The constitution of statism
May 6, 2020 11 Comments
In previous posts 1,2 I have criticised material that F. A. Hayek wrote in The Road to Serfdom. In this post I criticise The Constitution of Liberty because it is another Hayek book that is advocated by people who claim to be in favour of free markets. I think this book is bad enough that I doubt that anyone who likes it will be a consistent advocate of freedom.
In Chapter One Hayek writes:
By “coercion” we mean such control of the environment or circumstances of a person by another that, in order to avoid greater evil, he is forced to act not according to a coherent plan of his own but to serve the ends of another. Except in the sense of choosing the lesser evil in a situation forced on him by another, he is unable either to use his own intelligence or knowledge or to follow his own aims and beliefs. Coercion is evil precisely because it thus eliminates an individual as a thinking and valuing person and makes him a bare tool in the achievement of the ends of another. Free action, in which a person pursues his own aims by the means indicated by his own knowledge, must be based on data which cannot be shaped at will by another. It presupposes the existence of a known sphere in which the circumstances cannot be so shaped by another person as to leave one only that choice prescribed by the other.
This is not a clear explanation of coercion. Suppose that I invite a friend to my house and he falls asleep. I want to go out and I lock the back door but not the front door and there are no other exits from the house. My friend has to leave by the front door. Have I coerced him or not under Hayek’s definition? Hayek continues:
Coercion, however, cannot be altogether avoided because the only way to
prevent it is by the threat of coercion.
If the only way to prevent coercion is by the threat of coercion then any person who could get away with murder would commit murder. Suppose a man is on holiday in a large forest with his son and he could get away with murdering his son and burying the body where it would never be found. Since he won’t be coerced for this murder the man would murder his own child according to Hayek.
In Chapter Nineteen Hayek writes:
“Social insurance” thus from the beginning meant not merely compulsory insurance but compulsory membership in a unitary organization controlled by the state. The chief justification for this decision, at one time widely contested but now usually accepted as irrevocable, was the presumed greater efficiency and administrative convenience (i.e., economy) of such a unitary organization. It was often claimed that this was the only way to assure sufficient provision at a single stroke for all those in need.
There is an element of truth in this argument, but it is not conclusive. It is probably true that, at any given moment, a unified organization designed by the best experts that authority can select will be the most efficient that can be created.
Social insurance enforced by the state has not been chosen voluntarily, so there is no way of assessing whether people would voluntarily give up the required resources. So by what criterion can Hayek say that a social insurance scheme is efficient? Hayek provides no answer to this question because there is none. A government “economist” will come up with some number and call it efficiency but that number is meaningless because the people subjected to social insurance have to pay for it whether they find it useful or not.
In Chapter Twenty Hayek writes:
It is the great merit of proportional taxation that it provides a rule which is likely to be agreed upon by those who will pay absolutely more and those who will pay absolutely less and which, once accepted, raises no problem of a separate rule applying only to a minority.
If people are likely to agree to proportional taxation then the government should stop enforcing its collection because people will pay it voluntarily. The government won’t do that because people don’t agree with the rule.
Many people are puzzled by why Hayek writes so unclearly. I’m not puzzled. Unclear writing and thought are required to evade problems with statist ideas like progressive taxation that are explained by economics. Hayek was an anti-capitalist who had some mild doubts about what powers the government should have because he had read Socialism by Ludwig von Mises without understanding it properly. If you’re going to read about free markets you might as well skip Hayek and read competent economists like Mises and George Reisman.
About conjecturesandrefutations
Conjectures and Refutations 
> hat powers
typo
I corrected the typo.
> Suppose that I invite a friend to my house and he falls asleep. I want to go out and I lock the back door but not the front door and there are no other exits from the house. My friend has to leave by the front door. Have I coerced him or not under Hayek’s definition?
I’m not sure how the friend’s situation meets the criteria of of being “forced to act not according to a coherent plan of his own but to serve the ends of another.” If his plan is just to leave the house at some point, it seems like there is no issue. Without specifying a bunch more context, it doesn’t seem like the friend “is unable either to use his own intelligence or knowledge or to follow his own aims and beliefs” or is reduced to “a bare tool in the achievement of the ends of another.”
