Category Archives: Politics

Different Types of Federalism

31 Thursday Jul 2025

Posted by in Politics, Politics for Worldbuilders, State Formation

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Modern fantasy/scifi seems to not feature many federal countries (or as we will call them, “federations”)—that is, countries made up of several subunits such as states or provinces, each with certain powers that are distinct from those of the central government. (If a central government has total control over a country, and its subunits or provinces are merely administrative tools of the central government, this is called a “unitary state.” The “districts” in The Hunger Games come to mind.) Yet a federal design gives worldbuilders lots of opportunities for cool setting details and plot conflict.

I live in the United States, and some of my fellow Americans might assume that federations pretty much work the way things do in the U.S.: the states join together as co-equal partners under the federal government, with the same privileges and rights (that is, our federalism is symmetrical), initially for the sake of mutual defense against an outside threat and later to participate in the growing power of the strong federal government. (Alfred Stepan calls this “coming-together federalism.”) In fact, only a handful of federations were formed via coming-together federalism: the United States and Switzerland (which predated the French Revolution), and New Zealand (which did not last long as a federation).

William Riker argued that federations with a weak central government tended not to last long. They would be preyed upon by external enemies, lose internal cohesion as the subunits pull away from the central government and each other, or else decide to strengthen their central government in response—as the U.S. did, when we replaced the Articles of Confederation (which featured a weak central government heavily dependent on the states for its revenue) with the Constitution (featuring a much stronger Federal government with its own taxing power and laws).

(We can see some of these tensions working in real time in Europe, as the E.U. attempts to increase its control over member states and some states resist bitterly, with the U.K. leaving the E.U. altogether.)

If a federation has a strong central government, meanwhile, the central government tends to accumulate more power over time. As Riker put it, “If a federalism is centralized, then the ruler(s) of the federation have and are understood to have greater influence over what happens in the society as a whole than do all the rulers of the subordinate governments. And, having this influence, they tend to acquire more.” Eventually, it might dispense with the federal form altogether and restructure as a unitary state, as New Zealand did.

(This is comparable to the dynamic between a Palace ruler and a Nobility in the model of Samuel Finer, which I wrote about in my first worldbuilding book.)

But that is only one way to do things. (Which is great news for worldbuilders, because it means we have a great set of flexible concepts to make interesting settings with.) Following Stepan, we can actually talk about three ways in which a federation might form:

  • Coming-together federalism;
  • Holding-together federalism; and
  • Putting-together federalism.

Moreover, there are many other possible federal or quasi-federal arrangements other than the symmetrical model. Daniel Elazar lists several, which we will discuss a bit later. First, let’s look at the different ways a federation might form.

Coming-Together Federalism

Riker argues that when a federation is formed among formerly independent states, it only remains a federation if it’s in the interest of both the political organizers and of the states. On the side of the organizers, they should want to expand their power over the states (perhaps over the other states, if the federation is spearheaded by one or two of the stronger states), but not be strong enough to do so by force. If they were strong enough, they would simply conquer or annex the states and form an empire, with a unitary government. (Stepan partly disagrees, as we will note below.)

On the part of the states, they need to have a sense of their own independent identities (or they would simply join into a larger empire), but should want the benefits of federation more than they want to remain independent. Most frequently, this includes protection from external attack, but also the opportunity to benefit from the federation’s increased power—especially the power to invade foreign neighbors!

If the federation ceases to be in the interest of the organizers, or of the constituent states, Riker says, then the federation eventually collapses—either because the states pull away, or because the central government breaks the federal bargain and becomes a unitary state.

Holding-Together Federalism

In another pattern pointed out by Stepan, a formerly unitary country may decide that some sort of federal structure is needed to prevent the country from breaking apart altogether. This could happen if the state is made up of several ethnic or linguistic groups in tension with each other—whether they have coexisted in one country for centuries, as with Belgium, or were more recently glued together, as with India. To preserve the country as a whole, the political regime is willing to transfer some of its power to the subunits (even if it has to create the subunits from scratch, as India frequently does).

Stepan points out that federalism seems to be the government structure best able to preserve the stability of a multinational country, because it best allows smaller communities to exercise their rights as communities. “In fact, every single longstanding democracy in a territorially based multilingual and multinational polity is a federal state. . . . [S]ome groups may be able to participate fully as individual citizens only if they acquire, as a group, the right to have schooling, mass media, and religious or even legal structures that correspond to their language and culture. Some of these rights may be described as group-specific collective rights. Many thinkers in the liberal tradition assume that all rights are individual and universal and view any deviation from individualism and universalism with suspicion, but this assumption is open to question.”

Putting-Together Federalism

Contrary to Riker, Stepan notes that some nondemocratic states, seeking to expand their power over their neighbors or actually conquering them, will preserve the conquered states in a federal arrangement. This is especially likely when the conquered states have their own durable national identities, similar to the holding-together model. Preservation of the federal subunits often allows for smoother administration of the absorbed territories, and makes submission to the conquerer somewhat more palatable to the conquered. Thus, federation can be a type of empire-building strategy.

The most prominent example was the Soviet Union, through which communist Russia dominated the formerly independent states that had broken away from the collapsing Russian Empire. The USSR recognized the linguistic and ethnic pluralism of its vast territories via the separate socialist “republics,” though Russia was unquestionably the top dog and extracted much wealth and resources from the peripheral republics.

(This model is partly replicated within modern-day Russia as well. Moscow treats Russia’s outlying provinces effectively as conquered territory, sucking up their wealth and manpower to benefit the elites.)

Different Varieties of Federalism

We mentioned above that not all federations are symmetrical—not all of the subunits have the same powers and privileges as each other. This is where we have tremendous scope to be creative.

Daniel Elazar noted, “The simplest possible definition [of federalism] is self-rule plus shared rule. Federalism thus defined involves some kind of contractual linkage of a presumably permanent character that (1) provides for power sharing, (2) cuts around the issue of sovereignty, and (3) supplements but does not seek to replace or diminish prior organic ties where they exist.” He lists several types of federal associations between states, aside from the symmetrical federation:

Before the United States Constitution introduced the modern style of federalism, Europe only knew of the confederation. In a confederation, the constituent states still mostly govern themselves, joining together only for limited purposes (usually mutual defense and foreign policy).

In more recent times, new flavors have developed. In a federacy, a larger and smaller power join together in an asymmetric relationship. The smaller power has more autonomy from the federal arrangement than the larger power, or existing subunits of the larger power if there are any; in return, it also has less influence over the governance of the larger power. Real-life examples include Arab Iraq and Iraqi Kurdistan, Serbia and Kosovo, or the United States and Puerto Rico.

