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Source link: http://archive.mises.org/8235/on-the-impossibility-of-limited-government/

On the Impossibility of Limited Government

June 27, 2008 by

At the outset of the American “experiment,” writes Hans-Hermann Hoppe, the tax burden imposed on Americans was light, indeed almost negligible. Money consisted of fixed quantities of gold and silver. The definition of private property was clear and seemingly immutable, and the right to self-defense was regarded as sacrosanct. No standing army existed, and a firm commitment to free trade and a noninterventionist foreign policy appeared to be in place. Two hundred years later, matters have changed dramatically. What can possibly be done about this state of affairs? First, the American Constitution must be recognized for what it is — an error. FULL ARTICLE


Steve Sadler June 27, 2008 at 5:55 pm

What a stunning article. I am partiuclar surprised at how many things in this article are both offensive (to my American pride) and irrefutable.

I stand amazed and humbled not to have grapsed some of these elements more clearly on my own….

So much of this was bubbling and brewing in my head….thank you for articulating it so succinctly!

jaqphule June 27, 2008 at 5:57 pm

Well, since mises.org is having database issues or some such, I can’t read the article in full. I can however comment on:

“The definition of private property was clear and seemingly immutable”

Wrong, wrong, and dead wrong. The definition of private property changed drastically as you crossed the Mason-Dixon line. The Constitution may have been flawed from the get-go in other ways, but trying to add patches to the Constitution to eradicate slavery, and the leftover problems from slavery, and the leftover problems from original solutions of removing slavery, all in the spirit of good intentions, has left a wide stream of bad precedent. Direct such effects included Plessy v. Fergussen, Brown v. Board of Education, the 14th amendment entire, encroachments on states rights following the Civil War, Jim Crow, race riots, affirmative action, the KKK… Each of these things handed our masters weapons of mass illiberalism. The indirect effects, including the 17th amendment, increased police powers, judicial activism, and others, are countless.

True, the Constitution held seeds of its own destruction, but I think the ones that caused failure the quickest are the simplest to find. Let it be a signal fire to future generations of revolutionaries: DO NOT COMPROMISE ON NATURAL RIGHTS.

jason4liberty June 27, 2008 at 7:30 pm

I likewise must say that arguments about the futile nature of limiting government power have been bubbling in my head for some time. My father is a tax protester, to the extent that he has previously spent 18 months in jail for contempt of court. I have a strong tradition of ingrained skepticism for authority from him.
We have both traditionally held that the country was “fixable” if we (the people) could restrain the government back into their limited function, as defined by the Constitution. This belief has become increasingly unsettled in my mind as I read more on mises.org and various relevant authors (and viewed the performance of my government after ascent to adulthood). I have recently presented the anarchocapitalist idea that minarchism still demands rights violations – that any coercion by government constitutes tyranny and should be eliminated – to my father. He was also unsettled.
I look forward to discussing this article with him. From my perspective, the theory so succinctly articulated here puts the idea of “saving the country by a return to the Constitution” into the coffin, slams it shut, and buries it in the ground. Surely the anarchocapitalist such as Niccolo are saying “Why didn’t you see it before? Duh!” How does the school of minarchism or Constitutionalism refute the basic principles so articulately stated in this article?
On a side note, are all of Hoppe’s writings footnoted like this article? You learn a lot just by reading the footnotes!

Niccolo June 27, 2008 at 8:47 pm

Actually, Jason, I sympathize with you greatly – especially as someone who has also seen his father go to prison over something like tax evasion or court-contempt, albeit my father was sent to prison for a much longer duration and was gone for most of my life because of it. Finding Anarchism isn’t an easy process, nor does it come quickly. I’m happy to have you interested in it though. :-)

By the way, I reject the term Anarcho-Capitalist fully, as I reject the term capitalist for meaning quite clearly the mode of economy found in the 19th century with the specific elemental results from it. I view capitalism equally as immoral as systems that many call socialism, and in some cases more so.

This, however will probably not be a particularly convincing point yet, as it goes even farther down the rabbit hole of liberty which causes no inductees to Anarchism a bit of anxiety – though I do not deny that you are surely intelligent and fully capable of comprehending the message. I think it’s sufficient enough to have arrived to the general idea for now though.

