Monday, March 25, 2019

A Grand Fresco: The Origins of Political Order


How do you write about a book that is almost 600 pages long (in small print), has 25 pages of references, and the ambition to explain political institutions from the dawn of mankind to the French Revolution, from kinship-based bands of hunters to Voltaire? This was Francis Fukuyama’s objective in this monumental (yet eminently readable) book, “The Origins of PoliticalOrder” (note the plural).

My review, given the size and importance of the book, will be done in two parts, First, here, I will review the logic of the arguments put forward by Fukuyama. In the second review, I will engage into some critique.

There is one key idea of the book. If you wish to have a functional political order that enables economic growth and gives people freedom from arbitrariness of the sovereign or from oppression by their peers, you need three components: (i) a strong state, (ii) rule of law, and (iii) accountability.

It may seem at first that this is nothing especially new, but the way that Fukuyama presents his case is. A strong state is needed to provide public goods (most important being domestic law and order, protection of property, and defense against external attack). But the strong state has  to be “penned in” from two sides. From the top (as it were) by an ideology or religion that imposes limits on the state: this is the rule of law. Sovereign himself, however powerful, has to be subject to law. The second constraint comes from below: the state needs to be accepted, that is, accountable to people (where “people” is variously defined). We thus achieve the seemingly impossible: we have a strong state that cannot behave as it pleases, and needs some form of consent of those it governs.

The three independent component parts allow Fukuyama to show how one of them was achieved by some societies, two by others, but that they came together, all three, only in the 17th century England. China is the case of what Fukuyama calls “precocious state formation”. Qin China was the first to create a state: a process which, according to Fukuyama, is fundamentally unnatural because to have a state means to fight “patrimonialism”, people’s innate tendency to favor their own kin and tribe. State on the contrary requires clear, apersonal rules and system of advancement based on some general criteria including merit. Qin China, through ruthless centralization, and the defeat of a number of regional aristocracies, achieved that. But, it achieved it, Fukuyama thinks, too early. China thus created a powerful state –a thing which eludes many communities still today, more than two millennia after the Chinese did it—but it never created rule of law nor accountability. It was absolutist, from the start until today.

Absence of rule of law of course does not mean that there is no law. What is today called “rule by law” (as opposed to the rule of law) is what Legalism was in China: ability of the Emperor to create laws at will, and have them obeyed. There was no lawlessness nor anomie but there was neither rule of law that constrained the state: a set of rules that can be changed only through previously agreed procedures.

There were cases of states that had an early form of the rule of law: religious rules that limited sovereign’s ability to do whatever he wanted. But such societies lacked either accountability, or both accountability and a strong state. Religions, according to Fukuyama, were useful in producing the rule of law because they placed the sovereign under one higher law: divine. This was the case in Islam (Umayyads, Abbasids and later Ottomans and Memluks), India thanks to Hinduism and Buddhism, and Europe thanks to Christianity (or rather mostly thanks to Catholicism).  

The absence of rule of law in China is seen as due to the absence of a codified religion with its divinely-ordained rules. In effect, codification of religion—being  a “people of the book”—is what Fukuyama believes is needed for the creation of early rule of law. Writing down divine rules, and having them “embodied” in a group of scholars or religious orders (ulamas, Brahmins, Christian clergy) whose main purpose is to watch over their application, limited the arbitrary power of the sultans, Indian princes and European kings.

Ottomans come for a special praise because they were able to create a strong state and an early rule of law (the latter, as just explained, thanks to Islam). The strong state was built on the backs of devşirme, the practice of abducting Christian children from their parents in order to create an elite corps of soldier- and administrator-slaves. This (in many ways abhorrent) practice allowed Ottomans to create a non-patrimonial state, to keep the grandees at bay, and not let kinship and family relations dominate the state. Ottoman decay began when janissaries were finally able to parlay their advantage to their children and then, together with magnates, to repatrimonialize the state. A one-generation aristocracy is the best way to ensure a strong non-patrimonial state. But it is hard to achieve because of people’s desire to transmit their advantages to offspring.

Accountability is the last to get on the scene. Until the European democratic revolutions, accountability was mostly non-existent (the Sultans did not have to ask people for permission for their actions) and was, at best, limited. It worked through the power of aristocracy, clergy or gentry to provide checks on the sovereign, principally to control the introduction of new taxes (Cortes in Spain, regional parlements in France, zemskiy sobor in Russia). But until the advent of the English parliament accountability was not only limited to a few classes, but sporadically exercised and even more sporadically obeyed.  It thus waxed and waned depending on the relative powers of the sovereign and aristocracy.

When does the political order decay? When the state is incapable to reform itself  to respond to new challenges (say, a powerful neighbor) and when it gets repatrimonalized.  The decay section is not exactly novel (to  be unable to reform is not very original), but the emphasis on repatrimonization as the source of decay allows us to better see that the state remains an unnatural organization in the sense that it is permanently in danger of succumbing to the more atavistic instincts of human nature—to prefer own kin rather than be subject to impersonal rules.

