Hans Hoppe has found the answer. In his outstanding book, Democracy—The God That Failed, he shows that democracy is the cause of these modern ills. This is a very bold claim, given democracy’s current status as a secular religion. But Hoppe’s careful theoretical reasoning is airtight—this is a paradigm-shifting book.

The process of civilization

To understand how democracy destroys civilization, we must first understand how civilization comes about. Civilization is the outcome of saving and investment, in other words: capital accumulation. As people save and invest in capital goods (e.g., tools and machines), the production of goods increases—they become wealthier. With more resources at their disposal, saving becomes less costly, and people can invest even more in capital goods. This again results in greater production and a corresponding drop in the cost of saving and investing. This self-reinforcing cycle of capital accumulation is known as the process of civilization.

As Hoppe explains in Chapter 1, people’s time preferences—their degree of present- or future-mindedness—determine the amount of saving and thus the rate of capital accumulation. A high time preference denotes a high premium on the present over the future: the cost of foregoing consumption in favor of saving is higher. Alternately, a low time preference denotes a low premium on the present over the future: the cost of foregoing consumption in favor of saving is lower. To illustrate, a person with a high time preference would engage in activities that pay out in the present (and even at the expense of the future), such as impulse spending, eating junk food, promiscuity, drunkenness, drug abuse, etc. A person with a low time preference would take on activities that pay out in the long term, such as saving and investing, maintaining good health, improving skills or education, developing a good reputation, etc.

The process of civilization is characterized by a fall in the time preference of society. As people become wealthier from the increased production of capital goods, the cost of saving (foregoing consumption) falls—their time preference falls. As this process unfolds, people become ever wealthier and more farsighted.

The decivilization effect of democracy

The existence of government weakens the process of capital accumulation. Under democratic rule, this weakening effect is considerably enhanced. Unless it is stopped, democracy will eventually raise time preferences to the point of capital consumption, and a self-reinforcing process of decivilization will be set in motion—ultimately leading towards the destruction of society.

There are many ways that democracy destroys civilization; the most significant being taxation, war, legislation, and redistribution. These effects are further amplified because public resistance to government is systematically weakened under democracy.

Taxation

Any and all taxation falls directly on producers—taxation is a penalty on production. As a result of taxation, the rate of return on investment is diminished. Saving to invest becomes less lucrative, so people consume more and save less than they otherwise would have. People become more present-minded and the process of civilization is impeded. The amount of taxation determines how significant this effect will be.

If the government is privately owned (i.e., a monarchy), then this effect will be limited. Since the government is his personal property, a monarch has an interest in both the present tax revenues and the long-term capital value of his kingdom. His incentive is to tax moderately, so as not to diminish the future productivity of his subjects, and hence his future tax revenues. On the other hand, if the government is publicly owned (i.e., a democracy), then this effect will be significantly more prominent. Since elected rulers are only temporary caretakers, not owners, of government property, their time horizons are very short—they’re very present-minded. They have no interest in the long term value of the government. Rather, their incentive is to maximize their own benefits while they are in power. Accordingly, democratic rulers tend to tax (and inflate the currency) as much as politically possible, even if it decreases the productivity of private citizens and hence future tax revenues. But this should come as no surprise, as public government, like all public property, is plagued by the tragedy of the commons.

Consider the analogy of public farming. Imagine a farmer who is given the use of some land to grow crops on, but he doesn’t own the land and only gets to use it for four years. His incentive will be to maximize his benefit over the four year term, without regard for the soil quality after the fourth year. Because he can’t reap the benefits of maintaining good soil quality after his term ends, his incentive is to deplete the soil to squeeze out as much benefit from it as possible before he loses its use—in other words, he engages in capital consumption. The same incentives are at work under public government. Without private property ownership, there can be no long-term economic planning.

War

While all governments can externalize the costs of war, a public government will be much more warlike than a private one. A king personally owns the resources that pay for the war and thus his incentive is to keep warfare limited (war is outrageously expensive) and pursue his foreign policy through peaceful means, such as contractual acquisitions of territory and intermarriage with other ruling families. Democratic rulers have no such interest in saving money—it’s not their money to begin with and they can’t privately pocket the funds if they don’t go to war. Consequently, democracies lack a major deterrent to engaging in warfare.

