“Foreword,” to Hoppe, A Theory of Socialism and Capitalism

Below is my Introduction to Hans-Hermann Hoppe’s A Theory of Socialism and Capitalism (Laissez Faire Books, 2013). Earlier editions of the book may be found here.

[Update: here are the epub and mobi files]

Appended below my Introduction is the Editorial Preface by Jeffrey A. Tucker

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Foreword to the Laissez Faire Edition by Stephan Kinsella

YOU ARE IN for a treat. Hans-Hermann Hoppe’s A Theory of Socialism and Capitalism: Economics, Politics, and Ethics (1989) utterly captivated and enlightened me when I read it over twenty years ago.

All of Professor Hoppe’s writing is insightful, including his books The Economics and Ethics of Private Property (2003), Democracy: The God That Failed (2001), Economic Science and the Austrian Method (1995), and The Great Fiction: Property, Economy, Society, and the Politics of Decline (2012), published earlier this year by Laissez Faire Books. But TSC has always been my favorite. An integrated, systematic treatise, not merely a collection of related essays, it is truly Professor Hoppe’s magnum opus—his Human Action, his Man, Economy and State.

TSC is so rich with insights that it bears careful reading, and periodic re-reading. In a book review of TSC, Professor Robert McGee noted:

When I read a book, I make marginal notations and underline the points that I think are worth reading a second time. With this book, I found that I had to restrain myself because I was making so many notations that it slowed my reading. Practically every paragraph has at least one point worth reflecting upon.¹ 

I made a similar observation about TSC and other works by Hoppe in a review of his Economics and Ethics of Private Property:

If Professor Hans-Hermann Hoppe’s books and articles would come already-underlined and highlighted, it would save readers a lot of time. Or at least each book should come with a free pen attached. For when I follow my usual habit of underlining, circling, checking, starring, or highlighting important insights in the books I read, I find that my copies of Hoppe’s books start to look as if a two-year-old with a crayon had gotten hold of them.²

In fact, this book is not only my favorite among Professor Hoppe’s works, but my favorite nonfiction book period, and one of the most important books I’ve ever read. It sets out a rigorous analysis of the nature of property rights, and relates this to both economics and political theory. The book is rooted in Misesian praxeological concepts and analysis, and in Rothbardian libertarian insights.

Chapter 2 is foundational and introduces and explains the basic concepts that are indispensible to economic theory and political philosophy: property, contract, aggression, capitalism and socialism. With Hoppe’s characteristic rigor, he identifies the essential aspects of these concepts. As he writes:

Next to the concept of action, property is the most basic category in the social sciences. As a matter of fact, all other concepts to be introduced in this chapter—aggression, contract, capitalism and socialism—are definable in terms of property: aggression being aggression against property, contract being a nonaggressive relationship between property owners, socialism being an institutionalized policy of aggression against property, and capitalism being an institutionalized policy of the recognition of property and contractualism.

Hoppe also explains “the precondition necessary for the concept of property to emerge”: scarcity. If all goods were superabundant or “free goods,” there would be no possibility of rivalry or conflict, and no need for property rights. Without property rights, contract would be meaningless; no one would own anything (they would have no need to), and the idea of consent or giving or selling things would be meaningless. Far more than his two great influences, Mises and Rothbard, Hoppe emphasizes the importance of this fundamental precondition of all human action and of property and political ethics. Mises, and of course Rothbard, recognized that human action employs scarce means, but did not give great attention to the connection between scarcity and property itself. David Hume observed that the fundamental fact of scarcity leads to conflicts, requiring (property) rules, an insight which greatly influenced Hoppe.³ Hoppe integrated the praxeological focus on scarce resources as means of action with the Humean focus on scarcity of resources as giving rise to possible conflict and the necessity of property rules, thus extending and strengthening the Austro-libertarian framework.

This emphasis permitted Hoppe to easily see why so-called intellectual property cannot be justified well before the Internet forced libertarians to take a hard look at these issues. In a Mises Institute panel discussion in 1987 with Professor Hoppe, Rothbard, and others, someone asked, “Does the idea of personal sovereignty extend to knowledge? Am I sovereign over my thoughts, ideas, and theories?”

In his response, Hoppe said, “In order to have a thought, you must have property rights over your body. That doesn’t imply that you own your thoughts. The thoughts can be used by anybody who is capable of understanding them.”⁴

Here Hoppe anticipated the anti-IP position that has become predominant among most libertarians today, especially among anarchists and Austro-libertarians. Because of his focus on scarcity as the precondition of property, he can easily see that non-scarce things like knowledge cannot be ownable things, i.e. subject to property rights. Mises’s praxeological framework shows that all human action employs scarce means to achieve desired goals, but that action is guided by knowledge. The scarce means are ownable in a property rights system, because they are scarce; knowledge, while indispensible for successful action, is not a scarce means of action and thus not the type of thing that property rights are for. By having a clear understanding of the fundamental concepts of economic and political theory, Hoppe is able to easily see that IP makes no sense—a conclusion that is still difficult for many libertarians to reach, especially non-Austrians.