To have a strong state is therefore to be engaged in a permanent struggle against family. Christianity, according to Fukuyama, was particularly good in fighting family ties; Chinese history can be summarized as one endless conflict between the state and family. Every time you give a job to your friend or cousin, you are repartrimonalizing the state. And think how unnatural it is to behave equally toward everybody for it means, as noted by Montesquieu, that “a virtuous man has no friends”.

In the next post, I will provide some thoughts on the organization of the book, and a few critiques.

Monday, March 18, 2019

Formal and actual similarities between climate change and global inequality, and suboptimality of the nation-state


There are obvious and (to some people) surprising similarities between global climate change and global inequality. Both are obviously global problems. Neither can be solved by a single country, group or individual. In both cases, there are significant externalities and consequently coordination problems. Both issues are even formally linked (that is, not only conceptually): elasticity of carbon emissions with respect to real income is around 1. This means not only that if person’s (or country’s) income increases by 10%, emissions tend to increase at the same rate, but that the distribution of emitters mimics the distribution of income. Since in the global income distribution the top decile receives at least 50% of global income, it is also responsible for at least one-half of all emissions.

But there are also significant differences. The effects of global inequality are in part  the product of high within-country inequalities that obviously have to be dealt with at the level of nation-states. There are only two parts that are truly global. The first is that high global inequality also means high global poverty; the second is that high global inequality is due to a significant extent to high inequality between countries’ incomes which in turn fuels migration.

The issue of global poverty is an ethical issue for all those who are not poor. It is not otherwise an issue that affects the non-poor in their daily lives. Moreover since they do not share space with the global poor, they, in their daily lives, tend to ignore them.

Migration is the only concrete manifestation of global inequality that affects people in rich countries. If some of them want to reduce migration, it is in their self-interest to help growth of poor countries. But the benefits and costs of migration are unevenly distributed within rich countries’ populations. Some groups like employers, users of many services, and workers with complementary skills gain from migration while others who compete with migrants, or those who are afraid that their culture would be “diluted”,  lose. Thus the overall effect of global inequality on the lives of most people in rich countries boils down to the effect of migration.

The effect of global climate change is different in the sense that it is more remote in time and is uncertain. The winners and losers are not clear. To combat climate change requires adjustment of behavior by individuals and countries in order to forestall effects which lie in the future and whose benefits are unclear, while costs of adjustment are obvious and present. Individual adjustment, while entailing often significant monetary or convenience cost for that individual, has close to zero effect on climate change and is therefore not rational to undertake from a purely personal perspective. Change in the behavior of larger groups, induced by taxation of especially “bad” activities, can produce effects but the distribution of benefits from these adjustments is unknown. Even if the benefits were somehow equally distributed, a group that adjusted its behavior would receive a very small share of all benefits. It is a typical externality problem.

This implies that no group of people and no individual country has an incentive to do anything by itself: they have to be roped into an international framework where everyone is compelled to reduce emissions and where, in the case of success, net benefits would be, most likely, unequally distributed. (Note the similarity with social insurance schemes.) This is indeed what has happened with Kyoto and Paris accords. To complicate the matters further, however, nation-states are not really the best units to do this, although they are the only ones through which, given the current global governance structure, such policies can be conducted. This is because the man emitters who should be targeted are the rich, regardless of where they live. Thus, a much more appropriate approach would be an international (global) taxation of goods and services consumed by the rich. But for that one would need to have an international authority that would be allowed to tax citizens of different countries and to collect  revenues globally.

As I mentioned above, there is a formal equivalence between global inequality and climate change. Migration, which is the strongest “negative” (from the point of view of some)  effect of global inequality, also requires international coordination. The increased migration of Africans into Europe cannot be solved by any individual country alone. It can be “solved” or rather managed only by a joint action (distribution of quotas) involving both the emitting and receiving countries. But unlike climate change which is basically considered an overall “bad”,  migration is not an overall “bad”, but rather an overall “good”. Therefore targeting for more action countries that are likely to be the largest emitters of migrants does not make sense.

In fact, in the case of migration, we deal with a “global good” that reduces global inequality and global poverty even if it may in some cases produce negative effects. Because of these real or putative negative effects (economic and social) we need rules that would assuage some people’s fears lest these people wreck and stop the whole process of migration.  This is where the idea of “circular migration” and differentiation between job-related rights (equal for all) and civic rights (not available to migrants) comes from (in my “Global Inequality” as well as in the forthcoming “Capitalism, Alone”). In the case of climate change, we are dealing with something that is essentially a “bad”, but we have trouble making those who are generating the bulk of this “bad” pay for it and forcing them to change their behavior.

