On Centralization, Decentralization, And Self-Defense – Analysis


By Hans-Hermann Hoppe

States, regardless of their constitution, are not economic enterprises. In contrast to the latter, states do not finance themselves by selling products and services to customers who voluntarily pay, but by compulsory levies: taxes collected through the threat and use of violence (and through the paper money they literally create out of thin air). Significantly, economists have therefore referred to governments—i.e., the holders of state power—as stationary bandits. Governments and everyone on their payroll live off the loot stolen from other people. They lead a parasitic existence at the expense of a subdued “host population.”

A number of further insights emerge from this.

Naturally, stationary bandits prefer larger loot to smaller loot. This means that states will always try to increase their tax revenue and further increase their spending by issuing more paper money. The larger the loot, the more favors they can do for themselves, their employees, and their supporters. But there are natural limits to this activity.

On the one hand, the bandits have to be careful not to burden the “hosts” whose work and performance make their parasitic existence possible so much that the latter stop working. On the other hand, they have to fear that their “hosts”—and especially the most productive among them—will migrate from their dominion (territory) and settle elsewhere.

Against this background, a number of historical tendencies and processes become understandable.

First of all: It becomes understandable why there is a tendency towards territorial expansion and political centralization: with this, states succeed in bringing more and more “hosts” under their control and making it more difficult for them to emigrate to foreign territories. This is expected to result in a larger amount of loot. And it becomes clear why the end point of this process, the establishment of a world state, while certainly desirable from the standpoint of the ruling gang, would by no means be a blessing for all of mankind, as is often claimed. Because one cannot emigrate from a world state, and hence, there exists no possibility of escaping state looting by emigration. It is therefore to be expected that with the establishment of a world state, the scope and extent of state exploitation—indicated, among other things, by the level of state income and expenditure, by monetary inflation, the number and volume of so-called public goods and persons employed in the “public service”—will continue to increase beyond any previously known level. And that is certainly not a blessing for the “host population” that has to fund this state superstructure!

Second: A central reason for the rise of the “West” to become the world’s leading economic, scientific, and cultural region becomes understandable. In contrast to China in particular, Europe was characterized by a high degree of political decentralization, with hundreds or even thousands of independent dominions from the early Middle Ages up until the recent past. Some historians have described this state of affairs as “ordered anarchy.” And it is now common among economic historians to see in this quasi-anarchic state a key reason for the so-called European miracle. Because in an environment with a large variety of independent, small-scale territories in the immediate vicinity of each other, it is comparatively easy for the subjects to vote with their feet and escape the robberies of state rulers by emigration. To avert this danger and to keep local producers in line, these rulers are under constant pressure to moderate their exploitation. And this moderation, in turn, promotes economic entrepreneurship, scientific curiosity, and cultural creativity.

Third: In combining these two insights, the grand course of modern history becomes intelligible. Territorial expansion requires war – wars between rival gangs of stationary bandits. But the conduct of war requires means (economic resources), and bandits do not produce anything. They parasitically draw on the means produced and provided by others. They can influence the overall volume of production and the size of their own loot indirectly, however, through the treatment of their “host population.” Other things being equal, the more “liberal” – the less exploitative – the ruling gang, the more productive will be the host population; and parasitically drawing on a more productive host population, then, it is internally “liberal” gangs that tend to win out in war and drive the centralization process. I have called this the paradox of imperialism: internally liberal regimes tend to conduct a more aggressive foreign policy and are the central promoters of imperialism.

This helps understand not only the rise and long-lasting economic and financial supremacy of the collective “West” over and above all of the “Rest.” It helps in particular also to understand the sequence and the progressive stages of Western imperialism. From sizable Spain and Portugal as leading imperialist powers (but broke at last ), the center of economic gravity moves to the small liberal Low Countries (Netherlands), and it is from there that the next major imperialist ventures are launched. The Low Countries are then cut to size, set back and surpassed as the leading imperial power by a liberal Britain with some world-wide Empire. Finally, after more wars, Britain’s former colony, the break-away US takes over and expands on Britain’s erstwhile role. Owing to its ultra-liberal (in comparison) internal policies, US-America grows to become the world’s greatest economic power, and sitting and drawing on such cushy economic foundation, then, the US government has risen to become the world’s foremost imperial power, with a world-wide network of military bases and of foreign vassals and a US-paper-dollar that functions as the international reserve currency (allowing the US gang to have a free lunch – to spend and consume – at foreigners’ expense).

