Larry Barnhart
March 1990

  The essence of ownership is control. Webster's Dictionary defines ownership as: "proprietorship; legal right of possession; legal or just claim or title (to something)." This definition by itself does not help us much. However, Webster's Dictionary offers further clarification by introducing the concept of beneficial ownership. Beneficial ownership is defined as follows: "in law, the right to use property for one’s on advantage, the legal title to which may be held by another."

  This brings us to the issue of "public property." Who is this Mr. or Ms. Public? Where do we find this amorphous creature who seems to be separate from and superior to the rest of us? From the standpoint of the average citizen, "the public" is best defined as "anyone else but me." It would be fine if we were able to let it go at this. However, this analysis would not be complete without taking into account those who claim to represent this creature called "the public." These representatives are better known as "politicians." Being guardians of the "common good," they deserve to be looked at closer, for as one cynic put it, "Politicians are people who manage public affairs for private advantage," or by definition, politicians are beneficial owners of public property.

  To illustrate this point, let's go back to the summer of 1989. The place is the State Fairgrounds in Pueblo, Colorado. A man named Doug Bruce, along with a few others, tried to stand in front of the entrance gates and collect signatures from people who are in favor of a state constitutional amendment which would limit politicians' ability to tax. In a very short time, he and the others were told by police that he must stop petitioning, or face being arrested. At the same time, other people were collecting signatures to raise taxes on cigarettes, and they were not bothered. What are we to make of this? Apparently, those in favor of raising taxes are part of the public, while those seeking to lower taxes are not.

  The State Fairgrounds are said to be public property, and now we have learned that some people are part of the public, and others are not. By now it should not be too difficult to figure out who it is that makes such a determination: those who gain from higher taxes and lose from lower taxes, namely, politicians and bureaucrats. In this case, they very effectively demonstrated control, and therefore ownership of the State Fairgrounds.

  What makes this case even more interesting is the fact that it was a battle over taxes. Why are taxes such a volatile issue? Maybe it is because while some people pay taxes, others live off them. If there is a class struggle, it is a struggle between the "taxpaying class" and the "tax-eating class." Of course, members of the taxpaying class want lower taxes while members of the tax-eating class want higher taxes.

  A veteran petitioner told me that his greatest success was in middle and lower-middle-class neighborhoods. Also, small business people are more in favor of tax limitation than are large businesses. These observations are useful in determining just who the taxpayers and the tax-eaters are. Apparently, those on the very bottom and those on the top are the beneficiaries of our present tax system, while those in the middle are the ones who are stuck with the bill. Unfortunately, many who are trying to limit taxes are doing so only for personal reasons. While they are right to try to improve their lot by trying to shake off the tax-eaters, if they really knew what is at stake, they would fight with much less fear and with much greater passion. At the present rate of tax increases, our grandchildren, if not our children, will be living in slavery. (In other words, they will be allowed to keep only a small portion of the results of their labor.)

  In my five years of intense study of economics, I have read many books, including some from the far right and from the far left. One thing they both agree on is a statement made by Angus Black, a far-left professor who wrote The New Radical's Guide to Economics: ". . .whatever government does, it does poorly." Most people tend to agree with this observation, but few consider why this is so and cannot be otherwise. Here, a little logic will take us a long way. Consider this: if you give X number of dollars to an entrepreneur who has much to gain and everything to lose, and then give the same number of dollars to a bureaucrat who has little to gain and virtually nothing to lose, who is going to be a better steward of their resources? When the entrepreneur fails, he or she will likely have to go back to a low-paying job. No alibis are accepted. On the other hand, a smooth-talking bureaucrat can actually be promoted after making a serious blunder. (This happens often to military officers whose names are remembered long after the blunder itself has been forgotten.)

  As taxes increase, more money, and therefore more property, is taken away from the private sector where the rewards of success and the penalties for failure are great and given to the public sector where there is little to gain or lose. This property is then used inefficiently at best, wasted at second best, or at worst, used to restrict our personal and economic freedoms. The property we entrust to our politicians is only available to us when our opinions agree with theirs, and if our opinions do not agree with theirs, it is either off-limits or used against us (i.e. Police, courts, and the tools of their trades.)

  The bigger government gets, the more power politicians and bureaucrats have to build or collapse whole industries with the stroke of a pen. In 1978, while taking a course on Small Business Administration, a class-mate who was President of a trucking company in Virginia said that taxes were his prime consideration in determining whether to rebuild or replace trailers. Another example was the construction boom spawned by the Economic Recovery Tax Act of 1982, which went bust after the Tax Complification Act of 1986.

  Last year, during the Amendment 6 debates, the media marveled at the spectacle of politicians and businesses joining forces to fight the amendment. To them it seemed unprecedented that business should like high taxes. In reality, it was only big businesses like Coors and U.S. West who favored high taxes. Actually, they do not really care for high taxes. However, while high taxes may be inconvenient to established interests, they are death to new competitors. To be certain, if Adolf Coors were to attempt to start a brewery in today's highly taxed and highly regulated society, he probably would not have fared so well. (High taxes and massive regulation accomplishes indirectly what explicit laws prohibiting competition accomplished in the French mercantilist era. It should also be noted that a culture who sabotages its innovators also unwittingly sabotages its own survival.)

  The final issue to consider regarding the expansion of government power is: do human beings live best through the use of force, or through the use of reason. One luxury a government has when it mismanages its affairs is it can cover losses by increasing taxes. A private citizen has no such option. Maybe this explains the popularity of running to government in order to solve every little problem. Solving a problem usually requires the cooperation of more than one person. Therefore, government force can seem like a short-cut, because force-of-law is used as a substitute for reason and persuasion. Whether the motivation be greed or a concern for the "common good," escalating the level of conflict in our society can only be harmful for everyone in the long run.

  The last paragraph has implied that government is force. This idea was understood well by our fore-fathers. George Washington went so far as to declare: "Government is force. It is not reason. It is not eloquence. And like fire, it is a dangerous servant and a fearful master." Thomas Jefferson declared: "That government governs best that governs least." In other words, we need to be careful about how we employ force or the agencies of force in an attempt to solve human problems.

  Here is a thought for those who feel justified in lobbying Washington, D.C. and the State Capitols. If you are too nervous to use a gun to confiscate your neighbor's property directly, don't hire a politician to do it for you. Think! By what standard do you wish to compete: productive excellence, or force? Choose wisely. Ayn Rand once observed, "when force becomes the standard, the murderer will always win out over the pick-pocket."

  In conclusion, as we allow government to claim progressively larger shares of our nation’s wealth, we will suffer a corresponding loss of both freedom and prosperity. What is your choice?

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