Mises Daily

The Myth of National Defense

The Myth of National Defense by Hoppe

[This is the introduction to The Myth of National Defense: Essays on the Theory and History of Security Production (Mises Institute, 2003).]

In the American Declaration of Independence, Thomas Jefferson affirmed

these truths to be self-evident: that all men are created equal; that they are endowed by their creator with inalienable rights; that among these are life, liberty, and the pursuit of happiness: that to secure these rights, governments are instituted among men, deriving their just powers from the consent of the governed; that whenever any form of government becomes destructive of these ends, it is the right of the people to alter or abolish it, and to institute new government, laying its foundation on such principles, and organizing its powers in such form as to them shall seem most likely to effect their safety and happiness. Prudence indeed will dictate that governments long established should not be changed for light and transient causes; and accordingly all experience has shown that mankind are more disposed to suffer while evils are sufferable, than to right themselves by abolishing the forms to which they are accustomed. But when a long train of abuses and usurpations pursuing invariably the same object, evinces a design to reduce them under absolute despotism, it is in their right, it is their duty to throw off such government, and to provide new guards for their future security.

More than 200 years after the Declaration of Independence, it seems appropriate to raise the question whether governments have in fact done what they were designed to do, or if experience or theory has provided us with grounds to consider other possibly more effective guards for our future security.

The present volume aims to provide an answer to this fundamental question.

In fact, this question has recently assumed new urgency through the events of September 11, 2001. Governments are supposed to protect us from terrorism. Yet what has been the U.S. government’s role in the terrorist attacks on the World Trade Center and the Pentagon?

The U.S. government commands a “defense” budget of $400 billion per annum, a sum equal to the combined annual defense budgets of the next 24 biggest government spenders. It employs a worldwide network of spies and informants. However, it was unable to prevent commercial airliners from being hijacked and used as missiles against prominent civilian and military targets.

Worse, the U.S. government did not only fail to prevent the disaster of September 11, it actually contributed to the likelihood of such an event. In pursuing an interventionist foreign policy (taking the form of economic sanctions, troops stationed in more than 100 countries, relentless bombings, propping up despotic regimes, taking sides in irresolvable land and ethnic disputes, and otherwise attempting political and military management of whole areas of the globe), the government provided the very motivation for foreign terrorists and made the U.S. their prime target.

Moreover, how was it possible that men armed with no more than box cutters could inflict the terrible damage they did? Obviously, this was possible only because the government prohibited airlines and pilots from protecting their own property by force of arms, thus rendering every commercial airline vulnerable and unprotected against hijackers. A $50 pistol in the cockpit could have done what $400 billion in the hands of government were unable to do.

And what was the lesson drawn from such failures? In the aftermath of the events, the U.S. foreign policy became even more aggressively interventionist and threatening. The U.S. military overthrew the Afghani government that was said to be “harboring” the terrorist mastermind Osama bin Laden. In the course of this, thousands of innocent civilians were killed as “collateral damage,” but bin Laden has not been captured or punished to this day, almost two years after the attacks. And once a U.S. approved government had been installed in Afghanistan, the U.S. government turned its attention to wars against other enemy states, in particular Iraq with its huge oil reserves. The U.S. refused even to rule out the employment of nuclear weapons against enemy regimes. No doubt, this policy helped to further increase the number of recruits into the ranks of people willing to use extreme violence against the U.S. as a means of retribution.

At the same time, domestically the government used the crisis which it had helped to provoke to further increase its own power at the expense of the people’s liberty and property rights. Government spending, in particular on “defense,” was vastly increased, and a new government department for “homeland security” was created. Airport security was taken over by the federal government and government bureaucrats, and decisive steps toward a complete electronic citizen surveillance were taken.

Truly, then, the current events cry out for a systematic rethinking of the issues of defense and security and the respective roles of government, the market, and society in providing them.

* * *

Two of the most widely accepted propositions among political economists and political philosophers are the following:

First: Every “monopoly” is “bad” from the viewpoint of consumers. Monopoly here is understood in its classical sense as an exclusive privilege granted to a single producer of a commodity or service; i.e., as the absence of “free entry” into a particular line of production. In other words, only one agency, A, may produce a given good, X. Any such monopolist is “bad” for consumers because, shielded from potential new entrants into his area of production, the price of his product X will be higher and the quality of X lower than otherwise.

