When A King Sold Bonds Under the Gold Standard This Had No Effect on the Total Money Supply; If He Spent More, Others Would Have to Spend Less

Furthermore, constrained by a commodity money standard, monarchs were unable to "monetize" their debt. When the king sold bonds to private financiers or banks, under the gold standard this had no effect on the total money supply. If the king spent more as a consequence, others would have to spend less. Accordingly, lenders were interested. in correctly assessing the risk associated with their loans, and kings typically paid interest rates substantially above those paid by commercial borrowers.

In contrast, under the gold exchange standard with only a very indirect tie of paper money to gold, and especially under a pure fiat money regime with no tie to gold at all, government deficit financing is turned into a mere banking technicality. Currently, by selling its debt to the banking system, governments can in effect create new money to pay for their debt. When the treasury department sells bonds to the commercial banking system, the banks do not pay for these bonds out of their existing money deposits; assisted by open-market purchases by the government owned central bank, they create additional demand deposits out of thin air. The banking system does not spend less as a consequence of the government spending more. Rather, the government spends more, and the banks spend (loan) as much as before. In addition, they earn an interest return on their newly acquired bond holdings. Accordingly, there is little hesitation on the part of banks to purchase government bonds even at below market interest rates, and rising government debt and increased inflation thus goes hand in hand.

—Hans-Hermann Hoppe, Democracy: The God That Failed; The Economics and Politics of Monarchy, Democracy, and Natural Order (New Brunswick, NJ: Transaction Publishers, 2011), 60n27.

For a Democratic Ruler, It Matters Little Whether Bums or Geniuses, Below or Above-Average People Immigrate into the Country; In fact, Bums and Unproductive People May Well Be Preferred as Residents and Citizens

As far as immigration policies are concerned, the incentives and disincentives are likewise distorted, and the results are equally perverse. For a democratic ruler, it also matters little whether bums or geniuses, below or above-average civilized and productive people immigrate into the country. Nor is he much concerned about the distinction between temporary workers (owners of work permits) and permanent, property owning immigrants (naturalized citizens).  In fact, bums and unproductive people may well be preferred as residents and citizens, because they create more so-called "social problems," and democratic rulers thrive on the existence of such problems. Moreover, bums and inferior people will likely support his egalitarian policies, whereas geniuses and superior people will not. The result of this policy of nondiscrimination is forced integration: the forcing of masses of inferior immigrants onto domestic property owners who, if the decision were left to them, would have sharply discriminated and chosen very different neighbors for themselves. Thus, as the best available example of democracy at work, the United States immigration laws of 1965 eliminated all previous "quality" concerns and the explicit preference for European immigrants, replacing them with a policy of almost complete nondiscrimination (multiculturalism).

--Hans-Hermann Hoppe, Democracy: The God That Failed; The Economics and Politics of Monarchy, Democracy, and Natural Order (New Brunswick, NJ: Transaction Publishers, 2011), 145-146.

Ironically (!) a System of Freely Fluctuating Paper Currencies (the Friedmanite-Monetarist Ideal) Is No Monetary System at All; It Is a System of Dysfunctional Partial Barter

Moreover, secession also promotes monetary integration. The process of centralization has also resulted in monetary disintegration: the destruction of the former international commodity (gold) money standard and its replacement with a dollar-dominated system of freely fluctuating government paper monies, i.e., a global, U.S.-led government counterfeiting cartel. However, a system of freely fluctuating paper currencies--the Friedmanite-monetarist ideal--is strictly speaking no monetary system at all. It is a system of partial barter--dysfunctional of the very purpose of money of facilitating rather than complicating exchange. This becomes obvious once it is recognized that from the point of view of economic theory, there is no special significance attached to the way national borders are drawn. Yet if one then imagines a proliferation of ever smaller national territories, ultimately to the point where each household forms its own country, Friedman's proposal is revealed for what it is--an outright absurdity. For if every household were to issue its own paper currency, the world would be right back at barter. No one would accept anyone else's paper, economic calculation would be impossible, and trade would come to a virtual standstill. It is only due to centuries of political centralization and the fact that only a relatively small number of countries and national currencies remain, and hence that the disintegrative consequences and calculational difficulties are· far less severe, that this could have been overlooked. From this theoretical insight it follows that secession, provided it proceeds far enough, will actually promote monetary integration. In a world of hundreds of thousands of independent political units, each country would have to abandon the current fiat money system which has been responsible for the greatest worldwide inflation in all of human history and once again adopt an international commodity money system such as the gold standard.

--Hans-Hermann Hoppe, Democracy: The God That Failed; The Economics and Politics of Monarchy, Democracy, and Natural Order (New Brunswick, NJ: Transaction Publishers, 2011), 116-117.

What Will a King's Typical Immigration and Emigration Policy Be? (1) Prevent the Emigration (the Leaving) of Productive Subjects; (2) Expel His Nonproductive Subjects, and (3) Keep the Mob of Inferior Producers Out

It is time to enrich the analysis through the introduction of a few "realistic" empirical assumptions. Let us assume that the government is privately owned. The ruler owns the entire country within state borders. He owns part of the territory outright (his property title is unrestricted), and he is partial owner of the rest (as landlord or residual claimant of all of his citizen-tenants real estate holdings, albeit restricted by some preexisting rental contracts). He can sell and bequeath his property, and he can calculate and capture the monetary value of his capital (his country).

