Consider the issue of secession. While there is often a correspondence between the borders of a nation and the set of persons who want to identify with a particular nationality, there are many instances when the preponderance of persons in a region would strongly prefer not to be part of the nation that exercises sovereignty over them--Chechins in Russia, Basques in Spain, Kurds in Turkey, Iran and Iraq, Kashmiris in India, Catholics in Northern Ireland, Hungarians in Serbia, Romaina, and Slovenia, Corsicans in France, Palestinians in Israel, Christians in Sudan, and so on around the globe. The particular locations of national borders are primarily the result of wars. In many cases, the only justification that can be given for borders apart from "If you try to take what I claim, I'll kill you," is that any acknowledgement that borders were subject to question would lead to interminable conflict, so we are better off abiding by what we have than allowing the question to be opened.

But this puts the advocates of maintaining existing borders in the potentially uncomfortable position of needing to support every "reasonable" government that seeks to suppress its secessionists. This then necessitates an evaluation of the reasonableness of the complaints of every minority with regard to language, religion, education, the provision of public services, marriage rules, child-rearing practices, tolerated intoxicants, and every other area of social life about which people can disagree. The person who wants to support the efforts of a government to suppress its secessionist minorities must be able to say that in every area where the government imposes a rule on the minority, no right that the minority ought to have is violated. It is becoming increasingly difficult to sustain a claim that it is possible to know what rights minorities deserve. I predict that within a century, humanity will come to a consensus that the right of a defined unit to secede from a larger governmental entity is a basic human right, that no nation or administrative sub-unit is entitled to cling to control of a compact sub-unit whose citizen are united in their desire not to be controlled by the larger entity.

Already we may be seeing the first signs of this. Czechoslovakia was peacefully partitioned into The Czech Republic and Slovakia, although the fact that this seems to have been mutually desired makes it less evidential for the thesis. The Kremlin acquiesced with only a little grumbling to the dismantling of the USSR. Here one might propose that with democracy looming, it was valuable for Russians to ensure that they would not become a minority in their own nation. After some fighting, the international community pressured the remnants of Yugoslavia to accept the departure of Slovenia, Croatia and Bosnia. Canada seems to acknowledge implicitly that if the people of Quebec really want to no longer be part of Canada, they may have their way. When Quebecoi insist that Native American tribes that want to remove their tribal lands from the jurisdiction of Quebec must never be allowed to do so, they sound inconsistent. This is not enough evidence to make a convincing case, but it may be straws in the wind. Still, in so many other cases, there is little if any general international support for the efforts of secessionists.

The dissatisfied minority can make a claim for an opportunity to secede on the following basis: The prior claim to territory is based on the rights of the minority as well as the majority to equal shares of natural opportunities. The minority have rights to themselves. They should not be obliged to live in a type of nation they do not want. They may find all other nations unacceptable, or other nations may find the dissatisfied minority unacceptable. Justice requires that there be some way in which the dissatisfied minority can receive their rightful share of natural opportunities, free of obligations that entangle them with others, so it is proper for them to expect to be able to sever their share from the territorial rights that belong jointly to the majority and the minority.

The majority could justly require the minority to take their share of rights in whatever territory the majority wished to cede, provided that the ratio of the value of the territory so ceded to the value of the territory retained was roughly equal to the ratio of the minority to the majority, with any discrepancy settled by periodic cash payments. The majority might also reasonably require the minority to pay any costs of the separation.

When the people of a nation ensure that they do not claim more than their shares of natural opportunities, when they permit any citizen who desires to leave to do so, and they stand ready to allow any substantial majority within a reasonably compact subarea to succeed, then the people of that nation can justly say, "The laws we choose to live under represent our conception of what a nation ought to be. If you don't like it, create your own nation somewhere else. We claim for ourselves no more than our share of what nature provides." Thus a wide variety of arrangements within nations are consistent with justice.

Economic theory can say something about the types of nations that can be expected to emerge in such a world. As mentioned previously, one would expect fewer barriers to immigration, since immigrants would arrive with claims to their shares of natural opportunities. Also, nations could expect to have greater difficulty retaining citizens when they had either low wages, low returns to saving, or laws that people found oppressive. ...  Read the whole article

Nic Tideman:  The Ethics of Coercion in Public Finance

Similarly, the localities within a national subdivision are free to implement a pattern of locality entitlements that differs from the ones described, provided that they allow any locality to "emigrate." Since locations do not move, "emigration" here means secession. But secession is potentially expensive, because of the difference in the way that entitlements are calculated when membership in larger entities changes.

For example, suppose that Toronto wanted to secede from Ontario and become a separate province. As long as Toronto is a part of Ontario, the group that shares the rental value of Toronto (in an unimproved condition) consists of all Ontario localities. If Toronto were to become a separate province, that rental value would be shared among all Canadian provinces, and a much smaller share would come back to Toronto. The opportunity to share such rent would be glue that would tend to bind localities in provinces and provinces in the nation. But if the pressures to separate ever became great enough, the right to do so would be recognized.

If localities are permitted to secede from national subdivisions in place of emigrating, one might ask whether individuals may secede from nations. The answer is, in principle, yes, but it is likely to be impractical for them to do so, except on the fringe of civilization. If an individual who wants to declare himself an independent nation, the share of rent that he can claim is the land value per person in the equalization of rent among nations. But, unless he wants to live on the edge of civilization, he will need land in the midst of other people, where rents will be very high. Furthermore, his neighbors would not be treating him unjustly if they responded to his secession with an economic boycott. Thus it could be expected that people would not propose to secede in the middle of existing jurisdictions.

When all individuals and jurisdictions are free to emigrate and to secede in whatever ways they find practical, and equal access to natural opportunities for all members of any entity is the default option from which the entity is free to depart, then any taxes that are imposed as a condition of continued membership in the entity are consistent with Neutrality. People really can go somewhere else if they don't like it, and the equal access to natural opportunities required by Liberalism is satisfied.