>> Coercion, however, cannot be altogether avoided because the only way to
prevent it is by the threat of coercion.
> If the only way to prevent coercion is by the threat of coercion then any person who could get away with murder would commit murder.
My wild guess is that Hayek has something in mind like dealing with criminals, some of whom he may regard as incorrigible. He may also have foreign menaces in mind. He *must* know that other things (such as ideas) prevent coercion (right?!), but his writing here does not reflect that (presumed) knowledge. So you are right to criticize his use of “only”.
> Social insurance enforced by the state has not been chosen voluntarily, so there is no way of assessing whether people would voluntarily give up the required resources. So by what criterion can Hayek say that a social insurance scheme is efficient?
Indeed. The Hayek remarks re: social insurance are super disgusting.
> If people are likely to agree to proportional taxation then the government should stop enforcing its collection because people will pay it voluntarily. The government won’t do that because people don’t agree with the rule.
Hayek rekt.
> who had some mild doubts about hat powers
typo there, think u meant *what* powers not hat 🎩 powers.
Solid post 👍
> I’m not sure how the friend’s situation meets the criteria of of being “forced to act not according to a coherent plan of his own but to serve the ends of another.” If his plan is just to leave the house at some point, it seems like there is no issue. Without specifying a bunch more context, it doesn’t seem like the friend “is unable either to use his own intelligence or knowledge or to follow his own aims and beliefs” or is reduced to “a bare tool in the achievement of the ends of another.”
He is serving my end of going out the front door instead of the back door. He can’t use his intelligence and knowledge to go out of the back door even if he wants to. So it’s not clear to me whether Hayek would count that as coercion.
Some of my criticism of Constitution of Liberty:
https://curi.us/1532-hayek-and-socialism#11570
“If people are likely to agree to proportional taxation then the government should stop enforcing its collection because people will pay it voluntarily. The government won’t do that because people don’t agree with the rule.”
I don’t undestand why Hayek is wrong here. The way I see it is the way Popper saw traditions. Taxation, even progressive taxation is already an important tradition/institution in liberal societies. Most of it is voluntary(a minority is not). We just don’t know how to translate the content of the tradition into another tradition which doesn’t require the govt. Changing traditions like that is very hard besucase it would require changing an entire culture not just the tax laws.
“Taxation is an unsolved evil, but not an exception. In advanced societies it requires no more violence than other laws, and is deemed legitimate by most taxpayers.” DD in a tweet.
I agree with that quote, is it wrong?
Do you think that if tax laws where no longer enforced in the short term(20 years) people wouldn’t still pay them?
> Taxation, even progressive taxation is already an important tradition/institution in liberal societies. Most of it is voluntary(a minority is not).
I don’t agree that it is mostly voluntary. Parents and teachers spend a lot of effort torturing children into adopting conventional ideas, including ideas like taxation. Teachers and parents never present children with any alternative ideas about how to pay for the services the government currently provides. Indeed, even the idea of companies like Amazon only paying the amount of tax required by law is usually regarded as evil:
https://www.taxjustice.net/2018/08/10/why-is-amazon-still-paying-little-tax-in-the-uk/
Even with all this pressure and indoctrination some people still make the effort required to avoid paying taxes:
https://iea.org.uk/publications/research/the-shadow-economy
> We just don’t know how to translate the content of the tradition into another tradition which doesn’t require the govt. Changing traditions like that is very hard besucase it would require changing an entire culture not just the tax laws.
I agree that changing away from taxation would require changing our entire culture. It would have to be changed into a culture that values consent and takes it seriously as a priority. Most people go out of their way to blur the distinction between voluntary and non-voluntary conduct on many issues including taxation.
> “Taxation is an unsolved evil, but not an exception. In advanced societies it requires no more violence than other laws, and is deemed legitimate by most taxpayers.” DD in a tweet.
>
> I agree with that quote, is it wrong?
I don’t see how I can reasonably be expected to agree or disagree with text that has been taken out of a context you haven’t provided.
