Category Archives: Taxation is theft

Free Markets Are a Prerequisite for Art and Charity

Catching up on some of the news this week.  Aside from the hilarious, abysmal failure of Obamacare Lite (aka the American Health Care Act (AHCA), the budget has been getting a lot of publicity.  I realize some of my readers are not number crunchers, so for this post, I’ll refrain from digging into those details of the budget plan and focus more on the qualitative aspects.  (No promises for future posts. 😉 )  

Center Stage with the liberal Left this week is PBS, the National Endowment for the Arts, and Meals on Wheels.  From some of the memes and posts you’ve been reading, undoubtedly you know that Humanity as a whole is about to descend into a Dark Age.  Elderly veterans will be callously left to starve.  Our great-grandchildren will have to read about Art and Educational Programming in history books because without Government support, there will be none.

That is if our great-grandchildren are actually reading.  And reading history books.  

Maybe they’ll learn about it on YouTube.  (Wait, isn’t that art?  I digress.)  

Without digging into numbers as promised, I’ll simply mention that the Left loves to point out these programs are tiny budget considerations compared to, say, Social Security or Medicare or the Military policing the world (all of which I’m also in favor of slashing).  But if I’m bleeding trillions of dollars a year, spending money we don’t have and borrowing more, then yeah, I’m looking for every opportunity to save a buck.  Guess that makes me heartless and greedy.

Think about the government slush fund created to support the broad and nebulous space known as Art.  Is all Art good and worthy of our combined, financial support?  To those that defend the NEA and PBS, does it matter where the money goes, just as long as it is labeled as “Art”?  I’ve been around musicians, graphic artists, videographers, photographers, sculptors, painters, poets, dancers, writers, and actors for most of my life.  I can tell you without hesitation that Artists are some of the most critical people I know.  They love to rip into other artists calling them Hacks, Attention Whores, Corporate Shills, Sell Outs and Wannabes.  If they’re being honest, they will even admit Nickelback isn’t as good as Buddy Guy.

For over half a century, our tax dollars have been taken from us for a committee to decide which Art should be supported.  So, let’s say you’re an artist/entrepreneur trying to open a small local gallery in Chicago.  You don’t have a large staff, and you’re barely able to keep your doors open.  You then learn that the Art Institute of Chicago received, yet again, another $20,000 grant from the NEA, despite the fact that they have a budget of tens of millions of dollars and support from corporate and private philanthropists from all over the world.  In fact, in their 2016 Financial Statements, the Art Institute of Chicago declared they had over $70 million in Net Contributions Receivable. (Sorry, numbers, I know.)  

Is this acceptable to you artists and supporters of Art?  In economics, we call these Rent Seekers.  Basically, those that are rewarded are not necessarily the best, the purest, or even the most popular.  The reward goes to those that can successfully navigate the system.  If you’ve got lots of money already and can hire dedicated staff to apply for grants and government funding, chances are you will reap the rewards.  

This is also one of the reasons why you can easily find countless examples on the web of questionable spending of public funds in the name of “Art” — things like almost a half million dollars for medieval smells museums and $100k for Shakespear without Words.  

Then there’s Meals on Wheels, as mentioned above.  Their funding is also on the proverbial chopping block.  Or so that’s what we’ve been led to believe from the headlines and memes.  In fact, less than 3% of their operating budget comes from federal grants.  

Again, numbers.

But what is the solution then?  Without Government stealing from everyone, creating slush funds with zero accountability, and rewarding organizations and artists with the means and knowledge to navigate the grant writing maze game?  

The Free Market, of course.  

Take, for example, this blurb from the NEA’s own website.  

Capture

So now, the NEA is an investment vehicle?  If $9 of private investment for the arts is voluntarily given by individuals and organizations, why do we need to steal the last dollar of $10?  Can’t those $9 be used to create catalysts for communities, productive jobs, net adds to GDP, and revitalize communities?  Or is there something magical about that federal $1 bill.  (#fungibility) 

Just can’t seem to get away from numbers, can I?  

The Free Market encourages individuals to support Art in all of its glorious shapes and sizes based on our preferences.  In fact, more people voluntarily support the arts, despite the theft that government practices.  If they had more disposal income to allocate, support for the arts would grow even further.  George F Will wrote in the Washington Post

Americans’ voluntary contributions to arts organizations (“arts/culture/humanities” institutions reaped $17 billion in 2015) dwarf the NEA’s subventions, which would be replaced if those who actually use the organizations — many of them supported by state and local government arts councils — were as enthusiastic about them as they claim to be. The idea that the arts will wither away if the NEA goes away is risible.

A bit dated, but still relevant, the Heritage Foundation wrote that the NEA actually discourages charitable gifts to the Arts.  

But where’s the assurance that people would freely fill the void if the government safety blanket is removed?  Look no further than Meals on Wheels.  When the news was announced that the proposed budget cuts might impact 3% of their existing budget, those silly fools John and Jane Q. Public donated 50 TIMES their normal rate and 5 TIMES as many volunteers stepped forward to get their hands dirty and work at Meals On Wheels.  

How is that possible without the threats of government coercion?  Why would anyone voluntarily support the things that matter to them without the use of force?

It’s a mystery, to be sure, what makes people act so irrationally.  

But let me add one other consideration to this topic which I had alluded to in my post title.  Milton Freedman wrote in his book “Free to Choose” that voluntary exchange is a necessary condition for both prosperity and freedom.  It’s not a guarantee of prosperity and freedom.  But is a necessary prerequisite.  

