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Government by Contract – Article by Kyrel Zantonavitch

Government by Contract – Article by Kyrel Zantonavitch

The New Renaissance Hat
Kyrel Zantonavitch
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Government should be by contract only. The citizen and the state should come to a mutual, official, legal agreement. All adults, upon turning 18 or 21 or so, should sign a formal, written, binding, social compact in which they agree to abide by the constitution and the laws of a given country in exchange for government services. This means in exchange for the defense of their liberty and the protection of their rights.

This essentially means the systematic, careful, full-time safeguarding of their person and property by professionally trained and armed government agents or civil servants. The would-be citizen or resident should freely agree to pay a certain fee – say 3% per year of his local income or .5% per year of his local net worth – in trade for expert police and military defense, plus court and jail services, plus the government administration thereof.

In theory the contractee of the state might be commanded to surrender some of his rights — such as serving one year of military duty, or a lifetime of no slander or defamation in speech, or being subjected to subpoena coercion at any time. But the potential citizen or resident is always perfectly free to quit, or to refuse to join, such a slightly despotic state.

It’s understood that at any time, for any reason, the citizen is free to immediately, unilaterally cancel his contractual agreement by giving brief, official, public or written notice. Thus he renounces his citizenship — and consequent legal obedience and political loyalty — to his former country and government. It’s also understood that the government can strip him of his citizenship or political rights — also by providing official, public notification slightly in advance — for major violations of the constitution or law.

In both cases the person involved can either join another government or become a temporarily or permanently stateless person. But no fines, jail terms, or other civil penalties are allowed due to his “treason,” especially not any property or wealth confiscation. If the former citizen owns land, and so chooses, he can theoretically become a one-man country. Or the previously-signed government contract may require him to sell his land for a fair price and then leave.

Because the former citizen or resident is no longer bound under political contract to some social group, and thus is no longer paying his service fees or “taxes”, the old government will now stay off his private real estate, and will no longer necessarily protect his person or property from criminals and invaders, i.e. from any attackers or rights-violators. He must defend himself.

Moreover the newly independent person can no longer visit his former country without government permission, such as a visa of some kind. When such a person does visit he must temporarily subject himself to the local laws of the foreign government, and perhaps also pay some sort of visitor’s fee.

Government by contract ensures that any given state is fully legitimate and proper in that it clearly and openly enjoys 100% of the consent of the governed, from its voluntary members. Convicted criminals may dispute this, but they freely chose to become citizens or residents prior to conviction. Their arrest, trial, and punishment should be entirely open, and a matter of public record, as well as completely based upon the principles of justice and individual rights, and a product of laws that the convicted criminal previously freely agreed to.

Any given government should follow the legitimate and proper course of attaining a formal, serious, contractual assent from the totality of its adult citizenry, and all free, sovereign individuals therein. A government not founded on the consent of the governed is a type of criminal syndicate or imposed tyranny which desperately needs to be avoided.

Kyrel Zantonavitch is the founder of The Liberal Institute  (http://www.liberalinstitute.com/) and author of Pure Liberal Fire: Brief Essays on the New, General, and Perfected Philosophy of Western Liberalism.

This TRA feature has been edited in accordance with TRA’s Statement of Policy.

Frédéric Bastiat’s “Economic Sophisms” Is Now More Important Than Ever – Article by Julian Adorney and Matt Palumbo

Frédéric Bastiat’s “Economic Sophisms” Is Now More Important Than Ever – Article by Julian Adorney and Matt Palumbo

The New Renaissance HatJulian Adorney and Matt Palumbo
June 29, 2015
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The great economist Frédéric Bastiat would have turned 214 today. His contributions to liberty have been many, but while so many advocates of free markets focus on The Law, there is another book that represents his legacy even better: Economic Sophisms. This short work of essays epitomizes perhaps his most important contribution: using taut logic and compelling prose to bring the dry field of economics to hundreds of thousands of laymen. Bastiat did not, generally, clear new ground in the field of economics. He read Adam Smith and Jean-Baptiste Say and found little to add to these giants of economic thought. But Bastiat possessed a keen wit and a clear, pithy writing style. His writings have become immensely popular. One-hundred-and-fifty years after his death, essays like “A Petition” are still circulated as an effective counter to progressive economics. Bastiat makes three central contributions in Economic Sophisms. First, he reminds us that we should care about the consumer, not just the producer. Second, he dismantles the argument that there are no economic laws. Third, and more generally, he is one of the few politicians and writers who thought with his head, not with his heart. Bastiat used logic to clearly lay out the consequences of political actions instead of hiding behind good intentions.

