Hoppe's Democracy: The God That Failed

this is jeff deist and you're listening to the human action podcast [Music] ladies and gentlemen welcome back once again to another human action podcast show now if you've been following along you know we've been going through books this is the podcast which is all about books we're not afraid to read them here and we've worked our way through a lot of mises is canon and also murray rothbard's books we've also done some one-offs most recently we spent some time with kind of a an unknown henry hazlett book on constitutionalism and parliamentary government so that was fun but as promised i told our audience that i would begin working our way through some of the hans herman hoppa collection and i thought with the election coming up in the united states there was no better time to dig into democracy the god that failed which is probably hapa's most famous and also most controversial book and so i'm very pleased this week to join me in this discussion is actually a friend of mine giant bhandari uh who is someone i have gotten to know through his capitalism and morality conference which he runs every summer in canada when they let us do so with covid he is a long time investor and advisor in the national resource natural resources and mining stock sector he once worked for casey research and also a thoroughgoing hopkins so all that said giant it's great to hear your voice thanks for having me jeff well let me start with this when this book came out in 2001 or alternatively i suppose when you first became aware of this book you know where were you both literally physically and also in your ideological or intellectual development jeff there has been a lot of my years is spent on trying to understand what was wrong about india the country that i grew up in and i was always trying to connect the dots of my experiences to do with india and why it had continued to deteriorate now contrary to conventional wisdom india is a growing economy it is a country that is improving but if you really pay close attention to that country you realize that that country has continued to deteriorate and i have been on an agenda to understand what was wrong about it and i have traveled the world i have been to uh tens and tens of third world countries and i came up with exactly the same problem that all these third world countries were getting worse by the day despite that the conventional wisdom is completely different the world thinks that these third world countries are developing countries which is actually not true so i came across hans hermann's hoppe spoke democracy the gods that failed and it gave me a theoretical framework to put together my experiences to put together what i had seen growing up in india and i started to realize that the key problem behind deterioration of india was actually democracy and uh so that is where i came to see where hans hoppe not only had done a fabulous job in showing why democracies uh lead to worsening and a cultivation of an in an immoral society even in the west but also that it leads to worsening of societies in the third world uh and i came to understand that actually democracy is the worst way to run a society because it's anti-marital and it destroys the spine and institutions of the society so were you living in india when you read it um no i was uh yes actually i was living in india but i read it when i was already in canada and soon after i read the book i decided that i need to get to know uh him dr hans hermann hope a better and i went to one of his conferences in trakai in turkey which was another mind-altering conference just because of one fact because he does not worry about uh talking about issues which are politically incorrect and not acceptable in the conventional uh mainstream society well the introduction to this book you know it's an introduction but he doesn't ease you in jaya i mean he gets right into it and and he lays out his basic thesis for the book which is first i'll run through this quickly first that we might view monarchies in the past as privately owned governments and they're not as bad as advertised we might view democracies as publicly owned governments and they're not as good or as salutary is advertised and finally that no state ultimately whether monarchical or aristocratic or theocratic or democratic can be viewed as justified when we really get into the theory of it and so what states really produce are bads which are injustice and aggression when what we want in terms of organizing society is goods we want justice and non-aggression so you know tell us a little bit more about you know how you view his thesis so jeff any kind of government is bad government governments are designed to be unaccountable uh the only kind of government i want is the minimal government a minimal for the culture of that society and any uh approach for any society should be to minimize the size of the government what we have in democratic societies is a compulsion and a dna of democratic society is to keep increasing the size of the government because democratic societies deal with the uh with getting as many votes as possible and that come through a populism and demagoguery what they want to do is to promote welfare state which leads to an immoral society and worsening of the morality of the society and as he addresses in the book it leads to increase in illegitimacy in the society uh it leads to a society which becomes increasingly a whining and entitled society people think it is their right to get hold of the money from the pockets of other people uh people who are wealth generators and that really creates an inversion in the meritocratic system because instead of money is staying in the hands of the capitalists my people who provide uh capita financial spine to a civilization the money goes from their hands to the consumers who eat away that money into chips and pepsis and coca-colas and what you see is a degeneration of the society and again