The anti-tax movement in the United States has evolved from a fringe component of American politics 40 years ago into one that is central today. And certainly, the country has had a long history of tax protests, right? Actually, wrong.
While the Boston Tea Party is often cited as the inspiration for today's so-called Tea Party, the Boston Tea Party was an outgrowth of a movement to end "taxation without representation." The American colonists didn't object to taxes per se; they objected to taxes levied by a body--in this case the British Parliament--in which they had no representatives. That's hardly the situation with the modern Tea Party. The members of the modern movement may not like their elected representatives, but they do have them.
The Whiskey Rebellion is the only significant tax revolt in American history prior to California's Proposition 13, a 1978 ballot initiative which limited property taxes. The Whiskey Rebellion of the 1790s was about the unfair way in which the distilled spirits tax was structured. It was deeply regressive (i.e., small operators paid significantly higher effective tax rates than large ones) and designed by then Treasury Secretary Alexander Hamilton to drive small farmers and distillers in the West out of business in favor of large farmers and distillers in the East. Far from desiring a smaller federal government, the protestors wanted money spent on greater government protection against Indian raids and better roads to transport their goods to eastern markets.
And so, the historical animus that Americans supposedly have toward taxes has been largely manufactured to facilitate the propaganda machine of the modern anti-tax movement. This means that the long hiatus between the Whiskey Rebellion and Proposition 13 must be considered the norm in American history and that some recent change in American circumstances must be responsible for the modern anti-tax movement.
Joseph Tainter, author of the Collapse of Complex Societies, may have an answer. In a 1996 essay entitled "Complexity, Problem Solving, and Sustainable Societies" he explains the basics of his theory, namely, that increased complexity is a mode of problem solving; that it requires additional inputs, especially energy inputs; and that it eventually leads to diminishing and then negative returns. Diminishing returns make a society less resilient in the face of shocks and more subject to collapse--not complete destruction, Tainter says, but a simplification process that can be very painful and harrowing to live through and result in many casualties.
It is Tainter's notion of diminishing returns that sheds light on the modern anti-tax movement. It seems no accident that the movement grows up in an era, the 1970s, of constrained energy supplies. These supplies are essential to maintaining the complex functioning of industrial societies. In the earlier part of the century the colossal achievements of the Federal Government led people to respect its efficacy. It softened the blow of the Great Depression, led the country to victory in World War II, and built a superhighway system that connected the entire country as well as other infrastructure to power the economy and to protect the environment. But these were the low-hanging fruit.
Today, adding lanes to highways relieves congestion only until enough development takes place next to it to clog it all over again. We've reached the point of diminishing returns.
When the astronauts first set foot on the Moon, it was a staggering achievement. But the achievements in space since then have been less spectacular and more incremental. We have reached the point of diminishing returns.
Government spent lavishly on higher education and public schools in order to educate a new generation for a more complex society. There were dreams as recently as the mid-1990s that so-called distance learning would make college-level classes available to nearly everyone. But the dynamics of learning worked against this new complexity. People, it turns out, learn best in small groups with an actual teacher present. And, the increasingly complex information and techniques which students must now master call for even more personal attention, not less. We have reached the point of diminishing returns.
We need ever more educated people, but we have no way of turning them out more efficiently. So we must invest ever greater funds into educating the ever growing number of specialists we need. And, in education as in many other areas, these funds are showing diminishing returns. The returns are not zero, but no longer so hefty as they were.
Public health systems virtually wiped out many infectious diseases including polio through mass vaccination and better health practices. The results were profound and the costs were small. Now we spend lavishly on medical research to make incremental advances in treating chronic conditions such as heart disease and cancer which are in some respects products of industrial civilization.
A public used to such grand strides in all areas of life--strides aided in many ways by government expenditures--became increasingly frustrated by the declining returns for each additional dollar spent on government programs. They attributed this decline, however, to poor teachers or lazy civil servants. They could not think in terms of declining marginal returns; nor could they imagine that in a complex society the failure to maintain increasing investments in infrastructure and education would only make matters worse. So, they revolted. They looked for enemies and found them, namely, public employees. And, they began a campaign to defund them believing that they were taking too many of society's resources and not producing the results the public wanted.
The defunding campaign has weakened our infrastructure and left our children undereducated for the complex world they now find themselves in. The stresses created by increased complexity have caused Americans to embark on a path that can only lead to collapse, the kind that Tainter imagines. The public has been lulled into believing that "efficiency" in government such as we supposedly see in large corporations will solve the problem of declining marginal returns from investment in complexity. But corporations, as Tainter points out, face the same headwinds. The easy and obvious technical discoveries have been made. Huge investments are now needed just to obtain incremental progress. That doesn't mean technical progress isn't possible, only that it will not leap forward in the way it did in the first half of the last century.
There are those who will point to the computer revolution and now the biotech revolution and say that in these fields the leading businesses have overcome the problem of declining marginal returns. First, it is worth pointing out that both of these industries have significantly added to the complexity of society. And so, their connection to the declining marginal returns and even negative returns of technology cannot be dismissed. The effects of these industries must not simply be judged in a vacuum but within the context of the society they serve.
In fact, we have already seen some of the negative returns of a highly networked society in the form of the worst economic crash since the Great Depression and in the dangerous effects of biotechnology produced by companies that understand nothing of ecology and are therefore blind to the unintended effects of their inventions.
Tainter suggests that declining marginal returns from complexity may not be a soluble problem for a society structured as ours is. We have relied on copious amounts of fossil fuels to allow us to overcome many of our challenges. This cheap energy source has been perhaps the key input enabling increased complexity as an efficacious problem-solving strategy.
It is not obvious how we as a society could climb down off the cliff of complexity gracefully in the absence of increasing supplies of fossil fuels. But it is obvious that the anti-tax movement is pushing us toward that cliff more quickly because of its failure to comprehend that we need to plan for a less complex future using tools that are not so blunt as a simple-minded tax revolt. And, yet given the poor level of understanding among the public and the ruling elite about complexity and society, it is completely understandable that the debate is being governed by the false premises propagated by the anti-tax movement.