The argument for free trade is a simple, logical proof. Trade is defined as voluntary exchange. From this it follows that all trades are mutually beneficial (ex ante). In other words, each party in a trade expects to benefit. If this were not so, then the exchange would not occur. Nobody will make a trade that they believe will leave them worse off. One would only make a disadvantageous exchange if it were involuntary—but this violates our definition of trade as voluntary exchange. Evidently, if all trades are undertaken because both parties expect to benefit, then any restriction of trade can only serve to eliminate gains from trade. Unrestricted free trade maximizes prosperity. This follows directly from the logic of voluntary exchange.

Now, if economists contend that tariffs are bad because they eliminate mutually beneficial exchanges and breed inefficiency, then they must also oppose sales taxes. For what is a sales tax but a tariff on trade between individuals? Sales taxes increase the cost of trades, eliminating mutually beneficial exchanges. They discourage specialization and trade, and encourage inefficient self-sufficient production.

Furthermore, this principle applies to all taxes that add to the marginal cost of production and trade. An income tax, for example, increases the marginal cost of producing for trade (a portion of each additional dollar earned is lost as taxes). This discourages production and reduces prosperity. It also encourages inefficient self-sufficient production (they don’t tax the work you do for yourself… yet). The only tax that wouldn’t harm incentives to produce and trade would be a tax of fixed amount unrelated to income or wealth (also known as a head tax). Of course, taking peoples’s money via taxation harms them, but a head tax wouldn’t do the added damage of reducing the incentive to produce and trade. Needless to say, a head tax would never be implemented in practice, as it would effectively end the welfare state.

In conclusion, if economists are to be consistent in their principled support of free trade, they must also oppose sales taxes on exactly the same grounds. If a tariff is a bad way to raise government revenues, then so is a sales tax. By the same principle, they must also oppose any tax related to income or wealth. These taxes harm the incentives to produce and trade. If economists are not willing to accept these conclusions, then they must also weaken their support for free trade.

At the most basic level, all goods are produced locally to some people (at least the producers and their neighbors). Why does the location of production matter at all? A head of lettuce moving in a refrigerated truck is the same as a head of lettuce sitting in the refrigerator of the local store. Transportation doesn’t change the nature of the product. Furthermore, “local” is an arbitrary point on a continuum—is local 100 or 1000 miles? Why not 101 or 1001 miles? Taken to its logical conclusion, localism implies that everyone should be a self-sufficient producer and eschew all trade—it doesn’t get any more local than that. To put it bluntly, localism is a bad idea, based on a non-understanding of the economics of trade. Trades are mutually beneficial (else they would not occur) on all levels: from local to global.

Consider an Alaskan and a Colombian trading salmon and coffee. Despite the great distance separating them, this arrangement is the cheapest way of providing the Alaskan with coffee and the Colombian with salmon. If they were to “buy local” they would have to resort to very costly (wasteful) methods of production (such as greenhouses or cold-water tanks) or forgo the product entirely. Needless to say, they are both much worse off without trade.  The general principle I’ve outlined is that cost, not location, is the key factor. Alaskans can produce salmon at a much lower cost than Colombians, who can produce coffee at a much lower cost than Alaskans. If the savings from using efficient production exceed the transportation costs, then they both gain by trading because they can acquire the other product at a lower cost than if it were produced locally. By specializing and trading, they minimize waste and conserve scarce resources. To forgo mutually beneficial trades because of location is to shoot yourself in the foot.

The economics lesson here is about scarcity. Since resources are scarce, we must economize their use in order to maximize prosperity. By using the lowest cost methods of production, we minimize the amount of resources that are used up in producing goods. This leaves more resources for the production of other goods, increasing our well-being. In other words, the least cost method is the least wasteful method. So rather than worry about where the product comes from, just look at its price. If local goods happen to be cheaper, then they were produced less wastefully. Same for faraway goods. (Keep in mind, however, that this only holds in a free market, as government distorts prices which hides true costs). A lower price means that less resources were used in bringing the product to you (including the resources used up in transportation). This is why so many goods are produced non-locally: the savings from producing in a more efficient location exceed the costs of transportation. We all benefit from these savings by enjoying more goods at lower prices.

