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Nassau Senior argues that government is based upon extortion (1854)

In his general introduction to the science of political economy Nassau W. Senior (1790-1864) applies the principle of the division of labor to the functions of government and concludes that it behaves very differently from other exchanges in the market in that it extorts much more than the fair value of the service it provides:

It is obvious, however, that the division of labour on which government is founded, is subject to peculiar evils. Those who are to afford protection must necessarily be intrusted with power; and those who rely on others for protection lose, in a great measure, the means and the will to protect themselves. Under such circumstances, the bargain, if it can be called one, between the government and its subjects, is not conducted on the principles which regulate ordinary exchanges. The government generally endeavours to extort from its subjects, not merely a fair compensation for its services, but all that force or terror can wring from them without injuring their powers of further production. In fact, it does in general extort much more: for if we look through the world we shall find few governments whose oppression does not materially injure the prosperity of their people.

But the labour which every individual, who relies on himself for protection, must himself undergo, is more than sufficient to enable a few individuals to protect themselves, and also the whole of a numerous community. To this may be traced the origin of governments. The nucleus of every government must have been some person who offered protection in exchange for submission. On the governor and those with whom he is associated, or whom he appoints, is devolved the care of defending the community from violence and fraud. And so far as internal violence is concerned, and that is the evil most dreaded in civilized society, it is wonderful how small a number of persons can provide for the security of multitudes. About fifteen thousand soldiers, and not fifteen thousand policemen, watchmen, and officers of justice, protect the persons and property of the seventeen millions of inhabitants of Great Britain. There is scarcely a trade that does not engross the labour of a greater number of persons than are employed to perform this the most important of all services.

It is obvious, however, that the division of labour on which government is founded, is subject to peculiar evils. Those who are to afford protection must necessarily be intrusted with power; and those who rely on others for protection lose, in a great measure, the means and the will to protect themselves. Under such circumstances, the bargain, if it can be called one, between the government and its subjects, is not conducted on the principles which regulate ordinary exchanges. The government generally endeavours to extort from its subjects, not merely a fair compensation for its services, but all that force or terror can wring from them without injuring their powers of further production. In fact, it does in general extort much more: for if we look through the world we shall find few governments whose oppression does not materially injure the prosperity of their people. When we read of African and Asiatic tyrannies, where millions seem themselves to consider their own happiness as dust in the balance compared with the caprices of their despot, we are inclined to suppose the evils of misgovernment to be the worst to which man can be exposed. But they are trifles compared to those which are felt in the absence of government. The mass of the inhabitants of Egypt, Persia, and Burmah, or to go as low as perhaps it is possible, the subjects of the Kings of Dahomi and Ashantee, enjoy security, if we compare their situation with that of the ungoverned inhabitants of New Zealand. So strongly is this felt, that there is no tyranny which men will not eagerly embrace, if anarchy is to be the alternative. Almost all the differences between the different races of men, differences so great that we sometimes nearly forget that they all belong to the same species, may be traced to the degrees in which they enjoy the blessings of good government. If the worst government be better than anarchy, the advantages of the best must be incalculable. But the best governments of which the world has had experience, those of Great Britain and of the Countries which have derived their institutions from Great Britain, are far from having attained the perfection of which they appear to be susceptible. In these governments the subordinate duties are generally performed by persons specially educated for these purposes, the superior ones are not. It seems to be supposed that a knowledge of politics, the most extensive and the most difficult of all Sciences, is a natural appendage to persons holding a high rank in society, or may be acquired at intervals snatched from the bustle and the occupation of laborious and engrossing professions. In despotisms, the principal evils arise partly from the ignorance, and partly from the bad passions of the rulers. In representative governments, they arise principally from their unskillfulness. It is to be hoped that a further application of the division of labour, the principle upon which all government is founded, by providing an appropriate education for those who are to direct the affairs of the State, may protect us as effectually against suffering under ignorance or inexperience in our governors, as we are now protected against their injustice.

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Buried in his general discussion of the division of labor is Nassau Senior’s theory of the origin of the state. He sees it emerging from a society in which everybody provided for their own security, until one enterprising individual “offered protection in exchange for submission” by others. But he observes that, unlike all other trades and exchanges between individuals, the benefits of the division of labor which government offers is “subject to peculiar evils”, most notably the ability to “extort” more from their customers than the value of the protection they offer. This means that the government typically takes by means of taxation “all that force or terror can wring from them (the taxpayers) without injuring their powers of further production.” As a loyal Victorian, Senior was confident that the government of Britain had now attained a level of near “perfection” in the way it carried out its duties, where a mere 15,000 soldiers could defend a country with a population of 17 million people. Nevertheless, the way he phrased his arguments suggests that he still had moments of doubt that “the bargain, if it can be called one, between the government and its subjects, is not conducted on the principles which regulate ordinary exchanges.”

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