Democratic warfare is also excessively brutal. Once again, because the rulers have no incentive to save money, war spending is much higher, resulting in larger wars. And because the government is public, the government’s wars are the public’s wars: nationalist fervor sweeps the people and support for the war becomes the unquestioned norm. Wars also become open-ended ideological wars (e.g., “making the world safe for democracy” or the “war on terror”). The entire populace becomes part of the war machine, resulting in total war: domestic tyranny (extreme taxation and regulation), conscription, enormous war expenditures, mass destruction, and mass murder of both militants and civilians.

Legislation

Since the kingdom is the private property of the king, he has a strong incentive to uphold the integrity of private property law (the validity of his ownership of the kingdom depends upon it). The king also has an incentive to uphold economically beneficial law—private property law—to increase value of his kingdom. Democratic rulers have no private ownership stake in the government and thus have no incentive to uphold the integrity of private property law. Nor do they have an incentive to maintain economically beneficial law. On the contrary, they can benefit by creating artificial laws—legislation—that serve to undermine private property law for their own benefit. Under democracy, mountains of legislation erode private property law: property owners become increasingly restricted in what they can do with their property. As private property law is continually weakened, long-term planning becomes more and more uncertain and people become more and more present-minded.

Redistribution

Because of the electoral nature of democracies, special interest politics becomes the name of the game. In order to win an election, politicians must compete for the support of interest groups. The largest and most lucrative interest group (most votes) is the “have-nots”, and politicians can cater to them with wealth redistribution policies. Thus, democracies take on a redistributionist role: the welfare state is born. As basic economic reasoning tells us, if you tax productivity and subsidize non-productivity, you will end up with less producers and more nonproducers. A destructive cycle sets in: as producing becomes less and less lucrative and nonproducing becomes more and more so, welfare spending increases while production and thus taxable income decreases. Thus, welfare policies only exacerbate the problems they intend to cure. They reward present-mindedness and discourage future-mindedness and, if left to run their course, will inevitably lead to a Soviet-style economic collapse.

Public resistance

It’s worth noting that democracy’s tendency towards big government is significantly helped along by its public image. Any government ultimately rests on the consent of the governed, and democracy can more easily secure such consent. By fostering the illusion of self-rule (i.e., “We are the government”, “We are doing it to ourselves”), democracy systematically weakens public resistance to government interventions. Under monarchy, one has no hope of joining the ruling family and benefiting from the state’s activities. Under democracy, however, one has the opportunity to be part of a majority or even to become one of the rulers, and so can potentially benefit from state activities. Thus, monarchical subjects tend to be more resistant to government than citizens of democratic states. This acceptance allows democracies to become much larger and much more interventionist without igniting revolutionary sentiment.

Evidence

The devastation of democracy is clearly evident in the historical record. As Hoppe writes:

Let’s take a closer look at the historical evidence concerning taxation, war, legislation and redistribution under monarchy and democracy (discussed by Hoppe in Chapter 2):

Taxation

• Monarchy: 5-8% of national income; no inflation (commodity money).
• Democracy: Over 50% of national income; plus paper-money inflation. Remarks Hoppe: “Now, year in and year out the American government expropriates more than 40 percent of the incomes of private producers, making even the economic burden imposed on slaves and serfs seem moderate in comparison.” (pp. 243)

War

• Monarchy: Limited wars for settling territorial disputes. Battles fought by hired mercenaries with minimal bloodshed. Civilian life was unaffected by wars.
• Democracy: Total wars fought for ideological goals (”Liberty”, “Democracy”, “fighting terrorism”, etc.) and thus open-ended and grotesquely brutal. Civilian life is heavily disrupted by wars, not only because of domestic burdens (taxation, regulation and conscription), but because civilians are no longer considered “off limits” to combatants.

Legislation

• Monarchy: Kings were considered judges, not legislators. Law was considered fixed and immutable (and the king’s own property rights rested on its validity). Legislation was unheard of.
• Democracy: Rulers rise above the law, they become judges and lawmakers. Vast mountains of legislation regulate virtually every aspect of private life. This is effectively totalitarian power.

Redistribution

• Monarchy: Consumption state—wealth redistributed from subject to sovereign.
• Democracy: Welfare state—wealth redistributed not only from citizen to state, but between citizens. Public welfare spending typically amounts to 25% of the national product.

