Monthly Archives: April 2018

Wealth, Power, and Social Orders

26 Thursday Apr 2018

Posted by in Economics, History, Politics, Politics for Worldbuilders, State Formation, Uncategorized, Writing

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(This post is part of Politics for Worldbuilders, an occasional series.)

Suppose there were two people on a desert island. One owns a crate of food; the other owns a gun. What is going to happen?

Very shortly, the person with the gun is going to also “own” the food; the other person might be dead, or might be reduced to the level of a slave. (In the immortal words of Clint Eastwood, “There are two kinds of people in this world…”)

This illustrates the fundamental problem of property’s relationship to power: if an actor has a lot of power but little wealth, it will often try to gain more wealth through violence. If an actor has much wealth but little power, it will often try to use its wealth to gain power—if only for self-defense! And this dynamic has played out throughout history, leading to endless cycles of bloodshed and misery.

To survive, as North, Wallis, and Weingast (NWW) argue, groups of people need to come up with some solution to this danger—a way to align the interests of those who have wealth and those who have power. This is called a social order.

NWW identify three kinds of social orders: the foraging social order, the limited-access or “natural” social order, and the open-access social order. Foraging bands deal with the problem of wealth and power very simply: group members have roughly equal wealth, physical strength, and social status. There is relatively little incentive to take more with violence, as the other group members will unite to destroy you.

As we will discuss fully at another time, egalitarian bands use several techniques to enforce social equality: malicious gossip, mandatory gift-giving, and the threat of splitting the group if one faction becomes too powerful, to mention a few. However, these methods do not guarantee success; it often happens that a respected chief is able to accumulate enough personal loyalty, wealth, and prestige that he can gain lasting control over the group, which is passed on to his descendants.

That brings us to the limited-access order, which has been the predominant mode of social organization throughout the history of states. In a nutshell, those with power are also given control over wealth as a consequence, in a tacit agreement between elites in order to minimize conflict between them. In the words of NWW, “By manipulating privilege, interests are created that limit violence.” The most obvious example was European feudalism, in which brigands with large armies “went legit” and set themselves up as landed aristocrats, along with supporting networks of bureaucrats and clergy to help them run things. As NWW put it, “In all natural states, economics is politics by other means: economic and political systems are closely enmeshed, along with religious, military, and educational systems.” One could also look at Soviet-style communism, in which wealth flowed to the regime leaders by virtue of their control over the military and police apparatus.

A key aspect of the natural order was that impersonal law and procedural equality did not exist. The regime was not a neutral arbiter of people’s social and commercial disputes; it existed to defend the privileges of the ruling coalition as a class, and thus your treatment by the regime depended on your personal relationship with the ruler or other elites. As NWW put it, “Personal relationships, who one is and who one knows, form the basis for social organization and constitute the arena for individual interaction, particularly personal relationships among powerful individuals.” This limited the ability for people to form complex organizations, in business or society more generally: if they could not settle disputes internally, the state would not do the job for them and the organization would collapse.

Partly, this was by design. Elites protected the value of their “rents” by deliberately restricting the ability of those outside the regime to organize groups of people. It may seem strange to us, in our society of mass organizations, but in the feudal era it was tantamount to treason to organize an independent guild of craftsman outside of the regime-sanctioned guild, or to have a town of people who swore loyalty oaths to each other. That was why English entrepreneurs needed to petition the Crown for the right to form a joint-stock corporation, for example. And in Communist or Fascist regimes, even such mundane organizations as chess clubs needed to be approved by the regime. In this way, a limited-access regime is able to retain control over economic activity and take its cut, and to prevent possible competitors from arising via new organized groups in the populace.

Again, the natural order is the most prevalent throughout history. It is almost inevitable for those with power to demand wealth, for those with wealth to seek access to power, for the two classes of people to become incestuously intertwined and then to use their power to suppress competition. Think of the relationships in many Latin American countries between oligarchs and generals. Think of the paramount business associations and unions found in much of Western Europe, organized and maintained by the state, which have the effect of protecting incumbents and squelching entrepreneurialism.

The biggest problem with the natural order, however, is that it is fundamentally unstable. If someone becomes too powerful or too wealthy too quickly, suddenly there is a mismatch between what he has and what he (or others) might want. This generally leads to a breakdown of the delicate balance of power in the regime, culminating in violence or even civil war. This is why, argue NWW, autocratic regimes tend to underperform democracies in economic growth over time: because their relatively better performance during good times is outweighed by frequent destructive episodes of civil war and social breakdown.

