A government is a territorial monopolist of taxation and legislation.  The only way they can increase revenue is to increase the tax base.  They do try to increase taxation, but they can lose their tax base.  No government wants that.  They also try to inflate the currency.  The harm may go unnoticed, but the increase in revenue is only temporary, and the currency must be inflated again.  This is very harmful and can’t be done continuously.  It doesn’t matter what type of government this is, they will all try to make use of this wonderful position.

While they will all use the monopoly position, not all will go about this equally.  Each monopolist will certainly push the limits of exploitation, not all will reach the same levels.  The reason the levels will differ among governments is property.  Do you ever change the oil or go for a tune up in a rental car?  But you will in your own car.  Why?  Because you want it to last, maybe have a higher trade in value, etc.?  That can be simplified to one thing, property.  The rental, you don’t own, its not your property.  In a car you do own, it’s your property and you’re concerned about the capital value.

With that example, it’s easy to see that you take care of your own property better than others.  Now, lets expand that example.  What about land?  You’re not going to invest money to redo the kitchen in a rental house, but you will in your own house.  In a rental, you won’t see a return when you move out.  You will in your own house.  It’s the same as the rental car, seems obvious enough.

Let’s continue with that example.  What about a mine?  Say someone else, or the government, owns a mine.  The mine is rented or leased to a company.  What do you suppose would happen?  The company—not being the owner—will attempt to use up the resources before the lease or rental agreement is over.  What if the company is the owner?  The company—being the owner—will not use all of the resources because they will be worried about resale.  What if they don’t plan on selling?  The mine will not be depleted immediately because they will be worried about future income.  Say, the resource is more scarce in the future, the company will be able to supply.  The company is doing a valuable public service.

As the example has been expanded, we can see ownership is beneficial.  Now, lets continue to expand the example.  Say, an entire country.  What do you think will happen?  The owner of a country can try to raise taxes or inflate the currency.  What do you suppose will happen?  Well, the owner of the country may be removed (regicide), the taxed will resist, and the inflated currency will come back to the owner.  What about a non-owner?  Well, they have a lease or a term as its commonly called, there will be not as much resistance to taxation, and the term will be over when the inflated currency comes back—it’s the next guy’s problem.

One can see the owner is significantly held back from the level of exploitation.  This example was to demonstrate the superiority of monarchy over democracy.  The monarch is the owner of the country, the leader of a democracy is just a renter of a country for the length of the term.  In essence, the monarch is the owner of a car.  The leader of a democracy is renting the car.  Why is this so easy to see with a rental car but not a country?  The logic is the exact same.  Under democracy, the slaves think they are masters.   Democracy wasn’t thought of as being a good form of government until Woodrow Wilson.  At most, democracy was thought of as only being workable in a small town.  There’s a reason every single founder, not one exception, viewed democracy as mob rule.

References

Hans Hermann-Hoppe; Democracy—The God That Failed

Murray Rothbard; The Ethics of Liberty