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Technology Shifting Power from Center back to Everyone

The state’s monopolistic institutions, such as the Federal Reserve, are not providing the necessary services or generating the results to keep the population satisfied. The four justifications for the existence of a state.

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WealthCycles Commentary

A state is a man-made structure; it doesn’t exist in nature. So why do humans create states? The four justifications for the existence of states—communications, education, money and security—are steadily being eroded, thanks to the democratizing effects of technology, as Jeffrey Tucker outlines in this informative video.

Referencing Hans-Hermann Hoppe’s seminal work, A Theory of Socialism and Capitalism, Jeffrey Tucker, famed for his work with the Laissez-Faire Club’s Whiskey Club took a break from his usual debate style to offer an analysis of how Hoppe’s perspectives are playing out in today’s version of the state.

Founded in 1972, Laissez Faire Books (LFB) began as a publisher and distributer of books on liberty, with particular emphasis on economics and finance. Originally founded by John Muller, LFB was housed on Mercer Street in Greenwich Village. This locale, as well as the richness of events taking place in the 1970's contributed LFB’s long-term success.

Its location in Greenwich Village attracted non-libertarians as well. They may not have purchased books, but Bob Dylan, Jerry Rubin, Alger Hiss and Bella Abzug passed through its doors. Hiss remarked to a friend, “It’s a clean anarchist bookstore.” Muller and Presley [founder and long-term operator], who strove to make the bookstore attractive as well as useful, were amused by this ironic comment. Dylan asked if the store carried haiku poetry. Presley, pointing out that it was a libertarian and anarchist bookstore, directed him to a copy of the IWW Songbook.

In 2011 LFB was acquired by Agora Financial, LLC, which continues to operate the organization, and which named Jeffrey Tucker publisher and executive director. Today LFB stays true to its founding principles while taking advantage of technology to reach its audience.

LFB is the innovator behind the dazzling and creative Laissez Faire Club, a subscription service for eBooks, reports, forum discussions, and a full-service “gated digital city” on the web.

During this podcast, Tucker’s goal is to introduce the listener to Hoppe’s elementary question, why invent a state? After all, there must be a reason that humans, time and again, have created states. The seemingly obvious answer is that humans create states because they are enhanced by the existence of the state. Without the state humanity is told that would be in a condition of desperation: no education, no media, no justice, no prosperity… you get the idea. But Hoppe, according to Tucker, goes on to point out that in reality one would never create a state.

You wouldn’t sit around with your tribe and say, “You know, what we really need to do is appoint two guys we really respect and give them all control over law, and tell them to enforce the law, to not be despotic, and to install mechanisms, that they themselves control, to ensure that they will not be despotic.”

Nevertheless, states do come into being, so the question remains why? The answer is that in each case a handful of people are able to convince the larger population that there is value and benefit to the existence of the state. Generally, this validation centers on the need for services, services which the citizens believe are controlled and only available from the state. In order for the state to survive it must maintain a monopoly over these four institutions.

1.     Communications

2.     Education

3.     Money

4.     Security apparatus, i.e. justice, police


There was a time, not all that long ago, when the government’s monopoly over communication was complete. For example, the U.S. Post Office was the sole means for day-to-day delivery of mail, including packages, from one location to another. Phone systems, radio, and later television were all under the absolute control of government. Freedom of speech existed, but without the ability to easily share, or distribute, ideas.

More than any other system, the government monopoly on communication has been completely dismantled. First, with the advent of alternate carriers and now with the plethora of digital communication tools available to everyone, communication, not just from house to house, but also from country to country, is completely unfettered.


Like communication, education was once under the sole control of the state. All children were required to go to school, by law, and there were no reasonable methods of complying with the law without sending children to government-controlled public schools. Sounds like a monopoly, doesn’t it?

The same technological advances that fostered the democratization of communication have also been used to break the back of the state’s monopoly on education. With the Internet, there is literally nothing that can’t be learned through a simple connection to the World Wide Web. Even public schools, which are still a big part of the education system, are less and less controlled by government because of the variety of both public and private financing.


Your initial view of money may lead you to believe that the state continues to exercise monopolistic control over the creation of money. And, to some extent this is true. It is equally true, however, that the state is under tremendous popular pressure to resolve the problems that plague the U.S. and world economies. This means that the state’s monopolistic institutions, such as the Federal Reserve, are not providing the necessary services or generating results to keep the population satisfied. The traditional role of banking in the economy, for example, is badly broken, causing the citizenry increasingly to find alternate methods of transacting business, such as peer-to-peer loans, private lenders and private financing.

Technology is even facilitating the use of new kinds of money. In our blog post Bitcoin Invades Mainstream Banking System we talked about how Big Government (the state) is trying to fend off alternate currencies by creating fear, uncertainty and doubt.

If you’ve been following the Bitcoin story for any period of time, you have seen big government’s criticism that the system is nothing more than a gathering place for illegal businesses and even terrorist plots. Yes, Bitcoin promotes privacy and anonymity, but that is more the result of people’s natural desire for freedom of choice. See Free Competition in Currency Act [WOULD GIVE] Americans Freedom of Choice.

Security Apparatus: Justice, Police

Of the four institutions identified by Hoppe, the Security Apparatus is by far the one over which the state maintains the most consistent control. Even so, this control is starting to erode, as large sub-groups of the population begin to see the role of the security system as that of the “long arm of government” rather than as a servant of the people. Once again, the erosion of popular faith in and support of the institution is the crack in the wall of the state’s monopoly. Tucker cites businesses utilizing arbitration in lieu of the centralized system of justice, used today more broadly, suggesting that it is a far more desirable process to solving disagreement.

Systemic Collapse

So what happens when the state’s unquestioned monopoly over the four institutions that justify the very existence of the state starts to fail? In other words, what happens next?

If all four of these institutions collapse, or become almost irrelevant to civilian society, which seems to be the trend, what happens next? This tradition of thought hasn’t fully explored that question. I don’t think revolution immediately happens. Most likely what happens is you see a displacement takes place. Once the institutions of free society are built up and become robust, more functioning, and more able to serve human needs than the state system, that people eventually turn to the private systems and the public systems basically rot and die. [think ignored & obsolete]

Already, as outlined above, control over the four pillars of the state’s raison d'être has been seriously eroded. Not only are the mechanisms of mass communication now increasingly privatized and decentralized, the establishment-centered corporate owners of mass media are increasingly challenged by the online democracy of bloggers, Yelpers, e-book publishers, and social media communities. In addition to the growing number of privately operated charter schools and universities, the same Web-based infrastructure that has democratized communication has democratized the dissemination of education.

Even money, or more correctly currency, long the rigidly controlled product of the state under penalty of law, is steadily falling into disrepute as more and more people recognize its role in plundering the wealth of the people in order to support the interests of the state. Alternate local currencies, barter systems, digital currencies and precious metals are steadily coming into use, both at the local, individual level and at the global, institutional level.

As Tucker acknowledges, security, arguably the most legitimate role of any government, is the sector over which its control is least challenged. Here, too, advanced technology plays a role, broadcasting incidents of police or military malfeasance in the 24-7 online alternative news cycle—a mechanism that allows the people to police the authorities, even as the authorities police them. In a nutshell, the effect of modern technology has been to distribute the balance of power more evenly between state and individuals. Now it’s up to us to make sure it doesn’t swing back the other way again.