An associated state arrangement (also called a “compact of free association”) is similar to a federacy, except that either member can unilaterally decide to pull out of the arrangement (rather than needing mutual agreement). Consequently, the member states have even less influence on each other than under a federacy. Examples include the United States and Micronesia, and (for a time, until they withdrew) the U.K. and several of its former possessions in the Caribbean.

Common markets are confederations that focus on economic cooperation, rather than broader political cooperation—such as the Caribbean common market, CARICOM. That said, a common market can sometimes act as a precursor to broader political unions, with the key example being the European Economic Community’s transmogrification into the European Union.

We can also usefully compare federalism with a different political model, the consociation, in which a country is divided not into territorial subunits, but into religious, cultural, ethnic, or ideological groupings, each with its own privileges. Elazar comments, “It is generally agreed that consociational regimes are based on the agreement of elites, each of which must be capable of maintaining control over its own segment in the grand coalition. Thus the segments have to be organized internally on hierarchical lines but governed by the people selected to be at the top.” This is a common strategy where a country is subject to dangerous tensions between communities that must nevertheless figure out how to coexist.

For example, Lebanon features a power-sharing agreement between its Sunni, Shia, and Maronite Christian communities, under which all three must agree on major policies and the appointment of political leaders. Moreover, it has been agreed that the president must be Maronite, the prime minister must be Sunni, and the speaker of parliament a Shia. Consociational arrangements are often more fragile than federal ones, as the Lebanese example shows; but that is often more the fault of the existing tensions between communities that consociationalism is meant to manage.

****

Summing up, we have a whole range of ways in which political units can associate with each other. We can also imagine ways in which the federation members might come into conflict. Subunits might demand more autonomy, or one subunit might block a national policy that other subunits might want, or vice versa. Independence movements might strengthen in a subunit based on linguistic or national identity, if the larger federation does not adequately respect the community’s desires. And on and on.

As a worldbuilder, can you think of ways to use these concepts to make your story conflicts more compelling?

Types of Government Legitimacy

23 Sunday Feb 2025

Posted by in Politics, Politics for Worldbuilders, Writing

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Why do people obey a government? And how can you use this in your fiction?

At the most basic, people obey for two reasons: they want to, or they are forced to.

(And for many people, both of these are at work at the same time. Margaret Levi calls this quasi-voluntary compliance, and it’s far more effective than relying on either mechanism on its own.)

For the moment, let’s talk about why people might want to obey a government—or to be more precise, because they believe that they should obey. This is the concept of legitimacy, that a government has the right to do what it does, and has the right to demand obedience from its citizens (and conversely, the citizens have a moral obligation to obey). Philosophers and governments have offered many reasons why citizens should obey their governments, but we can boil them down to four categories:

1. Justice demands it. This category encompasses theories of divine right or divine justice; we obey the government because the gods tell us to. It also includes non-theistic theories of justice; if the institutions of government help to maintain a just society, some philosophers say, that creates an obligation on citizens to uphold those institutions. Even if a particular law may be unjust, they say, it still might be necessary to obey the law in order not to weaken the whole system, which maintains social order and justice.

Needless to say, if the gods do not exist or do not merit obedience, or the society as a whole is unjust, this claim to legitimacy loses some of its force. At the extreme, if society is so unjust that total societal collapse would be an improvement, then justice would demand disobedience rather than obedience.

2. Loyalty to our nation compels us. This theory of legitimacy is based on two claims. First, that we each are a part of a larger whole—a family, a nation, a species—and owe our service and sometimes our very lives to that larger group. Second, obedience to the government is the best way to advance the good of the larger group.

If one is more of an individualist, rejecting claims of duty to the group, this claim to legitimacy loses its force in turn. Even if someone believes in group duties in theory, she might reject the worthiness of her particular group and seek to affiliate with another group instead. Finally, one might believe that his government is actually harming the interests of his group, and believe that group loyalty demands disobedience to the government instead.

3. We empower the government through consent. From John Locke on, modern thinkers often base political legitimacy on the consent of the governed. Some thinkers go so far as to say that only consent can ground the power of the government, and that all the other claimed bases for legitimacy (like divine right, for example) are insufficient.

The tricky thing is that in the real world, citizens have almost never freely consented to their governments. In the United States, for example, we adopted the Constitution over 200 years ago; almost no American since then has ever been given the choice to consent to the government we live under. Facing this difficulty, advocates of consent theory often fall back on some version of tacit consent; by continuing to participate in society, you implicitly endorse the original episode of consent.

But tacit consent has limited moral force, because citizens are almost always subject to some sort of constraint or coercion. For example, if we are born in a given country, it takes a great effort to move to a different one. Voting in an election does not necessarily imply consent to your government; you might be voting for the lesser of two evils, out of mere self-defense. And there is no practical way to “secede” from your government if you do not want to consent to its rule over you (so-called Sovereign Citizens notwithstanding!). So one could reasonably argue that mere participation in society does not imply that you consented to that society.

4. Legitimacy from providing benefits. Some thinkers essentially believe that when the government provides a benefit, such as health care or national defense, that creates an obligation in the citizenry to obey—perhaps out of gratitude, perhaps out of the need to participate in order to make the benefit available to your fellows.

These theories are hotly contested by thinkers like Robert Nozick, who argued that you can’t just give somebody something that was not asked for and then demand payment. Others who cautiously accept the principle still object that it doesn’t establish the degree of obligation created; if the government provides a public library, does that obligate you to fight and die in its wars?

That said, this is a very common form of legitimacy in smaller groups such as tribal bands; the chief sees that the tribe is fed, and demands obedience in return.

* * *

In the real world, elements of all of these theories are usually at work. For example, you might obey the king because you believed he was blessed by the gods, but also because trying to overthrow him would lead to massive death and upheaval, and because he’s doing a good job at fostering commerce.

In your stories, you can judiciously emphasize any of these ideas as they mesh with the story you want to tell. Clarity on how a government justifies itself, and why its citizens might agree or disagree, will help you develop your story’s themes more strongly.

Governments and the Quick-and-Dirty Triangle of Public Policy

09 Monday Oct 2023

Posted by in Economics, Politics, Politics for Worldbuilders, Writing

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In the previous post, I discussed several basic functions of government—while inserting snide remarks about whether governments actually carry out these functions. Anyone who pays even the slightest attention to the news will understand why; governments often claim to pursue a given goal, but then enact policies that seem designed to a) be ineffective at achieving that goal or actually make the problem worse, and b) happen to benefit the ruling faction politically or monetarily.

Why? In the basic model of public-choice economics, it is because all government officials act in their own personal best interest, at all times, even if that involves neglecting or victimizing the populace. If there is any hope of good policy, says this model, it can only be when it is in the personal interest of the officials to deliver good policy. (This is why democracies tend to have better policies than autocracies, at least on average: politicians need to at least look like they are furthering the interests, or perceived interests, of at least half the voters.)

