Sep 10, 2022

Democracy Is The Worse Form Of Government, Except For The Rest?

Quote Winston Churchill.

The following article by Brian Maher, in the Daily Reckoning, is, though more or less a spoof, very thought provoking, but must be read to the end to get his conclusion.  For my readers, we must remember that, in the Bible, there were no Democracies, but many Monarchies or Autocracies, even among God's people, the Jews, King Solomon, King David, King Jesus etc. RB

Two centuries ago, a somewhat obscure Scotsman named Tytler made this profound observation: "A democracy cannot exist as a permanent form of government. It can only exist until the majority discovers it can vote itself largess out of the public treasury."  (I think we have arrived at our due date. RB)

The queen of England’s demise has turned our 

mind to monarchy — and democracy.

English royalty had long been defanged, declawed and 

demoted. Today’s monarch is but a totem of sorts, an 

ornament on the hood of an automobile or the top of 

a Christmas tree.

The United Kingdom is a parliamentary democracy. 

It is therefore subject to all the glories, benefits, 

advantages, swindles, vanities and preposterous-

-nesses that democracy offers.

Is democracy superior to monarchy? We have taken 

up the question before (see below).

Today we take up a related question: Is the profligate 

central bank the creation of popular democracy?

Writer Paul Rosenberg — author of Production Versus 

Plunder:

The central issue here is that central banks were 

made practical only by the modern version of 

democracy. Given that “democracy” is a sacred 

dogma these days, that message can be a hard fit.

Nonetheless, the fact is that central banking, and 

giant banks in general, were impractical until 

democracy was instituted.

You have captured our interest, sir. Please continue:

Prior to democracy, loans were undertaken by 

monarchs, who were personally responsible for 

their loans… many rulers simply refused to pay 

loans they had taken. King Philip II of Spain refused 

to pay back his loans at least a dozen times.

Because of this, banking was seriously limited. 

Bankers developed techniques of dealing with 

sovereign defaults, of course, but central banking as 

we know it was more or less impossible.

The institution of democracies and republics, however, 

solved that problem.

But how?

Under democracy, loans are not debited to an 

individual, but to the nation as a whole.

This device of “public credit” makes all citizens, and 

their children, responsible for repaying the loan. From 

the institution of democracy and public credit onward, 

loaning money to a government gave the banker a 

legal and perpetual claim against the people.

That is, democracy “socialized” the banking system. 

The citizen stands in back of the loan:

The person who signs for the loan ends up bearing 

almost no responsibility, and gets to spend all the 

money.

Millions of people who never approved the debt are 

left holding the bag, and passing the obligation to 

their children.

This is how $30 trillion of debt can be piled up on 

top of an otherwise reasonable populace. Under a 

monarchy, this couldn’t have happened.

Here Mr. Rosenberg cites the poet Percy Shelly:

The device of public credit was first systematically 

applied as an instrument of government... The most 

despotic governments of antiquity were strangers 

to this invention, which is a compendious method 

of extorting from the people far more than praetorian 

guards, and arbitrary tribunals... could ever wring.

Neither the Persian monarchy nor the Roman 

empire, where the will of one person was acknow-

ledged as unappealable law, ever extorted a 

twentieth part the proportion now extorted from the 

property and labor of the inhabitants of Great Britain.

Substitute the inhabitants of Great Britain for the inhabit-

ants of the United States — or any other “advanced” 

nation — and you have the flavor of it.

Why haven’t we citizens seized our pitchforks and run 

the central bankers through?

Voting. Voting offers us the illusion of control. The 

swindle is a self-swindle.

Here this Rosenberg fellow cites Mr. John K. Galbraith:

When people put their ballots in the boxes, they are, 

by that act, inoculated against the feeling that the 

government is not theirs. They then accept, in some 

measure, that its errors are their errors, its aberra-

tions their aberrations, that any revolt will be 

against them.

Ignorance is bliss, it is often said. There is your proof.

Yet as is also said: Ignorance is costly…

Below, we republish our reflections on monarchy and 

democracy. Which is superior? Read on.

Regards,

Brian Maher
Managing Editor, The Daily Reckonin

The Daily Reckoning Presents: Is democracy truly 

superior to monarchy?…

******************************

Democracy vs. Monarchy

By Brian Maher

Brian Maher

BRIAN
MAHER

Today we trample sacred ground… 

trumpet a message of heresy… and 

offend the pieties. For we challenge 

the cherished and soothing assump-

tions of democracy.

