The State (Studyblog of Ch 8 of ATSC)

Socialism's, in whatever degree or form, instrument is the State. As examined in the previous chapters of Dr. Hoppe's ATSC, socialism as such can be labeled as both uneconomic and unjust. It is uneconomic because the amount of wealth in society will by necessity be relatively less (if not in absolute terms). Socialism is also unjust, as covered in Hoppe's last chapter, because it cannot be defended as just by acting and arguing man in argumentation.

Socialism: Creation of Victims and Resistance

Capitalism: Characterized by voluntary contracting and exchanging.

• There is no 'winner' and 'loser.'
  
• Both parties are 'winners' because both expect to profit, otherwise one or both parties would not have agreed to it.
• It is voluntary.
  

Socialism: Characterized by expropriation and exploitation.

• There is a 'winner' and 'loser.'
• Like acts of individual-private theft, the taking away from a user-owner and contractor is to lessen his wealth and increase the wealth of the State.
• It is not voluntary, but done through coercion.

The State----by its very actions----actions that are necessary for it to be a State at all----create victims. It should be expected that there would naturally be some resistance because of this.

It can be assumed that resistance can change through time, be higher or lower, and be of greater or lesser threat to the institution of the State. States have invariably grown in size, enlarged their expropriation and exploitation of natural property owners, and have consequently enlarged the number of victims.

The question is then, why and how have States accomplished this? Those in the State, like most everyone else, have an interest in "stabilizing their current income" and increasing it. And, again, this means the number of victims will tend to increase upward over time, if those in the State are successful.

[Capitalist Enterprise: What Effects Size--->
---Consumer Demand---this limits how much money a business can make. Costs cannot be more than what consumers are willing to pay.
---Competition---consumers can go to competition. This requires any business to lower expenses and stay innovative. (In fact, competition is not just with those businesses that are making the same thing but with all businesses.)
Socialist Enterprise: What Effects Size--->
---Consumer demand NOT a factor---instead consumers are all uniformly forced into the relationship. Thus, States grow in spite of demand.
---Competition NOT a factor---States therefore do not need to operate at low costs. They do not have to worry and can work at high costs. Thus, States grow in spite of the fact that they are not fiscally conservative.]

Capitalism versus Socialism: Boycotts

Capitalism: Always allows boycotts, at any time.* Those affected by boycotts must suffer under them and cannot use violence to stop them.

Socialism: Never allows boycotts.
One that does not believe this is asked to try the following: Stop paying taxes and announce it. Or demand that "your future payments of taxes depend on certain changes." (No doubt you will not get that far.)

(Which system is thus more humane and ethical?)

Under socialism you cannot "cancel your membership" and proclaim your wish to be left alone (while, at the same time, leaving everyone else alone by not engaging in any aggression or invasion against anyone).

As Hoppe writes: "assumedly without having aggressed against anyone through your secession, this institution would come and invade you and your property, and it would not hesitate to end your independence. As a matter of fact, if it did not do so, it would stop being what it is. It would abdicate and become a regular private property owner or a contractual association of such owners. Only because it does not abdicate is there socialism at all."

*(Please note that this means, of course, boycotts can never be acts of physical aggression. This standard works both ways, unlike socialism. A boycott can consist of organizing people not to go to X store, for example. But this does not mean that a boycott-protest can happen right in the store. That would be trespassing, if the store owner told those people to leave. Nor does it mean that a protest can damage the property of the store.)

Growing Statist Ideas

The author writes that there are three general and basic reasons that have lessened resistance to State growth, despite an increased number of victims:

1--- The first is a prerequisite. All States require the backdrop of aggression. This way no one person can 'cancel membership.'
2--- To expand implies enlarging the number of victims. This must somehow be compensated by increased public support. States therefore work at "corrupting the public" by redirecting some of the expropriated property within civil society. I.e., by enlarging the public's number to be at the receiving end of State coercion.
3--- Furthering this process is to complete the ostensibly openness of the State. This is done by opening up mass participation in the State's works, especially to those that have above average desires to rule others. Given that these feelings exist with people, opening the State up will lessen feelings of hostility and correspondingly increase an acceptance of State dominion.

(1) The Continued Threat of Violence

This is the first requirement of the State to even exist.

For this reason this fact has been masked to the public: terms like "aggression" are replaced by words that appear neutral or positive. Regardless of words, the actions speak for themselves.