this is what i have seen in in india i have seen the same over the last 30 years of my life in the west the western society has continued with every gyration of democratic election a worsening of the society the spine the institutions of the society in the west has have continued to deteriorate and the power structure has got inverted the lowest common denominator increasingly controls the society in the western countries well one of the fascinating things he points out in the introduction is that world war one which he really marks as the beginning of the end in terms of democracy democratic republicanism coming to the fore across the west is that world war one was unlike most previous wars of the 19th century which were fought among monarchs was a war as much about ideology as it was about territory so that's a new twist and i think that presaged the wars we have unfortunately found ourselves in since that so you know i wonder is there any analogy here when india came out of its colonial british period how did it morph or find its way to what we might call direct or mass democracy india became a mass democracy from get go after the british left and that actually is exactly what happened in pakistan in in all of africa and that had happened in a lot of colonial countries in cambodia vietnam and the disaster was that most of these countries immediately after the colonial powers left became totalitarian dictatorial governments but again the way people look at history they ignore that episode uh people also like to think that the poke the more poor you are the higher your growth economic great growth rate should be but again if you really pay closer attention to countries like india and the other third world countries post their independence so-called independence you see that economic growth actually across the third world was worse than it was in the developing developed world which shows to you that institutions of these countries were starting to crumble rapidly the best people from these countries left these countries so uh the best people from india left for the uk immediately after 1947 and they were smart enough to realize what was happening and british had basically washed their hands off india because they were no longer gaining any uh any uh positive as uh profitability from uh occupying these countries or running these countries they were tired of running these chaotic countries so the best indians left in 1947 for the uk because they liked the the british empire my grandfather had photographs of the british kings and queens on his office walls until his very last days because he told me consistently that if nothing else the british gave him respect for paying for his paying taxes to the british government whereas in india what came after india became so-called independent you had to pay bribes to the tax officers and you had to pay bribes in accordance to how much tax you were paying because the tax officer automatically assumed that the higher the tax you were paying the more tax you more income you must be hiding so that was the kind of degeneration that he had seen and i have consistently seen and that's again you see across the world across the third world political deterioration started happening right away democracies immediately led to tyranny's not freedom again against the conventional wisdom democracy leads to the worst tyrannies because the masses come to rule the societies and masses are interested in bread and circuses they are not interested in moral values they are not interested in philosophy so that was what i saw happening in the country tyranny was everywhere when i was growing up again conventional wisdom is that democratic countries are not tyrannical which is actually completely false because as long as the masses approve of tyranny of the government it keeps happening and that is where i see a huge amount of tyranny and oppression in the country in india and as you can see immediately west of india pakistan has gone completely crazy it is it has it has gone completely fanatic and india is on the same on the same track india is rapidly becoming a fanatic country because again the way you get the vote of the masses is by pandering to their religious and their bread and circus related demands and you lead to a fanatic immoral society with because of hollowing out out of the institutions well in chapter one of hapa's book is it is about exactly what you just characterized which is the process of decimalization so hapa brings up time preference and he says that the opposite of that the process of civilization is set in motion by individual savings so capital accumulation allows for a more productive economy uh each individual worker becomes more productive wages rise savings rise and all of this is of course beneficial and and to be encouraged so you know whether we're talking about india or the united states or any third world country which doesn't really respect this process or encourage this process you know how why is capital not being accumulated in india let's just say the country with with other than canada and the us with which you're most familiar what why is why are individual savings in this process of civilization why is this not happening in india well firstly you have to look at the culture indians are not entrepreneurial people now again conventional wisdom is that indians are very entrepreneurial people but the fact is that the entrepreneurial people of india has left the country and they are the kind of people you come across as gujaratis in the uk or among some of the business people in the united states now what happens with the masses is that they are envious and they want to take away money of the people who are savers and who generate wealth and in a democratic system you give them a feeling that because they have equal rights in terms of voting they must also be equal in every aspect and they should get a part of the wealth created by wealth creators and savers now if