"It is not difficult to illustrate the validity of these conclusions if one considers the all-too-familiar case of taxing money assets. Such assets are only acquired and held because they can purchase other valuable assets at future dates. They have no own intrinsic use-value at all (as in the case of a fiat paper money), or such use-value is insignificant compared to the exchange-value (as in the case of the gold standard where money also has an—albeit small—commodity value). Rather, the value attached to them is due to their future purchasing power. Yet if the value of money consists of representing other future available assets, the effects of taxing money becomes clear immediately. Most importantly, along with increasing the marginal utility of leisure or consumption, such a tax increases the marginal utility of such future assets. This change in the constellation of incentives translates itself for an actor into increased attempts to obtain these assets more quickly, in less time-consuming production processes. The only production processes now that are systematically shorter than those of attaining future assets indirectly, via the earlier acquisition of money, are those of acquiring them through direct exchanges. Thus, taxation implies that barter trade will be substituted increasingly for the lengthier roundabout production method of monetary exchanges. But once again, resorting increasingly to barter is a regression to economic primitivism and barbarism. It was precisely because production for bartering purposes yielded an extremely low output that mankind actually outgrew this developmental stage and instead increasingly resorted to and expanded a system of production-forindirect-exchange purposes which, while requiring a longer waiting period, renders a far larger return of ever more and different assets drawn into the cash nexus. Every act of taxation means a coerced step backward in this process. It reduces output, decreases the extent of the division of labor, and leads to a reduction in social and economic integration (which, it may be noted, could never have become worldwide, were it not for the institution of indirect monetary exchanges)." Hans-Hermann Hoppe.
Posted on: Sun, 16 Jun 2013 13:54:37 +0000
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