|
If the state is privately owned, then the Sovereign will tend
to avoid taxing his subjects so oppressively that he reduces
their incentive to work and earn. If he does so he impairs his
future potential takings, and thereby harms himself. If he
taxes too severely, in other words, the present value of his
estate will fall. To be sure, this Sovereign will tax; but he
taxes subject to the objective that he at least maintains and,
if possible, enhances the present value of his personal
property. For this reason, self-interest will tend to restrain
his tax policies. He will "save" today, i.e., restrain his
present appetite for plunder, in order to "invest" in his
realm and thus reap more booty in the future. The hereditary
monarch who properly understands his own self-interest
recognises that the lower the degree of taxation, the more
productive his subjects will be; and the more productive the
subject population, the higher will be the present value of
the ruler's monopoly of expropriation.
> Private Government Is
Constrained Government
Hoppe provides another reason why the private ownership of the
state will tend towards relatively (that is, compared to a
democracy) moderate and enlightened government. By definition,
the ownership of private property implies either its exclusive
use or the use by others on the owner's terms. It follows that
entrance into the ruling family will be severely restricted.
The larger the ruling family, the smaller each member's
present and future share of the proceeds derived from raiding
their subjects. Self-interest thus implies a relatively small
and cohesive ruling family. Further, if the distinction
between the few rulers and the many ruled is clear, and if
there is virtually no chance that a subject can enter the
ruling family, then the private ownership of the state creates
an unmistakable division between the Sovereign and his
subjects. This rigid divide, in turn, stimulates the
development of clear "class consciousnesses." One infuses the
privileged Sovereign and the ruling family, and the other
permeates his plundered subjects.
Central to the subjects' self-perception is the level-headed
recognition that they are exploited and that their rulers are
plunderers and parasites. The very logic of the privately
owned state, in short, immunises subjects against the delusion
that the Sovereign and his actions are of, by and for the
people. Under these conditions subjects are very unlikely to
develop a psychological attachment or identification to
"their" state because even the dullest subject understands
that it simply isn't. They regard themselves not as the
citizens of state X but rather as the subjects of King Y. The
private ownership of the state thus contains a vital
self-regulating mechanism. The ruler and the ruled are
suspicious of one other, and each is sensitive to his property
rights vis-ΰ-vis the actions of the other. Specifically, the
privately owned state tends to generate hostility, opposition
and resistance among the ruled to any expansion of the
Sovereign's privileges.
> Private Government Gives
Peace a Chance
These two moderating incentives in domestic affairs also
extend to external affairs. Every state, monarchical or
democratic, will if possible pursue an expansionist foreign
policy. The larger the territory and the population over which
its monopoly of confiscation extends, the more numerous and
rewarding the opportunities for and, in all likelihood, the
bigger the proceeds of plunder. In a privately owned state,
the Sovereign's attempt to enlarge the geographic size of his
realm is by definition the ruler's private business. Given the
inherent exclusivity of a privately owned state, and the
resultant resentments, suspicions and clear-headedness of the
ruled, subjects will tend correctly to regard the
Sovereign's foreign policy adventures as things that might
well cost but cannot benefit them. They will be rightly
suspicious of the Sovereign's territorial ambitions, distrust
any rationale for them (such as military glory, religious
redemption, threats from foreigners, etc.) and resent the
taxes they will likely be compelled to pay in order to finance
such boondoggles. Consequently, of the possible methods of
enlarging his realm namely plunder (warfare), purchase or
inheritance a private owner of the state who knows what's
good for him tends to prefer the latter. Instead of conquest,
he will advance his expansionist desires through land
purchases and a policy of intermarriage between members of
different ruling families. In a privately owned state, foreign
policy is a relatively peaceful game of monarchical scheming,
negotiation and manoeuvre. Why risk your estate in battle when
you might defend and even enlarge it in the bedroom?
|
The "Public" State: The Bloodthirsty
God That Has Utterly Failed |
Why, in sharp contrast to an hereditary monarch,
should the agents of democratic states tend almost invariably to have
high time preferences? Why, in other words, do they act and spend
recklessly, obsess about today, ignore tomorrow and thereby squander
and dissipate capital? Why, in short, should politicians in Western
democracies including "fiscal conservatives" resemble nothing so
much as drunken, spoilt and obnoxious teenagers? Hoppe shows that they
are innately unruly because, unlike the monarch, they do not
personally own the monopoly privilege of expropriation and
hence the plunder it has yielded in the past and will generate in the
future. The agents of democratic states merely control the
proceeds of the expropriation that occurs today.
