A Theory of Socialism and Capitalism

A Theory of Socialism and Capitalism was Hans-Hermann Hoppe's first treatise in English and the one that put him on the map as a social thinker and economist to watch. This new edition includes a detailed analysis by one of his leading students and interpreters, Stephan Kinsella. Also, Jeffrey Tucker writes the editorial preface that draws attention to the insights in the book that the reader might otherwise miss.

Hoppe argues that there are only two possible polls in economic affairs: socialism (violation of private property) and capitalism (respect for private property). All systems are combinations of those two types. The capitalist model he defines as pure protection of private property, free association, and exchange – no exceptions. All deviations from that ideal are species of socialism, with public ownership and interference with trade.

Within the structure of socialism, he distinguishes the left and right version. "Conservative" socialism favors high regulation, behavioral controls, protectionism, and nationalism. The "liberal" version tends more toward outright public ownership and redistribution. In addition, there is a technocratic version that intervenes based on expediency. The consequences of socialism vary based on their degree and kind, but they have similarities: high costs, resource waste, low growth, and economic stagnation.

This structure of the book is that of a comparative-systems text, but it goes much further than that. What matters about this book most is the theory and the analytics that Hoppe uses to make the case. This is where we find the innovation. This is where the book shines. This is where the reader will find a more perfect form of a side of an argument that has been ongoing for hundreds if not thousands of years. The reason is Hoppe's method. It is strictly logical, proceeding step by step through every thought, expanding and expanding relentlessly but never leaping from point to point in a way that skips or takes anything for granted.

It is through this method that Hoppe presents a thorough and compelling case for the existence and protection of private property, explaining in some detail the first condition of ownership: rivalrous use of physical resources. His defense of self ownership is the first application of the philosophical rule against performative contradiction to issues of political economy. His case against technocratic regimes rests, implausibly, on an epistemological case for a special kind of cause-and-effect relationship that exists in human affairs over the natural sciences. Even his understanding of Marxism is unique: he is careful to discard only the illogical and nonsensical parts while retaining the features that actually do make sense. The book concludes with essays on the two most common objections to a fully privatized society.