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Introduction to Democracy, The God That Failed by Hans-Hermann Hoppe

by Hans-Hermann Hoppe (New Brunswick, NJ: Transaction Publishers, 2001)

 

  1. On Time Preference, Government, and the Process of Decivilization    
  2. On Monarchy, Democracy, and the Idea of Natural Order    
  3. On Monarchy, Democracy, Public Opinion, and Delegitimation    
  4. On Democracy, Redistribution, and the Destruction of Property     
  5. On Centralization and Secession     
  6. On Socialism and Desocialization     
  7. On Free Immigration and Forced Integration     
  8. On Free Trade and Restricted Immigration     
  9. On Cooperation, Tribe, City, and State     
  10. On Conservatism and Libertarianism     
  11. On The Errors of Classical Liberalism and the Future of Liberty     
  12. On Government and the Private Production of Defense     
  13. On The Impossibility of Limited Government and the Prospects for Revolution 

World War I marks one of the great watersheds of modern history. With its end the transformation of the entire Western world from monarchical rule and sovereign kings to democratic-republican rule and sovereign people that began with the French Revolution was completed. Until 1914, only three republics had existed in Europe - France, Switzerland and after 1911, Portugal; and of all major European monarchies only the United Kingdom could be classified as a parliamentary system, i. e., one in which supreme power was vested in an elected parliament. Only four years later, after the United States had entered the European war and decisively determined its outcome, monarchies all but disappeared, and Europe along with the entire world entered the age of democratic republicanism.

In Europe, the militarily defeated Romanovs, Hohenzollerns, and Habsburgs had to abdicate or resign, and Russia, Germany, and Austria became democratic republics with universal - male and female - suffrage and parliamentary governments. Likewise, all of the newly created successor states with the sole exception of Yugoslavia adopted democratic republican constitutions. In Turkey and Greece, the monarchies were overthrown. And even where monarchies remained nominally in existence, as in Great Britain, Italy, Spain, Belgium, the Netherlands, and the Scandinavian countries, monarchs no longer exercised any governing power. Universal adult suffrage was introduced, and all government power was vested in parliaments and "public" officials.

The world-historic transformation from the ancien regime of royal or princely rulers to the new democratic-republican age of popularly elected or chosen rulers may be also characterized as that from Austria and the Austrian way to that of America and the American way. This is true for several reasons. First off, Austria initiated the war, and America brought it to a close. Austria lost, and America won. Austria was ruled by a monarch - Emperor Franz Joseph - and America by a democratically elected President - Professor Woodrow Wilson. More importantly, however, World War I was not a traditional war fought over limited territorial objectives, but an ideological one; and Austria and America respectively were (and were perceived as such by the contending parties) the two countries that most clearly embodied the ideas in conflict with each other.[1]

World War I began as an old-fashioned territorial dispute. However, with the early involvement and the ultimate official entry into the war by the United States in April 1917, the war took on a new ideological dimension. The United States had been founded as a republic, and the democratic principle, inherent in the idea of a republic, had only recently been carried to victory as the result of the violent defeat and devastation of the secessionist Confederacy by the centralist Union government. At the time of World War I, this triumphant ideology of an expansionist democratic republicanism had found its very personification in then U.S. President Wilson. Under Wilson's administration, the European war became an ideological mission - to make the world safe for democracy and free of dynastic rulers. When in March 1917 the U.S.-allied Czar Nicholas II was forced to abdicate and a new democratic-republican government was established in Russia under Kerenski, Wilson was elated. With the Czar gone, the war had finally become a purely ideological conflict: of good against evil. Wilson and his closest foreign policy advisors, George D. Herron and Colonel House, disliked the Germany of the Kaiser, the aristocracy, and the military elite. But they hated Austria. As Erik von Kuehnelt-Leddihn has characterized the views of Wilson and the American left, "Austria was far more wicked than Germany. It existed in contradiction of the Mazzinian principle of the national state, it had inherited many traditions as well as symbols from the Holy Roman Empire (double-headed eagle, black-gold colors, etc.); its dynasty had once ruled over Spain (another bete noire); it had led the Counter-Reformation, headed the Holy Alliance, fought against the Risorgimento, suppressed the Magyar rebellion under Kossuth (who had a monument in New York City), and morally supported the monarchical experiment in Mexico. Habsburg - the very name evoked memories of Roman Catholicism, of the Armada, the Inquisition, Metternich, Lafayette jailed at Olmuetz and Silvio Pellico in Bruenn's Spielberg fortress. Such a state had to be shattered, such a dynasty had to disappear."[2]

