When I read Hoppe’s Democracy, I did it with a very skeptical mindset. I had heard the man preferred monarchy to democracy, and I had heard that he advocated for something called physical removal. Due to my time spent on social media, I had seen arguments against pure “majority rules” democracy and had bought in, but I thought “surely, the United States is not a democracy.” I hold the belief that so many others do: we aren’t a democracy, we are a constitutional republic (whatever that loosely means). This issue was that I had no idea what democracy was or the real reasons as to why it is bad. The intent of this article is to explain the first part of Hans-Hermann Hoppe’s Democracy: The God that Failed, in a shorter and more concise manner.
The book begins with the explanation of the economic phenomenon of time preference. I have written on this before, but in short, what this means is that societies that are oriented towards the future will increase their process of civilization. Societies that are oriented towards the present will slow down or roll back the process of civilization. Remember that these societies are made of individuals, and these individuals are the ones who have a preference for or against the future. Think of the difference between a primitive man (caveman, if you will) living moment by moment to survive, doing very little to focus on the future. Contrast this idea of a man to the venture investor, sacrificing his present earnings for the hope of future gain. This investment is what lets civilization spring forward, so promotion of this investment is a good thing. It allows new medicines and technologies to be created, which alleviates our human suffering.
Government violations of property rights (coercive taxes), this raises time preference, which means that people prefer the present to the future. This is because they have less money now, but more importantly, taxes persist, which means less future money. If you are going to have less than you would hope to in the future, your expectations are lowered and you shall become more present-oriented. Government taxes everyone to different degrees, but nonetheless, everyone is made more present-oriented. Those that should be looking out the most for the future, which are investors and tech geniuses, are more heavily taxed (capital gains is really high) which does not do anything food for the process of civilization. It slows it down and keeps innovation from happening.
Every government is a territorial monopolist which violates the property rights of the citizenry. Every government stands as a threat to civilization, but different governments stand as threats to civilization to a different degree. Hoppe argues (as an extension of Mises) that government relies on widespread popular contentment to exist. The original form of government is the development of small territorial monopolies that are formed by people with exceptional speech, persuasion, and leadership abilities, whom Hoppe calls “elite,” for they have the gift of being able to get followers to be content with what they’re doing. The state is under their control. They own the state as property as you own your house, Xbox, or car as property. It is theirs, and this is called a private government.
A private government owner individually owns the state and has the most powerful say in what it does and does not do. This ruler will have the final say, for the state is his. Because the ruler owns the state like private property, all taxes that he gains become his assets. He now owns the money stolen from his population. He may now do as he wishes. Hoppe goes on to say that “The institution of private government ownership systematically shapes the incentive structure confronting the ruler and distinctly influences his conduct of government affairs.” The structure of the state within a country plays a critical role in how the head of state will act.
Private ownership of government would promote foresight and economic calculation. Because the ruler is there for as long as he pleases, and his descendants may be there long after he is gone, he is urged to look far into the future. This means that he would actually be concerned about the long-term effects of debt and taxation, so he is mindful so to not overtax the population and destroy its long-term wealth. If the owner of a government destroys the long-term wealth of a country, that is less wealth for him in the future, for he makes his living by stealing from them, at least primarily. If he lets the economy grow, that is more money for him to live parasitically on in the future.
The king also would feel compelled to promote private property rights. Ron Paul likes to say “don’t steal, the government hates competition,” which is very true. The ruler would realize an economy is not productive when people are stealing from one another and eroding property rights, so he would take effective measures to prevent that. There is historical precedent for this, too, for French philosopher Bertrand de Jouvenel wrote “The King’s rights have incomparably greater scope than those of the miller; but as far as the miller’s right goes it is as good as the king’s; on his own ground, the miller is entitled to hold off the king.” What de Jouvenel described is the private property norm being implemented and recognized among European kings, citing the French king’s oath, which stated that all shall be held to this equal justice.
The ruling family would be highly selective too, meaning that only the ruler and his close family (or whoever he deemed appropriate) would reap the benefits of the parasitic lifestyle. The boundary between the rulers and the ruled is clear. It is clear who the ruler is, too, but this also means there is someone specific to target in the event that over taxation is to happen. The ruler has many benefits, but he is also accountable.
When it comes to war, kingly rulers will fight wars over property disputes or territorial issues, if they fight them at all. The funding for the war would come from the capital held by the king’s estate, and he has to be mindful so as to not overtax the population, making them turn on him. This high cost of war makes peace a highly preferable alternative, which is why there was much cross-family marriage in the kingly times. He would also be mindful of where he does and does not fight, for he now has troops that volunteered to join, seeing as that an involuntary draft would threaten his legitimacy.
Public Government – Democracy
A different kind of government has become popular in recent days, though. That type of government is democracy. Democracy is not a system where a bunch of people vote on everything, and the 51% always rules. Rather, it is a governmental system that does not have a private owner. It is a government that the “people own,” at least allegedly. The United States fits under this definition, for there is no private owner of the government. Most of the world also fits under this definition today. This is a tough definition to grasp, for when the disadvantages of democracy are brought up, people think “surely I do not live in this type of country,” but this fact of the matter is that they probably do. These are the disadvantages of having a government that is ruled by the people, for when the people (or the public) rules, that is when the government is called a public government.
