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Why the State Celebrates Its Failures
The Mises Institute ^ | May 09, 2005 | Grant M. NĂ¼lle

Posted on 05/09/2005 6:19:48 AM PDT by kjvail

The second anniversary of America's expedition into Iraq passed with relatively scant fanfare. Since hostilities in Mesopotamia commenced, thousands of American and Iraqi casualties have been tallied. Every month Washington spends billion of dollars on counterinsurgency and rebuilding efforts in Iraq and further afield, which swells the nation's largest budget and budget deficit in its history[i].

As vast quantities of blood and treasure are expended abroad, Washington politicians win plaudits domestically for their warmongering, and government contracting at home and abroad burgeon, on what basis is this imperial project—financed by foreign lenders and American taxpayers—justified?...

...Democracy deconstructed

As Hans Hermann-Hoppe adeptly describes in Democracy: The God that failed, the democratic state is inherently a "public" monopoly. Unlike privately-owned monopolies, e.g., monarchies where the sovereign generally has an incentive to moderate expropriations of property to preserve the realm's present value for heirs, state officials in a democracy are mere caretakers who cannot privately enrich themselves from ownership or sale of government property.

Rather, a moral hazard and tragedy of the commons ensues as bureaucrats and politicians may merely exercise use of government property while on the state payroll, precipitating a strong inducement to maximize current use of government property, irrespective if such activities entail dire consequences for taxpayers and the economy at large.

As concerns government finance, officials conduct the borrowing and enjoy the resultant political plaudits from the constituencies that benefit from state largesse while other private citizens defray the expenditures and debts via taxation or government-stoked money creation. Indeed, Hoppe contends an elected president can run up public debts, instigate inflation, inaugurate long-running wars, and introduce other state projects footed by hapless taxpayers without being held personally liable for the consequences.

Rothbard’s Wall Street, Banks and American Foreign Policy methodically chronicles how the personnel of successive democratically-elected administrations manipulated American foreign policy to secure the narrow self-interests of connected business interests whilst justifying these massive, costly and incessant interventions on the pretext of combating communism or promoting democracy.

Politicians who have aggressively expanded the state in America and elsewhere are extolled as great. Verily, democratic governance provides an alluring career for aspiring politicians, their cronies and bureaucrats. Not only do officials have the resources accrued by the state at their disposal, they also exercise the authority and wherewithal to confiscate private property and participate in the process of spending and borrowing—absent individual culpability—all the while receiving a salary and pension funded by taxpayers. Furthermore, politicians and appointed administrators are only accountable during regular popularity contests, in which voters can reshuffle personnel but are not inclined to alter fundamentally the scheme of free-for-all theft.

Hoppe states democracy abolishes the distinction between rulers and ruled—the limited opportunity to become a member of the royal family that pervaded under monarchy—and assumes that any member of the political system may ascend to the upper echelons of governance. Given the state's indispensable need to steal for its subsistence and the nearly unfettered entry into the ranks of the ruling class, democracy renders it that much easier for politicians to accelerate exactions from the public, as the gates remain open for any individual or faction to gain access to governmental powers and impose the same taxes or regulations themselves. As democracy has taken root in the United States and elsewhere, jostling between rival political factions has been less about how flaccid or robust the state should be, but what direction the state should take as its scope expands.

The ability of elected politicians and entrenched bureaucrats to institutionalize and enforce systematic predation and redistribution of private property is an outcome of the democratic ethos itself. Indeed, the grand bargain of democracy is this: every individual within the system—whether voluntarily or not—cedes the inviolable title to his or her property for the ability to either elect, participate in or marshal a political movement that competes for the privilege of seizing and spending everyone else's money. It follows that individual responsibility and private property ownership are seriously impaired and denigrated as the government-instituted "law of the jungle" taps innate human characteristics such as envy, self-preservation, and keenness for gratification.