As an increasingly ideologically motivated conflict, the war quickly degenerated into a total war. Everywhere, the entire national economy was militarized (war socialism),[3] and the time-honored distinction between combatants and non-combatants and military and civilian life fell by the way-side. For this reason, World War I resulted in many more civilian casualties - victims of starvation and disease - than of soldiers killed on the battlefields. Moreover, due to the ideological character of the war, at its end no compromise peace but only total surrender, humiliation, and punishment was possible. Germany had to give up her monarchy, and Alsace-Lorraine was returned to France as before the Franco-Prussian war of 1870-71. The new German republic was burdened with heavy long-term reparations. Germany was demilitarized, the German Saarland was occupied by the French, and in the East large territories had to be ceded to Poland (West Prussia and Silesia). However, Germany was not dismembered and destroyed. Wilson had reserved this fate for Austria. With the deposition of the Habsburgs the entire Austrian-Hungarian Empire was dismembered. As the crowning achievement of Wilson's foreign policy, two new and artificial states: Czechoslovakia and Yugoslavia, were carved out of the former Empire. Austria herself, for centuries one of Europe's great powers, was reduced in size to its small German-speaking heartland; and, as another of Wilson's legacies, tiny Austria was forced to surrender its entirely German province of Southern Tyrolia - extending to the Brenner Pass - to Italy.

Since 1918 Austria has disappeared from the map of international power politics. Instead, the United States has emerged as the world's leading power. The American age - the pax Americana - had begun. The principle of democratic republicanism had triumphed. It was to triumph again with the end of World War II, and once more, or so it seemed, with the collapse of the Soviet Empire in the late 1980s and early 1990s. For some contemporary observers, the "End of History" has arrived. The American idea of universal and global democracy has finally come into its own.[4]

Meanwhile, Habsburg-Austria and the proto-typical pre-democratic Austrian experience assumed no more than historical interest. To be sure, it was not that Austria had not achieved any recognition. Even democratic intellectuals and artists from any field of intellectual and cultural endeavor could not ignore the enormous level of productivity of Austro-Hungarian and in particular Viennese culture. Indeed, the list of great names associated with late nineteenth and early twentieth century Vienna is seemingly endless.[5] However, rarely has this enormous intellectual and cultural productivity been brought in a systematic connection with the pre-democratic tradition of the Habsburg monarchy. Instead, if it has not been considered a mere coincidence, the productivity of Austrian-Viennese culture has been presented "politically correctly" as proof of the positive synergistic effects of a multi-ethnic society and of multi-culturalism.[6]

However, at the end of the twentieth century increasing evidence is accumulating that rather than marking the end of history, the American system is itself in a deep crisis. Since the late 1960s or early 1970s, real wage incomes in the United States and in Western Europe have stagnated or even fallen. In Western Europe in particular, unemployment rates have been steadily edging upward and are currently exceeding 10 percent. The public debt has risen everywhere to astronomical heights, in many cases exceeding a country's annual Gross Domestic Product. Similarly, the social security systems everywhere are on or near the verge of bankruptcy. Further, the collapse of the Soviet Empire represented not so much a triumph of democracy as the bankruptcy of the idea of socialism, and it also contained an indictment against the American (Western) system of democratic - rather than dictatorial - socialism. Moreover, throughout the Western hemisphere national, ethnic and cultural divisiveness, separatism and secessionism are on the rise. Wilson's multicultural democratic creations, Yugoslavia and Czechoslovakia, have broken apart. In the U.S., less than a century of full-blown democracy has resulted in steadily increasing moral degeneration, family and social disintegration, and cultural decay in the form of continually rising rates of divorce, illegitimacy, abortion, and crime. As a result of an ever expanding list of non-discrimination - "affirmative action" - laws and non-discriminatory - mutlicultural-egalitarian - immigration policies, every nook and cranny of American society is affected by forced integration, and accordingly, social strife and racial, ethnic, and moral-cultural tension and hostility have increased dramatically.