TLWP Sam June 27, 2008 at 11:02 pm

How quaint – the U.S. Constitution was doomed from the start – it had an amendment process and people just amended it to suit themselves. Oopsies! Still how quaint that HHH (Triple H? Heheheh. :) ) finds “the masses are always dull and indolent”. Perhaps a good reason for Libertarian to be for qualified immigration (or opposed to unqualified immigration). The masses who arrived from the Old World after the American Revolution were just feudal peasants looking a new feudal lord because the Old World lands were full, hence a flood of people willing take orders and not question those in power. But considering “the masses are always dull and indolent” proves that Monarchies sit nicely with that analysis – few have to ability to be ‘movers and shakers’ whilst most are ready to take orders and be serviles provided you remember to have ‘bread and circuses’. But as HHH rightly pointed out (and the tone that I have always found in Libertarian articles) is this is a case of Prince John who wrongly occupies the power base unlike King Richard who does. Hence the story of Robin Hood (who tries to remove Prince John) is more of a righteous coup d’etat than some sort of revolution. Likewise Libertarian misgivings represent an aspiration to a righteous coup d’etat in that those who hold the keys to society are unrightful and Libertarians seek to return that power to those who should justly have it.

George Thomas Kysor June 27, 2008 at 11:34 pm

“…it is difficult to imagine how the central government would dare to invade a territory and crush a group of people who had committed no other sin than trying to mind their own business.” – Hoppe

Waco comes readily to my mind.

Mike Sproul June 28, 2008 at 12:24 am

When, exactly, was money gold and silver? From the start, colonists mostly used bookkeeping barter, where books were kept in shillings, but trades were made with tobacco, hides, molasses, etc. It was 1690 when Massachusetts first issued paper money, soon to be followed by all the other colonies. That paper circulated at least until 1750, and of course the revolution itself was financed by paper continental dollars.

newson June 28, 2008 at 2:08 am

but mike, wasn’t that just gresham’s law in action? (the various prohibitions imposed by the crown on the american colonies).

i can’t see why even trade with the indians wouldn’t have moved to gold/silver, as it wouldn’t have taken them long to figure out the convenience of precious metal money, as opposed to barter.

P.M.Lawrence June 28, 2008 at 2:23 am

No, Newson. Apart from fur and tobacco, there wasn’t much in the American northern mainland colonies worth sending to Europe before the 19th century. In fact, mercantilist policies reinforced those so that Gloucestershire tobacco, say, wouldn’t destroy even those (it was just good enough in quality but enough nearer the markets to be cost effective even without slave labour). The only trade that was worth enough to bring in significant amounts of bullion was sending food to the sugar colonies – but those had little surplus bullion either (that’s why there ever was any molasses further north – they sent that back). To cap it all, from the mid 18th century the bullion surge from Spain started to move through to oriental countries in greater amounts than it was arriving, so Europe had less.

Paul Marks June 28, 2008 at 7:30 am

The idea that England had an “absolute” monarchy before 1688 is false.

The power of Kings and Queens to tax and to pass new laws was limited by the Common Law tradition and by Parliament.

In the past some Kings had been very powerful indeed – for example Henry VIII was a tyrant (although even he had to throw his minister Thomas Cromwell to the wolves when opposition to Royal policy became too great), but the idea that say Charles II or James II were “absolute” Kings is absurd.

As for the United States:

It was not the people who were at fault (at least not at first), it was the elite.

Even in 1932 (in the face of the Great Depression) only about 2% of the voters supported the socialists – and most voters supported a candidate (F.D.R.) who was pledged to cut taxes and government spending.

The fact that he did the opposite and also greatly increased government regulations (all under the influence of the socialists of the “Brains Trust”) is hardly the fault of the people.

Although the reelection of F.D.R. in 1936 could be called the fault of the people – but they were buried in propaganda from leftist radio stations (thanks to the government practice of licensing radio stations – one of the administrators in the 1930′s being a young L.B.J.) and the endless lectures of their “betters” (the academics, the media people and so on).

As for the Civil War:

Lincoln was an economic interventionist (it would have been much better if the free market Salmon P. Chase had got the nomination in 1860), but slavery was a great evil.

Nor was the United States some sort of semi socialist place after the Civil War.

Even as late as 1928 total government spending (Federal, State and local) was 12% of the economy.

Perhaps such things as government schools (pushed by the semi collectivist H. Mann and the fully collectivist Bellamy brothers) did “prepare the ground” for collectivist ideas among the people, but it was the elite (the academics and so on) who were won over to collectism early on and most fully.

