There is nobody in this country who got rich on his own. Nobody. You built a factory out there? Good for you.

This is the theory of the division of labour. More goods and services can be produced through using specialisation and stages of production, adding comparative advantage to this, than the amount of goods and services that can be produced by an individual seeking to produce the entire good or service himself.

Thus the division of labour [under comparative advantage] has resulted in the wealth and living standards of all those who participate in the division of labour, free trade under the indirect exchange method using money, to rise. The initial statement is therefore true.

But I want to be clear: you moved your goods to market on the roads the rest of us paid for; you hired workers the rest of us paid to educate; you were safe in your factory because of police forces and fire forces that the rest of us paid for. You didn’t have to worry that marauding bands would come and seize everything at your factory, and hire someone to protect against this, because of the work the rest of us did.

The argument only indirectly applies to the initial argument. The author assigns causation to the argument: because of roads, education, safety, provided through government taxation and provision of these goods and services, can the division of labour take place.

This argument for causation is incorrect. Second, all of the above services can be provided by the free market, and will be provided by the free market if their provision is demanded by consumers. They [the goods & services provided by government] will also be provided under conditions of competition, and not a monopoly of coercion, thus lowering their costs, both in money terms and psychic terms.

Now look, you built a factory and it turned into something terrific, or a great idea? God bless. Keep a big hunk of it. But part of the underlying social contract is you take a hunk of that and pay forward for the next kid who comes along.

The ‘Social Contract’ is nothing more than an apologist argument for government taxation. If the free market can provide all the goods and services required by society, at lower costs, without coercion, or the violation of property rights, then there is simply no basis for government, and certainly none for taxation.

With private property rights, the passing forward of capital is allowed for. The capital is gifted, sold or passed through inheritance to the next private owner who takes possession of those property rights and any value associated with it. The new owners will have the self-interest to either continue to maintain or add value to that capital, or dispose of it to some individual who will. There is no requirement for government to assume any responsibility in this process at all.

Government taxation is purely and simply redistribution, with government pocketing the ‘handling charge’ in the redistribution process. Redistribution takes resources away from proven producers, and allocates them in part to proven deadbeats, or non-productive areas of the economy. In this way stagnation can only follow.