06.20.09Monarchy vs. Democracy and The Decline of Civilization
Despite incredible advances in knowledge and technology over the past few decades, living standards have actually declined (also see here and here). Taken alone, this makes no sense—comparable advances in the past, such as the industrial revolution, have sparked enormous increases in prosperity. On top of falling living standards, civilization is crumbling: war, poverty, crime, debt, disease, social dysfunction, family breakdown, hedonism, etc. Why are so many things going wrong, despite unparalleled advances in knowledge and technology? This is the great unanswered question of our time.
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:
From the perspective of economic theory, the end of World War I can be identified as the point in time at which private-government ownership was completely replaced by public government ownership, and from which a tendency towards rising degrees of social time preference, government growth, and an attending process of decivilization should be expected to have taken off. Indeed, as indicated in detail above, such has been the grand underlying theme of twentieth century Western history. Since 1918, practically all indicators of high or rising time preferences have exhibited a systematic upward tendency: as far as government is concerned, democratic republicanism produced communism (and with this public slavery and government sponsored mass murder even in peacetime), fascism, national socialism, and, lastly and most enduringly, social democracy (“liberalism”). Compulsory military service has become almost universal, foreign and civil wars have increased in frequency and in brutality, and the process of political centralization has advanced further than ever. Internally, democratic republicanism has led to permanently rising taxes, debts, and public employment. It has led to the destruction of the gold standard, unparalleled paper-money inflation, and increased protectionism and migration controls. Even the most fundamental private law provisions have been perverted by an unabated flood of legislation and regulation. Simultaneously, as regards civil society, the institutions of marriage and family have been increasingly weakened, the number of children has declined, and the rates of divorce, illegitimacy, single parenthood, singledom, and abortion have increased. Rather than rising with rising incomes, savings rates have been stagnating or even falling. In comparison to the nineteenth century, the cognitive prowess of the political and intellectual elites and quality of public education have declined. And the rates of crime, structural unemployment, welfare dependency, parasitism, negligence, recklessness, incivility, psychopathy, and hedonism have increased. (pp. 42-43)
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.
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“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.”
Lol, nice “evidence.”
The reasoning is: “problem: individualism. solution: hyperindividualism”.
Looks like the socialists came out of the woodwork
This starts with so many dubious assumptions I cannot take it seriously. The conclusions are nonsense and don’t even make sense.
I’d suggest taking a look at Hoppe’s book. It’s very well documented, in fact it sometimes seems that there’s more footnotes than text!
It’s an extremely politically incorrect position, but it follows directly from basic economic reasoning.
This is satire, right? If not the author is a first class idiot.
Nope & nope.
This article was posted over at Metafilter a couple days ago.
Unfortunately, I didn’t see many people who even gave it a fair chance. They just reject it because it doesn’t jive with what they were taught in the government schools.
“[M]onarchical subjects tend to be more resistant to government than citizens of democratic states.”
I had to stop reading to wipe the tears of laughter from my eyes.
Another thing that makes me laugh are anarchists in general. They’re no different from the hard-line Democratic or Republican pundits. They spout line after line of rhetoric without regard to contravening evidence. The only thing that makes a Democratic or Republican pundit any better (and not much better, mind you) is the fact that their rhetoric actually has some factual, readily substantiable, basis in reality.
When has anarchism historically been realized, where has it succeeded, and what evidence can be cited of it’s successes? I can cite you a whole lot of evidence that shows where Democracy has succeeded.
Democracy may be flawed, but it’s worked better than anything else yet.
One last thing: CAPITALISM AND DEMOCRACY ARE NOT SYNONYMOUS!
Very intriguing article. It’s too bad most of the posters have been just flipping it off.
The general economic analysis seems sound, but I would like to see more historical references. (I know, I know, read the book.) What is the basis for citing such a low rate of taxation under monarchies? What time period, geographical areas are we talking about? For instance, wasn’t high taxation unevenly distributed a root cause of the anti-monarchial French revolution?
Also, the Roman Empire would seem to be a huge counter-example. Taxation rates were ruiniously high and only got worse as the form of government drifted toward absolutism.