In light of these disillusioning experiences fundamental doubts concerning the virtues of the American system have resurfaced. What would have happened, it is being asked again, if in accordance with his reelection promise, Woodrow Wilson had kept the U.S. out of World War I? By virtue of its counterfactual nature, the answer to a question such as this can never be empirically confirmed or falsified. However, this does not make the question meaningless or the answer arbitrary. To the contrary, based on an understanding of the actual historical events and personalities involved, the question concerning the most likely alternative course of history can be answered in detail and with considerable confidence.[7]

If the United States had followed a strict non-interventionist foreign policy, it is likely that the intra-European conflict would have ended in late 1916 or early 1917 as the result of several peace initiatives, most notably by the Austrian Emperor Charles I. Moreover, the war would have been concluded with a mutually acceptable and face-saving compromise peace rather than the actual dictate. Consequently, Austria-Hungary, Germany and Russia would have remained traditional monarchies instead of being turned into short-lived democratic republics. With a Russian Czar and a German and Austrian Kaiser in place, it would have been almost impossible for the Bolsheviks to seize power in Russia, and in reaction to a growing communist threat in Western Europe, for the Fascists and National Socialists to do the same in Italy and Germany.[8] Millions of victims of communism, national socialism, and World War II would have been saved. The extent of government interference with and control of the private economy in the United States and in Western Europe would never have reached the heights seen today. And rather than Central and Eastern Europe (and consequently half of the globe) falling into communist hands and for more than forty years being plundered, devastated, and forcibly insulated from Western markets, all of Europe (and the entire globe) would have remained integrated economically (as in the nineteenth century) in a world-wide system of division of labor and cooperation. World living standards would have grown immensely higher than they actually have.

Before the backdrop of this thought experiment and the actual course of events, the American system and the pax Americana appear - contrary to "official" history, which is always written by its victors, i.e., from the perspective of the proponents of democracy - to be nothing short of an unmitigated disaster; and Habsburg-Austria and the pre-democratic age appear most appealing.[9] Certainly, then, it would be worthwhile to take a systematic look at the historic transformation from monarchy to democracy.

While history will play an important role, the following is not the work of a historian but of a political economist and philosopher, however. There are no new or unfamiliar data presented. Rather, insofar as a claim to originality is made, it is that the following studies contain new and unfamiliar interpretations of generally known and accepted facts; moreover, that it is the interpretation of facts, rather than the facts themselves, which are of central concern to the scientist and the subject of most contention and debate. One may, for instance, readily agree on the fact that in nineteenth century America average living standards, tax rates, and economic regulations were comparatively low, while in the twentieth century living standards, taxes, and regulations were high. Yet were twentieth century living standards higher because of higher taxes and regulations or despite higher taxes and regulations, i.e., would living standards be even higher if taxes and regulations had remained as low as they had been during the nineteenth century? Likewise, one may readily agree that welfare payments and crime rates were low during the 1950s and that both are now comparatively high. Yet has crime increased because of rising welfare payments or despite them, or have crime and welfare nothing to do with each other and is the relationship between the two phenomena merely coincidental? The facts do not provide an answer to such questions, and no amount of statistical manipulation of data can possibly change this fact. The data of history are logically compatible with any of such rival interpretations, and historians, insofar as they are just historians, have no way of deciding in favor of one or the other.

If one is to make a rational choice among such rival and incompatible interpretations, this is only possible if one has a theory at one's disposal, or at least a theoretical proposition, whose validity does not depend on historical experience but can be established a priori, i.e. once and for all by means of the intellectual apprehension or comprehension of the nature of things. In some circles this kind of theory is held in low esteem; and some philosophers, especially of the empiricist-positivist variety, have declared any such theory off-limits or even impossible. This is not a philosophical treatise devoted to a discussion of issues of epistemology and ontology. Here and in the following, I do not want to directly refute the empiricist-positivist thesis that there is no such thing as a priori theory, i.e., propositions which assert something about reality and can be validated independent of the outcome of any future experience.[10] It is only appropriate, however, to acknowledge from the outset that I consider this thesis - and indeed the entire empiricist-positivist research program, which can be interpreted as the result of the application of the (egalitarian) principles of democracy to the realm of knowledge and research and has therefore dominated ideologically during most of the twentieth century, - as fundamentally mistaken and thoroughly refuted.[11] Here it suffices to present just a few examples of what is meant by a priori theory - and in particular to cite some such examples from the realm of the social sciences - in order to put any possible suspicion to rest and recommend my theoretical approach as intuitively plausible and in accordance with common sense.[12]

