Date: 6 July, 2023

A Summary View

1. The Sovereign Power
2. The Ruling Elite
3. The Political Class
4. The Bureaucratic or Functionary Class
   1. Force Wielding Institutions
   2. The Welfare State
   3. The Regulatory State
5. The Plutocratic or “Crony Capitalist” Class
6. State Privileged or Dependent Firms & their Employees
   1. State Owned Firms
   2. State Privileged Firms
   3. State Dependent Firms
7. The Dependent Class
8. Net Tax Payers (NTP)

A More Detailed Discussion

The Sovereign Power

The Sovereign Power historically used to be a single person, such as a monarch, emperor, or dictator. All legitimate power came from them and they considered all the property and the inhabitants in the country to be “theirs” to do with what they willed. In the modern state “sovereignty” is more nebulous in that it can reside in a semi-fictitious entity known as “The Crown”, or “the people” as represented in an elected body like Parliament or Congress.

The Ruling Elite

The “ruling elite” is the ultimate decision maker of policy, drawn from the ruling family, tribe, army, nobility, church, political party, senior leaders of congress or parliament, and legal, banking, industrial, security elites, depending upon the historical circumstances. This relatively small group control the “Command Centres” of the state (the Presidency, Congress, the military, the intelligence services, the Federal Reserve (or Reserve Bank), the Supreme Court, the Taxation Office, etc) and run the show. This group is a very small minority of those who benefit from access to state power. Some theorists also call this group the “Deep State” which was first developed to explain the power structure within the modern Turkish state. They remain in power for long periods of time and are shielded from the upheavals and uncertainties of the electoral cycle.

The Political Class

The “Political Class” more generally speaking is made up of elected politicians who sit in Congress / Parliament. The real power wielders in Parliament are the senior party leaders, the chairmen of the more important congressional committees which control spending and formulate legislation, and senior bureaucrats who run the main government bureaucracies (Health, Education, Welfare). Most MPs are concerned with getting re-elected and serving the vested interests in their state or district. We can add to this group some of the more wealthy and influential “private individuals” from finance, banking, think tanks, industry (especially defence and communications), and media moguls who advise the government on policy matters. Much of their influence comes from their ability to raise funds for politicians to get elected.

The Bureaucratic or Functionary Class

The Bureaucratic or Functionary Class carry out and implement the government policies which they are given. This large group can be divided into those who run and work for the “Force Wielding Institutions” which have a monopoly of the use of force or violence, such as the Courts, police, prisons, and the armed forces; the main government bureaucracies of the “Welfare State” such as Health, Education, and Welfare; and the other bureaucracies and Commissions which administer and regulate the economy and citizen’s lives (i.e. the Regulatory State)

Many bureaucrats and sate functionaries are low ranking office workers, public school teachers, and post office workers, etc, and are thus by no means members of the “ruling class” but they are in a technical sense “net tax-receivers” and have a long-term interest in voting to maintain government (or rather tax-payer) funding for the institutions which employ them and pay their retirement benefits.

The Plutocratic or “Crony Capitalist” Class

The Plutocratic or Crony Capitalist Class are very wealthy and influential business owners who actively seek to get or retain special privileges from the state in the form of subsidies, contracts, monopolies, favourable legislation, favourable monetary policy, etc. This class is quite complex to understand using the crude NTP/NTR distinction since they may still receive most of their income from the private sector (hence making them technically NTP). However they benefit enormously from their access to state by getting the entire economic system skewed in their favour.

State Privileged or Dependent Firms & their Employees

There are several types of firms in this category. There are the “State Owned Firms” which are entities owned and run by the state. These include (or used to include) transport (buses, railways, ports), public utilities (water, gas, electricity), and industries considered to be of “strategic” importance such as munitions and armaments work. Another category are “State Privileged Firms” which have been given “protection” or subsidies such as the car industry or the sugar industry. A third category are “State Dependent Firms” who earn some of their income by selling goods and services in the market but which also seek and get government contracts in order to make profits. They are a complex mixture of sometimes being a “tax receiver” as well as a “tax payer”. Whether they are “net” in one direction of the other has to be determined on a case by case study. The latter two categories are nominally private firms which receive the bulk (perhaps all) of their income from privileges granted to them by the state, such as tariff protection for the car industry, or who are largely dependent for their income on contracts made with the government (and paid by tax-payers) such as companies which specialize in building highways or military equipment.

