Category Archives: Writing

Building an Economy: Entrepreneurship

26 Tuesday Sep 2023

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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!)

Building an Economy: Social Capital

25 Monday Sep 2023

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We previously discussed how the main factors of production are land, labor, capital, and entrepreneurship. I might have to amend that list, however, to include social capital—that is, the set of beliefs and attitudes about the world that influence how people living together cooperate to form a society, or not. (I might also end up squeezing it into an existing category such as the “culture” component of human capital; but the categorization is artificial anyway.)

The study of social capital was largely kicked off by Robert Putnam, famous most recently (I think) for Bowling Alone, his argument that the American social fabric was fraying. But the basic theory was based on over a decade of research prior to that, focused on Italy. By comparing the northern cities of Italy (which had a heritage of having become free cities some 500 years ago) with cities in the Italian south (which did not), Putnam showed not only that people in the northern cities were much more prone to social and civic involvement, were less tolerant of corruption, and had more generalized trust—he showed that these characteristics had measurable impacts on economic growth. The more social capital a society had, the more economic growth.

Luigi Zingales (in A Capitalism for the People) discusses why this is so, specifically with regard to generalized trust—that is, the predisposition to trust other people even before you know them. Generalized trust is the reason that we hand packages off to the postal worker, that we deposit money in the bank, and that we buy things from the supermarket while they are still in the package. A general belief that most people are trustworthy, absent concrete evidence otherwise, makes possible a tremendous amount of trade and exchange.

Contrast the above picture with the situation in backward villages of Sicily. Zingales describes a social milieu where no one trusts anyone else outside of his family (and even within the family, not much!), and people are chiefly concerned with not being a sucker. Moreover, that expectation is justified by experience, as government officials are corrupt, businessmen are shady, and people from other families will cheerfully exploit any momentary advantage offered by some poor sap. As one result, farmers do not cooperate with each other and end up with perennially bad yields, remaining mired in poverty.

Zingales also notes that it takes a very long time for people to develop generalized trust. Immigrant communities in the United States from low-trust countries take several generations for their level of generalized trust to rise to the level prevailing in American society. By contrast, it is very easy to lose such trust. If a government victimizes the people, or businesses do the same (for example, by the growth of crony capitalism or by violating laws with impunity), generalized trust suffers immediately and the legacy of such abused trust can echo for hundreds of years.

Depressing, certainly (especially given how cavalier our political class is acting right now in squandering the trust of the public; but I digress). But extremely useful for worldbuilders. If you characterize an invented society as having high or low levels of social capital, that has a whole host of implications for its history, its future development, the basic attitudes of the people, and its level of economic dynamism.

*****

(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

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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.

****

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

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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 III

26 Wednesday Jul 2023

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In previous blog posts, we discussed Jeremy Weinstein’s work on the internal dynamics of rebel groups, and how they lead some groups to commit indiscriminate violence against civilians. In a nutshell, groups with limited initial resources are forced to establish close relationships with civilian communities in order to survive, which forces them to discipline their forces and share significant power with communal leaders.

By contrast, groups with significant wealth at their founding (for example, due to state sponsors or involvement in the drug trade) have no strategic imperative to depend on civilians, and furthermore tend to recruit personnel who are in it for the money. As a result, personnel tend to abuse civilians, the leadership doesn’t want to incur the costs of disciplining them, and the groups tend not to share power with the civilian populace.

We are now at the crux of it. The foregoing processes tend to encourage “rich” rebel groups to use massive violence against civilians, mostly because their previous mistreatment of civilians leaves them with no other options. Let’s see why.

Rebel groups want civilians in (or near) their territory to cooperate with them—to provide food, tax revenue, recruits, and information about government troops and collaborators. Civilians, on the other hand, may or may not want to cooperate. Some might be government supporters or officials. Even if civilians oppose the government, they may not want to risk government reprisals. And they might view the rebels as worse than the government, and not want to cooperate with them even if they could do so safely. Therefore, rebel groups (and governments, for that matter) will sometimes want to harm civilians who cooperate with the enemy or refuse to cooperate with them—not least in order to frighten other civilians into complying with their demands.