As Frederic Bastiat explained in The Law, self-preservation and self-development are universal instincts among men as is the preference to do so with the minimum amount of pain and the maximum level of ease. Plunder then is favored over production, so long as the risks and inputs of confiscation are not as agonizing or as indomitable as the painstaking act of production and exchange. When given an opportunity to seize private property or stipulate regulations on owner's use thereof, as democratic rule is wont to do, participants in the political system vie for the chance to apply the state's coercive arm in service of their supporters' ends.

Motivated by envy and self-preservation, all classes of individuals demand, whether through forceful or pacific means, the franchise as its price for defraying the expenses of others running the government. Once empowered to help decide the course of public expenditures—Bastiat wrote—plundered classes opt to be as licentious as other enfranchised classes, rendering the systematic looting universal, even though such profligacy is undeniably detrimental to the economy's well-being.

It should be noted that the chief feedback mechanism of democratic government, voting, does occur in private enterprises and associations. Beyond this superficial similarity, however, there are acute distinctions. Shareholders exercise voting rights in a corporation proportionate to stock ownership whereas every eligible voter in a democratic election is entitled to one vote, irrespective if they are net tax-eaters or taxpayers.

Should shareholders grow disaffected by voting procedures, business strategies or dividends payouts they may opt out of owning a portion of an enterprise by selling stock, a prerogative denied to democratic voters who must acquiesce to government spending plans and policies—regardless of consent—lest they risk jail or emigration. The intrinsic tenuousness of property ownership in a democratic system and the inability to extricate oneself and possessions from possible confiscation accelerates the temptation to seize other people’s goods.

Bastiat argues that the onset of universal plunder undermines the purpose of law, in his view the collective organization of the individual right to defense of life, liberty and property. The moment law is perverted to engineer ends contrary to individual liberty, e.g., enshrining the notion individuals are entitled to a portion of each other’s property absent voluntary agreement, the conversion pits morality versus the adulterated law. Thus, moral chaos is the outcome of democratization, as one must either relinquish respect for the law or compromise moral sense.

The divergence between morality and democratic rule can be observed in legal positivism, the notion that right and wrong are absent prior to the introduction of legislation. Legislation attenuates predictability of law as the free entry into government and the intrinsic fluidity of political priorities ensure the governing process reflects the most urgent desires of policy-makers and the electorate, irrespective of the long-term ramifications of the enacted rules. Furthermore, the emergence of public or administrative law, which exempts government agents from individual culpability when exercising their sanctioned duties, enables the state's workforce to engage in behaviors that no other individual may commit licitly. Lew Rockwell cites a few euphemisms where the state excused itself from the laws it professes to uphold, such as kidnapping posing as selective service, counterfeiting masquerading as monetary policy and mass murder sold as foreign policy[v].

Consequently, law is not considered negative—inimical to injustice as Bastiat would have it—much less universal, eternally bestowed, discoverable by man and anterior to the institution of government. Bastiat asserts that the prior existence of life, liberty, and property is the impetus for enacting laws in the first place. Moreover, the demarcation between right and wrong and the very definition of crime is obfuscated and debased by the inexhaustible and transitory adoption and amendment of legislative diktat and the bifurcation of law codes applicable to the rulers and the ruled.

In sum, the unique characteristics of democratic government tend, according to Hoppe, Bastiat and others, to accelerate rising time preference, decivilization, and the incidence of crime to the detriment of private property, voluntary production and exchange, individual responsibility and even morality.

Why then do Messrs. Bush, Wolfowitz, and any other politicians, statesmen or bureaucrats get away with inaugurating recurring conflicts and administer an ever-expanding vehicle of coercion and plunder? The fundamental rules and ethos of democratic government impel man's innate inclination toward self-preservation and self-development to not only produce, trade and safeguard his own possessions but also employ legal theft to acquire more property from others.

Politicians and their deputies are merely the best at exploiting the system's impaired moral climate to organize the state's confiscatory arm to serve their backer's interests.


