Wednesday, May 16, 2007 13 Comments

UR's plan to fix Iraq

It's all very well fixing the world in theory. It would be nice, however, if someone would fix it in practice. Obviously the place to start is the most screwed-up place we can find.

Therefore, please allow me to present Unqualified Reservations' one-page plan for Iraq.

The goal of this plan is to convert Iraq into the most prosperous and stable region in the world. The primary obstacle is the weather, which will still suck. Anyone with thoughts on Mesopotamian climate mitigation should forward them immediately to my attention.

First, we need to deal with Iraqi Kurdistan. The US will recognize the Kurdistan Regional Government within its present de facto borders, and formally commit itself to nonintervention in any dispute between Kurdistan and Turkey.

This leaves fifteen Ottoman-era provinces, or vilayets. The US will abolish the so-called nation of "Iraq," default on its debts, and privatize the vilayets with their present borders, converting them to independent emirates governed by publicly-traded sovereign security companies.

These SSCs will be the sovereign governments of the new emirates of Mesopotamia. They will be responsible for all internal security within their territories. The US will guarantee their external security (security against foreign invasion) for a period of ten years. In return they will agree not to convert themselves into Al Qaeda theme parks.

The SSCs will be publicly-traded corporations listed in Dubai. Their shares will be divided into two classes of equal size, A and B. All profits the SSCs produce will be returned to all shareholders equally, but B shares have voting rights whereas A shares do not. In 25 years, all A shares convert to B shares.

B shares will be sold in a Dutch auction in Dubai, providing the initial capital for the SSCs.

A shares will be allocated uniformly among all persons now living who were born in Iraq including Kurdistan, and who give, or whose guardian gives, their word of honor to support the new system of government. All Iraqis will be allocated shares of all emirates, without regard to their current residence, whether in Iraq or elsewhere. A shares are not citizenships. They are fully transferable, they confer no rights except for the dividends they receive, and no more will be issued.

The SSCs, since the emirates will be their only assets, can be expected to govern them stably and effectively, much as the UAE (Dubai and its neighbors) are governed. The difference is that public ownership, rather than family ownership, is a much stabler and more efficient system for governing a large corporation. As a result we can expect the Iraqi emirates to be even more effectively governed than the UAE, which is already quite peaceful and prosperous.

The first task of the SSCs will be suppressing all violence and other organized political activity in the emirates. They will abolish all gangs, parties, mafias, militias, liberation fronts, revolutionary brigades, and other murderous detritus of the democratic period. Under the SSCs, the business of Iraq will be business, just as in Dubai.

Or we could just get the hell out and let the place turn into "Mad Max: The Documentary." Or we could keep using it as a sort of live-fire training range to create a battle-hardened army (perhaps the principal unrecognized advantage of occupying Iraq). I'm sure that, by some definition of ethics, these are the only ethical options.


Anonymous nick said...

Great blog, Mencius. I love your formalism idea, with the caveat that there is a strong distinction to be made between police powers and what we consider normal corporate powers today. There are crucial distinctions between arrest/imprisonment and kidnapping, between taxes and extortion, between judicial damages and robbery for revenge, and so on. The distinctions, however, contrary to today's popular ideas, are generally ones of due process, not of whether the entity doing the arrest or kidnapping is a "government" or not. Under the "property-in-everything" view, the rights to perform these governmental activities are property rights, which fits right in with formalism. But they don't necessarily have to be bundled with each other.

Another cavaeat is that free alienability of all rights goes overboard. Some kinds of property rights, particularly some political ones, should be inalienable.

This Iraq plan is interesting. Of course the Coalition Provisional Authority was something of a corporation with political powers itself, albeit not sold on an exchange.

I have written about how most of the English colonies in America were also corporations, some of them with issued shares as proposed here. While the shareholders were mostly not the citizens and vice versa, the citizens nevertheless gained a considerable degree of power through legislatures allowed in the charter or granted by the corporation to the citizens. So there was a democratic vote separate from shareholding. Other such colonial corporations, however, had far worse track records at liberty, e.g. the African Company which given its business of kidnapping slaves received a charter which allowed it, at least as far as the English king and law were concerned, to declare martial law in Africa.