A rebel group that has close ties with civilian populations (usually because it began its existence as “poor”) will have a much easier time using violence in a selective, targeted fashion. Because the populace trusts them, civilians are more willing to give information to the rebels. And because the rebels have close ties to the populace, they will be able to vet information they receive to make sure that their informants are telling the truth, so that they don’t harm an innocent party by mistake. Punishments are usually more graduated (such as kidnapping civilians and confining them for a time), giving rebels the chance to discover a mistake before harm becomes irreparable (i.e. the wrong person is shot). Finally, when mistakes are made, the rebels usually make amends to the populace and punish the offending personnel, reinforcing the trust that the population has in them.

As a result, “poor” rebel groups will tend to use violence selectively against civilians, seizing or assassinating government officials and collaborators and rarely harming the wrong people. The overall level of violence against civilians will be fairly low (at least from the rebel side; often government forces are less discriminate, for the same reasons we are about to discuss with reference to “rich” groups).

In contrast, we discussed how “rich” groups will tend to abuse civilians because they don’t bother disciplining their troops, and they will tend to exclude civilians from power arrangements. As a result, civilians will tend not to trust such rebel groups, even if they nominally support them over the government (and they may not). Rebel groups will thus receive less information from civilian sympathizers, making it harder for them to selectively target government collaborators or functionaries, or to punish civilians who are refusing to cooperate with them.

Worse, when they do receive information from civilians about potential targets, “rich” rebel groups will have a hard time verifying its accuracy (if they even care to). As a result, malicious civilians will frequently exploit the rebel groups to take revenge against their neighborhood enemies. Even without such deliberate deceit, rebels will frequently target the wrong people, ending up harming innocents. This will cause civilian trust to erode still further and causing information flows to slow or stop. In the end, even if rebel groups wanted to target civilians selectively, they will find it impossible.

But such groups still have a strategic need to force compliance by civilians. Unable to use violence selectively, they will instead resort to collective punishment, massacring people at random or even whole communities in order to frighten other communities.

Obviously this is a suboptimal outcome for the rebels, even setting aside moral concerns. Once you murder people indiscriminately, it becomes almost impossible to go back as no civilians will trust you or want to help you. “Rich” rebel groups are thus set on a path to continued massacre and bloodshed that ends only when they establish unchallenged control over a given community or population. (And even then, the pervasive acts of individual exploitation will continue.) Their ability to gain popular support will be very much hobbled, and their effectiveness in challenging the government and ruling the populace will be significantly less than it might have been.

Still, it’s not impossible to overthrow the government and rule a country while murdering indiscriminately. (Charles Taylor comes to mind in Liberia.) Less dramatically, in Mozambique, RENAMO managed to bring the ruling government to the bargaining table after a very long and bloody civil war.

In the final post of this sequence, we will discuss how external shocks can challenge rebel groups’ ability to operate, and how their responses to such shocks might change their pattens of behavior from “activist” to “rich” or (rarely) vice versa.

*****

(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!)

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!)

Internal Discipline in Rebel Movements, Part I

13 Thursday Jul 2023

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

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We fiction writers often feature resistance movements in our stories. American culture in particular lionizes rebels and guerrillas, thanks in part to our rose-colored cultural memory of the American Revolution on the one hand, and some people’s idealized picture of socialist revolution in the Che Guevara mode on the other.

In real life, most resistance movements fail before they even get started. Of the ones that get established enough to fight a serious war against the state, most of them lose—and before they lose, many of them victimize civilian populations more brutally than the states they try to overthrow.

Yet some resistance movements are protective of civilians, and maintain internal discipline to ensure that their foot soldiers do not steal or murder with impunity. Some of them end up getting corrupted by success and start predating civilians; but a few manage to stay moral all the way to victory.

What makes the difference? Why do some rebel groups routinely harm civilians and others don’t? And more to the point, how can we writers use these concepts in our stories?

