On How to Pay for Convivial Governance


This is the last of four essays which, taken together, outline my proposed system of minimal governance, called convivial governance. Today, it’s time to ask the thorny question: how should all this be paid for? Again, while I aim to make the general principles of how convivial governance should be paid for as clear as I can, the details may end up being very different from what I have envisaged.

Payment for protection

How to pay for government has been an issue for centuries. John Locke, in his Second Treatise of Government, wrote: “It is true governments cannot be supported without great charge, and it is fit everyone who enjoys his share of the protection should pay out of his estate his proportion for the maintenance of it.”

From which, I deduce two things about Locke’s view on this matter. First, an individual’s payment must be his proportion of the total. Second, it must come out of his estate. That is, from his wealth, not from his income, or from a cut on transactions he makes. What I think Locke is saying is that an individual’s payment for the “protection” functions of government should be in direct proportion to his wealth. That is similar to what happens with home buildings insurance, where (assuming the risk is constant) the price is in proportion to the amount insured for. And it seems very reasonable indeed, to me at least.

So, the amount each individual must pay each year for the “protection” elements of convivial governance ought to be a (small) percentage of the individual’s total wealth. Once this is achieved, to support these functions there will be no need for any taxes on income, or on transactions, or on anything else.

The services of convivial governance

Referring back to my previous essay, the services provided by convivial governance will be as follows:

At the neighbourhood level (NCG): A small set of functions concerned with neighbourhood matters, migration and representation at the community level.

At the community level (CCG): Military defence. First responders, including police. Setting of local rules as needed. Co-ordination of the provision of infrastructure. Maintenance of the local publicly accessible infrastructure, notably roads. And quality control. Of these, the first two come under the heading of protection, as might quality control too.

At the non-local level (SCG): Detective work on criminal cases. A justice and arbitration system, covering (at least) restitution for wrongs, punishment for crimes, and contract disputes. Together, of course, with its back-ups, such as prisons. Diplomacy, as required. And quality control. Of these, detectives and criminal justice come under the heading of protection. Diplomacy and quality control, too, might reasonably be included under that heading.

Payments for convivial governance

So, here are the various payments, which individuals or households might be expected to make each year, in order to support convivial governance.

First and foremost, payments to the CCG and SCG for those of their functions which come under the heading of protection. In a perfect world, these amounts should be in proportion to the total wealth of the individual or household being protected. Unfortunately, it’s hard to assess a person’s wealth accurately, without knowing so much about them that their privacy becomes compromised. So, at the start, I expect the system might work like home contents insurance, with the payer declaring how much wealth they want to insure, and a “cap” in proportion being placed on the level of protection. But for the longer term, I think there may be a better solution, which I’ll come to a little later.

Second, a payment for the NCG. This, I would expect, would be a small payment per head, just like a personal subscription to any other society.

Third, payments for infrastructure. It is only fair that the costs of infrastructure development and maintenance should be borne by the users of that infrastructure, in proportion to their use of it. For new infrastructure, this can be achieved through pay-as-you-go fees, such as tolls. These fees should include an allowance for the CCG’s work on co-ordinating the development.

As to maintenance, the only payments to convivial governance will be to the CCG for maintenance of local infrastructure in the public space, such as roads and parks. How this should best be paid for will vary from place to place and from asset to asset. In the particular case of roads, it might be achieved reasonably fairly by a small levy (far smaller than today’s fuel taxes!) on fuel sold in the CCG. For other types of infrastructure, the simplest and easiest option may be to include this, and the local rules function, along with the protection payments.

Fourth and last, civil courts would operate much as they do today, with court fees being paid by the loser of each case.

Some numbers – the current system

So, it’s time to start chucking around some ball-park numbers. I’ve been looking at figures for the UK, which ought to be fairly representative among Western countries.

According to Wikipedia, in 2017 the UK government spent about £34 billion on police and the criminal justice system combined, and £46 billion on the military. This is £80 billion out of a total spend of £772 billion, or just over 10% of total government spend. At the then UK population of 66 million, this amounts to £1,210 per head, or £2,900 per household.

The total government spend was £11,700 per head, or just over £28,000 per household. To put that in context, the government spend per household was almost exactly equal to the average worker’s gross pay in that year.

Of the 90% of government spend which did not go on police, military or criminal justice, part is accounted for by infrastructure development. This looks like around £50 billion, or 6.5% of total spend. Under convivial governance, this would be paid for by user fees for the new infrastructure.

Then there are things like welfare and pensions (looks like £270 billion, 35%), health care (£145 billion, 19%) and education (£102 billion, 13%). These, while vital, should never have been allowed to become politicized. In convivial governance, they would be provided by private actors operating in the free market, satisfying the needs and desires of individuals who know their own priorities and know what they need.

The rest of the spend looks to be things like vote-buying schemes, and subsidies to cronies. However, from a different source, I managed to find a figure of £4 billion for road maintenance in that year; a piffling 0.5% of total spend.

