What is the “cost” of maintaining a society?

Broad discussion on community costs, services and taxes is often polarised into two distinct schools of thought.

Property is theft” (Proudhon)
Private ownership is fundamental to individual freedom” (comment seen posted on a website forum)

Perhaps it is time to bring some thinking to the table that is not too strongly aligned with either? What sort of society would we build if we did this? Spend just a little while looking through economic forums on the internet, and you will quickly identify with the “two-school” picture of general debate.

If we start from the perspective of these two extremes (and they are extreme), can we think through a position where private ownership is rewarded, while also making sure that the ownership of private property does not facilitate a form of legal theft? Before thinking that one through too hard, remember that we are looking at this from a society point of view – NOT the short lived and self-interested perspective of the individual.

OK. So let’s start thinking about the type of society we want, how it will look, and how it will work.


To start with, let’s agree that arguing for extremes conveniently whitewashes all of the grey which makes up day-to-day life and decision-making. Extremes can be helpful to find faults in logic or to identify potential issues but they are generally unhelpful when attempting to be fully objective and allow the mind to simply consider ideas that may be unusual or outside of the square.

Given that this is an economic pondering, we can start by referring back to the basic economic problem – limited resources being contested by a species with unlimited wants. Each individual/ family/ community/ country/ race/ gender has its own imperatives and objectives but at the risk of trivialising issues, we could break them down into the two simple categories : needs and wants.
The average human being needs clean water, sufficient food to make it through their day, a safe place to sleep, access to help when they are ill or injured, and some form of social interaction to help maintain mental stability. That is about it. What is often forgotten in economic or political (most of the argument raised on these issues is political rather than economic) discussion is that ‘freedom’ is not one of the basic needs (this needs to be said, as many people comment on various social economic issues by harking back to Libertarian principles of ‘freedom’). It is a want, and i would argue that it is a very poorly understood want at that. You and i and the bulk of the species want freedom. Yet most of us cannot elucidate exactly what ‘freedom’ is. Few have stopped to ponder the strings attached to us all or how our version of freedom differs from a textbook version through the unnoticed influences of hegemonic power, social constructs or societal influence (not to mention the well-documented straight-jacket of language, signs, symbols and unintentional body signals). Fewer again have considered how that ‘freedom’ will play out when considered in the light of a complete economic analysis of impact and outcomes. How do you achieve this when the combined sum of our wants is in excess of available resources, leading to the unavoidable result of some missing out on their basic needs? At what stage does one persons’ want for ‘freedom’ exceed another persons’ need to reach a subsistence level of living? Should there even be a requirement that all people should be able to reach a subsistence level of living?
As much as i detest the phraseology and the pigeon-holing outcome of the term “global”, the arguments on issues of need and want should be considered from a global point of view because in the modern world, those who miss out on basic needs are often in a completely different part of the world from those who are busy fulfilling their wants. Thinking on this level is not achieved through the Anarchistic approach of local co-operatives.This would suggest that anarcho-capitalist systems (taken to the logical outcome of minimal or no government) are insufficient to meet the challenges of actual flows of capital and labour. Nor are commune-style systems up to the task, as it can demonstrably be shown that if no-one owns an asset then everyone can take advantage of it, leading to some taking so much that the asset is eventually eradicated (a “Tragedy of the Commons” tale that is exhibited in places as diverse as United States coastal fishing communities through to Pacific Island flooding potentially caused by a build-up of carbon in the global atmosphere that has nothing to do with the Islanders themselves). The idea of international ‘obligations’ brings into the debate its own tome of inbuilt prejudices, assumptions and ideologies. Most communities cannot even agree on how to deal with their local ‘poor’, so considering international balances is fraught with interpretive nuances and traps, nicely encapsulated in the idea that “they’re not poor, they’re just lazy”. And we begin to leave ourselves open to arguments of “global governments” and various forms of banking cartel conspiracy theories.
However, the fundamental flaw in most mainstream economic argument on “big” issues (of the kind you will find in many internet forums about the allocation of resources or arguments for or against some broad social policy), is the lack of scope in addressing the basic Economic Problem. In other words, by focussing on one issue it is How do you provide for everyones’ basic needs and desire for ‘freedom’, given limited resources? If everyone is free to achieve their best outcomes, at what stage do we measure the costs of those people reaching their objectives? In other words, if someone in a capitalist society “makes it” and accumulates large amounts of assets, wealth and prestige then at what stage do we look at the costs, to other members in that society or society itself, of providing the environment in which that accumulation is possible? You could argue taxes but we have considered that in other posts, and taxes singularly fail to measure or allocate for this social cost.

