Government v3.0, Confidence and Preference Cascades

In 1776 Thomas Jefferson, at the urging of the other Founders, wrote the Declaration of Independence - the fundamental philosophical document underlying the creation of these United States.  As a fundamental philosophical document it was, in part, a statement of how things ought to be, followed by a description of how things really were.  In particular, this passage was a statement of how things ought to be:

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.--That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed...

With very few exceptions in history, governments have been "instituted among Men" for very different reasons than to secure the rights of the governed.  Governments throughout history have been established for one reason and one reason only: to secure and expand the power and privilege of the powerful and privileged.

Just a year earlier in his bestseller Common Sense, Thomas Paine wrote:

Society in every state is a blessing, but Government, even in its best state, is but a necessary evil; in its worst state an intolerable one: for when we suffer, or are exposed to the same miseries BY A GOVERNMENT, which we might expect in a country WITHOUT GOVERNMENT, our calamity is heightened by reflecting that we furnish the means by which we suffer. Government, like dress, is the badge of lost innocence; the palaces of kings are built upon the ruins of the bowers of paradise.

That was written from the perspective of an eighteenth-century Englishman, having come from a nation in which the Divine Right of Kings was already pretty severely curtailed by a Parliament of Lords and Commons.  But the coming Revolutionary War was based in resistance to that government extracting wealth from its colonies in violation of the rights of the people living in those colonies.

I'm currently reading Why Nations Fail:  The Origins of Power, Prosperity, and Poverty.  I should probably have waited until I finished the book before writing this essay, but so much is going on right now that the urge to write struck, and I must obey.  I'm about a third of the way into the book, and the authors have made the point, repeatedly, that all governments are, in their term, extractive - that is, government takes from the governed and redistributes that wealth...somehow.  As Paine put it "we furnish the means by which we suffer."  In the overwhelming majority of cases throughout history, that wealth has gone to line the pockets of King and cronies - securing and expanding the power and privilege of the powerful and privileged.  At best, these extractive governments result in technological and societal stagnation.  At worst, eventual societal collapse.  BUT - in those rare cases where "the right people are in charge" - occasionally a government works to allow its people to increase the overall wealth of the State.

This generally doesn't last long.  Robert Heinlein put it thus:

Throughout history, poverty is the normal condition of man. Advances which permit this norm to be exceeded -- here and there, now and then -- are the work of an extremely small minority, frequently despised, often condemned, and almost always opposed by all right-thinking people. Whenever this tiny minority is kept from creating, or (as sometimes happens) is driven out of a society, the people slip back into abject poverty.

This is known as "bad luck."

What about "anarchy"?  The authors provide a couple of examples, but these go to illustrate their contention that, if actual, measurable wealth-creation is desired then some sort of centralized control is a prerequisite.  But central control is not sufficient in itself.  It is a mechanism as easily (more easily) implemented to extract wealth as to allow its creation.

Why not?  Why does wealth creation not occur without centralized control, nor last long even with it?

Human nature.

John Locke identified the incentives that led to economic advancement in America:  life, liberty, property.  Governments that protect these three things provide incentive for that extremely small minority -- frequently despised, often condemned and almost always opposed by all right-thinking people -- to create wealth.  They create this wealth not for the betterment of their fellow man, but because they can be (largely) assured they can keep it.

Still, a rising tide lifts all boats as the saying goes.

And stealing is easier than work, as another saying goes. 

In 1911 fascist sociologist Robert Michels proposed what he called The Iron Law of Oligarchy: 

It is organization which gives birth to the dominion of the elected over the electors, of the mandataries over the mandators, of the delegates over the delegators. Who says organization, says oligarchy.

And:

Historical evolution mocks all the prophylactic measures that have been adopted for the prevention of oligarchy.

