While it is easy to conceive of the contractual origin of a system of competitive security suppliers, it is inconceivable how private property owners could possibly enter a contract which entitled another agent to compel anyone within a given territory to come to it exclusively for protection and judicial decisionmaking, barring any other agent from offering protection services. Such a monopoly-contract would imply that every private property owner had surrendered his right to ultimate decisionmaking and the protection of his person and property permanently to someone else. In effect, in transferring this right onto someone else, a person would submit himself into permanent slavery. According to liberal doctrine, any such submission-contract is from the outset impermissible (hence null and void), because it contradicts the praxeological foundation of all contracts, i.e., private property and individual self-ownership.14 No one rightfully can or likely will agree to render his person and property permanently defenseless against the actions of someone else. Similarly inconceivable is the notion that anyone would endow his monopolistic protector with the permanent right to tax. 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.
13See on this Murray N. Rothbard, Power and Market: Government and the Economy (Kansas City: Sheed Andrews and McMeel, 1977), chap. 1.
14The contract theory of the state here criticized originated with Thomas Hobbes and his works De Cive (chaps. 5-7) and Leviathan (chaps. 17-19). Hobbes there claimed that the legal bond between the ruler and the subjects, once it has been tied, is indissoluble. However, notes Cassirer,
most influential writers on politics in the seventeenth century rejected the conclusions drawn by Hobbes. They charged the great logician with a contradiction in terms. If a man could give up his personality [i.e., his right to self-ownership] he would cease being a moral being. He would become a lifeless thing—and how could such a thing obligate itself—how could it make a promise or enter into a social contract? This fundamental right, the right to personality, includes in a sense all the others. To maintain and to develop his personality is a universal right. It is not subject to the freaks and fancies of single individuals and cannot, therefore, be transferred from one individual to another. The contract of rulership which is the legal basis of all civil powers has, therefore, its inherent limits. There is no pactum subjectionis, no act of submission by which man can give up the state of a free agent and enslave himself. For by such an act of renunciation he would give up that very character which constitutes his nature and essence: he would lose his humanity. (The Myth of the State, p. 195)
Since Locke, liberals have tried to solve this internal contradiction through the makeshift of "tacit," "implicit" or "conceptual" agreements, contracts, or constitutions. Yet all of these characteristically tortuous and confused attempts have only contributed to one and the same unavoidable conclusion: That it is impossible to derive a justification for government from explicit contracts between private property owners.15
1 On John Locke's views on "consent" see his Two Treatises on Government, Book II, sec. 119-22. Recognizing that government is not based on "express" consent, he writes there,
the difficulty is, what ought to be looked upon as a tacit consent, and how far it binds—i.e., how far any one shall be looked on to have consented, and thereby submitted to any government, where he has made no expression of it at all. And to this I say, that every man that hath any possession or enjoyment of any part of the dominions of any government doth hereby give his tacit consent, and is as far forth obliged to obedience to the laws of that government, during such enjoyment, as any one under it, whether this his possession be of land to him and his heirs for ever, or a lodging only for a week; or whether it be barely traveling freely on the highway; and, in effect, it reaches as far as the very being of any one within the territories of that government. (sec. 119)
In effect, according to Locke, once a government has come into existence, regardless of whether one has expressly agreed to its rule in the first place or not and no matter what this government does in the following, one has "tacitly" consented to it and whatever it does as long as one continues to live in "its" territory. That is, every government always has the unanimous consent of everyone residing under its jurisdiction, and only emigration—"exit"—counts as a "no" vote and the withdrawal of consent according to Locke (sec. 121).
For a modern, even less convincing (or rather more absurd) attempt along the same lines see James M. Buchanan and Gordon Tullock, The Calculus of Consent (Ann Arbor: University of Michigan Press, 1962), and James M. Buchanan, The Limits of Liberty: Between Anarchy and Leviathan (Chicago: University of Chicago Press, 1975). As Locke before them, Buchanan and Tullock recognize that no government, anywhere, is based on express consent or explicit contracts. But not to worry, they assure us, for this does not mean that governments do not nonetheless rest on unanimous consent. Even if actual disagreements and real nay-sayers exist, this fact might merely obscure some underlying and more profound agreement and unanimously shared consensus on the level of "constitutional choice" and decisionmaking. However, this underlying deeper agreement on the "rules of the game," we are then told by Buchanan and Tullock, is also not an actual agreement—in fact, no constitution has ever been expressly agreed upon by everyone concerned. Rather, it is what they refer to as a "conceptual" agreement and "conceptual" unanimity. In so twisting a real "no" into a conceptual "yes," Buchanan and Tullock then first come to diagnose the state as a voluntary institution on a par with private business firms:
IV
Liberalism's erroneous acceptance of the institution of government as consistent with the basic liberal principles of self-ownership, original appropriation, property, and contract, consequently led to its own destruction.
