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Daily Bell: Are you denying, then, that we need the state to defend us?

Dr. Hans-Hermann Hoppe: Indeed. The state does not defend us; rather, the state aggresses against us and it uses our confiscated property to defend itself. The standard definition of the state is this: the state is an agency characterized by two unique, logically connected features. First, the state is an agency that exercises a territorial monopoly of ultimate decision-making. That is, the state is the ultimate arbiter and judge in every case of conflict, including conflicts involving itself and its agents. There is no appeal above and beyond the state. Second, the state is an agency that exercises a territorial monopoly of taxation. That is, it is an agency that can unilaterally fix the price that its subjects must pay for the state’s service as ultimate judge. Based on this institutional set-up you can safely predict the consequences. First, instead of preventing and resolving conflict, a monopolist of ultimate decision-making will cause and provoke conflict in order to settle it to its own advantage. That is, the state does not recognize and protect existing law, but it perverts law through legislation. Contradiction number one: the state is a law-breaking law protector. Second, instead of defending and protecting anyone or anything, a monopolist of taxation will invariably strive to maximize his expenditures on protection and at the same time minimize the actual production of protection. The more money the state can spend and the less it must work for this money, the better off it is. Contradiction number two: the state is an expropriating property protector.

By Anthony Wile – March 27, 2011

Introduction: Dr. Hans-Hermann Hoppe, born in 1949 in Peine, West Germany, studied philosophy, sociology, economics, history and statistics at the University of the Saarland, in Saarbruecken, the Johann Wolfgang Goethe University, in Frankfurt am Main, and at the University of Michigan, in Ann Arbor. He received his doctorate (Philosophy, 1974, under Juergen Habermas) and his “Habilitation” degree (Foundations of Sociology and Economics, 1981) both from the Goethe University in Frankfurt. Dr. Hoppe is the author of eight books – the best known of which is Democracy: The God That Failed – and more than 150 articles in books, scholarly journals and magazines of opinion. As an internationally prominent Austrian School economist and libertarian philosopher, he has lectured all over the world and his writings have been translated into more than twenty languages.

Daily Bell: Please answer these questions as if our readers were not already aware of your fine work and considered opinions. Let’s jump right in. Why is democracy “the God that failed?”

Dr. Hans-Hermann Hoppe: The traditional, pre-modern state-form is that of a (absolute) monarchy. The democratic movement was directed against kings and the classes of hereditary nobles. Monarchy was criticized as being incompatible with the basic principle of the “equality before the law.” It rested on privilege and was unfair and exploitative. Democracy was supposed to be the way out. In opening participation and entry into state-government to everyone on equal terms, so the advocates of democracy claimed, equality before the law would become reality and true freedom would reign. But this is all a big error.

True, under democracy everyone can become king, so to speak, not only a privileged circle of people. Thus, in a democracy no personal privileges exist. However, functional privileges and privileged functions exist. Public officials, if they act in an official capacity, are governed and protected by “public law” and thereby occupy a privileged position vis-à-vis persons acting under the mere authority of “private law.” In particular, public officials are permitted to finance or subsidize their own activities through taxes. That is, they are permitted to engage in, and live off, what in private dealings between private law subjects is prohibited and considered “theft” and “stolen loot.” Thus, privilege and legal discrimination – and the distinction between rulers and subjects – will not disappear under democracy.

Even worse: Under monarchy, the distinction between rulers and ruled is clear. I know, for instance, that I will never become king, and because of that I will tend to resist the king’s attempts to raise taxes. Under democracy, the distinction between rulers and ruled becomes blurred. The illusion can arise “that we all rule ourselves,” and the resistance against increased taxation is accordingly diminished. I might end up on the receiving end: as a tax-recipient rather than a tax-payer, and thus view taxation more favorably.

And moreover: As a hereditary monopolist, a king regards the territory and the people under his rule as his personal property and engages in the monopolistic exploitation of this “property.” Under democracy, monopoly and monopolistic exploitation do not disappear. Rather, what happens is this: instead of a king and a nobility who regard the country as their private property, a temporary and interchangeable caretaker is put in monopolistic charge of the country. The caretaker does not own the country, but as long as he is in office he is permitted to use it to his and his protégés’ advantage. He owns its current use – usufruct – but not its capital stock. This does not eliminate exploitation. To the contrary, it makes exploitation less calculating and carried out with little or no regard to the capital stock. Exploitation becomes shortsighted and capital consumption will be systematically promoted.

Daily Bell: If democracy has failed what would you put in its place? What is the ideal society? Anarcho-capitalism?

Dr. Hans-Hermann Hoppe: I prefer the term “private law society.” In a private law society every individual and institution is subject to one and the same set of laws. No public law granting privileges to specific persons or functions exists in this society. There is only private law (and private property), equally applicable to each and everyone. No one is permitted to acquire property by means other than through original appropriation of previously un-owned things, through production, or through voluntary exchange, and no one possesses a privilege to tax and expropriate. Moreover, no one is permitted to prohibit anyone else from using his property in order to enter any line of production he wishes and compete against whomever he pleases.

Daily Bell: How would law and order be provided in this society? How would your ideal justice system work?

Dr. Hans-Hermann Hoppe: In a private law society the production of law and order – of security – would be undertaken by freely financed individuals and agencies competing for a voluntarily paying (or not-paying) clientele – just as the production of all other goods and services. How this system would work can be best understood in contrast to the workings of the present, all-too-familiar statist system. If one wanted to summarize in one word the decisive difference – and advantage – of a competitive security industry as compared to the current statist practice, it would be: contract.

The state operates in a legal vacuum. There exists no contract between the state and its citizens. It is not contractually fixed, what is actually owned by whom, and what, accordingly, is to be protected. It is not fixed, what service the state is to provide, what is to happen if the state fails in its duty, nor what the price is that the “customer” of such “service” must pay. Rather, the state unilaterally fixes the rules of the game and can change them, per legislation, during the game. Obviously, such behavior is inconceivable for freely financed security providers.

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