When privitization was tried (for normal business corporations) recently in Russia, many shareholders ended up being defrauded or extorted from their shares. Furthermore, nasty political problems could arise from people who sell their voting share and later regret it, much less those who lose their shares to fraud or extortion (new recruits for the insurgency, anybody?). This problem would be even worse given the ease of violence in Iraq combined with the corporation itself controlling the courts that decide disputes over the ownership of its own shares.

I thus would amend your proposal as follows:

(1) Voting shares should be inalienable.

(2) The corporate charter must include protection of basic procedural rights of the kind found in many constitutions (the American colonial charters broadly required the corporations to respect and protect "the basic rights of Englishmen", so that the colonists inherited an unenumerated series of traditional common law rights).

(3) A special international court or a micro-federal Iraqi court would hear appeals of issues involving the corporate charters, e.g. over who owns shares, as well as over the basic rights granted to citizens and other persons the charter.

(4) There should be another set of shares which would be shares to mineral rights -- no voting power but have a dividend based on a set fraction of oil profits from fields. These could be Iraqi-wide so that citizens have an incentive to enhance the profits of their neighboring territory as well as their own, thus some incentive to avoid war -- at least nothing to gain by conquering the neighboring oil fields. There should be some restrictions on alienation here, too, and perhaps the dividends should be only paid to senior citizens in the form of a pension.

May 16, 2007 at 4:36 PM  
Blogger Mencius Moldbug said...

Nick, as a huge Unenumerated fan I am overjoyed to see you here. I will now perform a small jig.

I think the difference between our philosophies is that, unlike basically everyone in the world, I don't see any apriori reason to believe in inalienable rights. This is what takes me out of the legal-formalist and libertarian range, to something that's undeniably darker and stranger - less Christian, I would say.

My view is that a peaceful and prosperous modern society could operate entirely on the basis of pacta sunt servanda, without inalienable rights. In other words, it would recognize no wrong besides breach of contract, and give everyone full sovereignty over future selves.

The question is somewhat abstract. Government is a matter of customer service for me, and I don't think a lot of prospective customers would actually want to live in a city where people could enforceably sell themselves into slavery. It's just weird. Nonetheless, I see nothing at all in this concept inconsistent with the idea of law.

Don't get me wrong. I do not flounce around in my toga and tunic. I have no desire to restore the Roman Republic. And I have great respect for the English tradition of common law. It is an organic product of history, worthy of all the veneration it receives.

But it is not a product of God. And one tendency I dislike in Locke and in the libertarian writers who followed him, right down to Rothbard, is their tendency to find ethical absolutes and assume that these will result in workable law. Homesteading theory, for example, as Nozick pointed out, is a mess. I actually prefer Locke, who tells us that natural law is God's law, to Rothbard, who claims it can be derived from pure reason. To me this is crypto-Christianity in a nutshell.

There is also a lot of Germanic law in the common law, in particular the principle that - as you mention - government agency confers no special rights, rex sub lege. Again this is a hallowed and very elegant design, even if there is little trace of it left in practice today.

But this does not make it right or wrong. Perhaps the right to arrest may not have to be bundled with sovereign ownership of property. But maybe it should be, anyway.

So, again, there is much that is great from the English legal tradition. But there is some, also, that I would say is suspect. I am not a conservative, so I feel free to just call it as I see it.

And I especially do not think that political rights should be inalienable. If you make the state a corporation (which of course it already is - a corporation being just a bunch of people who have agreed to work together), you allocate shares, and then you confer both voting rights and inalienability on those shares, you recreate democracy.

Most people would say this is a good thing. I think the assertion is by no means obvious. I invoke K-L by reference. Hans-Hermann Hoppe is not half the writer K-L was, and I don't think he's at all convincing to anyone who's not already a libertarian, but his book is good too.

So I actually think the example of the colonial charters is an example of what not to do, because (as you say) those charters quickly degraded into democracy.

A slightly more believable formalist thought-experiment (I would love to see the Bush Administration take my advice on Iraq - I think it's sound advice - but...) is the question: what happens if Dubai does an IPO?

