By Donald Boudreaux
Published: Tuesday, May 22, 2012, 5:40 p.m.
Eduardo Saverin is very wealthy. Although only 30, he's already a billionaire. Mr. Saverin's wealth is the result of his $30,000 investment a while back in Facebook.
At the time Saverin made that investment, Facebook's economic prospects were hardly clear. Committing $30,000 to an upstart enterprise was risky.
Of course, in this case, Saverin's risk paid off. Facebook is today a globally popular social media site whose huge customer base proves that it is unusually effective at satisfying consumer demands. So not only did Saverin gain by taking a risk to help create such a productive company, but Facebook's nearly 1 billion users -- few of whom personally risked a dime of their own wealth to make Facebook a reality -- also benefit from Facebook's development.
But Saverin has angered politicians on Capitol Hill by renouncing his U.S. citizenship. The popular assumption (which likely is correct) is that Saverin took this step to avoid having to pay punishing U.S. taxes on his newly acquired fortune.
U.S. Sen. Bob Casey (D-Pa.) and U.S. Sen. Chuck Schumer (D-N.Y.) introduced legislation that would not only increase the monetary penalties on wealthy people who renounce their U.S. citizenship, but would also prevent such people from ever again visiting the United States.
The first word that comes to mind when contemplating Casey's and Schumer's proposed statute is "disgusting." The second word is "scary."
In 1944, F.A. Hayek published a book soon to become, and to remain, a classic: "The Road to Serfdom." In it, Hayek carefully explained how each bit of power that people cede to government -- regardless of their motives for doing so -- is another paving stone on the road to serfdom.
The laying of any one stone might not be much; putting just one or two more stones in place does not itself catapult a society into serfdom.
But keep laying the stones, one after another after another. Eventually, the road is fully paved. We look up from our labors of seeking ever more privileges from government to find we are serfs.
I don't think that we in America have quite yet reached serfdom, although we're closer to that contemptible condition today than we were 10 years ago. But Casey's and Schumer's effort to punish Saverin for giving up his U.S. citizenship serves as an especially concrete warning that, unless we mend our ways, serfdom isn't far off.
The abject state of medieval serfs, remember, was grounded in the belief that each serf was bound to a particular manor -- that each serf was the near-slave of a particular lord -- that the lord, his family and his armed henchmen enjoyed both the power and the right (by grace of God, by God!) to keep each serf in bondage (with brute force, if necessary) and to expropriate huge quantities of the fruits of serfs' labors. No serf could lawfully choose to unbind himself. He was stuck. He was the subject, and his lord was his master.
Serfs could vote with neither their earnings nor their feet.
Do not Casey and Schumer act as if Saverin is an American serf? Do not these elected representatives of an allegedly free people wish to tie down productive Americans to a particular manor (the United States)? Do not these politicians arrogantly presume that the fruits of American entrepreneurship and effort belong first and foremost to the lords of the manor, sitting in their gaudy thrones on Capitol Hill?
Donald J. Boudreaux is a professor of economics at George Mason University in Fairfax, Va. His column appears twice monthly.
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