Tuesday, July 3, 2007 43 Comments

Why, when, and how to abolish the United States

A good test for getting rid of anything is: if we didn't have this, would we need it?

For example, let's say you have a ratty old armchair. You love your chair, you do. It was a new chair once and fine, it reclines, and you have spent many cool evenings ensconced in it, drinking Henry Weinhard's and munching Pringles, maybe indulging in a few controlled substances and watching Liquid TV (yes, the chair is that old). But many Pringles and not a little Henry's have made their ways into its funky blue fibers, which are not, in any way shape or form, washable. And frankly, with the new set from Pottery Barn - you're just not sure it goes.

Here's one way to put the question. If you didn't have your chair, and you saw it sitting on the sidewalk somewhere, would you say: "Dude, someone's throwing out a perfectly good chair!" If so - definitely, keep it. If not...

Of course, to make the analogy accurate, the chair would have to be 231 years old, so full of beer and chips it makes a sort of slosh-crunch noise when you sit on it, have a huge sharpened coil that's worked its way past the foam and stabs you in the ass on a regular basis, smell like a cross between a dead goat and an oil refinery, refuse to function at all without a staff of specialized chair administrators who must be onsite 24-7 and are extremely expensive and rude, and have expanded to fill the entire first floor of your house, with giant pseudopodia of ratty blue upholstery snaking out the windows and invading the neighbors' lawns.

Obviously, I've stopped taking the tablets. I feel much better now. Everything is clear.

If central North America, a wonderful place full of awesome people, consisted of forty-eight perfectly normal countries which related to each other much the way present management relates to Canada, except maybe without the immigration nonsense, what would happen? Would we be reduced again to bondage under the steely paw of the British Lion? Would the French invade, or the Russians, or the Mexicans? Would armored spearheads strike northward from Juarez, not stopping until they refilled their radiators with the clean, cold waters of Lake Superior?

Or would our children, without a Department of Education, be uneducated? Without a National Security Agency, would we feel insecure? Without a Department of Energy, would our cars stop running? Without a State Department, would we... does anyone even know?

Your mileage may of course vary. But I think this answers the "why." The "when" is also pretty obvious. That leaves "how."

Unfortunately, I'm pretty sure it's impossible to abolish the United States. I think there will still be a United States in 2076, 2176, 2776, and 3776. I don't see any way around this at all. And if there is a way, it is probably pretty nasty, because let's face it, these guys, whatever we think of them, have some impressive explosives.

So I think it makes sense to think about plans that (a) don't involve blowing shit up, (b) are actually practical, and (c) otherwise come as close as possible to abolishing the United States.

My basic conclusion is that if the reason you want to abolish the United States is that you don't like paying taxes, you are pretty much out of luck. In fact, under my plan, there will still be a United States and taxes will probably, if anything, go up.

But taxes are just payments from some Americans to other Americans. Think of them as rent. Why do you pay rent to your landlord? Because he owns the place. Why does he own the place? Do you know? Do you care? If you insist that everyone who owns something has to, in some deep spiritual sense, deserve it, what you need is not a country but an ashram.

If your landlord was like the United States, though... but I think we get the point. Which is that the problem is not all the money we send to Washington, but all the crazy things Washington does with it. If DC was just a big check-sorting facility, cashing checks from some Americans and cutting them to others, I for one would have much less of a problem.

Clearly, the United States - today - is not a check-sorting facility. It puts men into space and brings them back again, it is intensely concerned with Somalia, Nepal and Venezuela, it studies horticulture, heart disease and horse psychology, it has opinions on what we should and shouldn't eat, drink, smoke or screw, and it ain't shy about acting on them.

But what is it? And why is it here? What in God's name is the purpose of the United States? As Jack Nicholson said in About Schmidt: "Who is this old woman who lives in my house?"

You need to think back to when you were taking the tablets. Most Americans have still not figured out that you can just hide them under your tongue, pretend to swallow and spit them out later in the bathroom. So they still think what they're supposed to think.

The result is that they believe in the United States. They relate to it pretty much the way a Catholic relates to the Catholic Church. Oh, sure, there are problems, the Archbishop of Ouagadougou likes little boys, St. Peter's roof leaks and the Pope is an atheist. The Church is always in need of repair. But its problems are occasions for renewed energy, not for throwing out the baby with the bathwater.

This sort of institution-worship, in the context of countries, is called nationalism. Nationalism is a sort of mental virus that makes its sufferers think that, although they can't see a baby in the bathwater, although they have no reason at all to believe there was ever a baby in there, although an old oil drum full of rain and mosquito larvae is basically the last receptacle any mother would even consider using for the purpose of baby-washing, the water is deep and not exactly transparent, and there certainly could be a baby in there, so there probably is one.

Nationalism in the modern sense of the word was pretty much invented by a Frenchman, and major-league asshole, by the name of Jean-Jacques Rousseau. As this dickhead wrote, in his Considerations on the Government of Poland:
When first he opens his eyes, an infant ought to see the fatherland, and up to the day of his death he ought never to see anything else. Every true republican has drunk in love of country, that is to say love of law and liberty, along with his mother's milk. This love is his whole existence; he sees nothing but the fatherland, he lives for it alone; when he is solitary, he is nothing; when he has ceased to have a fatherland, he no longer exists; and if he is not dead, he is worse than dead.
As anyone who's ever watched the History Channel knows, this kind of crap has since been responsible for the murder of well over a hundred million people. Many of them, of course, in Poland - thanks for nothin', Jacques. (On the flip side, you can't say Hugo Boss didn't make a cool uniform.)

