Tuesday, January 3, 2017

Hoppe and Monarchy vs. Democracy

The following email discussion recently took place.  I have rearranged the timeline on some of the exchanges so that they are easier to follow.

Michael Edelstein:
Monarchy Vs. Democracy: Critique Of Hoppe

https://liberty-intl.org/2016/12/a-critique-of-hans-hermann-hoppe-monarchy-vs-democracy/
 Jeffrey Rogers Hummel:
Hi Michael, 
Thanks for sending this link. I meant to mention it last night at dinner, but it slipped my mind. As I think I’ve mentioned before, I find Hoppe’s argument on monarchy an extreme example of what Rothbard used to denounce as a priori history. Any genuine familiarity with the actual history of monarchy exposes Hoppe’s rosy view as not only totally ahistorical but truly bizarre.
Happy New Year,
Jeff

Robert Wenzel:
Hi Jeff, 
Would it be fair to say that your view is that there is no particular government structure that necessarily brings about better outcomes or do you hold the view that democracy is superior? 
Bob

 Jeffrey Rogers Hummel:

Hi Bob,

I think the empirical evidence is clear that democracy, on average, is better for the general population, at least so far. Whether that is just an historical coincidence or results from the structure of democracy is a trickier question. I’m inclined to accept Mises’s argument that one of the major benefits of democracy is that it permits less violent regime changes.

Best,
Jeff

Walter Block:
Dear Jeff 
You and I have very a different view of Murray's opposition to apriori history. Murray opposed concluding, with no reason at all, no evidence at all, that since the USSR was bad, internally, therefor they MUST be equally bad insofar as their foreign policy is concerned. 
Hans doesn't do that at all. Rather he does indeed offer a reason: time preferences. And he did indeed furnish empirical examples. This Polish guy quarrels with the quality of the latter, but does not deny that Hans at least offers some instances. 
Best regards,
Walter
 Jeffrey Rogers Hummel:
 Hi Walter,

I would contend that those who concluded a priori that the USSR must pursue an aggressive foreign policy did have theoretical arguments for that belief that, even if mistaken, were nonetheless at least as good as Hoppe’s incredibly weak time-preference argument.

One problem with Hoppe’s a priori claim is that it confuses time preference with time horizon. They are completely different concepts. Time preference is entirely subjective. Time horizon (e.g. how long you can expect to be in power) is based on observable objective conditions. There is no necessary theoretical reason that one’s external time horizon should affect one's internal time preference. Of course, there might be an empirical relationship between the two, but I have not seen any evidence for it, at least among monarchs.

If Hoppe’s reasoning made any sense, it would imply that a hight-time preference criminal living under a regime in which punishment is usually immediate would magically have a lower subjective rate of time preference if moved to a regime in which punishment is usually delayed until the distant future.

Best,
Jeff

Walter Block:
 Dear Jeff: 
I don't understand your last sentence. Please explain.
Most petty criminals have high time preference. When nightstick justice was employed in the early 1900s (immediate punishment), I think this helped reduce crime. No? 
Best regards,
Walter

 Jeffrey Rogers Hummel:
Yes, of course nightstick justice helped reduce crime. But not because it had any effect on the criminal’s subjective time preference. It was because it affected his objective options (opportunity cost). 
Let’s say you have a strong subjective preference for chocolate ice cream. But for some reason, the price of chocolate ice cream rises to $1000 a pint, and you therefore never buy it anymore. Your subjective preference for chocolate ice cream hasn’t necessarily changed. Rather the opportunity cost of acquiring it.





Also see: Hayek on Democracy, Special Interests, and Dictatorships

2 comments:

  1. I haven't read Democracy, the God that Failed in a while, but I think Mr. Hummel is mincing words or misreading Hoppe's argument.

    The argument does not stem primarily from time preference, but from incentives and their long-term effect. This is a function of both time preference and opportunity cost.

    A long time horizon (Hummel is correct to point out this distinction, keenly), in a legal order that does not allow for full ownership/access to the wealth of civil society, creates an incentive to govern cautiously and prudently.

    Over time, this would, as a quasi-empirical matter that is more a function of human psychology and culture, encourage monarch practices that allow for prudent rulership. This is where time preference comes in.

    Hummel treats time preference (all subjective preference) as some given function that is not susceptible to external influence. If I learned tomorrow that chocolate ice cream makes me 100% more likely to die young, I probably change my preference for it.

    Hoppe's argument is not a limited "time preference" argument - and cannot be dismissed as such. It is a comprehensive argument that incorporates incentives, time preference, opportunity cost, cultural change, the prevailing legal order, and yes, historical example.

    A democracy does not immediately destroy long-held healthy time preferences. But, over time, due to its nasty incentives for short-term behavior, it can (the theory goes) corrupt the preferences of the population. Hulsman wrote an entire book on how central banking / inflation does this.

    For a real-world example, look at how the famously low time-preference Japanese have been devolving into spenders rather than savers. Very measurable and regrettable. This has happened during both democracy and central banking.

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  2. I must agree with Mason...its about incentives. Empirically there are no absolute democracies nor absolute monarchies. But there are numerous examples of varying degrees of both in the world today. On the small side I would point to shopping malls, office buildings, hotels and even covenant-based residential communities. While they are under constant assault from democratic mobs and politicians they do persist. Larger monarch-like organizations like Hong Kong and Singapore have been very successful in terms of human wealth and well being.

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