A theory of history is needed in order to properly interpret historical events and evidence, diagnose social problems, and prescribe solutions for them. We need to know how things happen - how things used to be, how they got to be the way they are, and how things might be in the future. Bad theories of history will impair historical understanding, lead to misdiagnoses of social problems, and invalid treatments for them. We can only achieve historical understanding and social progress based on historical theories that are logically and empirically sound.

Today, one of the most popular theories of history is that of Karl Marx, the 19th-century thinker who inspired the Russian Revolution and Soviet Union, among many other socialist movements, and whose ideas remain popular in Western academia. Is the Marxist theory of history “essentially correct”? Yes, according to Hans-Hermann Hoppe. Hoppe studied under Marxist intellectual Jurgen Habermas in his native Germany, before discovering Austrian economics. Hoppe is quite influential amongst many who consider themselves hardcore members of the “paleo-conservative” or “paleo-libertarian” movement.

Marxism is based upon the labor theory of value, but that theory was widely discredited by economists in the late 19th century, and replaced by marginal utility theory instead. Thus, Hoppe doesn’t defend the labor theory of value, of course, but says that Marxism is still right about what he calls the “hard core of the Marxist theory of history.” To summarize:

1. History consists of a struggle between ruling and oppressed classes, in which the rulers economically exploit the oppressed;
2. The ruling class acts as a unified group in its class interest;
3. Ruling class competition centralizes and concentrates State power;
4. Ruling classes thus tend towards world domination and economic stagnation, until the oppressed finally achieve class consciousness and act in their own class interest by overthrowing their rulers in violent revolution¹.

What Hoppe means by “ruling class” differs from Marxism, whose class theory is based on the social distribution of economic inputs. For Marxism, those with capital are “capitalists,” those who only have labor are “workers,” etc. Instead, he implicitly adopts classical liberal class theory based on whether wealth is acquired coercively or not². The ruling class gets its wealth by force and/or fraud from the oppressed, who get their wealth by non-violent, non-fraudulent economic activity. This is unlikely to be persuasive to those who adhere to Marxist definitions of “class” or “coercion.” However, it may be valid to analyze society by means of the classical liberal definition of “rulers” and “the oppressed,” as Weberian ideal types, to the extent that they approximate reality. In reality, of course, individuals may get their wealth by a mixture of these methods, both coercive and non-coercive, and determining which of these methods is predominant may vary greatly from person to person.

One major problem shared by both Hoppe’s and Marx’s account of the ruling class is that they both have it acting as a unified group, in its class interest, instead of in the self-interest of each of its individual members. Each individual member of the ruling class has both his own self-interest, and his class interest, and supposedly acts in the latter, not the former. As Ludwig von Mises, the great Austrian economist, said:

What has to be shown is how the individuals are induced to act in such a way… Marx answers that consciousness of the interests of their class determines the conduct of the individuals. It still remains to be explained why the individuals give the interests of their class preference over their own interests. We may for the moment refrain from asking how the individual learns what the genuine interests of his class are. But even Marx cannot help admitting that a conflict exists between the interests of an individual and those of the class to which he belongs.³

Both Marx and Hoppe assume that members of the ruling class have a class interest, know what it is, and act according to it. In practice, however, there are plenty of disagreements between members of ruling classes about what is in their class interest, and a mixture of rewards and punishments are always in effect to prevent defection by dissenters so that ruling class members do not act in their own self-interest instead. Or, as is often the case, the rulers at the top of the hierarchy may be acting only in their own self-interest, getting the rest of the ruling class to go along with them in various coercive ways. E.g., ruling class members or their families may be locked up, killed, tortured, taken hostage, they may be banned from engaging in non-coercive economic activity (or given monopolies over it), they may be required to perform service for the ruler, they may be given land, money, or titles, it may be illegal for them to criticize or oppose their rulers, etc. Such measures would not be required if ruling classes tended to act in their own class interest instead of their self-interest, but history is littered with so many examples of such measures that they are the rule, not the exception.

