Taxation, forced labor, and theft: comment.

• Author: Edwards, James Rolph
• Position: Controversy

Libertarianism is not as monolithic an ideology as many people believe. though all libertarians would agree that taxes should be low, there is a strong purist view that taxation itself is illegitimate. As Edward Feser notes in the fall 2000 issue of The Independent Review, however, one finds few libertarian academics supporting that view. Feser then explains and analyzes the arguments of two prominent academics, Robert Nozick (1974) and Murray N. Rothbard (1982), who have taken the position that taxation is illegitimate per se because it constitutes forced labor, presumes partial ownership of the person by the state, or is a form of theft. Feser also rebuts, with some success, several of their critics.

From considerations similar to those of Nozick and Rothbard, modified in the light of a Jeffersonian and Madisonian minarchist view that some government is necessary (and must be adequately financed) in order to preserve individual rights and freedom, I once proposed a radical method of financing government without taxation (Edwards 1984-85). Here I argue, however, that libertarian objections to taxation for the finance of pure public goods can be met. Indeed, the striking thing about Feser's otherwise excellent discussion is that he never comes to grips with the nature of public goods or with the rationales for taxation both logically and empirically inherent in the existence of such goods.

Suppose we take seriously the minarchist notions that an institution such as government is necessary for the maintenance and preservation of the free society that all libertarians value, and that government is literally productive in the optimal provision of such public goods as systems of criminal and civil law, enforcement of law and contract, protection of property rights, and national defense. That is, the provision of such public goods arguably has effects similar to those of money. They reduce transactions costs and allow an extension of the division of labor, simultaneously releasing for other productive uses the private resources that otherwise would have to be employed in self-defense. On this basis, given the inherent properties of public goods, libertarian objections to the minimal taxation necessary for the provision of such goods lose their force.

Public Goods, Free Riding, and Theft

The basic properties of public goods are well known. In stark contrast to private goods, public goods are nonexcludable and nondepletable. Once a public good has been provided, everyone can obtain its benefits without paying. In many cases, such...