There is an odd development in some certain libertarian circles, an embrace of monarchy. The standard argument is that monarchies are more likely to have libertarian policies because the country is closer to private than in a democracy. The monarch has a long time horizon, wanting to maximize the value of his country for his children (first male child?), while the politicians in a democracy have a time horizon of just the next election. While the argument is plausible on its face, it contains many implicit assumptions which, once shown, demonstrate the silliness of the idea.
The piece that provoked my ire is by the Mad Monarchist, writing on libertarian monarchy. He begins with a misreading of history, or at the very least, very misplaced values:
In the past, I have touched on how the very monarchial Middle Ages was perhaps the closest the world has ever come to the totally privatized society that many libertarians dream of.
He does not name any of these libertarian monarchical societies, so I am forced to speculate on what they are. Nevertheless, it shows a very bad misreading of history. The most important event since the neolithic revolution was the industrial revolution. Prior to the industrial revolution man lived in the world of Malthus. Sustained per capita economic growth was unheard of. Any increase in production meant an increase in population, not the standard of living. This changed with England.
However, for the industrial revolution to be possible a prior institutional revolution was necessary. It was a merchant revolution. In Europe the monarchies dominated. The merchant revolution occurred when merchants became wealthy enough to challenge them. Sometimes this led to merchant controlled governments such as Venice or Genoa. Other times the monarch was left in place, but their power drastically weakened, i.e. England. This brings us to his second mistake:
Libertarians, on the other hand, who support pure capitalism, accept as well that total equality is impossible and not even desirable.
Libertarians do believe in one kind of equality, equality before the law. First, monarchies intrinsically lack this feature, the royal family is legally different from everyone else. However, I, and other libertarians, might be willing to trade limited legal privileges for a true libertarian society in every other aspect. That being said, historically, the problem with monarchies is not just the legal privileges of the ruling family, but legal privileges in general.
Rule of law, treating everyone equal before the law, co-evolved with increased merchant representation in government. Throughout history the price of economic freedom has been blood and gold. Until the rise of the merchant class, rule of law didn’t exist because the impoverished lacked gold to challenge the ruling elite. As the merchants gained wealth through trade, they were able to challenge the landed aristocracy in governance. Both the Dutch revolution and the Glorious Revolution (which was actually conquest by the Dutch), commonly described as religious, also had extremely strong commercial undertones. It was the newly ascendant merchant class claiming political power.
The reason for aristocratic dislike of commercial activity reveals the underlying assumption which plagues arguments for monarchies, the stability and permanence of a particular government. North Korea, an unmentioned monarchy, is a useful illustration of the logic. Kim Jong Un and his family could be greatly enriched, similar to China, from economic liberalization. Why doesn’t he do it? Because economic liberalization creates new power centers which threaten monopolies of power.
States are not eternal. In order to retain power, states must prevent challenges to their authority. Modern liberal democracies are powerful enough to allow capitalism and the accumulation of wealth from trade. However, throughout history and currently in the third world, the states were weak. They sustained power through coalitions, buying off their support with rent. Economic liberalization threatens those rents, and thereby threatens the stability of the state as coalitions break apart. Governance is far more difficult and complex than monarchists realize.