"No government of the left has done as much for the poor as capitalism has. Even when it comes to the redistribution of income, the left talks the talk but the free market walks the walk. What do the poor most need? They need to stop being poor. And how can that be done, on a mass scale, except by an economy that creates vastly more wealth? Yet the political left has long had a remarkable lack of interest in how wealth is created. As far as they are concerned, wealth exists somehow and the only interesting question is how to redistribute it." ~ Thomas Sowell
If It Really Were Their Money
A famous theory about taxes has it that wealth belongs to society and taxation merely determines how much of it the citizenry may use. This is what is argued in The Myth of Ownership by co-authors Thomas Nagel and Liam Murphy (Oxford, 2002). You and I do not own even our labor. It belongs to society and government is in charge of telling what we get to use and what remains in its coffers.
According to this socialist view of wealth, there are no private property rights at all, only government grants. Taxation is entirely just instead of a type of extortion. Indeed, instead of being a misguided relic of feudal times, when it was believed the monarch owned and ruled the realm'with everyone else paying rent for the privilege of living and working'Murphy and Nagel argue that it is private property that is a myth.
We can test, however, whether this view is really how most ordinary men and women understand the wealth of a country. Is it some kind of collective or is it rather the sum of all privately held resource?
The former theory implies that whenever people are productive, the result is really public property. This is why if one stays at a hotel while on a trip, the government is supposedly fully authorized to collect taxes, and it does so good and hard, you can believe it. No matter what you purchase or trade, government is there to get its loot'or, if you buy the Murphy-Nagel idea, allows us keep just some of the wealth involved in the transactions.
This does suggest that the wealth is in fact the government's, not ours. If it were the latter, then we would be asked to pay for services and would have the choice to either do so, walk away, or get it from someone else. Instead government seizes what it deems it requires and permits us to keep some of it for our own use.
But there is something odd here: if the productivity we are involved in is generated from friendly, unrecorded exchanges, the government is left entirely without what it supposedly owns. Say you go on a trip and instead of renting a hotel room and car, you stay with a friend or family members and borrow one of their wheels. Clearly, few believe, rather perversely, that you have thereby robbed the government of what belongs to it. Yes, you pay no taxes. But does this amount to ripping off the government? Is the IRS supposed to mount a search and seizure campaign, ferreting out all of us who have managed to escape its clutches? Would people stand for such a policy, requiring them to report to the government all such private transactions and handing over to it what Murphy and Nagel believe belongs to government in the first place?
No. We know well enough that it is smart and wise to arrange such exchanges among ourselves so government does not manage to get its dirty large hands on what is, after all, quite rightly ours. When we make such side deals, off the books, we rightly feel the pride that comes from having circumvented the powers that be, having managed to escape an otherwise difficult to resist armed force.
In fact, government'those hired hands whose proper job is to secure our rights, with all the rest of their activities amounting to forcibly imposing themselves on us'does not own the wealth of the country, we all do. Government, having been left carelessly unrestrained and with too much power, manages to act as the old monarch'or socialist commissar'who thought he (or she) owned everything by divine or historical right, including our labor. But it has no right to act this way. What makes it possible for it to do so is that it has accrued to itself vast unjust powers.
And we know this, nearly all of us, well enough so that we feel absolutely no obligation to avoid keeping for ourselves whatever we can get away with. Even those corporations that manage to dodge taxes by taking their business off shore know this, so instead of yielding to the vicious propaganda about how they are stealing from the government, they hire clever tax lawyers and often manage to escape their extortionists.
Maybe in time it will be appreciated that government, like any other service organization, must earn its resources rather than seize it by force.