KOL154 | “The Social Theory of Hoppe: Lecture 2: Types of Socialism and the Origin of the State”

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Kinsella on Liberty Podcast, Episode 154.

This is the second of 6 lectures of my 2011 Mises Academy course “The Social Theory of Hoppe.” I’ll release the remaining lectures here in the podcast feed in upcoming days.

The slides for this lecture are appended below; links for“suggested readings” for the course are included in the podcast post for the first lecture, episode 153.

Transcript below.

LECTURE 2: TYPES OF SOCIALISM AND THE ORIGIN OF THE STATE

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Slides

TRANSCRIPT

The Social Theory of Hoppe, Lecture 2: Types of Socialism and the Origin of the State

Stephan Kinsella

Mises Academy, July 18, 2011

00:00:00

STEPHAN KINSELLA: Can you guys hear me okay?  Video and slide showing?  Hello?  Test, test.  Okay, hey, good evening, everyone.  It’s 6 p.m. central time US, later for some of you I know.  So let’s get started.  If there’s any initial questions about last week’s lecture, which I’ll go over some of in a little bit, I’ll be happy to take them now.  But tonight, what I would like to concentrate on, I’ll catch up on some of the things I didn’t cover last time and talk about Hoppe’s views on types of socialism and the origin of the state.  And I don’t know if I’ll have time to get to de-socialization.  So, by the way, I posted last week a couple of funny things to the forums about “Drop It Like It’s Hoppe,” a sort of rap thing by a friend of mine.  And also, a Facts About Hoppe, which I thought were amusing, so hope people enjoyed that.

00:01:02

So let’s go on here.  So quick review, last class we talked about basically Hoppe’s place in the Austrian and liberal sort of literature and scheme, his influences, his style, his background, his basic orientation.  And we talked about basic fundamental property-based and human-action-based, praxeology-based foundational concepts and principles, which run through most of his work, various implications of the human action axiom like conflict and scarcity, choice and cost, and profit and loss, and ends and means and causality, and the sort of methodological dualistic approach of Mises, which basically is looking at the causal world with the scientific method approach and more empirical approach, that is paucity, physical laws, and then trying to test those laws to see if you can falsify your hypothesis, which is the sort of standard way most people think of science.

00:02:14

But the Austrian view is that’s one type of science.  Another type of science is the social sciences, which are focused on – can anyone hear me, or is it just Rick that’s having a problem?  Okay, so I’ll keep going.  Methodological dualism, which looks at the causal world in one sense and which, in the case of humans, would be human behavior, just analyzing what motions human bodies go through, or trying to understand the human ends and means and purposes – excuse me – which is the teleological realm.  And from that realm, we know certain things a priori.  We know that humans have ends or purposes.  They employ means.  There’s opportunity cost.  They have choice.  There’s a presupposition of causality.

00:03:09

If you didn’t presuppose causality, you couldn’t act because action employs means, which are scarce means in the world, which are causally efficacious at achieving your ends, which are believed to be.  So an operative presupposition of action would be causality as well.  So these are the a priori things that come from this side of dualism.  Then we talked about different property-related concepts like contract, aggression, capitalism, socialism, even the state, which are all defined in terms of this fundamental concept of property.

00:03:43

00:03:46

I’m going to go to slide three.  So today we’re going to continue the discussion of property, talk about how the state arises and what its definition is, and then talk about different types of socialism or statism.  And if we have time, we’ll get to de-socialization, which I doubt we will actually, but that’s okay.  We can cover that next time.  The readings would be chapters three, four, and five and, to some degree, six of TSC, Theory of Socialism and Capitalism, also Hoppe’s article “Banking, Nation States, and International Politics,” which is chapter three of his EEPP book, and finally, “De-socialization in a United Germany,” which we may not get to today.

00:04:33

Okay, so let me just make one note.  I don’t know if I made this clear enough last time about the concept of property.  Many of you may have noticed that this word is used a little bit carelessly by a lot of people, libertarians and others.  It’s used sometimes to refer to the scarce resource itself.  Like you’ll say my car is my property.  So they use the word property to refer to the thing that is owned.  But technically it’s more of a relationship or a denotation of the ownership right that’s a legally respected right.

00:05:14

Now, legally doesn’t mean state law.  It could mean private law, but basically some kind of institutionalized, legally recognized relationship, that is, a right to control a given resource.  So I think to be careful, we need to think most of the time of property as the ownership right in a resource, not the resource that is owned.  And this usage sort of goes back to the traditional usage of the word property, which has been used for hundreds of years in liberal thought, in classical liberal thought.

00:05:52

Richard Overton in 1646 put it this way, talking about self-ownership: “To every individual in nature, is given an individual property by nature, not to be invaded or usurped; for everyone as he is himself, so he hath a self propriety, else he not be himself.”  So you see the propriety is sort of like a proprietorship or ownership over yourself.  It’s not yourself.  It’s the ownership over yourself.

00:06:20

And John Locke in 1690 in his Second Treatise of Government has this classic formulation.  Though the Earth, and all inferior creatures be common to all men, yet every man has a property in his own person, and nobody has any right to it but himself.  So we need to think of property as the relationship between an actor or an agent, that is, basically a human being, and some scarce resource, including his own body, which is also a scarce resource.  So property answers the question who has the right to control this resource.  It’s not who has the actual control of the resource.  Actual control can be thought of as mere possession or – so think of Crusoe on a desert island.

00:07:07

He would actually have control of resources that he employs as means in his actions, but he really wouldn’t have ownership because he wouldn’t have any legal right, because a legal right is something that other people can respect.  So the legal right is more of a social concept, which is compatible, by the with way, with Ayn Rand’s view of rights as social sort of devices.

00:07:32

Now, there’s a really good definition by A.N. Yiannopoulus.  He is one of the world’s leading civil law scholars.  He’s in Louisiana.  The civil law is one of the two great legal systems in the world, the common law, which is in England and many of the former commonwealth or former commonwealth countries like most of the US, most of Canada, etc.  And then the other great legal system is that in the continent, so it’s sometimes called the continental system in Europe and also in Louisiana in America for historical reasons and in Quebec in Canada and Scotland to a degree actually, in England.  That’s called the civil law or code-based systems.

00:08:20

00:08:24

And Yiannopoulos – now, he’s not a libertarian, but it’s striking how compatible his analysis is with the Austrian libertarian way of looking at property.  As he defines it, his treatise, which actually I’ll show you.  I love this.  This is [indiscernible_00:08:44].  It’s the civil law theories from Louisiana, property, fantastic, very expensive books, but they’re great.  So this is this book here, such great works of scholarship.  In any case, he defines it as I have it on the page here.  I won’t read the whole thing, but basically I’ll read part of it.  Property is the exclusive right to control an economic good.

00:09:04

It’s the concept that refers to the rights and obligations that have to do with the relations of man with respect to things of value, and he even goes into here about scarcity.  He says that some things are needed, and because of the demand on them, they become scarce, and then laws help govern the use of these things.  And then he says property rights are a direct and immediate authority over a thing.

00:09:28

Now, authority is sort of a loaded normative term, which means a legally recognized authority or right to control.  He has another nice, compact expression at the bottom of the page here, on page five slide five.  Ownership is the – I’m sorry.  Possession – ownership is the right to control, or you can think of the right to possess by it where a mere possession is the factual authority that someone has over a thing.  So even a thief would have temporary possession over a car he stole, for example, but he wouldn’t have the right to control it.  He would just have actual or the factual authority but not the legally recognized authority.  So that’s how we need to think of property, and this is how Hans Hoppe thinks about it throughout his work.

00:10:18

Now, let’s continue with what we were talking about last time about homesteading.  So homesteading, or sometimes called original appropriation, would be assigning ownership.  Hold on a second.  Ethan, would you get that for me?  It’s right there behind you.  Assigning ownership to something that was previously unowned, a scarce resource that was unowned.  Hold on a second.  Okay, based upon a certain link, an objective link between the owner and the resource, so that is what homesteading is in the Lockian sense and is sort of reformulated by Hoppian and Misesian and Rothbardian terms.

00:11:10

Now, this intersubjectively ascertainable language is more of a Kantian kind of language.  Objective is how we would describe it, so he uses those sort of synonyms as you can see here.  So in Hoppe’s terminology, in Hoppe’s conceptual framework, any assignment of ownership to an unowned resource other than by this objective link, that is, by mixing your labor or embordering it, would be basically the equivalent of just asserting by verbal decree that you own it.

00:11:44

The problem with this is, this is just a subjective opinion.  It’s something anyone can do.  Any number of people can use this at the same time, and it doesn’t suffice to establish any kind of link that’s a unique link between the person claiming the ownership and the property.  So it doesn’t serve the function of property, which is to assign an owner to this resource so that conflict can be avoided, so that the resource can be used productively and peacefully and as part of an economy in a society.

00:12:14

So as Hoppe looks at it is to homestead something is to emborder.  That’s what you can think of it as embordering, to produce border lines.  So if there’s any empty field, you could build a house on it or put a farm on it or put a fence around it.  So you can put a border up that others can observe in some kind of way.  Possessing an apple would be embordering it, showing that you own it and what the limits of your ownership are by the fact of possession for example.  So there are different ways of embordering things or homesteading them based upon the nature of the good, the nature of the use to which the human will put it as a means to action.