Fourth: These imperialist ventures may initially have liberating effects: a relatively more liberal – less exploitative or more capitalist – regime may be exported to a comparatively less liberal society. However, the further the process of imperial expansion and of political centralization advances, i.e., the closer one gets to the ultimate goal of a one-world government with a global central bank issuing a single universal fiat currency, the less pressure there is on the ruling gang to continue in its former internal liberalism. Internal exploitation, taxation, inflation and regulation will increase and economic crises, stagnation or even impoverishment and decline will result. And with the economic failure of political centralization becoming increasingly obvious/dramatic, then, the opposite tendency toward de-centralization gains in strength. The lesson of the “European Miracle” is remembered, and the vision of a radically decentralized world, brought about by means of territorial secession – the very anti-thesis to a world-state – gains in popularity. The vision of a world made up of thousands upon thousands of Liechtensteins, Swiss cantons and independent free-holds (dominiums), all linked by free trade and an international gold standard and all seeking, in competition with other places, to retain and attract productive people with favorable local conditions.

One central, regularly presented challenge to this secessionist project – the challenge I will take up in the following – is this: Secession implies that a larger territory is split into two or more smaller parts. Yet how are small and increasingly smaller units to protect and defend themselves against the imperialist desires on the part of some larger state neighbor? Are not small states run by small gangs in constant danger of being conquered and taken over by larger states and larger gangs? And isn’t the only lasting safety and security to be found then as part and parcel of a large state and ultimately a world-state? Similarly, and directed against the anarchists in particular, it is queried: How can a state-less territory possibly defend itself against an invasion by some neighboring state? Isn’t a state necessary in order to defend against another state? And does this not show the inevitability of states and statism?

First off: Notwithstanding all political centralization going on in the contemporary world, there are still many small or smaller states side by side with large or larger states, in peaceful coexistence. Why hasn’t France taken over Monaco, or Germany Luxemburg, or Switzerland Liechtenstein, or the US Cuba or Costa Rica, or Brazil Uruguay? The reason is certainly not, that the leaders of the large(r) gangs have any scruples regarding conquest, confiscation, imprisonment or even killing of innocent victims. They owe their very own position as gang leaders to such acts, and they continue to perform them on a daily basis. Rather, what constrains the conduct of the gang leadership and prevents it from giving in to its imperialist desires and going to war, is public opinion.

Unlike the good-old-days, when rival gang leaders went mano-a-mano to fight it out in public with their own weapons, in modern wars the gang leadership stays protected behind, outside the battlefield, and the actual fighting is done by other people, and with other people’s means (money and property). It is not sufficient that the leadership calls for war, then. Others (many others), from the military high-command up high all the way down to the soldier pulling the trigger and the worker producing tanks and ammunition, must be willing to execute its orders. And for such obedience to become possible a reason, a justification must be given by the gang-leadership. There must be a provocation on the part of the take-over target, some outrageous misconduct, that can be presented at home as a justification for an invasion.

Moreover, in addition to domestic (and international) public opinion, the gang leaders are constrained of course in their imperialist desires and their willingness to go to war by the defensive capabilities of the to be conquered and subjected rival gang. The stronger and better armed the rival gang, the higher are the costs of war (and the better must appear the reasons to go to war nonetheless).

In light of this, two guiding principles must be followed by small states and even more so by secessionist movements, whether leading to another, smaller state or a state-less territory (an anarchic social order): First, do not provoke, and second, be armed. I will take up and elaborate on both requirements in turn.

From the viewpoint of the larger gang, secession is in and of itself a provocation and the secessionists deserve to be crushed. But it can crush the secessionists and go to war against its own people only if it has public opinion on its side. In order to prevent this and to help bring about instead a public opinion favorable, sympathetic or at least neutral to their cause, then, the secessionists should declare their independence in the least provocative way. To that purpose, the secession should be presented as a separation solely and alone from the large(r) government gang and as motivated by some particular grievance against this gang – but not, and by no means also as a separation from the people residing in the territory controlled by this gang, with whom one is to maintain normal relations.

