A Review of Hans Hermann Hoppe’s Democracy: The God That Failed, by Keith Preston

In the early 1950s a collection of essays was published in a single book titled “The God That Failed”. The “god” being referred to was Soviet Communism and the authors were disillusioned former Communist enthusiasts whose god had been tried and found severely flawed. Now, a half century later, Hans Hermann Hoppe provides a penetrating critique of another failed political idol. Hoppe’s “Democracy: The God That Failed – The Economics and Politics of Monarchy, Democracy and Natural Order” (Transaction Publishers, 2001) may well be the most important book on political philosophy to emerge in the last century and may eventually mark the initiation of a whole new era in political thought. If Hoppe’s thesis is correct, and he argues his case quite persuasively, then he has revolutionized modern political philosophy in a manner approaching Copernican dimensions.

A native of Germany and a professor of economics at the University of Nevada at Las Vegas, Hoppe continues in the school of “Austrian” economics developed by Ludwig von Mises and his student, Murray N. Rothbard. Mises is probably best known for his critique of state socialist schemes for centralized economic planning arguing that such endeavors are literally scientifically impossible as they contain no mechanism (such as the pricing system of the market) by which consumer demand can be effectively calculated thereby guaranteeing that such plans are destined to be wasteful, inefficient failures with shortages of essential goods, overproduction in other areas, a demoralized, unproductive workforce, long-term economic stagnation and eventual economic collapse. Mises resisted the near universal enthusiasms for Marxism and social democracy of his era and clung steadfastly to the classical liberalism and utilitarianism that had emerged in the eighteenth and nineteenth centuries.

Mises’ pupil Rothbard took things a bit further, synthesizing Austrian economics with nineteenth century American individualist anarchism and rejecting utilitarianism in favor of a type of revised Lockean natural law theory from which he derived a position that insisted upon absolute individual private property rights (largely defined according to the Lockean “first discovery/mix with labor” principle). Whereas Mises had accepted conventional parliamentary democracy as a form of government, Rothbard rejected the state entirely insisting that even such functions as crime control, courts and defense could be provided by competing private agencies operating on a free market. While Rothbard rejected liberal democracy, he tended to regard it as an advancement over the monarchical and aristocratic systems of the Old Order.

Not so, says Hoppe. Instead, democracy is dismissed as a degeneration towards even greater centralization, statism, tyranny and societal destruction. Hoppe recognizes that the overall standard of living and life expectancy has risen during the time that democracy has been commonplace but insists that this is in spite of rather than because of the advent of democratic state systems. Improvements in the overall human condition have instead been the result of the growth of the market economy, the division of labor, industrialization, technological advancement, higher productivity, etc. Democracy has contributed to none of this in Hoppe’s view. To the contrary, democracy has been an obstacle to continued economic improvement which might have been even greater had not democratic states been in the way. Hoppe describes the history of Western political systems as moving from the comparatively stateless feudal order and independent territories to consolidated nation-states and absolute monarchies to modern centralized welfare-warfare state mass democracies to the current foundations being laid for a future global government. Hoppe regards this as an ominous trend leading to universal statism and the destruction of liberty and prosperity.

Essential to Hoppe’s thesis is the concept of “time-preference” which is used as a means of describing the degree to which a person prefers instant or delayed gratificaton. Someone with a “high” time-preference values instant gratification to a larger degree and is less willing to forgo immediate pursuit of pleasures or consumption of goods for the sake of some future goal like savings, investment, health, maintaining resources for unforeseen disasters, etc. Likewise, someone with a “low” time-preference is more willing to endure short-term sacrifices for the sake of some future goal. A person with a “low” time-preference is “future-oriented”. The more goals one has for the future the more one must work, save, invest, produce and delay gratification in the present. One must maintain a relatively high level of self discipline, personal responsibility and cooperation with others in the process. Consequently, in a society where overall time-preferences are low the general level of productivity, responsibility, cooperation and civility will be high.