TOPICS: Culture/Society; Government; News/Current Events; Philosophy; Politics/Elections
KEYWORDS: conspiracytheory; democracy; govwatch; intelligence; iraq; lewsers; monarchy; secondanniversary; tinfoilcoinvestor
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To: x
I'm against the pseudo-scientific theory that somehow monarchy is inherently better than republican government. It's based on too narrow and too selectively chosen a sample of history. It's junk social science.

I wouldn't go so far to call it junk science. I do believe that monarchies, as far as general trends, tend to have longer time preferences and are less destructive than democracies. But monarchies are certainly not ideal. It doesn't matter what type of government there is if it is not run by ethical people.

It would be impossible for societies to return a monarchical system. We can't go back and recreate what is gone. We are living in an age of individual empowerment and people would never return to a monarchical system.

Since we cannot depend on any political system to consistently produce ethical leaders, the only solution is to come up with an entirely different system, a system that is designed to be the least destructive and oppressive. To me, that would be the private non-monopolistic system that Hoppe brings up at the end of his book. The specifics of such a system, how we can get there, I don't know.

81 posted on 05/10/2005 1:56:43 PM PDT by ValenB4
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To: iconoclast
This is pretty simple, mate. Either we fight the jihadis over there, or we fight them over here.

On second thought.

we fight recruit the jihadis over there, or we then we'll fight them over here

82 posted on 05/10/2005 2:19:20 PM PDT by iconoclast (Conservative, not partisan.)
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To: iconoclast

I can't stand that stupid argument about fighing them over here. We lost in Vietnam and yet I don't recall having to fight the communists over here because of it. That type of propaganda is designed for those who enjoy having others think for them. In terms of jihadis, they're probably already over here. If not, it's pretty easy to get in.


83 posted on 05/10/2005 2:32:38 PM PDT by ValenB4
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To: annalex
they will have to set up a politburo tasked to prevent any such ideological slippage.

With out "ideological slippage," libertarianism cannot exist. Its built in to the philosophy. Of course the monarchists will want a politburo to ensure that the natural outcome is not tampered with by any revisionist or outside influences. But this is all academic, as libertarians will have long settled the problem prior to gaining popularity enough to effect any significant societal changes in their direction.

84 posted on 05/10/2005 2:57:14 PM PDT by jackbob
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To: jackbob

Well, that was the point of my irony. I agree with you that libertarianism (whatever that really is) will naturally evolve into a "rightwing, highly conservative monarchy", unless some comissariat prevents it.


85 posted on 05/10/2005 3:03:03 PM PDT by annalex
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To: kjvail
This is exactly backwards, it was the destruction of the Austria-Hungarian and German monarchies that gave us WWII.

I was talking -- as you can see if you read the lines you quoted -- about the First World War. It was monarchies and multinational empires -- Serbia, Austria, Russia, and Germany -- that brought that war about. Thus it's understandable why so many people assumed that the war was the last judgment of monarchy. I think they were wrong, but they had good reasons for feeling as they did.

Today, with the benefit of hindsight one could argue that the monarchies should have been left in place in 1919. There's something to be said for the argument. Habsburgs and Hohenzollerns were better than Hitler. Anything would be. But there are also problems with the argument.

It's dubious to claim that Hitler or a Hitler-like figure could never have come to power in a Monarchy. The Italian monarchy didn't prevent Mussolini from coming to power, and the case was similar in Romania. And the idea that a monarch could simply dismiss such a tyrant is a pipe dream.

Hitler did come to power thanks to the old monarchist Hindenberg. He won much support from monarchists and Germany's minor princelings. Such a tyrant could also have come to power because of the failure of a monarchy without a democratic interlude, and this could well have been the case in 1918 or 1919.

You're taking the tyranny produced by a breakdown in democracy (after the earlier breakdown of monarchy) as a sign of democracy's weakness, and ignoring the earlier vices of monarchy that produced WWI and set the stage for WWII. It's true that democracies had trouble cleaning up the mess produced by the First World War, but doubtful that monarchies would have done any better.

