If As Nozick Claims “Taxation Is Theft”, Can It Ever Be Just?

IF AS NOZICK CLAIMS “TAXATION IS THEFT”, CAN IT EVER BE JUST?

The central argument to this debate is to what extent state intervention in the distribution of goods is justified, if at all. It is a debate that has largely been established with the emergence and expansion of the Welfare State. Theorists such as R Nozick, who claim that taxation is theft and who therefore, defend a minimal state where state intervention in the economy is kept to a minimum. In contrast there are those who can loosely be described as social democrats who insist that there are moral grounds for state intervention. I would address both of these views within this essay.

In his book Anarchy, State and Utopia, Nozick argues for a minimal state whose sole purpose should be to maintain order. “The minimal state is the most extensive state that can be justified, any state more extensive violates peoples rights”

The minimal state is often advocated by the British Conservative party who favour a laissez faire approach that does not compliment the welfare concept. According to Nozick the Welfare Concept infringes on a persons right to choose what they do with their ‘holdings’. Therefore, taxation for Nozick represents state intervention at the highest level. He regards taxation, as being similar to forced labour. “Taxation of earnings from labour is on par with forced labour”. This argument is based on the notion, that by taxing a person’s wages you are in effect taking hours from a person. He responds to his critics by arguing that even those who consider this claim to be ridiculous would object on principle to each person working an extra five hours in order to aid the disadvantaged.

Using his entitlement theory, which outlines what we are legitimately, entitled to and how, Nozick claims that we are entitled to our holdings if gained legitimately. “A person who acquires a holding in accordance with the principle of justice in acquisition is entitled to that holding” He goes further to say that this also applies to the transfer of holdings from one person to another.

This is a preview of the whole essay

Nozick claims that justice in what you own is historical, whereas the welfare principle is based on equality of outcome and therefore, does not take into consideration how a person acquires their holdings, as it is not deemed relevant to the distribution. “Welfare economics is the theory of current time slice principles of justice”. Therefore, advocates of Nozick’s entitlement theory consider history of what and how you have acquired your holdings as central to their idea of distributive justice. In contrast, distribution based on for instance moral merit or any of what Nozick considers to be patterned principles deprives us of our right to decide what to do with what we have. Distribution based on moral merit or equality does not account for our right to what we earn as people choose how spend their earnings and if this consequently benefits another then they are legitimately entitled to it. Therefore, it is not possible for a patterned conception of justice to be deemed acceptable as it infringes on individual choice.

“No end state principle of justice can be continuously realized without continuous interference with peoples lives”

A central argument presented by Nozick is that for some people the acquisition of material goods is central to their happiness and consequently in order to meet this objective they must sacrifice their own time and labour. For others happiness is reliant on their ability to enjoy their leisure time and who therefore do not need to work as hard as their more materially concerned counterparts. It would follow that some people deserve a lesser share as a result of their own personal choice. If you are forced to work additional hours to subsidise the tax paid on your wages you have in effect lost your right to decide and allowing decisions to be taken for you means your rights have been prohibited. “This process whereby they take this decision from you makes them a part owner of you; it gives them a property right in you”

All of Nozicks arguments are based on the rejection of any imposition that infringes on individual liberties. Nozick’s arguments can be applied to other principles as individual freedoms can create problems wherever a constitution of what ought to be done is attempted. In the case of taxation though, he has written extensively, providing counter arguments for various objections whilst considering alternatives. However, as he is a defender of individual liberty, taxation can never be just as if a person does not choose to give but is forced then the first component of individual freedom has been violated and therefore cannot be justified by Nozick.

In support of the argument presented by Nozick, Milton Friedman, winner of the Nobel Prize for Economics in 1976, contends that it is not possible to adopt socialist economic programmes whilst advocating individual freedom. This ‘democratic socialism’ as he terms it, is a contradiction in terms as it compromises the principle of individual freedom by imposing restrictions on monetary arrangements. “A society which is socialist cannot also be democratic in the sense of guaranteeing individual freedom”

The main argument that he puts forward is that political arrangements cannot be deemed acceptable unless economic arrangements are considered legitimate. He argues that political freedom can only be achieved via economic freedom. One view put forward by Milton Friedman is that any ideology that ensures economic freedom generally, maintains political freedom. He goes further to suggest that political freedom has only been evident in society that has established economic freedom. “History suggests that capitalism is a necessary condition for political freedom””

If this is accurate then the essence of taxation means that political freedom is not realized in many countries that claim to maintain it. Milton Friedman then goes onto to contest this view by asking that we look at fascist Italy and Germany which illustrates that capitalism does not ensure political freedom just as socialist systems do not as is evident in the case of the USSR.

This confrontation between the economic and political inspired many philosophers and theorists to develop a means by which both freedoms could be realized without seriously encroaching on one another. One philosopher, a radical reformer in the 19th century, called Jeremy Bentham contended that political freedom is a means to economic freedom and that it therefore takes precedence. “Welfare rather than freedom became the dominant note in democratic countries”

On the other side of the argument and in objection to the subsequent policies that were established, are those like Hayek that would claim that economic freedom is a means to political freedom as without economic freedom the concept of individualism is violated rendering political freedom unachievable.

Jeremy Bentham’s additional arguments that support the idea of the welfare state can be found in the utilitarian philosophy that he is associated with. The utilitarian argument of the greatest amount of happiness to the greatest amount of people does much to support the welfare principle

“because those who have few goods gain a greater utility from obtaining at least some, or because welfare economics raises general welfare by boosting aggregate demand”

The utilitarian philosophy is based on the premise that humans are encouraged by the achievement of happiness and therefore support the view that whatever creates the most amount of happiness for the greatest number in society should be the basis of political decisions if they are to be deemed morally correct. If the objective of a political system is to create the greatest amount of happiness then the welfare system is a tool that can be used to create this. A society as a whole cannot be content unless the majority of its members are satisfied. Therefore, the welfare system is supported by the utilitarian philosophy.

Another argument used to justify state intervention in the distribution of goods if formulated by Rawls and is that of ‘the original position’. Using this theory Rawls contends that if we have no knowledge of who we are or our social standing and then asked to select the principles of justice that will be adhered to the result would be of equal liberty and of distribution being justified only when it is of benefit to the disadvantaged. This would be so as behind this ‘veil of ignorance’ no one would agree to the principle of slavery for instance, as there is a possibility that you yourself could be a slave. Therefore, equal liberty would be a main component of any principles of justice that ensued. The second component of justice that Rawls mentions is the acceptance of inequality in distribution only for the benefit of the disadvantaged. This supports welfare economics as it is its very objective in that the welfare system exists solely for the purpose of enabling support for those less advantaged. This theory is compatible with both capitalism and democratic socialism and is therefore a well-regarded theory.

In conclusion to this debate for those who advocate individual liberty as a central component to their philosophy taxation can never be just as it violates peoples rights. However, it is pointless to have economic freedom without social justice.

As in the absence of political freedom economic freedom cannot be realized.

R Nozick page 149

Ibd page 169

Ibd page 151

Ibd page 154

Ibd page 163

Ibd page 172

Milton Friedman page 8

Ibd page 10

Ibd page 11

Plant Chapter 4 as cited in Marsh & Stoker, page 35

Rawls 1972: Daniels 1975 as cited in Marsh & Stoker, page 35