Examples of what I mean by a priori theory are: No material thing can be at two places at once. No two objects can occupy the same place. A straight line is the shortest line between two points. No two straight lines can enclose a space. Whatever object is red all over cannot be green (blue, yellow, etc.) all over. Whatever object is colored is also extended. Whatever object has shape has also size. If A is a part of B and B is a part of C, then A is a part of C. 4 = 3 +1. 6 = 2 (33 - 30). Implausibly, empiricists must denigrate such propositions as mere linguistic-syntactic conventions without any empirical content, i.e., "empty" tautologies. In contrast to this view and in accordance with common sense, I understand the same propositions as asserting some simple but fundamental truths about the structure of reality. And in accordance with common sense, too, I would regard someone who wanted to "test" these propositions, or who reported "facts" contradicting or deviating from them, as confused. A priori theory trumps and corrects experience (and logic overrules observation), and not vice-versa.

More importantly, examples of a priori theory also abound in the social sciences, in particular in the fields of political economy and philosophy: Human action is an actor's purposeful pursuit of valued ends with scarce means. No one can purposefully not act. Every action is aimed at improving the actor's subjective well-being above what it otherwise would have been. A larger quantity of a good is valued more highly than a smaller quantity of the same good. Satisfaction earlier is preferred over satisfaction later. Production must proceed consumption. What is consumed now cannot be consumed again in the future. If the price of a good is lowered, either the same quantity or more will be bought than otherwise. Prices fixed below market clearing prices will lead to lasting shortages. Without private property in factors of production there can be no factor prices, and without factor prices cost-accounting is impossible. Taxes are an imposition on producers and/or wealth owners and reduce production and/or wealth below what it otherwise would have been. Interpersonal conflict is possible only if and insofar as things are scarce. No thing or part of a thing can be owned exclusively by more than one person at a time. Democracy (majority rule) is incompatible with private property (individual ownership and rule). No form of taxation can be uniform (equal), but every taxation involves the creation of two distinct and unequal classes of tax-payers vs. tax-receiver-consumers. Property and property titles are distinct entities, and an increase of the latter without a corresponding increase of the former does not raise social wealth but leads to a redistribution of existing wealth.

For an empiricist, propositions such as these must be interpreted as either stating nothing empirical at all and being mere speech conventions, or as forever testable and tentative hypotheses. To us, as to common sense, they are neither. In fact, it strikes us as utterly disingenious to portray these propositions as having no empirical content. Clearly, they state something about "real" things and events! And it seems similarly disingenious to regard these propositions as hypotheses. Hypothetical propositions, as commonly understood, are statements such as these: Children prefer McDonald's over Burger King. The world-wide ratio of beef to pork spending is 2:1. Germans prefer Spain over Greece as vacation destination. Longer education in public schools will lead to higher wages. The volume of shopping shortly before Christmas exceeds that shortly after Christmas. Catholics vote predominantly "Democratic." Japanese save a quarter of their disposable income. Germans drink more beer than Frenchmen. The United States produces more computers than any other country. Most inhabitants of the U.S. are white and of European descent. Propositions such as these require the collection of historical data to be validated. And they must be continually re-evaluated, because the asserted relationships are not necessary (but "contingent") ones; that is, because there is nothing inherently impossible, inconceivable, or plain wrong in assuming the opposite of the above: e.g., that children prefer Burger King to McDonald's, or Germans Greece to Spain, etc.. This, however, is not the case with the former, theoretical propositions. To negate these propositions and assume, for instance, that a smaller quantity of a good might be preferred to a larger one of the same good, that what is being consumed now can possibly be consumed again in the future, or that cost-accounting could be accomplished also without factor prices, strikes one as absurd; and anyone engaged in "empirical research" and "testing" to determine which one of two contradictory propositions such as these does or does not hold appears to be either a fool or a fraud.

According to the approach adopted here, theoretical propositions like the ones just cited are accepted for what they apparently are: as statements about necessary facts and relations. As such, they can be illustrated by historical data, but historical data can neither establish nor refute them.[13] To the contrary. Even if historical experience is necessary in order to initially grasp a theoretical insight, this insight concerns facts and relations that extend and transcend logically beyond any particular historical experience. Hence, once a theoretical insight has been grasped it can be employed as a constant and permanent standard of "criticism," i.e., for the purpose of correcting, revising, and rejecting as well as of accepting historical reports and interpretations. For instance, based on theoretical insights it must be considered impossible that higher taxes and regulations can be the cause of higher living standards. Living standards can be higher only despite higher taxes and regulations. Similarly, theoretical insights can rule out reports such as that increased consumption has led to increased production (economic growth), that below-market-clearing (maximum) prices have resulted in unsold surpluses of goods, or that the absence of democracy has been responsible for the economic malfunctioning of socialism as nonsensical. As a matter of theory, only more saving and capital formation and/or advances in productivity can lead to increased production, only guaranteed above-market-clearing (minimum) prices can result in lasting surpluses, and only the absence of private property is responsible for the economic plight under socialism. And to reiterate, none of these insights requires further empirical study or testing. To study or test them is a sign of confusion.

