28 February 2011

Degenerate Formalism

Aretae has responded to my defence of formalism:

My major objection is not North Korea, but china from 1000BC to 1900AD or Japan ~1500-1850. Stable society with stable-ish rulers stagnate hard. In neither case was maintaining rule a big deal...but in both cases, you had enormous periods of malthusian stagnation. That's what scares the shit out of me about the formalist prescription is that the Game theory seems to guarantee that path.

This time the criticism is not that the leader untrammeled by democracy will be too rapacious, but instead too unambitious — happily sitting at the top of a stable but stagnating civilisation.

Once again, true formalism has an easy answer: as in any underperforming enterprise, the CEO of a stagnating sovcorp will draw the attention of investors who believe that by changing management they can get an improved return. They will buy the shares, call an emergency general meeting, and have the management replaced. Their fully-legal hostile takeover will be bloodless, as the share-purchasing crypto protocols ultimately give them control over the keys that activate the guns.

And again, I don't buy all that. Mencius described the joint-stock sovcorp as an advance on the "family business" sovcorp, or hereditary absolute monarchy. Formalism without magic guns is just royalism — perhaps we could call it "degenerate Formalism", as there is just one share of voting stock and it is indivisible.

So, is Formalism in its degenerate form susceptible to this kind of stagnation? I do not feel able to discourse adequately on three millenia of Chinese history. My impression of the last thousand is not of permanent stagnation, but of a complacency that set in after some centuries of being more technically and economically advanced than any neighbour. Success always carries a danger of such complacency, but success is nevertheless worth aiming for.

Japan, similarly, being sufficiently strong and advanced to be quite safe from its only neighbours, made a conscious decision to rest on its laurels, which only ceased to work when the world shrank around it.

No European country made any such abdication of striving for greater wealth and power, not because of different political arrangements, but because the competition between powers never waned.

Malthusian, is, I think, a red herring. Malthus was right about a world where agriculture was the main activity. Adding more people to the same agricultural land produced diminishing returns. It is conceivable that similar contstraints could return, but it does not seem imminent. Again, forms of government are not the determining factor.

On the other hand, it must be recognised that for any government, rapid growth, and particularly growth driven by technological change, is potentially destabilising. The key is that it unpredictably makes different groups in society more and less powerful, so that any coalition is in danger of rival groups rapidly gaining enough power to overwhelm it. Back with Malthus, if one group of families owns land, you can predict that they will continue to own land for many generations. But if another group is powerful because of trade, or manufacturing, or entertainment, they might be bust in ten years' time. That is why the stability of feudalism is unlikely to return.

There are two circumstances in which the natural tendency of government to restrain technological advance is avoided. One is if it is as easy as possible for the newly rich to take power. That way, whatever the new technology is, those who benefit from it are in charge, and they will drive it on. The other is to totally detach power from wealth creation. Then the ruler will not care who is doing well, provided the country is wealthy enough for him to take a generous cut. The aim of formalism is to achieve the second situation. The ruler should be secure enough that he does not fear growing wealth of any interest group. The question is whether such security is possible.

The best government is one that nobody is trying to overthrow. Western democracy works as well as it does not because of any virtue it has, but because of the virtue people imagine it has, which false belief induces them to leave the government unmolested. If people were to understand that government is better when it is unchallenged, they would largely cease to challenge it.

I believe this was generally the case in late-medieval Europe. People did respect the anointed King, not primarily out of superstition, but because they understood that politics would only make things worse, as they were worse in the days of feudalism. This happy state of affairs was undone by the Stuarts' idiotic fumbling of the religion question in England, and the return of politics in England triggered copycats around the world, in just the same way as Tunisia has triggered waves of politics across the Middle East. The world has yet to recover from the English Civil War.


Aretae said...

Very well said...it is looking like our priors are awfully close. More incoming soon.

TGGP said...

Reminds me of Albert O. Hirschmann.