I’ll add my own variation of Milton’s idea to say that in order for the Arts and Charity to not only survive but to thrive, voluntary exchange or Free Markets are a necessary prerequisite.  If arts and charity were supported more and more by coerced, government participation rather than individual choice, eventually Government will determine what are acceptable forms of art and what causes are worthy of “charitable” support.  As I pointed out above, most likely this road leads to successful Rent Seekers and the Politically Connected grabbing up all of the attention and resources.

Imagine if Trump’s administration was given the reigns to decide not only which forms of art and charity are worthy of support but also if he could decide which forms are ALLOWED.  What if Obama was given that amount of power?  Or John McCain or Hillary or Chad Kroeger of Nickelback?  The Free Market is the single greatest protector of the Arts and Charity because individuals can decide which of the countless choices available should be rewarded with our support, both financially and otherwise.  

The government should not be in the business of deciding which forms of Art and Charity are acceptable or not.


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What Would You Say, Ya Do, Here?

Just a short thought prompted by an exchange I had recently on Facebook with a former student of mine. When it comes to Labor, there’s a difference between Value and Activity. In the free market, Value is determined by the Consumer. Whoever is buying decides if the good or service offered has enough Value to justify the price. As I’ve written before, in a free market, Price is simply the agreement of terms set by the Buyer and Seller. If the Buyer doesn’t see enough Value at a given price, he doesn’t buy. If the Seller doesn’t see an adequate return on his labor, she doesn’t sell.

The Free Market demands Producers give their best in order to attract the most Buyers. Now, a Seller could very well try to cut corners, use inferior materials, or cookie-cutter mass produce his goods to get them to market at the lowest price. And the Buyer might favor affordability over quality. Choice. That’s the magic of the Free Market.

Activity is also known as busy work. I’m sure you can identify someone with whom you’ve worked that seems to always be busy, but you can never really articulate what it is that they do or what their contribution to the organization might be. If you’re familiar with the movie Office Space, one of my favorite scenes is when Tom is meeting with the Bobs, trying to explain what did at Initech. People skills!

Now, this is not a rant against management or some Proletariat rallying cry for the Workers. Good managers absolutely add value to an organization. But the biggest culprit of Activity promotion is Government. Government thrives on pushing paper, filling out redundant forms, following arbitrary procedures and protocol, perpetuating outdated equipment, and generally making you wait. And the reason is simple. Government has very little accountability. They’re not measured on whether their Activity produces anything efficiently. They usually have no competition, so there’s little incentive to make any improvements to the status quo.

I remember seeing news stories of the Soviet Union where everyone was given Activities to perform. Someone might have been responsible for cutting pipes. Another person might have been instructed to produce the joints. Another made the valves. Turned out that the pipe cutters used ¾ inch pipes. The joint makers used ½ inch. The valve makers used 3/8 inch fittings. Because they each had an Activity to perform and no incentive to make sure their product was useful or compatible with others, they just kept making their daily quotas. And what happened? Well, if you were trying to build a house, you probably ended up using a lot of duct tape.

Only in the Free Market, where Producers are rewarded for Value they create and Consumers are empowered to choose the products and services that exactly fit their needs, can a nation thrive, overcome poverty, innovate and explore, and progress ahead. Government, almost universally, stands as the greatest inhibitor of progress. It is a parasite on the Free Market, rewarding Activity and not real Value creation.

Is Taxation Theft?

Was scanning the news feed and came across a short blip from a Keynesian economist that wrote something along these lines —

If you’re ever debating with a libertarian, you’ll invariably end up being accused of supporting theft because you believe people have a social duty to fulfill by paying their taxes.  Taxation is not theft.  It’s more akin to paying rent.  Plus, you get things in return for your taxes, so that’s hardly theft.  You can also vote against raising taxes.  . . .  And you DO have social responsibilities.  No man is an island unto himself.

<sigh>

<deep breath>

Imagine you have $10.  You can spend it on one thing or several items.  You decide you want to buy a pair of cheap sunglasses because summer is coming up.  You have exactly enough money to cover the price at which the seller is willing to make a trade with you.  Unfortunately, there’s a 100% sales tax so the total price is now $20.  Neither you nor the seller want to have to pay the tax, but you don’t have a choice.  The government has told you that instead of sunglasses, you both need to buy math textbooks or help reduce the price of Corn (even if you’re allergic to corn) or fund a war thousands of miles away in a country you’ve never heard of against an enemy with whom you have no quarrel.

Not only that, but the government decides you’re not trustworthy to spend enough to pay the sales tax that’s required to keep all the socially responsible programs going.  So, they decide that before you even see that $10 from your hard-earned labor, they’ll snatch it from your check.

Boys and girls.  That is, in fact, the very definition of theft.

You can justify it by way of “if you don’t like it, you can always leave” or by negotiating a __% tax rate instead of 100% for those that really need a break .  You could argue that these social responsibilities are so great, but so expensive, that no one would possibly fund it voluntarily, and thus requires the use of force.  You can argue we get things in return for the taxes, so it can’t possibly be theft.  A thief would never give you back something in exchange.  (Curious if that logic would stand when a burglar takes your TV but leaves you a Big Mac in exchange.)

NONE of these points change the definition of theft.  It only attempts to justify it.  I’ve said it many times.  If you are okay with that, then that’s your choice.  Just admit that you are in favor of theft under certain circumstances.  I, on the other hand,  have a moral objection to theft.