13See Helmut Schoeck, Envy: A Theory of Social Behavior (New York: Harcourt, Brace and World, 1970).
14See de Jouvenel, On Power, pp. 9-10.
Worse still, given that in every society more "have-nots" of everything worth having exist than "haves," the politically talented who have little or no inhibition against taking property and lording it over others will have a clear advantage over those with such scruples. That is, open political competition favors aggressive (hence dangerous) rather than defensive (hence harmless) political talents and will thus lead to the cultivation and perfection of the peculiar skills of demagoguery, deception, lying, opportunism, corruption, and bribery. Therefore, entrance into and success within government will become increasingly impossible for anyone hampered by moral scruples against lying and stealing. Unlike kings then, congressmen, presidents, and Supreme Court judges do not and cannot acquire their positions accidentally. Rather, they reach their position because of their proficiency as morally uninhibited demagogues. Moreover, even outside the orbit of government, within civil society, individuals will increasingly rise to the top of economic and financial success not on account of their productive or entrepreneurial talents or even their superior defensive political talents, but rather because of their superior skills as unscrupulous political entrepreneurs and lobbyists. Thus, the Constitution virtually assures that exclusively dangerous men will rise to the pinnacle of government power and that moral behavior and ethical standards will tend to decline and deteriorate all-around.
Moreover, the constitutionally provided "separation of powers" makes no difference in this regard. Two or even three wrongs do not make a right. To the contrary, they lead to the proliferation, accumulation, reinforcement, and aggravation of error. Legislators cannot impose their will on their hapless subjects without the cooperation of the president as the head of the executive branch of government, and the president in turn will use his position and the resources at his disposal to influence legislators and legislation. And although the Supreme Court may disagree with particular acts of Congress or the president, Supreme Court judges are nominated by the president and confirmed by the Senate and remain dependent on them for funding. As an integral part of the institution of government, they have no interest in limiting but every interest in expanding the government's, and hence their own, power.15
15See on this the brilliant and indeed prophetic analysis by John C. Calhoun, A Disquisition on Government (New York: Liberal Arts Press, 1953), esp. pp. 25-27. There Calhoun notes that a
written constitution certainly has many advantages, but it is a great mistake to suppose that the mere insertion of provisions to restrict and limit the powers of the government, without investing those for whose protection they are inserted with the means of enforcing their observance, will be sufficient to prevent the major and dominant party from abusing its powers. Being the party in possession of the government, they will... be in favor of the powers granted by the constitution and opposed to the restrictions intended to limit them. As the major and dominant parties, they will have no need of these restrictions for their protection.... The minor or weaker party, on the other contrary, would take the opposite direction and regard them as essential to their protection against the dominant party.. . . But where there are no means by which they could compel the major party to observe these restrictions, the only resort left them would be a strict construction of the constitution. ... To which the major party would oppose a liberal construction—one which which would give to the words of the grant the broadest meaning of which they were susceptible. It would then be construction against construction—the one to contract and the other to enlarge the powers of the government to the utmost. But of what possible avail could the strict construction of the minor party be, against the liberal interpretation of the major, when the one would have all the powers of the government to carry its construction into effect and the other be deprived of all means of enforcing its construction? In a contest so unequal, the result would not be doubtful. The party in favor of restrictions would be overpowered.... The end of the contest would be the subversion of the constitution.... the restrictions would ultimately be annulled and the government be converted into one of unlimited powers Nor would the division of government into separate and, as it regards each other, independent departments prevent this result.... as each and all the departments—and, of course, the entire government—would be under the control of the numerical majority, it is too clear to require explanation that a mere distribution of its powers among its agents or representatives could do little or nothing to counteract its tendency to oppression and abuse of power.
In sum, then, Rothbard has commented on this analysis,
the Constitution has proved to be an instrument for ratifying the expansion of State power rather than the opposite. As Calhoun saw, any written limits that leave it to government to interpret its own powers are bound to be interpreted as sanctions for expanding and not binding those powers. In a profound sense, the idea of binding down power with the chains of a written constitution has proved to be a noble experiment that failed. The idea of a strictly limited government has proved to be utopian; some other, more radical means must be found to prevent the growth of the aggressive State. (ForANew Liberty, p. 67)
IV
After more than two centuries of "constitutionally limited government," the results are clear and incontrovertible. At the outset of the American "experiment," the tax burden imposed on Americans was light, indeed almost negligible. Money consisted of fixed quantities of gold and silver. The definition of private property was clear and seemingly immutable, and the right to self-defense was regarded as sacrosanct. No standing army existed, and, as expressed in Washington's Farewell Address, a firm commitment to free trade and a noninterventionist foreign policy appeared to be in place. Two hundred years later, matters have changed dramatically.16 Now, year in and year out the American government expropriates more than 40 percent of the incomes of private producers, making even the economic burden imposed on slaves and serfs seem moderate in comparison. Gold and silver have been replaced by government-manufactured paper money, and Americans are being robbed continually through money inflation. The meaning of private property, once seemingly clear and fixed, has become obscure, flexible, and fluid. In fact, every detail of private life, property, trade, and contract is regulated and reregulated by ever higher mountains of paper laws (legislation), and with increasing legislation, ever more legal uncertainty and moral hazards have been created, and lawlessness has replaced law and order. Last but not least, the commitment to free trade and noninterventionism has given way to a policy of protectionism, militarism, and imperialism. In fact, almost since its beginnings the U.S. government has engaged in relentless aggressive expansionism and, starting with the Spanish-American War and continuing past World War I and World War II to the present, the U.S. has become entangled in hundreds of foreign conflicts and risen to the rank of the world's foremost warmonger and imperialist power. In addition, while American citizens have become increasingly more defenseless, insecure, and impoverished, and foreigners all over the globe have become ever more threatened and bullied by U.S. military power, American presidents, members of Congress, and Supreme Court judges have become ever more arrogant, morally corrupt, and dangerous.17
See also Anthony de Jasay, Against Politics: On Government, Anarchy, and Order (London: Routledge, 1997), esp. chap. 2.
