In the beginning of humanity, there was only "land" (nature-given resources and obstacles) and "labor" (human bodies). Strictly speaking, the only given supply of any good is that of body-time.

all other goods—be they perishable or durable consumer goods such as berries or caves, or indirectly useful goods (production factors), such as berry bushes and their surrounding land—is not "given." It is the result of someone's prior action; of the appropriation (homesteading) of nature by a specific individual. The facts and laws of nature and human biology are "givens," of course, and nature as such may be generous or skimpy. But only through an individual's act of appropriation is nature turned into a supply of goods. It is even more obvious that the supply of all produced goods is not "given." Be they consumer goods, which have been stored, conserved or made more durable, or produced factors of production (capital goods), they are all the outcome of the activities of specific individuals.

The imposition of a government tax on property or income violates a property or income producer's rights as much as theft does. In both cases the appropriator-producer's supply of goods is diminished against his will and without his consent. Government money or "liquidity" creation involves no less a fraudulent expropriation of private-property owners than the operations of a criminal counterfeiter gang.

But taxation, the government's provision of liquidity, and government regulations—unlike their criminal counterparts—are considered legitimate, and the victim of government interference—unlike the victim of a crime—is not entitled to physical defense and protection of his property. Because of their legitimacy, then, government violations of property rights affect individual time preferences systematically differently and much more profoundly than does crime. Like crime, government interference with private-property rights reduces someone's supply of present goods and thus raises his effective time-preference rate.

Crime, because it is illegitimate, occurs only intermittently—the robber disappears from the scene with his loot and leaves his victim alone. Thus, crime can be dealt with by increasing one's demand for protection goods and services (relative to that for nonprotection goods) so as to restore or even increase one's future rate of investment return and make it less likely that the same or a different robber will succeed a second time with the same or a different victim.

In contrast, because they are legitimate, governmental property-rights violations are continual. The offender does not disappear into hiding but stays around, and the victim does not "arm" himself but must (at least he is generally expected to) remain defenseless.

Consequently future property-rights violations, rather than becoming less frequent, become institutionalized. The rate, regularity, and duration of future victimization increases.

if government property-rights violations take their course and grow extensive enough, the natural tendency of humanity to build an expanding stock of capital and durable consumer goods and to become increasingly more farsighted and provide for ever-more distant goals may not only come to a standstill, but may be reversed by a tendency toward decivilization: formerly provident providers will be turned into drunks or daydreamers, adults into children, civilized men into barbarians, and producers into criminals.

Under the assumption of self-interest, every government will use this monopoly of expropriation to its own advantage—in order to maximize its wealth and income. Hence every government should be expected to have an inherent tendency toward growth. And in maximizing its own wealth and income by means of expropriation, every government represents a constant threat to the process of civilization—of falling time preferences and increasingly wider and longer provision—and an expanding source of decivilizing forces.

Democratic rule—in which the government apparatus is considered "public" property administered by regularly elected officials who do not personally own and are not viewed as owning the government but as its temporary caretakers or trustees—typically only follows personal rule and private government ownership. Because masses or majorities cannot possibly possess any natural authority (this being a personal, individual trait), democratic governments can acquire legitimacy only unnaturally—most typically through war or revolution. Only in activities such as war and revolution do masses act in concert and do victory and defeat depend on mass effort. And only under exceptional circumstances such as these can mass majorities gain the legitimacy needed to transform government into public property.

All that has changed is that it has now been made easy for the ruled to change the personnel of the leading wielders of Power. Viewed from one angle, this weakens Power, because the wills which control a society's life can, at the society's pleasure, be replaced by other wills, in which it feels more confidence. But by opening the prospect of Power to all the ambitious talents, this arrangement makes the extension of Power much easier. Under the "ancien regime," society's moving spirits, who had, as they knew, no chance of a share in Power, were quick to denounce its smallest encroachment. Now, on the other hand, when everyone is potentially a minister, no one is concerned to cut down an office to which he aspires one day himself, or to put sand in a machine which he means to use himself when his turn comes. Hence it is that there is in the political circles of a modern society a wide complicity in the extension of power.

While a king is by no means opposed to debt, he is constrained in this "natural" inclination by the fact that as the government's private owner, he and his heirs are considered personally liable for the payment of all government debts (he can literally go bankrupt, or be forced by creditors to liquidate government assets). In distinct contrast, a presidential government caretaker is not held liable for debts incurred during his tenure of office. Rather, his debts are considered "public," to be repaid by future (equally nonliable) governments. If one is not held personally liable for one's debts, however, the debt load will rise, and present government consumption will be expanded at the expense of future government consumption. In order to repay a rising public debt, the level of future taxes (or monetary inflation) imposed on a future public will have to increase. And with the expectation of a higher future-tax burden, the nongovernment public also becomes affected by the incubus of rising time-preference degrees, for with higher future-tax rates, present consumption and short-term investment are rendered relatively more attractive as compared to saving and long-term investment.

any income or wealth redistribution within civil society implies that the recipients are made economically better off without having produced either more or better goods or services, while others are made worse off without their having produced quantitatively or qualitatively less. Not producing, not producing anything worthwhile, or not correctly predicting the future and the future exchange-demand for one's products thus becomes relatively more attractive (or less prohibitive) as compared to producing something of value and predicting the future exchange-demand correctly. Consequently—and regardless of the specific legislative intent, be it to "help" or "protect" the poor, the unemployed, the sick, the young or the old, the uneducated or the stupid, the farmers, steelworkers or truckers, the uninsured, the homeless, whites or blacks, the married or unmarried, those with children or those without, etc.,—there will be more people producing less and displaying poor foresight, and fewer people producing more and predicting well. For if individuals possess even the slightest control over the criteria that "entitle" a person to be either on the receiving or on the "giving" end of the redistribution, they increasingly will shift out of the latter roles and into the former. There will be more poor, unemployed, uninsured, uncompetitive, homeless, and so on, than otherwise.