Ideological progress

Was the change from monarchy to democracy a step backwards? In practical terms, there is no question: democracy has had tremendously bad effects compared to monarchy. But in terms of ideological progress, democracy has been a (confused and pathetic) step towards more justice. While monarchy and democracy are both forms of unjust political rule, monarchy is exclusive rule by accident of birth while democratic rule is open to anyone. Democracy is fairer in the sense that the opportunity to rule is universal, whereas monarchy only allows for arbitrary family rule. In other words, if there must be rulers, then it’s more just that the rulers are selected through open competition than by arbitrary heredity. But this was the fateful error of the classical liberals: to see exclusivity rather than privilege as the problem. They merely replaced personal privileges (of the king) with functional privileges (of the democratic ruler). Of course, the real solution is to remove the privilege of ruling altogether, so that there is no ruler-ruled distinction.

To be sure, when democracy is rejected as illegitimate, we won’t be headed back to monarchy. Democracy will join monarchy as laughable and politically unthinkable. Given the natural human inclination to justice, we will move towards something perceived to be right and just. Anarchy, a society without rulers, is the pinnacle of this progress in political ideology. Once it dawns on the public that democracy is the dead-end sign on the road of statism, we will have a stateless society. Then the process of civilization will take off and humanity will prosper like never before.

The downside is that, until democracy is delegitimized in the public eye, we should expect an accelerating decivilization, and even the ultimate destruction of society through complete economic disintegration. Chances are that it won’t get that far, because the failures of democracy will become ever more apparent and people will eventually be forced to recognize their error if they want to maintain modern living standards. The sooner people realize that democracy is a social death wish, the less devastation we will have to endure. What we need then, is an ideological revolution to make the world safe from democracy! Democracy is insane—it ought to be called democrazy!

Conclusion

While all of this may seem no more than an intellectual curiosity, it has extremely important ramifications for the general public, as well as for minarchists. What better way of delegitimizing democracy than to show people that democracy is the destroyer of civilization and even worse than monarchy? People in democratic countries are deeply indoctrinated with a quasi-religious faith in democracy, so this is an explosive subject, but if used carefully it could ruin democracy forever in many minds. Democracy is the last remaining bastion of statism, and by attacking democracy we strike at the very heart of statism.

As for minarchists, if they are truly interested in limited government, then they must grapple with the fact that public government is prone to cancerous growth and that private government is the only sustainable form of limited government. Since they generally believe that democracy is legitimate while monarchy isn’t, this forces them into an awkward choice: either limited government through private government ownership (i.e., monarchy); or democracy (i.e., constitutional republic) and its inevitable big government. The cognitive dissonance is delicious!

Perhaps most importantly, Hoppe’s insight is the key to understanding and interpreting the 20th century. We now have the answer to the previously baffling question of why civilization is in decline despite enormous scientific and technological progress. It is public government that causes a vicious cycle of rising time preference, and is responsible for the accelerating destruction of society. It is public government that inexorably pushes mankind from civilization back to the jungle. Practically all social ills can be traced back to the effects of the democratic state, from war and poverty to dysfunctional families and widespread bad health. Happily, we also have the solution to this problem: a market anarchist society based on universal private property rights. Only by abandoning democracy and statism will we be able to reap the enormous increases in prosperity that we should expect from such incredible progress in science and technology.

Further reading

For more on this topic, see Democracy—The God That Failed, especially chapter 1. Chapter 2 contains a highly informative historical analysis of monarchy and democracy.

The thing is, they also consider the principles of liberty to be important. Constitutionalists believe that markets are better than central planning, but that government is necessary to protect liberty—that government is a necessary evil. This contradictory position mainly exists because they lack the understanding of the logical conclusion of the principles of liberty: the stateless society. But rather than just rejecting them as statists, we should reach out to them as potential libertarians in the spirit of gain orientation. Fortunately, an open mind and a little education are all that’s needed to arrive at a consistent pro-liberty position.

On practical grounds, Austrian economics is quite clear: the market always beats the State. Competition always beats monopoly. Why leave the government with any role at all if the market can provide us with everything we want? If the market is better than government in every other area, why would it fail in the so-called “essential roles of government”: national defense, police and courts? The functions of both national defense and police could be produced more efficiently by entrepreneurs selling protection services. Private courts would easily provide better, speedier and more affordable justice than government courts. Security and justice are extremely important, all the more reason not to leave them in the hands of a coercive socialist monopoly. There is no place for the state in a free society; anything the government can do, the market can do better.