> Democracy Begets Socialism
In a "public" state, the ability to bully, coerce and intimidate lies
temporarily (until the next election) in the hands of a particular set
of "trustees" selected by subjects. In this asylum, the voter can
choose candidate X or party Y. She can select a package of coercion
such that her surrender of property is somewhat lessened (this occurs
far less frequently than people seem to think), or she can vote to rob
her neighbours and help herself to some of the booty. Critically,
however, she cannot completely reject or exempt herself from this
criminality. Like a resident of a mental institution, she can select
among trivial alternatives. She can choose either more pudding at
dinner or more time to watch TV or a later bedtime; and if her choice
"empowers" her, then so much the better. But make no mistake: the
agents of the democratic state remove fundamental decisions from her
hands. Most importantly, she cannot under any circumstances elect to
leave the asylum.
A critical ambiguity and source of resultant calamity thus lies at the
very core of the "public" state. It is unclear who, if anyone, owns
the democratic state's "property" that is, what its agents have
robbed from their subjects. As a result, insoluble problems of
"corporate governance" bedevil it. Clearly, however, this plunder does
not belong personally to the state's agents. They cannot bestow it or
their privileged positions on their heirs. More generally, eyebrows
are raised when these agents sell or rent the state's property and
personally pocket the receipts. Civil servants the servants of the
state thus control the current income derived from plunder,
but they do not personally own the underlying assets or capital
base.
The politician's status as the temporary hand at the criminal
syndicate's helm profoundly shapes his incentives. It thereby
determines how he conducts his incursions upon his subjects. Assuming
that he is self-interested, the politician will strive to maximise the
state's current income that is, to dispense as many favours as he
can upon himself, his followers and mascots. He must live and spend
for today because he may not survive the next election. Better,
therefore, to plunder his subjects now rather than risk leaving booty
for his political opponents. They, after all, will use the state's
income to entrench themselves and thereby exclude him and his henchmen
from the levers of privilege. The politician in the democratic state
therefore has every incentive, knowingly or otherwise, to consume and
impair his subjects' capital. He cares little or nothing if he boosts
the state's current income at the expense of a more-than-proportional
decrease of his subjects' assets. To expect a politician to act
prudently in the present, and to believe that he can plan sensibly for
the future, is utterly to misunderstand the nature of the beast and
its habitat. It is to believe, in effect, that a Tasmanian devil can
become a docile vegetarian.
If the state is "publicly" owned, then the "successful" Sovereign
the one who (or the coalition that) repeatedly wins elections must
maximise the State's current income such that he pleases the majority
of his subjects. As a result, he will invariably undertake a policy of
divide and rule. He will attempt to focus his plunder upon the
relatively few (i.e., rob Peter) and use the proceeds to generate
electoral support from the relatively many (i.e., pay Paul). The
"redistribution" of income, both overt (through taxes) and indirect
(i.e., via regulations, deficit spending and the central bank's
inflation, etc.), is thus an inherent and inescapable curse of
democracy. Because the incumbent Sovereign must constantly outbid
wannabe Sovereigns, the extent of redistribution-by-plunder and
hence the burden of taxation and regulation will inexorably rise.
Elections thereby become beauty pageants contested by artful dodgers
and ugly liars. They are, as H.L. Mencken knew, auctions on the
redistribution-in-advance of stolen goods.
The successful politician, then, is necessarily disingenuous and
duplicitous. He is also cunning: he will tend to avoid taxing so
heavily and overtly that he raises his supporters' ire. (His
opponents, on the other hand, can go to Hell). Indeed, he may even
champion "tax cuts." But draconian cuts of expenditure that is, the
relaxation of pillage and the move towards compassion and justice are taboo. Instead, the winning politician will gravitate towards
indirect, less visible and thus more insidious forms of assault such
as deficit finance and inflation.
