Let me start with some of my famous humility. If you would have asked me until a week ago if I really must have one book only, which one should it be, I would have told you of course it should be My Democracy is a God that Failed.
Today, if you would ask me, I would have to say, you have to have two books.
So, The Myth of National Defense, and this is a book that I want to talk about a little bit because it just came out and is obviously of great relevance for this conference.
Let me begin with a quotation from the Declaration of Independence, you know, the beginning about the inalienable rights to liberty and property and pursuit of happiness and so forth.
And then Jefferson continues to say, governments are instituted among men deriving their just powers from the consent of the governed
and that whenever any form of government becomes destructive of these ends, it is the right of the people to alter or abolish it and to institute new government
laying its foundation on such principles and organizing its powers in such form as to them shall seem most likely to affect their safety and happiness.
Prudence indeed will dictate that governments long established should not be changed for light and transient causes.
And accordingly all experience has shown that mankind are more disposed to suffer while evils are sufferable
The topic of the book is to think about these alternative methods.
But when a long train of abuses and usurpations, pursuing invariably the same object, evinces a design to reduce them under absolute despotism, it is in their right, it is in their duty to throw off such government and to provide new guards for their future security.
The topic of the book is to think about these alternative possibilities that exist.
Now, obviously, more than 200 years after the Declaration of Independence, it seems appropriate to raise the question whether government has in fact done what it was designed to do, that is, to protect us.
or if experience has provided us with grounds to consider other possible and more effective ways to guard our own security.
In fact, this question has of course even gained in importance because of the events of September 11.
As I said, governments are supposed to protect us and they protect us, of course, also from terrorism.
Yet what has the government's role been in this particular event, the attack on the World Trade Center?
The US government commands a defense budget of $400 billion per year.
That is a sum that equals the spending on defense of the next 24 countries in the world.
And it employs a worldwide network of spies and informants.
Unfortunately, not too many people could speak Iraqi, I guess.
In any case, it was unable to prevent commercial airliners from being hijacked and used as missiles against civilian targets.
In fact, the situation is even worse. Because the government did not only fail to prevent the disaster of September 11,
2011, it actually contributed to the likelihood of such an event. In pursuing an interventionist
foreign policy, taking the form of economic sanctions, of troops stationed in more than
hundred countries, relentless bombings of various places, propping up despotic regimes
all over the world, taking sides in irresolvable ethnic and territorial conflicts and otherwise attempting political and military management of whole areas around the globe.
The government actually provided the very motivation for foreign terrorists and made the United States a prime target for these attacks.
In addition, how was it possible that men armed with no more than box cutters could inflict the terrible damage that they did inflict?
Now obviously this was only possible because the government prohibited airline pilots from protecting their own property by force of arms
and thus rendering every commercial airline vulnerable and unprotected against potential hijackers.
A pistol of $50 in the cockpit would have done what $400 billion were unable to do.
And what has been the lesson from all of this?
The lesson has been that the United States became even more aggressive after the events.
The United States military overthrew first the Afghani government that was said to be harboring Osama bin Laden.
And in the course of this thousands of innocent people were of course killed as collateral damage, a wonderful term.
But up until this day Bin Laden has not been captured and in order to distract from this disaster of not being able to find him, they began a war against Iraq and lied us into it.
The United States refused even to rule out the use of nuclear weapons in these types of endeavors and no doubt this policy helped to further increase the number of potential recruits into the ranks of people willing to use extreme violence against citizens of the United States.
At the same time, domestically, the government used the crisis that it had brought about, which it helped to provoke, to further increase its own power at the expense of the people's liberty and property rights.
Government spending, in particular on defense, was vastly increased.
I should mention Walter took the line away from me.
What do we need a Department for Home Defense for?
I thought that was the task of the Defense Department.
But an appropriate term for the Defense Department would be, of course,
opposing it to homeland security would be a foreign insecurity department.
Now, all of airport security was nationalized and all the rest of it, Patriot Act, you know all the stories.