Globalization is often smeared as evil, but in truth, it is one of the greatest triumphs of human civilization. Localism is the real evil as it engenders waste, which can only bring poverty. Global free trade is the engine of worldwide prosperity and continues to be one of the most important solutions in the eradication of world poverty.

Consider the following thought experiment: suppose that the minimum wage is raised to $1000/hour. What are the implications? Evidently, most employers can’t pay that much and they’ll go out of business. If that weren’t so, we could all become fantastically wealthy just by decreeing a ridiculously high minimum wage. Now suppose that the minimum wage is lowered to $0.01/hour. Again, employers won’t pay that wage (even though they’d like to) because other firms are bidding for the same workers, and this drives wages up. The reason employers don’t pay the decreed wages is that wages are determined by supply and demand, not government edict. Firms hire workers with the goal of earning profits, while wages are costs. They competitively bid wages up to the point where the wage (cost) equals the benefit or extra profit gained from hiring that worker. So competition for profits practically ensures that workers get paid according to their productivity, according to the value of their labor. (In economics jargon, they get paid their discounted marginal revenue product.)

Now let’s trace out the effects of an increase in the minimum wage on the employers affected (e.g., those hiring unskilled labor). First, the increased labor costs lead some firms to lay off workers and others to shut down, since demand for their goods and hence their prices have not changed. But the downsizing and shutdowns reduce the supply of the goods, increasing their price. This new, higher price justifies the higher wage for those who kept their jobs, since they are now producing a more valuable product. The end result is that some workers lose their jobs, while the rest enjoy the higher wage. Consumers lose because prices are now higher.

Since workers are paid according to their productivity (like all factors of production), all the minimum wage does is to make it illegal to buy or sell labor beneath the price floor. The government is essentially saying: “You must be this productive to legally work in our country.” This is most harmful to the least skilled of workers, the ones we want to help most. They will be the first to be fired, and will be cut off from the chance to gain the work experience and job skills needed to earn a legal wage. Allowing such people to work for lower than minimum wages gives them a chance to work their way to a better life. To deny them the freedom to negotiate their own wages and to leave them legally prohibited from working is a moral outrage.

Some clever economists might argue that the minimum wage can increase the total wages paid to all workers. This could happen if the amount of workers unemployed was more than offset by the increased wage. But what is this except human sacrifice?! They would knowingly unemploy the most needy in order to increase the aggregate income of workers. This position is morally bankrupt and an insult to those who genuinely want to help the less fortunate.

In sum, the minimum wage harms the very people it intends to help. It’s a moral outrage that ought to be instantly abolished. Freedom is the best policy to help the poor.

Recommended learning:

• Gene Callahan’s excellent analogy, in which he compares the minimum wage with a hypothetical “minimum stock price”. Find it in his book, Economics for Real People (free online), pages 189-194.
• Roger Garrison’s Mises University lecture. You can follow along by downloading his powerpoint.
• Mary Ruwart, Healing Our World (free online). A great book for leftists, Ruwart shows how government restrictions hurt the poorest to the benefit of the wealthy and politically connected.

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.

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).

“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.

“It is no crime to be ignorant of economics, which is, after all, a specialized discipline and one that most people consider to be a “dismal science.” But it is totally irresponsible to have a loud and vociferous opinion on economic subjects while remaining in this state of ignorance.” – Murray Rothbard

There is no question Rothbard was addressing the vast majority of humanity when he wrote the above quotation. After all, it is true: nearly everyone is completely ignorant of economic reasoning, and yet nearly everyone holds very strong opinions on economic subjects. Just think about the many, many basic economic fallacies that are accepted as common knowledge:

• minimum wage
• rent control
• price controls
• price gouging
• drug prohibition
• gun control
• protectionism
• bailouts
• Keynesianism
• stable price level
• government can create jobs
• anti-trust regulations
• etc. ad nauseum

People just do not understand the basics of supply and demand or the price system, or the incentive structure of a tax-funded monopoly. For example, the average person is ignorant of the fact that a minimum wage will unemploy marginal workers, or that there are systematic reasons why there are long lines at the post office and not at the supermarket.