So when the pills wear off, what is the United States? It's actually very simple. The United States is an organization acting as a legal person. In other words, it is a corporation.

This particular corporation happens to own most of North America. It also happens to have a very unusual management structure, about which more in a moment. But to cement its corporateness in our minds, let's change its name and call it "Fedco."

Fedco is basically in two businesses. One of them is real-estate and the other is security. No one else is going to secure Fedco's continent for it, so it has to insource.

Fortunately, when you have nuclear weapons and your only neighbors are Mexico and Canada, security isn't exactly a difficult problem. It's also important to consider internal security - Fedco won't last long if its tenants can rise up and appropriate the property. But happily, at least for Fedco's purposes, we're a long way from the age of muskets. An AR-15 is a nice weapon, but it's not much use against modern armor.

What we have here is a corporation with enormous assets and almost no costs. Fedco can jack our rent all the way to the top of the Laffer curve. As, in fact, it does - Democrats and Republicans may disagree on how to get there, but they agree on revenue maximization. And, with modern military technology, Fedco's security overhead should be negligible.

So why is Fedco up to its eyeballs in red ink? Why does it funnel vast rivers of cash into so-called security measures that seem to have nothing at all to do with protecting its property? And into all other kinds of crazy things, for that matter? GE, Google and Microsoft are as big as many governments and certainly more profitable than any, and they may have executive jets, but none of them had a space program last time I checked.

In fact, when you look at Fedco's management structure according to the normal theories of corporate governance, we understand perfectly why it's so screwed up. Granted, it is a very extreme case. But all the pathologies are extremely predictable.

A normal corporation involves three classes of actor: customers, contractors, and creditors. Customers are people who pay the company for goods or services. Contractors are people who the company pays for goods or services. Creditors are people the company owes money to.

The absolute and inviolable rule of corporate governance is that a corporation is controlled by its creditors. Typically the class of creditors with control are the shareholders. Equity (stock) can be defined as the least senior tranche of debt - shareholders only get dividends if everyone else is satisfied. So equity returns are the most sensitive to the company's performance, and he who holds the bag gets to carry it. But in a bankruptcy, for example, the whole cake shifts down a layer - shareholders are wiped out and debtholders become shareholders.

Shareholder-controlled enterprises scale extremely well for two reasons. One, all shareholders have exactly the same interest - making the company as profitable as possible. Two, the distribution of profits is simply defined as the distribution of shares. The result is that there is zero friction between shareholders.

A corporation controlled by its customers is sometimes called a cooperative. Cooperatives work fine for small enterprises whose customer base is homogeneous and whose management is relatively uncomplicated. But they tend to break down quickly at larger scales, because customers form factions which try to subsidize themselves.

If the cooperative is a fruit store, for example, people who like cherries may form a party that agitates for low margins, or even negative margins, on cherries. It's easy to make this up by jacking up the price of peaches, and if there are more cherry-lovers than peach-lovers, this is exactly what will happen. The result is that people start screaming at each other and the whole enterprise explodes, the usual fate of cooperatives.

One of the many strange ideas associated with nationalism is something called "democracy," which argues that Fedco should be a cooperative. According to democratic doxology, cooperatives provide the best customer service, because customers vote for better service.

Almost every intelligent person in the world today accepts this idea as sensible and obvious, but the same could once have been said for the divine right of kings. Its weirdness is easy to see if you imagine what would happen if, say, Starbucks replaced its conventional system of shareholder government with a political system in which customers elected management. Perhaps in frenzied rallies and debates of the Dark-Roast versus Really-Dark-Roast parties. The idea that this would result in better coffee is laughable.

Government may not be as complex and difficult a task as most of us think, but it is certainly more complex and difficult than serving standardized hot beverages. Thankfully, most of us now understand that politicians are just for show and cannot, under any circumstances, be allowed any real responsibility. The occasional cases in which this principle is violated serve primarily to remind voters of its importance.

So Fedco, while it still has a bit of the cooperative flavor, is mainly organized around the other model of bad corporate governance: control by contractors (essentially, employees). To be exact, most of Fedco's decisions are made by its civil service.

As a general rule, an employee-controlled enterprise will never, ever be profitable. In fact, even its bondholders are lucky if they see any payments. The primary interest of contractors is, first, if they can get away with it, in distributing profits to their own pockets; and second, if they can't, in expanding or at least protecting their own power bases. They will make as much work for themselves as they can get away with.

Of course, even the CEO of a company is a contractor. This is why corporations have boards, who work for the shareholders. (In my opinion, it's an abuse to have any corporate employees, even the CEO, on the board.)

If you combine a shareholderless governance model with an enormous revenue stream, you have the perfect recipe for massive and permanent inefficiency and incompetence, and an enormous overgrowth of pointless, self-serving tasks. This is exactly what we see in Fedco. Of course, it could just be a coincidence.

The solution, in my humble opinion, is to make Fedco work like a normal corporation. This can be done by abolishing its current management structure and, retaining all the rights of and limitations on the existing United States, replacing its political system with shareholder-based governance.

A Fedco managed by its shareholders will naturally tend to devolve into a check-processing center, with a small expenditure on security. (If you're spending more than $10 billion a year to secure the US, you're probably spending too much.) Fedco can streamline itself further by delegating all tax collection to the now quasi-independent states - its shareholders care about the quantity of their dividends, not how they are raised. I suspect the Laffer maximum probably involves a lower, flatter and simpler taxation structure, but I'm just guessing.

The only problem is that Fedco, at present, has no shareholders (though many creditors). Converting Fedco from a gift of Providence, a light for the ages, a city on a hill, into an ordinary money-grubbing corporation, requires a complete equity restructuring. Who owns Fedco?