To further help their cause, and to justify and emphasize their declaration of independence as a universal human right, the secessionists are advised to explicitly allow also for secession from the secessionist territory. That is, people within the secessionist territory should be permitted also, for instance, to stay with the old, larger gang and continue to subscribe and submit to its legal framework if they so desire. As for the secessionists, to declare their independence is to declare that the rules and regulations of the ruling gang do no longer automatically apply also to the secessionist territory. Many old, traditional rules may be kept by the secessionists – such as much or even most of existing private law (including criminal law) – but other rules or commands – mostly public law provisions – may be rejected, changed or nullified. In any case, to minimize the risk of a violent reaction from the ruling gang, the separation should occur in a decidedly peaceful manner and in a cooperative spirit.

That is, for instance, the secessionists should not touch the properties within its territory that are claimed as “their own” by the central government gang (offices, administrative buildings, etc.). Independence only implies that central government agents working within the secessionist territory are no longer permitted to perform any executive function at the places where they are. This may lead to the relocation of some such agents or else it may lead to a change in their employer or their occupation – all peacefully. Moreover, to further help avoid any possible “provocation,” the secessionists should declare their commitment to a policy of non-intervention regarding the internal affairs of the rest-territory and to free and unhampered interregional trade, and they should make it clear that they are prepared to pay for the use of any goods or services provided by the larger gang on and off its territory (water, electricity, streets, etc.) the same price, based on the same itemized bill, that also domestic residents must pay. (As far as capital endowment is concerned, the secessionist supposedly had already contributed their part to it before seceding; after the secession, then, only the current usage of such goods and services can be billed.)

Further, in order to minimize the risk of a violent crack-down by the central gang, it is advisable also to abstain from any internal policies that could be construed as provocations. A prohibition of secession from the secessionists, for instance, can be easily construed as such by the smitten central gang. However, more generally – and more interestingly – it is the very institution of a state – a small state, but nonetheless a territory governed by a monopolist of law and order – that entails reasons and grounds for complaints that can always be used against it, whether by a well-intentioned party such as an anarchist or by an ill-intentioned one, such as the ruling central gang. Even the most liberal small state has a monopoly of jurisdiction and taxation and thus cannot but create some victims, who, properly stylized as “victims of human rights violations,” may provide the “excuse” for an invasion. And as for the actual world, there are countless of “victims” and of the “oppressed” to be found everywhere, and they may even be paid to cry out loud for outside help and intervention.

Far more difficult for a central gang, then, to find fault and to discover a reason for a violent reaction against the secessionists, if these do not institute another state, however small, but a free territory, a state-less private law society. On the secessionist territory all sorts of social relations, of hierarchies and of rank-orders exist; there exist a multitude of private households, enterprises and associations, each with its own internal rules; and there are also services and institutions such as police, insurance and arbitration in place – but, importantly, there exists no territorial monopolist of ultimate decision-making that could issue commands that were binding on all of the territory’s residents and private properties. Any fault, any provocation or aggression to be discovered in a private law society by a ruling central gang, then, is someone’s private fault, provocation or aggression, and as such cannot be used to justify an attack on the collective secessionists. Indeed, if (and to the extent that) there are provocative and aggressive acts committed, these are most likely the acts of criminals – of con-artists, thieves, burglars, rapists, murderers or plain frauds – and criminals will be treated as criminals in a private law society, of course, and be swiftly and effectively punished there. And this result: the treatment of criminals as criminals and the effective containment or reduction of crime, then, is almost impossible for a central government gang to portray to its home public as a provocation and a good enough reason for an invasion of the secessionist territory.

What, however, if the larger gang still decides to attack, all accommodating efforts and peace offerings on the part of the secessionists notwithstanding? In that case, especially when the secessionists are small in numbers and they are confronted with a huge and mighty gang, it might be best to simply give up and surrender and hope for better times. That way, at least no death and destruction occurs. The motto “rather dead than red” – or more generally: “rather dead than conquered” – and the fighting spirit that it implies may be appropriate sometimes and for some people. But at other times, in particular whenever not only the fighter’s own life but also that of family and friends is at stake, it may be plain stupid and irresponsible, empty heroism.

Even if sometimes advisable, however, surrender is by no means the only option available to secessionists vis-à-vis a big neighboring gang intent upon re-taking its lost territory. They can of course also arm themselves and thus increase the cost of war for an attacker.

What, then, makes for deterrence?

For one, there is certainly strength in numbers. The larger the number of secessionists the more difficult to beat them into submission. But more important than sheer numbers is the cohesion of the secessionists. It is not diversity that gives strength to the secessionists (or the inhabitants of independent small states), but homogeneity: linguistic and cultural commonality, a culture of reciprocity, mutual trust and community spirit.