Jeremy Weinstein, in his book Inside Rebellion, provides an unexpected answer that becomes utterly compelling as he lays out his evidence. Weinstein argues, on the basis of considerable fieldwork in Peru, Uganda, and Mozambique as well as analysis of the literatures on several other civil wars, that the key difference is the level of resources available to the rebel group at its inception.

If a group initially has very few resources (primarily money, food, and weapons), then it must quickly build links to a broader civilian community in order to survive. The need to maintain relationships with the populace then impels the group to develop strong internal discipline and governance, and to behave well with civilians (except for selective killings done for strategic reasons, for example executing collaborators).

If, on the other hand, a group has access to significant resources—money from a state sponsor, or from the drug trade, or from natural resources, for example—then it has much less need to maintain good relations with the civilian populace. That, by itself, doesn’t force a group to harm civilians; but the easy availability of resources tends to lead a group to pay its members well, which attracts a different (and less savory) caliber of recruit than would agree to join a poor, weak resistance group without resources.

This is not a simple argument of “rich group kills civilians, poor group does not.” Weinstein carefully lays out the cascading effects of that difference in initial conditions as they bear on five distinct problems faced by rebel groups (and by governments too, although that is outside of Weinstein’s scope):

  • Recruitment;
  • Maintaining discipline;
  • Managing civilians in areas the group controls;
  • Punishing people for cooperating with the enemy or otherwise shirking; and
  • Resilience (that is, maintaining your membership and its governance structures over time)

*****

Before I explain these, let me just take a moment to rhapsodize about good theories. (Because this is my blog, and I can do what I want!) The world is full of thorny questions, and equally full of bad answers to those questions—as H.L. Mencken put it, “[T]here is always a well-known solution to every human problem—neat, plausible, and wrong.” It is a true joy to read a theory that suggests an answer that is utterly unexpected, and yet as you read the argument, it addresses so many features of the initial problem that the theory seems impossible to refute.

Obviously, later work can improve on even good theories. But some theories stand the test of time, and persist in their unaltered form despite the best efforts of later scholars. (Einstein’s theories are good examples. In a different domain, so is the work of Mancur Olson on collective-action problems.)

Not to suggest that Weinstein’s work is definitely in that latter category. But if it were, I wouldn’t be surprised.

Now back to our regularly scheduled program!

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Weinstein’s model builds from the starting assumption that there are two kinds of people who might join a rebel movement: “investors” and “consumers.” Investors are willing to incur significant short-term costs for the sake of the long-term goal of victory. Consumers, on the other hand, are interested in gaining benefits today from their association with the rebel group: a salary, a gun, prestige, the chance to loot plunder, the chance to harm neighbors they don’t like. Which type of recruit predominates in a rebel group has powerful effects on the development of the group.

If a rebel group is poor, it cannot offer immediate benefits to members. As a result, consumers would tend not to join the group, having little reason to. The group’s only option, therefore, is to attempt to appeal to investors—that is, develop links to a civilian population with which it shares ethnic, communal, or ideological ties to which it can appeal to gain support and foster loyalty. This means that the group will have to build institutions of self-governance, so that the civilian populace has reason to trust that the group will protect civilians from the government and from its own members.

It is important to emphasize that getting the support of a civilian base is a strategic imperative for poor rebels, regardless of their political program, ideology, or even personal standards of morality. Those poor groups that don’t manage it will simply wither away from lack of recruits or lack of food. This task will be easier with a rank-and-file made up of investors, who are relatively more willing to submit to discipline that serves the group goals, than it would be if most members were consumers and therefore willing to break the rules for personal gain.

Weinstein also finds that poor rebel groups spend a lot of effort filtering out low-quality recruits, despite the difficulties in finding manpower. Such groups have far too much at stake to risk antagonizing civilians with undisciplined behavior, like the National Resistance Army in Uganda and the Shining Path in Peru (except for the Shining Path in the Huallaga Valley, which became enmeshed in the cocaine trade and therefore followed the “rich group” trajectory).