Hoppe describes government as having the social effect of raising time-preferences and reducing expectations for delayed gratification. Government is characterized as having essentially the same effect on society as natural disasters or crime. Both natural disasters such as floods and earthquakes and crimes such robbery and theft diminish the individual’s immediate supply of goods thereby raising time-preferences and reducing the amount of resources available for allocation toward future goals. Government achieves a similar effect through its activities of taxing the resources accumulated by the individual, devaluing the unit of exchange (“money”) through inflationary monetary policies and restricting the use of resources through regulations and prohibitions. All of this serves to reduce the overall level of productivity and cooperation by reducing the supply of goods available for savings, investment and exchange. Indeed, government is described as having a worse effect on these values than natural disasters or crime as government aggression against and confiscation of individual resources is continuous and ongoing while natural disasters and crime are sporadic and temporary.

The concept of time-preference is used by Hoppe to compare and contrast the effects of monarchical and democratic governments on society, respectively. Hoppe argues that a monarchical ruler will typically have a lower time-preference and be more future oriented than democratically elected rulers and that the policies enacted by a monarch will typically inspire the general population to more salutary behavior than those implemeted by a democratic government. Under a monarchy, the nation is considered the personal property of the king. The nation is then added to the monarch’s own personal estate. Naturally, the monarch wishes to improve the value of and maintain the quality of his estate and the prosperity of his estate is connected to the prosperity of the nation as a whole. The monarch also wishes to increase the wealth of the nation for the sake of his posterity and his legacy. A monarch will not wish to tax his subjects to the degree that overall productivity declines and the wealth of the nation, and therefore the monarch’s personal and family wealth, decreases. On the other hand, democratic rulers are merely the trustee managers of publicly owned resources. They cannot use these resources once they leave office nor can they bequeath public resources to their offspring. Therefore, the incentive is great to consume in the present with no regard for the future. Also, the higher taxes are at the present time the more resources will be available for democratic rulers to make use of. The long-term effects of such taxation on wealth creation are irrelevant to politicians whose position is temporary. Similarly, as democratic rulers are not personally liable for debts that they incur, but may instead pass such debts on to future generations of taxpayers, there is no incentive for frugality in the present while there is every incentive for wastefulness and improvidence. This explains why taxes and public debts are much higher under democratic governments than under monarchical ones.

Democracy is described by Hoppe as providing incentive towards irresponsible and predatory behavior among both the political class and the general population. A monarch achieves his postion by inheriting it. The question of what the character of a particular monarch will be is largely a roll of the dice. A monarch may be a vicious predator, a harmless mediocrity or perhaps even a relatively competent and fair-minded individual. Democratic rulers, on the other hand, come to power largely on the basis of selling themselves to voters. To be effective at this, a successful politician must be, for the most part, an unscrupulous demagogue. Democratic politicians typically acquire a following for themselves by promising to repress or plunder rival economic or cultural groups for the benefit of their own supporters. Under a democracy, the life, liberty and property of every individual comes up for grabs by everyone at every election. Shifting coalitions of oligopolistic special interests and unconstrained popular majorities form who constantly square off against one another. A situation is created where A and B conspire against C, B and C conspire against A, C and A conspire against B. Democracy becomes merely a substitute for an all-out multiple factioned civil war. The overall moral quality of society degenerates into a war of each against all. Also, the constant plundering and repression of some for the benefit of others decreases the productivity of those being attacked and simultaneously increases the dependency, unproductiveness, infantilization and irresponsibility of those being subsidized with the fruits of the plunder. The general trend in society will be one of decreased productivity and increased crime, recklessness and incivility. Hoppe demonstrates that this trend is currently being played out in Western, particularly American, civilization.

