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Mises Economics Blog

On the Morality of Black Market Activities

October 23, 2006 5:01 AM by Stefan Karlsson | Other posts by Stefan Karlsson | Comments (10)

Today on LRC, I explain why high taxes makes black market nannies and other black market activities necessary and why the assertion of a statist Christian leader in Sweden that black market activities constitute theft is absurd.

Comments (10)

  • JIMB
  • Nice. You might also have commented the belief "avoiding taxation is a moral crime" is in essentials the belief the state owns the property and lives of every person and there is no logical reason why the state then could not demand payment even to the point of slavery - after all, it already confiscates a significant portion of their lives (time, energy, creativity, effort, property, etc). As far as the Christian part: what God has created is a universe of willful people that "own themselves" in the sense that they have free action that can be exercised morally or immorally, so society can be structured morally and only on prior consent. I think you have all the arguments in your favor: both religious (if you care to exercise those) and from observable natural moral law.

    In fact, a basic principle of justice is prior consent. I cannot go to my neighbor and demand of him payment for work I've done without his consent as to the terms of the work (even worse I cannot foist on him a despicably deficient product and demand ten times the price else my henchmen will throw him in jail for "evading taxes" as the government routinely does).

    So where's the consent? Clearly "paying less than is determined by law" is evidence of lack of consent and unless there is evidence the government has first obtained willing consent absent duress or threats (like jail or fines or violence), paying less taxes than determined by law is primae fascie case of the government ruling unjustly, unfairly, unconsensually, and therefore by aggressive thievery.

    To me, the government has no claim at all unless there is consent - the arguments about the "wedge" are saying we all (the transactors and the government) win if the government would be less aggressive, so it sounds attractive to those in government as legal trade increases dramatically when tax rates are lowered.

    However, that is also asking to expand the operations of the thief to more transactions - a thief who at root is immoral and aggressive and despicable denying any basic principles of justice in the first place - so their eventual score is all-the-bigger and they become all the more deadly.

    That is a point I've consistently argued with the "supply siders" who don't seem to share the trepidation about government -- against all evidence to the contrary over the last 10,000 years.

  • Published: October 23, 2006 7:50 AM

  • billwald
  • Interesting essay in Nov "Scientific American" www.sciam.com/ontheweb "Welfare States, beyond Ideology." Author compares high tax-high income states Scandanavian) with low tax-high income state(generally English speaking) and concludes the Nordic system produces better economic results. As both systems have large black markets . . . .

    We can expect to see a increasing black market in ciggybutts which will finance political campaigns in the USofA.

  • Published: October 23, 2006 11:31 AM

  • Urbanitect
  • It should be noted that in countries that have been completely collectivized, the black market is often the only means of survival. To be opposed to the black market then implies being against life.

  • Published: October 23, 2006 3:22 PM

  • adi
  • I'm from Finland and like Sweden it has a huge rate of personal taxation and social security taxes.

    Same collectivist mentality prevails here as in Sweden;

    "Evasion of taxes and social security contributions is stealing from the common fund" (said by the representative of Christian Democrats) and "Honest employers and employees are forced to pay the shortfall which is caused by the tax evasion".

    Fallacies like those are too numerous to refute and there is always people who claim that YOUR income is not YOUR'S but it's states (or common to all).

  • Published: October 24, 2006 6:22 AM

  • Francisco Torres
  • The moral imperative of life is to live a life that detracts not at all from the lives others who will follow us into this world will have available to them.

    There is a problem to this assertion: how would you live in such a way as to not make it detrimental to a next generation, if you need to live in order to HAVE a next generation? The only sure-fire way to achieve the first would be to stop living, thus leaving ALL resources to a future generation. However, this would make it impossible for a future generation to exist. This is called a perfunctory contradiction.


    We have to weigh whether or not we want to bequeath to the future a black market by our participation in it, which is questionable since black market goods and even employees are sometimes dangerous to their consumers.

    Why would it be questionable, based on such a flimsy premise: "SOMEtimes they are dangerous"?


    From our current wholesale moral dilemma, we might leave the world better than we found it, if we could do away with as much government as is possible, unless government is seen to be a benefit to humans.

    I do not understand - why would leaving even a small government accomplish the moral imperative? And why should we assume that a small government would be more moral than a big government? Does morality dwell in the numbers and not the deeds, all of a sudden?

  • Published: October 24, 2006 10:01 AM

  • Lisa Casanova
  • Black market goods are sometimes illegal because they are seen as dangerous, but sometimes (drugs, for example), the fact that they are only sold on the black market makes them more dangerous than they might otherwise be.

  • Published: October 24, 2006 4:36 PM

  • Francisco Torres
  • Don,

    I was not aware one needed to be a PhD or a president of a board of trustees to even dare point out the obvious fallacy behind your assertion.

    As for saying that I meant it was not possible to live without trashing the world, seems like dishonesty is another of your debating tools, appart from the crass ad hominem you showed. When asserting that the "moral imperative" is living in a way that detracts NOT AT ALL from future generations, the problem becomes one of defining just what "detracts" would mean to a future person. Since we cannot know, then the only way such imperative could be achieved in the total way you indicated would be by leaving the earth pristine, every rock and plant and animal right where it is. Thus, we would have to stop living.

    Since the "NOT AT ALL" leaves no room for degrees of "detracts" (again, because "detracts" can be defined as almost anything), then I can only conclude you created a perfunctory contradiction.

  • Published: October 24, 2006 9:39 PM

  • M E Hoffer
  • "the problem becomes one of defining just what "detracts" would mean to a future person."

    Francisco,

    No doubt.

  • Published: October 24, 2006 9:55 PM

  • Francisco Torres
  • By "not at all" I mean what is implied by the assertion that it is possible to leave the world in better condition than we found it.

    Depends on what you mean by "better", and if it means the same to a future person. Since you pressume these would be the same, you are now begging the question.

    If we cannot easily discern the direction our actions will take, free will is very difficult to affirm, or, positively express.

    Again, it is irrelevant what we may know are the consequences of our acts, since by the way your "moral imperative" is phrased, the only way to achieve a world that "detracts not" from future generations would be to act not at all - basically stop living. You may rephrase your definition and thus avoid the conundrum.

    But it certainly goes without saying, had the immoral choice of all previous heroin users not been made, he would not have died in this way.

    The previous heroin users were not responsible for your brother's decision, unless you are willing to accept that your brother did not possess free will and was at the mercy of those previous heroin users. Either you must accept he was able to act freely and thus freely chose to overdose, or that he was not.

    We must act. But we also must restrain ourselves.

    Anything we do now could detract somewhat from the lives of a future generation. In order to live, we must use resources, resources that will not be available to a next generation. Do you want to rethink your "moral imperative" now?

  • Published: October 26, 2006 1:03 AM

  • Francisco Torres
  • Sorry to hear that, Don.

    Francisco Torres,
    The Mexican Philosopher

  • Published: October 26, 2006 11:04 AM

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