that in 500 years there'll be no typhoons or earthquakes or any of that stuff. We might have saved some lives and, you know, made the rain come in between 2 and 4 in the morning or something like that. So weather is not an uncontrollable thing, it's government's fault. I've made a few errors myself, I think much more serious.

1:39One of them is I screwed up the difference between hypocrisy and a performative contradiction. Hypocrisy is saying, you know, charity is good but you don't give to charity. I'll give to charity a performative contradiction, I am dead, and not I am dead tired, just that I am dead, would be that the very saying of it is undermined by the saying of it. So there's a difference between a performative contradiction and hypocrisy. Another thing I screwed up on royally was the secession. Marion asked me a question and I really didn't understand the sophistication of it, and it was really unfair of him to do it because he's more of an expert in this than I am. I wrote a PhD dissertation on that. For me, secession is, you know, one of many, many issues and he's more of an expert on that. The way I see it now, and I discussed this with my buddy Roderick Long, states have no rights.

2:29So the big state has no right to allow a little state to form, a little state has no right to secede, individual people do. And as a matter of practicality, you never usually get gigantic differences between the libertarianness of the big one and the libertarianness of the little one. But you could imagine one where the overall state was pretty good, but the little state that was seceding was horrible. Nazis or commies or something like that. And what Roderick says is nobody has any rights here, states don't, but individuals do. And if the individuals secede, which they have a right to do, and then they violate the rights of the smaller group within that smaller seceding state, Well, then we should send in a Lincoln Brigade or something like that, well-named because they were a bunch of Marxists, the ones that went into the 1936 Spanish Civil War.

3:25And we send individual people in, or individual people just go in and help. Or you make some sort of deal when Quebec wants to secede from Canada, you say, sure, but when Montreal wants to secede from you, what do you say about them, Apple? So you try to promote some consistency. The difficulty with these questions, you get a lot of second-bestness and you get a lot of empirical issues where praxeology just can't apply. So there are rational people, all of whom subscribe to the basic premises, sometimes disagree. Another thing I wanted to mention, I didn't think that, who was it that asked about professors who teach at public schools?

4:11I think that the answer, I'd like to give a different answer or what I think is a better answer. I think that the approximation, the first approximation of tax payers versus tax recipients is a very good one. But I think we can do a little bit better than that. The way I look at this, and I've published several articles on this, well I've published several articles on everything so there's no exception. The way I look at this is through the Nuremberg trial. Suppose the libertarians had a Nuremberg trial, what would we do? And I think that all the tax recipients would be in a dock, but some of them would be innocent. For example, free enterprise teachers who teach in public schools such as me. And the way I look at it is this.

4:58What I have here is two axes. One axis, the leader, the middle guy, the bottom guy. And then I have a bad to worse axis. In other words, this is horrible stuff. This is okay, but it's bad when the government does. In other words, we would have education in libraries and museums in the free society. So that's the least bad. The very bad would be the Fed, because we wouldn't have a Fed. Even worse would be public highways, because they kill 40,000 people a year. And much worse than that would be a concentration camp. So in other words, we have an axis of horribleness. To the right is more horrible, to the left is less horrible. And here are the leaders. And then I have this sort of a demand curve, if you will.

5:43Namely, the very top people, the education secretary and the undersecretary, like Bill Evers. I think he's the under. Those people would be guilty of something, whereas the ordinary person who works in a library would not be severely dealt with. The chief of the Fed would be in trouble, but the people who wash the bathrooms in the Fed would not be a simile for the highways. Some guy who sweeps the highways would be okay, but the leaders of it. And I'm not sure about even people who push a broom in the concentration camp. That's why I put the thing crossways. Now, I do have a Marxist professor and a pre-enterprise professor, and it matters what you're teaching. Now, of course, it's a little self-serving because I would be down here because I taught at public universities.

