DemocracyThe God That Failed (10 page)

The legislatively-enacted redistribution of income and wealth within civil society can essentially take on three forms. It can take the form of simple transfer payments, in which income and/or wealth is taken from Peter (the "haves") and doled out to Paul (the "have-nots"). It can take the form of "free" or below-cost provision of goods and services (such as education, health care, or infrastructure) by government, in which income and/or wealth is confiscated from one group of individuals—the taxpayers—and handed out to another, nonidentical one—the users of the respective goods and services. Or it can take the form of business and/or consumer regulations or "protection laws" (such as price controls, tariffs, or licensing requirements), whereby the wealth of the members of one group of businessmen or consumers is increased at the expense of a corresponding loss for those of another "competing" group (by imposing legal restrictions on the use which the latter are permitted to make of their private properties).

Regardless of its specific form, however, any such redistribution has a two-fold effect on civil society. First, the mere act of legislating—of
democratic lawmaking—increases the degree of uncertainty. Rather than being immutable and hence predictable, law becomes increasingly flexible and unpredictable. What is right and wrong today may not be so tomorrow. The future is thus rendered more haphazard. Consequently, all-around time-preference degrees will rise, consumption and shortterm orientation will be stimulated, and at the same time the respect for all laws will be systematically undermined and crime promoted (for if there is no immutable standard of "right," then there is also no firm definition of "crime").
³¹

³⁰
Most important among the policies affecting social time preference is the introduction of "social security" legislation, as it was introduced during the 1880s in Bismarck's Germany and then became universal throughout the Western world in the aftermath of World War I. By relieving an individual of the task of having to provide for his own old age, the range and the temporal horizon of private provisionary action will be reduced. In particular, the value of marriage, family, and children will fall because they are less needed if one can fall back on "public" assistance. Indeed, since the onset of the democratic-republican age, all indicators of "family dysfunction" have exhibited a systematic upward tendency: the number of children has declined, the size of the endogenous population has stagnated or even fallen, and the rates of divorce, illegitimacy, single parenting, singledom, and abortion have risen. Moreover, personal-savings rates have begun to stagnate or even decline rather than rise proportionally or even over-proportionally with rising incomes. See Allan C. Carlson,
Family
Questions:
Reflections
on
the
American
Social
Crises
(New Brunswick, N.J.: Transaction Publishers, 1992); idem, "What Has Government Done to Our Families?"
Essays
in
Political
Economy
13 (Auburn, Ala.: Ludwig von Mises Institute, 1991); Bryce J. Christensen, "The Family vs. the State,"
Essays
in
Political
Economy
14 (Auburn, Ala.: Ludwig von Mises Institute, 1992); also Joseph A. Schumpeter,
Capitalism,
Socialism,
and
Democracy
(New
York: Harper, 1942), chap. 14.

³¹
On the relationship between time preference and crime see James Q. Wilson and Richard J. Herrnstein,
Crime
and
Human
Nature
(New York: Simon and Schuster, 1985), pp. 49-56 and 416-22; Edward C. Banfield,
The
Unheavenly
City
Revisited;
idem, "Present-Orientedness and Crime," in
Assessing
the
Criminal:
Restitution,
Ret
ribution,
and
the
Legal
Process,
Randy E. Barnett and John Hagel, eds. (Cambridge, Mass.: Ballinger, 1977). While high time preference is by no means equivalent with crime—it also may find expression in such perfectly legal forms as personal recklessness, insensitivity, rudeness, unreliability, or untrustworthiness—a systematic relationship between them still exists, for in order to earn a market income a certain minimum of planning, patience, and sacrifice is required: one must first work for a while before one gets paid. In contrast, specific criminal activities such as murder, assault, rape, robbery, theft, and burglary require no such discipline: the reward for the aggressor is tangible and immediate, but the sacrifice—possible punishment—lies in the future and is uncertain. Accordingly, if the degree of social time preference is increased, it can be expected that the frequency of aggressive activities will rise. As Banfield explains:

The threat of punishment at the hands of the law is unlikely to deter the present-oriented person. The gains that he expects from the illegal act are very near to the present, whereas the punishment that he would suffer—in the unlikely event of his being both caught and punished—lies in a future too distant for him to take into account. For the normal person there are of course risks other than the legal penalty that are strong deterrents: disgrace, loss of job, hardship for wife and children if one is sent to prison, and so on. The present-oriented person does not run such risks. In his circle it is taken for granted that one gets "in trouble" with the police now and then; he need not fear losing his job since he works intermittently or not at all, and as for his wife and children, he contributes little or nothing to their support and they may well be better off without him.
(The
Unheavenly
City
Revisited,
pp. 140-41)