We needn’t accept the strong form of this model, at least not all the time. We can still recognize that some political figures and bureaucrats genuinely want to do a good job. But good policy is hard to pull off, even with the best of intentions, because governments don’t always have enough information to make good judgments about complex policy choices, and often don’t even understand the information they do have. This is related to the “knowledge problem” of Hayek—people are better at accurately perceiving their own personal surroundings and experiences than they are at interpreting imprecise representations of the wide world that have gone through several rounds of abstraction and reification.

In an environment of insufficient information, it is very easy for even a small faction of self-interested actors to put their thumb on the policy scale, so to speak, so that policies end up favoring them. It is also easy for well-intentioned ideologues to push policies that seem nice in the abstract, but prove hideously inappropriate for the real world.

For worldbuilding purposes, we can boil down the messy workings of policy formation into a triangle with three points. One point represents the “best” policy that could be arrived at, assuming that governments were perfectly benevolent and omniscient. (This assumes, of course, that you know what the “best” policy would be for your invented society; but hey, it’s your story.)

A second point represents the most likely policy to be arrived at assuming benevolent intentions but imperfect decisionmaking, given the limitations of available knowledge and skill among policymakers, their mental models, and the capabilities of existing government structures, among other bits of administrative friction. (You can throw in the workings of the political system as a further obstacle, if you want to be ambitious!)

A third point represents what policy would be set if government officials were strictly maximizing their own personal interests (or alternatively, the interests of the state as against the populace or rival states—or a combination of both!). This is trickier than it seems; as we discussed with regard to taxation, an actor’s evaluation of its best interest will depend on its values and time horizon, among other things. But as a rule of thumb, it still gives you something to hang your hat on.

This is not meant to be a rigorous exercise, but a quick and dirty way to think about policy choices in your invented setting. For any given society, or even for specific policy areas in the society, you can arbitrarily decide at what point (within the triangle) public policy is going to land—and then you get to imagine how it ended up that way!

*****

(This post is part of Politics for Worldbuilders, an occasional series. Many of the previous posts in this series eventually became grist for my handbook for authors and game designers, Beyond Kings and Princesses: Governments for Worldbuilders. The topic of this post belongs in the planned second book in this series, working title Wealth [Commerce?] for Worldbuilders. No idea when it will be finished, but it should be fun!)

Government’s Role in the Economy

09 Monday Oct 2023

Posted by in Economics, Politics, Politics for Worldbuilders, Writing

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We’ve repeatedly alluded to the role of governments in structuring the economy. The full role of government goes well beyond a single blog post, or even a single book, but we can still lay out a few basic ideas to structure how we think of governments’ role in the economy in our worldbuilding settings. We’ll begin by talking about what ideal governments do, and in a later post we will discuss reasons why the real world often falls short of the ideal.

Let’s begin with a simple inventory:

Providing and enforcing laws. We’ve discussed how commerce thrives in stable societies where the threat of violence and banditry is low, and we can rely on enjoying the fruits of our labors even far in the future. The more secure that property rights are, the more complex commerce tends to become.

Notably, you don’t need a formal government to have and enforce laws. Several societies achieved a degree of social and commercial stability without a formal government, because a customary or religious set of laws was widely agreed upon and followed. Examples were/are the Nuer, Somali tribes following customary law, and the Jewish diaspora. Some societies in a border region even maintained a shared legal code even while at war with each other, such as the Law of the Marches between England and Scotland.

Similarly, it’s not necessary that a territory follow a single law code. In medieval England, the law merchant would compete with royal courts, which in turn competed with the courts of local lords. Today in America, the states often compete to provide laws that are favorable to particular industries, and companies also can use private arbitration to settle disputes.

Still, it seems that formal governments tend to be more effective at maintaining a stable legal system, on average. Or at any rate, the provision of law and order is one of the most compelling justifications that governments can give for their existence.

Providing public goods. How one defines “public goods” strongly depends on one’s level of cynicism, but in general we can say that there are certain kinds of things that governments have historically paid for that often do not get paid for in their absence. Militaries, road networks, and massive irrigation projects and drinking water are typical examples. One of the classic justifications of government is that by levying mandatory taxes and directing unified projects, it can overcome the collective-action problem and ensure that everyone benefits from public goods that everyone wants, but no one is able to fund on their own.

Again, many are quick to label something a “public good” when in fact it could be provided privately, as long as the necessary incentives are created and methods exist to coordinate people and resources. Mercenary units have existed since the dawn of time, and private companies often build roads and water projects if they are able to charge for them. Robert Nozick imagined a contractual mechanism in his Anarchy, State, and Utopia for people to commit money to a project and only be charged if enough other people join, and today we actually do this on crowdfunding sites such as Kickstarter. I myself have hoped for a long time that we could replace much of our tax code with crowdfunded public works (and published a rather amateurish short story on that theme—but we all have our old shames!).

Nevertheless, there is a sense felt by many that certain goods and services ought to be provided collectively, and not through market mechanisms. National defense and crime prevention are prime examples.

Redistribution of incomes. The oldest governments known, in ancient Egypt and Mesopotamia, spent the bulk of their efforts on gathering food and then distributing it to their populaces. Ever since, some level of social support has been practiced by nearly all governments. The scale of such redistribution varied widely between, say, the Soviet Union and Victorian England. But in general, governments usually recognize that their power comes from their (control over the) populace, and that allowing large numbers of people to starve to death does not serve their interests (if it can be prevented cheaply enough, anyway).

Redistribution is expensive, and often bitterly resisted by those who are forced to pay for it. And it is also quite common for redistribution to be manipulated to produce, ahem, unexpected beneficiaries.

Aside from the three roles above, economists typically point to three other roles that seem, to me, rather less universal:

Stabilizing the economy. Economic fluctuations and crises are of concern to states, for several reasons. (But not all states are able to respond usefully; and not all states’ responses are effective.)

In one interesting example, he Babylonian Talmud records that the Temple in Jerusalem would use a portion of its treasury to buy food products if market prices were unusually low, and then sell them to the market once prices rose. [Find the cite.] The text is silent on whether such market activity was meant to be stabilizing; but the profits from such trading were spent on “extra” sacrificial offerings, rather than being retained, suggesting that profit was not the motivating factor.

Maintaining competition (or the reverse!). Often, governments use regulations to prevent markets from being dominated by particular actors. For example, governments might impose a fixed rate on rail freight so that farmers are not squeezed by the rail companies. A city might require that marketplace stalls have a maximum size, so that many sellers can fit in the town square. 

Conventional economists aside, often governments do the opposite: reserve an entire market sector for a designated monopoly. This can be done for purely self-interested reasons (such as to enrich a government minister or an ally), but governments often justify monopolies in situations with high barriers to entry, such as the need to outfit a private navy to deepen trade links with the East Indies, or building fantastically expensive semiconductor plants. Creating a monopoly, it is sometimes believed, can prevent “wasteful” competition in situations where it would yield little benefit.

