Hoppe-ing Mad

A young gentleman (whose expertise in various technical fields makes him a valuable companion, and whose opinion I value greatly) recently tweeted an exerpt from Democracy: The God That Failed, a 2001 book by Hans-Hermann Hoppe. I will confess my unfamiliarity with the text, so please recognize that the following comments reflet my exposure to only this relatively small portion.

The piece, if I am correct in my analysis, is making the argument that democracy is inherently unstable and that monarchies are a more stable and desireable form of governance. If I may sum up my reaction in .gif form:

giphy

Truly, this presidency is the gift that keeps on giving.

Hoppe makes several points in the brief essay that I read, but I would like to address what I believe are his two main assertions: that monarchies tend more towards moderation and that taxation is theft.

Moderate Monarchies

Hoppe’s contention is that a monarcy would tend to be more moderate than a democracy. He writes that:

[A king’s] degree of economic exploitation will tend to be less than that of a government caretaker…private government ownership stimulates the development of a clear “class consciousness” on the part of the nongovernment public and promotes the opposition and resistance to any expansion of the government’s exploitative power. A clear-cut distinction between the (few) rulers on the one hand and the (many) ruled on the other exists, and there is little risk or hope of anyone of either class ever falling or rising from one class to the other. Confronted with an almost insurmountable barrier in the way of upward mobility, the solidarity among the ruled-their mutual identification as actual or potential victims of governmental property rights violations-is strengthened, and the risk to the ruling class of losing its legitimacy as the result of increased exploitation is heightened.

Are Monarchies More Receptive To The People?

The notion that a monarchy would be more moderate is false on its face. Amartya Sen, in Development As Freedom, makes it clear that governments which do not face electoral accountability are more exploitative, more oppressive, and more willing to sacrifice long-term benefits for short-term gain. He writes (emphasis mine), that “No famine has ever taken place in the history of the world in a functioning democracy….Famines have tended to occur in colonial territories governed by rulers from elsewhere (as in British India or in an Ireland administered by alienated English rulers) or in one-party states (as in the Ukraine in the 1930s, or China during 1958-1961, or Cambodia in the 1970s), or in military dictatorships.” [1]

Hoppe’s contention that a privately-owned government would be more receptive to the needs of its subjects than that of a democracy is, by definition, absurd. The idea that an unelected monarch would be held to a stronger account than a politician in a representative democracy (who must face voters regularly) only makes sense if we concede Hoppe’s second point.

Hoppe’s Second Point

Hoppe’s assertions rest on the assumption that every actor involved in the economy would behave rationally (they never do, because of course they don’t, but ignore that for right now). He believes that a privately-owned government wouldn’t overly exploit its worker-subjects because “private ownership in and of itself leads to economic calculation and thus promotes farsightedness. In the case of the private ownership of government, this implies a distinct moderation with respect to the ruler’s incentive to exploit his monopoly privilege of expropriation, for acts of expropriation are by
their nature parasitic upon prior acts of production on the part of the
nongovernmental public.”

I can’t find any fault in Hoppe’s theory anywhere. But anyone who’s been semi-conscious since, say, 2008 has to be aware that almost without exception, owners of capital (who fit every defintion of Hoppe’s private owner) have acted with no sense of foresight and with no discernable motivation beyond grabbing everything they can with both hands.

If Hoppe’s theory is correct, then why did Exxon bury evidence of climate change for decades? Wouldn’t it have been more rational to plan for the long term and invest in non-extractive technologies? If Hoppe’s theory is correct, why did American Airlines shareholders go ballistic when the company announced a wage increase? Wouldn’t the long-term health of the company be better served by higher-paid, happier workers?

I could go on, but the point is: private actors are no better, and are probably worse, than public figures when it comes to making long-term decisions. The notion that a monarch wouldn’t overwork and overexploit his workforce is proven misinformed over and over again.

But what about the flipside, the idea that the subjects, so overworked as they would be, would rise up? Self-interest would require the monarch to make sure that his subjects never got so crushed that they decided to rebel. Again, this is the kind of theory that makes sense among rational people who have never met another person.

When the State holds monopoly power over violence, it has no need to fear a peasant uprising; when one actor holds all the boots, batons, and bombs, it only needs to concern itself with how it will wash the blood off of the streets. Can Hoppe point to a single instance in recent history where a popular rebellion was able to dislodge an entrenched political figure? I’d guess not. The power imbalance is too massive. As David Harvey says, “What happened in 1917 in Russia couldn’t happen today. I mean the thing that struck me about Ferguson was the sight of those militarized police taking and going down — I mean, there’s no way, it seems to me, that a political movement could imagine taking to the streets and storming the barricades and getting anywhere. They would simply be mowed down.”

Quit Whining, Pay Your Taxes

The imposition of a government tax on property or income violates a property owner’s and income producer’s rights as much as theft does. In both cases the owner-producer’s supply of goods is diminished against his will and without his consent. Government money or Illiquidity” creation involves no less a fraudulent expropriation of private property owners than the operations of a criminal counterfeiting gang. As well, any government regulation as to what an owner may or may not do with his property-beyond the rule that no one may physically damage the property of others and that all exchange and trade be voluntary and contractual-implies the “taking” of somebody’s property, on a par with acts of extortion, robbery, or destruction. But taxation, the government’s provision for liquidity, and government regulations, unlike their criminal equivalents, are considered legitimate, and the victim of government interference, unlike the victim of a crime, is not entitled to physically defend and protect his property.

As Matt Bruenig has written, the notion of “pre-tax” income is absurd. Hoppe seems to be asserting here that taxation is theft, because it is involuntary and it takes from an individual what is that individual’s own property.

Taxation can only be theft when you can say, in pure honesty, that the product of your labor is truly yours. Is it? We’ll set aside things like capital income and inherited wealth, just so we can engage with the strongest version of Hoppe’s argument. Let’s imagine the archetypical Randian “maker” (as opposed to the parasitic “taker”) who built up wealth with his or her own labor. As the argument goes, one exerts his or her own labor-force to create a widget, which is then sold for a profit.

But you did not build an oil rig out of steel you smelted out of iron you dug out of the ground with your own hands. You did not refine the oil into the plastic you used to build the mold for your prototype. You did not lay down the asphalt for the roads that ship your product, nor did you blaze a trail through the jungle to find the rubber trees that were used to build the tires on the trucks and planes that compose your worldwide shipping network. You did not turn the sand into glass to install as a window in the storefront where your good was sold.

Even more fundamentally, you did not discover, ex nihilo, the engineering and mathematical concepts that you utilized to build your widget. You did not discover, independent of those who came before you, the written word with which to formally document your thought process. No, the uncomfortable truth is that none of us stand alone, all of us are elevated by our predecessors, most of whom we will never meet. Your success or failure is not the result of your talent, or not your talent only, but rather the result of billions–yes, billions–of other people, some living, some dead. Wealth is not created in some contextless vacuum, where a modern-day Prometheus steals fire from the gods to bring wisdom to the rest of us.

To put it another way: how can anyone make the argument that the product of my labor is mine, when I used the product of so many other people to make it?

Concluding Remarks

Careful readers might point out, if they wanted, I have not taken any time to address what is really Hoppe’s key point: that democraies are inefficient and immoral. There’s a reason for that, and it’s not that I agree with him. I happen to have Some Thoughts about this, and I think it deserves its own piece. So, for now, let this be enough.


[1] Amartya Sen. Development As Freedom, 1999. Page 16.



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  1. Hoppe-ing Mad, Part 2: Electric Boogaloo – The Georgia Wonk

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