Hitler was a rabid anti-monarchist, he blamed them for the defeat of Germany in WWI.

Hitler blamed that defeat on the Jews and Socialists. He did dislike the Austrian monarchy for it's multinational character -- and of course tyrants hate whatever get in their way. But it's not clear that monarchists as monarchists were necessarily against Nazism.

We remember aristocrats who turned against Hitler, and it's right to honor them. But Germany was full of minor kings and petty princes and dukes who supported Hitler. Many joined the party and even the SS -- including relatives of the British, Dutch, and Greek royal families.

Just as Plato predicted and had been show 150 years earlier in France - democracy leads to tyranny.

True, for Plato democracy leads to tyranny. But in his view, monarchy and aristocracy (timocracy and oligarchy, more or less) inevitably end in democracy. It's a cycle. You want to argue that the motion can be arrested at monarchy. In that you're not so very different from Wilsonians who feel that all will lead to lasting democracies. Unfortunately, you can't arrest the process like that.

86 posted on 05/10/2005 3:11:34 PM PDT by x
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To: annalex

The philosophy of freewill is not tied down to any current dogma, and what may be the current natural outcome of the current dogma is not absolutelisticly definitive of free will. Time will bring progress, and your commissariats won't prevent it. Monarchy will not continue to be natural outcome.


87 posted on 05/10/2005 3:15:21 PM PDT by jackbob
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To: x; kjvail

The imperial prince was member of the NationalSocialist German Workers Party, and openly campaigned for that party, as did most members of the landed aristocracy. Of course this says nothing significant either way.


88 posted on 05/10/2005 3:23:29 PM PDT by jackbob
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To: ValenB4; iconoclast

Not even four years hence you both have completely forgotten the lessons of 9/11... and of 2/26.


89 posted on 05/10/2005 3:37:18 PM PDT by thoughtomator ("One cannot say that a law is right simply because it is a law.")
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To: jackbob

I don't want or need a commissariat, and following the inevitable and not very remote collapse of the democratic state, I will be very happy with the natural order as it emerges.


90 posted on 05/10/2005 3:54:23 PM PDT by annalex
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To: thoughtomator

So only those for the Iraq war remember and appreciate 9/11? Get real. You should change your screen name. The first part of it doesn't apply. After the next attack, then we can talk about how great the war was.


91 posted on 05/10/2005 3:56:42 PM PDT by ValenB4
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To: annalex
You state, without much substantiation, that monarchs "could be quite spendthrift and wasteful", and that they "get countries into ruinous wars and irritating fiscal crises".

Look at Bourbon-Habsburg rivalry. We've had this discussion before.

For a social order to be inherently better one needs to examine the principles underlying the order. Piling on examples of bad monarchs -- particularly when examples of bad republics are close on hand -- does nothing to advance a theoretical argument.

You're welcome to make your theoretical model. Once you have, though, it has to be empirically tested. That's what the examples of bad monarchs are: counterexamples that you ought to take into account. If the opposing evidence is more than the supporting evidence, there's something wrong with you're model. I'm not an expert, so I'm not going to venture a scholarly verdict on Hoppe's hypothesis, but I trust I've presented enough grounds for questioning his theories.

The monarchist argument is that a king has no need to expand his power beyond the point when his kingdom is secure. He therefore naturally tends to govern as libertarians teach, minimally, and with protection of rights as primary concern.

In other words, the argument is that kings will behave as prudent investors, as bourgeois shareholders or rentiers. There are problems with that as well. Kings, like other rulers, are subject to influences and pressures. They are confronted with real or perceived threats to their power and react or overreact in response to them. Moreover, they are subject to lust for power, avarice, hunger for glory, luxuriousness, insecurity and all the other human vices.

