The other day I read an article over at Mises that makes an interesting, if somewhat obvious point: that despite incentives which encourage long time preferences in monarchical rulers compared to democratic rulers with limited terms, other circumstances can encourage rulers of all kinds to have different time preferences.
The example provided by Uffe Merrild is Eric VI of Denmark, who was pushed into very short-term time preferences by circumstances surrounding his rule.
The obvious retort is that incentives are not deterministic, but actually we can go into the analysis a bit more deeply.
First, term of rule (ranging from lifetime with the ability to give to heirs to a small number of years) is not the only incentive that affects time preference. Cultural aspects can make kings short-sighted and presidents long-sighted. It is worth noting that Merrild explains that Eric VI had fourteen children, including four boys, but none of them survived beyond infancy. In this case, it was primogeniture, the requirement that legal authority be passed entirely to a monarch’s eldest male child, that made Eric desperate.
In a private law society, authority only extends as far as one’s property line, and one’s ability to write a will bequeathing property to heirs is theoretically unlimited.
There are many other aspects that might make a monarch short-sighted, including impending invasion and confiscation of his property, natural disaster, a lack of worthy heirs, or even simple personal failing.
Similarly, many conditions can lengthen the time preferences of elected leaders. A cultural pressure to see elected officials as public servants rather than plutocrats can do this. Robust checks and balances, or relatively easy recall of politicians who fail to serve the people can also help.
People often exaggerate Hoppe’s argument for why ownership creates better caretakers than election. Yes, the fact that ownership bestows certain long-term rights does incentivize owners to maintain the capital value of their property. Yes, democratically elected leaders are incentivized to reap short-term gains while in office because the ability to reap those gains is uncertain and may end abruptly. But this is not the same as saying all kings are better than all elected leaders, nor that all monarchies are better than all democracies.
Hoppe’s argument shows why ownership gives owners a reason to maintain the value of the things they own. Hoppe would also likely argue that practically no historical monarch actually earned ownership of his kingdom by way of legitimate purchase. This fact alone might encourage conquerors to be worse, on average, than elected leaders.
The point of the thought exercise is to show that ownership leads to better results on average than temporary control based on popularity. This leads to a society based on strong protections for private property and therefore with a higher respect for each individual’s consent in any matter which concerns him.
In the Austrian praxeological fashion, this is true a priori, with all the limitations that entails, and finding evidence of bad kings or good presidents does not alter its truth.
Featured image based on a photo by Markus Spiske at Unsplash.