From Tyranny to Liberty – How Turning Government Into a “Not-For-Profit” Is a Practical Step Toward Voluntary Living

From Tyranny to Liberty – How Turning Government Into a

“Not-For-Profit” Is a Practical Step Toward Voluntary Living


The forefathers of modern libertarian thought, from Lysander Spooner to Ludwig von Mises and Murray Rothbard, have set forth excellent principles on which to found an individualist code of ethics. Liberty and libertarianism have  begun to take roots in mainstream academia. Scholarship at and provide great resources on philosophy and economics, and liberty-oriented think-tanks like The Independent Institute and Reason Magazine help emphasize libertarian pursuits in our current time.

The common motif in the movement is getting government out of our lives and wallets. However, the means to the end differ across a spectrum – some advocate for government policy change; some advocate for grassroots movements; others, like the Seasteading Institute,  suggest that we create new experimental islands; and even some suggest the black market will overshadow the government’s control.

These suggestions/theories all have their merits, but few can articulate a practical policy which can shift our government expediently into a fully voluntary society.

To fill the gap, I would ask for the libertarian movement to get behind the “not-for-profit” government model.

What does that mean? Well, it means that, like any not-for-profit corporation, the United States government will no longer maintain a monopoly on anything, but will instead compete with the private market for revenue and services.

In order to survive, the U.S. government will have to rely on voluntary contributions from individuals who will have the ability to make specific or general gifts to the government.

The underlying principle is this: When the government no longer has the ability to collect money with the threat of force, only that which the public truly values will be funded.

So, for example, if the people no longer want a massive department of defense bombing every country possible, the people will simply no longer fund the military and will drain it of its resources.

Likewise, if the people are tired of the BATF or the Department of Education, the people can choose to specify where their money will go, if at all.

The benefits are numerous:

  1. The government can no longer ignore the political will of the people.
  2. Programs which receive little support will go defunct by virtue of not being funded.
  3. Private alternatives will be given the chance to arise (such as private education, postage, security, etc.)
  4. The government will be unable to do more than what the people are voluntarily funding it for.

The best way to initially effect this policy is to allow earmarks to specific departments. How the departments carry out their function should be left to policy initiatives instead of funding because earmarks per issue will be very burdensome to carry out (just imagine if the government accepted funds for courts but the donor exempts “rape” cases – very tough to manage the request and even tougher not to intermingle funds). Also, funding by department will swiftly reveal what programs the public finds most/least valuable.

Of course, moving toward a “not-for-profit” form of government shouldn’t be the end of the story. The people of America ought to advocate for government downsizing in other ways such as decriminalization, budget cuts, and dismantling.

I believe that no single act (short of ending government itself or maybe ending the Federal Reserve) could be more profound at reshaping the political sphere for liberty. Everything the government does will hinge on its ability to pay. When the public can cut the government off like any other product, the people gain control over their lives.

This turning of government into a not-for-profit could be likened to the Articles of Confederation, but it should go beyond the Federal government to include states, counties, cities and other subdivisions.

When the government is totally dependent on the free will and grace of the people’s wallets, then it will finally have to meet their demands or face radical losses.



The reason the not-for-profit model is so attractive is because it forces the government to engage the people if it wants money. Much like any other good or service provider in the free market, the government will likely have to prove its worth in order to receive benefits. This requires a two-way relationship that truly looks to the values of the constituents, not just to the expected coercive force producing wealth. It also promotes transparency, as any attempts to hide what is going on will further skepticism followed by detraction. Just like any other not-for-profit, if the government cannot demonstrate what it is doing with your money, you and the other supporters will be reluctant to give. If the government is not perceived as producing efficient value, the people are all the more likely to turn to the free market for a solution.

Some may argue that this will cause a collective action problem where the rich/business owners end up paying more because the poor won’t pay anything. This may be true, but is that not already happening in the current market? Does not a majority of taxes already come from the rich and business owners? ( :

Being the case, the business class of America has an incentive to bear the burden if they find that the American governmental system provides them value. For example, if business owners think the local courthouses and police are doing a great job at stopping theft and vandalism, they will be incentivized to continue to donate. In a sense, it could be a point of pride for businesses to advertise their contribution to the government. Just like Walmart has poster boards showing who they support in the community, a business may advertise their support of certain things like the police, courthouses and national defense to tell the community they care. Sounds superficial, but that’s already our state of public relations and marketing.

As for outcome, if there is underfunding, and that causes a material harm to the public through increased crime/violence, then it is logical that businesses and individuals will give more money to the government if they think it is worth it. (Or possibly find a better method in the market if that is attractive).

This concept already comports with our current model of government. No place is crime-free, and, when crime increases or other social problems arise, members of the legislature craft legislation and present it to the public to address the issues. Why couldn’t this same process be done at the local level, including not just policy but the strings to the purse itself?

To summarize other concerns, the not-for-profit model of government shares no different critique than that of the theft-funded (tax) government. Fear of government bribery? Already exists. Fear of new criminal demographic changes? Already exists. Fear of nuclear threats? Already exists. Fear of money going missing? Have you been reading the news?

The only change the people will find between the not-for-profit and the tax-funded government is that they will save money on tax compliance (because it doesn’t exist), save money on wasteful government spending, and save their psyche from the constant threat of force against person and property.

