Often the arguments in support of the state are grounded on the state’s ability to restrict “the bad” in society, or to defend from other states in a defensive war. While it is true that individuals harmful to the health and property of others are the main problem that a society faces, arguments for a centralized power to have any positive effect on this issue are slim at best.
In defense of the area in control of a state, history has shown that near extermination of its male population in total war is not out of the question, so the belief that a state has a net positive impact on the well-being of its citizens is a rather unfounded one. While the state’s action against violence and destruction of property are, at this stage, unconvincing, a more voluntary system of governance could, in theory, help on this issue future societies, at least in progress to a true free market.
The idea that the state can provide services and other advantages to its citizens that did not previously exist is in contrast to the arguments of state protection—a fallacy that ought to be dismissed outright. Infrastructure, healthcare, and other services that the political state must produce are not, in fact, produced by the state, but by private individuals. This is no great insight, but offers us a way to understand how the state procures these “goods” from its citizens.
The state uses taxation to provide any goods or services. If it did not use taxation, but rather offered services voluntarily to consumers in exchange for money on the market, it would not be a state, but rather a business just like any other.
By taxing, debt, or inflation, the state acquires control of power to steer its citizens’ production, but it does not attain any resources to actually bring about anything more than already exists. It can shell out money to different sectors of production for eternity, but it cannot “give” without taking. Thus, no new net production comes from the state. The state—by taxing money and putting it to use—only directs the production of its subjects to attain its own ends. In fact, this ought to be considered an act of government consumption.
If individuals kept the money they paid in taxes, they would end up putting it into productive efforts that serve their individual desires or saving it. In this way, less money goes to producers and fewer individual wants are satisfied.
All this is to show a simple, unquestionable fact about the nature of the state in regards to its attempts to provide service to its citizens through taxation. The state cannot provide its citizens anything they have not already produced. While it can take without giving, it cannot give without taking. The state “investing” money into something only distorts the market, transfers money from producers to non-producers, and brings about production of goods nobody wanted in the first place.
