The Scam Called the State

A transcript of the Lew Rockwell Show episode 8 with Hans-Hermann Hoppe.

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ANNOUNCER:  This is the Lew Rockwell Show.

ROCKWELL:  Dr. Hans-Hermann Hoppe is a senior fellow of the Mises Institute, was professor of economics at the University of Nevada, Las Vegas, author of many important books — The Economics and Ethics of Property, for example.  Hans is also an expert on the state.

Murray Rothbard once described the state as “a gang of thieves, writ large.”  And if you think of it that way, obviously there’s a vast propaganda effort by the state and the people on its payroll, or the people who would like to be on its payroll, to convince us all that it’s perfectly legitimate for what is essentially a parasitical organization to live off the rest of us at a very high style, to kill us, to tax us, to conscript us, to loot us; in general, control us.

Hans, how is it that such a thing can take place?  How is it that human beings allow the state to exist and to rule, and even love it and bow down to it and have almost religious feelings towards it?

HOPPE:  If you look at the central argument in favor of the state, it is very easy to recognize that there is a fundamental flaw involved.  So it is really a miracle that the state got off the ground.

The argument in favor of the state is simply this: There exists scarcity in the world and because there is a scarcity in the world, conflicts are possible between different people.  What do we do about these conflicts that break out?  How do we create peace among people?  And the proposal that is made by statists, from Thomas Hobbs on to the present, was because there are constantly conflicts going on, contracts among the various individuals will not be sufficient.  What we need is one ultimate decision-maker who decides who is right and who is wrong in every case of conflict.  And this ultimate decision-maker in a given territory, this monopolist of ultimate decision-making in a given territory is defined to be a state.

Now, if you think about this, the flaw in the argument becomes apparent once you realize that if there is an ultimate decision-maker in every case of conflict, then the implication is that there must be — that this institution also rules who is right and who is wrong in cases of conflict that this institution itself has with other individuals.  It is not only an institution that decides who is right and wrong in conflicts that I have with someone else; it is also deciding who is right and wrong in cases where itself is involved in conflicts with others.  And once you realize this, then it becomes immediately apparent that such an institution can itself cause conflicts and then decide, of course, in its own favor who is right and who is wrong.

That can be illustrated in particular by institutions such as supreme courts, for instance.  If we have a conflict with some governmental entity, the ultimate decision-maker, who is right or who is wrong — the state or I, myself — this is decided by supreme courts or constitutional courts.  And constitutional courts are part of the same institution with which I have a conflict.  And of course, it is then easy to predict what the outcome of this conflict arbitration will be.  It will always be, “I, the state, am right and the people who complain about me are wrong.”  It is a prescription for increasing the power of this institution continuously; causing conflicts and then deciding in favor of itself; and then telling the people who complain about the state how much they need to pay for these judgments that are made by the state itself.  So it is easy to see what the fundamental flaw in the construction of an institution such as the state are (sic).

ROCKWELL:  And so, Hans, this is why we’ve had this seemingly unstoppable increase in state power, certainly since — in America, ever since 1776.  So is there any hope?  Is the state all powerful?  Is there nothing that can stand against it?  Is there no way to oppose it?

HOPPE:  The first thing in order to oppose it has to be, of course, the insight into the nature of the state.  It is curious that economists in all other areas are against monopoly and in favor of competition.  They are against monopoly because, from the point of view of consumers, monopolists will be institutions that produce at higher-than-minimum costs and the quality of the product will be lower than it otherwise would be.  And competition we regard as good from the point of view of consumers, because competing firms are continuously striving to lower their productions costs, pass on the lower production costs in the form of lower prices to consumers in order to out-compete their competitors and, of course, produce the most highly (sic) quality products possible under given circumstances.