Residents of Dubai, especially expats, have no political rights at all. Dubai offers them a generally British system of law, but it is a sovereign nation and the Ruler can change anything at any time. They seem quite happy with the deal.

The reason that the people of Dubai don't fear oppression is that they live under a government that treats them as customers. Their rights are enforced by the fact that the al-Maktoums have every reason to treat them well, and every reason not to abuse them. In other words, a very ordinary relationship between a business and its customers. It is all "exit" and next to no "voice." And, clearly, it works.

If Dubai was a publicly-held company rather than a family-owned one, this bond if anything would be strengthened. Residents of Dubai would be much more confident in believing that commercial reasoning, not family infighting, determined their fates. Their protection against politics would be all the stronger.

Notice that, in this theory, there is no need at all for popular sovereignty, or for a natural law above the sovereign. Dubai is just a patch of land owned by Dubai Inc, and if you want to live there you have to subject yourself - irreversibly - to its ordinances.

Not that there isn't a use for external arbitration. Notice that in my proposal, the SSCs are chartered in Dubai, not in themselves. In a world of SSCs, cross-chartering would be ideal, so that a feedback loop cannot develop around a breakdown of justice. Also, as in most libertarian theories of private sovereignty, subjecting one's decisions voluntarily to an external arbitrator may attract customers.

Basically, what formalism boils down to is the proposition that governments are a form of property as legitimate as every other, and that the whole tradition of thought that associates personal liberty with popular sovereignty is a blind alley. Personal liberty is an emergent property, I believe, of any efficiently-run state which is internally secure.

As for the non-American colonial experience: I am certainly no expert on the various African chartered companies, but I do know that Europeans in Africa by and large bought rather than kidnapped their slaves. One can argue that this is morally equivalent, but the argument has to be made.

Certainly, from our moral perspective, the charter granted to the Africa Company should have enjoined it from the slave trade. In any case these chartered companies were not truly sovereign; they existed and eventually were destroyed at the sufferance of the Crown. I'd also point out that if we are evaluating track records of Western systems of government in Africa, you have to work awful hard to make democracy look good.

The sine qua non of any state is internal security. You can't even think about external security until you control your territory. As a Machiavellian in the sense of James Burnham, I think of "popular sovereignty" as a political formula as per Mosca. In other words, it is a way of convincing your subjects that they actually govern themselves, despite the fact that this makes no logical sense and cannot possibly be true.

My view is that modernity has made political formulas unnecessary, mainly as a result of advances in military and communications technology. It's just not that hard to restrain a mob if you are determined to do it. People can learn to accept the idea that they have to pay taxes because their taxes are rent, paid for living on someone else's sovereign property, whose owners acquired it by right of adverse possession 500 years ago. I think Dubai bears this out.

May 16, 2007 at 7:28 PM  
Anonymous George Weinberg said...

Iraq is among the worst places in the world to try out something like ancap, though. The whole ancap viewpoint is based on the idea that wealth is of human creation, is rightfully initially owned by its creators, and after that is traded for goods and services. This idea, while not quite valid for the world as a whole, would work pretty well for places like Japan or Switzerland that, despite having drawn quite weak hands when it comes to natural resources, nonetheless became quite wealthy.
For places like Iraq, though, the zero sum model seems more appropriate. Wealth is control of the natural resource, which exists in an essentially fixed quantity. That is to say, although technological advances may increase the amount of recoverable oil, most of these advances won't be made in Iraq or by Iraqis. For the proposed security companies, oil revenue would be almost the only source of income, and people would be (in almost all cases) a net liability.

May 16, 2007 at 7:58 PM  
Blogger Mencius Moldbug said...


Again an insightful comment.

It is easy to see how we got to the point where it's tempting to see the Iraqis as a net liability. The proposition certainly can't be ruled out in any a priori sense - surely, after the Singularity, they would be. And surely some are.

Nonetheless, a human head is a computer of mind-boggling processing power and it runs on next to nothing in food. And note that Dubai, right next door, has a considerable need for unskilled labor on its Vegas-Disneyland buildings.

The fact that there is oil (and not all Iraqi provinces have oil) neither adds nor subtracts to the value of the humans. The humans can certainly cause trouble for the oil business - but all the more reason to keep them happy.

