The jobs fallacy is the belief that job creation promotes prosperity. It just seems obvious that more jobs means more prosperity: more jobs means more income. Politicians are constantly clamoring about job creation. But there’s a subtle error here. Bastiat points out the absurdity of this argument.

Labor is a means to the end of consuming goods. The means is not the end, and all value derives from the end. Labor itself does not make us prosper—the results of labor are what we consider prosperity. Labor itself impoverishes us—it is costly: at the very least we lose leisure time. We only engage in labor because we expect the products of labor to enrich us more than the labor impoverishes us. What we’re after is to make a profit—a surplus of enrichment over impoverishment. We want to maximize the ratio of product to labor, of output to input, of result to effort.

Obviously, the best possible case would be to have all result with no effort—no work and an abundance of goods. The worst possible case would be all work and no result (which Bastiat called ‘Economic Sisyphism’). Protectionists, who argue that free trade eliminates domestic jobs, are actually advocating a reduction in the result to effort ratio. They want to reduce the amount of cheap goods—the “result”—coming from abroad, and increase the amount of effort—”create more jobs”—required to produce a given result. Wouldn’t it be wonderful if foreigners put us all out of work by flooding us with free goods? Wouldn’t it be awful if all trade between persons were prohibited and each one of us had to be self-sufficient, fully employed for every waking hour, yet barely (or not even) surviving?

The jobs fallacy is a part of a larger fallacy: favoring the interests of producers over consumers, i.e., favoring the means over the end. Production is only a means to the end of consuming the goods produced. Production derives its value from the value of the product. If some goods are no longer valued, their production loses its value. Production itself is not a source of value.

Consumer demand is the source of value. The more people are willing to pay for a good, the more producers of that good will be willing to pay for the inputs required to manufacture it, and so on until value is imputed all the way back to labor, land, and natural resources. In this way, the entire economic structure of production is dictated by consumers, via the price structure established by this backwards imputation of value.

Since all value is derived from consumer demand, it follows that satisfying consumer wants to the greatest extent possible maximizes prosperity. Promoting production can only increase prosperity to the extent that it satisfies consumer wants. But interfering with free trade always harms the interests of consumers and thus impoverishes. Therefore, free trade is the optimal policy.

It’s common for people to think that if domestic producers earn more due to a trade restriction, then they will spend those extra earnings, and the money will work its way through the economy, and no harm will have been done. This is a perfect illustration of the fallacy of the seen and the unseen, as Bastiat put it. The gain to the protected industry is highly visible—the number of jobs “created” is easily countable. But the losses to consumers are harder to see—each consumer loses a tiny bit because of the higher price of the protected good, but summing across all consumers, the loss is greater than the “gain”. Similarly, removing the protections will cause a highly visible loss of jobs, but also a small enrichment to each consumer, which adds up to a net gain. To downplay these small increases in consumers’ prosperity is to stand in the way of human progress. The history of progress has consisted of innumerably many such small enrichments of consumers.

Crusoe economics can add valuable insight into this problem. Consider a small group that washes up on an isolated island after a shipwreck. If there were a friendly primitive population on a neighboring island willing to trade with them, to do so would be in their interest. We can immediately see that “protecting the domestic producers” by restricting trade is a pure loss. Clearly, labor has an opportunity cost: increasing the amount of labor required to produce a given output impoverishes the islanders. That extra labor could have instead been spent resting, or on other productive activities, such as fashioning tools.

It’s all too easy to fall for Keynesian sophisms when thinking about a modern economy in all its bewildering complexity. Hence the importance of reasoning from fundamental principles and using conceptual tools such as Crusoe economics to avoid lapsing into fallacy.

In summary, the jobs fallacy is at root a confusion about the source of prosperity. Jobs are only a means to prosperity. Job creation via protectionist measures is literally sacrificing the end to the means.

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.

Toward a Theory of Strategy for Liberty

In chapter thirty of his book “The Ethics of Liberty”, Rothbard laid down the groundwork of anarchist strategy. Basically, there are two principles libertarians must keep in mind when pursuing strategy. First, we must not violate the nonaggression principle. Second, we must be abolitionists, for advocating anything less than the immediate abolition of aggressive violence would mean the sanctioning of injustice.