Clearly, those of us who do understand economic reasoning will have to address this widespread ignorance. But instead of having to use the unwieldy phrase “economic ignorance” over and over, I have coined the term ecognorance (e-COG-nor-ance) to designate the ignorance of economics so prevalent today. Thus, “ecognorance” as a noun means the condition of economic ignorance, while the adjective “ecognorant” designates being unaware of economic knowledge. For example, we would say that statists are ecognorant, or that they live in a state of ecognorance.

I foresee that this new term will save a lot of economists’ time in pointing out how ecognorant people are. (See? Before I would have used the clunky, longer phrase “economically ignorant”. Linguistic efficiency!)

Democracy is universally held up as the sacred political ideal. In fact, it is no exaggeration to say that democracy is a secular religion. Observe: We fight wars for it (“Making the world safe for democracy”). We are implored to blindly participate in it (“It doesn’t matter who you vote for, just vote”). And most tellingly, it is taboo to question it. Anyone who claims that democracy is bad is likely to be labeled a Nazi. (Even though Hitler was democratically elected and much of Nazism was promoted with democratic rhetoric.)

Nevertheless, I will attempt to prove that democracy is one of the worst political ideologies, on par with dictatorship and communism. My argument is three pronged. First, democracy is founded on initiatory violence. It is thus no more acceptable than murder or rape. Second, it can be refuted by a reductio ad absurdum; namely, that while we accept democracy for government, we would never accept it applied consistently in our lives. Third, democracy is unnecessary. What is there to vote on? All essential functions of society can be provided voluntarily and competitively on the market. Programs like the minimum wage and rent control are actually counter-productive, and can be eliminated altogether. There are many other problems with democracy: its ineffectiveness, its corruption, its total war, and its decivilization effect; but I will not address these here (see Hoppe). Last, I will address two strategies to undermine and weaken democracy: not voting and secession.

Democracy is immoral

Let us start with a definition. The root word definition of democracy gives us “demos” = “people” and “cracy” = “rule”. Essentially, democracy means rule by the people, or more commonly, rule by majority.

With this definition we can come to my first point. Democracy is a rule by majority over a minority. This means that the majority must threaten or initiate violence against the minority in order to rule. Aggression, invasion, and hegemony are at the very root of democracy.

Assume the majority wishes to levy a tax while the minority dissents. The majority must initiate coercion or threaten punishment against the minority to enforce payment. They are literally robbing the minority of private property. If the minority were not compelled to pay, it would not be a democracy. In other words, democracy could only be voluntarily if all decisions were unanimous. But, then it would cease to be majority rule. So, the inescapable problem of democracy is that it replaces voluntary interaction with initiatory coercion.

Moreover, democracy relies on a prohibition of secession. A democracy must initiate violence against seceding minorities in order to maintain majority rule. “If every dissident minority secedes after every opposed decision, then there is no democratic regime.” Thus, “those who advocate democracy are also logically advocating, that at some point secession be suppressed. And almost inevitably, that implies the use of force – military force. You can not be a democrat unless you are prepared to kill.” (source) Democracy, as it must initiate violence against minorities and secessionists, is the moral equivalent of a fascist dictatorship. Democracy is a lynch mob writ large.

One may object that democracy is not pure majority rule, but involves some individual rights. However, this does not obtain. For if some individual rights are respected, the logical conclusion is that all rights are respected, in which case democracy would not exist. The majority could not initiate violence against the minority, or violently suppress secession movements. Such acts would be rights violations. The other logical conclusion is that all rights are actually just privileges granted by the majority, and are subject to the majority’s whim, in which case we have democracy. There can be no justification for holding an inconsistent middle ground.

Democracy is absurd

My second argument is a reductio ad absurdum. Democracy, as rule by majority, does not recognize individual rights. All property is subject to the will of the majority. But why settle for majority rule only in roads, police, courts, schools, libraries, regulations, etc.? If it is right and just for a majority to rule over a minority, why not apply this principle consistently and take it to its logical conclusion: if democracy applies to 1,000,000 people ruling over 10,000; then it must also apply to any scenario where two people rule over one.