Thus in one case we try to keep what is globally good (migration) by reducing fears of those who may, locally, be affected negatively. In the case of climate change, we try to avoid something that is globally bad by using the only instrument that we have (nation-state) which is clearly suboptimal for that purpose. We are thus in both cases trying to devise what may be called “second-best” solutions, mostly because of a political limitation called the nation-state.

Friday, February 22, 2019

A reflection on two dictators


Tito and Franco could not be, in many ways, more different: they were the antipodes. One fought with the Nazis; another against them; one was a strict reactionary favoring religion; another an atheist Communist; one was excluded from the post-World War II global governance structures, almost a pariah; another fully integrated in them;  one leading a colonial war, another being lionized by anti-colonial leaders; one protecting private property, another abolishing it. I could probably go on.

Like with all antipodes, there are similarities too. Both were born the same year (1892), and died within less than five years of each other; each ruled for more than three decades, unchallenged; both acquired or gave themselves military titles: one was a Generalissimo, another Marshall; both named streets and squares after them (Tito even cities); both came to power through bloody civil wars; both proceeded to mass executions of their opponents (although the degree of guilt and involvement in atrocities and genocide among Tito’s opponents was of an entirely different order of magnitude than among Franco’s); both started economic reforms in the 1960s; both were born Catholic; and both were buried in memorial complexes (although Franco’s is much more grandiose).

What they have in common too is that very little of what they did or built remains standing. And it is precisely what I would like to highlight. How little has remained of what the European strongmen of the first half of the 20th century tried to create. History has not been kind to them (as they were not kind to their contemporaries). Lenin and Stalin’s edifice is all gone: the social system has returned to capitalism, and the country has crumbled and been divvied up. The same is true for Tito. Kemal Ataturk’s foundations are on a daily basis dismantled by Erdogan. Of Mussolini’s Italy there remain only imperial-looking buildings and bridges: no corporatism, no imperial glory, no monarchy. And obviously, Hitler’s Germany ended up in ruins, both literally and figuratively. The Federal Republic (as well as the GDR) were built on the direct contradiction of all that the Nazi stood for. We should be glad that history has been so unkind to the 20th century's European dictators.

But looking at Tito and Franco I was also keen to look at what still remains of the two’s “work”. And it seems to me that the verdict there is in Franco’s favor (though I will explain later why it might be so). Reading on the one hand Spanish newspapers and on the other hand, Serbian (and less frequently Croatian), I notice a much greater frequency with which Franco, compared to Tito, is mentioned. And this is not only because of the current moves to exhumate, and bury elsewhere, his remains. He is mentioned by those who criticize the post-Francoist constitution, and by those who notice that the current monarchy was “blessed” or installed by him.  

For Tito the situation is different. Not only has the edifice he created disappeared and been broken into pieces (although along the borders he designed or at least approved), and the political and economic system he favored disbanded, but there is no one in the successor states of Yugoslavia that can be considered  to be his “heir” or to have been put in a position of power by him, even indirectly so.

While the political heritage of Franco is more apparent, this may not be so on the level of popular memories or perceptions. Francoist “logistics”, names of streets etc. are, I think, completely expunged in Spain, but Tito’s remain in parts of Yugoslavia (in a few places in Slovenia, Croatia, and Macedonia; only in Serbia is he completely “erased” from history although his tomb is there). In people’s memories however Tito’s period, for most of those who lived then, or who learned about it from their parents, remains linked with economic prosperity, ethnic peace and conviviality, and an important international role. While the economic prosperity is significantly greater in some former republics now, it is not so in others; ethnic peace has been replaced with either permanent conflicts or at least tensions—almost no single border of the former republics is free of dispute; and a significant international role has been replaced by its very opposite: insignificance. But this is not the case with Franco because today’s Spain is much richer, freer, and internationally influential than the Spain he left.

So, while the “people’s memory” may be kinder to Tito than to Franco, the fact that politically everything that was associated with Tito has disappeared means that if we measure how much, politically, remains of the two, the balance is in Franco’s favor. But that does not mean necessarily that Franco was a better statesman. I think the main difference comes from the “material” with which they built their states. Franco built on the foundation of a nation, that although regionally and ethnically diverse, existed within more or less the same borders, for some seven centuries before he came to power. Moreover, a nation that was a major world power. Tito’s “material” were peoples who, for most of the previous five or so, centuries were under foreign rule or tutelage. The foundation on which Tito built existed but for a couple of decades before he came to power—and moreover exploded to pieces and genocidal killing in the World War II. So one built with stones, another with sand.

Tito’s task, as well as the task of every Eastern or Central European leader who tried to rule a multi-ethnic country, was to build a state edifice using a crumbling “material”—or to paraphrase Bolivar, to try to harvest the sea. (“J’ai labouré la mer”). This is why politically or socially nothing remains of Tito’s times. And why such a state of affairs will never return.