Traditional monarchies--and kings--are the closest historical examples of this form of government.

What will a king's typical immigration and emigration policy be? Because he owns the entire country's capital value, he will tend to choose migration policies that preserve or enhance rather than diminish the value of his kingdom, assuming no more than his self-interest.

As far as emigration is concerned, a king would want to prevent the emigration of productive subjects, in particular of his best and most productive subjects, because losing them would lower the value of the kingdom. Thus, for example, from 1782 until 1824 a law prohibited the emigration of skilled workmen from Britain. On the other hand, a king would want to expel his nonproductive and destructive subjects (criminals, bums, beggars, gypsies, vagabonds, etc.), for their removal from his territory would increase the value of his realm. For this reason Britain expelled tens of thousands of common criminals to North America and Australia.

On the other hand, as far as immigration policy is concerned, a king would want to keep the mob, as well as all people of inferior productive capabilities, out. People of the latter category would only be admitted temporarily as seasonal workers without citizenship,and they would be barred from permanent property ownership. Thus, for example, after 1880 large numbers of Poles were hired as seasonal workers in Germany. A king would only permit the permanent immigration of superior or at least above-average people; i.e., those, whose residence in his kingdom would increase his own property value. Thus, for example, after 1685 (with the revocation of the Edict of Nantes) tens of thousands of Huguenots were permitted to settle in Prussia; and similarly Peter the Great, Frederick the Great, and Maria Theresa later promoted the immigration and settlement of large numbers of Germans in Russia, Prussia, and the eastern provinces of Austria-Hungary.

--Hans-Hermann Hoppe, Democracy: The God That Failed; The Economics and Politics of Monarchy, Democracy, and Natural Order (New Brunswick, NJ: Transaction Publishers, 2011), 142-143.

The Idea of Democracy Is Immoral as well as Uneconomical; Justice as well as Economic Efficiency Require a Pure and Unrestricted Private Property Society

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

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

--Hans-Hermann Hoppe, Democracy: The God That Failed; The Economics and Politics of Monarchy, Democracy, and Natural Order (New Brunswick, NJ: Transaction Publishers, 2011), 104-105.

American Society Is Affected by Government Management and Forced Integration; Accordingly, Social Strife and Racial, Ethnic, and Moral-Cultural Tension and Hostility Have Increased Dramatically

Similarly, the social security systems everywhere are on or near the verge of bankruptcy. Further, the collapse of the Soviet Empire represented not so much a triumph of democracy as the bankruptcy of the idea of socialism, and it therefore also contained an indictment against the American (Western) system of democratic--rather than dictatorial--socialism. Moreover, throughout the Western hemisphere national, ethnic and cultural divisiveness, separatism and secessionism are on the rise. Wilson's multicultural democratic creations, Yugoslavia and Czechoslovakia, have broken apart. In the U.S., less than a century of full-blown democracy has resulted in steadily increasing moral degeneration, family and social disintegration, and cultural decay in the form of continually rising rates of divorce, illegitimacy, abortion, and crime. As a result of an ever-expanding list of nondiscrimination--"affirmative action" --laws and nondiscriminatory, multicultural, egalitarian immigration policies, every nook and cranny of American society is affected by government management and forced integration; accordingly, social strife and racial, ethnic, and moral-cultural tension and hostility have increased dramatically.

--Hans-Hermann Hoppe, introduction to Democracy: The God That Failed; The Economics and Politics of Monarchy, Democracy, and Natural Order (New Brunswick, NJ: Transaction Publishers, 2011), xiii.

The Only Task a Government Was Ever Supposed to Assume--of Protecting Our Life and Property--Our Caretakers Do Not Perform

After more than a century of compulsory democracy, the predictable results are before our very eyes. The tax load imposed on property owners and producers makes the economic burden even of slaves and serfs seem moderate in comparison. Government debt has risen to breathtaking heights. Gold has been replaced by government manufactured paper as money, and its value has continually dwindled. Every detail of private life, property, trade, and contract is regulated by ever higher mountains of paper laws (legislation). In the name of social, public or national security, our caretakers "protect" us from global warming and cooling and the extinction of animals and plants, from husbands and wives, parents and employers, poverty, disease, disaster, ignorance, prejudice, racism, sexism, homophobia, and countless other public enemies and dangers. And with enormous stockpiles of weapons of aggression and mass destruction they "defend" us, even outside of the U.S., from ever new Hitlers and all suspected Hitlerite sympathizers.

However, the only task a government was ever supposed to assume--of protecting our life and property--our caretakers do not perform. To the contrary, the higher the expenditures on social, public, and national security have risen, the more our private property rights have been eroded, the more our property has been expropriated, confiscated, destroyed, and depreciated, and the more we have been deprived of the very foundation of all protection: of personal independence, economic strength, and private wealth. The more paper laws have been produced, the more legal uncertainty and moral hazard has been created, and lawlessness has displaced law and order. And while we have become ever more helpless, impoverished, threatened, and insecure, our rulers have become increasingly more corrupt, dangerously armed, and arrogant.

--Hans-Hermann Hoppe, Democracy: The God That Failed; The Economics and Politics of Monarchy, Democracy, and Natural Order (New Brunswick, NJ: Transaction Publishers, 2011), 89-90.