Declare independence

The below op-ed was published in the AFR today under the title Let People be Free to Choose (need subscription).

Apparently, the only people in our society smart and responsible enough to make important life decisions are politicians and bureaucrats. They make decisions about where we should spend our money, which hobbies are appropriate, and how much risk we should accept. 

The reason for this government control is the perception that some people can’t live without help and guidance. While some liberals object to this paternalism, such sentiments are clearly popular with a majority of Australians. 

But many people in Australia can look after themselves and make their own life decisions. It is neither necessary nor appropriate to treat all Australians as dependent on the government. We can help those who need help without extending welfare and behavioural control to people who are at least as competent as politicians in managing their own life. 

One option is to allow Australians who need help to “declare dependence” on the state. 

We could also allow Australians who clearly don’t need government control to “declare independence.” 

Allowing some individuals to declare independence from the welfare and nanny states would not harm anybody else. Independent people would still pay tax, and would still need to follow laws that prevent them from directly harming others. People who didn’t claim independence could continue living exactly as efore. 

People would take pride in declaring independence, and independent people would also escape welfare churn. At the moment, every year $90 billion of is returned to the people who paid it, through schemes, rebates, subsidies, and services. An independent person could choose not to receive these welfare benefits, and would not pay this portion of their tax. 

Once somebody is clearly self-sufficient, there is no “public good” argument for managing their decisions. 

Indeed, if we are not going to trust law-abiding, self-sufficient people with lifestyle decisions like how much they put into superannuation or whether they smoke a joint, it seems strange that we trust them with responsibilities that affect others more, such as voting, driving, and having children. If we don’t trust anybody with making simple lifestyle decisions for themselves, why do we assume that politicians and bureaucrats have a superhuman ability to make the right choices for them? 

Declaring dependence would be the reverse of declaring independence. Dependent people would be assisted in paying living expenses, getting decent health and education opportunities, finding a job, and maintaining a home. As they would be net recipients from the government, they should not pay tax.  

But such people would admit they were unable to manage their own lives and were volunteering for greater bureaucratic control over their decisions. It would make sense to ban them from risky activities that might lead to self-harm and make them a drain on the public purse, and to force them to do other things, like investing for retirement, that would make them less reliant on welfare. More dramatically, it might make sense for dependent people to forfeit their right to vote. 

People should also be able to choose to continue living their present, semi-dependent and semi-controlled lives. But if we want to deal with the growing problems of tax-welfare churn and a shrinking sphere of individual choice, we need to let free people choose to live without excessive government intervention. 

(John Humphreys is one of the authors of Declaring Dependence, Declaring Independence: Three Essays on the Future of the Welfare State, published by the Centre for Independent Studies on Wednesday)

40 thoughts on “Declare independence

  1. Well, anybody who walks through the doors of Centrelink is already declaring themselves defendant.

    Anybody who earns a decent income (thus paying a hefty share of income tax and pays taxes on fuel and groceries) is already declaring themselves independent.

    But many of those independent people who slave away know they give up too much in taxes, and they would not want to give away their ability to recover some of it through middle class churn, like baby bonus, family tax credits etc etc.

  2. Typo above: I meant dependent, not defendant.

    Stupid spell-check .. I’m not right-clicking underlined words in a hurry again.

  3. Jono- both the words are correctly spelled; it’s just that defendant doesn’t make logical sense. We need a logic-checker.
    This article makes a lot of sense; therefore it won’t be implemented. Well done, john and co!!!
    A more productive idea might be a libertarian law-book, showing us the few laws that a libertarian nation might still have. A few suggestions for road rules, at least, like ‘All addresses have names- the only number allowed is the number of meters to drive from the last intersection.’, et cetera. “Gray’s Estate, 450m on the left, Alkaringa Road” might be sufficient for me, if you knew my suburb, as my road is a no-through road.

  4. I think it’s a good idea for reform. As long as the ultimate target is the total abolishion of middle class welfare (and all welfare if I had my way).