The Dependent Class

The Dependent Class is comprised of people who receive benefits from the state such as health, retirement, or other welfare benefits. Some were NTP when they were working (probably in the private sector) but are now NTR in their retirement. Others have always been NTR. Some others are very poor and/or sick people who have been trapped in the cycle of poverty which has been created by the welfare state over the past 60 years. This latter group might also be categorised as “victims” rather than “beneficiaries” of the modern welfare state.

Net Tax Payers (NTP)

“Net Tax Payers” consists of individuals and firms who pay more in taxes than they receive in state benefits. Historically, there have also been groups who have been forced to labour for little or no remuneration (slaves, serfs, conscripts). This group is a complex one because it is not immediately apparent whether they are, on net, NTP or not. There may be some clear examples of “pure net tax-payers” still in existence, but in this thoroughly statised and regulated world most of us would fall into the category of the “grey zone” where we pay taxes but also “consume taxes” in the form of using streets and getting police protection from robbers. Then there are the people who change their class status over time, people who are net tax-payers in their prime working age and then become net tax-receivers in their retirement.

For further reading on CLCA

• see a page which lists the material on my website on CLCA: <davidmhart.com/liberty/index.html#clca>
• my chapter on “Class” in The Routledge Companion to Libertarianism. Edited by Matt Zwolinski and Benjamin Ferguson (Routledge, 2022) , pp. 291-307.
• a much longer version of which is here: “Libertarian Class Analysis: An Historical Survey” <davidmhart.com/liberty/ClassAnalysis/HistoricalSurvey/Sept2020draft.html>
• a paper I gave at the 2018 Libertarian Scholars Conference, The Kings College, NYC, 20 Oct. 2018: “Plunderers, Parasites, and Plutocrats: Some Reflections on the Rise and Fall and Rise and Fall of Classical Liberal Class Analysis” <davidmhart.com/liberty/Papers/Plunderers/DMH-PPP-Oct2018.html>
• the book I co-edited of a collection of texts in classical liberal and libertarian class analysis, Social Class and State Power: Exploring an Alternative Radical Tradition, ed. David M. Hart, Gary Chartier, Ross Miller Kenyon, and Roderick T. Long (Palgrave Macmillan, 2018).

[Frontispiece to John Wade’s “Black Book” (1835) showing John Bull (i.e. the British people) who has been captured and tied down (like Gulliver in Jonathan Swift’s Gulliver’s Travels (1726) by the Lilliputians, who in this case are figures representing the army, the church, members of parliament, and the judiciary. The Lilliputians taunt him and rifle his pockets to steal his money.]

Concepts which Apply to Human Behavior and Economic Activity in General and which are also applicable to CLCA

Note: the abbreviation CL = classical liberal and CLCA = classical liberal class analysis.

Before discussing the key ideas which are specific to CLCA we should take note of some more generals principles which apply to all people in every aspect of their lives.

The first thing to note is that every individual has interests and goals which they attempt to pursue and to satisfy. It is generally believed that these so-called “selfish interests” are revealed primarily in “economic activity” where people pursue “profits” or a narrowly-defined “economic” betterment of their lives. Classical economics was criticized for assuming the existence of an “economic man” who was entirely devoted to the pursuit of these kinds of interests. and goals. This of course is too narrow a view as people have “interests” which are much broader than this as Adam Smith discussed in great detail in his work The Theory of Moral Sentiments (1759).

The great insight of the Public Choice school of economics (James Buchanan and Gordon Tullock) was that workers in the “public sector” also had interests and goals which they attempted to pursue by working within state institutions, such parliament or Congress, or the state bureaucracy, just as other individuals pursued their interests and goals in the “economy”. The interests and goals of politicians and bureaucrats are things like fame, power, high salaries, increased budgets to dispose of, promotion, and so on.

The second thing to note is that people associate with others in order to better pursue their interests and to achieve their goals. In the personal or economic realm they form groups, associations, clubs, business firms, and churches; and, in the political realm they form lobby groups, political parties, and governments, etc. What is common to both forms of association is that individuals with common goals and shared interests come together to better achieve those goals and to pursue those interests.

