DemocracyThe God That Failed

by Hans-Hermann Hoppe

  Moreover, a monopoly of jurisdiction will inevitably lead to a steady deterioration in the quality of protection. If one can appeal exclusively to government for justice, justice will be distorted in favor of government, constitutions and appeals courts notwithstanding. Constitutions and appeals courts are government constitutions and agencies, and any limitations on government action they might provide are invariably decided by agents of one and the same institution. Predictably, the definition of property and protection will continually be altered and the range of jurisdiction expanded to the government's advantage.

  IV

  While they are both inconsistent with the protection of life and property, princely and democratic government are also different in one fundamental respect. The decisive difference lies in the fact that entry into a princely government is systematically restricted by the prince's personal discretion, while under democracy entry into and participation in government is open to everyone on equal terms. Anyone not just a hereditary class of nobles is permitted to become a government official and exercise any government function, all the way up to that of prime minister or president.

  Typically, this distinction between restricted versus free entry into government and the transition from princely to democratic government has been interpreted as an advance toward liberalism: from a society of status and privilege to one of equality before the law. But this interpretation rests on a fundamental misunderstanding. From a classical-liberal point of view, democratic government must be considered worse than and a regression from princely government.

  Free and equal entry into government democratic equality is something entirely different from and incompatible with the classical-liberal concept of one universal law, equally applicable to everyone, everywhere, and at all times. Liberalism, Mises noted, "strives for the greatest possible unification of law, in the last analysis for world unity of law."10 However, free entry into government does not accomplish this goal. To the contrary, the objectionable inequality of the higher law of princes versus the subordinate law of ordinary subjects is preserved under democracy in the separation of public versus private law and the supremacy of the former over the latter. Under democracy, everyone is equal insofar as entry into government is open to all on the same terms. In a democracy no personal privileges or privileged persons exist. However, functional privileges and privileged functions exist. As long as they act in an official capacity, democratic government agents are governed and protected by public law and thereby occupy a privileged position vis-avis persons acting under the mere authority of private law (most fundamentally in being permitted to support their own activities by taxes imposed on private law subjects). Privileges, discrimination, and protectionism do not disappear. To the contrary. Rather than being restricted to princes and nobles, privileges, discrimination, and protectionism can be exercised by and accorded to everyone.

  Mises, Nation, State, and Economy, p. 38.

  Predictably, under democratic conditions the tendency of every compulsory monopoly to increase prices and decrease quality is strengthened. As a hereditary monopolist, a prince regards the territory and people under his jurisdiction as his personal property and engages in the monopolistic exploitation of his "property." Under democracy, exploitation does not disappear. Even though everyone is permitted to enter government, this does not eliminate the distinction between the rulers and the ruled. Government and the governed are not one and the same person. Instead of a prince who considers the country his private property, a temporary and interchangeable caretaker is put in monopolistic charge. The caretaker does not own the country, but as long as he is in office he is permitted to use it to his and his proteges' advantage. He owns its current use, usufruct, but not its capital stock. This does not eliminate exploitation. Rather, it makes exploitation less calculating and carried out with little or no regard to the capital stock. In other words, it is shortsighted.11

  Both hereditary princes and democratic caretakers can increase their current spending by means of higher taxes. However, a prince tends to avoid increasing taxes if this leads to capital consumption—a drop in the present discounted value of the capital stock of which he is the owner. In contrast, a caretaker shows no such reluctance. While he owns the present tax-revenue, he does not own the capital stock from which it is derived—others do. Accordingly, under democratic conditions taxation increases far beyond its level under princely rule.

  11On this and the following see Murray N. Rothbard, Power and Market: Government and the Economy (Kansas City: Sheed Andrews and McMeel, 1977), chap. 5; and Hans-Hermann Hoppe, "The Political Economy of Monarchy and Democracy, and the Idea of a Natural Order," Journal of Libertarian Studies 11, no. 2 (1995).

  In addition, both princes and caretakers can increase their current spending by means of debt, and endowed with the power to tax, both tend to incur more debt than would private citizens. However, whereas a prince assumes a liability against his personal property whenever he borrows from (sells bonds to) the nongovernment public (hence the present value of his property falls), a democratic caretaker is free of any such consideration. He can enjoy all the benefits of higher current spending, while the liability and concurrent drop in property values falls upon others. Accordingly, government debt is higher and increases faster under democratic conditions than under princely rule.

  Finally, both princes and caretakers can use their compulsory monopoly power to gain control over the money supply, so both can also increase their own present spending by inflating the supply of money. However, a prince who inflates the money supply will weigh two factors: his immediate enrichment and the fact that, as the inevitable result of a larger money supply, the future purchasing power of money and of his own future taxes will be lower. Unlike a prince, a democratic caretaker is concerned only with his immediate enrichment, for he does not own current and future tax revenues. He only owns the present tax revenue, so he is solely concerned with the present purchasing power of money. By increasing the money supply, he can increase his present purchasing power, while the attendant lower purchasing power of money and tax receipts must be born in the future by others. Accordingly, money inflation will also be more prevalent under democratic conditions than under princely rule.