On this latter point, Rothbard writes: “If liberty is to be the highest political end, then this implies that liberty is to be pursued by the most efficacious means, i.e., those means which will most speedily and thoroughly arrive at the goal. This means that the libertarian must be an “abolitionist”, i.e., he must wish to achieve the goal of liberty as rapidly as possible. If he balks at abolitionism, then he is no longer holding liberty as the highest political end.” (259)

To those people who charge abolitionism as being “unrealistic”, Rothbard responds that these anti-radicals “hopelessly confuse the desired goal with a strategic estimate of the probable path toward that goal. It is essential to make a clear-cut distinction between the ultimate goal itself, and the strategic estimate of how to reach that goal; in short, the goal must be formulated before questions of strategy or “realism” enter the scene.” (259)

The problem with advocating gradualism in theory is that it “totally undercuts the overriding goal of liberty itself; its import, therefore, is not simply strategic but an opposition to the end itself and hence impermissible as any part of a strategy toward liberty. The reason is that once immediate abolitionism is abandoned, then the goal is conceded to take second or third place to other, anti-libertarian considerations, for these considerations are now placed higher than liberty…. In fact, [gradualism] would mean that the libertarian advocated the prolongation of crime and injustice.” (260-61)

Rothbard continues: “Another contradictory means would be to commit aggression (e.g., murder or theft) against persons or just property in order to reach the libertarian goal of nonaggression. But this too would be a self-defeating and impermissible means to pursue. For the employment of such aggression would directly violate the goal of nonaggression itself.” (261)

With these strategic constraints in mind, Rothbard asks: “Must the libertarian necessarily confine himself to advocating immediate abolition? Are transitional demands, steps toward liberty in practice, therefore illegitimate? Surely not, since realistically there would then be no hope of achieving the final goal. It is therefore incumbent upon the libertarian, eager to achieve his goal as rapidly as possible, to push the polity ever further in the direction of that goal. Clearly, such a course is difficult, for the danger always exists of losing sight of, or even undercutting, the ultimate goal of liberty…. The transitional demands, then, must be framed while (a) always holding up the ultimate goal of liberty as the desired end of the transitional process; and (b) never taking steps, or using means, which explicitly or implicitly contradict that goal.” (262)

The problem with not following this last point is that it “implies that the State is not really the enemy of mankind, that it is possible and desirable to use the State in engineering a planned and measured pace toward liberty. The insight that the State is the permanent enemy of mankind, on the other hand, leads to a very different strategic outlook: namely that libertarians push for and accept with alacrity any reduction of State power or State activity on any front; any such reduction at any time is a reduction in crime and aggression, and is a reduction of the parasitic malignity with which State power rules over and confiscates social power.” (262-63)

Rothbard concludes ”by affirming that the victory of total liberty is the highest political end; that the proper groundwork for this goal is a moral passion for justice; that the end should be pursued by the speediest and most efficacious possible means; that the end must always be kept in sight and sought as rapidly as possible; and that the means taken must never contradict the goal—whether by advocating gradualism, by employing or advocating any aggression against liberty, by advocating planned programs, or by failing to seize any opportunity to reduce State power or by ever increasing it in any area.” (264)

Strategy and libertarian principles

Next, it is fundamental to understand that the immigration debate is wholly about strategy. There is no controversy as to how immigration would work in an anarchic society. The debate is on how to get there.

Open borders

The open border advocates say that libertarians must oppose all government institutions, and closed borders, as a government institution, must therefore be opposed. Government borders are the root cause of forced exclusion; hence government borders should be abolished. Government property and antidiscrimination laws are the root causes of forced integration; hence these should be abolished.

On the face of it, this position seems consistent with libertarian principles: addressing the root cause is the most efficient means to achieving the end, hence it is abolitionist. It only advocates abolishing government functions, and so does not violate the nonaggression principle. This strategy realizes that the State is “the permanent enemy of mankind”, and pushes for the “reduction of State power or State activity on any front”, specifically by abolishing government borders, government property, and antidiscrimination laws. Finally, it always holds up the ultimate goal of a society of free integration and free exclusion.

Closed borders

The closed border advocates, following Hoppe, have advanced the following argument:

1. Public property rightfully belongs to taxpayers.
2. Taxpayers have a right to government protection of their property.
3. Foreigners who are not invited explicitly can be assumed to be unwanted.
4. Therefore, government ought to restrict access to all foreigners who are not invited.

