Cobden Bright posted a comment in an earlier article that deserves the prominence of full posting, slightly edited. This follows on from The Anglosphere and Economic Freedom
The fact that a country taxing over 40% of GDP from its populace can be considered the 5th most “economically free” country in the world is rather depressing. Let’s face it, most countries on that list are not economically free at all – they are just slightly less bad than most of the others.
The people at Cato also seem to have forgotten about tax rates. A person paying 0% tax is in most respects an economically free man – someone paying 50% per year is a slave for half their working life. So they should have included tax havens like Monaco, Bermuda, the Bahamas, Cayman Islands etc, and low tax larger countries like Russia.
Also, as noted by a previous poster, it is actions, not written laws or words, which achieve freedom. A backward country with repressive laws may be freer for you personally if those laws are not enforced, or avoidable at low cost via bribes or cunning. So a corrupt backwater may be relatively free in real terms, whereas a “free” country like America will tax you ruthlessly even if you move to live on the other side of the world, and will exact severe penalties for certain voluntary economic exchanges (e.g. buying a joint or a Cuban cigar).
Which raises the final question – is there any meaningful distinction between economic and personal liberty? I would say no. How free are Hong Kong, Singaporean, UK or US citizens to buy and sell firearms, narcotics, or sexual entertainment?
Finally, there is a bizarre tendency for everyone to take GDP figures at face value. Remember who makes these up? Yes, that’s right folks, it’s our old friend the government. So take GDP figures with a pinch of salt. Firstly, much government spending, most of which is highly wasteful, is regarded as a positive contribution to GDP. So employing someone on $30k per annum to build bridges to nowhere is seen as economically just as “good” in GDP terms as paying someone $30k per year to build a house, or work as a doctor or shopkeeper. Yet obviously the latter activities are productive, and the former destructive or at best worthless. This focus on production per se, rather than useful production, means utterly worthless projects drive a country up the GDP ranks. Thus countries with large amounts of state spending get an artificially high GDP rating.
The only real way to measure economic prosperity is to visit a place for a while and see what kind of real living standards prevail. What kind of cars do people drive, what clothes do they wear, how nice are their houses, are the streets clean, how good are the restaurants, how long does it take to get from A to B?
Cobden Bright
Pardon my foolish confusion, but did you just say that you consider taxation a barometer of freedom?
Yep, that’s what you said. I direct you to the oil tyrannies, where the populace pays little or no tax, and I invite you to ask them whether they consider themselves particularly free. Or, for that matter, the old Stalinist regimes, where taxes weren’t gathered because the means of production were already controlled by the state throughout the length and breadth of the economy.
This is what pisses me off about anti-taxation purists: no feel for the social contract, no acknowledgement that taxation is not necessarily a zero-sum exchange, that taxation is something more than simple theft. No-one taxes a slave – he has no property! The master might be taxed on the value of his slave *as* property, but that taxation reflects on the status of the master, not the slave.
A man paying 0% taxation is either a pauper, a criminal or a slave.
Cobden Bright, overall, an excellent posting. Well said, particularly on nailing the daft idea that economic freedom is somehow different from freedom in general.
Mitch H, it may (?) be true that some folk living under tyrannies pay no taxes that we would see as such, but clearly such folk are living in conditions where a large portion of their time is coercively controlled by the State. That surely is the point of Cobden Bright’s objection to the kind of tax rates seen in even so-called capitalist nations.
As for your point about tax being part of some social agreement, social contract, etc, well, it depends on whether you accept the premise, as socialists do, that we have to pay as much tax as we do to enjoy the benefits of living in a modern society.
The zero-sum argument you use is disingenuous to say the least, because we can only describe an exchange as positive sum if both sides to that exchange are acting voluntarily. And tax, by definition, is a coercive act of FORCE. The argument that it is imposed by notionally democratic governments is hardly much of an argument given that in practice this means that 51 percent of an electorate feel they have right to seize wealth from the 49 percent.
That’s not to say that some form of collective fund-raising in a free society to pay for stuff like the basics of limited government is not possible, but let’s not try and con ourselves into thinking that the 40 percent-plus tax rates of Western democracies have got anything to do with some sort of social contract struck by free men.
Mitch H: You have just shown the danger of picking out one part of an article and using it to characterise the whole thing.