When I noted earlier that this is not the work of a historian but of a political economist and philosopher, I obviously did not believe this to be a disadvantage. Quite to the contrary. As has been indicated, historians qua historians cannot rationally decide between incompatible interpretations of the same set of data or sequence of events; hence, they are unable to provide answers to most important social questions. The principle advantage that the political economist and philosopher has over the mere historian (and the benefits to be gained from the study of political economy and philosophy by the historian) is his knowledge of pure - a priori - social theory, which enables him to avoid otherwise unavoidable errors in the interpretation of sequences of complex historical data and present a theoretically corrected or "reconstructed," and a decidedly critical or "revisionist" account of history.

Based on and motivated by fundamental theoretical insights from both, political economy and political philosophy (ethics), in the following studies I propose the revision of three central - indeed almost mythical - beliefs and interpretations concerning modern history.

In accordance with elementary theoretical insights regarding the nature of private property and ownership vs. "public" property and administration and of firms vs. governments (or states), I propose first a revision of the prevailing view of traditional hereditary monarchies and provide instead an uncharacteristically favorable interpretation of monarchy and the monarchical experience. In short, monarchical government is reconstructed theoretically as privately owned government, which in turn is explained as promoting future-orientedness and a concern for capital values and economic calculation by the government ruler. Secondly, equally unorthodox but by the same theoretical token, democracy and the democratic experience are cast in an untypically unfavorable light. Democratic government is reconstructed as publicly owned government, which is explained as leading to present-orientedness and a disregard or neglect of capital values in government rulers, and the transition from monarchy to democracy is interpreted accordingly as civilizational decline.

Still more fundamental and unorthodox is the proposed third revision.

Despite the comparatively favorable portrait presented of monarchy, I am not a monarchist and the following is not a defense of monarchy. Instead, the position taken toward monarchy is this: If one must have a state, defined as an agency that exercises a compulsory territorial monopoly of ultimate decision-making (jurisdiction) and of taxation, then it is economically and ethically advantageous to choose monarchy over democracy. But this leaves the question open whether or not a state is necessary, i.e., if there exists an alternative to both, monarchy and democracy. History again cannot provide an answer to this question. By definition, there can be no such thing as an "experience" of counterfactuals and alternatives; and all one finds in modern history, at least insofar as the developed Western world is concerned, is the history of states and statism. Only theory can again provide an answer, for theoretical propositions, as just illustrated, concern necessary facts and relations; and accordingly, just as they can be used to rule certain historical reports and interpretations out as false or impossible, so can they be used to rule certain other things in as constructively possible, even if such things have never been seen or tried.

In complete contrast to the orthodox opinion on the matter, then, elementary social theory shows, and will be explained as showing, that no state as just defined can be justified, be it economically or ethically. Rather, every state, regardless of its constitution, is economically and ethically deficient. Every monopolist, including one of ultimate decision-making, is "bad" from the viewpoint of consumers. Monopoly is hereby understood in its classical meaning, as the absence of free entry into a particular line of production: only one agency, A, may produce x. Any such monopolist is "bad" for consumers because, shielded from potential new entrants into his line of production, the price for his product will be higher and the quality lower than otherwise. Further, no one would agree to a provision that allowed a monopolist of ultimate decison-making, i.e., the final arbiter and judge in every case of interpersonal conflict, to determine unilaterally (without the consent of everyone concerned) the price that one must pay for his service. The power to tax, that is, is ethically unacceptable. Indeed, a monopolist of ultimate decision-making equipped with the power to tax does not just produce less and lower quality justice, but he will produce more and more "bads," i.e., injustice and aggression. Thus, the choice between monarchy and democracy concerns a choice between two defective social orders. In fact, modern history provides ample illustration of the economic and ethical shortcomings of all states, whether monarchic or democratic.

