DemocracyThe God That Failed (24 page)

Lastly, as for strategic considerations, in order to approach the goal of a non-exploitative social order, i.e., private property anarchy, the idea
of majoritarianism should be turned against democratic rule itself. Under any form of governmental rule, including a democracy, the "ruling
class" (politicians and civil servants) represents only a small proportion of the total population. While it is possible that one hundred parasites may lead a comfortable life on the products of one thousand hosts, one thousand parasites cannot live off of one hundred hosts. Based on the recognition of this fact, it would appear possible to persuade a majority of the voters that it is adding insult to injury to let those living off of other peoples' taxes have a say in how high these taxes are, and to thus decide, democratically, to take the right to vote away from all government employees and everyone who receives government benefits, whether they are welfare recipients or government contractors.

²³
See on this Hans-Hermann Hoppe,
A
Theory
of
Socialism
and
Capitalism
(Boston: Kluwer, 1989); idem, "Desocialization in a United Germany,"
Review
of
Austrian
Economics
5, no. 2 (1991); Murray N. Rothbard, "The End of Socialism and the Calculation Debate Revisited," in idem,
The
Logic
of
Action
One
(Cheltenham, U.K.: Edward Elgar, 1997); idem, "How and How Not To Desocialize,"
Review
of
Austrian
Economics
6, no. 1 (1992).

²⁴
See on this Rothbard,
The
Ethics
of
Liberty;
Hans-Hermann Hoppe,
The
Econom
ics
and
Ethics
of
Private
Property
(Boston: Kluwer, 1993) esp. part 2; also Anthony de Jasay,
Choice,
Contract,
Consent:
A
Restatement
of
Liberalism
(London: Institute of Economic Affairs, 1991).

In addition, in conjunction with this strategy it is necessary to recognize the overwhelming importance of secession and secessionist movements. If majority decisions are "right," then the largest of all possible majorities, a world majority and a democratic world government, must be considered ultimately "right," with the consequences predicted at the outset of this chapter. In contrast, secession always involves the breaking away of smaller from larger populations. It is thus a vote against the principle of democracy and majoritarianism. The further the process of secession proceeds to the level of small regions, cities, city districts, towns, villages, and ultimately individual households and voluntary associations of private households and firms, the more difficult it will become to maintain the current level of redistributive policies. At the same time, the smaller the territorial units, the more likely it will be that a few individuals, based on the popular recognition of their economic independence, outstanding professional achievement, morally impeccable personal life, superior judgment, courage, and taste, will rise to the rank of natural, voluntarily acknowledged elites and lend legitimacy to the idea of a natural order of competing (non-monopolistic) and freely (voluntarily) financed peacekeepers, judges, and overlapping jurisdictions as exists even now in the arena of international trade and travel. A pure private law society—as the answer to democracy and any other form of political (coercive) rule.
²⁶

25
See on this also Murray N. Rothbard,
Power
and
Market
,
pp. 189ff.

26
On the law and economics of secession see
Secession,
State
and
Liberty,
David Gordon, ed. (New Brunswick, N.J.: Transaction Publishers, 1998), with essays by Donald W. Livingston, Stephen Yates, Scott Boykin, Murray N. Rothbard, Clyde N. Wilson, Joseph R. Stromberg, Thomas DiLorenzo, James Ostrowski, Hans-Hermann Hoppe, Pierre Desrochersand Eric Duhaime, and Bruce L. Benson; also HansHermann Hoppe, "The Western State as a Paradigm: Learning From History,"
Politics
and
Regimes:
Religion
and
Public
Life
30 (1997); Robert W. McGee, "Secession Reconsidered,"
Journal
of
Libertarian
Studies
11, no. 1 (1994).

5

On
Centralization
and
Secession

A state is a territorial monopolist of compulsion—an agen
cy which may engage in continual, institutionalized property rights violations and the exploitation—in the form of expropriation, taxation, and regulation—of private property owners.
¹
Assuming no more than selfinterest on the part of government agents, all states (governments) can be expected to make use of this monopoly and thus exhibit a tendency toward
increased
exploitation. On the one hand, this means increased domestic exploitation (and internal taxation). On the other hand, and this aspect in particular will be of interest in the following, it means territorial expansionism. States will always try to enlarge their exploitation and tax base. In doing so, however, they will come into conflict with other, competing states. The competition between states qua territorial monopolists of compulsion is by its very nature an eliminative competition. That is, there can be only one monopolist of exploitation and taxation in any given area; thus, the competition between different states can be expected to promote a tendency toward increased political centralization and ultimately one single world state.

A glance at Western history suffices to illustrate the validity of this conclusion. At the beginning of this millenium, for instance, Europe consisted of thousands of independent political units. Now, only seve
ral dozen such units remain. To be sure, decentralizing forces also existed. There was the progressive disintegration of the Ottoman Empire from the sixteenth century until after World War I and the establishment of
modern Turkey. The discontiguous Habsburg Empire was gradually dismembered from the time of its greatest expansion under Charles V until it disappeared and modern Austria was founded in 1918. And only recently, before our very eyes, the former Soviet Empire disintegrated. There are now more than a dozen independent states on the soil of the former Soviet Union. The former Yugoslavia consists now of Slovenia, Croatia, Serbia, Macedonia, and Bosnia. And the Czechs and the Slovaks have split and formed independent countries. However, the overriding tendency was in the opposite direction. For instance, during the second half of the seventeenth century, Germany consisted of some 234 countries, 51 free cities, and 1,500 independent knightly manors. By the early nineteenth century, the total number of the three had fallen to below 50, and by 1871 unification had been achieved. The scenario in Italy was similar. Even small states have a history of expansion and centralization. Switzerland began in 1291 as a confederation of three independent cantonal states. By 1848 it was a single (federal) state with some two dozen cantonal provinces.