Or, as Hoppe writes:

“A popular government that wants to safeguard its citizens and their domestic property from forced integration and foreign invaders has two methods of doing so: a corrective and a preventative one. [First, the corrective method:] the government must reduce the quantity of public property and expand that of private property as much as possible, and whatever the ratio of private to public property may be, the government should help rather than hinder the enforcement of a private property owner’s right to admit and exclude others from his property. [Second, the] government must also engage in preventative measures. At all ports of entry and along its borders, the government, as trustee of its citizens, must check all newly arriving persons for an entrance ticket; that is, a valid invitation by a domestic property owner; and anyone not in possession of such a ticket must be expelled at his own expense.” – Democracy: the God that Failed, p. 167

Now, there are some problems with this argument. First, public property actually belongs to all victims of the State, not just taxpayers. Second, since when do anarchists accept the theory of government as the “servant” of the people? Government is a criminal gang, plain and simple. If the mafia forces you to pay protection money, does that give you a right to their protection services? Third, assuming that uninvited foreigners are unwanted is sketchy – what if immigrants move in, and an entrepreneur, noticing the surplus of labor, decides to start a business and hire the immigrants to work for him? They would no longer be unwanted.

But even if we ignore these problems and accept the argument, we must still ask: Is this strategy congruent with libertarian principles?

Abolitionism

First we must determine if the closed border position meets the libertarian abolitionism criterion. If the root causes of forced integration are government property and antidiscrimination laws, shouldn’t the closed border advocates be calling for the immediate abolition of these things, instead of closed borders? However, one might respond that closed borders are a transitional step on the path to full anarchism. That is, the closed border advocates are still holding the ultimate goal of anarchism, but are pursuing intermediate means to bring us closer to the final end. Thus, according to this argument, advocating closed borders is not gradualism in theory.

But does this response hold? Problem solving logic tells us that addressing the root cause is the fastest and most thorough way to solve a problem. In the case of forced integration it is not open borders but government property and antidiscrimination laws that are the root cause; open borders are only a contributing cause. Hence, the proper abolitionist strategy is to strike the root, i.e. privatize government property and abolish antidiscrimination laws. Moreover, under anarchy there are no government borders; advocating closed borders now only to abolish them later means engaging in the same gradualism that Rothbard warned against. Supporting government borders for X years and then abolishing them is exactly the kind of planned program that epitomizes gradualism in theory. As Rothbard said, we libertarians must call for the immediate abolition of all government programs; anything less would be sanctioning injustice. Thus, the closed border position falls into the trap of gradualism in theory and accordingly fails the abolitionism test.

Using the State

But even if we ignore the abolitionism criterion, there is still a more fundamental critique. Rothbard said that libertarians cannot follow any strategy that “implies that the State is not really the enemy of mankind, that it is possible and desirable to use the State in engineering a planned and measured pace toward liberty.” But what is the closed border position except an advocacy of using the State to restrict immigration? Of using the State to engineer a path to anarchism? As libertarians we must “push for and accept with alacrity any reduction of State power or State activity on any front”. Advocating government borders, i.e. advocating an increase in State power, is clearly a violation of libertarian principles. For supporting government borders means supporting government border guards, government border checkstops, and a government bureaucracy to manage the border. On this point then, the closed border position utterly and decisively fails. Closed borders cannot be a libertarian strategy because they violate libertarian principles.

Nonaggression Principle

Furthermore, does the closed border position violate the nonaggression principle? The answer seems to be yes, as government borders violate the right of admission and hence cause forced exclusion. However, a closed border advocate might respond that they are calling for sponsored immigration, not completely restricted immigration. Thus, the government would admit all invited immigrants, and the right of admission remains unviolated.

First, this response still faces the problem of trying to use the State as a means to libertarian ends. Second, and more importantly, the government would be guilty of forestalling: preventing potential homesteaders from accessing unowned property. By engaging in sponsored immigration, the government would be preventing uninvited immigrants who would have homesteaded unowned property, which is surely in abundance in North America. (The government “claiming” frontier land does not count as legitimate ownership.) Thus, although sponsored immigration would not cause forced exclusion, it would cause forestalling, and hence violate the nonaggression principle. Again, we find that closed borders cannot be a libertarian strategy.