Second: The production of security must be undertaken by and is the primary function of government. Here, security is understood in the wide sense adopted in the Declaration of Independence: as the protection of life, property (liberty), and the pursuit of happiness from domestic violence (crime) as well as external (foreign) aggression (war). In accordance with generally accepted terminology, government is defined as a territorial monopoly of law and order (the ultimate decision maker and enforcer).

That both propositions are clearly incompatible has rarely caused concern among economists and philosophers, and insofar as it has, the typical reaction has been one of taking exception to the first proposition rather than the second.

The contributors to this volume challenge this “orthodox” view and offer both empirical and theoretical support to the contrary thesis: that it is the second proposition, not the first, which is false and ought to be rejected.

As far as empirical—historical—evidence is concerned, proponents of the orthodox view face obvious embarrassment. The recently ended twentieth century was characterized by a level of human rights violations unparalleled in all of human history. In his book Death by Government, Rudolph Rummel estimates some 170 million government-caused deaths in the twentieth century. The historical evidence appears to indicate that, rather than protecting life, liberty, and the pursuit of happiness of their citizens, governments must be considered the greatest threat to human security.

Proponents of the orthodox view (willing to compromise the first thesis regarding the “evil” of monopoly in order to maintain the second concerning the necessity of state government) cannot entirely ignore this seemingly overwhelming evidence to the contrary. If they wish to rescue from refutation the thesis that government is indispensible for the provision of law and order, they must revise the second thesis. Experience shows that some states are aggressors, not protectors. Thus, if one is not to discard the second thesis altogether, its further specification is required: it is only possible to claim that some states protect.

Accordingly, rather than faulting government as such for the dismal security record in particular during the past century, several attempts have been made to explain this record as the result of specific forms of government. Numerous political scientists, including the aforementioned Rummel, have tried to show by various statistical means that it is the absence of democratic government which explains the “anomalies” of the twentieth century. Admittedly, democracies go to war against nondemocratic regimes, but supposedly not against other democracies. Hence, it would seem to follow—and this thesis has in the meantime become part of the American neoconservative folklore—that once the Wilsonian dream of “making the world safe for democracy” has been achieved, eternal peace and security will be accomplished.

In a similar vein, political economists such as James Buchanan and the school of “constitutional economics” have suggested that the admittedly miserable record of governments concerning the provision of internal and external security can be systematically improved by means of constitutional reforms aimed at the strict limitation of governmental powers.

Both these explanations are scrutinized and rejected in this volume. As for the thesis of the peaceful nature of democracy, several contributors note that, in accordance with military historians such as J.F.C. Fuller and M. Howard, it rests on a rather selective or even erroneous reading of the historical record. Let me mention only two such misreadings. First, how can this thesis account for a seemingly obvious counterexample such as the American War of Southern Independence (the War Between the States) with its until then unparalleled brutality? Answer: by excluding and ignoring it or downplaying its significance. Second, proponents of the peaceful-democracy thesis typically support their claim by classifying traditional monarchies and modern dictatorships as autocratic and nondemocratic and contrasting both to what they classify as genuine “democracies.” Yet historically (and if any grouping must be done at all), it is democracy and dictatorship that should be grouped together. Traditional monarchies only resemble dictatorships superficially. Instead, dictatorships are a regular outgrowth of mass democracy. Lenin, Stalin, Hitler, and Mao were distinctly democratic rulers as compared to the former Emperors of Russia, Germany, Austria, and China. Indeed, Lenin, Stalin, Hitler, and Mao (and almost all of their smaller and lesser known successors) were outspoken in their hatred of everything monarchic and aristocratic. They knew that they owed their rise to democratic mass politics, and they employed democratic politics (elections, referenda, mass rallies, mass media propaganda, etc.) throughout their reign.

On the other hand, as for the proposal of constitutional reforms aimed at limiting state power, several contributors to this volume explain that any such attempts must be considered futile and ineffective if and insofar as the interpretation and the enforcement of such limitations is left to government itself or to one of its organs, such as a governmental supreme court. (See more on this below.)