00:12:55

00:12:59

Let’s go on here.  Now, I mentioned earlier there are several fundamental concepts, and some of them imply other concepts that are very fundamental as well.  Scarcity is sometimes used by people in a sloppier way to mean things that are not very common, like not very abundant, like if there is some kind of disease among chickens and so we have fewer eggs being produced, you could say eggs are getting more scarce.  But that’s more of a colloquial, not a rigorous, economic concept of scarcity.  Scarcity does not mean merely nonabundant.

00:13:41

It means that the particular object is a scarce object or what economists call rivalrous.  It means there can be rivalry over it.  What this means is only one user can use this good at a given time, and if two or more people try to use it, they would have to have physical conflict over it.  So you can actually think of a scarce good as something that is conflictable, something that is possible to have conflict over, something that cannot be used simultaneously by more than one person at the same time as a means of action.  So you have to think of scarcity meaning this, and this is crucial to Hoppe’s entire political framework and his economics.

00:14:28

And conflict, what he means is physical violent interaction and strife where two or more actors want to employ the same means or where they’re attempting to achieve or use the same end thing, which is basically a means of action.  But anyway, it’s a scarce resource.  So what is conflicting is actions.  It’s not desires.  It’s not interests.  It’s actions that conflict.  Actions always employ scarce means, and when two or more actors seek to use the same scarce good at the same time, it’s not possible.  That is where the conflict is.

00:15:06

So, for example, people often use overly metaphorical or sloppy language, and they’ll say something like people fight over religion.  But technically that’s actually not true.  People never fight over religion.  Religious differences might be the motivation for the action.  They might be the reason why you clash, but what you’re clashing over is always necessarily scarce resources including land or bodies or the property owned by people, like their money, whatever.  So if one religious group invades another to convert them to their religion, they’re actually physically – using physical spears and axes and bows or guns or whatever against the land and property and bodies of the people that disagree with them.

00:16:02

It’s always a clash over scarce resources whereas the dispute’s motivation could be a religious difference, but that’s not what the fight is actually over.  It’s always physical means being used against physical scarce material and goods.  Imagine if everyone in the world were just some kind of intangible ghosts and can pass through each other and couldn’t actually affect each other or harm each other.  There would be no possibility of conflict or disagreement, and there would be no need for the concept of property.

00:16:30

So again, always keep in mind about the Misesian concept of action as action is something that employs means, which are scarce resources that are causally efficacious at achieving a given end.  And again, you can see that by viewing human action this way, all actions imply choice.  Now, this doesn’t mean that there is actually free will in some kind of ultimate sense.  In fact, the question is really irrelevant.  If you view another human being and try to understand what they’re doing in terms of human action, that is, teleologically, that is, you understand them the way you understand yourself as an actor, having choice and values and preferences and goals and employ means to achieve ends, then you are viewing them as actors, and you are understanding what they do as action and teleologically.  You’re not viewing them as some kind of deterministic or mechanized cloud of subatomic particles following the four laws of physics.  Theoretically you could according to Mises and Hoppe

00:17:40

So this is an interesting comment here, which goes into an issue that’s very controversial with a lot of people.  It goes to religion.  It goes to philosophy.  It goes to the issue of free will and determinism.  And in my view, it’s not characterized this way by Hoppe or by Mises, but I believe the right way to characterize what they are saying is a type of compatibilism, which I actually agree with.  Compatibilism is the view that, in a sense, both determinism and free will are true.  And if you have a dualist perspective of human action, I think it helps to explain that because what it means is when you view people as human actors, you’re necessarily presupposing and understanding what they’re doing as if they have choice.  So you can’t really say they don’t have choice when you’re looking at them as actors.

00:18:36

If you look at them as mechanistic meat robots basically, then you’re not looking at them as actors.  You’re looking at their behavior, not their action, and that would be the causal and possibly deterministic realm.  So Hoppe says in Economic Science and the Austrian Method, one of his epistemological works: No scientific advance could ever alter the fact that one must regard one’s knowledge and actions as unpredictable on the basis of constantly operating causes.

00:19:06

You might hold this conception of freedom to be an illusion, and one might well be correct from the point of view of a scientist with cognitive powers substantially superior to any human intelligence or from the point of view of God.  But we are not God, and if our freedom is illusory from his standpoint, and our actions follow a predictable path, for us this is a necessary and unavoidable illusion.  So, in other words, it might be an illusion.  Hoppe’s not really taking a stand, but what he’s saying is you cannot help but regard action as being uncaused or as being free, volitional.  That’s free will, even if our bodies really follow a predetermined path as could be seen by some super intelligence outside of our universe or whatever.  He’s basically saying that, to me, this is a type of compatibilism because he’s saying it’s possible for both to be true.

[Update: for more on Hoppe’s writing related to this issue, see, e.g.: p. 292 and 301–302 of EEPP:

00:20:02

In the causal realm, we might be caused and determined.  Therefore, in the teleological realm, we view our actions as being explained in the human action framework, which necessarily views our actions as being volitional or making choices.  Now Mises says something similar in Human Action.  We do not assert that man is free in choosing and acting.  We merely establish the fact that he chooses and acts.  Now, what does he mean by you can choose but it’s not free?

00:20:38

I think what he’s saying is you don’t have to take this monistic freewill approach and say that we’re completely free.  What he’s saying is we choose, and choice has a meaning.  It means that the human actor evaluates more than one possible act he could perform.  He makes a choice and thereby demonstrates the one that he prefers.  Whether it’s determined or not is really not necessary to answer.

00:21:04

So Mises goes on.  Some philosophers are preparing to explode the notion of man’s will as an illusion and self-deception because we must follow the laws of causality.  He says something similar to what Hoppe said.  They may be right or wrong from the point of the prime mover, which is God or the cause of itself.  But from the human point of view, action is the ultimate thing.  We don’t assert man is free in choosing and acting.

00:21:31

We merely establish the fact that he chooses and acts and that we are at a loss to use the methods of the natural sciences for answering the question why he acts this way and not otherwise.  So they sort of regard human choice as a fundamental that you can’t challenge, and whether or not it can be explained or somehow compatible with the apparent determinism that comes from a scientific view of the causal world he doesn’t really care about.  It really doesn’t matter, and I tend to agree with that as well.

00:22:00

Now, and the bottom I’ve already gone over, how dualism explains how you can approach things this way.  Now, again, the various fundamental concepts—cost, profit, ends, means, and causality—are all implied in action.  What does that mean?  Well, every action is aimed at a certain goal you’re trying to accomplish.  That’s your end.  And you’re trying to alleviate some kind of uneasiness that you feel or make the world result in a state of affairs that’s different than it otherwise would and that you evidently prefer.  So if that happens, if you succeed in what you want to happen, then you achieve what we call a profit.

00:22:43

Now, profit is not always monetary.  In general terms, it’s a psychic profit.  That means you’re better off now, or at least you’re better off.  You assume that you will be better off when you perform the action.  That is, your ex ante perspective is that the action, if successful, if your predictions are right will make you better off.  That’s the profit.  Now, typically we speak of monetary profit.  Now, that’s in an advanced economy having money in a market economy, or as we say, a catallactic economy.  That would be catallactic profit.  That’s sort of a type of or a subset of profit.

00:23:21

Now, all action has to employ some kind of scarce means, that is, some kind of means that can help you achieve the end you want.  So you can see how this way of looking at action, which is really undeniable because the act of questioning is an action itself, looking at action with this structure help you see that these other concepts that are packed into it or built into it are themselves also undeniable.  Now, one word that Mises and Hoppe use sometimes is apodictic, A-P-O-D-I-C-T-I-C, apodictic or apodictic, which just means basically ineluctable or undeniable, something that is so fundamental and basic that you presuppose it in the very act of questioning it, so to deny it would be contradictory.

00:24:07

Okay, now, think of it this way.  This is an important thing to get, which I mean I don’t think I understood this, this clearly until a few years ago actually because it’s never made explicit.  But it’s very implicit in the work of Hoppe and also in Rothbard and Mises.  So you can think of these fundamental concepts working together this way.  All have to do with property manipulation and ownership.  Homesteading or appropriation is how we create new property titles, and we do that by embordering.

00:24:40

And you could call that a productive act because you’re creating something subjectively into the world of commerce and human value that wasn’t there before, in a way – before something is unowned, in a way it doesn’t really exist.  It’s brought into human existence by the act of homesteading.  So homesteading is the only way to create a new property title.  Contract is the owner of property using his dominion over that thing to transfer the ownership of it, so contract transfers property, titles.

00:25:15

And we can think of that as a general concept that includes not only exchanges or even unilateral commercial transfers but gifts and bequeaths or bequests at one’s death by a will, etc.  Basically, it’s a transfer of ownership from a current owner to a new owner, however you do it.  Now, production transforms owned goods, and we’ll get to this in a minute, but a really important thing to recognize here, and this comes into the intellectual property debate, it creates wealth and value, but it doesn’t create property.

00:25:52

So production means you own something and you work on it using your intellect, using your ideas about causality, using your ideas about what ends are possible what things you can do with it, using your information and ideas about what possible means you can employ to change this or what shapes you could rearrange it into.  Basically, you rearrange it into a more valuable configuration.  So these are the fundamental property concepts: homesteading, contract, and production.