(This is a crucial reason why dictators need to gain control over their countries’ wealth: not merely out of greed, but to protect themselves from rich competitors. Regime outsiders who strike it rich represent a deadly threat to the regime.)

The third form of social order, the open-access order, is a historical anomaly: it first emerged only a few centuries ago in Britain, as elites gradually transformed their particular privileges into general rights (through a long and subtle process that NWW discuss in detail). This does not merely mean democracy, though Britain and the United States are the chief examples. In the open-access order, elites have no special privileges in law, and military power is removed from partisan politics or the extortion of wealth, becoming a neutral enforcer of the political system; it stays neutral because no single political or business leader has the opportunity to bring it under his or her control.

What distinguishes the open-access order, and what makes it work, is that anyone is allowed to enter politics or business, and to organize companies or political parties or activist groups without the permission of the regime. And you need both parts: political freedom is protected by economic dynamism, as new companies challenge the old leaders and displace them before they get too cozy with the government. Economic freedom is protected by electoral competition and turnover in political leadership, which makes policies that benefit the mass populace relatively more attractive to ambitious politicians compared to policies that benefit a handful of powerful companies. (See the post on selectorate theory.) NWW call this the “double balance.”

It should be noted, however, that for all its achievements the open-access order is profoundly fragile and in danger of backsliding into a natural regime. This can happen in either of two ways (or both simultaneously). First is for the government to become too powerful relative to the economy, in which case it can throttle free competition. Second is for individual businesses to become too wealthy and influential compared to their competitors or the government, which leads businesses and governments to build corrupt relationships with each other, with businesses gaining special privileges and returning the favor by keeping favored politicians in power. To a degree, such backsliding is always present (the military-industrial complex comes to mind, as does the growing political power of Google, Amazon, and Facebook). And the natural tendency is for such collusion to accumulate like layers of sediment over time.

As Mancur Olson warns in his The Rise and Decline of Nations, it is always easier to organize a small group of powerful actors to lobby government for some subsidy, than it is for the mass of the citizens to organize against them. This is because the average person is barely affected by the average subsidy and won’t bother to get involved, whereas the beneficiaries have a great deal to gain. Over time, this tendency results in a steady calcification of the economy and the government, as interest groups accumulate to feast on the populace’s wealth through direct or indirect means. The only way to prevent such decline, Olson suggests mordantly, is for an invading army to sweep away the existing corrupt relationships.

Fortunately, this invasion can be metaphorical. David P. Goldman (AKA “Spengler”) argues that American corruption declined in the 1980s, as the new tech industry displaced the existing corporate titans despite their close relations with government. The same can happen in the political sphere, if a determined political faction dismantles corrupt bargains and is rewarded electorally for it. That is the strength of the open-access system.

But it remains fragile. In the United States, we ought to be alarmed by the unprecedented decline in new business formation in the past decade, and the manner in today’s tech oligarchy is actively stifling competition—even as they exert themselves in the political sphere.

As authors, how can we use these concepts? Here are some points of conflict: growing power brings the temptation to take the wealth of others. Growing wealth attracts violent vultures, or inspires the wealthy to gain power as well. Sudden shifts in power and wealth will threaten to destabilize the balance of power in a society, with war as a likely result. (A brief glance at the history of the Congo will provide many depressing examples.) These tendencies are rich ore for story conflict, and the thoughtful author can build powerful plots from them.

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(And don’t forget, I’m accepting submissions to a fantasy anthology, Ye Olde Magick Shoppe. Check out the announcement and start writing!)

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Legibility and Power

22 Sunday Apr 2018

Posted by in Politics, Politics for Worldbuilders, State Formation, Uncategorized, Writing

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(This post is part of Politics for Worldbuilders, an occasional series.)

Suppose you wake up one day to find that you are the new king of your very own state. After a moment of shock, you start to think about all the cool things you can do now—the laws you can pass, the taxes you can collect, the armies you can raise. But then you realize that even if you pass a law, you don’t know if people will follow it; even if you impose taxes, you don’t know if people will pay them; even if you raise an army, you don’t know whether it will remain loyal. In short, sitting in your palace at the center of your new domain, your first problem—maybe your most severe problem—is being able to perceive what people are doing.

There are several strategies you could use in response. You could appoint trusted subordinates to carry out your will and enforce your laws (see my post on English aristocrats), if you have such trusted subordinates! You could impose head taxes or customs duties at the city gates or other travel bottlenecks, so people passing through will be unable to avoid them. But each of these approaches has limits. A more ambitious strategy, used by practically all states throughout history, is to deliberately increase the populace’s legibility: the degree to which its activity can be monitored.

