Wednesday, December 30, 2015

The Problem With Opportunity Cost Is Simple

Comment on: Comparative Advantage: An Idea Whose Time Has Passed by Michael Munger

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Imagine King Ralph back in the day. He's trying to decide whether to start a war. He thoroughly understands that wars are very expensive. So if he does start a war... then he might have to forego something else that he also really wants. Like, a much bigger and fancier castle. After much deliberation... King Ralph decides that the war is worth foregoing a better castle.

Is this scenario an example of the concept of opportunity cost? Well yeah. For King Ralph the opportunity cost of war is a better castle. Therefore, as long as the opportunity costs are considered... then there's nothing wrong with allowing one person to decide how everybody's money is spent...

opportunity cost = monarchism/dictatorships

Errrr... what? Something is missing from the equation if the answer is "monarchism" or "dictatorships". So what's missing? Well... what's missing is the fact that King Ralph didn't actually earn the money that's he's spending. Is this a "minor" detail? If anybody thinks so then I'll be happy to give them my paypal address!

Here's how we can modify the equation...

opportunity cost + earner valuation = ?

What's it equal? Clearly it doesn't equal "monarchism"! King Ralph wasn't considering the opportunity cost of his own money. Really the only place where people consider the opportunity costs of their own hard-earned money is the market...

opportunity cost + earner valuation = market

The small problem with this equation is that it's kinda redundant. I should hope that "earner valuation" automatically conveys that the opportunity costs are considered. I don't think that you can valuate anything without considering the (opportunity) costs. The result is...

earner valuation = market

Actually, "opportunity cost" isn't the only economic concept built into "earner valuation". Another built-in concept is Quiggin's Implied Rule of Economics (QIRE)...



It basically states that society's limited resources should create more, rather than less, value for society as a whole. Without this rule there's nothing explicitly wrong with everybody's taxes being wasted on unnecessary wars. In other words, earner valuation is only desirable if our goal is to create the maximum value for society.  This means that opposing earner valuation is the equivalent of supporting the destruction of value.

Friday, December 25, 2015

Clarifying The Demand For Defense

Merry Christmas.  Here's my reply to: effectively directing the bulk of government spending

... and some relevant passages.

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After 9/11, if taxpayers had been free to directly allocate their taxes, then defense would have received even more funding than it actually received?  Even though the DoD failed to do its job... not only would taxpayers have rewarded the DoD... but they would have rewarded it more than congress did?

The bottom line up front: Taxpayers are the people least likely to spend the wrong amount of money on defense.  In other words, taxpayers are the people most likely to correctly discern whether any given expenditure will provide a real or imaginary advantage.

Perhaps the best place to start would be to compare federal income tax receipts (source) with the amount of money that defense actually received (source)...



The numbers are in billions.  Here's the chart data along with defense as a percentage of income tax...




Is this right?  I'm not 100% confident that I did this correctly.  If it is correct....then, in order for taxpayers to have spent more money on defense than defense actually received... it would have been necessary for them to spend, on average, more than 55% of their taxes on defense.  Does that sound plausible?

Right now people can't choose where their taxes go.  This means that we don't know the demand for public goods.  I refer to this as demand opacity.  Even though we don't know the demand for defense... I'm pretty sure that taxpayers wouldn't have spent as much money on defense as congress did.

Let's consider some of the relevant economic concepts...

The Demand For Defense - Relevant Passages

Some passages relevant to this blog entry... Clarifying The Demand For Defense


Bang For The Buck


To satisfy our wants to the utmost with the least effort - to procure the greatest amount of what is desirable at the expense of the least that is undesirable - in other words, to maximize pleasure, is the problem of economics. - William Stanley Jevons, The Theory of Political Economy


Presumably, individuals would prefer to pay less for virtually any good or service, since doing so rationally maximizes their utility from payment (Becker 1962). - Cait Lamberton, A Spoonful of Choice


The desire of food is limited in every man by the narrow capacity of the human stomach; but the desire of the conveniencies and ornaments of building, dress, equipage, and houshold furniture, seems to have no limit or certain boundary. Those, therefore, who have the command of more food than they themselves can consume, are always willing to exchange the surplus, or, what is the same thing, the price of it, for gratifications of this other kind. - Adam Smith, Wealth of Nations


