The Fundamental Error of “Statism”

In blatant disregard for ridicules “Intellectual Property” laws Bad Quaker Dot Com tries to publish one article a week without the permission of the author. This week we are pleased to bring you an article by an amazing man who our staff writer Ben Stone, considers the sword bearer and heir to the Rothbard branch of the libertarian tradition, Hans-Hermann Hoppe.


The Fundamental Error of “Statism”

(Taken from: State or Private Law Society, by Hans-Hermann Hoppe, delivered at the Mises Institute Brasil’s 2nd Austrian School Conference in Porto Alegre on April 10, 2011.)

As widespread as the standard view regarding the necessity of the institution of a state as the provider of law and order is, it stands in clear contradiction to elementary economic and moral laws and principles.

First off, among economists and philosophers two near-universally accepted propositions exist.

First: Every “monopoly” is “bad” from the viewpoint of consumers. Monopoly is here understood in its classic meaning as an exclusive privilege granted to a single producer of a commodity or service, or as the absence of “free entry” into a particular line of production. Only one agency, A, may produce a given good or service, X. Such a monopoly is “bad” for consumers, because, shielded from potential new entrants into a given area of production, the price of the product will be higher and its quality lower than otherwise, under free competition.

Second: The production of law and order, i.e., of security, is the primary function of the state (as just defined). Security is here understood in the wide sense adopted in the American Declaration of Independence: as the protection of life, property, and the pursuit of happiness from domestic violence (crime) as well as external (foreign) aggression (war).

Both propositions are apparently incompatible with each other. This has rarely caused concern among philosophers and economists, however, and in so far as it has, the typical reaction has been one of taking exception to the first proposition rather than the second. Yet there exist fundamental theoretical reasons (and mountains of empirical evidence) that it is indeed the second proposition that is in error.

As a territorial monopoly of ultimate decision-making and law enforcement, the state is not just like any other monopoly, such as a milk or a car monopoly that produces milk and cars of comparatively lower quality and higher prices. In contrast to all other monopolists, the state not only produces inferior goods, but “bads” (non-goods). In fact, it must first produce bads (such as taxes) before it can produce anything that might be considered a (inferior) good.

If an agency is the ultimate judge in every case of conflict, then it is also judge in all conflicts involving itself. Consequently, instead of merely preventing and resolving conflict, a monopolist of ultimate decision-making will also cause and provoke conflict in order to settle it to his own advantage. That is, if one can only appeal to the state for justice, justice will be perverted in the favor of the state, constitutions and supreme courts notwithstanding. These constitutions and courts are state constitutions and courts, and whatever limitations on state action they may set or find is invariably decided by agents of the very same institution under consideration. Predictably, the definition of property and protection will be continually altered and the range of jurisdiction expanded to the state’s advantage. The idea of some ‘given,’ eternal and immutable law that must be discovered will disappear and be replaced by the idea of law as legislation – as arbitrary, state-made law.

Moreover, as ultimate judge the state is also a monopolist of taxation, i.e., it can unilaterally, without the consent of everyone affected, determine the price that its subjects must pay for the state’s provision of (perverted) law. However, a tax-funded life-and-property protection agency is a contradiction in terms: an expropriating property protector. Motivated, as everyone is, by self-interest and the disutility of labor, but equipped with the unique power to tax, state agents will invariably strive to maximize expenditures on protection, and almost all of a nation’s wealth can conceivably be consumed by the cost of protection, and at the same time to minimize the actual production of protection. The more money one can spend and the less one must work for it, the better off one will be.


Hans-Hermann HoppeHans-Herman Hoppe

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