DemocracyThe God That Failed
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54See on this Henri Pirenne, Medieval Cities (Princeton, NJ: Princeton University Press, 1974). "The clear interest of the monarchy," writes Pirenne,
was to support the adversaries of high feudalism. Naturally, help was given whenever it was possible to do so without becoming obligated to these [city] middle classes who in arising against their lords fought, to all intents and purposes, in the interests of royal prerogatives. To accept the king as arbitrator of their quarrel was, for the parties in conflict, to recognize his sovereignty. The entry of the burghers upon the political scene had as a consequence the weakening of the contractual principle of the Feudal State to the advantage of the principle of the authority of the Monarchical State. It was impossible that royalty should not take count of this and seize every chance to show its good-will to the communes which, without intending to do so, labored so usefully in its behalf, (pp. 179-80) See also ibid., p. 227f. and dejouvenel, On Power, chap. 17.
Hence, when democratic rule has finally exhausted its legitimacy the problem faced will be significantly more difficult than when kings lost their legitimacy. Then, it would have been sufficient to abolish the king's monopoly of law and law enforcement and replace it with a natural order of competing jurisdictions, because remnants of natural elites who could have taken on this task still existed. Now, this will no longer suffice. If the monopoly of law and law enforcement of democratic governments is dissolved, there appears to be no other authority to whom one can turn for justice, and chaos would seem to be inevitable. Thus, in addition to advocating the abdication of democracy, it is now of central strategic importance that at the same time ideological support be given to all decentralizing or even secessionist social forces. In other words, the tendency toward political centralization that has characterized the Western world for many centuries, first under monarchical rule and then under democratic auspices, must be systematically reversed.55 Even if as a result of a secessionist tendency a new government, whether democratic or not, should spring up, territorially smaller governments and increased political competition will tend to encourage moderation as regards exploitation. In any case, only in small regions, communities or districts will it be possible again for a few individuals, based on the popular recognition of their economic independence, outstanding professional achievement, morally impeccable personal life, and superior judgment and taste, to rise to the rank of natural, voluntarily acknowledged authorities and lend legitimacy to the idea of a natural order56 of competing judges and overlapping jurisdictions—an "anarchic" private law society—as the answer to monarchy and democracy.
55On the political economy of political centralization, and the rationale of decentralization and secession see Hans-Hermann Hoppe, "The Economic and Political Rational for European Secessionism," in Secession, State, and Liberty, David Gordon, ed. (New Brunswick, N.J.: Transaction Publishers, 1998); Jean Baechler, The Origins of Capitalism (New York: St. Martin's Press, 1976), esp. chap. 7; see also chap. 5 below.
56"In a sound society," writes Wilhelm Ropke,
leadership, responsibility, and exemplary defense of the society's guiding norms and values must be the exalted duty and unchallengeable right of a minority that forms and is willingly and respectfully recognized as the apex of a social pyramid hierarchically structured by performance. Mass society ... must be counteracted by individual leadership—not on the part of original geniuses or eccentrics or will-o'-the wisp intellectuals, but, on the contrary, on the part of people with courage to reject eccentric novelty for the sake of the 'old truths' which Goethe admonishes us to hold on to and for the sake of historically proved, indestructible, and simple human values. In other words, we need the leadership of... "ascetics of civilization," secularized saints as it were, who in our age occupy a place which must not for long remain vacant at any time and in any society. That is what those have in mind who say that the "revolt of the masses" must be countered by another revolt, the "revolt of the elite."... What we need is true nobilitas naturalis. No era can do without it, least of all ours, when so much is shaking and crumbling away. We need a natural nobility whose authority is, fortunately, readily accepted by all men, an elite deriving its title solely from supreme performance and peerless moral example and invested with the moral dignity of such a life. Only a few from every stratum of society can ascend into this thin layer of natural nobility. The way to it is an exemplary and slowly maturing life of dedicated endeavor on behalf of all, unimpeachable integrity, constant restraint of our common greed, proved soundness of judgment, a spotless private life, indomitable courage in standing up for truth and law, and generally the highest example. This is how the few, carried upward by the trust of the people, gradually attain to a position above the classes, interests, passions, wickedness, and foolishness of men and finally become the nation's conscience. To belong to this group of moral aristocrats should be the highest and most desirable aim, next to which all the other triumphs of life are pale and insipid No free society, least of all ours, which threatens to degenerate into mass society, can subsist without such a class of censors. The continued existence of our free world will ultimately depend on whether our age can produce a sufficient number of such aristocrats of public spirit. (A Humane Economy, pp. 130-31)
3
On Monarchy, Democracy, Public Opinion, and Delegitimation
I
It is appropriate to begin with a few observations on Ludwig von Mises, and his idea of a free society.
