DemocracyThe God That Failed

by Hans-Hermann Hoppe

  Governments—and democratic governments in particular—erode "good" and promote "bad" neighborhoods through their tax and transfer policy. They do so also, and with possibly an even more damaging effect, through their policy of forced integration. This policy has two aspects. On the one hand, for the owners and residents in "good" locations and neighborhoods who are faced with an immigration problem, forced integration means that they must accept, without discrimination, every domestic immigrant, as transient or tourist on public roads, as customer, client, resident, or neighbor. They are prohibited by their government from excluding anyone, including anyone they consider an undesirable potential risk, from immigration. On the other hand, for the owners and residents in "bad" locations and neighborhoods (who experience emigration rather than immigration), forced integration means that they are prevented from effective self-protection. Rather than being allowed to rid themselves of crime through the expulsion of known criminals from their neighborhood, they are forced by their government to live in permanent association with their aggressors.17

  The results of a system of private protection insurers would be in striking contrast to these only all too familiar decivilizing effects and tendencies of statist crime protection. To be sure, insurers would be unable to eliminate the differences between "good" and "bad" neighborhoods. In fact, these differences might even become more pronounced.However,drivenbytheirinterestn rising property values and falling protection costs, insurers would promote a tendency to improve by uplifting and cultivating both "good" and "bad" neighborhoods. Thus, in "good" neighborhoods insurers would adopt a policy of selective immigration. Unlike states, they could and would not want to disregard the discriminating inclinations among the insured toward immigrants. To the contrary, even more so than any one of their clients, insurers would be interested in discrimination, i.e., in admitting only those immigrants whose presence adds to a lower crime risk and increased property values and in excluding those whose presence leads to a higher risk and lower property values. That is, rather than eliminating discrimination, insurers would rationalize and perfect its practice. Based on their statistics on crime and property values, and in order to reduce the cost of protection and raise property values, insurers would formulate and continually refine various restrictive (exclusionary) rules and procedures relating to immigration and immigrants and thus give quantitative precision—in the form of prices and price differences—to the value of discrimination (and the cost of nondiscrimination) between potential immigrants (as high or low risk and value-productive).

  17See Hans-Hermann Hoppe, "Free Immigration or Forced Integration?" Chronicles (July 1995).

  Similarly, in "bad" neighborhoods the interests of the insurers and the insured would coincide. Insurers would not want to suppress the expulsionist inclinations among the insured toward known criminals. They would rationalize such tendencies by offering selective price cuts (contingent on specific clean-up operations). Indeed, in cooperation with one another, insurers would want to expel known criminals not just from their immediate neighborhood but from civilization altogether, into the wilderness or open frontier of the Amazon jungle, the Sahara, or the polar regions.

  IX

  What about defense against a state? How would insurers protect us from state aggression?

  First off, it is essential to remember that governments as compulsory, tax-funded monopolies are inherently wasteful and inefficient in whatever they do. This is also true for weapons technology and production, and military intelligence and strategy, especially in our age of high technology. Accordingly, states would not be able to compete within the same territory against voluntarily financed insurance agencies. Moreover, most important and general among the restrictive rules relating to immigration and designed by insurers to lower protection cost and increase property values would be a rule concerning government agents. States are inherently aggressive and pose a permanent danger to every insurer and insured. Thus, insurers in particular would want to exclude or severely restrict—as a potential security risk—the immigration (territorial entry) of all known government agents, and they would induce the insured, either as a condition of insurance or of a lower premium, to exclude or strictly limit any direct contact with any known government agent, be it as visitor, customer, client, resident, or neighbor. That is, wherever insurance companies operated (in all free territories) state agents would be treated as undesirable outcasts, potentially more dangerous than any common criminal. Accordingly, states and their personnel would be able to operate and reside only in territorial separation from, and on the fringes of, free territories. Furthermore, owing to the comparatively lower economic productivity of statist territories, governments would be continually weakened by the emigration of their most value-productive residents.