Unlike the ruler of a private state, the ruler of a public government does not own it. He is only there for a term, making him the caretaker, rather than the ruler. This means that whoever the ruler is, they will be compelled to use up as many government resources as they can during their time in office. That is why we see Donald Trump and we saw Barack Obama going on many many golf trips, and it is why we have seen presidents for decades go on lavish vacations with their families. This makes sense, for whatever the caretaker does not consume now, they may never be able to consume. This caretaker will also not have much foresight, for he is only looking at what it takes to be re-elected, rather than the long-term effects of policy. A ruler can make promises that he obviously cannot keep and rack up debt because of it, ignoring the long-term economic effects as long as it means re-election.
At the same time, the class distinction is weakened, and almost nonexistent. Anyone can become a member of the ruling class, meaning that anyone can run for office. This creates an illusion and makes taxation seem much less of a violation of property rights. When your nice neighbor Jeff is the elected official raising taxes, the theft does not seem quite as horrendous as it did beforehand.
In comes a spiral of rising time-preference (or present orientedness). As politicians make promises that rack up debt, that increases future taxes. People see that the future looks bleaker and bleaker and decide to focus more on today. Fewer people are looking towards the long-term and more people look towards the short term, and the fastest way to get rich in the short term is the violation of property rights, so burglary and theft increase, along with corporate lobbying to get government benefits. We spend more and more and shovel more and more onto the next generation, which is why we tax the youngsters of today for the elderly’s social security, while today’s youth will never see a penny of that go back into their pockets. The national debt goes up and up, for spending bills in the house and senate only need to appease the public in the present, rather than the nation and its people in the long term. This process only gets worse as time goes on and spending goes up.
Democracy also promotes a welfare state. Law (which is based on ethics) erodes, while legislation (which is based on politicians) arises. Legislation will be passed to please today’s population, and the state will also work to make people dependent upon it. It will begin to give out welfare and entitlements, and since people respond predictably to incentives, this will predictably begin to decrease future productivity. If someone can get paid to not work, why would they work? If government can make people dependent on them by shoveling them money, why wouldn’t they? Decivilization will be set in motion, for people cease to be productive and focus more on the present.
The mere act of legislating creates uncertainty when it comes to the law, which causes people to be present-oriented, and we know what that does. At the same time constantly unpredictably changing legislation promotes disrespect for the law, causing crime rates to go up.
War changes as well. The best way to gain territory and increase the tax base for a public government becomes invading other countries. It is why we saw massive military conquests across Europe. Thankfully, the U.S. managed to contractually obtain land through most of its existence, but many other democratic countries did things non-peacefully.
When a king engages in a war, it is a war between him and his private resources against the private estate of another king. The attack will be contained between those two rulers, for if a king wants the other’s property, he will be careful as to not attack civilians and potential taxpayers for whatever king gains that property. The civil population would be “mere spectators” in a war between monarchs, according to Guglielmo Ferrero, an Italian historian. He continues that “having to economize their men, generals try to avoid fighting battles,” in his book Peace and War. The king was against the king, rather than the country being against the country.
Public governments at war engage in total war. Because the distinction between the rulers and the ruled is nonexistent, there is no ruler to target, so the entire civil population is suddenly involved in the conflict. This also means the would-be ruled get especially involved, leading to nationalism, or “the emotional identification of the public with large anonymous groups of people” based on language, culture, race, or just country, according to Hoppe. These wars now mold into national wars. The war is against two different ways of life, which means that the only way to win is “cultural, linguistic, or religious domination and subjugation (or extermination).” The distinction between combatants and noncombatants becomes null and the brutality of war increases to a horrific degree. “The new era of democratic republican warfare… is the era of total war.” Think of the American Civil War, where the Northern Union was intent on the complete decimation of the Southern lifestyle, causing entire towns to be burnt to the ground and a profound number of American-born troops to be lost.
The World Today
Today, we see a skyrocketing national debt, a growing welfare state, and American imperialist wars to implement the vague idea of “democracy” in middle eastern countries. We see increased present orientedness and rising crime rates, along with a bureaucratic system that does not care if it solves any problems. As Jeff Deist said after Trump’s inauguration:
Democracy was always a bad idea, one that encourages mindless majoritarianism, political pandering, theft, redistribution, war, and an entitlement mentality among supposedly noble voters. It’s an idea whose time has passed, both on a national and international scale. The future of liberty is decentralized, and will be led by smaller breakaway nations and regions where real self-determination and real consensus is not an illusion. Jefferson and Hoppe were right about democracy, but it took Trump and Brexit to show the world how quickly elites abandon it when they don’t prevail.
Democracy takes many forms and characterizes most of the world today. The small individually owned and ruled and economically calculable private governments are the prime alternative to this. The small state of Liechtenstein currently serves as the prime example for real-world Hoppeanism being implemented.
Democracy is a pathetically failed god that the west, along with the rest of the world, needs to quit idolizing. When you think of democracy, no longer this of raw majoritarianism, but rather see it for what it is: public government ownership. There is no hope for the future of civilization as long as we keep the model of the state.
This was originally published on 71 Republic.