The Leader as King, the Leader as CEO

Of all the ideas in Unqualified Reservations, perhaps the one I found most compelling is the comparison of the state with a corporation.

In the Moldbug view, the state, in any meaningful sense, already is a corporation - a group of individuals working for a shared purpose under an agreed-upon structure. It's just that the modern democratic state is a very oddly run corporation. This was satirised very well in the Moldbug theory of rotary management, where he described how bewildering democratic governance would look if applied to a regular company.

But behind the parody was a serious, and brilliant, point. Most educated people in the west think that the way we run corporations is approximately optimal, given their tasks. That is, being run with dispersed shareholders separate from the customer base, elections of board members who appoint an all-powerful CEO who is subject to board dismissal, and a share price to monitor performance. And most educated people in the west similarly think that the way we run governments is approximately optimal, given their tasks - that is, with democratic elections, a permanent civil service, judicial review etc.

But it is not at all clear that the tasks of the two organisations are that different. And since they are governed in such totally different ways, if you think that they are both optimal, it is incumbent upon you to explain what specifically about the differences between the organisational tasks requires such totally different structures.

The Moldbug answer is quite simple - there is no difference. Companies fill essentially similar functions to countries, and we can thus judge the expected success of difference governing structures by the relative success of different company structures. Sovereign corporations would likely outcompete sovereign democracies, in much the same way that regular corporations outcompete co-operatives (which is approximately what democracies are, but with more dysfunction). They just haven't been tried.

But there is another aspect to this metaphor that gets less emphasis.

Suppose we have a family-owned firm. All the shares are owned in their entirety by the male head of the family, the father. The father is both the sole shareholder and the CEO. He passes both the CEO position and his equity stake, simultaneously, to his eldest son upon his death. In this corporation, the two roles are inextricably linked by company by-laws - if at any point the father ceases his role as CEO and transfers it to someone else, then the shares and any cash flow rights are transferred to his successor, except those periodic payments given as a gratuity by the new CEO who may keep him on as an informal adviser. This has some beneficial effects, since the principal-agent problem is basically solved - the CEO now has the strongest possible incentives to maximise the value of his shares.

The father does not have to make every single decision - as CEO, he can hire advisers and delegate certain decisions, but ultimate authority must remain with him in order for him to retain his ability to reap the profits of the company. As both CEO and sole shareholder, there is no board to either evaluate his performance as CEO, or provide external opinions - the only opinions he will hear are those of subordinates directly employed by him, and who may be fired by him at any moment. Indeed, as CEO he is wary of delegating too much, lest people misinterpret these actions under the company by-laws as meaning that his delegate is actually the new CEO and shareholder. As a result, it is hard for him to reap the profits of the company without actively managing it. At first this works okay, but he has to keep doing this even when he is old and feeble - retirement means losing his equity stake.

Because the CEO must hold all the shares, he is prevented from raising outside equity. If he wants to raise capital for a project, only debt financing is available. As a result, if the CEO has a firm that is short in pledgeable assets, he may find it difficult to raise external funds for capital projects. This occasionally makes it difficult for him to ward off competitor firms.

While the father naturally has affection for his son and successor, he loves his other children too, and ideally would like to arrange to transfer his shares to a formal trust to provide for all of them. Unfortunately, company by-laws prevent the shares from being transferred to a trust. Most of the time, he can rely on his oldest son to treat the rest of the family fairly well, but it's always a gamble. In addition, he occasionally suspects that the total profits would be greater if he transferred power to his smarter, younger son, rather than his oldest wastrel son. But the by-laws are fairly strict on that point.

Every so often in the corporate history, the father becomes completely evil, incompetent, or mad. Since this threatens not only the value of his shares, but the livelihoods of his senior employees and the welfare of the customers, they occasionally take drastic action. But since the by-laws don't allow for the removal of a bad CEO, and since there's no way for the CEO to transfer control without impoverishing himself, this usually means that the current CEO has to be killed. Since this is a risky move, which the current CEO has the highest conceivable incentives to prevent, it's only attempted in the most dire circumstances.

There are other unscheduled transfers of power. Sometimes, the eldest son gets impatient, and kills off the father. Sometimes, a junior son will kill off the eldest in a deniable manner, in order to be further in line for the CEO job. You'd think that the by-laws would explicitly preclude someone from benefiting in this manner, and the shares and CEO job would be taken away, but oddly this isn't the case.

Because the parallels are more straightforward, and because I lack the cleverness and imagination of Moldbug, it's probably quite apparent that I'm describing a simplified version of absolute monarchy. I have defended absolute monarchy before, and think that it probably worked a lot better than people today tend to think. But like before with democracy, we can use the history of corporate governance to judge the merits of monarchy versus neocameralism, or sovereign corporations.

Reader, suppose that we unleashed our monarchical corporation into the world, to compete with the firms in the S&P 500. Do you suppose it would succeed? True, it has its advantages. If it started in office with a great CEO, it might do quite well for a while, since it wouldn't suffer from the standard principal agent problems of managers empire-building, or enriching themselves at the expense of shareholders. But how long do you think such an arrangement would last, especially past the first CEO? Most CEOs, even good ones, are only at the top of their game for a short number of years, and when they screw up, they have to get replaced by someone else, who is picked from among the top managers across the whole planet. The advantages here are fairly plain.

It seems quite apparent that our monarchical firm would struggle to compete. Most of the world's successful coprorations have structures that are nothing like the one we describe above. They look more like our regular, familiar public firms.

"But," you may protest, "there are successful family firms too!"

This is true. In the world today, there are large, successful family-run firms. But they tend look more like regular public companies than our monarchical corporation. Many of them are publicly traded as well, like Wal-Mart, with the family retaining only a controlling stake. Out of the rest, the shares can be distributed across family members or held a trust. The CEO job can be kept within the family, or transferred to an outsider (even if the outsider is "adopted" into the family, like in Japan). The firm can raise equity financing.

And for the families that own such firms, they don't seem to be in a huge hurry to change their corporate by-laws to those of a monarchical corporation. By revealed preference, they seem to prefer more modern arrangements.

Out of the various aspects of an absolute king, it seems beneficial that the executive has absolute authority over personnel, budget, operations, and other kinds of organisational decisions. Divided power in this regard mostly just causes problems and inefficiencies. But the linking of absolute organisational authority (which both the King and CEO share) with sole inalienable equity ownership (which only the King has) is not nearly so obviously beneficial. And the process of removing a bad CEO seems far preferable to the process of removing a bad king.

Moreover, if the CEO is not to be the sole shareholder, then it seems misguided to make the CEO the sole judge of his own performance. Having a board, who lacks any major organisational authority except the power to appoint and remove the CEO, along with other major structural changes, seems fairly benign as far as divided power goes, and is very beneficial in the event that you need to change the CEO. It's possible that the board might become meddlesome, but most of the charges against boards made by economists are that they rubber stamp the CEO's decisions too much, not that they're overly combative.

And finally, dispersed shareholders also go a decent way to combating the problem of an owner with perverse or evil preferences. When the sole shareholder in a country is the king, it's possible that the king just has preferences for evil, nasty stuff. Sure, he'd like more profit, but perhaps he's more interested in droit du seigneur, even though it's value-destroying and the citizens hate it.

But if we take the preferences of a multitude of shareholders, and ask what set of preferences can they agree upon, it's typically to just get paid more. In other words, maximise dividends, and let each shareholder buy whatever he wants. There's not usually cross-subsidisation of shareholders in their purchases from the company. It's possible that shareholder citizens in a sovereign corporation might also vote for droit du seigneur, but it seems easier and cheaper to just get hookers or groupies with the extra dividends.

Sovereign corporations have their problems, no doubt. But if your plan for how you'd like a government to be run varies wildly from how you'd like a regular corporation to be run, then you at least want to know the specific reasons why, lest the ghost of William of Occam haunts your country's fortunes.

On Power and Coordination

Occasionally, as Paul Samuelson once noted, one is tempted to write something that one can’t decide whether it’s something important, or something completely obvious. So it is here – if in doubt, go with humility and bet on the latter.

Power, in general, is the ability to impose one’s own preferences on somebody else, overriding whatever the person’s own preferences are.

So how does that come about?

It seems that there are two main ways.

The most straightforward way is to have some attribute that the other person lacks – in other words, there can be inherent differences between people. You can be stronger, or smarter, or better looking, or trained in a specific skill. This is the simplest form of power – the bully. I am stronger than you, therefore I can impose my will upon you. This kind of power is readily apparent, and understandable instinctively even to small children.

But this only gets you so far. Think about Hillary Clinton. She came close to having the ability to annihilate most of the human race with nuclear weapons. On what personal attributes did this arise? She has a certain wily cynicism, and a will to power. But she is so frail that she could barely stand up. She is so unlikable that even those voting for her now admit that nobody really liked her. She’s above average intelligence, but you could take a randomly chosen math professor from a top 200 college in the US and they’d be considerably smarter. So something is missing.