In 2001, academic Hans-Hermann Hoppe scribbled 

a book bearing the soaring title Democracy: The God 

That Failed. Hoppe’s work is a dart leveled against that 

holiest of secular divinities.

Hoppe’s primary tort against democracy?

It wastes. It exhausts its capital. It forever takes the 

short view. Hoppe uses the economic concept of 

time preference to nail his point through.

A Jill with low time preference delays her gratification 

until the future. She is disciplined. She is willing to 

have her cake later — only after she has tended to 

her duties.

But a Jack with high time preference orients toward 

present consumption. He wants his cake now — and 

the future can go scratching.

Democracy, in Hoppe’s regard, “wants it now.” It is a 

spendthrift, a profligate, a child at large in a candy 

store.

As the drunkard cannot see beyond the next drink… 

democracy cannot see past the next election.

The problem, says Hoppe, is that democratic 

leaders do not own the machinery of government. 

It is theirs on 

temporary loan. Thus the democratic politician is 

a mere placeholder.

But is that not our system’s cardinal virtue — that 

power 

is not permanently lodged in a single vessel? A 

rotating 

roster of rogues is far superior to one alone, you 

counter.

Otherwise, the American Revolution was a vast 

swindle, 

and the Fourth of July is a blackguard’s holiday.


A Prearranged Raid on the Treasury

But because a leader under democracy does not own 

the government apparatus, argues Hoppe, he has no 

incentive to maximize its value. Instead, he tends to 

deplete it. His limited time horizon forces him toward 

immediate gratification.

That is, he must get while the getting is there to be gotten.

Consider the aspiring democratic official who seeks the 

franchise of a demanding public.

He may feel the tug of fiscal conscience. But should he 

fail to gratify the crowd’s clamorings, he knows the other 

fellow will. And our democratic aspirant will lose his 

election.

So he offers up the requisite sweets.

If Social Security benefits must increase to sweep him 

into office, they will increase. Will it take more Medicare 

benefits, more unemployment insurance, more welfare? 

Then these you will see.

His election represents a prearranged raid upon the 

Treasury. If the national purse is thin, if the burden 

cannot be met from existing stocks, then let it go upon 

the credit card.

Is the business sordid? Might it eventually throw the 

Republic into bankruptcy?

Well, eventually is a long way off, he says. Let it fall 

into the next fellow’s lap. Besides, we’ll simply grow 

our way out of it.

This is the office-seeker under modern democracy.

Compare, for a moment, democratic government 

with a rented automobile…

Who Ever Washed a Rental Car?

The renter does not own the auto. He, therefore, has no 

regard for its long-term health. So he over-accelerates 

the engine. He pummels the brakes. Down its gullet, he 

pours the lowest-test gasoline. Would he ever check the 

oil?

And who, may we inquire, has ever run a rental through 

a wash?

Here Hoppe applies the theory to democratic govern-

ment:

It must be regarded as unavoidable that public-govern-

ment ownership results in continual capital consump-

tion. Instead of maintaining or even enhancing the 

value of the government estate, as a king would do, 

a president (the government’s temporary caretaker 

or trustee) will use up as much of the government 

resources as quickly as possible, for what he does 

not consume now, he may never be able to consume… 

For a president, unlike for a king, moderation offers 

only disadvantages.

Hoppe speaks of a king.

Unlike democracy, Hoppe contends, monarchy takes the 

long view. The monarch owns the apparatus of govern-

ment. As will his heirs. So he naturally inclines to policies 

that increase the value of his property over time.

If Social Security, Medicare and the rest begin to deplete 

the government’s stocks, the monarch will announce a 

halt to them.  (If his subjects ask for his help) RB

“It’s welfare you want, subject? I understand the church 

runs a charity."

“Social Security, you seek? I suggest you begin planning 

early for your retirement. And remember to save against 

the rainy day".

“You say you want health care? I hope you don’t smoke 

or drink too much. And let me mention it now — sugar is 

a far-from-healthful substance. Besides, there are private 

insurers. I can refer you to several if you wish.”


The People Tell the King to Get Bent

Is such a system undemocratic? Certainly.

Callous, perhaps? Well, perhaps it is.