6:31But the Marxist professors who taught at public universities would be in trouble. If they taught at private universities, this would be free speech. So this is just an alternative way of looking at it. These are very controversial areas, but I thought I'd pipe in and give what I thought would be a good answer to that. Okay, with these preliminaries, I now want to talk about the subject to which I've been assigned. And that's taxes. Jeff Herbiner and I are sort of partners on this. He did like the first half of this and I do the second. I'm very much given to diagrams. Somehow a picture says a thousand words. I see things easier in diagrams. So I'll offer this diagram. This is the way most public finance courses are taught, where you have progressive, proportional and regressive. And over here you have 15 different kinds of taxes.

7:28And the usual course is you go over each tax and you compare progressive, proportional and regressive. Sometimes, rarely, you get a course where you just go the first third of the semester, you take all progressives and compare them and then all proportionals and compare them. You get, at the end, you cover everything, but that's sort of the way most public finance courses are organized. Here is a way of looking at progressive, proportional and regressive. Over here I have Y for income. Over here I have the tax rate and over here the tax revenue. Progressive goes this way, proportional is the flat tax. Regressive is flat or decreasing. And this wouldn't be bending backwards, but I couldn't make it better than that.

8:14So, it would be increasing at an increasing rate, increasing at a proportional rate, or increasing at a decreasing rate. So, these are just ways of looking at the tax business. Okay, what does Murray have to say about taxes? Boy, that's a stupid question, isn't it? He's not in favor of them. And the word, if I had to pick one word to summarize his view on taxes, he's relentless. sort of the way that that Bob Murphy said that Boehm-Bawerk was on fallacious interest rates he just sort of goes over and over you saw almost you're almost cheering for the underdog I mean you know if you sort of favor the underdog when you read Boehm-Bawerk you sort of say well you know maybe these guys aren't so bad so as I'm reading this I'm saying well maybe taxes aren't really so bad I mean it's a little sick but and I came to my right senses pretty quickly but But Murray just pulverized it, it's magnificent to read this stuff.

9:14The first point he makes, and again this is a continuation of what Jeff said so I'm not going to repeat what he said. The conservative economists are very biased in favor of saving, you know, if any tax lowers saving they get all upset. And Murray is saying, you know, what's so great about saving, I mean not that we're We're against saving, but the ideal is not to promote saving. We're not saving uberallis. It's rather you want to have the proportion of saving and consumption that is compatible with time preferences of the people. And you don't want to have less saving, but you don't want to have more saving either. He asked, do the poor rob the rich in taxes? And he says, no, the state robs both, which I think is very good. He makes a very good point about, you know, all the...

10:03If you look at the conservative economists, you know, progressive taxes are horrible, and proportional taxes or the flat tax is supposed to be the free enterprise idea. You know, that if you favor free enterprise, then you favor flat taxes or proportional taxes. And Murray says, this is ridiculous. Look, which would you rather have, a flat tax of 90% or a very progressive tax where The lowest income paid one-tenth of one percent, and the highest income paid two percent of taxes. It would be very progressive, but it would be very low. And Murray says, of course, we would favor the less harm, and the less harm means less government tax take. Talks about tax illusion, which is similar to money illusion, which is people think that they base their decisions on their gross income, which is nonsense.

10:54Rather, they base their decisions on the money that they actually get. They're not fooled by having a big gross income and their take-home pay is much less. They base their decisions on their take-home pay. Okay, now we get to Henry George. Before we get to Henry George, I have to acquaint you with a Murray Rothbard rule. The Murray Rothbard, he has many Murray Rothbard rules, but one of the Murray Rothbard rules is that people, that is other people, not us guys, we're the good guys. Other people specialize in what they're the worst on. For example, Milton Friedman is really sound as a bell. He's wonderful on minimum wage, rent control, tariffs, the AMA, you know, like medical licensing. He's really, really good. What does he specialize in?