More convincing to the contributors of this volume appears a third thesis, advanced by the economist Ludwig von Mises, which may be considered a combination of the above. Mises asserts that in order to fulfill its primary function as a provider of security, a government must satisfy two conditions: it must be democratically organized, and it must permit unlimited secession in principle.

[W]henever the inhabitants of a particular territory, whether it be a single village, a whole district, or a series of adjacent districts, make it known, by a freely conducted plebiscite, that they no longer wish to remain united to the state to which they belong at the time, their wishes are to be respected and complied with. This is the only feasible and effective way of preventing revolutions and international wars. (Ludwig von Mises, Liberalism [Irvington-on-Hudson, New York: Foundation for Economic Education, and San Francisco, Calif.: Cobden Press, 1985], p. 109)

One obvious attraction of this thesis is that it can account for the events of the American War of Southern Independence. Thus, until 1861, it was generally taken for granted in the U.S. that a right to secession existed, and that the Union was nothing but a voluntary association of independent states; but when the desire for the unrestricted right to secede was no longer respected, the state turned from protector to aggressor. Mises’s thesis is accorded considerable attention in this volume, and the role of secession as a means for limiting or escaping government depredation is emphasized repeatedly.

However, in requiring a protective state to allow unlimited secession from its jurisdiction, Mises’s explanation essentially renders the State a voluntary membership organization with taxes amounting to voluntarily paid (or withheld) membership dues. With an unlimited right to secession even at the level of individual households, the government is no longer a “State,” but a club. Hence, strictly speaking, Mises’s thesis must be considered a rejection of proposition two rather than merely its revision. The contributors to this volume concur with this judgment, not only for empirical reasons but even more so for theoretical ones.

Every attempt to explain the dismal performance of governments (States) qua providers of security as inherent in the nature of state-government must begin with a precise definition of state-government (the State). The definition of the State adopted throughout this volume is uncontroversial. It corresponds closely to that proposed by Thomas Hobbes and adopted to this day by countless political philosophers and economists.

Briefly, Hobbes argued that in the state of nature, men would constantly be at each others’ throats. Homo homini lupus est. Each individual, left to his own devices and provisions, would spend too little on his own defense. Hence, permanent interpersonal warfare would result. The solution to this presumably intolerable situation, according to Hobbes and his followers, is the institution of a State (government). In order to institute peaceful cooperation—security—among themselves, two individuals, A and B, require a third independent party, S, as ultimate judge and peacemaker. However, this third party, S, is not just another individual, and the good provided by S, that of security, is not just another “private” good. Rather, S is a sovereign and has as such two unique powers. On the one hand, S can insist that his subjects, A and B, not seek protection from anyone but him; that is, S is a compulsory territorial monopolist of protection and ultimate decision making (jurisdiction). On the other hand, S can determine unilaterally (without unanimous consent) how much A and B must spend on their own security; that is, S has the power to impose taxes in order to provide security “collectively.”

Based on this definition of government as a compulsory territorial monopolist of protection and jurisdiction equipped with the power to tax without unanimous consent, the contributors to this volume argue that, regardless of whether such a government is a monarchy, a democracy, or a dictatorship, any notion of limiting its power and safeguarding individual life, liberty, and property must be deemed illusory. Under monopolistic auspices the price of justice and protection must rise and its quality must fall. A tax-funded protection agency, it is pointed out, is a contradiction in terms: it is an expropriating property protector and can only lead to ever more taxes and less protection. In fact, even if a state limited its activities exclusively to the protection of life, liberty, and property (as a protective state à la Jefferson would do), the further question of how much security to provide would arise. Motivated like everyone else by self-interest and the disutility of labor, but with the unique power to tax without consent, a government’s answer will always be the same: to maximize expenditures on protection—and almost all of a nation’s wealth can be consumed by the cost of protection—and at the same time to minimize the production of protection.

Furthermore, a monopoly of jurisdiction must lead to a deterioration in the quality of justice and protection. If one can appeal only to the State for justice and protection, justice and protection will be distorted in favor of government—constitutions and supreme courts notwithstanding. After all, constitutions and supreme courts are state constitutions and courts, and whatever limitations to government action they might contain is determined by agents of the very same institution. Accordingly, the definitions of life, liberty, and property and their protection will continually be altered and the range of jurisdiction expanded to the state’s advantage.

