Hans-Hermann Hoppe presents an interesting theory of natural elites, intellectuals, and the state, starting from the theory presented by Bertrand de Jouvenel:
According to his view, states are the outgrowth of natural elites: the natural outcome of voluntary transactions between private property owners is non-egalitarian, hierarchical, and elitist. In every society, a few individuals acquire the status of an elite through talent. Due to superior achievements of wealth, wisdom, and bravery, these individuals come to possess natural authority, and their opinions and judgments enjoy wide-spread respect. Moreover, because of selective mating, marriage, and the laws of civil and genetic inheritance, positions of natural authority are likely to be passed on within a few noble families. It is to the heads of these families with long-established records of superior achievement, farsightedness, and exemplary personal conduct that men turn to with their conflicts and complaints against each other. These leaders of the natural elite act as judges and peacemakers, often free of charge out of a sense of duty expected of a person of authority or out of concern for civil justice as a privately produced “public good.”The small but decisive step in the transition to a state consists precisely of the monopolization of the function of judge and peacemaker. This occurred once a single member of the voluntarily acknowledged natural elite was able to insist, despite the opposition of other members of the elite, that all conflicts within a specified territory be brought before him. Conflicting parties could no longer choose any other judge or peacemaker.
Once the origin of a state is seen as the outgrowth of a prior, hierarchically structured order of natural elites, it becomes clear why mankind, insofar as it was subject to government at all, has been under monarchical (rather than democratic) rule for most of its history. There have been exceptions, of course: Athenian democracy, Rome until 31 B.C., the republics of Venice, Florence, and Genoa during the Renaissance, the Swiss cantons since 1291, the United Provinces (the Netherlands) from 1648 until 1673, and England under Cromwell. But these were rare occurrences, and none of them remotely resembled modern, one-man-one-vote democratic systems. Rather, they too were highly elitist. In Athens, for instance, no more than 5% of the population voted and was eligible for positions of rulership. It was not until after the end of World War I that mankind truly left the monarchical age.
From the moment when a single member of the natural elite successfully monopolized the function of judge and peacemaker, law and law enforcement became more expensive. Instead of being offered free of charge or in exchange for voluntary payment, it was financed by a compulsory tax. At the same time, the quality of law deteriorated. Rather than upholding ancient private property laws and applying universal and immutable principles of justice, a monopolistic judge, who did not have to fear losing clients as the result of being less than impartial, would pervert the existing law to his own advantage.
How was this small yet decisive step of monopolizing law and order by a king, which predictably led to higher prices and a lower quality of justice, possible? Certainly, other members of the natural elite would resist any such attempt. Yet this is why the eventual kings typically aligned themselves with the “people” or the “common man.” Appealing to the always popular sentiment of envy, kings promised the people cheaper and better justice in exchange for and at the expense of taxing — cutting down to size — their own betters (the king’s competitors.) Second, kings enlisted the help of the class of intellectuals.
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A fundamental change in the relationship between the state, natural elites, and intellectuals only occurred with the transition from monarchical to democratic rule. It was the inflated price of justice and the perversions of ancient law by kings as monopolistic judges and peacekeepers that motivated the historical opposition against monarchy. But confusion as to the causes of this phenomenon prevailed. There were those who recognized correctly that the problem was with monopoly, not with elites or nobility. However, they were far outnumbered by those who erroneously blamed the elitist character of the ruler for the problem, and who advocated maintaining the monopoly of law and law enforcement and merely replacing the king and the highly visible royal pomp with the “people” and the presumed decency of the “common man.” Hence the historic success of democracy.How ironic that monarchism was destroyed by the same social forces that kings had first stimulated and enlisted when they began to exclude competing natural authorities from acting as judges: the envy of the common men against their betters, and the desire of the intellectuals for their allegedly deserved place in society. When the king’s promises of better and cheaper justice turned out to be empty, intellectuals turned the egalitarian sentiments the kings had previously courted against the monarchical rulers themselves. Accordingly, it appeared logical that kings, too, should be brought down and that the egalitarian policies, which monarchs had initiated, should be carried through to their ultimate conclusion: the monopolistic control of the judiciary by the common man. To the intellectuals, this meant by them, as the people’s spokesmen.
As elementary economic theory could predict, with the transition from monarchical to democratic one-man-one-vote rule and the substitution of the people for the king, matters became worse. The price of justice rose astronomically while the quality of law constantly deteriorated. For what this transition boiled down to was a system of private government ownership — a private monopoly — -being replaced by a system of public government ownership — a publicly owned monopoly.
A “tragedy of the commons” was created. Everyone, not just the king, was now entitled to try to grab everyone else’s private property. The consequences were more government exploitation (taxation); the deterioration of law to the point where the idea of a body of universal and immutable principles of justice disappeared and was replaced by the idea of law as legislation (made, rather than found and eternally “given” law); and an increase in the social rate of time preference (increased present-orientation.)
A king owned the territory and could hand it on to his son, and thus tried to preserve its value. A democratic ruler was and is a temporary caretaker and thus tries to maximize current government income of all sorts at the expense of capital values, and thus wastes.
Here are some of the consequences: during the monarchical age before World War I, government expenditure as a percent of GNP was rarely higher than 5%. Since then it has typically risen to around 50%. Prior to World War I, government employment was typically less than 3% of total employment. Since then it has increased to between 15 and 20%. The monarchical age was characterized by a commodity money (gold) and the purchasing power of money gradually increased. In contrast, the democratic age is the age of paper money whose purchasing power has permanently decreased.