In the ten years I've been posting on this blog, I have been echoing this Iron Law, calling it "entropy," but in the end, it all boils down to the same thing - human nature.  Stealing is easier than working, and where better to steal than from the lofty (and protected) perch of Government Authority?  It's already legal, how hard is it to just turn the screws a little tighter?  It's for the Greater Good, you know.  Once you've convinced yourself of that, how hard is it to justify a little well-earned luxury?  Or extorting a little graft?

Government is power.  Power corrupts and attracts the corrupt.  We forget this at our peril.  Per the Iron Law of Oligarchy, government set up for any reason other than the protection of power and privilege are inevitably suborned.  Henry Louis Mencken observed:

All government, in its essence, is a conspiracy against the superior man: its one permanent object is to oppress him and cripple him. If it be aristocratic in organization, then it seeks to protect the man who is superior only in law against the man who is superior in fact; if it be democratic, then it seeks to protect the man who is inferior in every way against both. One of its primary functions is to regiment men by force, to make them as much alike as possible and as dependent upon one another as possible, to search out and combat originality among them. All it can see in an original idea is potential change, and hence an invasion of its prerogatives. The most dangerous man to any government is the man who is able to think things out for himself, without regard to the prevailing superstitions and taboos. Almost inevitably he comes to the conclusion that the government he lives under is dishonest, insane and intolerable, and so, if he is romantic, he tries to change it. And even if he is not romantic personally he is very apt to spread discontent among those who are.

Author and scientist Jerry Pournell has written what I think is a corollary to Michel's Iron Law of Oligarchy, Pournell's Iron Law of Bureaucracy:

Iron Law of Bureaucracy states that there will be two kinds of people:

First, there will be those who are devoted to the goals of the organization. Examples are dedicated classroom teachers in an educational bureaucracy, many of the engineers and launch technicians and scientists at NASA, even some agricultural scientists and advisors in the former Soviet Union collective farming administration.

Secondly, there will be those dedicated to the organization itself. Examples are many of the administrators in the education system, many professors of education, many teachers union officials, much of the NASA headquarters staff, etc.

The Iron Law states that in every case the second group will gain and keep control of the organization. It will write the rules, and control promotions within the organization.

And that second group will fight to retain and increase the power and privilege their position gives them.  The examples are almost endless, ranging from spending thousands of taxpayer dollars on vehicles and  lavish office furnishings to outright embezzlement. 

And it isn't just the executive and legislative branches that are affected by corruption and power-hunger.  The Judicial branch has examples as egregious.  But overall, the people have trust and confidence in their government.  The West in general, and the U.S. in particular is what is termed a "high trust" society.  Economics blogger Arnold Kling says this about social trust:

If you can trust the processes of government, then that is a good thing. Good trust in government is based on processes that provide for accountability, checks and balances, equal protection, and punishment of official corruption.

Trusting the virtues of government leaders is a bad thing. It leads one to cede rights and powers to government that are easily abused.

...My idea of a high-trust society differs from that of many elites. Elitist journalists think that a high-trust society is one where we trust the mainstream media. Elitist politicians and activists think that a high-trust society is one where we trust legislators, regulators, and experts to exercise broad authority. In contrast, I believe that a high-trust society is one in which processes ensure that elites are subject to checks and accountability. It is particularly important for legislators, regulators, and experts to have their authority limited and their accountability assured.

Robert Heinlein again:

Any government will work if authority and responsibility are equal and coordinate. This does not insure "good" government, it simply insures that it will work. But such governments are rare — most people want to run things, but want no part of the blame. This used to be called the "backseat driver" syndrome.

So, in general the population of the United States accepts a certain level of corruption, overreach and petty tyranny because, well, human nature. We believe that some people cannot be trusted, but most can.   We expect the mechanisms of our government, the checks and balances, to rein in the worst cases and we live with the minor stuff because overall, the system works.