  V

  Moreover, with free entry into and participation in government, the perversion of justice and protection (law and order) will proceed even faster. The notion of universal and immutable human rights and in particular of property rights essentially disappears and is replaced by that of law as government-made legislation and rights as government-given grants.12

  12On the fundamental distinction between law and legislation see Bruno Leoni, Freedom and the Law (Indianapolis: Liberty Fund, 1991); Friedrich A. Hayek, Law, Legislation and Liberty, 2 vols. (Chicago: University of Chicago Press, 1973), vol. 1: Rules and Order; Murray N. Rothbard, The Ethics of Liberty (New York: New York University Press, 1998).

  Rather than just redistributing income and wealth from civil society onto government by means of taxation, deficit financing, and money inflation, both hereditary princes and democratic caretakers can also use their monopoly of jurisdiction for the redistribution of income and wealth within civil society. The incentives faced in this regard by princes and caretakers are distinctly different, however.

  It is instructive to take another look at princely government. As regards redistribution, princes face two disincentives. The first is a logical one. Even though a prince ranks above everyone else, his rights, too, are private rights, albeit of a somewhat elevated kind. If a prince takes the property of one person and distributes it to another, he undermines the principle on which his own position and security vis-a-vis other princes rests.13 Second, from an economic point of view, all general income and wealth redistribution from the "haves" of something to the "have-nots" is counterproductive and reduces the overall value of the territory. This is not to say that princes abstain from redistributive policies entirely, but their policies take a distin
ctly different form. On the one hand, they must appear in accordance with the idea of private property rights; on the other hand, they should increase future productivity and hence the country's present value. Accordingly, princes typically grant personal rather than group privileges; they award privileges to haves instead of havenots, and they attend to so called "social problems" by reallocating labor cultivation, acculturation, and colonization policies rather than redistributing income and wealth.

  In contrast, a democratic caretaker faces no logical obstacle to the redistribution of private property. Rather than involving himself with the preservation and improvement of capital values, he will be concerned primarily with the protection and advancement of his own position against the competition of new government entrants.

  This type of caretaker's legitimacy does not rest on the legitimacy of private property. It rests on the legitimacy of "social" or "public" property. Thus, if he takes property from one person and gives it to another, as a caretaker he does not contradict his own ideological foundation. Rather, he affirms the supremacy of the different principle of social ownership. Consequently, under democratic conditions private law—the law of property and contract underlying civil society—disappears as an independent domain of law and is absorbed by an all-encompassing public—government made—law (legislation). As the German socialist legal theorist Gustav Radbruch noted, from the perspective of a democratic caretaker "private law is to be regarded only as a provisional and constantly decreasing range of private initiative, temporarily spared within the all-comprehensive sphere of public law."" Ultimately, all property is public property. Each established private property right is only provisionally valid and may be altered in accordance with a caretaker's unilateral determination of the requirements of "public safety" and "social security."

  13See also Bertrand de Jouvenel, Sovereignty: An Inquiry into the Political Good (Chicago: University of Chicago Press, 1957), pp. 172-73,189.

  Second and more specifically, because caretakers do not own the country's capital stock, the counterproductive effects of income and wealth redistribution are of little or no concern. However, the long-term repercussions of redistributive measures are unimportant to them, while their immediate and short-term effects are not. A caretaker is always under the pressure of political competition from others seeking to replace him. Given the rules of democratic government—of one-manone-vote and majority rule—a caretaker, whether to secure his present position or advance to another, must award or promise to award privileges to groups rather than particular individuals, and given that there always exist more have-nots than haves of everything worth having, his redistribution will be egalitarian rather than elitist. Accordingly, as the result of democratic competition the character structure of society will be progressively deformed.

  For one, regardless of the criteria on which it is based, all redistribution involves "taking" from an original owner and/or producer—the "haver" of something—and "giving" to another nonowner and/or nonproducer—the "nonhaver" of this thing. The incentive to be an original owner or producer of the thing in question is reduced, and the incentive to be a nonowner and nonproducer is raised. Consequently, the number of havers and producers declines and that of nonhavers and nonproducers rises. And since it is presumably something good that is being redistributed—of which the haver-producers have too much and the nonhaver-nonproducers too little, this change implies quite literally that the relative number of bad or not-so-good people and bad or not-sogood personal characteristics and habits will continually rise, and life in society will become increasingly less pleasant. Rather than colonization, cultivation, and acculturation, democracy will bring about social degeneration, corruption, and decay.

  14Gustav Radbruch, DerMensch im Recht (Gottingen: Vandenhoeck, 1927), p. 40.

  Moreover, free competition is not always good. Free competition in the production of goods is good, but free competition in the production of bads is not. Free competition in the torturing and killing of innocents, or free competition in counterfeiting or swindling, for instance, is not good; it is worse than bad. It has already been explained why government as a compulsory membership organization endowed with the power of ultimate decisionmaking and taxation must be considered a bad, at least from a liberal viewpoint. It requires a second look to realize that democratic competition is indeed worse than bad.