The state is also incompatible with basic moral principles. For instance, it is morally wrong to initiate violence against another person. Yet this is all the State can ever do, using “the strong arm of the law”. Taxation is a perfect example, since a government couldn’t exist without it. Taxes are not voluntary, they must be enforced with coercion. Government can only tax you because it has the overwhelming power to force you to pay. If it didn’t have so much power, you could try to defend yourself. However, most people choose to pay because of this threat of violence (which, in any other scenario, would be recognized as extortion or robbery). If you don’t pay, and insist on not paying, you will eventually be staring down the barrel of a government gun. After your non-compliance with their written requests, they will initiate violence against you by arresting you and putting you in jail (otherwise known as kidnapping). If you resist their efforts and attempt to defend yourself, you will be shot (murdered). Notice that the government is the aggressor—it initiates the violence. The person who refuses to pay does no more than defend himself from their attacks.

The State is a destructive parasite that is inherently immoral. Government is socialism—even the smallest one. Les Antman nailed it when he wrote that “limited government is the theory that free market capitalism is best protected by a socialist monopoly.” There’s no way around it: the State must go.

Most constitutionalists have a healthy anti-government attitude. They just don’t realize that a society without government is both possible and desirable. They’re ripe for becoming full-blown libertarians.

To learn about the workings of a stateless society, I recommend reading Chaos Theory (only ~50 pages) [pdf version] or The Market For Liberty [also in pdf and audio-book]. Another excellent short introduction is Roderick Long’s Libertarian Anarchism: Responses to Ten Objections.

David Gross presents Like the withered stalk of a cattail posted at The Picket Line. David argues that there is growing awareness of the corruption in the central institutions of authority — government, economy, media, etc.

Andrew Q presents A Libertarian Defense of Property Redistribution posted at Capital Goods. He discusses Carson and Rothbard’s arguments on land theft and property redistribution.

Andrew Q also presents A Critique of Agorism posted at Capital Goods. Agorism is a novel strategy and merits further debate and discussion.

Scott Hughes presents What Freedom Means to Me posted at Philosophy Forums.

Francois Tremblay presents History is written by the idiots posted at Check Your Premises. He discusses the teaching of history and cautions anarchists in their choice of media.

John Petrie presents Toy lead-content regulations hurt small toy makers posted at Blagnet.net. Unsurprisingly, government regulations benefit big business while screwing the little guy.

John Petrie also  presents Saving is good, not bad, for American economy posted at Blagnet.net. John discusses the ecognorance of Keynesian pump-priming and the vilification of saving.

David Z presents Legalize ALL Drugs posted at No Third Solution.

Continuing with drug prohibition, see my article The Case Against Drug Prohibition. Not only is prohibition ineffective, but it causes crime, corruption, and increases the risk of overdosing.

That’s all for this edition, which will be the last due to a lack of interest. Thanks to everyone who submitted.

Check out the January edition, hosted at Democracy Sucks.

Send your submissions here before Feb. 28.  Pro-market or anti-state viewpoints only.

This is going to be the last edition, due to a lack of interest, so send in your best writing. Let’s make this the greatest Market Anarchist Carnival of them all!

Here’s the abstract:

Gun control violates the right of individuals to control their own property. It also violates economic law. Enforcement of gun control creates incentives to produce guns on the black market. Gun control causes crime and corruption, whereas gun ownership actually deters crime, and is a check against tyrannical government. In a free society, weapons can be controlled through voluntary, peaceful means.

I wrote this after reading John Lott’s More Guns, Less Crime. I wasn’t impressed with his empirical approach, so my goal was to build a case against gun control based on economic principles and theoretical, a priori arguments.

Here’s the abstract:

Prohibition violates the right of individuals to control their own bodies, and violates economic law. Any increased enforcement of prohibition creates greater incentives to produce drugs. Prohibition causes crime and corruption. It increases the potency and reduces the quality of drugs, causing consumption-related deaths. The solution to drug abuse is not aggressive violence, but voluntary cooperation.