If we now turn to consider the immediate self-interest of the consumer, we shall find that it is in perfect harmony with the general interest, i.e., with what the well-being of mankind requires. When the buyer goes to the market, he wants to find it abundantly supplied. He wants the seasons to be propitious for all the crops; more and more wonderful inventions to bring a greater number of products and satisfactions within his reach; time and labor to be saved; distances to be wiped out; the spirit of peace and justice to permit lessening the burden of taxes; and tariff walls of every sort to fall. In all these respects, the immediate self-interest of the consumer follows a line parallel to that of the public interest. He may extend his secret wishes to fantastic or absurd lengths; yet they will not cease to be in conformity with the interests of his fellow man. He may wish that food and shelter, roof and hearth, education and morality, security and peace, strength and health, all be his without effort, without toil, and without limit, like the dust of the roads, the water of the stream, the air that surrounds us, and the sunlight that bathes us; and yet the realization of these wishes would in no way conflict with the good of society. - Frédéric Bastiat, Abundance and Scarcity


The produce of industry is what it adds to the subject or materials upon which it is employed. In proportion as the value of this produce is great or small, so will likewise be the profits of the employer. But it is only for the sake of profit that any man employs a capital in the support of industry; and he will always, therefore, endeavour to employ it in the support of that industry of which the produce is likely to be of the greatest value, or to exchange for the greatest quantity either of money or of other goods. - Adam Smith, Wealth of Nations


Whilst every man is free to employ his capital where he pleases, he will naturally seek for it that employment which is most advantageous; he will naturally be dissatisfied with a profit of 10 per cent., if by removing his capital he can obtain a profit of 15 per cent. This restless desire on the part of all the employers of stock, to quit a less profitable for a more advantageous business, has a strong tendency to equalize the rate of profits of all, or to fix them in such proportions as may, in the estimation of the parties, compensate for any advantage which one may have, or may appear to have, over the other. - David Ricardo, On the Principles of Political Economy and Taxation


The selective process of the market is actuated by the composite effort of all members of the market economy.  Driven by the urge to remove his own uneasiness as much as possible, each individual is intent, on the one hand, upon attaining that position in which he can contribute most to the best satisfaction of everyone else and, on the other hand, upon taking best advantage of the services offered by everyone else.  This means that he tries to sell on the dearest market and to buy on the cheapest market.  The resultant of  these endeavors is not only the price structure but no less the social structure, the assignment of definite tasks to the various individuals. The market makes people rich or poor, determines who shall run the big plants and who shall scrub the floors, fixes how many people shall work in the copper mines and how many in the symphony orchestras.  None of these decisions is made once and for all; they are revocable every day.  The selective process never stops.  It goes on adjusting the social apparatus of production to the changes in demand and supply.  It reviews again and again its previous decisions and forces everybody to submit to a new examination of his case.  There is no security and no such thing as a right to preserve any position aquired in the past.  Nobody is exempt from the law of the market, the consumers' sovereignty. - Ludwig von Mises, Human Action


Geometry presupposes an arbitrary definition of a line, "that which has length but not breadth." Just in the same manner does Political Economy presuppose an arbitrary definition of man, as a being who inevitably does that by which he may obtain the greatest amount of necessaries, conveniences, and luxuries, with the smallest quantity of labour and physical self-denial with which they can be obtained. - J.S. Mill, Essays on Some Unsettled Questions of Political Economy


The interest of a nation in its commercial relations to foreign nations is, like that of a merchant with regard to the different people with whom he deals, to buy as cheap and to sell as dear as possible. But it will be most likely to buy cheap, when by the most perfect freedom of trade it encourages all nations to bring to it the goods which it has occasion to purchase; and, for the same reason, it will be most likely to sell dear, when its markets are thus filled with the greatest number of buyers. - Adam Smith, Wealth of Nations


If this doctrine is true, and as all men think and invent, as all, in fact, from first to last, and at every minute of their existence, seek to make the forces of Nature co-operate with them, to do more with less, to reduce their own manual labor or that of those whom they pay, to attain the greatest possible sum of satisfactions with the least possible amount of work; we must conclude that all mankind is on the way to decadence, precisely because of this intelligent aspiration towards progress that seems to torment every one of its members. - Frédéric Bastiat, What Is Seen and What Is Not Seen


