Indian Libertarians

Why government is detrimental to human wellbeing

anacap Monday September 22, 2014

Government is detrimental to human wellbeing because there is nothing government can do without first causing harm to some human beings. Even the good that government can do to some human beings comes at the cost of harm done to other human beings. It is impossible that it be otherwise.


The reasoning is extremely simple. Any action requires means (commonly known as resources). Government does not possess any resources of its own. It does not obtain the resources it needs for its actions by producing goods of value to others, trading them on the free market of voluntary exchange and generating surpluses in the process. What it does is to violently take away other people’s legitimate property and use that to obtain the resources it needs.


So right there, before it does any ‘good’, government has done harm. But what about the ‘good’ that it does with the resources thus obtained? Can there not be net social benefit as a result of government’s actions. The short and simple answer is ‘No’.


Why the answer is ‘No’


To comprehend this answer, we need to first understand that ‘wellbeing’ is a subjective, psychic concept. It is the subjective appraisement that one’s state of existence is better off than…….. what? In comparison to……. what? It is in answers to these questions that the key to the comprehension of social wellbeing lies.


Fundamentally, man is a purposeful being. It is in his nature to engage in action aimed at satisfying his ends (whatever those ends may be). Action (purposeful behaviour) presupposes that man is able to visualise at least 2 alternative universes

  1. one that would result if he did not act in a specific manner
  2. one that would result if he were to act in that specific manner

Man as a purposeful being who chooses, say, path 2 does so because he subjectively ‘prefers’ the outcome of path 2 to that of path 1. Any other inference would contradict the purposeful nature of man. This preference is what is properly understood as the subjective appraisement of individual wellbeing. It’s like saying “I’d rather be in this state than in that state. That’s why I choose to do this.”


Every individual has his or her preferences. Satisfying one’s preferred ends requires the individual to apply means towards end satisfaction. Means are the things that an acting individual may act on. These means either exist in nature or have to be produced by the use of other things found in nature (including human labour).


So, how does one obtain these ‘means’? If you were Robinson Crusoe, you would have to produce every means all by yourself. If you lived in a society where different individuals produced different means, you could either continue to produce all those means by yourself, or wholly or partially obtain it from others who produce them.


But why would any other individual offer you what (s)he has produced? Is (s)he not also an individual acting to satisfy his/her own ends? The answer is simple. What if (s)he thinks your stuff satisfies his/her end better than the stuff (s)he has? In that case, (s)he would voluntarily offer what (s)he has to obtain what you have. In economics, this is called the concept of reverse valuation and the action of A offering X to B to obtain Y from B with both parties acting of their own volition is called voluntary exchange.


Voluntary exchange and human wellbeing


The interesting thing about voluntary exchange is that both parties, A and B, ex-ante (or as understood just prior to the action) attain their more preferred state as a result of the exchange. This attainment of the more preferred state of existence is what economics understands as enhancement of human wellbeing. If you walked into a cake shop and bought a cake for Rs. 60, it is because at the instant just prior to the exchange, you preferred to obtain the cake rather than retain your Rs. 60 (which you could have done). No one is forcing you to buy the cake.


It is very important not to confuse this ex-ante understanding with ex-post analysis, i.e., analysis with the benefit of hindsight (which is always 20/20). Imagine that you bite into the cake and find that it tastes like mud. That only means that you chose the wrong means. You can at best learn from this and not buy that cake from that shop again. It does not in any way change the fact that ex-ante, the cake was your preferred option.


From the cake seller’s point of view, he voluntarily gave you the cake. That implies that he preferred to obtain the Rs. 60 rather than keep the cake to himself. He could very well have done the latter but chooses the former.


Thus, in this 2 person example, it becomes clear that ex-ante, both parties to the voluntary exchange attain a state of greater wellbeing as a result of the exchange. This is easily extendable to an economy with billions of actors because all exchanges are between 2 individuals. If every exchange is voluntary, then every individual enhances his/her ex-ante subjective wellbeing as a result of every such voluntary exchange that (s)he participates in.


What if B were not to prefer X over Y? Clearly, he would not voluntarily offer Y to A in order to obtain X. How is A to obtain Y? He has 4 options.

  1. See what is the best he can do with X
  2. Produce Y himself
  3. Look for someone else who would prefer X to Y
  4. Use violence to take Y away from B

Cases 1 and 2 are cases of no interpersonal exchange. Case 3 is an extension of the voluntary exchange analysis done earlier. Case 4 is interesting and is an example of what economics calls violent exchange.


What we can see is that these two types of exchange – voluntary and violent – are mutually exclusive and collectively exhaustive. If there is an exchange, it must be either voluntary or violent. There is no 3rd class of exchange possible. This makes the study of violent exchange very important.


Violent exchange and human wellbeing in the 2-person example


The key to understanding violent exchange is the realisation that in our example, A is better off because he has obtained a more preferred means. B, however, is worse off because he is deprived of his more preferred means. Even if A offers him X in exchange, he is worse off because he preferred Y to X. It is also clear that he is worse off as a result of A’s use of violent force.


Is it however possible that overall wellbeing is enhanced? The important point is that that no meaningful statement of this sort can be made. Wellbeing is the subjective appraisement of an individual. It is not a quantity denoted by a cardinal number or measured in terms of one. So, you are in no position to square off B’s lowered wellbeing with A’s enhanced wellbeing and claim any enhancement of overall wellbeing. Monetary calculations in the name of cost-benefit analysis are a bastardisation of the estimation of social wellbeing.


Violent exchange and social wellbeing


Extending this to a society that includes billions of people, violent exchange leaves the peaceful, voluntary segment of society worse off and the perpetrators of violence better off. Thus, we see that violent exchange is harmful to producers and beneficial to looters. This is even more so if the society is under the control of a gang that systematically loots the productive members of that society. If you’ve seen Sholay, you would know what I mean.


In the long run, this situation becomes worse and even the looters become worse off. This is because the productive segment of society shrinks and the loot available to take away through the use of violence correspondingly shrinks. Over time, the ranks of the looters keep swelling while those of the producers keep shrinking. Eventually, no one produces and everyone is a looter. But since there is nothing produced, there is nothing to loot. So, the society degenerates from an advanced, civilised society based on production to a primitive, barbaric society based on hunting, gathering and looting. Thus, we see that violent exchange, especially if systematic and institutional, makes society worse off.


Why the very existence of government is detrimental to human wellbeing


Government cannot exist without initiating force, i.e., using violence against the people it “governs”. To enforce its monopoly on the legal use of force, i.e., to be a government in the first place, it has to initiate violence against competitors. To possess any resources to function, it needs to collect taxes. Taxes are not voluntary payments. They are extracted using the threat to use violent force. Seizure of property or confining a person in a cage, i.e., arrest and imprisonment, are acts of violence. So is collecting ‘fines’. In all these actions, government is no different from Gabbar Singh.


These being the most basic actions of a government just to exist, we see that the mere continued existence of government is just the institutionalisation of a system of violent exchange that will use violent force to extract resources from the productive members of society in order to distribute the same to, obviously, the non-productive or parasitic members of society.


As explained earlier, a sustained, institutionalised system of violent exchange harms society by bringing it down from the advanced state of a civilised society characterised by production to a primitive, barbaric one based on hunting, gathering and predation. Thus, it is easy to see that the very existence of government is detrimental to social wellbeing. The proper goal for anyone who wishes to see a prosperous society is to work towards the shrinking and the eventual abolition of government.