11:40Any of them? No. He barely mentions them. Instead, where did he leave most of his money in his estate? To the voucher plan where, you know, he's not that good. What does he otherwise specialize in? Murray policy, business cycles, where he, from our point of view, is not good at all. It's very similar with Henry George. Henry George was magnificent on everything, except the single tax, the land tax. There he was horrible. And what does he specialize in? On the single tax. He's known only for that. Other than that, he was a laissez-faire, free enterprise good guy. So what's going on here? Murray says the one good thing about Henry Murray George's tax scheme is that he would eliminate all of the taxes and just have a single tax on land and Murray likes the first part, eliminate all of the taxes and he doesn't like the tax on land.

12:35He makes the initial point that the tax can't be shifted, it gets capitalized, it goes back to the factors of production and land is a preeminent factor of production so it can't be shifted to anyone else. The people who it is put on, there'll be no incidents to anyone else, they'll end up paying it. But then he asks, well how do you establish ground rent? I mean, if they're going to take 100% of it and I'm a landowner, why should I charge you anything? I might as well charge you nothing because I'm not going to keep anything. So what should the tax be on? In other words, the idea is my land is worth a lot and in a free enterprise system would be 10,000 a month rent. Fine. But why should I charge you that if I know that they're going to just take it? I charge you zero, so I'll pay zero tax. So he says that the zero tax won't get any revenue,

13:19which I guess is good. Maybe we should convert to the single tax. No, I'm not serious here. Okay, so what's the deal with, why does he hate, why pick on poor land? I mean, land is inoffensive. Henry George has this thing, well, idle land is no good. It's the devil's workshop or something like that. And Murray makes the point that it's idle for a reason, and there are several reasons. One of the reasons is that we've got more land than labor, so we can't use all land. I mean, there's land up in Alaska or in the Rockies that nobody uses. And happily, because if it was the other way around, you'd have unemployed people. Better to have unemployed land than unemployed people. And the other reason, even for land in a downtown area, sometimes you'll see an empty lot, which is obviously not sub-marginal land.

14:10People are waiting to figure out who to give the land to, to most maximize revenues. We don't have instantaneous knowledge, the entrepreneur of land, the land owner, doesn't know how he can maximize the value of his holdings and he has to try and figure it out and during that time there's idle land. Sometimes you see idle stores or idle apartments, not, you don't, idle hotel rooms, you don't can have 100% occupancy of everything and there's nothing wrong with that. While I'm on idle land, I want to take a little bit of a detour and talk about immigration because my view on immigration, I think, is very related to this idle land business. See, the way I figure it on the immigration issue, and by the way, immigration is a very, very divisive issue, Murray, when he initially wrote about immigration, was a free borders and his later writing about it was a closed borders type. Hans Hoppe, who I revere as an Austrian and libertarian theorist, is a closed borders person and there are others among them myself who are open borders.

15:16What's my view? My view is we should have open borders, complete open borders and anyone can come in here and nobody should be stopping them as long as there's one square inch of private land. Namely, if you want to keep the Gaia out, if you want to keep the outsiders out, what you do is you privatize everything, privatize the roads, privatize the parks, privatize everything, and then if anyone comes in, it'll be an invasion or a trespass. You see, what Hans says is, look, there are three things that enter into international trade. One is the free movement of goods, the free movement of investment, and the free movement of Labor or People. Well, with regard to goods, there are two agreeing partners, the exporter and the importer. With regard to investment, there are, again, two people who agree, the investor and the investee. But, Hans says, but in the case of immigration, there's no such thing. Somebody just washes up on our shores with no buy or leave from anyone. Well,

16:20Look, if there's empty land in the middle of Colorado, in the middle of, you know, Utah, Montana, what violation is created by somebody coming in with a helicopter and landing on that un-homesteaded land in the middle of Alaska? What libertarian crime did they commit? The problem I had, and I'll have to revise my thinking and my writing on this, is with regard to sub-marginal land. The point is, land is sub-marginal in a certain context, and in other contexts it's not sub-marginal. In other words, if there are people desperate to flee from foreign dictator types, land in the middle of Colorado, in the Rocky Mountains, won't be sub-marginal even though it was in the absence of them.

