Concentrating money is one way --often effective-- of concentrating labor, since if there is labor available and willing to do work, it can normally be hired to do it for available money. Dispersing money disperses labor, other than labor that will work together for free or for possible future payoff. Tasks which require a greater number of workers to be able to be done, done well, or done with any reasonable efficiency generally need a supply of money or credit (the promised, and likely future, payment of money) in order to be accomplished. 

People with similar values in certain areas are more likely to voluntarily pool their money and/or their labor to accomplish something they all want in those areas that none of them can create or afford (to hire the labor to create) separately. They may build a church or a country club or even a business together. They may build a hospital or support a particular charity or civic activity. People with sufficiently differing values tend to be less likely to want to pool their resources toward more than the most basic common human needs that cannot (easily) be met without concentrated labor. 

Taxes are an attempt to pool money to concentrate labor toward governmentally decided ends. Insofar as people have any say in the amount of taxes they pay and how the money is spent, then the more agreement there is about ends, the more readily tax revenues can be raised without social discontent. The less people have any say in how much money is raised and what it is to be spent on, or the less agreement there is about what work needs to be done, the more that taxes will be a source of social discord. Mechanisms that require greater agreement in a community to pass taxes will have proportionally greater chances for social acceptance of the taxes. Such mechanisms are super-majorities (e.g., a two-thirds or three-fourths majority, rather than a half-plus-one majority) or formulas that require some consensus from known minorities as well (e.g., such as a formula that requires not only a majority approval from a large segment of society, but sizable vote from a minority group(s), say a 30% vote).

Stock markets, financial institutions such as banks or insurance companies, etc., are means of more voluntarily collecting money that gets concentrated into larger sums and that then can be utilized to concentrate labor. But these institutions tend to attract money for purposes other than doing particular work projects that contributors want to see accomplished. They collect money to provide insurance, banking services, investment profits, etc. People may buy stock in a particular company because they want to see accomplished the kind of work that company does, but for the most part the point is to make a profitable return on money, not to provide themselves or society with a service or product that would otherwise not likely be available.

It seems to me that besides having legislated taxes, there is no reason governments could not organize voluntary "tax" funds to do certain kinds of work that sufficient people feel is important to have done. That way money could be raised and concentrated for certain tasks without having to go through social and political strife and without the loss of some programs that a minority might be willing to fund. Further, if these taxes were voluntarily paid, there would be pressure on those in charge of the programs to operate them in a way that satisfies those who contribute. Some of these programs might even return a profit and attract money on that basis as well. There is no reason a job training program or particular kind of school, for example, might not require people they train to pay back some percentage of the money they earn from their training; or a business incubator program may be begun that ends up not only being helpful but profitable as well.

The objection to voluntary taxes is that projected revenues cannot be expected and counted on in the way that normal, often partially involuntary, taxes can be. This might actually be a good thing, because it means (or at least should mean) that the money will have to be spent on a pay-as-you-go basis, instead of borrowing against anticipated earnings. Or, if necessary, contractual agreements could be entered into whereby those who initially volunteer funds, incur a legal obligation to do so for an agreed period of time. But there is no reason that some projects cannot be funded this way where there are many people who want the projects and are willing to pay for them, even though a sufficient majority cannot be found in a legislature or council to increase taxes to pay for them. If a group of people can come together to build something such as a church building, there should be no reason why a group of people could not contribute toward the building of something like a new school building.

A lot is said today about getting computers into schools. The goal most frequently mentioned is to get one computer into every classroom, and wherever possible to have computers in the library or in a computer lab where students can access them to do work. This is a very expensive enterprise, and it is questionable that it is the most efficient and best way to introduce students to computers and to give them access to computers. A better way would be to organize buying groups to allow parents to purchase computers themselves for home use from private enterprises at bigger discounts. It is not easy to do much on a computer during a classroom period, whereas students with computers at home can learn much more and get much more out of them. An organized buying group can shave much money by taking bids from vendors eager to sell large volumes. Where schools or districts organized buying groups for computers, software, for Internet access, or for whatever is relevant to education, citizens could benefit from a government service without tax revenues being raised or spent. 

I worked on trying to find the benefit of such a program in the early 1990's when Internet access was costly and hard to find, and when computers were far more expensive. With just a few phone calls I was able to find a local vendor willing to sell computers designed primarily for student use that included printers, modems, and software for $300 less than the least expensive advertised price one could find at the time. This price was predicated on orders from 100 or more families⁽¹⁾. Moreover, I was able to talk an Internet service provider into allowing local school districts to combine to pay for one backbone site they could share instead of each having to pay for their own site. The set-up fee for a site at that time was so prohibitive only the wealthiest school districts could have afforded one. 

So government's could save people money instead of costing them money, if that was realized or thought to be a proper function of government. This is a way for government to assist private enterprise rather than to compete with it or to ignore its potential. It takes some of the risk, and the cost passed on to the consumer of that risk, out of private enterprise by letting potential suppliers know what their volume of business will be ahead of time before they do any work or have to buy parts or hire laborers. It provides opportunities for citizens and for businesses. And the reason it is in many cases a better function of government than on private enterprise itself is that, in the case of computers and schools, perhaps no private group would have done it or could have done it as a profitable function itself, since it was a one-time fairly minor bit of labor. Further it fostered education, which was in the purview of state government anyway. 

Businesses that can operate from large volume orders, particularly potential start-up businesses, can avoid risk and can pass on the savings risk entails. The typical retail operation stocks items they hope to sell. They have to stock the items so customers will be attracted to browse or shop. However, since the merchant has to pay for the items s/he does not sell also, the cost of what might not sell has to be incorporated into what does sell. This makes the price of what does sell higher than necessary, and, in many cases, less attractive to purchase, thus decreasing sales potential. Merchants in a position to stock only what they need as they need it, can make more profit and still sell at a lower price. This, again in the normal situation, fosters even greater sales because of the lower price. So government organizations in some cases are in a position to be able to foster commercial enterprise while saving their constituents money. All at no cost in tax revenue, and without government's having to be a supplier or a customer itself. It serves this function merely as a catalyst where appropriate.

1. Increased demand can reduce prices instead of elevating prices, if the increased demand is coordinated in such a way that suppliers can plan for it and desire it enough to bid for it. If potential buyers unite, instead of competing with each other (particularly for what is under-produced and often only produced on speculation of selling), and combine their purchasing power, they can lower prices available to them. (Return to text.)