The reason for these measures is that belonging to a ruling class is a private good, but doing anything to establish or maintain a ruling class is a public good. Any member of the ruling class gets the benefits of membership, regardless of whether they do anything to establish or maintain it or not. This is the well-known “free-rider” problem in economics. History is full of examples of how actually-existing ruling classes solve this problem, either by excluding some from ruling class membership, or by granting higher or lower statuses to those within the ruling class. Traditional aristocracies have all sorts of titles of rank such as lords, earls, dukes, barons, knights, princes, monarchs, emperors, etc., to the point where it is difficult to remember which are higher and lower than the others, and each member of the ruling class may hold more than one such title. Bureaucracies and military chains of command have similar systems. These ranks have often meant different levels of wealth, income, and even different legal privileges and immunities enjoyed by those within each ruling class. This would be completely unnecessary if members of ruling classes actually acted in their class interest instead of their own self-interest. A more fruitful way to analyze ruling classes would be to assume that all of its members act in their own self-interest, then see how that might lead them to act as a group, how much, and what effect that has on society. The economic school of thought known as Public Choice Theory tries to do that, but Hoppe is completely dismissive of that school of thought, without even attempting that sort of analysis.

Next, Hoppe simply asserts without evidence that ruling class competition leads to the centralization and concentration of power. First of all, the very fact that such competition exists is yet more proof that ruling classes do not act in their class interest as a united front. History is full of examples of internal competition within ruling classes (e.g., civil wars), as well as external competition between different ruling classes (e.g., international wars). Secondly, why should we assume that the effect of such competition upon the power of the ruling class only goes in one direction? Why would it never go in the opposite direction, that of the decentralization and de-concentration of power? While it’s possible that ruling class competition would only have this one-way effect, it’s equally possible in theory that it could go in the opposite direction at least some of the time. Additionally, even if the effect is only one-way, it may not proceed at the same pace or in the same ways in different societies, and Hoppe provides no way to tell how fast it might be, how far it might go, nor what forms this centralization and concentration of power might take.

While some such competition certainly has resulted in centralization and concentration of power, some of it has also gone in the opposite direction. When centralization and concentration of power has taken place, it has been faster and gone further in some societies, while being slower and going less far in others. And the forms of centralization and concentration of power have varied, as well. E.g., in political science, distinctions have been made between different “paths of State-formation,” the “Continental,” the “Constitutional,” and the “Coalitional” paths. The Continental path is the one that most closely fits Hoppe’s account, but it still deviates significantly from it:

The first rudiments of modern government originated in the course of the fifteenth century in a littoral triangle of the North Atlantic encompassing contemporary France, Spain, and England. A series of wars both within and among the three countries provided the catalyst for the emergence of the earliest state structures. In France, the centralizing effect of the Hundred Years’ War favored the monarchy over regional power centers; it also gave rise to the first standing army in Europe, which subsequently enabled Louis XI to triumph over his aristocratic rivals. In England, the Wars of the Roses reduced the authority and depleted the resources of the nobility, enabling Henry VII to fill the resulting power vacuum to his advantage. In Spain, civil wars devastated Castile and Aragon prior to the joint accession of Ferdinand of Aragon and Isabella of Castile; the resultant anarchy facilitated centralization by the strong-willed couple. The subsequent conquest of Moorish-ruled Grenada then became the decisive event in the emergency of the Renaissance state in Castile. A century later, Francis Bacon eulogized Henry VII, Louis XI, and Ferdinand of Aragon as the ’three Magi of kings’ of their age. Later historians would refer to them as the New Monarchs. By building up military force and asserting royal authority, they reversed a long-term trend toward political decentralization across Western Europe.

With important variations from country to country, the process by which war stimulated state formation in the Renaissance consisted of five interrelated steps:

1. An internal power struggle between the center and the periphery of a given state;
2. A shift in favor of the center due to developments in military technology and organization that increased the cost and administrative complexity of waging warfare;
3. A revolution in taxation, as the rising fiscal demands of warfare, both internal and external, caused governments to make intensified efforts at revenue extraction;
4. The rise of central bureaucracies in response to the fiscal and administrative challenges of warfare;
5. A feedback cycle in which the increasing fiscal and bureaucratic power of states enabled them to field larger and more powerful armies, which meant larger and more destructive wars, which drove the whole process in a circular spiral upward.⁴

The Continental path thus differs from Hoppe’s theory in several significant ways:

