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Enterprise, Number 14, September 15, 1996.
Liberty Leasing
A Modest Proposal for Freedom in Our Time
By L. Reichard White
[email protected]Exclusive to The Libertarian Enterprise
Suppose a company, called perhaps "Liberty Leasing" (L.L.), could approach an employer with the following proposition: "I can take over your legal liability for employing your worker, John Freeman, and your total cost of employing him will be 5% less than it is now." At the same time, suppose Liberty Leasing (L.L.) could give John Freeman a 15% increase in take-home pay --- and could make 10% for itself as well.
It has become a relatively common practice among some businesses to sub-contract the job of paying, maintaining, and sometimes even hiring and firing, their people. The companies which take over this job are called "employee leasing" businesses because they literally lease a company's employees TO that company. The main reason for this is the complexity of meeting government rules, regulations, orders and controls, etc. incurred in hiring under federal and state jurisdictions -- and the potential legal liability of even minor infringements. For example, are the people you pay "employees" -- or are they private contractors? If you think they're private contractors but the IRS arbitrarily claims they are employees, you'll be hit with big fines and back taxes.
An employee leasing company takes on the legal liability of seeing that, according to government red tape, all the i's are dotted and all the t's are crossed. In return, the company buying these leasing services pays "cost plus." The cost includes ALL the real costs of hiring someone, including FICA, unemployment insurance, etc. The "plus" is usually in the neighborhood of 5% of the cost. A company leasing its employees from an "employee leasing company" has in effect turned all administration costs, and all responsibility and liability for the statutory legalities of hiring its people over to the leasing company. In a sense, it's a form of litigation insurance.
Rather than collecting the "plus" from the employer, why does L.L. instead reduce the employer's over-all cost by five percent? The idea here is to encourage the employer to free someone, not to make more money. The company may not have used employee leasing before. It may be something new to them and they may have to install new accounting methods and software, etc. In the long run perhaps, L.L. CAN charge cost plus. Time and the market will tell.
But what makes the figures in the opening paragraph possible? How could a company lease from Liberty Leasing and pay LESS while John Freeman takes home more? Those figures are based on the assumption that the real cost a business incurs in hiring under USA Corp. jurisdiction is about 30% above the true free market price, and that L.L. does not operate within the *U*nited *S*tates. (Those of you who don't understand this notion yet can learn some VERY interesting things by looking into it further. *1) I believe 30% is a VERY conservative figure. Anyone out there have a more solid figure than 30%?
Of course, John Freeman would have to opt out of USA Corp. jurisdiction *2 -- or already have done so. *3 He would have to understand he no longer had any claim on Federal Government-provided "safety nets" of any kind. Perhaps Liberty Leasing might provide some alternative free-market insurance/retirement options, etc. at a competitive price for any who desired them. These would have to be a better value and safer than those provided by Washington if they were to sell.
Ten percent for Liberty Leasing is not userous: Before it ever opened its doors, L.L. would have to have it's legal status and attack response plans IN ORDER. It would probably want to be operating as some sort of common-law trust -- but leave that to the experts. And it would want to have "the experts" on retainer and on call. Any of you experts out there interested? You KNOW Liberty Leasing WILL be attacked. In fact, 10% might not be enough for L.L., especially at first -- unless there are some experts out there willing to donate their time or perhaps accept capital shares? Liberty Leasing would probably first want to try itself out only leasing people already VERY well versed in their rights, and aware of the dangers, etc. This would help gauge government response. You'd probably want to get the algorithm down cold before you made the service available to a wider group.
The advantages of such a program to spreading the option of freedom are great. There are many people -- I've talked to bunches of them -- who'd like to opt out of the system but they still need their jobs. They don't know how to go about it, and particularly, how to approach their employer. Companies don't want the hassle of dealing with a concept and paper-work they don't understand, let alone the IRS, etc. Liberty Leasing would eliminate both these problems. A representative would approach the employer with a developed, logical, presentation, and the lease would take the employer off the legal hook -- and save him money as well. There must be some sympathetic employers out there who would be willing to try this out. Are you one? This could make the impossible easy for many who want to opt out.
Clearly, this is only a very preliminary proposal. Is it plausible? Are you interested? Do you have any relevant info, experience, or suggestions? Are you an interested expert? I will be happy to act as a clearing house for information and development. If someone else wants to do it, that's fine too.
Permission to re-post granted. Re-posting encouraged!*1 See "THE FEDERAL ZONE" by Mitch Modeleski, available for $40 from Account for Better Citizenship, PO Box 6189, San Rafael, California Republic, Postal Zone 94903-0189/TDC for starters. Back to Text
*2 United States Federal Jurisdiction is Constitutionally limited to Washington D.C., Guam, Puerto Rico, The US Virgin Islands etc. and areas specifically ceeded to it by the various States for particular purposes such as military bases. See United States Constitution, Art. 1, Sect. 8, Clause 17. In essence, you are not under USA Corp. jurisdiction if you do not live within these territories --- unless you have signed contracts or agreements with USA Corp, such as Social Security, etc. Such contracts _may_ be recinded on the basis of fraud, misrepresentation, duress, unconscionability, undue influence, mistake, etc. Back to Text
*3 Businesses already operate outside USA Corp. jurisdiction within various states. Anthony Hargis runs a free market bank in Southern California -- I have an account there. He's been in operation for more than ten years. Harry Plott operates a collection of free market businesses from his base in Florida. Reportedly there is a furniture store in Oklahoma and a printer in Los Angeles. Back to Text
L. Reichard White lives six houses up from the old Black Horse Tavern, a birth place of the Whiskey Rebellion -- which explains alot. His current project is a revision of historical perspective, based on the theory that many modern problems find their basis in small-group altruistic instinctive drives which make dupes of us in modern history's large super-groups. He has supported his writing habit for over twenty years by beating casinos at their own games.
Imagine a government bent on sharing its sensitive, caring, environmentally friendly ways with an entire universe. Then imagine the army it needs. CLD - Collective Landing Detachment. Dark military SF. By Victor Milan. From AvoNova.