Once Hoppe has identified the essential characteristics of aggression and socialism, in terms of contract and property, he is then able to dissect various real-world types of socialism: socialism Russian-style, socialism social-democratic style, the socialism of conservatism, and the socialism of social engineering.

In chapter 7, Professor Hoppe sets forth his provocative “argumentation-ethics” defense of libertarian rights.⁵  The idea here is that when we seek to evaluate what political norms are justified—for example, whether socialism or capitalism is justifiable—we must engage in argumentation, or discourse, to settle these matters. However, argumentation is by its nature a conflict-free way of interacting, which requires individual control of scarce resources (note again how the fundamental fact of scarcity plays a role in Hoppe’s analysis; without scarcity, conflict is impossible, and thus the idea of “conflict-free” is meaningless, and argumentation about which norms to adopt would be impossible and unnecessary). In genuine discourse, the parties try to persuade each other by the force of their argument, not by actual force. Each party is free to disagree without being bonked over the head if he does so. There is recognition by both parties that each employs scarce means (all action employs scarce means, including argumentation), including the scarce means of one’s body, and that each person is respecting the other’s self-ownership.

In other words, because, in a world of scarcity, there is the possibility of interpersonal conflict over scarce resources, there can arise the practice of discussion of which norms should be adopted or are justified (without scarcity, no conflict is possible and no property or other norms are necessary or even meaningful). A conflict-free discourse is one in which both parties do respect the other’s property rights in their own bodies, i.e. self-ownership. As Hoppe explains, argumentation in this way presupposes the validity of self-ownership, and thus any argument for political norms that violate self-ownership will always be contradictory, since it will be incompatible with the unavoidably presupposed self-ownership norms of any possible argumentation. Hoppe also goes on to show that argumentation also presupposes the right to own homesteaded scarce resources as well. It is for these reasons that no socialist ethic (that is, institutionalized or public aggression) can ever be argumentatively justified, that is, it cannot be justified, as all justification is argumentative justification. (Private aggression, i.e. crime, of course also cannot be justified.) The libertarian ethic of cooperation and respecting others’ bodies and homesteaded or contractually acquired resources is the only possible ethic compatible with the norms of argumentation.

Some libertarians, yours truly included, regard this theory as a profoundly important development in political philosophy. Rothbard did, too:

In a dazzling breakthrough for political philosophy in general and for libertarianism in particular, he has managed to transcend the famous is/ought, fact/value dichotomy that has plagued philosophy since the days of the scholastics, and that had brought modern libertarianism into a tiresome deadlock. Not only that: Hans Hoppe has managed to establish the case for anarcho-capitalist-Lockean rights in an unprecedentedly hard-core manner, one that makes my own natural law/natural rights position seem almost wimpy in comparison.⁶

In addition to the foundational material in chapter 2 and the systematic analysis of types of socialism in chapters 3-6, and the radical new defense of libertarian rights and capitalism in chapter 7, TSC contains a wealth of other insights, many of them contained in the detailed footnotes. These include a criticism of empiricism-positivism and socialist arguments relying on these flawed ideas (ch. 6), as well as eviscerations of the conventional economic approaches to public goods and monopoly theory (chs. 9 & 10), and an explanation of why the “public slavery” of socialism is even less efficient than a private, chattel slavery system (ch. 3 n26). Another profound insight is Professor Hoppe’s explanation that aggression is an invasion of the physical integrity of another’s property; that there are no property rights in the value of property⁷ (this insight also explains problems with the idea of intellectual property, arguments for which often assume property rights in value). And see also Hoppe’s important discussion of the distinction between property rights in bodies and in external scarce resources and how they are acquired, which has relevance for the self-ownership and alienability vs. inalienability debate.⁸  And much more.

This book is eye-opening; it is profoundly important; it is exhilarating; it is fun. Prepare yourself for an intellectual feast.

Stephan Kinsella
Houston, TX
September 2012

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Editorial Preface by Jeffrey A. Tucker

THE FIRST TIME I read this book, I read it as a book on comparative economic systems, one that concluded that markets work better than any form of state planning. This was what I thought the book was about and that is the information I extracted from the text. As a result, I think I must have missed 90 percent of what in this book makes it magnificent. After all, there are many thousands of books that make the case for freedom over planning. The whole of history makes that case. It is not an unknown lesson, even if governments around the world totally ignore the lesson.