This gives us then obviously reason enough to provide a systematic explanation for these events.
And this is what I want to provide in very truncated form, a systematic explanation for this complete failure of government to do what it is supposed to do, that is to protect us.
Now, two of the most widely and dearly held propositions among political economists and political philosophers are the following.
The first one, let's call it the first axiom, is every monopoly is bad from the point of view of consumers.
Monopoly is understood here in its classical sense as an exclusive privilege granted to a single producer of a commodity or of a service.
That is, the absence of free entry into specific lines of production.
In other words, only one agency, Agency A, let's say, may produce a given good, let's say, the good X.
And any such monopolist is bad from the point of view of consumers, because shielded from competitors,
The price of his product, the price of X will tend to be higher than it would be if competition were in existence
and the quality of the product X tends to be lower than it would be if there would be competition in this particular area.
That's the first axiom. Monopoly is bad.
Now the second axiom. The second axiom, again shared practically by all economists nowadays
and political philosophers as well, is the production of security, protection must be undertaken and is a primary function of government.
And here security is understood in the wide sense as it is adopted in the Declaration of Independence,
meaning the protection of life, property, liberty and the pursuit of happiness from domestic violence and external enemies.
In accordance with generally accepted terminology, then government is defined as a territorial monopoly of law and order.
That is, government is the ultimate decision maker and enforcer in a certain territory.
Now what you immediately recognize of course is that both of these propositions are clearly incompatible.
First we say monopoly is lousy, bad for consumers, and then we say for that particular task of protecting us,
which seems to be one of the most important tasks that can be done for us, there we need a monopolist.
Curiously, most economists and most political philosophers see absolutely no problem with holding two views that are entirely incompatible, that cannot be reconciled with each other.
And if you make them aware of this, the usual reaction is then to make exception to the first axiom, that is saying maybe not all monopolies are bad, but never ever even contemplating the idea that maybe something is wrong with the second axiom, that is that protection must be provided by a monopolist, by the government.
The authors in the midst of national defense are more inclined to take the second position.
That is to say, there might be something wrong with the claim that governments must be providing law and order and security.
And they are more consistent because they have the general monopoly theory in the back of their mind which explains why a monopolist tends to be lousy.
Now as far as empirical or historical evidence is concerned, the proponents of the orthodox view regarding the necessity of government face some obvious embarrassment.
Because the recently ended 20th century was characterized by a level of human rights violations that is unparalleled in all of human history.
There's been a book published by Mr. Rommel, there are lots of criticism that can be leveled against that book,
in his book, where he points out that in the 20th century alone, governments were responsible for the deaths of 170 million people.
Now, if you count all the criminal assaults that took place, you will probably not come up with a high number like this,
even if you start from the beginning of mankind until the present.
So the historical evidence appears to indicate that rather than protecting life, liberty and the pursuit of happiness of their own citizens, governments must be considered to be the greatest threat to human security.
Now, proponents of the orthodox view that we attack in this book might be willing to compromise the first thesis.
That is, the first thesis regarding the evil of monopoly in order to maintain the second thesis, the necessity of government to provide law and order.
but they can obviously not entirely ignore the empirical evidence that has accumulated
and if they take the empirical evidence that has accumulated into consideration
then they are forced to somehow modify their thesis about governments are necessary in order to provide law and order
And what they have done is by and large modifying the Caesars in the following way.
One group says, experience shows that some states are aggressors and not protectors.
Thus, one is not to discard the second Caesars altogether.
Its further specification is required and we only claim that some states do protect and other types of states do engage in aggression.
Now, what are the states that allegedly do not engage in aggression and are so to speak successful when it comes to protection?
Numerous political scientists, including Mr. Rommel that I mentioned before, have tried to show through various statistical means that it is the absence of democratic government which explains the anomalies of the 20th century.
They argue that admittedly democracies go to war against non-democratic regimes, but supposedly they do not fight each other.
Democracies are, so to speak, peaceful vis-a-vis each other. And from that, in their view, it would seem to follow.
