Economic authoritarians of all stripes (these’d be Hayek’s “socialists of all parties”: I’m not singling out the Left here) love to argue that markets can only operate — or only operate at the levels they do — thanks to the complex (and expensive) framework of society. Thus, since commerce is contingent on society, commercial agents owe society for the benefits they reap — and therefore taxation is just payment rather than theft. You gotta pay for the apparatus of contract (and criminal) law, a strong military to keep the bad guys away, schools and colleges to educate your employees, and so on. The tax man is just internalizing an external cost. Right?
Megan McArdle wonders why we don’t apply the same reasoning to other private interactions that, like commerce, benefit from a well-ordered society:
You can only make money in the context of society, and so society has a right to regulate your transactions, and seize the proceeds, in any way that society sees fit.
And yet, the argument applies just as well to our sex lives or our political beliefs: they take place in the context of all sorts of government protections, from rape prosecutions to whistleblower laws. Without markets and the government, the “anything between two consenting adults” morality to which the majority of the elite subscribes would be impossible; the closest substitute for these things is family, and families have a very clear, deep, and persistent interest in regulating the sexual behavior of their members.
Does this mean that the government (or our employers) may properly restrict our sexual behavior to that of which a majority of our neighbors approve? That bed you’re having sex in probably travelled on the interstate highway system, so standby for government inspection….
No? The government can’t do that? Then why is this argument supposed to be a telling blow against arguments for strong property rights and freedom from interference in voluntary economic transactions?
Of course, the government has regulated sexual behaviour based on what an apparent majority thinks is best for society. Hence prohibitions on miscegenation, sodomy, polyphilia, and other acts between consenting adults — most of which have either fallen entirely out of favour or are rapidly doing so, as people have come to recognize that government has no business in the sex lives of its citizens, even if it enables them.
What does this say about regulation of commerce?
There are appropriate laws concerning sex — all of which prohibit aggression. The same naturally applies to commerce. But as Don Boudreaux notes (curiously without referencing the lex mercatoria), you don’t need a government to have laws.