    When you claim the baby bonus or similar middle class welfare scheme you are effectively signing away your economic independance from the state – and I think it’s a good thing to call a spade a spade and attract attention to this fact.

    However I imagine this idea would attract opposition from lefties saying that it is “disciminatory” (a word rarely defined) against poor people.
    I also think the terms “dependant” or “independant” may lose their meaning over time.

  5. Tim R – Claiming ‘middle class welfare’ not economic dependence. It’s just pragmatism. As a libertarian I would much rather not recieve middle class welfare and be taxed a whole lot less, but given lower taxes are not on the table I’ll take it. It would be more accurate to refer to it as an ‘inefficient middle class tax refund’

    Similarly the LDP will take the government funding one it gets over the required number of votes, even though it is opposed to the system. I don’t see anything hypocritical in that.

    Economic dependence only happens when either –

    a) most of your income comes from government handouts; or
    b) your total welfare bill is greater than the tax you pay

    ps. Jono – nice freudian slip – were you alluding to the criminal history of centrelink clients? 😉

  6. Jono — the idea is trading your middle-class welfare in for a tax cut equal to exactly the same amount as the middle-class welfare. That would take a person out of the welfare system and remove $90 billion worth of churn. Only then would they be truely independent of government.

    And welfare recipients may be implicitly declaring themselves dependent, but they are still treated the same as semi-independent people. If they need extra rules, those rules are put on all of us. If the rest of us are given certain responsibilities (eg voting) then they have the same responsibilities. I think it makes sense to draw a distinction between dependent and independent people, and then treat them accordingly.

  7. Going a bit off topic here, but picking up on nicholas grey’s post I’d be curious to know more about ‘the few laws a libertarian nation might still have’. e.g. would we still have rules for:

    – wearing seat belts? (I know – it’s a restriction on liberty – but it has significantly reduced the road toll as well as public expenditure, and it is really a minor restriction)
    – speed limits? (and road rules in general – should people be free to make decisions about which side of the road they drive on?)
    – public parks and gardens? (or would it be up to the market to provide these if people are willing to pay for it? how would you collect revenue without fencing the parks off and having a ticket gate?)
    – emergency services like 000?
    – National parks? (are they too restrictive on our freedoms?)
    – naming streets – who decides them? what if someone living in the street doesn’t like the name and wants to change it?

    Don’t get me wrong, I still consider myself libertarian and think it’s far better than any alternatives, but like any philosophy there are limits, and completely deregulating street addresses is possibly taking it a bit too far. It’s good to test out a credible political philosophy by exploring its limits.

    Perhaps there’s a pragmatic limit. Back to street addresses – it’s technically a nanny-state breach of our individual liberty to force us to conform to some arbitary numbering system dictated by the state (how Communist!). We should be free to describe our street location however we wish, and we take personal responsibility if no-one can find our houses.

    That would be the ‘pure’ libertarian position, I’m guessing. But does anyone seriously think this would be anything other than utter chaos? Besides, the restriction on liberty is so trivial compared to the administrative and logistical nightmare, it’s probably worth sticking to a ’10 Smith Street, Smithsville’ type system.

  8. Seat belts – no problem if health insurance is private.

    Speed limits should be set by raod owners – including the option to have unlimited speeds like the Autobahnen does.

    Parks and gardens – can be left up to several organisations, including developers and then to community title corporations. The property owners and developers will have such an incentive if we really want parks. If not, housing gets cheaper.

    National parks – give everyone direct transferrable ownership in a Governing corporation…just like the ABC etc.

    Naming streets – there is an incentive for postal and insurance services to coordinate with developers. It already happens this way top a large extent.

    Triple 000 emergency services – I don’t see how they are “unLibertarian”, they provided privately in the US or have been provided for in the past. Otherwise minimal or voluntary taxation could fund them.

    Don’t panic.

  9. The “independence” idea doesn’t have to be linked to every other libertarian idea. It would be perfectly possible to retain national parks, emergency services, council parks and street naming conventions.