> Democracy Means Ruinous Debt and
Malinvestments
The democratic state, in other words, is very likely to accumulate a
large and ever-expanding load of debt. A monarch by no means eschews
debt, but as the realm's personal owner he faces a significant
constraint: he and his heirs are personally liable for the repayment
of their debts. Because they are his (or his heirs') debts, he can be
- and, as history shows, occasionally has been forced by his
creditors to liquidate assets. In diametric contrast, because the
agents of the democratic state do not personally own the state's
property, they are not personally liable for any of the debts they
incur (or, more generally, for any of the monumental wastage and loss
of property that routinely occurs) during their tenure. In a
democracy, unlike a monarchy, the ownership of the state's property is
indeterminate; accordingly, the personal economic responsibility of
politicians simply does not exist. In a democracy, the "responsible"
politician is simply a figment of the imagination.
The debts that politicians incur are "public debts" that will
allegedly be repaid by future (and equally unliable and hence
irresponsible) politicians. If you bear no personal liability for any
debts you incur, then the temptation to abandon prudence and indulge
yourself and your mates becomes irresistible. What better way to boost
consumption today? And who cares if this consumption comes at the
expense of investment today and thus consumption tomorrow? Similarly,
who cares (or even knows) that an orgy of debt-financed consumption
tonight necessitates a hangover of rising direct taxes (or indirect
taxes like the central bank's inflation) in the morning? The logic of
a "public" state, for both rulers and ruled, is therefore to spend
today and forget tomorrow. As time preferences rise, present
consumption and short-term speculation flourish and long-term saving
and investment flounder.
The agents of the democratic state, then, inevitably distort the
country's structure of production and erode its base of capital. Over
the decades they crimp and in some democracies have destroyed standards of living. But the democratic politician has little
incentive to know about the long-term destruction his policies wreak;
and if he does know, he has not much reason to care. These things are
problems for politicians well beyond the next election; as such, they
are utterly irrelevant for today's politicians (and most voters).
Unlike the monarch, then, self-interest provides no incentive for the
democratic Sovereign to restrain his predations upon his subjects.
Quite the contrary: he will intensify plunder in the present in order
to secure his popularity and reputation for "compassion." In the
democratic state, the politician recognises that the less obvious the
taxation and the more visible its redistribution, the more grateful
and unified his supporters will be; and the stronger his coalition,
the greater the chance he will carry the next election. Accordingly,
the constant consumption of capital and consequent erosion of the
country's capital base is an unavoidable consequence of democracy.
Unlike a monarch, for a politician a policy of prudence and moderation
offers only disadvantages. Destruction and extremism, on the other
hand, promise popularity and victory at the polls.
> Democracy Corrupts Property Rights
Some of democracy's most sinister characteristics are so subtle that
they are almost completely unrecognised. When a state moves from the
monarchical towards the democratic end of the continuum, its
interpretation of its monopoly of "public" violence changes initially
imperceptibly but ultimately dramatically. Assuming self-interest, a
monarch will (notwithstanding his exceptional status) seek to enforce
pre-existing body of property law. As a property owner, he has an
incentive to assume, accept and encourage private ownership. That,
after all, is the basis of his rule. Critically, therefore, he does
not create new law; he merely occupies a privileged position within an
existing and all-encompassing system of private property law. With one
exception, namely the monarch's privileges, in the "private" state
property rights tend to be clear and secure.
In diametric contrast, when the state is "publicly" owned and
administered, a new type of "law" that is, legislation and
regulation necessarily emerges. "Public" law makes de jure
something that the indeterminate ownership of the state's property
creates de facto. It exempts the agents of the state from any
personal liability for the consequences of their actions. It also
excuses "publicly owned" resources from the same standard demanded of
private resources. Accordingly, "public law" such as constitutional
and administrative law is "higher" law in the sense that it subsumes,
and thus erodes, private law in general and private property law in
particular. In a democracy, in other words, private rights are
increasingly subordinated to and eventually displaced by the state's
privileges.