Indeed, there is a second, and broader way.

Most power comes from coordination.

Coordination at heart, is the power of other people’s beliefs. The belief among the members of a group that they will all act together, or all act at the command of a leader. The belief of the dominated group that they will be punished severely for any resistance.

The simplest form is cooperation – an explicit agreement to help each other out. This can create power even if everyone is otherwise equal. A criminal gang combined creates much more power for each of its members than they would have if they were acting alone. Four people together can gang up on another person while taking much less damage than one quarter of what they’d sustain in a one on one fight. So they have a force multiplier –the gang of four can win more than four uneven fights.

With basic co-ordination, the equivalent of ‘having inherent strength’ is having the power of numbers –inherent attributes and coordination are complements, as people generally want to coordinate with the strongest person. But co-ordination can outstrip inherent differences in numbers quite easily. Four bullies in a schoolyard can terrorize the entire rest of the student body, even though the latter are much more numerous, and their combined strength is greater. This is just another way of saying that if everyone else could coordinate, they would actually hold the power. How do they do that? How do they agree to a plan, and get everyone to stick to it? It seems like such a trivial thing to surmount, but it is in fact the entire thing.

Or if that’s trite, how did the ~35% Sunni population of Iraq rule over the ~65% Shiite population for so long? It could be that the Sunnis are better fighters, but the subsequent developments don’t seem to immediately support this – the Iraqi government may or may not survive American withdrawal, but the Shiites successfully expelled the Sunni from Baghdad, and I doubt that ISIS car bombs are sufficient to reverse this.

Beliefs often create self-fulfilling prophesies. When everyone knows that Saddam is in charge, and that dissent is ruthlessly punished, it becomes very difficult for the Shiite to all know when and how to rise up at once (even the first American arrival in 1991 wasn’t enough to generate this). The army will always be co-ordinated in their response, but the mob lacks the discipline and certainty to know that actions will be followed through. So everyone wonders if they start lobbing Molotov cocktails at the police, will the rest of the people join them, or abandon them to the tender mercies of Saddam and his industrial shredders? This uncertainty greatly benefits the incumbent government – that is to say, the better co-ordinated group.

As a result of this, smart leaders worry a lot about preventing opposition groups from organizing. Gary King’s research about Chinese internet censorship reveals that the ChiComs understand this principle very well. Most people seem to think that it’s risky to criticize the government, but this isn’t what actually gets you censored. You can say that a governor is worthless, or corrupt, or a crook. You can say that he’s having an affair, and give the name of his mistress. This kind of information is actually quite useful to the Communist party. Like any organization, they have to measure the performance of their subordinates, and promote the competent. Finding out which local officials are pissing off lots of citizens is something you’d like to know.

What you can’t say, however, is “…and so let’s go protest”. That is what gets you censored. And it turns out this holds true even for positive statements that involve collective action. “Let’s have a rally in support of the new environmental policy” also gets you censored. When lots of people turn up in the streets at once, moods can change very quickly. Remember, co-ordination (where we all think and do the same thing) doesn’t need to be co-operation, where we all explicitly agree to help each other. It’s enough if a single event makes a mob all get angry at once, there doesn’t need to be a central controlling figure or an organized plan.

This paper finally explained to me why the Chinese government was so paranoid about Falun Gong. Aren’t they just a meditation group? Probably, but it turns out it doesn’t matter. If you can get 10,000 people to all turn up at once in Tienanmen Square, you are a potential existential threat to the government, even if all you’re doing is meditating.

This is also the story of the Gulen movement in Turkey. As a mutual advancement society and cult of personality, they had strong loyalty to Gulen and each other. But so did Erdogan’s supporters, and they had the advantage of both the incumbency of government, and a superiority of numbers. So how did the Gulenists come close to pulling off a coup? They held one considerable co-ordination advantage over Erdogan – they knew who all the key Erdogan supporters were, but Erdogan didn’t know who the Gulenists were. This meant that even though Erdogan knew he was being undermined, and had the numbers to crush them, he didn’t know who to strike. So he was strong, but blind.

The story I heard (though all such stories out of Turkey are speculation) was that the key development that took place earlier in the year was that Erodgan had finally cracked the communication system by which the Gulenists were able to communicate with each other. And suddenly the game changed very quickly. Once he knew who they were, the Gulenists were in a tight spot. The story goes that they had to rush forward plans for the coup, because they knew that Erdogan was planning a big purge of them. In some sense, this was obvious – why in God’s name would you start a coup on a Friday night, rather than at 4am? Subsequent events bear this out too – within days of the coup’s failure, there were long lists of people fired or imprisoned. This means that they had at least some of the lists in advance.

But even so, it was a near thing. Because beliefs are fragile, if one can decisively change everyone else’s opinions, the Gulenists could have turned into the Baathists of Iraq, ruling over a much larger population. The key moment, as I wrote about before, was Erdogan’s facetime press conference. By getting the message out to lots of people to take to the streets, suddenly the Gulenists had a much harder time, because the government supporters now had both numbers and co-ordination – the self-fulfilling prophesy of the coup succeeding starts to turn around, people desert, and you end up dead or in prison. Until the last few months, the Gulenists looked like a very savvy model of how to build power to subvert and overthrow a government with a smaller force. Usually, guerrilla movements appeal to the numbers of the people, and their discontent. Almost pulling off a coup without popular support, and without being the army itself, is quite an impressive feat, even if they ultimately failed.

Viewed from this angle, we can suddenly see why formal systems of government are so difficult to achieve, whether this is in the form of an all-powerful king or an all-powerful constitution. Saying that the king will have absolute authority is presuming the conclusion you’re trying to reach. The king doesn’t fight off armies single-handedly, he rules because his subjects believe that it’s in their interests to follow his orders. Does this hold true for every possible order? If the order hasn’t been given yet, it might be hard to say. But if orders stop being obeyed, either he stops being an all powerful king and becomes merely one center of power in the system of government, or stops being king altogether, most likely killed by the general who disobeyed him.

We thus have a basis for Maine’s striking observation about the British crown – that some of its powers were probably lost through lack of use. If the nature of power is people’s beliefs, these are hard to measure. And while past history is a good guide to what people think now, how do you know the world hasn’t changed in the interim? Even the ruling flag must continue to be run up the flagpole from time to time in order to know that people will continue to salute.

Because cooperation requires us to agree upon a plan, it usually requires hierarchy. Somebody is at the top, and gives orders. This way, everyone knows what they need to do. And so gangs nearly always have a leader.

As I noted before, the first king is the king because he is a great leader of men, and able to upset the old order. And these traits get passed on to subsequent generations, giving them a fundamental advantage over other men. But still, subsequent monarchs are primarily the king simply because they are the son of the old king, and everyone believes that this is the basis for government, so orders get obeyed. In this regard, succession planning and institutional rules are very important in maintaining power. Monarchies make this process very simple, as rules of succession are familial and well-laid out. If they create bad incentives, it’s for potential offspring of the king to kill each other, but at least the general populace is relatively well insulated from such issues. One-party states, like the Chinese Communists, sometimes are able to manage the process pretty well. But this usually involves handing over power before the leader dies. Otherwise there’s uncertainty about who will take over, which can lead to infighting and difficulties when the leader dies, or mass purges in the leadup.

Moreover, the orderly handing over of power becomes incredibly important in getting leaders to step aside when the time is right. If there is a strong tradition of treating past rulers fairly, then current rulers will be more willing to step down when they get old and frail. If there is a history that rulers get killed and replaced, the incentive is a to pull a Mugabe, and hang on until they carry you out in a box. In this regard, the most important development of the American revolution was George Washington’s decision to step down after two terms, as it encouraged the other leaders to follow suit, rather than setting up a dictatorship because they knew that if they didn’t, the next guy would do it.

And finally, we have part of an answer to the puzzling fact that major political developments are often entirely unpredicted even a short period beforehand – World War I sweeping away the monarchies, for instance, or the fall of the Berlin Wall. Hemingway's observation about bankruptcy 0 that it happens gradually, then suddenly - is especially true of governments. It turns out that both ‘The government is stable’ and ‘the government has collapsed’ are self-fulfilling beliefs. As a result, discontent builds slowly, but can stay at a high level for quite a long time, because of the incumbency advantage of the self-fulfilling belief in stable government. These kinds of shifts will likely have a substantial degree of randomness to them –an East German official mistakenly announces that the border with West Berlin will be opened immediately, and this sets off an avalanche that brings down the whole system.

In other words, you could be years or months away from a seismic shift in government, and you probably wouldn’t know it.

Change beliefs and you change the power structure, because beliefs are the power structure.

An Economist's Cautionary Note on Free Trade

Among most economists (among whom I count myself as one), free trade is a pretty strongly favoured policy.

The reasons for this are fairly good, and fairly straightforward, in the standard case for free trade.