00:26:22

00:26:26

Okay, so the way Hoppe looks at it and the way I agree is the proper way is to view property rights – first of all, human rights – the only human rights are property rights.  Or put it this way.  All human rights are property rights because rights are always about who owns what, who gets to do what.  And that’s only a question that pertains to scarce goods because anything else can’t be conflicted over, and there’s no social problem to solve there.  There’s no need for a rule.  There’s no need for a norm.  There’s no need for a right.  There’s no need for a law.  It makes no sense.  So all human rights are property rights, and property rights are necessarily only in scarce resources.  This is why information is not ownable, and this is why we have to be careful.

00:27:12

I’ve already mentioned a few times how they’re a certain sloppiness with concepts and words, which is okay usually, but you have to be careful not to let it lead you to equivocation on accident or to overuse of metaphors.  So, for example, Rothbard explains that all rights are property rights, and the things we talk about like the freedom of speech, freedom of the press are not really independent rights.  They’re just consequences of property rights.  Okay, so as you can see from the previous breakdown on page 11.

00:27:49

Let me go back – from homesteading, contract, and production, that – back on page 12 now – that creation is not an independent source of ownership.  And this is a common view even among Rand who contradicted this somewhat when she’s talked about intellectual property.  But Mises, Rothbard, and Hoppe and even Rand were explicit about this.  What they view is wealth is created by rearranging already owned factors of production or scarce resources.

00:28:19

I have a blog post that discusses this in detail, which I’ve linked for here on this page, and I’ll quote some of it on the following pages.  So let’s take Hoppe first because he’s the subject of the course even though he came later than the others I’ll quote.  Hoppe writes: One can acquire and increase wealth either through homesteading, production and contractual exchange, or by expropriating and exploiting homesteaders, producers, or contractual exchangers.  Now, what he’s doing there is distinguishing between peaceful and violent ways of acquiring wealth.

00:28:53

But what I want to focus on here is the first half of that sentence.  You can increase wealth by homesteading.  Now, that’s true.  If you acquire an unowned resource and make it your own, now you have something that’s valuable to you that you didn’t have before.  If you have a contractual exchange, by definition, both parties to an exchange, let’s say two people exchange a chicken for a pig.  Each one demonstrates by his action that he values the things he receives more than the thing he gave up.

00:29:25

It’s actually not what conventional economists would say.  It’s an even exchange, that the value of the pig is equal to the value of the chicken.  It’s actually not true.  The guy that receives the chicken values that chicken more than the pig he gave up.  The guy that receives the pig, receives the pig more than the chicken he gave up to acquire it.  So each one is better off after the exchange, which is why every contractual exchange actually increases the sum total of wealth in society, not by a cardinal number, not that you can measure utility, but you know that both parties are better off after.

00:30:02

Lucas says this screws up the model so don’t say this.  You’re right, and in fact, this is a presupposition of income tax law.  The way it operates, they quite often will tax you for the value they say of something, by its monetary value.  But this is actually unscientific because if I pay $10,000 for a car or someone gives me a car that someone else would pay $10,000 for and the IRS will tax me on $10,000 worth of value, well, actually the car may be worth more than $10,000 to me because I paid $10,000 for it, so I value the car more than the $10,000.  So you could see that these – the state actually requires unscientific economic principles.

00:30:48

Okay, but now, I left out production.  So production, by production, Hoppe means rearranging something you already own to make it more valuable.  That is an increase in wealth.  So let me go onto the next page and let you see what Rothbard and others said about it.  So even Ayn Rand wrote this.  This is a fascinating quote, which I don’t think she quite realized the implications of it when it comes to patents and copyrights or intellectual property, which she supported.  She acknowledges here very powerfully: The power to rearrange the combinations of the natural elements is the only creative power man possesses.  Creation does not mean the power to bring something into existence out of nothing.  Creation means the power to bring into existence an arrangement of natural elements that hadn’t existed before.

00:31:43

So you can see what this implies is you own some property, and then you rearrange it to make it more valuable.  Apple takes plastic and metal and – excuse me – silicon and turns it into an iPod.  If you put it into the blender and see if it will blend, then you turn it back into a useless hunk of matter.  But you have to own this matter to rearrange it into something more valuable.  Now, the Randians will say you’re creating values, and therefore you own these values, but of course you can see this as double counting or it’s unnecessary.  You don’t need to say you own the value that you create.  You don’t need to own the product that you create to own the iPod that you fashioned because you had to own the raw factors first that went into it.  And you own them because you already own the property that goes into it.

00:32:34

Rothbard says something similar.  Man finds himself in a certain situation, and you decide to change the situation to achieve your ends, but you can only work with the numerous elements that he finds in the environment by rearranging them to bring about the satisfaction of his ends.  Now, some of the objectivists and Randians have accused Rothbard of plagiarizing from Rand because he used to be in her orbit.

00:32:58

But let me show you what Mises said earlier than both of them about the nature of production.  He says there’s a naïve view that regards it as bringing into being of matter that didn’t exist before as creation.  But then he says this is inadequate.  The role played by man consists solely of combining his personal forces with those of nature so that your cooperation leads to a particular desired arrangement of material.  No human act of production amounts to more than altering the position of things in space and leaving the rest to nature.  And that part means relying upon causal laws that will get you what you want, but basically, they’re all talking about the same thing.

00:33:41

Okay, now, let’s switch to the origin of the state, the nature of the state, and then we can talk about different types of socialism.

00:33:56

So this is Hoppe’s – a quote from Hoppe.  Let me begin with a definition of the state.  Now, this is one characteristic of Hans Hoppe which I have always admired is his ability to have very, concise, and essentialist definitions.  He doesn’t leave a lot of things to implication like a lot of writers do, and making it explicit helps to clarify just what you’re arguing.  And you’ll see this also with Rothbard.  Rothbard is a very clear writer.  You can understand what he’s saying.  If you try to read a lot of political theorists of other schools, even the Hayekian school sometimes, but especially the leftists and the Marxists and others, they are awful, very vague and slippery, and they change definitions from minute to minute.  So this is an admirable quality.  So his definition of the state is really good here.

00:34:48

What must an agent be able to do to qualify as the state?  He must be able to insist that all conflicts – now remember, this goes back to his view of conflict as conflicts over the use of a conflictable or rivalrous or scarce means.  All conflicts among the inhabitants in a given territory must be brought to him for ultimate decision-making for his final review.  In particular, this agent must be able to insist that all conflicts involving himself be adjudicated by him or his agent.

00:35:20

Now, implied in this power to exclude all others from acting as ultimate judge, as the second defining characteristic of a state, is the agent’s power to tax, that is, to unilaterally determine the price that justice seekers must pay for his services.  Now, you can see that this actually applies to any state, even a minarchy, and Hans says in other places – he combines the power to tax with the power to have a monopolistic decision-making power in a given territory.  And these are actually sort of both sides of the same coin.  And in fact, either one is sufficient for the other.

00:35:58

Imagine an agency that didn’t have a monopolistic right to outlaw competition in adjudication services but it has the power to tax.  Well, if it has the power to tax, then it can outcompete all other agencies because it can take money from the people and use it to subsidize its services, similar to the way that public or state schools, government schools in, say, the US are hard for private schools to compete with, and that’s why private schools are a minority.  Conversely, if you didn’t have the power to tax but you had the power to outlaw competition, then the agency could simply charge a monopoly price for its services, which people will be forced to use because you’re preventing them from using competing services.  So that’s the same as a tax.  So basically, taxing implies monopoly, and monopoly implies taxes.

00:36:55

00:36:58

Edward asks, what about the mafia and the black-market arbitration that escapes the state’s jurisdiction?  I’m not sure what your question is about it.  If you want to elaborate, you can, and I would say the state doesn’t have to have 100% complete control to exist.  That’s obvious.  Even now, there’s a black market, but the state just has to have enough to survive and prosper and stay around.

00:37:20

Now, one difference between – no, nothing is perfect.  It’s just sufficient to be an institution that can survive.  The mafia is very similar to the state.  The main difference is it’s not seen as legitimate.  In fact, that’s the primary difference.  It’s not seen as legitimate by the people that it persecutes.  It also basically taxes people and outlaws competition with violence to some degree.  But it’s not seen as legitimate, so it’s always the extent to what it can get away with before people start fighting back.  It’s more limited.

00:38:00

The state deludes people into thinking primarily by democracy and the right to vote and by employing them and giving them benefits it makes people – I think – actually Jock says, the state is like Stockholm syndrome.  I actually think that’s a good analogy to explain the mentality of people that believe the state is legitimate.  They are basically victimized by the state, but they believe the state’s lies that they need the state to survive and to have a good society.

00:38:33

Lucas mentions private arbitration.  Yeah, but private arbitration that’s open and legal operates under the sort of umbrella of state control and only with the state’s permission.  In fact, if you have an arbitration and there’s a determination and you have your arbitral award and you want to enforce it, if the loser refuses to comply, then what you have to do is actually take that to a state court for ultimate enforcement.  And the state actually will not enforce arbitral awards that it deems to be contrary to public policy.

00:39:12

That is, if you try to escape – let’s say you had a – you made your employees sign an arbitration agreement, the rules of which or the rules of the arbitration agreement or the agency that you agree to hear it don’t permit the employees to argue based upon environmental protection laws or human rights protection laws or minimum wage or pro-union legislation.  Well, then the state’s courts simply wouldn’t enforce that.  So it’s all basically puppets of the state or operating under the state’s wings or control.

