The Great Fiction, Second Expanded Edition

Imagine a world government, democratically elected according to the principle of one-man-one-vote on a worldwide scale. What would the probable outcome of an election be? Most likely, we would get a Chinese-Indian coalition government. And what would this government most likely decide to do in order to satisfy its supporters and be reelected? The government would probably find that the so-called Western world had far too much wealth and the rest of the world, in particular China and India, far too little, and that a systematic wealth and income redistribution would be necessary.1 Or imagine that in your own country the right to vote were expanded to seven year olds. While the government would not likely be staffed of children, its policies would most definitely reflect the “legitimate concerns” of children to have “adequate and “equal” access to “free” french fries, lemonade, and videos.2

With these “thought experiments” in mind, there can be no doubt about the consequences which resulted from the process of democratization that began in Europe and the U.S. in the second half of the nineteenth century and has come to fruition since the end of World War I. The successive expansion of the franchise and finally the establishment of universal adult suffrage did within each country what a world democracy would do for the entire globe: it set in motion a seemingly permanent tendency toward wealth and income redistribution.3

One-man-one-vote combined with “free entry” into government democracy implies that every person and his personal property comes within reach of and is up for grabs by everyone else. A “tragedy of the commons” is created.4 It can be expected that majorities of “have-nots” will relentlessly try to enrich themselves at the expense of minorities of “haves.” This is not to say that there will be only one class of have-nots and one class of haves, and that the redistribution will occur uniformly from the rich onto the poor. To the contrary. While the redistribution from rich to poor will always play a prominent role, it would be a sociological blunder to assume that it will be the sole or even the predominant form of redistribution.5 After all, the “permanently” rich and the “permanently” poor are usually rich or poor for a reason. The rich are characteristically bright and industrious, and the poor typically dull, lazy, or both.6 It is not very likely that dullards, even if they make up a majority, will systematically outsmart and enrich themselves at the expense of a minority of bright and energetic individuals. Rather, most redistribu­tion will take place within the group of the “non-poor,” and frequently it will actually be the better-off who succeed in having themselves subsi­dized by the worse-off. Consider, for example, the almost universal practice of offering a “free” university education, whereby the working class, whose children rarely attend universities, pay through taxation for the education of middle-class children!7 Moreover, it can be expected that there will be many competing groups and coalitions trying to gain at the expense of others. There will be various changing criteria defining what it is that makes one person a “have” (deserving to be looted) and another a “have-not” (deserving to receive the loot). At the same time, individuals will be members of a multitude of groups of “haves” and/or “have-nots,” losing on account of one of their characteristics and gaining on account of another, with some individuals ending up net-losers and others net-winners of redistribution.

The recognition of democracy as a machinery of popular wealth and income redistribution in conjunction with one of the most fundamental principles in all of economics that one will end up getting more of what­ ever it is that is being subsidized provides the key to understanding the present age.8

All redistribution, regardless of the criterion on which it is based, involves “taking” from the original owners and/or producers (the “hav­ers” of something) and “giving” to nonowners and nonproducers (the “nonhavers” of something). The incentive to be an original owner or producer of the thing in question is reduced, and the incentive to be a non-owner and non-producer is raised. Accordingly, as a result of subsi­dizing individuals because they are poor, there will be more poverty. By subsidizing people because they are unemployed, more unemployment will be created. Supporting single mothers out of tax funds will lead to an increase in single motherhood, “illegitimacy,” and divorce.9 In out­lawing child labor, income is transferred from families with children to childless persons (as a result of the legal restriction on the supply of labor, wage rates will rise). Accordingly, the birthrate will fall. On the other hand, by subsidizing the education of children, the opposite effect is created. Income is transferred from the childless and those with few children to those with many children. As a result the birthrate will in­crease. Yet then the value of children will again fall, and birthrates will decline as a result of the so-called social security system, for in subsidiz­ing retirees (the old) out of taxes imposed on current income earners (the young), the institution of a family—the intergenerational bond between parents, grandparents, and children—is systematically weakened. The old need no longer rely on the assistance of their children if they have made no provision for their own old age, and the young (with typically less accumulated wealth) must support the old (with typically more accumulated wealth) rather than the other way around, as is typical within families. Parents’ wish for children, and childrens’ wish for parents will decline, family breakups and dysfunctional families will increase, and provisionary action—saving and capital forma­tion—will fall, while consumption rises.10

