Hoppe is repeatedly accused by people who are either uncharitable or who have reading comprehension problems of being a “monarchist.” But as Lew Rockwell notes, Hoppe “contrasted [democracy] with monarchy, not because he favors monarchy but rather to help us understand.” Hoppe argues that the incentives faced by a monarch would tend to make him make better decisions to highlight the even worse problems of a democratic system. It is not a defense of monarchy.
And as Hoppe has explicitly stated,
Despite the comparatively favorable portrait presented of monarchy, I am not a monarchist and the following is not a defense of monarchy. Instead, the position taken toward monarchy is this: If one must have a state, defined as an agency that exercises a compulsory territorial monopoly of ultimate decision-making (jurisdiction) and of taxation, then it is economically and ethically advantageous to choose monarchy over democracy. But this leaves the question open whether or not a state is necessary, i.e., if there exists an alternative to both, monarchy and democracy. History again cannot provide an answer to this question. By definition, there can be no such thing as an “experience” of counterfactuals and alternatives; and all one finds in modern history, at least insofar as the developed Western world is concerned, is the history of states and statism. Only theory can again provide an answer, for theoretical propositions, as just illustrated, concern necessary facts and relations; and accordingly, just as they can be used to rule certain historical reports and interpretations out as false or impossible, so can they be used to rule certain other things in as constructively possible, even if such things have never been seen or tried.
In complete contrast to the orthodox opinion on the matter, then, elementary social theory shows, and will be explained as showing, that no state as just defined can be justified, be it economically or ethically. Rather, every state, regardless of its constitution, is economically and ethically deficient. Every monopolist, including one of ultimate decision-making, is “bad” from the viewpoint of consumers. Monopoly is hereby understood in its classical meaning, as the absence of free entry into a particular line of production: only one agency, A, may produce x. Any such monopolist is “bad” for consumers because, shielded from potential new entrants into his line of production, the price for his product will be higher and the quality lower than otherwise. Further, no one would agree to a provision that allowed a monopolist of ultimate decison-making, i.e., the final arbiter and judge in every case of interpersonal conflict, to determine unilaterally (without the consent of everyone concerned) the price that one must pay for his service. The power to tax, that is, is ethically unacceptable. Indeed, a monopolist of ultimate decision-making equipped with the power to tax does not just produce less and lower quality justice, but he will produce more and more “bads,” i.e., injustice and aggression. Thus, the choice between monarchy and democracy concerns a choice between two defective social orders. In fact, modern history provides ample illustration of the economic and ethical shortcomings of all states, whether monarchic or democratic.
Moreover, the same social theory demonstrates positively the possibility of an alternative social order free of the economic and ethical shortcomings of monarchy and democracy (as well as any other form of state).
Hoppe’s primary aim is to show how bad democracy is, and to demolish the shibboleth commonly held among even many libertarians that even if democracy isn’t perfect it was at least an improvement over monarchy. Hoppe argues that even Rothbard and Mises were susceptible to this:
In fact, although aware of the economic and ethical deficiencies of democracy, both Mises and Rothbard had a soft spot for democracy and tended to view the transition from monarchy to democracy as progress. In contrast, I will explain the rapid growth of state power in the course of the 20th century lamented by Mises and Rothbard as the systematic outcome of democracy and the democratic mindset, i.e., the (erroneous) belief in the efficiency and/or justice of public property and popular (majority) rule.
Hoppe’s comments on monarchy are meant to help understand the deficiencies of democracy, and states in general.