In recent weeks multiple political scandals have hit the news, and older ones have been revived.  Let's list some:

• Holder's refusal to prosecute the New Black Panthers for voter intimidation
• Fast and Furious gun-running to Mexican drug cartels by the Bureau of Alcohol, Tobacco, Firearms and Explosives
• The prosecution of Gibson Guitars for, well, for apparently importing wood.
  
• The collection of months of phone records from the Associated Press by the Justice Department
• The investigation of Fox News reporter James Rosen, also by the DoJ
• IRS targeting of right-wing groups applying for tax-exempt status while greenlighting left-wing applications, and the suppression of this information before the November election

I'll ignore the Benghazi scandal at the moment, because all of the items listed above share a common theme - suppression of political opposition by an administration - protecting the power and privilege of the powerful and privileged.  Here's Piers Morgan's take on it from a few days ago:


Peggy Noonan wrote last week in her Wall Street Journal op-ed This is No Ordinary Scandal about the IRS debacle, concluding:

Everyone involved in this abuse of power should pay a price, because if they don't, the politicization of the IRS will continue—forever. If it is not stopped now, it will never stop. And if it isn't stopped, no one will ever respect or have even minimal faith in the revenue-gathering arm of the U.S. government again.

She followed up with another piece, A Battering Ram Becomes a Stonewall, repeating:

Again, if what happened at the IRS is not stopped now—if the internal corruption within it is not broken—it will never stop, and never be broken. The American people will never again be able to have the slightest confidence in the revenue-gathering arm of their government. And that, actually, would be tragic.

Bob Krumm retorted to that last:

Actually it wouldn’t be “tragic” if the American people were not to have confidence in this or any arm of their government.  It would be exactly what the Founders called for. My favorite quotation from the entire 85 editions of the Federalist Papers is this one from Federalist 25 by Alexander Hamilton:

"The people are always most in danger when the means of injuring their rights are in the possession of those of whom they entertain the least suspicion."

In fact, you could almost sum up the gist of the entire Constitution with that single statement, as the Constitution attempted to set up a system where no branch of government was in sole possession of the means of injuring our rights.  How far we have strayed, however, when the wing of the government that determines how much of our labors are to be taken into the Federal trough also inquires about our associations,  our religious practices, and soon, our medical care. Peggy, you are right to call for a special investigator.  But you are wrong to assert that it is a tragedy if, as a result of this scandal, we no longer have  confidence in the IRS.  The real tragedies would occur as a result of believing that any branch of government was deserving of our unsuspicious confidence.

Thomas Jefferson also wrote in the Declaration of Independence:

But when a long train of abuses and usurpations, pursuing invariably the same Object evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security.

Back in 2004 TheGeekWitha.45 wrote:

We, who studied the shape and form of the machines of freedom and oppression, have looked around us, and are utterly dumbfounded by what we see. We see first that the machinery of freedom and Liberty is badly broken. Parts that are supposed to govern and limit each other no longer do so with any reliability. We examine the creaking and groaning structure, and note that critical timbers have been moved from one place to another, that some parts are entirely missing, and others are no longer recognizable under the wadded layers of spit and duct tape. Other, entirely new subsystems, foreign to the original design, have been added on, bolted at awkward angles. -- We know the tools and mechanisms of oppression when we see them. We've studied them in depth, and their existence on our shores, in our times, offends us deeply. We can see the stirrings of malevolence, and we take stock of the damage they've caused over so much time. Others pass by without a second look, with no alarm or hue and cry, as if they are blind, as if they don't understand what they see before their very eyes. We want to shake them, to grasp their heads and turn their faces, shouting, "LOOK! Do you see what this thing is? Do you see how it might be put to use? Do you know what can happen if this thing becomes fully assembled and activated?"

 But C.S. Lewis observed not so long ago:

Of all tyrannies, a tyranny exercised for the good of its victims may be the most oppressive. It may be better to live under robber barons than under omnipotent moral busybodies. The robber baron's cruelty may sometimes sleep, his cupidity may at some point be satiated; but those who torment us for our own good will torment us without end, for they do so with the approval of their consciences.