Even today most academics (and other elite types) are far more collectivist than most ordinary people.

Even many billionaries are more inclined to higher taxes and so on than most ordinary people – for example Warren Buffet, George Soros, Peter Lewis and Marc Cuban (and, of course, Mrs Kerry and so many others in the high ranks of the Democrats).

You are more likely to find at least some respect for freedom and limiting government among the ordinary “Rednecks” with their “guns and God”.

newson June 28, 2008 at 8:18 am

to pm lawrence:
you’re referring to foreign trade, whereas i think mike’s point was about domestic trade, and the absence of gold/silver in the currency mix.

i can’t see why the quantity of gold/silver is relevant to its appeal or otherwise. less common, more expensive.

newson June 28, 2008 at 8:30 am

to paul marks:
i remember with fondness my first reading of “1984″ on the school benches. orwell, too, seemed to place all his hopes on the commonsense of the “proles”.

Mike Sproul June 28, 2008 at 9:21 am


Gresham’s Law worked wherever government tried to fix the rate of exhange between two kinds of money. Curtis Nettles and Andrew McFarland Davis wrote a lot about colonial currency, and a recurring theme was the perennial shortage of bullion in the colonies (caused when official exchange rates under-valued bullion). Very little gold and silver circulated. One of their more interesting observations was that the introduction of paper currency “was of more use to the colonists than if the silver mines of peru had been opened in their midst” (or words to that effect, from cotton mather, I think.)

Elaine Supkis June 28, 2008 at 1:32 pm

Not only does this article not even mention slavery, the ultimate crime against humans next to outright murder, it also doesn’t mention why we have no Parliament but rather, the present, non-direct representative system.

The slave owners feared democracy. Not only did they fear it, they needed the Constitution to give slaves 3/5ths human status so they could jigger the votes. This gave slave owners many more political votes than free men [women were not allowed to vote, either].

On top of all this, before the Civil War, the slave owners in the south DEMANDED the Federal government impose THEIR slave laws on the north. The Supreme Court said a slave could not flee to the northern half, they must leave the USA in order to find civil rights!

The SOUTH wanted Federalism when it came to human slave property owning rights. Not anything else. This is the great divide which is pure hog wash. The south loves to rule the rest of us via the Senate and the President overturning Congress.

Matt June 28, 2008 at 2:43 pm

“By imposing a proportional or progressive income tax and redistributing income from the rich to the poor, for instance, states in effect define the rich as aggressors and the poor as their victims. (Otherwise, if the rich were not aggressors and the poor not their victims, how could taking something from the former and giving it to the latter be justified?)”

Justified… very simple, take over the educational system and imbue into every child the virtue of Self-Sacrifice and Selfless Service to Country (the people) and after a few decades… there you have it!

pro_ip_libertarian June 28, 2008 at 3:28 pm

I’ve disagreed with a fair amount of HHH’s writings in the past and with parts of this article as well, but this is pretty interesting. Specifially I have some concerns about the dynamics of all these insurance company interactions. You would have to have a very effective set of rules about their interactions to prevent them from becoming a corporate oligarchy. But it is interesting nonetheless.

So where are the new Hong Kongs, Singapores, Monacos, and Lichtensteins going to be set up in the US? What are the main factors one should be looking for to determine the most suitable prospective locations?

Pro_IP_Libertarian June 28, 2008 at 3:35 pm

I’ve disagreed with a lot of what HHH has written in the past and with parts of this article but this is interesting. Specifically I have some concerns about all these interactions with insurance companies, even in their current state they can get pretty shady. There would have to be some very effective rules in place to prevent them from becoming a corporate oligarchy.

So where are the new Hong Kongs, Singapores, Monacos, and Lichtensteins going to be set up in the US? What are the main characteristics one should be looking at when examining prospective locations?

web surfer June 28, 2008 at 6:15 pm

…it is necessary to recognize that the ultimate power of every government — whether of kings or caretakers — rests solely on opinion and not on physical force. The agents of government are never more than a small proportion of the total population under their control. This implies that no government can possibly enforce its will upon the entire population unless it finds widespread support and voluntary cooperation within the nongovernmental public. It implies likewise that every government can be brought down by a mere change in public opinion, i.e., by the withdrawal of the public’s consent and cooperation.

See this left-libertarian site below for information on this process:

Power to the People!!!