Surplus, Not Scarcity

Economic Sophisms expresses a common theme over and over again: we should craft policies that focus on consumers, not on producers.When Bastiat uses these phrases, it can be easy to misinterpret him. Keynes, writing 100 years after Bastiat, hijacked the terms. But Bastiat wasn’t a Keynesian. When he discusses how consumption is the end goal of the economy, what he means is: having goods (which benefits consumers) is more important than making goods (which benefits producers). Put another way, producers prefer scarcity, because it drives up prices. Consumers prefer surplus for the opposite reason. Producers advocate all sorts of methods for reducing the total quantity of goods (theirs excepted, of course). Producers seek to tax goods from other countries that compete with their own. They outlaw machines that would replace them. Producers even favor policies like burning food to drive up food prices, a policy that caused much starvation when it was enacted in the United States during the Great Depression. Consumers, by contrast, prefer abundance. They are happiest when they have a plethora of goods to choose from at a low price. Bastiat points out that we are all consumers, including the producers. The man who produces railroads also uses his wages to buy goods. One can imagine a world with no producers, a paradise in which man’s every need is fulfilled by nature or a benevolent God. But one cannot imagine a world with no consumption. In such a world, man would not eat or drink, have clothing or buy luxuries. Consumption, and quality of life, is the essential yardstick to measure a society’s economic prosperity.

When we enact producer-backed measures like tariffs, Bastiat argues, we favor producers’ interests over consumers’. We show that we’d rather have scarcity than surplus. Taken to its logical extreme, such a policy is absurd. Would anyone truly argue that total scarcity is preferable to having plenty?

The Principle of No Principles

In Bastiat’s day, it was fashionable to claim that no real principles exist. X may cause Y, but a smaller X needn’t cause a smaller Y; it could cause Z instead, or A. Today, we see the same logic: people who claim, for instance, that a minimum wage hike to $100 would kill jobs but that a hike to $10.10 would somehow create them. In essay after essay, Bastiat destroys this myth. Economics is not a foggy morass where up is sometimes down, left can be right, and there are no absolute truths. Economics is not like nutrition, where a glass of wine can heal while two gallons can kill.In economics, a cause will produce a correlational effect, regardless of how large the cause is. If small X causes small Y, large X causes large Y. A minimum wage hike to $100 will kill many jobs; a minimum wage hike to $10.10 will still kill some. The effect does not vary, only the size of it. Indeed, one of Bastiat’s most common argumentative tools is reductio ad absurdum, or carrying a concept to its logical conclusion. Opponents of mechanization want to force railroads to stop at one city and unload goods, thereby generating work for the porters? Very well, says Bastiat. Why not have them stop at three cities instead? Surely that would generate even more work for the porters. Why not stop at twenty cities? Why not have a railroad composed of nothing but stops that will make work for the porters?

By carrying concepts to their logical conclusion, Bastiat provides a firm antidote to the fuzzy thinking of protectionist advocates.

Think with Your Head

In Bastiat’s time, just as today, it was popular to think with one’s heart. “We must do something!” went the rallying cry; never mind the consequences. Good intentions were enough. Make-work, for instance, has always been a favorite policy of those who think with their hearts. They see men and women unemployed and demand government take action. Often, this action takes the form of impeding human progress: using porters instead of railroads, for instance. The initial consequence, for the porters, is positive: more end up employed. But Bastiat recognizes that such policies, while they may protect the porters, harm the economy as a whole. They raise prices and create scarcity. Bastiat looked at more than just the direct consequence of an action. He examined all the outcomes, using taut chains of logic to demonstrate how each policy would impact those whom he was most focused on — the consumer.

Bastiat’s Legacy

Bastiat did not invent any new economic tools or schools of thought. But the clear logic with which he thought through economic ideas, and the clear and witty prose with which he lambasted those who did not do so, have made him one of the most popular economic figures of all time. Bastiat’s ideas in this text have been borrowed, rehashed, and republished for over 150 years. His insights have been appropriated by dozens of prominent thinkers. Most famously, Henry Hazlitt based Economics in One Lesson largely on the essays in Economic Sophisms. As we make note of his 214th birthday, perhaps we should raise a toast to the man whose ideas — in all their adopted formats — have done so much for the cause of liberty.

Julian Adorney is an economic historian, entrepreneur, and fiction writer.

Matt Palumbo is the author of The Conscience of a Young Conservative and In Defense of Classical Liberalism.

This article was published on Mises.org and may be freely distributed, subject to a Creative Commons Attribution United States License, which requires that credit be given to the author.