"The decisive question is this: what controls and constrains the size and growth of such a business? It should be clear that the constraints on the size of firms in the business of expropriating producers and contractors are of a categorically different nature than those limiting the size of firms engaged in productive exchanges. Contrary to the claim of the public choice school, government and private firms do not do essentially the same sort of business. They are engaged in categorically different types of operations. 19 The size of a productive enterprise is constrained on the one hand by consumer demand (which imposes a definite limit on the total revenue attainable), and on the other hand by the competition of other producers, which continuously forces each firm to operate with the lowest possible costs if it wishes to stay in business. For such an enterprise to grow in size the most urgent consumer wants must be served in the most efficient ways. Nothing but voluntary consumer purchases support its size. The constraints on the other type of firm, of government or the state, are altogether different. For one thing, it is absurd to say that its size is determined by demand in the same sense as the size of a private firm is determined by demand. One cannot say, by any stretch of the imagination, that the homesteaders, the producers, and the contractors who must surrender part of their assets to a government have demanded such a service. Instead, they must be coerced into accepting it, and this is conclusive proof of the fact that the service is not actually in demand at all. Hence, demand cannot be considered as a limit on the size of government. Insofar as it grows, the state grows by acting in open contradiction to demand. The state is also not in the same way constrained by competition as is a productive firm. Unlike such a firm, the state must not keep its cost of operation at a minimum but can operate at above-minimum costs because it is able to shift its higher costs onto competitors by taxing or regulating their behavior. Thus, the size of the state also cannot be considered as constrained by cost competition. Insofar as it grows, it does so in spite of the fact that it is not cost-efficient. This, however, is not to say that the size of government is not constrained at all and that the historical fluctuations in the size of states are mere random walks. It only states that the constraints on the firm “government” must be fundamentally different. Instead of being constrained by cost and demand conditions, the growth of an exploitative firm is constrained by public opinion: 20 It is not voluntarily supported, but by its very nature employs coercion. On the other side of the same coin, coercion implies creating victims, and victims are not supporters but active or passive resisters of a firm’s size. It is conceivable that this resistance can be lastingly broken by force in the case of one man, or one group of men, exploiting one or maybe two or three others, or another group of roughly the same size. It is inconceivable, however, to imagine that force alone can account for the breaking down of resistance in the actually familiar case of small minorities operating their business of expropriating and exploiting populations tens, hundreds, or thousands of times their size. 21 For this to happen, such a firm must have public support in addition to its coercive force. A majority of the population must accept its operations as legitimate. This acceptance can range from active enthusiasm to passive resignation. But there must be acceptance in the sense that a majority must have given up the idea of actively or passively resisting any attempt to enforce nonproductive and noncontractual property acquisitions. Instead of displaying outrage over such actions, of showing contempt for everyone who engages in them, and of doing nothing to help make them successful (not to mention actively trying to obstruct them), a majority must actively or passively support them. Only in light of this can it be explained how the few can govern the many. State-supportive public opinion must counterbalance the resistance of victimized property owners to the extent that active resistance appears futile. The state of public opinion also imposes a constraint on the size of the state in another respect. Every firm in the large-scale business of property expropriation must naturally aim to be a monopolist in a definite territory, for one can only prosper in such a business so long as there is something that can be expropriated. However, if competition were allowed in the business of expropriating, there would obviously be nothing left to take. Hence, in order to stay in business, one must be a monopolist." Hanns Herman Hoppe.
Posted on: Sat, 06 Jul 2013 14:14:13 +0000
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