Prof. Dr. Hans-Hermann Hoppe currently serves as Professor of Economics at the University of Nevada, Las Vegas. He is also a Distinguished Fellow of the Ludwig von Mises Institute, in Auburn, Alabama, and editor-at-large of the Journal of Libertarian Studies. Hoppe is the author of eight books and more than one hundred articles in books, scholarly journals, and magazines of opinion. As an internationally prominent Austrian School economist and libertarian philosopher, he has lectured all over the world and his writings have been translated into twenty languages.

Two of the most widely accepted propositions among political economists and philosophers follow:

First, the production of security, of law and order, must be undertaken by and is the primary function of government. Here, security is understood in the wide sense adopted in the American Declaration of Independence, as the protection of life and property from domestic violence as well as foreign aggression. In accordance with generally accepted terminology, government is defined as a territorial monopoly of law and order, and as such is the ultimate decision maker and ultimate enforcer in cases of conflict.

Secondly, every monopoly is bad from the consumers' point of view. Monopoly here is understood in its classical sense as an exclusive privilege granted to a single producer of a commodity or service, i.e. as the absence of free entry into a particular line of production. In other words, only one agency, A, may produce a given good, x. Any such monopoly is bad for consumers because shielded from potential new entrants into the monopolist's area of production, the price of its product x will be higher and the quality of x lower than otherwise.

That both propositions are clearly incompatible has rarely caused concern among economists and philosophers. In so far as it has, the typical reaction has been one of taking exception to the second proposition rather than the first.

Indeed the first proposition - that law and order must be provided by a state - has become a dogma and a taboo subject.

Nonetheless, there exist strong, indisputable arguments as well as abundant empirical-historical evidence that it is the first proposition which is false and ought to be rejected.

Indeed, the situation is truly amazing. The defenders of the mentioned dogma provide no proof for their position. Worse, their position is more untenable than that of any other defender of monopoly because government is not just like any other monopoly, such as a milk or car monopoly that produces low quality products at high prices. Government is unique among all other agencies in that is produces not only goods but also bads. Indeed, it must produce bads in order to produce anything that might be considered a good.

As defined, government is the ultimate judge in every case of conflict - including conflicts involving itself. Consequently, instead of preventing and resolving conflicts, a monopolist of ultimate decision-making will provoke a conflict in order to settle it to its own advantage. That is, if one can only appeal to government for justice, justice will be perverted in favor of government, constitutions and supreme courts notwithstanding. Indeed, these constitutions and courts are government constitutions and courts, and whatever limitations on government action they may find is invariably decided by agents of the very same institution. Predictably, the definition of property and protection will be altered continually, and the range of jurisdiction expanded to the government's advantage. The idea of eternal and immutable law which is discovered will disappear and be replaced by the idea of law as legislation, as state-made law.

Moreover, government is a monopolist of taxation, and while those who receive the taxes - the government employees - regard taxes as something good, those who must pay taxes regard the payment as something bad, as an act of expropriation. As a tax-funded life-and-property protection agency, then, the very institution of government is nothing less than a contradiction in terms. It is an expropriating property protector, "producing" ever more taxes and ever less protection. In fact, even if a government limited its activities exclusively to the protection of the property of its citizen, the further question of how much security to produce would arise. Motivated, as everyone is, by self-interest and the disutility of labor but equipped with the unique power to tax, a government agent's goal will invariably be to maximize expenditures on protection - and almost all of a nations' wealth can conceivably be consumed by the cost of protection - and at the same time to minimize the production of protection. The more money one can spend and the less one must work, the better off one will be!

In sum, the incentive structure established with the institution of government is not a recipe for protection of life and property, but indeed a recipe for maltreatment, oppression, and exploitation.

And this is precisely what the history of states illustrates.

Consider that shining example of a protective state: the US - the wonderland that people everywhere are supposed to emulate.

According to the pronouncements of our state rulers and their intellectual bodyguards, we are better protected and more secure than ever. We are supposedly protected from global warming and cooling, from the extinction of animals and plants, from the abuses of husbands and wives, parents and employers, from poverty, disease, disaster, ignorance, prejudice, racism, sexism, homophobia, and countless other public enemies and dangers.

In fact, however, matters are strikingly different.

In order to provide us with all this "protection", the state managers expropriate more than 40% of the incomes of private producers year in and year out (about $ 15,000 per person) compared to which even the economic burden imposed on slaves and serfs seems moderate. Government debt and liabilities have increased uninterruptedly (unfunded liabilities are currently $ 80 trillion, or six times GNP), thus increasing the need for future expropriations. Owing to the substitution of government paper money for gold, financial insecurity has increased sharply, and we are continually robbed through currency depreciation.