"The program of liberalism," wrote Mises,
if condensed into a single word, would have to read: property, that is, private ownership of the means of production (for in regard to commodities ready for consumption, private property is a matter of course and is not disputed even by the socialists and communists). All the other demands of liberalism result from this fundamental demand.1
Based on private property, Mises explained, the emergence of society—human cooperation was the result of the natural diversity of people and property and the recognition that work performed under division of labor is more productive than work performed in self-sufficient isolation. He explained:
If and as far as labor under the division of labor is more productive than isolated labor, and if and as far as man is able to realize this fact, human action itself tends toward cooperation and association;... Experience teaches that this condition higher productivity achieved under division of labor is present because its cause the inborn inequality of men and the inequality in the geographical distribution of the natural factors of production is real. Thus we are in a position to comprehend the course of social evolution.2
If the emergence of society human cooperation under division of labor can be explained as the result of self-interested action, it is also true that, mankind being what it is, murderers, robbers, thieves, thugs, and con-artists will always exist, and life in society will be intolerable unless they are threatened with physical punishment. "The liberal understands quite well," wrote Mises,
1Ludwig von Mises, Liberalism: In the Classical Tradition (Irvington-on-Hudson, N.Y.: Foundation for Economic Education, 1985), p. 19.
2Ludwig von Mises, Human Action: A Treatise on Economics (Chicago: Regnery, 1966), pp. 160-61.
that without resort to compulsion, the existence of society would be endangered and that behind the rules of conduct whose observance is necessary to assure peaceful human cooperation must stand the threat of force if the whole edifice of society is not to be continually at the mercy of any one of its members. One must be in a position to compel the person who will not respect the lives, health, personal freedom, or private property of others to acquiesce in the rules of life in society. This is the function that the liberal doctrine assigns to the state: the protection of property, liberty, and peace.3
If this is accepted, how is a government to be organized so as to assure that it will in fact do what it is supposed to do: protect pre-existing private property rights? In view of what I shall say later on in favor of the institution of
monarchy, Mises's liberal opposition to the ancien regime of absolute kings and princes is worth noting here. Kings and princes were privileged personae. Almost by definition, they stood opposed to the liberal idea of the unity and universality of law. Thus, Mises stated, the liberal theory of the state is hostile to princes.
The princely state has no natural boundaries. To be an increaser of his family estate is the ideal of the prince; he strives to leave his successor more land than he inherited from his father. To keep on acquiring new possessions until one encounters an equally strong or stronger adversary—that is the striving of kings Princes regard countries no differently from the way an estate owner regards his forests, meadows, and fields. They sell them, they exchange them (e.g., "rounding off" boundaries); and each time rule over the inhabitants is transferred also. ... Lands and peoples are, in the eyes of princes, nothing but objects of princely ownership; the former form the basis of sovereignty, the latter the appurtenances of landownership. From the people who live in "his" land the prince demands obedience and loyalty; he regards them almost as his property.4
3Mises, Liberalism, p. 37.
4Ludwig von Mises, Nation, State, and Economy: Contributions to the Politics and History of Our Time (New York: New York University Press, 1983), pp. 32-33. Further,
Mises notes,
[t]he princely state strives restlessly for expansion of its territory and for increase in the number of its subjects. On the one hand it aims at the acquisition of land and fosters immigration; on the other hand it sets the strictest penalties against emigration. The more land and the more subjects, the more revenue and the more soldiers. Only in the size of the state does assurance of its preservation lie. Smaller states are always in danger of being swallowed up by larger ones. (p. 39)
As Mises rejected a princely state as incompatible with the protection of private property rights, what was to be substituted for it? His answer was democracy and democratic government. However, Mises's definition of democratic government is fundamentally different from its colloquial meaning. Mises grew up in a multinational state and was painfully aware of the antiliberal results of majority rule in ethnically mixed territories.5 Rather than majority rule, to Mises democracy meant literally "self-determination, self-government, self-rule,"6 and accordingly, a democratic government was an essentially voluntary membership organization in that it recognized each of its constituents' unrestricted right to secession. "Liberalism," explained Mises,
forces no one against his will into the structure of the state. Whoever wants to emigrate is not held back. When a part of the people of a state wants to drop out of the union, liberalism does not hinder it from doing so. Colonies that want to become independent need only do so. The nation as an organic entity can be neither increased nor reduced by changes in states; the world as a whole can neither win nor lose from them.7
The right of self-determination in regard to the question of membership in a state thus means: whenever the inhabitants of a particular territory, whether it be a single village, a whole district, or a series of adjacent districts, make it known, by a freely conducted plebiscite, that they no longer wish to remain united to the state to which they belong at the time, their wishes are to be respected and complied with. This is the only feasible and effective way of preventing revolutions and international wars.... If it were in any way possible to grant this right of self-determination to every individual person, it would have to be done.8
5"In polyglot territories," Mises writes, "the application of the majority principle leads not to the freedom of all but to the rule of the majority over the minority.... Majority rule signifies ... for a part of the people . . . not popular rule but foreign rule" (ibid., pp. 55 and 50). Under the special circumstances of Habsburg-Austria as a multinational and yet fundamentally German state, the application of majoritarian principles would not only promote the dissolution of the Empire. In particular, whether the Empire was dissolved or not, democracy would systematically work against the Germans and ultimately lead to German "national suicide" (p. 117). This, according to Mises, was the "tragic position" of the German liberals in Austria (p. 115). "Democratization in Austria was identical with de-Germanization"(p.l26).