As a result of subsidizing the malingerers, the neurotics, the care­less, the alcoholics, the drug addicts, the AIDS-infected, and the physi­cally and mentally “challenged” through insurance regulation and compulsory health insurance, there will be more illness, malingering, neuroticism, carelessness, alcoholism, drug addiction, AIDS infection, and physical and mental retardation.11 By forcing noncriminals, in­cluding the victims of crime, to pay for the imprisonment of crimi­nals (rather than making criminals compensate their victims and pay the full cost of their own apprehension and incarceration), crime will increase.12 By forcing businessmen, through “affirmative action” (“nondiscrimination”) programs, to employ more women, homosexuals, blacks, or other “minorities” than they would like to, there will be more employed minorities, and fewer employers and fewer male, heterosexual, and white employment.13 By compelling private land owners to subsidize (“protect”) “endangered species” residing on their land through environmental legislation, there will be more and better-off ani­mals, and fewer and worse-off humans.14

Most importantly, by compelling private property owners and/or market income earners (producers) to subsidize “politicians,” “political parties,” and “civil servants” (politicians and government employees do not pay taxes but are paid out of taxes),15 there will be less wealth formation, fewer producers and less productivity, and ever more waste, “parasites” and parasitism.

Businessmen (capitalists) and their employees cannot earn an income unless they produce goods or services which are sold in markets. The buyers’ purchases are voluntary. By buying a good or service, the buyers (consumers) demonstrate that they prefer this good or service over the sum of money that they must surrender in order to acquire it. In contrast, politicians, parties, and civil servants produce nothing which is sold in markets. No one buys government “goods” or “services.” They are produced, and costs are incurred to produce them, but they are not sold and bought. On the one hand, this implies that it is impossible to determine their value and find out whether or not this value justifies their costs. Because no one buys them, no one actually demonstrates that he considers government goods and services worth their costs, and in­deed, whether or not anyone attaches any value to them at all. From the viewpoint of economic theory, it is thus entirely illegitimate to assume, as is always done in national income accounting, that government goods and services are worth what it costs to produce them, and then to simply add this value to that of the “normal,” privately produced (bought and sold) goods and services to arrive at gross domestic (or national) product, for instance. It might as well be assumed that govern­ment goods and services are worth nothing, or even that they are not “goods” at all but “bads,” and hence, that the cost of politicians and the entire civil service should be subtracted from the total value of privately produced goods and services. Indeed, to assume this would be far more justified. For on the other hand, as to its practical implications, the subsi­dizing of politicians and civil servants amounts to a subsidy to “produce” with little or no regard for the well-being of one’s alleged consumers, and with much or sole regard instead for the well-being of the “producers,” i.e., the politicians and civil servants. Their salaries remain the same, whether their output satisfies consumers or not. Accordingly, as a result of the expansion of “public” sector employment, there will be in­ creasing laziness, carelessness, incompetence, disservice, maltreatment, waste, and even destruction—and at the same time ever more arrogance, demagoguery, and lies (“we work for the public good”).16

After less than one hundred years of democracy and redistribution, the predictable results are in. The “reserve fund” that was inherited from the past is apparently exhausted. For several decades (since the late 1960s or the early 1970s), real standards of living have stagnated or even fallen in the West.17 The “public” debt and the cost of the existing social security and health care system have brought on the prospect of an imminent economic meltdown.18 At the same time, almost every form of undesirable behavior, unemployment, welfare dependency, negligence, recklessness, incivility, psychopathy, hedonism, and crime has increased, and social conflict and societal breakdown have risen to dangerous heights. If current trends continue, it is safe to say that the Western welfare state (social democracy) will collapse just as Eastern (Russian-style) socialism collapsed in the late 1980s.

However, economic collapse does not automatically lead to improvement. Matters can become worse rather than better. What is neces­sary besides a crisis are ideas—correct ideas—and men capable of understanding and implementing them once the opportunity arises. Ul­timately, the course of history is determined by ideas, be they true or false, and by men acting upon and being inspired by true or false ideas. The current mess is also the result of ideas. It is the result of the over­whelming acceptance, by public opinion, of the idea of democracy. As long as this acceptance prevails, a catastrophe is unavoidable, and there can be no hope for improvement even after its arrival. On the other hand, as soon as the idea of democracy is recognized as false and vicious—and ideas can, in principle, be changed almost instantaneously—a catastrophe can be avoided.