17:11So what I have to do is modify my claim and say, As long as there's one inch of non-submarginal land around, we should have open borders. So if you don't want people to inundate us, just privatize everything and then it'll be a trespass unless they come in with permission and then it's compatible with libertarianism. So this is a connection between the immigration and the Georgist view on land. Okay, Murray says that Georgists ignore the importance of time in production. What China and India lack is not land. They've got plenty of sub-marginal land. What they lack is time or investment, development investment. Land speculation is good. It's trying to get property into the hands of the people who can use it best.

17:59The Georgians don't like land speculation because it's non-tangible. But there was a time when the economic community was against services because they were non-tangible. There was a time, the physiocrats I think, I might be wrong on this because I'm no historian of thought that they thought that only farmland was good and anything else was questionable. And Murray's point is that anything between voluntary consenting adults in an economic setting is legitimate, certainly including land speculation. Okay, now we get to canons of just taxation, and this, you know, I was once asked to write a book by my former employer at the Fraser Institute, The Goodness of Government, and I said it's going to be a very short book. Well, you know, if I were asked to write about just taxation, I would say, well, I can write about it, and you know, here's a blank page.

18:54Murray stretches it out. He is relentless. He goes over every jot and tittle of every possible objection or every claim that there is such a thing as just taxation and he bats them all out of the park. I don't know that I'll have time to go over all of them but to just give you a flavor of what he's doing, let me proceed. Okay, so first we're seeking after the just tax and he makes an an analogy between the just tax on the one hand and the just price on the other hand. And what is the just price? Well, the just price is the market price. So if the just price is the market price, then the just tax should be the market tax, if you follow that syllogism. Of course, there is no such thing as a market tax because in the market you can't have a tax because in the market it's voluntary trade and the tax is compulsory trade so you've got a little bit of a contradiction here. So Murray is saying before searching

19:52Looking for the just tax, justify taxation at the outset, and if you can't justify taxation at the outset, how are you going to find a just tax? It's a shimmer. Okay, so what's the first candidate that he is going to bat out of the park? CCCC. I sometimes remember things with those ways, collection costs, convenience, and certainty. Collection Cost, Convenience and Certainty. The idea here is that if collection costs are minimized, if tax is more convenient and if it's certain, then it's a better tax than not. And Murray says, reducing collection costs, well the bureaucrat, if you reduce collection costs, the bureaucrat doesn't have a job and he says, you know, he favors higher collection costs and who can say him nay because you can't have interpersonal comparisons of utility And the idea is that if there's anyone who objects on a reasonable ground, then you can't unambiguously conclude that collection cost reduction is a good thing or a thing in the direction of a just tax.

21:03What about convenience? Well, he says the more convenient, the more taxes they'll be. And since we're against taxes in the first place, let's make it less convenient. Let's make it really difficult. You know, none of this tax simplification thing where you just sort of figure out your tax on a postcard and you send it in. Let's make it impossible for anyone to figure out their taxes and nobody will be able to figure it out. Here I have to mention the withholding tax and my favorite whipping boy or punching bag, my man Milton Friedman. Milton Friedman came up with the withholding tax. What's the withholding tax? The withholding tax is, see without the withholding tax all of your taxes would be due on April 15th. And if you make $100,000 a year and your tax burden is $40,000 a year, you've got to send in a check for $40,000 on April 15th, and that's going to hurt.

21:51People are going to say, whoa, $40,000 I give to those rascals? But instead what they do is they withhold it every week, a couple of bucks, so it's painless. And sometimes they withhold a little bit more than $40,000, so the government actually gives you a refund and you say, oh, isn't the government great? It gave me 3,000 bucks back. They're not so bad, contrary to the, you know, these weirdos who were saying government is bad. That's the withholding tax. Milton Friedman was very active in creating this. To his credit, he later apologized for it. But can you imagine Murray Rothbard going down to Washington, D.C. and working on a withholding tax? I mean, it just sort of boggles the imagination. Certainty, Murray says, well, if it's certain, then you can't bribe, and if the bribe is less than the tax, this is good.