a wealth say creator and saver thinks that his money is going to go away by theft uh using the government he has no reason to either create his capital or he has every reason to take that wealth away from his own country now uh this leads to a situation historically in which indians took out took out their wealth from india to outs countries outside the country where they had better protection of their capital for example switzerland the united states or the united kingdom but as time has progressed these people are more and more fearful about protecting their wealth in uh outside the country as well because uh there are uh more and more restrictions on how your money moves around the world uh and these are the real problems that the these people face and what they end up doing mostly is that they buy properties and they buy gold and they distrust the system so much that they dig holes in their houses and hide their gold and silver and that happens across the country people don't even trust the banks because again the government is nothing but a a robbing agent they drop for the masses and they want to take away wealth from the wealthy people now of course masses are in delusion because they think they are going to get this money that they get government to rob from the wealth creators what actually happens is that people who run the government particularly the bureaucrats pocket virtually everything that they steal from wealth generators so capital does not get accumulated poor people don't get jobs and the smartest people leave the country and what you have see is the same kind of deterioration in india pakistan and the rest of the third world countries now the united states and india are both at least nominally democratic countries but we know that you know there are owners and controllers in the united states would say there's there's a set of oligarchs who basically own and control the us who essentially owns and controls india there is uh really no real control it's a very very chaotic society indians i like to say that an organization of two people in india has one percent too many um because indians simply cannot work in an in an organization there's no teamwork it's an extremely low trust or i would say negative trust society you should be most fearful of people next to you so no one really controls that society except that uh some very rich businessman and again remember that in a democratic corrupt institutionally corrupt society businessmen are not the people who are wealth generators they are the people who make money because of their connections with the government so what businessmen do is that they want to get privileges from the government and these are the big houses two or three big houses in the country and they have been able to collect a lot of wealth in the country only because of their uh connections with the government they are very dysfunctional companies they don't really provide proper services to the people and the services they provide are at a very high cost i talk often talk with an economist a mississippian friend of mine in india and we always talk this thing that the companies are actually negative wealth generating companies in india and you can see that from the gdp per capita of india which is only about two thousand dollars per year now in the medieval times uh gdp per capita of india was about 500 per capita so in the last 500 years gdp per capita has hardly grown in that country and again you see that most of the gdp has grown because of higher agricultural productivity and technological innovation that india goes as as the free gift from the western world but because of organizations because of businesses india has failed to generate wealth and it continues to actually get worse as time gone by so again if you put all this together you see that it's an extremely chaotic country the prime minister and the president might think that they control the country but they have virtually no control over the country the only control have they have is in being a catalyst to worsen the country on a daily basis the rich people control only as much as in the sense that they can get uh tax money diverted into their pockets well it's interesting you bring up the rich because there's a quote here at page 73 of hapa's book that says rich men still exist today but more frequently than not they owe their fortune now directly or indirectly to the state hence they are often more dependent on the state's continued favors than people of far lesser wealth so this idea that the you know wealthy elites or at least business elites would be uh less less inclined to support the state is of course false but when you when you talk about both countries the united states and india as being mass democracies what's the difference so is it just that the level of corruption that you and i or hapa would argue is engendered by democracy and democratic voting is greater in india i mean what creates what why is there a greater degree of trust in the united states and why is there a greater degree of capital accumulation in the united states if in fact as per hapa democracy is so bad yeah but jeff culturally they are very different societies and that takes us out of the context of democracy the reason the u.s is what it is is because it's uh it's basically england a new version of england uh enlightenment awakening of human consciousness happened in the united kingdom and you have to marinate a society in the concept of reason in the concept of philosophy in the concept of a western kind of culture for at least a millennia or two before you awaken that society before you make people in that society interested in more than just pleasures and you have to get people interested in things more than themselves in they must develop a higher calling we must remember that the third world countries are culturally very different just because they have technological capabilities because they have seeped into them from the west