The curious thing is that when it comes to the most important matter in human life, namely the protection of life and property, there, curiously enough, almost all economists are in favor of having a monopoly providing this particular service, and seem to think this argument — the argument no longer applies that a monopoly will require far higher expenses in order to produce whatever they produce, and the quality of the product, in this case law and order or justice, will be lower.  So at the beginning of any type of roll back of the state, has to stand an insight into the nature of the state as a monopolist and an insight into the negative effects that monopolies have in all walks in life, and in particular in the area of law and order.

What we can hope for at the best is that the number of competing states should be as large as possible if we don’t succeed to abolish the state at all.  The larger number of states does not allow states as easily as they would like to to increase taxes, to increase regulations because people will then vote with their feet.

The most dangerous situation that one can imagine would be a world government that imposes the same tax-and-regulation structure on a world-wide scale, taking away any incentive for people to move from one place to another because the tax-and-regulation structure is the same everywhere.  On the other hand, if we would have a situation where we have tens of thousands of Lichtensteins and Switzerlands and Monacos and Hong Kongs and Singapores, then even though each individual state might want to increase taxes and regulations, they simply cannot get away with it without immediate repercussions, namely people moving from less favorable locations to more favorable locations.

ROCKWELL:  Hans, when we think of thinkers like de la Boetie, Hume, Mises, Rothbard, they all pointed out that as impregnable as the state seems, with all its armies and its vast numbers of employees and that vast propaganda apparatus, that it actually is vulnerable because the state, as a minority parasite depending on the majority, depends on the consent of the governed.  And to the extent that people withdraw their consent, even the most powerful state, as we saw in the Soviet Union, as we saw under the Shah in Iran, British rule in India, and other instances, even the most powerful state can crumble.  So is that also a hope of ours?

HOPPE:  Of course.  Again, the point here is that the president can give an order, but the order must be taken up and executed by a general.  The general can give an order, but the order has to be executed by some officer.  The officer can give an order, but the soldiers ultimately have to do the shooting.  And if they don’t shoot, then whatever the president says, what the highest commander says has absolutely no effect.

In this sense, states can only execute their policies if people lend them their voluntary consent.  They might not agree with everything that the state does and orders them to do, but they are obviously, as long as they cooperate, of the opinion that somehow the state itself is a necessary institution.  And the few mistakes that they perceive are the necessary price that must be paid in order to maintain the overall goodness that the state produces.  Once this illusion disappears, once people recognize that the state is nothing else but a parasitic institution, and no longer obey the orders that are issued, then all the powers, even of the most mighty despot, will immediately disappear.

But in order for that to be possible, it is first necessary that people develop what we might call a class consciousness, not in the sense that the Marxists think of class consciousness, that is, that there’s conflict between the employee — employers and the employees, but a class conflict between, on the one hand, the state rulers or the ruling class, and the state subjects.  So the state has to be perceived as an exploitive, parasitic institution.  And only then, if we have a developed class consciousness of this kind, is there any hope that by withdrawing consent from the state that the state might ultimately collapse.

ROCKWELL:  I always liked Hobb’s point, or rather enjoyed Hobb’s point that one of the things that threatens the state is humor and laughter.  You’re supposed to respect them; take them very seriously.  He said it was a very dangerous thing if people were laughing at the government.  So I think I’ll just leave everyone with the important injunction, “Laugh at the government.”

Dr. Hoppe, thanks so much.

And I want to again mention his book, The Economics and Ethics of Private Property.  Take a look at his archive on under “Columnists.”  All his articles are very much worth reading.  At the bottom of the articles, you can click on his book covers and buy these books.

Hans, thanks very much.

HOPPE:  Thank you.

ANNOUNCER:  You’ve been listening to the Lew Rockwell Show, produced by, the best-read Libertarian website in the world.  Thanks for listening.

ROCKWELL:  Well, thanks so much for listening to the Lew Rockwell Show today. Take a look at all the podcasts. There have been hundreds of them. There’s a link on the upper right-hand corner of the LRC front page. Thank you.

Podcast date, July 29, 2008

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