 This is Jeff Deist, and you're listening to the Human Action Podcast. Ladies and gentlemen, welcome back once again to another Human Action Podcast show. Now, if you've been following along, you know we've been going through books. This is the podcast, which is all about books. We're not afraid to read them here. And we've worked our way through a lot of Mises' canon and also Murray Rothbard's books. We've also done some one-offs. Most recently, we spent some time with kind of an unknown Henry Hazlett book. Unconstitutionalism and parliamentary government. So that was fun. But as promised, I told our audience that I would begin working our way through some of the Hans-Hermann Hoppe collection. And I thought with the election coming up in the United States, there was no better time to dig into democracy, the God that failed, which is probably Hoppe's most famous and also most controversial book. And so I'm very pleased this week to join me in this discussion is actually a friend of mine, Giant Bondari, who is someone I have gotten to know through his Capitalism and Morality Conference, which he runs every summer in Canada when they let us do so with COVID. He is a longtime investor and advisor in the natural resources and mining stock sector. He once worked for Casey Research and also a thoroughgoing Hoppean. So all that said, Giant, it's great to hear your voice. Thanks for having me, Jeff. Well, let me start with this. When this book came out in 2001 or alternatively, I suppose, when you first became aware of this book, where were you both literally physically and also in your ideological or intellectual development? Jeff, there has been a lot of my years spent on trying to understand what was wrong about India, the country that I grew up in, and I was always trying to connect the dots of my experiences to do with India and why it had continued to deteriorate. Now, contrary to conventional wisdom, India is a growing economy. It is a country that is improving. But if you really pay close attention to that country, you realize that that country has continued to deteriorate. And I have been on an agenda to understand what was wrong about it. And I have traveled the world. I have been to tens and tens of third world countries and I came up with exactly the same problem that all these third world countries were getting worse by the day, despite the conventional wisdom is completely different. The world thinks that these third world countries are developing countries, which is actually not true. So I came across Hans Hermann Hoppe's book, Democracy, The God That Failed. And it gave me a theoretical framework to put together my experiences, to put together what I had seen growing up in India. And I started to realize that the key problem behind deterioration of India was actually democracy. So that is where I came to see where Hans Hoppe not only had done a fabulous job in showing why democracies lead to worsening and cultivation of an immoral society even in the West, but also that it leads to worsening of societies in the third world. And I came to understand that actually democracy is the worst way to run a society because it's anti-meritocratic and it destroys the spine and institutions of the society. So were you living in India when you read it? No, I was, yes, actually I was living in India, but I read it when I was already in Canada. And soon after I read the book I decided that I need to get to know him, Dr. Hans Hermann Hoppe better. And I went to one of his conferences in Turkey, which was another mind-altering conference, just because of one fact, because he does not worry about talking about issues which are politically incorrect and not acceptable in the conventional mainstream society. Well, the introduction to this book, you know, it's an introduction but he doesn't ease you in, Jayat. I mean, he gets right into it and he lays out his basic thesis for the book, which is first, I'll run through this quickly, first that we might view monarchies in the past as privately owned governments and they're not as bad as advertised. We might view democracies as publicly owned governments and they're not as good or as salutary as advertised. And finally that no state ultimately, whether monarchical or aristocratic or theocratic or democratic, can be viewed as justified when we really get into the theory of it. And so what states really produce are bads which are injustice and aggression when what we want in terms of organizing society is goods. We want justice and non-aggression. So, you know, tell us a little bit more about, you know, how you view his thesis. So, Jeff, any kind of government is bad government. Governments are designed to be unaccountable. The only kind of government I want is the minimal government, a minimal for the culture of that society. And any approach for any society should be to minimize the size of the government. What we have in democratic societies is a compulsion and a DNA of democratic society is to keep increasing the size of the government because democratic societies deal with getting as many votes as possible and that come through populism and demagoguery. What they want to do is to promote welfare state which leads to an immoral society and worsening of the morality of the society. And as he addresses in the book, it leads to increase in illegitimacy in the society. It leads to a society which becomes increasingly a whining and entitled society. People think it is their right to get hold of the money from the pockets of other people. People who are wealth generators and that really creates an inversion in the meritocratic system because instead of money staying in the hands of the capitalist people who provide financial spine to a civilization, the money goes from their hands to the consumers who eat away that money into chips and Pepsi's and Coca-Cola's. And what you see is a