00:39:49

So the conclusion to this quote by Hoppe – excuse me – based on this definition of the state, it is easy to understand why a desire to control a state might exist.  For whoever is a monopolist of final arbitration within a given territory can make laws, and whoever can legislate can tax, and this is enviable position, and I have a couple links here.  I have a link to Hoppe’s article, which this quote comes from, and this thinking runs through a lot of his work, and also a blog post by me, which quotes this and elaborates on it a little bit.

00:40:22

Okay, now, how does the state arise, that is, something that’s different than a mafia that can only get away with so much?  So Hans has a fantastic article, which is now a chapter in the expanded edition of his Economics and Ethics of Private Property, chapter three, “Banking, Nation States, and International Politics.”  I can’t go into that whole article here, but the fundamental thing to get from it for this purpose here is he goes into a systematic analysis of exactly how the state sort of insidiously takes control of certain institutional features of society to slowly have its tentacles in everything and to basically take control.

00:41:06

So, as he argues, the state takes over and corrupts many institutions and aspects of life such as roads and transportation.  I mean all the roads in society are primarily state-owned, which leads, by the way, in Hans’ view, which we’ll discuss in another lecture, to forced integration because, for example, the roads the government puts up are free to use.  It makes it easy for citizen A to travel across the country, and the state has antidiscrimination laws so that if the road takes you to a neighborhood that could be private and might have a restriction against people that are culturally different or whatever, but now they can’t enforce this, and so it’s easy for people to get there.

00:41:50

So it’s a way of the state forcing integration on people, which has implications for Hoppe’s immigration views.  Communications—as soon as the radio waves started being privatized in the courts, in the common law in the early part of the 19 – I guess 1900s – sorry – yeah, 1900s, the FCC was created and basically appropriated it and monopolized it.  I’m talking about the US here.  And now they’re trying of course to regulate the internet and communications because communications is a – and of course there’s extreme censorship in more authoritarian regimes, what people are permitted to read, what people are permitted to say, who they’re permitted to talk to, freedom of the press, freedom of speech, of course law and justice, the courts, the police, healthcare now.  Money is another extremely important one.  The government takes over money.  These are all private institutions and features that would arise.

00:42:51

But the state insidiously starts taking over, the financial and banking sector of course and money and education, another extremely important one.  That’s explicitly for propagandistic purposes.  So when the government takes over so many things like this, it starts getting its hooks into the entire fabric of society.

00:43:12

And then finally the big one—slide 19 now—would be democracy itself.  So we have a system of state education, which makes people sort of believe the myths of democracy, and we are the state.  And then the state redistributes state power itself, makes everyone a shareholder in the state in a sense, a stakeholder in the state.  My mom might be taking social security payments.  Someone else might be on welfare.  Someone else might have a job at the local prison.  Someone else may be manufacturing munitions that – in the defense industry that the Army – the military buys.  Someone else may be going to a subsidized school or college.  And so everyone starts thinking of themselves as part of the state and dependent on the state and beneficiaries of the state.  And they have a stake by their voting and by their lobbying to try to use the state to take from others to get for themselves, and that helps reduce resistance to state power.

00:44:25

So when people view themselves as owners of the state or we are the state, when you can vote and you believe the myth that your vote matters and you can control things when you’re dependent on the state for your survival, then you’re not going to resist the state expansion of power as much as you would if it was, say, a monarchy or even a despot or a mafia where the distinction between the ruler and the ruled is clear.  And the fact of the violence and basically the theft that this ruler is committing is visible and evident.  And you might put up with a king as long as he provides some benefits to you.  He’s kind of harsh.  He taxes you.  You grudgingly pay it, but at least he sort of helps keep foreign armies away and does some kind of justice.

00:45:15

So the role of these isolated states is that of state actors to be clear, but not in the modern democratic state.  Anyway, the point of this article, this chapter is to talk primarily about money and banking, so that’s why he concludes that with the monopolization of law and security production, traffic, communication, and education – oh, by the way, we can mention the TSA here of course and airplane traffic and transportation – excuse me – which the government regulates, as well as the democratization of state rule.  All features of the modern state have been identified but one: the monopolization of money and banking, and then he goes into talk about that.

00:45:58

And of course, you can see how horrible that is as well with our current recession and economic cycles, etc., which the state creates, and then the state comes in and rides into the rescue or uses this as an excuse to seize more power in emergency level or to print literally trillions of dollars of money and to hand it over to cronies of the state like Goldman Sachs, etc., GM, the airline industries.  And everyone just puts up with it because they believe the state’s lies that the state can protect us from this horrible disaster, which the state itself of course has caused.

00:46:39

00:46:43

Tito has a question.  Well, actually, you don’t have a question.  Okay, here it is.  Tito says, given Hoppe’s definition of the state, will we then presume that, rather than government per se, the state is more precisely a form of government?  We can’t accurately suggest that a monarchy is a monopolistic expropriator by its nature, and neither is democracy.  Both are governments.  The state is, by its nature, a monopolistic expropriator.  Well, okay, my view of this, and I think it’s compatible with Hoppe’s views, the word government of course is widely used by libertarians and others again in a sloppy fashion, sometimes as a synonym for the state and sometimes not as a synonym for the state.  Hans tends to use the word state, which I believe is more precise.

00:47:31

I would tend to think that the word government means – the best meaning of the word government is some kind of institutions of justice and law in a given society whether that’s a state government or whether it’s a private government.  So I would agree with you that, in a way, a state is a type of government.  It’s just a – it’s a bad type of government.  So I would agree with you on that, but that’s why we talk about the state because that’s a more clear definition.

00:47:59

00:48:04

And, by the way, you might notice this too.  So the – when the state takes all these – has all this control over our institutions, they gradually infiltrate our language and our concepts with what I call classificationism.  Basically, everything comes down to a state arbitrary classification.  Like they’ll say is that a marriage or is that not a marriage?  And if it is, then certain rules apply and certain don’t.  I mean there’s millions of – hundreds of these things of what an employee is, what – if you’re not an employee, then you’re not subject to certain rules, what money is, what it means to be practicing law or practicing medicine, what income is, what interstate commerce means, etc.  I have a blog post on this as well, which you can click on there.

00:48:48

And Hoppe’s view is the state is fundamentally based on a mistake by the populace.  That is, it rests upon societal consent because it’s always a small group parasitically leaching off society at large.  So it could not survive.  It doesn’t have enough physical might to survive if every – if 90% of society saw it as a mafia.  It couldn’t get away with what it gets away with.  So it’s – the only reason they exist is because people have a mistaken notion about its legitimacy.  And this is because of ideological propaganda, which again is accomplished because of its control over media, communication, and especially education and because of widespread economic illiteracy of the people.

00:49:39

Most people, I believe, are decent, and if they really understood the economic consequences of the law that they support, they would be much less willing to support statist and socialist policies and also because of the problem of vested versus diffuse interests, that is, special interest groups are motivated to lobby Congress, for example, to pass laws that help them.  And it only affects everyone else in society a small amount, and they don’t have an organized interest in countering it.  In this way, we get to a point of warring special interest groups and basically a system like we have now where everyone is trying to get theirs at the expense of everyone else.

00:50:17

00:50:23

By the way, I’m not much of a conspiracy theorist myself.  I think Hoppe is more sympathetic to them than I am.  And Rothbard was far more sympathetic, but he does have a good point here, Rothbard does, about – this goes back to the state ideology point.  He says that the state tries to poo-poo the idea of conspiracies, and the idea if you look at the bottom, this quote here, is that a conspiracy theory could unsettle the system by causing the public to doubt the state’s ideological propaganda.  So he’s saying that conspiracy theories are useful because they help people to distrust the state, and I think there’s something to that, but that doesn’t mean that they’re all correct.

00:51:04

00:51:13

Now, back to Hoppe’s essentialist definition of socialism.  Remember, he defined it as socialism has to be conceptualized as an institutionalized interference with or aggression against private property and private property claims.  Now, you’ll notice here that the standard definition of socialism talks about state control or collective control over the means of production.  But Hoppe looks at that as just one – he generalizes beyond that and says look, there’s nothing special normatively or politically about the means of production.  It’s just one type of useful property, but there’s lots of types of useful property.  They all serve as means to – means as part of action, scarce goods, scarce means that are part of action.

00:51:56

And so – and he also – the word institutionalized distinguishes it from private crime.  Now, he’s, of course, a libertarian opposed to private crime and views that as aggression.  But it’s just private aggression, not institutionalized.  Institutionalized would have to be some kind of regular, systematic, repeated, sustained interference or aggression committed by an institution, an agency in society that is seen as legitimate, and therefore, can impose these laws on people.  And capitalism correspondingly is defined as a social system based on explicit recognition of private property and a contractual, non-aggressive exchange between private property owners.  So he defines it this way, and some people objected to this because they want to maintain the word socialism to refer to basically communism or state control of the means of production.

00:52:51

But Hoppe’s essentialist definition allows him to sort of see common threads in things that are less than full-fledged or outright socialism or communism and see the common thread between them.  And basically, this goes back to his definition of the state.  Basically, in Hoppe’s terminology, the state, any state, even a minarchy, is necessarily and to the extent that it exists is socialistic, so that even a minarchy has to commit some kind of systematic aggression, which is socialistic.