Frankly, I would be happy to undertake the responsibility. This would make me King Mencius the First, a position I believe is ideally suited for my temperament and skills. The only question would be who got to peel my grapes.

However, the purpose of any such restructuring is for it to happen. Therefore, the general principle of equity distribution is that equity should be distributed to the individuals most in a position to bring about the reboot.

For example, recipients of Fedco "entitlement" payments, such as Social Security, Medicare, and so forth, are excellent candidates for equity ownership, as their political power is proven. These individuals are unlikely to vote for any plan that shrinks their checks. Presumably eliminating unnecessary Fedco activities will provide cash that can actually boost the value of these proto-equities.

On the other hand, civil service employees should also receive equity, as they clearly have power, and the goal of restructuring is to align formal and actual power. Streamlining Fedco will eliminate an enormous number of civil service jobs, and these people are obvious opponents. Perhaps their objections could be overcome by receiving dividend-producing equities in proportion to their former salaries, so that their income decreased by 20% or so, but they didn't have to go to work anymore.

There are also influential parties, such as journalists, professors, and so on, who are not part of the civil service proper, but seem to have some influence on public opinion. They, too, should have a stake in the new world of Fedco. Or they can donate it to the charity of their choice.

Many voters think of Fedco as primarily a charitable organization. And it's certainly true that Fedco does many charitable deeds - although, as John Bright once said, he had often known Parliament to do a good thing, but never just because it was a good thing. Eliminating direct involvement in charity, and replacing it with Fedco shares owned by charities, is an excellent way to separate philanthropy from its ulterior political motivations.

Lastly, of course, Fedco shares could be distributed to voters themselves. However, I suspect that after the above there will be not much left to go around. Politics in the US today is a game of the powerful, and if you actually want to abolish politics, you have to deal with the existing power structure rather than the ideal form it pretends to be.

There is one very large problem that the above ignores: the bizarre, and clearly terminally ill, monetary system run by Fedco itself. Clearly, Fedco cannot pay dividends in its own corporate scrip. I don't think this problem is unsolvable, but it certainly demands its own discussion.

A happy July 4 to all UR readers, in the US and outside it...

43 Comments:

Anonymous Anonymous said...

Your brief summary/analysis of the problems of the current government and the problems to face for eleminating it is pretty spot on.

Your solution has a major practical and at the same time ethical flaw though. You even spelled it out yourself several times, but you didn't notice it, or chose to ignore it.
The problem is the priority of values with different people. You are right, in a corporation the shareholders all share a common value, and it is usually their highest value: profit. But they cannot be made accountable for what the corporation does for that profit, which is why whe have oil companies funding wars and dictatorships, which is why there are so many oil pests etc, or in the case of food companies, which is why we only have crap/unhealthy food left affordable and available for the normal customer (although this is also in large part due to subsidies, but who lobbied for those subsidies?)

The function of the government is to make sure those things in a society get done, that are necessary, but not really profitable in a monetary sense and/or require more ressources than any other institution/person can accumulate.
Base research is a prime example. You mentioned the space program. But you forgot to mention that without the space program, there would be no Microsoft, no sattelite TV no GPS etc. No private or corporate entity bothered to work on this stuff, since the investment is too high and the the outcome is too unpredictable.
The corporate form of organisation is good for making profit. It's of little or only auxiliary utility for anything else. And causes a lot of of other problems in virtually every other aspect of life.

July 4, 2007 at 4:32 AM  
Anonymous dearieme said...

I like the smell of oil refineries. M. Rousseau was Swiss. And I'll bet (but with whom?) that the USA won't survive a 1000 years, except perhaps in the way Constantinople did at the end. Not much does survive for 1000 years.

July 4, 2007 at 7:29 AM  
Blogger Eric H said...

Did Rousseau really write that, or did you transcribe it straight out of Mein Kampf?

Also, the reason GE, Google, and MS don't have space programs is that Fedco and its competitor SovInc already provide all of the benefits of space travel to any billionaire who wants to go, to launch his own communication or spy satellite, to launch his own ICBM. Why buy when you can rent?

July 4, 2007 at 11:59 AM  
Blogger chris miller said...

I agree with anonymous - Fedco was not organized to turn a profit -- and I don't see why it should.

Rather than a Fortune 500 corporation, think of it as a giant condo association.

That's what condo associations do, isn't it ? Provide security, adjudicate resident disputes, and deliver certain other necessary services like power and water.

When you think of it that way -- Fedco is actually doing quite a good job (better than most contentious condo associations) - since we residents do, by in large, peacefully get what we need without needing recourse to some outside power to settle our disputes.

Fedco has spared its population (if not its soldiers) the horrors of war for about 150 years -- which is some kind of world record, isn't it ?

I didn't want to waste my evening over at our local high school stadium looking at the Independence Day fireworks -- but now you've convinced me to go.

God Bless the USA !

July 4, 2007 at 12:37 PM  
Blogger Mencius Moldbug said...

anonymous,

I think the claims for "spinoff" productivity of the space program are gross exaggerations. If you want to research chips or software, surely the ideal approach is to research chips or software.

Most of the examples you mention fall in the category of "charity" - they are actions which benefit others, and whose benefit can never be returned to the actors.

Charity is wonderful. But how can we be sure that governments will provide it? Is it actually in their interests to be charitable? Or is it just in their interests to claim to be charitable? Surely you are aware how much of today's "basic research" is actually pork.

All charitable actions have one thing in common: they eat money. They consume a revenue stream.