On the magnitude of the increase in criminal activity brought about by the operation of democratic republicanism in the course of the last hundred years as a consequence of steadily increased legislation and an ever-expanding range of "social," as opposed to private, responsibilities—see McGrath,
Gunfighters,
Highway
men,
and
Vigilantes,
esp. chap. 13. Comparing crime in some of the wildest places of the American "Wild West" (two frontier towns and mining camps in California and
Nevada) to that of some of the wilder places of the present age, McGrath ("Treat Them to a Good Dose of Lead," pp. 17-18) sums up thus by stating that the frontier towns of Bodie and Aurora actually suffered rarely from robbery ... today's cities, such as Detroit, New York, and Miami, have 20 times as much robbery per capita. The United States as a whole averages three times as much robbery per capita as Bodie and Aurora. Burglary and theft were also of infrequent occurrence in the mining towns. Most American cities today average 30 or 40 times as much burglary and theft per capita as Bodie and Aurora. The national rate is ten times higher.... There were no reported cases of rape in either Aurora or Bodie Today, a rape occurs every five minutes. . . . More than 4,100 of them occur in Los Angeles county alone.... The rape rate in the United States per 100,000 inhabitants is 42.... [Violence, including homicide, was frequent in Bodie and Aurora] but the men involved were both young, healthy, armed, and willing. . . . Yes, men (and some women) went about armed and male combatants killed each other, mostly in fights where there were somewhat "even chances." On the other hand, the young, the old, the female, and those who chose not to drink in saloons and display reckless bravado were rarely the victims of crime or violence. Moreover, dirty, low-down scoundrels got their just dessert.... In the early 1950s the city of Los Angeles averaged about 70 murders a year. Today the city averages more than 90 murders a month— In 1952 there were 572 rapes reported to the LAPD. In 1992 there were 2,030 reported. During the same years robbery increased from a reported total of 2,566 to 39,508, and auto theft from 6,241 to 68,783.

Second, any income or wealth redistribution within civil society implies that the recipients are made economically better off without having produced either more or better goods or services, while others are made worse off without their having produced quantitatively or qualitatively less. Not producing, not producing anything worthwhile, or not correctly predicting the future and the future exchange-demand for one's products thus becomes relatively more attractive (or less prohibitive) as compared to producing something of value and predicting the future exchange-demand correctly. Consequently—and regardless of the specific legislative intent, be it to "help" or "protect" the poor, the unemployed, the sick, the young or the old, the uneducated or the stupid, the farmers, steelworkers or truckers, the uninsured, the homeless, whites or blacks, the married or unmarried, those with children or those without, etc.,—there will be more people producing less and displaying poor foresight, and fewer people producing more and predicting well. For if individuals possess even the slightest control over the criteria that "entitle" a person to be either on the receiving or on the "giving" end of the redistribution, they increasingly will shift out of the latter roles and into the former. There will be more poor, unemployed, uninsured, uncompetitive, homeless, and so on, than otherwise. Even if such a shift is not possible, as in the case of sex-, race-, or age-based income or wealth redistribution, the incentive to be productive and farsighted will still be
reduced. There may not be more men or women, or whites or blacks, at least not immediately. However, because the members of the privileged sex, race, or age group are awarded an unearned income, they have less of an incentive to earn one in the future, and because the members of the discriminated sex, race, or age group are punished for possessing wealth or having produced an income, they, too, will be less productive in the future. In any case, there will be less productive activity, self-reliance and future-orientation, and more consumption, parasitism, dependency and shortsightedness. That is, the very problem that the redistribution was supposed to cure will have grown even bigger. Accordingly, the cost of maintaining the existing level of welfare distribution will be higher now than before, and in order to finance it, even higher taxes and more wealth confiscation must be imposed on the remaining producers. The tendency to shift from production to nonproduction activities will be further strengthened, leading to continuously rising time-preference rates and a progressive decivilization—infantilization and demoralization—of civil society.
³²