00:53:25

And conversely, socialism is necessarily a state, so he basically looks at them, and that allows him to look at it as a spectrum, different types, blends, flavors of socialism, types of states that is, which have different effects on society because they’re different types of states, different types of socialism.  So this is why he says there must exist varying types and degrees of socialism and capitalism, that is, varying degrees to which property – private property rights are respected or ignored.  Societies are not simply capitalist or socialist.  Indeed, all existing societies are socialist to some extent.

00:54:09

Now, he doesn’t mean here that all societies have to be socialist to some extent.  What he means is in today’s world, because everywhere that there’s society, there’s a state, and then there’s socialism.  And he breaks it down into different types, and I’m only going to touch on some of his key analyses and features of these because once you start reading into this, you get the hang of it.  I mean he breaks it down into socialism Russian-style, which most people would call socialism or communism, socialism social-democratic-style, the socialism of conservativism, and the socialism of social engineering.  These are – excuse me – chapters three, four, five, and six of TSC.

00:54:53

So why don’t we do this?  Let’s talk – let’s continue on for another – a few more minutes before we have Q&A or before having a break and go into some of these so that we can get close to finishing today.  So first he talks about socialism Russian-style.  Now, there’s not too much surprising here.  It’s just that his framework allows him to first analyze the most pristine or paradigmatic type of socialism and analyze its effects.

00:55:27

A lot of these are common to libertarian and Austrian critics of socialism.  But basically, he first talks in the book around page 28 about how, if you have any type of institutionalized socialism, that is, redistribution of property rights, then this is going to have bad effects on society.  Even in the Garden of Eden it would result in reduced investment and also in non-productive personality types.  Basically, people would become more aggressive, and that’s because aggression would become more profitable.  And non-aggression is not as legally respected, and you can’t profit from it as much.

00:56:10

So he said even in the Garden of Eden, but now in this chapter, he’s talking about what he talks – what most people call socialism par excellence, that is, that kind of standard thing they think of as socialism, a Marxist sort of social system where the means of production, which means the scarce resources used to produce consumption goods, are nationalized or socialized, that is, controlled collectively instead of being owned privately by private property owners like capitalists.

00:56:39

And you notice here that he’s talking here about the means of production is a type of scarce resource or scarce good.  It’s a means of action, but it’s a subset of all scarce resources.  It’s the subset that is used to produce consumption goods, which are another scarce resource or scarce good.  Now, Hans’s essentialist definition, he would include both of those, the systematic aggression against both of those as a type of socialism.  But here we’re talking socialism par excellence or Russian-style, so it’s the typical type of socialism most people think about.  The type that the Democrats will laugh when they say it’s ridiculous to call Obamacare socialized medicine.

00:57:25

It’s ridiculous to call that socialism.  Now, in one sense they’re correct that it’s not really the state control of the means of production.  But it does amount to an institutionalized interference with private property rights, the taxes we need to pay for it, the regulations that tell people what to do or doctors, etc.  So it would have similar effects to – at least similar negative effects to standard socialism.

00:57:54

Anyway, Hoppe in this chapter analyzes many aspects of communism or this Russian-style socialism.  So for example, he looks at the economic effects, and he breaks it down into three primary effects, and one would be there would be a relative drop in the rate of investment and rate of capital formation.  And the reason is when you socialize goods, you favor the non-user and the non-producer, and the non-contractors of the means of production.  So you basically get what you subsidize, and this raises cost for users, producers, and contractors, so there’s fewer people acting in those roles.

00:58:30

00:58:34

That means there’s going to be less original appropriation of natural resources, less production and upkeep of the old factors, and less contracting.  And these are the ways that wealth is generated remember, so there’s less wealth.  Now, this is true.  This first effect he notes is true of all types of socialism.  Even in a minarchy you’re going to have this effect to some degree, maybe not as extreme or severe, but the same effect.  Now, a second effect is it’s going to result in a wasteful use of the means.  So that’s also a way of destroying wealth because when you use property for its most desired ends, then you have less wealth being produced.

00:59:16

00:59:20

To stay on track let’s skip over this.  You can – if you’ve read these chapters, you’ll see he goes into a lot of detail about the intricate analysis of the different ways these different types of socialism affect society.  So then number three, it causes relative impoverishment, a general drop in the standard of living by overutilizing the factors of production.  And the reason is, if you’re a caretaker of property, then you have a different incentive to maintain it and use it effectively that a private owner would.

00:59:51

This is sort of the tragedy of the commons to an extent, just a traditional incentive problem of socialism.  He also mentions lastly that socialism Russian-style has important changes in the character structure of society.  It changes people’s personality over time, and this is true.  It makes people less alert to opportunities for profit, less productive.  They don’t care as much about anticipating changes in consumer demand because they can’t do anything about it, or they can’t profit from it as much.  They don’t develop as many market strategies.

01:00:27

So people’s initiative declines.  Their work habits decline.  And then if the state has to reintroduce a little bit of capitalism because they’re just going – they’re becoming impoverished, it’s too late to get the people to change.  You’ve already ruined the whole character of a society.  And in this chapter – let’s go on to the next one, socialism social-democratic-style.   So as Hoppe argues, even if you have a moderate-market socialism, you still can’t prevent a relative impoverishment of the population if there’s socialized production to any extent.

01:01:17

So what he explains is that the failures of communism were too apparent, and it was too unpopular.  So a lot of these countries, even though they had the same egalitarian and anti-capitalist impulses, didn’t want to put central planning in place.  So they put a softer version, which is social-democratic-style, and one – there are two central features.

01:01:40

01:01:45

So unlike Marxist socialism, private ownership in the means of production is not outlawed.  It’s permitted except with some exceptions—except for education, traffic and communications, central banking, and the police and the courts.  And remember, in Hoppe’s “Banking and Nation States” piece we just went over, these are important ways the state gets its tentacles and control over society.  And the second thing is the owners of the means of production only own part of their income that they can acquire from using these means of production, and then part of it goes to the state like in the form of taxes or some other kind of controls.

01:02:20

And of course, this is going to have systematic effects too, similar to but not the same as but similar to Russian-style socialism.  There will be less production, more impoverishment, less wealth formation, more leisure.  People will value leisure more because it’s – productivity is relatively less rewarding, so they’re lazier, spend more time at leisure.  And then people also shift their activities to less productive activities or gray market or black-market activities or things that are not taxes or taxed relatively less.  So it distorts the structure of society that way as well.

01:03:02

Now, this – a really interesting shift is when – and most people would recognize that social democracy is sort of a soft type of socialism even though it’s not outright central control of the means of production.  But Hoppe, of course, shows that using the essentialist definition of aggression and statism that he has that, of course, every state is socialist to some degree, and conservative policies and conservative types of governments and regimes also are socialistic but in a different way.

01:03:34

So he starts off here with a fascinating overview of the history of feudalism which, by the way, is compatible with the left-libertarian, mutualist-type criticism that is common nowadays of existing property structures that came from feudalism or state favoritism in the past.  I mentioned – I don’t know if I mentioned earlier or in another lecture that Hoppe’s views on homesteading of easements is also compatible with the sort of left-libertarian criticism.  His idea that, if you have people in a community and they’re traveling to the river, but they haven’t really homesteaded the land, they might have homesteaded an easement, the right of way, over the land, and if someone then homesteads that land, they homestead it subject to the easement or right of way.

01:04:23

This is similar to some of the complaints a lot of left libertarians have, and the fact that this is built into Hoppe’s work shows I think that some of their concerns are already addressed by anarcho-capitalists like Hoppe.  So, for example, here he talks about the assignment of property rights to these feudal lords where they started acquiring all this property didn’t come from actual appropriation or contract.  They just were given a special privilege by the state or by the system, and then that allowed them, of course, to collect rents from the serfs and to have extra market power and to develop these feudal kingdoms.  And this is a type of socialism as well because it’s an institutionalized interference with private property rights.

01:05:16

Whose rights would it be interfering with?  It would be interfering with the rights of the people that were actually using the property, for example, the serfs.  Basically, it’s taking their property rights from them, and of course this is a different type of socialism than Russian-style or even social-democratic-style, but it’s also going to have negative effects.  Hoppe calls this aristocratic socialism.  Now, this is perfectly compatible with his other writings, which we’ll get to in another lecture, about the relative superiority of some kind of constitutional monarchy, traditional monarchy.

01:05:48

It doesn’t mean he’s a monarchist.  In fact, he’s not, and it doesn’t mean that to the extent these monarchies are feudalistic like this that they don’t have problem as well.  They do.  But you can still say one type of state is institutionally inferior or superior in different ways than other types.  And, as Hoppe notes, these conservative states tend to use price controls, regulations, and behavior controls, which are socialistic in Hoppe’s framework because they interfere with people’s use of their property or their bodies, which is a type of property.

01:06:26

01:06:30

Finally, I’ll pause here, and we’ll take a break.  But he also has a long chapter, and we won’t get into this too much because a lot of it has to do with his build-up to his methodology and his attack on positivism.  But he’s talking here about, in America and pragmatic, practical societies, which are not really that principled thinking but use a lot of the methods of the natural sciences, a lot of empiricism, influence from Karl Popper where we have more piecemeal social engineering which, by the way, is becoming more systematized.

01:07:04

But one policy here, social security for example – now these, of course, have similar effects to the socialist policies of the other types but different.  So why don’t we take a break here?  It’s 7 past the hour.  Let’s come back at 15 past the hour, and we will resume with a few more slides and then some Q&A.  I’ll be back shortly.  See you at 15 past.