Some numbers – convivial governance

Let’s contrast this with how much convivial governance would cost us, shall we? The protection payments to CCG and SCG combined would be about £2,900 per household per year. The NCG annual subscription would be small, probably not much more than £25 per person. The road maintenance charge to the CCG would be of the order of £60 per year per person or (given that there are about 47 vehicles – cars and larger – in the UK per 100 people) £130 per vehicle. We’d also have to pay some tolls when using new infrastructure; add another £250 or so per year for that. Add it all up, put on an extra 15% for contingency, and you get £3,800 or so per year. Per household, not per person. And that’s it!

And that’s it. The rest of our earnings, we can use to buy the things we want, from the people we like to deal with. We can keep our money away from those we don’t like, and those that have treated us badly. For example: politicians, bureaucrats, psychopaths, crony “capitalists” and other rip-off merchants, bullies, killjoys, guilt-trippers, snoopers, bossy busybodies, meddlers, enviers, wasters, thieves, dirty-tricksters, troublemakers, obstructers, stop-the-worlders, peddlers of lies, bullshitters, the dishonest, assholes in general, and anyone that has or ever has had a political agenda. To hell with the damned lot of them. We, the good people of the world, will be able to live our own lives at last!

Demurrage

I mentioned above that there might be a better solution for collecting protection payments. In fact, for collecting any payment whose size should be in proportion to the total wealth of the payer. But it could only work in an ACG (Area of Convivial Governance – in concept, a group of allied CCGs) which is sufficiently large to have its own currency.

This solution is called demurrage. This word has several senses, but the one I mean here is a controlled, predictable inflation of the currency. With the proceeds being passed to CCGs and their SCGs, in proportion to the population of each CCG. This would spread the burden fairly, by in effect taxing fixed assets in the ACG, and other assets denominated in the ACG’s currency, at a rate in direct proportion to their value. It would also eliminate tax bureaucracy!

I envisage this demurrage would probably be done each month, to supply the month’s budget to each CCG and its SCG. And because these are non-profit organizations, any surplus remaining at the end of the month would be fed back to the people in the CCG, in the form of a per capita bonus.

More numbers

Now, let’s look at some numbers again. At 2017 prices, we need to raise £80 billion a year for protection services in a UK sized ACG. Add 15% for contingency, giving £92 billion. Now, the UK GDP (nominal) that year was £2.04 trillion, so the amount we need for the year is 4.5% of GDP. (In contrast to what the UK government actually took in 2017, which was 38% of GDP).

At the historical average wealth to GDP ratio, about 3.5, that would be 1.3% of total UK wealth. Though that ratio is currently higher than 3.5, meaning the demurrage required to cover all protection services is less than 1.3% per year. If we decided to go the whole way, and use demurrage to cover all activities of convivial governance – so no-one would ever have to pay any kind of “taxes” at all – then the inflation needed would still be less than 1.5% per year.

In wartime, there might be additional levies, or a higher demurrage, for an expanded militia. But once we have got rid of the last political states, there will be no rationale for anyone to try to make a war. For, with all individuals on the look-out for real wrongdoings, anyone planning a war would find it hard to avoid detection for long. And under convivial governance and its ideal of common sense justice, anyone seeking to start a war would be extremely harshly punished. So, once the last state has gone, we will be able to reduce, and eventually abolish, all militaries. Along, of course, with the costs that go with them.

A post-script

I won’t try to sum up this essay, or its three predecessors. Instead, I’ll offer a little ditty, to give an idea of what life might be like under convivial governance. It is modelled after the playground song “No more Latin, no more French.”

In a few years, how will things be,
When England is an ACG?

No more taxes, no more wars,
No more scheming behind closed doors.
No more lies or propaganda,
No more “justice” without candour.

No more politician prats,
No more bossy bureaucrats.
No more weasel words from moanies,
No more cushy jobs for cronies.

No more marxists, no more greens,
We all know that they’re has-beens.
No more fascists, no more tories,
We don’t listen to their stories.

No more barriers in the way
Of those who want to earn good pay.
No more taking of earned wealth,
Whether obvious or by stealth.

No more cameras all about,
Spying on us to catch us out.
No more tracking of our bytes,
No more trampling on our rights.

No more stops without good cause,
No more bad, politicized laws.
When England is an ACG,
Then all its people will be free.

6 comments

  • Christopher James

    A grand article, Sirra, but what the eff has happened to this Blog when nobody but sorry me comments on such a fine article? Even the old LA “Bolg” had more regular commenters! Judging by the comments, this seems to be a niche White Nationalist vs. Gold Standard, Referendum Party types.

    What the Heath has happened? Is British libertarianism a dead duck? Are the chubby trust-fund babies of Samizdata its only living representatives? Answers bon a postcard, please.

  • I need clarification. Is this article describing what we would call a tax? If so, I would not have expected this.

    I expected something a bit different under this sort of system. I thought it would work more along the lines of voluntary payments for services, on the assumption that private property is sufficiently widespread that there would be no need for comprehensive state support.