My view on Humanity is not too far from Maistre's, and surely events have not given us a very high opinion of the average Iraqi. But we have seen him under a very, very perverse set of incentives.

May 16, 2007 at 8:46 PM  
Anonymous nick said...

I'm not sure there is such a large difference between our worldviews, as reflected in our both being happy to have encountered each other here. One bit of difference may lie in your statement "I am not a conservative". I am skeptical of this claim since you are very interested in paleoconservatism and ancient legal principles. But to the extent you engage in (what ironically seems to me rather Idealist) reduction of the political world into simple principles (whether property rights or pacta sunt servanda -- two very different things) it is indeed easy to get quite radical.

BTW, you must believe that at least those principles themselves are inalienable, no? Or should I also be able to sell all the future rights of myself and my children to ever have any of our contract or property rights enforced?

I am a conservative, in the plain sense that I believe there is much worth conserving. Richard Dawkins pointed out that organisms have highly improbable structures and fuctions, but if you splice out just a handful out of the hundreds of thousands of genes from an organism you end up with lifeless goo. Almost every mutation is deleterious. Organisms are highly evolved and fragile in this sense. Genetic engineering has been going on for a long time and it still proceeds mostly one gene at a time for this reason (even though the Singularity is supposedly just a few years away :-).

I believe the same thing is even more true of the legal and political world. It is more complex and even less susceptible to human understanding and tinkering than our genetic code. Civilization would collapse without contract, property, and either tort or criminal law -- these are ancient and highly evolved "strings of DNA". We thus think alike when you emphasize the importance of property and contract. But there is much else legal and political worth conserving and just these two principles can hardly be sufficient for forming a working legal or political system. Many other highly evolved memes are needed as well.

If I had to simplify my worldview into brief principles I'd quite agree with the crucial importance of ownership and pacta sund servanda, but I'd add at least one other crucial thing I've learned from extensive study of legal history -- namely the special role of coercive powers -- especially the legal power to arrest people or property, as opposed to the serious crimes of kidnapping and theft.

Small-government libertarianism and AC both fall down in failing to realize how important this is. The small-state people simply assume these are the monopoly of the state. The forbidden "initiation of force" is defined in terms of the substantive law, and the issue of who should respond to a possible or probable initiation of force, and by what procedures, are considered secondary at best. AC, since it recognizes the unbundling of police powers from governments, should know better but it doesn't. It simply assumes "the market" as understood by modern economists living in modern states will prevent historically real outcomes of unbundling coercive powers from the state, such as slavery, brutal extortion, and genocide. But the market itself as we know it is a creature of contract, property, and tort law bundled in with the state. Back when guild corporations wielded police powers the result was far from a free market economy and was quite deplored by Adam Smith and the like.

If I had to state a simple principle that I think is necessary to convert AC into a useful formalism, a way to distill the politically crucial area of procedural law, it might be nemo iudex in causa sua -- no person should be a judge in his own case. Our proposals to charter the Iraqi SSCs and adjudicate and enforce their charters elsewhere (whether an Iraqi micro-federal court or in Dubai) fall out from this ancient principle.

The exit costs of Dubai, Hong Kong and Singapore are low because these are highly evolved trading ports. Their cultures been specializing as international trade hubs for a very long time. Most of the rest of the world does not and will not. So their model, attractive as it is, cannot readily be exported to places where exit costs have been extremely high and continue to be high, like Iraq. The result might well more resemble the Congo Free State than Dubai.

All that said, having lived in D.C. and seen it firsthand, as well as having been a victim of it, I am very sympathetic to your description of the ideologically deceitful nature of the Fourth Republic.

May 17, 2007 at 2:28 PM  
Blogger Mencius Moldbug said...


Thanks again for your kind comments!

Formalism is not an Ideal, in my opinion, because it is a well-defined "design pattern" with a well-defined purpose. One good way to see this is to apply it to paradoxes, such as the one you propose above.

The fact that people are born and die introduces a complexity into this nice system of interacting agents in a scarce resource environment. A good example is one your question implies: can you sell your children into slavery?

