DemocracyThe God That Failed

by Hans-Hermann Hoppe

  22The incompatibility of private and public law has been succinctly summarized by Randy E. Barnett, "Fuller, Law, and Anarchism," The Libertarian Forum (February 1976), p. 7:

  For example, the State says that citizens may not take from another by force and against his will that which belongs to another. And yet the State through its power to tax "legitimately" does just that. . . . More essentially, the State says that a person may use force upon another only in self-defense, i.e., only as a defense against another who initiated the use of force. To go beyond one's right of self-defense would be to aggress on the rights of others, a violation of one's legal duty. And yet the State by its claimed monopoly forcibly imposes its jurisdiction on persons who may have done nothing wrong. By doing so it aggresses against the rights of its citizens, something which its rules say citizens may not do.

  To this one might want to add only two more pertinent observations: The State says to its citizens "do not kidnap or enslave another man." And yet the State itself does precisely this in conscripting its citizens into its army. And the State says to its citizens "do not kill or murder your fellow men." And yet the State does precisely this once it has declared a "state of war" to exist. See also Rothbard, The Ethics of Liberty, chaps. 22, and 23.

  V

  In light of this, an answer to the question of the future of liberalism can be sought.

  Because of its own fundamental error regarding the moral status of government, liberalism actually contributed to the destruction of everything it had originally set out to preserve and protect: liberty and property. Once the principle of government had been incorrectly accepted, it was only a matter of time until the ultimate triumph of socialism over liberalism. The present neoconservative "End of History" of global U.S. enforced social democracy is the result of two centuries of liberal confusion. Thus, liberalism in its present form has no future. Rather, its future is social democracy, and the future has already arrived (and we know that it does not work).

  Once the premise of government is accepted, liberals are left without argument when socialists pursue this premise to its logical end. If monopoly is just, then centralization is just. If taxation is just, then more taxation is also just. And if democratic equality is just, then the expropriation of private property owners is just, too (while private property is not). Indeed, what can a liberal say in favor of less taxation and redistribution?

  23As Rothbard notes in this connection, it

  is curious that almost all writers parrot the notion that private owners, possessing time preference, must take the "short view," while only government officials can take the "long view" and allocate property to advance the "general welfare." The truth is exactly the reverse. The private individual, secure in his property and in his capital resource, can take the long view, for he wants to maintain the capital value of his resource. It is the government official who must take and run, who must plunder the property while he is still in command. (Power and Market, p. 189)

  If it is admitted that taxation and monopoly are just, then the liberal has no principle moral case to make.24 To lower taxes is not a moral imperative. Rather, the liberal case is exclusively an economic one. For instance, lower taxes will produce certain long-run economic benefits. However, at least in the short-run and for some people (the current tax recipients) lower taxes also imply economic costs. Without moral argument at his disposal, a liberal is left only with the tool of cost-benefit analysis, but any such analysis must involve an interpersonal comparison of utility, and such a comparison is impossible (scientifically impermissible).25 Hence, the outcome of cost-benefit analyses is arbitrary, and every proposal justified with reference to them is mere opinion. In this situation, democratic socialists only appear more upfront, consistent, and consequent, while liberals come across as starry-eyed, confused, and unprincipled or even opportunistic. They accept the basic premise of the current order—of democratic government—but then constantly lament its antiliberal outcome.

  If liberalism is to have any future, it must repair its fundamental error. Liberals will have to recognize that no government can be contractually justified, that every government is destructive of what they want to preserve, and that protection and the production of security can only be rightfully and effectively undertaken by a system of competitive security suppliers. That is, liberalism will have to be transformed into the theory of private property anarchism (or a private law society), as first outlined nearly one-hundred-fifty years ago by Gustave de Molinari and in our own time fully elaborated by Murray Rothbard.26

  24Thus, writes Murray N. Rothbard,

  if it is legitimate for a government to tax, why not tax its subjects to provide other goods and services that may be useful to consumers: why shouldn't the government, for example, build steel plants, provide shoes, dams, postal service, etc.? For each of these goods and services is useful to consumers. If the laissez-fairists object that the government should not build steel plants or shoe factories and provide them to consumers (either free or for sale) because tax-coercion has been employed in constructing these plants, well then the same objection can of course be made to governmental police or judicial service. The government should be acting no more immorally, from a laissez-faire point of view, when providing housing or steel than when providing police protection. Government limited to protection, then, cannot be sustained even within the laissez-faire ideal itself, much less from any other consideration. It is true that the laissez-faire ideal could still be employed to prevent such "second degree" coercive activities of government (i.e., coercion beyond the initial coercion of taxation) as price control or outlawry of pornography; but the "limits" have now become flimsy indeed, and may be stretched to virtually complete collectivism, in which the government only supplies goods and services, yet supplies all of them. < The Ethics of Liberty, p. 182)

  25See Lionel Robbins, The Nature and Significance of Economic Science (New York: New York University Press, 1984); Murray N. Rothbard, "Toward a Reconstruction of Utility and Welfare Economics," in idem, The Logic of Action One (Cheltenham, U.K.: Edward Elgar, 1997).