The central task of those wanting to turn the tide and prevent an outright breakdown is the “delegitimation” of the idea of democracy as the root cause of the present state of progressive “civilization.” To this purpose, one should first point out that it is difficult to find many propo­nents of democracy in the history of political theory. Almost all major thinkers had nothing but contempt for democracy. Even the Founding Fathers of the U.S., nowadays considered the model of a democracy, were strictly opposed to it. Without a single exception, they thought of democracy as nothing but mob-rule. They considered themselves to be members of a “natural aristocracy,” and rather than a democracy they advocated an aristocratic republic.20 Furthermore, even among the few theoretical defenders of democracy such as Rousseau, for instance, it is almost impossible to find anyone advocating democracy for anything but extremely small communities (villages or towns). Indeed, in small communities where everyone knows everyone else personally, most people must acknowledge that the position of the “haves” is typically based on their superior personal achievement just as the position of the “have-nots” finds its typical explanation in their personal deficiencies and inferiority. Under these circumstances, it is far more difficult to get away with trying to loot other people and their personal property to one’s advantage. In distinct contrast, in large territories encompassing millions or even hundreds of millions of people, where the potential looters do not know their victims, and vice versa, the human desire to enrich oneself at another’s expense is subject to little or no restraint.21

More importantly, it must be made clear again that the idea of democracy is immoral as well as uneconomical. As for the moral status of majority rule, it must be pointed out that it allows for A and B to band together to rip off C, C and A in turn joining to rip off B, and then B and C conspiring against A, and so on. This is not justice but a moral outrage, and rather than treating democracy and democrats with respect, they should be treated with open contempt and ridiculed as moral frauds.22

On the other hand, as for the economic quality of democracy, it must be stressed relentlessly that it is not democracy but private property, production, and voluntary exchange that are the ultimate sources of human civilization and prosperity. In particular, contrary to widespread myths, it needs to be emphasized that the lack of democracy had essentially nothing to do with the bankruptcy of Russian-style socialism. It was not the selection principle for politicians that constituted socialism’s problem. It was politics and political decisionmaking as such. Instead of each private producer deciding independently what to do with particular resources, as under a regime of private property and contractualism, with fully or partially socialized factors of production each decision requires someone else’s permission. It is irrelevant to the producer how those giving permission are chosen. What matters to him is that permis­sion must be sought at all. As long as this is the case, the incentive of producers to produce is reduced and impoverishment will ensue. Pri­vate property is as incompatible with democracy as it is with any other form of political rule.23 Rather than democracy, justice as well as economic efficiency require a pure and unrestricted private property soci­ety, an “anarchy of production” in which no one rules anybody, and all producers’ relations are voluntary and thus mutually beneficial.24

Lastly, as for strategic considerations, in order to approach the goal of a non-exploitative social order, i.e., private property anarchy, the idea of majoritarianism should be turned against democratic rule itself. Under any form of governmental rule, including a democracy, the “ruling class” (politicians and civil servants) represents only a small proportion of the total population. While it is possible that one hundred parasites may lead a comfortable life on the products of one thousand hosts, one thousand parasites cannot live off one hundred hosts. Based on the recognition of this fact, it would appear possible to persuade a majority of the voters that it is adding insult to injury to let those living off other peoples’ taxes have a say in how high these taxes are, and to thus decide, democratically, to take the right to vote away from all government employees and everyone who receives government benefits, whether they are welfare recipients or government contractors.