People can form associations and behave within them and with other individuals and associations in two different ways. They can either associate with others in a peaceful and cooperative manner where no coercion or physical force is used and their rights to life, liberty and property are respected, and all parties in the association and those outside the association with whom they deal, enjoy the mutual benefits of such association. This way of peacefully associating creates a myriad of voluntary associations and allows for a vast network of voluntary exchanges to take place in what we call “markets” and “civil society”.

Or people can associate in order to use force or violence to pursue their interests and achieve their goals. They can thus steal the property of other people, and can force them to act or not act in ways the association does not like. These coercive associations can be “private” (as in criminal gangs, or pirates) or more formally organised “public institutions” such as an army, a government, or an “established” church.

The third general point which needs to be made is that within these associations and institutions people act or change their actions and behaviour as a result of the existence of incentives and disincentives which they face. If there are opportunities to “profit” from doing “x” they will have an incentive to do “x” and more likely than not will do “x”. Here I mean by “profit” an improvement in their situation, the achieving of one of their goals, or the furthering of one of their interests.

The Key Ideas which are specific to CLCA

The most important concept for CLs is the idea that there are two mutually exclusive ways in which wealth can be acquired. This idea has been best explored and described by the French political economist Frédéric Bastiat (1801-185), the German sociologist Franz Oppenheimer (1864-1943), and the American economist Murray Rothbard (1926-1995). In Oppenheimer’s terminology there is “the economic means” of acquiring wealth (by producing things oneself or by voluntary trade with others, in other words by free trade and free markets) and “the political means” of acquiring wealth (by the use of force to acquire things other people have produced, in other words by taxation, confiscation, forced labour (slavery), and regulation.

Coercion can be used by individuals acting “privately” as with thieves and robbers to directly steal the property of others, or what Bastiat called “extra-legal plunder”, i.e. plunder which takes outside or against the law, as in burglary or highway robbery.

Another way is which can be used is “publicly” in an institutionalized manner by the state itself, or what Bastiat “ called legal plunder” , i.e. plunder sanctioned or carried out by the state and its agents.

Thus CLs emphasize the central role played by state coercion in enabling plunder to take place, either by other “legally privileged” individuals, who are given monopolies, land grants, protection from competition, subsidies, or other benefits; or in an organised and institionalised way through state bodies and administration, such as taxation, regulation of trade and industry, legal protection to own slaves, and conscription into the army.

Therefore, whether or not a person or group used coercion to acquire wealth and other benefits was viewed by CLs as the defining characteristic of two different kinds of “class” (or groups) which were important in understanding how their societies functioned and explained the tensions and conflicts within their societies. The particular terms CLs used to describe these two classes varied over time (see fuller description below) but they had one thing common; they were not based on “wealth” as such (as in “rich vs. poor”) or social or economic function (as in a “worker earning wages” vs. the capitalist who owned the factory which paid the wages) but rather how that wealth or function was acquired or carried out – whether by coercion or by voluntary exchange with others. Thus for CLs this notion of class was a “political” one which had the coercive powers of the state at its core.

According to this view then, those who use “the economic means” to acquire wealth or pursue their goals constitute one class which has been variously described as the “productive” or “industrious “ class”, “la classe spoliée” (the plundered class), or more generally “the ruled”.

On the other hand, those who use “the political means” to acquire wealth or pursue their goals constitute an “unproductive” class, “la classe spoliatrice” (the plundering class), or more generally “the ruling class” or “the rulers”.

It follows from this division of society into two classes each of which has a different way of “acquiring wealth” or pursuing and achieving other goals and interests, that there has been and still is today an antagonistic relationship between these two classes which has manifested itself over the centuries as a “class struggle”; between the exploited productive class which wishes to keep the property it has created or acquired through peaceful exchange, and the exploiting unproductive class which wishes to maintain or increase the benefits it gets from the exploited productive class.