First and foremost, it follows from the initial error concerning the moral status of government that the liberal solution to the eternal human problem of security—a constitutionally limited government—is a contradictory, praxeologically impossible ideal. Contrary to the original liberal intent of safeguarding liberty and property, every minimal government has the inherent tendency to become a maximal government.
The market and the State are both devices through which cooperation is organized and made possible. Men cooperate through exchange of goods and services in organized markets, and such cooperation implies mutual gain. The individual enters into an exchange relation in which he furthers his own interest by providing some product or service that is of direct benefit of the individual on the other side of the transaction. At base, political and collective action under the individualistic view of the State is much the same. Two or more individuals find it mutually advantageous to join forces to accomplish certain common purposes. In a real sense, they "exchange" inputs in the securing of the commonly shared output. (The Calculus of Consent, p. 19)
Moreover, by the same token, Buchanan claims to have discovered a justification for the status quo, whatever it happens to be. "The institutions of the status quo" always embody and describe an "existing and ongoing implicit social contract." Even
when an original contract may never have been made, when current members of the community sense no moral or ethical obligation to adhere to the terms that are defined in the status quo, and ... when such a contract... may have been violated many times over The status quo defines that which exists. Hence, regardless of its history, it must be evaluated as if it were legitimate contractually. (Buchanan, The Limits of Liberty, pp. 96,84-85)
Once the principle of government—judicial monopoly and the power to tax—is incorrectly accepted as just, any notion of restraining government power and safeguarding individual liberty and property is illusory. Predictably, under monopolistic auspices the price of justice and protection will continually rise and the quality of justice and protection fall. A tax-funded protection agency is a contradiction in terms, for it is an expropriating property protector
that will inevitably lead to more taxes and less protection. Even if, as liberals have proposed, a government limited its activities exclusively to the protection of preexisting private property rights, the further question of how much security to produce would arise. Motivated (as everyone is) by self-interest and the disutility of labor but equipped with the unique power to tax, a government agent's goal will invariably be to maximize expenditures on protection (and almost all of a nation's wealth can conceivably be consumed by the cost of protection) and at the same time to minimize the production of protection. The more money one can spend and the less one must work to produce, the better off one will be.16
Moreover, a judicial monopoly will inevitably lead to a steady deterioration in the quality of protection. If no one can appeal for justice except to government, justice will be perverted in favor of the government, constitutions, and supreme courts notwithstanding. Constitutions and supreme courts are government constitutions and agencies, and whatever limitations on government action they might contain or find is invariably decided by agents of the very institution under consideration. Predictably, the definition of property and protection will continually be altered and the range of jurisdiction expanded to the government's advantage.17
16Explains Murray N. Rothbard, For A New Liberty (New York: Collier, 1978), pp. 215-16:
[T]here is a common fallacy, held even by most advocates of laissez-faire, that the government must supply "police protection," as if police protection were a single, absolute entity, a fixed quantity of something which the government supplies to all In actual fact, there are almost infinite degrees of all sorts of protection. For any given person or business, the police can provide everything from a policeman on the beat who patrols once a night, to two policemen patrolling constantly on each block, to cruising patrol cars, to one or even several round-the-clock personal bodyguards. Furthermore, there are many other decisions the police must make, the complexity of which becomes evident as soon as we look beneath the veil of the myth of absolute "protection." How shall the police allocate their funds which are, of course, always limited as are the funds of all other individuals, organizations, and agencies? How much shall the police invest in electronic equipment? fingerprinting equipment? detectives as against uniformed police? patrol cars as against foot police, etc? ... The point is that the government has no rational way to make these allocations. The government only knows that it has a limited budget.
Second, it follows likewise from the error regarding the moral status of government that the traditional liberal preference for and attachment to local (decentralized and territorially small) government is inconsistent and contradictory.18 Contrary to the original liberal intent, every government, including local government, has an inherent tendency toward centralizing and ultimately becoming a world government.
Once it is incorrectly accepted that in order to protect and enforce peaceful cooperation between two individuals A and B, it is justified and necessary to have a judicial monopolist X, a twofold conclusion follows. If more than one territorial monopolist exists, X, Y, and Z, then, just as there can presumably be no peace among A and B without X, so can there be no peace between the monopolists X, Y, and Z as long as they remain in a "state of anarchy" with each other. Hence, in order to fulfill the liberal desideratum of universal and eternal peace, all political centralization and unification, and ultimately the establishment of a single world government, is justified and necessary.19
17Explains Murray N. Rothbard, ForANew Liberty, p. 48:
[N]o constitution can interpret or enforce itself; it must be interpreted by men. And if the ultimate power to interpret a constitution is given to the government's own Supreme Court, then the inevitable tendency is for the Court to continue to place its imprimatur on ever-broader powers for its own government. Furthermore, the highly touted "checks and balances" and "separations of powers" in the American government are flimsy indeed, since in the final analysis all of these divisions are part of the same government and are governed by the same set of rulers.