1. It reversed a pre-existing trend away from centralization, which is completely missing from Hoppe’s account. Per Hoppe, we should expect to see nothing but rival empires throughout history, each claiming as much territory as they possibly can, and ruling it all from one power center such as ancient Rome, Egypt, Persia, China, etc. Events like the collapse of the Roman Empire are completely unexplained by Hoppe.
2. Technological changes that raise the cost of warfare are another factor influencing centralization of power which Hoppe misses, but this is a well-known factor influencing the distribution of political power at least as far back as ancient Greece, as seen in Aristotle’s Politics. If the most effective weapons technology is cheap and easy to use, then political power gets distributed widely, as with firearms in modern Europe and America. If the most effective weapons are expensive and difficult to use, then political power gets highly concentrated and reserved to those who can afford them as well as professional experts in using them, as with heavy armored cavalry in the Middle Ages, or artillery in more recent European history, as indicated by the French kings who had their cannons inscribed with the Latin motto: “Ultima Ratio Regis” - the “Final Argument of Kings.”
3. Centralization and concentration of power requires ongoing wars, which lead rulers to continue the process of military escalation, requiring them to raise more taxes, mobilize more people, buy more supplies and weapons, hire more bureaucrats, etc. The possibility of a stable equilibrium in which a ruling class has reached the limits of what its “ecosystem” can support, then ceased to expand to a point of unsustainability, is also missing from Hoppe’s account. However, history is full of empires which have lasted hundreds or thousands of years such as China, Egypt, Rome, etc. Even when those empires have fallen either to external conquest or civil war, they have often reconstituted themselves soon after, with so much contituity as to be readily identifiable as being the same empire under a different ruling dynasty. If Hoppe’s theory that ruling class competition can only result in centralization and concentration of state power were true, then we would not see such long-lived “universal empires” in history. Or, at least, Hoppe provides no explanation for their longevity and stability.

Another path of state-formation, the “Constitutional path,” is even more different from Hoppe’s theory:

…England diverged in several critical points from the continental path of state formation. It pursued instead what we will call the constitutional path, in which the bureaucratic and centralizing effects of war were muted, and no revolution in taxation occurred. One reason for this was the existence of a well-established middle class with which the English monarchs could ally in their efforts to counter the landed power of the nobility. Middle-class representation in the Commons meant that the constitutional arrangement of the medieval era actually facilitated monarchical efforts to counter this landed power–hence the Crown had no incentive to crush the Estates. … The second factor that preserved constitutional government in England was its insular isolation. Secure behind the Channel, England had no engine of constant war to drive the process of centralization and state formation⁵.

This brings up yet another historical factor missing from Hoppe’s theory: Geographic barriers such as the English Channel, an instance of what has been called “the stopping power of water”⁶. Geographic barriers that raise the cost of offense and lower the cost of defense include rivers, lakes, marshes, deserts, seas, oceans, and mountain ranges. Indeed, such barriers have been included in a theory of primary state-formation, in which they are said to constitute a form of “social circumscription,” which make the cost of leaving territory so high that its inhabitants choose not to flee after being defeated by invaders. This was Robert Carneiro’s improvement upon the classic “conquest” theory of primary State-formation, by Franz Oppenheimer⁷. Throughout history, geographic barriers are the most common borders between territories ruled by different rulers. Since Marxism is a theory of historical materialism, such material factors as geographic barriers (and weapons technology) are remarkably absent from Hoppe’s defense of the Marxist theory of history.

A third path of State formation has also been identified, the “Coalitional path”, typified by Switzerland:

The Swiss Confederation was a unique phenomenon in late medieval and Renaissance Europe. It was the antithesis both of the New Monarchies, where centralizing forces held sway, and its fellow Germanic principalities in the Holy Roman Empire, which were still mired in feudal disarray. The Confederation had neither a central bureaucracy nor a state administration at the national level during the first five hundred years of its existence. Yet it not only fielded effective armies, but displayed an internal cohesion and stability that set it apart from the more transient military leagues of the era. Politically decentralized but socially cohesive, it was a sovereign state without a state apparatus, ’an asylum for republican ideas in the midst of monarchical and feudal Europe.’ The success of its formula is seen in its survival as an independent state to the present day.

