Property taxes: sovereign usury?

June 11, 2015 § 32 Comments

Lots of folks have suggested that fiat currencies and fractional reserve banking create fake economic value out of nothing and are therefore, if not usury strictly speaking, somewhere in the moral vicinity of usury.  So far when this has come up in discussion it has turned out that critics of both don’t really understand either.  The former are options issued by the government which allow the bearer to settle tax liabilities; the ‘created money’ in the latter are options against the balance sheets of banks, denominated in the former.  There is nothing usurious going on and no creation of fake wealth except to the extent that the balance sheets of banks carry usurious (as opposed to nonrecourse) loans.  This should be at least mildly familiar territory to anyone who has read and understood the Usury FAQ.

But there is one kind of government activity that does bear close resemblance to usury: the levying of property taxes.

Here is a (slightly modified) comment I left on Kristor’s Orthosphere post (which itself is less about property tax than it is a preamble to another subject, the beginning of what I hope will be a series of posts well worth following):

Another prudential reason to oppose property taxes is that they encourage treating all property as liquid and fungible, discouraging ownership of anything illiquid and making ownership of illiquid things into something less than real ownership.

Property taxes are like the sovereign’s version of usury: the sovereign demands a fixed percentage repeatedly every tax period until the owner is destitute, independent of the owner’s actual fortunes during the period. The sovereign qua publican doesn’t care about the owner’s fortunes a bit: he just demands his pound of flesh every year.

Transaction taxes (sales, income, VAT, etc) on the other hand are one-time levies directly tied to the activities and fortunes of the person taxed — including property owners, because property owners who work, invest, and buy goods and services in the inevitable struggle against entropy pay transaction taxes when they do those things.

Property tax in contrast is not merely a form of economic double-jeopardy: it is a form of economic infinite-jeopardy.   If property were a bucket of water, transaction taxes represent taking a scoop of water every time the bucket changes hands in public commerce.  Property taxes represent a hole in the bottom of the bucket, a limitless demand against property owners, in effect making the sovereign into the property owner and the notional “owners” into rent-paying tenants.  (Some folks might like it that way — but they ought to be forthright about the fact that their preferred social arrangement involves de-facto abolishment of private property).

More generally, taxes on nonexistent transactions in illiquid property are inherently unjust.  Property taxes are a particularly egregious species of this tax genus, because they repeat ad infinitum.

None of this excuses the property owner from his duty to steward his property well for the sake of the common good and those more directly in his care, of course — just as the sovereign’s authority does not excuse him from his duty to rule over his subjects well for the sake of the common good and those directly subject to him.

But it seems to me that deposing kings and stripping owners of all of their property (even when you rent it back to them) are serious matters requiring serious reasons, not to be undertaken in the ordinary course of things. The sovereign’s title to already-owned private property (as distinct from taking a share in public transactions) is like the poor man’s title to bread. I don’t think it is surprising that folks who are fond of democracy often tend to be fond of property taxes: they both reflect inherently brittle and cavalier modern attitudes about authority, where kingship and ownership are both forms of authority.

If you use their words you will end up thinking their thoughts, redux

May 11, 2015 § 15 Comments


(From the ngram viewer).

The things you post on the Internet are forever

April 19, 2015 § 52 Comments

I’ve been banned from the W4 thread on fractional reserve banking now, so to the relief of many I can get back to my blogging vacation.  But for the record, I’ve preserved my two (additional) comments which were deleted. I leave interpretation of events in the thread to readers.  I have all versions of the thread saved (up to the point of being banned) to prevent the “memory hole” effect, in case the thread is further “edited”, mainly because I wanted to preserve what I actually said.  I’ll just post the full unedited thread somewhere here if more bits of it start disappearing there.

While the combative stuff may be amusing in a juvenile sort of way, the thread does contain quite a few comments from me explaining my perspective on fiat money, inflation, fractional reserve banking, and the like. So if you find those subjects of interest you might want to check it out.

