The Economics and Ethics of Private Property

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1 The Economics and Ethics of Private Property

2 The Ludwig von Mises Institute's Studies in Austrian Economics LUD' 1G ~ INSTITUTE

3 The Economics and Ethics of Private Property Studies in Political Economy and Philosophy Hans-Hermann Hoppe Department of Economics University of Nevada, Las Vegas '' ~ Springer Science+Business Media, LLC

4 Library of Congress Cataloging-in-Publication Data Hoppe, Hans-Hermann. The economics and ethics of private property : studies in political economy and philosophy / Hans-Hermann Hoppe. p. cm. -- (The Ludwig von Mises Institute's studies in Austrian economics) Includes index. ISBN ISBN (ebook) DOI / Right of property--economic aspects. 1. Title. II. Series. HB711.H '7--dc CIP Copyright for chapters 2, 4, 5, 6, 8, 9: The Ludwig von Mises Institute, Auburn University, Auburn, Al.; reprinted with permission. Copyright for chapter 1: Center for Libertarian Studies, Burlingame, Ca.; reprinted with permission. Copyright for chapter 3: The Independent Institute, San Francisco; reprinted with permission. Copyright for chapter 7: Basil Blackwell, Oxford; reprinted with permission. Copyright 1993 by Springer Science+Business Media New York Originally published by Kluwer Academic Publishers in 1993 Softcover reprint ofthe hardcover lst edition 1993 AII rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, mechanical, photo-copying, recording, or otherwise, without the prior written permission of the publisher, Springer Science+ Business Media,LLC. Printed an acid-free paper.

5 To Murray N. Rothbard

6 CONTENTS About the Author Preface ix xi Part One ECONOMICS Chapter 1 Fallacies of the Public Goods Theory and the Production of Security 3 Chapter 2 The Economics and Sociology of Taxation 27 Chapter 3 Banking, Nation States and International Politics. A Sociological Reconstruction of the Present Economic Order. 61 Chapter 4 Marxist and Austrian Class Analysis 93 Chapter 5 Theory of Employment, Money, Interest and the Capitalist Process. The Misesian Case Against Keynes 111 Part Two PHILOSOPHY Chapter 6 Chapter 7 Chapter 8 On Praxeology and the Praxeological Foundation of Epistemology 141 Is Research Based on Causal Scientific Principles Possible in the Social Sciences? 165 From the Economics of Laissez Faire to the Ethics of Libertarianism 173 Chapter 9 The Justice of Economic Efficiency 195 Chapter 10 On the Ultimate Justification of the Ethics of Private Property 203 vii

7 Chapter 11 Appendix Austrian Rationalism in the Age of the Decline of Positivism Four Critical Replies References Index viii

8 About the Author Hans-Hermann Hoppe was born on September 2, 1949, in Peine, West Germany. He attended the Universitat des Saarlandes, Saarbrticken, the Goethe Universitat, Frankfurt/M., and the University of Michigan, Ann Arbor, for studies in Philosophy, Sociology, History, and Economics. He earned his Ph.D. (Philosophy, 1974) and his "Habilitation" (Sociology and Economics, 1981), both from the Goethe Universitat. He taught at several German universities as well as the Johns Hopkins University Bologna Center for Advanced International Studies, Bologna, Italy. He is presently Professor of Economics at the University of Nevada, Las Vegas, and Senior Fellow of the Ludwig von Mises Institute, Auburn University, Auburn Al.. Hoppe is author of Handeln und Erkennen (Bern 1976); Kritik der kausalwissenschaftlichen Sozialforschung (Opladen 1983 ); Eigentum, Anarchie und Staat (Opladen 1987); A Theory of Socialism and Capitalism (Boston 1989) and numerous articles on philosophy, economics and the social sciences. lx

9 PREFACE The collapse of socialism across Eastern Europe - as manifested most dramatically by the events of the forever memorable November 9, 1989, when the Germans of East and West reunited, moved and overjoyed, on top of the Berlin Wall - has added more support and urgency to the central thesis of this volume than I had ever hoped for. Whether the following studies deal with economic topics, such as employment, interest, money, banking, business cycles, taxes, public goods, or growth; with philosophical problems as the foundations of know ledge, and of economics and ethics in particular; or the reconstruction and theoretical explanation of historical and sociological phenomena such as exploitation, the rise and fall of civilizations, international politics, war, imperialism, and the role of ideas and ideological movements in the course of social evolution - each ultimately contributes to but one conclusion: The right to private property is an indisputably valid, absolute principle of ethics and the basis for continuous 'optimal' economic progress. To rise from the ruins of socialism and overcome the stagnation of the Western welfare states, nothing will suffice but the uncompromizing privatization of all socialized, that is, government, property and the establishment of a contractual society based on the recognition of the absoluteness of private property rights. *** In writing the following studies I received help from many sides. Special thanks go to my wife Margaret, who again took on the task of de Germanizing my English; to Llewellyn H. Rockwell, President of the Ludwig von Mises Institute, and Burton S. Blumert, President of the Center for Libertarian Studies, for their continuing support of my work; and to my friend David Gordon, for his numerous invaluable suggestions and comments. : My largest debt is to Ludwig\von Mises and Murray N. Rothbard, the 20th century's two greatest- although much neglected- economists and social philosophers. While I never met Ludwig von Mises, and indeed had not heard of his name until after his death, I am fortunate to have been closely associated with Murray Rothbard for the past six years, first in New York City, and since 1986 as colleagues at the University of Nevada, Las Vegas. Apart from the intellectual debt that I owe him, words can not express my personal gratitude. His wisdom, insight, kindness, enthusiasm, and unflagging encouragement have been a continuous inspiration to me. It is therefore to him that this volume is dedicated. XI

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