State Violence versus Private Self-Defense: The first is directed at innocence, i.e., one who has not aggressed or physically harmed anyone else. Taxation cannot be classified as anything but aggression. The second deals with man defending his person and property from an invader who is engaging in physical aggression.

Boycotts, as examined above, also show that the State uses aggression to stop legitimate boycotts where capitalism does not engage in aggression to stop them.

The State and the Need for Supportive Public Opinion

A State that only existed in redistribution from society to its direct hands would find much resistance in any expansion.

There is also a fundamental limit to any State's size: More interventionism and redistribution leads to an increasingly poor society. This also requires that the State itself be to a great extent smaller than society. It could not last if it was bigger.

It is hence a system where the few really rule over the many. That is, that a few have power and are in the position of this role. Redistribution could never be greater than the source it takes it from.

For those reason---the few rule----underlying threats of violence cannot be enough to hold socialism together. It also needs public support.

States, as a result, use considerable resources to sustain and grow favored opinion. For example, it might be claimed that socialism generates great wealth and is a just order in comparison to capitalism. Or, as in earlier times, propaganda might be that the rulers are appointed by God.

(2) Redistribution within Society and the Corruption of Ideas

But actions, Hoppe says, are more powerful than "verbal propaganda." So States have moved away as being purely parasitic and into the role of producing consumer goods and engaging in wealth redistribution within civil society.

Both, however, rely on violations of man's private property: The first takes from natural owners and uses the wealth stolen to produce consumer goods. The second takes from individual A and gives it to B (which includes a 'charge fee' that goes to the State).

This (1) generates support for the uses of these goods and the receivers of redistributed income. (2) creates a dependency. Both facilitate "strategic purposes" to secure statist-socialist ideology. They "break up resistance."

[Later, as these produced goods and redistribution services are assimilated into public opinion, it becomes as if it is impossible to imagine a world without the State doing these activities. (Effects of redistribution have been examined in previous chapters. The production of public goods will be dealt with in a later chapter of Hoppe's book.)]

There is also danger to the State: It can fail at certain tasks and public support can drop. Rulers must therefore plan ahead as best as they can. It explains why the State moves into some areas versus others...

Exploiting everyone equally would not make sense, for instance.

This would create a lot of resistance----resistance that would come from everyone. A fully equal redistribution of wealth would still have victims and "victims would still be victims." (Not everyone needs to be equally 'compensated' by redistributionist policies. Some need to be more than others. And some men could pose a greater potential threat than others.) Instead it is more prudent to "play [people] against each other." Small groups can be exploited for larger ones, which will compensate for more resistance and resentments from the former group. Giving favors to popular interest groups versus less powerful ones. Etc. This is the "art" of politics-----not the myopic "art of doing the possible."

More on Socialism vs. Capitalism:

Capitalist enterprises have the incentive to maximize voluntarily made profits, i.e., to calculate costs of production minus expected demand. State enterprise, on the other hand, seeks to maximize coercion by threat and select bribes.

The Discriminatory Aspect of Politics vs. Capitalism: The difference between this and other State discriminatory policies is that politics has the incentive to do such. Capitalism must bear costs. A business enterprise that does not sell to X group bears the costs and will be less competitive versus another business enterprise.

[More specifically, there are two general types of redistributions that will occur: (1) egalitarian and (2) conservative. The first deals with redistribution from 'haves' to 'have nots.' The second deals with the 'already haves.' This includes special benefits, in redistribution and regulation, to especially favor the upper classes and to freeze people into their current positions.]

State Services

States cannot do everything. Producing too much would result in a declining income. They must focus on producing that which is "strategically relevant" to increase their power.

1. Education: This would be a logical step to bring about desired pro-statist views. States can accomplish this by monopolizing education and setting up compulsory laws and/or controlling any and all private education institutions by making them license-approved.
   
2. Traffic and Communication: Militarily it has always been historically required to control these areas, directly or indirectly. This includes roads and coasts to telecommunication and the media.
   
3. Money: Monopolizing the money supply allows coin-clipping. Ending a free market in banking, introducing a central bank, and ending a hard-market money with backless paper would remove all major restraints so as the State can, at will, tax indirectly through inflation, while not having to raise taxes directly on people which is typically unpopular. [For a more detailed analysis, and one that expands this topic to international politics and economic imperialism, you can't do much better than reading this essay by Hoppe.]
   
4. Security, Police, Defense, Judicial Courts: This is the most important because the moment the free market is allowed entrance the State would, by definition, not exist. These services have been blended with the State, in the minds of the public, producing the idea that they are (falsely) "synonyms" in relation to the State.
   

