King Billy's Horse, or the Mill?

by Gene Callahan

'The late lamented Patrick Morkan, our grandfather, that is,' explained Gabriel, 'commonly known in his later years as the old gentleman, was a glue-boiler.'

'O, now, Gabriel,' said Aunt Kate, laughing, 'he had a starch mill.'

'Well, glue or starch,' said Gabriel, 'the old gentleman had a horse by the name of Johnny. And Johnny used to work in the old gentleman's mill, walking round and round in order to drive the mill. That was all very well; but now comes the tragic part about Johnny. One fine day the old gentleman thought he'd like to drive out with the quality to a military review in the park.'

'The Lord have mercy on his soul,' said Aunt Kate, compassionately.

'Amen,' said Gabriel. 'So the old gentleman, as I said, harnessed Johnny and put on his very best tall hat and his very best stock collar and drove out in grand style from his ancestral mansion somewhere near Back Lane, I think.'

Everyone laughed, even Mrs. Malins, at Gabriel's manner, and Aunt Kate said:

'O, now, Gabriel, he didn't live in Back Lane, really. Only the mill was there.'

'Out from the mansion of his forefathers,' continued Gabriel, 'he drove with Johnny. And everything went on beautifully until Johnny came in sight of King Billy's statue: and whether he fell in love with the horse King Billy sits on or whether he thought he was back again in the mill, anyway he began to walk round the statue.'

Gabriel paced in a circle round the hall in his goloshes amid the laughter of the others.

'Round and round he went,' said Gabriel, 'and the old gentleman, who was a very pompous old gentleman, was highly indignant. "Go on, sir! What do you mean, sir? Johnny! Johnny! Most extraordinary conduct! Can't understand the horse!"'

~ James Joyce, "The Dead," Dubliners

There are many friends of liberty whose goal is to bring back to America the constitutional republic she once had. As far as I know them, I find that they are sincere, well-intentioned people. But they are making a mistake.

Certainly, I would be happier to live under the federal government as it existed in 1800 than as it exists today. But, even if we could get back to that arrangement, it wouldn't last.

Sanford Ikeda, in The Dynamics of the Mixed Economy, explains why. Let us imagine that we are living in an America with a truly minimal state: it provides a legal system, defense, law enforcement, and that's all. For the sake of brevity, we'll lump those services together as "protection." In order to provide protection, the state must somehow raise the revenue to supply it. If it does so through completely voluntary means, it has essentially stopped being a state. Without the power to extract taxes from its subjects, it will find it impossible to maintain its monopoly on protective services, as people can simply stop paying it, and it will lack the means to enforce that monopoly.

Since the minimal state must tax, it must set the level of taxes, or, looking at the other side of the coin, it must decide how much protection to provide. Whatever level of protection it chooses, some people will be unhappy with the decision. We should especially note that since, in a constitutional republic, the level of protection will be set somewhere in the middle of the range of desired amounts, there will be a large group of people who feel they are getting, and paying for, too much of it.

It's not impossible that those people will choose to just grin and bear it, but it is very unlikely. Humans act in order to improve situations they find unsatisfactory, and the people paying too much in taxes, in their own eyes, have the motivation to act.

Simply not paying their taxes will subject them to violence from the state. But since those taxes were imposed on them by political means, it will occur to them that they can use the same means to try to gain some compensating benefit. Perhaps they will lobby to have extra protection for their neighborhood, to have a military base located nearby, increasing local trade, or to get street lights on their road, in the name of increased security.

Whatever benefit they wrestle from the state will change the situation of those who were happy with the old amount of protection. They are paying the same amount in taxes as before, but some of their previous benefits have been shifted to others. Now they have a motivation to form an interest group and lobby the state to provide them with some new benefit as compensation for their loss.

In the meantime, however wise and noble the founders of the state were, state service will act as a magnet for the person who wants to exercise power over others. In order to maneuver his way into a position of power, such a person will have every reason to rub salt in some interest group's wound. By goading "his" interest group on in its grievance, a politician can build a "constituency" that he can ride to power.

It may be hard to believe, but soon enough that limited, constitutional republic you fought for will have a trillion-dollar-a-year budget, and be involved in every aspect of its subjects' lives. It may seem like a merely theoretical possibility, but it really could happen! Oh, wait, it did happen, didn't it? As Bill Anderson recently said on this site:

Because politics is about competing individuals grabbing for power, it means that one group of individuals ultimately is able to take power and abuse another group of individuals. While political classes like to couch their actions in terms of "social justice," what they really are doing is plundering one set of individuals and transferring their wealth to their supporters. This is the only way the system operates. There are no alternatives.

Not only is the minimal state inherently unstable, but also, once we buy into the idea, our argument for liberty loses its clarity. Rather than saying, "It is wrong to initiate violence against others," the defender of liberty winds up saying, "Well, it's wrong to initiate violence against others, ahem, except when a duly constituted body, representative of the people, after careful deliberation, decides it's right to initiate violence against others, don't you see?"

So, why is it difficult for people to abandon the belief that we need to enthrone an originator of violence in order to have a peaceful society? Some people have fallen in love with King Billy's horse. The pomp and glory of the state holds them in thrall, and the chance to be near power, even if that power is just riding them toward its own end, is too difficult to resist. Other people think they're back in the mill: They have always had to labor away to provide resources for the state, and they cannot conceive that there are open fields and hilltops to roam.

You think the state is a necessary evil? Well, which is it: Are you in love with the horse King Billy sits on, or are you just stuck on the treadmill?

Gene Callahan [send him mail] has just finished a book, Economics for Real People, to be published this year by the Ludwig von Mises Institute.

© 2001, Gene Callahan

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