Last, but not least, is the issue of taxation. As noted above, a government border means border guards, checkstops, and a border bureaucracy. As these are all government institutions, they must be funded by taxation, i.e. robbery. Thus, advocating government borders means advocating robbery! Surely it is obvious that libertarians cannot use statist means to achieve anarchist ends; we cannot use aggression to reach the goal of nonaggression. Thus, closed borders are a self-defeating and impermissible strategy.

One might object that closed border advocates are just getting restitution for past injustices. It is true that someone could receive welfare as restitution, for example; however, to advocate increasing the power of the welfare state is completely illegitimate. Likewise, one can benefit from closed borders; but it is totally illegitimate to advocate increasing the State’s power and control over the borders.

Conclusion

Thus, even if we accept the premises of Hoppe’s rights argument, his conclusion still violates libertarian principles. First, advocating closed borders fails the criterion of abolitionism. Supporting government borders for X years and then abolishing them afterward is gradualism in theory, plain and simple. Second, closed borders means using the State to achieve libertarian ends, and implies that “the State is not really the enemy of mankind”. Closed borders fail because they increase State power. Third, closed borders violate the nonaggression principle, once through forestalling and again through taxation. Thus, closed borders fail the test of libertarian principle, and cannot be a legitimate strategy.

Lastly, I want to point out the inconsistencies inherent in the closed border position. Libertarians are constantly pointing out that government doesn’t work. Mises has shown that economic calculation under government is impossible. Hayek has shown that central planners cannot gather the knowledge to run the economy. The perverse incentives stemming from tax-funded monopolies are well known. Do closed border advocates really expect us to believe that these arguments hold true in all cases except for borders?!

Her entire book can be easily annihilated by exposing the errors in her thesis on page twenty-two: to challenge the idea “that the triumph of deregulated capitalism has been born of freedom, that unfettered markets go hand in hand with democracy. Instead, I will show that this fundamentalist form of capitalism has consistently been midwifed by the most brutal forms of coercion inflicted on the collective body politic as well as on countless individual bodies. The history of the contemporary free market – better understood as the rise of corporatism – was written in shocks.”

Now, any person even somewhat familiar with libertarianism will think this is written as a joke. However, pathetic as it is, Klein is being serious. She really believes this.

There are four major errors in this thesis which, when recognized, effectively cripple the rest of her book. They are:

1. The idea that the free market has triumphed.
2. The idea that democracy is a good thing, and that it is compatible with a free market.
3. This one is just blatantly false – The idea that libertarianism can be “midwifed” by coercion- the initiation of violence.
4. Associating two incompatible ideologies – a free market and corporatism.

Note that Klein assumes that “free market” and “capitalism” are synonymous terms. However, the latter is a meaningless word. It has no substance. In this article I will use the term “free market” in its true meaning: a stateless society.

Triumph of the free market?

Let us begin. First of all, there is no “contemporary free market”. There has been no “triumph of deregulated capitalism”. This error stems from Klein’s fatal inability to define her terms. Imagine: writing a 600 page book without defining the central term of her thesis! A free market is a society where rights are respected and there is no legal possibility for initiatory violence. Anyone can look around and see the massive amount of government intervention in our lives. Taxation, regulation, welfare, warfare, subsidies, price controls – the list goes on and on. All of these things are artifacts of statism, not the free market. In all of these cases, people’s rights are violated by government. Clearly, we do not live in a free society. We are oppressed by a band of criminals called government.

Furthermore, there cannot be a free market due to the fact that every land mass on earth is controlled by a government- which is the negation of liberty. So forget the idea of a “global free market”, as Klein says on the inside flap of her book; there aren’t even cases of local free markets!

Also, wouldn’t libertarians, the main proponents of a free market, have known if their ultimate goal was achieved? Or did someone forget to tell them, “Hey guys, we already won!”? Obviously, Klein is wrong. The free market has not triumphed (yet).

Free markets against democracy

Her next error is trying to attack the idea that “free markets go hand in hand with democracy”. Here she is assuming that democracy is good and that if free markets do not come about democratically, then they must be bad. However, regardless of how a free market comes about, there is one important fact to consider: that free markets and democracy are incompatible.