18On the characteristic liberal preference for decentralized government see Wilhelm Ropke, jenseits von Angebot und Nachfrage (Berne: Paul Haupt, 1979), chap. 5.
19 Interestingly, while socialists of all stripes—traditional Marxists, social democrats, American "liberals" and neoconservatives—have typically shown little difficulty in accepting the idea of world government and have thus at least been consistent, classical liberals have rarely if ever acknowledged the fact that by the logic of their own doctrine they too are forced to be advocates of a single, unified world government and clung instead, inconsistently, to the idea of decentralized government. Now theoretical consistency is not necessarily a good thing; and if a theory is consistent but false, one might well admit that it may be preferable to be inconsistent. However, an inconsistent theory can never be true, and in not facing up to the inconsistency of their theoretical position liberals have typically neglected to pay attention to and account for two important, and from their own viewpoint "anomalous" phenomena. On the one hand, if law and order requires a single, monopolistic judge and enforcer (government), as they claim, why does the relationship between, say, German and American businessmen appear to be just as peaceful as that between, say, New York and California businessmen, despite the fact that the former live in a "state of anarchy" vis-a-vis each other? Isn't this positive proof that it is not necessary to have government in order to have peace?! On the other hand, while the relationship between the citizens and firms of different countries is neither more nor less peaceful than that between citizens and firms of one and the same country, it appears to be equally obvious that the relationship of any one government, say the U.S., vis-a-vis both its own citizens as well as other (foreign) governments and their citizens is anything but peaceful. Indeed, in his well-known book Death by Government (New Brunswick, N.J.: Transaction Publishers, 1995), Rudolph Rummel has estimated that in the course of the twentieth century alone, governments have been responsible for the deaths of approximately 170 million people. Isn't this positive proof, then, that the liberal view concerning the "state of anarchy" as conflict-ridden and of "statism" as the sine qua non of security and peace is just about the reverse of the truth?
Last, it follows from the error of accepting government as just that the ancient idea of the universality of human rights and the unity of law is confused and, under the heading "equality before the law," transformed into a vehicle of egalitarianism. As opposed to the antiegalitarian or even aristocratic sentiment of old liberals,20 once the idea of universal human rights is combined with government, the result will be egalitarianism and the destruction of human rights.
Once a government has been incorrectly assumed as just and hereditary princes and kings ruled out as incompatible with the idea of universal human rights, the question of how to square government with the idea of the universality and equality of human rights arises. The liberal answer is to open participation and entry into government on equal terms to everyone via democracy. Everyone—not just the hereditary class of nobles—is permitted to become a government official and exercise every government function. However, this democratic equality before the law is something entirely different from and incompatible with the idea of one universal law, equally applicable to everyone, everywhere, and at all times. In fact, the former objectionable schism and inequality of the higher law of kings versus the subordinate law of ordinary subjects is fully preserved under democracy in the separation of public versus private law and the supremacy of the former over the latter.21 Under democracy, everyone is equal insofar as entry into government is open to all on equal terms. In a democracy no personal privileges or privileged persons exist. However,functional privileges and privileged functions exist. As long as they act in official capacity, public officials are governed and protected by public law and occupy thereby a privileged position vis-a-vis 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).22 Privilege and legal discrimination will not disappear. To the contrary. Rather than being restricted to princes and nobles, privilege, protectionism, and legal discrimination will be available to all and can be exercised by everyone.
20On the aristocratic roots of liberalism see Bertrand de Jouvenel, On Power: The Natural History of its Growth (New York: Viking, 1949), chap. 17; Erik von KuehneltLeddihn, Liberty or Equality (Front Royal, Va.: Christendom Press, 1993).
21On the distinction between private and public law see Bruno Leoni, Freedom and the Law (Indianapolis, Ind.: Liberty Fund, 1991); Fried rich A. Hayek, Law, Legislation, and Liberty (Chicago: University of Chicago Press, 1973), vol. 1, esp. chap. 6.
Predictably, under democratic conditions the tendency of every monopoly to increase prices and decrease quality will only be stronger and more pronounced. As hereditary monopolist, a king or prince regarded the territory and people under his jurisdiction as his personal property and engaged in the monopolistic exploitation of his "property." Under democracy, monopoly, and monopolistic exploitation do not disappear. Even if everyone is permitted to enter government, this does 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 regards the country as his private property, a temporary and interchangeable caretaker is put in monopolistic charge of the country. 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 will not eliminate exploitation. To the contrary, it will make exploitation less calculating and more likely to be carried out with little or no regard to the capital stock. In other words, exploitation will be shortsighted.23 Moreover, with free entry into and public participation in government, the perversion of justice will proceed even faster. Instead of protecting preexisting private property rights, democratic government will become a machine for the continual redistribution of preexisting property rights in the name of illusory "social security," until the idea of universal and immutable human rights disappears and is replaced by that of law as positive government-made legislation.
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