Reducing tax evasion and avoidance, some anthropological comparisons

Today I read http://www.tackletaxhavens.com/the-solutions/ again, and thought these are the kind of proposals the Occupy movement should publicise and explain on the street with flipcharts under streetlamps.

Tax evasion and avoidance are obvious cases of free-riding on co-operative societies -aka. the ‘fundamental problem of social life’. Even in a simple game theory model, a stable co-operative social system can establish itself if there are sanctions (survival or reproductive costs) on free-riders and sanctions on those who refuse to punish free-riders. You need both for the system to be stable. 

Is that one of the key problems with the Age of Enlightenment idea of the Nation-State? -i.e. alienating the right to use legitimate force to enforce social norms from citizens to the state discourages the second-order public good of punishing free-riders directly and immediately, so even IF the state punishes ‘egregious and aggressive examples’ of free-riding in terms of tax evasion and avoidance (which it is inherently unlikely to do), it is obviously far less naturally efficient than the innate, universal mechanisms of immediate sanctioning of free-riding – i) gossip (also observed with a similar function in *female* chimpanzees), ii) public ridicule, iii) moral shunning and finally iv) total social and economic ostracism (refusal of commensality). 

We can still do all four of these direct, immediate mechanisms of social sanctioning of free-riders in modern, large complex societies: 

i) Gossip (that’s exponentially more efficient now we have the internet), 

ii) Public ridicule -political comedy is one of the most powerful forms of peaceful protest -Have I Got News For You etc. is part of this, and so are comedic forms of protesting on the streets.

iii) Moral shunning -this is already happening on an individual level, gradually more people are choosing to do business with more socially responsible companies and avoid the tax-avoiders where possible -but we’re lacking a society-wide organisation to co-ordinate this process, probably because the ‘Church’ or equivalent functional social organisations have not caught up with modernity yet and historically as a society we’re still feeling once burnt twice shy about organised religion. 

iv) Total social and economic ostracism -we don’t yet have this level of ostracism in modern societies, it’s getting too close for comfort to the citizen’s right to use force, because the subjects of complete ostracism in the ancestral human environment would usually die of starvation or exposure, and in medieval history the stage of ‘vitandi excommunicando’ -an excommunicant to be despised and avoided, by order of the Church- was traditionally associated with the civil authorities then burning them at the stake. (I have some sympathies with that approach, but it certainly isn’t going to catch on now, and overall that’s probably a good thing!) –

The nearest thing I’ve seen so far to the ancestral sanctioning mechanism of total social and economic ostracism is Carrot Mob.org -a collective consumer negotiating network, which aims to wield coordinated co-operative consumer spending power to incentivize companies with good business ethics and correspondingly (but not emphasising this aspect) punish those with bad business ethics. Carrot Mob is not yet known widely in the UK, but it’s growing in the USA.

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