Are all men, without exception, interested in acquiring all things cheaply, that is to say, in getting the utmost possible amount of things in exchange for the smallet amount of labour?  Yes.  Therefore all men have an equal interest in hindering destruction, in countenancing production and saving. - Edmond About Handbook of Social Economy: Or, The Worker's A B C


Everybody is eager to charge for his services and accomplishments as much as the traffic can bear. In this regard there is no difference between the workers, whether unionized or not, the ministers, and teachers on the one hand and the entrepreneurs on the other hand.  Neither of them has the right to talk as if he were Francis d'Assisi. - Ludwig von Mises Planning for Freedom


Thursday, December 24, 2015

Minimum Wages - The Impossibility of "No Vacancy"

Reply to: The Aluminum Rule by Miles Kimball

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I feel like I read a story about why people should have the freedom to swim in the ocean. It’s a true story… but what if you knew, for a fact, that there were sharks in the ocean? Wouldn’t it be… ummm… “iffy” to leave this “minor” detail out of your story?

Not sure if I win the award for terrible analogies but I don’t think the minimum wage problem is a minor detail when it comes to immigration.

Since it’s Christmas and all… perhaps it would be like traveling to a motel that has a big bright sign in front that says “Vacancy”. But when you talk to the person at the front desk they inform you that the only vacancy is in the stables. Stables?  Barn? Parking lot? What’s the modern day equivalent of stables?

Minimum wages are the equivalent of preventing the “No Vacancy” sign from ever being turned on. It’s as if there could never ever ever ever be such a thing as a labor surplus. Except… the point of minimum wages is that wages would be really low without them. So the very existence of minimum wages means that a labor surplus isn’t just a high probability… it’s in fact the reality. But the reality of the labor situation is obscured by the presence of minimum wages. Just like a murky ocean hides the presence of sharks.

Now, if my next door neighbor invited me over for a sleepover, which would be strange, but it turned out that the only available space he had for me was in his dog’s house… then it wouldn’t be a huge problem because I could simply take a few seconds to walk back home and sleep in my comfortable bed. The cost incurred as the direct result of false information would be very low. I was tricked but it wasn’t a big deal. I wasn’t like Jacob who worked 7 years to marry Rachel but ended up with Leah instead.

When it comes to immigration though… the cost of moving to a different country is quite high. This makes false information a very big problem. Well… certainly big enough that I feel that it would be irresponsible of me not to mention it at least once… or twice… or a dozen times.

I don’t think that I’ve actually dedicated even one blog entry to open borders. Unlike Bryan Caplan… he’s a huge fan of open borders. I do support open borders… but I don’t actively support them because the minimum wage makes me feel like I’m complicit in a major conspiracy to lie to every poor person in the world about our labor situation. Who lies to poor people about something so important as the availability, or lack thereof, of jobs? It would be a different situation if our wages accurately reflected/communicated our labor situation. Then I’d write a bunch of blog entries in support of open borders. Once the borders were open and wages accurately communicated our labor situation then poor people could make much more informed decisions whether it was worth the cost/risk to move here. Maybe poverty will be eliminated once poor people can easily avoid moving to countries that have a labor surplus.

Anyways, I know you oppose minimum wages. Well… at least that’s my impression. But my constructive criticism is that I feel it’s a bit… irresponsible… to write in support of open borders without also mentioning the importance of accurate information regarding the labor situation.

Monday, December 21, 2015

The Case Against Basic Income



John Quiggin is writing a book about opportunity cost.  Personally, I perceive that there's a scarcity of books about opportunity cost.  So I plan on buying his book when it's published.  The more people who purchase his book... the more money he will receive.  The more money he receives... the more likely it is that he, and others, will write more books about opportunity cost.  The less money he receives... the less likely it is that he, and others, will write more books about opportunity cost.

We need profits (broadly speaking) to correctly influence people's behavior.  Low profits should discourage the associated behavior while high profits should encourage the associated behavior.   The more accurate profits are... the more benefit we will derive from everybody's behavior.

Now,  if we were mind-readers and/or omniscient... then none of this would be relevant.  I wouldn't have to be here writing down and sharing what everybody already knows.  I wouldn't have to buy Quiggin's book when it comes out.  Everybody would already know what's important to everybody else and everybody would allocate their resources accordingly.  But we really aren't mind-readers and/or omniscient.  This is why accurate communication is so fundamentally important to society.