¹
On the theory of the state see Murray N. Rothbard,
For
A
New
Liberty
(New York: Macmillan, 1978); idem,
The
Ethics
of
Liberty
(New York: New York University Press, 1998); idem,
Power
and
Market
(Kansas City: Sheed Andrews and McMeel, 1977); Hans-Hermann Hoppe,
Eigentum,
Anarchie
und
Staat
(Opladen: Westdeutscher Verlag, 1987); idem,
A
Theory
of
Socialism
and
Capitalism
(Boston: Kluwer, 1989); idem,
The
Economics
and
Ethics
of
Private
Property
(Boston: Kluwer, 1993); also Albert J. Nock,
Our
Enemy,
the
State
(Delevan, Wise: Hallberg Publishing, 1983); Franz Oppenheimer,
The
State
(New York: Vanguard Press, 1914); idem,
System
der
Soziologie,
Vol.2:
Der
Staat
(Stuttgart: G. Fischer, 1964); Anthony de Jasay, the
State
(Oxford: Blackwell, 1985).

Moreover, from a global perspective, mankind has come closer than ever before to the establishment of a world government. Even before the dissolution of the Soviet Empire, the United States had attained hegemonical status over Western Europe (most notably over West Germany) and the Pacific rim countries (most notably over Japan)—as indicated by the presence of American troops and military bases, by the NATO and SEATO pacts, by the role of the American dollar as the ultimate international reserve currency and of the U.S. Federal Reserve System as the "lender" or "liquidity provider" of last resort for the entire Western banking system, and by institutions such as the International Monetary Fund (IMF), the World Bank, and the recently established World Trade Organization (WTO).
²
In addition, under American hegemony the political integration of Western Europe has steadily advanced. With the recent establishment of a European Central Bank and a European Currency (EURO), the European Community is near completion. At the
same time, with the North American Free Trade Agreement (NAFTA) a significant step toward the political integration of the American continent has been taken. In the absence of the Soviet Empire and its military threat, the United States has emerged as the world's sole and undisputed military superpower and its "top cop."

²
On the role of "fiat" (paper) money, central banking, and international (interstate) monetary cooperation as a vehicle of political unification and an instrument of economic imperialism, i.e., the exploitation of "peripheral" by "dominant" states, see Hans-Hermann Hoppe, "Banking, Nation States, and International Politics: A Sociological Reconstruction of the Present Economic Order," in idem,
The
Economics
and
Ethics
of
Private
Property;
JorgGuidoHulsmann, "Political Unification: A Generalized Progression Theorem,"
Journal
of
Libertarian
Studies
13, no. 1 (1977); also Murray N. Rothbard,
Wall
Street,
Banks,
and
American
Foreign
Policy, (Burlingame, Calif.: Center for Libertarian Studies, 1995). See also notes 18 and 19 below.

According to the orthodox view, centralization is generally a "good" and progressive movement, whereas disintegration and secession, even if sometimes unavoidable, represent an anachronism. It is assumed that larger political units—and ultimately a single world government—imply wider markets and hence increased wealth. As evidence of this, it is pointed out that economic prosperity has increased dramatically with increased centralization. However, rather than reflecting any truth, this orthodox view is more illustrative of the fact that history is typically written by its victors. Correlation or temporal coincidence do not prove causation. In fact, the relationship between economic prosperity and centralization is very different from and indeed almost the opposite of what orthodoxy alleges.
³

Political integration (centralization) and economic (market) integration are two completely different phenomena. Political integration involves the territorial expansion of a state's power of taxation and property regulation (expropriation). Economic integration is the extension of the interpersonal and interregional division of labor and market participation.
⁴
In principle, in taxing and regulating private property owners and market income earners, all governments are counterproductive. They
reduce
market participation and the formation of economic wealth.
⁵
Once the existence of a government has been assumed, however, no direct relationship between territorial size and economic integration exists. Switzerland and Albania are both small countries, but
Switzerland exhibits a high degree of economic integration, whereas Albania does not. Both the U.S. and the former Soviet Union are large. Yet while there is much division of labor and market participation in the U.S., there was almost no economic integration in the Soviet Union, where virtually no private capital ownership existed.
⁶
Centralization, then, can go hand in hand with either economic progress or retrogression. Progress results whenever a less taxing and regulating government expands its territory at the expense of a more exploitative one. If the reverse occurs, centralization implies economic disintegration and retrogression.

³
On the following see Jean Baechler,
The
Origins
of
Capitalism
(New York: St.Martin's Press, 1976), esp. chap. 7; Hans-Hermann Hoppe, "The Economic and Political Rationale for European Secessionism," in
Secession,
State,
and
Liberty,
David Gordon, ed. (New Brunswick, NJ: Transaction Publishers, 1998); also Eric L. Jones,
The
European
Miracle
(Cambridge: Cambridge University Press, 1981); Nathan Rosenberg and L.E. Birdzell,
How
the
West
Grew
Rich
(New York: Basic Books, 1986); David S. Landes,
The
Wealth
and
Poverty
of
Nations
(New York: Norton, 1998).

⁴
On the the emergence of division of labor and economic integration see Ludwig von Mises,
Human
Action:
A
Treatise
on
Economics,
Scholar's Edition (Auburn, Ala.: Ludwig von Mises Institute, 1998), chap. 8; Murray N. Rothbard, "Freedom, Inequality, Primitivism, and the Division of Labor," in idem,
Egalitarianism
as
a
Revolt
Against
Nature
and
Other
Essays
(Auburn, Ala.: Ludwig von Mises Institute, 2000).

⁵
See on this Rothbard,
Power
and
Market.