In the well-known story, Goldilocks, lost in the woods, happens upon a house. Opening the door she finds three bowls of porridge on the dining table, and, being awfully hungry, sits down to eat. The first bowl of porridge is too hot and the second too cold, but the third bowl is just right. Hunger pangs all gone, Goldilocks is overcome by tiredness and goes in search of a place to rest her head. The first mattress she finds is too hard and the second too soft, but the third mattress is just right. As she sleeps the bears whose house it is return home, and being less than amused to find Goldilocks there, pick every last morsel of flesh from her delicate bones. Thus Goldilocks, trespasser and thief, learns her lesson – albeit a little too late to do her any good.
Thanks to progressive reforms undertaken in the intervening years, being eaten by a family of homeowning bears is now far less of a worry than it used to be. For most of us the risk is negligible. But it can, and does, still happen; tired and hungry libertarians being particularly vulnerable to this grim fate.
Comedian and actor, Dominic Frisby, is likely much funnier than Goldilocks was, and certainly knows more about Bitcoin than she did. A few years ago he wrote a book called “Life after the State”, wherein he set out a vision of a more perfect world. One where – despite his promising title – the state has not disappeared altogether, but it is much, much smaller than at present. In short, Frisby tells us about a world where the state has become just right: government is neither too big nor too small; taxation is neither too high nor too low; regulations are neither too light nor too heavy.
This “Goldilocks libertarianism” is indeed charming stuff, which is why there are always writers writing about it and always readers reading about it. But just how much has to be just right in order for the state to be just right?
Let us take as our point of departure, the minimal or nightwatchman state. The government levies just the right amount of tax. Very good. But what does it mean to say that taxation is just right? That there is enough money to pay for the government to do those things that only government can do with nothing left over, and that those paying taxes are happy with how much tax they are paying. – Reader, are you happy with how much tax you are paying? Would you like to pay less tax than you do now? If a politician offered to shift some of the burden from you onto those with broader shoulders, would you not be tempted to take him up on it? And what of your fellow men? Would they be tempted, do you think?
And why would a politician not make some such offer? Whether it is, for example, the desire to improve his position vis à vis other politicians, or simply to be even more beloved by the people, surely a politician has his own interests that he seeks to further? If so he will only refrain from making an offer if he is ignorant of his own interests, or because he is a thoroughgoing altruist. Each of these is as likely as the other.
We can be sure, then, that unless every single voter and every single politician is just right, the necessity of taxation along with the necessity of having to decide “who pays what” guarantees that political competition (inter- and intra-party) will exist even in a minimal state.
But this of not the end of the story.
Taxes pay for the things government does, and though a minimal state does the minimal amount of things, contrary to what is usually assumed the things it does are not fixed once and for all. For instance, as we all know, a nightwatchman state must provide protection against domestic criminals. But what counts as “protection”? Any number of things. Perhaps the government might treat all citizens to a bodyguard and station snipers outside their homes twenty-four seven; perhaps it might give them a couple of padlocks and a leaflet on the importance of keeping their valuables out of sight; or perhaps it might have some police drive around an area and respond to crimes as they are reported. But how many is “some” police? Is it enough? Too many? Too few? Who can say?
What it comes down to, then, is this. A nightwatchman state must decide not only “who pays what,” but also “who gets what”. That a certain amount of revenue must be raised does not tell us how it must be raised; that certain services must be provided does not tell us how they must be provided. Each allows of an indefinite number of answers, and no one answer is definitive. Though the two would be effectively one and the same in a free market, politics renders them distinct: it is perfectly possible to get more whilst paying the same or less. Moreover, it is in the interest of the voter to ask the politician to give him “more for less”, and for the politician to offer “more for less” to the voter. But these are precisely the conditions that exist in non-minimal states. Indeed, the independence of “who pays what” and “who gets what” is the very reason non-minimal states are non-minimal.
Of course we need not lose any sleep over this so long as the government, the opposition parties, the voters, and the taxpayers are just right. But while it is not impossible that men should, en masse, become angels, it is rather unlikely. We might even go so far as to call such a hope utopian.