Consulting by RPM || Free Advice Blog

Say What You Will About Monarchies, At Least They Understood Free Trade

I am working on a book project with Bill Peterson on democracy. He sent me a copy of Hans Hoppe’s Democracy: The God That Failed, which somehow I never managed to read up until now. I have seen so many of Hoppe’s lectures at the Mises Institute that I figured I already knew what was in the book.

Well I was totally wrong. So far I have only read the first essay, but it blew me away. When I get caught up with my other work I will write a review for Mises.org. (And no, I haven’t hit the famously controversial parts yet, so I can’t yet say whether people are blowing that out of proportion.)

Among his other points, Hoppe argues that hereditary monarchies have a much greater incentive to enact productive long-term policies because they can pass the estates on to their children. In contrast, the people running a democratic government at any given time, only have a few years in which to suck out as many resources as possible.

For something completely different, I am writing up a quick description of mercantilism. I was explaining that it was the dominant philosophy guiding governments from the 16th – 18th centuries, until the ideas of Adam Smith and other British classical economists overturned it. Then I was going to add that in modern times, we have seen the rebirth of mercantilist ideas, because even though 99% of economists endorse free trade, the general public doesn’t.

Does anyone see a connection here? I don’t know enough history to be able to say one way or the other, but per Hoppe, is it just possible that the European monarchies implemented mercantilist policies when they genuinely believed they promoted national prosperity, but then when David Hume et al. proved them wrong, they switched to free trade? But with the rise of democracy, it doesn’t matter what the rulers actually know to be the correct long-term policies–they have to enrich a few special interests as quickly as possible, before they leave office?