Hoppe Lecture at Modelhof Academy: “Private law society without a state” (2012)

by PFS on July 28, 2026

From the Vault: “Vortrag von Professor Hoppe in der „Akademie Modelhof“: „Privatrechtsgesellschaft ohne Staat““, Mises Institut Deutschland (Jan. 16, 2013) (“Lecture by Professor Hoppe at the Modelhof Academy: “Private law society without a state”). See also Modelhof Akademie; Vortrag von Professor Hoppe in der “Akademie Modelhof”: “Privatrechtsgesellschaft ohne Staat,” HansHoppe.com

January 16, 2013 – On November 23, 2012, Prof. Dr. Hans-Hermann Hoppe spoke at the “Akademie Modelhof” (Müllheim, Canton Thurgau, Switzerland) on the topic of “Private law society without a state”.

In his lecture, Prof. Hoppe demonstrates that competition in today’s party democracy – a competition in lying and profiteering, in deception and camouflage – cannot produce good results.

As an alternative, he offers a private-law society, based on self-determination and voluntariness. In this system, conflicts are resolved neutrally.

Prof. Hoppe also points out that the model of a private law society is not a utopia, but rather rigorously thought out, realistic, and, upon closer inspection, even self-evident.

We thank the “Akademie Modelhof” for permission to publish the videos.

Andreas Marquart

The videos are below. English translations TBD.

Transcript of Main Lecture (Grok)

Hans-Hermann Hoppe Private Law Society without a State Modelhof Academy, 23 November 2012

Opening Remarks and the Ideal State

00:00:05

I thank Daniel Model for the invitation and especially for the fact that I am allowed to appear here first. Knowing that the lecture would take place in the green hall, I deliberately put on a green tie for the occasion.

A central theme of this academy is the question of the ideal state, and I will try to give an answer. The ideal state is no state at all — or what I call a private-law society. Before turning to that subject, however, I want to make a few preliminary remarks about the fundamental human situation, a basic human problem, and the solutions that have been proposed for it, solutions which I regard as mistaken. Only afterward will I come to the actual topic.

This is a long train of thought, so try to follow it in a relaxed way. If you later want to re-read the argument more carefully, there is a small booklet of mine available downstairs titled Der Wettbewerb der Gauner (“The Competition of Crooks”), where you can absorb these ideas at a slower pace.

Scarcity as the Root of Conflict

00:01:50

Imagine Robinson Crusoe alone on his island. For a single isolated person there are no social problems; he can do whatever he likes. The moment a second person appears — Friday arrives on the island — a problem arises that simply does not exist for one person.

To clarify the nature of this problem, let us first assume paradise-like conditions: there is no scarcity of goods at all. Under those conditions there is almost no possibility for Robinson and Friday to quarrel, because whatever one of them takes does not diminish what the other person wants. Conflict becomes possible only when scarcity exists — that is, when one person wants to use a particular good in one way and another person wants to use the same good in a different way. Without scarcity there are no interpersonal conflicts.

Even in the Garden of Eden, however, one scarce good remains: our own physical body. Robinson might want to do something to Friday, or Friday to Robinson, and a conflict would then exist. How is such a conflict resolved in paradise? The answer is relatively simple: my body belongs to me and your body belongs to you. I may do whatever I want with my own body as long as I do not invade yours. If I wish to do something with your body, I need your consent; the same rule applies in reverse. I may move wherever I like and occupy any place, unless that place is already occupied by another person. In that case I must wait until he leaves before I can take it myself. In the Garden of Eden, therefore, only this simple rule is required: every person is the owner of his or her own body.

The Four Fundamental Rules of Private Property

00:05:00

The real world differs from paradise essentially only in that there exists an almost infinite number of scarce goods over which conflict can arise. Let me first present the rules that virtually all people accept, more or less, in order to avoid conflict in a world of universal scarcity. I did not invent these rules; many others have formulated them. If you examine your own private life, you will find that you almost always follow them.

The first rule is the same one that would already apply in paradise: every person is the owner of his or her own body and has exclusive control over it. Consider the alternatives. Who else should be the owner of my body if not I? I am the only person who can act directly with this body. Everyone else can affect it only after first controlling their own body and then intervening against mine. The alternative is simply slavery: I belong to someone else instead of belonging to myself.

The second rule is that every person is the owner of, and has exclusive disposition rights over, those things that previously existed in a state of nature and that this person has appropriated for the first time. Even children understand this: “I had the toy first, therefore I have a better claim to it than any later comer.” One becomes the owner of whatever one transforms from an unowned natural state into an appropriated state. The first person to do so is the owner.

