What a day to be reading “Democracy, The God That Failed”

I started a new book last Shabbat. Hans Hermann Hoppe’s “Democracy: The God That Failed.” He’s not as good a writer as Rothbard, sentence structure more confusing and convoluted, but his mother tongue is German like Mises, so considering, it’s pretty good.

The thrust of it is that democracy is actually a step backward for humanity, and monarchy is preferable. For many reasons, one being that monarchy is privately owned government, where the right of confiscation is capitalized into one dynasty, allowing for lower time preference rates (farsightedness) insofar as preserving the right of confiscation and maximizing its value long term.

Democracy is publicly owned government, which is worse, because the government officials cannot capitalize their right of plunder, and therefore their time preference rates become much higher (shortsighted) and they try to extract as much as they can as fast as they can without worrying about preserving the wealth of the government they are the caretakers of.

Axiomatically, the progress humanity has enjoyed since democracy became the leading form of government has been in spite of democracy, not because of it.

I have only finished the first chapter, but I love the way he splits it between “privately owned” government and “publicly owned” government. One other way to see it is that tax rates in monarchies rarely exceeded 10%. 20% is absolute highest recorded in the Torah by Pharaoh. 20% tax rates in Israel or America would seem puny. We pay much, much more than that. Not just income taxes, but everything taxes. Our standards of living are still higher because we have so much more capital equipment, more for the government to steal without starving us.

So it is very interesting that the pinnacle of democracy, a plebiscite, a referendum, may lead to the starvation of an entire country (Greece).

I would much rather live, ceteris paribus, given current levels of capital and technology, in a monarchy where I know that he won’t steal so much from me as to bankrupt himself. A democracy is much more dangerous. If you’re going to tell me that a king can just kidnap me whenever he wants me as fodder to fight his wars, yes, that’s true.

And I point you to Vietnam and the forced draft in Israel.

Is democracy as we know it a failure?

I’ve been pondering this question for some time now as western civilization continues to crumble. The western idea of democracy, as it moves further and further from God and more towards government as an end in itself, seems to show that democracy as we know it is indeed a failure.

As government grows and grows, people rely on it more and more, which encourages it to grow and grow until people lose any sense of personal responsibility for their actions. As government continues to collapse under its own weight, the people demand more and more protections from the government, unable to realize that they cannot be provided.

You can tell people 1000 times that there is no money for medicare, social security, and wars, and it simply won’t register. Of course there’s money. The government can just cut a check.

So people unaware that they have personal responsibilities, keep voting for the person who promises to take it away from them in exchange for promises of money and benefits fed by a printing press of money backed by nothing but the word of the government itself, a logical loop of death and inflation.

Money starts to overflow the system. But people will never vote for the guy who promises to flush the system clean. This involves way too much pain and coming to terms with reality. The government has to take care of you, take care of the system, so the money has to keep flowing.

At some point, and this will be soon, reality will take effect regardless of whether people want to acknowledge it or not. This creates more pain than would have been necessary to have been endured had people chosen to recognize reality by free choice, which is arguably the entire purpose of the human race on planet earth.

The reality is that money is only a medium that is reflective of work done. Real money is real stored work in liquid form that can be exchanged. When someone lends you real money, they lend you the work that they did that they do not need at the moment to survive. It’s extra. You have to pay it back by working harder in return. If you don’t pay it back, that work was lost. This is debt. Lost work. If there’s too much of it, there’s not enough productivity to support the population in debt and they collapse and go back to zero. This is a default.

You work hard at your business, you earn money, you store it in an account. You accrue capital. That stored work can be exchanged for other goods and services, or lent on the expectation that it will be repaid in interest.

But the printing press and money backed by the false word of governments has replaced “work”. And reality will catch up in the form of that money losing its pretend value as the assumed storage unit of work done.

When the dominoes fall, all printed money will totally outnumber the amount of actual work done in the world, as the amount of work done in the world shrinks in real terms as people go unemployed. Without productive work, people starve. Increasingly, the money in the world is reflective of handouts by governments rather than work. Money reflective of nothing will lose all value. That’s when the system will become unsustainable.

All the financial tricks done by world banks to play around with money they actually did no work with – produced no food, no thing of actual value, no goods, will be recognized as paper pushing. It will suddenly be discovered that the amount of money in the world way outstrips the amount of real work done in the world.

Work adds value and prosperity to the world. A printing press does not. When the amount of work vs printing press money becomes apparent, that’s when the system falls.

There is no way you will get a majority of people to understand this. They will keep voting for the money until they drown in it.

This is why democracy has failed for now. Unless you can get a majority of humanity to accept reality, which seems a really long shot.