Under the standard theory, the main basis for the benefits of free trade is comparative advantage. If Australia is relatively more efficient in producing iron ore (that is, if it has a comparative advantage in iron ore), and China is more efficient at producing manufactured goods, then at the country level both Australia and China are better off if Australia specialises in iron ore, China specialises in manufactured goods, and the two countries trade with each other. Then both countries are able to obtain more consumption of each good than they would alone, given whatever initial resources they have. This is an economic benefit, understood since David Ricardo wrote about it in 1817.

If one thinks of the economic units in terms of countries, free trade between China and Australia is Pareto improving. Both countries are made better off, and no one (in this limited model) is made worse off. This is the Holy Grail of economic policy. The optimal level of tariffs is thus zero, as restrictions on free trade harm both countries.

But if one thinks instead at the level of individuals within a country, then free trade is no longer Pareto improving relative to tariffs. In the example above, if I'm a worker in an Australian manufacturing firm which was previously protected by tariffs, and these get eliminated, then I really do get screwed. It's not just complaining - as my firm goes broke, I lose my job, and the previous skills I have are no longer economically useful in my country. Even if I get another job, I likely will have a lower future wage for quite a while, if not permanently.

The steel workers in Ohio complaining about free trade aren't just making it up. Things really did get a lot crappier when tariffs were eliminated.

But economics has an answer here. Free trade isn't Pareto improving, but it is Kaldor Hicks improving. In other words, the total gains to the economy are sufficiently large that the beneficiaries could organise a transfer payment to those who lost their jobs which would made the Ohio steel workers also better off. 

As a matter of political economy, this transfer doesn't actually happen. You'd have to pay the losers from free trade a very large sum of money if they have to transition to years of unemployment, or a permanently lower future income. 

Of course, this isn't really a problem of economics, more just politics. Is it the economist's fault that his prescriptions don't get followed?

So much for the standard theory. It's actually pretty good, as far as it goes. Like good economic proofs, it flows from assumptions to conclusions. If it's wrong, it's because there's something in the model that's being left out, or one of the assumptions is questionable.

There are a number of possible extensions one can make, like depreciating human capital. But to me, it's the base assumptions that are the most interesting. What are they?

We have the following:

1. Consumption is a good. You're better off consuming more goods and services than fewer goods and services, all else equal.

2a. Leisure is a good, or equivalently

or 

2b. Work is a bad.

In other words, for any given level of consumption, you'd rather work less than work more. 

These are not terrible assumptions. #1 seems probably true. You may hit a point of satiation with consumption, but over most ranges of wealth that people operate on, having more stuff beats having less stuff, unless the stuff poses other costs (like screwing up your children, in which case all else isn't equal).

But what about #2?

Going from a 14 hour work day to a 10 hour work day, with the same wages and consumption, is surely an improvement in welfare.

Going from a 10 hour work day to a 6 hour work day, with the same wages and consumption, is also almost surely an improvement in welfare. 

But the big question is the following: is it still an improvement in welfare to go from a 6 hour work day, to a zero hour work day in perpetuity?

In other words, if your consumption stayed exactly the same, would you prefer to have some sort of job, or no job, ever?

You may think work sucks, but be careful what you wish for.

What if it turns out that people actually need some sense of purpose, some reason to get up in the morning?

Admittedly, having a job isn't always a fun purpose. But it's a structure, and a discipline, and a set of people you can interact with, and a routine that, if it works well, results in the satisfaction of providing for yourself.

What would life look like if you had basic consumption needs provided for you, no strings attached, without any need to work?

Well, as it turns out, we have many decades of data on that question. They're on display in a housing estate or ghetto near you. And the results ain't pretty. Ask Theodore Dalrymple, who wrote about this extensively: 

Every few months, doctors from countries like the Philippines and India arrive fresh from the airport to work for a year's stint at my hospital. It is fascinating to observe their evolving response to British squalor.

At the start, they are uniformly enthusiastic about the care that we unsparingly and unhesitatingly give to everyone, regardless of economic status. For a couple of weeks, they think this all represents the acme of civilization, especially when they recall the horrors at home. Poverty—as they know it— has been abolished.

Before very long, though, they start to feel a vague unease. A Filipina doctor, for example, asked me why so few people seemed grateful for what was done for them. What prompted her question was an addict who, having collapsed from an accidental overdose of heroin, was brought to our hospital. He required intensive care to revive him, with doctors and nurses tending him all night. His first words to the doctor when he suddenly regained consciousness were, "Get me a fucking roll-up" (a hand-rolled cigarette). His imperious rudeness didn't arise from mere confusion: he continued to treat the staff as if they had kidnapped him and held him in the hospital against his will to perform experiments upon him. "Get me the fuck out of here!" 

My doctors from Bombay, Madras, or Manila observe this kind of conduct open- mouthed. At first they assume that the cases they see are a statistical quirk, a kind of sampling error, and that given time they will encounter a better, more representative cross section of the population. Gradually, however, it dawns upon them that what they have seen is representative. When every benefit received is a right, there is no place for good manners, let alone for gratitude.

By the end of three months my doctors have, without exception, reversed their original opinion that the welfare state, as exemplified by England, represents the acme of civilization. On the contrary, they see it now as creating a miasma of subsidized apathy that blights the lives of its supposed beneficiaries. They come to realize that a system of welfare that makes no moral judgments in allocating economic rewards promotes antisocial egotism. The spiritual impoverishment of the population seems to them worse than anything they have ever known in their own countries. And what they see is all the worse, of course, because it should be so much better. The wealth that enables everyone effortlessly to have enough food should be liberating, not imprisoning. Instead, it has created a large caste of people for whom life is, in effect, a limbo in which they have nothing to hope for and nothing to fear, nothing to gain and nothing to lose. It is a life emptied of meaning.

"On the whole," said one Filipino doctor to me, "life is preferable in the slums of Manila." He said it without any illusions as to the quality of life in Manila.

I skipped the most striking descriptions of the problem, because if I started, I'd end up quoting the whole thing. Read it all, if you haven't before.

A question, dear reader.

Do you think the problems of the people described above stem from a lack of consumption? They don't have to do any work, so in a standard model, the only problem left is that they must be consuming too little.

Suppose that Dalrymple is describing his subjects in the above article honestly, and you have two policy choices to consider for the above recipients.

Option A - Increase their welfare payments by 50%

Option B - Find them a not unpleasant job for 6 hours per day, and require them to do honest work in order to receive the same welfare payments as before.

Which of these two policies would result in a larger improvement in human welfare for such people?

In the standard model, the answer is obvious. Given our assumptions, Option A is far preferable. Do you believe that?

Would it change your mind to find out that lower class whites in America (especially in rust belt parts of the US that have been worst hit by job losses from free trade) in recent decades have been so despondent that their life expectancy has actually been dropping as they kill themselves with alcohol, opiates, and suicide?

The standard answer to this is that we have an opiate problem. And a drinking problem. These are "substance abuse" issues. But why now? Alcohol was always there. Why is it only now that people decide there is no other purpose or hope in their lives, and start drinking themselves to death?

To turn these concerns back into the language of economics, the Holmes conjecture is that if leisure is not always a good, and work is not always a bad, then it is no longer obvious that the optimal level of tariffs is zero.

Sometimes, you might prefer to have some restrictions on trade in order to keep jobs in America.

But you have to be honest about why you're doing this.

Targeted tariffs won't raise consumption. They won't spur economic growth. They will lead to more expensive goods, and less consumption. David Ricardo was right on all that. Comparative advantage still exists, and be very wary of anyone who talks about free trade without acknowledging this.

But they might also lead to more employment. And this may well be worth it in terms of the quantity that the economist's social planner is meant to care about, namely total welfare.

It might lead to fewer rust belt whites killing themselves with opiates, because their communities are totally hollowed out with everybody sitting around on welfare without any purpose in their lives.

If steel products cost slightly more as a result, personally that doesn't strike me as the end of the world.

Of course, this is a cautionary note, not a case for tariffs-a-go-go. To say that the optimal level is not zero does not imply that the optimal levels is high, or across-the-board. And it's also not clear that tariffs versus free trade is the only solution to this, or even the best one.

I personally think that automation is a much bigger worry in this regard than free trade. I have similar questions about automation, which also doesn't strike me as everywhere and always welfare improving.

These aren't straightforward questions. If you ban the automobile, we get stuck with horses and carts forever.

And yet... and yet...

The Deaton and Case finding seems to me to be one of the most important findings in social science in recent years, and portends an enormous and growing problem. There are lots of workers who simply do not seem to be economically useful anymore, and in communities where lots of these people have ended up on welfare as a result of the endless grind towards replacement by robots, life is purposeless and miserable.

There are many other purposes that can be fostered - community, charity, art, religion, family.

But until we have a handle on how to solve the torrent of lives being sucked into the abyss of misery, as large as the AIDS epidemic, I remain open to a range of different policies in response.

Chesterton’s Fence and Democracy

Among those passages that resonate with those of a conservative temperament, one of my favourites has to be Chesterton’s Fence.