Still more deterrence can be built up by the secessionists if they allow and promote the institution of an armed citizenry and the establishment of people militias, organized and led by military professionals trained and providing training especially in the conduct of partisan and guerilla warfare. To further strengthen their defensive capabilities and make for still more deterrence, the secessionists may also join or form alliances with various external providers of logistic and military intelligence, assistance, services and equipment (mercenaries). In this endeavor, however, great care must be taken not to lose control over one’s own destiny to some other, foreign entity or institution. That is, the secessionists should stay strictly away from what Thomas Jefferson warned about long ago as “entangling alliances,” i.e. any permanent alliance that may involve or implicate them in foreign quarrels, conflicts or wars that are not, and that are not regarded by them as their own quarrels, conflicts or wars. (NATO is such an entangling alliance: an attack on any one member is supposedly an attack on all members and requires that all members must go to war against the attacker, even if the attacker had been provoked by the attacked.)

Moreover, almost totally ignored and forgotten today, in an atmosphere of heightened militancy and belligerence manufactured in connection with the war in the Ukraine, the “small” can also defend themselves against the “big” by means of civil disobedience. Provided the secessionists – and more generally: the “small” – have the will to be free of the conquerors, the effectiveness of civil disobedience as a defense strategy can hardly be overestimated. The disobedience can take many forms and come in countless degrees. It can range from ostentatious acts of defiance to some completely unobtrusive conduct, thus allowing almost everyone to participate in the defense effort: the courageous and the timid, the young and the old, the leaders and the followers. One may publicly refuse to obey certain laws, or evade and ignore them. One may engage in sabotage, obstruction, negligence, or simply display a lack of diligence. One may openly scoff at orders or comply only incompletely. Tax-payments may be refused or evaded. There may be demonstrations, sit-ins, boycotts, work-stoppages or plain slacking-off. The conquerors may be maltreated, molested, chided, ridiculed, laughed-at or simply ostracized and never assisted in anything. In any case: all of this contributes to the same result: to render the conquerors powerless. The conquerors will leave or they will be absorbed and assimilated by the conquered.

Last but not least, the secessionists – the small – may defend themselves against some bigger invader and raise the level of deterrence for him also in being ready for retaliatory action and counterattack. Any such retaliation should never be directed against the “people,” i.e. the citizenry residing in the territory controlled by the invading gang, while the gang leadership itself is considered off-limits, however, as is current practice and legal opinion. Rather and to the contrary: in order to be effective as a deterrent, any retaliation should be explicitly and exclusively directed against the gang leadership. The leadership, from the king, president and prime minister up high on successively downward should come to fear, wherever they are, that they may be personally targeted as aggressors and be brought down by long- or short-range precision weapons, assassination commandos or secretive poisoning. At the same time, all collateral damage to the property of innocent civilians should be avoided or at least minimized, so as to raise sympathy for the secessionists (the small) and sow doubt and skepticism regarding the war policy of one’s big home-gang, potentially endangering the gang leadership’s legitimacy in the public mind and thus bringing about a situation to be averted at all costs.

Contrary to popular opinion, then, the unitary, top-down command structure of a state is not necessarily a strength in war, but it leaves an Achilles heel open to any adversary. Once the top are toppled the war is essentially over. So, whenever under attack (and unwilling to surrender), go for the top of the attacking gang. Yet this does not just hold for the (small) attacked, however, but also for the (big) attacker. He, too, will go for the top of the secessionists (the small) to accomplish his conquest or re-conquest. And the institution of a state is also the Achilles heel in the defense of the secessionists – the small – against a take-over by the big central gang – and it is once again the anarchic, no-state private law society that turns out as offering the best protection and defense against such contingency.

If the secessionists institute another, smaller state on a smaller territory (rather than a private law society), the decision of how to defend against an invasion by some bigger neighboring gang will fall to the leadership of the secessionist state. As the monopolist of ultimate decision-making, the leadership of the new small(er) gang decides, bindingly for everyone on the secessionist territory, whether to resist or not; if to resist, whether in the form of civil disobedience, armed resistance or some combination thereof, and if of armed resistance, of what form. If it decides to put up no resistance, this may be a well-meaning decision or it may be the result of bribes or threats by the invading state – but in any case, it will be contrary to the will of many who would have liked to resist and who are thus put in double jeopardy because as resisters they now disobey their own state as well as the invader. On the other hand, if the state decides to resist, this again may be a well-meaning decision or it may be the result of pride or fear – but in any case, it too will be contrary to the preferences of many who would have liked not to resist or to resist by different means, and who are now entangled as accomplices in the state’s schemes and subjected to the same collateral fallout and victor’s justice as everyone else.