Not all monarchs fit Hoppe's happy bourgeois scheme. Some kings have been brought up with an exaggerated sense of their own entitlements and a stunted sense of responsibility. One real problem was that the populace that the kind was theoretically reponsible to often had no voice in its governance. Another was that the members of that public didn't count for much in the thinking of the day. The desire for glory was long seen as the common corruption of monarchy. Flattering and deceitful courtiers have also long been seen as a real problem. It would be nice if monarchies corresponded to Hoppe's ideal, but it's not the case.

What Hoppe's doing is contrasting an idealization of monarchy with a caricature of republicanism. He's selling the mirror image of 18th century republican thinking. They offered a picture of republican leaders as public spirited and virtuous and monarchy as corrupt in large part because they had little experience of real republics in action. Hoppe peddles an idealized version of monarchy, that many who lived under actual monarchies wouldn't recognize as true.

92 posted on 05/10/2005 3:57:59 PM PDT by x
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To: x
In other words, the argument is that kings will behave as prudent investors, as bourgeois shareholders or rentiers

No, the libertarian argument is not about the character of the king at all. The argument is that his position -- as one who governs by birthright and cannot be legitimately ousted -- makes him favor rights, legality, peace, and stability. It doesn't mean that bad kings are impossible, it means that even bad kings are nudged in the right direction by the necessity to avoid a revolution, while even good politicians are nudged into the wrong direction by the necessity to get elected.

There is a valid moralistic argument for Christian monarchy as well -- based on the fact that the Church is the repository of the moral teaching and installs the king -- but I did not make that argument in the post you are responding to.

93 posted on 05/10/2005 4:14:51 PM PDT by annalex
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To: thoughtomator
and of 2/26.

I give. What is that, Iraq voting day?

94 posted on 05/10/2005 4:20:40 PM PDT by iconoclast (Conservative, not partisan.)
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To: iconoclast

See. You forgot.


95 posted on 05/10/2005 4:36:04 PM PDT by annalex
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To: annalex

Is THIS what you're talking about?

http://www.whitehouse.gov/news/releases/2003/02/20030226-11.html


96 posted on 05/10/2005 4:40:46 PM PDT by iconoclast (Conservative, not partisan.)
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To: iconoclast

I have no idea. I forgot, too.


97 posted on 05/10/2005 4:42:45 PM PDT by annalex
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To: annalex
It's easy living in a republic to overestimate the vices of elected politicians and ignore the vices that kings and royal governments had in the real days of monarchy. What kings did to maintain their family income streams wasn't necessarily what their subjects regarded as being in their own best interest (and of course, some kings brought their countries close to ruin with their wars and extravagances). It took representative institutions to teach kings that the average person and his or her desires might have a value in their calculation.

Even bad kings are nudged in the right direction by the necessity to avoid a revolution, while even good politicians are nudged into the wrong direction by the necessity to get elected.

Unfortunately, insecurity of thrones can nudge bad kings to be even worse -- to become all the more oppressive in the fear that their power is threatened. This is a temptation that is less common in republics than in monarchies or dictatorships. For a public official to know that he will be out of office in four years isn't necessarily a bad thing.

A lot depends on the wider cultural context. Comparing monarchy under the best circumstances to representative governments under the worst circumstances is a crooked game.

98 posted on 05/10/2005 4:44:42 PM PDT by x
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To: annalex
I have no idea. I forgot, too.

LOL!

This is a good way to end the day ... I think I'll hit the sack and watch the boob tube for a while. ;o)

99 posted on 05/10/2005 4:47:33 PM PDT by iconoclast (Conservative, not partisan.)
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To: annalex

You missed the point. As I said libertarianism is still being developed as a philosophy. The end state theories are most likely only important as a direction. As a minarchist, I'm quite glad that you recognize that the democratic state is unlikely to collapse. When tied to a constitution, democratic states are the best known options of all possibilities.


100 posted on 05/10/2005 4:56:06 PM PDT by jackbob
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