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Theory, History, and the Prospects for Liberty

Mises Daily: Tuesday, September 25, 2001 by


Democracy: The God That Failed. By Hans-Hermann Hoppe. (New Brunswick: Transaction Books, 2001) $24.95.

Some believe that Western—and with it, American—thought on politics and society has come to an embarrassing halt. Hans-Hermann Hoppe’s long-awaited book on political theory is determined to show that history has not failed to end with the social democratic consensus but rather is just beginning.

Democracy: The God That Failed (New Brunswick: Transaction Books, 2001) breaks new ground by bringing the Austrian economics of Ludwig von Mises and Murray N. Rothbard to bear on history and attempting a broad sociological reconstruction of the modern world. The rationalist exposition has left standing few obstacles to a vision of a social order securely grounded in private property, the "natural order."

Aided by a few certain propositions sometimes confined to a narrow conception of economics, Hoppe seeks the inner logic of political-economic change over time. Thus, we act in a world of scarce resources, and our actions inevitably involve time preference, disutility of labor, and other things grounded in the nature of human action. Two chapters apply these concepts to shed light on the origins of civilization. Development of resources by first appropriators, who exchange goods among themselves, leads over time to falling rates of time preference, and thus to the growth of civilization. To the extent that property is secure, capital accumulation and higher incomes follow, for those participating. 

The civilizing process, grounded on private property, allows for learning and improved knowledge of productive processes, further raising the level of social life. Criminals undermine social happiness, but states—where they exist—pose a much greater threat to property, liberty, and civilization itself.

Criminal and state activities, in fact, resemble natural disasters in their effects.

States’ predations are far more costly because states enjoy legitimacy. The key to their behavior is their successful claim to a territorial monopoly of provision of defense services (protection) at prices set by themselves (compulsory taxation). One can foresee that states would likely break down civilizing processes through violations of property rights. Recent events have served to underscore Hoppe’s emphasis on provision of protection as the central issue in political theory. States justify their activities (and territorial monopoly) largely on the claim that they do protect their subjects; when they manifestly fail to do this, questions necessarily arise about their whole project.

A territorial monopolist can do much harm while his legitimacy in the eyes of the public lasts. Further, different forms of state impose systematically different results on society (p. 17). The comparison is not in favor of democracy. A king, as a private "owner," in effect, of a monopolistic protection racket, can violate property rights but also has incentives to restrain such violations, to "invest" in, and improve, "his" society. Elected officials, by contrast, can only exploit current state income, and have positive incentives to maximize their looting while they hold office. 

One might, therefore, expect democracies to be much more expensive than the old territorial monarchies, and Hoppe provides ample evidence of this. War, too, changes its character under democracy; instead of being fought over minor territorial issues, wars under mass democracy are fought over ideological issues, giving rise to total war. Soldiers—now "cheap" because of democratic conscription—can be used up in unprecedented numbers; whence the Western front in World War I.

Open competition—free entry—to political jobs, allows people to express their envy and argue for the expropriation of others. Potential political parasites become far more numerous than under monarchy. Growing "democratic" demands on property shift people’s time-preference schedules toward short-run consumption, short-run thinking, and capital decumulation. The outcome is "decivilization," and "formerly provident providers [are] turned into drunks or day-dreamers, adults into children, civilized men into barbarians, and producers into criminals" (p. 15). Any resemblance to the last century is not the author’s fault.

Democratic, "publicly-owned" governments, administered by short-term officeholders, generate endless new "laws," marked by nothing so much as their unpredictability: "what is right and wrong today may not be so tomorrow" (p. 31). Money, too, fluctuates in the form of mere paper tokens created by fiat. Taxes rise and never come down. Minute regulation of private business and redistribution of wealth by winning political coalitions speed up the shift in time preference schedules. Subsidization of bad behavior, shortsightedness, etc., creates more of those things. State growth under democratic auspices leads to "capital consumption, shrinking planning horizons and provisions, and a progressive infantilization and brutalization of social life" (p. 40).

All this contrasts starkly with a "natural order" resting on private property. The key mistake of eighteenth-century reformers was to think that monarchy itself was the problem, the lone source of war and oppression. But "the problem lay with monopoly, not with elites or nobility" (p. 72). Opening up that monopoly to democratic competition has only worsened things, four or fivefold. 

Society’s Destructive Protectors

Hoppe then treats the origins of society in reason and self-interest. The natural order arising there from calls up feelings of social solidarity, rather than the other way around. He has already noted that democracy, by blurring the distinction between ruler and ruled, lessens people’s ability to grasp the political causes of social breakdown. The functional difference between the state and the public persists (p. 83), yet people dream that they "are the government."