Democracy damages society in other ways. Under a monarchy, there is a clear distinction between the rulers and subjects. Entry into government is typically limited to the royal family and perhaps a few associates and business partners. Under a democracy, the government is ostensibly composed of “everyone” and is “of the people”. Elected officials are “the people’s representatives”. State policy is “the will of the people” and so forth. By perceiving themselves as somehow magically practicing self-rule, there is a decrease in “class consciousness” among the subjects and therefore less popular objection and resistance to taxes, legistlation, public debt and even war. Indeed, wars waged by democratic governments tend to be particularly destructive. Monarchical wars are typically fought for the acquistion of territory by the rulers. The public recognizes this and is resistant to participation in such wars. Consequently, popular opinion limits the ability of the monarch to impose taxation or conscription for the purpose of prosecuting the war effort. Democratic wars, on the other hand, tend to be ideological wars. Wars are fought “to make the world safe for democracy”, “to defeat godless communism”, to turn back the “yellow peril” or the “red horde”, to “rid the world of want and fear” or “to eliminate terrorism”. Hence, the entire resources of a nation are mobilized for the sake of the war effort. Citizens view themselves as fighting for their “country” rather than for their government or ruling class. Such wars become “total” wars. The goal becomes the complete annihlation of the enemy rather than the mere acquisition of territory. The distinction between combatants and non-combatants is diminished. Unconditional surrender becomes the overriding military objective. Methods of territorial acquistion and the handling of foreign policy disputes available under a monarchy, such as marriage or contract, are unavailable to a democratic state. Therefore, foreign policy is organized primarily on the basis of violence.

Hoppe points out that until the commencement of the First World War in 1914, only a handful of Western nations were democracies-America, France, Switzerland and, nominally, England and the Netherlands. All other European nations were monarchies. Since 1914, monarchy has completely disappeared in favor of universal democratization. The subsequent century has seen a massive growth of government, bureaucratic proliferation, increasingly brutal and all-encompassing wars, exorbitant taxation, inflation and currency devaluation, centralization of government, the accumulation of enormous public debts, a breakdown of family and community solidarity, increased mediocrity among the intellectual classes, the rise of totalitarian ideologies such as communism and fascism and an overall increase in crime, economic dependency on the state, personal irresponsibility and ethnic and cultural strife. Hoppe’s prognosis for the future of Western civilization is not pleasant. Mounting public debts, ever increasing state obligations for social insurance payments, increasingly exorbitant health care costs, currency destabilization and tax burdens are leading towards a likely economic meltdown. The ongoing tendency towards world government, increased ethnic strife and attacks on traditional liberties, ever expanding social pathologies and perpetual international warfare can only lead to tyranny, societal disintegration and eventual civilizational collapse.

As for efforts to reverse this alarming trend, Hoppe insists that the first order of business is to scrap the idea that the power of government, particularly democratic government, can ever be genuinely limited, whether by a written constitution or otherwise. The principle flaw in schemes for limiting the power of government is that legal and constitutional provisions for such limitations are to be interpreted and applied by agents of the state, namely, judges and lawyers, who possess a powerful self-interest in the expansion of the state. In other words, under a limited government the state is to police and regulate itself. The mice are to guard the cheese and the foxes are to guard the chickens. In Hoppe’s view, the primary error of classical liberalism was its acceptance of the idea of the state as a necessary evil, rather than as an unnecessary one.

Hoppe favors elimination of the state completely in favor of a system commonly referred to as “anarcho-capitalism” which he alternately decribes as “private property anarchy”, “natural order” or “private law society”. Under such arrangements, all government functions would be privatized including police, courts, streets and defense. The state’s armed forces would be dismantled in favor of private mercenaries, militias and guerillas. The state’s monopolistic judicial system would be eliminated in favor of competing arbitration agencies. Government-run police forces would be abolished and private police services would operate on the basis of fee-for-service or private contractual agreements. The construction and maintenance of streets and roads would be the perogative of private companies. All taxation and legistlation would be abolished. As for the question of how such a system is to be achieved, Hoppe advocates the building of localized secession movements which would simultaneously work to secure complete independence for their area. The result would be the proliferation of numerous city-states and sovereign territories akin to present day Liechtenstein, Monaco, San Marino, Hong Kong or Singapore. These new political units would then privatize all government functions and effectively abolish the state.