When "moral busybodies" achieve positions high in bureaucracies, when they "write the rules, and control promotions within the organization," then tyranny - even the petty tyranny of lemonade stand inspectors - is never far behind.

Let me switch gears here for a moment.  I follow Bill Whittle's work fairly closely, including his sporadic Stratosphere Lounge vidcasts.  For a while now, Bill has been painting a rosy picture of our political future.  He credits Thad McCotter, former Michigan Congressman, for the observation that our Constitution was written essentially by farmers for an agrarian nation.  It was not well suited to an industrialized nation where large and diverse populations lived crammed into urban areas, and an extremely small minority - despised, condemned, and opposed by all right-thinking people - accumulated vast quantities of wealth.  That produced Government v.2.0 - large, ponderous, heavily bureaucratized and regulating.  With the strictures laid down by the architecture of the Constitution, this took some time, but the Iron Law of Bureaucracy enabled the bypassing, dismantling, folding, spindling and mutilating of the original document under the banner of necessity.

But, McCotter advises, the Information Age will eventually change all of that.  When an individual can pick up an iPhone and order steel from China, the world is a very different place and our massive, sclerotic Gov.2.0 can no longer keep up.  Case in point - gun control.  The recently released design for a functional printable handgun resulted in the inevitable government crackdown on that design, but it's too late - "You can't stop the signal." 

The idea of Government v3.0 has resulted, unsurprisingly, in a book - America 3.0: Rebooting American Prosperity In The 21st Century.  Glenn Reynolds wrote an op-ed recently on the idea, Future's So Bright We Have to Wear Shades.  Excerpt:

The book's authors, James Bennett and Michael Lotus, argue that things seem rough because we're in a period of transition, like those after the Civil War and during the New Deal era. Such transitions are necessarily bumpy, but once they're navigated the country comes back stronger than ever.

--

If America 2.0 was a fit for the world of giant steel mills and monolithic corporations, America 3.0 will be fit for the world of consumer choice and Internet speed.

Of course, America 2.0 won't really vanish. Just as the America 1.0 spirit of entrepreneurialism and ingenuity survived in the shops and garages that gave birth to the Internet era, the big bureaucracies won't vanish -- they'll just become smaller and less significant. And, hopefully, more solvent.

In a way, our current problems exemplify the need for change. As Democratic strategist David Axelrod said last week, "the government is so vast" that we can't expect a president to actually be in charge of things. A government that is too big for its chief executive to manage is something that can't go on forever. Time for change, and the sooner, the better.

Bill Whittle thinks the way to Government v3.0 is through what he calls "parallel structures." One example is homeschooling. You pay your property taxes which go to fund public education, but you keep your kids out of that system and pay - again - to give your kid an actual education. Further, you join up with other homeschooling families and form a cooperative to keep your costs down. Get retired business professionals to teach, for example.

Another example - stop thinking of yourself as defined by your employment. Instead of doing the America 2.0 thing of trying to work for one company or in one industry for your whole career, think of yourself instead as a contract worker. What can you do? What are your hobbies? Can you monetize them? A good example of this is Larry Corriea, ex-gun dealer, ex-accountant, now author - but he could do any or all if necessary, and he's fully self-employed now.

It sounds wonderful.

But it ignores the Iron Laws of Oligarchy and Bureaucracy.

The transition from Government v.1.0 to Government v.2.0 was inevitable.  It was an expansion in the power of bureaucracy, and it increased the power and privilege of the powerful and privileged.  Government v.3.0?  Not so much.  If you think lemonade stand inspectors are bad, wait until the government really starts reacting against the Information Age economy.