Here are the two deleted comments, for the record:


As always I say things as I really see them, and don’t much care how that strikes other people. Some people love it, others hate it, some love it when I agree with them and hate it when I don’t, and many attribute all sorts of things to me that I did not say; and I am willing to let the chips fall where they may. But what you see when you read my words is my actual thoughts expressed as clearly as my capacities allow. If someone else wants to package these concepts up in a way that modern entitled morally bankrupt people find less offensive, I’ll leave that to those with a more ‘pastoral’ bent.

And it isn’t exactly a new theme for me that people need to take a hard look at themselves and own their own choices, rather than blaming society or the government for the consequences of their free acts.


The government has no special obligation to look after the welfare of citizens …

It is the government’s play thing to destroy as it wishes – as long as it does not engage in usury!

We should play a drinking game where every time Tony puts words in someone else’s mouth, everyone takes a drink. Except we’d all die of alcohol poisoning. Just from his last comment.

Posted by Zippy | April 19, 2015 5:54 PM

In which I do a little cyber gophering

April 6, 2015 § 14 Comments

I’m not back, but I didn’t manage to get fully away, as I felt it would be inappropriate to just ignore the discussion in my friend Paul Cella’s kind review of my usury ebook. The discussion there may be of interest to readers of this blog.

Have a wonderful Easter season, y’all!

UPDATE: The discussion (seemingly inevitably) wandered into the domain of currencies, bank deposits, commodities, and the like, despite the irrelevance of theories about those kinds of things to the usury doctrine.  My final comment on that (orthogonal to usury) subject is here (discussion starts in the original ebook review and spills over into that thread).

Note again that (even though I am right, hah!) one need not understand those subjects the way I do at all in order to understand what usury is and why usury is both morally wrong and economically destructive.

UPDATE 2: My comments in the second W4 thread are being edited.  That is their perogative, but here are the last two in full, for the record:


When the Bible and early Church teachers denounce usury on loans of money, they could not well be talking about charging usurious interest on government-issued vouchers, since that did not exist yet.

And that isn’t relevant, for reasons I leave as an exercise (hint: question 35).

The problem with any attempt to have a discussion with you – well, one of them at any rate – is that you cannot seem to keep more than one simple concept in your mind at a time, so every discussion becomes an endless, tedious game of whack-a-mole. If we talk about A, B, and C, by the time we’ve gotten to C you have forgotten everything already discussed in A. By the time A is re-clarified for the seventh or eighth time, you have forgotten everything about C. This happens even when you are having a conversation with yourself about your own ideas, which is why your posts and comments are characterized by (among other things) a certain, shall we say, lack of pith.

I used to think that you were a liar, who would constantly misrepresent my views, pretending not to grasp things I had already addressed many times and imputing things to me that I had not said. I thought that for quite a long time. But I think I was (in a sense) giving you too much credit.

At this point I really am convinced that it is just a cognitive deficit on your part. That is a problem that no amount of clarifying words from me (or anyone else) can cure. I’ve had no great difficulties explaining usury to everyone from children, to octogenarians with no financial background, to financial experts. And I’ve had discussions with people who clearly wanted to obfuscate the subject for ideological reasons. I don’t think you fall into that second category. I just think that any attempt at discussion with you specifically on pretty much any subject, is – for whatever underlying reason – a pointless and endless game of squirrel-chasing characterized primarily by endless hashing and rehashing of manifest irrelevancies which, for whatever reason, you are convinced are significant.

And by the way, on the use of the term “money” your beef isn’t with me.

My position all along – which in typical fashion you respond to as if you were talking to someone else with a different position – is that commodity, coin, fiat money, deposits and other call options, etc are essentiallydifferent things (none of which are licit to lend under a mutuum for gain, since it isn’t licit to lend anything at all under a mutuum for gain), despite economists’ sloppy conflation of them all into one category which they label “money” and despite their contingent historical entanglements. If you have a semantic beef about the label “money” it is with economists, not with me. This is typical Tony-projection-onto-Zippy, yet again.

I couldn’t care less what labels people settle on to use for these things, and other things besides (e.g. non recourse vs full recourse loans), as long as they are treated as the very different things that they are — something you fail to do in the OP, by the way.


I should suppose that the kings coined their money to pay their dues, to soldiers’ pay or to military suppliers, traders etc and not that the subjects could pay their taxes. How in the world would people have access to these newly minted coins? Would the king just distribute them so that people could pay him back in taxes?