  In every society, as long as mankind is what it is, people who covet another man's property will exist.15 Some people are more afflicted by this sentiment than others. But people usually learn not to act on such feelings or even feel ashamed for entertaining them. Generally only a few individuals are unable to successfully suppress their desire for others' property, and they are treated as criminals by their fellow men and repressed by physical punishment. Under princely rule, only one single person—the prince—can possibly act on the desire for another man's property, and it is this which makes him a potential danger and a "bad." Apart from the already noted logical and economic disincentives, however, a prince is further restrained in his redistributive desires by the circumstance that all members of society have learned to regard the taking and redistributing of another man's property as shameful and immoral and accordingly watch a prince's every action with utmost suspicion. In distinct contrast, by freeing up entry into government, everyone is permitted to openly express his desire for other men's property. What was formerly regarded as immoral and accordingly suppressed is now considered a legitimate sentiment. Everyone may openly covet everyone else's property, as long as he appeals to democracy; and everyone may act on his desire for another man's property, provided that he finds entrance into government. Hence, under democracy everyone becomes a threat.

  Consequently, under democratic conditions the popular, if immoral and anti-social, desire for other men's property is systematically strengthened. Every demand is legitimate, if it is proclaimed publicly under the special protection of "freedom of speech." Everything can be said and claimed, and everything is up for grabs. Not even the seemingly most secure private property right is exempt from redistributive demands. Worse, subject to mass elections, those members of society with little or no moral inhibition against taking another man's property, habitual amoralists who are most talented in assembling majorities from a multitude of morally uninhibited and mutually incompatible popular demands, efficient demagogues, will tend to gain entrance in and rise to the top of government. Hence, a bad situation becomes even worse.16

  15 See on this Helmut Schoeck, Envy: A Theory of Social Behavior (New York: Harcourt, Brace and World, 1970).

  Historically, the selection of a prince was through the accident of his noble birth, and his only personal qualification was typically his upbringing as a future prince and preserver of the dynasty and its status and possessions. This did not assure that a prince would not be bad and dangerous, of course. However, it is worth remembering that any prince who failed in his primary duty of preserving the dynasty—who wrecked or ruined the country, caused civil unrest, turmoil and strife, or otherwise endangered the position of the dynasty—faced the immediate risk of either being neutralized or assassinated by another member of his own family. In any case, however, even if the accident of birth and his upbringing could not preclude that a prince might be bad and dangerous, at the same time the accident of a noble birth and a princely education also did not preclude that he might be a harmless dilettante or even a good and moral person. In contrast, 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. Prime ministers and presidents are selected for their proven efficiency as morally uninhibited demagogues. Thus, democracy virtually assures that only bad and dangerous men will ever rise to the top of government17; indeed, as the result of free political competition and selection, those who rise will become increasingly bad and dangerous individuals, yet as temporary and interchangeable caretakers they will only rarely be assassinated.
<
br />   16See also Hans-Hermann Hoppe, Eigentum, Anarchie und Staat. Studien zur Theoriedes Kapitalismus (Opladen: Westdeutscher Verlag, 1987), pp. 182ff.

  17Politicians, notes H.L. Mencken with his characteristic wit,

  seldom if ever get there [into public office] by merit alone, at least in democratic states. Sometimes, to be sure, it happens, but only by a kind of miracle. They are chosen normally for quite different reasons, the chief of which is simply their power to impress and enchant the intellectually underprivileged. . . . Will any of them venture to tell the plain truth, the whole truth and nothing but the truth about the situation of the country, foreign or domestic? Will any of them refrain from promises that he knows he can't fulfill—that no human being could fulfill? Will any of them utter a word, however obvious, that will alarm and alienate any of the huge pack of morons who cluster at the public trough, wallowing in the pap that grows thinner and thinner, hoping against hope? Answer: maybe for a few weeks at the start.... But not after the issue is fairly joined, and the struggle is on in earnest. . . . They will all promise every man, woman and child in the country whatever he, she or it wants. They'll all be roving the land looking for chances to make the rich poor, to remedy the irremediable, to succor the unsuccorable, to unscramble the unscrambleable, to dephlogisticate the undephlogisticable. They will all be curing warts by saying words over them, and paying off the national debt with money that no one will have to earn. When one of them demonstrates that twice two is five, another will prove that it is six, six and a half, ten, twenty, n. In brief, they will divest themselves from their character as sensible, candid and truthful men, and become simply candidates for office, bent only on collaring votes. They will all know by then, even supposing that some of them don't know it now, that votes are collared under democracy, not by talking sense but by talking nonsense, and they will apply themselves to the job with a hearty yo-heaveho. Most of them, before the uproar is over, will actually convince themselves. The winner will be whoever promises the most with the least probability of delivering anything. (A Mencken Chrestomathy [New York: Vintage Books, 1982], pp. 148-51)