My first public appearance as a speaker in the United States took place more than two
decades ago here in New York City in 1986 at the first major Mises Institute conference
held to celebrate Murray Rothbard's 60th birthday and so I'm particularly pleased to be back
here.
Now, let me begin with the definition of a state.
What must an agent be able to do to qualify as a state? This agent must be able to insist
that all conflicts among the inhabitants of a given territory be brought to him for ultimate
decision making or be subject to his final review. In particular, this agent must be
be able to insist that all conflicts involving himself be adjudicated by him or his own agent.
And implied in the power to exclude all others from acting as ultimate judge, as the second
defining characteristic of the state, is the agent's power to tax, that is to unilaterally
determine the price that justice seekers must pay for his services. Now based on this
With this definition of a 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 he who can legislate can also tax. And surely this is an enviable position.
More difficult to understand is how anyone can get away with controlling a state.
Why would others put up with such an institution?
Now, I want to approach the answer to this question indirectly.
Suppose you and your friends happen to be in control of such an extraordinary institution.
What would you do to maintain your position, provided, of course, you didn't have any moral scruples?
You would certainly use some of your tax income to hire some thugs. First, to make peace among your subjects so that they stay productive and there is something to tax for you in the future. But more importantly, because you might need these thugs for your own protection should the people somehow wake up from their dogmatic slumber and challenge you. Now, this will not do, however. In particular,
If you and your friends are a small minority in comparison to the number of your subjects,
and only if you are a small minority can you live a comfortable life on the backs of others.
For a minority cannot lastingly rule a majority solely by brute force, it must rule by opinion.
The majority of the population must be brought to voluntarily accept your rule.
This is not to say that the majority must agree with every one of your measures. Indeed,
it may well believe that many of your policies are mistaken. However, it must believe in
the legitimacy of the institution of the state as such, and hence that even if a particular
policy may be wrong, that such mistake is an accident that one must tolerate in view
In view of the fact that some greater good is provided by this institution.
Yet how can one persuade the majority of the population to believe this?
And the answer is only with the help of the intellectuals.
Now how do you get the intellectuals to work for you?
To this the answer is easy.
The market demand for intellectual services is not exactly high and stable.
Intellectuals would be at the mercy of the fleeting values of the masses, and the masses
are uninterested in intellectual philosophical concerns. The state, on the other hand, can
accommodate the intellectuals typically over-inflated egos and offer them a warm, secure and permanent
birth in its apparatus. However, it is not sufficient that you employ just some intellectuals.
You must essentially employ them all, even the ones who work in areas far removed from those that you are primarily concerned with, that is philosophy, the social sciences and the humanities, for even intellectuals working in mathematics or the natural sciences, for instance, can obviously think for themselves and so can become potentially dangerous. It is thus important that you secure also their loyalty to the state.
Put differently, you must become a monopolist, and this is best achieved if all educational
institutions from kindergarten to universities are brought under state control and all teaching
and researching personnel is state certified. But what if the people do not want to become
educated? For this, education must be made compulsory, and in order to subject the people
The intellectuals know such egalitarianism to be false, of course, yet to proclaim nonsense such as everyone is a potential Einstein if only given sufficient educational attention pleases the masses and, in turn, provides an almost unlimited demand for intellectual services.
Now, none of this guarantees correct status thinking, of course. It certainly helps, however,
in reaching the correct status conclusion, if one realizes that without the state one
might be out of work and may have to try one's hands at the mechanics of gas pump operation
instead of concerning oneself with such pressing problems as alienation, equity, exploitation,
The Deconstruction of Gender and Sex Roles or the Culture of the Eskimos, the Hoppes
or the Zulus.
In any case, even if the intellectuals feel underappreciated by you, that is, by one particular
state administration, they know that help can only come from another state administration,
but certainly not from an intellectual assault on the institution of a state as such. Hence,
it is hardly surprising that as a matter of fact, the overwhelming majority of contemporary
intellectuals, including most conservative or so-called free market intellectuals are
fundamentally and philosophically statists. Now has the work of the intellectuals paid
off for the state. I would think so. If asked whether the institution of a state is necessary,
I do not think it is exaggerated to say that 99% of all people would unhesitatingly say
yes. And yet, this success rests on rather shaky grounds, and the entire status edifice
can be brought down if only the work of the intellectuals is countered by the work of
of Anti-intellectual intellectuals, as I like to call them.