01:07:31

01:07:34

[indiscernible_01:07:34] question about Hoppe’s arguing that government or really the state is not necessary for law and justice enforcement.  Yeah, he makes it explicitly in several places.  I think it’s in his book The Myth of National Defense or something like that.  He’s got a chapter or two in there on that, and he’s got one or two other pamphlets or articles about this, and I’m going to cover that in our subsequent lecture.  But try his book, The Myth of National Defense.

01:08:02

01:08:07

Let me go through a few more of my slides here.  I actually – so no, I’ve actually kind of finished what I wanted to go over here.  He’s got a nice article, which I’ll cover briefly next lecture on “De-Socialization in a United Germany.”  He also has an extended sort of discussion in the previous chapters we just discussed comparing East Germany and West Germany.  It’s showing how the difference between those two is striking.  It’s a great laboratory case showing the – how sort of this example bears out some of his predictions about his economic predictions about how socialism can affect a society, culturally, personality wise, spiritually, politically, and of course, in varied economic ways.

01:09:06

Now, what he does – you’ll note that Hans is an apriorist.  That is, he’s an Austrian in the Misesian tradition who believes in the use of deductive laws, that is, a priori laws.  What Mises does and what Hoppe does is they take a starting point, certain undeniable propositions like, for example, the action axiom or the a priori of action.  And they deduce certain facts from this that cannot be denied, and then they introduce certain contingent facts to make the analysis more tailored to what we have and more interesting.  But these introduced facts are usually a little bit less controversial, or they’re not controversial at all.

01:09:59

For example, the assumption is made that we don’t have a barter economy, that we have catallactic commercial, roughly free-market economy with money.  And if you assume that there’s money, then you can make other deductions based upon your basic, fundamental economic laws, and then that hold as long as the assumptions are true, that is, as long as there is money.  So this is a common technique of Mises and Hoppe.  And so what he does in his chapters analyzing the effects of socialism is he says, listen, I’m deducing all these effects, systematic effects, by basically pure reason, by deductive reason.

01:10:39

Now, he can’t say what the extent of the effects are.  He can say if you diminish property rights in this following way, then you can expect to see these types of consequences.  There’s a tendency.  He can’t say what the extent or magnitude is.  And what Austrians believe is that you don’t really – you can’t test or verify a priori laws, but you can illustrate them with historical examples.  So that’s what Hans is doing with the Germany and East Germany/West Germany analysis.  He’s saying that, look, my preceding analysis is – stands on its own as a deductive exercise with certain empirical assumptions.

01:11:24

But let’s take a look at the West Germany/East Germany case to illustrate it, not to test it fully but just to illustrate it and get an idea of the magnitude of some of these tendencies.  So he also has – like I say, we’ll talk in detail next time, and let me explain what we’re going to talk about in the next one.

01:11:43

We’ll talked about the de-socialization.  In the next class, we’re going to switch to ethics and Hoppe’s case about libertarian rights and argumentation ethics.  We may get into a little bit of more political matters as well, so that’s a reading assignment.  I’ll post it on the course page later today.  So we have plenty of time.  There were some questions which I didn’t get to earlier because I wasn’t – I didn’t stop for all of those.  So if I’ve missed any that you want to repeat here or refer me to, or if you have any other questions, I’ll be happy to discuss anything, or if anyone wants to discuss anything, go for it.

01:12:21

01:12:28

Tito Warren asks, what are my thoughts on geolibertarianism?  I assume you mean Georgism.  I think it’s unlibertarian.  I think it’s based upon bad economics, kind of crankish views on value, and the Austrians disagree with.  The idea of a single tax is insane I believe.  I mean basically it’s a type of socialism because it’s a type of institutionalized interference with private property rights, that is, the right to land.

01:13:04

Now, it probably would be better than what we have now if that’s all you had, but it would, of course, metastasize and turn into a worse tyrannical state like we have now.  So I don’t think it’s very sound.  I don’t think it makes any sense, and I think it has a fixation on land, with land as some kind of special type of good, but I don’t think there’s any economic case for that.  I think land – now I don’t know if Hoppe has written much on Georgism.  I know Rothbard did.  Rothbard demolished Georgism in some of his articles.

01:13:38

But anyway, the idea of tax is a bad idea, and the idea that you don’t own the product – or the rent comes from land because you didn’t create the land.  You only improved on it or something like that I think is nuts.  But the libertarian idea is simply always to answer the question who has the right to control this scarce resource?  And the libertarian answer is the person with the better connection to it.  And so, a piece of land is a scarce resource, and the original homesteader has a better claim to that land than anyone else including this single-taxing agency, whether it’s the community or whatever.  So I don’t agree with it, and I know Hoppe doesn’t agree with it.  I know Rothbard supposes it.

01:14:31

So are there any other questions?  Anything I missed in the – let me scroll up here and see if there’s any questions I missed.  If I miss anything, you can call it to my attention.  I think most of this was your chatting among each other.  I do see Jock posted Proudhon’s definition of government.  Let me see here.  To be governed is to be watched, inspected, spied upon, directed, law-driven, numbered, regulated, enrolled, etc.  You know, I mean this is this sort of leftist conflation of authority with tyranny or with statism, and – so let’s see.

01:15:16

Do I have this on the wrong – I have it on all participants.  Let me see if I’m not looking at everything right.  Is there something I’m missing here?  I have the chat window open.  That’s all I can see.  I don’t see something about Michael.  Oh okay.  Let me see what the forum question is here.  Hold on a second.  There’s a Moodle forum question here, which I missed.  Oh I don’t know how I missed this.  I thought I had a subscription.  Maybe it was just posted.  Okay, this is from Eric Stabe.

01:16:07

I’m confused by what seems to be a contradiction in Hoppe’s TSC this week.  Let me flip back through the slides.  Is this what you guys are talking about, Eric Stabe’s?  Oh quickly, I see John McGinnis has asked a question here.  Hoppe uses the argument – I wonder why I’m not seeing this.  So maybe it’s not focusing it to all.  You’ve got to send to all participants I believe.  Hoppe uses the argumentation theory but says Mises took Hoppe to a new level.  Will you discuss this?  Yes, I will in the epistemology discussion.  I will discuss that probably two lectures from now.

01:16:49

Okay, let me go back to Eric Stabe’s question.  He thinks there’s a contradiction in TSC.  In chapters two and three, Hoppe speaks of how socialist economies force people to rely on family – let me cut and paste this here so everyone can see it.  This is from Eric Stabe.  Okay, socialist economies force people to rely on family, relationships, and persuasion to advance their economic standing rather than ingenuity and skill.  Later, on page 70, he says people develop uniform and uninteresting personalities, and the state kills creativity.  These statements seem to be at odds.  How can a person’s behavior – I’m sorry I didn’t see this question before.  How can a person’s behavior be at once – I might need to reply to this later after thinking about it because this is sort of [indiscernible_01:17:49].  Hold on a second.  How can your behavior at once, reacting to the same stimulus, become both more private and more political?

01:17:59

Having to rely on interpersonal relationships to achieve advancement would seem to force people to become more personable and seek interaction with others.  I’m actually – I’d have to look at it and see.  Maybe someone here can – I’m having trouble concentrating on this right now.  Does someone else here have a thought on what he’s talking about?  Socialist economies force people to rely on the family.  I don’t know what he means – to advance their – I’m not sure what you’re talking about in the first part.  What I’ll do is I’ll either address this next week, or I’ll try to answer in writing that everyone can see later this week to answer that question.  I’ll look at the quotes you’re talking about.

01:18:46

01:18:54

Manjula Guru says, in the readings, socialism is said to be liberalism in the US.  Can you explain this?  I think you mean the terminology question.  I’ve never quite understood exactly how this bizarre shift happened.  I mean, from my perspective, the word liberalism used to denote sort of a progressive, pro-individual, enlightenment sort of improvement in the human condition.

01:19:24

Free-market, classical liberalism it’s called now in the US.  And somehow the leftists and socialists in the US co-opted that term where its meaning has been changed in the US where liberalism means basically social-democratic socialism, whereas in Europe I believe the word liberalism still means what we call classical liberalism here.

01:19:49

I mean Mises had a book, Liberalismus, classical liberalism, or I think in the American market they called it Liberalism and the Classical Tradition so people wouldn’t think we’re talking about Bill Clinton and the Democratic party.  So it’s just a terminology thing.  It’s bizarre.  Libertarianism has more than one meaning.  I believe it has a philosophical meaning, having something to do with free will.  And of course, the word civil libertarian is usually a leftist sort of ACLU-type term that refers to people that believe in personal liberties but not really economic liberties, so words just have different meanings.

01:20:27

Edward Dehm: Do you prefer a term to refer to yourself as a non-left libertarian?  Well, I actually – I mean I’m sympathetic to a lot of the insights of the left, and I’m sympathetic to the argument that a lot of our history came from the left tradition.  There’s also intertwining with the right in some ways.  I think that the left-right spectrum is a flawed way of looking at things, and I think they are both types of socialism, and they are both wrong.  And they both have more in common with each other than we have with either of them, and I don’t think libertarianism is either left or right.

01:21:03

And I personally – and Hoppe has the same view.  I personally get a little bit – I won’t say upset, but I resist the idea, the call among left libertarians for us to learn from our origins on the left.  I mean I’m all for recognizing the insights of left libertarians, but as for the pure left itself, I think they’re utterly evil, so is the right, but I think they’re utterly evil and completely unlibertarian.  And if anything, they have something to learn from us like economic literacy and intellectual honesty and consistency, and the same with the right.

