A succubus is a mythological demonic entity personified as a female seductress who lures men away with the promise of pleasure while parasitically consuming their powers of reproduction and industry. It's also an apropos picture of the state as it is the ultimate parasite of mankind's industry and production.
It's easy and natural to take for granted the features of your own world. People who question familiar things like taxation, democracy, or public education appear more like lunatics holding signs on a street corner than legitimate thinkers.
Almost all mass media tells me that the relationship between the governors and the governed is as it should be, and to question that is dangerous and unfit for serious discourse. Yet it's becoming impossible to deny bureaucrats' abject parasitic nature on society and the possibility that this neat picture is actually a carefully contrived lie designed to perpetuate a multigenerational theft of wealth. This paper will explore the extent of that theft and its incalculable opportunity cost and describe a few weapons to stop it.
Income Theft
The concept of income tax is relatively modern in the broad span of human history. All previous tax systems focused on wealth, property, and consumption rather than income. This changed in 1913 when America passed the 13th Amendment, which introduced the income tax. This was a monumental shift in the ethics and philosophy of private property because it, in effect, inverted the default claim of ownership. Private ownership over one’s means was no longer the default right of individuals. Everything belonged to the state, and it decided what to give to individuals.
When it first passed, it charged a 3% tax on the top 3% of the populace. Today, that number has grown such that the top 40% of earners pay between 40% and 50% in taxes. There was opposition to the amendment because people feared it would inflate the federal government, which is what it did beyond anyone's imagination. See The Income Tax: Root of All Evil by Frank Chodorov
If you’re savvy enough to make good investments with your remaining income after income tax and those investments are successful, the state will also impose another 20-37% tax on that. This is all risk-free gain for the state because it didn't participate in the selection process or contribute to the work.
To put these numbers in perspective, consider this. If you earned $1M in 2023 and paid $500k in taxes, you will have funded the government for less than 3 seconds. The worm of the state never stops consuming. Without it, our world's most talented and productive minds would be, at minimum, 100% more productive. Like any parasite, it can't kill the host, so it must employ alternative expropriation methods besides taxes. This brings us to inflation.
Savings Theft
The great depression in the 1930s prompted countries like Britain to abandon the gold standard in 1931. The U.S. quickly followed suit in 1933 under President Franklin D. Roosevelt, who ended the convertibility of the U.S. dollar into gold domestically. This set the stage for unlimited money printing and, therefore, inflation. Inflation robs people of their savings without directly taking anything from them. Determining inflation rates is tricky because each political administration tweaks the calculation formula to make itself look good. Some have suggested the real inflation numbers have reached as high as 18% in 2022.
The combination of inflation and capital gains tax creates a vicious death spiral. If an asset appreciates in nominal terms due to inflation, capital gains tax applies to that nominal increase. This means that if an asset originally purchased for $400k is later sold for $500k due solely to inflation (with no real gain in purchasing power), the $100k increase is subject to taxation. The state robs you of your income, covertly deflates your savings and investments, and then taxes you on the changes caused by inflation under the guise that you profited.
State propagandists sometimes argue that inflation primarily impacts the ultra-wealthy. This is a veiled attempt to solicit class warfare and a myth. High-net-worth individuals invest in appreciating assets like houses, businesses, and land. Less wealthy people save in cash, and those with no savings are disproportionately impacted by the rising prices of goods and services. Inflation harms the poorest the most.
Agency Theft
If our income and savings are confiscated, what is left? Freedom itself. The last theft to consider is the erosion of our agency through the accumulation of regulations and conscription.
Labor laws “protect” jobs by artificially inflating the cost of cheaper imported goods through tariffs. Minimum wage laws exclude low-wage jobs and simultaneously eliminate an entire class of entry-level jobs. But regulation goes far beyond labor laws. “.. businesses sometimes need to hire specialists familiar with new, relevant regulations to conduct adequate tracking and reporting, increasing costs that transfer to the consumer.” According to some accounts, “the annual costs of regulations may be roughly as consequential as what the public pays in income taxes.” - Government Regulation - The Policy Circle
A paper from George Mason University later found that if regulation “...had remained frozen in place in 1980, the economy would have been $4 trillion -- or 25% -- bigger than it was in 2012” or “ almost $13,000 per person in that one year alone.” “Looked at another way, if the economic growth lost to regulation in the U.S. were its own country, it would be the fourth largest economy in the world..” - Study: GDP Would Be 25% Bigger If Government Regulations Had Been Capped In 1980
The final and possibly most devastating loss of freedom is demonstrated through conscription (compulsory military service). Take a moment to process this. People were forced, under threat of imprisonment, to fight and die in the Civil War, WWI, WWII, the Korean War, and Vietnam. A loose estimate places the number of conscripted deaths between 280k and 400k. This is like forcing 6 football stadiums of people to die in war against their will. Some people will argue that this is the cost of living in a free country, but that’s not so true. None of the above conflicts represented a threat to the sovereign border of the United States. These deaths were not the cost of living in a free country.