Walter Block provides one such example: Two robbers break into your house and steal your TV. You catch them, but as philosophical robbers, they point out that they are two and you are only one. As a majority following democratic principles, the robbers can rightly take your TV. Or imagine a single mother living with her three children. When she refuses to feed them ice cream for breakfast, the children, as a majority, could legitimately vote her out of the house. Or imagine a democratic organ clinic. A group of renegade surgeons could grab any person walking alone down the street, and as a majority, harvest the pedestrian’s organs. The democratic principle means that any minority must always submit to the rule of any majority.

The ultimate result of democracy carried to its logical conclusion reads like a dystopian nightmare: people would roam the streets in packs, mugging and looting any minority they could find. People would never leave their house alone, for fear of encountering any group of more than two people. Humanity would regress to some bizarre tribal warfare, where mobs would squabble desperately over who is more numerous. The larger mob—the majority—would then pillage and rob the smaller—the minority.  In fact, there could not even be laws, because law could be determined at random by any majority, such as Block’s TV robbers. Such a scenario is truly absurd.

Democracy is unnecessary

My last argument is that democracy is totally unnecessary. There is no conceivable reason to have a democratic government, because any government function can be provided voluntarily and competitively on the market. Because interactions on the market are always voluntary, we can avoid the moral problem inherent in democracy of using initiatory violence against innocent people. Through market competition, these services will be more efficient, because entrepreneurs must earn their income from customers and must compete with one another to provide the best service. Moreover, instead of investing power in a centralized government, the market decentralizes power into the hands of individuals. Rather than having some bureaucrat in Washington running everyone’s lives, the free market allows people to be responsible, self-reliant adults.

Abraham Lincoln wrote that

A majority, held in restraint by constitutional checks and limitations and always changing easily with deliberate changes of popular opinions and sentiments, is the only true sovereign of a free people. Whoever rejects it does of necessity fly to anarchy or despotism. Unanimity is impossible; the rule of a minority, as a permanent arrangement, is wholly inadmissible; so that, rejecting the majority principle, anarchy or despotism in some form is all that is left.” (emphasis added)

However, Lincoln was wrong. Unanimity is possible. A totally voluntary society is possible where all government functions are provided on the market. A society by consensus replaces the coercive relations of majority rule with mutual, voluntary, market relations. Lincoln’s division between democracy and anarchy/despotism is a false dichotomy. Unanimous rule is possible.

Thus, private roads would be run by profit seeking road companies, eager to satisfy customers. (Note that, historically, the first roads were privately owned.) They might collect payment from tolls, monthly subscriptions, or use road sensors that detect magnetically encoded stickers on your car. They might offer free service for commercial districts, or charge forbidding prices to through-traffic on residential streets. They could reduce road congestion through peak load pricing: charging high prices during rush hour and lower prices any other time, thus evening out the traffic flow. Importantly, road deaths would incur costs to road owners, both in repairs and reputation, in turn creating a financial incentive to provide safe, orderly roads. In comparison, democratic government roads are chaotic, ill maintained death traps: over 40,000 people die each year on roads in the U.S. alone.

So, there is no need to vote for politicians to provide roads, because the market can do a better job, and voluntarily to boot.

Private courts and police would likely be provided by insurance companies. As every exchange is a contract, people will buy contract insurance to resolve potential disputes. The insurance companies would have to indemnify victims, and would thus have a financial incentive to provide fair and efficient arbitration services. Insurance companies would stipulate in their contracts exactly how disputes would be resolved, leaving no problem of having to agree on an arbitrator after the fact. Competition would weed out corrupt companies and serve to keep premiums low.

In terms of police, note that protection from coercion is an economic good. Like contract insurance, people would buy protection insurance. Again, insurance companies must indemnify victims, and so have a financial incentive to eliminate crime. They would also stipulate in their contracts how justice would be meted out – mainly by restitution to the victim – and competition would keep them honest. Protection could also be provided by private property owners. For example, roads, malls, and office buildings can better serve customers by employing security guards, as is the case now.

Contrast government police and courts. Police are notorious for not preventing crime, and are increasingly becoming criminals themselves (e.g. taser murders). Government courts, as a monopoly industry, are bureaucratic, inefficient, and agonizingly slow. Government provision of justice is actually government perversion of justice.

There is no need to vote on police and courts, because they can be provided non-coercively on the market.