This development (and the redistribution of property, profits and
incomes more generally) has a subtle but profound effect upon
subjects. In Hoppe's words, "the mere effect of legislating of
democratic lawmaking increases the degree of uncertainty. Rather
than being immutable and hence predictable, law becomes increasingly
flexible and unpredictable. What is legal and illegal today may not be
so tomorrow. The future is thus rendered more haphazard. Consequently,
all-around time-preference degrees will rise, consumption and
short-term orientation will be stimulated, and at the same time the
respect for all laws will be systematically undermined and crime
promoted (for if there is no immutable standard of 'right' then there
is also no firm definition of 'crime')."
> Democracy Undermines Morals
Any redistribution of wealth among subjects necessarily means two
things. First, recipients of largesse do not produce more or better
goods or services, but nonetheless benefit. Second, the victims of
redistribution do not produce quantitatively or qualitatively less,
but they still suffer. To abstain from production thus becomes
a relatively more attractive proposition. As a result, the degenerate
logic of democracy encourages more people to produce less and to
display poor foresight; and it penalises people who strive to produce
more and to anticipate consumers' demands for goods and services. In
the democratic state, no vice goes unsubsidised and no virtue goes
unpunished.
As a result, the policy endemic to democratic states which
invariably entail greater expenditure and more impenetrable regulation
will inexorably create more poor, unemployed, uninsured,
uncompetitive, hapless, hopeless, homeless and otherwise idle people
than would otherwise exist. That is, the very "problem" that the
redistribution is supposed to cure will inevitably grow bigger.
Accordingly, and in the sense that the ratio of able-bodied and
productive people to the total population will constantly fall, the
cost of maintaining the existing level of redistribution will
relentlessly grow. In order to finance this growing burden,
ever-higher taxes and more extensive confiscation of wealth must be
imposed upon the remaining producers. The tendency, then, is to
corrupt incentives, and hence subjects' focus, from production to
idleness. Entitlement and subsidisation, in turn, beget
infantilisation and demoralisation what Hoppe has called
"decivilisation."
> Democracy Breeds Collectivism and
Nationalism
In a democracy, it takes two to tango. No politician, in other words,
can succeed without the active and often enthusiastic connivance of
voters, bureaucrats and judges. For this reason, too, the "public"
ownership of the state tends towards relatively (i.e., compared to an
hereditary monarchy) extreme, erratic, arbitrary and regressive rule.
In a democracy, entry into the political class is not completely open,
but the class barrier is much more permeable than in the privately
owned state. And anyone, in theory, can become the Sovereign. It is
true that the larger the political class, the smaller the average
member's share of the proceeds derived from pillaging subjects. At the
same time, however, the larger this class the more likely it is that
any particular individual who seeks to enter it will successfully do
so. The calculus of democracy thus mandates a large, growing and
amorphous political class. In a democracy, the distinction between the
not-so-few rulers and the many ruled is hazy, and there is a
reasonable-to-good chance that a sufficiently determined (i.e.,
sociopathic) individual can enter the political class. Hence a "class
consciousness" tends to be present within the political class
but absent among the subjects it ransacks.
For these reasons, central to subjects' self-perception as "citizens"
is the delusion that democracy means the rule of the people, by the
people and for the people. Equally delusional is the universal and
usually fervent belief that in a democracy the "leaders" create
"rights" and enact "policies" that benefit the people (particularly
poor people). The very logic of the democratic state distracts its
subjects from the central reality that their rulers are grafters,
scoundrels, brigands and leeches. The "public" state, in short,
creates a mass
Stockholm Syndrome: almost without exception, not only do subjects
worship the very state that marauds them; they also denounce any
opposition and resistance to the expansion of the Sovereign's monopoly
of "legitimate" coercion and violence. The democratic state thus lacks
any self-regulating and moderating mechanism. Most dangerously, it
tends to stifle opposition and resistance among the ruled to any
expansion of the Sovereign's desire to plunder.
Under these conditions, subjects eventually develop a psychological
attachment or emotional identification to "their" state and hence a
distrust of the state's critics and a dislike of other states'
subjects. Collectivism and nationalism, in other words, either
accompany or follow quickly in democracy's footsteps. The consequences
are catastrophic (see in particular Anthony Gregory's "Nationalism
and Anti-Americanism" and "Amerika
άber Alles vs. America, Land of the Free"). The fanatical
nationalism prevalent in "red" parts of the U.S. and the chardonnay
anti-Americanism that contaminates dinner parties in upscale parts of
Australia, Britain and Canada, for example, relies upon an identical that is, collectivist
impulse. To the American jingoist and the
leftie anti-American, the U.S. is a single, homogeneous entity not a
variegated collection of roughly 300 million individuals. To both
types of collectivist, the U.S. Government is a mirror image and
perfect microcosm of that allegedly uniform country and its supposedly
monochrome economy.