Opportunity Cost
One of the most dramatic ways to visualize the price of something is to consider its opportunity cost. Imagine what could have been accomplished without this governmental exploitation. The first and most obvious effect would be that everyone's income would be at least double what it is now. Not only would the income be 100% more, but it would be worth multiple times more than it is now. Along with this astronomical increase in value would come historic drops in the price of goods and services due to the absence of minimum wages or tariffs.
What could be done with all this wealth? We could double the total energy capacity of the United States in the first year. With a rough range of $6 billion to $9 billion per nuclear power plant, the $4.9 trillion collected in U.S. federal revenue for fiscal year 2022 could theoretically fund the construction of between 544 and 817 of these high-end nuclear reactors. The total U.S. electric generating capacity from all sources is around 1,200 GW. Adding 653 to 980 GW from nuclear would be the greatest civilizational advance in history.
We could go to the stars. The International Space Station (ISS) is one of the most significant and complex international engineering projects ever undertaken, costing approximately $150 billion to build and launch into orbit. Federal revenue for fiscal year 2022 could fund the construction of approximately 32.7 space stations. Or we could build a Dyson Sphere or a space elevator ($5B-$100B). The entire trajectory of human flourishing would be unshackled.
It is fitting that Ayn Rand named her book “Capitalism: The Unknown Ideal” because the full embrace of free market dynamics and their associated consequences has never been fully realized.
Our Defense
The state buys votes with the promise of incentives under the guise that the government can only produce prominent features of prosperous living. Every impulse to eliminate risk and diversity of outcome is endorsed, and naturally produced goods and services are routinely destroyed by being championed as human rights and nationalized under the guise of the public good. An endless stream of unintended consequences wreaks havoc on the populace, and more harmful measures are adopted to address the symptoms. It's a vicious circle that feeds on its own waste. How do we stop it?
Cryptoeconomics
The crypto movement was born from Austrian Economics and enshrined into cryptography and blockchains by the cypherpunks. It's the ultimate weapon against the tyranny practiced by current nation-states. While many abuses and scams exist, this does not undermine it as a tool for freedom and autonomy. Its mere existence speaks to the illegitimacy of intermediaries desperately trying to maintain the norms of the old world. The absurdity of securities laws and presumptive claims of tax claims on digital assets only magnifies the public suspicion that our current norms of economic extortion are illegitimate.
Today's crypto scene would be unrecognizably better without regulation. This is because offering direct financial incentives to token holders is illegal. Because of this, incentives are contrived and twisted. Startups don't need a larger stakeholder set. They need investors, but investors want a return on their investments. This could easily be achieved by paying dividends to holders, but this isn't allowed. So, instead, crypto startups need to create the appearance of decentralized governance. Mind you, they can’t actually be decentralized because all efficiency will be lost. Again, it's all second-order consequences sapping the power of industry.
Designing and deploying unstoppable cryptoeconomic systems is a revolutionary act. We must design with this context and assumptions in mind. We do not live in peacetime; our mechanism design should bear this out.
Culture
Technology alone doesn't create a new milieu. Ideas must change, and the Overton Window must shift. As crazy as this sounds, this partly happens through the propagation of memes. The illegitimizing of government overreach is the original meme promoted by Rothbard and Agorism.
Murray Rothbard (1926-1995) developed the anarcho-capitalist philosophy and advocated for forms of civil disobedience to challenge and delegitimize government authority. He saw it as a non-violent means of undermining state power and promoting liberty. Rothbard argued that by refusing to comply with unjust laws and government regulations, individuals could exert a form of passive resistance that would erode the state's legitimacy and encourage broader societal shifts towards a stateless society.
Samuel Edward Konkin III (1947-2004) promoted the philosophy of Agorism and argued that all relations between people should be voluntary exchanges using counter-economics. Counter-economics refers to the engagement in non-violent economic activity forbidden by the state and includes the black and gray markets, such as trading without licenses, avoiding taxes, and other forms of economic disobedience that undermine the state’s power and revenue.
Some current world leaders have picked up the torch and courageously promoted freedom and minimal government. This year, Argentinian President Javier Milei took the stage at the World Economic Forum in Davos, Switzerland, and delivered a shocking message about the virtues of freedom and capitalism: The Greatest Speech Of The 21st Century.
This boldness reflects radically changing mores. Brazilian fighter Renato Moicano went viral after his victory over Jalin Turner at UFC 300, giving a shout-out to Ludwig von Mises himself.
“I love America, I love the Constitution...I want to carry...guns. I love private property. Let me tell you something. If you care about your...country, read Ludwig von Mises and the six lessons of the Austrian economic school.” - Renato Moicano: "If You Care About Your...Country, Read Ludwig von Mises."
Joseph Goebbels, the Minister of Propaganda in Nazi Germany during World War II, famously said, “If you tell a lie big enough and keep repeating it, people will eventually come to believe it.” This is what has happened with the message that freedom is dangerous and unethical. We must counteract that indoctrination with memes highlighting the patent absurdity of statist claims. The shift is already happening. Stand on the right side of history. Kill the Succubus.