Granted, this was not a true hereditary monarchy but more like a rotating military dictatorship. So I guess the incentive for long-term thinking wasn’t so strong.
Another interesting case to examine would be Britain during the industrial revolution. A huge economic take-off under a mixed form of government – monarchy/oligarchy. According to Aristotle, mixed forms were the best, providing a balance.
A last note; J.R.R. Tolkien said his preferred form of government would be an “anarchic monarchy.” There are followers of this idea around – try googling it.
Thanks for posting this and don’t let the knee-jerk responses put you off. Something to think about.
Mike D,
American Revolution started at 10% income tax.
How much of an average American’s income is stolen by taxes today? At least half, I’m sure, if you add inflation and corporate taxes to your “visible” payroll taxes (don’t forget that your employer is forced to match your SS and Medicare taxes).
Also, government today take your money before you actually get it yourself, so taxation is easier than ever.
big mistake in the war section monarchs have started wars for no reason other than to secure their place in history far less likely than with a democratic short term leader
Not sure if history backs you up there Joe. Even warlike kings such as Louis XIV waged limited wars for specific concrete goals. Most monarchs were much more peaceable, husbanding their limited resources.
Democractic and Republican type states have been much more war-like, and more tendency to wage massive and very costly wars. Think of Athens, Republican Rome, Venice, the Italian city-states. And of course, America, who seems to always be attacking or threatening to attack someone, has bases all over the world, a bloated military budget, weapons of mass destruction etc etc.
Revolutionary France was also much more war-like than the ancien regime.
One problem with monarchies, though, is wars of succession when a king dies without a clear successor. THis happened repeatedly in 18thc Europe. (inter-breeding of royal families among nations adds to the mix) This could be dealt with by making the rules of succession very clear and unambiguous.
Actually the problem of succession is a major one for monarchic government. With simple primogeniture you face the risk of a sociopath or idiot getting in (ahem – nobody mention USA election 2000). With more complex rules you risk the above-mentioned wars of succession.
19th c Siam had a system which worked well to avoid these issues. The king was chosen by a council of nobles from among the descendents of previous kings. Thus, keeping it “in the family” to get the benefits of long-term interests and a selection process to weed out incapable candidates.
The latter Holy Roman Empire evolved into something much like this in practise. They were caught up in a few wars, some very bad and costly, but the Emperors started very few and mostly sought to avoid conflict. (Charles V may be an exception)
Government is simple and will work if the citizen can control his own destiny. However, when the citizen chooses to not control his own destiny government fails no matter how good it is on paper or historically.
It comes down to this:
Either choose to discipline yourself or you WILL be disciplined by someone else.
Put that in context of the US government today. It is a republic that is foolishly moving toward a democratic state because the citizens are under the false belief that they can do whatever they feel like. They have lost their self discipline to improve themselves, think that belief in God is somehow totalitarian, and let others make decisions for them. The tyranny of the masses is starting to take hold and many believe they cannot control their future. Once you lose your discipline or moral center then you lose everything and somebody sweeps in with something “better”. This “better” is being called “hope and change”.
Take heed my fellow Americans, you are about to lose your republic and you don’t even know why.
The republic has been lost since Civil War (if not before that).
Natalie,
Please explain your response. I am intrigued. I would argue a different point in time, but would like to understand your opinion or information I may not have.
The only real check on the growth of the Federal government was the right of the States to secede from the Union. So-called Civil War crushed this right by violence and made resistance to the federal policies much less effective.
You can also look up Jefferson 1798 resolutions that confirmed the States’ right to oppose unconstitutional federal laws.
Thanks for the explanation.
Wasn’t the Civil War about the rights of the Southern states to have unconstitutional policies? They decided to express that right by seceding from the union. The policies the South wanted to keep was to deny that “all men are created equal”. Thus the Civil War became the abolishment of slavery.
I definitely don’t want to sound like I’m defending slavery, but I think your history is wrong. There was nothing unconstitutional about slavery – “all men created equal” is from the Declaration of Independence. The constitution was written by a bunch of planters after all…
My reading is that it was the Federal Government which was acting unconstitutionally, by extending it’s power into areas that were originally intended for the separate states.
The crux is whether or not an individual state had the right to secede, which is debatable.