This article is primarily based on the arguments from Mark Thornton’s The Economics of Prohibition (PDF here). I was also inspired by Milton Friedman’s arguments in his interview on drugs. I think readers will be most surprised by the arguments that prohibition is self-defeating and increases the potency of drugs.

Here’s the abstract:

Free trade is both morally and practically superior to protectionism. First, protectionism violates the right of individuals to engage in voluntary exchange. Second, specialization and trade are beneficial whenever there is absolute or comparative advantage between individuals. Finally, protectionism is a negative-sum game: it makes everyone worse off, including the “protected” industries.

For those readers familiar with the Paul Craig Roberts/capital mobility debate, I’d like to know what you think of my critique (in the “Objections” section).

My goal is to create a one-stop resource where someone can learn the main tenets of libertarian anarchism. One of the problems with the libertarian movement is that it is lacking an “argument database” where a newbie can find the answer to every one of their questions. Sure there are websites like Libertarian Nation and Mises.org, or books like Human Action and Man, Economy, and State, but the reader still has to do a lot of work putting the pieces of the puzzle together. I want to present a systematic, step-by-step analysis of the premises and conclusions of both libertarian and statist arguments. By doing the heavy lifting, hopefully I can shorten the learning curve and multiply the progress of the libertarian movement (at least concerning education).

There are no comments in the Articles section, so I will make a blog post for each article, where you can comment.

My first three articles are up:

• The Case for Free Trade
• The Case Against Drug Prohibition
• The Case Against Gun Control

I plan to write future articles on: price controls, the case against monopoly, education, roads, health care, money, courts and police, and more.

“The true test, then, of the radical spirit, is the button-pushing test: if we could push the button for instantaneous abolition of unjust invasions of liberty, would we do it? If we would not do it, we could scarcely call ourselves libertarians, and most of us would only do it if primarily guided by a passion for justice. The genuine libertarian, then, is, in all senses of the word, an “abolitionist”; he would, if he could, abolish instantaneously all invasions of liberty, whether it be, in the original coining of the term, slavery, or whether it be the manifold other instances of State oppression. He would, in the words of another libertarian in a similar connection, ‘blister my thumb pushing that button!’” – Murray N. Rothbard, “Why Be Libertarian?“

The button-pushing question is the test of radicalism and consistency. Being an abolitionist is what it means to be a libertarian. As libertarians we must advocate the instantaneous abolition of injustice, because any form of gradualism in theory means legitimizing the continuation of injustice.

But some have objected that pushing the button would be a mistake. If people still believe government is necessary, they argue, then another government will simply take over, and the resulting chaos will negate any possible gains. For example, Wilt Alston writes:

“I’ve argued that pushing the button and ending the State would result in a lose-lose situation. Certainly, if one stopped the current state from functioning with some instantaneous bolt of lightning, that would be positive in the short run. However, in the long run, if the people, the citizenry, the proletariat, were not educated sufficiently by the time of the button-pushing, i.e., their pre-existing beliefs were not replaced sufficiently, then another state, possibly more coercive than the first, would soon arise. In the interim, we’d be faced with all manner of chaos as people nurtured on the sweet teat of the State struggled to fend for themselves!”

This view is muddled. The point of the button-pushing question is not to stop “the current state from functioning,” but to abolish it altogether. The State is not just a collection of buildings and people in suits, but a hegemonic relationship between individuals. The only way to count as abolishing the State is to abolish those hegemonic relationships.  Just interrupting the workings of government does not count as abolishing government. As Gustav Landauer wrote: “The state is a relationship between human beings, a way by which people relate to one another; and one destroys it by entering into other relationships, by behaving differently to one another.” Alston is wrong to think that merely stopping the current state from functioning constitutes “ending the State.”

To see the absurdity here, let us plug Alston’s definition into the button-pushing question:
If you could push a button that would temporarily stop the State from functioning, would you do it?

The key fallacy appears to lie in neglecting Boetié’s insight: that the power of government rests, not on force, but on public opinion. Thus, to abolish government we need to change public opinion. If government really rested on force alone, all that would be necessary to achieve anarchy would be to kill off the politicians and bureaucrats, or to blow up the Parliament building à la Guy Fawkes. But Alston recognizes this. He points out that we need to educate people so they can change their relationships. The only way to abolish government is to abolish the belief that government is necessary. But for some reason Alston does not think pushing the button will abolish this belief.