The third rule follows: everything I subsequently produce with my body and with the originally appropriated goods, so long as the act of production does not damage the property of others, is likewise my property. The producer is the owner of what he has produced.

The fourth and final rule is that one can also acquire property in things by voluntary exchange with prior owners. There are no other legitimate ways of acquiring property. All other forms of appropriation would be regarded as criminal behavior.

I will not go into a lengthy further justification of these rules. I trust that everyone intuitively recognizes them as the rules we actually observe in ordinary life. One further point deserves emphasis: the idea that conflict can be avoided only by assigning private property to particular persons is by no means a mere convention. There is simply no other way to avoid conflict than by determining, in every case, who owns which scarce good. Under common ownership, for example, conflict is automatic unless there happens to be complete harmony of interests. But such harmony does not exist. As long as interests diverge and one wishes to avoid conflict, the only solution is that it is always clear who owns this good and who owns that good, so that each person may do as he wishes with his own things. Private property makes peaceful coexistence possible even when people have completely different interests and no harmony exists among them.

The Social Problem: Dealing with Law-Breakers

00:11:00

As important as the insight into these rules is, and as important as it is to recognize that adherence to them can largely eliminate conflict, the fact remains that there are people who simply refuse to obey them. The question I call the social problem is therefore: what do we do with such law-breakers — people who attack the physical integrity of others or who try to take what others have produced?

The traditional answer has been that this is the task of the state. The state exists to enforce these rules, to bring rule-breakers to reason, and either to return them to the right path or to punish them for having broken the rules. This is the answer given by all classical liberals: the state’s sole function is to maintain law and order, nothing more.

Whether that answer is correct or incorrect depends on how the state is defined. The definition I am about to give is not my invention; it is the traditional definition of what constitutes a state. A state is not an ordinary firm. It is an institution distinguished by two special characteristics. First, the state is the ultimate decision-maker in every conflict. Whenever a conflict arises between persons, the state decides who is right and who is wrong. In particular, the state also decides who is right and who is wrong in conflicts that involve the state and its own agents. If you have a conflict with a policeman or a bureaucrat, who decides who is right? Another person who is part of the same organization. You immediately see what a peculiar construction this is: an institution that claims the last word in every conflict, including those in which it is itself a party.

And if one is permitted to have the last word in every conflict, one of course also has the right to levy taxes — that is, to impose compulsory payments on people. One can provoke a conflict and then decide it in one’s own favor, declaring that the money must be handed over because one is, after all, the ultimate judge in all disputes.

The Fundamental Error of Statism

00:15:10

What is the fundamental error of this statist idea that we need a state to act as conflict-resolver and final judge? Economists have always maintained that there is something wrong with monopolies. A monopoly is a producer who alone is permitted to produce a certain good and who may exclude all other persons or institutions from producing it. A milk monopolist, for example, is a firm that has the exclusive right to produce milk while everyone else is forbidden to do so. Why is this bad from the consumer’s point of view? Because the price of milk will be higher and its quality lower than would be the case if others could compete against this monopolist.

Monopolists are bad from the standpoint of consumers; from the monopolist’s own standpoint, of course, monopolies are wonderful. Every entrepreneur would prefer to be a monopolist. Yet from the consumers’ standpoint dealing with monopolists is disastrous. Interestingly, almost all economists who hold this view then turn around and claim that, when it comes to the production of law and order, we need a monopolist. Most economists are not even able to recognize the contradiction: on the one hand opposing monopolies and on the other hand declaring that in this particular field we need one.

If one asks whether a monopolist of law and order is perhaps less harmful than a monopolist of milk or automobile production, one immediately reaches the opposite conclusion: it is a far more dangerous monopolist. If milk is a bit more expensive or of slightly lower quality, one can live with that. But when law and order are produced by a monopolist, the entire sphere of life is affected; the situation is obviously far more perilous.

What can one predict will happen when a legal monopolist, a security monopolist, an enforcement monopolist is established? Simply on the basis of the construction of the state itself one can predict that this monopolist will use his position to generate conflicts and then decide them in his own favor. One does not need to be Einstein to see that this is a necessary consequence. Only if one believes that state employees are angels could one reach a different conclusion. The state will therefore provoke conflicts and then settle them to its own advantage.

The usual objection is that there are constitutions, constitutional courts, and supervisory bodies. Yet these supervisory bodies and constitutional judges are themselves part of the state apparatus. Imagine bringing a lawsuit claiming that you never signed a contract obliging you to pay taxes. When you appear before the constitutional court, the judges will of course notice that their own salaries are paid from taxes and will deliver the predictable verdict: the argument is irrelevant; of course you must pay taxes, and if you refuse we will lock you up.