It is surreal to me that you don’t see yourself answering your own question.

The sovereign creates official fungible currency and spends it on all the things that governments do. It circulates, and is in demand qua sovereign currency – has value to those the government pays with it – precisely because the sovereign uses it as his measurement units for public commerce, keeps its supply limited (lest it become worthless, like the stock of a company which issues too many shares), and because everyone needs access to some to settle their tax liabilities. This is entirely independent of the medium in which the sovereign issues his currency – gold, zinc, copper, paper, or mere ledger entries in a computer file.

This is similar to (but distinct from) banks issuing deposits. Banks issue deposit accounts as a zero-strike perpetual option to exercise against their assets. Sovereigns issue currency as an option/voucher to settle tax liabilities. Entanglement of the latter with portable commodities of intrinsic value (e.g. gold) is an accident of history, and that entanglement (as I have pointed out many times) actually reduces the transparency of what is taking place.

The deposit accounts issued by banks (and measured in units of sovereign currency) are backed by the bank’s assets: the various properties of varying liquidity in which it holds a stake. Actual currency issued by the sovereign (some of which is held in reserve by banks, to meet the demands of depositors) is backed by his power to tax.

That certain kinds of otherwise normally intelligent people are simply incapable of grasping this – not immediately perhaps, but after actually grappling with finance and trying to grasp what is actually taking place – is really quite puzzling, at least to me.

Give me a break

February 24, 2015 § 8 Comments

The recent usury discussionfest, sparked by a comment thread at the Orthosphere, tossed a bit of a monkey wrench into my plans to take a break from blogging in the fall; so I’ll probably avoid even commenting on other blogs for the next while just to stay out of trouble.  That’s an oblique way of letting y’all know I’ll be taking a break from blogging for a bit (and I really mean it this time, honest — so don’t say anything interesting, doggone it!)

For those who stumble upon the blog for the first time, it isn’t really ‘about’ any particular subject or subjects; but our discussions on usury, liberalism, positivism, democracytorture, and game are probably the most ‘popular’ (or controversial). The first four are personal hobby horses of mine; the latter were more a matter of just going where the discussion leads.  Feel free to browse around and make comments: I probably won’t be gone forever, since the sirens always seem to call me back; and the regulars may have something to say even if I don’t.

Speaking of the regulars – and you know who you are – in the words of the Prophet Bilbo Baggins, I don’t know half of you half as well as I should like; and I like less than half of you half as well as you deserve.

Secret agency, man

February 15, 2015 § 66 Comments

I haven’t written much on the “Intelligent Design versus Aristotlean-Thomism” debate since I became bored out of my mind by it several years ago.  But recently I’ve taken it up again, if only out of a sense of masochism.  (In reality it was probably because David Oderberg’s book Real Essentialism ended up synced to my newish Kindle Voyage, one thing leading to another — such is the whimsy of life).

The criticism of evolutionary “theory” which goes by the name “intelligent design”, the tip of the spear of which was Michael Behe’s book Darwin’s Black Box, has been subject to consistent and vocal attack by Aristotlean-Thomist critics over the past half decade or so.  (It should be said that I have no idea how representative this cadre of vocal critics is of AT in general). This criticism depends crucially on the AT distinction between artifacts and natural objects, the latter which (on the AT metaphysical account) have substantial forms and the former which have merely accidental forms.

All of that can be stipulated without in any way giving rise to a legitimate criticism of Michael Behe’s inference to intelligent agency from the data of microbiology.  (There may be plenty of legitimate criticisms; but the AT criticism based on the natural-artifactual distinction isn’t one of them).

Here philosopher and author Edward Feser clarifies his contentions about art versus cultivation in a fairly recent post:

… the distinction Aristotle is getting at here is really the distinction between substantial form and accidental form, and whether something came about through human interference or not is at the end of the day a secondary issue. For there are man-made things that have substantial forms and are thus “natural” in the relevant sense (e.g. new breeds of dog, water synthesized in a lab) and there are things that are not man-made but rather the result of natural processes that are nevertheless not “natural” in the relevant sense but have only an accidental rather than substantial form (e.g. a random pile of stones or dirt, qua pile, that has formed at the bottom of a hill). The usual cases of things with merely accidental forms are man-made, though, so that we tend (wrongly) to regard the man-made as per se “unnatural,” and the usual cases of objects that occur apart from human action are “natural” in the sense of having a substantial form, so that we tend (wrongly) to assimilate what is “natural” in the sense of occurring apart from human action to what is “natural” in the sense of having a substantial form or intrinsic principle of operation.