Weakened by various internal divisions and opposing forces and factions, then, the central gang may be able to crush the secessionists and retake its lost territory with just one surgical strike or one decisive victory over the secessionist government gang. Once this gang is defeated, the entire secessionist movement is finished (at least for the time being).

Matters are distinctly different, however, if the secessionists establish instead a private law society on the seceded territories. There is no government, no central gang in place that makes one all-binding decision on matters of war and peace. Instead there are numerous interconnected individuals and institutions who choose their own defense strategy, each in accordance with their own risk assessment. Consequently, the attacking gang has far more difficulties conquering the territory. It is no longer sufficient for the attacker to “know” the secessionist (small) government and to win one decisive victory over it to end the war. Because in a private law society there exists no one central decision-maker – and hence, there exist, from the perspective of the attacker, no one clearly identifiable enemy, but there exists instead a multitude of mostly “unknown” private parties, some big, some small, some hostile, some friendly or neutral, some armed and insured and others not. In that situation there is simply no reason to be found to “sell” to one’s invading soldiers or to the public at home (that is to finance the whole endeavor) as to why a collective war must be waged against the secessionists, if, after all, these are just a bunch of independent private parties, associations and institutions. Then, as noted already before, a case can possibly be made for the punishment of some particular party, but nothing constituting a casus belli could ever arise out of such a constellation. Indeed, faced with some neighboring free territory, the abandoned central ruling gang may well be happy to keep control of the territory that it still has and not to lose too many productive people to the secessionists (due to emigration) rather than engage in the violent reconquest of some lost territory and thereby running the risk of losing all of its legitimacy in the eyes of the general public, at home as well as abroad.

To sum up: From the nature of the state as a parasitic gang a tendency toward political centralization can be deduced. As well, based on a few elementary economic considerations, the “paradox of imperialism” and the “dialectic of centralization” can be explained. That is, the fact that political centralization reduces interregional competition and hence tends to lower economic welfare; and yet, that centralization insofar as it is driven by the most “liberal” gang leadership can have a liberating effect at first, and only eventually, the closer a ruling gang comes to the position of a global hegemon, shows its true colors of increasing oppression, social strife, economic crises and civilizational decline. Having about reached this point, the opposite tendency toward political de-centralization has increasingly gained in popularity in recent times. Consequently, the prospects of secessionist movements were analyzed: their difficulties, what mistakes to avoid, and how best to defend against a foreign take-over. In conclusion – as confirmed also empirically by the long-lasting peaceful coexistence of small and large states and by multiple examples of peaceful secession (USSR breakup, Czechia, Slovakia, Malaysia, Singapore, Brexit) – there is, all central gang objections notwithstanding, no principal argument to be made against a process of successively progressing secession. To the contrary, the further this process advances and the larger the number of independent territories the better for the all-around economic well-being. Nor is there any principal argument against the complete dissolution of the state and the establishment and the successful defense of a private law society, as the logical end-point of the process of secession and of political de-centralization. After all, a private law society, exemplified by hierarchically ordered families and by every small, family-centered face-to-face community, logically and temporally preceded any state and all political centralization; and notwithstanding all distortions and perversions of private law brought about in the meantime by state-legislation and so-called public law, the common, private (and criminal) law notions of right and wrong have not been wiped out entirely and forgotten. Hence, the establishment of a private law society via the lengthy detour of a history of statism is like a return to normal, to something old and familiar, from a long period of aberrations – albeit a return on a different level of social and economic development now, of course, than that prevailing when the process of state-formation and political centralization first took off, way back in history.

See also this and this.

About the author: Hans-Hermann Hoppe is an Austrian school economist and libertarian/anarcho-capitalist philosopher. He is the founder and president of The Property and Freedom Society.

Source: This article was published by the Mises Institute


The Mises Institute, founded in 1982, teaches the scholarship of Austrian economics, freedom, and peace. The liberal intellectual tradition of Ludwig von Mises (1881-1973) and Murray N. Rothbard (1926-1995) guides us. Accordingly, the Mises Institute seeks a profound and radical shift in the intellectual climate: away from statism and toward a private property order. The Mises Institute encourages critical historical research, and stands against political correctness.

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