The state is therefore a law-breaking law-protector, an expropriating property-protector. One can also predict that the state’s expenditures on the production of law and order will continually increase. In other words, expenditures on security are maximized while the actual production of security is minimized. The more money one can spend and waste, and the less one actually has to work productively, the better it is for those who occupy such a position.

Democracy versus Monarchy

00:21:00

A few remarks are in order concerning the democratic state in particular, with which I also have a bone to pick. The traditional form of the state was monarchy. Monarchy was attacked with the simple argument that it violates the principle of equality: not all persons are equal; there is a king who may do certain things that ordinary people are forbidden to do. We want everyone to be equal before the law. Therefore, it was proposed, we introduce democracy: anyone can in principle become king, and equality before the law is thereby established.

The answer is that this is of course completely untrue. Under democracy the contrast between people treated according to a higher or special law and people treated according to a lower law remains. The only difference is that personal privileges disappear and functional privileges take their place. When I act in an official state capacity I am subject to the rules of public law and may do things that a private person subject to private-law norms may not do. I may, for example, do what in private dealings is called stealing — namely levy taxes — only it is no longer called stealing. If in private life I steal something from you and then give it to someone else as a gift, that is called theft and receiving stolen goods. When state employees do the same thing on a large scale it is called social policy. Politicians are extraordinarily generous with donations precisely because the money is not their own; it is money previously taken from other people. With other people’s money one is always very generous; with one’s own money one is normally more careful.

Thus the dual legal system exists under democracy just as under monarchy. But the situation is even worse. By replacing monarchy with democracy one has replaced a person who regards the country more or less as his property with persons who are only temporary caretakers of the country. This makes them more short-sighted.

Imagine two identical houses. In one case I give you the house and say you are now the owner; you may inherit it, sell it, and so on. In the other case I say you are the caretaker of this house for four or eight years; you cannot sell it or bequeath it, but during the time you are caretaker you may extract as much rental income from it as possible. Would you behave differently? When you are only a temporary usufructuary your interest is to extract as much as possible from the house even if after eight years it is a ruin. You would never behave that way if you were the owner. Democratic politicians are those who want to plunder the country as quickly as possible because they have only a limited time in which to do so. A king, by contrast, normally has a much longer-term orientation and wants to leave an intact realm to his children.

Moreover, the expansion of state power is more difficult under kings because everyone knows “I can never become king myself. What is this fellow doing to me? I have no chance of ever rising to his position.” Resistance to tax increases and new regulations is therefore stronger. Under democracy everyone can hope that he himself might one day occupy that position, and resistance to the expansion of state power declines considerably.

One final argument that speaks for monarchy and against democracy as a form of state (I am not a monarchist, but I have sympathies for monarchists) is this: a king, because he reaches his position by chance, may by chance be a decent man, or he may be wicked. If he is wicked, the dynasty of which he is a part is normally concerned that the entire country might be lost, and the family circle then arranges for someone to remove the king in order to preserve the dynasty. There are hundreds of historical examples of this, and it is of course an extremely positive event when such people are shortened by a head. Under democratic conditions, by contrast, no one reaches power by chance; there is competition for the position. Competition is good when it concerns the production of goods, but competition is not good when it concerns the doing of evil. As law-breakers and expropriating property-protectors, states are in the business of doing evil to people. One does not want competition among the best thugs, the best managers of concentration camps, or those who have prevailed in the competitive struggle of killers. In democratic competition it is the greatest windbags, those who promise the most while knowing full well that none of it can be kept, who prevail. Imagine appearing as a politician and saying you are against all redistribution and in favor of abolishing taxes, or even merely of cutting them by 10, 20 or 30 percent. What chance would such a person have of being elected anywhere except perhaps in a small village where everyone knows everyone else? Democracy allows every person to live out his desire for the property of others and systematically promotes the rise of bad characters. Naturally the most cunning and vicious characters end up at the top.

The Private-Law Society

00:30:30

I now come to the private-law society. You have already recognized that the solution to the problem of how people can avoid conflict must itself be offered by freely competing enterprises. All persons must adhere to the same basic rules I stated at the beginning. We therefore need a non-statist solution. Law and order, of all things, must not be supplied by a monopolist. There is no ultimate legal monopoly and no tax privilege. No one is permitted to acquire property by any means other than original appropriation, production, or voluntary exchange. No one is permitted to prevent another person from the free use of his property so long as he does not violate the physical integrity of others’ property. And every person may enter any line of business with his property; he may produce whatever he wishes to produce.

