The New Roving Bandits

I can’t help but admire the way Amazon has Seattle firmly by the balls. Back in May, the City Council unanimously approved a per-employee tax on large employers to help fund affordable housing and homeless shelters. After Amazon halted construction on its new 17-story tower and threatened to take its jobs elsewhere, council members folded like a cheap tent encampment and repealed the tax. Ain’t nobody gonna tell Amazon what to do.

Wait… It’s supposed to be the government that bullies local businesses, not the other way around! As stationary bandits, they extort tax dollars from subjects under threat of violence. As greedy, profit-maximizing bandits, they maintain a monopoly on theft and keep other bandits at bay. As clever, forward-thinking bandits, they provide public goods and law and order to encourage future taxable income.

Agricultural societies benefit from the protection of a stationary bandit. Industrial economies do too. We tend not to find capital-intensive operations in undeveloped slums – with no one to monopolize theft, roving bandits compete to loot and plunder. Such is anarchy.

But stationary bandits require stationary subjects. If an aircraft manufacturer takes issue with local tax rates, it can’t just pack up and move its facilities to Mexico. I mean, it can, and many US companies did, but the capital outlay limits the credibility of the threat. An information-based company like Amazon, on the other hand, can drop a lease and move to Bangalore before the next City Council meeting.

The switching costs are lower.

Information technologists are no longer subjects to be governed, but customers in voluntary exchange. And a dissatisfied customer will happily take their business elsewhere. As we speak, there are twenty major cities bending over with bids to host Amazon’s next HQ. Chicago even offered to let Amazon keep $1.32 billion of the income taxes paid by its workers each year. The mayor might as well step down and install Amazon as the new autocrat.

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So here we are in the utopia described in The Sovereign Individual, where jurisdictions compete to provide protection to paying customers. I daresay it sort of sucks.

(If we were having this conversation on Twitter, here is where people would chime in and blame capitalism.)

The best way to deter bandits is to make the target look as unrewarding as possible. When the Roman emperor Julian embarked on a campaign against the Sassanid Empire, the Persians burned their crops, chased the livestock away, and deserted the villages. The citizens would rather live in a wasteland than submit to Roman rule. With nothing to conquer and no provisions to steal, the Romans had no choice but to retreat.

As the coastal cities turn themselves into third world slums, I wonder if that’s been the plan all along. Seattle, San Francisco, Los Angeles, NYC — they may be shitholes, but at least they’re our shitholes.

9 thoughts on “The New Roving Bandits

  1. People live in cities voluntarily. The reason why cities are heavily populated is because lots of people want to live there. The reason why rural area are lightly populated is that very few people want to live there. BTW, most Third World countries are mostly rural, it us one of the reasons they are poor.

  2. Banditry it is, alright. But there is a distinction. Amazon and their ilk provide value, if not to all stakeholders, to most without which they cease to exist. The value that stationary bandits provide – other than to their families and cronies – is at best opaque and questionable. And they get voted in as the preferred bandit ‘cos of their popularity and not competence. Which service provider, other than a government, can relieve you of your monies in the form of tax for services supposedly provided without even an ‘invoice”?

  3. “Wait… It’s supposed to be the government that bullies local businesses, not the other way around! As stationary bandits, they extort tax dollars from subjects under threat of violence. As greedy, profit-maximizing bandits, they maintain a monopoly on theft and keep other bandits at bay. As clever, forward-thinking bandits, they provide public goods and law and order to encourage future taxable income.”

    Beautiful paragraph!

  4. The biggest problem with homeless policies, is that the more subsidies a municipality provide, the move homeless they attract. This problem somehow cannot be seen by so-called “activists.” I am oddly an ivy league educated person (unfortunately white and male) who has been homeless in the past, and I can assure you that no sane homeless person would waste his or her time in some rural community with no resources. Cities are the place to go, especially those with generous policies and charities. Even the mentally ill can figure this out. This is why NYC, San Fran, LA, Seattle, and other cities attract so many homeless. These people in tern sell drugs to local children and molest them, if that is their “preference.”

    The US should only have public housing in rural communities where the undocumented are needed for labor. Let those on the dole do such jobs, even if we must subsidize them to provide a living wage. It is insane that most hard-working Americans cannot live in our finest cities, but drug-addled filth get free housing and food in such places (see NYC’s public housing population to get a hint of how obscene this problem is).

    1. I totally agree with you that the more subsidies there are, the more homeless people will come. Might also be a positive-feedback loop, where residents see a lot of homeless people and keep increasing subsidies to try to “solve” the problem. New York has an interesting program where they pay a year’s worth of rent if a homeless person goes elsewhere: https://nypost.com/2017/09/29/city-offering-to-pay-homeless-a-years-worth-of-rent-if-they-leave-town/

      I suspect that people living in rural communities are smart enough to vote against placing public housing in their communities. Undocumented immigrants who do farm labor in rural areas tend to be migratory, so at least they’re not a perennial problem.

      1. Rural communities do not attract people. They lose many young people due to lack of opportunities and lack of interest. Most rural communities are dying.

        As far as homeless people are concern there isn’t an infinite reservoir of homeless people. If enough homes are provided they will disappear. My suggestion is to provide apartment building with small apartments disperse thru out the city at a subsidized cost.

        There are also the homeless that are mentally ill. These will need social workers to work with them to make sure they are taking care of themselves.

        1. Chicken-and-egg. Rural communities do not attract people because they don’t have jobs. Companies don’t bring jobs to rural communities because there aren’t a lot of young people there. Silicon Valley used to be a rural community — Stanford’s nickname is still “The Farm”. It took lots of government funding after WWII to build Xerox PARC and create a tech industry there.

          Build housing in the city — well, people have been saying that for decades. Existing homeowners don’t want to build low-income housing in their neighborhood.

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