Here is the problem: "Qua expropriating property protector, a tax-funded protection agency is a contradiction in terms and will inevitably lead to more taxes and less protection. . . . Motivated (as everyone is) by self-interest and the disutility of labor but with the unique power to tax, a government agent’s response will invariably be the same: To maximize expenditures on protection, and conceivably all of a nation’s wealth can be consumed by the cost of protection, and at the same time to minimize the actual production of protection" (pp. 81–82). 

Even worse, "the selection of government rulers by means of popular elections makes it practically impossible that any good or harmless person could ever rise to the top" (pp. 89–90). Governments now "protect" us from all manner of hypothetical harms, even from our own bad thoughts, but flagrantly fail to protect "life and property" (p. 89). Such idiocy and nonfeasance must be met head-on. But what alternative is there to a democratic territorial monopoly of defense services?

Hoppe calls for a purely private-property society and a delegitimation of states. States rest, in the end, on public opinion, as LaBoétie, Hume, Mises, and Rothbard all stressed. In this connection, the alternative of "peaceful secession and noncooperation" must be put on the table (p. 91). Attacks on particular policies or politicians fail because "such criticism does not penetrate to the root of the problem. In the terminology of the ‘New Left,’ it is ‘immanent to the system’ and thus harmless from the point of view of the government" (p. 94).

After raising the specter of never-ending general redistribution of everyone’s property to everyone else through politics, Hoppe takes up the matters of centralization and secession. He reiterates that governance grounded on territorial monopoly necessarily leads to "increased exploitation" (p. 107). States began small, and larger states grew through competitive elimination of weaker ones. The pluralism of late medieval Europe—before the triumph of large states—was the seedbed of capitalism and material wealth. 

Monarchies and republics—in their early stages, at least—gained revenue by permitting private capitalism to develop. This enhanced tax base allowed such states to defeat less liberal states (p. 111). Hence the historical success of British and U.S. imperialism. Unhappily, to the extent that a successful state enjoys world hegemony bordering on world government, that state will no longer have any reason for self-restraint. Liberal policies vanish, while at the same time individuals have no exit, no way to "vote with their feet" by migrating to land outside the system (p. 112).

This approach to world order is, however, completely unnecessary. Economic integration does not require political integration; the latter, indeed, undermines achievements won in the economy. Creation of many smaller states through secession would in fact promote real commodity money by ending the "global, U.S.-led government counterfeiting cartel" (p. 116), foster trade, and further economic integration not subject to constant political plunder.

Hoppe takes up the failure of Soviet socialism, explaining its collapse specifically in terms of the impossibility of economic calculation in the state-imposed absence of real prices. He outlines a radical program of desocialization, which—had it been adopted in eastern Europe—could have shifted economic progress to those regions. Of course, U.S. and western European "help" arrived in time to abort this interesting opportunity to create a property-based anarchy of production.

Hoppe then seeks to decouple arguments for economic freedom from those in favor of unlimited migration of foreigners into others’ territories. The question, finally, is: Who are the owners of the territory? Existence of states actually creates the problem, given a state’s willingness to treat itself as the "ultimate super-owner" of its subjects’ lands (p. 142). 

By overproducing roads and maintaining public property, states bring unwanted immigrants right to the doorsteps of actual owners. Kings, at least, chose immigrants for their good behavior and productivity. Democratic rulers, governed by short-run considerations, choose immigrants for other reasons: "In fact, bums and unproductive people may well be preferred as residents and citizens, because they create more so-called ‘social problems,’ and democratic rulers thrive on the existence of such problems" (p. 145).

By now, the reader will have noticed that Hoppe is not much of an egalitarian. He agrees that Ricardo’s case for free trade is irrefutable; there is no case at all for protectionism. The logical conclusion for policy is to remove all obstacles to trade, so that people everywhere can prosper where they now live, thereby reducing incentives to migrate to currently prosperous countries. Taking the natural order of private property as his benchmark, Hoppe writes that in free societies there would be no issue of immigration as such. People would either be invited onto owners’ land, or not be so invited. For states to preempt private decisions invites social disaster. 

States Leveling Everything In Sight

As if all this were not unfashionable enough, Hoppe takes up "Cooperation, Tribe, City, and State." He begins with Mises’s treatment of the origins of society in differing abilities of individuals and the resulting system of cooperation based on property and exchange. He suggests that in early centers of trade—cities—wider social cooperation was made possible for differing ethnic populations. Only at the top did wealthy merchants experiment with marriage outside their group.

The presence of a state, as opposed to mere "governance," changes matters substantially. Ethnic favoritism by rulers drawn from one group seriously threatens the other populations. Under democratic conditions, short-term officeholders foster "egalitarian class politics" (p. 181), drawing more newcomers to the city. High time preference and decivilization ensue, as governments "promote divisiveness within the family: between the sexes—husbands and wives—and the generations—parents and children" (p. 182). Decay of the family, poverty, and growing crime, including increasing state interference, characterize the democratic cities.

