And he will take the tenth of your seed, and of your vineyards, and give to his officers, and to his servants. And he will take your menservants, and your maidservants, and your goodliest young men, and your asses, and put them to his work. He will take the tenth of your sheep: and ye shall be his servants. And ye shall cry out in that day because of your king which ye shall have chosen you; and the Lord will not hear you in that day. (I Samuel 8:15-18).

Te people of Israel wanted a king. They heard of the nations around them, and they were told that these nations had strong central governments. Each was led by a king, who embodied the power, prestige, and glory of his nation-state. The system of civil rule in Israel at this time was based on decentralized tribes. Each tribe had a system of judges. There was no legislature. There was no central civil government.

Samuel was both a priest and a civil judge. Representatives of the people of Israel came to him and asked him to anoint someone to serve as a king. He warned them against this. His warning came Economics in One Lesso... Hazlitt, Henry Best Price: $2.43 Buy New $7.43 (as of 12:35 UTC - Details) in the form of a threat: increased taxation. Not only would they have to pay taxes to the local tribal civil governments, they would now have to pay taxes to the central government, as embodied by the king.

Nevertheless the people refused to obey the voice of Samuel; and they said, Nay; but we will have a king over us; That we also may be like all the nations; and that our king may judge us, and go out before us, and fight our battles (vv. 19-20).

We might think that the threat of increased taxation would have scared them off. Not so. They wanted to be represented by someone with power, and they were willing to pay the price. The price was an additional tax of 10% of their income.

This 10% figure was the same as the tithe that was owed to the Levites, the tribe of the priesthood. Samuel warned them that the king would extract as much wealth from them as the entire priestly tribe was entitled to. This centralization of wealth and power would be enormous. But they did not care. They wanted a powerful central state, so they got one. It lasted through four kings. During the early years of the fourth king, Rehoboam, a tax revolt took place. The nation of Israel separated into the northern and southern kingdoms (I Kings 12). It was never brought together again under the rule of a Hebrew king.

The threatened system of taxation was proportional. It followed the same rule as the principle of the tithe. Everybody paid the same percentage. No group within the society would be able to extract a greater percentage of wealth from a richer group. The economic burden that afflicted the rich would also afflict the poor. The king of Israel would be an equal opportunity exploiter. Nevertheless, the people demanded a king. How an Economy Grows a... Schiff, Andrew J. Best Price: $1.99 Buy New $7.20 (as of 11:05 UTC - Details)

It was clear that the productivity of the people of Israel would decline under the rule of the centralized government as manifested by a single king. A tenth of their wealth would be extracted every year. In addition, he would take menservants and maidservants away from them. These servants would no longer be part of the household production system. The wealth that they would otherwise have produced would be transferred to the king and his household. The households would no longer be as productive, because the resource inputs available to them would be siphoned off by the king. Nevertheless, the people demanded a king.

We take away two lessons from this. First, people who are in ethical rebellion prefer tyranny to liberty. This came as no surprise to Samuel, for God had told him that this would be the case.

And the Lord said unto Samuel, Hearken unto the voice of the people in all that they say unto thee: for they have not rejected thee, but they have rejected me, that I should not reign over them.

Second, they are not swayed by the argument that higher taxes will reduce their wealth. They prefer to live under the embodiment of power rather than enjoy greater personal productivity. They did not listen to the economic logic of Samuel. He was correct in his assessment, but they paid no attention.

This is always the problem with voters who criticize the existing tax code. They do not object to taxation as such. They are happy to extend power to the central government. They just want a different tax code, so that someone else will have to bear a greater burden of taxation. They reject the principle of the tithe: proportional taxation. They think they can use their influence so that the Basic Economics Sowell, Thomas Best Price: $23.50 Buy New $28.97 (as of 11:50 UTC - Details) central government will extract greater wealth from those who have more income than they do. Their call for tax reform is this: “Don’t tax you. Don’t tax me. Tax the guy behind the tree.”

1. Owner

Private ownership is based on a legal connection between ownership rights — legal immunities from theft — and personal responsibility. In the biblical worldview, God grants ownership to an individual. He hereby increases the individual’s personal responsibility.

Ownership provides a test of performance: ethical and economic. The owner has a responsibility to increase his wealth on behalf of God, the original owner This was taught by Jesus in the parable of the talents (Matthew 25:14-30). The original owner delegates the responsibilities of asset management to three men. Later, he returns for an accounting. He sees if each of them has increased the owner’s wealth. Two did; one did not. The two who did are then given greater wealth — redistributed by the owner from the steward who had buried his coin: a zero rate of return.

Jesus used a parable about money as a way to get the main point across: increasing your productivity is an ethical requirement. It is also a judicial requirement. The best way to increase someone’s productivity is to make him an owner. God then holds him responsible. In the parable, God did not hand over ownership to a committee. He handed it over to individuals.

2. Window

Kindle Paperwhite, 6&r... Best Price: $40.90 (as of 05:45 UTC - Details) Wealth serves as a tool of production. In the case of Samuel’s warning, the focus was on the output of the land and the household: seeds, domesticated animals, and servants. Some of these assets served as consumption goods. But they could also be converted into production goods: capital. It is clear from the parable of the talents that God expects a positive rate of return on His investments. This means that owners must set aside a portion of their wealth for investment purposes.

The free market allows owners to increase their wealth by serving customers. Asset owners — customers — bid against each other for the output of capital. They are the strongest bidders for assets. They own money. Money is the most marketable commodity. The capital owner then decides whose bid to accept, including his own if he decides not to sell. He can select from a wide range of bidders. If he is successful in producing goods and services desirable in the eyes of customers, he then allocates his output by the rule of every auction among strangers: high bid wins.

This allows resource owners to bid for ownership or temporary control over each other’s assets. Owners of money (buyers) compete against each other. Owners of goods (sellers) compete against each other. Out of this competition comes an array of prices. The highest bidder wins, product by product, auction by auction. This judicial system of voluntary resource allocation allows people with any amount of wealth to seek to exchange whatever they own for whatever they would like to own. This is a judicial system of liberty. It produces an economic system of exchange. What is being exchanged? Ownership: legal immunities and economic stewardship.

In the free market system, the most efficient — least wasteful — producers gain an increasing share of the society’s wealth. As long as they continue meet the demands of competing customers, they will continue to accumulate wealth if they are more efficient than their competitors. Meanwhile, those producers who are not efficient in meeting the demands of customers will be losers. They will steadily experience a depletion of their capital. Capital is transferred, through voluntary competition, from inefficient producers to efficient producers. The arbitrators of this transfer are customers, who reward the most efficient producers. This system of ownership encourages capital owners to continue to produce. It leads to capital accumulation: better tools. It leads to richer customers: higher output/income and more choices. This ownership system hands control over the scarce means of production to customers by way of their economic agents: efficient producers. Customers retain authority in this auction process because they own money: the most marketable commodity.

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