If you would follow these rules, wealth will be maximized. and if we follow these rules, then all conflicts can conceivably be avoided

The Economics of World Government

by Hans-Hermann Hoppe

"With this, I'll stop and let you think about it."

At the beginning, I want to repeat a few points that I have made in my previous lecture on law and economics, and then I want to get to an entirely different subject than the one that I dealt with in that previous lecture.

Because there is a scarcity in the world, we can have conflicts regarding these scarce resources. And because conflicts can exist whenever and wherever there exists scarcity, we do need norms to regulate human life. Norms – the purpose of norms is to avoid conflicts. And in order to avoid conflicts regarding scarce resources, we need rules of exclusive ownership of such scarce resources or, to say exactly the same, we need property rights to determine who is entitled to control what and who is not entitled to control what.

These rules, I have defended in my previous lecture, the rules that Austrians regard as rules capable of doing this, avoiding conflict and, at the same time, being just rules are the following. 

• One is every person owns himself, his own physical body. He has exclusive control over his own physical body. 
• The second rule refers to, how do we acquire property, the right of exclusive control of scarce resources outside of our body in the external world. Previously – initially, the outside world is un-owned and we acquire property in objects outside of our body by being the first one to put certain resources to use and, thereby, we become the owner. This is also sometimes referred to as original appropriation or as homesteading. 
• Rule number three and four are implied in the previous two. He who uses his physical body and those things that he originally appropriates in order to produce something, to transform things into a more valuable state of affairs, thereby, becomes the owner of what he has produced. Producer owns the product. 
• And finally, we can also acquire property by a voluntary transfer from a previous owner to a later owner.

We again only emphasize in this lecture that there are intuitively sensible rules, who should own us unless – who should own us, except ourselves. Somebody else should own us sounds absurd. Should the second one be the owner who has done nothing to a resource, instead of the first one? Again, that sounds absurd. The producer does not own the product, but somebody who has not produced it should own the product? Again, that sounds absurd. And obviously, rule number four, if it would be possible to just to take something away from other people against their consent, civilization would be destroyed in a moment's time.

In addition, you also realize that if you would follow these rules, by and large, wealth will be maximized. And if we follow these rules, then all conflicts can conceivably be avoided.

Now the question is, there are, of course, people who just say, so what. Even if we can justify them and show that they are economically beneficial to follow and that all conflicts can be avoided if people were to follow these rules, there will be law breakers. There will be criminals, evil people as long as mankind exists. What do we do with these people? How do we enforce these rules? Merely stating them does not mean that people will actually act according to them under all circumstances. There will always be bad people.

The classical liberals gave the following answer to the question, how do we enforce these rules. They said this is the sole task of government, the sole task of a state. A state doesn't do anything else except to make sure that everyone who breaks these laws will be hit on the head and brought to their senses.

Now what do we have to make to this answer of the classical liberals? It includes in this case, also, Ludwig von Mises. And Ludwig von Mises' position was precisely these rules are the rules of a just society and it is the task of the state to see to it that people adhere to these rules and punish – and threaten to punish potential lawbreakers.

Now, whether this answer is right or wrong, that is, whether this is the task of the state and the state will do it efficiently, that depends, of course, on what is the definition of a state. And I'm not giving you a fanciful definition of the state but that definition that is more or less accepted by everyone who has ever written about the state. It is the standard definition of the state. And that is, the state is a territorial monopolist of ultimate decision making or of ultimate arbitration in some territory. That is, whenever there is a conflict arising, the state is the ultimate arbiter to decide who is right and who is wrong. There is no appeal beyond the state. His is the final word; you are right, you are wrong. And this implies also that the state is the final arbiter, the final judge, the final decision maker even in cases of conflict involving the state or state agents themselves. We will see in a moment that this is a very important implication of what a state is, and from that, lots of consequences follow.

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