This is my interpretation, thoughts, and commentary regarding how the government of a free society, meaning how the government under Laissez-faire Capitalism, is funded and financed, VERSUS regarding how the government of a tyrannical slave society, meaning the government under Statism, is funded and financed. The discussion regarding funding and financing a capitalist government comes first, followed by the discussion regarding funding and financing a statist government.
Funding and Financing of Government under Capitalism
To start, there is no coercive government forced taxation, fines, or fees under Capitalism, meaning in a free society. Therefore, the funding and financing of a capitalistic, constitutionally-limited government would be approached from a completely new and unique way.
Funding and Financing Programs for proper government functions under Capitalism would not be associated with or based on any type of taxation or wealth-property confiscation. Instead, funding would be based on such things as voluntary contributions and donations from individuals and businesses, and/or perhaps from many types of military or police festivals and fund raising events, and/or fees charged for proper, limited legitimate governmental services rendered (such as contractual enforcement) – whose purpose is to raise the funds necessary to pay for the proper functions of government, and nothing more. Under true Capitalism, no coercive government force (such as taxation or wealth-property confiscation) is permitted or allowed to be used to raise the necessary funds for the proper functions of government.
Again, such funding and financing would come from sources as services the government might provide, such as guaranteed contractual enforcement among individuals and business, fund raising events, and/or private donations.
Because there would be no taxation under Capitalism, I think that free, private citizens would have every rational selfish incentive, selfish motivation, self-interest, and self-preservation orientation to voluntarily contribute and donate funding and financing to their limited government (to the extent that the individual could afford) – so that this constitutionally-limited government could continue to provide a proper and strong police and military force to maintain peace among free individuals, to defend and protect against the initiation of force by criminals, other individuals and groups, including invasion from a foreign country or other group, and to provide a proper, objective justice system (courts) based on the objective rule of law, guided by rational-objective laws and/or legislation – all oriented to the recognition, preservation, defense, and protection of individual rights, property rights, derivative freedoms, and unregulated economic freedom for all individuals and businesses.
Also, under true Laissez-faire Capitalism, the funding and financing of a capitalistic, constitutionally-limited government would ONLY be available for and spent on the three essential functions of government:
(1) a proper military,
(2) police and law enforcement, and
(3) a proper, objective justice system (courts).
Under true Laissez-faire Capitalism, the funding and financing of a capitalistic, constitutionally-limited government WOULD NOT be available for, nor spent on, “publicly funded” welfare programs, services, subsidies, “pork” projects and programs, or special interests projects and programs. For example, under true Capitalism, there would be:
- NO government funding for Government “Public” Education or Schools
- NO government funding for FEMA or other Disaster Relief programs
- NO government funding for any financing or banking bailouts
- NO government funding for Social Security or any National Savings programs
- NO government funding for government supplied Medical and Health Care, including such programs as Medicaid or Medicare
- NO government funding for “Public” Hospitals or Health Centers
- NO government funding for “Public” Housing or homeless shelters
- NO government funding for Farm and other business subsidies
- NO government funding for Energy subsidies
- NO government funding for Welfare program or service, of any kind
- NO government funding for Lobbyists or any special interest group
- NO government funding for establishing and maintaining any government forced monopolies, such as the U.S. Postal Service
- NO government funding for “Public” Parks, Libraries, or any Public Sports Stadiums
- NO government funding for Roads, railways, waterways, and other transportation projects
- NO government funding for “Public” Airports or “Public” transportation projects.
Under true Laissez-faire Capitalism, the funding and financing of a capitalistic, constitutionally-limited government WOULD ONLY be available for, and spent on, a proper, “top-notch” and “top-dollar” protective national military, proper “top-notch” and “top-dollar” protective police forces and facilities, and the all necessary and required applications and facilities of a proper, objective justice system (courts). In other words, the funding and financing of government under a capitalist system would be to fund ONLY the proper functions of government. Period.
As I wrote in Item No. 2, Lobbyists and Special Interest Groups would not exist in a true, laissez-faire, capitalist society. There would be no need for them as no individual, business, or group would be able to use a proper constitutionally-limited government to interfere with, infringe upon, meddle with, limit, prohibit, dictate, regulate, mandate, manipulate, violate, or control individual or economic freedom, individual rights, property rights, derivative freedoms, or any free-market economic, commerce, banking, finance, or business activities, practices, and processes.
— For an insightful discussion regarding the financing of government in a free society, see Ayn Rand’s book The Virtue of Selfishness, Chapter 15, “Government Financing in a Free Society,” pb pp. 116-120 (Signet, ~1980).
Funding and Financing of Government under Statism
Any form of Statism is funded and financed by an ever increasing, growing, burdensome, compulsory taxation, fine, and fee system. Taxation is legalized theft – theft of property, i.e., theft of the money, income, wealth, profit, and any other type of property that is produced, earned, inherited, saved, invested, etc. by any and all productive people, including businessmen, (meaning all producers) of a nation. Legalizing government theft, such as forced taxation, does not make it right, correct, or moral. Theft is theft – and taxation is legalized theft, it is wrong, it is immoral, and it is evil – and it is an initiation of physical force against individuals and businesses, and makes slaves out of the citizenry and a slave system of the economy.
I suggest that statist-type governments will do anything, whatever they deem necessary, to confiscate and steal income, profits, wealth, and property to maintain their political and social power and control (maintain the coercive status quo) over the citizenry – at all costs – and I strongly emphasize “anything,” including imprisoning tax evaders and confiscating their properties (present day United States), passing laws and legislation to collect increasing fees and taxes (present day United States). And, in other more radical statist countries, even the threatening of direct physical violence, or engaging in the threat of or outright murder, if necessary, to collect taxes and confiscating property for government funding, financing, and control (present day North Korea or Venezuela), including nationalizing all industry and commerce if necessary. At extreme Statism (socialist dictatorship), the majority of taxes, fees, and wealth-property confiscation – if not all and any production – eventually go to the maintaining and self-preservation of an ever increasing tyrannical police and military force just to keep the citizenry enslaved and controlled.
For examples of present day statist countries that are focused on expanding their police and military to keep the citizenry enslaved and controlled, I refer you to such present day nations as present day Russia, China, Cuba, North Korea, Iran, or Venezuela, and such historical examples as the former U.S.S.R. or Nazi Germany, or early England during its Reign of Kings and Queens, and even further back to the Roman Empire.