  Such a theoretical transformation would have an immediate twofold effect. On the one hand, it would lead to a purification of the contemporary liberal movement. Social democrats in liberal clothes and many high-ranking liberal government functionaries would swiftly disassociate themselves from this new liberal movement. On the other hand, the transformation would lead to the systematic radicalization of the liberal movement. For those members of the movement who still hold on to the classic notion of universal human rights and the idea that self-ownership and private property rights precede all government and legislation, the transition from liberalism to private property anarchism is only a small intellectual step, especially in light of the obvious failure of democratic government to provide the only service that it was ever intended to provide (that of protection). Private property anarchism is simply consistent liberalism; liberalism thought through to its ultimate conclusion, or liberalism restored to its original intent.27 However, this small theoretical step has momentous practical implications.

  26On Gustave de Molinari see his The Production of Security (New York: Center for Libertarian Studies, 1977); David M. Hart, "Gustave de Molinari and the Anti-Statist Liberal Tradition," Parts I, II and III, Journal of Libertarian Studies 5, no. 3 (1981), 5, no. 4 (1981), and 6, no. 1 (1982); on Murray N. Rothbard see besides the works cited above also his Man, Economy, and State, 2 vols. (Auburn, Ala.: Ludwig von Mises Institute, 1993).

  27An instructive example for the logical-theoretical affinity of classical liberalism and private property anarchism, i.e., radical libertarianism, is provided by Ludwig von Mises and his influence. Mises's best known students today are Friedrich A. Hayek and Murray N. Rothbard. The former became Mises's student in the 1920s, before Mises had fully worked out his own intellectual system, and would essentially become a moderate (right-wing) social democrat. (See on this assessment Hans-Hermann Hoppe, "F.A. Haye
k on Government and Social Evolution: A Critique," Review of Austrian Economics 7, no. 1 [1994].) Rothbard on the other hand became Mises's student in the 1950s, after Mises had worked out his entire system in his magnum opus Human Action: A Treatise on Economics, and would become the theoretician of anarcho-capitalism. Unshaken, Mises would maintain his original theoretical position as a minimum-state liberal. Yet, while distancing himself equally from Hayek's left-wing and Rothbard's right-wing deviationism, it is clear from Mises's review of Rothbard's first magnum opus, Man, Economy, and State, in The New Individualist Review 2, no. 3 (Fall 1962) that it was Rothbard to whom he felt a greater theoretical affinity. More importantly, of the following generations of intellectuals up to the present, few of those who fully absorbed the work of Mises and Hayek and Rothbard have remained true to the "original" Mises, and fewer still have become Hayekians, while the overwhelming majority has come to adopt Rothbard's revisions of the Misesian system as the logically consequent fulfillment of Mises's own original theoretical intent. See also note 30 below.

  In taking this step, liberals would renounce their allegiance to the present system, denounce democratic government as illegitimate, and reclaim their right to self-protection. Politically, with this step they would return to the very beginnings of liberalism as a revolutionary creed. In denying the validity of all hereditary privileges, classical liberals would be placed in fundamental opposition to all established governments. Characteristically, liberalism's greatest political triumph —the American Revolution—was the outcome of a secessionist war.28 And in the Declaration of Independence, in justifying the actions of the American colonists, Jefferson affirmed that "governments are instituted among men, deriving their just powers from the consent of the governed," to secure the right to "life, liberty, and the pursuit of happiness"; and

  that whenever any form of government becomes destructive of these ends, it is the right of the people to alter or abolish it, and to institute new government, laying its foundation on such principles, and organizing its powers in such form, as to them shall seem most likely to effect their safety and happiness.

  Private property anarchists would only reaffirm the classic liberal right "to throw off such government, and to provide new guards for their future security."

  Of course, by itself the renewed radicalism of the liberal movement would be of little consequence (although as the American Revolution teaches, radicalism may well be popular). Instead, it is the inspiring vision of a fundamental alternative to the present system which flows from this new radicalism that will finally break the social democratic machine. Rather than supranational political integration, world-government, constitutions, courts, banks, and money, global social democracy, and universal and ubiquitous multiculturalism, anarchist-liberals propose the decomposition of the nation state into its constituent heterogeneous parts. As their classic forebearers, new liberals do not seek to takeover any government. They ignore government. They only want to be left alone by government, and secede from its jurisdiction to organize their own protection. Unlike their predecessors who merely sought to replace a larger government with a smaller one, however, new liberals pursue the logic of secession to its end. They propose unlimited secession, i.e., the unrestricted proliferation of independent free territories, until the state's range of jurisdiction finally withers away29 To this end—and in complete contrast to the statist projects of "European Integration" and a "New World Order"—they promote the vision of a world of tens of thousands of free countries, regions, and cantons, of hundreds of thousands of independent free cities—such as the present-day oddities of Monaco, Andorra, San Marino, Liechtenstein, (formerly) Hong Kong, and Singapore—and even more numerous free districts and neighborhoods, economically integrated through free trade (the smaller the territory, the greater the economic pressure of opting for free trade!) and an international gold-commodity money standard.

