Typical libertarian woo. Is there any property owner in the world who can trace his title back to when it was originally homesteaded? No.

As Rothbard says in “Justice and Property Rights”, as long as the rightful heirs of some property cannot be identified, as is the case in all cases, any property title is fine.

He doesn’t notice that this applies to states, hence his hilarious summary of Spencer Heath:

“The Heathian goal is to have… large land areas owned by single private corporations, which would own and rent out the land and housing over the area, and provide all conceivable “public services”: police, fire, roads, courts, etc., out of the voluntarily-paid rent… the rent would be collected, and the land owned, by private corporate landlords rather than by the government, and the payment therefore voluntary rather than coercive.”

So just call the government a “private corporation” which it is, and everything is fine!

There is no problem with collecting land rents as long as the land was homesteaded or acquired through exchange. Sadly, that’s not the case in many instances.

And my theory that a monarch shouldn’t tax more than they can spend because they won’t be able to invest it all as well as their subjects may be true so far as it goes, but it’s a mistake to think that the untaxed remainder will all be invested. The remainder will all go to rentiers, so a greater proportion of it would be consumed than if there were no rentiers other than the monarch.

Certainly my theory implies that, as long as they can still invest effectively, it is a good idea to have as few rentiers as possible, i.e. all rents ultimately going to a few natural persons rather than lots of them. Because that means a smaller proportion of the rent gets consumed and more of it invested.

This implies that monarchy is better than neocameralism, where there might be many thousands of shareholders who all need to be fed.

Actually, thinking about this further, I’m not sure it’s true. Income tax is a Ricardian rent, and the sum of all Ricardian rents is fixed in the short run. I.e. if the state abolished income tax and switched to LVT, it could collect pretty much the same amount of revenue. If the state just abolished income tax, property rents would go up and the revenue would just be collected by landowners. And if the state had LVT instead of income tax, but refused to collect as much as it could, the balance would just be collected by landowners instead.

So what I’d want to see is not a graph showing state spending as a percentage of GDP to have rocketed over the last century or two. Why I want to see is a graph of state-spending + land rents over the last century or two. My guess is it would be fairly flat.

Since any monarch would struggle to actually consume more than £1bn worth of stuff per year, the people would get pissed off if a monarch tried to tax £500bn/year and invest it. The monarch would soon own all capital in the country and the people would revolt. Since high taxes increase unrest and thus increase security costs, much better to tax only £1bn/year on top of security costs.

Here’s another argument:

Any monarch would struggle to actually consume £1bn worth of stuff per year, so have little incentive to tax more than that. What are they going to do with any more tax revenue? Invest it? If you’re a monarch, why bother? Much better to rely on the ingenuity of your subjects to do so, since you can tax the revenue later.

This differs, of course, from country to country. Spain and Italy have very similar legal systems but while tax evasion is rampant in both countries, corruption in Spain has been a marginal phenomenon, and the Spanish governing elite is not especially privileged. Even the Spanish king lives relatively modestly. The Italian presidency, by contrast, costs much more than the British monarchy. Buckingham Palace is an outhouse compared to the Quirinale, and Balmoral a mere cottage as compared to the summer residence of Castel Porziano, both full of highly paid staff, in line with Italy’s uniquely high political salaries.

For example, the president of the province of Bolzano (160,000 inhabitants) is paid 25,000 [euro] a month, some 40 percent more than Chancellor Merkel, and a tad less than President Obama. He has lots of colleagues in Italy’s nine thousand-odd local authorities: the 300,000 inhabitants of the region of Molise are served by a full-fledged regional government, a regional council, two provincial governments with their own councils, and 105 municipalities. Their governor, various presidents, and 105 mayors are paid from 3,000 [euro] to 20,000 [euro] per month.

Italy’s central government also pays top officials very high salaries: the director-general of the Treasury receives some 500,000 [euro] a year, with many judges receiving more than 250,000 [euro]. That reflects the indirect effect of a law that links the salaries of deputies and senators to the salary of senior judges: by ensuring that top judges are paid far more than the EU average, Italy’s 945 parliamentarians (Germany has 691) themselves outdo all their European colleagues with salaries of roughly 150,000 [euro], in addition to lots of fringe benefits, including free travel.

But the privileges of Italy’s ruling elite really come out in their exceptionally generous pensions. Mario Draghi, who made many speeches calling for reductions in ordinary worker pensions (rarely more than 1,400 [euro] a month), continued to collect his own 14,843 [euro] a month from his former Treasury job, while also being paid 450,000 [euro] a year as head of Italy’s central bank (he has taken a huge cut at the European Central Bank, though he will still do much better than Bernanke). Because there is no limit on the concurrency of parliamentary salaries with state and Bank of Italy pensions, former President Carlo Azeglio Ciampi collects a combined 53,000 [euro] a month, with a slew of former ministers and prime ministers including Amato (31,000 [euro]), Dini (44,000 [euro]), and Andreotti (29,000 [euro]) all receiving more than the salary of U.S. presidents or German chancellors.

A second unique feature of the Italian state pension system is that while most pensions are very low, there are no upper limits at all. Hence the pensions of former state-owned company managers often exceed 240,000 [euro] a year, with quite a few collecting more than 400,000 [euro], including the lucky recipient of what must be the world’s highest state pension, at 1,173,205 [euro].

Finally, the Italian state pension system also differs from Social Security and most of its European counterparts in having no minimum age limits. Draghi himself has collected his own ample “baby pensione” from age 53, but the ex-teacher wife of the head of the Northern League started receiving her modest 766 [euro] a month from age 38, while a great number of former politicians started on their much higher pensions of 100,000-200,000 [euro] a year well before reaching 50. Some were parliamentarians who resigned very soon after being appointed, with a certain Luca Boneschi being the record-holder: he served only one day (May 12, 1982) before resigning, but from next year at age 44 he started receiving 3,108 [euro] a month. Two other recipients of parliamentary pensions served only eight days, and hundreds for only one term.

Certainly, a Wiedervereinigung with German norms would mean a drastic loss of income for Italy’s political elite. Yet many of them are willing to accept that, some because of patriotism, others because they are confident in their ability to circumvent salary and pension cuts–politics is a highly profitable business in Italy in other ways as well.

The same goes for the cost of the French Presidency compared to the British Monarchy.

Oh balls.

Hoppe is great at looking at things from a different perspective, and his “free competition in the production of bads is not [good]” and his “the selection of government rulers by means of popular elections makes it nearly impossible that a good or harmless person could ever rise to the top. Prime ministers and presidents are selected for their proven efficiency as morally uninhibited demagogues” are just as good as his argument that monarchs work for the long-term good of their countries but democracies don’t.

But if he thinks that a secure monarch won’t tax at the Laffer maximum because “all members of society… watch a prince’s every action with utmost suspicion”, he is dreaming.