DemocracyThe God That Failed (23 page)

Most importantly, by compelling private property owners and/or market income earners (producers) to subsidize "politicians," "political parties," and "civil servants" (politicians and government employees do not
pay
taxes but are
paid
out of taxes),
¹⁵
there will be less wealth
formation, fewer producers and less productivity, and ever more waste, "parasites" and parasitism.

¹²
On crime and punishment see Murray N. Rothbard,
The
Ethics
of
Liberty
(New York: New York University Press, 1998), chap. 13;
Assessing
the
Criminal,
Randy E. Barnett and John Hagel, eds. (Cambridge, Mass.: Ballinger, 1977);
Criminal
justice?
The
Legal
System
vs.
Individual
Responsibility,
Robert J. Bidinotto, ed. (Irvington-on Hudson, N.Y.: Foundation for Economic Education, 1994).

¹³
On the law and economics of "affirmative action" and discrimination see Richard A. Epstein,
Forbidden
Grounds
(Chicago: University of Chicago Press, 1992);
Dis
crimination,
Affirmative
Action,
and
Equal
Opportunity,
Walter Block and Michael Walker, eds. (Vancouver: Fraser Institute, 1982).

¹⁴
On conservation and environmentalism see Murray N. Rothbard, "Conservation in the Free Market," in idem,
Egalitarianism
as
a
Revolt
Against
Nature
and
Other
Essays
(Washington, DC: Libertarian Review Press, 1974); idem,
Power
and
Market,
pp. 63-70; idem, "Law, Property Rights, and Air Pollution," in idem,
The
Logic
of
Action
Two
(Cheltenham, U.K.: Edward Elgar, 1997); Llewellyn Rockwell, Jr.,
The
Anti-Environmentalist
Manifesto
(Burlingame, Calif.: Center for Libertarian Studies, 1993).

¹⁵
See on this Rothbard,
Power
and
Market
,
chap. 2, and pp. 84ff. To recognize this important truth it is only necessary to raise the question "What would happen if all taxes were abolished?" Would this imply, for instance, that everyone's income would increase from net (after-tax) income to gross (before-tax) income? The answer is clearly "no." For something is currently done with the taxes collected. They are used, for instance, to pay the salaries of government employees. Their salaries could not possibly rise if taxes were abolished. Rather, their salaries would fall to zero, which demonstrates that they are not paying any taxes at all. As Rothbard explains: "If a bureaucrat receives a salary of $ 5,000 a year and pays $ 1,000 in 'taxes' to the government, it is quite obvious that he is simply receiving a salary of $ 4,000 and pays no taxes at all. The heads of government have simply chosen a complex and misleading accounting device to make it appear that he pays taxes in the same way as any other men making the same income" (ibid., p. 278, also p. 142). Once this has been understood it becomes obvious why certain groups such as school teachers and university professors are almost always and uniformly in favor of higher taxes. They are not thereby generously accepting a greater burden imposed on themselves. Instead, higher taxes are the means by which they increase their own tax-financed
salaries. On the issue of taxpayers versus tax-consumers (or tax-eaters) see also John C. Calhoun,
A
Disquisition
on
Government
(New York: Liberal Arts Press, 1953), pp. 16-18.

Businessmen (capitalists) and their employees cannot earn an income unless they produce goods or services which are sold in markets. The buyers' purchases are voluntary. By buying a good or service, the buyers (consumers) demonstrate that they
prefer
this good or service over the sum of money that they must surrender in order to acquire it. In contrast, politicians, parties, and civil servants produce nothing which is sold in markets. No one
buys
government "goods" or "services." They are produced, and costs are incurred to produce them, but they are not sold and bought. On the one hand, this implies that it is impossible to determine their value and find out whether or not this value justifies their costs. Because no one buys them, no one actually demonstrates that he considers government goods and services worth their costs, and indeed, whether or not anyone attaches any value to them at all. From the viewpoint of economic theory, it is thus entirely illegitimate to assume, as is always done in national income accounting, that government goods and services are worth what it costs to produce them, and then to simply
add
this value to that of the "normal," privately produced (bought and sold) goods and services to arrive at gross domestic (or national) product, for instance. It might as well be assumed that government goods and services are worth nothing, or even that they are not "goods" at all but "bads," and hence, that the cost of politicians and the entire civil service should be
subtracted
from the total value of privately produced goods and services. Indeed, to assume
this
would be far more justified. For on the other hand, as to its practical implications, the subsidizing of politicians and civil servants amounts to a subsidy to "produce" with little or no regard for the well-being of one's alleged consumers, and with much or sole regard instead for the well-being of the "producers," i.e., the politicians and civil servants. Their salaries remain the same, whether their output satisfies consumers or not. Accordingly, as a result of the expansion of "public" sector employment, there will be increasing laziness, carelessness, incompetence, disservice, maltreatment, waste, and even destruction—and at the same time ever more arrogance, demagoguery, and lies ("we work for the public good").
¹⁶

¹⁶
On the fundamental errors involved in the standard national income accounting procedures, and a constructive alternative, see Murray N. Rothbard,
America's
Great
Depression
(Kansas City: Sheed and Ward, 1975), pp. 296-304; idem,
Power
and
Market,
pp. 199-202.