  28On the radical liberal-libertarian ideological sources of the American revolution see Bernard Bailyn, The Ideological Origins of the American Revolution (Cambridge, Mass.: Harvard University Press, 1967); Murray N. Rothbard, Conceived in Liberty, 4 vols. (New Rochelle, N.Y.: Arlington House, 1975-79).

  If and when this alternative liberal vision gains prominence in public opinion, the end of the social democratic "End of History" will give rise to a liberal renaissance.

  29Interestingly, just as Jefferson and the American Declaration of Independence consider secession from a government's jurisdiction a basic human right, so Ludwig von Mises, the twentieth-century's foremost champion of liberalism, has been an outspoken proponent of the right to secede as implied in the most fundamental human right to self-determination. Thus he writes:

  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 a state... their wishes are to be respected and complied with. This is the only feasible and effective way of preventing revolutions and civil and international wars If it were in any way possible to grant this right of self-determination to every individual, it would have to be done. (Mises, Liberalism, pp. 109-10)

  Essentially, with this statement Mises has already crossed the line separating classical liberalism and Rothbard's private property anarchism; for a government allowing unlimited secession is of course no longer a compulsory monopolist of law and order but a voluntary association. Thus notes Rothbard with regard to Mises' pronouncement, "[o]nce admit any right of secession whatever, and there is no logical stopping-point short of the right of individual secession, which logically entails anarchism, since then individuals may secede and patronize their own defense agencies, and the State has crumbled" (The Ethics of Liberty, p. 182); see also idem, Power and Market, pp. 4-5, and idem, "The Laissez-Faire Radical: A Quest for the Historical Mises," Journal of Libertarian Studies 5, no. 3 (1981).

  12

  On Government and the Private Production of Defense

  It is the right of the people to alter or abolish it, and to institute new government, laying its foundation on such principles, and organizing its powers in such form, as to them shall seem most likely to effect their safety and happiness. (Declaration of Independence)

  I

  Among the most popular and consequential beliefs of our age is the belief in collective security. Nothing less significant than the legitimacy of the modern state rests on this belief.

  I will demonstrate that the idea of collective security is a myth that provides no justification for the modern state, and that all security is and must be private. First off, I will present a two-step reconstruction of the myth of collective security, and at each step raise a few theoretical concerns.

  The myth of collective security can also be called the Hobbesian myth. Thomas Hobbes, and countless political philosophers and economists after him, argued that in the state of nature, men would constantly be at each others' throats. Homo homini lupus est. Put in modern jargon, in the state of nature a permanent 'underproduction' of security would prevail. Each individual, left to his own devices and provisions, would spend "too little" on his own defense, resulting in permanent interpersonal warfare. The solution to this presumably intolerable situation, according to Hobbes and his followers, is the establishment of a state. In order to institute peaceful cooperation among themselves, two individuals, A and B, require a third independent party, S, as ultimate judge and peacemaker. However, this third party, S, is not just another individual, and the good provided by S, that of of security, is not just another "private" good. Rather, S is a sovereign and has as such two unique powers. On the one hand, S can insist that his subjects, A and B, not seek protection from anyone but him; that is, S is a compulsory territorial monopolist of protection. On the other hand, S can determine unilaterally how much A and B must spend on their own security; that is,
S has the power to impose taxes in order to provide security "collectively."

  There is little use in quarreling over whether man is as bad and wolf-like as Hobbes supposes or not, except to note that Hobbes's thesis obviously cannot mean that man is driven only and exclusively by aggressive instincts. If this were the case, mankind would have died out long ago. The fact that he did not demonstrates that man also possesses reason and is capable of constraining his natural impulses. The quarrel is only with the Hobbesian solution. Given man's nature as a rational animal, is the proposed solution to the problem of insecurity an improvement? Can the institution of a state reduce aggressive behavior and promote peaceful cooperation, and thus provide for better private security and protection? The difficulties with Hobbes's argument are obvious. For one, regardless of how bad men are, S—whether king, dictator, or elected president—is still one of them. Man's nature is not transformed upon becoming S. Yet how can there be better protection for A and B, if S must tax them in order to provide it? Is there not a contradiction within the very construction of S as an expropriating property protector? In fact, is this not exactly what is also—and more appropriately —referred to as a protection racket? To be sure, S will make peace between A and B but only so that he himself can rob both of them more profitably. Surely S is better protected, but the more he is protected, the less A and B are protected from attacks by S. Collective security, it would seem, is not better private security. Rather, it is the private security of the state, S, achieved through the expropriation, i.e., the economic disarmament, of its subjects. Further, statists from Thomas Hobbes to James Buchanan have argued that a protective state s would come about as the result of some sort of "constitutional" contract.1 Yet who in his right mind would agree to a contract that allowed one's protector to determine unilaterally—and irrevocably—the sum that the protected must pay for his protection? The fact is no one ever has!2