The overwhelming majority of state supporters are not philosophical statists. That is, status
because they have thought about the matter. Most people do not think much about anything
philosophical at all. They go about their daily lives and that is it. So most support
stems from the mere fact that the state exists and has always existed as far as one can remember
and that is typically not farther away than one's own lifetime. That is the greatest achievement
of the status intellectuals is the fact that they have cultivated the masses natural intellectual
laziness or incapacity and never allowed for the subject of the state to come up for serious
for serious discussion. The state is considered as an unquestionable part of the social fabric.
The first and foremost task of the anti-intellectual intellectuals then is to counter this dogmatic
slumber of the masses by offering a precise definition of the state as I have done at
the outset and then to ask if there is not something truly remarkable, odd, strange,
I am confident that such simple definitional work will produce some very first but serious doubt regarding an institution that one previously had been taken for granted, and that seems to be a good start.
Again, recall, a state is an institution that decides who is right and wrong in conflicts involving itself.
Now, further, proceeding from less sophisticated yet not incidentally more popular pro-state
arguments to more sophisticated ones, to the extent that intellectuals have deemed it necessary
to argue in favor of the state at all, their most popular argument, encountered already
at kindergarten age, runs like this. Some activities of the state are pointed out, the
Builds Roads, Kindergarten Schools, it delivers the mail and puts the policeman on the street.
Imagine there would be no state, then we would not have these goods. Thus a state is necessary.
And at the university level, a slightly more sophisticated version of the same argument
is presented. It goes like this. True, markets are best at providing many or even most things,
But there are other goods markets cannot provide or cannot provide in sufficient quantity or
quality. And these other so-called public goods are goods which bestow benefits onto
people beyond those people who have actually produced or paid for them. Foremost among
such goods ranks typically education and research. Education and research, for instance, it is
it is argued are extremely valuable goods. They would be under produced, however, because
of free riders, that is cheats who benefit via so called neighborhood effects from education
and research without actually paying for it. Thus, the state is necessary to provide otherwise
under produced or unproduced public goods such as education and research.
Now these statist arguments can be refuted by a combination of three fundamental insights.
First, as for the kindergarten argument, it does not follow from the fact that the state
provides roads and schools that only the state can provide such goods. People have little
difficulty recognizing that this is a fallacy. From the fact that monkeys can ride bikes,
it does not follow that only monkeys can ride bikes. And secondly, immediately following,
It must be recalled that the state is an institution that can legislate and tax, and hence that
state agents have little incentive to produce efficiently. State roads and schools will
only be more costly and their quality will be lower, for there is always a tendency for
state agents to use up as many resources as possible doing whatever they do, but actually
Now, third, as for the more sophisticated statist argument, it involves exactly the same fallacy encountered already at the kindergarten level. For even if one were to grant the rest of the argument, it is still a fallacy to conclude from the fact that states provide public goods that only states can do so. But more importantly, it must be pointed out that the entire argument demonstrates a total ignorance of the most fundamental
The fundamental fact of human life, namely scarcity.
True, markets will not provide for all desirable things.
They are always unsatisfied once, as long as we do not inhabit the Garden of Eden.
But to bring such unproduced goods into existence, scarce resources must be expended,
which consequently can no longer be used to produce other, likewise desirable things.
Whether public goods exist next to private ones does not matter in this regard. The fact
of scarcity remains unchanged. More public goods can only come at the expense of less
private goods. Yet what needs to be demonstrated is that one good is more important and valuable
than another one. This is what is meant by economizing. Yet can the state help economize
Scars Resources. This is the question that must be answered. In fact, however, conclusive
proof exists that the state does not and cannot economize, for in order to produce anything,
the state must resort to taxation or to legislation, which demonstrates irrefutably that its subjects
do not want what the state produces, but actually prefer something else as more important than
and those things produced by the state.
Rather than economize, the state can only redistribute.
It can produce more of what it wants
and less of what the people want.
And to recall, whatever the state then produces
will be produced inefficiently.
Finally, the most sophisticated argument
in favor of the state must be briefly examined.
From hops on down to this argument
has been repeated endlessly.
It runs like this. In the state of nature, that is before the establishment of a state permanent conflict reigns, everyone claims a right to everything and this will result in interminable war. There is no way out of this predicament by means of agreement for who would enforce these agreements. Whenever the situation appeared advantageous, one or both parties would break the agreement and conflict would result.