If you separate the charity from the real-estate business, and give the former a bunch of shares in the latter, essentially as an endowment, you have an ideal design. The real-estate company produces and the charity consumes.

Moreover, rather than one big organization whose goal is to do good things on behalf of humanity, you can actually allocate shares to a much larger number of much smaller charities. For obvious reasons, targeted charities work better than omnibus charities.

July 4, 2007 at 1:02 PM  
Blogger Mencius Moldbug said...

chris,

Switzerland has done much better - and it's in a far more dangerous neighborhood.

The US is not a condo association, because a condo association doesn't generate cash. The UN is a lot more like a condo association (if not a very effective one).

The US probably should have been a condo association, with the states being the condo owners. But now it has a lot of people who relies on the Federal revenue stream to, as Tony Soprano put it, "eat." If you want to turn it back into a condo association, those people are your enemies. And who needs enemies?

July 4, 2007 at 1:05 PM  
Blogger Mencius Moldbug said...

eric h,

Hitler wouldn't have mentioned "law and liberty." (Not that there was much of either under Robespierre, who followed Rousseau to the letter.) But if you follow the link, that quote is hardly out of context. The whole thing is deeply frightening.

dearieme,

Just because he was from Switzerland doesn't make him anything but a Frenchman. I've been to Geneva and all I heard was ribbit, ribbit, ribbit. The idea that ethnicity and nationality must be identical is characteristically Rousseauvian.

July 4, 2007 at 1:11 PM  
Blogger Mencius Moldbug said...

And I, too, like the smell of oil refineries. But keep the goat out of it - ugh. Goat is only good when it's fresh.

July 4, 2007 at 1:11 PM  
Blogger Steve said...

Let me restate your proposal: "Assuming that people stop believing in nationalism..."

This is rather like talking about how much better everything will be just as soon as we abolish religion.

July 4, 2007 at 2:07 PM  
Anonymous George Weinberg said...

This sort of institution-worship, in the context of countries, is called nationalism.
It's important to distinguish between the concept of "nation" (which is an ethnic or cultural identity) and state. Nationalism as a political concept may be essentially an attempt to equate the two, but what's called internationalism is not so much the opposite of nationalism as an attempt to delegitimize the concept of nationality. In particular, in the USA oddly enough "United States" is the name of the state and "America" is the name of the nation. People who object to the use of the word "American" (except to mean "Indian") are attempting to delegitimize the the concept of an American identity.

Although experience shows that the idea of equating a nation and a state tends to lead to disaster, if there are going to be such things as states it seems fairly natural that the boundaries of a state and a nation should often largely coincide.

The United States is an organization acting as a legal person. In other words, it is a corporation.

This may be true as far as it goes, but it overlooks a vital point: a state is very special in that most organizations largely engage in voluntary transactions whereas a state is intrinsically coersive. Furthermore, at least in the west today, it has in many peoples' minds a monopoly on legitimized coercion. That is, it's okay to coerce people if you're acting through the state, and it's not okay otherwise.

I in many ways think like a libertarian, but one way I differ from them is that a don't think my morals can be derived from pure logic (although I certainly don't think they're mere arbitrary preferences either), and I'm aware that most people don't share them. The idea, for example, that I have a right, let alone a duty, to force adults to wear seatbelts or not set off fireworks on the fourth for their own protection is utterly foreign to me. But I'm aware that many. perhaps most, other people believe they do have such duties, and it's futile to attempt to convince them otherwise. I don't think changing the structure of the government is going to make these attitudes go away.

Clearly, Fedco cannot pay dividends in its own corporate scrip.
I don't see why not, if it can be exchanged for products the corporation produces. No one will want to hold on to scrip unless they're fairly sure it will retain most of its purchasing power, but that's a different problem.

Theoretically it doesn't change shareholders' total value whether dividends are paid or not (that is, the value of the shares should decrease by an amount equal to that of the dividends paid), and that doesn't change whether the dividends are paid in gold, "dollars", or big mac certificates.

July 4, 2007 at 2:21 PM  
Blogger AMcGuinn said...

Is superior weaponry really sufficient for maintaining internal security? I would think delinquent "tenants" could cause the landlord a huge amount of trouble without exposing themselves to tanks or airstrikes.

My fear is that a big slightly-effective democracy may actually be the most cost-effective way of keeping control.

July 4, 2007 at 10:05 PM  
Blogger Christopher said...

The obvious problem with your proposal is that it confuses is with ought.

Your proposal would, as I understand it, formalize elements of the status quo. You've failed to demonstrate that these elements are a good idea in and of themselves. Given how much change the de facto system has endured given a largely invariant de jure system, why would your de jure system fare better? If it did, would that even be a good idea?

I also think you overestimate the difficulty of armed rebellion against the Federales. Our military is effective, but expensive. — In the event of open rebellion, affording the technology to suppress rebellion might not be possible if the ability to collect taxes is compromised. (Yes, I'm handwaving the assumption that loss of taxes will hurt the Government's credit rating, just play along.)

July 5, 2007 at 9:08 AM  
Anonymous Anonymous said...

Mencius,

New to this site. You got a great referral from Econlog. Just like to say that I really think you're on to something here, and that I have found it intriguing enough to go back to the archives and start reading from the beginning.

So is the idea of the US as a badly run corporation valid? Yes, I think it is. I have been thinking for awhile that the government is a part of the free market to the extent that it participates in value for value transactions that are freely entered into. Unfortunately, it also acts frequently as an agent for a wide variety of mafiaesque organizations. The trick, it seems to me, is to preserve the free market part while minimizing the mafia influence.

Sorry if this posts twice - having trouble figuring this out.