In the matter of reforming things, as distinct from deforming them, there is one plain and simple principle; a principle which will probably be called a paradox. There exists in such a case a certain institution or law; let us say, for the sake of simplicity, a fence or gate erected across a road. The more modern type of reformer goes gaily up to it and says, “I don’t see the use of this; let us clear it away.” To which the more intelligent type of reformer will do well to answer: “If you don’t see the use of it, I certainly won’t let you clear it away. Go away and think. Then, when you can come back and tell me that you do see the use of it, I may allow you to destroy it.

Do not, in other words, argue from a position of ignorance. It is not enough to know what you dislike about some existing arrangement. You have to know its strengths, especially those which might have justified the policy’s existence. This is the engineer’s version of the Ideological Turing Test. You need to be able to make the best case possible for the existence of the status quo. Only then will you know what is being given up.

As I have written about in these pages before, I find the democratic process to be ridiculous. It seems incredibly unlikely that this is the optimal way to govern a country, but since it’s been imbued with a religious and moral sheen, not many people are able to think seriously about the possibility of getting rid of it, let alone what might replace it (other than braindead answers like ‘tyranny’). As a result, there is extraordinarily little experimentation with genuinely different forms of government.

So we know what we don’t like. But we have to pass the Chesterton Critique. Do we know why democracy, at least in its modern incarnation of the civil service state, works as well as it does? Do we know what aspects we might be losing? This is especially important, because we need to know what kind of traits to try to include in a replacement system. Or if it’s not possible to include all the benefits, we need to know what should be included in the costs column of any reform.

Now, this is different from the Ideological Turing Test, because we are not asked to give the answer that its supporters will give. This is likely to be faulty and delusional. Rather, we want the engineer’s answer, like Maine. We want to know what defense Machiavelli might make. We want to know, in other words, not the democrat's defense of democracy in America. We want to know the reactionary’s defense of democracy.

Here is one answer. I propose to make another.

Democracy holds out the fig leaf of minor, token power to all citizens. Individually, you have a voice. “Your voice matters!”, it cries out. Of course, everyone knows that individually their voice doesn’t matter, but collectively perhaps their voices do matter.

That is the fiction. I, and Moldbug, suspect that the people’s voices collectively don’t matter that much. The permanent civil service and the rest of the cathedral hold most of the levers of power. We are, of course, about to see this idea tested in the Trump Presidency. I forget who exactly wrote this (apologies!), but if Trump wins and proceeds to rule, then Moldbug was wrong. It’s entirely possible, and something on which I’m agnostic (though my best guess is that it won’t happen).

But let’s take the Moldbug hypothesis for now. Voting collectively doesn’t matter. Why might it be useful to keep this mechanism in place?

One trick that the makes of air conditioners for office buildings figured out a while ago is that people have endless fights about the temperature of offices. At almost any temperature, some people find it intolerably cold, and others are roasting. But oddly, people got much happier when they had entirely fake thermostats installed. My office has one. There’s a temperature dial you can fiddle with, and even a button you can press that causes a light to come on for 30 seconds, just to show that it’s hooked up to something, if not actually the air conditioner. On further reflection, it's preposterous. What exactly is this button meant to do? Is it an 'on' button? If so, do I need to press it every 30 seconds, because it keeps going off.

But having these buttons and thermostats there makes people feel like they’re able to do something. It channels their complaints and rage, which previous would have been directed at each other, management, facilities and whoever else, into fiddling with a harmless switch, which they never quite know if it actually does anything or not. Even if they suspect it doesn’t, periodically they’ll fiddle with it, because why not try anyway? Maybe it's the mysterious button, perhaps I need to press it in addition to fiddling with the thermostat. Your voice matters for office temperature!

Voting for candidates in an election is the fake air conditioner switch of the political world. Instead of throwing rocks at the police, or burning down the capital, or plotting a coup, people keep fiddling with their individual political thermostat. This channels their energy into harmless pursuits. But it also increases actual satisfaction, even given the current policies! Often, people aren’t able to accurately perceive the world around them, so may not even know exactly if things have changed. But if they can do something, and see some minor visible effect in the world around them, such as the thermostat being higher or one of “their guys” in charge, they feel happier.

But viewed in this light, it’s easy to see that not all forms of voting will be equally successful at generating this pattern. A key part is that the choice space of actions must be fairly crude, and the measurement of consequences rather difficult. Direct democracy, such as through ballot initiatives, is very destabilizing in this regard. When citizens can form their own specific formulations, firstly they demand quite specific things (“No gay marriage in California”), which are easy to tell if they’re not being implemented. As a result, when the powers that be decide that the peasants’ games have gone too far, they must be explicitly cracked down on, when judges remind people who is actually in charge. Do that too often, and people might figure out that the thermostat isn’t actually connected to anything.

But if you only give people a periodic choice every four years, and they only get one single ‘A or B’ choice placed in front of them, AND their choice is only to launder what they want done through the will of a president or prime minister, who may or may not have been sincere, may or may not have just changed his mind after voting, may or may not have had enough support from within his own party… well, it suddenly becomes very hard to show definitively that the voting didn’t make any difference.

And so the system is stable. Dissent is channeled into harmless outlets, and it stays there because nobody can every quite prove that the outlets are indeed harmless.

But even more than that, there’s a genius that comes from the nature of voting itself. Specifically, it’s a participatory act. And not only that, it’s costly. You have to get off your butt, drive to the primary school, and fill in the damn form.

Cognitive dissonance being what it is, people who have wasted their time filling out a form will convince themselves that the form is actually a really important practical and moral act. Otherwise, why have I been doing it for so long, wasting my time on it? In other words, by making the action slightly costly, people are even more likely to tell themselves absurd stories about how voting can actually change the world.

Now, this is something that is harder to achieve in a monarchy. The King explicitly wants it known that he is in charge. If you dislike the King, stiff $*** – he’s the King, and you’re a peasant. Now, with a sufficiently stable power structure, this is okay. But it means that the peasants have to obey out of either a) inherent loyalty and love for the ruler, and/or b) fear of punishment. Do these right, and they should be enough. But there’s an extra insurance policy of having a system that fools some fraction of the potential mob into thinking that they either ARE already in charge, or can be if they just sit patiently and keep pressing the right button every four years.

Sovereign corporations offer people a different bargain – you can’t choose how the country is run, but you can choose if you want to stay. This may well be fine too.

Again, none of this means that we shouldn’t ditch democracy. We just should know what we’ll be losing, and ponder if there's any way to replicate it in what we'd like to create.

The second large benefit I can see is what I think of in my crude financial terms as the analysts consensus forecast problem, or the wisdom of crowds. Suppose every analyst observes the true earnings estimate with some independent error term. Then the average of many analysts will be more accurate than any individual analyst.

Now, you might think that I am arguing that the average person will be wise in what policies to implement, but that is not my purpose at all. Unlike the analysts version above, not all electors are equally informed about policy. If many of your analysts are morons, you probably want to exclude them entirely.

So what are voters actually good at knowing? Pretty much only one thing – whether their life has gotten crappy recently, or whether it’s improving. They may know something of the specific cause, or they may not. They are unlikely to have much useful to add about how things need to change. But if you just want to find out how the overall realm is going, a vote is not a bad option.

Think of voting it as a button labeled ‘Throw the Bums Out’. By voting for the incumbent, they’re saying they’re happy. By voting for the other guy, they’re not. Not only do you get information about the aggregate answer to this question, but with exit polling, you can approximately figure out who was unhappy, which might tell you why.

The problem for a king is that this kind of knowledge is dispersed over the whole kingdom. It’s the standard central planner’s problem, and why you want to rely on prices. Think of voting as like a very crude version of average opinion for the ‘Do things need changing?’ question.

Of course, viewed from this angle, what we really want is just an opinion poll. And ideally we'd like to ask a lot more detailed questions, rather than just one. Perhaps something more like the census. But if there’s one thing the Trump election showed, it’s that people sometimes falsify opinions to pollsters, especially when they have to answer in person. The trusted anonymity of the polling both means you get a) genuine answers, even if they’re misguided, and b) avoid the sampling error from limited polling.

Now, you definitely don’t want this kind of voting mechanism hooked up to the actual levers of power. But it’s the kind of information that a genuinely benevolent leader would want to collect in some form or another. It doesn’t need to look like voting, but something to achieve a similar effect is probably useful. It helps solve the hubris that comes along with absolute power – when you feel you’re a genius, and all your underlings are sycophants, how will you actually find out if your policies aren’t having the intended effect? Turns out it’s not so easy, until one day you're on the palace balcony giving a speech, the peasants start jeering, and suddenly the jig is up. Woe be to the leader who forgets to find out the real opinions of his peasantry.

These are surely not an exhaustive list. Out of the two broad classes, I think the ‘harmless outlet for dissent’ is considerably more important. But it’s a problem worth pondering.