degeneration of the society. And again, this is what I have seen in India. I have seen the same over the last 30 years of my life in the West. The Western society has continued with every gyration of democratic election, a worsening of the society, the institutions of the society in the West have continued to deteriorate. And the power structure has got inverted. The lowest common denominator increasingly controls the society in the Western countries. Well, one of the fascinating things he points out in the introduction is that World War I, which he really marks as the beginning of the end in terms of democracy, democratic republicanism coming to the fore across the West, is that World War I was unlike most previous wars of the 19th century, which were fought among monarchs, was a war as much about ideology as it was about territory. So that's a new twist. And I think that presaged the wars we have unfortunately found ourselves in since then. So I wonder, is there any analogy here when India came out of its colonial British period, how did it morph or find its way to what we might call direct or mass democracy? India became a mass democracy from get-go after the British left. And that actually is exactly what happened in Pakistan in all of Africa. And that had happened in a lot of colonial countries in Cambodia, Vietnam. And the disaster was that most of these countries immediately after the colonial powers left became totalitarian dictatorial governments. But again, the way people look at history, they ignore that episode. People also like to think that the more poor you are, the higher your economic growth rate should be. But again, if you really pay closer attention to countries like India and the other third world countries post their independence, so-called independence, you see that economic growth actually across the third world was worse than it was in the developing developed world, which shows to you that institutions of these countries were starting to crumble rapidly. The best people from these countries left these countries. So the best people from India left for the UK immediately after 1947 and they were smart enough to realize what was happening. And British had basically washed their hands off India because they were no longer gaining any positive profitability from occupying these countries or running these countries. They were tired of running these chaotic countries. So the best Indians left in 1947 for the UK because they liked the British Empire. My grandfather had photographs of the British kings and queens on his office walls until his very last days because he told me consistently that if nothing else the British gave him respect for his paying taxes to the British government, whereas in India what came after India became so-called independent, you had to pay bribes to the tax officers and you had to pay bribes in accordance to how much tax you were paying because the tax officer automatically assumed that the higher the tax you were paying, the more income you must be hiding. So that was the kind of degeneration that he had seen and I have consistently seen. And that's again you see across the world, across the third world, political deterioration started happening right away. Democracies immediately led to tyrannies, not freedom. Again, against the conventional wisdom, democracy leads to the worst tyrannies because the masses come to rule the societies and masses are interested in bread and circuses. They are not interested in moral values. They are not interested in philosophy. So that was what I saw happening in the country. Tyranny was everywhere when I was growing up. Again, conventional wisdom is that democratic countries are not tyrannical, which is actually completely false because as long as the masses approve of tyranny of the government, it keeps happening and that is where I see a huge amount of tyranny and oppression in the country, in India and as you can see immediately west of India, Pakistan has gone completely crazy. It has gone completely fanatic and India is on the same track. India is rapidly becoming a fanatic country because again, the way you get the vote of the masses is by pandering to their religious and their bread and circus related demands and you lead to a fanatic, immoral society because of hollowing out of the institutions. Well, in chapter one of Hoppe's book is about exactly what you just characterized, which is the process of decilillization. So Hoppe brings up time preference and he says that the opposite of that, the process of civilization is set in motion by individual savings. So capital accumulation allows for a more productive economy. Each individual worker becomes more productive, wages rise, savings rise and all of this is of course beneficial and to be encouraged. So whether we're talking about India or the United States or any third world country, which doesn't really respect this process or encourage this process, why is capital not being accumulated in India, let's just say, the country other than Canada and the US with which you're most familiar? Why are individual savings and this process of civilization, why is this not happening in India? Well, firstly, you have to look at the culture. Indians are not entrepreneurial people. Now, again, a conventional wisdom is that Indians are very entrepreneurial people. But the fact is that the entrepreneurial people of India has left the country and they are the kind of people you come across as Gujaratis in the UK or among some of the business people in the United States. Now, what happens with the masses is that they are envious and they want to take away money of the people who are savers and who generate wealth. And in a democratic system, you give them a feeling that because they have equal rights in terms of voting, they must also be equal in every aspect and they should get a part of the wealth