Alston’s error is creating two methods of abolishing the State: the “superficial” method and the “real” method. The former involves stopping the State from functioning. As we have seen, this does not count as abolishing the State. The latter involves abolishing the belief that government is necessary, i.e. educating the population, and hence would actually abolish the State. Now, the pushing the button causes the “instantaneous abolition of unjust invasions of liberty”. Why, then, does Alston believe pushing the button would result in the superficial method and not the real method?

Obviously, if pushing the button abolished the belief that government is necessary, then there would be nothing to worry about because people would be educated sufficiently. Society would not fall into chaos and a new State would not arise, because public opinion would have shifted to anarchism. But this is all the button-pushing question has ever said!  Pushing the button means abolishing the belief that government is necessary, not just dismantling the visible apparatus of government. The non-button-pushers have created a debate where none exists by misinterpreting the question.

To avoid this misinterpretation, the button-pushing question should be reworded to read:

If you could abolish government by pushing a button that would immediately convince everyone that government is unnecessary (which is the only way to abolish government), would you do it?

“If we put yeast in a bottle of grape juice, they’d be eating up the sugar in the grape juice, consuming their energy source, and at the same time they’d be giving off a waste product, namely alcohol, which would be poisoning them. So their numbers would proliferate until they ate up their energy sources and poisoned themselves with their waste product, and then they’d have a die-off. Were doing exactly the same thing with fossil fuels: we’re eating up our energy source as fast as we can, and we’re polluting our environment with the waste product. So, are we smarter than yeast? That’s the question.”

Now, if humans really were like yeast, this would be a frightening scenario. But fortunately for us humans, we are not mindless bacteria. Instead, we are acting humans. We choose. We have purposes. We use means to achieve ends. Yeast do not have free will, do not use means to achieve ends, and hence cannot act.

When humans cooperate with each other to live in society, their actions are governed by the immutable laws of economics. The most basic laws are those of supply and demand:

If demand for a good increases, or if the good’s supply decreases, its price will be higher than it otherwise would have been. Consequently, the higher price will discourage demand while encouraging increased supply. Conversely, if demand for a good falls or if the good’s supply rises, its price will be lower than otherwise. As a result, the lower price will encourage increased demand while discouraging supply. On a freed market these incentives create a tendency for supply to equal demand.

This is just common sense. Superbowl tickets are expensive because a lot of people want them; but the high price discourages uninterested fans. When gas prices skyrocket, we cut back on driving. When strawberries are in season, the price falls, and we buy more of them. These are all examples of supply and demand in everyday life.

So what does this have to do with fossil fuels? If humans are “eating up our energy source as fast as we can”, then the supply will fall, causing the price to rise. The higher price will discourage consumption and provide incentives for people to increase the supply — either through conserving the resource, discovering new supply, inventing new technology, or by substituting different resources. Even though humans are using up resources, the price system — manifested in human action — automatically responds to a shortage by creating incentives for people to increase the supply. Scarcity creates incentives for abundance. Humans will not use up all their resources and experience a die-off because, through the marvel of the price system, resources are allocated to reflect supply and demand.

Even in the worst case scenario where no new resources are discovered, no new technologies are invented, and no substitutes are found, a die-off very unlikely. The laws of supply and demand will still apply. As resources become more and more scarce, the price will rise, and people will have to change their lifestyle to reflect the “post-carbon” reality. Peak-oilers talk about the necessity of “post-carbon communities”. What they don’t realize is that if oil does run out, it will be market forces that lead to urban gardening, walkable communities, re-localization, and the rest of the post-carbon lifestyle.

Of course, this is only true for the price system of a freed market. If government violently intervenes in the economy and prevents or distorts the functioning of the price system, then even the wildest doomsday predictions of socio-economic collapse might come true. Peak oil is a very real problem for statism, and is another reason for the separation of society and State.

Heinberg’s analogy breaks down because humans can allocate resources through the market price system, whereas yeast cannot. Yeast will mindlessly deplete their energy source and experience a die-off. Humans, when faced by scarcity, will react to high prices by finding new resources or changing their behavior. This is the core difference: humans act, yeast don’t.

Thus, humans are smarter than yeast. However, we must qualify that statement: When it comes to economics, some humans are not smarter than yeast.