Whatever one thinks of the distinction between art and cultivation, it is simple enough to reframe Michael Behe’s design inference in a way such that the AT objection collapses on itself and goes away.

Suppose a living thing is found and examined, and it is determined that it is statistically ludicrous to suggest that this living thing occurred in unaided nature: the evidence clearly shows it to be the result of genetic engineering or tinkering by intelligent agents. Think of an apple tree which produces apples with “GMO Red Delicious, by the Secret Agent” embedded in the DNA of the apple. Or a tree that produces chairs. Or a bacteria that eats oil spills.

We may not know who the intelligent agents happen to be: that might remain hidden, a secret.  But nevertheless we can tell, as a forensic matter, that they exist(ed) and must have tinkered.

The ID guys observe this ‘signature in the cell’ and infer that the (efficient) causes of the apple tree must include the actions of an intelligent agent.  Just as the regular rows of corn in a farm imply a farmer, the signature in the cell implies a signer.

Now we can grant that the ID guys didn’t go out of their way to learn everything about AT metaphysics before studying microbiology, and pre-frame their writing on the design inference – its facticity as deduced from empirical evidence – in such a way as to avoid getting AT knickers in a twist.

But whose job is it to interpret factual claims through the lens of AT metaphysics? Is that the job of empirical fact finders, or is that really the job of AT metaphysicians?

ID (whatever one thinks of its veracity or plausibility as an empirical matter) is first and foremost a factual claim: a claim that the observed properties of life cannot be explained by (the efficient causes of) chance and the laws of physics, and that therefore, as a forensic inference, life could not be here absent the intervention of intelligent agency — not (necessarily), it is true, the creation ex nihilo of God, but the ordinary agency that slams us in the face with a hammer every time we observe human beings make choices.

When confronted with this factual claim, AT metaphysicians have two intellectually honest choices qua AT metaphysicians: they can dispute the factual claim, or they can go to work explaining how the factual claim is explicable through the lens of AT metaphysics.

The vocal AT critics of ID have done neither of these two things.

There were times when I thought they were disputing the factual claim. That can’t be the case though, because if it were the case they would be admitting the empirical falsifiability of their metaphysics.

And they certainly have not attempted to explain the empirical factual claim through the lens of AT metaphysics.  Instead they have spent enormous energy arguing that ID is incompatible with AT.

So my conclusion is that they’ve spent years of attack dog articles avoiding the central issue and changing the subject.

“God does not play design!”

February 13, 2015 § 30 Comments

In the comments of the post below I compared the putative theistic personalism of “intelligent design” to the putative anti-realism of quantum mechanics.  Perhaps, we might propose, AT critics of ID are just insisting that “God does not play dice!”

But it isn’t as if Einstein could have coherently characterized quantum mechanics itself as intrinsically misguided, to wit:

“[X] is implicitly committed to metaphysical anti-realism, and is therefore a misguided attempt to make sense of reality.”

Replace X with “quantum mechanics” and it is a ludicrous statement. Replace X with “the Copenhagen interpretation” and it is at least arguable. The latter implicitly and explicitly makes much more concrete and specific metaphysical commitments than the former.

“[X] is implicitly committed to theistic personalism*, and is therefore a misguided attempt to make sense of reality.”

Replace X with “the design inference in Darwin’s Black Box” and it is a ludicrous statement (whatever one thinks of the design inference as an empirical matter or theistic personalism as a theological matter). Replace X with “Dembski’s interpretation” or “Torley’s interpretation” and perhaps it isn’t (emphasis on ‘perhaps’: I haven’t read all of the back and forth because it frankly is not relevant to my own interests).

* This could as easily be “a mechanistic conception of nature” rather than “theistic personalism”.


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