    Developers already get some say in the street names. For instance, my dad (a developer, not a councillor) has just named a street in a new development after my mum (Linsay Crt). 🙂

    All of these points are qualitative different to victimless crimes.

    As for the laws that a libertarian nation might have. I think you’d just have one law: “all action must be voluntary and peaceful”. The rest comes down to definitions and interpretation.

  10. Papachango, I mentioned my idea on a previous post, that the owners of roads would make the rules as to who uses the roads. I think that we could, if we took over, reform public entities so that those who choose to be citizens would vote on the laws that govern ONLY public properties, such as roads. If a local government wanted users to wear seatbelts, then locals would wear seat belts, or pay higher insurance premiums.
    As to Temujin’s law, I’d say- All trades must be free and fair. This definition also excludes fraud, inadvertently left out by the other definition.
    And I’d have this law- That the victim of a crime is due compensation from the committer which is to equal the costs of the crime, including the costs involved in getting the committer to pay the costs.

  11. Good article, although the argument needs more development to win over the doubters (no doubt space was limiting).

    One aspect they would surely raise is the position of dependents of those who declare independence. If I declare independence and thus pay lower taxes and are not eligible for welfare, what happens to my 6 young children when I later develop depression, start drinking heavily and gamble away all my money? Are they similarly independent or are children automatically dependent until they can make an adult choice?

    It’s always the exceptions that lead to loss of support.

    National party voters will of course want to be dependent when their income goes down, and independent when it goes up.

  12. nicholas – fair enough, but who would actually own the roads? Local councils? leaving aside the fact that many councils aren’t very efficient at organising anything, wouldn’t this lead to more chaos?

    e.g If I live in Stonnington council I know you have to drive on the right and the limit is 50 km/hr, but when I visit my grandmother in Banyule I’m going to have to learn the road rules of all five councils I drive through, possibly change sides of the road a few times etc.

    DavidL – I imagine if you’re independent with dependents you’re personally responsible for those dependents until they can make an adult choice. If you fail in that duty you could be charged, or transferred back to dependent status.

    But then who makes the judgment on whether you’ve failed in your duty of care to your dependents? Hard to stamp out government interference fully isn’t it?

  13. Papa- already considered. This would be the one reason for State Governments to exist, as Conference and Convention centers for local Councils. And this is one of the things that a libertarian lawbook would discuss, and have guidelines for. The current Federal capital would then become a super-convention center, taking back ideas for all to consider. I suspect that councils would simply keep whatever road-rules they inherited, such as the Australia-wide rule about driving on the left.
    And here’s another idea- Time-Share local governments! Instead of any professional politician, all who choose to be citizens would have some days a year set aside for government work, when they would oversee the professional bureaucrats, and collectively make policies, and engage in local militia work. To really down-size governments, we might need to make them part-time for all.

  14. who would actually own the roads? Local councils? leaving aside the fact that many councils aren’t very efficient at organising anything, wouldn’t this lead to more chaos?

    Papachango, I share your reservations. I regard myself as a libertarian but I really don’t think the idea of fully privatised roads is practical. It obviously works on high volume roads and there is certainly a lot of scope for more privately owned tollways, but I can’t see it working everywhere. The idea of negotiating 50 different sets of road rules and costs while transporting goods from one side of Sydney to the other, or from Melbourne to Sydney, defies economic and practical common sense.

    I also don’t accept the proposition that the owner of the road has the right to force me to wear a seatbelt or otherwise coerce me when nobody else is affected. A similar debate has been underway in the US recently about the right of concealed carry permit holders to keep a gun in their car while at work, when the employer has a policy against it. The Florida Supreme Court has now ruled that the right of self-defence prevails over the right of property owners. I agree – self ownership comes before property ownership.

  15. I disagree with the pessimism. There already are plenty of private roads, but people don’t even know they’re private because there is open access.

    Gated communities and townhouse developments seem to be able to build and maintain roads just fine.

