The nineteenth century was the peak period for European monarchies which took control over most of the world. The then dominant capitalist system is sometimes regarded as a model, the implementation of which in the twentieth and twenty-first centuries was abandoned in favor of social democracy. However, in accordance with libertarian theory capitalism based on the existence of great empires is inferior to the ‘early’ capitalism of medieval Europe which was based on the governance of several hundred small states (Kleinstaaterei). Hoppe’s theory of aggressiveness of liberal countries and passivity of socialist countries confirms that the nineteenthcentury capitalism was built on unstable foundations and therefore bound to collapse and give way to the twentiethcentury totalitarianisms.