Professor Hoppe has made a monumental contribution to the world of political philosophy. This work is the first serious effort to provide a critique of modern statist “democracy” from an anarchist perspective. Hoppe does not offer anything particularly new to the anarchist attack on the state in a general sense. He largely repeats the arguments offered by earlier anarchists ranging from Godwin to Proudhon to Tolstoy to Rothbard. These and other writers have recognized that the state is an artificially privileged exploiter class that seeks to monopolize exploitation within a particular territorial jurisdiction. Conventional intellectual arguments used to justify the state such as those derived from “social contract” theory and “implicit consent” theory have been thoroughly refuted by Lysander Spooner and others. Hoppe provides no new insights here. Instead, it is with his attack on democratic states specifically that Hoppe makes his contribution to the overall development of anarchist political philosophy. Most people in modern societies generally recognize the illegitimacy of monarchical, aristocratic, theocratic, fascist, communist and military states. However, democratic states are typically thought of as being somehow different from other types of states and as operating on diametrically opposite principles from other regimes. Hoppe skillfully refutes this common misperception.

It has become a commonplace adage among anti-statists that democracy is simply a system whereby four wolves and a sheep take a vote on what to have for lunch and then the wolves pat themselves on the back for being so enlightened and progressive as to take a vote before devouring the sheep. It is a logical absurdity to equate democracy with freedom in the way that mainstream political philosophers and commentators typically do. A system where individuals and minorities are at the mercy of unconstrained majorities hardly constitutes freedom in any meaningful sense. Still, many contemporary persons continue to regard freedom and democracy as synonymous. Indeed, some even equate freedom with merely possessing suffrage in a multi-party system. Democracy is often invoked to justify the most heinous state crimes. The tyrannical drug war is sometimes justified in the name of democracy with the idea being that if the majority approves then any action against individuals must be acceptable. Warmongers currently screaming for an all-out American assault on virtually the entire Muslim world for the sake of advancing Israeli imperialism often try to justify themselves by claiming Israel is “democratic” while its neighbors are not. (Actually, Israel is a racist theocracy.) Military conscription is often justified in the name of democracy. After all, Switzerland has the draft and they are the world’s most democratic nation, right? Democratic states typically recognize no limits on their “right” to levy taxes on their subjects with the rationale being that if “the people” elect the government then the people must be taxing themselves. Both social democrats and traditional conservatives appeal to “democracy” to justify virtually any act of repression ranging from zoning ordinances to gun control legistlation to censorship to eminent domain to asset forfeiture laws.

Anarchists, libertarians and, indeed, anti-statists of any stripe must recognize that the abolition of the state is a profoundly un-democratic project as far as modern statist conceptions of democracy are concerned. The political battles of the future will not be between leftists and rightists or liberals and conservatives but between anti-statists and their democratic statist enemies. It is at this point that the meanings of the various types of “democracy” need to be clarified. Democracy may indeed be a wonderful way of operating a voluntary organization or community like a labor union, a cooperative, a neighborhood association, a church or a birdwatchers’ club. However, to operate the coercive apparatus of the state as a “democracy” is to invite disaster. Democratic statism simply provides a popular majoritarian cover to whatever actions are carried out by interest groups currently in control of the state who wish to repress or plunder their economic, cultural or ideological competitors.

Often, left-anarchists and anarcho-socialists will present themselves as champions of “direct democracy”, “consensus democracy” or “participatory democracy”. However, this type of democracy is fundamentally different from the centralized, authoritarian, special interest/party politics variety of “democracy” on which modern states are organized. Essential principles of any genuine democracy are voluntarism and decentralization. Membership in participatory democratic communities must be voluntary. The rules and norms of such communities must be consensual in nature. Minorities must not be coercively bound by majoritarian preferences and such communities must be small enough for direct face-to-face deliberation to take place and for dissenters to migrate if they so desire. As an anarcho-capitalist, Hoppe seems to oppose democratic institutions of any type, voluntary or otherwise. Yet, Hoppe’s model of an anarchical system is a decentralized collection of private, voluntary communities governing themselves according to their own contractually agreed upon rules. His ideal model of social organization is relatively similar to that employed by shopping malls, planned residential communities and traditional “company towns”. But there is no reason why voluntary communities could not form on the principle of either individual private property ownership or voluntary communal ownership and manage themselves in a manner similar to historic New England town meetings.