What Cobden also says is: Which raises the final question – is there any meaningful distinction between economic and personal liberty? I would say no.
That passage actually shows that Cobden understand the concept of freedom just fine!
The fact is there is no ‘social contract’ (I sure as hell did not agree to one), there are just objective individual rights and individual moral agents. Society is just a series of social (as opposed to political) interactions and it is not more than the sum of its individual parts.
Still, Mitch H. has a point that to reduce everything to tax rates is also very misleading. Regulation can easily cause much restriction of freedom without raising tax rates. Relatively high tax rates with little regulation is more honest, and can easily be more free, than rather lower tax rates with a lot of regulations and restrictions.
Perry, what are “objective individual rights” and whence do they derive their overriding authority? Are they God-given? The thing is, I don’t really believe in such things. I believe that the recognised social and legal limits to the actions of individuals pragmatically arise out of social interraction.
Becky,
What you fail to understand is that libertarians do not generally have “social interraction”. We are typically quite lonely people. But we don’t mind. We use all our private quality time thinking up marvellous theories explaining why government, the oldest and most enduring of human maladies, must be vanquished.
Fred, thank you. You’ve explained a lot. Becky to libertarians: get out more!
If this index were the only one to go on, it’s not clear what these rankings would tell you. But put it together with other indices that capture other aspects of strength of civil society, and most of the same countries show up — the Anglosphere, plus Scandinavia and Germany’s “Calvinist bookends” — Switzerland and the Netherlands (but not Germany proper or Austria.) This is the kind of correlation that indicates that something is happening here.
It also demonstrates that there’s nothing magical about the English-speaking peoples per se, since the same above-mentioned non-Anglosphere types usually shown up. What all of these cultures have in common is that they preserved the non-centralized features of medieval European constitutionalism (multiple centers of power, parliamentary institutions) and evolved them into modern constitutional regimes while other Euroopean societies saw them succumb to centralized autocracy under the pressure of military competition in the 17th and 18th centuries. Britian’s insular status, Switzerland’s mountains, the Netherlands’ marshy terrain, Scandinavia’s almost-insular status all gave them some respite from the need to create a centralized militaristic state. France, Prussia, and Spain all succumbed. Unfortunately, their centralized bureaucratic tendencies survived their transition to democracy, and are now being imposed through the EU on their once-more-fortunate neighbors.
Becky, objective individual rights include such small matters as the freedom of speech and assembly. Property rights also feature in the list of such rights. I’m interested in your statement that you don’t believe in “such things” but since I did not understand your last sentence I’m afraid I don’t really know what you believe.
Leaving aside that GDP is an imperfect measure the proportion of GDP in private hands is an extremely telling indicator as it tells you something about all the activities of government. A high ratio of budget to GDP indicates not only a welfare state but a large bureaucracy enforcing a lot of freedom zapping regulation. I can agree that some level of collective fund raising is needed since I do believe government has a role. But when government takes over a quarter of everything society produces its activities have expanded beyond any “collective contract” I would sign up to. In this respect Cobden is right none of these countries is economically free when the paragon of free markets the USA spends 29% of GDP on government, the UK 37% and socialist France 45%.
Listing things doesn’t demonstrate they exist “objectively”. I can offer all sorts of properties for various heraldic beasts, but I can’t take you out and introduce you to one.
Asserting a right is something you can do only within a legal or social framework which supports it. It’s nonsensical to claim there’s an “objective” right to property when some state thug has the power to take it from you without redress.
You are certainly free to enjoy property to the extent no-one else can curtail that enjoyment. You might believe that the social framework should secure certain property rights against interference, as I do. But those property rights can’t have any existence (though we can define them as closely as we like, and believe in their desirability as fervently as we like) without institutional support.
The same goes for all so-called human rights.
Becky,
Perry, what are “objective individual rights” and whence do they derive their overriding authority? Are they God-given?
Depends on your religious views I guess. My view is that they arise simply due to the nature of being human.
The thing is, I don’t really believe in such things.
Then the logical extension of your beliefs is that others can justly kill you or take your stuff by force.
If you do not believe that others can justly kill you or take your stuff by force, then you do indeed believe in objective individual rights.
Guy,
Asserting a right is something you can do only within a legal or social framework which supports it. It’s nonsensical to claim there’s an “objective” right to property when some state thug has the power to take it from you without redress.