  Now, what if such a government should decide to attack or invade a free territory? This would be easier said than done. Who and what would it attack? There would be no state opponent. Only private property owners and their private insurance agencies would exist. No one, least of all the insurers, would have presumably engaged in aggression or even provocation. If there were any aggression or provocation against the state at all, this would be the action of a particular person, and in this case the interest of the state and insurance agencies would fully coincide. Both would want to see the attacker punished and held accountable for all damages. But without any aggressor-enemy, how could the state justify an attack not to mention an indiscriminate attack? And surely it would have to justify it, for the power of every government, even the most despotic one, ultimately rests on opinion and consent, as La Boetie, Hume, Mises, and Rothbard have explained." Kings and presidents can issue an order to attack, of course, but there must be scores of men willing to execute their order to put it into effect. There must be generals receiving and following the order, soldiers willing to march, kill, and be killed, and domestic producers willing to continue producing to fund the war. If this consensual willingness were absent because the orders of the state rulers were considered illegitimate, even the seemingly most powerful government would be rendered ineffectual and collapse, as the recent examples of the Shah of Iran and the Soviet Union have illustrated. Hence, from the viewpoint of the leaders of the state an attack on free territories would be considered extremely risky. No propaganda effort, however elaborate, would make the public believe that its attack was anything but an aggression against innocent victims. In this situation, the rulers of the state would be happy to maintain monopolistic control over their present territory rather than run the risk of losing legitimacy and all of their power in an attempt at territorial expansion.

  18Etienne de la Boetie, The Politics of Obedience: The Discourse of Voluntary Servitude (New York: Free Life Editions, 1975); David Hume, "The First Principles of Government," in idem, Essays. Moral, Political and Literary (Oxford: Oxford University Press, 1971); Ludwig von Mises, Liberalism: In the Classical Tradition (San Francisco: Cobden Press, 1985); Murray N. Rothbard, Egalitarianism as a Revolt Against Nature and Other Essays (Auburn, Ala.: Ludwig von Mises Institute, [1974] 2000).

  As unlikely as this may be, what if a state still attacked and /or invaded a neighboring free territory? In this case the aggressor would not encounter an unarmed population. Only in statist territories is the civilian population characteristically unarmed. States everywhere aim to disarm their own citizenry so as to be better able to tax and expropriate it. In contrast, insurers in free territories would not want to disarm the insured. Nor could they. For who would want to be protected by someone who required him as a first step to give up his ultimate means of self-defense? To the contrary, insurance agencies would encourage the ownership of weapons among their insured by means of selective price cuts.

  In addition to the opposition of an armed private citizenry, the aggressor state would run into the resistance of not only one but in all likelihood several insurance and reinsurance agencies. In the case of a successful attack and invasion, these insurers would be fa
ced with massive indemnification payments. Unlike the aggressing state, however, these insurers would be efficient and competitive firms. Other things being equal, the risk of an attack—and hence the price of defense insurance—would be higher in locations in close proximity to state territories than in places far away from any state. To justify this higher price, insurers would have to demonstrate defensive readiness vis-a-vis any possible state aggression to their clients in the form of intelligence services, the ownership of suitable weapons and materials, and military personnel and training. In other words, the insurers would be effectively equipped and trained for the contingency of a state attack and ready to respond with a two-fold defense strategy. On the one hand, insofar as their operations in free territories are concerned insurers would be ready to expel, capture, or kill every invader while trying to avoid or minimize all collateral damage. On the other hand, insofar as their operations on state territory are concerned insurers would be prepared to target the aggressor (the state) for retaliation. That is, insurers would be ready to counterattack and kill, whether with long-range precision weapons or assassination commandos, state agents from the top of the government hierarchy of king, president, or prime minister on downward while seeking to avoid or minimize all collateral damage to the property of innocent civilians (nonstate agents). They would thereby encourage internal resistance against the aggressor government, promote its delegitimization, and possibly incite the liberation and transformation of the state territory into a free country

  X

  I have come full circle with my argument. First, I have shown that the idea of a protective state and state protection of private property is based on a fundamental theoretical error and that this error has had disastrous consequences: the destruction and insecurity of all private property and perpetual war. Second, I have shown that the correct answer to the question of who is to defend private property owners from aggression is the same as for the production of every other good or service: private property owners, cooperation based on the division of labor, and market competition. Third, I have explained how a system of private profit-loss insurers would effectively minimize aggression, whether by private criminals or states, and promote a tendency toward civilization and perpetual peace. The only task outstanding is to implement these insights: to withdraw one's consent and willing cooperation from the state and to promote its delegitimization in public opinion so as to persuade others to do the same. Without the erroneous public perception and judgment of the state as just and necessary and without the public's voluntary cooperation, even the seemingly most powerful government would implode and its powers evaporate. Thus liberated, we would regain our right to self-defense and be able to turn to freed and unregulated insurance agencies for efficient professional assistance in all matters of protection and conflict resolution.

  13

  On the Impossibility of Limited Government and the Prospect for Revolution

  In a recent survey, people of different nationalities were asked how proud they were to be American, German, French, etc., and whether or not they believed that the world would be a better place if other countries were just like their own. The countries ranking highest in terms of national pride were the United States and Austria. As interesting as it would be to consider the case of Austria, here I shall concentrate on the U.S. and the question whether and to what extent the American claim can be justified.