The idea that the constitution was put together by a “bunch of planters” is very inaccurate. For instance, Benjamin Franklin was a high society Englishman (VERY educated) that destroyed any chance of returning to England when he decided freedom was more important than status. He gave up comfort for a chance to live truly free.
When you say unconstitutional do you say as interpreted in modern times? The founding fathers INTENDED the Constitution to be interpreted in the context of when it was written so we do not lose the original intent.
I find it a funny parallel that the United States is very much where it was in the 1700s today when it comes to states rights, the rights of the individual, and the reach of the Federal government. You have two major groups: one wanting to live a moral lifestyle and the other wanting licentious lifestyles. One group claims to be a champion of the individual’s rights, while the other says that we are treating certain classes of humans as disposable or not even human. Except this time the ones wanting to lead a licentious lifestyle are seizing power and pushing the will of the government on the people. By your logic, the current Federal governments actions are unconstitutional.
The parallels are interesting:
1 human rights are a central theme
2 federal government intervention in the states and citizens affairs
3 the whole tension between the two is going to end badly for someone in the future
My guess is massive civil war or massive genocide. The difference will be left to the historians.
It’s important not to indulge in elitist attitudes and language, and dwelling on obscure theorism that’s not accessible to many whom anarchy is most relevant. Emphasis should be directed towards immediate, easily comprehensible and humanist ideas and actions. People first!
Confused: “It’s important not to indulge in elitist attitudes and language, and dwelling on obscure theorism that’s not accessible to many whom anarchy is most relevant.” ??? Please explain.
I have come to the point that I recognize that this democracy and probably the rest of the western democracies are soon going to fail. I am not going to argue this point.
With my belief in mind, can someone tell me if there are any groups or writers out there who has quit blaming this or that group. Is there anyone out there who recognizes that where we are at politically, socially, economically etc., is an inevitable result of our DNA and the sum total of our experience? Is there any group or writer that understands that there is nothing that will be done or can be done turn us from this inevitable decline?
And if there is such a person or group that accepts the inevitability of what is happening, do they have any advice for us who also accept the above, what we should do to prepare for the coming failure of our democratic system? I want to go beyond forums that simply for the protection of our right to bear arms.
In addition, I want practical advice. I would like someone to be able to provide a description of what will likely happen during the last few years to the last few days of our democracy? What form of government will likely follow? Mostly I would like to know what I should do to prepare on a personal level. For example, what form should one’s wealth be in? Where should one live? What kind of jobs, occupations, or skills should one have?
One last thing. We need to accept that where we are is exactly where we are supposed to be given our DNA and the sum of our experience. Those are the only two factors that play in to where we are and where we are heading. There is no one to blame and no one can turn us from this path. For myself and my family, it is time to quit fighting the inevitable and prepare for what is to come. If there isn’t already, I think there should be a forum dedicated to this idea.
[...] recovering. *I had started writing a HUGE rebuttal, and was referencing some sources, and found this page. Even tho I am FAR from being so easily defined as a liberal (or Conservitive for that matter) this [...]
Pleeeze ppl!
Capitalism is the insatiable beast that’s eating your children!
This putrid vermin, and those who grow fat suckling at it, seek to consume your soul and befoul you with their materialistic excrement.
While they pick over your entrails, they will provide the entertainment in form of a puppet show. It’s the Punch and Judy republicrat distraction hour! It’s fun because you’re led to believe that you’re an actual participant! Don’t forget to get your vote. It’s only one dollar!
But really, they just want you fat and happy. Why not try some of their freshest excrement. It “looks” like the food, goods, and services you used to know, but it’s improved by them and for them, to make it easier to sell to you. So sink your teeth in and don’t mind the smell.
Don’t you understand that it’s all for your benefit? They’re making life cheaper for you! Look at all they’ve saved for you by cutting out that expensive local labor. And so what if the food had to be replaced with petrochemicals; it ships better.
And don’t worry your pretty head with edukashun. An informed populace might start thinking about 2 and 2 and how they add up, and that’ll just make you worry, which is not “happy”.
So stay fat, stay stupid, and take your soma.
Do I sound bitter?
Sinclair