Similarly, state monopolies are often advocated for in situations prone to “natural” monopolies, such as a water utility that needs to build pipes to every building.

Finally, and most speculatively, we have:

Correcting externalities. Often, commercial activity creates costs that the participants can shift to others, such as pollution or the depletion of natural resources. Since the participants don’t bear the whole costs, they have incentives to act in ways that are, globally speaking, not optimal. Governments often (claim to) act to control such misaligned incentives. For example, the U.S. government has a cap-and-trade system to limit harmful emissions from power plants, and many have advocated for a carbon tax to discourage energy-intensive behavior.

*****

Now, merely listing the potential activities of governments does not tell you what governments actually do, or why. As we know, governments often have different motivations than the welfare of their peoples. But this post is already going long, so we will discuss a three-part model for government motivations in a future post.

*****

(This post is part of Politics for Worldbuilders, an occasional series. Many of the previous posts in this series eventually became grist for my handbook for authors and game designers, Beyond Kings and Princesses: Governments for Worldbuilders. The topic of this post belongs in the planned second book in this series, working title Wealth [Commerce?] for Worldbuilders. No idea when it will be finished, but it should be fun!)

Building an Economy: Entrepreneurship

26 Tuesday Sep 2023

Posted by in Economics, Politics, Politics for Worldbuilders, Writing

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In the economics literature, there is a heated debate over whether entrepreneurship should properly be considered a factor of production, or whether it is better thought of as a special mode of using the three main factors of production. For the present purposes I don’t really care; the main thing is that entrepreneurship is sufficiently different from land, labor, and capital that it merits discussion by itself.

What is entrepreneurship? Depending on who you read, it can consist of either or both of willingness to bear risk, or skill at coordinating and directing the other three factors of production. In either case, unlike land and capital (both passive resources) and labor (the physical work of masses of people), entrepreneurship is a mental and social activity of individuals (though groups of skilled entrepreneurs can be quite effective, for example the “PayPal Mafia”)

Willingness to bear risk (or uncertainty, not the same thing) means to accept the possibility of failure when trying something that could work better (or be more profitable) than the status quo. The entrepreneur has a certain amount of resources, and is willing to devote them to some business pursuit even though they could be lost if things go bad. This is distinct from “normal” work or investing, where a given amount of labor or capital yields a more or less predictable output (wages or interest payments). (You might argue that many workers face risks as well; according to this framework, they would therefore be acting in part as entrepreneurs.) This was the standard 18th- and 19th-century formulation, pioneered by Cantillon.

The newer understanding of entrepreneurship is skill at coordinating the three factors of production in new and more productive ways. This aspect is somewhat broad; it could encompass inventiveness, creativity, strategic vision, skill at managing employees and vendors and getting them to play nice with each other, skill at negotiating deals, or a deep desire for technical or organizational optimization. Note also that this aspect of “entrepreneurship” doesn’t require that the entrepreneur be using her own capital; the entrepreneur could be an employee of the firm specifically for her entrepreneurial talents, rather than being the boss and risking her own money. This vision of entrepreneurship was pioneered by Joseph Schumpeter and Israel Kirzner.

A word on organizational skill. Anyone who has ever run a business, or been a supervisor or manager, knows just how hard it is to get a group of people pointed in the same direction and keep them from dissolving into acrimony or full-throated mutual combat. The ability to manage people, and to cultivate a strong organizational culture, is what often separates successful companies (and countries) from backward ones. And the prevailing culture of a society can make building strong organizations easier or harder. Willingness to work hard and work as a team, balanced by the confidence to take individual initiative, can lead to tremendous results. Conversely, a society that fosters narrow selfishness, does not encourage individual drive, and punishes nonconformity or excellence, will tend to produce organizations that are lackluster at best.

Additionally, while entrepreneurs are risk-tolerant, they still want to find good opportunities that are worth the risk. So they thrive in a society that is relatively stable (but not stagnant!), has predictable laws, and low levels of violence. Societies with high corruption and banditry, on the other hand, make entrepreneurialism a difficult sell—because businessmen are much less likely to enjoy the fruits of their labors.

As a result, you can fairly characterize whole societies as being more or less hospitable to entrepreneurialism. America is famously entrepreneurial (or more properly, certain parts of America); Israel has been called the “Startup Nation,” punching well above its weight in terms of new businesses. By contrast, countries with high levels of social stratification and economic corporatism, such as France or Germany, will tend to discourage entrepreneurs because it is hard for them to challenge the status quo with something new. And countries that have high corruption or social unrest (or even civil wars) will have little entrepreneurialism beyond the informal “hustles” of people trying to keep themselves alive by any possible means.

*****

(This post is part of Politics for Worldbuilders, an occasional series. Many of the previous posts in this series eventually became grist for my handbook for authors and game designers, Beyond Kings and Princesses: Governments for Worldbuilders. The topic of this post belongs in the planned second book in this series, working title Wealth [Commerce?] for Worldbuilders. No idea when it will be finished, but it should be fun!)

A Few More Comments on Cities

20 Wednesday Sep 2023

Posted by in Economics, Politics, Politics for Worldbuilders, Writing

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Rereading Fernand Braudel recently, I came across two critical points he makes during his discussion of cities. We’ve previously discussed how cities show up where they are most convenient for commerce, production, or government control (and sometimes all three at once). But Braudel adds some lovely texture to that discussion.

First, he notes that in Europe, cities were often placed by rivers in order to take advantage of watermill power for production. Every inch of suitable riverbank was harnessed by mills, where possible (and where the riverbank was not already devoted to docks for the vast array of shipping needed to supply the city). If the site was not conducive to the growth of a city, the mill complex would become a standalone production site, such as ironworks or mines. But cities had several advantages as centers of production even before the Industrial Revolution, namely that they had lots of workers nearby and potentially had lots of customers, and easy access to the transportation networks for raw materials and the export of finished goods.

In a more abstract sense, you could say that cities grow where they can access enough power (plus food, another frequent topic of Braudel’s). If new ways to produce (and transport!) power emerge, expect to see new cities grow up that can make use of the new power availability to exploit opportunities that previously were out of reach.

Second, we noted that “administrative” cities often have little production of their own, and rely on constant government funding. Braudel (starting around pg. 530 of Structures of Everyday Life) gives us hard numbers of major European capitals, which were particularly prone to such tendencies, and they are quite astonishing.

Lavoisier, writing in the mid-1700s, estimated that the city of Paris spent some 260 million livres per year to support its populace—of which only 20 million came from commercial profits, while 140 million came from government salaries and bonds, and 100 million came from ground rents or from business activities conducted outside of the city.