Right now society has far too many people who are struggling to survive.  Unfortunately, there are many people who believe that the solution is to implement a basic income.  The government giving people money regardless of their behavior's benefit to society will simply discourage beneficial behavior and increase the number of people who depend on a basic income to survive.  Inaccurate communication is the cause of, rather than the solution to, the problem.

Therefore, the correct solution is to increase the accuracy of what's being communicated.  This involves eliminating the minimum wage and tearing down barriers to entry.  It also involves allowing people to choose where their taxes go.  Accurate communication is just as important for public goods as it is for private goods.

So it's really not about fairness.   Worrying about fairness is barking up the wrong tree.  What should concern us most is accuracy.  When we focus on accuracy then poverty will be quickly eliminated.

Miles Kimball vs Matt Bruenig

Miles Kimball (blog) and Matt Bruenig (blog) are both liberals.  A few days ago they had a twitter discussion that was worth sharing...

Context

Linda Tirado: I'll drop minimum wage endorsement if you drop tax/investment protections and disavow lobbyists. That'd be fair.
Miles Kimball: I lean toward requiring all lobbyist interactions with congresspeople or their staff be videotaped an posted publicly.
Tirado: that's a net good no matter what, and common ground. But minimum wage advocacy is the same pressure for favorable regulations.
Kimball: Not for favorable regulations--in this case no regulations. No regulations is the starting point, not a favor.
Tirado: that's as true of any regulation that has ever existed.
Kimball: Starting point for comparison should be no regulations except these rules: no stealing, threatening violence, or deception.

Context

Matt Bruenig: miles way of here, the actual baseline includes only one rule: don't touch another person's body.
Kimball: I don't see how you can possible get good results without a rule against theft. Certainly no welfare theorem.
Bruenig: "theft" is a meaningless concept without an agreed upon notion of who is entitled to what, not a helpful baseline
Bruenig: in fact, paying too low wages *is* theft
Kimball: I can see lack of a basic income as theft, but not low wages. Do you have a right for me to employ you?
Bruenig: Wage floors don't force anyone to employ anyone though. It's all voluntary.
Bruenig: That's the basic problem with all min wage args that are premised upon unfairness to the employer.
Bruenig: The employer is not required to pay minimum wages. It doesn't have to operate if it doesn't like the rules.

According to Kimball... the lack of basic income is theft.  Which means that he has an obligation to pay you.  But then he immediately argues that he doesn't have an obligation to employ you.  Eh?  What?  

According to Bruenig... a wage floor is acceptable because employing people is voluntary.  If a wage floor is acceptable and beneficial... then what about a donation floor?  Donations are certainly voluntary.  So would it be beneficial to prevent people from making donations that are under $100 dollars?  

Kimball is obligated to donate money to you... and Bruenig is obligated to ensure that Kimball's donation to you is large enough.  

I can imagine Bruenig following Kimball around.  Kimball spots a homeless person and feels obligated to give him a dollar.  Bruenig quickly obligates Kimball to give the homeless person at least $100 dollars. 

See also: 



Saturday, December 19, 2015

John Quiggin vs More Weeds

In John Quiggin vs Weeds I shared what he wrote in the comment section of his blog entry... Income redistribution: Where should we start?...

Plume, I agree with other commenters here. From now on, for my post, can you limit yourself to one comment per post per day.

Catching up on some of his blog entries I just discovered another attempt by Quiggin to weed his garden.  In the comment section of Locke’s Road to Serfdom he wrote...

Brett, you were banned some time ago. I don’t want my discussion threads derailed by debates with you. Could other commenters refrain from responding to Brett, please.

Some weeds are hard to get rid of!  Clearly Quiggin doesn't value Plume's and Brett's contributions as highly as he values other people's contributions.  Just like I don't value all the different plants in my garden equally.  "Weeds" are the plants that I value the least.  I'd be happy if my garden didn't have any weeds in it!  In fact, I'd love to have a magic wand that would instantly turn each and every weed in my garden into an orchid!  How awesome would that be?  I would just wave the wand over a weed and voila!  It would be instantly transformed into an orchid!  Then my garden would provide me with much more value!   