Accordingly, to the hyper-nationalist, the U.S. Government and
particularly its military embody all that is good in the American
people; and to oppose the invasion of Iraq or Afghanistan, or the U.S.
military or the political class of Washington more generally, is to
"hate America." And to chardonnay anti-Americans, the U.S. Government
and particularly its foreign relations encapsulate all that is
reprehensible in the American people. As far as they are concerned, to
admire America's Jeffersonian heritage, the vigour of its innovators
and the warmth, decency and generosity of the vast majority of its
inhabitants is automatically to support holus-bolus the incumbent
rιgime's foreign and domestic policies.
Hyper-Americans and anti-Americans agree that America's essential
character is synonymous with the Leviathan in Washington and its
aggressively interventionist policies. Their only disagreement is
whether these policies are good or bad. Only somebody who believes fervently
that the U.S. Government is America and vice versa could
entertain such idiotically confused views. But that's collectivism for
you.
> Democracy Foments Total War
The malign incentives that facilitate economic warfare in domestic
affairs extend to foreign affairs. In a "public" state, everything
including the Sovereign's attempt to enlarge the geographic size and
external power of the realm is by definition everybody's business.
In a democracy, subjects will tend to regard the Sovereign's foreign
policy adventures as things in which they have every interest after
all, "national security" and "national pride" are at stake.
Accordingly, subjects will cheer "their" Sovereign's territorial
ambitions and will blindly embrace any rationale, no matter how
fraudulent and absurd, used to justify them. Further, surprisingly few
peaceful means of enlarging the realm are available to the agents of
the democratic state. Because they cannot bequeath the state to their
heirs, intermarriage with agents of other states is pointless. That
leaves plunder (warfare) and purchase. But when subjects' blood is
boiling, and national honour and security are allegedly at stake
(which in a democracy they often seem to be), purchase at any price,
let alone a reasonable one, is simply not an option. Democracies, in
short, resort to war much more quickly than monarchies; more
generally, "public" states are inherently more belligerent than
"private" ones.
Even worse, democracy not only increases the likelihood but also the
intensity of war. Monarchical wars are characterised by dynastic
objectives; and given the monarchy's basis, these objectives are
usually private and territorial. Because the monarch's subjects lack
any emotional attachment to the state, his quarrels are seldom
ideologically motivated: they are usually simple disputes over
specific properties. Moreover, because the monarch's subjects rightly
recognise that they have nothing to gain but much to lose from his
foreign interventions, they expect (and monarchs feel compelled to
recognise) a clear distinction between combatants and non-combatants.
The democratic state, on the other hand, blurs the distinction between
rulers and ruled, and thereby fosters subjects' emotional
identification with "their" state. It also encourages subjects to
regard themselves as a distinct and righteous "people" with particular
"interests" and a glorious destiny which, of course, only the state
can protect and advance.
Itself an aggressive ideology, democracy breeds another aggressive
ideology: nationalism. Hence the wars of democratic states are
nationalistic and ideological wars. No longer merely private haggles
over particular pieces of property, democratic wars become zero-sum
crusades between ideological, linguistic, ethnic, or religious groups.
As such, they cannot be resolved through negotiation but only by means
of ideological, cultural, linguistic or religious domination or
extermination. In the wars that democracies wage, it thus becomes more
and more difficult for members of the general public (whether they
reside within a combatant or non-combatant country) to remain neutral.
