21 September 2011

Well Said

By -- Badtux the Democracy Penguin

In a previous post, I pooh-poohed the notion of "limited government" in the Libertarian sense of the word (basically a return to 1776 when the U.S. government consisted of the War Department and the Post Office, and the Libertarians aren't so sure about the Post Office thing). I pointed out that there has not been a single democracy on the face of this planet within the past fifty years that has voted for "limited government", and thus the only way you could have "limited government" in the Libertarian sense of the word is the old fashioned Pinochet way -- by imposing it at gunpoint.

But once you admit that "limited government" in the Libertarian sense of the word is a lost cause because every junkie has a mother and a brother who want him protected from himself, every 18 year old has a father who wants certain things outlawed to maybe keep said 18 year old living long enough to have some sense, and so forth, then you have to wonder: What are the limits of power?

There's two answers to this question:

The majority in a democracy will not knowingly vote for laws that oppress the majority. And if they unknowingly vote for such laws, as long as it remains a democracy such laws will get repealed. Thus I don't think we need to fear that the majority in a democracy will vote that all citizens be terminated at age 65 in order to save on Medicare costs, because, after all, everybody eventually reaches age 65.
The majority in a democracy, like the majority everywhere, fear violence and conflict and will not knowingly pass laws that oppress a large enough minority that widespread civil disorder is the result.
The end result is that in a democracy, you have significant barriers to the sort of widespread tyranny that you see in most non-democracies. Lest you point out the sad history of racial discrimination and segregation in the South, I'll just point out that it was enforced via the same means that any other such regime of terror is enforced: it was imposed at (white) gunpoint, not by the vote of the majority of the citizens of those states.
Okay, so now let's talk about taxes. If there are no fundamental restrictions on taxes, what will keep the majority from, say, voting to impose a 100% tax on the 100 richest people in America?

Well, first of all, the 100 richest people in any nation don't produce a significant amount of economic output (output is produced by workers, not by executives, who merely reap the benefits of the work that the workers do), so it'd be a one-time redistribution of capital. Because the majority of workers produce the majority of the nation's income -- workers own only 51% of the nation, but earn 78% of the nation's income -- the majority in a democracy will never impose confiscatory taxes upon the majority, because the majority is *them*. In short, what limits taxation in a democracy is the simple fact that the majority of the income is earned by workers, and thus taxing a minority won't raise sufficient money to run the big government that the majority wants even if the majority taxed that minority at 100%. Sooner or later they'd have to raise their own taxes, because they're earning most of the income.

In short, what limits taxes in a democracy is low income inequality. If the worker majority are rewarded with a fair amount of the income that they produce for the ownership class, they will not impose confiscatory taxes on the ownership class because confiscatory taxes on the ownership class simply won't accomplish anything. It is only when the ownership class decides to get greedy and grab 49% of the assets of the nation despite being only 1% of the nation's population that suddenly they have to worry about confiscatory taxes being levied against them by the working majority -- at which point I have to say, they have nobody to blame but themselves, yo.

BTW, this is also why the worker majority won't award themselves unlimited welfare -- they'd have to tax themselves to provide it, so what's the point? -- but that's another right wing anti-democracy talking point to destroy at some point in the future.

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