July 5, 2007 at 9:49 AM  
Anonymous nick said...

Mencius' proposal is a nice lampoon of the federal government. But taking it as it seems to be given, as a serious proposition, I and others pointed out many problems with it when it was previously mooted. Hardly any of these critiques seem to have been addressed here.

Basic to many of these problems is that the "real" as well as nominal powers the U.S. federal government exercises are extremely different than what we moderns think of as property rights (i.e. economic property rights). As I've pointed out repeatedly, and George reiterates here, political powers (and their formalization in political property rights) involve powers to coerce and cause people to behave quite differently than economic property rights. Most economic notions of a free market do not apply. Taxes and treaties are not the voluntary contractual relationships economists assume when they model markets. So the claim that converting them into property rights will reflect the "real" power structure is quite wrong.

Among other things this profound difference has the practical effect that political opposition to Mencius' proposal will come primarily from the non-pecuniary motives of political power, such as the desire to "do good" and "change the world" by exercising political power over others (the bread and butter ideology of Washington D.C. and the mass media). Merely preserving financial flows in the forms of economic property rights will be woefully insufficient to win the support of most power players.

Another basic problem is that the proposal ignores the history that political property rights produced freedom when divided up (not only by territory but by subject matter) and mutually respected, and great oppression when concentrated into a single organization. (Adam Smith's observations and my own paper on private jurisdictions are pertinent here). In other words it ignores the tremendous value of federalism. In a modern context federalism can take the form of international governing bodies have some political powers (which might be formalized as political property rights), the U.S. federal government retaining some of its powers, that no State (or any other kind of entity) should have arbitrary sovereign powers, and that much power is and should remain local (sheriffs, campus police, shopping mall security guards and jail cells, the right of residence dwellers to bear arms and shoot burglars, etc.)

July 5, 2007 at 2:44 PM  
Blogger Mencius Moldbug said...

steve, george - see below...

nick -

The sages are, of course, on your side. But I continue to maintain that your distinction between political and economic rights is entirely artificial.

First, there is nothing voluntary about property rights. If I own X and you don't, you have no say in the matter at all. In fact, even the most Lockean of Lockeans defends my right to defend my property from you, using any level of force that may be required.

Taxes and treaties are no more or less voluntary. If you define "Fedco" as the owner of the United States, recognizing the current de facto arrangement, Fedco has the right to defend itself against the aggression of those who wish to occupy its territory without paying rent, just as a landlord has the right to defend itself against the aggression of squatters.

As for the assumption of unlimited sovereignty, it's true that I've deployed it in the past, but only as a worst-case scenario. Note my statement in the post: a formalized Fedco should have no more or less power than it has today.

Preferably, in fact, less. The powers to (a) collect taxes (ideally on a block level from the states, letting them decide how to raise the revenue), (b) coerce the states into maintaining free government, pretty much as you describe it, and (c) take all steps, including the declaration of martial law, needed to secure its property, are quite sufficient.

Certainly redefining Uncle Sam as Fedco would offend many peoples' egos, no matter how much you paid them off. I am not saying this is easy! I am saying that I don't believe there is a more practical route to effectively abolishing Washington, DC.

Because many humans will exchange any amount of money for a remarkably small amount of power, no buyout can completely satisfy the needs of all defenders of the status quo. However, because all humans prefer money to nothing, a buyout is strictly more practical than abolition without compensation.

(Note that the same principle was applied, generally with success, in those nations that chose to peacefully abolish slavery. Slaveholders in the British Empire, for example, certainly did not receive full compensation for the value of their "property," but they got some, and this made abolition more rather than less likely.)

July 5, 2007 at 7:58 PM  
Blogger Mencius Moldbug said...

george,

The problem with "American identity" is that, once you remove the equation of nation and state, it's not clear how much you have left. It's sort of the three-horseshoes-and-a-horse situation in reverse.

Culturally, I have far more in common with Brahmins around the world, especially native English speakers, than I have with Americans at large.

Similarly, in Rousseau's time, the idea of nationalism was essentially an attack on Europe's hereditary aristocracy, which was very much a transnational elite. A Spanish aristocrat had far more in common with a Russian aristocrat than with a Spanish shepherd.

There are certainly a number of very distinctive American identities. Some of them are mirrored in other countries, some not so much. I have called them "castes," but they could just as easily be called Peoples or Volks.

There are countries largely (though not entirely) populated by a single caste - Japan is a good example. Or Iceland. I agree that there are many advantages to this kind of homogeneous cultural system - as Robert Putnam, much against his will, notes.

But the US, though it was once much closer, is not such a place. And describing it as one won't make it one.

July 5, 2007 at 8:06 PM  
Blogger Mencius Moldbug said...

george,

Also, the question of corporate scrip (fiat currency) is so complicated that I simply have to avoid being dragged into it. Rest assured, however, we will go there!

July 5, 2007 at 8:07 PM  
Blogger Mencius Moldbug said...

amcguinn,

The temptation to rhyme it with "a snow mall buck" is unfortunate, but I like your blog.

Briefly: people can cause a whole lot of trouble, but they only tend to do so when they think they have a chance of winning. Most - if not all - of the successful revolutionary movements in the 20th century are really best seen as paramilitary appendages of political movements. (The exceptions prove the rule - for example, compare the OAS to the FLN.) No politics, no problem. (Or at least small problem.)

In practice, democracy means the rule of those who control public opinion. Typically in the 20th century this meant the rule of those who controlled the broadcast spectrum. This is, in your parlance, a great way to maintain internal security, remarkably inexpensive or even profitable.

