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Hoppe on Political Economy of Monarchy and Democracy; and “Natural Elites” and Intellectuals

Two articles to be discussed here, one posted by the Mises Institute and another one from 2006.

This past week, the Mises Institute, and, posted a lengthy article by economist Hans-Hermann Hoppe, Political Economy of Monarchy and Democracy. In this article, Prof. Hoppe discusses the difference between private (monarchical) and public (democratic) ownership of government, their

  1. Comparative Economics,
  2. The Transition from Monarchy to Democracy (1789-1918),
  3. Exploitation and Present-Orientedness
  4. and Concludes with the idea of “Natural Order”

Given that a monopoly of territorial protection and jurisdiction by either monarchy or democratic rule causes a rise in cost and decline in quality of those monopolized services, among other negative consequences,

….when democratic rule has finally exhausted its legitimacy, the problem faced will be significantly more difficult than when kings lost their legitimacy. Then, it would have been sufficient by and large to abolish the king’s monopoly of law and law enforcement and replace it with a natural order of competing jurisdictions, because remnants of natural elites who could have taken on this task still existed. Now, this will no longer be sufficient. If the monopoly of law and law enforcement of democratic governments is dissolved, there appears to be no other authority to whom one can turn for justice, and chaos would seem to be inevitable. Thus, in addition to advocating the abdication of democracy, it is now of central strategic importance that at the same time ideological support be given to all decentralizing or even secessionist social forces; that is, the tendency toward political centralization that has characterized the Western world for many centuries, first under monarchical rule and then under democratic auspices, must be systematically reversed….

Prof. Hoppe also makes reference to “natural elites,” which he explains further in this 2006 article, Natural Elites, Intellectuals, and the State. In that article, Prof. Hoppe discusses the origins of the “state,” how it came to exist, and the differences between “natural elites” and the state-promoting and state-sponsored elites. The “natural elites” are the ones who have achieved status through natural talents and abilities, characterized by “wisdom and bravery,” and who

possess natural authority, and their opinions and judgments enjoy wide-spread respect,….with long-established records of superior achievement, farsightedness, and exemplary personal conduct that men turn with their conflicts and complaints against each other. These leaders of the natural elite act as judges and peacemakers, often free of charge out of a sense of duty expected of a person of authority or out of concern for civil justice as a privately produced “public good.”

What primarily characterized the formation of the “state,” Hoppe suggests, was the monopolization of those very functions of judge and peacemaker. Economically,

From the moment when a single member of the natural elite successfully monopolized the function of judge and peacemaker, law and law enforcement became more expensive. Instead of being offered free of charge or in exchange for voluntary payment, it was financed by a compulsory tax. At the same time, the quality of law deteriorated. Rather than upholding ancient private property laws and applying universal and immutable principles of justice, a monopolistic judge, who did not have to fear losing clients as the result of being less than impartial, would pervert the existing law to his own advantage.

Prof. Hoppe then discusses the role of intellectuals in monarchies and in the rise of democracies, and points out that the majority of intellectuals at the time of transition from monarchies to democracies did not recognize that the problem with society and justice under monarchical rule was with the rulers’ monopoly of justice and law; rather, the intellectuals promoted keeping government’s monopoly, but just replacing the monarch with “the people” in a democracy. However,

To the intellectuals, this meant by them, as the people’s spokesmen.

Prof. Hoppe explains the economic consequences of the transition of monarchical monopolies to democratic monopolies, the rise in governmental expenses from about 5% to 50% of the GNP, and the rise in government employment from about 3% to 20% of total employment, and the monarchs’ commodity money of gold with an increasing purchasing power that shifted to democracies’ fiat paper money with a steadily decreasing purchasing power.

What happened to the “natural elites” as democracy began and evolved?

The fortunes of the great families have dissipated through confiscatory taxes, during life and at the time of death. These families’ tradition of economic independence, intellectual farsightedness, and moral and spiritual leadership have been lost and forgotten. Rich men exist today, but more frequently than not they owe their fortunes directly or indirectly to the state. Hence, they are often more dependent on the state’s continued favors than many people of far-lesser wealth. They are typically no longer the heads of long-established leading families, but “nouveaux riches.” Their conduct is not characterized by virtue, wisdom, dignity, or taste, but is a reflection of the same proletarian mass-culture of present-orientation, opportunism, and hedonism that the rich and famous now share with everyone else.

The fate of intellectuals, thanks to the evolution of democratic rule, is that of state-apologists, claims Prof. Hoppe. In my own opinion, this isn’t just leftist intellectuals, but the right-wing, war supporting “intellectuals,” who are as much statist and promoters of statism and socialism at the expense of liberty and property as are the leftists.

There are more propagandists of democratic rule around today than there were ever propagandists of monarchical rule in all of human history.

And Hoppe continues with the alleged “free-market” intellectuals of Milton Friedman and his ilk, who support a central bank, paper money and the welfare state in general (the very aspects of democracy that are playing a major role in destroying  Western civilization). And Hoppe is critical of the Newt Gingrich “Republican Revolution” of the 1994 elections, with “Revolutionary” Gingrich nevertheless praising the New Deal and civil rights legislation that have destroyed private property rights and freedom of association and contract, the very values that were promoted and advanced by actual Revolutionaries in the late 18th Century.

What kind of a revolution is it where the revolutionaries have wholeheartedly accepted the statist premises and causes of the present disaster? Obviously, this can only be labeled a revolution in an intellectual environment that is statist to the core.

Hoppe describes the importance of morality, which is lacking in today’s intellectuals, and ways to counter the pro-state intellectuals of both  left and right, with an anti-intellectual intellectualism, and with courage, and with hope:

Fortunately, the ideas of individual liberty, private property, freedom of contract and association, personal responsibility and liability, and government power as the primary enemy of liberty and property, will not die out as long as there is a human race, simply because they are true and the truth supports itself.

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