Because this antagonism has manifested itself differently at different historical moments the study of the history of this class struggle and system of exploitation has interested CL historians and political economists for several centuries. In their historical writings they have identified a number of paradigmatic forms which this system of class exploitation has taken, namely,

1.) the conquering class vs. the conquered class (the Levellers, Thomas Paine, Augustin Thierry)

2.) the slave owning class vs. the slaves (Charles Comte, Charles Dunoyer, Gustave de Molinari)

3.) the feudal and aristocratic land-owning class vs. the serfs who work the land, and the privileged merchants who benefited from the policy of “mercantilism” which regulated the towns-people who produced other goods an services (Adam Smith, Richard Cobden)

4.) and in the more complex commercial and industrial stage of economic development which emerged in the 19thC there are the “net tax-receivers” (those who receive more in benefits and privileges from the state than they pay in taxes) vs. the “net tax payers” (those who pay more than than they receive in benefits and privileges from the state) (Frédéric Bastiat, Calhoun)

5.) in the late 19thC and especially after WW2 there appeared another important group which was part of the welfare and administrative state, i.e. the professional and permanent members of the bureaucracies which regulated economic activity and managed the growing expenditure and redistribution of tax money for state-provided health, education, and welfare. We now have a new pairing of classes, namely “the regulators / administrators” vs. “those who are regulated / administered”. (William Graham Sumner, Herbert Spencer)

It is not surprising then, that CL historians, political economists, and sociologists have argued that societies have evolved over time through stages each with its own particular means of producing wealth and with its own particular types of “ruling class” which extracts this wealth from the producing class. A handful of radical and more optimistic CLs (Gustave de Molinari, Herbert Spencer, Murray Rothbard) thought that eventually a fully liberal society might emerge in which exploitation and rule by an exploiting class would come to an end as the state was dismantled entirely and its coercive activities replaced by voluntary and market alternatives. The more pessimistic CLs (most “classical liberals”) thought that it might be possible to limit exploitation by means of a written constitution, limited government, and vigilant “pro-liberty” public opinion.

Conclusion

So in conclusion I would summarize the key ideas behind CLCA as follows:

1.) every individual has interests and goals
2.) people associate with others in order to better pursue their interests and to achieve their goals
3.) there are two mutually exclusive ways in which wealth can be acquired, either by non-violent production and exchange (the “economic means of acquiring wealth”), or the use of violence and coercion to take what others have produced and created (“the political means”)
4.) the state is thus the “organization and institutionalization of the political means” of acquiring wealth and pursuing its members goals, which extracts wealth from the tax-paying public and uses it for its own purposes or gives it to its allies and its supporters
5.) this creates two “classes” within society: those who use “the economic means” to acquire wealth and pursue their goals and who constitute the productive, exploited (plundered) class, or “the ruled”; and
those who use “the political means” to acquire wealth and pursue their goals and who constitute the unproductive, exploiting (plundering) class, or “the rulers.”
6.) these two classes are in an antagonistic relationship with each other, since those who are the exploited or plundered class wish to minimize or end entirely the amount of their liberty and property which is taken by the exploiting class; while this exploiting class wishes to maintain or even enlarge their position of power and wealth acquisition over those they rule.
7.) the class structure of our society has evolved over centuries as the means of production of wealth has changed and as the particular groups which control the state have also changed. evertheless the thing which has not changed is that fact these two types of class still exist and that the antagonistic relation between the two still remains, thus causing hardship and injustice which CLs wish to end.

Histories of the discipline of sociology usually give short shrift to the classical liberal tradition.¹ Sometimes Alexis de Tocqueville gets a mention; Herbert Spencer is dismissed as an anachronism who is barely worth reading anymore; some technical aspects of Pareto’s thought is readily discussed but his “fascist” turn in the 1920s is a cause for worry and a reason to dismiss much of the rest of his work; and of course Max Weber is seen as a pivotal figure in the development of the modern discipline.

However, most of the space in these histories (including dictionaries and encyclopedias like those by Blackwell, Princeton, and Routledge) is devoted to socialist and other statist-inspired authors whose intellectual lineage goes back to Auguste Comte and Karl Marx. This is to get everything backwards in my view, as these “socialist sociologists” came after a lot of significant work in establishing the foundations of the disciple were laid by “liberal sociologists”. I have tried to show this alternative lineage in my anthology of classical liberal class analysis (CLCA) entitled “Plunderers, Parasites, and Plutocrats: An Anthology of Classical Liberal Writing on Class Analysis from Boétie to Buchanan” and in a monograph, a shortened version of which is destined to appeared as a chapter on “Class” for the Routledge Companion to Libertarianism ed. Matt Zwolinski (forthcoming). In that work I sketch out a distinguished line of thinkers stretching back to the Levellers in the 1640s who should be included in any good history of sociological analysis, especially one that is interested in the emergence of institutions like private property, voluntary association, trade between individuals, the emergence of markets and other complex economic institutions, the emergence of the state, slavery and serfdom and others forms of exploitation, war, and so on.