And this thesis has in the meantime become, so to speak, the standard folklore of the neoconservatives.
and conservatives. This would then imply that once the Wilsonian dream of making the world safe for democracy has been achieved, then eternal peace and security will be accomplished.
Now, in a similar vein, some political economists such as James Buchanan and the School of Constitutional Economics, they have suggested that the admittedly miserable record of governments concerning the provision of internal and external security can be systematically improved by means of some constitutional reforms.
We just write a different constitution than the one that we had or repair the existing one a little bit and then eternal peace will break out.
Now, both of these explanations or both of these excuses are carefully scrutinized and rejected in that volume on the myth of national defense.
As for the thesis of the peaceful nature of democracy, several contributors in the volume point out that in accordance with military historians such as J.F.C. Fuller and Michael Howard that this rests on a complete misinterpretation of history.
Fuller in particular and also Michael Howard point out that whatever one might say about democratic wars, democratic wars because they are ideological wars.
Not wars that deal with certain territorial issues and can be easily ended once the territorial issues have been settled.
have been settled, but ideological wars similar in nature to religious wars tend to be uniquely brutal.
You never know when to end the war because you never know when people have really converted, have accepted the right view.
The only time that you can be absolutely sure that the conversion has taken place is by killing all the people off.
And of course you know that they have converted to whatever, Islam, Christianity, Judaism, who knows what.
In addition, this thesis that democracies are peaceful is contradicted quite obviously by the example of the American Civil War or the American War of Southern Independence.
Here we have two democracies fighting a war against each other and fighting a war that was, up until that point, one of the most brutal encounters that we know of in human history, similar to the religious wars several hundred years before.
Why do they ignore this? There is no clear-cut answer to this. It doesn't fit into their picture. Accordingly, they simply don't take it into account.
The second error, which is also dealt with in greater detail in the book, is that the proponents of the thesis of the peaceful nature of democracies
democracies typically support their claim by classifying traditional monarchies and modern dictatorships as both being autocratic and non-democratic regimes.
That is, they confuse dictatorships and monarchies, think of both exactly the same type of thing.
Yet historically, if one has to group, make any classifications at all, historically it is the case that democracy and dictatorship that should be grouped together.
Traditional monarchies only resemble dictatorships in a very superficial way because they have one ruler.
Instead, dictatorships are the regular outgrowth of mass democracy. Lenin, Stalin, Hitler, Mao were all distinctly democratic rulers as compared to the former emperors of Russia, Germany and Austria.
Lenin, Stalin, Hitler and Mao and almost all of their smaller followers in other places were outspoken in their hatred of everything monarchic and aristocratic.
They knew that they owed their own rights to democratic mass politics. They were all plebs.
Hitler would never have risen to any position in Germany if the Kaiser would have remained in place.
They knew that they owed their rise to power to democracy and they engaged massively in elections, in referenda, in mass rallies, in mass media propagandas throughout their entire reign.
They were popular politicians. On the other hand, and as for the proposal of constitutional reforms,
There is reform in the constitution so that the government is curtailed in its activities, limiting state powers through constitution.
Several contributors to the volume explain that any such attempt must be considered to be futile and ineffective
if and insofar as the interpretation and the enforcement of such limitations is left to government itself or to one of its organs, such as the government controlled Supreme Court.
The Supreme Court has an interest in interpreting the Constitution in such a way that the power of the government is continuously enlarged, that is in their own interest.
Even if they sometimes might disagree with this law or that law, their overall interest is the power of the central government must be strengthened, because as the power of the central government is strengthened, my own power as a judge of the Supreme Court is also strengthened.
I'll come back to this point in a few minutes.
Now, more convincing to the contributors to this volume appears a third thesis that was advanced by Ludwig von Mises, which might be considered to be a mixture of the two previous ones, but it turns out to be an entirely different one.
Mises asserts that in order to fulfill its primary function as a provider of law and order, a government must satisfy two conditions.