Lastly, there is no need to vote on such price control programs as the minimum wage or rent control, because they simply do not work. In fact, they are actually counter-productive: instead of helping, they hurt the poor.

For instance, the minimum wage coercively increases the price of labor, thus decreasing the income of employers. With increased labor costs, employers must demand less workers, and do so by laying off marginal workers and creating less new jobs. The minimum wage is an unemployment law. It hurts poor, marginal workers the most.

Likewise with rent control. By coercively lowering the price of housing, the incomes of landlords are reduced. With less income, landlords cannot afford to maintain their current supply of housing, and so will reduce the supply and/or reduce the quality. The effect is double: reducing the supply causes a shortage, and reducing the quality leads to widespread slum housing. Rent control is the primary cause of slums. Again, it is poor and marginal tenants who are hurt the most. Rent control is a homelessness law.

There is no need to vote on price controls, because they do not even work.

Strategy

But if democracy is morally revolting, illogical, and destructive, we are still presented with the fact that most countries are democratic, or at least subscribe to its rhetoric. Keeping in mind our goal of a totally voluntary, unanimous society, how can we delegitimize and expose democracy as the fraud it is?

The first step is to stop voting. The politicians’ credibility and legitimacy depend on the support of the masses. As de la Boétie and Hume have shown, the government rests, not on force, but on the public opinion of the citizenry. By abstaining from voting, we can lower voter turnout to the point where the winning government is supported by only a small minority, say 20% of the population. For example, if total voter turnout is 45%, and the election is very close, say 23% to 22%, that means that only 23% of the population is running the country. Suddenly people realize that democracy no longer means majority rule; it is now minority rule. Moreover, why do politicians beg us to vote, telling us “It doesn’t matter who you vote for, just vote”? The answer is that politicians feel very nervous without mass public support. Knowing that only a small minority supports them, they must be very moderate with their policies lest the people revolt. Thus, not voting is a strong way to destabilize and threaten democracy.

Next, it is essential to realize that any internal governmental reform is near impossible. The politicians and bureaucrats are enjoying their position as leaders of a protection racket, and are not going to give it up voluntarily. Governmental reform is akin to trying to infiltrate and bring down the Mafia from the inside—it’s not going to happen.

Thus, our second strategy is secession. “Democracy relies on a prohibition of secession. A democratic regime assumes a ‘demos’—a unit of political decision-making which is constant between decisions. If every dissident minority secedes after every opposed decision, then there is no democratic regime.” (source) In other words, “secession allows the democratic process to be circumvented or evaded, without a direct attack on the government. In a secession, the existing government is not overthrown, the nation is not colonized, the people are not murdered or enslaved.” (source) Peaceful secession is a nonviolent expression of the right to free association.

Secession is like punching democracy in the gut. Secession subverts and undermines the democratic process. The integrity of majority rule is violated when a minority threatens to secede rather than obey majority decisions. As Abraham Lincoln wrote: “The principle [of secession] itself is one of disintegration, and upon which no government can possibly endure”. Further, once the legitimacy of secession is granted, it opens up a Pandora’s Box of secessionist claims that cannot be rejected. Secession would have an exponential, snowball effect: Once Vermont secedes, Quebec’s secession will progress more smoothly, New York will become a free independent city, and on and on! This is why governments fear secession so much: once it starts, it can’t stop. Once one secession is granted, entire nation-states will crumble apart. Finally, the principle of secession must lead to secession of the individual, at which point the ideal of the totally voluntary society has been reached.

Conclusion

I have attempted to show that democracy is undeserving of its status as the ultimate political structure. Democracy is based on aggression, not voluntarism, and thus is morally repulsive. Taken to its logical conclusion, democracy leads to absurdity. No rational person would accept democracy if it was applied to every aspect of their lives. Finally, democracy is wholly unnecessary – there is nothing that needs to be voted on. Further, our strategy to smash the sacred cow of democracy must be rooted in nonaggression. If we aggress or initiate violence we are no better than the democrats. Not voting and secession allow us to maintain the moral high ground, while effectively challenging the moronic democratic philosophy. And so, democracy is immoral, irrational, and unnecessary. It should be torn down from its revered pedestal and tossed onto the intellectual junk pile of history.