Tuesday, April 12, 2011

Theft Across Generations

This is the second post in which I am looking at the objections that Larry (a.k.a. The Barefoot Bum) made to my claim that much government debt constitutes theft from future generations.

In my previous post, I gave a description of what it takes for government spending to be permissible - that those who pay the debt must obtain a worthwhile benefit. However, much government debt does not fit this description. It fits a description that I described as theft.

Larry wrote:

In fact, unless you are in possession of a time machine, it is physically impossible to steal anything from our children. Asserting that a deficit now as stealing from our children is as utterly deluded as belief in God.

So, let's say that I want t buy a car for $20,000. I get access to your bank account, from which i take the money and buy the car. Even though we can imagine situations in which this would not be theft, we can fill in the details where we all would nearly all agree that it is.

Yet, i am to believe that if, instead, I were to give the seller the ability to take $21,000 from your account tomorrow that this would not be theft. It would, instead, be a legitimate transaction because no theft can take place across time.

One might want to claim that, consistent with the claim that theft cannot occur across time, no theft occurs until the car seller actually takes the money.

Of course, it is possible that some of our children could use a deficit to justify theft from others of our children, but that theft is not really dependent on our actions now it will be our children's choice whether or not to steal from each other.

The person who makes this move is simply playing language games. There's no substantive difference between this and what I wrote. There is only a difference in what words are to be used in describing it. One person wants to limit the term 'theft' to the single act of forced money transfer that occurs at the end of the deal, while another (me) uses the term for an expended set of actions across time that culminates in the forced transfer.

This dispute over how to define 'theft' is as void of substance as the dispute over how to define 'planet' - the latter having no relevance to what is true of Pluto.

For all practical purposes, an institution that allows buyers to empower sellers to take money without consent (or political representation) from third parties to cover the costs of their purchases - plus interest - is institutionalized theft. As practiced, it is an institution that requires this future theft. Without this future theft - or at least the expectation and demand that this future theft will occur - the institution itself would cease to exist?

So, what are we doing taking part, promoting, and codifying an institution, and passing laws granting people the legal authority to use violence in defense of this institution, when it is an institution that requires as a component this future theft?

Much of our government debt fits this description. We make purchases today by giving sellers - or giving people who have cash to give to sellers - certificates for the forceful (backed by violence) transfer of wealth from future taxpayers at a future date.

It us one thing for me to buy a home by signing a mortgage where I agree to make monthly payments over the next 30 years. It is quite another for me to buy a house authorizing the seller to garnish your wages for the next 30 years. And government debt is a transaction of the second type.

We can see how some might find this attractive. To the degree that we all carry around credit cards allowing us to spend money from somebody else's bank account with no regard as to its balance, a great many if us are going to feel tempted to overspend. It's not difficult to imagine all of us seeing our debts balloon - caused by out-of-control buyers, over whose spending we have no control, consuming whatever it is they desire because they can pass the costs onto us.

It is one thing for us to buy a house and agree to make a certain number of payments each month for the next 30 years. It is quite another to buy a house authorizing the seller to garnish somebody else's wages for the next 30 years to get the money.

That is what future generations are (metaphorically) seeing in us. For them, it is the moral equivalent of getting a credit card statement every month, with more and more charges added to each statement, made by out-of-control spenders, and having no ability or authority to refuse - waiting for the day when their minimum payment required on the debt exceeds their capacity to pay. Now, what is the person who scoffs that this is not theft trying to say?

Is he trying to tell us that, even though morally objectionable it is a violation of language to call this 'theft'?

Or is he trying to say that running up somebody else's debt without their consent is never morally objectionable as long as that person doesn't see the debt (or get the visit from the people with guns demanding payment) until some future date?

The first option is a trivial semantic claim that lacks substance. It a dispute over what something is to be named, not a dispute over what it is.

The second is absurdly false on its face.


josef johann said...

In a sense no future generation has political representation or the ability to consent to anything.

Should we then refrain from infrastructure investments, such as a national high speed rail network which may saddle future generations with debt, but also benefit them?

Alonzo Fyfe said...

Joseph Johann - I covered your question in the 2nd paragraph above and in the previous post referenced there.

Bradley said...

I suppose that you might justify projects from which future generations would benefit even though there was no consent on the basis that they haven't reached maturity yet. Parents are given some rights to do certain things that they wouldn't otherwise be able to do on that basis.

How would you respond to the criticism that future generations aren't really being compelled to pay taxes in the future since they are free to leave the country?

Forrest said...

Hmmm, I enjoy your blog and I'm usually more or less in agreement with you, but I have to differ with you here.

I don't know what the exact figure is but let's just say every child born today is born with $30,000 worth of debt. You write that this is theft, so let's say we pay off the debt today, so that every child is born with $0 worth of debt. Are these children any better off after we've paid off the debt? No, because to pay off the debt we had to tax their parents $30,000 and when their parents die, they will die $30,000 poorer than they would have otherwise, and thus leave $30,000 less in inheritance to their children. With the debt the child is born owing $30,000 and with the debt paid off the child inherits $30,000 less and is thus still out $30,000. Both situations are equal so the child should have no preference as to whether we pay the debt off now or later.

Anonymous said...

And if we don't run the entire planet into the ground isn't that a gift across generations?