One flaw in Hoppe’s analysis is his failure to differentiate as thoroughly as necessary between the republican ideal of classical liberalism and the all-encompassing centralized statism of modern “democracy”. Hoppe regards classical liberal republicanism largely as an initial phase of the conversion from monarchy to democracy. He sees modern democracy as an outgrowth of republicanism. This perspective seems woefully inadequate. Classical liberalism arose in the eighteenth century as an antidote to the tyranny of the ancien regime. The solution to the problems of the Old Order was to be the establishment of a decentralized, confederal republic ordered on the principles of inalienable individual rights, constitutionally limited government and wide separation of powers, both vertically and horizontally. Democracy was to be used merely for administrative purposes within a larger framework of severely limited governmental power. This system, which found its purest expression in the American Revolution, is the diametrical opposite of the authoritarian, centralized, bureaucratic, unconstrained, special interest, state-corporate, welfare-warfare mass democratic states of the modern era. Modern states are not an outgrowth of but a specific repudiation and overthrow of the classical liberal republican ideal.

The pertinent question involves the matter of what forces brought about the demise of republicanism. Hoppe attributes the growth of the modern state to the monopolistic legal order of a constitutional state whereby the constitution is to be enforced by an arm of government, the extension of the franchise and the subsequent creation of more and more interest groups looking to feed at the state’s trough and the natural tendency of government to expand over time. However, the initial expansion of statism largely came about as a result of the growth of business corporations and the seizure of power by these corporations. Classical liberal thinkers like Adam Smith and Thomas Jefferson predicted that if the then-nascent corporate class was to continually grow in power and influence the result would be the subversion and destruction of the republican system. The creation of the U.S. constitutional system was in and of itself a coup against the more decentralized and libertarian Articles of Confederation by northeastern banking and mercantile interests led by the likes of Alexander Hamilton who preferred a stronger central government for the advancement of commercial interests. The consolidation of federal power over the states in the American Civil War was largely the result of the seizure of the federal government by northern industrial capitalist interests led by Abraham Lincoln who wished to suppress their southern feudal competitors and subordinate the south as an economic colony. The further growth of the state in the late nineteenth century was primarily rooted in the mercantilist ambitions of early “big business” leaders of the robber baron period.

Since the beginning of the twentieth century, capitalist corporations have been central to statist expansion during the Progressive era, the First World War, the Depression and the New Deal era, the Second World War, the Cold War, the Great Society, 1980s Reaganite military socialism and, now, the current laying of the foundations for a global corporate state via the World Trade Organization, International Monetary Fund, the World Bank, NAFTA, etc. As a staunch economic conservative, Hoppe is loathe to fully recognize the role of capitalist power in the fostering of statism. However, any serious attack on the state must necessarily include an attack on corporate power as well. While it is true that business corporations operating on a purely contractual basis could be among the many different types of economic organizations that could exist in a stateless economy, the present U.S. corporate system rests heavily on state intervention and many contemporary economic elites have attained their positions as a result of the infrastructure created by corporate statism. The collapse of the U.S. regime would mean the simultaneous collapse of the corporate structure as well. The matter of what will come afterward is the next question needing an answer.