But when broadcast doesn't matter anymore, the center disappears and democracy becomes dangerous again, reverting to its aggressive malignant form. We are still not yet at the point where it's just as easy to consume unauthorized as authorized audio and video, and when we get there - look out.

July 5, 2007 at 8:15 PM  
Blogger Mencius Moldbug said...

christopher,

I find your criticisms astute.

I am not, however, confusing "is" with "ought." I don't think it is a good thing that Fedco owns the US. In fact, I think it is a bad thing. However, it is my assessment that the advantages of trying to revise this situation are far outweighed by the costs. I admit that I am not a military expert, though, so perhaps I'm wrong.

And in any case this judgment depends on my own personal value system, which considers violence a very bad thing. The reason I tend to assume this "ought" is not that it can be derived from "is," but simply that the proportion of people living in the world now who do not share it is very small, and probably (in fact, hopefully) none of them read UR.

Your question:

Given how much change the de facto system has endured given a largely invariant de jure system, why would your de jure system fare better?

is especially astute, because it goes to the root of the point: why do we have law?

My answer is that where de facto and de jure power coincide, there is a point of stability, because those with de facto power have, by definition, the power to preserve the status quo. But when the two poles drift apart, and the law becomes a fiction, this effect disappears.

A good chemical analogy is the Van der Waals bond, which can keep things stuck together but is no match for an ionic or covalent opponent. If you can get your facto to line up with your jure, they may stick, but if they are far enough from each other they have no strong desire to converge. Indeed they prefer not to, as those with informal power tend to be quite happy with it.

July 5, 2007 at 8:24 PM  
Blogger AMcGuinn said...

Mencius,

Blaming the media is always easy and sometimes right, and given the homogeneity of the American press, it is natural to assume that it has a big influence. In the UK we have a much more diverse and competitive press - the Sun and the Mail are to a large degree right of the Conservative party, while the Guardian and the BBC are well to the left of the Labour party. Now to you and me, that choice isn't nearly as much as we would like, but when the media expresses the full range of popular popular opinion, it is not obvious that it has much power to extend it further -- popular opinion constrains the press as much as vice versa.
(Your caste analysis of the US is presumably not intended or expected to apply exactly to the UK, but our ruling Establishment is very similar to your "Brahmins")

July 5, 2007 at 10:33 PM  
Blogger River Cocytus said...

mencius; Incisive critique, but when you have a hammer everything begins to look like a nail.

For instance, who should have the right to execute a person? Wield military power in war? Levy taxes? If you 'own' something, who prevents me from taking it from you by force? Who determines what fair weights and measures are? Some things, like a common transmission protocol (HTML for instance) will develop on their own without any governing body. Others will not.

So the question I have for you is, how are governments the same as corporations if, I, with a group of 100 armed men, take what is yours, who stops me? Just the next biggest guy? And who stops him? And would we permit any regular corporation in existence to wield said right to legitimate force? The government is legitimately allowed to force me to pay taxes. But, the government grants me the right to defend myself - bearing arms - and what I own. Without their coercive nature it would be, within our own borders, a matter of might making right.

The idea of a government is that we pay a cost to make an environment secure enough to create economic, spiritual, social and technological growth. Imagine the sand without the sandbox, and so forth. Logic is not sufficient but only a method, for creating ethics. This is because, due to physical constraints, what is logical may change. In Easter Island in the late years it may have been perfectly logical to be a cannibal. But does that make it right? I would say no. In good times it seems logical to be good; in bad times it seems logical to be bad. But if bad times come upon us (which disasters of many kinds may precipitate) being bad - in the ethical sense, as in, screwing the other guy, stealing, killing, etc, creates an environment where being bad is beneficial. As we computer scientists say, the Greedy Algorithm cannot find all optimal solutions.

I would argue however, that the government has become both religion-like and corporate-like and these are aspects that need to go. 'Nationalism' in some ways is a form of government taking on a religious tone; and being 'for profit' - i.e. nationalized business of any sort, is government taking on a corporate tone, which is in my book out of the question.

July 6, 2007 at 8:34 AM  
Anonymous RU said...

I, too, have read the archives of this blog from the beginning.

July 6, 2007 at 10:21 AM  
Blogger Mencius Moldbug said...

amcguinn,

I agree with your analysis. The problem is that the only people who read the Sun or Mail are morons. I exaggerate - slightly.

And why is this? It's because anyone who gets a decent education, in the US or the UK, gets it from institutions which teach the BBC/NYTimes line.

The entire intellectual system of the West was corrupted by its 20th-century connection to government. Public opinion reflects press opinion, press opinion reflects academic politics, and academic politics are driven by power-struggles in which the attraction of the state is clear.

The victory of Keynesian over Misesian economics, for example, is a classic case of this. Theories of economics which led to jobs advising the state were adaptive. Theories which didn't weren't.

The result is that the ideas that appear in the Sun and Mail strike almost all intelligent people as moronic, not because they are, but because most of the people who hold them are morons. Obviously this is a vicious cycle.

July 7, 2007 at 12:33 PM  
Blogger Mencius Moldbug said...

Cocytus,

It is peculiar, isn't it, how this blog attracts computer scientists!

Your thinking is reasonable, but I'd still say it is teleological. From a practical standpoint, we have a goal: government which acts ethically. We wish to obtain that goal, which I suspect we both define in more or less the same way.

My belief is that ethical government is most likely to appear, and most important to stabilize, in cases where the government's devotion to ethics is motivated by economic rather than moral considerations.

Whereas when the government sees itself as a vehicle of good, in the usual Calvinist style, in practice what it is doing is persuading its subjects to worship it.