Hence people recognize that there is but one solution to the desirable goal of peace, namely
the establishment per agreement of a state, namely a third independent party as ultimate
judge and enforcer. Yet if this thesis is correct and agreements require an outside
enforcer to make them binding, then a state by agreement can never come into existence
For in order to enforce the agreement which leads to the establishment of a state to make this agreement binding, so to speak, another outside enforcer, a prior state, would already have to exist. And in order for this state to have come into existence, yet another, still earlier state, must be postulated, and so an infinite regress results. On the other hand, if we accept that
If the states do exist, and of course they do, then this very fact contradicts the Hobbesian story.
The state itself has come into existence without any outside enforcer.
At the time of the alleged agreement, no prior state existed.
Moreover, once a state is in existence, the resulting social order still remains a self-enforcing one.
To be sure, if A and B now agree on something, their agreements are made binding by an external party, the state.
However, the state itself is not so bound by any outside enforcer.
There exists no external third party insofar as conflicts between state agents and state subjects are concerned.
And likewise, there exists no external third party for conflicts between different state agents.
Insofar as agreements entered into by the state are concerned, that is, such agreements can only be self-binding on the state.
That is, the state is bound by nothing except its own self-accepted and enforced rules, the constraints that it imposes on itself.
Yet this is precisely what the Hobbesian story wants to rule out as impossible, namely a social system capable of producing peace and security based on the self-enforcement of rules.
Now this brings me to the final step in my argument. If the failures of the pro-state arguments are so apparent and the anti-state or anarchist position is so compelling, why then are anti-intellectual intellectuals so unsuccessful in making their case?
The reason is that ideas don't spread on its own. For ideas to spread it requires proponents of these ideas and these proponents cannot live of love and air alone.
Anti-intellectual intellectuals too require resources to sustain a living so that they can write and teach.
And if they want to be effective in their work, they require an institutional support system that helps promote and distribute their ideas.
This is the crux of the problem then.
True, the distribution of ideas, also unorthodox ideas, has become much easier in recent decades with the development of the Internet.
However, this does not change in the slightest effect that 99% or so of all intellectuals are directly or indirectly supported by the state and that 99% or so of all institutional support of education and research is state financed with predictable consequences. That is to say, there is simply not enough financial support available for anti-intellectual intellectual endeavors to turn the currently
and miniscule minority of principled, anti-state intellectuals into the critical mass necessary to overcome the overwhelming odds in favor of the state. True, some anti-intellectual intellectuals have managed to slip through the cracks and a few have even attained pampered positions within the current status education and research system, but these are institutional accidents which are quickly repaired within the system.
System, by either corrupting these individuals or rendering them institutional, ineffective
and freezing them out. Hence, there is no way around the insight that there are not enough
anti-intellectual intellectuals around because there is insufficient funding to support them
in larger numbers, compelling many potential anti-state intellectuals to choose other non-intellectual
Hardly surprising the state had its hands in creating this situation, namely by doing its very best to destroy what I call the natural elites.
Natural elites are men of independent wealth and independent minds.
and Minds. Competing as such, most directly with the state's monopolistic aspiration
as ultimate judge, natural elites everywhere are considered potentially dangerous by the
state. Accordingly, to reduce this danger, the state has co-opted members of the natural
elite into the state system and thereby made their wealth dependent on continued friendly
behavior on their part, or else it has confiscated or threatened to confiscate their wealth,
and in any case it has sucked them all into the very same education system as everyone
else. To be sure, there still exist wealthy men. Indeed, more of them exist today than
ever before. But increasingly less of them can be described as independently wealthy
because most of their wealth can be destroyed in the blink of an eye by the state. Nor is
there a lack of intelligence to be found among these people. But as a result of decades of
relentless educational propaganda, their once independent minds have become dulled, clouded
and corrupted. They feel guilty about their wealth and dabble in politically correct so-called
Social endeavors to compensate for their alleged sins. And in any case, the rich and famous
today embrace the very same easy to be manipulated high time preference lifestyle of don't worry,
be happy as the masses. Yet not all hope is lost because there exists the Mises Institute
which within the 25 years of its existence has become the world's leading center of
of Anti-Statist Intellectual Work. And despite all efforts to the contrary and however reduced
in numbers and strengths, there still exists some remnants of a natural elite as the presence
of you, the supporters of the Mises Institute, proves. Together, with your help, the moral
and economic perversion that is the state can be exposed. With some luck, we may actually
We initiate a genuine social revolution, namely the triumph of liberty and with it unheard
of prosperity over state tyranny, impoverishment and waste. Or we may at least contribute to
the fact that matters do not become worse, or become worse only more slowly. And in any
case together we can take pride in the fact that we made a contribution to keep moral
and Economic Truths Alive. Thank you.