Nic Tideman: The Morality of Taxation: The Local Case

There is a gentler side of taxation that provides some explanation of our tolerance of this coercion. Taxation can be the way that people achieve their common purposes. People may agree to be taxed so that there will be money to pay for public services that they want. From this perspective, taxation may be considered no more than the dues for belonging to a club that provides people with things that they would rather pay their share of than do without. However, to make this "voluntary exchange" theory of taxation relevant, people must be able to choose freely whether or not to "join the club," to be a citizen of the taxing jurisdiction. With all land claimed by some taxing jurisdiction, the choice isn't exactly free.

The problem of morality in taxation is the following:

• How do we retain the possibility of people pooling their contributions to the cost of services that they agree are worthwhile, while eliminating the possibility of citizens treating their fellow citizens as targets of plunder?
• What are the limits of obligations that we can justly impose on our fellow citizens?
• And how do we set up a structure of government that will ensure that these limits are observed?

The turn-of-the-century Swedish economist, Knut Wicksell, had ideas that dealt with some of these questions (Wicksell, 1958 [1896]). Wicksell argued that if a public expenditure is worthwhile, then there must be some allocation among citizens of the taxes that are needed to finance the expenditure that would make everyone better off. If legislatures were required to achieve unanimity to pass spending programs, then they would have to find allocations of taxes that were unanimously acceptable before they could pass those programs. In that case, majorities would have no opportunity to exploit minorities, and inefficient proposals would be prevented from passing as well. Wicksell recognized that if complete unanimity were required, strategic holdouts would be likely to prevent any program from passing, so he was content to recommend a rule of "near-unanimity," without being specific about what this meant.

While Wicksell's insights are interesting, they do not fully solve the problem of moral taxation, because any departure from unanimity opens the door to exploitation of minorities, and the requirement of more-than-majority approval means that the costs of coalition-building will leave some worthwhile activities unapproved. Still, we would probably have a much more efficient public sector if every public expenditure required two-thirds approval in legislative bodies.

But to make taxation truly voluntary, the option to leave must be viable. If people could move costlessly from one jurisdiction to another, taking all of their belongings with them, then competition among jurisdictions would tend to eliminate oppressive taxation. This would leave only the fees that people were prepared to pay to have public services (Tiebout, 1956). ... read the whole article

Nic Tideman: The Political Economy of Moral Evolution

This paper argues that a liberal theory of the resolution of disagreements about the requirements of justice must include the possibility of secession. When such a possibility is allowed, it can be predicted that there will be changes not only in the character of disputes about the requirements of justice, but also in the patterns of taxes and public expenditures. There will be a greater propensity for seeing the other side's point of view in disputes about the requirements of justice, and a greater tendency to support public activities by efficient taxes on the beneficiaries of public expenditures.

The paper begins with a discussion of the nature of moral truth, its relation to scientific truth, and the way in which moral knowledge grows. Next discussed is the difficulty of translating moral knowledge into social institutions, arising from the inevitability and impropriety of judging one's own cause. Ackerman's "neutral dialogue" is endorsed as the most acceptable way of dealing with this difficulty. But I suggest that in dialogues regarding the requirements of justice there should be an understanding that one possible outcome of the dialogue is failure to agree on mutually acceptable conditions for being part of the same society, leading to a parting of the ways. The conditions under which such a parting would occur constitute the most fundamental question of justice. I suggest that Ackerman's proposed condition of equal sharing of the providence of nature (Ackerman's initial manna) among all generations constitutes an appropriate basis for parting if agreement should be impossible.

I argue that such an understanding of the possibility of secession would provide a better framework for the growth of moral knowledge than when the politically successful are able to preclude experiments with alternative conceptions of justice. It would also reduce opportunities for the politically adroit to exploit the less adroit. If competition among societies for citizens resulted from the possibility of secession, the competitive equilibrium would include land value taxation. ...

There are several practical difficulties with secession as the resolution of moral disagreement that need to be mentioned.

• First, as long as the world seems so hostile that defense against foreign invasion is required, there will be efficiencies in defending larger areas.
• Second, when sovereignty is fragmented, there will be a temptation to levy taxes that will be paid predominantly by foreigners. It was in response to the recognition of this that the U.S. Constitution included a ban on taxes in interstate commerce. The same impulse can be seen today in the desire of localities to impose taxes on restaurant meals, backed up by the argument that a substantial fraction of such a tax is paid by people from out of town.
• Third, if any partition were undertaken, there would be likely to be numerous people who found themselves on the wrong side of the dividing line, as happened so tragically when Pakistan was partitioned from India.

I will respond to these in order. ...

So suppose that those who wished to secede claimed no more land and natural resources per capita than were available to others, but they constituted a group that was distinctly more capable than average. Could those who were left behind argue that this departure of talent was unfair to them? ...

With respect to tax and expenditure decisions, politically active special interests would face an important additional limitation in their efforts to exploit the rest of the public: An exploited group could secede. While the costs of secession would limit the use of secession as a device for avoiding exploitation, the need to be sensitive to this possibility would create pressure for benefit-related taxation and for an efficient public sector. If alternative states are viewed as competing for citizens, one can ask what offers potential citizens would receive from states. The answer from economic theory is that each citizen would be offered his marginal product, plus the rent on the share of land and natural resources to which the state would have a claim by virtue of his citizenship. Competitive pressures would induce states to refrain from taxing labor incomes, unless there were social costs associated with the generation of income. Future capital accumulations would similarly tend to escape taxation. Thus land, natural resources and previously accumulated capital would be the only tax bases not subject to erosion by competitive pressure. read the whole article