The formation of the Swiss confederation and its emergence as an independent state followed a radically different path from that of the Atlantic monarchies. Its path of state development might be termed the coalitional path of state formation. It had five essential elements:

1. The absence of a serious internal power struggle between centralizing and local forces;
2. A war of independence from a larger empire that forged a military alliance between geographically linked provinces;
3. The formation by these provinces of a representative assembly responsible for foreign and military affairs;
4. A decentralized approach to administration, with taxation not centralized but remaining the responsibility of the provinces;
5. The existence of long-term threats to security that molded a sense of national unity and helped maintain the coalition even in peacetime.⁸

The Coalitional path of state formation shows that a long-term invasion threat and the need to remain prepared and united to defend against it can lead to a stable equilibrium of power in which centralization and concentration are low. Such coalitions would include the North Atlantic Treaty Organization (NATO), in which each country’s membership is voluntary and can be rescinded unilaterally at any time, the consent of all existing members is required for any new members to join, and which has no independent tax or legislative powers of its own. Unity of NATO membership was maintained by the Soviet threat throughout the Cold War and by the threat of Russian aggression afterwards, as evidenced by the Russian invasions of Moldova, Azerbaijan, Georgia, Ukraine, Syria, etc. The current Russian invasion of Ukraine is said by many to have only strengthened NATO’s unity. Thus, absence of war and military preparedness is not the only way to prevent continuous centralization and concentration of power.

Hoppe’s theory does have a mechanism for thwarting centralization and concentration of power, just like Marxism: The development of class consciousness by the oppressed, which then act as a group in its class interest, overthrowing the ruling class in violent revolution. While there certainly have been many examples of violent rebellions, revolutions as well as other forms of both violent and non-violent resistance to oppression, these examples have not fit the theory of class consciousness. Additionally, Hoppe and Marx share the unexplained contradictory assumptions that while the ruling class does act in its class interest, the oppressed do not. The objections to rulers acting in their class interest apply equally to the theory of the oppressed acting in its class interest instead of each individual member of that class acting in his self-interest.

Before going into the details of how the historical examples of resistance to rulers have differed from Hoppe’s account, we need to remember what Hoppe says about it:

The gradual abolition of feudal and absolutist rule and the rise of increasingly capitalist societies in Western Europe and the United States–accompanied by unheard of economic growth and increasing population–was the result of a growing class consciousness among the exploited, who were ideologically molded together through the doctrines of natural rights and liberalism⁹.

In other words, the idea of resistance gets widespread adoption by the oppressed, who then take it upon themselves to start resisting their rulers. In the rise of Western liberalism, this resulted from widespread adoption of the ideology of Western liberalism. This process was a gradual one, resulting in the abolition of absolutism and feudalism. Every part of this description is false. The abolition of absolutism and feudalism were not gradual, and the rise of Western liberalism was not the result of the widespread adoption of the ideology of Western liberalism by the oppressed. Nor did the oppressed act as a unified group in its supposed “class interest” to achieve these goals.

In England, royal absolutism was abolished when king Charles I started the English civil war, and was then overthrown by Parliament and executed for treason against the English people. The English civil war was one of the bloodiest wars in British history on a per-capita basis, not rivaled until the First World War. Then it was followed by the dictatorship of Cromwell, who ruled until his death, only to be replaced by the restoration of the Stuart dynasty under king Charles II. When Charles II died, his successor king James II was widely suspected of secretly conspiring to re-impose Catholicism upon Protestant England, so he was overthrown in the Glorious Revolution, in which William of Orange came over from the Netherlands at the head of a large invasion force, which fortunately didn’t have to fight because James II fled the country. Parliamentary sovereignty was thus established in England instead of absolutism, and England has remained a constitutional monarchy ever since.

This process was not one of gradual reforms, but of violent oscillations between theocrats, “Republican” dictators, Parliamentarians, and constitutional monarchs. Its motives were largely religious (Catholic vs Protestant), nationalistic (English vs Scottish/Irish/French/etc.), and regional (the “Court” and “Country” parties). Lastly, there was no widespread adoption of classical liberal ideology by the oppressed. Rather, splits within the ruling class led to alliances with elements of the lower classes along the aforementioned lines of division, which didn’t strictly follow either Marxist or classical liberal class theory. There was a proto-libertarian ideological movement within Cromwell’s army, the “Levellers,” led by John Lilburne, but they were not the dominant ideological element within even their side of the English Civil War, much less within England as a whole. It wasn’t until after the Glorious Revolution that John Locke wrote and published his classic statement of classical liberal political theory, refuting the defense of absolutism that had been made by Sir Robert Filmer. Even then, Locke’s theory of popular rather than Parliamentary sovereignty was considered dangerously revolutionary for a long time afterwards in Britain, only becoming the basis of the American Declaration of Independence about a century later in British America, not England itself. If anything, classical liberalism was a consequence of the demise of absolutism in England, rather than a cause of it.

