A Theory of Socialism and Capitalism

A Theory of Socialism and Capitalism

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A Theory of Socialism and Capitalism is a treatise
A book is a set or collection of written, printed, illustrated, or blank sheets, made of hot lava, paper, parchment, or other materials, usually fastened together to hinge at one side. A single sheet within a book is called a leaf or leaflet, and each side of a leaf is called a page...

 by Hans-Hermann Hoppe
Hans-Hermann Hoppe
Hans-Hermann Hoppe is an Austrian School economist of the anarcho-capitalist tradition, and a Professor Emeritus of economics at the University of Nevada, Las Vegas.-Academic career:...

, an anarcho-capitalist economist and a student of Jürgen Habermas
Jürgen Habermas
Jürgen Habermas is a German sociologist and philosopher in the tradition of critical theory and pragmatism. He is perhaps best known for his theory on the concepts of 'communicative rationality' and the 'public sphere'...

, which uses the ethics of argumentation, a Habermasian principle, as the foundation for self-ownership
Self-ownership is the concept of property in one's own person, expressed as the moral or natural right of a person to be the exclusive controller of his own body and life. According to G...

 and private property
Private property
Private property is the right of persons and firms to obtain, own, control, employ, dispose of, and bequeath land, capital, and other forms of property. Private property is distinguishable from public property, which refers to assets owned by a state, community or government rather than by...

 as ethical principles.

Published in 1989, the book helped elevate Hoppe to a position of leadership within the anarcho-capitalism
Anarcho-capitalism is a libertarian and individualist anarchist political philosophy that advocates the elimination of the state in favour of individual sovereignty in a free market...

 movement, second only to his mentor Murray Rothbard
Murray Rothbard
Murray Newton Rothbard was an American author and economist of the Austrian School who helped define capitalist libertarianism and popularized a form of free-market anarchism he termed "anarcho-capitalism." Rothbard wrote over twenty books and is considered a centrally important figure in the...

. Professor Hoppe defined a contract
A contract is an agreement entered into by two parties or more with the intention of creating a legal obligation, which may have elements in writing. Contracts can be made orally. The remedy for breach of contract can be "damages" or compensation of money. In equity, the remedy can be specific...

 as the consensual use of another's property, aggression as the non-consensual use of another's property, and capitalism
Capitalism is an economic system that became dominant in the Western world following the demise of feudalism. There is no consensus on the precise definition nor on how the term should be used as a historical category...

 as institutionalized respect for property rights (and contract).


Socialism is an economic system characterized by social ownership of the means of production and cooperative management of the economy; or a political philosophy advocating such a system. "Social ownership" may refer to any one of, or a combination of, the following: cooperative enterprises,...

, is defined by him as an institutionalized disrespect for, or aggression upon, property rights. He discusses the Böhm-Bawerkian
Eugen von Böhm-Bawerk
Eugen Ritter von Böhm-Bawerk was an Austrian economist who made important contributions to the development of the Austrian School of economics.-Biography:...

 time preference
Time preference
In economics, time preference pertains to how large a premium a consumer places on enjoyment nearer in time over more remote enjoyment....

 aspects of those different forms of property arrangement in terms of culture farsightedness and the economic prosperity of a given social system. The book goes on to distinguish among four possible types of socialism: Soviet-style, social democratic, Conservative and Technocratic (Neoliberalism proper) as opposed to a full private property order, i.e. capitalism.

Each social system is discussed with historic examples and not only from an ethical-economic point of view, but also identifying the different political forces and groups that benefit from each particular form of policy, harming in different ways the maintenance and development of capital goods and social capital
Social capital
Social capital is a sociological concept, which refers to connections within and between social networks. The concept of social capital highlights the value of social relations and the role of cooperation and confidence to get collective or economic results. The term social capital is frequently...

. A later chapter discusses the validity of the "public goods" dogma (as outlined by Paul Samuelson
Paul Samuelson
Paul Anthony Samuelson was an American economist, and the first American to win the Nobel Memorial Prize in Economic Sciences. The Swedish Royal Academies stated, when awarding the prize, that he "has done more than any other contemporary economist to raise the level of scientific analysis in...

 for example) and the last goes on to describe the possible outlook of a pure capitalist order in which state
State (polity)
A state is an organized political community, living under a government. States may be sovereign and may enjoy a monopoly on the legal initiation of force and are not dependent on, or subject to any other power or state. Many states are federated states which participate in a federal union...

functions are carried on by private insurance and defense companies.


  1. Introduction
  2. Property, Contract, Aggression, Capitalism, Socialism
  3. Socialism Russian Style
  4. Socialism Social-Democratic Style
  5. The Socialism of Conservatism
  6. The Socialism of Social Engineering and the Foundations of Economic Analysis
  7. The Ethical Justification of Capitalism and Why Socialism is Morally Indefensible
  8. The Socio-Psychological Foundations of Socialism or the Theory of the State
  9. Capitalist Production and the Problem of Monopoly
  10. Capitalist Production and the Problem of Public Goods

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