You are certainly free to enjoy property to the extent no-one else can curtail that enjoyment. You might believe that the social framework should secure certain property rights against interference, as I do. But those property rights can’t have any existence (though we can define them as closely as we like, and believe in their desirability as fervently as we like) without institutional support.
There is a difference between the existence of rights, and their defense.
Surely you would agree that a baby or a frail elderly person has rights that allow freedom from violence? Yet, neither the baby nor the frail elderly person may be able to defend his rights.
Rights exist without and prior to their securement. It is their securement that gives rise to any social order.
But it is a fallacy to state that rights do not exist without their securement. It is the very evident existence of rights without their securement that results in the definition of tyranny.
So is any system of criminal law, and any system of civil law that does not rely solely on mutually agreed arbitration. Any political argument that is a call, at its base, for the revocation of force from the body politic is as ultimately pointless as agitation in favor of the repeal of the law of gravity. Force when removed from government merely falls to those institutions or groups willing to fill the resulting void. I prefer a democratically elected and constitutionally limited government established upon a clear and coherent social contract to the apparent alternatives – rampant anarchy, the lawless oligarchy that eventually precipitates from such anarchies, and all other rule-by-self-appointment systems such as plutocracy, aristocracy, military rule, corporatism, the dictatorship of the proletariat, etc, etc, drearily etcetera.
This is why constitutionalism is preferable to simple majority rule. The United States’ explicit social contract establishes that the 51% cannot simply and directly expropriate the wealth of the 49%. Taxation is, theoretically, required to be indiscriminate – that is, the 51% can only, when all things work properly, tax the whole of the 100%, according to consistent rules.
Now, this does not always work properly, and there’s a bit of class-warfare currently raging because of a perception that certain advocates for a “wealth class” are displacing taxation from that “class” to the rest of the population. You might guess from my comments that I agree that the advocates for the “wealth class” are running out of control. I believe in a reasonably progressive tax structure, in which wealth is taxed, income is taxed, and income is taxed progressively, within rational limits. This is not because I think that wealth ought to be transferred from the “undeserving rich” to the “oppressed poor”, but rather that I believe that the wealthy receive a higher marginal benefit from government than the poor, and that it is their obligation to pay accordingly higher rates of taxation. Similarly, the poorer taxpayer is less capable of carrying higher rates of taxation, and ought only to be taxed at a rate he is capable of paying.
As for the periodic enthusiasms of anarchists, minarchists, and libertarians for private assumption of the obligations of normal modern government functions, I direct you to the marvelous example of the Islamic charities of the Middle East, whom in the absolute vacuum of oil-tyranny disregard for social services, have done such a bang-up job of performing as private governmental entities.
Mitch H.,
So is any system of criminal law, and any system of civil law that does not rely solely on mutually agreed arbitration. Any political argument that is a call, at its base, for the revocation of force from the body politic is as ultimately pointless as agitation in favor of the repeal of the law of gravity.
There is a very qualitative aspect to force that you are missing – the difference between its initiation and its use in response to such initiation. For example, if I was walking down the street and you came up and batted me over the head with a baseball bat, that would be unjust force. However, if I saw you coming and used force in self-defense against such a pummeling, that would be just force.
Laws can be judged as either just or unjust. Laws that delineate the extent of property rights or outline punishment proportion to the use of unjust force are just laws. Laws which initiate force to achieve a particular utilitarian outcome at the expense of violations of individual rights, such as the Drug War are unjust laws.
Taxation occurs only with the iniation of force. This use of force is the polar opposite of the type of force used in self-defense against violence.
40% my foot. That’s 40% before you add in VAT, corporate taxes passed-forward as price increase, the cost of compliance with regulation, inflation, the waste of materials due to a distored market, etc etc etc
Say 90% and you’re probably close.
So is any system of criminal law, and any system of civil law that does not rely solely on mutually agreed arbitration.
Pretty much, assuming you mean “initiated force”. We call that opinion “anarcho-capitalism”.
Your question is an interesting one, Cobden, and of course I agree: the distinction between economic and personal liberty is meaningless.
The best (as in most concise) expatiation on that topic I’ve found is in The Road to Serfdom. Economic liberty is simply one sort of personal liberty. Thus the dichotomy is a falsr one, asserted only by such people as would like to deprive a person or a group of their own property. Anyone who says property rights are infinitely violable is usually a complete hypocrite. What they ordinarily mean to say is that OTHER peoples’ economic liberty is a sham–their own, of course, is sacrosanct.