22:39So we don't want certainty, we want uncertainty in taxes. How about tax evasion? Now there's this guy, I think it's Arthur Seldin, but it might be Arthur Shenfield, who wrote a book called Tax Avoision. Not tax evasion, but tax avoision. What he means by that is, is it legitimate to take every deduction you can to hire an accountant So you hire an accountant so you can reduce your tax burden legitimately, and he goes out on a limb and says yes. I mean, isn't that radical? I'm kidding, it's not very radical, and this is what passes for, you know, radical free enterprise in some quarters. Murray is taking a very much more radical view, not that it's legitimate to reduce your taxes by ways that the government allows, but that it's legitimate to reduce your taxes by any ways because it's a theft.

23:26And just as you don't have to tell the burglar where your jewels are, you don't have to tell the taxman what he wants to hear. Okay, the next one is the distribution of the tax burden. And the so-called canon of just taxation is uniformity of treatment. And uniformity of treatment has a certain cachet because, you know, equality before the law is a legitimate way of looking at things. Well, if you have equality before the law, Shouldn't You Have Equality Before the Taxman? The taxman is, in other words, there's an analogy there. And Murray says equal treatment, that means equal slavery. It means that if somehow in 1862 we could come down to Alabama and have a helicopter and free 3% of the slaves, that this would be illegitimate because we're not treating all the slaves equally.

24:21Equally, we're only freeing some of them, 3%, and 97% we're not freeing. And obviously it's better to free 3% of the slaves than no percent of the slaves, but that is a violation of equal treatment because now you're not treating the slaves equally. So equal treatment is not the be-all and end-all of ethical analysis. The next one is tax exemptions are evil. Everyone should pay the tax, we shouldn't have loopholes, we shouldn't have tax exemptions, because they're really a subsidy. Now I worked for this guy Mike Walker at the Fraser Institute and he had this view and he and I got into a little spat over and I was saying, you know, tax exemptions are just not a subsidy. They're only a subsidy if you think the government legitimately owns all the GDP and they're generously allowing you to keep some of their money. But if you don't think that they own the money then when they don't take it from you it's not The fact that they're giving you a subsidy is just that they're not taking your money.

25:21No, he couldn't believe this. We went down to Alvin Rybushka at the Hoover Institution. I'm not sure why Mike picked Alvin. Alvin would be the guru of this. And of course, Alvin was sensible and, you know, agreed with me, which is a tautology. Kidding, kidding. But a lot of people feel this. They feel that if the government is not taxing you, they're giving you a subsidy. But this implies that they own the whole GDP and where did they get the right to the whole GDP? The whole thing is sort of hard to understand. Murray says this is like blaming the slave for fleeing his master, if you think that, you know, they're giving you something. Okay, what's, and his answer is to extend the exemption to everyone.

26:11Don't blame the churches for getting a tax exemption. Don't say, well, the churches should pay taxes since we're paying taxes, rather saying, since they're not paying taxes, we're not going to pay taxes. Let's extend the exemption instead of reduce the exemption. So if I've got a new hero for my next Defending the Undefendable, the loophole-er as hero, the guy who creates more loopholes in taxes is a good guy. Okay, the next one is that he talks about the uniformity and the necessary distortion of all taxes. There's no such thing as a neutral tax. We move from automobiles to armaments. And the next point he makes, a very interesting point, bureaucrats cannot pay taxes. Now a bureaucrat gets a job, he's He's working in the Fed, he makes $100,000 a year, and he's got to pay $30,000 tax.

27:11And Murray says, no, no, no, he's not really paying tax. It's rather he's getting $70,000 salary because it's just a bookkeeping ledger domain. He really can't pay taxes because he's part of the criminal gang that's taking taxes. He says it's impossible to unambiguously define income, for example, if you're having an income What about imputed rent? What about imputed labor? Farm goods? Housewife? It's all arbitrary, there is no non-arbitrary way of doing these things. It's similar to the socialist calculation debate. If you don't have markets in these things, you can just guess about them. And they make arbitrary rules about what you can expense and what you can't.