16Robert Higgs, Crisis and Leviathan: Critical Episodes in the Growth of American Government (New York: Oxford University Press 1987), p. ix, contrasts the early American experience to the present:
There was a time, long ago, when the average American could go about his daily business hardly aware of the government—especially the federal government. As a farmer, merchant, or manufacturer, he could decide what, how, when, and where to produce and sell his goods, constrained by little more than market forces. Just think: no farm subsidies, price supports, or acreage controls; no Fede
ral Trade Commission; no antitrust laws; no Interstate Commerce Commission. As an employer, employee, consumer, investor, lender, borrower, student, or teacher, he could proceed largely according to his own lights. Just think: no National Labor Relations Board; no federal consumer "protection" laws; no Security and Exchange Commission; no Equal Employment Opportunity Commission; no Department of Health and Human Services. Lacking a central bank to issue national paper currency, people commonly used gold coins to make purchases. There were no general sales taxes, no Social Security taxes, no income taxes. Though governmental officials were as corrupt then as now—maybe more so—they had vastly less to be corrupt with. Private citizens spent about fifteen times more than all governments combined.—Those days, alas, are long gone.
What can possibly be done about this state of affairs? First, the American Constitution must be recognized for what it is—an error. As the Declaration of Independence noted, government is supposed to protect life, property, and the pursuit of happiness. Yet in granting government the power to tax and legislate without consent, the Constitution cannot possibly assure this goal but is instead the very instrument for invading and destroying the rights to life, liberty, and the pursuit of happiness. It is absurd to believe that an agency which may tax without consent can be a property protector. Likewise, it is absurd to believe that an agency with legislative powers can preserve law and order. Rather, it must be recognized that the Constitution is itself unconstitutional, i.e., incompatible with the very doctrine of natural human rights that inspired the American Revolution.18 Indeed, no one in his right mind would agree to a contract that allowed one's alleged protector to determine unilaterally —without one's consent—and irrevocably—without the possibility of exit—how much to charge for protection; and no one in his right mind would agree to an irrevocable contract which granted one's alleged protector the right to ultimate decisionmaking regarding one's own person and property, i.e., of unilateral lawmaking.19
17On the growth of U.S. government, and in particular the role of war in this development, see The Costs of War: America's Pyrrhic Victories, John V. Denson, ed. (New Brunswick, N.J.: Transaction Publishers, 1997); Higgs, Crisis and Leviathan; Ekkehart Krippendorff, Stoat und Krieg (Frankfurt/M.: Suhrkamp, 1985), esp. pp. 90-116; A New History of Leviathan, Ronald Radosh and Murray N. Rothbard, eds. (New York: Dutton, 1972); Arthur A. Ekirch, The Decline of American Liberalism (New York: Atheneum, 1967).
18For the most forceful statement to this effect see Lysander Spooner, No Treason: The Constitution of No Authority (Colorado Springs, Colo.: Ralph Myles, 1973); also Murray N. Rothbard, The Ethics of Liberty (New York: New York University Press, 1998), esp. chaps. 22 and 23.
Second, it is necessary to offer a positive and inspiring alternative to the present system.
While it is important that the memory of America's past as a land of pioneers and an effective anarcho-capitalist system based on self-defense and popular militias be kept alive, we cannot return to the feudal past or the time of the American Revolution. Yet the situation is not hopeless. Despite the relentless growth of statism over the course of the past two centuries, economic development has continued and our living standards have reached spectacular new heights. Under these circumstances a completely new option has become viable: the provision of law and order by freely competing private (profit and loss) insurance agencies.20
19In fact, any such protection-contract is not only empirically unlikely, but logically-praxeologically impossible. By "agreeing-to-be-taxed-and-legislated-in-order-to-be-protected" a person would in effect surrender (alienate) all of his property to the taxing authority and submit himself into permanent slavery to the legislative agency. Yet any such contract is from the outset impermissible, and hence null and void, because it contradicts the very nature of protection-contracts, namely the selfownership of someone to be protected and the existence of something owned by the protected (rather than his protector), i.e., private—separate—property.
