One of the main theses you’ll encounter in the writings of virtually any participant in Ukrainian progressive public discourse is formulated roughly as follows: “unfortunately, the Ukrainian state has been seized by people who use it exclusively for personal gain.” From this follows, for example, a certain condescension toward tax nonpayers and those evading various state services. What is the point of giving money to officials, they say, if they’re just going to steal it anyway? This also leads to the belief that “when our power comes, then you won’t dare hide anything, and everyone must bring everything to the common pot.”
By the way, the progressive public is currently conducting a sort of test of how much the new power is “ours” — whether one can finally demand that other people “truly” pay taxes or still needs to wait; whether the new power is sufficiently aligned with our values that we can, just like in Europe, start reporting our neighbors to the authorities for being scoundrels and evading the state eye. If you look at internet activity from this perspective, you’ll discover that the majority of posts are actually devoted precisely to testing Poroshenko — starting right from the famous discussion about those invited to the inauguration. To our common relief, so far Poroshenko is not passing the test, his team is not the right one, he is not quite doing the right things, and in general he is an “oligarch.” Calls to report one’s neighbor to the cops are being made, of course, but by general sentiment, the conclusion is rather: “well, of course, he is not Yanukovych, but our power is still far away.” Further, opinions diverge. Some believe that Poroshenko will “come to his senses,” others — that “circumstances will force reforms to be carried out,” still others hope for the ATO veterans who “will return and establish order” and so on.
Looking at the results of this test, the author sighs with relief. At the thought that someday “our” power will actually come, I am overcome with horror. This horror comes from understanding that “our power” will be “the last nail in the coffin of Ukrainian statehood.” Statehood, well, never mind it, but I feel sorry for the people, because if the state eye receives full support from the progressive public, then what is Putin compared to that — then giants such as Mao Zedong and Pol Pot should joyfully squeak in their little coffins.
The reason for my, to put it mildly, skepticism lies in understanding what an incredible tangle of myths and misconceptions we are dealing with, and that if this tangle is followed in practice, the matter will end in famine and genocide.
Take, for example, the aspect we are now discussing — “honest” tax payment and careful following of instructions and orders composed by wise and strategically thinking leadership. Notions of reality in this aspect look approximately like this: what a person does, he does “only for himself,” and taxes and other exactions — these are his “contribution to society.” That is, the bourgeoisie, oligarchs, and other bad people only want to live for their own pleasure and “don’t want to share.” To share — means to pay a tax, which is the “contribution to society.”
In reality, everything is precisely the opposite. Your contribution to society is how useful you are to other people. In a world where there is money, it is not difficult to determine this contribution — it is your income. Strictly speaking, you have given society products worth more than your income. And this does not include good deeds that are difficult to “monetize.” And if you become richer, it means you bring more benefit to other people. That’s the whole mechanism. Each of us carries something to “society” and receives something from it in return — this exchange makes “society as a whole” richer.
In this sense, taxes are not “contributions to society” at all, but rather the opposite — a withdrawal from it. Economists understood this circumstance perfectly well. Government expenditures are consumption, not investment. The idea of a “contribution to society” supposedly made through taxes is, of course, not new, but it only became established somewhere from the 1950s of the last century, from the era of faith in technocracy and salvific state intervention. Somewhere from the era of John Kenneth Galbraith and other people of that sort, all of this began. At the same time, I note that this opinion spread not so much among “academics,” that is, scientists engaged in economics, as among various kinds of advisors and other people hired by the state. That is, in the West this is just one opinion among many, and even those who consider taxes useful usually believe that a “contribution to society” is what you give to other people in exchange.
To us, the view of taxes as a “contribution to society” came along with the cargo cult of everything progressive and European, and, on the soil of economically ignorant people of simply biblical proportions, it spread extremely widely and became dominant. Therefore, even if your enterprise earns millions of dollars a month, you are still, for the progressive public, a scoundrel and a wretch, because you do not make any contribution to society, you don’t want to share, you scoundrel.
And now imagine what will happen if people with such views come to power. After all, why and how is our state “used exclusively for personal gain”? The method is well known even to the progressive public. It consists in maximally hindering voluntary exchange between people and preventing them from making a “contribution to society.” Usually this is achieved through unbearable regulation and orders that are impossible to fulfill and which, moreover, contradict each other. “Personal gain” appears for officials because people agree to pay them (in addition to taxes) to be left alone, so they can continue to “make a contribution to society.” The progressive public simply wants what entrepreneurs currently pay to avoid — to work. But if it becomes impossible to buy one’s way out, then there will also be no cooperation and no real “contribution to society.” After that we will be able to finally congratulate ourselves, because then we will finally experience what we have feared for so long.