Every detail of private life, property, trade, and contract is regulated by ever higher mountains of paper laws (the index of the Code of Federal Regulations alone contains about 800 pages), which has created permanent legal uncertainty and moral hazard. In particular, we have gradually been stripped of the right to exclusion inherently implied in the very concept of private property. As sellers we cannot sell to and as buyers we cannot buy from whomever we wish. As members of associations we are not permitted to enter into whatever restrictive covenant we believe to be mutually beneficial. As Americans, we must accept immigrants we do not want as our neighbors. As teachers, we cannot get rid of ill-behaved students. As employers, we may not fire incompetent or destructive employees. As landlords, we are forced to put up with undesirable tenants. As bankers and insurers, we are not allowed to avoid bad risks. As restaurant and bar owners, we must accommodate unwelcome customers and cannot appropriately accommodate welcome ones. As members of private associations, we are compelled to accept members and actions in violation of our own rules and restrictions.

Moreover, while the state has made continuous efforts to disarm its population and thus rob it of all means of self-defense, crime rates have gradually increased, notwithstanding ever higher budget allocations. On the other hand, in the name of the so-called war on drugs, the state arrests more than 1 million offenders of victimless crimes per year as criminals, and it often confiscates the defendant's means of defense against such accusations before the trial has even started. Further, the war on drugs has provided the state the opportunity to destroy essentially all of our financial privacy and bank secrecy.

In the name of patriotism and homeland security, the state can now tap our telephones and read our emails.

The FDA causes untold pain and suffering day in and day out by delaying or even prohibiting the timely marketing of pharmaceutical drugs.

The department of HUD manages to infest formerly safe residential districts with crime through its placement of low-cost housing within homogeneous middleclass residential districts.

Through its ill, incompetent, and inefficient maintenance of all of its so-called public goods and utilities, the state contributes to wild fires, floods, and other natural or man-made disasters as the events surrounding hurricane Katrina have recently shown. There was no timely evacuation, despite plenty of warning time and ample means of bus transportation. There was no water supply and no electricity for weeks. The habitation of flood prone areas was subsidized. There was a total breakdown of law and order in the Superdome and outside. Large groups of policemen deserted, and looting, even with the participation of city police, was rampant. Private relief efforts were hampered by FEMA officials.

In short, the more the state has increased its expenditures on social security and public safety, the more our private property rights have been eroded, the more our property has been expropriated, confiscated, destroyed or depreciated, and the more we have been deprived of the very foundation of all protection: economic independence, financial strength, and personal wealth.

The path of every president and practically every member of Congress is littered with hundreds of thousands of nameless victims of personal economic ruin, financial bankruptcy, impoverishment, despair, hardship, and frustration.

But this is far from all. The state is supposed to protect us from foreign enemies and dangers. Indeed, the US now has an annual defense budget that some analysts have estimated at $ 750 billion per year, or $ 3,000 per person.

Yet curiously, the borders of the US have never been seriously threatened. Actually, the borders were threatened only once during the War of Southern Independence from 1861-65, and on that occasion the Union government earned the unique distinction of declaring war against a large part of its own population and engaging in the wanton murder of hundreds of thousands (600,000) of its own citizens.

As for the rest of the military ventures, they were essentially aggressive and imperialist in nature. The US had no business in WWI, yet its participation in this war played a decisive role in bringing communism to Russia, fascism to Italy, national-socialism to Germany, in preparing the fields for WWII, in turning most of central and eastern Europe communist as well, and thus contributing mightily to making the twentieth century the century of socialism and one of the bloodiest centuries in all of human history.

In sum, while we have become more helpless, impoverished, threatened, and insecure, the US government has become ever more brazen and aggressive. In the name of national security, it defends us mostly outside of the US, equipped with enormous stockpiles of weapons of aggression and mass destruction from ever new Hitlers and suspected sympathizers.

Are we safer now from foreign threats? That is highly doubtful. Intervention creates unreliable friends. Indeed, it creates enemies and foes everywhere. The events of 9-11 2001 are revealing: The government is supposed to protect us from terrorism. Yet what was its role in the terrorist attack on the World Trade Center and the Pentagon?

Despite its enormous military budget and a worldwide network of spies and informants, the government was unable to prevent commercial airliners from being hijacked and used as missiles against prominent commercial and military targets. Worse, the government not only failed to prevent the disaster, it actually contributed to the likelihood of the event. In pursuing an interventionist foreign policy (taking the form of economic sanctions, troops stationed in more than 100 countries, relentless bombings, propping up despotic regimes, taking sides in irresolvable land and ethnic disputes, and otherwise attempting political and military management of whole areas of the globe), the US government provided the very motivation for foreign terrorists and made the US their prime target.