If after all no one is entitled to keep and manage their own wealth, by what mechanism do they assert their right to manage the wealth of others? The logical conclusion of the view that property rights are a collective matter turns out to be that no one actually owns anything. So any claim to a portion of what belongs to others (which is to say is rightfully “theirs”) on the basis that you’re somehow entitled to it (which is merely to say that it is rightfully “yours”) is completely irrational.
Obviously, it requires a contradiction to claim that there are such things as social entitlements, but not personal ones. This is the key moral and logical insight of libertarianism, and one that socialists have failed utterly to address.
I think it’s all a bit hard to measure using one master index or gauge.
There are unfree societies with no tax, bureaucratic societies with excellent transport infrastructure, free societies with rather low standards of living.
I think we usually have to see how we feel about social freedom, financial freedom, political freedom and so on in some culture and add it all up in an admittedly fuzzy subjective judgement.
Many communist societies, for example, had – whether as safety valve or natural reaction…. or even socially-corrosive problem (take your pick) – a lot more freedom for ordinary people to have more sexual fun with more different attractive partners, than say, Britain. One Czech psychiatrist in the early 90s suggested that in controlled, totalitarian communist societies, sex and romance was one of the few areas left in which ordinary people could find an outlet for adventure.
Just an example. I do not say this is/was good or bad – just note that there is a bewildering range of ways different observers might measure freedom in different cultures.
Becky: As an earlier commenter replied to you (complete with helpful links to the requisite books on Amazon) when you made a similarly ill informed comment about objective rights, I do not see my job as explaining either Popper or Rand’s observations on the objective nature of reality, or how that leads to objective rights.
Jonathan (& perhaps Perry) (pro Becky),
It’s interesting we can agree on so many policy prescriptions with such a strong difference on a fundamental point.
I’m not generally keen on rights at all, because I take it that rights impose correlative duties on others, and I’m keen to keep duties to a minimum and freedoms maximised. My freedom is curtailed by your right, and vice versa.
I take it that a right implies a power exercisable either personally or through some social appparatus (and in the case of the incapable, on their behalf, by others). My conception of a right is allied that of a legal right.
Yours, on the other hand, seems to be more in the nature of a moral imperative. So I can see how you can claim it exists absent the possibility of exercise. But it can still only be meaningful in a social setting, since the imperative is not on the possessor of the right but others.
All,
On the general point of the post (which is what got me started on this thread–apologies for wandering): league tables are terribly sensitive to your criteria.
Since you have to have some (just driving around doesn’t get high marks at think-tanks) limited set of rules, it does make sense to rank “Economic Freedom” on the basis of security of property from arbitrary seizure, and freedom to start a business without placating officials. It has the great merit of avoiding all the discussions about dubious economic aggregate figures, effective tax rates, and so forth. That may be why Cato chooses the approach it does.
However, add a criterion or change the weighting and there’ll be lots of changes. Not enough to move a country from the top to the bottom of the league however, unless the new criterion far outweighs the others AND is unusually distributed.
So we might expect Britain to move down or up a few places but it would still be clustered with other Anglospheric nations high up the league of Economic Freedom–if sinking.
The problem with a general measure of freedom is weighting the various factors, not just measuring them individually. How to balance press freedom against requirements for business licenses? Or gun laws against fair trials? Individual priorities will vary, and your league table might not be mine, even if we can all agree nowhere is quite as free as we’d like, and we definitely don’t want to live in Saudi Arabia.
For any one who cares to read to read it, I posted my response to this in the link above.
Cobden makes one important point which is that economic and personal liberty are indistinguishable, but few here would dispute that.
As for the rest, its a mishmash of largely indefensible positions. To take one example, he asks how free are we if we can not buy firearms or narcotics (I’ll skip sexshows because no one serious would be concerned with them)? Well what about nuclear weapons, 12 year old virgins , black slaves? The point being that society restricts economic rights in certain areas for social welfare and public order reasons. Convince your fellow citizens that you should be allowed the economic freedom to buy and sell the above and I might listen you.
Cobden,
“A person paying 0% tax is in most respects an economically free man – someone paying 50% per year is a slave for half their working life”
Take “Statist” countries (50% tax rate).