If a rebel group has significant starting resources, on the other hand, it will be able to rapidly gain recruits by offering them steady pay. This tends to attract a much higher proportion of consumers. It also means that the strategic imperative to gain the support of civilians is largely absent: the group can support itself even if it is hated and feared by civilians, as long as the money or guns keep rolling in. As a result, the group will spend far less effort appealing to the populace, and will also spend less effort on filtering out low-quality recruits because it incurs little penalty from undisciplined behavior that harms civilians.

Moreover, even if the group wanted to stop its forces from harming civilians, it would have a hard time doing so: because most of its members are consumers, i.e. out for immediate gain, they will tend to resist orders not to predate on the civilian populace. So the group will tolerate bad behavior by its troops towards civilians in exchange for demanding obedience on the battlefield.

Now, you might wonder what happens if a group with significant resources nevertheless managed to resist the temptation to behave badly—and instead managed to only recruit investors, impose strong discipline, build links to the populace, etc. In theory, this is possible. In practice, however, the tremendous risks that rebels take when opposing the government would make it almost impossible for them not to take the quick and easy way of recruiting a bunch of thugs to boost their manpower, if they had the cash available. Remember, most rebellions fail miserably. Immediate survival often weighs more heavily on the minds of rebel leaders that the problems of tomorrow that they are unwittingly setting into motion.

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The foregoing is only the first half of Weinstein’s discussion, and this post is already quite long. In future posts I will summarize his discussion of how “rich” and “poor” rebel groups differ in how they govern civilians under their control, how they punish civilians for resisting their control or for apparent collaboration with the enemy, and how they maintain their own membership over time. But you can already see where the trend is going.

******

(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!)

Beliefs About Economic Growth

10 Monday Jul 2023

Posted by in Economics, Politics for Worldbuilders

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There have been many, many books written about culture (and you should definitely read a few!), and some of them discuss the effect of culture on politics, or the economy, or both. (We already discussed Ronald Inglehart in an earlier post.) Going too far into the weeds on this topic will take us very far afield, but I did want to point out one key bit of cultural variation that has massive political significance: Do people believe that the economic pie is fixed, or that it can be grown?

If you believe that economic wealth has a fixed quantity, then you believe that no one can gain wealth unless someone else is losing it. (This basic attitude was a staple of Continental socialism. Proudhon’s “Property is theft” and Balzac’s “Behind every great fortune lies a crime” come to mind.) If so, then the key ground of economic conflict becomes “Who gets what?” The characteristic emotion toward the rich will be jealousy. All else equal, more effort will be spent in redistributive activities such as government lobbying, speculation, and sheer banditry.

If you believe that economic wealth can grow in the aggregate, then your attention will be drawn towards ways that wealth can grow. An attitude of optimism may, or may not, coincide with a certain disdain for those who could be accumulating wealth but instead allow themselves the luxury of idleness (though this disdain tends to be characteristic of societies influenced by Calvinism in particular, per Max Weber). The key economic conflict becomes “What is standing in the way of greater wealth?” The characteristic emotion toward the rich will be admiration. All else equal, more effort will be spent building businesses, engaging in commerce, and building infrastructure.

Of course, in the real world we tend to believe in a complex, contradictory mix of both. Partly this is due to our evolutionary history. Prehistoric times were typically a rough approximation of the “fixed pie” condition, because people had few possessions—and what they had often needed to be shared, for the sake of mutual survival. And during long stretches of written history, economic conditions were persistently bad as societies were ravaged by war and famine. The last two or three hundred years featured an explosive growth of affluence beyond anything in our prior experience.

Additionally, it is clear that some people become wealthy by creating wealth, and others become wealthy by taking the wealth of others. Steve Jobs, for example, became fantastically wealthy by creating whole new categories of tools for the betterment of humanity (ideally!). By contrast, Trevor Milton bilked investors seeking to participate in the electric-car boom and sold them a bill of goods. (He may not remain wealthy for long, however, depending on his sentencing in September!)

Still, those two opposed attitudes towards wealth can motivate a whole range of beliefs and behaviors—excellent grist for the fictional mill!

*****

(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, along with some overlap with the planned third book, working title Tyranny for Worldbuilders. No idea when they will be finished, but it should be fun!)