Some 141,000 people lived in Berlin in 1783, of which some 33,000 were soldiers and their families, 13,000 bureaucrats-and-families, and 10,000 servants—in other words, over a third of the city was economically unproductive, spending salaries that came from tax revenue. Many of the remainder made their living solely by catering to the needs and tastes of the salaried class.

St. Petersburg, capital of imperial Russia, was even more lopsided. In 1789, it had about 220,000 inhabitants, more than two-thirds of whom were male. Soldiers, (military) sailors, and cadets (and their families) comprised some 55,000 people, over a quarter of the city. Large numbers of others were servants. And let us not forget the bureaucracy. The city itself was placed in a bad location for practical purposes, constantly dealing with bitter cold and floods that killed many every year, far away from its sources of food and even building material; but that was where Peter the Great wanted his court, due to the spectacular vistas it afforded. Consequently, vast sums of money were spent to build the city and keep it working.

None of this is bad, per se. If a country has the money and wants to spend it in a major city, good for it. But it does illustrate that the fortunes of such cities are inextricably tied to those of the government. Braudel notes that when the Mughals of India moved their capital city, practically the entire population of the old capital would move with them; they had no way to support themselves otherwise.

Braudel also points out, in an argument later echoed by Jane Jacobs, that when a capital city grows too large and lacks an independent commercial base, its elites end up bending government policy to favor the capital city at the expense of the rest of the country. Jacobs noted in particular that London favored policies that benefited its international banking business and impoverished the rest of Britain. Paris likewise became a massive megalopolis that drained wealth from the countryside.

(I note in passing that until recently, Washington DC and its environs were not a major urban powerhouse—that role was played by New York, Los Angeles, and other major cities able to counterbalance the centralizing tendencies of the capital. By 2011, however, that had changed. The region has become overrun by well-paid lobbyists, and to a lesser degree by financial and healthcare firms that benefit from easy access to regulators. This was probably a symptom, not a cause, of the growth of centralized policy; but once such people are ensconced, they continue to drum up business at the expense of the common citizen. See Luigi Zingales, A Capitalism for the People [2012]. Matters have only become more exacerbated since he wrote.)

*****

(This post is part of Politics for Worldbuilders, an occasional series. Many of the previous posts in this series eventually became grist for my handbook for authors and game designers, Beyond Kings and Princesses: Governments for Worldbuilders. The topic of this post belongs in the planned second book in this series, working title Wealth [Commerce?] for Worldbuilders. No idea when it will be finished, but it should be fun!)

Internal Discipline in Rebel Movements, Part IV

30 Sunday Jul 2023

Posted by in Politics, Politics for Worldbuilders, Revolution, War, Writing

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In previous posts, we discussed Jeremy Weinstein’s argument of how rebel groups’ initial access to resources tends to put into motion a series of cascading decisions over who to recruit, how to govern civilians, and how to employ violence against civilians—with the result that initially “rich” rebel groups usually end up using indiscriminate violence against civilians, and those resource-poor groups that survive long enough tend to become “activist” groups with close ties to the populace, and use violence selectively (though in some cases the level of violence may still be high if they face high levels of civilian collaboration with the government).

Now, in this final post of this sequence, we will ask a crucial question: do rebel groups ever change character from “rich” to “activist” or vice versa? And if so, when?

Weinstein argues that rebel groups can face four types of external shocks to their existing organizational logic:

  1. Battlefield losses can weaken beliefs by civilians and by the rebels themselves that victory is possible, or near; and it also creates the need to replace casualties.
  2. Battlefield success can lead observers to conclude that the rebels are about to win, and therefore that joining the rebels is a ticket to future power or largesse.
  3. The rebels may access new economic resources, or economic resources may suddenly halt, threatening to undermine the rebels’ existing organizational logic.
  4. The government may change its strategy, increasing the incentives for civilians to cooperate or encouraging rebels to defect.

“Rich” rebels, having previously foreclosed on building trust with civilians, typically respond to 1, 3, and 4 by intensifying violence and repression. (Such groups don’t view 2 as a problem.) They lack the organizational capacity to change course, most of the time. In particular, rebel groups that suddenly lose access to an external patron or that lose their tax resources are no longer able to pay their troops as they once did; but because their personnel are out for personal benefit rather than interested in the common good, a (formerly!) “rich” group would have a very difficult time switching the logic of its behavior to an “activist” model that relies on cultivating support from the populace.

Instead, such groups tend to unleash even more violence against civilians, engaging in more looting to gather resources, more indiscriminate violence to discourage collaboration (which is often self-defeating), and kidnapping and forced recruitment in order to replace battlefield losses. (The Lord’s Resistance Army is a notorious example, relying as it does on recruiting children who it kidnaps and forces to commit atrocities.)

In rare cases, a formerly “rich” group facing utter destruction can decide to try and reconfigure itself as an “activist” group out of desperation. This depends heavily on the presence of talented leadership, and faces many pitfalls such as defection of its current members, distrust by civilians, and continued government pressure.

“Activist” groups tend to react to 1 and 4 (i.e. strategic setbacks of various kinds) by reinforcing their commitment to their existing relationships with civilians. The temptation to resort to forced recruitment to solve short-term problems is certainly present, but typically outweighed by the groups’ long-term orientation. Adversity is not a new problem for such groups. The tricky bit is how they respond to success: an influx of new money or recruits (2 and 3).

Sudden control over new resources can come about in several ways. A rebel group can gain a new patron. It can extend its control over more civilians and suddenly have more tax revenue. It could capture natural resources such as diamond mines. However it happens, new money means new temptations to corruption. In the worst case, the group can find itself slipping into the logic of “rich” groups.

Weinstein finds that “activist” groups are best able to resist this threat if they put in place strong organizational structures to control the new money and make sure it is being spent on strategic objectives, rather than to enrich leaders or troops. If such structures are not present, the group is in great danger of undermining its organizational logic and becoming a “rich” group.

Similarly, a sudden influx of recruits who merely want to “back the stronger horse” threatens to weaken the group’s commitment to its principles and proper behavior towards civilians (in the language of our model, the group would have a higher proportion of “consumers” and fewer “investors”). Successful activist groups are those that respond by strengthening their screening efforts and indoctrination, in order to filter out troublemakers and impress upon the rest that the group operates according to firm rules.

In general, effective leadership seems to be crucial in how a rebel group handles changing conditions. Weinstein theory doesn’t encompass leadership per se, other than noting its importance in influencing outcomes.

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I have seen very little fiction concerning rebel groups that discusses the challenges brought on by success. This seems like an oversight, given how frequent the problem of “betraying the revolution” is in real life, and more importantly the fantastic story conflicts that can be generated in this way. Now you have a conceptual model for thinking about such conflicts; huzzah!