In addition, in conjunction with this strategy it is necessary to recognize the overwhelming importance of secession and secessionist move­ments. If majority decisions are “right,” then the largest of all possible majorities, a world majority and a democratic world government, must be considered ultimately “right,”25 with the consequences predicted at the outset of this chapter. In contrast, secession always involves the breaking away of smaller from larger populations. It is thus a vote against the principle of democracy and majoritarianism. The further the process of secession proceeds to the level of small regions, cities, city districts, towns, villages, and ultimately individual households and voluntary associations of private households and firms, the more difficult it will become to maintain the current level of redistributive policies. At the same time, the smaller the territorial units, the more likely it will be that a few individuals, based on the popular recognition of their eco­nomic independence, outstanding professional achievement, morally impeccable personal life, superior judgment, courage, and taste, will rise to the rank of natural, voluntarily acknowledged elites and lend legitimacy to the idea of a natural order of competing (non-monopolistic) and freely (voluntarily) financed peacekeepers, judges, and over­lapping jurisdictions as exists even now in the arena of international trade and travel. A pure private law society is the answer to democ­racy and any other form of political (coercive) rule.26

* Previously published as chapter four of Democracy: The God That Failed (New Brunswick, N.J.: Transaction Publishers, 2001).

• 1The combined population of China and India is around 2.2 billion (of a current world population of about 6 billion). By contrast, the combined population of western Europe and North America is approximately 700 million.
• 2During the mid-nineteenth century the average life-expectancy in western Europe and North America was approximately forty years. At that time, apart from being restricted exclusively to males as well as by significant minimum property requirements, the franchise was restricted by a minimum age requirement of typically twenty-five years (in some places such as the United Kingdom and Sweden the requirement was as low as twenty-one years, and in others such as France and Denmark it was as high as thirty years). Nowadays, while the average life-expectancy in western Europe and North America has risen to well above seventy years, the franchise extends everywhere to males and females, all property requirements have been abolished, and the minimum voting age has been generally lowered to eighteen years. If the original “maturity” requirements had been maintained, the minimum age should have been raised instead: from on the average twenty-five years to about fifty years!
• 3As a rough indicator of this tendency one may want to relate successive expansions of the electorate during the late nineteenth and early twentieth century to the rise of the socialist and social-democratic voter turnout (and the parallel decline of classical liberal parties). A few examples will have to suffice here. (1) Germany: For the years 1871, 1903, and 1919, the total number of votes cast was 4.1, 9.5, and 30.5 million respectively; the socialist voter turnout was 3, 32, and 46 percent respec­tively; the liberal voter turnout was 46, 22, and 23 percent respectively. (2) Italy: For the years 1895,1913, and 1919, the total number of votes was 1.3, 5.1, and 5.8 million respectively; the socialist voter turnout was 7, 18, and 32 percent respectively; the liberal voter turnout was 80, 56, and 35 percent respectively. (3) United Kingdom: For the years 1906 and 1918, the total number of votes was 7.3, and 21.4 million respectively; the socialist voter turnout was 5 and 21 percent respectively; the liberal voter turnout was 49, and 25 percent respectively. (4) Sweden: For the years 1905, 1911, and 1921, the total number of votes cast was 0.2, 0.6, and 1.7 million respectively; the socialist voter turnout was 9, 28, and 36 percent respectively; the liberal voter turn­ out was 45, 40, and 19 percent respectively. (5) Netherlands: For the years 1888, 1905, and 1922, the total votes cast was 0.3, 0.8, and 3.3 million respectively; the socialist voter turnout was 3,17, and 27 percent respectively; the liberal voter turnout was 40, 28, and 9 percent respectively.
• 4The “tragedy of the commons” refers to the overutilization, waste, or depletion of resources held in common (as publicly owned goods). See Managing the Commons, ed. Garrett Hardin and John Baden (San Francisco: W. H. Freeman, 1977).
• 5See on this Joseph A. Pechman, ‘The Rich, the Poor, and the Taxes They Pay,” Public Interest (Fall 1969); Murray N. Rothbard, For a New Liberty (New York: Collier, 1978), pp. 157–62.