But is it fiscally stable? Yes.

In brief, monarchy may be better with money than 

democracy. It is a superior steward of wealth — at 

least by this theory.

Once again, Hoppe:

While a king is by no means opposed to debt, 

he is constrained in this “natural” inclination by 

the fact that as 

the government’s private owner, he and his heirs 

are considered personally liable for the payment 

of all 

government debts (he can literally go bankrupt, 

or be forced by creditors to liquidate government 

assets).

Consider, as one example:

In 1392, England's Richard II was in arrears to

the Pope in Rome… and required 1,000 pounds 

toward satisfaction of his debt. He did not have it.

So old Rich appeared before the citizens of 

London with an open hat.

Moreover, they refused him. Imagine it!

Freeman Tilden, from his neglected 1936 

masterwork 

A World in Debt:

Kings had power enough to contract 

debts, but found it much more difficult 

to take advantage of that power

… The feudal system, with its insecurity 

and constant 

clash of petty divisions, was not calcu-

lated to invite credit.

In distinct contrast, Hoppe argues, we find 

the democratic president:

A presidential government caretaker is not held liable 

for debts incurred during his tenure of office. Rather, 

his debts are considered “public,” to be repaid by 

future (equally nonliable) governments.

Perhaps this explains — pandemic aside — why the 

national debt of the United States runs to some $31 

trillion?

It is a capital fact beyond all dispute:

Most democratic nations groan beneath bloated 

government… extortionate taxation… and 

Himalayan levels of debt.

Taxes

How does this lovely, lovely state compare with the 

barbarous age of monarchs, Mr. Hoppe?

During the entire monarchical age until the 

second half of the 19th century… the tax burden 

rarely exceeded 5% of national product. Since 

then it has increased constantly. In Western 

Europe it stood at 15–20% of national product 

after World 

War I, and in the meantime it has risen to 

around 50%.

Government spending ran to roughly 10% of GDP 

prior to World War I. It currently nears 50% in 

many democratic 

countries.

Total government spending in this Land of the 

Free amounts 

to 36% of GDP — nearly 40%.

Perhaps in retrospect, the world might have been 

made safe for monarchy in 1917.

And maybe our Colonial forefathers should have 

left old King George alone in 1775. His tax bite 

was so light… it failed to 

break the skin.

Our researches reveal that American Colonial 

taxation ran to about 1% of total income — 1%.

And between 1764 and 1775, claims political 

scientist Alvin Rabushka:

The nearly 2 million white Colonists in America paid on 

the order of about 1% of the annual taxes levied on the 

roughly 8.5 million residents of Britain, or 1/25th, in per 

capita terms…

As traitorous as it may appear, we are half-tempted to 

disinter King George’s innocent bones and throw them 

a much overdue parade.

But let us entertain no more thoughts of heresy.

The Worst System of Government… 

Except for the Rest

Hoppe’s book is actually no call for monarchy. 

As the author himself states at the onset — 

“I am not a monarchist and the following is not 

a defense of monarchy.”

His primary purpose is to diagnose an illness 

— not to prescribe a cure.

Hoppe’s sins against democracy are nonethe-

less of the mortal variety. And mainstream 

academics put him under excommunication 

for his blasphemies.

But to repeat, Hoppe does not call for monarchy. 

Nor do we.

Beneath our seditious motley beats the heart of 

an American patriot… and our blood runs true 

under red, white and blue.

Besides, a king could be every inch the scoundrel 

as an American president. And since he faces no 

election, how could we possibly count upon him 

to say amusing and idiotic things?

Let us, therefore, not discount the comedic value 

of democratic government.

In addition, monarchy is certainly no guarantee 

against bankruptcy — as history records well. 

More than a few ne’er-do-well kings have driven 

their realms to rack and ruin. Who can dispute it?

But it is due more to incompetent kingmanship 

than kingmanship itself. A rascally Henry VIII can 

inherit a throne as easily as a wise Solomon. 

Regardless, it matters little…

Hoppe’s monarchic realm will never exist — not 

in today’s age of mass democracy.

But does it soften his case?

Winston Churchill famously quipped that 

democracy was the worst form of government 

except for the rest.

But upon further reflection, perhaps monarchy 

is the worst form of government… except for 

the rest…

Regards,

Brian Maher

Brian Maher
Managing Editor, The Daily Reckoning


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