Bourgeois Values

Hoppe now turns to the important topic of the relationship between conservatism and libertarianism (chapter ten). While there is widespread agreement on the symptoms of decivilization, there is less agreement on causes and cures. In the absence of a "principled antistatism" (p. 191), Pat Buchanan and his allies have espoused "social nationalism," protectionism, and a historicist doctrine of willpower, amounting in the end, says Hoppe, to mere "destructionism" (pp. 193–197). Left libertarians, deeply undermined by the process of social decay, come in for criticism as well (pp. 204–207). Yet, Rothbard’s culturally conservative, bourgeois libertarianism on the one hand, and traditional conservatism on the other, show "praxeological compatibility, sociological complementarity, and reciprocal reinforcement" (p. 202).

The rest of the chapter is given over to demonstrating how a pure private-property order would promote conservative social values. Conventional intellectuals, who barely even yawn over mass murder by organized states (provided those states are "of the Left"), will doubtless find Hoppe’s discussion of peaceful exclusion and discrimination by property-owners to be the height of intolerance. Hoppe repays them in advance by writing that a free society will not tolerate democrats and communists (p. 218).

The Failed Promise of Classical Liberalism

Hoppe dismisses the "end-of-history" fad, and looks instead for reasons why classical liberalism failed to deliver freedom. He finds the key, not surprisingly, in liberalism’s acceptance of territorial monopolies of defense provision, that is, states. Of social contract theory, he writes: "No one can or will enter a contract that allowed a protector to determine unilaterally, without consent of the protected, the sum that the protected must pay for his protection" (p. 228).

Given the usual incentives, such a program means in fact that "protectors" will be keen on revenue collection, while skimping on service. The liberal logic entails an even greater error: the notion that only world government can bring about peace (p. 231). It was this line of thinking that undermined as good a classical liberal as Lionel Robbins. That world government would be the greatest disaster ever is plain enough. Hoppe concludes that "global U.S. enforced social democracy is the result of two centuries of liberal confusion. Thus, liberalism in its present form has no future" (p. 234, my italics).

But there is another form of liberalism along the lines pioneered by Gustave de Molinari and Murray Rothbard: "Private property anarchism is simply consistent liberalism; liberalism thought through to its ultimate conclusion, or liberalism restored to its original intent" (p. 236). This liberalism does not ask to take over any government, anywhere. It only seeks to escape history’s trap by way of secession.

Hoppe sketches out how people in free societies might organize protection of their lives and property in the absence of states, those paradoxical "expropriating property protectors." Following up on the work of Molinari, Morris and Linda Tannehill, and Rothbard, he develops a private law model in which private agencies perhaps linked with insurance companies would provide the services that can allegedly only be provided by states.

Those who have followed this literature, including Hoppe’s previous publications, will have no trouble accepting the economic reasoning involved here. Certainly the notion that, over time, differing private legal systems will tend to converge on solutions seems logical enough. I leave it to readers to examine the arguments in detail. The key problem remaining is the defense of zones of freedom created by secession and state collapse from such states as still exist, and while there is a good start here, much work remains to be done.

What Is To Be Done?

In his final chapter, Hoppe outlines a possible route to free societies. He begins with a critique of American history. In fact, if not in law, American colonists lived in societies approaching full freedom. In throwing off British rule Americans made the crucial mistake of establishing, first, thirteen territorial monopoly governments. They compounded that error by setting up a single monopolist for "federal" matters.

This new, single monopolist had judicial powers and unlimited discretion to declare what it would be paid for its services. On the basis of Hoppe’s reconstruction of political sociology, the long-run outcome is not very shocking. Constitutional restrictions were as nothing, practically, and the once-"limited" state, having "enumerated powers" only, now bestrides the globe as the last remaining superpower—final overextension.

Now, early Americans were not overrun, en masse, with the desire to loot other people’s property. The taste was acquired over time, as the possibilities became apparent to aspiring plutocrats and popular demagogues. (These are my comments, not Hoppe’s.) Hoppe notes that even those who wished only to be left alone had to enter republican politics in self-defense. Once "in," they too were subject to the deformation of character attached to political life.

The present system, with its revolving-door "choices" between the Loot-and-Shoot party and the Shoot-and-Loot party (again, my terms), demonstrates Hoppe’s claim that limited governments do not remain limited for long—constitutional niceties and the imbecilities of "representation" (p. 284) notwithstanding.

And, so, what is to be done? By now, Hoppe’s answer to Lenin’s question can be foreseen by the astute reader. It involves ideological struggle combined with piecemeal secessions into smaller units than were involved, say, in 1861. It is the vision of a world of city-states, able to provide for their own defense. 

Middle-class property owners of the world, disunite. You have a world to win back.


Joseph Stromberg is historian-in-residence at the Ludwig von Mises Institute in Auburn, Alabama.  See his Mises.org Archive.  You can reach him at MAIL.