Quiggin definitely wants his blog's comment section to provide him with much more value.   He also definitely opposes slavery.  But honestly I'm not quite sure why he opposes slavery.  I don't think that I've ever read a blog entry of his that he's dedicated to explaining why, exactly, he opposes slavery.    

What's wrong with slavery?  Let's take Brett for example.  Right now he's a weed in Quiggin's garden.  From Quiggin's perspective... all the space that Brett takes up in Quiggin's garden could be allocated to far more valuable plants.  In other words... the opportunity cost of Brett is too high.  What if Quiggin could wave his magic wand and transform Brett into an orchid?  Wouldn't that be a good thing?  And isn't slavery a magic wand that would do the trick?  Then Brett would do whatever Quiggin wanted him to do.

Crooked Timber and Australia are two different spaces.  The first is a virtual space and the second is a physical space.  Both spaces have Quiggin in common and it stands to reason that he would like to derive the maximum value from both of his spaces.  

In this blog entry... Private infrastructure finance and secular stagnation... Quiggin wrote...

Apart from the direct effect of lower investment, there’s a strong case that infrastructure investment increases the returns from private investment in general and therefore stimulates growth.

Quiggin wants the Australian government to spend more money on infrastructure.  Evidently he perceives a positive correlation between growth and infrastructure spending.  Just like he perceives a negative correlation between growth and war spending.  

Does Quiggin want to rely on slavery to ensure that people spend more of their money on infrastructure?  Well... 

Let's say that Brett is in the US.  This means that, no matter how much money the Australian government spends on infrastructure, none of that money would be taken from Brett's labor.   Brett wouldn't be forced to do something that makes Quiggin happy.  Brett wouldn't be Quiggin's slave.  

But what if Brett moved to Australia?  Then more of Brett's labor/life would be spent/sacrificed to infrastructure.  Brett would be Quiggin's partial slave.  Brett would be forced, in some part, to do something that makes Quiggin happy.  "Partial slave"?  Errr... part-time slave?  

It would make me happy if Quiggin addressed the topic of full-time vs part-time slavery.  What if I had a magic wand that would force Quiggin to stop whatever it was that he is doing and spend an hour or two... or three... or four... writing a blog entry on the topic of full-time vs part-time slavery?  Would I wave my wand?  Probably... not.  It would be very presumptuous of me to do so.  I have absolutely no idea what Quiggin is doing now!  Maybe what he's doing now is more important/valuable than what I want him to do.  Yet, Quiggin has no problem waving his magic wand (voting) trying to force millions of his fellow Australians to spend more of their money on infrastructure.  As if it's very unlikely that any of them have more important public goods to spend their money on.

Quiggin has accused Locke of hypocrisy for speaking out against slavery while profiting from the slave trade.  Is it hypocritical for Quiggin to criticize Locke while fully endorsing part-time slavery? 

Personally, as a pragmatarian, I have absolutely no problem with people being forced to pay taxes.  My problem is when people are prevented from choosing where their taxes go.  Does it make me a hypocrite that I oppose slavery but support taxation?  Well...

The reason that I oppose slavery is because I support difference.  

Progress is a function of difference.  Slavery limits progress because it diminishes difference.  Less difference means less progress.  More difference means more progress.  Sexual reproduction is superior to asexual reproduction because the outcome of sexual reproduction is more difference... which means more progress.    

Giving people the freedom to choose where their taxes go would inject a massive amount of difference into the public sector.  This massive amount of difference would yield a massive amount of progress.

Is Brett's difference diminished when he's forced to spend some of his dollars on public goods?  Nope.  Everybody needs public goods just like everybody needs private goods.  The incredibly obvious and fundamentally important yet intensely unappreciated aspect is that we don't all need the same exact amount of public or private goods at the same exact time.   Our preferences and circumstances are incredibly diverse!  This is why markets are just as necessary for public goods as they are for private goods.  And it's why the absence of a market in the public sector is directly responsible for diminishing Brett's difference.  Brett can't shop for himself in the public sector.  He can't decide for himself whether more defense or more infrastructure will maximize the value he derives from the public sector.  Brett is a slave to the extent that he can't decide for himself how his own resources are allocated.  And Quiggin supports slavery to the extent that he supports preventing Brett from deciding for himself how his own resources are allocated.  