Moreover, the same social theory demonstrates positively the possibility of an alternative social order free of the economic and ethical shortcomings of monarchy and democracy (as well as any other form of state). The term adopted here for a social system free of monopoly and taxation is "natural order." Other names used elsewhere or by others to refer to the same thing include "ordered anarchy," "private property anarchism," "anarcho-capitalism," "autogovernment," "private law society," and "pure capitalism."

Above and beyond monarchy and democracy, the following is concerned with the "logic" of a natural order, where every scarce resource is owned privately, where every enterprise is funded by voluntarily paying customers or private donors, and where entry into every line of production, including that of justice, police and defense services, is free. It is in contrast to a natural order that the economic and ethical errors of monarchy are brought into relief. It is before the backdrop of a natural order that the still greater errors involved in democracy are clarified and that the historic transformation from monarchy to democracy is revealed as a civilizational decline. And it is because of the natural order's logical status as the theoretical answer to the fundamental problem of social order - of how to protect liberty, property, and the pursuit of happiness - that the following also includes extensive discussions of strategic matters and concerns, i.e., of the requirements of social change and in particular the radical transformation from democracy to natural order.

Regardless of the unorthodox interpretations and conclusions reached in the following studies, the theories and theorems used to do so are definitely not new or unorthodox. Indeed, if one assumes, as I do, that a priori social theory and theorems exist, then one should also expect that most of such knowledge is old and that theoretical progress is painstakingly slow. This indeed appears to be the case. Hence, even if my conclusions may seem radical or extreme, as a theoretician I am decidedly a conservative. I place myself in an intellectual tradition that stretches back at least to the 16th century Spanish Scholastics and that has found its clearest modern expression in the so-called Austrian School of Economics: the tradition of pure social theory as represented above all by Carl Menger, Eugen von Boehm-Bawerk, Ludwig von Mises, and Murray N. Rothbard.[14]

At the outset, I noted Habsburg-Austria and the United States of America as the countries associated most closely with the old monarchical regime and the new and current democratic-republican era, respectively. Here we encounter Habsburg-Austria again and discover another reason why the following studies also may be called An Austrian View of the American Age. The Austrian School of economics ranks among the most outstanding of the many intellectual and artistic traditions originating in pre-World War I Austria. As one of the many results of the destruction of the Habsburg Empire, however, the school's third generation, led by Ludwig von Mises, was uprooted in Austria and on the European continent and, with Mises' emigration to New York City in 1940, exported to the United States of America. And it would be in America where Austrian social theory has taken root most firmly, owing in particular to the work of Mises' outstanding American student, Murray N. Rothbard.

The following studies are written from the vantage point of modern Austrian social theory. Throughout, the influence of Ludwig von Mises and even more of Murray N. Rothbard is noticeable. The elementary theorems of political economy and philosophy, which are employed here for the purpose of reconstructing history and proposing a constructive alternative to democracy, have found their most detailed treatment in Mises' and Rothbard's principle theoretical works.[15] As well, many of the subjects discussed in the following have also been dealt with in their many applied works. Furthermore, the following studies share with Mises and especially Rothbard a fundamental and robust anti-statist and pro-private property and free enterprise position.

This notwithstanding, the following studies can in two regards claim originality. On the one hand, they provide for a more profound understanding of modern political history. In their applied works, Mises and Rothbard discussed most of the twentieth century's central economic and political issues and events: socialism vs. capitalism, monopoly vs. competition, private vs. public property, production and trade vs. taxation, regulation, and redistribution, etc.; and both gave detailed accounts of the rapid growth of state power during the 20th century and explained its economically and morally deleterious consequences. However, while they have proven exceptionally perceptive and farsighted in these endeavors (especially in comparison to their empiricist-positivist counterparts), neither Mises nor Rothbard made a systematic attempt to search for a cause of the decline of classical liberal thought and laissez-faire capitalism and the concomitant rise of anti-capitalist political ideologies and statism during the 20th century. Certainly, they did not think of democracy as being such a cause. In fact, although aware of the economic and ethical deficiencies of democracy, both Mises and Rothbard had a soft spot for democracy and tended to view the transition from monarchy to democracy as progress. In contrast, I will explain the rapid growth of state power in the course of the 20th century lamented by Mises and Rothbard as the systematic outcome of democracy and the democratic mindset, i.e., the (erroneous) belief in the efficiency and/or justice of public property and popular (majority) rule.