6Ibid.,p.46.
7Ibid., pp. 39-40.
Hence, Mises's answer as to how to assure that a government will protect property rights is through the threat of unlimited secession and its own characteristic of voluntary membership.
II
I do not wish to further investigate Mises's idea of democratic government here but to turn instead to the modern definition of democracy and the question of its compatibility with the foundation of liberalism: that of private property and its protection.
It might be argued that Mises's definition of democratic government was applicable to the U.S. until 1861. Until then, it was generally held that the right to secession existed and that the Union was nothing but a voluntary association of independent states. However, after the crushing defeat and devastation of the secessionist Confederacy by Lincoln and the Union, it was clear that the right to secede no longer existed and that democracy meant absolute and unlimited majority rule. Nor does it appear that any state since that time has met Mises's definition of democratic government. Instead, like their American model, all modern democracies are compulsory membership organizations.
It is all the more surprising that Mises never subjected this modern model of democracy to the same systematic analysis that he had applied to princely government. To be sure, no one has been more farsighted regarding the destructive effects of modern governments' social and economic policies than Mises, and no one has recognized more clearly the dramatic increase of state power in the course of the twentieth century, but Mises never connected these phenomena systematically with modern compulsory democracy. Nowhere did he suggest that the decline of liberalism and the dominance of anticapitalist political ideologies in this century of socialism, social democracy, democratic capitalism, social market economics or whatever other label has been attached to various antiliberal programs and policies finds its systematic explanation in majoritarian democracy itself.
8Mises, Liberalism, pp. 109-10. The objections Mises has against unlimited secession are solely technical in nature (economies of scale, etc.). Thus, for instance, Mises admits having difficulties imagining "in a nationally mixed city to create two police forces, perhaps a German and a Czech, each of which could take action only against members of its own nationality." Nation, State, and Economy, p. 53. On the other hand, Mises notes that
the political ideas of modern times allow the continued existence of small states more secure today than in earlier centuries. . . . There can be no question of a test of economic self-sufficiency in the formation of states at a time when the division of labor embraces broad stretches of land, whole continents, indeed the whole world. It does not matter whether the inhabitants of a state meet their needs directly or indirectly by production at home; what is important is only that they can meet them at all.... Even at the time when the state structure was unified, they [seceding inhabitants] did not obtain [their imported] goods for nothing but only for value supplied in return, and this value in return does not become greater when the political community has fallen apart.... The size of a state's territory therefore does not matter, (pp. 81-82)
What I propose to do here is to fill in the gap left by Mises and provide an analysis of the logic of majoritarian democracy, thereby making modern history—our age—intelligible and predictable.
Ill
Without the right to secession, a democratic government is, economically speaking, a compulsory territorial monopolist of protection and ultimate decisionmaking (jurisdiction) and is in this respect indistinguishable from princely government. Just as princes did not allow secession, so it is outlawed under democracy. Furthermore, as implied in the position of a compulsory monopolist, both democratic government as well as princes possess the right to tax. That is, both are permitted to determ
ine unilaterally, without consent of the protected, the sum that the protected must pay for their own protection.
From this common classification as compulsory monopolies, a fundamental similarity of both princely and democratic government can be deduced9: Under monopolistic auspices, the price of justice and protection will continually rise and the quantity and quality of justice and protection fall. Qua expropriating property protector, a tax-funded protection agency is a contradiction in terms and will inevitably lead to more taxes and less protection. Even if, as liberals advocate, a government limited its activities exclusively to the protection of pre-existing property rights, the further question of how much protection to produce arises. 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 almost 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. The more money one can spend and the less one must work to produce, the better off one will be.
9On the economic theory of monopoly see Murray N. Rothbard, Man, Economy, and State: A Treatise on Economic Principles, 2 vols. (Auburn, Ala.: Ludwig von Mises Institute, 1993), chap. 10; on the monopolistic production of security in particular see idem, For A New Liberty (New York: Collier, 1978), chaps. 12 and 14; Gustave de Molinari, The Production of Security (New York: Center for Libertarian Studies, 1977); Morris and Linda Tannehill, The Market for Liberty (New York: Laissez Faire Books, 1984); and Hans-Hermann Hoppe, The Private Production of Defense (Auburn, Ala.: Ludwig von Mises Institute, I 998).