Friedrich Hayek argued that restriction of the use of the coercive powers of the state to enforcement of the negative rules of just conduct (prohibition of actions harming others) makes it possible for individuals and groups to live in peace without agreeing on common ends. He noted that mutually beneficial exchanges enable people to help each other to achieve their individual ends without agreeing on what those ends should be (Law, legislation and liberty, V2, 1982, p 110).
This line of reasoning implies that use of coercion by governments to advantage some people at the expense of others (for example, through government spending and taxation) is a threat to peaceful coexistence. Does this mean that we should expect to see a great deal of civil disorder in countries with high government spending?
Not necessarily. Peaceful coexistence can begin to disintegrate long before there is any evidence of civil disorder.
Consider the situation where people take action to avoid high taxes, for example by moving business activities to a country with lower tax rates. These avoidance actions may be legal and the people taking them may have a great deal of respect for democratic decision-making processes. It seems to me that these avoidance actions are just as much evidence of a breakdown in peaceful coexistence as they would be if they had been taken in response to threats of plunder by some group in the community who were taking the law into their own hands.
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