Rebuilding the Gulf Coast

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I
have just returned from a trip to the Gulf Coast. Members of my
church organized relief supplies and formed a cavalcade of trucks
carrying food, water, and clothing. We initially went to help a
small church in Bayou LaBatrie, a church whose congregation had
been involved in the relief effort almost as soon as Katrina had
passed. Finding our help was more desperately needed in Biloxie,
we formed up with a similar group that had come down from Michigan
and proceeded on to some of the worst hit parts of the three-state
area. The scope of the devastation is simply beyond human imagination
and I came back to Georgia despondent and pessimistic. The realistic
hope to rebuild the Gulf Coast in our lifetime seemed beyond the
bounds of the possible. However, I had a long conversation with
my long-time libertarian nephew, who had an ingenious suggestion.

The Gulf Coast should be declared a tax-free and regulation-free
zone, at least for a limited period of time. Period. It is a simple
idea, but like many simple ideas, it has profound implications,
some of which I would like to explore. In the first place, the “limited
period of time” would have to be defined. I would prefer it to be
indefinite, but to expect that the government would forego their
tax and regulatory power forever is simply unrealistic. I suggest
that 10 years would be a realistic period. It would allow a reasonable
period of time for those who wished to move into the area (I do
not limit these people only to those who left, but to those
who would want to live there under the conditions proposed). The
area would be a tax-free zone. The miniscule amount of funds needed
to provide police protection would be provided by user fees. This
freedom from taxation must be absolute. There would be no federal,
state, or local taxes whatsoever. There would be no Social Security
taxes withheld from paychecks, no Medicare taxes, no capital gains
or unemployment taxes paid by businesses (nor any other business
tax, for that matter), no property taxes, special assessments for
neighborhood improvements, sales taxes, inheritance taxes, fees
paid for business licenses, and so on. And the miniscule amount
of revenue raised by user fees would go toward the provision of
police protection of person and property, and the enforcement of
voluntarily agreed upon contracts. Yes, I know that many anarcho-libertarians
such as myself believe that protection could best be provided by
private agencies. But I think that is too big a leap right now for
the average American to even consider. What of all the “services”
that government now provides? All would be provided by the private
sector, that is, by entrepreneurs seeking to make a profit by providing
for human needs as demonstrated by the process of the free market,
supply and demand and the adjustment of prices that demonstrates
consumer preferences. Schooling? It would be expected that many
parents would home school, but I expect that many private schools
would spring up. The success or failure of any such enterprise would
be determined solely by how well consumer needs are met. Fire protection?
Private companies, volunteer organizations, insurance cooperatives
organized by businesses, who knows what the private market would
do or how the system would evolve? And I leave it to a possible
future article to explore the ramifications of no government regulation
whatsoever. But natural law, rather than administrative law, would
prevail. That is, murder, theft, rape, fraud, and all crimes that
violate the inviolability of one’s sovereignty over one’s body and
the fruits of one’s labor would be absolutely prohibited (unlike
in the present system).

What of those receiving government subsidies? There would be none.
Anyone who chose to live in the affected area would forego any and
all government handouts, at least until they chose to leave the
area or the grace period expired. This would be an attraction to
those who might be receiving some assistance now but who might be
attracted by the idea of true liberty and the chance to improve
their standard of living without any government interference whatsoever.
The attraction to dynamic and flexible businesses to move in and
to conduct their affairs so as to operate in the most efficient
manner and without the incredible burden of complicity with the
endless amount of government regulation, would be undeniable. Likewise,
the prospect to potential employees to take home all the
fruits of their labor would act as a strong inducement to bring
back productive people into the area. It is estimated that up to
50% of our income is now confiscated in one way or
another, and that regulatory costs drive up the cost of living perhaps
by 50%. Even if nominal wages were to lower, because of the
absence of minimum-wage laws, for example, real wages and
standard of living would be higher because of increased purchasing
power. What would this increased purchasing power buy? Some with
high time preferences might choose to spend it all on present goods.
Others might choose to save a significant portion, perhaps to invest
in the affected area so as to continually improve their standard
of living. But whatever would be done, would be done without any
government coercion whatsoever. Each person would be free to live
his or her life as he or she saw fit. But government involvement
with their lives would be virtually absent.

Who would choose to live under those conditions? They would tend
to be the most self-reliant, independent, adaptive, and productive.
That in itself argues for an industrious and hardy population of
people who would resettle the area. A major attraction to the American
taxpayer is that virtually no tax funds would be involved
in the rebuilding effort. The foregone taxes are already lost, as
the area is consuming tax funds now and won’t be a tax provider
for the foreseeable future. The displaced persons who are the recipients
of tax relief now are going to be receiving tax relief under the
present system whether the Gulf Coast is rebuilt or not. Certainly
the immediate relief efforts are needed and the various private
relief organizations I observed are doing a superb job and should
be encouraged and supported (but not by government). But to expect
that the government is going to rebuild New Orleans and the rest
of the Gulf Coast is to have faith in an institution that long since
broke faith with the American people and continually shows its ineptitude,
on a larger and larger scale as time goes by. It does one thing,
and does it very well…it “eats out our sustenance” and exerts
more power over us day by day. It can’t improve things, but it can
always make things worse. The only way New Orleans and the
rest of the Gulf Coast is going to recover from this unprecedented
disaster is to allow the free enterprise system to do what it does
best, create wealth, satisfy human needs, and improve the standard
of living for all.

September
13, 2005

John
Sampson [send him mail]
is a retired physician who currently resides on the coast of Georgia.

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