Applied concretely to the problem of law and order, this means that the production of security, law and order in a private-law society is likewise carried out by freely financed service providers and enterprises that compete with one another in the free market — exactly as the production of all other goods. I do not claim to be able to predict in detail how a society of this kind would look. One can, however, make a number of relatively detailed predictions about what will happen and how it will differ markedly from what we currently have before us.

Self-Defense and the Myth of the Violent Wild West

00:33:00

First, a minor point to which I shall return later: of course the right of self-defense exists in such a society. Every person has the right to defend his property when he or it is attacked. You know that in Switzerland this is less pronounced than in most other countries, where states tend increasingly to disarm their citizens. The reason is obvious: if one is in the business of taking other people’s property, one naturally prefers that those people not be in a position to defend themselves. That is exactly what I would do if I were the monopolist of law and order — disarm everyone first.

In a private-law society the ownership of weapons is sacrosanct. Everyone has the right to own weapons. Although self-defense will play a relatively minor role in a private-law society (because of the division of labor), it is worth pointing out the myth that societies of this kind were marked by constant murder and mayhem. Reference is often made to the Wild West, where people allegedly walked around fully armed and the impression is created that such societies were characterized by continuous violence. That is complete nonsense. The Wild West was an extraordinarily peaceful society. Imagine trying to rob a bank when every bank employee is armed. Do you think you would get out alive? Imagine trying to hold up a stagecoach when all the passengers have weapons in their pockets. You would never succeed. These are fantasy pictures told by state propagandists. Robberies and the like were extraordinarily rare. There is an interesting book called More Guns, Less Crime that demonstrates in great empirical detail that, other things equal, the higher the rate of gun ownership the lower the crime rate. Heterogeneous societies generally have more crime than homogeneous ones. Switzerland, incidentally, is a relatively good example of a society with a low crime rate precisely because (or at least partly because) so many people own assault rifles.

In a private-law society one would normally rely on the division of labor. We do not manufacture our own television sets or sew our own suits; these things are produced through specialization. We can likewise expect that in a private-law society law and order will be produced through the division of labor by specialized firms: private police services, private insurance companies, private arbitration organizations, and so on.

Contract as the Decisive Difference

00:37:30

If one wants to express the decisive difference between a privately organized security industry and the present statist practice in a single word, that word is contract. Under current conditions the state, as the ultimate legal monopolist, stands in a contract-less legal relationship toward us. There is no contract between the state and us, and it is not even clearly fixed what belongs to us as inviolable property. There is property tax and land tax; what of your property actually belongs to you? Only as much as the state leaves you. What of your land belongs to you? Only as much as the state leaves you. Nor is the price you must pay the state fixed; it is continually altered.

Imagine a private security provider saying something of this sort: “I contractually guarantee you nothing. I do not tell you which concrete things I intend to protect as your property, nor do I tell you what I am obligated to do if, in your opinion, I fail to perform. I also reserve the right to change the rules of the game at any time, and in any case I reserve the unilateral right to determine the price for this completely indeterminate service.” Is there anyone here who would sign such a contract? Yet that is exactly the situation we face.

Conversely, it is completely clear what would be the case in a private-law society. A provider offering that kind of contract would not find a single customer. In a private-law society contracts must be offered that contain clear descriptions of property and clearly defined mutual performances and obligations. Moreover, these contracts can be altered during their term only by mutual consent; unilateral changes are impossible. From this fundamental advantage of the private-law society a whole series of detailed improvements relative to the present state of affairs follow.

Competition, Prices, and the Optimal Quantity of Security

00:40:40

First of all, competition among freely financed security providers would ensure that the price of security per unit of value protected tends to fall, whereas at present it continually rises. Beyond that, competition would ensure that there is neither over-production nor under-production of security. Security is a good that competes with all other goods. If I spend more on insurance and police protection I have less money left for beer or restaurant meals. Every good competes with every other good.

How much security should be produced? How much money should be devoted to producing security? When this is left to a monopolist the answer is always: the more money I receive the better. Do we need one policeman, two, three, a hundred? Should they be paid 100, 200 or 3,000 francs? Do we need one tank, two tanks, a hundred tanks? Should we station a personal bodyguard with a machine gun next to every person? The state says: the more money I have, the more I can protect you. But perhaps we do not want to be protected so extensively, because this good competes with all other goods. Only under competition does it emerge how much money people actually want to spend on their security. Not every person wants the same amount of security. Some are strong and can defend themselves; others are weaker and want more protection. People in cities may need more protection than those in the countryside; younger people may need less than older ones; people in eastern Switzerland may want less than those in western Switzerland, and so on. In a market society each person gets as much security as that security is worth to him.