The first person to provide a systematic explanation for the apparent failure of governments as security producers along the above sketched lines was Gustave de Molinari (1818–1912), a prominent Belgian-born French economist, student of Jean-Baptiste Say, and teacher of Vilfredo Pareto, and for several decades the editor of the Journal des Économistes, the professional journal of the French Economic Association, the Societé d’Économie Politique. De Molinari’s central argument was laid out in his article “De la Production de la Securité” of February 1849. The argument is worth quoting because of its theoretical rigor and its seemingly visionary foresight:

If there is one well-established truth in political economy, it is this: That in all cases, for all commodities that serve to provide for the tangible or intangible needs of consumers, it is in the consumer’s best interest that labor and trade remain free, because the freedom of labor and trade have as their necessary and permanent result the maximum reduction of price. And this: That the interests of the consumer of any commodity whatsoever should always prevail over the interests of the producer.

Now in pursuing these principles, one arrives at this rigorous conclusion:

That the production of security should, in the interests of the consumers of this intangible commodity, remain subject to the law of free competition.Whence it follows: That no government should have the right to prevent another government from going into competition with it, or require consumers of security to come exclusively to it for this commodity. . . . Either this is logically true, or else the principles on which economic science is based are invalid. (Gustave de Molinari, Production of Security, J.H. McCulloch, trans. [New York:_Center for Libertarian Studies, 1977], pp. 3–4)

De Molinari then predicted what would happen if the production of security is monopolized:

If, on the contrary, the consumer is not free to buy security wherever he pleases, you forthwith see open up a large profession dedicated to arbitrariness and bad management. Justice becomes slow and costly, the police vexatious, individual liberty is no longer respected, the price of security is abusively inflated and inequitably apportioned, according to the power and influence of this or that class of consumers. (Molinari, Production of Security, pp. 13–14)

Nearly all contributors to this volume pay explicit tribute to Molinari’s pathbreaking theoretical insight. Hence, the present volume is dedicated to the memory of Gustave de Molinari.

If Molinari’s explanation of the dismal performance of government as security provider by the nature of government qua compulsory territorial monopolist of law and order is accepted, however, then the question of alternatives arises. Accordingly, the bulk of this volume consists of contributions to this quest for private and voluntary (market-produced) alternatives to the failed and fundamentally flawed system of state-protection. How could and would an alternative system of freely competing security producers work? Based on historical experience and economic logic, how effective are private alternatives such as mercenaries, guerrillas, militias, partisans, and privateers? What are the consequences of the free proliferation of weapons, in particular of nuclear arms? What is the role of ideology and public opinion in defense and war? What type of good is defense, a “private” or a “public” good? Can protective defense be provided by freely competing and financed insurance agencies? How would the “logic” of competitive insurance-protection differ from that of monopolistic state-protection? How can the transition from a system of monopolistic to competitive security production be achieved? What is the role of secession in this process? How can state-free societies—natural orders—possibly defend themselves against state attacks and invasions? These are the central questions addressed and answered in the present volume by an international assembly of contributors from philosophy, economics, history, sociology, and political science.

* * *

The contributions to Section One on state-making and war-making set the stage historically and conceptually.

Marco Bassani and Carlo Lottieri locate the topic and theme of the volume in history and the history of political thought. They emphasize the historical modernity of the institution of a State—States have not always existed—and direct particular attention to medieval (feudal) Europe as an example of a “Society without State,” from which valuable insights regarding the present and its possible paths of transformation can be gained. They explain the ideological revolution, associated with such names as Machiavelli, Bodin, Hobbes, and Rousseau, that supported and led up to the rise of the State. They review the rise of a liberal-libertarian ideological opposition to Statism, associated in particular with the names of Molinari (in the nineteenth century) and Rothbard (in the twentieth). They note the importance of European “realism,” i.e., the “elitist” social theorists such as G. Mosca, V. Pareto, and R. Michels in Italy and Carl Schmitt in Germany, for a correct understanding of the “non-neutral” nature of the State and sovereignty. And they explore the prospects for liberty and protection in the current world torn between a tendency toward political centralization (a One World Order) and an opposite tendency toward decentralization and secession.