• 6See on this Edward C. Banfield, The Unheavenly City Revisited (Boston: Little, Brown, 1974), esp. chap. 3. Typically, Banfield explains, poverty is merely a transi­tory phase, restricted to the early stage in a person’s working career. “Permanent” poverty, by contrast, is caused by specific cultural values and attitudes: a person’s present-orientedness or, in economic terms, his high degree of time preference (which is highly correlated with low intelligence, and both of which appear to have a common genetic basis). Whereas the former—temporarily-poor-yet-upward-moving—individual is characterized by future-orientation, self-discipline, and a will­ingness to forego present gratification in exchange for a better future, the latter—permanently poor—individual is characterized by present-orientation and hedonism. Writes Banfield:
  If [the latter] has any awareness of the future, it is of something fixed, fated, beyond his control: things happen to him, he does not make them happen. Impulse governs his behavior, either because he cannot discipline himself to sacrifice a present for a future satisfaction or because he has no sense of the future. He is therefore radically improvident. He works only as he must to stay alive, and drifts from one unskilled job to another, taking no interest in his work.... He is careless with his things and, even when nearly new, they are likely to be permanently out of order for lack of minor repairs. His body, too, is a thing “to be worked out but not repaired.” (pp. 61–62)
• 7See on this Armen Alchian, “The Economic and Social Impact of Free Tuition,” in idem, Economic Forces at Work (Indianapolis, Ind.: Liberty Fund, 1977); Rothbard, For a New Liberty, chap. 7. Other examples involving this type of redistribution are farm subsidies, favoring in particular large wealthy farmers, minimum wages, fa­voring higher paid skilled (and unionized) workers at the expense of unskilled (and nonunionized) workers, and, of course, all forms of “business protection” laws (protective tariffs), favoring wealthy owners of corporations at the expense of the mass of comparatively poor consumers.
• 8On the economics of redistribution see Ludwig von Mises, Socialism: An Economic and Sociological Analysis (Indianapolis, Ind.: Liberty Fund, 1981), esp. chap. 34; Murray N. Rothbard, Power and Market: Government and the Economy (Kansas City: Sheed Andrews and McMeel, 1977), pp. 169ff.; idem, For a New Liberty, chap.8.
• 9For a detailed empirical investigation of these and numerous related issues see Charles Murray, Losing Ground (New York: Basic Books, 1984).
• 10Concerning the effect of “social security,” compulsory school attendance laws and the prohibition of child labor on the progressive destruction of families see Allan C. Carlson, What Has Government Done to Our Families? (Auburn, Ala.: Ludwig von Mises Institute,1991); also Bryce J. Christensen, The Family vs. the State (Auburn, Ala.: Mises Institute,1992).
• 11For one of the earliest, most profound, and most farsighted analyses of this see Mises, Socialism, pp. 429–32 and 438–41. Writing in the early 1920s, Mises described the effects of “social insurance” as follows:
  By weakening or completely destroying the will to be well and able to work, social insurance creates illness and inability to work; it produces the habit of complaining In short, it is an institution which tends to encourage disease, not to say accidents, and to intensify considerably the physical and psychic results of accidents and illnesses. As a social institution it makes a people sick bodily and mentally or at least helps to multiply, lengthen, and intensify disease. (p. 432)Moreover, Mises proceeds to the heart of the matter and explains why insurance against most health and accident risks, and in particular against the risk of unemployment, is economically impossible:
  The value of health and accident insurance becomes problematic by reason of the possibility that the insured person may himself bring about, or at least intensify, the condition insured against. But in the case of unemploy­ment insurance, the condition insured against can never develop unless the insured persons so will....Unemployment is a problem of wages, not work. It is just as impossible to insure against unemployment as it would be to insure against, say, the unsaleability of commodities....Unemployment insurance is definitely a misnomer. There can never be any statistical foundation for such an insurance. ( p. 439)On the logic of risk and insurance see further Ludwig von Mises, Human Action: A Treatise on Economics, scholar’s edition (Auburn, Ala.: Mises Institute, 1998), chap. 6; on the dysgenic consequences of social “insurance” see Seymour W. Itzkoff, The Road to Equality: Evolution and Social Reality (Westport, Conn.: Praeger, 1992); idem, The Decline of Intelligence in America (Westport, Conn.: Praeger, 1994).