because the members of the privileged sex, race, or age group are awarded an unearned income, they have less of an incentive to earn one in the future, and because the members of the discriminated sex, race, or age group are punished for possessing wealth or having produced an income, they, too, will be less productive in the future. In any case, there will be less productive activity, self-reliance and future-orientation, and more consumption, parasitism, dependency and shortsightedness. That is, the very problem that the redistribution was supposed to cure will have grown even bigger. Accordingly, the cost of maintaining the existing level of welfare distribution will be higher now than before, and in order to finance it, even higher taxes and more wealth confiscation must be imposed on the remaining producers. The tendency to shift from production to nonproduction activities will be further strengthened, leading to continuously rising time-preference rates and a progressive decivilization—infantilization and demoralization—of civil society.

Retrospective And Prospects The process of civilization set in motion by individual saving, investment, and the accumulation of durable consumer goods and capital goods—of gradually falling time preferences and an ever widening and lengthening range and horizon of private provisions—may be temporarily upset by crime. But because a person is permitted to defend himself against crime, the existence of criminal activities does not alter the direction of the process. It merely leads to more defense spending and less nondefense spending. Instead, a change in direction—stagnating or even rising time preferences—can be brought about only if property-rights violations become institutionalized; i.e., in the environment of a government. Whereas all governments must be assumed to have a tendency toward internal growth as well as territorial expansion (political centralization), not all forms of government can be expected to be equally successful in their endeavors. If the government is privately owned (under monarchical rule), the incentive structure facing the ruler is such that it is in his selfinterest to be relatively farsighted and to engage only in moderate taxation and warfare.

In the course of one and a half centuries—beginning with the American and French Revolutions and continuing to the present—Europe, and in its wake the entire western world, has undergone an epochal transformation. Everywhere, monarchical rule and sovereign kings were replaced by democratic-republican rule and sovereign "peoples."" The first direct attack by republicanism and popular sovereignty on the monarchical principle was repelled with the military defeat of Napoleon and the restoration of Bourbon rule in France. As a result of the Napoleonic experience, republicanism was widely discredited during much of the nineteenth-century. "Republicanism was still thought to be violent—bellicose in its foreign policy, turbulent in its political workings, unfriendly to the church, and socialistic or at least equalitarian in its view of property and private wealth."41 Still, the democratic-republican spirit of the French Revolution left a permanent imprint. From the restoration of the monarchical order in 1815 until the outbreak of World War I in 1914, popular political participation and representation was systematically expanded all across Europe. Everywhere the franchise was successively widened, and the powers of popularly elected parliaments were gradually increased.

From the perspective of economic theory, the end of World War I can be identified as the point in time at which private-government ownership was completely replaced by public government ownership, and from which a tendency toward rising degrees of social time preference, government growth, and an attending process of decivilization should be expected to have taken off. Indeed, as indicated in detail above, such has been the grand underlying theme of twentieth century Western history.

Since 1918, practically all indicators of high or rising time preferences have exhibited a systematic upward tendency: as far as government is concerned, democratic republicanism produced communism (and with this public slavery and government sponsored mass murder even in peacetime), fascism, national socialism and, lastly and most enduringly, social democracy ("liberalism").46 Compulsory military service has become almost universal, foreign and civil wars have increased in frequency and in brutality, and the process of political centralization has advanced further than ever. Internally, democratic republicanism has led to permanently rising taxes, debts, and public employment. It has led to the destruction of the gold standard, unparalleled paper-money inflation, and increased protectionism and migration controls. Even the most fundamental private law provisions have been perverted by an unabating flood of legislation and regulation. Simultaneously, as regards civil society, the institutions of marriage and family have been increasingly weakened, the number of children has declined, and the rates of divorce, illegitimacy, single parenthood, singledom, and abortion have increased. Rather than rising with rising incomes, savings rates have been stagnating or even falling. In comparison to the nineteenth century, the cognitive prowess of the political and intellectual elites and the quality of public education have declined. And the rates of crime, structural unemployment, welfare dependency, parasitism, negligence, recklessness, incivility, psychopathy, and hedonism have increased.

Ultimately, the course of human history is determined by ideas, whether they are true or false. Just as kings could not exercise their rule unless public opinion accepted their rule as legitimate, so democratic rulers are equally dependent on public opinion to sustain their political power. It is public opinion, therefore, that must change if we are to prevent the process of decivilization from running its full course. And just as monarchy was once accepted as legitimate but is today considered to be an unthinkable solution to the current social crisis, it is not inconceivable that the idea of democratic rule might someday be regarded as morally illegitimate and politically unthinkable. Such a delegitimation is a necessary precondition to avoiding ultimate social catastrophe. It is not government (monarchical or democratic) that is the source of human civilization and social peace but private property, and the recognition and defense of private property rights, contractualism, and individual responsibility.

States will always try to enlarge their exploitation and tax base. In doing so, however, they will come into conflict with other, competing states. The competition between states qua territorial monopolists of compulsion is by its very nature an eliminative competition. That is, there can be only one monopolist of exploitation and taxation in any given area; thus, the competition between different states can be expected to promote a tendency toward increased political centralization and ultimately one single world state.