does not mean that just because they are more wealthy but just because they can watch western films and put on western clothes makes them spiritually and morally awakened they are actually not they have no interest in values they have no interest in principles in fact jeff if i talk the same things that you and i are discussing right now virtually every indian including all the most educated indians will laugh at me because they they will tell me uh what are you becoming are you trying to become a philosopher are you trying to become you're so stupid in your conversation so that's the kind of thinking those people have well let's turn our lens to the us and canada a little bit and you know where we can take this perspective and say what are the problems which are i think rapidly developing in the west and one thing hapa points out is that one of the great tricks of democracy is that it eliminated this them versus us class consciousness that existed under a monarch and we get into this mindset we where we are the government and that we're all sort of the owners of the united states and so because of that you know democracy engenders higher and higher time preference even in the west and that it makes us want to vote ourselves stuff today at the expense of tomorrow so you know from your perspective uh do you think the united states and canada are on a bad path absolutely i have been living in the west for the last 30 years and i have seen a continual deterioration in the western society the people with the money have increasingly become people who are connected with the government more people who cater to the mass expectation of bread and circuses and so yes a democratic system irrespective of where it is has led to a continual deterioration in the western society what you have for example in canada justin trudeau is what i might call won't even call her bobo because he is just interested in pandering to the lowest common denominator in the society and in a situation like that you hollow out the institution slowly because the government the institutions are no longer run on moral values uh they are run on pandering to the to the people who are interested in bread and circuses and the fact remains jeff that even in the most enlightened western society you would always have more than 50 people who are not interested in philosophy who are not interested in moral values and they are not a part of institutional building but he by giving them the vote you actually bring them in institutional building but they are not interested in putting a moral and rational framework in the institutions and they participated in converting those institutions into bread and circus uh institutions and again that's what you see in the western world today in the united states and particularly in canada where the government is all about inc or actually increasingly or all about bread and circuses today you know it's interesting in chapter four of this book on democracy redistribution and the destruction of property this is the title of the chapter another subtle title from hapa here you know he makes this point which which i thought was interesting if we're going to have universal suffrage or near universal suffrage within a country why not have worldwide suffrage when and if that were the case effectively china and india both of which have over a billion people would would hold sway over all of us so doesn't that naturally follow from the same thinking that that wants universal suffrage within a country of course and if that's what you really believe in you will destroy the society completely indians and africans will actually rule the world and actually i hold for china in much higher regard than i do the rest of the third world because china is the only third world country that managed to let go of its third world status but if you gave uh a universal suffrage on the basis of one global government that will be a complete destruction of the world because uh what those people will do is that wealth creators will cease to exist their money will go from capital to consumption uh people with money will not be wealth creators they will just be those thieves who will be taking money out of the pocket of tax savers so they can't be wealth creators so they will be money class but they cannot be wealth creators and that is exactly what you already see in the western world with this many of the i.t companies and the companies connected with the government and uh so yes uh if you have a global suffrage uh you will see a complete decay and a rapid decay of the society so where but where's our hope you know if we look at chapter three here uh hapa lays out a mission system of democracy which is actually a little different than advertised in other words yes mises saw democracy as a mechanism for peaceful transfer between uh governments within a society but he also understood that without a right to secession democracy is just a compulsory monopoly the same as any prince or king so right now in the united states for example as i know you know we have a really nasty lecture come up a a variety of tensions between red and blue uh etc and the question becomes how do we ameliorate things and and my answer or at least the answer of most of us at the mises institute is well we do so by breaking up and that there's no true form of liberalism available to us if you can't exit uh peaceably exit than existing political arrangement but you're painting a picture of societies which even in the west an overwhelming majority people are not interested in logic or enlightenment value so how do we uh try to improve things it you know it sounds like you're painting a very anti-intellectual picture so firstly this is an interesting thing when you say democracy leads to a peaceful transition and it actually does around the world democracy has wherever the democracy has set deep roots transition is usually peaceful but that also means that a spineless people manage to stay on in