‘Tear Down This Wall!’ makes for great rhetoric. But it should be the last stage of a lot of reasoning.

The purgatory of eternal twilight

In the strange no man's land between sleep and wakefulness, I sat on the plane. I had only gotten four hours of sleep the night before, but, unusually for me, sleep would not come now. I turned on my laptop, felt tired, turned it off again, but still couldn’t sleep.

And as my mind eventually turned to introspection on my situation, a meandering thought drifted towards a strange meeting I had last week.

It was an office visit, with a casual work friend at another company. I hadn’t seen him in perhaps a year or so. When I got to the door, he seemed scattered and disheveled. He was dressed in an unusually casual manner – an oversized army jacket that didn’t fit properly, and a black t-shirt advertising some business or other. The man who had escorted me there commented that it looked like my friend had just woken up. “I had, actually”, my friend replied. When our escort left, my friend still seemed out of sorts, fiddling with his phone, rubbing his eyes, looking in odd directions.

I expected him to regain his composure and for us to talk business, but he still seemed distracted after a minute or two. His conversation had odd extended pauses, halting as if he were constantly losing his train of thought in mid-sentence, and he didn't make much eye contact.

At some point, he said ‘I actually have an alarm that requires me to answer arithmetic puzzles before it turns off’. He showed it to me. I cheerfully made conversation by asking him if he used the snooze button, and he said he did. ‘I found that I actually had a lot of success by giving it up altogether’, I continued. ‘Once you get into the habit of always getting up immediately at the first alarm, it becomes almost a Pavlovian response, no matter how tired you are.’

As if my words only partially registered, he rambled about how a friend of his had an alarm clock that would walk around when it went off, and you had to get up to switch it off. ‘The effect’, he said, ‘was that he just got really adept at picking up objects and throwing them at the alarm.’ The motion he made while he did this was to dramatically pick up his keys and turn towards the wall, pretending to throw them. It was the only display of alertness the whole time, and jarring in contrast to the general struggle and sluggishness he had displayed otherwise.

By this point, the conversation had started to go on past the point where we would have been expecting to move on to substantive matters, but instead we had been on a single topic of smalltalk the whole time, which had started to feel like it had lingered too long. ‘I really wanted to come in and meet you, even though I was really tired. I’ve only gotten about 12 hours of sleep this week.’

It was Thursday.

And suddenly, the penny dropped. He was suffering from crippling insomnia.

I felt absurd, wishing to take back my self-satisfied stories about the benefits of willpower in avoiding the snooze button. My friend was drowning, for lack of sleep. He talked about it so much, for the reason that old war memoirs talk about food much more than fighting – because they were starving and wretched, and it was the only pleasure they sought in life. At a certain point of hunger, getting food becomes all consuming, and mere prospect of getting a bullet at some stage in the future becomes much more distant.

Embarrassed at myself, I heard him talk more. ‘Things got a bit worse when my wife got a job in a distant town, which means she has to get up at around 6. I’ll try to get up to give her a kiss before she goes, and…’

I don’t actually remember the way that sentence drifted off, but I was struck with an immense sadness. Suddenly the enormity of the problem became apparent. I could see him, struggling to maintain a functioning relationship with his wife in his zombie-like state, and tenderly giving up precious minutes of rest to show her affection. His work must surely be suffering too. We were halfway through our meeting time and hadn’t even begun to talk business. I cannot imagine that things got better without me there.

At last, as he started to slowly become more coherent, the conversation finally turned more towards our main productive endeavors, and he seemed to slowly approach proper functioning. When we first walked in, it was as if he were literally drunk. By this point, he seemed to be merely tipsy, slowly sobering up.

I found my eye drawn towards the odd shape of his car keys. The top of the remote was all covered with a strange uneven rubbery plastic substance, leaving only a small hole for the button. As events started to make sense, I wondered if he had dropped them a lot in his haze.

As I write these words, I wonder if he himself was the “friend” in the story with the walking alarm. The keys were quite possibly broken from being thrown in exactly the manner that he pretended. He had developed a Pavlovian response, alright. It was a visceral rage at whatever was denying him the thing his body wanted most in the world.

I wanted to say something about his plight, but as is the introvert’s curse when dealing with unfamiliar situations, the words didn’t come. His life looked like it was falling apart from tiredness, and to comment on it, even if wholeheartedly sympathetically, would risk emphasizing just how obvious that was. The only consolation was that he was probably so distracted that this might not register. I was struck by a very strange urge to give him a hug, not because it would have made things better, but out of a primal desire to offer some sort of comfort, even if wholly ineffectual, even if wholly inappropriate.

As I write these words, I can think of what I should have said. “I’m sorry to hear you’re not sleeping well, mate. I really appreciate you coming in just to see me today, given it seems tough right now.” The sympathy of the staircase, so to speak.

Sometimes, the cross that the unafflicted must bear is seeing the pain of those whose welfare one desires, knowing there’s nothing one can do.

Sometimes, even the standard consolations for this don’t work. There is no one to get angry at. There is no constructive solution you can offer. There is no hope of even finding a remotely satisfying explanation for why things are the way they are.

And in this suffering, one can only console oneself with the fact that one’s own reflected misery is a tiny problem to bear by comparison, and one should strive for compassion for others in this unsatisfactory world.

Existence is suffering, as the sage put it.

Ponder this, and wisely reflect.

On Maine and Moldbug

Continuing my foray into the illustrious brotherhood of the Froude Society, I’ve been reading Popular Government by Sir Henry Sumner Maine.

To read these books is to see the genesis of Unqualified Reservations – not that these books exactly mirror Moldbug, but one can see where some of the ideas come from. Of course, part of what makes Moldbug so fascinating for most people to read is that the ideas are so radically different to what one normally comes across. One of the meta points of Unqualified Reservations, encapsulated in the dictum to ‘Read Old Books’, is that if one reads the same thing as everyone else, one is likely to think the same thing as everyone else. Sufficiently old ideas when sincerely expressed are apt to strike you as more shocking and new than anything else you will encounter.

And the strongest all-pervading sense wherein Maine (writing in 1885) departs from modernity is his willingness to view democracy with the cold eyes of a political engineer. In the starkest terms possible, Maine writes as if the entire democratic process has no moral component whatsoever, either positive or negative. Voting is not a sacred duty, a fundamental right, an ennobling and dignifying symbol of equality, or any of the other hoary notions that today have been attached to the term. So what is it then?

Political liberty, said Hobbes, is political power. When a man burns to be free, he is not longing for the "desolate freedom of the wild ass" ; what he wants is a share of political government.

Can you imagine a more bracing tonic than that? When you say “I want to be free” or wear your “I voted” sticker, you are really saying “I covet political power”. Not so ennobling when phrased that way, is it? There is nothing wrong with power, of course. Someone has to have it. But the pursuit of it is hardly considered a morally virtuous cause.

Democracy, then, is merely one of a number of possible ways of governing the state, whose outcomes should be judged solely on those terms:

There is no word about which a denser mist of vague language, and a larger heap of loose metaphors, has collected. Yet, although Democracy does signify something indeterminate, there is nothing vague about it. It is simply and solely a form of government. It is the government of the State by the Many, as opposed, according to the old Greek analysis, to its government by the Few, and to its government by One. … Democracy is best described as inverted Monarchy.

We have grown up viewing democracy with a diet of rhetoric that resembles the way that a love poem describes a human body. And here, for the first time, is an anatomy textbook. To a modern western audience, this is a somewhat jarring perspective.

Maine is also unsparing in pointing out where the democratic principle, when analysed, fails to make sense. Firstly, if the people are actually wise in their judgments, why do their judgments have to be laundered through the process of first electing representatives, to whom are delegated general decision-making authority? This argument becomes even more forceful as the possibility of online elections makes frequent plebiscites cheaper and more practical. As Maine notes

The arguments of the French Liberal party against the Plebiscite, during the twenty years of stern despotism which it entailed upon France, have always appeared to me to be arguments in reality against the very principle of democracy.

Indeed.

Similar important questions get raised by the existence of second legislative chambers, such as Senates, which have different electoral rules to the lower Houses.

Nothing brings out so clearly as does this class of contrivances a fundamental doubt afflicting the whole Democratic theory. It is taken for granted that a popular electorate will be animated by a different spirit according as it is grouped; but why should there be any connection between the grouping of the People and the Voice of the People? The truth is, that as soon as we begin to reflect seriously on modes of practically applying the democratic principle, we find that some vital preliminary questions have never been settled. Granting that the People is entitled of right to govern, how is it to give its decisions and orders? …
Vox Populi may be Vox Dei, but very little attention shows that there never has been any agreement as to what Vox means or as to what Populus means. 