Crime Prevention, Victim Compensation, and Incentives

00:43:30

The most important difference between statist security producers and private-law security production lies in the content of what is produced. Consider first the problem of crime-fighting. As you know, the state is notoriously inefficient in this area because the agents charged with the task are paid from tax revenue, that is, independently of their productivity. Why should one work when one is also rewarded for doing nothing? Why should I chase criminals when I can also hand out parking tickets? More than that, one can even assume that the state has a certain interest in allowing a certain level of crime to persist, because one can then hope for larger budget allocations. As a small anecdote: during the Cold War the American CIA systematically dramatized the military strength of the Soviet Union in order to obtain larger appropriations. Anyone who had actually seen those countries knew that half the tanks were non-functional on any given day because a few screws were missing, and that the economic strength of the Soviet Union was infinitely lower than claimed and was simply inflated. A similar interest can be attributed to all police forces.

Still worse is the fact that current crime-fighting is not concerned at all with compensating victims. On the contrary: when the state actually catches criminals — at which it is very inefficient — the victims are often additionally burdened with the tax costs of housing these crooks and bandits so that they can play table tennis, receive their daily muesli, and in America even study law and train in gyms so that they can be more successful next time.

Look at private security services. Keep in mind that present-day insurance companies are heavily regulated by the state and therefore do not do what insurance organizations would do on a free market. An insurer would of course be good at crime prevention, because whenever he fails to prevent something he must pay. The state never comes to you and says “I actually wanted to protect you; unfortunately it didn’t work out, so here is 10,000 or 100,000 francs in compensation.” No compensation is paid. An insurer must compensate; for that reason he will be good at prevention. After a crime has been committed and damage has been done, an insurer must cover the loss and will therefore be good at recovering the stolen goods. If your house is broken into and you go to the police and report what was stolen, you can be sure the report will simply be filed away; no one will make any real effort to recover the loot. An insurer will try to recover it, because everything he recovers he does not have to replace. Finally, an insurer has an interest in tracking down the perpetrators, because only then is it possible to make the perpetrators compensate the victims instead of making the victims pay for the housing of a captured offender.

Peacefulness, Insurability, and the Rejection of Victimless Crimes

00:48:30

Private security industries are also generally peace-promoting. States are by nature aggressive institutions because they can shift the costs associated with aggression onto third parties. This applies both to their relations with their own citizens and to their relations with foreign states. If they had to bear the full costs of going to war themselves they would presumably not do so. Because they can shift those costs onto innocent third parties who have nothing to do with the matter, they are more aggressive. For private organizations aggression is costly; one would have to raise premiums, and if one raises premiums one loses customers relative to competitors who say “I stay out of all conflicts and for that reason offer you lower premiums.”

Not all risks are insurable at all. Can one insure against the risk of committing suicide tomorrow? The answer is never; no insurance company will do that. Can one insure against setting fire to one’s own house? That is also impossible. Can one insure against business bankruptcy? Impossible. Can one insure against unemployment? Also impossible (what is currently so named has nothing to do with genuine insurance). One can insure only against events over which one has no control. Everything one can control oneself falls into the sphere of personal responsibility.

For this reason insurers will refuse to come to your aid if you have provoked a conflict. No insurer will say “I insure you in every case if someone hits you.” They will say “I insure you only against unprovoked attacks. If you yourself committed a provocation and a retaliatory measure follows, we do not insure that kind of risk.” Every insurer will therefore insist that the insured behave in a civilized, rule-conforming manner; otherwise there is no insurance coverage. For the same reason insurers will insist that people do not engage in self-help justice, even when it is justified. Self-help justice carries the danger of retaliatory measures and of uncertainty. Because all of that is costly, insurers will insist that one submit to ordered, regular procedures that establish who is right and who is wrong. Self-help justice will therefore practically disappear.

Finally, insurance companies will no longer prosecute victimless crimes. At present enormous sums are spent by all states on the prosecution of crimes for which there is actually no victim: drugs, gambling, and the like. All of these are things that are voluntarily agreed upon between adults. There is no victim. (If there is a victim, it is ordinary crime.) Yet a multitude of things are currently prosecuted and vast amounts of money spent on them even though there are no victims. Would an insurance company insure against such things? It would first have to collect enormously higher premiums. Who would be willing to pay those higher premiums for something that does not affect him at all? Victimless crimes would therefore again become what they are: private sins, perhaps, or activities in which some people engage that others prefer to have nothing to do with. But since they do not touch one’s own person or property, one would not insure against them.

