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Free Liberal: Coordinating towards higher values

Free Liberal

Coordinating towards higher values

Civil Society

by Fred E. Foldvary

Civil society is the sector of human action and property not owned and directed by government. During the era of Soviet rule, when government controlled all society, the people of the USSR and its satellite states yearned for a civil society, where individuals could enjoy liberty, voluntary association, and private enterprise. Even in the relatively free societies of today, government control is pervasive, and many seek a greater role for civil society.

Civil society has three elements. First is the commercial element, the spontaneous order of an exchange economy, the market for goods and the factors of production. Second is the benevolent element, charitable donations. Third is voluntary association, the creation and organization of clubs, mutual-aid societies, and families. These elements are not distinct, but intertwine like strings in a fabric.

The contrast to civil society is imposed government. Government is non-civil because it uses coercion to accomplish its ends. The government sector includes the portions of the property and enterprises directly owned by government, such as the military and infrastructure. The uncivil sector also includes restrictions and taxes on voluntary human action, imposed on what otherwise would be aspects of civil society.

Free-minded people think of free markets, private enterprise, the spontaneous order, and free societies, but a more encompassing label is “civil society.” A contrast is typically made between governments and markets, but the more fundamental distinction is between voluntary action and coerced action. Civil society includes governance, with planning and coordination. Every organization has its own internal rules, and it has contractual and friendly relationships with other organizations.

While many libertarians envision a minimal role for the state and its imposed government, another vision is to seek to make governance voluntary, whatever its size. In the latter case, the direction of reform is not just to shrink government, but to transform it into voluntary association. For example, in education, the reform would be to give students and parents an equal financial choice between governmental and civil-society schooling.

Those who seek to shift taxation from labor to land rent usually seek to influence government officials and voters, but another approach is to shift the financing of public goods from imposed government to civil society. Many people who vigorously resist having their property taxed will gladly pay rental dues to civil-society organizations. They buy condominium units and willingly pay several hundred dollars a year to the association. If that same amount of money were demanded as a governmental tax, they would scream.

The voluntary associations of civil society can provide all the public goods that are now being distributed by imposed government. The members of a homeowner association regard their assessment payments as a voluntary exchange for services, rather than a tax on their property by a coercive government. Those who seek to shift public revenue from the punitive and unjust taxation of labor to the efficient and equitable tapping of site value generated by nature and civic works should ask whether the primary aim is specifically the financing of government or rather the elimination of the rental subsidy that government endows to landowners by pumping up their land value with public works paid for by taxes on wages.

The line of least political resistance to a shift in public revenue is usually the replacement of government by civil society. Imagine if contractual civic associations such as condominiums and land trusts took control and ownership of the infrastructure - streets, highways, parks, airports, security, fire protection, and public health. The shift in provision would be accompanied by a shift in public finances. Down would come taxes on labor, replaced by fees, dues, rentals and assessments, which in essence are land-based payments. There would be no revolts against property taxes, because these payments would be regarded as voluntary.

If the aim is to expand civil society and shrink imposed government, then the primary direction of reform is to change the law to facilitate this transfer. Allow the people and property owners in a neighborhood to organize associations that shift the provision of civic services from government to these clubs, with a corresponding reduction in taxation.

The word “civil” also means behavior that is considerate, kind, polite, cordial, nonviolent and respectful. Civil society’s voluntarism fosters civil behavior, whereas the coercive prohibitions, taxes, and restrictions imposed by governments often induce corruption and violence. Consider the violence and corruption caused by the trade in illegal drugs versus the mostly peaceful markets in legal substances.

A movement towards civil society would make people more cooperative, replacing uncivil political and military resource grabs with commercial exchange, benevolent giving, and fraternal sharing. Let’s get civil!

This article first appeared in the Progress Report, Reprinted with permission.

Dr. Fred Foldvary teaches economics at Santa Clara University and is the author of several books: The Soul of Liberty, Public Goods and Private Communities, and the Dictionary of Free-Market Economics.

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