How was it possible that men armed with no more than box cutters could inflict the terrible damage they did? Obviously, this was only possible because the government prohibited airlines and pilots from protecting their own property by force of arms, thus rendering every commercial airline vulnerable and unprotected against hijackers. A $ 50 pistol in the cockpit could have done what $ 100s of billions in the hands of government were unable to do. Moreover, the mightiest power on earth could not even prevent an attack on its own military headquarters, the Pentagon, Do we need to know more about the utter failure of government as our protector?!

What can we learn from all this? What can we do to improve our security?

First and very importantly, I have destroyed the myth here that governments are effective protectors of life and property. Nothing could be further from the truth. They are the most dangerous enemies of life and property. Where do we learn this dangerously false myth? In the public schools, which we are forced to attend during our most impressionable years. They are designed to be the centers of statist indoctrination. "Without states, chaos would break out." You have all heard this nonsense.

Thus, a first fundamental step in regaining security lies in regaining intellectual sanity, and this requires the total privatization of the educational system. Get the state out of education. This is not expensive. People, like bureaucrats, who spend other people's money rather than their own tend to be "generous" with this money. Accordingly, public (tax-funded) schools are far more expensive than private schools. In particular, poor people would benefit tremendously through the replacement of public by private education.

Secondly, as already indicated repeatedly, security is most importantly a matter of financial wealth. Great wealth, diversified assets (regarding type and geographical location), the ownership of several homes and several passports, ready access to private means of transportation - these are the things that give us a sense of security. However, they have been largely restricted to the richer strata in society. They should become increasingly available to all strata; but this is only possible if the rapacious appetite of the state for our property is curtailed and resisted, and more and more of our productive output remains where it originates and belongs, namely in our private hands. State expenditures should fall year after year and the proportion of privately produced wealth remaining in private hands increase from year to year.

Third, states have always tried to disarm their subjects, because it is easier to rob an unarmed than an armed man. To regain our security, the right to self-defense, which includes in particular the right to bear arms, must be restored. Only slaves are not permitted to own arms, and it is a sign of a free man, that he does own arms. Furthermore, free armed men must be permitted to form militias. Contrary to government propaganda, the more guns there are, the less crime there is. Indeed, the decentralized militia structure of Switzerland was an important reason for the unwillingness of Nazi Germany to invade Switzerland. Surely the Nazis would ultimately have succeeded in occupying a much smaller country, but the price of trying to do so appeared prohibitive.

Fourth, the European Community has just passed strict anti-discrimination laws - laws that are incompatible with the right to private property, which includes the right to include and exclude others at will, for whatever reason, provided one is willing to pay the price for such discrimination. It is important to criticize, undermine, or at least ignore and not enforce such laws. For private protection and security, it is essential that people be free to form exclusive protective covenants (gated communities). These communities are composed of comparatively homogeneous members, which reduces transaction costs, reduces security expenditures, lowers insurance premiums, and enhances security all-around through greater social control. They allow people to live under a self-chosen law code (including matters of conflict arbitration). Ostracism, which such communities allow, is one of the most powerful means of bringing about civilized behavior.

Last but not least, there must be an economically sound vision regarding what can take the place of the state as judge and policeman. Such a vision exists: Law and order can be provided at comparatively low cost and infinitely higher quality than is the case under statist conditions by private, freely financed insurance firms. (See my books Democracy the God That Failed and The Myth of National Defense for details.)

While states do not indemnify their subjects if they have failed in the obligation to protect our life and property, insurance companies do. For purely financial reasons, that makes insurance companies efficient in the prevention of crime, in the recovery of stolen loot, as well as in the apprehension of criminals. The disastrous records of tax-funded monopolists in this regard hardly need to be mentioned.

Insurance companies would encourage the private ownership of weapons as means of self-defense with lower premiums, just as they offer lower premiums if clients have an alarm system or a safe at home. There is no need to discuss the state in this connection.

States can externalize the cost of aggression onto hapless taxpayers and thus are by nature aggressive. Insurance companies are by nature defensive organizations. They would not cover the risks associated with provocative or aggressive behavior of their clients but insist on civilized non-provocative conduct as a requirement for insurance.

Insurance companies would not legislate. Instead they would offer fixed contracts which could only be changed with the consent of all parties concerned. Insurance firms would, in the case of interagency conflicts (conflicts between clients of different insurers) resort to independent and competing arbitration agencies which would make an attempt to reach solutions deemed fair by all parties. Otherwise, they would not be chosen for the task again. States do it differently. If citizens have a conflict with a state official, it is another state official (judge) who decides about right and wrong - with a predictable systematic bias.