Maine also has some brilliant analyses of the flaws of direct democracy, though a powerful comparison to the jury system. It is a long passage, but one worth quoting in full:

We have in England a relic of the ancient Popular Justice in the functions of the Jury. The Jury-technically known as the "country"-is the old adjudicating Democracy, limited, modified, and improved, in accordance with the principles suggested by the experience of centuries, so as to bring it into harmony with modern ideas of judicial efficiency. The change which has had to be made in it is in the highest degree instructive. The Jurors are twelve, instead of a multitude. Their main business is to say "Aye" or "No" on questions which are doubtless important, but which turn on facts arising in the transactions of everyday life. In order that they may reach a conclusion, they are assisted by a system of contrivances and rules of the highest artificiality and elaboration. An expert presides over their investigations-the Judge, the representative of the rival and royal justice-and an entire literature is concerned with the conditions under which evidence on the facts in dispute may be laid before them. There is a rigid exclusion of all testimony which has a tendency to bias them unfairly. They are addressed, as of old, by the litigants or their advocates, but their inquiry concludes with a security unknown to antiquity, the summing-up of the expert President, who is bound by all the rules of his profession to the sternest impartiality. If he errs, or if they flagrantly err, the proceedings may be quashed by a superior Court of experts. Such is Popular Justice, after ages of cultivation. 

Now it happens that the oldest Greek poet has left us a picture, certainly copied from reality, of what Popular Justice was in its infancy. The primitive Court is sitting; the question is"guilty" or "not guilty." The old men of the community give their opinions in turn; the adjudicating Democracy, the commons standing round about, applaud the opinion which strikes them most, and the applause determines the decision. The Popular Justice of the ancient republics was essentially of the same character The adjudicating Democracy simply followed the opinion which most impressed them in the speech of the advocate or litigant.

Nor is it in the least doubtful that, but for the sternly repressive authority of the presiding Judge, the modern English Jury would, in the majority of cases, blindly surrender its verdict to the persuasiveness of one or other of the counsel who have been retained to address it.

A modern governing democracy is the old adjudicating democracy very slightly changed.

This is one of the great damning critiques of the modern democratic process. It is obvious to all contemporary readers what a travesty of justice it would be to substitute the modern jury system for the old one. It is also quite apparent that Maine’s final point is right – modern voting for the president looks a lot like ancient Greek justice. Is the fate of an entire people less important than the fate of a single defendant?

It is the interest in these kinds of possible modifications that makes the engineering side of Maine most apparent. While Maine is highly skeptical of democracy by the standards of modernity, by the standards of Moldbug he is actually an optimist. He thinks that democracy can be improved, and its weaknesses at least tempered by good design. For instance, he is optimistic about representative government relative to direct democracy – as he notes, “the effect was to diminish the difficulties of popular government, in exact proportion to the diminution in the number of persons who had to decide public questions.” Similarly, Maine is also enthusiastic about US State constitutions which specify formal procedures for their amendment. This is viewed as being a superior process to the ambiguity of the British process.

With the benefit of 130 years of hindsight, of course, it is easier to observe the failure modes that Maine didn’t foresee. What if, instead of formally amending the constitution, legislatures simply passed laws that exceeded the initial bounds, and then further appointed compliant judges who were on board with the ruling ideology and believed in things like ‘living constitutions’?

Or, more radically, what if the ruling party simply decided to replace the electorate through mass immigration? This has been the story of the latter half of the 20th Century. Maine understood the incentives to modify the franchise, but modifying the population itself was a leap of imagination that even he didn’t consider.

And this is where the comparison with Moldbug becomes instructive. Moldbug is a pessimist about the entire democratic process. Cthulu swims left, as the now famous expression goes. Democracy is, in other words, a fundamentally left wing phenomenon that will sooner or later produce left wing outcomes. As a result, the failure modes themselves are inevitable (according to Moldbug), not merely possible. The franchise will never be stable, as the incentives to expand it will always be present. Maine, for instance, speaks with some praise about Belgian suffrage restrictions that limit the vote to those with an education. That this would be desirable seems highly likely. But would it be stable, even if it were passed? This is the crucial question which Maine doesn’t address, and which Moldbug does quite forcefully in the negative. And when suffrage gets expanded, the decisions will shift to the lowest common denominator, or be usurped by the constant meddling with public opinion. On this last point, Maine agrees – with the mass franchise, leadership will be by “the wire-pullers”, a wonderful description of modern democratic leaders and political operatives. But Maine doesn’t get to the point of outright condemnation. To an engineer, the building that is the American constitution has survived a lot longer than what would have been predicted, and so must have something going for it. In the later stages of the US Empire, this may strike us as optimistic, but we can’t fault Maine for not foreseeing the entire future.

But the comparison with Moldbug is not universally to Moldbug’s advantage. Because, despite the large overlap between their worldviews, the two writers have one important philosophical difference. If Maine is an engineer of government, then Moldbug is more like a scientist of government. A scientist aims to develop a theory that will help him understand the world, from which practical results can then be deduced. An engineer views scientific knowledge as a means to constructing something durable, but it is only a means to an end. Kludges and rules of thumb are acceptable to engineers, but are anathema to scientists, to whom they represent only incomplete understanding.

The engineering side of Maine, which overlaps with the historian side of Froude, depicts political power as something not entirely subject to formula. One can shape it and set rules, but, like an engineer’s buildings, governing structures will eventually collapse, despite the best of intentions. In particular, the question of who holds true power in Maine's descriptions is often difficult to ascertain at any point in time, and there can be considerable ambiguity on that point. For instance, consider Maine’s description of the history of the powers of the English King:

The powers over legislation which the law recognizes in the Crown are its power to veto Bills which have passed both the House of Commons and the House of Lords, and its power to dissolve Parliament. The first of these powers has probably been lost through disuse. There is not, at the same time, the smallest reason for supposing that it was abandoned through any inconsistency with popular government. It was not employed, because there was no occasion for employing it.

As to the right to dissolve Parliament by an independent exercise of the royal will, it cannot be quite confidently asserted to have become obsolete. The question has been much discussed in the Colonies which attempt to follow the British Constitutional procedure, and it seems to be generally allowed that a representative of the Crown cannot be blamed for insisting on a dissolution of the Legislature, though his Ministers are opposed to it. It is probable, however, that in this country the object would be practically attained in a different way.

This is a very different world from the world of absolute power, or even absolute certainty about the distribution of power. Even if a King starts with a given set of powers, according to Maine, he may lose them simply through lack of use. And the most shocking word here is ‘probably’. Maine is implying that because the right to dismiss Parliament hasn’t been tested in a while, we actually don’t know if it still would be followed. His descriptions of how the Cabinet ended up arising out of nothing to effectively set the legislative agenda, while the House of Commons mostly ended up questioning the executive branch, is similarly fascinating and nuanced. You can set up a system in a way, and it can actually work in that way for a while, but then at some point things might change in practice, even as the same nominal roles are all there.

This kind of real world ambiguity and nuance is sometimes missing in Moldbug’s writing. The CEO of a neocameral state is described as being all powerful, subject to the possibility of board dismissal. Presumably he can order half the population shot if he wants, unless the board fires him before it gets carried out. He won’t have incentives to do this, of course, and Moldbug makes a convincing argument that this is the only real bulwark against abuses of authority. But if our CEO deems it to be value-maximising, the power is there. Of course, at the moment our neocameral CEO is only a hypothetical figure, and so it's easy to grant him hypothetical absolute power. But how do we know that things will actually work out that way? The critique of neocameralism that usually gets leveled is 'Do we want this to happen, or will it lead to undesirable outcomes?'. But there's a second possible question - 'Even if we do want this, can we actually create it?'. I don't mean rhetorically that it's obvious that we can't, merely that it isn't a given.

In other words, when the rubber hits the road, if the CEO gives the order to fire on the crowd at the football game because he thinks it will increase shareholder value, do the security forces actually shoot? And what happens next if they don't? Until you're a CEO commanding a drone army, there’s only human beings all the way down, and either they follow, or they don’t. Sometimes, you just won’t know until you give the order. And this is a problem that, no matter how much we might like it, I suspect we can’t simply engineer away with cryptographically locked weapons. Moldbug is brilliant, don’t get me wrong, and his imagination of how different forms of government might work is second to none. But there is sometimes an absolutism in his descriptions of how governing arrangements might work that doesn’t seem to fit Maine’s descriptions of the nuances of actual power.

Of course, with the extra century's knowledge to guide us, Maine sometimes falls victim to the same trap, he’s just enamored of different restrictions. In particular, his praise for the way that the US Federal Constitution sets out specific enumerated powers and structures (relative to the ambiguity of the British system) seems to have been optimistic even at the time. If he'd written the book after FDR, I suspect there's a few sections that might read quite differently.