Let’s take that a step further for the sake of clarity. Regardless of your opinion on the merit of the process or the allocation of the resources, taxes imposed by a central government reflect little more than the cost of providing a prescribed set of services. These may be health, welfare, defence and security, education, the provision of basic human infrastructure (water, electricity, housing), maintenance costs of supporting, monitoring and legislating for such issues as currency, legal systems and the actual process of taxation. A country runs at a surplus (in which case total government revenue exceeds the total of these costs) or a deficit (in which case the collection of government revenue is insufficient). Either way, there is no accounting for the provision of “society”. In other words, the ongoing accumulation of time, effort, capital, thought, process testing, and experience that has resulted in the society being able to even exist in the form that it does.

Right now, some folks should be checking their pulse because these comments are sufficiently broad that they create as many questions as they do answers and reading this may be causing a tad of anxiety, annoyance or anger. However, if that blood pressure can be kept under control for just a little bit longer, how about affording the benefit of the doubt and allowing that (even if all government expenditure is wrong or wasteful or misguided) no current government levies a tax component based on these points? You could argue that the simple misallocation of resources within governments creates room for such “silly” measures to be accommodated. Perhaps. However, there is very little comment in most internet forums that attends to the specific issue of society having a cost that is not a directly measurable cost. Again, Libertarian thought processes suggest that this is something that should not be measured, as government should be minimised at all times.
In other words, the “Private ownership is fundamental to individual freedom” mantra put forward by many of a Libertarian nature, avoids a full accounting of labour, capital and resource.
The “Property is theft” mantra so beloved of Anarchists (especially those who read Anarchist texts or material up to this comment and left their total learning and understanding at that level) avoids the obvious pitfalls of communally held property. It also ignores the fundamental fallibility of human nature. Even the originator of the phrase rethought his position later in life.
Asking the question “When does theft become a right?” is one that is sometimes used as an argument to invalidate private property or the accumulation of wealth. It is usually based around the idea that stealing an item of value and getting away with it results in a right to that property (in that no one can take it off you unless they can prove that you stole it). This question does raise serious issues on the difficulty of establishing ownership of private property in the first place but fails to provide a workable alternative to private property.

So, in a world of limited resources and unlimited wants, how do we work towards achieving a workable, fair solution in which the ideals held forward by Libertarian thinkers can be met while ensuring that the costs of a person achieving those ideals are more correctly accounted for?

Arguably, you do not need to even consider this question if you work on the “continuous growth model” that has underpinned most economic and social theory over the post-war period. However, it is also arguable that we are now in a period where science is beginning to identify specific limits to human capacities on Earth. Therefore, it would be foolish not to start to spend a bit of time and effort looking at the allocation of resources within societies and trying to work out ways of ensuring that all costs in a society are accounted for before opening the spigots of continuous growth capitalism. 
How about limiting private property rights to a single lifetime? It is arguably the perpetuation of property rights across generations that allows for the natural inflationary “bubbles” in an economic community to get out of control, leading to the inefficient misallocation of resources.

Those who benefitted the most through the structure of the society they lived in, will end up paying the most – but that is no longer their problem because they are dead. What about their family, you could validly argue? Shouldn’t that person be able to pass on their hard-earned (or not – think Lotteries or theft or greed or deception or astounding good luck) wealth to their loved ones? Aren’t there issues about changes in lifestyle in a family when the breadwinner dies? How about one person out of a couple – does the remaining partner have to lose their home or key assets? What about farms and family businesses? Yes, these are all valid difficulties but don’t follow that estate beneficiary argument too far, as you will simply end up arguing the validity of an entrenched oligopoly or clique of super-rich or royalty or an aristocracy, leading to the inevitable misallocation of resource to later generations of potential unworthys and ingrates.

In other words, what if there were some way of negating any passing of assets through an estate?

This post started by suggesting that extremes were a bad way of working through arguments on real world issues, so it must be admitted that leaping to this suggestion is faulty argument at best. However, private property has stood the test of time well as a reasonably efficient allocator of resource, so it is illogical to limit it within a lifetime of an individual, as this would negate the incentive to strive for something better. The problem with private property is arguably its transferal across generations.

There is the other obvious problem that estate taxes are in most cases a failure, as evasion and avoidance become entrenched in the system. However, the theory behind the idea of full society cost accounting is a thought is begging for a real-world implementation. Successful implementation would help negate one of the great inequities of private property ownership, and lead to better resource allocation across generations within a society.

At some later stage, further pondering can take place on the application of this idea to the issue of sustainability (not the “tree-hugging” version but the idea of humans taking only the resources that can be sustained by the planet).

mmmmmm….. Overall, this is a rather poorly worded and argued piece. However, the idea of this forum is to raise issues and attempt to address them, so it is at least a start.


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