You earn 100. Taxman wants 50. Home: 50.
You earn 10. Taxman wants 5. Home: 5.
In both cases (rich & poor), though, you’ll get for free medical coverage worth 100.000, 15-year-long education worth 50.000 & military defense worth 300.000 per head. And you also have the freedom not to think about it because it’s guaranteed & easily available.
Take “free” countries (0% tax rate).
You earn 100. Taxman wants 0. Home: 100.
You earn 10. Taxman wants 0. Home: 10.
Suppose you need URGENT medical intervention or want your kid to be educated NOW or your country IS BEING attacked. Will you feel economically free at all?
“…In both cases (rich & poor), though, you’ll get for free medical coverage worth 100.000…” -Kodiak
Kodiak, If you use the word “free” when discussing taxation, disribution of state sponosored benefits and national economics then your statement becomes an “oxymoron.” There is no “free” in these situations. All of these things that you list (“medical coverage”…”education”…”military defence”) must be paid by SOMEONE/SOMEWHERE.
…And I am not aguing (at least not here/now) that these things shouldn’t be provided by the State/Government…Only that your choice of the word “free” in this situation is misleading…
MayDay 72,
Perhaps you’re right.
But look at those data issued by the World Health Organisation:
World ountry ranking
HEALTH SYSTEM PERFORMANCE
01 France
(…)
18 UK
(…)
37 USA
LIFE EXPECTANCY
03 France
(…)
14 UK
(…)
24 USA
What’s more important? The freedom for real people to live better & longer? Or the freedom for businesses to make more profits (no tax) to the detriment of you & me (no welfare)?
“What’s more important? The freedom for real people to live better & longer? Or the freedom for businesses to make more profits (no tax) to the detriment of you & me (no welfare)?” -Kodiak
…Hmmm…If given the choice I choose…BOTH…
…But to be serious…I think that the only important/true meaning of the word “freedom” is (something like): “minimizing the power/scope of government/state to infringe on non-coercize actions of/between individuals…”
…You are right…There are other definitions for the words “free” and “freedom”…But it is my belief that if you deviate from that primary definition (listed above) too far then you are in danger of not having freedom at all…but perhaps the exact opposite…
…Would you/I define “corporate taxes”, “environmental regulations” or “unemployment insurance” as “socialism”? Maybe/maybe not…But there has been much violence/tyranny caused (especially) in the last century in an attempt to reduce human suffering/poverty….
…Again…I’m not saying that Sweden or France are in any danger of becoming Pol Pot’s Cambodia or Stalin’s U.S.S.R. (any time soon)…I just tend to be somewhat skeptical of people with “good intentions” that want to “solve problems” by reducing or regulating legal/voluntary interactions/exchanges between individuals…
…I would certainly agree that providing more people with healthcare, public safety, a cleaner natural environment, etc. are all important/noble goals…I just think that the state/government is poor/dangerous tools to use to achieve (some of) these goals…Best to empower INDIVIDUALS…
…Some quotes for you…
“Minerva save us from the cloying syrup of coercive compassion!” -Camille Paglia
“I cannot redistribute wealth, but I can distribute misery equally.” -Deng Xiaoping
“If you put the federal government in charge of the Sahara Desert, in 5 years there’d be a shortage of sand.” -Milton Friedman
“Giving money and power to government is like giving whiskey and car keys to teenage boys.” -P.J. O’Rourke
Kodiak:
…Damn…Oops…The link should have been this…Sorry…
🙂
MayDay72,
The quotations are excellent !
State worshipping isn’t for me either.
Just I found interesting to show -perhaps clumsily- that freedom cannot be reduced to tax rate alone & social welfare caricatured into sheer Statism.
I’ve got nothing against individuals since I too am one. It’s absolutely normal that people want control over their own lives. The contrary would be absurd of course.
But what I am now is not what I was nor what I will be. And what I am is not what you are nor what anyone else can be. Time, plurality & diversity are indeed notions transcending -not abolishing- the individual as such.
And it’s not because Deng Xiao Ping or Léon Trotsky are real bastards that having a decent State is a crime.
As you aptly said: ” Sweden or France are (NOT) in any danger of becoming Pol Pot’s Cambodia or Stalin’s U.S.S.R.”.