What matters about this book most — which I discovered on second, third, and fourth readings — is the theory and the analytics that Hans-Hermann Hoppe uses to make the case. This is where we find the innovation. This is where the book shines. This is where the reader will find a more perfect form of a side of an argument that has been ongoing for hundreds if not thousands of years. The reason is Hoppe’s method. It is strictly logical, proceeding step by step through every thought, expanding and expanding relentlessly but never leaping from point to point in a way that skips or takes anything for granted.

It is through this method that Hoppe presents what I think is the first truly thorough and compelling case for the existence and protection of private property. That sentence must necessarily sound like an exaggeration, since many thinkers from Aristotle to today have written in defense of private property. But Hoppe still distinguishes himself by explaining in some detail the first condition of ownership: rivalrous use of physical resources. It seems incredible that it should have taken the entire history of humanity to come up with a clear explanation of such a fundamental point. But, so far as I can tell, it is true. Hoppe is the first to zero in on this point with such precision and to formulate it in a way that excludes absurd implications or takes for granted a certain set of intuitions on the part of the reader. (A careful reader might cite the rare and unusual case of Benjamin Tucker as a predecessor in this regard and there is some truth in that, though Tucker’s explanation and application of the idea was not as robust as Hoppe’s.)

This is only the first of the pioneering insights in this book. His taxonomy of economic systems is brilliant. His defense of self-ownership is the first application of the philosophical rule against performative contradiction to issues of political economy. His case against technocratic regimes rests, implausibly, on an epistemological case for the special kind of cause-and-effect relationship that exists in human affairs but not in the natural sciences. Even his understanding of Marxism is unique: he is careful to discard only the illogical and nonsensical parts while retaining the features that actually do make sense.

At the same time, this method that Hoppe uses can be a challenge for the reader. His argument is seamless. He doesn’t highlight his own contributions. He doesn’t tell the reader where he is innovating. As a result, it is too easy for the uninitiated to read right passed the amazing material and not fully appreciate just what a contribution it truly is. It is also too easy to discard some portions because they do not fit with the reader’s existing political biases concerning the use of terms. As an example, he uses the term conservative in a special way. I once thought he was setting up a caricature. Now I see that what he identifies is a deeper reality that is not on display in the push and pull of day-to-day political dialogues.

On the surface, then, this book might look like an introduction to economic systems. The deeper reality is that this book represents not just a culmination of thousands of years of reflection on political economy but actually represents a major extension of the entire field into the area of ethics and epistemology, correcting much of what came before and putting it on a firm foundation for the future. It is for this reason that this book is of enormous value, and deserving of several complete studies, even by those who already accept the major thesis of the book. It is a deep and wide well from which to drink for a lifetime, and one that will be a source of intellectual nourishment for generations to come.

1. Robert W. McGee, “Book Review” [of Hans-Hermann Hoppe, A Theory of Socialism and Capitalism], The Freeman: Ideas on Liberty (September 1989), available at thefreemanonline.org. [↩]
2. Stephan Kinsella, “The Undeniable Morality of Capitalism,” St. Mary’s Law Journal 25 (1994): 1419–47, p. 1420, available at stephankinsella.com. [↩]
3. See, e.g., TSC, ch. 2, n2 (citing Hume in connection with the scarcity argument), and the YouTube video “Hoppe and Hume,” http://youtu.be/Gv6oemGUBfs (uploaded June 10, 2012). [See also my post, The Amazing Hume] [↩]
4.  Transcript of panel discussion, Austrian Economics Newsletter, vol. 9, no. 2 (Winter 1988), p. 7, available at mises.org. [↩]
5.  For more background, see Stephan Kinsella, “Argumentation Ethics and Liberty: A Concise Guide,” Mises Daily (May 27, 2011), available at mises.org/daily/5322. [↩]
6.  Murray N. Rothbard, “Beyond Is and Ought,” Mises Daily (Aug. 24, 2010), originally published in Liberty (Nov. 1988), available at mises.org/daily/4629. [↩]
7.  TSC, ch. 2, n11, ch. 7, text at n. 127 et seq. [↩]
8.  TSC, ch. 2, n12 &14–15. For further discussion of these matters, see my articles “How We Come To Own Ourselves,” Mises Daily (Sep. 7, 2006), “A Libertarian Theory of Contract: Title Transfer, Binding Promises, and Inalienability,” Journal of Libertarian Studies 17, no. 2 (Spring 2003): 11–37 , and “What Libertarianism Is,” Mises Daily (August 21, 2009), available at stephankinsella.com. [↩]