Walt D. June 28, 2008 at 7:51 pm

The Founding Fathers forgot to include private property as a fundamental right.
With all the election year rhetoric, with talk of windfall profits tax, nationalization of oil refineries, higher corporate an personal taxes and redistribution of income, assault on the right to private property has come to the forefront.
Are we heading in the same direction as Zimbabwe?

scineram June 28, 2008 at 7:53 pm

Einstein was socialist, you promote democracy, hardly nonviolent and left libertarian.

Matt June 28, 2008 at 7:57 pm

Well I must say that was a thought provoking article, however; it seems that much of the logic is based on the concept that what makes a government dangerous and untollerable is the ability to tax the people. Most people would agree that an overtaxed citizent is an unhappy citizent. But a government with no abilit to tax the people would also lead to an unhappy citizent. Public funding is necessary for a successful police department, judical system (judges, courts, and prison), and other essential roles that the government fills. By logic of Aristotle and Isaac Morehouse, a middle ground is always desireable among two bad things (ex. being a drunk and being uptight) but never between a good thing a bad thing(ex. murdering and not murdering). Therefore a middle ground is desireable among a government that has too much ability to tax and a government with no ability to tax. I believe our founding fathers recognized this and did the best they could to find that middle ground. The constitution is nearly revolution proof because an enlightened public allways has the ability to ammend the document itself. However, the public has increasingly lost interest in the politics of our government. We must once again become aware of our government and do our best to modify it as we, the people, see fit.

TLWP Sam June 28, 2008 at 8:49 pm
pro_ip_libertarian June 28, 2008 at 10:09 pm

Sorry for the double post, I didn’t think it went through the first time.

Walt D.-

The Founding Fathers forgot to include private property as a fundamental right.

Well the Declaration talks about Life, Liberty, and the Pursuit of Happiness, it’s kind of hard to pursue happiness if some stooge else thinks they own your body, your time, or your property. The Constitution also gets at a lot of the issues indirectly. Common Law also addresses a lot. Some may claim that there is no “right to property”, but their arguments can likely be easily knocked down using those sources.

Are we heading in the same direction as Zimbabwe?

Some of the same principles that caused those problems are being ignored here, so unfortunately that is becoming a possibility. To paraphrase whoever commented about ignorance, economic ignorance in action can eventually be truly horrible.

Stephen June 28, 2008 at 10:35 pm


The secession of the South was indeed about State’s rights with slavery being one of those issues but nowhere near the main one – and Lincoln’s tyrannical response had nothing to do with the plight of the slaves. The South was attempting to combat the rising power of the Federal Government, something many people in the North could relate to. Hence the unlawful jailing of people, including Governors, judges, representatives, media, and regular citizens by Lincoln. The Northern states were the ones profitting from the slave trade at the time – slave ships were registered in places like NYC, Boston, and Newport.
As for the concern w/ the lack of a Parliment then Founding Fathers were concerned with the idea of mob rule, a democracy, and an un-educated populace. This is spelled out in the Federalist papers and IMHO is both parts brilliant and prophetic. With the passage of the 16th and 17th Amendments we simultaneously gave the central government more power and the mob the ability to call for the transfer of wealth from one individual to another in the guise of “helping” a needy person, read victim. The story of Davy Crockett standing up in Congress and stating it is not their money to give to someone else is unfortunately a thing of the past in today’s government.

P.M.Lawrence June 29, 2008 at 4:21 am

Newson, of course I was referring to “foreign” trade. More precisely, I was referring to trade with the mother country, and to its cumulative effect on the stock of materials available for use as money, rather than to the trade itself. Getting gold and silver into the northern colonies needed “foreign” trade or central government expenditures like soldiers’ pay, since there were scarcely any local sources (not quite zero, but near enough, and net negative considering the silver outflow for necessary imports – Defoe records saddles being sent from London, I forget just where).

The “foreign” trade wasn’t what Mike Sproul was considering, but it set the conditions for what was available for use as money. Real bills worked, but only for bills relating to tobacco which connected to European markets; other bills’ value collapsed (Robert Graves mentions this in his Sergeant Lamb historical novels). Molasses worked, because it arrived in trade from the sugar colonies. Even nails were used, as they had value in use. But there was simply no bullion to talk of, apart from a limited stock, because of no net supply. It would have been possible to supply timber, tar and other shipbuilding materials to Europe, but local needs took those up when they were cheap in Europe (which usually got them from the Baltic trade), so they only mattered in times of war when other sources were threatened and war time prices were available.

josh m June 29, 2008 at 4:49 pm

Just a note on the audio version: It would be better not to spoon-feed the meaning or import of the text. You may also want to pay more attention that there are no gratuitous pauses to the text’s natural pauses.

