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 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 Managing Editor, The Daily Reckoning