It must be democratically elected, he claims. I think that's wrong, but nonetheless.
And, which is a more important point in his argument, and it must be a government that permits unlimited secession in principle.
What he says here is this, whenever the inhabitants of a particular territory, whether it be a single village, a whole district or a series of adjacent districts, make it known by a freely conducted plebiscite that they no longer wish to remain united to the state to which they belong at the time, their wishes are to be respected and complied with.
This is the only feasible and effective way of preventing revolutions and international war.
Now, one obvious attraction of this Mises thesis is that this thesis can roughly account for the events of the United States 19th century history.
Until 1861, by and large, people took the right to the seat for granted.
And because of this, the government was very mild, so to speak.
After 1861, there was absolutely no doubt anymore that there did not exist a right to the session.
Accordingly, the government became ever more brutal, ever more intrusive, ever more aggressive.
aggressive. However, the question is, is this Caesars of Mises, so to speak, just an amendment, or is it really entirely different Caesars from the ones that Buchanan and Rommel and similar people propose?
And I think it is fundamentally an entirely different thesis, because if there exists an unlimited right to the session, then we do no longer have a state in front of us.
Then we have basically a club in front of us, and people are voluntary members of this club.
If everybody can succeed and they don't succeed, then obviously they declare I'm a member of this club.
On the other hand, if they can succeed, then this indicates clearly that this is not a state.
A state would not let you succeed from it.
So I think Mises's thesis is actually showing that governments are incapable of providing these services of law and order.
Now, let me provide you with a definition of the state and then simply explain why all of these things that I described early on had to happen, had to be expected, so to speak.
A state, the definition of a state that I propose is the standard definition. It corresponds closely to the
definition also given by Thomas Hobbes and a large number of philosophers and political economists and it goes
According to Hobbes, when people are in a state of nature, then they are constantly at each other's throats.
One man is another man's wolf, is the statement that Hobbes gives.
Each individual, so to speak, left to its own devices and provisions, would spend too little on its own defense.
and hence permanent interpersonal warfare would result.
Now, and the solution to this presumably intolerable situation, according to Hobbes and his followers,
is then the institution of a state or a government.
In order to institute peaceful cooperation or security among themselves,
The State is not just another individual and the good that the State provides, that is of security, is not just another private good, instead the State is considered to be sovereign and has as such two unique powers.
On the one hand, the state can insist that its subjects, A and B, do not seek protection from anyone except from the state itself.
That is, the state is a compulsory territorial monopolist of protection and ultimate decision making.
And on the other hand, the state can determine unilaterally, without unanimous consent, how much A and B its subjects must spend on their own security.
That is, the state has the power to impose taxes in order to provide security collectively.
Now, look at this Caesars. Based on this definition of a government, as I said, completely uncontroversial definition.
Based on this definition of government as a compulsory territorial monopolist of protection and jurisdiction equipped with the power to tax without unanimous consent,
The contributors to this volume, myself, argue that regardless of whether such a government is a monarchy, a democracy or a dictatorship,
any notion of limiting its power and safeguarding individual life, liberty and property must be deemed illusory.
Under monopolistic auspices, the price of justice and protection must continuously rise and its quality must continuously fall.
A tax-funded protection agency, it is pointed out by several contributors, a tax-funded protection agency is a contradiction in terms.
And in terms, it is an expropriating property protector. What would you think of a protector who came to you?
I'll protect you, but first I take half of your property away from you and then I use this half of your property that I take away from you in order to protect the other half that you have.
In fact, even if a state limited its activities exclusively to the protection of life, liberty and property, as a protective state a la Jefferson is supposed to do, even if it would just do this, the further question would immediately arise, how much security do I provide for the public?
And motivated, as everyone else, by self-interest and as everybody else not liking to work, that is by disutility of labor, but equipped with a unique power to tax, we can predict that a government's answer will always be the same.
is the same. That is to maximize expenditures on protection and conceivably all of a nation's wealth can be used for protective purposes and at the same time minimize the actual production of protective measures.
