I hung out with my brother and Bernardo tonight and realized that Bernardo and I have fundamentally different views of liberty. To paraphrase him, he thinks that our rights as humans derive from a Rousseau-ian "social contract" that depends solely on whatever agreements a majority makes within itself. I, on the other hand, believe that we each individually have inalienable rights that supersede any the desires of any majority, even if it's everyone else in the world against me alone.

I think this ode to tax havens will serve as a concrete example of our differing perspectives. I agree with the writer, Johnathan Pearce, and I expect Bernardo will take the communitarian position.

The difficulty that even any pro-freemarketeer politicians - if there are many - have in defending tax havens is defending the right of people to essentially flee from an oppressive but still-democratic regime. In chatting to people on this issue and reading the commentary, a lot of people make the assumption that wealth is collectively owned if enough voters wish it so and that therefore no-one has the right to flee from the looting intentions of such voters. In other words, non-domiciled residents who want to get away from the British taxman are not being good, democratic citizens by shirking their 'responsibilities'.

At its core, what this issue throws up, beyond the practical issues of how tax rates hurt economies, is a broader issue of the obligations, if any, that an individual has to his fellow citizens. If one believes the classical liberal idea that governments exist to serve the individual and not the other way round, that individuals have no apriori obligations to others, then the crackdown on tax-avoiders should be seen as the power grab that it is.

Another issue, of course, is this: democracy and liberty are not the same thing, a point that has been remarked at this blog many times before. For sure, democracy may - may - be the least-worst way to kick out a government and replace it with a hopefully better one, but the idea that freedom comes from letting 51% of the electorate steal from 49% of the electorate has precious little to do with liberty. The right to own property and enjoy its fruits unmolested is as important as freedom of speech or the right to self defence. Tax havens rile communitarians precisely because they are a standing reproach to the looters who use democratic mandates to justify their depredations. They act as a brake on the power of governments with a temporary majority in a democratic assembly every bit as powerful as other checks and balances such as independent courts and upper chambers.

The "classic liberal" ideas expressed in that second paragraph are utterly foreign to modern "liberals" -- leftists -- who rarely hesitate to advocate the use of coercive power for the accomplishment of their desired ends.

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