After less than one hundred years of democracy and redistribution, the predictable results are in. The "reserve fund" that was inherited from the past is apparently exhausted. For several decades (since the late 1960s or the early 1970s), real standards of living have stagnated or even fallen in the West.
¹⁷
The "public" debt and the cost of the existing social security and health care system have brought on the prospect of an imminent economic meltdown.
¹⁸
At the same time, almost every form of undesirable behavior unemployment, welfare dependency, negligence, recklessness, incivility, psychopathy, hedonism, and crime has increased, and social conflict and societal breakdown have risen to dangerous heights.
¹⁹
If current trends continue, it is safe to say that the Western welfare state (social democracy) will collapse just as Eastern (Russian-style) socialism collapsed in the late 1980s.

However, economic collapse does not automatically lead to improvement. Matters can become worse rather than better. What is necessary besides a crisis are ideas—correct ideas—and men capable of understanding and implementing them once the opportunity arises. Ultimately, the course of history is determined by ideas, be they true or false, and by men acting upon and being inspired by true or false ideas. The current mess is also the result of ideas. It is the result of the overwhelming acceptance, by public opinion, of the idea of democracy. As long as this acceptance prevails, a catastrophe is unavoidable, and there can be no hope for improvement even after its arrival. On the other hand, as soon as the idea of democracy is recognized as false and vicious—and ideas can, in principle, be changed almost instantaneously—a catastrophe can be avoided.

¹⁷
For an instructive study using Rothbard's suggestions for an alternative method of national income accounting see Robert Batemarco, "GNP, PPR, and the Standard of Living,"
Review
of
Austrian
Economics
1 (1987).

¹⁸
For a summary overview see Victoria Curzon Price, "The Mature Welfare State: Can It Be Reformed?" in
Can
The
Present
Problems
of
Mature
Welfare
States
Such
as
Sweden
Be
Solved?
Nils Karlson, ed. (Stockholm: City University Press, 1995), esp. pp. 15-19.

¹⁹
In the U.S., for instance, between 1960 and 1990 the murder rate doubled, rape rates quadrupled, the robbery rate increased five-fold, and the likelihood of becoming the victim of an aggravated assault increased by 700 percent. See on this Seymour Itzkoff,
The
Decline
of
Intelligence
in
America;
Roger D. McGrath, "Treat Them to a Good Dose of Lead,"
Chronicles
(January 1994).

The central task of those wanting to turn the tide and prevent an outright breakdown is the "delegitimation" of the idea of democracy as the root cause of the present state of progressive "decivilization." To this purpose, one should first point out that it is difficult to find many proponents of democracy in the history of political theory. Almost all major thinkers had nothing but contempt for democracy. Even the Founding Fathers of the U.S., nowadays considered the model of a democracy, were strictly opposed to it. Without a single exception, they thought of democracy as nothing but mob-rule. They considered themselves to be members of a 'natural aristocracy,' and rather than a democracy they advocated an aristocratic republic.
²⁰
Furthermore, even among the few theoretical defenders of democracy such as Rousseau, for instance, it is almost impossible to find anyone advocating democracy for anything but extremely small communities (villages or towns). Indeed, in small communities where everyone knows everyone else personally, most people must acknowledge that the position of the "haves" is typically based on their superior personal achievement just as the position of the "have-nots" finds its typical explanation in their personal deficiencies and inferiority. Under these circumstances, it is far more difficult to get
away with trying to loot other people and their personal property to one's advantage. In distinct contrast, in large territories encompassing millions or even hundreds of millions of people, where the potential looters do not know their victims, and
vice
versa,
the human desire to enrich oneself at another's expense is subject to little or no restraint.
²¹

²⁰
See on this Erik von Kuehnelt-Leddihn,
Leftism
Revisited
(Washington D.C.: Regnery Gateway, 1990), esp. chap. 6. Of the American founders, Alexander Hamilton was a monarchist. Likewise, the Governor of Pennsylvania, Robert Morris, had strong monarchist leanings. George Washington expressed his profound distaste of democracy in a letter of September 30,1798, to James McHenry. John Adams was convinced that every society grows aristocrats as inevitably as a field of corn will grow some large ears and some small. In a letter to John Taylor he insisted, like Plato and Aristotle, that democracy would ultimately evolve into despotism, and in a letter to Jefferson he declared that "democracy will envy all, contend with all, endeavor to pull down all, and when by chance it happens to get the upper hand for a short time, it will be revengeful, bloody and cruel." James Madison, in a letter to Jared Parks, complained of the difficulty "of protecting the rights of property against the spirit of democracy." And even Thomas Jefferson, probably the most "democratic" of the Founders, confessed in a letter to John Adams that he considered

the natural aristocracy ... as the most precious gift of nature, for the instruction, the trusts and governments of society. And indeed, it would have been inconsistent in creation to have formed men for the social state, and not have provided virtue and wisdom enough to manage the concerns of society. May we not even say that that form of government is best, which provides most effectually for a pure selection of these natural
aristoi
into the offices of government?