While this is an effective way to impose internal security, and I certainly think internal security is a good thing, it is not the only way to achieve this goal.

And it opens up many avenues by which the state can commit evil and define it as good. An essentially Machiavellian worldview, in which government is not a moral agent, does not admit these options. All the great crimes of the recent past have been committed by states which portrayed themselves as profoundly ethical actors. Removing this mask, eliminating the ability of the beast to portray itself as good, uninstalls an essential module in this perverse system.

This is why James Burnham called his sadly underappreciated book "The Machiavellians: Defenders of Freedom."

July 7, 2007 at 12:44 PM  
Anonymous nick said...

" there is nothing voluntary about property rights. If I own X and you don't, you have no say in the matter at all....Taxes and treaties are no more or less voluntary. "

Yikes, now you are mouthing Progressive (even Marxist!) cliches. The crucial distinction is that I can't legally use my economic property rights to take your property. Economic property rights are governed by the substantive common law of tort, property, and contract, and generally follow the libertarium dictum, "do not initiate force or fraud".

Political property rights, on the other hand -- rights to tax, to arrest or search with probable cause, to subpoena witnesses, to render and enforce judgments involving damages or injunctions, to put criminals or those in contempt of court in jail, and so on, are procedural rather than substantive in nature, and inherently involve initiations of force, at least when looked at in isolation, as they are when the property rights are defined (e.g. as franchises. They are property rights to initiate force. (Rothbardistas chafe at these kinds of rights, but I wrote about their utter necessity here)

This crucial distinction also shows up between contracts and treaties: duress in formation (e.g. somebody putting a gun to your head and saying, "sign here"), is a legal defense to enforcement of a contract, but not to a treaty.

July 7, 2007 at 1:33 PM  
Anonymous nick said...

MM: "Fedco has the right to defend itself against the aggression of those who wish to occupy its territory without paying rent, just as a landlord has the right to defend itself against the aggression of squatters."

Actually, in most states there is no general right for landowners to defend their land forcefully against trespassers. Generally the landowner must call the cops (if it's criminal trespass) or sue in court to get an injunction (after which a civil trespass would also be criminal). In some states dwellers of residences can shoot burglars even if not in defense against a threat beyond mere burglary, but most states restrict even a dweller to self-defense against a violent threat. A landlord cannot even evict a residential tenant in most states using "self help" -- they must get a court order and have the cops do it for them.

Since any rights to shoot trespassers or burglars (beyond defense against threat of serious bodily injury) or evict tenants by force involves an increase in force far out of proportion to a trespass or breach of contract, it is a political right. An older example was the political property right called "infangthief" which gave a landowner the right to hang thieves caught red-handed on their land. Some land came bundled with some kinds of political property rights, some with others, just as the variety of easements and the like that come bundled with land can vary. These and other franchises were property rights conceptually distinct from ownership of the land, just as easements and the like can be attached to land but are conceptually distinct rights from ownership of the land itself.

Shop owners would love to exercise infangthief, but today must make do with the "shopowner's privilege" which in many states gives them more rights than individual citizens to make an arrest and detain a reasonably suspected shoplifter. Shopkeeper's privilege (and citizen's arrest itself) is another political right -- a right to locally initiate or use disproportionate force under certain lawful procedures and conditions.

I am generally in favor of bundling more political property rights (e.g. the right to use forceful self-help to evict deliquent tenants and trespassers) with economic property rights. But they are still distinct kinds of rights and certaintly do not necessarily have to be bundled in fixed ways. Rather we can take advantage of the flexibility of property law to try out a wide variety of bundlings.

July 7, 2007 at 2:04 PM  
Anonymous nick said...

Errata: I miswrote the following: "there is no general right for landowners to defend their land forcefully against trespassers."

That should read, "...to defend their land with serious bodily harm or deadly force...". If the land owner has (or is) a bouncer who can grab trespassers by the scruff of their neck and carry them off the property, that's fine. But the landowner's rights certainly fall very far short of the killing-it-will that is a common feature of war.

July 9, 2007 at 2:29 PM  
Anonymous tggp said...

I think I read this before, but since I just came across it again now I remember it and want to link to it. Before I have advocated marginalism over the sort of crisis and change that the people I refer to as "worse-is-better libertarians" (with Stefan Molyneux being a prime example) advocate. Bryan Caplan explains why here.

July 9, 2007 at 9:14 PM  
Blogger Mencius Moldbug said...

nick,

I don't disagree with any of this - except that it perhaps neglects to mention the coolness of the word "infangthief," which I hope someday I will live to read in the New York Times. Or whatever replaces it.

July 9, 2007 at 9:15 PM  
Blogger Mencius Moldbug said...

tggp,

Violence is certainly an unproductive tool if your goal is to lead public opinion toward some productive change, which is one of the many reasons I never advocate violence - even "civil disobedience."

However, it's a mistake to equate radical change with violence. Marginalism cannot be derived from these premises. Caplan himself mentions the fall of the Soviet Union, and even better examples occurred in places like East Germany and Czechoslovakia. There was nothing marginal about either.

I prefer to think of reboots rather than revolutions, but certainly if you have to have the latter, there is nothing wrong with the "velvet" or "orange" kind.

July 9, 2007 at 9:21 PM  
Blogger Mencius Moldbug said...

nick,

Sorry, that applied to your last comment, not its predecessor.

The point of property rights is that their initial distribution is arbitrary, and quite involuntary. If course once they exist they must be respected and transferred only in voluntary ways, but this does not solve the problem of origin.

For example, why shouldn't Fedco hold infangthief for North America? Who else would start with it? Of course it can be broken up and sold, and perhaps it should be, but at present it certainly seems to be a monopoly...