Interestingly, despite the fact that no known state-constitution has ever been agreed upon by everyone falling under its jurisdiction and despite the apparent impossibility that this fact could ever be different, political philosophy, from Hobbes over Locke on down to the present, abounds with attempts to provide a contractual justification for the state. The reason for these seemingly endless endeavors is obvious: either a state can be justified as the outcome of contracts, or it cannot be justified at all. Unsurprisingly, however, this search, much like that for a squared circle or a perpetual mobile, has come up empty and merely generated a long list of disingenuous, if not fraudulent, pseudo-justifications by means of semantic fiat: "no contract" is really an "implicit," or "tacit," or "conceptual" contract. In short, "no" really means "yes." For a prominent modern example of this Orwellian "newspeak" see James M. Buchanan and Gordon Tullock, The Calculus of Consent (Ann Arbor: University of Michigan Press, 1962); James M. Buchanan, The Limits of Liberty (Chicago: University of Chicago Press, 1975); idem, Freedom in Constitutional Contract (College Station: Texas A and M University Press, 1977). For a critique of Buchanan and the so-called Public Choice School see Murray N. Rothbard, The Logic of Action Two (Cheltenham, U.K.: Edward Elgar, 1997), chaps. 4 and 17; Hans-Hermann Hoppe, The Economics and Ethics of Private Property (Boston: Kluwer, I 993), chap. 1.
20See on the following also chap. 12; Morris and Linda Tannehill, The Market for Liberty (New York: Laissez Faire Books, 1984), esp. chap. 8.
While hampered by the state, even now insurance agencies protect private property owners upon payment of a premium against a multitude of natural and social disasters, from floods and hurricanes to theft and fraud. Thus, it would seem that the production of security and protection is the very purpose of insurance. Moreover, people would not turn to just anyone for a service as essential as that of protection. Rather, as de Molinari noted,
before striking a bargain with (a) producer of security, . . . they will check if he is really strong enough to protect them (and) whether his character is such that they will not have to worry about his instigating the very aggressions he is supposed to suppress.21
In this regard insurance agencies also seem to fit the bill. They are "big" and in command of the resources— physical and human—necessary to accomplish the task of dealing with the dangers, actual or imagined, of the real world. Indeed, insurers operate on a national or even international scale, and they own substantial property holdings dispersed over wide territories and beyond the borders of single states and thus have a manifest self-interest in effective protection. Furthermore, all insurance companies are connected through a complex network of contractual agreements on mutual assistance and arbitration as well as a system of international reinsurance agencies representing a combined economic power which dwarfs most if not all contemporary governments, and they have acquired this position because of their reputation as effective, reliable, and honest businesses.
While this may suffice to establish insurance agencies as a possible alternative to the role currently performed by states as providers of law and order, a more detailed examination is needed to demonstrate the principal superiority of such an alternative to the status quo. In order to do this, it is only necessary to recognize that insurance agencies can neither tax nor legislate; that is, the relationship between the insurer and the insured is consensual. Both are free to cooperate or not to cooperate, and this fact has momentous implications. In this regard, insurance agencies are categorically different from states.
The advantages of having insurance agencies provide security and protection are as follows. First off, competition among insurers for paying clients will bring about a tendency toward a continuous fall in the price of protection (per insured value), thus rendering protection more affordable. In contrast, a monopolistic protector who may tax the protected will charge ever higher prices for his services.22
21De Molinari, The Production of Security, p. 12.
Second, insurers will have to indemnify t
heir clients in the case of actual damage; hence, they must operate efficiently. Regarding social disasters (crime) in particular, this means that the insurer must be concerned above all with effective prevention, for unless he can prevent a crime, he will have to pay up. Further, if a criminal act cannot be prevented, an insurer will still want to recover the loot, apprehend the offender, and bring him to justice, because in so doing the insurer can reduce his costs and force the criminal—rather than the victim and his insurer—to pay for the damages and cost of indemnification. In distinct contrast, because compulsory monopolists states do not indemnify victims and because they can resort to taxation as a source of funding, they have little or no incentive to prevent crime or to recover loot and capture criminals. If they do manage to apprehend a criminal, they typically force the victim to pay for the criminal's incarceration, thus adding insult to injury.23
22As Rothbard has explained, even
if government is to be limited to "protection" of person and property, and taxation is to be "limited" to providing that service only, then how is the government to decide how much protection to provide and how much taxes to levy? For, contrary to the limited government theory, "protection" is no more a collective, one-lump "thing" than any other good or service in society. . . . Indeed, "protection" could conceivably imply anything from one policeman for an entire country, to supplying an armed bodyguard and a tank for every citizen—a proposition which would bankrupt the society posthaste. But who is to decide on how much protection, since it is undeniable that every person would be better protected from theft and assault if provided with an armed bodyguard than if he is not? On the free market, decisions on how much and what quality of any good or service should be supplied to each person are made by means of voluntary purchases by each individual; but what criterion can be applied when the decision is made by government? The answer is none at all, and such governmental decisions can only be purely arbitrary. (The Ethics of Liberty, pp. 180-81)
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