So please, take the time to think through what I am advocating. Use this model as a way to convince your fellow man/woman that there is a practical, intelligent method for moving America toward a voluntary society without facing a total collapse.

The “not-for-profit” government model is not the total solution (or end), but what other policy can transform the government toward voluntaryism while still maintaining a semblance of stability? If you can think of it, I would love to hear it.


 A New Framework - The Not For Profit Government

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4 Responses to From Tyranny to Liberty – How Turning Government Into a “Not-For-Profit” Is a Practical Step Toward Voluntary Living

  1. David Shirk February 9, 2012 at 4:01 pm #

    Great article though i am forced to point out one flaw.

    The model as recommended above is not a bad one and is not to far off from where America started – even before she was called America. Yet the key issue is that government is control.

    In The days before Hamilton became secretary of the Treasury, the fledgling governments power was greatly skewed by those like Aaron Burr. The problem is that unlike the Romanticized version of Burr that people have today (the great slayer of Hamilton some say), Burr’s actions actually gave credence to the creation of a Federal Government by abusing his power at his level to such an extent that Hamilton had little problems putting Burr in his place on a National level. Hamilton argued that a federal government was needed to keep those like Burr from abusing their more localized power. Of course Hamilton really did not care about justice but rather the making of an empire with him as a great Oligarch thereof.

    I said that to say this:

    Early on Hamilton and many others figured out that what you could not gather in taxes, you could make back with policy and laws. The anti-federalist movement was squashed largely by Adams and his ilk via the alien and sedition acts. Using a policy would not use nearly as much money, but allow fines etc to be collected when they were not followed. Let us also not forget the famous Gibbons vs Agdons case where the state virtually allowed a monopoly to be created in the name of economic protection. Since then nothing has changed.

    The second thing i need to point out is that people are not united in thought and ideals, never have been and never will be. This is why so many people accept the current government as a necessary evil – they see it as unavoidable. The people who think this way hardly need to be a majority, but rather just enough to get a majority vote with which never has to over 30% of the voting population. This is why so many refuse to vote for Ron – he is wrongly labeled as unelectable – and thus a threat to the republicans – here is the breakdown:

    30% democrap

    30% pepublicant’s

    20% independent

    10% of those who refuse to play a foolish rigged games.

    Anyway, once a government is established, it has the power to set policies. As stated this requires few initial resources. Upon the policies earliest days, most do not even notice their creation as they are not yet invasive. Yet as these policies slowly become adapted, people are slowly molded to their whim. Over time an increase is made to the cost of the policy whether it be direct or indirect that is so slow that it is taken for granted. Once the people hit the point where this passes a certain point it is game over.

    That having been said, there is a large merit to this article as well:

    1 – The idea that a collapsing empire will be in the interest of the free minded is ludicrous. Historically speaking, it more often ends up with a ton of smaller territories being formed, and they are not forgiving. Eventually these territories re-consolidate to form a new country. In addition, the collapse process often ends up with martial law and rebellion that prevents any meaningful recovery for people period.

    2 – As such, it is far better to slowly degrade the power of the governing body over time. this is not a fast process, and as such often fails because when things get worse, people tend to panic and re-grant their government its old power. Or if it gets better people get complacent and the basis for a new system sets in.

    3 – However as sad as it is to hope in such things, it is the real only way out. I want to be hopeful because it is possible albeit slim. I will not be hopeful because people have proven to me to be shallow minded, forgetful, purposefully ignorant to avoid the headaches of learning the truth, and irresponsible in their way of life.

    4 – Call me a sucker, but i still hope that even though the state collapse is starting as we speak, that the damage will be done, and the next guy in office will not invoke martial law, and begin his office by cutting government as we have never seen throughout the history of the US. Unlikely, but it is all we got.

    Good point though.

    • Jaime February 10, 2012 at 12:23 am #

      I appreciate your feedback and your passion.

      While I completely understand your reservations, I think you miss out on how this system is much more palatable and conveyable to the average American than volumes of histories and philosophies.

      I can talk to any average Joe or Jane about voluntary contributions and sum up the principle in about 1 minute. The average Joe or Jane is more ready to accept this concept because “government” still exists in the picture, which allows the individual to process the transition.

      The greatest failure of the liberty movement is that they cannot articulate a policy which genuinely moves America toward voluntarism while placating the average voter.

      Again, this model is not starting from the beginning of time without government. It’s entire focus is the current state of people in America with the systems that be.

      If one can articulate a policy which more swiftly and effectively convinces and moves the mainstream toward voluntary living I would love to hear it.

      Until then, liberty uprising is still only a psychology and the people are still subject to taxation. ( :

  2. Paul October 21, 2014 at 12:24 pm #

    Hello, Jaime. I saw your article tilted The Not-For-Profit Government – Toward a New Constitution and I support such an idea. What do you say to people who believe that government is already a nonprofit (not-for-profit) organization, because “it does not make a profit”?

    • Jaime Sherman October 21, 2014 at 3:40 pm #

      Hey Paul!

      Great question! The government isn’t a not-for-profit in terms of how it is run. It uses taxes, not fundraising, to support goals. The government doesn’t make a profit in terms of arbitrage for most of its dealings, but it does take in funds for projects akin to private business endeavors. Also, not-for-profits do not have monopoly status – i.e. real not-for-profits cannot force a single plan or scheme upon everyone.

      I hope that helps!


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