July 9, 2007 at 9:23 PM  
Anonymous nick said...

The fall of the Soviet Union -- switching from one system to another existing kind of system -- is a far cry from trying something that has never been done before, like selling off stock in a world superpower's government. Why not start with a city or a county?

"The point of property rights is that their initial distribution is arbitrary, and quite involuntary. If course once they exist they must be respected and transferred only in voluntary ways, but this does not solve the problem of origin."

Since we agree on adverse possession (or more generally on the principle of prescriptive rights), why do we care a whit about the origins of long standing property rights? Compared with the distinctions I pointed out (contract vs. treaty, for example) the supposed problem of origins is mere trivia.

"why shouldn't Fedco hold infangthief for North America? Who else would start with it?"

To belabor the obvious, the U.S. federal government doesn't hold it because there's no power of infangthief in its charter. To the extent anybody ever held it in North America, it has long since passed away by lack of usage (see the case of the gallows that blew done in the wind in my paper, "Jurisdiction as Property"). Political property is "use it or lose it."

July 12, 2007 at 7:11 PM  
Anonymous nick said...

"why shouldn't Fedco hold infangthief for North America? Who else would start with it?"

To elaborate on my previous comment: as usual I am speaking formally, which usually means as specifically and concretly as possible and as aware as possible of distinctions as well as similarities when speaking analogically or metaphorically.

There is no specific power of infangthief (which is specifically the right to arrest and hang thieves caught red-handed on your land) remaining in North America, nor in England where it once existed. As an ancient common law style political property right it probably no longer exists anywhere.

A counterpart to prescriptive rights (rights gained by use) is that political property rights (at least the franchises, of which infangthief was one) can be lost through lack of use. In my paper "Jurisdiction as Property" there is the case of a lord with a right of gallows (the right to hang capital criminals generally, after a jury trial). The lord forfeited this political property right to its grantor, the king, it is reported, because the lord's gallows blew down and he didn't repair it -- presumably a poetic way of saying, or some evidence for, a problem with capital criminals (thieves, murderers, and a few other categories back then) troubling his jurisdiction, yet he hadn't been active in exercising his jurisdiction to thwart them.

The contrary view, that political property rights do not involve any duty to exercise them, was also a plausibly argued view (it became the dominant view for economic property), but it lost out to the "lose it or use it" view. I'll note, by very loose analogy, that modern landowners have certain positive duties to fix or warn about dangerous conditions on their property, or be liable for negligence if those conditions hurt somebody.

Today in most states in the U.S. shopkeepers generally hold the right to detain and search reasonably suspected shoplifters for a reasonble time, but when caught with the goods they are soon turned over to the local police and judicial system. In some states a dweller in a residence can shoot burglars regardless of overt threat to persons. And of course some agents of various governments (mostly state and local, not federal) have the right to arrest those they have probable cause to believe are thieves, and courts have the power to sentence them to jail, but not hanging. Such are the closest we come to infangthief.

Of course our statute-centric republic considers such rights to be derived by statute, not held as political property rights, so to say shopkeepers "hold" these rights is to insert our own ideas that these *should* be held as property rights. This is only a tenable ideological stance if we are pretty exacting about what property rights correspond to what current statutory rights, rather than claiming people or governments hold rights by loose analogy.

Few of the crimes of political science and ideology are worse than its abuse of common law analogies. The deepest layer in hell perhaps belonging to the idea of a "social contract". So as intersting as infangthief, the rights of landowners against trespassers, and so on are, let's be careful throwing around loose analogies of them, and be very aware of the distinctions as well as the similarities raised by these analogies. Let us, in other words, be formal.

July 12, 2007 at 7:57 PM  
Blogger Mencius Moldbug said...

The fall of the Soviet Union -- switching from one system to another existing kind of system -- is a far cry from trying something that has never been done before, like selling off stock in a world superpower's government. Why not start with a city or a county?

Oh, I agree absolutely. Stating it in terms of the US is simply a way to make the problem artificially hard - like designing a bridge for ten times its maximum expected load.

To belabor the obvious, the U.S. federal government doesn't hold it because there's no power of infangthief in its charter.

You're right - of course I am speaking metaphorically, and fuzzily.

My point, which I don't think has escaped you, was to reimagine the US as a private entity subject to a higher system of law. Its power to hang its own criminals, then, would be a form of infangthief.

Breaches of legal continuity happen - the US, by my count, has had four. Clearly treating it as "Fedco" would involve a fifth. In such a reboot, the entire concept of law can be revisited, but it has to be revisited in such a way that it won't be revisited next year - or in 20 years. Medieval concepts such as jurisdiction-as-property, of course, may be quite useful in this process if it ever happens.

July 12, 2007 at 8:44 PM  
Blogger Anton Sherwood said...

I prefer to think of reboots rather than revolutions . . . .

The word revolution originally meant a turning back to a notional golden age before the institutions were corrupted.

February 26, 2008 at 4:24 PM  
Anonymous Anonymous said...

"GE, Google and Microsoft are as big as many governments and certainly more profitable than any, and they may have executive jets, but none of them had a space program last time I checked."

They do now, of course. :) http://www.googlelunarxprize.org/

Personally, I find Google more scary than most states, primarly because the Googlers really believe in what they do...

March 10, 2008 at 5:13 AM  
Anonymous Anonymous said...

And further: http://www.google.com/virgle/

A Google mission to mars!

April 1, 2008 at 2:08 AM  
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January 31, 2009 at 11:26 PM  
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March 2, 2009 at 8:04 PM  
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March 6, 2009 at 9:19 PM  
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