    I think the idea of 50 different sets of road rules is a strawman. It simply wouldn’t happen. It didn’t in the past when we had private roads and it wouldn’t in the future. It’s in nobody’s interest to create that outcome, and the market is perfectly good at creating coordinating bodies when they are needed. There would be some differences in speed limits. But there already are some differences (including on private property), and we seem to be able to cope.

    Residential areas have an incentive to have (relatively) open and upgraded roads. Commercial districts have an incentive to have (very) open and upgraded roads. And long-distance roads can be covered easily either by community groups who have an interest in keeping the road open and free, or by companies who can charge a toll.

  16. I don’t agree with DavidL’s last point. Having laws on your land does not violate another person’s self-ownership. They are free not to go on your land.

    Like making rules about smoking on private property, or having a dress code on private property, the property owner should be allowed to set the rules of entry. As long as the rules are clearly understood, then by entering the property you are entering into an contract which obliges you to follow the rules.

    Basically, this is about a person’s right to deny entry to their property. Central to ownership is the right to deny entry… for any reason. That includes if you’re smoking, have the wrong clothes on, are the “wrong” religion, or are carrying a gun. Any reason. If you don’t have the ability to deny entry, then you don’t have full property rights.

    Suffice to say, I believe in property rights. 🙂

  17. I’d settle for small gated communities called local government with the scope for state and federal government severely reduced. In fact I’d take away the direct tax powers at the state and federal level and make them dependent on the local governments in much the way that the EU is almost entirely dependent on consitutent nations it’s operating revenue. However I can live with local roads being a government responsibility.

    The suggestion outlined in Johns article is essentially a softened version of panarchy. I think the article is a useful provocation but not a terribly useful foundation for policy reform. Most middle class welfare is already provided in terms of tax rebates. Schemes such as LITO, SATO, FTB-A, FTB-B are all tax reductions. They are also a dogs breakfast of complexity and the source of high EMTRs and associated disincentives. I don’t find anything particularily appealing about this approach either in economic or political terms.

  18. Terje — there is a big difference between having 20 different schemes of tax rebates and churning, and simply not paying tax. And you’re also not considering health, education and childcare subsidies.

    I am suggesting $90 billion lower tax, $90 billion lower spending, the end of tax-welfare churn, tax-free thresholds increased to around $50,000, and the creation of some people who fully escape the welfare state. Which bit of that don’t you like?

    Not only that, but it can be done while making nobody worse off. And it can be done incrementally with four moderate and simple reforms, as explained in the full paper.

    The reforms I’ve suggested have nothing to do with panarchy — softened or otherwise. They are about (1) self-sufficiency: ending $90b worth of tax-welfare churn; and (2) independence: allowing self-sufficient people to make more of their own decisions.

  19. You think gated communities are libertarian? Ever visited one?

    There are more ridiculous, petty, rules per square centimtre than anywhere I can think of. You have to paint your fence a certain colour, in many US ones you are even forbidden from hanging washing out to dry!

  20. Yes, that’s libertarian.

    It is perfectly libertarian for people to voluntarily get together in a community and agree to follow certain rules.

    The difference between libertarian and statism is not that libertarians have no rules. It’s that we believe human interaction should be peaceful and voluntary. There is nothing violent or involuntary about joining a community, club or farm with rules.

    If you don’t like the rules in a certain gated community or block of units, then don’t go there.

  21. Papachango;Temujin is right this time. The rules may seem draconian, but the residents are not forced to live there, they have chosen to be there and can sell and leave if they wish.

    In Libertaria for example a group of lefties could if they had the resources purchase an area ind impose whatever socialist rules the wish in creating their own ‘workers paradise’ provided the people entering into the agreement submit voluntarily and there is no attempt to impose those rules on outsiders.

  22. Terje — there is a big difference between having 20 different schemes of tax rebates and churning, and simply not paying tax. And you’re also not considering health, education and childcare subsidies.

    I agree. However in your article you say “Independent people would still pay tax” which kind of renders the above comment irrelevant. Or perhaps not irrelevant but in need of signficant clarification.

