Robert Higgs's Schlarbaum Award Acceptance Speech, delivered on October 12, 2007, at the Mises Institute's 25th Anniversary Celebration
States, by their very nature, are perpetually at war — not always against foreign foes, of course, but always against their own subjects. The state's most fundamental purpose, the activity without which it cannot even exist, is robbery. The state gains its very sustenance from robbery, which it pretties up ideologically by giving it a different name (taxation) and by striving to sanctify its intrinsic crime as permissible and socially necessary. State propaganda, statist ideologies, and long-established routine combine to convince many people that they have a legitimate obligation, even a moral duty to pay taxes to the state that rules their society.
They fall into such erroneous moral reasoning because they are told incessantly that the tribute they fork over is actually a kind of price paid for essential services received, and that in the case of certain services, such as protection from foreign and domestic aggressors against their rights to life, liberty, and property, only the government can provide the service effectively. They are not permitted to test this claim by resorting to competing suppliers of law, order, and security, however, because the government enforces a monopoly over the production and distribution of its alleged "services" and brings violence to bear against would-be competitors. In so doing, it reveals the fraud at the heart of its impudent claims and gives sufficient proof that it is not a genuine protector, but a mere protection racket.
All governments are, as they must be, oligarchies: only a relatively small number of people have substantial effective discretion to make critical decisions about how the state's power will be brought to bear. Beyond the oligarchy itself and the police and military forces that compose its Praetorian Guard, somewhat larger groups constitute a supporting coalition. These groups provide important financial and other support to the oligarchs and look to them for compensating rewards — legal privileges, subsidies, jobs, exclusive franchises and licenses, transfers of financial income and wealth, goods and services in kind, and other booty — channeled to them at the expense of the mass of the people. Thus, the political class in general — that is, the oligarchs, the Praetorian Guards, and the supporting coalition — uses government power (which means ultimately the police and the armed forces) to exploit everyone outside this class by wielding or threatening to wield violence against all who fail to pay the tribute the oligarchs demand or to obey the rules they dictate.
Democratic political forms and rituals, such as elections and formal administrative proceedings, disguise this class exploitation and trick the masses into the false belief that the government's operation yields them net benefits. In the most extreme form of misapprehension, the people at large become convinced that, owing to democracy, they themselves "are the government."
Individual passages back and forth across the boundary between the political class and the exploited class testify, however, to nothing more than the system's cunningly contrived flexibility and openness. Although the system is inherently exploitative and cannot exist in any other form, it allows some leeway at the margins in the determination of which specific individuals will be the shafters and which the shaftees. At the top, a modest degree of "circulation of elites" within the oligarchy also serves to mask the political system's essential character.
It is a sound interpretive rule, however, that anything that cannot be accomplished except with the aid of threats or the actual exercise of violence against unoffending persons cannot be beneficial to one and all. The mass belief in the general beneficence of democracy represents a kind of Stockholm syndrome writ large. Yet, no matter how widely this syndrome may extend, it cannot alter the basic fact that owing to the operation of government as we know it — that is, government without genuine, express, individual consent — a minority lives on balance at the expense of the rest, and the rest therefore lose on balance in the process, while the oligarchs (elected or not, it scarcely matters) preside over the enormous web of criminal organizations we know as the state.
Notwithstanding the ideological enchantment with which official high priests and statist intellectuals have beguiled the plundered class, many members of this class retain a capacity to recognize at least some of their losses, and hence they sometimes resist further incursions on their rights by publicly expressing their grievances, by supporting political challengers who promise to lighten their burdens, by fleeing the country, and, most important, by evading or avoiding taxes and by violating legal prohibitions and regulatory restraints on their actions, as in the so-called underground economy, or "black market." ... "