Tax laws are morally worse than some other laws. Taxation more closely resembles the war on drugs than laws against murder. The main purpose of a law against murder is to protect the public from murderers and so to protect them from violence. The main purpose of laws on taxation and drugs is to stop people from engaging in voluntary behaviour that deviates from tradition by threatening and using physical violence.
The context of the DD tweet is that he’s an anarcho-capitalist libertarian. He has major criticisms of the current system and wants better. It’s just an unsolved problem. It’s not an exception means it’s not an unsoluble problem: a system with no taxation is possible and desirable. So his comment about taxation not being an exception is saying taxation is *worse than* people usually view it, not better. It was an anti-tax, not pro-tax, comment. He’s contradicting people who say death and taxes are inevitable. (BTW death, too, is not a special exception. It’s just an unsolved and soluble problem. Like taxation, there’s nothing fundamentally different about it, in a grand philosophical sense, compared to other problems.)
It’s really hard to know how voluntary paying taxes is when people don’t have a choice. It’s similar to people living in China and they say they support the CCP – but they aren’t in a situation to make a voluntary choice, so the real support for the CCP is much lower than it seems to be.
Most people (in countries like USA) voluntarily pay taxes in the sense that no one has to come point a gun at them. It’s similar to many other laws – enforcement is pretty low relative to compliance. People aren’t just doing stuff when directly, overtly made to. That’s notable. You see worse compliance despite much more enforcement in societies like communist China or the USSR.
The IRS does not persecute enough people, with enough vigor, to generate the tax revenue that they do if people really didn’t want to.
I don’t think “voluntary” is a good word for that though. Here’s another distinction that’s relevant: there are many laws that I think are roughly correctly, and tax law isn’t on that list. My compliance with tax law is nevertheless similar to my compliance with a bunch of laws I agree with way more. One reason is I don’t want to devote my time and energy to fighting with the system re taxes even if the personal risk isn’t that bad. And fighting the system involves dishonesty (or else a much much higher chance of IRS action regarding me personally, or a ton of work to find ways to avoid taxes legally, or just having no income), and I have reasons to avoid dishonesty on general principle.
The actual issue under discussion was *proportional* taxation specifically. Hayek was claiming basically that everyone agrees it’s fair that e.g. we all pay 10% of our income in taxes, rather than different people paying different proportions. Note that this isn’t about the unfairness of different income tax brackets (progressive taxation), just about using a flat percentage. I don’t agree that a flat percentage, same for everyone, is fair. The government provides services. Lots of services in general have a flat fee, e.g. $20/month rather than charging a percentage of my income. That’s actually way fairer and makes more sense. If I get the same amount of police protection as someone else, shouldn’t I pay the same number of dollars as him, regardless of my income? So I disagree with Hayek.
DD, by contrast, has actually defended progressive taxation on the theory that in a free society rich people would want to fund science more than poor people, and would devote not only a larger dollar figure to it (justifying proportional taxation) but a larger percentage of their income (justifying progressive taxation). I don’t think the government should fund science and I regard government science in general as harmful. Maybe they spend a billion dollars and the result is a hundred million positive dollars of science, rather than actually negative (doing net harm after ignoring the cost of the billion itself). That’s hard to say. But jesus, as much as I’d like to fund science as a rich person in a free society, that doesn’t translate at all into wanting to fund government science, which is basically a contradiction in terms, as Atlas Shrugged taught us. Science was DD’s main example IIRC. Maybe you could make a similar argument with some better examples and come up with something reasonable but DD never worked that out and wrote it down.
I understand now.
It’s actually DD’s argument for govt funded science that I don’t understand. If rich people in a liberal society learn how to comand vast resources, and they conlude research is worthy of their money, they don’t need the govt to do it.
DD is not in favor of govt science but used rich ppl fund science more to defend progressive tax brackets. Which I don’t agree with but it’s a much more nuanced point than just advocating govt science.
“I don’t undestand why Hayek is wrong here.” The quote referenced is your’s not Hayek’s. It’s badly written cruz it’s confusing, I meant I don’t agree with you.