Weapons, Legal Variety, and Legal Harmonization

00:54:50

Returning once more to the problem of armament: I have already emphasized why states disarm the population. What would insurance companies do? Imagine going to an insurance company that says “I will insure you only on condition that you first hand over to me all hammers, nails, knives, and firearms.” One does not need to be inventive to know immediately that something is wrong with that insurance company. On the contrary, insurance companies would encourage armament, because it reduces risk. They would offer special reduced premiums to those who can demonstrate that they are trained in the handling of handguns — just as one receives premium reductions for having a safe at home in which valuables are locked. Insurance companies would therefore contribute to the arming of the population, whereas at present the exact opposite is the case.

A system of competing security producers also has a twofold effect on the content of the law. On the one hand it permits greater variety of law; on the other hand it leads to legal unification. Insurance companies can offer, for example, Mosaic law, atheistic law, Islamic law, or canon law. Persons can then decide: as a Catholic I submit to canon law; as a Jew I submit to Mosaic law, and so on.

The problem then arises of what happens when a conflict occurs between persons insured by two different companies. When you and I are under the same law the answer is settled in advance, because we have both agreed to it. But what happens when the insurance companies are of different kinds? Every client of an insurance company knows that such cases can arise and will of course insist that his own insurer has made provision for them in the contracts. The only workable solutions are these: if both insurers reach the same judgment there is no problem. If they do not, or if I have a complaint against my own insurance company, every insurance company will provide in its contract that an independent arbitration organization is then called in. No insurance company can say “then I decide” or “then the other one decides.” Every client knows that cannot work. It can work only if there is now an independent arbitration organization. And there will not be only one such organization; there will be competing arbitration organizations to which one turns.

These competing arbitration organizations ensure that something like legal unification occurs — that a universal law develops precisely in those cases where a Jew has a dispute with a Christian or a Muslim with a Jew. For such cases there is no Jewish law or Muslim law; there must be an international law.

What already exists in this regard? Look at international commercial traffic between Swiss and Germans, Austrians and Americans, and so on. There is no super-state. Look at the three-country corner near Basel: French, Germans, and Swiss. Are there more conflicts between persons on different sides of the border than between Zurichers and Bernese? I have never heard of it. It appears that there are just as many or just as few conflicts between persons on this side and that side of the border as between persons within a single territory. And what do people do when such conflicts arise? They go to arbitration organizations. In international commercial traffic it is already the case that firms submit to arbitration organizations, and if they refuse to submit to an arbitral award they are finished commercially; no one does business with them any longer.

In international commercial traffic we already have something similar to what would develop in a private-law society. From the conflicts handled by insurance companies, competing arbitration organizations arise that render judgments according to a universal law that gradually develops in legal practice. And if these arbitrators fail — if they come out with judgments that are recognized as outrageous — you can be sure that those arbitrators will not be engaged again in the next case. What can you do under present conditions when you feel that a judgment is a complete travesty? You can go to another instance that is itself part of the same organization responsible for the scandalous judgments. That is why I close with this observation.

Closing

01:03:00

If you want to read the argument through a little more carefully, my small booklet is available. I hope that what I have said has been at least somewhat stimulating and has prompted reflection. That is what this academy is for: that we think together and that you may hear something that at first seems strange. I am confident that you have recognized that what has been presented here is not entirely unthought-out. Thank you very much.

Transcript of Q&A (Grok)

Hans-Hermann Hoppe – Private Law Society without a State Q&A – Modelhof Academy, 2012 (Clean English transcript)

Opening

00:00

I’d also be happy to answer a few questions, so maybe for a quarter of an hour. Yes.

Murder, Restitution, and Victim-Centered Justice

00:09

They didn’t even address the murder issue. In cases of murder, they say that the body is property, and that is clearly a violation of property rights. But who will be compensated if the murdered person has no wife and no living descendants? Yes, how is this currently being handled?

Yes, so the murderer will be punished and imprisoned. In such a case, most of the victims or their relatives would then have a claim to compensation. If they apply the principle of proportionality, they could at most insist that he be executed. Normally one would not do that. Prices would then usually be negotiated. That means: compensate the victim’s family as best as possible.

If it is a wealthy person, one might demand a larger amount. If they are less wealthy, the amount might be smaller. Maybe you won’t get anything from him at all — but you don’t get anything from him these days either. There is no perfect solution for such things. The entire punishment system should focus solely on the victim — either the victim or the victim’s relatives.

The current situation is characterized by the fact that the victim is completely irrelevant. The victims are not being compensated in any way. In such a system that would of course be the central point. We should do everything humanly possible to make the victim whole. In many cases it is no longer possible to fully restore the situation, but we try to rectify it as best we can.