    I am suggesting $90 billion lower tax, $90 billion lower spending, the end of tax-welfare churn, tax-free thresholds increased to around $50,000, and the creation of some people who fully escape the welfare state.

    Yes I’m suggesting all those things also. However what has this got to do with declaring independance? The point is lost on me. Perhaps I’m one of the dim people that needs to declare themselves hopeless.

    Not only that, but it can be done while making nobody worse off. And it can be done incrementally with four moderate and simple reforms, as explained in the full paper.

    Perhaps it is in the full paper. Perhaps the idea is brilliant. In fact you usually have some good ideas so lets assume for the moment that it is brilliant. The issue is that I can only really comment on what I have seen of the idea which is the article that you have published here. Can you either give us a link to the full paper or else articulate in more detail how somebody who declares independance would be taxed.

    The reforms I’ve suggested have nothing to do with panarchy — softened or otherwise.

    In panarchy you choose your government. In your proposal you seem to be saying we can choose the extent to which we are governed. There would be the highly governed the highly ungoverned and the conservative middle. Perhaps the word “softened” is the wrong word but I do see some conceptual parallels. Although obviously it is the same government in each case so I also see problems with the comparison. Anyway feel free to ignore this point as it is the least of my concerns.

  23. interesting article, john. i have often suggested that those who only receive govt aid and pay no taxes may one day have to forfeit their right to vote, only to be shouted down, especially by libertarians. interesting to see you considering the idea.

    just back from a month in England and feeling positively energised by the cleansing effects of the looming UK recession (depression?)- people have totally lost faith in government – not just the ruling Labour administration but in government itself – wonderful news.

  24. as an aside, i suggest that international airspace is the ultimate statist’s paradise. to whittle away the hours (all 27 of them), i counted the number of rules and instructions on the plane. i lost count after 85.

  25. Pommy — the idea has previously been flagged by J.S. Mill and Hayek… so it has some libertarian support.

    I should say that the op-ed above is the summary of the entire publication, of which I was only one author. The section on “declaring dependence” (and forfeiting the vote) was written by Eugene Dubossarsky and Stephen Samild.

    Terje — I’ve been waiting for the CIS to put up the document so that I can link to it, but their IT people haven’t updated their website yet.

    My article said that independent people would still pay tax (for redistribution and public goods) but I also said that they would receive a tax cut equal to their lost welfare.

    The parts about ending the $90b churn is a pre-condition to declaring independence. That’s what would happen if “an independent person could choose not to receive these welfare benefits, and would not pay this portion of their tax.”

    I don’t want to go into the details here. I’ll put up a link once the full document becomes available (soon, insh’allah).

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  27. Perhaps you could set up your own courts? Hang on though maybe I don’t like the decision of your court so I’ll set up my own court at my address that I made up according to my own schema that no one else understands. And when no one respects my court I’ll just have to take up my firearm that I’m allowed to keep (according to my own laws) and legitimately enforce my findings.
    You see boys, all this stuff has happened before and it was chaos. I think you all need some serious history lessons. Why don’t you club together and buy some land a set up some medieval fiefs? Of course you’ll have to have a ballot to see who are the barons (unlimited liberty) and who are the serfs (perhaps not quite so free).

  28. As you can see, Papa, we are full of ideas here! My idea of independent local councils is similar to a collection of gated communities, and since gated communities work, so should time-share local governments!
    If you have any suggestions, and not just problems, let us know.

  29. “But such people would admit they were unable to manage their own lives and were volunteering for greater bureaucratic control over their decisions.”
    Why stop there, perhaps a Great Council chosen by the wise and strong CIS could “rehabilitate” these weaklings? Youu guys are heading in a very dangerous direction. Thank Christ you’ll never get anywhere.
    I’ve got another idea, why don’t you contact Prince Leonard?

  30. Patrick B, you have obviously never heard of Switzerland, where the Cantons have strong local laws. Us guys are heading in the direction of the future.
    As for contacting Prince Leonard, I have his Web address on my computer, and have had for a while. Again, you’re behind the times.