The classic discussion of legibility is by James C. Scott, across several of his books—most directly, Seeing Like a State and The Art of Not Being Governed. In a nutshell, states force changes in their subjects’ behavior in order to more easily monitor and control them. One example is having people carry an identity card; in our modern society, this is convenient for businesses as well as governments, but back in the days when most people lived in the same village all their lives, and knew each other intimately, the only purpose of identity papers was for the traveling government official to know whether you had paid your taxes this year.

More drastic examples include German “scientific forestry,” in which a complex forest ecosystem was demolished and replaced with a monocrop of elm trees, grown in carefully measured rows and columns, so that the lumber yield from the forest would be predictable (in theory); the frequent practice in Southeast Asia of forcing your peasants to live in your capital city, so that their behavior can be easily observed; demanding that they all plant wheat, which can be easily assessed and taxed just before harvest, and making it a crime to grow potatoes (which grow underground and can easily be concealed from the tax-man); and forcing people to take on last names, to make censuses easier and to better distinguish “William of Hole-in-the-Wall” and “William of Top-of-the-Hill” in the official records. (See e.g. here.)

Writing in 1951, Hanna Arendt imagined with horror what Soviet intelligence would be able to do if they possessed a social-network graph of their captive populace, the better to monitor dissidents and punish them, their families, and everyone they ever knew. (Of course, we today have obligingly entered ourselves into such a social-network graph, providing it with intimate data about our lives that any intelligence service would drool over—to our growing sorrow. We also carry tracking devices in our cars and on our persons! Truly, we are the most legible generation in all of history.)

On the flip side, people strive to make themselves less legible to the state, to evade its control. This is one reason why merchants, nomadic communities, and “barbarians” are typically viewed with suspicion by “official” society, since their capital is easily moved and they are hard to tax or control.

In general, however, the basic rule is more legibility = more control.

This is not just true with states. One of the enduring problems of business organization is how to make sure that one’s employees are doing what they are being paid to do. Production quotas were an early (and crude) mechanism to monitor employees; nowadays, employers often use video cameras, monitoring software on work computers, and the like. You can even see this concept on the personal level: think of the controlling husband who demands that his wife use only a credit card that he has the password for, the better to control her spending. (Or a controlling wife, or that matter.)

The theme of legibility is a rich vein of conflict for fiction. An especially important spur to conflict is when a new technology, or form of magic, or a new type of organization such as a police force or intelligence service, disrupts the status quo of legibility and makes people easier or harder to monitor. This can be something as mundane (to our eyes) as the first census in a country, in which the populace suddenly is categorized and sorted by the regime to enable better control. As an example, the Biblical figure of King David carries out a census and is said to have sinned grievously by doing so—so much so that the realm is punished with a divine death plague. The political scientist in me wonders whether this “death plague” is a coded reference to violent popular resistance to the census; in Southeast Asia, as Scott notes, the very first objective of rioting peasants often was not to lynch the local landlord (that came second), but to burn down the government’s records office.

Conversely, think of the heartburn that some governments are feeling over the growth of cryptocurrencies, which aspire to be completely untraceable and thus beyond the reach of taxation authorities.

In your fiction, the interplay between legibility and obscurity can drive compelling conflicts with the state, or with an employer, or a local mafia boss, or even within families. For states, the topic has implications for taxation, how armies are raised and led, and a host of other details. Again, a single fundamental constraint gives rise to many rich problems, all of which can be of service in your writing.

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(And don’t forget, I’m accepting submissions to a fantasy anthology, Ye Olde Magick Shoppe. Check out the announcement and start writing!)

Keeping Power

20 Friday Apr 2018

Posted by in Politics, Politics for Worldbuilders

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(This post is part of Politics for Worldbuilders, an occasional series.)

Fiction writers often create elaborate imaginary kingdoms or galactic empires, ruled by iron-fisted dictators or feckless legislatures or councils of wise elders. Often, however, the politics of such regimes often falls flat. Powerful figures line up for or against the protagonists seemingly at random, or “because the author says so.” While this can be fine, depending on the main emphasis of your story, it would be better to understand the dynamics of political conflict in your imaginary regime, so that you can use it as a basis for creating a compelling story.

But there are many different kinds of regimes: democracies, dictatorships, aristocracies, each of which has innumerable flavors and nuances in their structures. Does an author need to become an expert in all of them to write good political conflict?