Competing ideologies will suffer with governmental control over education and intellectuals.

Since internally there can be no competition on the services of "4.", there is also a tendency to disarm civil society, making them ever the more vulnerable and controllable relative to the State. [Obviously this increases the State's power and makes society weaker to it, but it also means greater dependency from civil society on them for protection from private criminals. Being more helpless as such will naturally make then more vulnerable vis-à-vis private criminals.]

Judicial courts could never have any direct competition, either. Public law is just one of "legalized aggression." The public would see right through a private and independent institution engaging in that kind of 'law' making. In addition, to have private law develop would show how unnecessary, counterproductive, and aggressive a statist society is. (Corruption is far more costly, and therefore less likely, in capitalism than socialism.)

Another State Limit: Beyond public opinion, a world with a multitude of States would put restraints on the growth of any one.

• One State cannot expand its control without sometime running into another State and its defenses.
• > 1 State also opens the possibility up for people to "vote with their feet." I.e., to move to a State that appears less internally aggressive.
• [Expansionism, Imperialism, and War: Which States will generally win out? All things being equal, there must not only be public support but lots of capital and resources to use. Since the States only exist parasitically on this, ones that are relatively less aggressive internally will win over those that are relatively more. Redistribution will have to adopt to serve this purpose. This requires less direct regulations and comparatively more taxation. Regulations stop transactions without direct benefit to the State while making society poorer. Taxation does the latter, but the State benefits. Thus, imperial States will have a relative shift from 'conservative' policies and regulations to 'progressive' ones.]
  

(3) Corruption via Democracy

Those in the State have the incentive to increase their position and wealth, but this desire to gain wealth via political means and the "lust for power" is also with many in the public. The State must deal with people that have this desire.

To deal with this it is in the State's interest to open positions up. The result will be to reduce "frustrated lust" and put the State in a position to expand greater than it would otherwise.

Hoppe quotes Bertrand de Jouvenel on the transition to democracy:

For the twelfth to the eighteenth century governmental authority grew constantly. The process was understood by all who saw it happening; it stirred them to incessant protest and to violent reaction. -- In later times its growth has continued at an accelerated pace, and its extension has brought a corresponding extension of war. And now we no longer understand the process, we no longer protest, we no longer react. This quiescence of ours is a new thing, for which Power has to thank the smoke-screen in which it has wrapped itself. Formerly it could be seen, manifest in the person of the king, who did not disclaim being the master he was, and in whom human passions were discernible. Now masked in anonymity, it claims to have no existence of its own, and to be but the impersonal and passionless instrument of the general will. – But that is clearly a fiction. . . .

Empirically speaking, history has shown this to be true. The growth of statism has followed the democratization of power. Moreover, being States with more power, with more resources at their command, they have been generally more victorious in wars.

Some Inner Contradictions and Failings of Democracy

Majority Rule & Democracy as a Moral Value Fails:

• A majority that voted to replace democracy with something else (e.g., dictatorship) would force democracy to admit that it is not a moral value. Democracy that votes to end itself is a contradiction.
  
• Democracy as a moral value makes it acceptable for a majority to vote for the killing of some minority. Someone that does not accept this as a moral value would have to admit that democracy is not an ultimate moral value.
• Any restrictions of democracy (e.g., a constitution or a restriction on a democracy voting to end democracy) would admit that there these restrictions are more fundamental than democracy.
• Democracy does not answer the question: 'Who decides in democracy?' This group of people or that?
• Saying that larger majorities over smaller ones is the answer (which is what majority rule is all about) implies that national limits don't and cannot exist. Democracy must then push to its logical conclusion which is a world government.
  
• Otherwise, it must be considered acceptable for smaller groups to call for secession from larger ones in democracy. The logical end to this would allow individuals to call for secession. What would be left is a pure capitalist society and democratic ideology would internally destroy itself.
• Man saying that it is neither of these two admits that there are moral values more fundamental to democracy and that this moral value must be rejected.
  

[See 5.5 in Power and Market by Murray Rothbard.]

Power versus Liberty

How to win to liberty: Directly boycotting clearly will not work, as shown above. For liberty to win there must be public support.

There must be (1) a rejection of the temptation to accept State bribes (2) and a lessening for the desire of power. The desire of power within the quarters of the public is not written in stone, says Hoppe. There is nothing that says that these tendencies must go on forever.