I’m not saying I could do any better, I just thought those might be constructive suggestions. Thank you for the fine efforts and for providing the audio version!

josh m June 29, 2008 at 5:08 pm

“A state, in accordance with generally accepted terminology, is defined as a compulsory territorial monopolist of law and order (an ultimate decision maker). Feudal lords and kings did not typically fulfill the requirements of a state; they could only “tax” with the consent of the taxed, and on his own land every free man was as much a sovereign (ultimate decision maker) as the feudal king was on his.”

I did not know that. If this is true, the feudalism we have today, whereby the state makes an automatic claim to everyone’s lives and property simply for being alive, is more backward than that of the Middle Ages!

Also a semantical observation: I don’t think there can logically be such a thing as a ‘voluntary tax’, which is why, I assume, Hoppe put the word ‘tax’ in quotations in this context. Still, I think a better word should be found. Would it be ‘dues’ or ‘fees’? Perhaps, ‘bi-lateral levies’ ? Any suggestions?

I think by definition, ‘tax’ necessarily means transfer ultimately backed by coercion. If the ‘taxed’ has a choice in the matter, then it necessarily ceases being a ‘tax’.

DS June 29, 2008 at 7:33 pm

The biggest flaw in the constitution is that if the politicians, judges, bureaucrats and the people that elect them decide to simply ignore any part of the constitution, then it is as if that portion never existed. There is no recourse.

Just look at the 9th and 10th amendments – these invalidate almost the entire workforce of Washington DC, yet are treated as if they do not exist any longer. Try bringing a case to the Supreme Court on the grounds that it violates the 9th or 10th amendment.

TLWP Sam June 29, 2008 at 8:17 pm

“A state, in accordance with generally accepted terminology, is defined as a compulsory territorial monopolist of law and order (an ultimate decision maker)”

How would a private land owner not meet this definition? How would you distinguish a rental payment and a tax?

P.S. Please do elaborate on how people are violating the Constition DS. Are you presuming that people and the Supreme Court are supposed to be interpreting the Constitution in a Libertarian light?

Steph June 29, 2008 at 8:43 pm

According to the writings of Madison and Jefferson I believe that the Constitution should be interpreted as it was written and ratified. Furthermore it was written for the understanding of the common man, not the most educated lawyers. This notion of making up things and stretching meanings to fit any scenario I do not believe would pass muster in any contract signed in the real world. If it did then what would be the point of contracts? I would finish, also based on the writings of Jefferson, with the idea that if we were to err in the interpretation of the Constitution that we should err on the side of State’s rights and liberty, not the Federal Government

P.M.Lawrence June 29, 2008 at 9:19 pm

TLWP Sam wrote “How would a private land owner not meet this definition? How would you distinguish a rental payment and a tax?”

This is actually a rather subtle point. There isn’t actually any distinction in the economics of it if you focus solely on the present, where payments are made, though there often is in the forms and legalities. The difference comes in what is carried forward from earlier.

Say you rent a car; the car was made or bought earlier by the person you rent it from. The rent relates to creating that resource. If a government taxes that car on a continuing basis rather than just on initial purchase, the pattern of payments is pretty much the same but it’s not going towards creating the resource, it’s paying off the government so it won’t stop you having the resource. However, in the present, both forms of payment connect to accessing that resource – so if you just focus there you can only tell the difference from what the payment is called and who gets it. This is ad hoc and can be disguised (suppose the car owner had to pay the tax? a renter would have the payments hidden in the rent, called rent and paid over to the owner – and it would be hidden even more if the tax had been on initial purchase).