In addition, with public ownership and free entry into a democratic-republican government, the foreign policy changes as well. All governments are expected to be expansionary, as explained above, and there is no reason to assume that a president's expansionary desires will be smaller than a king's. However, while a king may satisfy this desire through marriage, this route is essentially precluded for a president. He does not own the government controlled territory; hence, he cannot contractually combine separate territories. And even if he concluded inter-government treaties, these would not possess the status of contracts but constitute at best only temporary pacts or alliances, because as agreements concerning publicly-owned resources, they could be revoked at any time by other future governments. If a democratic ruler and a democratically elected ruling elite want to expand their territory and hence their tax base, then only a military option of conquest and domination is open to them. Hence, the likelihood of war will be significantly increased.
³³

³²
On the "logic" of government interventionism—its counterproductivity, inherent instability, and "progressive" character—see Ludwig von Mises,
Critique
of
Interventionism
(New Rochelle, N.Y.: Arlington House, 1977); see also idem,
Human
Action,
part 6: "The Hampered Market Economy."

For empirical illustrations of the decivilizing and demoralizing effects of redistributive policies see Banfield,
The
Unheavenly
City
Revisited;
Charles Murray,
Losing
Ground
(New York: Basic Books, 1984).

³³
Prior to and long after the onset of the democratic-republican transformation of Europe with the French (and the American) Revolution, most prominent social
philosophers—from Montesquieu, Rousseau, Kant, Say, to J.S. Mill—had essentially contended "That it was only the ruling classes [the king, the nobility] who wanted war, and that'the people,' if only they were allowed to speak for themselves, would opt enthusiastically for peace." Michael Howard,
War
and
the
Liberal
Conscience
(New Brunswick, N.J.: Rutgers University Press, 1978), chaps. 1 and 2, p. 45. Indeed, Immanuel Kant, in his
Perpetual
Peace
(1795), claimed a republican constitution to be the prerequisite for perpetual peace. For under a republican constitution,

Moreover, not only the likelihood but also the form of war will change. Typically, monarchical wars arise out of disputes over inheritances brought on by a complex network of interdynastic marriages and the irregular but constant extinction of certain dynasties. As violent inheritance disputes, monarchical wars are characterized by territorial objectives. They are not ideologically motivated quarrels but disputes over tangible properties. Moreover, since they are interdynastic property disputes, the public considers war the king's private affair, to be financed and executed with his own money and military forces. Further, as private conflicts between different ruling families the public expects and the kings feel compelled to recognize a clear distinction between combatants and noncombatants and to target their war efforts specifically against each other and their respective private property. As late as the eighteenth century, notes military historian Michael Howard,

on the continent commerce, travel, cultural and learned intercourse went on in wartime almost unhindered. The wars were the king's wars. The role of the good citizen was to pay his taxes, and sound political economy dictated that he should be left alone to make the money out of
which to pay those taxes. He was required to participate neith
er in the decision out of which wars arose nor to take part in them once they broke out, unless prompted by a spirit of youthful adventure. These matters were
arcana
regni,
the concern of the sovereign alone.
³⁴

when the consent of the citizens is necessary to decide whether there shall be war or not, nothing is more natural than that, since they would have to decide on imposing all of the hardships of war onto themselves, they will be very hesitant to begin such an evil adventure. In contrast, under a constitution where the subject is not a citizen, which is thus not republican, it is the easiest thing in the world, because the sovereign is not a citizen of the state but its owner, his dining, hunting, castles, parties, etc., will not suffer in the least from the war, and he can thus go to war for meaningless reasons, as if it were a pleasure trip.
(Gesammelte
Werke
in
zwolf
Banden,
Wilhelm Weischedel, ed. [Frankfurt/M.: Suhrkamp, 1964], vol. 11, pp. 205f.)

In fact the opposite is true: the substitution of a republic for a monarchy does not imply less government power, or even self-rule. It implies the replacement of bad private-government administration by worse public-government administration. On the illusionary character of Kant's and others' views to the contrary and the "positive" historical correlation between democracy and increased militarization and war, see Michael Howard
War
in
European
History
(New York: Oxford University Press, 1976); John F.C. Fuller,
War
and
Western
Civilization
1832-1932
(Freeport, N.Y.: Books for Libraries, 1969); idem,
The
Conduct
of
War,
1789-1961
(New York: Da Capo Press, 1992); also Ekkehard Krippendorff,
Staat
und
Krieg
(Frankfurt/M.: Suhrkamp, 1985).