01:21:45

So I just think I’m a libertarian.  Now, I used to say I’m an anarcho-libertarian or maybe an Austrian or Rothbardian libertarian.  I don’t even like the term anarcho-capitalist myself, but again, this is about Hoppe, and Hoppe does use the term anarcho-capitalist.  He doesn’t mean he’s a capitalist in the sense that it’s criticized by the left libertarians.  When they criticize capitalism, they mean the existing corporatist monopoly capitalist institutions we have in place now, which of course, so-called anarcho-capitalists are not in favor of either.  It’s just another semantic difference.

01:22:22

John McGinnis asks, capitalism and libertarianism seem interchangeable synonyms according to Hoppe.  I think so.  I think he’s going with – I guess in the ‘60s and ‘70s, ‘80s, the big libertarians like Milton Friedman and Rand and even Rothbard, they all, for some reason, used capitalism as a synonym or as maybe a proxy for – like a type of metonymy for a free-market order with strong private property rights and a thriving free-market advanced economy, maybe an industrialized economy.  So it has – it did become that way, and I think Hans does use it as more of a synonym.

01:23:09

I think Dannys says – Danny Sanchez from the Mises Institute says some left libertarians don’t like the good kind of capitalism either.  I agree with you, and this is my problem with their use of the word capitalism because, if you try to corner them and say, well, what we mean by capitalism is this, so we don’t really have a disagreement, they will still disagree with you saying that for some of them it really is substantive.  For example, they will say that, well, we’re against authority with libertarians, authoritarianism and being bossed around, pushed around by bosses, this kind of stuff, which sort of buys into this Marxist, leftist view of human nature and the economy and exploitation and alienation from your labor and all these kinds of things, which I think is not – first of all, it’s not part of libertarianism.  And I don’t even think it’s compatible with it.  It’s certainly not required by it.

01:24:09

01:24:14

Tito Warren: How should we reply to the leftist assertions that hierarchy is bad?  And they don’t really answer the question.  How should we reply?  Well, because it’s – well, first of all, I think it’s not a clearly defined term.  What does hierarchy even mean?  I mean libertarianism has a clear conceptual framework.  When we talk about scarce resources, property rights, aggression, these are all really clear.  We oppose aggression.  We think aggression is unjustified or immoral.  Now, we have our reasons for this, and that is our fundamental view.

01:24:55

And any kind of law that you want to set up that would prevent something that you think is bad like hierarchy, if the hierarchy is not aggression, then a law against it is aggression, so we oppose that, so we have a really simple view.  So if they would define what they mean by hierarchy, some types of it are wrong like a state’s hierarchy or laws that impose state power or that give power to some actors like unions, giving them the power to force citizens to negotiate in good faith with them, etc. then we oppose that because it violates property rights.  This is the problem with leftists I believe is they don’t really – clearly, they don’t have clear concepts, so I mean I don’t know what to say.

01:25:50

If people don’t want to be rational and think clearly, I don’t know how to communicate with them.  But I would say that it’s obvious that some types of hierarchy, if you use a broad term, are justified: natural hierarchies, family relationships, societal relationships.  I mean hierarchy just means some things are ranked higher than others in some way, so we can’t be complete egalitarians.  I mean maybe give them the Wilt Chamberlain example from Nozick’s Anarchy, State, and Utopia where he says that let’s say we have a completely egalitarian society where everyone is equal.

01:26:20

But then we have freedom, and everyone will want to see Wilt Chamberlain play basketball because he’s great.  So they all voluntarily give him a quarter or a dollar or whatever, and after a while he’s going to have an unequal distribution of wealth, yet it was done totally legitimately.  No one’s rights were violated.  So the only way to stop it would be to come and prevent people from trading voluntarily with each other.  But that would be a type of hierarchy, so you can see how it could arise, so it depends on the process.

01:26:50

01:27:00

Sure, you’re welcome, Tito.  Sorry, did I miss a question?  Any other questions?  Something about luck here.  I don’t know who brought that up, but of course that is the – that is basically the argument of John Rawls.  Let me type it here.  I don’t know how many of you are familiar with him.  He had a book called A Theory of Justice in ’70 something, early ‘70s, one of the most famous political theory books of all time.  And the book that came along as a response to it was Robert Nozick’s Anarchy, State, and Utopia, which I believe, and Hoppe – by the way, if you look at the introduction to Ethics of Liberty, Murray Rothbard’s Ethics of Liberty, written by Hoppe – the introduction was written by Hoppe.  He’s got a great section in there where he just totally devastates Nozick by comparing him and his approach to Rothbard.

01:27:52

I mean he argues that Nozick was more of a flashy kind of guy, a razzle-dazzle guy and dilettante, not a systematic thinker, not a foundational thinker unlike Rothbard who was systematic and careful and rigorous.  And so, it’s no surprise that Nozick wrote his book and never responded to criticisms and recanted of his libertarianism to a degree later on.  And actually Anarchy, State, and Utopia is an argument in defense of the state.  Most people think it’s an anarchist argument.  It’s not.  It’s an argument in defense of the state, how a minarchist state could be justified.

01:28:33

But in any case, John Rawls’ argument that Nozick was replying to was that people are born with – some people are born by luck with better skills or social status than others, and that’s unfair that they can benefit from that.  Therefore, we can justify imposing a type of egalitarian leveling effect on society, etc.

01:28:58

01:29:02

Danny asks – well, let me continue this real quick.  Jock says Rawls doesn’t prove a rationale for having coercive mechanisms of distribution.  You can diagnose the same problems as the veil of ignorance but still find voluntaristic ways of dealing with them.  Yeah, I agree with that, but I think he – I don’t know if he does, but I know that his argument is used to justify redistribution.  Of course, I think it fails, so I agree with you.  It doesn’t actually provide a rationale.  But I do think the veil of ignorance argument is very problematic.

01:29:47

Cathy Cuthbert is right.  Harrison Bergeron is the Kurt Vonnegut story.  Actually, Hoppe cites that story in – I think it’s in The Theory of Socialism and Capitalism or the other book that we went over tonight.  In one of his footnotes, he talks about that.  It’s basically the state imposing egalitarianism on people’s looks or capacities or skills, handicapping people that are better than others to make everyone equal.

01:30:13

Okay, Danny asks, in TSC, Hoppe uses the term conservative socialism and in general uses a negative connotation of the term referring to people using the state to coercively conserve their place in society.  In later works, he uses that term in a positive way.  What explains the shift in terminology?  Well, I think he’s – in the positive sense, I think he’s talking about cultural conservativism, so he’s talking about traditional, culturally conservative values like the importance of natural elites and family ties and natural leaders and private institutions like marriage and the home and maybe small cultural communities that – so he’s using it in that sense there that he’s in favor of.

01:31:11

And he’s explaining there how the state undermines and erodes that and how, in the absence of state, these things would be more important and would supplant a lot of the institutional functions that are poorly accomplished by the state now.  But I think in the first usage, conservative socialism, I think he’s referring to more like feudalism basically and also the republican or the conservative party’s opposition to change and the use of the state to prevent change and to preserve people’s place in society.  So I suppose the word has many meanings like a lot of words if he’s using it in one nuance one place.  I don’t think they contradict each other.  I think it’s just a little confusing because the same word is used in both.

01:32:04

01:32:19

Jock has a comment about European conservatives and being identified with aristocracy and feudalism in Hoppe’s time.  I tend to agree with that, but like I said, he’s got – his views on monarchy – most people sneer at this and say, oh, monarchy is ridiculous.  But of course, he’s not in favor of monarchy.  He uses that to criticize democracy.  He’s showing that the common assumption that the move from monarchy to democracy was – the common view is that that was progress.  He’s saying that that common view is mistaken.  He’s not saying it’s not better in any way.  He’s just saying that the common view that was this whiggish, unalloyed progress in society is not good.

01:33:01

Jock says economically a private state is less capital destructive.  Yeah, we’re going to discuss that in one of our lectures.  I mean he even has a letter to the editor to Chronicles magazine about 15-20 years ago where he argues that private slavery is less economically destructive than public slavery, not that he’s justifying either one, but he’s explaining the systematic economic effects of those.  So public slavery is kind of what we have now or what you have in common I would say.  Everyone is a slave of this big institution.  You have just massive destruction and impoverishment and waste, whereas chattel slavery in the US where there was an owner of a slave, you could expect the owner of the slave to have an incentive to take care of his property.  I mean it’s horrible to talk about, but you can analyze these things in a way and basically a private situation – or a public situation tends to be worse economically in a lot of these settings than a private one would.

01:34:07

01:34:11

Yeah, Yuri Maltsev does make that point.  Anyway, if you look on Hoppe’s website, hanshoppe.com, under the publications page, if you search for the word chronicles, you’ll see that letter.  Just search for the word chronicles.  Any other questions?

01:34:31

01:34:35

Edward asks about the is-ought problem in argumentation ethics.  Yeah, I’m going to go into that, as much detail as I can, and we can have a good discussion about the whole thing.  Cathy, I think if you look at the letter, I think he uses communism as the example unless you’re talking about Yuri, but if you’re talking to me – hold on.  Let me try to find it.  It’s right here, and I don’t have it in front of me right now.  I’ll just give you the link.  Here it is right here.  Oh, this is a long time ago I think, before he was really well-known, and this is just a letter to the editor to Chronicles, so I don’t think he got much for that, although his uncharitable critics could see them if they wanted to.