Characterizing the general attitude of the founders, then, the most appropriate pronouncement is that of John Randolph of Roanoke: "I am an aristocrat: I love liberty, I hate equality."

More importantly, it must be made clear again that the idea of democracy is
immoral
as well as
uneconomical.
As for the moral status of majority rule, it must be pointed out that it allows for A and B to band together to rip off C, C and A in turn joining to rip off B, and then B and C conspiring against A, and so on. This is not justice but a moral outrage, and rather than treating democracy and democrats with respect, they should be treated with open contempt and ridiculed as moral frauds.
²²
On the other hand, as for the economic quality of democracy, it must be stressed relentlessly that it is not democracy but private property, production, and voluntary exchange that are the ultimate sources of human civilization and prosperity. In particular, contrary to widespread myths, it needs to be emphasized that the lack of democracy had essentially nothing to do with the bankruptcy of Russian-style socialism. It was not the selection principle for politicians that constituted socialism's problem. It was politics and political decisionmaking as such. Instead of each private producer deciding independently what to do with particular resources, as under a regime of private property and contractualism, with fully or partially socialized factors of production each decision requires someone else's permission. It is irrelevant to the producer how those giving permission are chosen. What matters to him is that permission must be sought at all. As long as this is the case, the incentive of producers to produce is reduced and impoverishment will ensue. Private property is as incompatible with democracy as it is with any other form of political rule.
²³
Rather than democracy, justice as well as economic efficiency require a pure and unrestricted private property society an "anarchy of production" in which no one rules anybody, and all producers' relations are voluntary and thus mutually beneficial.
²⁴

²¹
Rousseau's
Social
Contract,
which appeared in 1762, was actually meant to be a theoretical commentary on the political situation in his hometown of Geneva, then an independent city state of less than 30,000 inhabitants ruled, in effect, by a tiny hereditary oligarchy of the heads of Geneva's leading aristocratic families in control of the Small Council and the Council of the Two Hundred. Rousseau's appeal to the "people" and "popular sovereignty" was intended as an attack on this oligarchy, but by no means as a defense of direct democracy and universal political participation as it is nowadays understood. Rather, what Rousseau had in mind when he wrote in support of the "sovereign people" were merely the members of Geneva's other political body, the Grand Council, which was made up of some 1,500 members and included besides Geneva's upper aristocratic crust also its lower hereditary aristocracy.

²²
Fortunately, despite the relentless propaganda spread by government funded and controlled school teachers—such as "democracy means that we all rule ourselves"—as well as by celebrated Nobel laureates such as James Buchanan and his "public choice" school of economics—such as "governments are voluntary institutions just as firms" (James M. Buchanan and Gordon Tullock,
The
Calculus
of
Consent
[Ann Arbor: University of Michigan Press, 1962], p. 19)— there is still enough common sense left, both in
academia
as well as among the general public, to find a sympathetic ear for such criticisms. As for
academia,
an economist as prominent as Joseph A. Schumpeter would note regarding views such as Buchanan's that "the theory which construes taxes on the analogy of club dues or the purchase of the service of, say, a doctor only proves how far removed this part of the social sciences is from scientific habits of minds" (Joseph A. Schumpeter,
Capitalism,
Socialism,
and
Democracy
[New York: Harper, 1942], p. 198). And as far as the general public is concerned, one can find consolation in the remarks of the great American journalist and writer H.L. Mencken, who wrote:

The average man, whatever his errors otherwise, at least sees clearly that government is something lying outside him and outside the generality of his fellow men—that it is a separate, independent, and hostile power, only partly under his control, and capable of doing him great harm.... Is it a fact of no significance that robbing the government is everywhere regarded a crime of less magnitude than robbing an individual, or even a corporation?... When a private citizen is robbed, a worthy man is deprived
of the fruits of his industry and thrift; when the government
is robbed, the worst that happens is that certain rogues and loafers have less money
to play with than they had before. The notion that they had ea
rned that money is never entertained; to most sensible men it would seem ludicrous.
They are simply rascals who, by accident of law, have a somewha
t dubious right to a share in the earnings of their fellow men. When that share is d
iminished by private enterprise the business is, on the whole, far more noble than not."
(A
Mencken
Chrestomathy
[New York: Vintage Books, 1949], pp. 146-4
7; see also H. L. Mencken,
Notes
on
Democracy
(New York: Knopf, 1926).