And most victims would not insist on physical punishment unless the person is a danger to the public. They would demand compensation for pain and suffering and the like. This also existed in the Middle Ages. For many offenses fixed tariffs were in place: “That’s the price — three goats, or five sheep,” and so on.

Children’s Rights and the End of Guardianship

01:51

Yes… she herself always speaks of one body, but what about children? Do they also have this right? If they don’t have it, then their parents can exercise it for them, so to speak. No, of course children have this right too, as long as they are children — and so do the parents. The question is: when does this guardianship expire?

My teacher Rothbard had the idea, and it seems plausible to me. You can’t just say it ends at the fifth year, or the sixth, or the seventh. That seems somewhat arbitrary. The moment children can run away and say “no,” that dependency disappears. I would allow certain exceptions — sometimes I would have chased after them and given them a good spanking and they would have come to their senses. But the basic idea seems correct to me.

Some children mature earlier, others later. If there are good indications that this is a truly serious decision and they have seriously said no, then these children can go to a mediator and say: “My parents are forcing me to come back, but listen to me — hear my arguments. Am I not independent enough that they have to let me go?”

One also wanted to address the problem that parents, especially while the children are still young, can basically do whatever they want with them. In Italy there is no authority that is, so to speak, an advocate for the children. Normally the relatives who are known do that. Some things like this can never be completely prevented. That is clearly not the case at present either.

Currently children are taken away from their parents against their will — not only if the parents do such things, but also for politically incorrect behavior. In Sweden you can take the children out of the house because their parents smoke at home, for example. No order in the world can prevent difficult, delicate problems from existing somewhere. That will remain the case as long as people are the way they are. In the system as I have described it there are far fewer problems than in the one we currently have. There’s nothing more that can be done. More is simply not humanly possible.

The Origin and Nature of Money

03:36

Yes, they keep bringing up the fact that something needs to be paid for. “They would make money. We need a central institution for money.” Well, money is created spontaneously on the market. Money is simply the most marketable of all goods. If there were a world with absolute certainty regarding future events, people would only hold consumer goods and production goods. Holding money would be a waste, in a sense.

Why hold onto money that you can’t eat and that isn’t used as an investment? The answer is: because there are uncertainties — because surprises can occur in life. And if you want to prepare for these surprises, you look for highly marketable goods that you can sell immediately to solve your problems. And such money has arisen everywhere in the world at all times of human history — whenever humanity evolved beyond the most primitive state of simple commodity exchange. This would probably have been a gold standard or silver standard. If the world had been different, perhaps a different metal. You don’t need a state for that.

On the contrary: if I look at the current monetary system, the introduction of paper money was only possible because those who originally used metallic money were expropriated. Paper money can never stand at the beginning of the development of money. If I said “Here, I’ll give you what you want for your glasses” and wrote you a slip of paper with “ten” on it… they would say she’s about to go crazy. And if I added two more zeros, they still wouldn’t put me in a mental institution.

Money was originally always a commodity. The reason it was accepted as paper is that this paper was originally a title to a commodity. They accept a note from me if it says that this note can be redeemed for, say, one gram of silver or gold. And what states did was: at some point they said “Okay, we’re no longer redeeming this paper for what it was originally intended to be. Now we only have paper left.” And we as the state are monopolists — we have a monopoly. We can now print these paper slips as often as we like. I would like to be able to do that too.

And then you can also predict what will happen. All state-owned banks are nothing more than money-printing machines. They print money from morning till night. Nobody will get rich that way, of course not. Otherwise there would be no more poor countries in the world. The idiotic countries also have printing presses. So they can all do that. A new banknote doesn’t create an additional piece of bread or anything real. Nothing. What it can achieve, however, is to make those who get the money first richer, while the other people lose out.

The counterfeiter counterfeits money — it costs almost nothing — and buys himself a Mercedes. The rest of society now has one less Mercedes, one less real commodity. But the money-printer has more, and prices slowly rise as these banknotes gradually seep through the economic system, causing one price after another to increase. Those whose income is fixed, however, can buy less with a banknote than was previously the case. Inflation — that is, the increase of the money supply — has as its purpose the redistribution of income in favor of those who get the money first. First it’s always the central bank, then the big banks that are closely connected to the central bank, and then the large clients of the big banks. And the small ones — they are the ones who are made poorer by the money losing purchasing power.

So there’s absolutely no need to worry about money. If you look at states, the most important institutions from the state’s point of view are, firstly, those who walk around in leather coats — who break your knees if you don’t pay your taxes and lock you up — and then there are those in suits: the people who sit in the central banks. And they are of course even more admired and highly respected, even though they are actually the more dangerous people. In my opinion, a person who works at the central bank is a dangerous person. Those in the lower ranks may not even know this, but those at the top certainly do.