And if there is a general delineation of where Maine seems to be more optimistic about how formal arrangements can limit and define government structures, it is regarding America. His analysis of Britain notes much of the deterioration of democratic governance, and he hadn't yet witnessed the full decline of the previous American governing structures (other than the Civil War, which he addresses relatively briefly, and seems oddly to think of as merely a temporary disruption to the same basic structure). Noting the big difference between the two countries, Maine attributes the relative success and consistency of American governing arrangements to the fact that its powers and structures were formalised, while Britain's were mostly established through tradition and tacit understanding. With the benefit of hindsight, this makes Maine overestimate how much the formal structures actually prevented the same trends, as opposed to perhaps just delaying them somewhat, or maybe even not achieving that. It turns out the piece of paper didn’t restrict government power after all, as Moldbug has been at pains to point out.

But doubt not that Maine is brilliant, and his depictions of the folly and stupidity of the democratic process are incisive and illuminating. Skip the travesty of election coverage these next two weeks and read some Maine instead.

Cognitive Dissonance Judo and the Surprising Malleability of Beliefs

There are few things in this world more stable than a man’s self-image.

You might think, perhaps reasonably, that values and core beliefs are the heart of man – what’s right and wrong, how he ought to act.

You might think, if you’re more scientifically inclined, that facts are the core – bare understanding of the basic reality of the world from which people figure out the rest.

But the psychology of cognitive dissonance doesn’t work that way.

What is stable, rather, is the conception of self. Usually, but not always, this is based on flattery and conceit. I am clever. I am pretty. I am moral. I am loved by those around me (or at least those of good character and judgment).

Whatever you like about yourself, in other words.

And the rest of reality – morals, beliefs, the whole lot – typically gets fitted in around that.  This isn’t to say that morals don’t actually matter, of course. Just that in this fallen world we live in, men make their rationalistions in quite predictable ways.

A beliefs-centred view says that a man starts with morals – that it is wrong to commit adultery, for instance. Believing this, he refuses to cheat on his wife. Having not cheated on his wife, he views himself as a good man and a good husband.

A self-image-centred view says that a man begins with the view that he is a good man and a good husband. He has a tentative view that adultery is wrong, and because he is currently satisfied with his wife (and also because there is no convenient way to have an affair with someone hot), he doesn’t feel the need to cheat on her. Having not cheated on her, he affirms the view that refraining from adultery is an important moral issue, and a key part of what makes him a good husband.

As long as a man doesn’t commit adultery, it’s very hard to tell these possibilities apart.

But what happens when a man’s marriage starts to deteriorate, and he ends up cheating on his wife?
The beliefs-centred view is a Dostoyevsky novel. It says that he will be wracked with guilt, and view himself as being an immoral and unworthy person.

The self-image centred view says that, rather, he will update his views on what is right and wrong to maintain his self-image. Having committed adultery, adultery must not be so bad after all, at least in the circumstances when he has done it. Perhaps it’s okay if the marriage has already broken down. Perhaps it’s okay as long as nobody finds out. Perhaps it’s okay if they were going to get divorced anyway. The beliefs about right and wrong can change. The only thing that can’t change, however, is his view of himself.

Like all models, this simplifies reality. Some people, especially the more introspective and intellectually honest, really do get wracked with guilt after doing bad things. Dostoyevsky didn’t imagine it out of whole cloth.

But looking at the world, how many husbands having affairs seem to be wandering around like Raskolnikov, torn up over their infidelities and unable to get up from bed? Is it more or less than the number that seem to have a spring in their step about finally getting laid again, and don’t seem much troubled by the fact that this flies in the face of the solemn vows they took years earlier?

And all of this has a lot to do with the leftist holiness signaling spirals that seem to characterize the early 21st century so vividly.

In order to gain status over one’s rivals, and signal ever greater fealty to the principles of progressivism, modern society has the need to change one’s opinion suddenly on all sorts of matters, firmly and publicly committing to the new zeitgeist and denouncing those not on board with the program. Cognitive dissonance being what it is, the targets of progressive ire are always those recalcitrants not on board with the current program today- the kulaks still to be beaten. The targets are definitely not the exact same progressives, like themselves, who in prior years held exactly the same views as the reactionaries they now denounce. Ever hear Bill Clinton being publicly seeking forgiveness for signing the Defence of Marriage Act? Ever hear liberals renounce themselves for voting for Barack Obama in 2008 when he opposed gay marriage, even as they renounce those who vote for politicians supporting religious conscience exceptions on gay marriage today?

The need to stay high status trumps the need to stick to one’s beliefs, so the old views get jettisoned. But part of one’s self-image is usually also that one is honest and upright, someone who believes things for good reasons, not a craven fool with no fixed principles who shifts his beliefs with the merest breeze of public opinion. And so having changed views, people are positively eager to forget that they ever held their previous views. Since bare facts about the world are also easy to manipulate in the service of self-image, this turns out to not be hard to do.

As part of my low level troll’s entertainment of provoking leftist cognitive dissonance, I enjoy sometimes asking progressives enamored of the latest fashion, such as transgender bathroom rights, exactly when they started caring about this issue, and why. They almost never have an answer to this. It may be only two years ago, but their mental distortions of ego-preservation are such that these origins are shrouded in mystery, and their own previous worldview is utterly inaccessible to them. What they think now, they must surely have always thought. The alternative would be to admit that their motive for joining this latest moral imperative (even if the current stance is presumed to be correct and virtuous) in fact rests with far baser motives – following fashions, fear of being denounced themselves, signaling their virtue.  And admitting this would defeat the whole purpose.

Sure, when pressed, they can’t think of any actual conversations they held or actions they took on the crucial issue of bathroom policy before, say, 2014. But this was only because they simply hadn’t yet fully comprehended the scale of the injustice. This lack of comprehension until the New York Times came knocking might itself seem to be a blight on their moral record, but rest assured this kind of introspection is highly unusual, and nobody but the most reactionary cynics like myself is in a hurry to point it out either.

Provoking cognitive dissonance is fun, but it won’t change anyone’s mind. If you want to at least have a chance at that, you can’t fight self-image, you need to use it to your advantage. This is the judo strategy – using an opponent’s own momentum against him.

One way to do this is to force progressives to consider that they may not always be the one getting to do the judging, and will one day themselves be the judged.

In other words, take a progressive interlocutor, and ask them the following hypothetical:

Progressive causes change over time. For a long time, nobody cared about gay marriage, then all of a sudden they did. That’s fine. Let’s merely posit the following – that this process will continue. In other words, in 20 or 30 years’ time, it seems likely that progressives will have found some new moral point that they care about passionately, but which people today don’t care about at all. Who knows what it will be specifically, but assume that they will feel about it as strongly then as you, my progressive friend, feel about gay marriage now, and they will see the absence of this cause as a huge injustice. If you need to make it concrete, pick fringe views on some cultural trait and substitute it as needed as the possible change –allowing polygamy or adult incest, breaking up the family unit, lowering the age of consent to 12, mandating veganism, whatever. To be ideal, it has to be something wacky that you’ve probably never thought of, like giving the vote to children, rather than something you’ve already encountered like veganism.

So our progressive of 30 years’ time feels as strongly about this as you do today about gay marriage. You, on the other hand, believe everything that you currently do today. They will view you exactly the same way that you view people who opposed gay marriage in 1986 – as unbelievably hateful and bigoted, part of a society-wide cruelty that is almost unfathomable.

And at last, we have our question. Who’s right in this argument about voting ages or adult incest? Are you, dear progressive, hateful, bigoted and disgusting in ways you don’t even understand today, on issues that you’ve barely given any thought to, for reasons you can’t yet guess? Or is the progressive of 30 years’ time merely taking on extreme views that disrupt a reasonable and understandable social compromise today?

If it’s the latter, are you willing to commit every one of your current views to paper (no matter how infrequently you ponder them) for all the world’s future employers to see, and defend them when the social zeitgeist changes? You might get to be the Brendan Eich of 2025, fired for having an insufficient commitment back in 2016 to the cause of extending US citizenship to everyone on the planet or whatever.

At this point, one is left with only a few options.

Either one actually writes a blank moral cheque to the progressives of the future and says ‘Yes, I am hateful! I am bigoted in ways I don’t even understand! Forgive me, President Chelsea Clinton!’.

Or one admits that these changing views are not actually crucial moral issues, but in fact moral fads and fashions that people follow for reasons other than the inherent justice of the causes at issue. This, if acknowledged, begins the descent down a rabbit hole that ends up a long way from modernity.

Or one says ‘No, I’m pretty comfortable with how society is currently arranged, and don’t wish to upend everything for the whims of the progressive elite of the future’.

In the third instance, congratulations. You’re now a gay marriage opponent in 1986.

Whether this will actually change minds, of course, is far more doubtful. But I have gotten flashes of introspection out of this line of questioning, which may at least somewhat cause them to think twice about the next great trend. That’s the hope, anyway. The path to understanding is rocky and circuitous.

The Long Shadow of Decolonialisation

As part of my ongoing attempts to join the illustrious brotherhood of the Froude Society, I’ve been reading ‘The Bow of Ulysses’, by James Anthony Froude.

There’s a lot of fascinating points about the overall state of the West Indies in the late 19th century. But one point that stood out for me, at least up to Chapter 10 where I am now, is the realization that the process of decolonialization started much earlier than I’d thought.