power or the next person who comes to power is another spineless person they are not the people who can fight uh you probably need uh more warrior-like people to run the society than spineless people uh look at again uh the prime minister of canada trudeau a completely spineless person who manages to uh run the country and he has no fear of continuing to be uh spineless uh my suggestion and again you know i i gave a lot of thought while reading to hans hermann hoppe's book i think what you really don't want to do is to increase the scope of of democracy what you don't want to have is more and more people participating in election what you want to do is to somehow statistically reduce participation of people to as much of elite and thinkers as you can and when america became a democratic and when america became free from british control they actually did not give vote to most people i think it was less than 10 percent of americans or probably just six percent of american adult population who were allowed to vote in elections in the united states uh or at least don't try to make countries more democratic as you said in the when you talked about the introduction of the book uh that it was america that in the during the first world war tried to start enforcing democracy around the world and that probably was the worst thing that happened to many of these countries because they put them on a path to becoming worse and worse my suggestion would be that let's try to reduce the size of the government and do not try to interfere in what they are do they are up to so for example chinese government might be a dictatorial government but let's not not try to make it democratic because you will only make it worse try to understand that democratic values are not good values and reduce and not make it democratic but reduce at the same time reduce the sizes of those governments well and toward that measure you know last question for you is at page 91 hapa discusses the treatise by the the french thinker labote and he talks about how the state needs our widespread support in other words it needs our cooperation and so hapa in talking about strategy says we ought to take this to heart and our goal is the delegitimization not just on economic grounds or utilitarian grounds but also on moral grounds and a bold advocacy for a purely private law society so how do we go about when the public treats the term democracy basically as a synonym for just or for legitimate how do we go about de-legitimizing democracy and the state in in the broader sense well that is why everyone should read this book and people should really start to understand that freedom and democracy are not synonymous they are actually opposite of each other democracy the more democratic you become the more bread and circus society you become and mosses always lead to hollowing out of institutions and increase in tyranny now masses might not say that they believe in tyranny but their actions and the way they vote inevitably lead to to to into increase in tyranny uh and again this is what you see uh the western world has become less and less free as time has gone by uh when i arrived in canada in 2003 they the western government had recently imposed use of ids for taking for boarding planes and a lot of people fought against it and then they basically gave up because now it has become such an acceptable part of how we conduct ourselves that we uh just take out our ids and show it to the uh to the plane to the aircraft people so again uh i think uh the the way to de-legitimize uh democracy and the way to delegitimize government is to understand that government is not a savior if at all it's the necessary ill and i think if we understand it we will participate in reducing the size of the government as time passes by i don't want to get rid of the government right away i don't want to defund the police right away but i want to contribute intellectually to reducing the size of the government to reducing the size of the police and as hans hermann hoppe says to increase the size of the private law society where people themselves from bottom up create the kind of system that they want to create to govern themselves rather than having a top-down authoritarian system telling them how to think and how to live well ladies and gentlemen there's three weeks until the election in the united states we're going to spend those last three weeks going through hans from hapa's democracy the god that failed it seems appropriate we need a different way of looking at things the coke and pepsi which we're being offered is not going to cut it and our guest today has been my friend giant bhandari we will link in the show notes to his personal website and also to his twitter feed we hope that you will follow him and also if you're interested in natural resources investing or mining stocks you might want to follow him as well and if you're interested in purchasing the book now unlike most of the books on our show usually the mises institute publishes a version of these books and we put it online for free in html format we don't own this book this book was published in 2001 by a different publisher and as a result we do sell it at our bookstore at mises.org but we don't own it and so it costs more than it ought to even in paperback but nonetheless if you go to mises.org find democracy the god that failed at our little store icon and then put in the code h-a-p-o-d for human action podcast you'll get a discount on this great book and we also have obtained the rights recently to an audio book format so that will be coming out very very soon for your kindle or other device and all that said giant i want to thank you so much for your time thank you very much jeff ladies and gentlemen you have a great weekend the human action 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Channel: misesmedia

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Length: 36min 33sec (2193 seconds)

Published: Fri Oct 16 2020