Democracy, a rule by majority, is commonly held up as the highest form of social organization. But this is just plain wrong. A rule by majority is morally no better than a dictatorship. Is there any difference between having one slave master and having many slave masters? Slavery is still wrong, no matter how many people want to do it.

Under democracy, the majority can do anything. They are the rulers. They can kidnap your children or “expropriate” your kidneys. To the contrary, under a free market, each individual is a sovereign ruler. They are the rulers of their person and property. No one else can own them and make them slaves, by using a gun or a ballot.

So, if democracy is held to be a good thing, then a free market is even better, because it allows each individual to be their own sovereign ruler, not subject to the whim of a majority. Under freedom, there is no voting where the majority beats the minority. Rather, in a free society all decisions are unanimous, because they must be made voluntarily.

Thus, the free market cannot “go hand in hand with democracy”. It is highly immoral to believe that you own, and can vote on someone else’s person and property. In a free society, only the owner can decide what to do with their property. As a result, a free market is much more moral than a democracy. It does not pretend that crime- theft, murder, kidnapping- is okay if a majority wants it. It recognizes that all crime is wrong, whether by a dictator or a majority.

Free markets against coercion

The most glaringly obvious error in her thesis is the idea that the free market has been “midwifed by the most brutal forms of coercion”. This is just laughable.

The basis of libertarianism is the nonaggression principle: no one can aggress against person or property of anyone else. Thus, the initiation of violence, or coercion, is a crime. So for Klein to say that the (non-existent) free market has been born of coercion is pure horse hockey. By definition, the use of coercion is incompatible with a free market. This is why libertarians want to abolish government – because it’s very existence is rooted in the coercive act of taxation. Libertarians want to establish a voluntary society, one where people are free from coercion, and the functions of governments are provided voluntarily by the market. Essentially, they want to make crime- the violent invasion of just property- illegal, and to make everyone subject to this law, including government.

Klein gives examples of coercive coups and wars, like Chile and Indonesia, and tries to guilt by association the supposedly free market economists who were involved. However, these acts are clearly unlibertarian. Regardless of what happened or who was involved, any coercive act is criminal and antithetical to libertarianism. Thus, it is illogical for Klein to blame an ideology founded on nonaggression for the deeds of violent criminals. Coercion and free markets are mutually exclusive; they cannot go together.

Also, Milton Friedman and the Chicago Boys are most definitely not free marketers. Once you accept any level of government, you have abandoned the free market for statism.

Free markets against corporatism

Klein’s thesis is starting to look very tattered indeed. Let us now address her final error and smash it to pieces.

She says that the free market is “better understood as… corporatism”. Corporatism was defined by Mussolini as the merger of state and corporate power. Right off the bat we can establish that corporatism is incompatible with a free market because it needs a state. As we have seen, governments are simply institutions of crime; they cannot exist in a free society. In fact, they are mutually exclusive. If a government exists, it must be at the expense of freedom. Thus, to associate corporatism with the free market is simply wrong.

For Klein to conflate these two ideologies is yet another error of logic, stemming from her failure to define her terms. Once the terms are defined, it is obvious that free markets and corporatism are irreconcilable and opposing ideologies.

The “plop” doctrine

We can see then, that Klein’s thesis fails totally and in each of its parts. There has been no triumph of the free market. A free society is incompatible with democratic government. Coercion and free markets are mutually exclusive. And corporatism and free markets are polar opposites. With her thesis smashed, it follows that her entire book is moot.

However, if she simply changed every reference of “free market” to “corporatism”, her book would be half-decent as an attack on the collusion between corporation and state. Libertarians have much to agree with in Klein’s book. We too are opposed to wars, dictators and torture. Klein’s error was that she horribly misidentified the root cause of these problems: criminal governments.

And yet, I still feel that the book is unsalvageable, due to her complete disregard for logic and reason. Maybe if she defined her terms, and removed all of the many, many, logical fallacies, and learned basic economics, and…

Besides, there are lots of books out there that are much more important than confused, anti-war socialism – Rothbard and Mises alone will keep you busy for years to come.

Here is what I think Klein should do:

In the interest of protecting the environment and of promoting truth over ignorance, I suggest that Klein immediately cease production and sales of her book. She should announce a global recall to ensure that no other innocent minds are corrupted by this sophistry. All copies of this book should be shredded and composted in sewage, to return from whence they came.