    To give an example, fire and rescue services could be provided by insurance companies. Motor and medical insurances could be extended to cover rescue and home and commercial buildings insurances could cover fire. Insurance companies would reimburse or contract out the sharp-end services. Each insurance company could agree to have a mandatory precept in place to cover non-insured persons. You might think this entails a moral hazard, but motor insurance works along these lines already and only a small minority of motorists are intentionally uninsured. Perhaps this is due to the stiff penalties for non-compliance, but even in a stateless society there would be ways and means to enforce these ‘rules’ culturally.

    Additionally, some towns and communities could have their own voluntary fire brigades and rescue services – similar to how retained firefighters and mountain rescue teams work now.

    This is supposed to be a completely different type of society (albeit borrowing many of today’s parameters such as private property), so the solutions need to be thought about much more fundamentally.

    • Tom,

      Apologies for slow response, I’ve been busy with brass band stuff.

      What I envisage is that the people who actually deliver the services, like firefighting and rescue, will be independent teams contracted to the CCG. Underneath they will be, as you say, “voluntary fire brigades and rescue services.”

      The reason why I put first responders at the CCG level is that, when an emergency call comes in, it isn’t always easy to tell precisely which emergency services you need. You might need fire engine, ambulance, police or any combination of the three. Also, you must have back-up – and at the very local level – in case the caller’s “preferred” responders are unable to do a particular job, for example because they are already out on a call. If the first response was done by competing insurance companies, there would be duplication of effort, and/or a possibility that some calls would get poor response due to lack of available company resources at the time.

      But when the ambulance arrives at the hospital, that is where the insurance aspect kicks in. Insurance companies will be very important in dealing with health care – including emergency health care. And, as you say, there will need to be provision for those who are non-insured, for whatever reason.

      As a general point, I am trying to change things as little as possible from what people are used to, while achieving the goal of what people are expected to pay for governance being as close as possible to the benefits they receive.

      • Yes, but the type of society you envisage would be predicated on several important contingencies. It couldn’t work in our society.
        At least, that’s the way I see it. It occurred to me several years ago when reading some of your early material – and also your book (which I need to get round to writing a review on) – that what you are arguing for is a return to the old English liberal order. It’s reactionary liberalism.

        The contingencies are [my opinion, I don’t pretend it’s Gospel]

        (i). People in general would need to be more capable than they are today and would need to do a lot more for themselves, whether it’s fixing their own cars or building their own houses, or co-operating as a community to provide certain essential services. A lot of services can’t be efficiently or comprehensively provided by markets alone. Self-reliance would step in.

        (ii). Communities would have to be ethnically homogeneous in a way that nation-states aren’t and can’t be. People will be inclined to live among ‘their own kind’ due to the need for an unspoken agreement on cultural things like laws and rules, what type of institutions to accept, and what is and is not right behaviour. Any codification of these things would be a mere formality.

        (iii). Communities would be rural, with the largest settlements tending to be small towns with only a few large cities. This is due to the need for land, the lack of structural support for services, and the ingrained habits of people who are inclined towards independence and self-reliance.

        (iv). The culture would be conservative and traditional. Families would be patriarchal (male-led) and large, with lots of children and close inter-generational associations. Again, this is mainly due to the lack of a social safety net.

        (v). The balance of power would tilt towards individuals, families, localities and regions and away from the Centre, but a Centre shared by people of broadly similar ethnic background and outlook will still be necessary for defence purposes, in order to repel cultures that cannot be tolerated.

        • Tom,

          On your (i), I think it’s important to distinguish between being self-starting, and being self-sufficient without outside trade. People in the new system will need to be self-starters, yes; they will need to be pro-active about earning a living. But this doesn’t go as far as things like repairing their own cars. As different people develop different skills, each will be able to use the things he is good at to trade for help with the things he is not so good at. That is the essence of the free market and the division of labour.

          (ii) It’s part of my purpose to provide a framework in which those who prefer the company of those of the same ethnicity can do so, and those of a more cosmopolitan outlook can also pick and choose whose company they will keep.

          Further, I see the Convivial Code (the statement of what is and what is not “right” behaviour) as being an important component of the system. I don’t think it will be a mere formality; it will be the “law of the land” for interactions between people who have not made any specific agreement to the contrary. And in particular, it will be the default which governs people’s interactions with those from different cultures. But people can always add to or vary, by mutual consent, the rules for dealing with each other; which might include incorporating rules from a specific cultural or religious heritage.

          (iii) Yes, I agree that, in time, most people will probably gravitate towards small and medium-sized communities rather than cities. As long as there’s enough land, of course. But the populations in most Western and Asian countries will start going down before long because of their below-replacement birth rates, so I don’t think that will be a problem.

          (iv) Like (ii), people who want to live in a traditional and conservative culture will be able to do so – as the Amish, for example, do today. And those who want something different will be able to try something different. As to a safety net, I see something like the friendly societies of the 19th century, providing a mix of insurance and mutual aid.

          (v) I don’t see there being any “balance of power” on a large scale, nor any central point at which power can easily collect. Think of the city states of the Italian Renaissance, or the German free imperial cities. As to “cultures that cannot be tolerated,” I think that the culture(s) which would not be tolerated would be warlike cultures. The local militia should be enough to defend its own area against any small scale attack; and if faced with a bigger foe, they would at need be able to call for assistance from their neighbours.

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