01:35:38

01:35:42

Danny says, is it true that Rothbard derived the homestead principle from self-ownership while Hoppe does the opposite, deriving self-ownership from the homestead principle, that we own ourselves because we’re first users of ourselves?  I don’t think that’s quite right.  I think – okay, we’ll talk about this next lecture more in the argumentation ethics.  But my perspective on it is this.  I think Rothbard actually didn’t derive it.  Rothbard sort of states his natural case like we’ve done already in the first lecture here like Hoppe does as well.  And he just takes it as sort of intuitive, illogical consistencies from [indiscernible_01:36:21].  But I think he takes it as sort of a Lockian given that we own ourselves.  Hoppe – I don’t think he says we’re first users.  That’s his argument for property.

01:36:35

Sorry for my poodle barking.  There’s someone walking by.  Hoppe’s argument is that you own a resource if you have a better link to it, a connection to it, than anyone else.  In the case of owned resources, external goods, the first user has this best connection to it because it was previously unowned, and you have a better connection than anyone else.  But his argument in the case – and I wrote about this in my article on “How We Come to Own Ourselves,” “How We Come to Own Ourselves.”  It’s on my website along with the Mises Daily.  Hoppe argues that the reason you have a better connection to your body is because you have direct control over it.

01:37:24

Now, in a way, that’s just a way of restating the Lockian idea that you’re a self-owner if you think of ownership as an actual thing rather than a normative thing.  You are the actual owner.  You are the natural owner, the one who actually does control your body.  So he has an example.  If I want to raise my arm, I can just will it and raise my arm, so obviously I have the better connection to my body.  I have an intimate connection with my body.  My personhood and my identity are infinitely bound up with this body because I’m the one actually directly controlling it.

01:37:56

That is his argument, and I think it actually is different than the homesteading argument, the first-use argument because if you go with first use, then parents would own their children because the mother – excuse me – the mother owns the matter in her body that grows into the baby.  And when it’s born, it’s just coming from her body.  She owns it.  But Hans’ view is no.  The baby or the human, when he reaches a certain point, has self-control, and so basically, he reappropriates the body that you could say is owned by the mother at a certain point.  It becomes owned by the baby or by the child at a certain point.  So there’s a shift in ownership of that physical resource from the parent to the baby because the baby has a better connection to it, not because of first use but because of direct control.

01:38:57

01:39:04

Any other questions?  Tito asks, are children property?  I don’t view children as property, and I don’t believe Hoppe views children as property.  I think the view is that children are self-owners, but there’s a continuum or spectrum when they develop from a state where they need care and someone to be a guardian for them.  So I think the view is that a child has rights.  A very young child has rights but doesn’t have full capacity to make decisions, etc.  And so, the presumption is that the parent, who has a natural link to the child, is presumed to have sort of the implicit consent of the child to be his decision-maker for his interest like a guardian until he reaches a certain level of maturity.

01:40:04

So the parent is a guardian.  That’s why I believe that the Hoppian/Rothbardian view would be that if a parent abuses a child, then the presumption is overcome that this human being is the one the child would – we can assume the child would appoint to be his guardian to exercise his affairs for him.  And it would go to some third party who could adopt the child or rescue the child or whatever.

01:40:29

01:40:33

Tito says, are they stewards of the child?  Yeah.  I mean the word in the law is guardian or in the civil law is tutor or tutrix.  Is there a claim to parenthood until the child reaches maturity?  I think there is a claim to parenthood, but the claim is – there’s two different claims.  There’s a claim of the parent with respect to the child, and that relationship with respect to the outside world.  With respect to the outside world, the outside world has to respect the child’s rights and views the parent as the spokesman for the child.  So the child doesn’t consent to being abused by an outsider because the parent makes it clear that you’re not going to do that to my child, exercising speaking for the child.  But between the child and the parent, I think that the parent doesn’t own the child.  The parent has the right by its natural link to the child to be the first one to be presumed to be the spokesman for the child.

01:41:39

Now, I personally believe that the parent has obligations to the child, positive, legally enforceable obligations as I argue in that article, “How We Come to Own Ourselves.”  I actually am not sure that Hoppe agrees with that because I think he is pro-abortion rights, although he hasn’t written much on this.  But I think that my argument could be used to argue that at least some abortions are at least somewhat aggression because it violates your obligation to the rights-bearing entity that you’ve created.  But this is – this course is not about my views.  I mean I’m happy to answer questions, but it’s about Hoppe’s views.  And maybe we can ask Hoppe.  I don’t know if he’s going to want to answer it because he asked me a long time ago to come up with an argument justifying abortion, and I gave up on it.

01:42:38

How would circumcision be viewed in this regard?  Well, look.  I’ll give you my perspective on this.  Oh, well, Jaya Dixit asked about the child wanting to leave.  Well, that’s Rothbard’s view, and I presume that Hoppe agrees with that.  When the child is mature enough to say no basically or I want to run away, the I think he has demonstrated a certain maturity.  But I mean I think practically, social customs and practical common sense would establish guidelines for that.  I don’t think it’s going to be a 3-year-old or a 5-year-old.

01:43:17

But in any case, about circumcision, I mean look.  I’ve read all the debates about this.  My view is that female circumcision would be such an unnecessary and mutilating type of act that, if the parent does that, you wouldn’t – the parent would lose their – they would lose their right to speak for the child because most people would assume that the child would not appoint such a person to be their guardian.  Male circumcision – I mean my personal view is even if you’re against it or you wouldn’t do it yourself or you think there’s arguments against it, I don’t think it’s so heinous and so obviously wrong that you can’t say that’s not within the parent’s scope of authority to decide for the child.

01:44:07

And most people that are circumcised that I’m aware of tend to be glad that they were or don’t resent it, sort of blessing it retroactively, indicating that there’s empirical evidence to think that it’s reasonable that the child would consent to the parent having the authority to make that decision for them, even if it’s largely on cultural or cosmetic grounds, so that’s my view.

01:44:34

01:44:46

Oh, well, some of you are talking about Block’s view on evictionism.  Again, I’m actually – Hoppe has hardly written on abortion that I’m aware of like I said.  I believe he’s loosely in favor of it, which we all have to be in the sense that would not want to empower the state to have that invasive power to police these types of private matters.  So as a practical matter, you pretty much have to be pro-choice legally speaking.  But I wouldn’t be surprised if he would take a dim view of it in the later stages like I would.  Now, whether he thinks that’s a type of aggression or murder or just immoral or unseemly I don’t know.

01:45:27

01:45:37

Edward asked a question about civil law and common law.  You said Hoppe has mentioned civil law is better than the common law because it’s written down and less subject to arbitrary interpretation by the state, and do I have an opinion of this?  Well, actually, I’m not aware of him writing that.  If you could find that, I’d be curious about it because I don’t think he’s actually ever written that.  It doesn’t sound like something he would say.  Well, if you can find that, I’d be really curious.  I don’t recall anything like that.

01:46:02

Now, I wrote a long article on the civil law in 1995 for the JLS when he was the editor, and he published it, so maybe he was getting something from that.  I’m from Louisiana, which is a civil law jurisdiction, and I have written a good deal on it, and I do think that the civil law is superior to the common law but not because it’s written down but just because it comes from the Roman system, which has better legal – cleaner legal concepts than the common law system.  Both the common law and the civil law are basically written down now.  I don’t think that – I don’t think, and I don’t think Hans would think that being written down is really a superior aspect to it.

01:46:49

Now, that is the view of some legal positivist types.  But if you find that, I’d be happy to look at it.  I’m actually curious.  So if he actually thinks civil law is superior to common law in some ways, this is news to me, but it could be for the same reasons I do.  I think it’s just better because it’s a more scientific, more rational foundation for law.  Please let me know.

01:47:13

Exactly.  Cathy says the Constitution is written and where did that get us, and I know Hoppe is just disgusted with the US Constitution and views it as a mistake.  So I don’t think he would fixate on the written aspect of it, and again, like I said, the common law is written down now.  Cases are published in written form, and there are treatises that summarize and systematize and categorize it in a written form, so I don’t think that’s the difference.

01:47:42

Jock talks about how the origins are about monopoly being the common law across the land.  Of course, there’s elements of that in the civil law as well.  In the Roman law, there was one law – now I’m forgetting the term.  There was one law for the Roman citizens and one law for the outsiders.  There’s actually a Latin or some kind of term for that, ius gentium I think, ius gentium, ius gentium – it’s some other – a term for the other.  Anyway – but actually this helped to develop a common law that wasn’t like the monopoly of the king’s law.  It helped the Roman law develop a magnificent body of legal rules that it has developed into.  But someone can Wikipedia that term and make sure I’m thinking of it right, but I think it was ius gentium and – anyway.  If anyone is curious, I’ll try to find it and talk about it next class.

01:48:45

Well, we’re almost 30 minutes over.  I don’t mind going over, but I know some people are very late, and people listening to the lectures later tend to get annoyed if we go too long because they don’t have any predictability.  So I’d be happy to answer a couple more questions, but I think we should cut it off soon or by the hour at the latest.  Any other questions?  Okay, it’s getting late for everyone, so thank you guys.  I enjoyed it.  Good questions, and we will pick this up with argumentation ethics and rights next week.  Thank you all much.

01:49:34