created by wealth creators and savers. Now, if a wealth creator and saver thinks that his money is going to go away by theft using the government, he has no reason to either create his capital or he has every reason to take that wealth away from his own country. Now, this leads to a situation historically in which Indians took out their wealth from India to countries outside the country where they had better protection of their capital. For example, Switzerland, the United States or the United Kingdom. But as time has progressed, these people are more and more fearful about protecting their wealth outside the country as well because there are more and more restrictions on how your money moves around the world. And these are the real problems that these people face and what they end up doing mostly is that they buy properties and they buy gold. And they distrust the system so much that they dig holes in their houses and hide their gold and silver and that happens across the country. People don't even trust the banks because again, the government is nothing but a robbing agent. They rob for the masses and they want to take away wealth from the wealthy people. Now, of course, masses are in delusion because they think they are going to get this money that they get government to rob from the wealth creators. What actually happens is that people who run the government, particularly the bureaucrats, pocket virtually everything that they steal from wealth generators. So capital does not get accumulated, poor people don't get jobs and the smartest people leave the country. And what do you see is the same kind of deterioration in India, Pakistan and the rest of the third world countries? Now, the United States and India are both at least nominally democratic countries, but we know that there are owners and controllers. In the United States, we say there's a set of oligarchs who basically own and control the US. Who essentially owns and controls India? There is really no real control. It's a very, very chaotic society. Indians, I like to say that an organization of two people in India has one person too many because Indians simply cannot work in an organization. There's no teamwork. It's an extremely low trust or I would say negative trust society. You should be most fearful of people next to you. So no one really controls that society except that some very rich businessmen and again remember that in a democratic corrupt institutionally corrupt society. Businessmen are not the people who are wealth generators. They are the people who make money because of their connections with the government. So what businessmen do is that they want to get privileges from the government and these are the big houses, two or three big houses in the country. And they have been able to collect a lot of wealth in the country only because of their connections with the government. They are very dysfunctional companies. They don't really provide proper services to the people and the services they provide are at a very high cost. I often talk with an economist, a Misesian friend of mine in India and we always talk this thing that the companies are actually negative wealth generating companies in India. And you can see that from the GDP per capita of India, which is only about $2,000 per year. Now, in the medieval times, GDP per capita of India was about $500 per capita. So in the last 500 years, GDP per capita has hardly grown in that country. And again, you see that most of the GDP has grown because of higher agricultural productivity and technological innovation that India goes as the free gift from the western world. But because of organizations, because of businesses, India has failed to generate wealth and it continues to actually get worse as time gone by. So again, if you put all this together, you see that it's an extremely chaotic country. The prime minister and the president might think that they control the country, but they have virtually no control over the country. The only control they have is in being a catalyst to worsen the country on a daily basis. The rich people control only as much as in the sense that they can get tax money diverted into their pockets. Well, it's interesting that you bring up the rich because there's a quote here at page 73 of Hoppe's book that says, rich men still exist today, but more frequently than not, they owe their fortune now directly or indirectly to the state. Hence, they are often more dependent on the state's continued favors than people of far lesser wealth. So this idea that the wealthy elites or at least business elites would be less inclined to support the state is, of course, false. But when you talk about both countries, the United States and India, as being mass democracies, what's the difference though? Is it just that the level of corruption that you and I or Hoppe would argue is engendered by democracy and democratic voting is greater in India? I mean, what creates, why is there a greater degree of trust in the United States and why is there a greater degree of capital accumulation in the United States, if in fact as per Hoppe, democracy is so bad? Yeah, but Jeff, culturally, they are very different societies and that takes us out of the context of democracy. The reason the US is what it is is because it's basically England, a new version of England, enlightenment, awakening of human consciousness happened in the United Kingdom, and you have to marinate a society in the concept of reason, in the concept of philosophy, in the concept of a Western kind of culture for at least a millennia or two before you awaken that society, before you make people in that society interested in more than just pleasures and you have to get people interested in things more than themselves. They must develop a higher calling. We must remember that the third world countries are culturally very different just