Douglass North's work contradicts Hoppe. While monarchs had the incentives Hoppe provides for them if they understood economics, Hoppe makes the mainstream mistake of assuming they had his knowledge of economics. Plus, North shows that monarchs never acted the way Hoppe says they did. Hoppe focuses on a small number of monarchs in early modern Europe who were influenced by the government reforms that came out of the Protestant Reformation, particularly those implemented in the Dutch Republic. Throughout history, and in most of the world, monarchs never acted like Hoppe claims they would act.
 

Des this mean you are for a Bush dynasty?
 

"While monarchs had the incentives Hoppe provides for them if they understood economics, Hoppe makes the mainstream mistake of assuming they had his knowledge of economics."

Nothing personal, but this is incoherent. Did they, or did they not, have the incentives Hoppe attributes to them? What does knowledge of any kind of economics have to do with it? And where does Hoppe make such an assumption about knowledge?
 

Dynastic rulers might actually have more incentive to impoverish their people than to enrich them as this will render them weak and easy to subjugate. So, while good policies will enrich a monarch's country it is of no use to them if it also means they lose control of it.

Perhaps this explains why North Korea, which has had and continues to have a dynastic ruling family, works so very badly.
 

@Beefcake_the_Mighty: Bob and fundamentalist are right in that monarchs can only implement the policies they *believe* are good, and if they don't have sufficient knowledge, they can implement bad policies despite having the national interest at heart.

My problem with Hoppe's argument here as always been: how do you distinguish a monarchy from a dictatorship? They seem very similar, yet his argument hinges on dictatorships being, um, more democratic, and hence very different from monarchies.
 

When you write about Hoppe’s ‘controversial section’, you probably mean the one about homosexuals and how they would be ‘removed’ from a libertarian society. I don’t think this particular conclusion follows from Hoppe’s own logic. There would be libertarian societies that will reject homosexuality, but homosexuals would not want to live there anyway, but probably bugger off to some more accepting region where nobody gives a damn about who you want to have sex with, and where there is probably a greater choice of good food, nice clothing, well-designed stuff, and friendly parties. Actually, exactly the kind of place most sensible people would probably want to live in. Grumps like Hoppe will be more than welcome to stick to their traditional values enclaves and write withering epistles on the horribly high time preference of homosexuals.
 

Hoppe also assumes that leaders are the usual maximisers of material wealth.

--They're not.
 

RW wrote:

Des this mean you are for a Bush dynasty?

Of course that's what I'm for. I'm surprised you have to even ask.
 

fundamentalist wrote:

While monarchs had the incentives Hoppe provides for them if they understood economics, Hoppe makes the mainstream mistake of assuming they had his knowledge of economics.

But this is the theory in my post, that pre-1800s the monarchs honestly didn't realize mercantilism was destructive, whereas once they learned, they embraced (relatively speaking) free trade.

In contrast, the people advising democratic rulers today have to know full well that free trade would make the country richer in just about all respects within 10 years, and yet those policies aren't enacted.

So are you agreeing wholeheartedly with my post, fundamentalist?
 

I think from a logical perspective, Hoppe's view of monarchs as wealth maximizers/protectors of their own property makes sense, but I am unsure of the historical record he uses. (There's many cases of tyranny under monarchy, more than there should be which is against Hoppe's thesis.) The democracy vs monarchy debate is an important one, I think. It's understandably not popular considering practically all current thought is overwhelmingly pro-democracy.

I think his concept of a dynastic "private" state is an important one for AC. Has anybody developed anything more on what he's laid out?

Jason
 

The Blackadder Says:

One difference between a monarchy and a dictatorship is that in the former succession is formalized, such that everyone knows and agrees who will be the new king (or queen) once the current monarch dies. This isn't generally true of a dictatorship (succession in a dictatorship can be dynastic, but this is usually on the dictator's whim), which means that a dictator has to keep a much tighter grip on his country, lest someone (anyone) challenge his leadership. There are cases in history where the succession of a monarch has not been clear; they haven't been pretty.
 

The Blackadder Says:

That said, there does seem to be a correlation between democracy and liberty. Look at a list of the world's oldest democracies. You'll find the Anglosphere, Switzerland, and a couple of Scandinavian countries. Now look at the top countries on the Index of Economic Freedom. What do we see? The Anglosphere, Switzerland, and a Scandinavian country (Denmark). The main difference between the two lists is that the Economic Index includes Hong Kong and Singapore, which were British colonies up until fairly recently.
 

Dictators (certainly in the modern sense) typically rule through some sort of political party apparatus/beauracracy, which in principle is open to anyone to join. In this sense they are similar to (modern) democracies and unlike traditional monarchies where the means of power (however distant from the center) are essentially closed to anyone outside the monarch's hereditary line.

Also, Hoppe never said that monarchs couldn't be tyrannical; his is a comparative analysis considering the nature of government stemming from differing incentive structures that would arise under leaders of the same character.

And James Rothfeld is still a wad.
 

This is a timely post, since I just finished reading that book myself, and posted a quick review here:

http://hiddeneconomist.blogspot.com/2010/01/democracy-god-that-failed-review.html

While being an important book, regarding the controversial part, I think the Hoppe overlooks the "economics of intolerance", and how not tolerating other people has a cost too, not only having "deviant behavior".

Basically he overlooks the nature of discrimination (i.e. exclusion), while of course being a prerogative of private property, there is such thing a productive discrimination, and non-productive discrimination (i.e. consumption).

Productive discrimination is related to exclusion in higher order goods (No drunk employee in the factory), and is based on maximizing productivity, while non-productive discrimination is a consumption action (No homosexuals in my factory) from the entrepreneur point of view, the same nature as employing one's incompetent nephew, for instance.