*****

(This post is part of Politics for Worldbuilders, an occasional series. Many of the previous posts in this series eventually became grist for my handbook for authors and game designers, Beyond Kings and Princesses: Governments for Worldbuilders. The topic of this post belongs in the planned fourth book in this series, working title War for Worldbuilders. No idea when it will be finished, but it should be fun!)

Collective Action Problems

27 Thursday Jul 2023

Posted by in Economics, Politics, Politics for Worldbuilders, Writing

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Why is it so hard to organize people behind a project that benefits everyone?

Economist Mancur Olson won a Nobel Prize for his answer (which he laid out in his book The Logic of Collective Action), which in a nutshell is this: when multiple people work on some task that benefits all of them, each of them faces an incentive to shirk—meaning to work less hard on the task and wait for all the other people to pick up the slack. If the group succeeds even when an individual member shirks, then that member gets all the benefit for none of the cost (that is, the member is a “free rider”). Conversely, if the member puts forward full effort but not enough others do and the project fails, then the working member is a sucker (so to speak) and has suffered high costs for no benefit.

But if all the people have that incentive to shirk, then everyone will shirk and the project itself will not be accomplished. As a result, says Olson, only certain types of groups will successfully accomplish their goals.

The first type is a group working toward a goal that is so valuable, each of its members would do all the work necessary by itself if it had to.

The second is a group that is small enough that each of the members can monitor the others, to make sure that they all are pulling their weight.

The third type of group is one that manages to create “selective benefits” to reward its members for their participation, even where direct monitoring is infeasible. For example, the AARP is an advocacy group that also provides benefits like insurance or travel perks to its millions of members. That encourages people to pay the membership fees, which are then used to fund the AARP’s advocacy.

(A selective benefit can also be social, or even metaphorical. For example, most religious groups consider charity to be spiritually beneficial for the giver. Someone who holds this belief will tend to give charity even in the absence of a material incentive to do so.)

By contrast, large groups of people who cannot monitor each other, and who lack a selective benefit to encourage participation, will have a very hard time sustaining cooperation between their members to achieve their goals.

Olson notes that lobby groups are often small groups of actors seeking especially valuable payoffs. Citizens’ groups, by contrast, are relatively large, and often have a hard time providing selective benefits. As a result, narrow lobbies (which Olson later names “distributional coalitions”) routinely have a leg up in advocating their goals (in a democracy but also in other systems, such as autocracies where access to the ruler is restrictive), compared to the citizens’ groups who are often unable to stop them. Over time, therefore, public policy is likely to be more responsive to narrow lobbies than to the interests of the majority, or the populace as a whole.

Olson continued exploring this insight in a follow-on book, The Rise and Decline of Nations. As the title indicates, Olson is pessimistic about the implications of his theory. If society remains stable over time, the number and power of distributional coalitions will grow as time passes; and “there is for practical purposes no constraint on the social cost such an organization will find it expedient to impose on the society in the course of obtaining a larger share of the social output for itself.” (As Adam Smith noted in an earlier century, “People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.”)

Distributional coalitions generally obtain “shares[s] of the social output” by securing special privileges for their members, such as by excluding competitors from their industries, or by getting a direct government subsidy paid for by general taxes. Typically, such privileges end up burdening the rest of society, and as such burdens accumulate, it becomes relatively less attractive for individuals to engage in productive activity—and more productive to devote your energies into fighting for a larger slice of the pie. Political life consequently becomes more and more acrimonious, a constant brawl of distributional groups against each other to see who can best expropriate the public.

As distributional coalitions proliferate and grow in power, society will reach a tipping point where its most talented people take up lobbying and rent-seeking rather than productive activity. At this point, the calcification of the economy accelerates. Worse, because much of the economy is now subject to the demands of distributional coalitions, and such coalitions make decisions slowly in a process of internal bargaining and consensus-building and lobbying the government, the economy as a whole grows less responsive to changing conditions. New technologies are adopted more slowly, resources are not reallocated to meet new crises and opportunities, and economic growth stagnates.

Importantly, the power of distributional coalitions depends on their relationships with the government and their dominance of their industries. Free politics and freedom of trade are therefore a threat to such coalitions; electoral turnover can bring less friendly politicians to power, and the rise of economic competition can disrupt the existing industry structure and dethrone those at the top. (Olson was writing before the rise of today’s powerful identity-based interest groups, or he would have said something similar about the power to define your own identity, rather than having it imposed on you by powerful interest groups that want to yoke you to their plow.) Therefore, distributional coalitions hate and fear freedom and seek to curtail it wherever possible. They much prefer stability, since that freezes their own advantageous position.

As a result, Olson concludes, long-lived societies tend to become shot through with durable class divides that harden over time, between those who amass special privileges for themselves and those who do not. (He discusses apartheid South Africa, Britain, the Indian caste system, and the pre-Communist Chinese guilds, among several other cases.) Those social groups with effective distributional coalitions tend to cement their power over time. As Olson notes, “There is greater inequality, I hypothesize, in the opportunity to create distributional coalitions than there is in the inherent productive abilities of people.”

The only way out, according to Olson, is to periodically disrupt society and shake up the cozy power arrangements that accumulate. The most common way in history that this came about was through conquest by a foreign power, unfortunately. But gentler means are also available, such as free economic and electoral competition.

******

In your own worldbuilding, Olson’s theory can be a powerful tool in creating settings simmering with latent conflict. The old and decadent society that is ripe for revolution is a mainstay of fiction for a reason. As a first pass, think about who the most powerful groups in your invented society are, and ask how they got there. Then ask, what would they want to do next, and at whose expense?

*****

(This post is part of Politics for Worldbuilders, an occasional series. Many of the previous posts in this series eventually became grist for my handbook for authors and game designers, Beyond Kings and Princesses: Governments for Worldbuilders. The topic of this post will show up in the planned second and third books in this series, working titles Wealth for Worldbuilders and Tyranny for Worldbuilders respectively. No idea when they will be finished, but they should be fun!)

Internal Discipline in Rebel Movements, Part II

22 Saturday Jul 2023

Posted by in Politics, Politics for Worldbuilders, Revolution, State Formation, War, Writing

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In a previous post, I discussed the theory of Jeremy Weinstein on why some rebel groups act in a relatively restrained manner towards civilians, while other groups engage in indiscriminate violence. He argued that much of the difference stemmed from the initial resources available to the group, and how that affected the incentives of people to join the rebels. Poor groups were forced by circumstance to become “activist” groups, that is, to appeal to a base of civilian support and to recruit personnel who were “investors,” i.e. willing to endure short-term sacrifices for the sake of the group’s long-term goals. In order to do that, activist groups were forced to maintain strong discipline to convince the civilian populace that it would protect them from abuses by its soldiers. Poor groups that failed to do so soon withered away from lack of recruits or food.