Meanwhile, in France both absolutism and the remnants of serfdom were abolished in the French Revolution, which began with widespread support within the ruling class, not just the oppressed. It was also quite violent and sudden, not gradual and peaceful, involving both civil and international war, the rise of Napoleon as emperor, the French invasions of Germany, Italy, Russia, Spain, Egypt, etc., as well as the “Quasi-War” between the French and US navies in the Atlantic. France abolished serfdom in many of the countries it invaded. Slavery was first abolished, then Napoleon attempted to restore it in Haiti as the wildly profitable sugar plantation colony it had once been, only to give up, leading Napoleon to sell the Lousiana Territory to US President Jefferson. While the French Revolution was motivated in part by the classical liberal ideology of “Liberté, Égalité, Fraternité,” it was also motivated by anti-clericalism and nationalism. Wars were fought between France and England, and France and America, despite all three of those countries being supposedly motivated by classical liberalism. Napoleon abandoned the attempt to restore slavery in Haiti because the military cost was too high along with all the other wars he was fighting, and he sold the Louisiana Territory to the USA to get the money he needed to keep fighting the rest of his wars, not out of any sense of solidarity with another liberal regime. The Haitian Revolution itself wasn’t animated by the love of classical liberalism by the illiterate slaves who revolted against the evils of slavery–which was indeed evil–and slaughtered their masters, and its result was not a democratic republic, but a dictatorship that lasted for a long time after. Compared to the rest of the Western world, Haiti remains politically and economically backwards to this day.

In Prussia and Russia, serfdom was abolished by the existing monarchs, in “revolutions from above.” In some other countries, it was abolished as a result of peasant rebellions which were sudden and violent, not gradual and peaceful, and came well before the advent of Western liberalism as an ideology. None of these examples fit Hoppe’s description of the oppressed achieving class consciousness by widespread adoption of classical liberalism, then overthrowing their rulers after economic stagnation brought on by ruling class centralization and concentration of power. Analysis of the actual history of how freedom came to be confirms the wisdom of the great classical liberal historian, Lord Acton, who said:

At all times sincere friends of freedom have been rare, and its triumphs have been due to minorities, that have prevailed by associating themselves with auxiliaries whose objects often differed from their own; and this association, which is always dangerous, has been sometimes disastrous, by giving to opponents just ground of opposition, and by kindling dispute over the spoils in the hour of success.¹⁰

As an heir to the classical liberal tradition, Hoppe ought to show greater familiarity with its greatest historical thinkers such as Lord Acton. As Acton rightly said, the true supporters of freedom have always been rare, not whole social classes, and, in order to succeed, they have had to join coalitions with others whose motives have differed from their own.

There is much more that could be said about the rise and fall of freedom in history, and many sub-topics that could be addressed, such as the collapse of the Roman Empire, the separation of Church and State, the demise of slavery, the causes of the Industrial Revolution, the rise and fall of free trade, the emancipation of religious minorities, etc. However, that would be a much greater task, and the primary purpose here is to refute Hoppe’s rehashed Marxist theory of history. In conclusion, to indicate what a proper theory of history would entail, consider what was said by another historian who made an effort in that regard:

Conventional social theory errs in supposing that historical change is caused by changes in basic social, economic, and political conditions alone. There is, in fact, no such thing as social, economic, and political conditions (or forces) alone; they are always part of a context of perception and feeling. Nor are their values, ideas, beliefs – alone; as a social matter, they are always interconnected with ’material interests.’ Power is also an idea; justice is also a force. Neither causes the other, in the physical-science sense of that word.

To understand why a great historical change occurred, one must go beyond the interrelationships between ideas and material conditions to the times and circumstances themselves, not only to recount them but also to show their historical significance, their meaning for the past and the future. Such legal institutions as the corporate character of the city, the alienability of urban property, and the liberties of the citizen are to be understood partly as manifestations of ideas and values and partly as instruments of economic and political power, but they are also to be understood as significant historical events and as parts of significant sequences of historical events. They were not merely ’manifestations’ and ’instruments’; they ’happened’; and knowing when and how they happened, and as part of what larger happenings they happened, helps one to understand why they happened. Indeed, the legal institutions of the Western city cannot be explained satisfactorily in any other way. In addition to the objective materialist ’why’ and the subjective idealist ’why’ there is a historical ’why’–a ’why’ that adds to the outer and inner dimensions of the inquiry both a past and a future dimension.¹¹