On the other hand, based on this deeper, "revisionist" understanding of modern history, the following studies arrive also at a "better" - clearer and more acute - understanding of the constructive alternative to the democratic status quo, i.e., a natural order. There are detailed explanations regarding the operation of a natural order as a state-less social system with freely financed insurance agencies serving as competitive providers of law and order. And there are equally detailed discussions of strategic matters. In particular, there are detailed discussions specifically of secession and of privatization as the primary vehicles and means by which to overcome democracy and establish a natural order.

Finally, with these studies I wish to promote in particular the tradition of Austrian social theory and contribute to its reputation as not only a bastion of truth but also as inspiring, exciting, and refreshing. And by the same token but more generally, I wish to promote and contribute to the tradition of grand social theory, encompassing political economy, political philosophy and history and including normative as well as positive questions. An appropriate term for this sort of intellectual endeavor would seem to be sociology. But while the term sociology has been sometimes used in this meaning, under the dominant influence of the empiricist-positivist philosophy the term has acquired an altogether different meaning and reputation. According to the empiricist doctrine, normative questions are not "scientific" questions at all, and there exists no such thing as a priori theory. That pretty much rules out grand social theory from the outset as "unscientific." Accordingly, most of what passes nowadays as sociology is not only just plain false but also irrelevant and dull. In distinct contrast, the following studies are everything a good positivist claims one cannot and shall not be: interdisciplinary, theoretically oriented, and dealing with both positive-empirical and normative questions. I hope to demonstrate by example that this is the right approach as well as the more interesting one.


Hans Hoppe teaches economics at the University of Nevada, Las Vegas. hopph@nevada.edu

[1] For a brilliant summary of the causes and consequences of World War I see Ralph Raico, "World War I: The Turning Point," in: John V. Denson, The Costs of War. America's Pyrrhic Victories (New Brunswick: Transaction Publishers, 1999).

[2] Erik von Kuehnelt-Leddihn, Leftism Revisited. From de Sade to Pol Pot (Washington, D.C.: Regnery, 1990), p. 210; on Wilson and Wilsonianism see further Murray N. Rothbard, "World War I as Fulfillment: Power and the Intellectuals," Journal of Libertarian Studies, Vol. 9, no. 1, 1989; Paul Gottfried, "Wilsonianism: The Legacy that Won't Die," Journal of Libertarian Studies, Vol. 9, no. 2, 1990; idem, "On Liberal and Democratic Nationhood," Journal of Libertarian Studies, Vol. 10, no. 1, 1991; Robert A. Nisbet, The Present Age (New York: Harper & Row, 1988).

[3] See Murray N.Rothbard, "War Collectivism in World War I," in: Ronald Radosh & Murray N. Rothbard, eds., A New History of Leviathan (New York: E. P. Dutton & Co., 1972; Robert Higgs, Crisis and Leviathan (New York: Oxford University Press, 1987).

[4] See Francis Fukuyama, The End of History and the Last Man (New York: Avon Books, 1992).

[5] The list includes Ludwig Boltzmann, Franz Brentano, Rudolph Carnap, Edmund Husserl, Ernst Mach, Alexius Meinong, Karl Popper, Moritz Schlick, and Ludwig Wittgenstein among philosophers; Kurt Goedel, Hans Hahn, Karl Menger, and Richard von Mises among mathematicians; Eugen von Boehm-Bawerk, Gottfried von Haberler, Friedrich von Hayek, Carl Menger, Fritz Machlup, Ludwig von Mises, Oskar Morgenstern, Joseph Schumpeter, and Friedrich von Wieser among economists; Rudolph von Jhering, Hans Kelsen, Anton Menger, and Lorenz von Stein among lawyers and legal theorists, Alfred Adler, Joseph Breuer, Karl Buehler, and Sigmund Freud among psychologists; Max Adler, Otto Bauer, Egon Friedell, Heinrich Friedjung, Paul Lazarsfeld, Gustav Ratzenhofer, and Alfred Schuetz among historians and sociologists; Hermann Broch, Franz Grillparzer, Hugo von Hofmannsthal, Karl Kraus, Fritz Mauthner, Robert Musil, Arthur Schnitzler, Georg Trakl, Otto Weininger, and Stefan Zweig among writers and literary critics; Gustav Klimt, Oskar Kokoschka, Adolf Loos, and Egon Schiele among artists and architects; and Alban Berg, Johannes Brahms, Anton Bruckner, Franz Lehar, Gustav Mahler, Arnold Schoenberg, Johann Strauss, Anton von Webern, and Hugo Wolf among composers.