By contrast, groups that began with access to money and guns from external sponsors, or from control over valuable resources such as drugs or gems, lacked the strategic imperative to seek civilian support. Moreover, they had a strong incentive to expand their membership by offering high pay or other benefits, and therefore attracted “consumer” members, those seeking short-term benefits that flowed from their membership in the rebel group. Groups largely made up of consumers had a much harder time preventing abuse of civilians, since their members were prone to looting or to abducting civilian women or murdering people they disliked for personal reasons. And such groups also had fewer reasons to impose strong discipline: because they had independent resources, they suffered few (initial) disadvantages from tolerating abuses of civilians.

In this post, we will continue Weinstein’s argument and examine the consequences of the previous paragraphs for rebel groups’ governance of civilian areas.

As rebel groups gain control over territory, they have to decide how to handle the civilians living there. Civilians can provide useful resources to rebel groups: information about government activity, new recruits, food, and tax revenue. However, civilians are strategic actors: they can choose to support the rebels or the government, and if neither option seems attractive they will try to flee the area entirely or to resist both sides.

Rebel groups have options in how to build governance structures in response. These can be said to vary on two factors: inclusiveness (AKA participation) and the extent of power sharing. (This is true of regime governments as well, which is not surprising since a rebel group administering territory is basically a kind of government.) A participatory governance regime tries to address the preferences and needs of the populace, while a non-participatory regime treats civilians with indifference at best, as targets of predation at worst. But even participatory governments need not actually share power over decision making, a tempting option in wartime. However, the more that a rebel group shares real power with civilians, the more that civilians will trust the group (or the government in similar circumstances) to uphold its bargains in the future. And in response, rebel groups that build participatory structures of true power sharing are likely to elicit more cooperation from civilian populaces.

Why then doesn’t everybody build such structures? Weinstein argues that the difference hinges on three factors (though he subdivides the factors somewhat differently on pages 171 and 196 of his book without tying the differences to his findings—tsk tsk, Cambridge University Press editors!):

  1. The degree to which the rebel group needs support from the populace;
  2. The extent to which extracting resources from the populace is dependent on civilian productivity; and
  3. The time horizons of the group’s members (i.e. whether they are predominantly “investors” or “consumers”), and the resulting ability of the group to make credible commitments to the populace.

A group that has significant starting resources needs the support of the populace less if at all, and will tend as a result to build non-participatory structures that do not share power. This tendency is exacerbated by the short-term orientation of its members, who want to plunder the populace and seize loot. Even the need to get food from the populace will not moderate this tendency much, since civilians cannot simply stop growing food and will therefore usually have food available to seize.

One complicating wrinkle occurs when the group can extract valuable resources from the populace, but only if the people commit their work to generating such resources. For example, the Shining Path in the Upper Huallaga Valley gained most of their revenue from the drug trade, but they therefore depended on civilians to grow coca. Out of self-interest, then, the rebels built structures that were responsive to civilian interest in having a predictable market for coca leaves, charging fixed taxes and administering public markets. (We would describe the resulting governance structure as inclusive but not featuring true power sharing.) 

A rebel group in this situation could instead choose to enslave civilians en masse, and some try, but this tends to result in civilians fleeing the area or throwing their support to the government in response. Still, the short-term orientation of group members tends to cause the breakdown of the inclusive structures over time, as individual members steal opportunistically. As a result, even non-activist groups that try to take the interests of civilians into account for selfish purposes often fall back on control by force.

An activist rebel group, on the other hand, is dependent on the support of the civilian populace for its very survival. As a result, it will prize the cooperation of civilians, and will tend to create governance structures that both are participatory and share true power, so that civilians will trust them to uphold their bargains. Because activist groups are largely made up of members with longer time horizons (i.e. patient “investors”), the members will submit to such checks on their power for the sake of the group’s strategic goals.

In later posts, we will discuss rebel groups’ strategic use of violence against civilians, and their ability to sustain their membership over time.

******

(This post is part of Politics for Worldbuilders, an occasional series. Many of the previous posts in this series eventually became grist for my handbook for authors and game designers, Beyond Kings and Princesses: Governments for Worldbuilders. The topic of this post belongs in the planned fourth book in this series, working title War for Worldbuilders. No idea when it will be finished, but it should be fun!)

Cities, Money, Power, and Political Bargains

20 Thursday Jul 2023

Posted by in Politics, Politics for Worldbuilders, State Formation, War

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For most of post-Roman, premodern history, Europe was hardly the most powerful region in the world. China and Japan were in many ways far more powerful than any European power and had more advanced technology. Africa too featured sprawling empires, such as that of Mali. Europe, by contrast, was something of a backwater, struggling with depressed trade, frequent war, limited education, and disease among other obstacles. And yet starting only a few hundred years ago, strong states emerged in Europe that were able to mobilize vast wealth and military strength sufficient to subdue most of the globe.

The question that scholars have grappled with is how this happened. The “state-formation” literature is generally more applicable to the discussion of state capacity (a topic to be covered in Book 3 of my series) rather than the economy per se; but it is still useful to us as we discuss worldbuilding models of the economy, because in one of the leading theories of state formation, economic development—and the growth of cities in particular—plays a central role.

In Charles Tilly’s Coercion, Capital, and European States, AD 990-1992, he argued that European cities played a key role in the development of strong states because of their role in concentrating and deploying capital. While many states (such as Russia) were heavily coercion-intensive, states that featured a large amount of capital (such as the Netherlands) eventually found that they could mobilize more of that capital by sharing political rights with the merchant class. As a result, high-capital states that made political bargains with their populace were eventually able to build more powerful militaries than predominantly coercive states, and that particular model of state structure became common.

(It is worth pointing out that Tilly explicitly limited the scope of his theory to Europe due to the unusual concentration of urban cities and high populations found there, and did not apply the theory to other regions. For a while, there was a thriving literature arguing that Tilly’s argument failed in various other regions, or that it did not account for various factors even in the European experience. When the dust died down, I think the best evaluation is that Tilly’s basic thesis holds true even outside of Europe where its necessary conditions hold, such as in China. And where it does not hold, scholars trying to explain why have enriched the general theory by discussing the differing conditions that resulted in other outcomes, such as Jeffrey Herbst’s work on African state-building.)

Fundamentally, the driving force behind the development of strong states was the need to prepare for war. The first states were formed by men seeking to extend their control over others, and the states with the most power would extend their control as far out as it could go, stopping only when they reached the limit of their ability to project power—whether because of the limitations of available transportation technology, geographical barriers, or the opposition of other states. As a result, in each region, the most powerful state set the terms of coexistence—neighboring weaker states could either submit to vassalage or outright conquest, or else spend disproportionate resources on their defense. As Tilly puts it, “[M]ost rulers settled for a combination of conquest, protection against powerful rivals, and coexistence with cooperative neighbors.”