The sticking point for the mainstream approach to the study of sociology is that they cannot get the idea into their heads that voluntary market relations, especially the payment of wages, are NOT necessarily an exploitative relationship, as well as the idea that every action of the state and its officers IS coercive in nature and this has a profound impact on the way people think, behave, and organise themselves.

I have endeavored to rectify this situation by putting online in HTML and facs. PDF formats some of the best work to be found in this classical liberal sociology so it can act as a counterweight to this massive disproportion in the traditional literature. Over the past few months I have worked on the following individuals, especially the “three greats” – Gustave de Molinari, Herbert Spencer, and William Graham Sumner.

A Survey of the Some CL Sociologists who wrote on Class Analysis

See my draft of a monograph on “Libertarian Class Analysis: An Historical Survey” (Sept. 2020) and a shorter version of this “An Introduction to Classical Liberal/Libertarian Class Analysis” ( Oct. 2020). Also the anthology I helped put together on “the alternative tradition” of thinking about class: Social Class and State Power: Exploring an Alternative Radical Tradition, ed. David M. Hart, Gary Chartier, Ross Miller Kenyon, and Roderick T. Long (Palgrave Macmillan, 2018).

Jeremy Bentham (1748-1832), James Mill (1777-1836) and “the sinister interests”

[James Mill (1770-1836)]

Jermey Bentham and James Mill were pioneering early 19th century political sociologists with their analysis of the “sinister interests” who ran the state for their own private benefit and not that of the “general interest.

See my short discussion of “James Mill and Jeremy Bentham on Class” and an anthology of James Mill’s writings on politics “The Political Writings of James Mill: Essays and Reviews on Politics and Society, 1815-1836”.

Charles Comte (1782-1837) and Charles Dunoyer (1786-1862) on the evolution of law, property, markets, and “industrial” societies

[Charles Dunoyer (1786-1862)]

Except for a very few historians and sociologists (the most notable being the Canadian sociologist Robert Leroux) the work of Comte and Dunoyer have been largely forgotten in spite of the great work they did in the late Empire and early Restoration period. I began gathering some of their most interesting essays which they published into journals, Le Censeur (1814-1815) and Le Censeur européen (1817-1819) as part of my bicentennial celebrations of the work. They wrote on the impact of war on economic and political development, the emergence of a new class of productive workers they called “les industrieux”, the nature of dictatorships, and a theory of historical development which they called the “industrial theory of history”.

A future project is to put online their most important work in HTML. It is a scandal that none of their work has been republished in French, let alone translated into English.

Editor’s note: I wrote my PhD on them several decades ago.

I have all their work online but only in facs. PDF format:

• Bibliography of Charles Comte and his major works: Traité de législation, ou exposition des lois générales suivant lesquelles les peuples prospèrent, dépérissent ou restent stationnaire (1827) 4 vols, and Traité de la propriété, 2 vols. (1834).
• Bibliography of Charles Dunoyer and his major sociological writings: L’Industrie et la morale considérées dans leurs rapports avec la liberté (1825), Nouveau traité d’économie sociale, ou simple exposition des causes sous l’influence desquelles les hommes parviennent à user de leurs forces avec le plus de LIBERTÉ, c’est-à-dire avec le plus FACILITÉ et de PUISSANCE (1830), 2 vols., and De la liberté du travail, ou simple exposé des conditions dans lesquelles les force humaines s’exercent avec le plus de puissance (1845), 3 vols.

Apart from myself, the following people have written extensively on Comte and Dunoyer:

Two major articles by Éphraïm Harpaz in the 1950s and 1960s, “Le Censeur, Histoire d’un journal libéral,” Revue des sciences humaines (1958) and “Le Censeur européen: histoire d’un journal quotidien,” Revue des sciences humaines (1964), which have been republished as Éphraïm Harpaz, Le Censeur. Le Censeur européen. Histoire d’un Journal libéral et industrialiste (Genève: Slatkine Reprints, 2000).