Part of the problem is the opaqueness of the part-time slavery mechanism.  If Brett lived in Australia then Quiggin probably wouldn't go to Brett's home and force him to spend more of his dollars on infrastructure and less of his dollars on defense.  Instead, Quiggin votes for representatives who might be elected and might spend more of Brett's dollars on infrastructure and less of his dollars on defense.  Just because the mechanism is so indirect and imprecise doesn't change the fact that Brett can't choose for himself which public goods he spends his dollars on.

Admittedly, accusing anybody of supporting any amount of slavery generally isn't the best way to make friends and influence people.  But as I've pointed out numerous times before... Quiggin is my second favorite liberal.  I'm confident that he will assume good faith and correctly perceive that my criticism is entirely constructive.  It's a very important topic and it's entirely possible that my logic is fatally flawed.  Maybe Brett isn't a part-time slave?

Well... while I'm at it... perhaps I should address the very popular topic of equality from the perspective of difference.  Let's say that Brett is super poor and Quiggin is super rich.  This means that Quiggin allocates a lot more resources than Brett allocates.  Quiggin and Brett are both different... but, because of the disparity in their wealth, Quiggin's difference has far more weight than Brett's difference.  Compared to Quiggin... Brett's difference is vanishingly small.  Given that my basic premise is the importance of difference.... wouldn't there be greater progress if a good chunk of Quiggin's wealth was given, in some form, to Brett?

For some time now Quiggin has been working on a book about opportunity cost.  Do you think it's awesome that he's writing a book about opportunity cost?  I sure do!  This means that I plan to purchase his book as soon as it's published.  When I do so I will be expressing my difference.  My difference is my interest in the topic of opportunity cost.  This difference of mine will be made manifest by my choice to allocate my money, a limited resource, to the purchase of Quiggin's book on opportunity cost.

With this in mind... it should be readily apparent that the redistribution of Quiggin's wealth to Brett would diminish my difference and the difference of everybody else who's going to purchase Quiggin's book.  There would most definitely be a net loss of difference.  Which would mean less progress.

Eh, of course I don't know for a fact that this specific loss of difference would result in less progress!  Nobody can possibly know!  Nobody has a crystal ball!  Hence the value of difference.  We cover more ground when people are free to buy, or not buy, Quiggin's book when it comes out.  And by covering more ground we learn more and make more progress.

So it's not that any given different path will certainly be correct.  It's that the freedom to go down different paths is how we maximize discoveries and hedge our bets as a society.  Perhaps Quiggin is correct that spending more money on infrastructure is the right path to take.  But nobody can know this with enough certainty to prevent people from choosing different paths.  Every stagnation/recession/depression that we suffer from is caused by the widespread belief that part-time slavery doesn't have any adverse consequences.  There will always be adverse consequences when too many eggs are placed in too few baskets.

Here are some relevant passages...


Regarding slavery as a continuum...

When, as among the ancients, the slave-market could only be supplied by captives either taken in war, or kidnapped from thinly scattered tribes on the remote confines of the known world, it was generally more profitable to keep up the number by breeding, which necessitates a far better treatment of them; and for this reason, joined with several others, the condition of slaves, notwithstanding occasional enormities, was probably much less bad in the ancient world, than in the colonies of modern nations. The Helots are usually cited as the type of the most hideous form of personal slavery, but with how little truth appears from the fact that they were regularly armed (though not with the panoply of the hoplite) and formed an integral part of the military strength of the State. They were doubtless an inferior and degraded caste, but their slavery seems to have been one of the least onerous varieties of serfdom. Slavery appears in far more frightful colours among the Romans, during the period in which the Roman aristocracy was gorging itself with the plunder of a newly-conquered world. The Romans were a cruel people, and the worthless nobles sported with the lives of their myriads of slaves with the same reckless prodigality with which they squandered any other part of their ill-acquired possessions. Yet, slavery is divested of one of its worst features when it is compatible with hope; enfranchisement was easy and common: enfranchised slaves obtained at once the full rights of citizens, and instances were frequent of their acquiring not only riches, but latterly even honours. By the progress of milder legislation under the Emperors, much of the protection of law was thrown round the slave, he became capable of possessing property, and the evil altogether assumed a considerably gentler aspect. Until, however, slavery assumes the mitigated form of villenage, in which not only the slaves have property and legal rights, but their obligations are more or less limited by usage, and they partly labour for their own benefit; their condition is seldom such as to produce a rapid growth either of population or of production. - J.S. Mill, Principles of Political Economy with some of their Applications to Social Philosophy


Regarding taxation as slavery....