[6] See Allan Janik & Stephen Toulmin, Wittgenstein's Vienna (New York: Simon & Schuster, 1973); William M. Johnston, The Austrian Mind. An Intellectual and Social History 1848-1938 (Berkeley: University of California Press, 1972); Carl E. Schorske, Fin-de-Siecle Vienna: Politics and Culture (New York: Random House, 1981).

[7] For a contemporary collection of examples of "counterfactual history" see Niall Ferguson, ed., Virtual History. Alternatives and Counterfactuals (New York: Basic Books, 1999).

[8] On the relationship between communism and the rise of fascism and national socialism see Ralph Raico, "Mises on Fascism, Democracy, and Other Questions," Journal of Libertarian Studies, Vol. 12, no. 1, 1996; Ernst Nolte, Der europaeische Buergerkrieg, 1917-1945. Nationalsozialismus und Bolschewismus (Berlin: Propylaeen, 1987).

[9] No less of an establishmentarian than George F. Kennan, writing in 1951, came indeed close to admitting as much: "Yet, today, if one were offered the chance of having back again the Germany of 1913, a Germany run by conservative but relatively moderate people, no Nazis and no Communists, a vigorous Germany, united and unoccupied, full of energy and confidence, able to play a part again in the balancing-off of Russian power in Europe - well, there would be objections to it from many quarters, and it wouldn't make everybody happy; but in many ways it wouldn't be so bad, in comparison with our problem of today. Now, think what that means. When you tally up the total score of the two wars, in terms of their ostensible objectives, you find if there has been any gain at all, it is pretty hard to discern." American Diplomacy 1900-1950 (Chicago: University of Chicago Press, 1951), pp. 55-56.

[10] See on this subject Ludwig von Mises, Theory and History. An Interpretation of Social and Economic Evolution (Auburn, Al.: Ludwig von Mises Institute, 1985); idem, The Ultimate Foundation of Economic Science. An Essay on Method (Kansas City: Sheed Andrews & McMeel, 1978); Hans-Hermann Hoppe, Kritik der kausalwissenschaftlichen Sozialforschung. Untersuchungen zur Grundlegung von Soziologie und Oekonomie (Opladen: Westdeutscher Verlag, 1983); idem, Economic Science and the Austrian Method (Auburn, Al.: Ludwig von Mises Institute, 1995).

[11] See Bran Blanshard, Reason and Analysis (LaSalle: Open Court, 1964); also Arthur Pap, Semantics and Necessary Truth (New Haven: Yale University Press, 1958); Saul Kripke, "Naming and Necessity," in: Donald Davidson & Gilbert Harman, eds., Semantics of Natural Language (New York: Reidel, 1972); Paul Lorenzen, Methodisches Denken (Frankfurt/M.: Suhrkamp, 1968).

[12] Even a "good empiricist" would have to admit that, according to his own doctrine, he cannot possibly know a priori whether or not a priori theorems exist and may be used to decide between incompatible explanations of one and the same set of historical data; hence, he would have to adopt a wait-and-see attitude, too.

[13] To avoid any misunderstanding: To say that something is "necessary" (and can be recognized as such "a priori"), is not to claim that one is infallible. Mathematicians and logicians, too, claim to be concerned with necessary relations, and yet they do not claim to be infallible. Rather, what is claimed in this regard is only that in order to refute a theoretical proposition (in contrast to a hypothetical one) another, evenl more fundamental theoretical argument is required, just as another mathematical or logical proof or argument is required (and not "empirical evidence") in order to refute a mathematical or logical theorem.

[14] See Murray N. Rothbard, Economic Thought Before Adam Smith. An Austrian Perspective on the History of Economic Thought (Aldershot, UK: Edward Elgar, 1995); idem, Classical Economics. An Austrian Perspective on the History of Economic Thought (Aldershot, UK: Edward Elgar, 1995); also Randall Holcombe, ed., Fifteen Great Austrian Economists (Auburn, Al.: Ludwig von Mises Institute, 1999).

[15] Ludwig von Mises, Human Action. A Treatise on Economics (Auburn, Al.: Ludwig von Mises Institute, 1999 [1949]); Murray N. Rothbard, Man, Economy, and State. A Treatise on Economic Principles (Auburn, Al.: Ludwig von Mises Institute, 1993 [1962]).