Murray N. Rothbard (1926–1995), the author of the second contribution to Section One, is the most important twentieth-century disciple of Molinari. In synthesizing Molinari’s monopoly (or rather antimonopoly) theory with Ludwig von Mises’s neo-Austrian system of free-market economics (praxeology) and natural-law ethics, Rothbard created a grand new anti-Statist theoretical system, of Austro-Libertarianism. As they were by Molinari, most contributors to this volume have been profoundly influenced by Rothbard and his system.

In his contribution to this volume, published originally in 1963 and reprinted here with the permission of the Ludwig von Mises Institute, Rothbard introduces the conceptual and terminological distinctions fundamental to all of the following. He clarifies the meaning of property, aggression, crime, self-defense, punishment, State, peace, war (”just” and “unjust”), revolution, imperialism, neutrality, and isolationism, and he explains the inherently aggressive nature of the State, i.e., the indissoluble link between War-Making and State-Making.

The contributions to Section Two focus on the subject of government forms, war, and strategy.

Erik von Kuehnelt-Leddihn (1909–1999), in the last article completed before his death, presents a sweeping portrait of European history and the role of monarchy and Christian kings. In the European-Christian worldview, the king was seen as part of a natural, quasi-familial hierarchical or “vertical” social order: of “God the Father in Heaven, the Holy Father in Rome, the King as the Father of the Fatherland, and the Father as the King in the Family.” He describes the gradual deconstruction of this vertical worldview and its displacement, beginning with the French Revolution and completed with World War I and II, by a “new” egalitarian or “horizontal” outlook incompatible with monarchy and kings. He identifies democracy (majority rule), socialism (international and national), and popular dictatorship as expressions of this new horizontal worldview. Furthermore, he provides ample historical illustration of how the transformation from monarchy to democracy changed the conduct of war from limited warfare to total war.

Gerard Radnitzky, in his wide-ranging essay, bolsters Kuehnelt-Leddihn’s case against democracy. Following Anthony de Jasay, Radnitzky begins with a detailed analysis of the economics and politics of majoritarian democracy and refutes as illusory and impossible the claims of constitutional economists such as James Buchanan. A discussion of the thesis “democracies are more peaceful” occupies the center of his chapter. Based on analytical considerations and detailed historical evidence, Radnitzky rejects the thesis. Further, he identifies the thesis “that democracies do not make war with each other” as “a cornerstone of the New World Order crowd” and U.S. imperialism and hegemony. He concludes with a few game-theoretical considerations regarding the possibility of private defense coalitions and some remarks on the likelihood of the decline and demise of the State.

Bertrand Lemennicier provides an economic-conceptual and formalistic, game-theoretical explanation of the effects and prospects of government policies and treaties concerning the nonproliferation of nuclear weapons. In accordance with standard economic cartel theory, Lemennicier argues that any such agreements are bound to fail due to external and internal pressure. The cartel members cannot lastingly prevent nonmember countries from developing nuclear weapons independently. And within the cartel, each member has a constant incentive to cheat (and sell). Moreover, Lemennicier argues that even if a cartel agreement could be maintained and enforced, this would still be a “bad” idea. The world is made less safe rather than more so when a single country dominates in nuclear possession and enforcement. “The U.S. retains a monopoly on nuclear dissuasion and plays the part of world enforcer, excluding international exchanges for countries seeking nuclear weapons,” writes Lemennicier. “Such a position is costly, and the U.S. has no legitimate claim to such a role.”

The contributions to Section Three review the historical record of private alternatives to State defense and warfare.

Joseph Stromberg considers the example of professional “standing armies” commanded by aristocratic officers. He looks at the experience with mercenary armies in Renaissance Italy. He discusses the role of a militia in republican theory and practice from ancient Greece and Rome to the United States and Switzerland. Special attention is given to guerrilla warfare. Its essentially defensive nature is explained, and its role in the American Revolution, in the War for Southern Independence, and in the Second Anglo-Boer War is discussed. Based on this evidence, Stromberg suggests as a solution to the problem of defensive protection some combination of voluntary militias (inspired if possible by a unifying ideology or faith) and modern mercenaries (in the form of professional insurance-protection companies), both steeped in the theory and practice of guerrilla warfare.