Hoppe is also a very reactionary cultural conservative and his comments denouncing “democrats, socialists, multiculturalists, counterculturalists and alternative lifestylists” are reminiscient of Stalinist diatribes against “Trotskyites, social democrats, petty bourgeoise anarchists, rootless cosmopolitans and bourgeoise degenerates”. Similarly, Hoppe’s anti-immigration hysteria comes perilously close to resembling the rhetoric of xenophobes and nativists raving about “mongrel hordes”. Nonetheless, Hoppe raises some interesting questions even on these points. Anarchists and libertarians frequently assume that the end of centralized monopoly government will automatically usher in the reign of a new millenium of freedom and tolerance. However, anarchism merely implies the existence of a social order based on the principle of voluntary association. Questions of property relations are irrelevant at this point. The division between private and communal property is not as clear as some seem to believe. On one hand, ALL property is private to some degree. State-owned property is, for all practical purposes, the private property of the state. Communal property is the private property of the commune. Likewise, many forms of “private” property are owned collectively in some way. Corporations are owned collectively by investors, shareholders and managers. Family property is owned collectively by husbands, wives and heirs. The anarcho-socialist vision of decentralized communes and federations of workers’ syndicates implies that the communes and syndicates will be the collectively owned private property of the workers and communities. Presumably, these units would be able to establish whatever types of internal rules and regulations they wished and exclude those who did not comply or who were not wanted. The same would obviously be true of the privately owned institutions such as schools or businesses that are favored by free-market libertarians. In an anarchist system, there would be no federal regulatory bureaucracy enforcing “civil rights”, “anti-discrimination” or other forms of egalitarian legistlation. Consequently, private communities controlled by the Nation of Islam would be able to exclude whites and Jews, businesses controlled by the Aryan Nations would be able to exclude blacks and Jews, Christian educational institutions would be able to exclude homosexuals and atheists, Jewish institutions would exclude Nazis and so on. Landlords could refuse to rent to tenants whose looks they did not like and employers could “discriminate” on any basis they desired. Even if the anarcho-socialist vision of an economy where all rental housing and industry is owned cooperatively by the tenants and workers was to be fully implemented, it is likely that Jewish housing cooperatives would deny admittance to raving anti-semites and that workers cooperatives would refuse to take in lazy, obnoxious parasites. All of this would be perfectly “legal” and permissable in an anarchist order unless some higher political authority said otherwise in which case the state would have re-emerged.

Hoppe argues that the level of discrimination would increase markedly in a stateless society. Libertarians have often been perplexed by the question of “authoritarian cultures”. What about those people and groups that simply do not desire liberty for either themselves or others? The venerable anarchist tradition of decentralization represents the best way out of this dilemma. In a system of small, localized, self-managed communities, persons who chafed under the norms of their community of origin would be able to migrate towards an environment that was hopefully more hospitable. Migration as a seriously viable option has long been demonstrated to be the best protector of individual liberty rather than centralized governments and state courts enforcing legistlated “civil rights”, “due process”, “constitutional rights” and other arbitrary and vaguely defined concepts that are easily ignored or repealed.

The utility of decentralization also gives additional weight to Hoppe’s prefered strategy of revolution by secession of small groups. The best bet for smashing Leviathan seems to be the building of separatist movements at the local and regional level. There are already a good number of small but growing groups of this type in the United States-the League of the South, Republic of Texas, the New England Confederation, Alaskan Independence Party, the Green Panthers and others. If these and other groups of this type were to grow and begin supporting one another a full-on assault on the state would be underway. These movements could support one another even when they are geographically separated or even ideologically opposed. In the southern states, for example, rural conservatives and populists could agitate for “states’ rights” or “county supremacy” while black nationalists and separatists could demand separate municipalities for predominately black communities in urban areas. Anarcho-socialists in Vermont or Oregon could align themselves with lassez faireists in Kansas or Texas. Small town Christian fundamentalists could align themselves with anarcha-feminist lesbian separatists in San Francisco. Most of the decentralist, libertarian and anti-state groups in the U.S. have yet to consider the opportunities that such alliances might generate. The rallying cry should be “Secessionists Unite!”. After all, this is what made the first American Revolution. Perhaps it will be the basis of a second American Revolution as well.

Copyright 2002. American Revolutionary Vanguard. All rights reserved.