  31. N.G. – apologies if I am coming across as a naysayer – as I said I consider myself a libertarian; I just want to test the practical boundaries of it. I do have ideas, and will express them along the way. Besides, if a ‘devils advocate’ point of view helps to develop better policies, all well and good.

    Funny you should mention Switzerland as well as gated communities. In both cases there is some pretty amazing direct democracy at a local level, but I maintain that in terms of individual freedoms, they are two of the least libertarian examples I can think of. Switzerland is an overly-regulated nation of control freaks who gleefully report each other to the authorities for breaking even the most petty administrative law. As a result the whole place runs like clockwork, but where’s the individual liberty?

    What’s interesting here is that people in Switzerland and gated communities appear to freely give away their individual liberties. You raise an argument that such restrictions on liberty are still libertarian provided they are voluntary. Fair enough, I see your point, especially on gated communities. It’s a bit harder with Switzerland, though, as it’s more difficult to say to a Swiss individual ‘if you don’t like it, don’t live there’.

    In fact I have some Swiss friends who moved to Australia just to escape the petty rules and bureaucracy – but it’s not possible for everyone.

    What’s the solution? I don’t know. You have sort of convinced me that voluntary collectives are still libertarian, and are probably a good thing where it just makes sense to have a standard set of rules. It just needs to be monitored to ensure the rules don’t get out of hand – and the rights of an individual to challenge mob rule are vigorously supported. Maybe you’re onto something with this idea of declaring independence.

  32. In a society committed to libertarian values, a gated society would not intrude on your land, nor ask for taxes. If you wanted to use the common property, then you might need to pay a fee.
    And if all citizens were time-sharers, the laws would be kept to the minimum, because it would be our time we were wasting. A professional politician probably feels like making laws to prove one is productive, and to justify a campaign promise. If we do away with elections, and all have a direct share in passing laws that only affect local public properties, we won’t need politicians. I think that politicians are the scourge of Switzerland (and other places).

  33. Patrick,

    It is your knowledge of history, economics and law that is lacking. Not ours.

    Our courts system in modern day Australia is being pressured to find private law solutions, due to too high case loads (too many laws) and less confrontational law (a general trend). Legislation is already driving us towards private law solutions such as arbitration, conciliation and private rulings. In fact the idea of a independent judiciary is entirely satisfied by private law courts.

    Iceland had a decentralised power structure and a private market for law enforcement for 300 years – the demise of this system was due to external pressures (European politics, war, agricultural failure and economic hard times). The system itself was stable.

    England also had private law enforcement with public law courts in the 19th century – it worked fine. England now has a crime problem, perhaps no fault of public law enforcement. An Englishman also had more rights than ever after 1832.

    Please tell me how a gated community with community title is anything like the feudal system – the comparison is beyond absurd.

    I am unsure that you will challenge your biases based on faulty reasoning and glib “pop” history. I sincerely hope you do, however.

    BTW we are making progress. The LDP has moved from micro party to minor party status. Do you want to give up as a prognosticator and forecaster before you lose too much money?

  34. Patrick — I’m not sure if you read my article. Independent people would still be subject to “victim” laws.

    And dependent people are already implicitly saying that are incapable of looking after themselves under the current system.

    The bureaucratic controls you seem to oppose already exist for everybody, and they are already controlled by a “wise and strong” (sic) group of politicians.

    I have always argued we should have fewer controls. The paternalists (that’s the nanny-staters, not me) respond that some people need to be controlled. In response, I am saying that those paternalistic laws shouldn’t apply to people who ARE able to look after themselves.

    I’m not really sure how you misunderstood the original article so badly, but I hope this makes things clear for you.

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  36. John was also on the radio yesterday trying to sell the idea. I listened to some of it but still don’t understand the point.

  37. Terje — I can’t understand how you can’t understand it. The concept is fairly simple.

    1. you receive less welfare and pay less tax

    2. if you are a net tax-payer then you can choose to opt-out of victimless laws and forfeit the right to future welfare

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