Larry Sechrest opens his contribution with a brief discussion of the nature of the “good” of defense and argues that defense is a distinctly “private” good (while “national defense” is an “imaginary” good). He then applies these theoretical considerations to the subject of naval warfare. In particular, he provides a detailed survey of “privateering” as a form of naval warfare conducted by privately owned ships from the twelfth to the nineteenth centuries. Sechrest explains how privateers operated, the legal customs that grew up around them, and how remarkably effective and profitable they were. Finally, as to why the practice of privateering declined after the nineteenth century, Sechrest argues that this has no technological reasons. To the contrary, privateering died out because it was “too” effective and threatened the jobs of the regular State-navies.

Jeffrey Rogers Hummel begins with a discussion of the anthropological preconditions of State formation and the reasons for the historical triumph of States over Stateless societies. He explores the reasons—population size, geography, political decentralization, wealth and technology—for the success of some States and world regions and the failure of others. In particular, Hummel investigates and emphasizes the importance of ideas and ideological convictions, of motivation and morale, in war and defense. Finally, he ponders the ideological requirements of liberating oneself of the “macroparasitism” of one’s own State and the prospects of defending a free territory against the potential aggression of another, foreign State. Hummel expresses considerable optimism regarding the effectiveness of such a defense—because free societies will be wealthier and technologically more advanced than statist societies—but cautions that the maintenance of a free society (rather than a regression to Statism) requires eternal ideological vigilance on the part of the public.

The final section, Section Four, is dedicated to the theory of private security production and its various practical applications.

In his contribution, Walter Block argues that to claim “that a tax collecting government can legitimately protect its citizens against aggression is to contradict oneself, since such an entity starts off the entire process by doing the very opposite of protecting those under its control.” In support of this claim, Block reviews, analyzes, and refutes the entire panoply of statist arguments: the “prisoner’s dilemma,” the “free rider,” the “externality,” and the “public goods” thesis in favor of “national defense.” Defense, Block explains, is defense of private property and as “private” as private property. Last, he discusses the thesis, popular especially in “public choice” and “constitutional economics” circles, that States are forms of clubs (and clubs forms of States), and he concurs with Joseph Schumpeter’s verdict that this thesis “only proves how far removed this part of the social sciences is from scientific habits of mind.”

In my own contribution to this volume, I open with a reconstruction the Hobbesian myth of “collective security” and its empirical and logical refutation. I then proceed to a detailed analysis of risk, property, and insurance. I comment on the “arbitrariness” of “national” borders, and hence of “national” defense (in contrast to the “natural” borders of private property and the defense of such borders). I provide a comparative analysis of insurance-protection versus State-protection and contrasts the logic of State-warfare to that of freely financed protection agencies. Finally, I point out that insurance agencies, in contrast to States, will not disarm those they protect, and he addresses the question of how a free and armed society in conjunction with professional protection-insurance agencies would likely go about defending itself against State aggression.

Guido Hülsmann, in the final contribution to this volume, deals with secession as a means of establishing a private-property order and assuring effective protection. He discusses the nature of secession and its comparative advantages as compared to other forms of political reform. After examining the conditions that must be met for secession to be successful, Hülsmann turns to a key problem of secessionist movements: defense against the government from which they are seceding. He argues that secessionist defense organizations must themselves be run on the basis of private-property principles to ensure that the political goal of libertarian secession be reached and that its military effectiveness be as high as possible.

Though the implications of the arguments made in this volume are radical and sweeping, the principles are quite simple at root. In economics, the contributors seek the consistent application of market theory, not its arbitrary exclusion from whole areas of life, such that it applies also to the delivery of goods and services associated with security and defense. In politics, the contributors seek only the application of the principle Jefferson presented in his Declaration of Independence, that people have the right and duty to throw off governments that are not effecting their safety and find alternatives that provide guards for future security. In both respects, these ideas represent a relatively unexplored application of traditional liberal theory. And yet, given the continued rise of the national-security state in our own time, the future of liberty itself may hinge on our willingness to push these principles to their fullest extent.

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