The Source of Wealth

In completing the manuscript for a book I’m finishing up concerning government expropriation of private property, I dug up one of my favorite Hoppe quotes which pithily and masterfully summarizes the means of acquiring wealth:

One can acquire and increase wealth either through homesteading, production and contractual exchange, or by expropriating and exploiting homesteaders, producers, or contractual exchangers There are no other ways. Both methods are natural to mankind. Alongside an interest in producing and contracting there has always been an interest in non-productive and non-contractual property and wealth acquisitions. And in the course of economic development, just as the former interest can lead to the formation of productive enterprises, firms and corporations, so can the latter lead to large-scale enterprises and bring about governments or states.

Just wonderful.This appears in Hans-Hermann Hoppe, “Banking, Nation States and International Politics: A Sociological Reconstruction of the Present Economic OrderReview of Austrian Econ., 4:1 (1990) at 60-61.

As discussed by Rothbard in The Ethics of Liberty, German sociologist Franz Oppenheimer sets out a similar distinction; he pointed out that there are two mutually exclusive ways of acquiring wealth: either by production and exchange, which he termed the “economic means”; or by confiscation of others’ property, which method Oppenheimer termed “the political means” to wealth:

There are two fundamentally opposed means whereby man, requiring sustenance, is impelled to obtain the necessary means for satisfying his desires. These are work and robbery, one’s own labor and the forcible appropriation of the labor of others. . . . I propose in the following discussion to call one’s own labor and the equivalent exchange of one’s own labor for the labor of others, the “economic means” for the satisfaction of need while the unrequited appropriation of the labor of others will be called the “political means“. . . . The State is an organization of the political means. No State, therefore, can come into being until the economic means has created a definite number of objects for the satisfaction of needs, which objects may be taken away or appropriated by warlike robbery.

Franz Oppenheimer, The State (New York: Vanguard Press, 1926) pp. 24–27 (emphasis added).

Albert Jay Nock, Our Enemy, The State (New York: Free Life Editions, 1973), p. 3, makes similar points, and I believe Bastiat may as well.

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4:25 pm on December 27, 2004