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Authors: Hans-Hermann Hoppe
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current income acquisition invariably have repercussions on present asset values
19 According to this characterization of monarchy, present-day "monarchies" such as Great Britain, the Netherlands, Belgium, Sweden, Norway, Denmark, or Spain are clearly monarchies in name only. In fact, they represent examples of what is here and in the following referred to as democracies. The term "monarchy," as here defined, applies instead most appropriately to the form of government that characterized Europe through the end of the eighteenth century: the ancien regime —whence, stimulated by the American and in particular the French Revolution and in a process that was not completed until after the end of World War I, monarchies were gradually transformed into democracies.
Indeed, monarchy and democracy can be conceived of analytically as representing the two endpoints of a continuum, with various possible forms of government located at greater or lesser distances from one or the other extreme. Elective monarchies as they existed for periods of time in Poland, Bohemia, and Hungary, for instance, are obviously less monarchic than are hereditary monarchies. Likewise, "constitutional" monarchies are less monarchic than preconstitutional ones. And "parliamentary" monarchies may well have to be placed closer to a democracy than to a monarchy, or, with universal suffrage, they may be no monarchy at all. On the other hand, while a republican form of government implies by definition that the government apparatus is not privately but publicly owned (by "the people"), and a republic thus possesses an inherent tendency to gravitate toward the adoption of universal suffrage, i.e., democratic republicanism, not all republics are in fact equally close to democracy. For example, an aristocratic "republic" such as that of the Dutch United Provinces before 1673 (when William of Orange was elected hereditary stadtholder) may actually have to be classified as a quasi-monarchy rather than a democracy.
On the distinction between monarchy, republic, and democracy and their various historical manifestations see Erik von Kuehnelt-Leddihn, Leftism Revisited: From de Sadeand Marx loHitlerand Pol Pot (Washington, D.C.: Regnery Gateway, 1990).
(reflecting the value of all future expected asset earnings discounted by the rate of time preference), private ownership in and of itself leads to economic calculation and thus promotes farsightedness.
While this is true of private ownership generally, in the special case of private ownership of government it implies a distinct moderation with respect to the ruler's drive to exploit his monopoly privilege of expropriation, for acts of expropriation are by their nature parasitic upon prior acts of production by the nongovernmental public. Where nothing has first been produced, nothing can be expropriated, and where everything has been expropriated, all future production will come to a shrieking halt. Hence, a private owner of government (a king) would avoid taxing his subjects so heavily as to reduce his future earning potential to the extent that the present value of his estate (his kingdom) would actually fall, for instance. Instead, to preserve or even enhance the value of his personal property, he would systematically restrain himself in his taxing policies, for the lower the degree of taxation, the more productive the subject population will be, and the more productive the population, the higher the value of the ruler's parasitic monopoly of expropriation will be. He will use his monopolistic privilege, of course. He will not not tax. But as the government's private owner, it is in his interest to draw—parasitically—on a growing, increasingly productive and prosperous nongovernment economy, as this would—always and without any effort on his part—also increase his own wealth and prosperity. Tax rates would thus tend to be low. 20
Further, it is in a personal ruler's interest to use his monopoly of law
19 According to this characterization of monarchy, present-day "monarchies" such as Great Britain, the Netherlands, Belgium, Sweden, Norway, Denmark, or Spain are clearly monarchies in name only. In fact, they represent examples of what is here and in the following referred to as democracies. The term "monarchy," as here defined, applies instead most appropriately to the form of government that characterized Europe through the end of the eighteenth century: the ancien regime —whence, stimulated by the American and in particular the French Revolution and in a process that was not completed until after the end of World War I, monarchies were gradually transformed into democracies.
Indeed, monarchy and democracy can be conceived of analytically as representing the two endpoints of a continuum, with various possible forms of government located at greater or lesser distances from one or the other extreme. Elective monarchies as they existed for periods of time in Poland, Bohemia, and Hungary, for instance, are obviously less monarchic than are hereditary monarchies. Likewise, "constitutional" monarchies are less monarchic than preconstitutional ones. And "parliamentary" monarchies may well have to be placed closer to a democracy than to a monarchy, or, with universal suffrage, they may be no monarchy at all. On the other hand, while a republican form of government implies by definition that the government apparatus is not privately but publicly owned (by "the people"), and a republic thus possesses an inherent tendency to gravitate toward the adoption of universal suffrage, i.e., democratic republicanism, not all republics are in fact equally close to democracy. For example, an aristocratic "republic" such as that of the Dutch United Provinces before 1673 (when William of Orange was elected hereditary stadtholder) may actually have to be classified as a quasi-monarchy rather than a democracy.
On the distinction between monarchy, republic, and democracy and their various historical manifestations see Erik von Kuehnelt-Leddihn, Leftism Revisited: From de Sadeand Marx loHitlerand Pol Pot (Washington, D.C.: Regnery Gateway, 1990).
(reflecting the value of all future expected asset earnings discounted by the rate of time preference), private ownership in and of itself leads to economic calculation and thus promotes farsightedness.
While this is true of private ownership generally, in the special case of private ownership of government it implies a distinct moderation with respect to the ruler's drive to exploit his monopoly privilege of expropriation, for acts of expropriation are by their nature parasitic upon prior acts of production by the nongovernmental public. Where nothing has first been produced, nothing can be expropriated, and where everything has been expropriated, all future production will come to a shrieking halt. Hence, a private owner of government (a king) would avoid taxing his subjects so heavily as to reduce his future earning potential to the extent that the present value of his estate (his kingdom) would actually fall, for instance. Instead, to preserve or even enhance the value of his personal property, he would systematically restrain himself in his taxing policies, for the lower the degree of taxation, the more productive the subject population will be, and the more productive the population, the higher the value of the ruler's parasitic monopoly of expropriation will be. He will use his monopolistic privilege, of course. He will not not tax. But as the government's private owner, it is in his interest to draw—parasitically—on a growing, increasingly productive and prosperous nongovernment economy, as this would—always and without any effort on his part—also increase his own wealth and prosperity. Tax rates would thus tend to be low. 20
Further, it is in a personal ruler's interest to use his monopoly of law
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