Does Ayn Rand's acceptance of Social Security payments invalidate her case for laissez faire capitalism?

This question was submitted by two people -- Sam and Stuart -- but my attempt to "combine" the questions resulted in its deletion. So I resubmitted it.

I have heard this criticism brought up numerous times myself. Typically, the criticism is characterized in the following way: Ayn Rand accepted government money while simultaneously decrying state coercion, therefore she is a hypocrite. However, I believe the premises of this critique are flawed. The government does not in any legitimate sense own anything including the money it at any point possesses. This is so because states are financed through coercive means, i.e. theft (states are not productive institutions). Like the rest of the American public, Ayn Rand was a victim of state-sponsored theft for much of her adult life, so any funds she received from the state coffers should be properly conceptualized as returned stolen goods.

As for the broader argument that free-market advocates should not use government-financed services, a similar principle applies. Government roads, libraries, post offices, etc. have all been financed by means of coercion. Furthermore, the majority of these institutions exist primarily, perhaps exclusively, due to monopolistic legislation (in other words, coercion) designed to safeguard state interests. The post office, for example, is shielded from competition in a variety of services.

But even ignoring all of that, simply ask yourself what the logical consequences of this argument are. Let us presuppose that it is in fact wrong for free market advocates to use any state-financed services or goods of any kind. Further, suppose the United States government decided to adopt a socialist market scheme vis-à-vis the ownership of production goods. How could a free market advocate survive in such a state?

Imagine another scenario: Bob is a free market advocate, and buys a house 10 miles outside a rural town. He owns a farm, and typically uses his private dirt road to get to town to sell his produce. One day, the state comes in and appropriates his private road via eminent domain. Not only that, his entire property is now literally enclosed by this road -- he can not possibly get to town, not to mention off his property, without using, albeit briefly, a state-financed road. Since Bob is a free market advocate, he is now faced with a dilemma: he can either remain in isolation and eventually starve to death, or use the state-sponsored road and abandon his free market views.

One must not fall victim to the notion that the state is a provider of services akin to a private enterprise. It is a gigantic difference of kind. The state is a coercive institution, and every subsequent 'service' it offers is an extension of its coercion. Replace 'state' with 'gang' and reexamine the issue: if you were a free market advocate and lived in a small town, and your neighbors Jeff and Todd came around to everyone's house and demanded you pay them 40% of your income or they would lock you in their basement for 5 years, and then used that money to build the only roads in town and employ security forces to prohibit the construction of any private roads, would you be in some bizarre sense morally obligated to avoid using Jeff and Todd's roads?

Everyone lives in the real world and chooses actions per the law of human action. There is no hypocrisy in living in the real world while advocating changes to it.

Many folks believe that by labeling someone a hypocrite they do not have to understand that persons perspective. It is an easy out for people who do not value knowledge and understanding as highly as they value judging and labeling others.

My take is this: I consider this sort of tax to be theft. There is no moral failing in accepting the return of one's stolen property. If the theif is much stronger than you you may have to accept less than ideal terms regarding the return of your property, but that's simply picking one's battles. So long as you only get back what you put in, plus any interest gained by the use of your property, there's absolutely no moral failure. To argue otherwise is to argue that a theif has the moral right to your property, while you do not! An argument may be made that one should seek better terms, or refuse to deal with theives at all, but that's an issue of application, the conditions of each individual will determine which is the best option. Since the state will not return the stolen goods except under certain conditions, and fighting this won't result in any success, it's not immoral to accept those conditions.

I've stewed on this issue for years, ever since I chose to collect some state family medical leave funds, rejoicing in getting "some of my money back", but later regretting my participation in an immoral system. Here are two more ways to look at this issue, and why I am filled with regret:

1. Bad:
What was stolen from Rand in the months/years prior, was then spent nearly immediately, and ended up in some bureaucrats' pockets, and in some program beneficiaries' pockets. For her, at a later time, to herself become a recipient of program funds, fresh funds from fresh victims must be stolen anew from different people. Thus she is party to new theft, claiming it is justice because she was once stolen from. I'm sorry, but you dont get to steal from Bob because James stole from you first. Two wrongs don't make a right.

Analogy: That stolen property is destroyed and can not be recovered - it is akin to stealing Joes dinner and feeding it to Sara - it is destroyed, consumed immediately. There is no preservation or creation of wealth involved. The only way for Joe to later become a recipient of the program himself, is to steal yet someone else's dinner. Joe should not be perpetuating more theft because he was stolen from first.

2. Maybe not so bad:
Joe doesnt really perpetuate more theft to become a recipient, because the government just keeps right on stealing fresh dinners anyway, whether Joe gets one or not - it is not a supply/demand mechanism afterall, it is a completely artificial government-enforced one. Or is it? It may very well be that the more people who ask for a new dinner, the more that "demand" will be cited by bureaucrats as reason to steal even more. So I can conceive that being a recipient is in a way assisting in, pushing for, fueling, demanding, voting for - the perpetuation of an immoral system.

What if so many people refuse to consume that the result is a huge surplus of funds stolen vs consumed? Wouldnt that help validate an argument for reducing that tax/that system? That would indeed give leverage in the right direction. So I still think that even though the Gov. keeps right on stealing whether we choose to consume those stolen goods or not, our refusal to consume them is the moral action, and could add up to a countering force against the theft.