• 12On crime and punishment see Murray N. Rothbard, The Ethics of Liberty (New York: New York University Press, 1998), chap. 13; Assessing the Criminal, ed. Randy E. Barnett and John Hagel (Cambridge, Mass.: Ballinger, 1977); Criminal Justice? The Legal System vs. Individual Responsibility, ed. Robert J. Bidinotto (Irvington-on Hudson, N.Y.: Foundation for Economic Education,1994).
• 13On the law and economics of “affirmative action” and discrimination see Richard A. Epstein, Forbidden Grounds (Chicago: University of Chicago Press, 1992); Discrimination, Affirmative Action, and Equal Opportunity, ed. Walter Block and Michael Walker (Vancouver: Fraser Institute,1982).
• 14On conservation and environmentalism see Murray N. Rothbard, “Conserva­tion in the Free Market,” in idem, Egalitarianism as a Revolt against Nature and Other Essays (Washington, D.C.: Libertarian Review Press, 1974); idem, Power and Market, pp. 63–70; idem, “Law, Property Rights, and Air Pollution,” in idem, The Logic of Action Two (Cheltenham, U.K.: Edward Elgar, 1997); Llewellyn Rockwell, Jr., The Anti-environmentalist Manifesto (Burlingame, Calif.: Center for Libertarian Studies, 1993).
• 15See on this Rothbard, Power and Market, chap. 2, and pp. 84ff. To recognize this important truth it is only necessary to raise the question “What would happen if all taxes were abolished?” Would this imply, for instance, that everyone’s income would increase from net (after tax) income to gross (before-tax) income? The answer is clearly “no.” For something is currently done with the taxes collected. They are used, for instance, to pay the salaries of government employees. Their salaries could not possibly rise if taxes were abolished. Rather, their salaries would fall to zero, which demonstrates that they are not paying any taxes at all. As Rothbard explains: “If a bureaucrat receives a salary of $5,000 a year and pays $1,000 in ‘taxes’ to the government, it is quite obvious that he is simply receiving a salary of $4,000 and pays no taxes at all. The heads of government have simply chosen a complex and misleading accounting device to make it appear that he pays taxes in the same way as any other men making the same income” (ibid., p. 278, also p. 142). Once this has been understood it becomes obvious why certain groups such as school teachers and university professors are almost always and uniformly in favor of higher taxes. They are not thereby generously accepting a greater burden imposed on themselves. Instead, higher taxes are the means by which they increase their own tax-financed salaries. On the issue of taxpayers versus tax-consumers (or tax-eaters) see also John C. Calhoun, A Disquisition on Government (New York: Liberal Arts Press, 1953), pp. 16–18.
• 16On the fundamental errors involved in the standard national income accounting procedures, and a constructive alternative, see Murray N. Rothbard, America’s Great Depression (Kansas City: Sheed and Ward, 1975), pp. 296–304; idem, Power and Market, pp.199–202.
• 17For an instructive study using Rothbard’s suggestions for an alternative method of national income accounting see Robert Batemarco, “GNP, PPR, and the Standard of Living,” Review of Austrian Economics 1 (1987).
• 18For a summary overview see Victoria Curzon Price, “The Mature Welfare State: Can It Be Reformed?” in Nils Karlson, ed., Can the Present Problems of Mature Welfare States Such as Sweden Be Solved? (Stockholm: City University Press,1995), esp. pp. 15–19.
• 20See on this Erik von Kuehnelt-Leddihn, Leftism Revisited (Washington D.C.: Regnery Gateway, 1990), esp. chap. 6. Of the American founders, Alexander Hamilton was a monarchist. Likewise, the governor of Pennsylvania Robert Morris had strong monarchist leanings. George Washington expressed his profound distaste of democracy in a letter of September 30, 1798, to James McHenry. John Adams was convinced that every society grows aristocrats as inevitably as a field of corn will grow some large ears and some small. In a letter to John Taylor he insisted, like Plato and Aristotle, that democracy would ultimately evolve into despotism, and in a letter to Jefferson he declared that “democracy will envy all, contend with all, endeavor to pull down all, and when by chance it happens to get the upper hand for a short time, it will be revengeful, bloody and cruel.” James Madison, in a letter to Jared Parks, complained of the difficulty “of protecting the rights of property against the spirit of democracy.” And even Thomas Jefferson, probably the most “democratic” of the founders, confessed in a letter to John Adams that he considered
  the natural aristocracy...as the most precious gift of nature, for the instruction, the trusts and governments of society. And indeed, it would have been inconsistent in creation to have formed men for the social state, and not have provided virtue and wisdom enough to manage the concerns of society. May we not even say that that form of government is best, which provides most effectually for a pure selection of these natural aristoi into the offices of government?Characterizing the general attitude of the founders, then, the most appropriate pronouncement is that of John Randolph of Roanoke: “I am an aristocrat: I love liberty, I hate equality.”