Similarly, the rents formerly paid by people in Canada’s Prince Edward Island, say, worked pretty much like land tax, only they weren’t paying off a government to stop it interfering with people who were living there all along, they were paying off proprietors for their past assistance in getting people settled there. Even for people born there, they wouldn’t have been there if their ancestors hadn’t been settled there by others. It so happens that that is a special case, where the proprietors had a windfall gain; they didn’t have to do as much work settling people as expected, because there were a whole lot of Loyalist refugees driven out by the American War of Independence who needed new homes and livelihoods. Still, that was force imposed by the rebels, not by the proprietors. As far as the proprietors were concerned it was matched by the risk they took (suppose they hadn’t been able to find settlers, or if settlers had expropriated them as happened to William Penn in Pennsylvania?). Later, the PEI proprietors were bought out with funds obtained from a bonds issue, which shifted the burden from PEI rents to the Canadian tax base.

There was indeed an injustice to the islanders, that they had to pay rent, and later to all Canadian taxpayers that they had to buy it out. Only, the injustice wasn’t done by the proprietors, it was done by the American rebels who exiled the Loyalists without compensation (breaking the treaty, or more precisely failing and refusing to put it into effect, which was why Britain was not obliged to stop impressing US sailors or to evacuate all posts and so on, until a later treaty superseded that).

But the forms and legalities can be confusing. Sometimes you get a land tax disguised by calling it a quitrent. Only, a real quitrent is paying former users to stop using the land in former ways, say to stop them grazing cattle there so farmers can plant crops instead. Morally, the amount owing corresponds to the opportunity cost, what the former users would have got from grazing the cattle (net). Strictly speaking, if the quitrent is not paid the remedy ought to be grazing cattle on the crops, not eviction let alone the court proceedings, criminal penalties, fines and asset seizures that governments do. So when a government does quitrent, it never was a former user, the sanctions are far greater, and on top of that the amount levied is whatever the government thinks fit. All of that comes from the government’s monopoly of force; they can threaten, enforce and charge more heavily than owners who have to compete for renters in a market, so they can’t make windfall gains above that (even in PEI, since tenants could always go to Ontario, say). It’s not really a quitrent at all, just disguised as that to make it easier to introduce. The government effectively expropriates genuine former owner/users with no compensation or inadequate and time limited compensation, getting no objections from the payers who are used to paying, then gradually changes the rules on the payers. The government benefits from the principle of “an old tax is a good tax”, because it doesn’t have to break in the payers.

DS June 30, 2008 at 1:00 am

Amendment IX

The enumeration in the Constitution, of certain rights, shall not be construed to deny or disparage others retained by the people.

Amendment X

The powers not delegated to the United States by the Constitution, nor prohibited by it to the states, are reserved to the states respectively, or to the people.

The real problem, of course, is that the constitution is so vaguely worded that it’s words can be twisted to mean almost anything – including becoming a giant monstrosity that few of the founders would recognize or endorse (maybe with the exception of Hamilton and Morris).

Fred Mann June 30, 2008 at 2:55 am

I think the most viable method for brining about a stateless society would involve purchasing a large patch of uninhabited rural land with no public roads or buildings, and then importing like-minded people to the area. This way, there is no need to convince locals to join your cause. If even one local were to resist under Hoppe’s suggested method of secession, then the resistor’s rights would have to be violated (good PR for the state) or the project would have to be abandoned.
The question remains … how many people are needed? Well, I don’t think we need to set up a fully-functioning society with a vast devision of labor at the outset. We merely need to acquire and defend a piece of land (the larger the better) and let the population grow from there. At first, we could commute to regular jobs until opportunities arise within the stateless area.
Of course, as the Ron Paul campaign showed, there may be more like-minded people than we think. Obviously, these people were constitutionalists (the REAL utopians), but still, it’s encouraging. Best of all, this project could begin immediately!! And frankly, I’m ready. Who’s with me?
As an aside, It might be a nice PR twist to write a “Declaration of Independence” to announce the secession. People have been brainwashed to love the Declaration, so we might as well use that to our advantage…

Duh! June 30, 2008 at 4:29 am

To Fred Mann. New Hampshire

Jake June 30, 2008 at 6:58 am

Great article. Every libertarian should understand that when it comes to states, smaller is better. I find it interesting that the people behind the NWO want all the worlds states reduced to one gigantic state, while HHH one of our greatest theorists argues for the exact opposite.

He’s also right about the moral and intellectual decay of our society, nothing but a severe wake up call in the form of a police state and a collapsed economy will wake the masses out of their slumber.

Ernie Hopkins June 30, 2008 at 8:46 am

Excellent Piece! We share the same conclusions in many areas. Add me to your friends and allies list!