In some sense, this is a specific application of one of Moldbug’s most insightful points – that the world has been getting more left wing for much longer than most people realize. And as a result, many of the social trends that we think of as 20th century phenomena actually have roots that start much earlier. This is the kind of insight that one is likely to get mostly by reading actual historical sources. Without actually going to the original sources, the temptation will always be to just substitute the modern understanding of historical issues.

The typical narrative of decolonialism starts with the only history that most people know – World Wars 1 and 2. Britain successfully defeated the Germans in both cases, but it was so exhausted, bankrupt and out of resources that it lacked the ability and will to maintain its colonies. Hence, it granted them all independence in fairly quick succession. The start of it all seems to have been Home Rule for Northern Ireland in 1922, after which things snowballed.

This is not a silly explanation, and probably has elements of truth to it. It is indeed true, as Wikipedia will confirm, that the height of the British Empire in terms of territory was achieved in 1921



If this is the main explanation, what should we expect to be the mood in 1887, when ‘The Bow of Ulysses’ was written? We arrive on the scene when Britain had an enormous empire, having been militarily dominant in Europe for at least 80 years. Victorian England was apparently jingoistic and patriotic about its Empire, as the story goes. Presumably the Empire was a source of considerable pride and fervor.

But Froude in 1887 paints a very different picture. The West Indies are depicted as being in a state of general decay. Froude contrasts the scene in Granada with the one described by Pere Labat, a Frenchman who had visited a century earlier, and had been optimistic about what the English would make of the colony after taking it from the French:

“The English had obtained Grenada, and this is what they had made of it. The forts which had been erected by his countrymen had been deserted and dismantled; the castle on which we had seen our flag flying was a ruin; the walls were crumbling and in many places had fallen down. One solitary gun was left, but that was honeycombed and could be fired only with half a charge to salute with. It was true that the forts had ceased to be of use, but that was because there was nothing left to defend. ... Nature had been simply allowed by us to resume possession of the island.”

Froude is primarily a historian, rather than a political theorist or an economist. He has a keen eye for the nuance and differences across the various islands he visits. But even in those that have fared better, such as Barbados, there is a strong sense that decay has been building for a long time, due to an interplay of causes:

“The position is painfully simple. The great prosperity of the island [Barbados] ended with emancipation. Barbadoes suffered less than Jamaica or the Antilles because the population was large and the land limited, and the blacks were obliged to work to keep themselves alive. The abolition of the sugar duties was the next blow. The price of sugar fell, and the estates yielded little more than the expense of cultivation.”

Countries have survived economic decline, of course. But in the West Indian colonies, the economic decline has a complex relationship with the declining English population, as Froude tells it, where cause and effect run in both directions. As the islands decay, the English have less economic incentive to remain there, tending to become absentee landlords. This in turn causes their estates to decay further, which reduces the incentives of the remaining English population to stay on the island. At some point, the exodus becomes self-fulfilling – English people leave just because they expect other English people to leave.

Froude’s description of St Vincent captures this mood of slow and inevitable decline very well:

“The prosperity has for the last forty years waned and waned. There are now two thousand white people there, and forty thousand coloured people, and the proportion alters annually to our disadvantage. The usual remedies have been tried. The constitution has been altered a dozen times. Just now I believe the Crown is trying to do without one, having found the results of the elective principle not encouraging, but we shall perhaps revert to it before long; any way, the tables show that each year the trade of the island decreases, and will continue to decrease while the expenditure increases and will increase.”

How many people do you think understand that white flight began not in the 20th century American mid-west, but in the 19th century British Caribbean?

Interestingly, the paragraph above is eerily prescient in that if you alter the frankness of the language and racial attitudes, its descriptions could apply very closely to both Rhodesia and South Africa in the mid-to-late 20th century.

Declining white population relative to the black population? Check.

Slow but inexorable economic decline? Check.

Meddling with governing arrangements to try to maintain the current power structure? Check.

Ultimate futility of such changes? Check.

The St Vincent Ghost of Christmas Future does not look encouraging. It’s not for nothing that my bet about South Africa six years ago is still looking pretty good.

What is remarkable, however, is that both Apartheid South Africa and Rhodesia were crushed under the weight of progressive western opinion, even in the teeth of strong efforts from the local white population to maintain the status quo. In the 19th century, there was no hegemon to push around the British Empire, and no major outside country demanding devolution of power (other than London elites). And yet the result was the same anyway. The same red/blue tribal and ideological conflict was playing out internally within London, rather than between Washington and Salisbury.

What is most striking in Froude’s descriptions, even more than the economic aspect of the decline, is the decline of will. Even by 1887, there is the general sense that people have lost the sense of quite what the empire is meant to be for. The West Indian colonies were fought over strongly when sugar was such a lucrative crop that they were valuable as a merely economic proposition. There remains a sense of noblesse oblige in remaining to secure good government for the subjects of these islands. But as the economy declines and the cost of the proposition increases, there arises a general question – what exactly are we doing all this for?

"Languidly charming as it all was, I could not help asking myself of what use such a possession could be either to England or to the English nation. We could not colonise it, could not cultivate it, could not draw a revenue from it. If it prospered commercially the prosperity would be of French and Spaniards, mulattoes and blacks, but scarcely, if at all, of my own countrymen. For here too, as elsewhere, they were growing fewer daily, and those who remained were looking forward to the day when they could be released. If it were not for the honour of the thing, as the Irishman said after being carried in a sedan chair which had no bottom, we might have spared ourselves so unnecessary a conquest.”

And remember, this is coming from someone who was for the most part a defender of Empire.

Without an obvious answer to this question, there arises a push towards general devolution of powers towards self-government. From the white populations of the islands, the primary causes seem to be quite frivolous: fashion, boredom, a desire not to be left behind, and the possibility of securing lucrative government appointments for themselves:

“Trinidad is a purely Crown colony, and has escaped hitherto the introduction of the election virus. The newspapers and certain busy gentlemen in ' Port of Spain ' had discovered that they were living under ' a degrading tyranny,' and they demanded a ' constitution.' They did not complain that their affairs had been ill managed. On the contrary, they insisted that they were the most prosperous of the West Indian colonies, and alone had a surplus in their treasury."

"They were a mixed and motley assemblage of all races and colours, busy each with their own affairs, and never hitherto troubling themselves about politics. But it had pleased the Home Government to set up the beginning of a constitution again in Jamaica, no one knew why, but so it was, and Trinidad did not choose to be behindhand. The official appointments were valuable, and had been hitherto given away by the Crown. The local popularities very naturally wished to have them for themselves.

This passage illustrates a number of points not widely appreciated in the common narrative. Firstly, the main instigators for political self-rule in these British colonies were not organized opposition from an unhappy local black population (such as was the case in the violent overthrow of the French in Haiti), but rather local English elites, who felt they personally stood to gain from the new arrangements.

But more importantly, these domestic forces on the side of political change are notable in Froude’s description for just how feeble and absurd they are. The only reason they can succeed is that a large portion of the elite in Britain have simply lost the desire to maintain the existing arrangements. As a result, the full independence obtained for these colonies in the 20th century was merely the last step in a gradual devolution of powers that began at around a century earlier. And the devolution of powers was actually quite acceptable to London elites, because they simply couldn’t be bothered with the whole thing any more. Froude describes the upshot of the meeting he talked about in the previous quote:

"The result, I believe, was some petition or other which would go home and pass as evidence, to minds eager to believe, that Trinidad was rapidly ripening for responsible government, promising relief to an overburdened Secretary for the Colonies, who has more to do than he can attend to, and is pleased with opportunities of gratifying popular sentiment, or of showing off in Parliament the development of colonial institutions. He knows nothing, can know nothing, of the special conditions of our hundred dependencies. He accepts what his representatives in the several colonies choose to tell him; and his representatives, being birds of passage responsible only to their employers at home, and depending for their promotion on making themselves agreeable, are under irresistible temptations to report what it will please the Secretary of State to hear. For the Secretary of State, too, is a bird of passage as they are, passing through the Colonial Office on his way to other departments."

World War 1 is not even a puff of smoke on the horizon, and yet the whole scene is already laid out for us. The most interesting part of reading Froude is to compare his descriptions to how events subsequently unfolded. Devolution ended up proceeding in largely the way he anticipated, but the process has a very different origin from the standard narrative today.

The larger point that emerges is that it is a mistake to judge the power of an empire, a people or a country by its territory or strength on paper. Societal decline is a slow process of erosion over decades, as institutions and the popular will get worn down. Abandonment of territory or government is in fact better understood as the last step of the process. Inertia alone will keep governing arrangements limping along long after the will to maintain them has actually disappeared. And the will to govern, once gone, is apparently a rather difficult thing to rekindle.

If all of this sounds somewhat like the latter stages of the American empire that we find ourselves living in, there is a reason. I can see why Moldbug recommended this book so highly.