Formalism is not an abstract good. It is not good because it is good. It is good because it achieves its purpose, and its purpose is to prevent violence (actually, I now think "chaos" is a better word, violence is overexposed) - that is, the combination of conflict and uncertainty.

It does this by holding people to their own promises. Holding a person to a promise their parents made for them doesn't compute. It is much more likely to be recognized as invalid by all parties, leading to uncertainty etc.

So a reasonable formalist approach to parental custody, I think, gives parents complete potestas over their children until emancipation at maturity, but no power to contract on their behalf.

As for individual rights, however, my answer is yes. Perhaps in some societies, this would be quite literally suicidal. But there are always many instruments of suicide.

The Congo Free State is not my example of good government. It's not clear to me, however, that it was that much worse than its postcolonial successors, especially the present state of the same place. It's also not clear that the way Leopold ran the place was the most efficient way to run a railroad - it certainly doesn't sound like it to me. And note that he was eventually expropriated, not strong evidence of shrewdness.

I am afraid I have a bit of Hobbes in me. Not only do I think of coercion as an essential power of the state, I also feel that restrictions on its use have to be abandonable in case of military necessity. One cannot arrest an invading army. Also, asymmetric warfare is no fun at all, and any policy that makes "urban guerrilla" activity more likely to succeed makes it more likely to happen.

That said, defining initiation of force in terms of substantive law, not in terms of sovereign right, is a very attractive approach which makes it much easier for one's citizens to sleep comfortably in their beds. Surely in this sense it is profitable.

The division between civilian law and martial law is important and necessary, and one wishes it had not been blurred, for example, in Iraq (which should never have attempted to return to civilian government). Ultimately I believe that the power to impose martial law at any time and for any reason is an essential element of sovereignty, because without it sovereign property cannot be secured. That said, I agree that the substantive treatment of coercion is a very nice feature of civilian law, although I am not sure it is an essential one.

When guilds had police and monopoly powers, they were acting as parasites - awarding guild monopolies is not the way to maximize the profit potential of a nation. Monarchs in the Western past were always subject to informal political pressures. They had constituencies. They were not in any sense CEOs.

Exit costs are certainly critical. The rent per capita you would expect from a global monopoly government is much higher than that you'd expect from a world of thousands of competing cities. Indeed there is, I think, a vicious cycle effect - the more consolidation occurs, the greater the advantage of further consolidation. An ideal formalist "reboot" would try to get to at least 2^16 jurisdictions - there must be some sweet spot at which the centrifugal force, efficiency of focus, outweighs the centripetal advantage of monopolistic consolidation.

Nonetheless, our existing governments are very large and very hard to exit, and run very much in the spirit of revenue maximization. And even formalizing these would be an improvement, because it would require us to identify the exact beneficiaries of tax dollars and stop the constant squabbling. For example, you could estimate the individual actuarial value of "entitlements" and use it for an equity (or, more likely, bond) distribution.

As for the conservation of law, I am certainly not offended by the concept. I have no visceral reaction against conservatives. I have tried very hard to train it out of myself.

But my original CS specialty was operating systems, and I find it all too easy to imagine a world which has been using Windows for the last 500 years. The idea of writing a new OS would be almost sacrilegious.

Yet Windows sucks already. And the difficulty in conservatism is figuring out which elements - such as, I believe, patents - never belonged in there in the first place. If you follow an essentially positivist program, deciding what to include rather than what to exclude, you get very different results. Yes, law is large - but it was large in France, when Napoleon rebooted it. I refuse to believe that the problem cannot be solved at an intellectual level, especially given the number of lawyers and legal scholars in the world.

Ideally, of course, jurisdictions of "old law" could compete against those of "new law..."

May 17, 2007 at 5:35 PM  
Anonymous nick said...


Your rejoinder is insightful as usual.