because they have technological capabilities, because they have seeped into them from the West does not mean that just because they are more wealthy, but just because they can watch Western films and put on Western clothes makes them spiritually and morally awakened. They are actually not, they have no interest in values, they have no interest in principles. In fact, Jeff, if I talk the same things that you and I are discussing right now, virtually every Indian, including all the most educated Indians, will laugh at me because they will tell me what are you becoming? Are you trying to become a philosopher? Are you trying to become your so stupid in your conversation? So that's the kind of thinking those people have. Well, let's turn our lens to the U.S. and Canada a little bit and where we can take this perspective and say what are the problems which are, I think, rapidly developing in the West. And one thing Hapa points out is that one of the great tricks of democracy is that it eliminated this them versus us class consciousness that existed under a monarch. And we get into this mindset where we are the government and that we're all sort of the owners of the United States. And so because of that, you know, democracy engenders higher and higher time preference even in the West and that it makes us want to vote ourselves stuff today at the expense of tomorrow. So, you know, from your perspective, do you think the United States and Canada are on a bad path? Absolutely. I have been living in the West for the last 30 years and I have seen a continual deterioration in the Western society. The people with the money have increasingly become people who are connected with the government or people who cater to the mass expectation of bread and circuses. And so, yes, a democratic system irrespective of where it is has led to a continual deterioration in the Western society. What you have, for example, in Canada, Justin Trudeau is what I might call won't even call a Bobo because he is just interested in pandering to the lowest common denominator in the society. And in a situation like that, you hollow out the institution slowly because the government, the institutions are no longer run on moral values. They are run on pandering to the people who are interested in bread and circuses. And the fact remains, Jeff, that even in the most enlightened Western society, you would always have more than 50% people who are not interested in philosophy or who are not interested in moral values and they are not a part of institutional building. But by giving them the vote, you actually bring them in institutional building, but they are not interested in putting a moral and rational framework in the institutions and they participated in converting those institutions into bread and circus institutions. And again, that's what you see in the Western world today in the United States and particularly in Canada where the government is all about actually increasingly or all about bread and circuses today. You know, it's interesting in chapter four of this book on democracy redistribution and the destruction of property. This is the title of the chapter, another subtle title from Hapa here. You know, he makes this point which I thought was interesting. If we're going to have universal suffrage or near universal suffrage within a country, why not have worldwide suffrage when, and if that were the case, effectively China and India, both of which have over a billion people, would hold sway over all of us? Doesn't that naturally follow from the same thinking that wants universal suffrage within a country? Of course. And if that's what you really believe in, you will destroy the society completely. Indians and Africans will actually rule the world. And actually, I hold China in much higher regard than I do the rest of the third world because China is the only third world country that managed to let go of its third world status. But if you gave a universal suffrage on the basis of one global government, that will be a complete destruction of the world. Because what those people will do is that wealth creators will cease to exist. Their money will go from capital to consumption. People with money will not be wealth creators. They will just be those thieves who will be taking money out of the pocket of tax savers. So they can't be wealth creators. They will be money class, but they cannot be wealth creators. And that is exactly what you already see in the Western world. But there's many of the IT companies and the companies connected with the government. And so, yes, if you have a global suffrage, you will see a complete decay and a rapid decay of the society. So where's our hope? If we look at chapter three here, Hapa lays out a Missessian system of democracy, which is actually a little different than advertised. In other words, yes, Mises saw democracy as a mechanism for peaceful transfer between governments within a society, but he also understood that without a right to secession, democracy is just a compulsory monopoly the same as any prince or king. So right now in the United States, for example, as I know, you know, we have a really nasty election come up, a variety of tensions between red and blue, et cetera. And the question becomes, how do we ameliorate things? And my answer, or at least the answer of most of us at the Mises Institute is, well, we do so by breaking up and that there's no true form of liberalism available to us if you can't exit, peaceably exit, an existing political arrangement. But you're painting a picture of societies which even in the West, an overwhelming majority of people are not interested in logic or enlightenment value. So how do we try to improve things? It sounds like you're painting a very anti-intellectual picture. So firstly, this is an interesting thing when you say democracy leads to a peaceful transition. And it