My point is that the later one will tend to disappear in a free society, something that Hoppe overlooks completely.
 

@ Bob Murphy

Call GW senior, I hear he has a consulting gig ready for you.

It was overheard him saying, "I like the way that young guy thinks."
 

"In contrast, the people advising democratic rulers today have to know full well that free trade would make the country richer in just about all respects within 10 years, and yet those policies aren't enacted"

Oh, they do?
 

Silas, what does this have to do with EM rights or IP?
 

BM wrote:

"In contrast, the people advising democratic rulers today have to know full well that free trade would make the country richer in just about all respects within 10 years, and yet those policies aren't enacted"

Anon asked: Oh, they do?

Yes, they do. You think Larry Summers or Ben Bernanke don't understand econ 101? Of course they know that the country as a whole would be wealthier if all trade barriers were dropped. But that's about as relevant as asking them what would help a school of fish off the coast of Spain.

I hope you don't think that what Larry Summers tells reporters he told the president, is what he really told the president or (better still) what he really believes.
 

John Nye says that Britain's supposed history of embracing free trade with the end of the Corn Laws is a sham. Watch his diavlog here.
 

Silas said:

My problem with Hoppe's argument here as always been: how do you distinguish a monarchy from a dictatorship? They seem very similar, yet his argument hinges on dictatorships being, um, more democratic, and hence very different from monarchies.

I think we need to control for the scope of the government, when we then compare different mechanisms of appointing its ruler(s). For example, I'd much rather live under (A) a democracy where it is understood that the government can only raise revenues through external tariffs, and where it would be inconceivable for the democratic politicians to enact a draft than (B) a monarchy where people thought the king had the right to demand military service, and had a right to 15% of your annual income.

So I think to be fair to Hoppe, we need to hold the scope of government constant, and then compare democracy vs. monarchy. (In fact, Hoppe's case is much stronger than that, because he gives plausible reasons for why a monarchy would tend to limit the scope of what the public found acceptable government behavior.)

I grant you Silas that maybe I'm not totally solving your issue, but I think that has something to do with it. To put it in other words, a dictatorship that was truly filled via elections every four years would also be awful. And in fact, now that I think of it, it would probably be even worse than a dictatorship for life.

A lot of this goes back to the debates on anarcho-capitalism, where we ask stuff like, "Well suppose one guy just happened to own every piece of land in the country, would that be fine with you? Wouldn't that be a dictator?" etc. My quick answer is yes, so long as he achieved that position voluntarily, then it would be fine. In order to be that rich, he must have been the most productive human ever, and then all those people knew what they were getting into when they either sold their land or moved onto his island. In order to make them want to do this, he must have built in contractual clauses about respecting their wishes to leave or blah blah blah.
 

The Blackadder Says:

The old Roman Republic used to periodically appoint a man dictator for six months, during which time he ruled absolutely and after which time he was granted legal immunity for any actions taken as dictator. Under the Hoppe/Murphy theory, this should have proved disastrous. In practice, however, the worst you could say about it is that it may have laid the groundwork for the establishment of a dictatorship for life later on (which, according to Hoppe/Murphy, was an improvement!)

Perhaps there is some feature of reality that the Hoppe/Murphy theory does not account for?
 

Bob: "pre-1800s the monarchs honestly didn't realize mercantilism was destructive, whereas once they learned, they embraced (relatively speaking) free trade."

I agree for the most part. I just don't think monarchs learned anything. I think that as parliaments became stronger they forced monarchs to do things they didn't want to do. Monarchs have rarely been very intellectual.

As North points out, monarchs always allowed the nobility to abuse the masses in order to retain their support and continue ruling. He didn't plunder the nobility, though. The Dutch created the first "open" society, as North calls it, in which the rule of law prevailed over the arbitrary rule of monarchs. As a result, the masses prospered. When the masses of other nations saw Dutch prospertiy, they wanted some of the same and forced the rule of law upon unwilling monarchs.

Of course, the big change in England came with the "Glorius Revolution" in which the Dutch prince William ran the English king out of town. William established in England the Dutch system of the rule of law and limited the power of the monarch significantly. William had become an enlightened nobleman, but only after a century of bloody fighting within his own country to rein in the nobility.
 

Dr. Murphy,

I have my disagreement here mostly with other commenters, not with you, sir.

Much can be said about Dr. Hoppe's theory. Although he does have his own contribution, it is based on earlier thinkers, such as Erik von Kuehnelt-Leddihn and Bertrand de Jouvenel, whom I am sure you will find referenced in the book -- if you haven't already.

When critique comes up of Hoppe's theory, it is generally accompanied with all sorts of examples that reality doesn't fit the model.

It is to some extent analogous to when leftists come creeping out of every hole, claiming that the theory that private property is better taken care of than public property is flawed, and they come up with examples of poorly run private property.

When a private business is poorly run, do we think the solution is to put the company under public administration?

When it comes to government, there are indeed many examples of poor choices. The solution was to put it "under public administration," and the result is before our very eyes.

The argument is of course that privately run property tends to be better run than publicly run property -- not that every single private property owner will run everything better than every single public caretaker. Is it not?

Similarly, the theory is that monarchy tends to be better than democracy. Not that every single monarch is better than every single democratic politico. Neither is it that it is better in every respect.

As for the transition period, emphasized here by some as the real golden age, it was indeed a period of checked monarchical power, and it may be a valid argument that it was necessary due to the excesses of the "age of absolutism." However, the great tragedy was -- as de Jouvenel noted -- when those who checked the monarchical power, grabbed the power for themselves. Then "we became the government," and the need for any check to speak of "vanished."