Not necessarily. A good starting point would be a general theory of how regime leaders stay in power or get overthrown—simple enough to be easily applied to your story, flexible enough to be relevant to ancient kingdoms, modern democracies, and everything in between. Fortunately, there is such a theory, developed by Bruce Bueno de Mesquita and his collaborators, and known in comparative politics as selectorate theory. It goes like this:

Imagine a Kingdom of Crelia. Its king, Rothgar the VIII, rules over a strong aristocracy headed by nine barons, not all of which like him very much, and a much larger pool of powerless peasants who pretty much have to suffer whatever comes. Rothgar doesn’t have to worry much about what the peasants think; but he must pay attention to the barons, because if enough of them turned against him, Rothgar could be overthrown and beheaded. Fortunately, he doesn’t have to keep all of them happy all the time—just a fraction of them, let’s say four. Their strength, plus his own, are enough to keep the other five barons in check.

To keep his supports happy, therefore, King Rothgar keeps their taxes somewhat lower than the other five barons, gives them more privileges at court, and sets royal policy to favor their interests over those of the five other barons, to some degree. (The peasants, needless to say, get milked for all that Rothgar and the barons can get.)

In terms of selectorate theory, the peasants (Residents) have no role in choosing the king. The nine barons, on the other hand, make up the Selectorate—the group of people with the right, or the power, to influence the selection of king. The selectorate is the outer circle; the inner circle, on the other hand, is the Winning Coalition, the four barons who make up Rothgar’s chief supporters.

Rothgar’s survival depends on maintaining his winning coalition. But he need not keep it as the same four barons; indeed, his main leverage over them is the threat of replacing a pushy baron with one of the other five barons in the selectorate. That threat allows him to keep the expense of maintaining his allies down to a reasonable level, so he can keep more taxes to himself.

His threat would be even more effective if he could expand the size of the selectorate, by appointing five or six peasants to the nobility. Now, there are fifteen barons total, and the king still needs only four of them as his supporters. With so many more options to choose from, Rothgar need pay a much lower price to secure his base of support. Any baron that tries to hold out will quickly be replaced by a more cooperative rival.

However, suppose that there are not nine total barons but only six. Then, each of the four supporter barons is in a powerful position; the king will have a much harder time replacing them individually, and has no way to replace them all. They can then extort a heavy price for their support, perhaps so heavy that the king’s own revenue is squeezed and he loses power over time. The same would be true if the king suddenly needed seven barons out of nine, instead of just four. (The country, needless to say, will suffer as spending on public goods drops off a cliff.)

As a rule, if the winning coalition is large relative to the size of the selectorate, it can extort a high price. If it is small relative to the selectorate, the ruler can keep more revenue for himself. At the limit, if you make the entire populace part of the selectorate while only requiring a tiny winning coalition (for example, with a strict meritocracy or an authoritarian party-based regime), then your supporters will have to make do with meager benefits indeed.

In general, therefore, the ruler has an interest in expanding the selectorate to cover a larger part of the population, and the selectorate members have an interest in restricting its size. Likewise, the ruler has an interest in reducing the necessary size of the winning coalition, and the selectorate would want to increase the size of the winning coalition.

You can see these dynamics play out in the political struggles over extending the right to vote. In the United States, for example, it was originally the case that only property-owning freemen could vote, about 6% of the population. Government policy thus tended to favor the landowning class. Over time, the right to vote was slowly extended to most white men, then most men, then most adults. At each step, some who already had the vote feared that their interests would be harmed by the new voters, and fought bitterly against their inclusion. And at each step, the size of the winning coalition grew along with that of the selectorate, and government policy thus changed to benefit larger portions of the total populace.

This brings up an important point. When the winning coalition is small, it can be bought off with policies that benefit itself, even if those policies harm the populace at large (as they often do; it is easy to tax the populace and enrich a handful of supporters). But as the winning coalition grows, relative to the populace as a whole, it becomes more likely that policies benefiting the winning coalition will also benefit the populace in general.

This, argues selectorate theory, is the main reason that democracies tend to be better run (on average) than dictatorships—the ruler must set policies that benefit 50% of active voters at a minimum, instead of a small handful of powerful nobles, generals, or businessmen.

The model can fit any regime you imagine. Communism? The Communist Party membership was quite large, compared to the size of the Politburo; regime figures could be replaced easily, and often were. Banana republic? The key figures are the generals and the main business leaders, who are hard to replace and thus demand a high price for their support. (For more, read The Dictator’s Handbook.)