Resistance against the higher taxes required to finance a war or to
war itself is regarded as treachery or even treason. Conscription of
labour and property, a euphemism for slavery, becomes the rule rather
than the exception. The wars democracies wage take masses of human
cannon fodder and then back them with the economic resources of the
shackled nation-state. Democratic wars, in short, tend to be
ideological, collectivist, nationalistic and hence total wars. In
fights to the death for national supremacy (or against national
suppression), all distinctions between combatants and non-combatants
disappear. Wars among many "public" states are thus indescribably more
destructive and cruel than are wars between two "private" states.
|
Do You Love Liberty? Then Denigrate
Democracy |
Austrian School economics begins with a handful of
elementary, a priori and hence unarguable axioms. Most notably, nobody
can purposefully refrain from action; the intention of every action is
to improve the actor's subjective well-being; production must precede
consumption, and so on. From these axioms, an extensive body of
knowledge the laws of human action have been deduced. More clearly
than two of its giants of the twentieth century (namely Ludwig von
Mises and Murray Rothbard), Hans-Hermann Hoppe has deduced one of
these laws: private property (i.e., individual ownership and rule) and
democracy (i.e., collective ownership and majority rule) are
incompatible. It's either one or the other. Why prefer private
property? Answer: it and not democracy is the ultimate source of
capital, its accumulation, prosperity, peace and therefore
civilisation (see also Hoppe's new book
The Economics and Ethics of Private Property).
Because it pierces the fog and cauterises the delusions that presently
envelope us, Hoppe's conclusion is fundamental. But as he recognises
and emphasises, it is hardly new. America's Founders knew it well, and
Canada's Founders understood it even better. Accordingly, they
attempted vainly, as many of them feared to build bulwarks against
it. Albeit through distinct paths, these countries' greatness is not
that they have become democracies: it is that they successfully
resisted democracy so long. In the U.S., the last-ditch defences were
overrun during the Great Depression and the Second World War. But well
into the twentieth century, leading people in both countries viewed
democracy and the state more generally through clear and
unsentimental lenses.
In "The Smart Set" (1922), for example, H.L. Mencken sagely observed
"democracy does not promote liberty; it diminishes and destroys
liberty." In "Last Words" (1926), he added "all the great tribunes of
democracy
convert themselves, by a process as simple as taking a
deep breath, into despots of an almost fabulous ferocity." Democracy,
Mencken concluded, "is incomparably idiotic, and hence incomparably
amusing. Does it exalt dunderheads, cowards, trimmers, frauds, cads?
Then the pain of seeing them go up is balanced and obliterated by the
joy of seeing them come down. Is it inordinately wasteful,
extravagant, dishonest? Then so is every other form of government: all
alike are enemies to laborious and virtuous men."
During these twilight years, even a few of the agents of the state
possessed a coherent conception of democracy. Perhaps most notably,
the U.S. Army Training Manual of 1929 defined "democracy" in
these words: "a government of the masses, authority derived through
mass meetings or any other form of direct expression; results in
mobocracy; attitude toward property is communistic negating property
rights; attitude toward law is that the will of the majority shall
regulate whether it is based upon deliberation or governed by passion,
prejudice, and impulse, without restraint or regard to consequences;
its result is demogogism [sic]
"
It is therefore utterly absurd to contend, as Francis Fukuyama and the
swarming legions of neoconservatives do, that liberal democracy is the
best conceivable social-political system. It neither fosters "freedom"
nor augurs "the end of history." This, the neocons' central assertion,
reveals their capacity for mendacity or self-delusion rather than
insight (see in particular "Neo-CONNED!"
by Ron Paul). When applied to the topsy-like spread of democracy, the
Whig conception of history, by which mankind marches erratically
towards ever-higher levels of progress, is flatly wrong. For people
who prefer less exploitation rather than more, who value
farsightedness and individual responsibility and eschew
shortsightedness and irresponsibility, and above all who love peace
and loathe war, the transition from private to public government
provides grounds for mourning rather than celebration.
"Whoever wishes peace among peoples must fight statism," said Mises.
Consequently, whoever fights statism must also fight democracy. As his
life demonstrates, it is entirely possible to struggle peacefully as
well as successfully.
What To Do? Nothing. Or, rather, disengage. How to disengage? A
good first step is the denigration and delegitimisation of democracy
and therefore of high taxes, growing debt, socialist government and
total war in the marketplace of ideas. Perhaps the growing revulsion
against the neoconservatives' wicked deeds in Afghanistan, Iraq,
Guantαnamo (and who knows where else?) will increase the likelihood
that they become history rather than terminate it.
|