The concept of the Preference Cascade is credited to Turkish economist Timur Kuran.  Glenn Reynolds described the idea in a 2002 op-ed, Patriotism and Preferences.  In short, average people behave the way they think they ought to, even though that behavior might not reflect their own personal feelings.  Given a sufficient "A-HA!" moment when they discover that their personal feelings are shared by a large portion of the population their behavior may change dramatically.  An example of this is the British colonists before and after publication of Thomas Paine's Common Sense.  A year before the Declaration of Independence, America was full of patriotic British convinced that things could be worked out with King George, but on July 4, 1776 the colonies were full of Americans determined that they needed independence.  Another is the recent "Arab Spring."  The catalyst there has been credited to the self-immolation of Tunisian merchant Mohamed Bouazizi in protest of his treatment by government authorities.

The Information Age allows the sharing of this kind of information at light-speed and it bypasses government censorship.  Note governments now trying to slam doors shut on IP telephony,  instant messaging, etc. 

In 2005 at the now-defunct blog Silent Running, its author wrote:

(Lord Kenneth Clark) said one of the most important features of a civilization, if not the most, was confidence. Confidence that it would still be around next year, that it was worthwhile planting crops now, so they could be harvested next season. Confidence that soldiers wouldn’t suddenly appear on the horizon and destroy your farm. Confidence that an apple seed planted in your backyard will provide fruit for your grandchildren. That if you paint a fresco, the wall its on will still be standing in a century. That if you write a book, the language you use will still be understood half a millennia in the future. And that if you hauled stone for the great cathedral which had been building since before your father was born, and which your baby son might live to see completed if, the good Lord willing, he lived to be an old man; your efforts would be valued by subsequent generations stretching forward toward some unimaginably distant futurity. And above all, the self-confidence that you are part of something grander than yourself, something with roots in the past, and a glorious future of achievement ahead of it. When the Romans lost that self confidence, when they began doubting their own purpose, they began to die. When the Rhine opposite Cologne froze on the last dying day of the year 406CE and the motley horde of Suevi, Alans, and Vandals charged across the Imperial border into the province of Gaul, that was the beginning of the end merely in the physical sense. They were simply taking an axe to an already rotten tree.

Here is a one-dollar bill:


It's ink on paper. It represents an idea, one that is shared by billions of people all over the planet.

This is also ink on paper. It too represents an idea shared by billions of people all over the planet. 


Why will one of them get you a hamburger off the value menu at McDonalds, and the other won't? Because of what those billions of people believe.

The current National Debt is in excess of $16,800,000,000,000. Our unfunded liabilities under current law exceed $124,000,000,000,000.

The Information Age is here. Government v.2.0 is massive, sclerotic, invasive, inept, corrupt, incompetent, malicious, vindictive - it is, in short, what the second type of bureaucrats make it in the furtherance of the bureaucracy and their own power and privilege.  And the Iron Law of Oligarchy says:

Historical evolution mocks all the prophylactic measures that have been adopted for the prevention of oligarchy.

People keep acting as though things can keep going on as they have, but as Glenn Reynolds keeps repeating, "Something that can't go on forever, won't."

At some point there will be a preference cascade. What that cascade will result in is impossible to predict, but I doubt it will be the rosy Government v.3.0 predicted by Bill Whittle and the authors of America 3.0.  I think Bill doubts it, too.  During his speech here in Tucson last week, he pulled out a dollar bill and one of those hundred-trillion Zimbabwe dollar asswipes.  During the Great Depression, he said, America had not fully transitioned to the Industrial Age.  A great number of people still lived on farms or at least grew a significant portion of their own food in gardens, so starvation wasn't a significant cause of death, but now?  Cities and suburbs exist on two or three days worth of food that must be trucked in.  If the common belief in the value of the dollar goes away, what will that look like?  And, pace Peggy Noonan, if people lose all confidence in not just the revenue-gathering arm of Government v.2.0, but all of it, what will that look like?

One thing's for sure - the powerful and privileged will do whatever it takes to keep as much power and privilege as they can.  And Government v.2.0 will be the tool by which it's accomplished.