27:56Then there's the problem of averaging of income. Some people's income is flat, other people's income goes up and down like this. and if you have a progressive tax the people that have this kind of a great variance in their income are in the worst position so you're allowed to average but how long should you average two years five years ten years there's no no right answer again okay then we have other criteria of taxes what about ability to pay for example and you know can you deduct your medical bills can you deduct food you have arbitrariness there and then he says that ability to The ability to pay is the Highwayman's criteria of collection. That's exactly what the Highwayman says. You know, how much money do you have? Okay, give it to me.

28:44That's what the ability to pay thing is. You don't have that in the market. Bill Gates pays the same amount for a loaf of bread as you or I do. And if we had ability to pay, or if we had proportional prices, if prices were like proportional taxes, we'd have the absolute income equality. Bill Gates would have to pay a hundred thousand for every slice of bread. You and I would pay two or three bucks for a slice of bread. A poor person would pay a penny for a slice of bread. So at the end of the day, no matter what your income was, you'd have the same amount of bread or autos or whatever. So if we, so bad is proportional taxes that if we applied it and made it proportional prices, we'd have absolute income equality and if you have absolute income equality, you reduce the economy back to barbarism because you take away all incentives of anyone Now with this, I have to mention a Chicago scheme. This is worthy of the University of Chicago.

29:44What they said is, okay, look, we've got a deal for you people. And what's the Chicago idea? The Chicago idea is, look, you all people declare whatever it is you own, let's say we're having a tax on property. You have property, you have a house, you have a dog, you have a car, you just declare what it's worth and you pay taxes on it. However, anyone can then buy what you declared at the price you declared. So if you're going to be snarky with us and you're going to say, well, I've got this house which is really worth, say, 200,000 and I'll declare it's worth five bucks, sure, pay taxes on five bucks, but then anyone can buy your house for five bucks. Or if you have a, my favorite example, the one that Murray uses, is a dog, you have a pet dog that's worth a thousand bucks and you declare it's worth three cents, and now anyone can buy your dog for three cents, or anyone can buy your dog for a thousand, namely you take away all consumer surplus, because if your dog is really worth a million dollars to you, you have to declare your dog as worth a million dollars and no one but Bill Gates can buy your dog, but then you're paying a lot of taxes on your dog, do you see the the evil

30:54I love this. I mean, there's a certain low cunning, because this would get you to declare the true value to you of things, or at least, not a market value, but a more accurate value, but it's diabolical, worthy of Chicago. Okay, let me move along. Oh yeah, then there's this guy Seligman, the faculty approach, who says that we are justified in having progressive taxes because money earns money. The richer you are, the more money you can earn. It's like money is fertile or something like that. Two dollar bills get together and get it on and, you know, they come up with a dime or something. something you get that idea little sick and revolting but what the heck all sparing in tax analysis and Murray says this is ridiculous rich people lose you have this aphorism from shirt sleeves to shirt sleeves and three generations you know the bigger they are the harder they fall there are many fortune 500 corporations that used to be on the fortune 500 corporation list 10 20 30

31:58years ago that are not there now just because you have money doesn't is no There's no guarantee of continued money. The only guarantee of continued money or wealth is continued ability to satisfy consumers. So Murray rejects this idea. Then he goes into an analysis of the, what do you call it, the relationship of taxes and charity. He rejects that. There's an awful lot of stuff here that I'm not going to have time to do because I'm trying to keep it to about a half hour. I do want to say one or two other things. He talks about ability to pay, sacrifice theory. Oh, one high point for me, so I'll just sort of mention high points because I've given you a sort of an inkling of what he's about.

32:47One of the high points for me was the head tax. He says if there's any tax that's justified, it's a head tax because, you know, everybody pays the same. and then he starts in attacking the head tax and I'm saying, no Murray, don't, don't attack the head tax, that's all we've got, but then I came back to my rational faculty, I said okay, you know, you can attack the head tax too, but one idea is if the taxes are limited to what the poorest person in society can pay, then the rest of us don't have to really pay too much and there's a certain coherence to that. What else do we have here? The benefit principle is the closest to the market, but he rejects the benefit principle as well, because the government doesn't create the benefit.