The Adventures of the Family, Private Property, and the State
The story about the servers of the Ministry of Justice that store data about transactions with the property of Ukrainian citizens is an excellent illustration of the state’s attitude toward property rights.
At first glance, it shows how vulnerable the formalized institution of property is if the state is not conscientious. Some people infiltrate the server room, start messing with the BIOS, employees report it, then the minister calms everyone down, saying that “those were our people.” The public is happy to be calmed, because if those were not “our people” after all, then it’s unclear how to live further.
This case demonstrates the erroneousness of the idea that only the state is capable of “protecting property rights.” This idea, in turn, is generated by prevailing notions that the state is somehow connected with property, and not only with its formally legal side, but with property as an economic phenomenon.
These notions in their most popular form are set forth in Engels’s book “The Origin of the Family, Private Property, and the State.” In the version of Engels and his followers, there were once happy times when people wandered across the Earth and fed on what they found. Everything was common among them, including wives and children, and there was no property at all. Then various cunning people and scoundrels appeared who began to appropriate more for themselves and assert that “this is mine.” There were especially many of them when the “phase transition” to agricultural farming occurred and a problem such as inheritance arose, which led, among other things, to property rights over women and the institution of marriage. The cunning ones needed to protect their stolen property, therefore the institution of coercion appeared — the state. That is, the sequence here is simple — property gradually gives rise to the state, and this happens objectively, due to the nature of things.
Currently, the origin of the state from private property (or the fact that only it is capable of eliminating Hobbesian war of all against all and establishing property rights) is not called into question. Only assessments and conclusions differ. The left advocates for primitive communism, asserting that the cause of all evils is property as such, while “liberals,” on the contrary, say that the state should take care of property, and only it is capable of doing so, and since it is now not evil but democratic and accountable to the people, then that very people should have at it.
This is all a very extensive and interesting topic. In this short column, I want only to make several remarks. The main one is that there never was any “primitive communism.” The idea of property arises together with human self-awareness. If a person is aware of their “self,” then they also know the concept of property, separating “me” from “not me.” Property rights arise in relations between people and determine who will use particular resources. In most cases, even in modern “advanced” society, they are determined by common sense, customary law, etiquette, and similar things, most often not reflected upon at all and not perceived as certain regulators. Written “property rights,” understood in a narrow legal sense, cover only an insignificant share of such legal relations.
The fact that some “wild tribes” jointly cultivate land and use each other’s tools together does not mean that they are “unfamiliar with the idea of property.” This fact only says that property rights for these groups of people do not require any special recording.
Generally speaking, few people realize how often in our lives we deal with property rights and how often they are regulated by unwritten rules. Letting a lady go first is not only an element of etiquette but also a rule regulating property rights. The rule “the lady goes through the door first” facilitates possible conflicts over the use of the resource “door.” In the case of two gentlemen, the rule “the older one goes through” applies, for example.
Society, not the state, is the main producer and “maintainer” of property rights. For example, in Copenhagen a bag with documents and money lay on a bench in a park for almost a full day before my acquaintance came to pick it up, having forgotten it there. In Kyiv, such a bag will not lie there even for an hour. And yet, both in Denmark and in Ukraine, the state strictly punishes theft. I think in Ukraine even more strictly.
That is, the idea of property and the mechanisms regulating who and when uses certain benefits are an integral part of what is called “society.” “Primitive communism,” unclouded by the idea of property, never existed; it is simply logically impossible. The state does not arise “from property,” because property appears together with the person and society; it does not require for its existence any institutionalized monopolistic violence, that is, the state.
Let us note another point. If the state “arose from property,” then “property protection” would be better where the state is larger and stronger. History says the opposite. Property rights work best not in despotisms or dictatorships, but in European countries where the state established itself under conditions of fierce internal competition. In the countries of the Anglo-Saxon world, where society relatively recently significantly exceeded the state, things were even better. But property rights were best defined, moreover at the level of jurisprudence, in the stateless Ireland, where, as historians assert, in the 17th century matters with property stood better than 200 years later, in the Victorian era blessed for many, in England.
The newest history of Ukraine clearly demonstrates the validity of this observation. Over 20 years, the state of affairs with property rights has only worsened. Raider attacks are a rather recent invention. Those who say that the state is allegedly powerless in such situations are mistaken. It is inactive, but by no means powerless. When it needs something from you, it displays wonders of persistence and skill. No raider attack is possible without the participation or complicity of the state. The seizure of the Ministry of Justice servers is simply a continuation of this practice at a new level. A level that can finally destroy the timid sprouts of property rights in Ukraine in their legal incarnation. If we want to minimize the consequences of this state of affairs, we must understand that property rights arise in society and are maintained by it. The state, however, is a product of military aggression, an institution intended not for the “protection” of property, but for its withdrawal and redistribution. It is pointless to seek protection from it. It is better, for example, to think about creating private registries.