Although I take your point about the need for emergency powers, I can't help but wonder if it's been overly influenced by the handful of recent historically minor events that have been heavily overblown by our paranoid press. Vastly worse than anything nongovernmental terrorists have ever done is the extensive record of mass violence by governments, of which only a handful of the many brutalities of the 20th century serve to illustrate the point -- Soviet gulags, communist starvations and killing fields generally, Hitler's "work camps", firebomb and nuclear massacres of civilians, and so on. Historically governments have committed far more mass violence than individuals or terrorist NGOs. I'd thus say the goal of ending violence (or chaos) implicates
the technique of reduing uncertainty by enumerating powers of coercion and leaving open-ended our rights to act free from coercion. So here's my general approach:

(1) Powers to coerce (arrest, imprison, kill, etc.) should be enumerated -- i.e. they should be defined and interpreted in narrow terms -- this parallels the security principle "least authority." And they should generally be alienable.

(2) Rights to act in uncoercive ways should be unenumerated (thus the name of my blog :-) and often should be inalienable.

The extent of powers should vary -- but in a formal way -- by the kinds of property and contracts to be protected and by the extent to which the enemy follows the rules.
In an area dominated by zero-sum fights over minerals like oil, the optimum answer is likely to still be rather poor by most peoples' standards. I notice that although it's easy to find flaws in your Iraq proposal, nobody (except perhaps my small proposed amendments) has actually proposed here (or anywhere else, to my knowledge) anything better.

As for holding children responsible for their parent's promises, this has to occur to some extent. For example, an estate generally has to satisfy the debts of the deceased before it can be inherited.

And the area of property rights is quite different from contracts. For example easements, covenants, and the like that "run with the property" are enforceable against subsequent owners. One can loosely say they "agree" to these restrictions when they buy the property, but neither the seller nor the buyer generally has the power to change them -- they are not contractual in nature. But they are an essential part of property law, and have analogs in other areas, e.g. articles of incorporation bind future shareholders and directors who never made the initial agreement, and no agreement in violation of those articles by any participants can change that.

So although pacta sunt servanda is a crucial principle there is plenty of important law and politics that can't be reduced to it, and children are stuck with some of the decisions of their parents. I find it quite preferable to stick them with inalienable rights than with inalienable duties or inalienable vulnerabilities to arbitrary power.

May 18, 2007 at 5:40 PM  
Blogger Mencius Moldbug said...


I intend to take this up again on the main stage, so I'll try to be brief.

Of course the murders by government in the 20C were tremendous. But those murders did not occur because states like Stalin's Russia were secure in their absolute sovereignty. In fact it was just the opposite. Stalin murdered out of fear - in his eyes, everyone he purged was a potential usurper. And under the Bolshevik system this was, in a sense, quite accurate.

In other words, these murders occurred as part of a struggle for control of government. If Stalin had had a magic wand of sovereignty that was self-enforcing, he would have had no conceivable reason to execute anyone.

Since he had no such wand, his paranoia - read Sebag-Montefiore's _Court of the Red Tsar_; the closer you were to Stalin, the more terrified of him you were, and probably the reverse (note Beria's fate) was rational in general, no matter how unjustified in specific.

Terrorism and fascism, in other words, are flip sides of the same coin. A terrorist (in the modern sense of the word) is a fascist who is out of power. A fascist who is in power has to worry that others will duplicate his feat, and thus cannot abandon his murderous ways.

Unenumerated freedoms are emergent properties of an absolute sovereign, who has no incentive to restrict "victimless crimes" or other behavior in which the interactions of his subjects do not interfere. In other words, they emerge naturally as a consequence of mutual interests.

Whereas if you try to constitute them as a consequence of limited government, you make the sovereign a judge in his own case. Obviously you are aware of the problems with this, and in fact it's hard to say it has worked well in practice.

"The extent to which the enemy follows the rules" is a very insightful thought, not new but not much regarded these days. I have a little to say on this as well.

I think of an estate as the legal continuation of the deceased. As for real estate, this is a nexus of contracts not just among buyer and seller - it also involves (in British terms) the Crown, which maintains the title structure, including easements etc.

May 19, 2007 at 7:24 PM  
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November 6, 2008 at 5:39 PM  
Blogger 信次 said...

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January 31, 2009 at 11:47 PM  
Anonymous Anonymous said...

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March 2, 2009 at 7:27 PM  
Anonymous Anonymous said...

^^ nice blog!! thanks a lot! ^^

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March 2, 2009 at 7:29 PM  
Anonymous Anonymous said...


March 6, 2009 at 5:08 AM  

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