Taxation of earnings from labor is on a par with forced labor. Some persons find this claim obviously true: taking the earnings of n hours labor is like taking n hours from the person; it is like forcing the person to work n hours for another’s purpose. Others find the claim absurd. But even these, if they object to forced labor, would oppose forcing unemployed hippies to work for the benefit of the needy. And they would also object to forcing each person to work five extra hours each week for the benefit of the needy.  But a system that takes five hours' wages in taxes does not seem to them like one that forces someone to work five hours since it offers the person forced a wider range of choice in  activities than does taxation in kind with the particular labor specified.   (But we can imagine a gradation of systems of forced labor, from one that specifies a particular activity, to one that gives a choice among two activities, to ... ; and so on up.)  Furthermore, people envisage a system with something like a proportional tax on everything above the amount necessary for basic needs. Some think this does not force someone to work extra hours, since there is no fixed number of extra hours he is forced to work, and since he can avoid the tax entirely by earning only enough to cover his basic needs. This is a very uncharacteristic view of forcing for those who also think people are forced to do something whenever the alternatives they face are considerably worse. However, neither view is correct.  The fact that others intentionally intervene, in violation of a side constraint against aggression, to threaten force to limit the alternatives, in this case to paying taxes or (presumably the worse alternative) bare subsistence, makes the taxation system one of forced labor and distinguishes it from other cases of limited choices which are not forcings.
The man who chooses to work longer to gain an income more than sufficient for his basic needs prefers some extra goods or services to the leisure and activities he could perform during the possible nonworking hours; whereas the man who chooses not to work the extra time prefers the leisure activities to the extra goods or services he could acquire by working more. Given this, if it would be illegitimate for a tax system to seize some of a man’s leisure (forced labor) for the purpose of serving the needy, how can it be legitimate for a tax system to seize some of a man’s goods for that purpose? Why should we treat the man whose happiness requires certain material goods or services differently from the man whose preferences and desires make such goods unnecessary for his happiness? Why should the man who prefers seeing a movie (and who has to earn money for a ticket) be open to the required call to aid the needy, while the person who prefers looking at a sunset (and hence need earn no extra money) is not? Indeed, isn’t it surprising that redistributionists choose to ignore the man whose pleasures are so easily attainable without extra labor, while adding yet another burden to the poor unfortunate who must work for his pleasures? If anything, one would have expected the reverse. Why is the person with the nonmaterial or nonconsumption desire allowed to proceed unimpeded to his most favored feasible alternative, whereas the man whose pleasures or desires involve material things and who must work for extra money (thereby serving whomever considers his activities valuable enough to pay him) is constrained in what he can realize?  - Robert Nozick, Anarchy, State, and Utopia


Regarding the value of difference...

I have suggested a different model and metaphor. The world is not a single machine. It is a complex, interactive ecology in which diversity -- biological, personal, cultural and religious -- is of the essence. Any proposed reduction of that diversity through the many forms of fundamentalism that exist today -- market, scientific or religious -- would result in a diminution of the rich texture of our shared life, a potentially disastrous narrowing of the horizons of possibility. Nature, and humanly constructed societies, economies and polities, are systems of ordered complexity. That is what makes them creative and unpredictable. Any attempt to impose on them an artificial uniformity in the name of a single culture or faith, represents a tragic misunderstanding of what it takes for a system to flourish. Because we are different, we each have something unique to contribute, and every contribution counts. A primordial instinct going back to humanity's tribal past makes us see difference as a threat. That instinct is massively dysfunctional in an age in which our several destinies are interlinked. Oddly enough, it is the market -- the least overtly spiritual of concepts -- that delivers a profoundly spiritual message: that it is through exchange that difference becomes a blessing, not a curse. When difference leads to war, both sides lose. When it leads to mutual enrichment, both sides gain. - Rabbi Jonathan Sacks, The Dignity of Difference