actually does. Around the world, democracy has, wherever democracy has set deep roots, transition is usually peaceful. But that also means that spineless people manage to stay on in power or the next person who comes to power is another spineless person. They are not the people who can fight. You probably need more warrior-like people to run the society than spineless people. Look at, again, the Prime Minister of Canada, Trudeau, a completely spineless person who manages to run the country and he has no fear of continuing to be spineless. My suggestion, and again, I gave a lot of thought while reading to Hans Hermann Hoppe's book. I think what you really don't want to do is to increase the scope of democracy. What you don't want to have is more and more people participating in election. What you want to do is to somehow statistically reduce participation of people to as much of elite and thinkers as you can. And when America became free from British control, they actually did not give vote to most people. I think it was less than 10% of Americans or probably just 6% of American adult population who were allowed to vote in elections in the United States. Or at least don't try to make countries more democratic. As you said, when you talked about the introduction of the book that it was America that during the First World War tried to start enforcing democracy around the world and that probably was the worst thing that happened to many of these countries because they put them on a path to becoming worse and worse. My suggestion would be that let's try to reduce the size of the government and do not try to interfere in what they are up to. So for example, Chinese government might be a dictatorial government, but let's not try to make it democratic because you will only make it worse. Try to understand that democratic values are not good values and reduce and not make it democratic but reduce at the same time reduce the sizes of those governments. Well, and toward that measure, you know, last question for you is at page 91, Hapa discusses the treatise by the French thinker Labote. And he talks about how the state needs our widespread support. In other words, it needs our cooperation. And so Hapa in talking about strategy says we ought to take this to heart and our goal is the de-legitimization. Not just on economic grounds or utilitarian grounds, but also on moral grounds and a bold advocacy for a purely private law society. So how do we go about when the public treats the term democracy basically as a synonym for just or for legitimate? How do we go about de-legitimizing democracy and the state in the broader sense? Well, that is why everyone should read this book and people should really start to understand that freedom and democracy are not synonymous. They are actually opposite of each other. Democracy, the more democratic you become, the more bread and circus society you become. And masses always lead to hollowing out of institutions and increase in tyranny. Now, masses might not say that they believe in tyranny, but their actions and the way they vote inevitably lead to increase in tyranny. And again, this is what you see the Western world has become less and less free as time has gone by. When I arrived in Canada in 2003, the Western government had recently imposed use of IDs for boarding planes. And a lot of people fought against it and then they basically gave up because now it has become such an acceptable part of how we conduct ourselves. That we just take out our IDs and show it to the aircraft people. So again, I think the way to de-legitimize democracy and the way to de-legitimize government is to understand that government is not a savior. If at all it's the necessary ill and I think if we understand it, we will participate in reducing the size of the government as time passes by. I don't want to get rid of the government right away. I don't want to defend the police right away. But I want to contribute intellectually to reducing the size of the government, to reducing the size of the police. And as Hans Hermann Hoppe says, to increase the size of the private law society, where people themselves from bottom up create the kind of system that they want to create to govern themselves rather than having a top-down authoritarian system telling them how to think and how to live. Well, ladies and gentlemen, there's three weeks until the election in the United States. We're going to spend those last three weeks going through Hans Hermann Hoppe's democracy, the God that failed. It seems appropriate. We need a different way of looking at things. The Coke and Pepsi, which we're being offered, is not going to cut it. And our guest today has been my friend, Giant Bandari. We will link in the show notes to his personal website and also to his Twitter feed. We hope that you will follow him. And also, if you're interested in natural resources investing or mining stocks, you might want to follow him as well. And if you're interested in purchasing the book, now unlike most of the books on our show, usually the Mises Institute publishes a version of these books and we put it online for free in an HTML format. We don't own this book. This book was published in 2001 by a different publisher. And as a result, we do sell it at our bookstore at Mises.org, but we don't own it. And so it costs more than it ought to, even in paperback. But nonetheless, if you go to Mises.org, find Democracy the God that Failed It, our little store icon, and then put in the code HAPOD for Human Action Podcasts. You'll get a discount on this great book. And we also have obtained the rights recently to an audiobook format, so that will be coming out very, very soon for your Kindle or other device. And all that said, Jayan, I want to thank you so much for your time. Thank you very much, Jeff. Ladies and gentlemen, you have a great weekend. Mises.org.