Within the constraints imposed by powerful rivals, states had to build structures to efficiently extract resources from their populations (or other populations forced to pay tribute or subject to plundering) and then translate those resources into military power. Tilly zeroes in on four variables to explain the variable success of a European state in doing so:

  • its concentration of capital,
  • its concentration of coercive power,
  • its need, and ability, to prepare for war, and
  • its position within the regional or international state system.

For Tilly, the key difference was between capital-intensive and coercion-intensive regions. In short, coercion-intensive states were able to mobilize larger armies, at least initially; but their advantage was nullified when warfare changed to require more and more money, to pay for professionalized troops, new weapons, and regularized logistics, and coercion-intensive states tended to have stunted economies as a result. Meanwhile, capital-intensive city-states had skilled professional armies, but small ones; they had not enough population to compete effectively with national states in the long run. The sweet spot was occupied by national states built around large, capital-intensive cities so that their political institutions tended to grant rights to the holders of capital. As a result, they could access large national populations and the money needed to fuel powerful armies.

Coercion

Tilly describes three kinds of European states during the period under discussion:

  • Tribute-taking empires tended to have relatively low accumulations of coercive power, but high concentration—that is, they might have had one or two armies that periodically swept through their vassal territories, demanding resources at swordpoint and punishing rebellions. Such empires were relatively fragile; if an adversary managed to accumulate significant coercive power, the empire’s ability to extract tribute might collapse entirely.
  • Systems of fragmented sovereignty typically included city-states as well as urban federations such as the Hanseatic League or the early Netherlands, which featured several loci of political power without a single clear sovereign. Such systems tended to have high accumulations of coercive power (usually because each of the constituent cities or other units was rich enough to afford its own army). This is almost true by definition; if a fragmented system were not able to accumulate a lot of coercive power, it would have been swallowed up by a competitor. However, such systems usually featured low coercive concentration, as the cities often cooperated poorly on defense and rarely subordinated their forces to a unified command.
  • Finally, national states were in the middle: featuring a high concentration of strong coercive power, but forced to bargain with their populations for their cooperation—typically by granting them political rights or participation of one kind or another.

Capital

Whether capital is concentrated or not depends heavily on the available technologies, and whether they tend to encourage distributed or centralized production.

In a subsistence economy, there is practically no capital at all as we are used to thinking of it. Even if there are a small handful of nobles living in castles, and merchants living in sturdy houses, most people have absolutely nothing to their names. Fernand Braudel (The Structures of Everyday Life, p. 282), writing of the centuries before the eighteenth century in Europe, notes that official inventories of possessions of the deceased almost invariably were restricted to “only a few old clothes, a stool, a table, a bench, the planks of a bed, sacks filled with straw.” That was all that most people had. Capital as we know it was the province of a very few people who engaged in large-scale trade or taxation. Labor-saving devices were few, even including such things as plows (many farmers were forced to use spades and dig by hand). The most readily available form of capital was living beings: livestock, slaves, professional hirelings, or peasants drafted for periodic corvée labor. (That is, the analytical distinction between capital and labor essentially breaks down.) As a result, to accumulate useful capital you had to command the labor of people, which is why rulers were often forced to rely on local landlords to muster their peasants.

In the “protoindustrialization” era of cottage industries, the available technology made production suddenly more efficient, but did not produce large economies of scale—at a time when the roads were just good enough for finished goods to be cost-effectively sent to markets, but not good enough for raw material and workers to routinely travel to centralized production. Capital flowed to labor, in smaller-scale workshops dispersed through cities and their surroundings or out in the countryside. This was the time of the putting-out system, of small workshops and manufacturies built around windmills and watermills, of largely local production. As a result, there was prodigious accumulation of capital compared to what had come before, but it was not excessively concentrated and was spread around relatively evenly. Still, cities served as nexuses for trade, and represented the most available “containers” for capital. City-based merchants and burghers became politically important, because they had the money that rulers needed to pay for their armies. (And sometimes, as in the case of the Hanseatic League, the burghers became rulers themselves.)

By contrast, industrialization featured massive centralized factories, encouraged by the coal boiler and the huge returns to scale that it created. Workers came to capital, concentrating themselves in the cities. The rewards of production became concentrated in relatively few hands and places, which consequently made it easier for governments to make bargains with such capitalists and appropriate some of that wealth in exchange for political privileges.

Effects on State Power

Tilly notes, “Two factors shape the process by which states acquire resources, and strongly affect the organization that results from the process: the character of the bottom-up hierarchy of capital [that emerges naturally from trade and exchange], and the place within that hierarchy of any location from which a state’s agents try to extract resources.” In other words, for a state to be capable of taxing individual incomes requires far more institutional capacity than a state that can only tax salt entering at a single port, for example. And conversely, a state that is dependent on a few sources of tax income must be more solicitous to the interests of the relatively few, relatively wealthy taxpayers.

As a result, states that emerged gradually during the early modern era developed in a clear pattern. The biggest cities with a lot of commercial activity and wealth often became their own city-states (such as in Italy and pre-Bismarck Germany). The regimes in these city-states were often thinly structured, able to easily collect customs duties and borrow money from bankers without large coercive bureaucracies. That, in turn, tended to discourage coercive government policies on the margin. Somewhat less powerful cities were typically incorporated into national states, but were able to negotiate political bargains with the developing state in exchange for their tax revenue (as in France).

By contrast, regions that were relatively poorer and had relatively few cities with weak commercial links with the hinterlands around them often were subject to straight coercion by the ruler, in states that covered a larger geographic area but a relatively dispersed and poor populace (such as Russia). Tilly writes, “In broadly similar ways, Russian, Polish, Hungarian, Serbian, and Brandenburger states formed on the basis of strong alliances between warmaking princes and armed landlords, large concessions of governmental power to nobles and gentry, joint exploitation of the peasantry, and restricted scope for merchant capital. Repeatedly, leaders of conquering forces who lacked capital offered their followers booty and land, only to face the problem of containing the great warrior-landlords they thereby created.” The only feasible solution was to rely on extensive force, which became less and less effective as the coercive states fell behind their neighbors on economy.

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This has gotten quite long and somewhat disorganized, but the key ideas are still useful in your worldbuilding. States need to survive in a dangerous world, and need money and power to do so. In poor settings, highly coercive states have an advantage; but as capital accumulates, richer societies that made political bargains with their populaces end up pulling ahead. (On average!)

*****

(This post is part of Politics for Worldbuilders, an occasional series. Many of the previous posts in this series eventually became grist for my handbook for authors and game designers, Beyond Kings and Princesses: Governments for Worldbuilders. The topic of this post will show up in the planned second and third books in this series, working titles Wealth for Worldbuilders and Tyranny for Worldbuilders respectively. No idea when they will be finished, but they should be fun!)