  In the following, I will identify three main sources of American national pride. I will argue that the first two are justified sources of pride, while the third actually represents a fateful error. Finally, I will go on to explain how this error might be repaired.

  I

  The first source of national pride is the memory of America's not-sodistant colonial past as a country of pioneers.

  In fact, the English settlers coming to North America were the last example of the glorious achievements of what Adam Smith referred to as "a system of natural liberty": the ability of men to create a free and prosperous commonwealth from scratch. Contrary to the Hobbesian account of human nature—homo homini lupus est—the English settlers demonstrated not just the viability but also the vibrancy and attractiveness of a stateless, anarcho-capitalist social order. They demonstrated how, in accordance with the views of John Locke, private property originated naturally through a person's original appropriation—his purposeful use and transformation—of previously unused land (wilderness). Furthermore, they demonstrated that, based on the recognition of private property, division of labor, and contractual exchange, men were capable of protecting themselves effectively against antisocial aggressors: first and foremost by means of self-defense (less crime existed then than exists now), and as society grew increasingly prosperous and complex, by means of specialization, i.e., by institutions and agencies such as property registries, notaries, lawyers, judges, courts, juries, sheriffs, mutual defense associations, and popular militias.1 Moreover, the American colonists demonstrated the fundamental sociological importance of the institution of covenants: of associations of linguistically, ethnically, religiously, and culturally homogeneous settlers led by and subject to the internal jurisdiction of a popular leader-founder to ensure peaceful human cooperation and maintain law and order.2

  II

  The second source of national pride is the American Revolution.

  In Europe there had been no open frontiers for centuries and the intra-European colonization experience lay in the distant past. With the growth of the population, societies had assumed an increasingly hierarchical structure: of free men (freeholders) and servants, lords and vassals, overlords, and kings. While distinctly more stratified and aristocratic than colonial America, the so-called feudal societies of medieval Europe were also typically stateless social orders. A state, in accordance with generally accepted terminology, is defined as a compulsory territorial monopolist of law and order (an ultimate decisionmaker). Feudal lords and kings did not typically fulfill the requirements of a state: they could only "tax" with the consent of the taxed, and on his own land every free man was as much a sovereign (ultimate decisionmaker) as the feudal king was on his.3 However, in the course of many centuries these originally stateless societies had gradually transformed into absolute—statist—monarchies. While they had initially been acknowledged voluntarily as protectors and judges, European kings had at long last succeeded in establishing themselves as hereditary heads of state. Resisted by the aristocracy but helped along by the "common people," they had become absolute monarchs with the power to tax without consent and to make ultimate decisions regarding the property of free men.

  1On the influence of Locke and Lockean political philosophy on America see Edmund S. Morgan, The Birth of the Republic: 1763-89 (Chicago: University of Chicago Press, 1992), pp. 73-74:

  When Locke described his state of nature, he could explain it most vividly by saying that "in the beginning all the World was America." And indeed many Americans had had the actual experience of applying labor to wild land and turning it into their own. Some had even participated in social compacts, setting up new governments in wilderness areas where none had previously existed, (p. 74)

  On crime, protection, and defense in particular see Terry Anderson and P.J. Hill, "The American Experiment in Anarcho-Capitalism: The Not So Wild, Wild West," Journal of Libertarian Studies 3, no. 1 (1979); Roger D. McGrath, Gunfighters, Highwaymen, and Vigilantes: Violence on the Frontier (Berkeley: University of California Press, 1984).

  2Contrary to currently popular multicultural myths, America was decidedly not a cultural "melting pot." Rather, the settlement of the North American continent confirmed the elementary sociological insight that all human societies are the outgrowth of families and kinship systems and hence, are characterized by a high degree of internal homogeneity, i.e., that 'likes' typically associate with 'likes' and distance and separate themselves from 'unlikes.' Thus, for instance, in accordance with this general tendency, Puritans preferably settled in New England, Dutch Calvi
nists in New York, Quakers in Pennsylvania and the southern parts of New Jersey, Catholics in Maryland, and Anglicans as well as French Huguenots in the Southern colonies. See further on this David Hackett Fisher, Albion's Seed: Four British Folkways in America (New York: Oxford University Press, 1989).

  These European developments had a twofold effect on America. On the one hand, England was also ruled by an absolute king, at least until 1688, and when the English settlers arrived on the new continent, the king's rule was extended to America. Unlike the settlers' founding of private property and their private—voluntary and cooperative— production of security and administration of justice, however, the establishment of the royal colonies and administrations was not the result of original appropriation (homesteading) and contract—in fact, no English king had ever set foot on the American continent—but of usurpation (declaration) and imposition.