• 21Rousseau’s Social Contract, which appeared in 1762, was actually meant to be a theoretical commentary on the political situation in his hometown of Geneva, then an independent city state of less than 30,000 inhabitants ruled, in effect, by a tiny hereditary oligarchy of the heads of Geneva’s leading aristocratic families in control of the Small Council and the Council of the Two Hundred. Rousseau’s appeal to the “people” and “popular sovereignty” was intended as an attack on this oligarchy, but by no means as a defense of direct democracy and universal political participation as it is nowadays understood. Rather, what Rousseau had in mind when he wrote in support of the “sovereign people” were merely the members of Geneva’s other political body, the Grand Council, which was made up of some 1,500 members and included besides Geneva’s upper aristocratic crust also its lower hereditary aristocracy.
• 22Fortunately, despite the relentless propaganda spread by government funded and controlled school teachers—such as “democracy means that we all rule our­selves”—as well as by celebrated Nobel laureates such as James Buchanan and his “public choice” school of economics—such as “governments are voluntary institu­tions just as firms” (James M. Buchanan and Gordon Tullock, The Calculus of Consent [Ann Arbor: University of Michigan Press, 1962], p. 19)—there is still enough com­mon sense left,both in academia as well as among the general public, to find a sympa­thetic ear for such criticisms. As for academia, an economist as prominent as Joseph A. Schumpeter would note regarding views such as Buchanan’s that “the theory which construes taxes on the analogy of club dues or the purchase of the service of, say, a doctor only proves how far removed this part of the social sciences is from scientific habits of minds” Joseph A. Schumpeter, Capitalism, Socialism, and Democracy (New York: Harper, 1942), p.198). And as far as the general public is concerned, one can find consolation in the remarks of the great American journalist and writer H. L. Mencken, who wrote:
  The average man, whatever his errors otherwise, at least sees clearly that government is something lying outside him and outside the generality of his fellow men—that it is a separate, independent, and hostile power, only partly under his control, and capable of doing him great harm....Is it a fact of no significance that robbing the government is everywhere regarded a crime of less magnitude than robbing an individual, or even a corporation? When a private citizen is robbed, a worthy man is deprived of the fruits of his industry and thrift; when the government is robbed, the worst that happens is that certain rogues and loafers have less money to play with than they had before. The notion that they had earned that money is never entertained; to most sensible men it would seem ludicrous. They are simply rascals who, by accident of law, have a somewhat dubious right to a share in the earnings of their fellow men. When that share is diminished by private enterprise the business is, on the whole, far more noble than not.” (A Mencken Chrestomathy [New York: Vintage Books, 1949], pp. 146–47; see also H. L. Mencken, Notes on Democracy [New York: Knopf, 1926].)
• 23See on this Hans-Hermann Hoppe, A Theory of Socialism and Capitalism (Boston: Kluwer, 1989); idem, “Desocialization in a United Germany,” Review of Austrian Economics 5, no. 2 (1991); Murray N. Rothbard, “The End of Socialism and the Calcu­lation Debate Revisited,” in idem, The Logic of Action One (Cheltenham, U.K.: Ed­ward Elgar, 1997); idem, “How and How Not to Desocialize,” Review of Austrian Economics 6, no. 1 (1992).
• 24See on this Rothbard, The Ethics of Liberty; Hans-Hermann Hoppe, The Economics and Ethics of Private Property (Boston: Kluwer, 1993) esp. part 2; also Anthony de Jasay, Choice, Contract, Consent: A Restatement of Liberalism (London: Institute of Economic Affairs, 1991).
• 25See on this also Murray N. Rothbard, Power and Market, pp. 189ff.
• 26On the law and economics of secession see Secession, State and Liberty, David Gordon, ed. (New Brunswick, N.J.: Transaction Publishers, 1998), with essays by Donald W. Livingston, Stephen Yates, Scott Boykin, Murray N. Rothbard, Clyde N. Wilson, Joseph R. Stromberg, Thomas DiLorenzo, James Ostrowski, Hans-Her­mann Hoppe, Pierre Desrochers and Eric Duhaime, and Bruce L. Benson; also Hans-Hermann Hoppe, “The Western State as a Paradigm: Learning From History,” Politics and Regimes: Religion and Public Life 30 (1997); Robert W. McGee, “Secession Reconsidered,” Journal of Libertarian Studies 11, no.1(1994).