Private Law Society vs. Anarcho-Capitalism

06:57

Yes, in principle a private-law society is anarchy, you could say that. An alternative term for it is anarcho-capitalism, but I don’t like this term because it has a disreputable flavor — people hitting each other over the head. That’s why I prefer the term “private-law society,” because it nicely emphasizes two things. Firstly, there is the law, and the point is emphasized that all people are treated equally under the law. There is no special right for a group of people — no higher and lesser right — but all persons are treated according to the same legal rules.

And it also conveys the message that we are well aware that there is private law, and when we conduct business among ourselves we generally behave in accordance with this law. Private law, too, is naturally permeated by elements of public law. There have also been perversions that have taken place. But overall, most people always think of it as so complicated. The Ten Commandments are usually sufficient to regulate people’s lives peacefully: “You shall not covet your neighbor’s property.”

And what do we hear from all the Christian parties? Redistribution here, redistribution there. This has nothing to do with Christianity. Christianity demands of us what all major religions demand: we should practice charity — but acts of charity consist of giving something voluntarily. And everything that has been done under the name of social policy is nothing but organized crime. The social policymakers in particular really get on my nerves for that reason. They always feel like they’re constantly doing something good. They’re not doing anything good at all.

Only those who freely give something of their own property to benefit other people are doing good. And this goodness is, in a sense, driven out of us by the existence of social policy. Of course they say: “They’re already taking half my salary. You can’t expect me to be a big donor for this and that now.” If they would let me keep more, yes of course — then one would give. What the churches have deemed appropriate for centuries. And then it also goes to people you know and for causes you actually support. Every small village has its village idiot. And when I was a boy there were also a few people who did really, really poorly, but they were always supported by the people who knew them. If all these things happen anonymously and are used for purposes that one doesn’t actually want to support, then I just find that disgusting.

Path to a Private-Law Order: Collapse, Secession, and Competition

08:52

Yes, please. Do you see any possibility — or have you already developed your own ideas — as to how society, the legal system, the political order could move or develop in that direction? Because if there were no such possibility, it would actually be too late. So, what I see as a scenario is that all the Western welfare states will collapse — just like when communism collapsed. They simply cannot meet their financial obligations. Then there will be an economic catastrophe.

In this economic catastrophe that I foresee, secessionist movements will prevail on a large scale. You can already see hints of something like that in some regions. Resistance to the EU will continue to grow — unfortunately last in Germany, due to German history. “We are responsible for the entirety of world history.” That’s why we have to wait it out as long as possible. And then it happens that Catalonia would secede from Spain because they say “we don’t want to finance Andalusia,” or the Bavarians might say “why are we financing Sicily? Let’s leave the money in Bavaria instead.” And if secessionist movements occur and states become smaller again, then states must be more liberal so that productive people don’t leave them.

So the interim solution I see is a world made up of thousands of Liechtensteins — quite unlike what is currently happening before our very eyes: namely a European central state with a uniform tax structure, actually a uniform regulatory structure, so that it is no longer worthwhile for entrepreneurs to go from one place to another — because the crap is the same everywhere. And even worse, of course, would be a world state. Then there are no economic reasons left to go from one place to another — just things like “the sun shines more there” or “it rains more there,” and so on.

And the greater the number of states, the more liberal they must be towards their own citizens. States are inherently illegal, so to speak, but the competition between many states forces them, in a sense, to behave better. Imagine you are just a small village and you say “We’re not doing free trade anymore.” Imagine Liechtenstein says “We’re not letting anyone out now. We’re closing the borders; we’re producing everything ourselves.” In fourteen days they would be in a famine. Small states must be liberal. And the ability for people to vote with their feet forces them to be comparatively nice.

So I can only advise the Swiss: never join the EU. Strictly reject the issue. Withdraw from the United Nations again. Give the cantons more power again. Send your central government home and let the cantons take care of things again — and then possibly go a step further and let the individual municipalities decide. The more diversity there is in the state system, the closer one comes to this goal. And I’m actually quite sure that’s the way things will go — but only through a catastrophe.

Closing Remarks

10:48

Yes, I’ll take one more question and then I think we should… Yes. Yes, because I deliberately didn’t eat anything beforehand, because I know that I’ll get sleepy. And I told Mr. Burel that beforehand. I didn’t want to eat beforehand, but afterwards — but it’s already quite late, I must say. Maybe we can take care of the remaining questions right here as we’re leaving or something. Well, thank you again very much.