Spend as much as you can and do as little as you can get away with.
Furthermore, a monopoly of jurisdiction must lead to a deterioration in the quality of justice and protection.
If one can appeal only to the state for justice and protection, justice and protection will be distorted in favor of government.
Constitutions and Supreme Courts notwithstanding. After all, constitutions and supreme courts are state constitutions and state courts, and whatever limitations to government action they might contain is determined by agents of the very same institution.
Accordingly, the definitions of life, liberty and property and their protection will continually be altered and the range of jurisdiction will be expanded to the state's advantage.
Things are even worse. If you are the ultimate judge in every case of conflict, then you will likely even provoke and cause conflicts and decide it then afterwards in your own favor.
I hit you on the head, you can only come to me to get justice.
And then I say, but that was perfectly justified that I hit you on the head and I punish you now for coming forward and complaining about this.
Now, the first person who provided a systematic explanation for the apparent failure of governments as security producers along the lines that I sketched here was the Belgian economist Gustave de Molinari who lived from 1818 to 1912.
De Molinari was a prominent Belgian-born French economist, a student of Jean-Baptiste Say and a teacher of Wilfredo Pareto.
For several decades he was the editor of the leading French economic journal, the Journal des Economistes, the professional journal of the French Economic Association in the 19th century.
De Molinari's central argument was laid out in an article about the production of security, which was published in February 1849.
And it is worthwhile to quote his argument because of his theoretical rigor and its seemingly visionary foresight.
Molinari says, if there is one established, well established truth in political economy, it is this, that in all cases, for all commodities that serve to provide for the tangible or intangible needs of consumers,
It is in the consumer's best interest that labor and trade remain free, because the freedom of labor and trade have as their necessary and permanent result the maximum production, maximum reduction of price.
And this, that the interests of the consumers of any commodity whatsoever should always prevail over the interests of the producers.
Now in pursuing these principles, one arrives at this rigorous conclusion, that the production of security should, in the interest of the consumers of this intangible commodity, remain subject to the law of free competition.
Hence it follows that no government should have the right to prevent another government from going into competition with it or require consumers of security to come exclusively to it for this commodity.
And then he concludes, either this is logically true or else the principles on which economic science is based are invalid.
and then Molinari predicted what would happen if the production of security is monopolized
and he said if on the contrary the consumer is not free to buy security wherever he pleases
you force with see open up a large profession dedicated to arbitrariness and bad management
Justice becomes slow and costly, the police vexatious, individual liberty is no longer respected, the price of security is abusively inflated and inequitably apportioned according to the power and influence of this or that class of consumers.
Now nearly all contributors to this volume pay explicit tribute to Gustav de Molinari and the volume is also dedicated to Molinari because of this.
If Molinari's explanation of the dismal performance of government as security provider by the nature of government as a compulsory territorial monopolist of law and order is accepted,
are accepted, however, then the question of alternatives arises, and accordingly the bulk of the volume, the myth of national defense, consists of contributions to this quest for private and voluntary market-produced alternatives to the failed and fundamentally flawed system of government protection.
The questions that are addressed in the book are,
how could and would an alternative system of freely competing security producers work?
Based on historical experience and an economic logic,
how effective are private alternatives such as mercenaries, guerrillas, militias, partisans and privateers?
What are the consequences of the free proliferation of weapons, in particular of nuclear arms?
What is the role of ideology and public opinion in defense and war?
What type of good is defense? A private good or a public good?
Can protective defense be provided by freely competing and financed insurance agencies?
How would the logic of competitive insurance protection differ from that of monopolistic state protection?
How can the transition from a system of monopolistic to competitive security production be achieved?
What is the role of secession in this process?
How can state-free societies or natural orders possibly defend themselves against state attacks and invasions?
These are the central questions addressed and as I believe answered in the present volume by an assembly of economists, philosophers, sociologists, historians and so forth.
And now I insist that you buy the book. Thank you.