NM June 30, 2008 at 1:28 pm

Prof. Hoppe,

An issue that I cannot resolve in my head – you say:

“insurers will be prevented from engaging in any form of external aggression because any aggression is costly and requires higher insurance premiums, implying the loss of clients to other, nonaggressive competitors.”

How can you guarantee this? What if the two insurers (the plaintiff’s and the defendant’s) cannot agree? Who will enforce this judgment?

darjen June 30, 2008 at 2:40 pm

NM, they would most likely have to bring in their arbiters and compromise on a solution. Sure it’s possible they could come to arms and attempt to use force on each other. But those situations would be rare, as it is not in their economic interest.

unbeliever June 30, 2008 at 2:57 pm

Hoppe’s idea that feudalism was not really feudalism or wasn’t that bad is sheer nonsense.

FTP June 30, 2008 at 3:49 pm

Fred Mann,

Have you heard of the Free Town Project in the town of Grafton, New Hampshire?

Grafton has one police officer (who is very kind and won’t bug you if you don’t have a driver’s license), a voluntary fire department, and no zoning laws.


Brainpolice June 30, 2008 at 4:33 pm

“Hoppe’s idea that feudalism was not really feudalism or wasn’t that bad is sheer nonsense.”

Agreed. He appears to romanticize it.

Fred Mann June 30, 2008 at 10:13 pm

I had not heard of the “free town”, but I was aware of the Free State Project. The problem is that neither project is dedicated to eliminating the state, but rather just restoring a minarchy. And we already know how that works. And again, we can’t have a stateless territory unless EVERYONE in said territory is on the same page.
These areas may provide a more fertile starting ground, but I think the federal government (eg Waco) will be the real obstacle, so I don’t think it really matters.

P.M.Lawrence July 1, 2008 at 10:40 pm

Feudalism wasn’t that bad, it’s just that when people hear the term they think of either its late stages when it had been co-opted and parasitised by centralists or of the even later things the French Revolution called “feudal” which were privileges the absolutists had used to buy out the feudalists. But Hoppe is wrong about feudalism himself; it was not a refinement of family and clan based approaches but something that superseded them (see Francois Ganshof’s work, and maybe Pirenne’s). Family capture occurred later, and was the early stage of what led to centralist capture. And, of course, “free” towns weren’t part of feudalism but emerged within its later stages, as part of a similar set of trade offs with centralists and magnates setting them up, as much as anything to reduce the independendence of lesser aristocrats and get cash revenue sources, and then – when conditions were right – losing control of them.

nicholas gray July 2, 2008 at 1:06 am

A monopolistic landholder is one person, but I have never heard of a one-person state! A state needs subjects to tax and regulate, hence states are collective. This is why Australia’s major seceder, Prince Leonard of Hutt River Province, calls himself a prince- he has only his family and no taxable subjects. Also states promise to provide things ‘to’ or ‘for’ their subjects, like roads, especially if they’ve had promisefests (a.k.a. elections) and want to keep some of their promises. Self-Monarchs don’t need to do that.

Joe Stoutenburg July 7, 2008 at 2:45 pm

Having an actuarial background and working for a large insurance company, I have long been intrigued with the idea of insurance companies providing security. I believe that the arrangements could work. There are two main factors (in addition to throwing off the yoke of oppressive government) that must be worked out:

1) The public greatly mistrusts insurance companies. How would they be convinced to accept insurance company services for government? [Though I have to wonder why they trust government more than insurance companies...]

2) Sadly, much of the mistrust is well-placed. Insurance companies enjoy many advantages through regulations, barriers to entry, tax laws and so forth. While the institutions of insurance require massive assets, I’m not convinced that individual companies must be so gigantic. There are markets for sharing risk, and insurance industries fight their development for fear of losing dominance. While insurance companies do compete among each, the level of innovation in a free market would drastically change the industry.

In short, the marketplace could provide the services outlined in this article. But the current insurance industry would probably drastically change if it was to adapt to an unfettered market.

Patri Friedman July 17, 2008 at 5:44 pm

This whole thing reads like a big argument for my seasteading proposals. But I am probably biased :).

Seriously, though. It’s the best chance we all have for experimenting with smaller governments.

Charles R. Kiss October 23, 2011 at 12:07 am

The image of the founding fathers is troubling. They were surely ahead of their time, but in terms of modern society, they might as well be cave people. Nostalgia for the past is almost always a sign an individual is lost.

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