33:39This idea of who gains more from the state, the rich or the poor. He says the poor gain more from the state, not the rich. This is an attack on progressive taxation, because the rich can have their own armed guards. The poor can have armed guards. and it's their economies of scale and guarding wealth. You can guard a whole vault full of money just easily as a vault with less money in it. So he says that if anyone is getting a ride, it's not the rich, it's the poor, but nobody really is. This is in sharp contrast to the distinction to the market. The market benefits the poor more than the rich. If you compare, say, the average person in the year 1505 With regard to lighting, well, he was in the dark and the rich guy had candles.

34:30Now the poor guy has a light bulb and the rich guy has a big chandelier but just a light bulb. In other words, what progress did is it brought the rich closer to the poor, right? Before the poor had just darkness or they had a walk, whereas the rich had horses. Now the poor have a small crappy car and the rich have a beautiful limousine, But still, the difference between walking and a coach and four, and a small car and a big car is much less. Now, this is not praxeology, and don't accuse me of, you know, interpersonal comparison of utility fallacies, but you can see the point that economic progress moves the poor up more than the rich in this sense, whereas with taxes, it's the other way around.

35:15Okay, what else do we have? Here, I think I found a mistake, let me put it up on the board, you people tell me if you think that this is correct or not, or... Whoops, this is on page 1240, 1240, reading here. The principle of equality would rule out, as would the benefit principle, Will All Government Actions Accept Defense for All Other Expenditures We Set Up Special Privilege or Subsidying? And what I did is I said, what about the pacifist? Namely, I don't think that it justifies even defense, and Murray is saying accept defense.

36:00But the pacifist is one who objects to even defense. Now, I don't know if I'm correct if the job of the editor is to change things like that. It's really substantive, it's not just a typo, and I'm not really sure, I mean, he who criticizes Murray Rothbard has to be very modest in his criticism, so I'm not saying that he's wrong and I'm right, I'm saying let's consider this 30 mines are better than one mine and maybe we can make sense of that. Okay, what else have I got here? Murray criticizes taxes that are for revenue only. He says that all taxes are for revenue. He talks about the voluntary tax.

36:53Let me end on voluntary tax since I'm just a little bit over my half hour. Ayn Rand favors the voluntary tax. She says, well, yes, yes, taxes are coercive. We don't favor coercion. We're non-aggression types also, in addition to you libertarians. By the way, you know what she calls libertarians? Ipis of the right. Hippies of the right, only she pronounced it Ipis. Ipis of the right. So us Ipis, we're against coercive taxes. And which is okay, we're against coercive tax too. We'll have voluntary taxes. And her idea of voluntary taxes is that every time you have a contract, you put a little sticker on it and to get that sticker you have to pay the government a certain fee but the obvious question is well suppose you want to have a contract and put a sticker not of the US government club but of the I don't know the Bob Murphy Defense Agency what then blank out to use some words that she uses against us in other words what Murray is saying is there really two

38:02There are two things that the government does, one it has compulsory taxes and the other it has a monopoly over whatever its functions are. So even if you could have a voluntary tax, that would be necessary but not sufficient to achieve full free enterprise. You would also need to get rid of this monopoly element and it's hard to see how she can accomplish that. On the other hand, you know, I don't want to totally bash Ayn Rand or even Milton Friedman, they've done good. The reason I pick on them as opposed to Galbraith or Marx is, you know, it's sort of like shooting fish in a barrel when you do that, and it's more fun to have a little bit of product differentiation. But I would hardly pick on these people if they didn't do any good. You know, sometimes I've been accused when I criticize Rand or Friedman and say, well, you know, they've done more for liberty than you have.

38:49And well, that's true, certainly. Ayn Rand with her book, her magnificent book, Atlas Shrug, have brought many people to our camp, as has Milton Friedman.