The other author of note is Robert Leroux, Aux fondements de l’industrialisme : Comte, Dunoyer et la pensée libérale en France (Paris: Editions Hermann, 2015).

Gustave de Molinari (1819-1912) on Political and Economic Evolution

[Gustave de Molinari (1819-1912)]

The Belgian/French political economist Gustave de Molinari is one of the great forgotten CL sociologists of the 19th century. As a young man he wrote some pioneering essays for the Dictionnaire de l’économie politique (1852-53), some 30 in French only 7 of which have been translated into English.

Soon after this he wrote a work in order to explore how Louis Napoleon came to be “Emperor” of a republic. His class analysis in this work was based on the idea of the conflict between the “tax-payers” and the “tax-eaters” and the new coalition formed between traditional ruling elites in the military and the church, the rising economic elites among the state and subsidized and protected agricultural and manufacturing industries, and the bureaucrats who ran the government agencies which regulated the economy: Les Révolutions et le despotisme envisagés au point de vue des intérêts matériels (Revolutions and Despotism seen from the perspective of material interests)(1852) – text.

Towards the end of his long life, after a couple of decades as an economic journalist for the Journal des débuts, he wrote a trilogy of great sociological works exploring economic and political evolution, and the impact of the French revolution and war on these evolutionary process: L’évolution économique du XIXe siècle: théorie du progrès (Economic Evolution in the 19th Century: A Theory of Progress) (1880) text, L’évolution politique et la révolution (Political Evolution and the Revolution) (1884) text; Grandeur et decadence de la guerre (The Rise and Fall of War) (1898) text.

He then wrote a final fourth volume which summarised his life’s work on this topic: Économie de l’histoire: Théorie de l’Évolution (The Economics of History: A Theory of Evolution) (1908) text.

It is scandalous that only one of these works has been republished – Grandeur et decadence de la guerre (The Rise and Fall of War) (1898 – by the Institute Coppet, and none translated into English.

Herbert Spencer (1820-1903) and the evolution of “industrial” and militant” types of society

[Herbert Spencer (1820-1903)]

The work of the English radical individualist is well known but not well understood. I have put online his major work on sociology The Principles of Sociology (1874-1896): vol.1; vol.2; vol.3; with a combined table of contents of the set to help researchers more easily explore his work.

William Graham Sumner (1840-1910) on Forgotten Men and Women, and Plutocrats

[William Graham Sumner (1840-1910)]

England had Herbert Spencer (1820-1903); France had Gustave de Molinari (1819-1912); and America had William Graham Sumner (1840-1910). All three did pioneering work in the emerging discipline of “sociology”, were radical classical liberals (libertarians), and were active in popularizing their ideas via journalism. Sumner was a professor of sociology at Yale University who wrote on free trade and protection, sound money and banking, and was an outspoken member of the American Anti-Imperialist League.

His work on classical liberal class analysis should also be mentioned, where he championed the interests of “The Forgotten Man and Woman” who paid the taxes which made it possible for the various vested interest groups, both large (plutocrats and party bosses) and small (those who sought government jobs), to enjoy their privileged position. Sumner also wrote several works against the theory and practice of socialism. In his view the great clash of the future would be between socialists from below and plutocrats from above, with the “forgotten” man and woman caught in the middle. I have put online the four volumes of his collected essays, his major treatise on sociology, Folkways (1906), and several other works:

• What Social Classes owe to Each Other (1883)
• Folkways: A Study of the Sociological Importance of Usages, Manners, Customs, Mores, and Morals (1906)
• Earth Hunger and Other Essays (1913)
• The Challenge of Facts and Other Essays (1914)
• The Forgotten Man and Other Essays (1918)
• War and Other Essays (1919)

1. See for example the massive and comprehensive (weighing in at 5 vols. and over 5,000 pages) The Blackwell Encyclopedia of Sociology. Edited by George Ritzer (Oxford: Blackwell, 2007); The Handbook of Economic Sociology. Second Edition. Neil J. Smelser and Richard Swedberg editors. (Princeton and Oxford: Princeton University Press, 2006); and the International Encyclopedia of Economic Sociology. Edited by Jens Beckert and Milan Zafirovski (London and New York: Routledge, 2006, 2011). [↩]