How can you use this in your fiction? Selectorate theory gives you several points of conflict to focus on: expanding or shrinking the winning coalition, or the selectorate; exactly who gets to be in the winning coalition; policies that benefit the winning coalition and harm the rest of the country, or an effort to change such policies as winning coalitions shift; a ruler who allows his winning coalition to fall apart, so a challenger can assemble such a coalition of her own. You can tune the details to fit your particular setting; but selectorate theory gives you a strong foundation on which to build the political conflict in your story.

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(And don’t forget, I’m accepting submissions to a fantasy anthology, Ye Olde Magick Shoppe. Check out the announcement and start writing!)

Class Conflict, Part One

09 Monday Apr 2018

Posted by in Better Fantasy, Politics, Politics for Worldbuilders, State Formation, Writing

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(This post is part of Politics for Worldbuilders, an occasional series.)

Imagine a small nomadic band of hunter-gatherers, living a carefree existence in the wild hill country—let’s call them the Pandu. They own little property aside from the weapons and tools they carry and the clothing they wear. Let’s even suppose that they practice free love, and that children are raised communally. Finally, imagine that everyone performs the same jobs: hunting, foraging, making clothing and tools, raising children, and making decorative jewelry that looks pretty (we can call these “prestige goods”).

One might think that the Pandu ought to be the perfect egalitarian society, without conflict over possessions or political power. And actual foraging societies do tend to be nearly egalitarian (for reasons discussed in Michael Taylor’s Community, Anarchy, Liberty, among other authors). Still, they are not perfectly egalitarian, even if there are no hard class divisions. Let’s see why.

Let’s say that some Pandu are somewhat better at hunting or foraging than others. Such “Good Hunters” manage to gather enough food in a shorter time, so they can spend more time creating prestige goods—or else they can gather extra food and trade it with others for their prestige goods. Over time, they will have more jewelry than less skilled hunters. At this point, jewelry starts to be not just pretty shiny things, but a sign of hunting skill.

Good Hunters will start to attract more intimate partners because of their greater prestige, or simply with gifts of food or jewelry; lesser hunters will lose out, in relative terms. If the story ends here, we would have a single-class society shot through with simmering tensions and periodic fits of jealousy-driven violence.

Now imagine that successful hunters had the right to eat their prey’s hearts, which grant magical powers and even greater hunting skill. Suddenly, we have a “rich-get-richer” scenario: Good Hunters would soon outstrip their less-skilled rivals, becoming a class in themselves that eventually possesses far more food, prestige, and social attractiveness than the “lower” class. The lower class could still feed itself, but would lack prestige and social standing, and likely intimate partners as a result—and would have no way to catch up, at least not through hunting skill.

Still, both of these classes would have broadly similar interests: they hunt the same game, gather the same foods, value the same goods. So long as interclass jealousy is kept under control, perhaps by social rituals that periodically erase class distinctions, the Pandu band will remain unified.

But suppose that the less successful hunters, recognizing that they cannot compete at hunting, decide to begin farming instead so that they can win prestige and intimate partners of their own. Suppose they are successful, and produce as much food on average as the Hunters do, achieving a broadly comparable social status. How does this change the picture?

For one thing, while the Hunters would continue their nomadic lifestyle, following the game as the seasons shift, Farmers suddenly are tied to a fixed plot of land. Even if they can travel during fallow seasons or even between the planting and harvest time, they would have to return to their plots of land to harvest their crop. Even if they plant multiple crops in multiple locations and circulate between them, they are now less mobile than before.

What’s more, Farmers have to feed themselves somehow while their crop is growing. They might borrow food from fellow Pandu, promising to repay them at the harvest. Likely, they would borrow from the Hunters. But perhaps the Hunters would take advantage of the new situation to demand back more food than they lent.

Suddenly, Hunters and Farmers have opposing interests. Hunters want to be mobile; Farmers less so. Hunters want their rights as lenders upheld, and perhaps to gain additional privileges in the process; Farmers would want to defend themselves against such privileges, or even to deprive Hunters of their repayment.

So what policy will the Pandu band follow? It will depend on the relative strength of each class, the ideological beliefs of the Pandu, and the skill of the band’s mediators or leaders. At all times, clashing interests will pull the band in different directions, and perhaps pull it apart entirely.

Class can go beyond simplistic notions of upper, middle, lower—it can also be derived from different and conflicting interests. And conflict, needless to say, is at the heart of good stories. You can generate powerful conflicts by depicting societies with opposing class interests, and those conflicts will be all the more compelling if your social classes are more than caricatures.

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(And don’t forget, I’m accepting submissions to a fantasy anthology, Ye Olde Magick Shoppe. Check out the announcement and start writing!)