The Laffer curve is about how much imposition or other types of trouble, people are willing to tolerate from their fellows. Arthur Laffer, a professor at the University of Southern California, is supposed to have drawn a bell shaped graph on a napkin once to show that up to an indeterminate but peak point of the curve people are very likely to put up with the burden of taxation. The peak isn’t the same for everyone, but everyone does have such a peak.
In particular the Laffer Curve concerns taxation, by some accounts a form of extortion, which government uses to obtain funds to operate its undertakings, both justified and not. Not unlike how some illegal groups obtain funds, the government threatens heavy fines and jail so those being threatened hand over funds, some who might do so otherwise but most who would otherwise keep them. Since, however, many governments can be voted out of office, the severity of the extortion has to be gauged with the possibility of eventual electoral resistance in mind.
This is no easy task and can often go awry. Yet in most countries tax revolts are relatively rare since few people wish to risk losing their forms of life just so as to retaliate against the powerful forces of the state. This, again, is similar to extortions carried out by some groups in which the victim is given some benefits in order to be placated—e.g., protection from vandalism (the bulk of it initiated by the organization itself).
I wish to suggest that the principle the Laffer Curve identifies is extendable into much more than the sphere of taxation. Any sort of government intrusion is subject to its insight. Censorship comes to mind—a certain amount of it will not be widely resisted, as in Venezuela in our time but once it reaches the proportions of, say, the old Soviet Union, there will be dissidence and the production of samizdat literature. Government regulation, much of it similar to the violating the prohibition against prior restraint—is also subject to it since it is taken to be more trouble at times to resist or oppose via the political process than to comply with it.
Indeed, statism as such is subject to the Laffer Curve analysis—in most societies it is not significantly enough resisted for it to subside, let alone disappear although now and then spurts of serious opposition are clearly in evidence. People subjected to statist measures of any sort simply will not mount effective resistance because to do so may involve greater losses than gains and they are, after all, often able to circumvent it reasonably successfully by using their own intelligence or hiring expert help in the form of specialist in various branches of intrusive law.
Finally, the Laffer Curve is useful, also, to explain why there is not enough political resistance to statism and why only a small percentage of the population bothers to mount any in developed countries where most people live quite well, and where mounting resistance is quite costly, relatively speaking the possibility of success is small while the cost of the revolt is considerable if one includes the loss of many amenities not enjoyed in less developed countries where protests are frequent. In undeveloped countries the situation is different, which helps explain why so often it is in such countries that we see rebellion and revolt against prevailing authorities and why there is frequent regime changes in many of them. Put bluntly, the bulk of the population has little to lose from rising up against the state. That is not so in most developed countries.
The small percentage of citizens who will insist on making an issue out of nearly any measure of statism in developed countries will not manage to achieve regime change, of course, but it will keep the idea alive. Yet this itself can contribute to the ineffectuality of such marginal efforts, since the rest of the population may perceive the small resistance as sufficient and proceed without given it any aid or even much attention.
Is there a remedy or is this normal? In a sense it is normal—most people will put up with some imposition from others. They will accept a certain amount of intrusive noise from neighbors, being bumped on the sidewalk by those who are hurrying to some destination, even some fender bender auto accidents, let alone insults and humiliation. Minor thefts or assaults are rarely reported to the authorities.
What is not normal, however, is becoming habituated to such tolerance for invasiveness from others. Most of us fear the consequences of such habituation—just as we fear being habituated to anything that harms us in the long run even though in the short it may not hurt much.
If it becomes evident enough, via education or examples from other regions of the world, that statism even in small increments has bad overall consequences, that things could turn out measurably better without it, the peak of the Laffer Curve may become more easily reached for the bulk of the people and the level of tolerance of statism could diminish considerably.