Let A Thousand Nations Bloom

Great post at Abandoned Footnotes on how theories of domination underlie the exit-voice paradigm:

Hirschmann’s conceptual framework can be used to make sense of some important features of contemporary political thought. In particular, to the extent that contemporary political thought conceptualizes the key political problem not as a problem of performance (pace Hirschmann) but as a problem of domination (how should we think and what should we do about the fact that some people appear to dominate others?), specific positions will tend to emphasize one or another of the three Hirschmannian “mechanisms” for dealing with it. Thus, “right-liberals” (libertarians, but also others) tend to focus on exit as the most important component of a solution to this problem, “left-liberals” (and many other leftists who would abhor the label “liberal,” but I want to leave these aside) tend to focus on voice, and “conservatives” tend to focus on legitimacy.

Let a thousand framers bloom?

A group of 25 citizens presented a draft of the constitution to Iceland’s parliament. The group, which is made up of ordinary residents, compiled the document online with the help of hundreds of others. The constitution council posted the first draft in April on its website and then let citizens comment via a Facebook Page. The council members are also active on Twitter, post videos of themselves on YouTube and put pictures on Flickr.

Iceland’s original constitution was created in 1944 when the country gained independence from Denmark. The country’s economic collapse in 2008 prompted calls for a rewrite with checks and balances to prevent a repeat of the financial crisis. The draft was due before the end of July. It may be put to a referendum without the input of parliament.

From the correspondence of Lord Macaulay and Henry Randall, author of the Life of Jefferson:

Your Constitution is all sail and no anchor. As I said before, when a society has entered on this downward progress, either civilization or liberty must perish. Either some Caesar or Napoleon will seize the reins of government with a strong hand; or your Republic will be as fearfully plundered and laid waste by barbarians in the twentieth century as the Roman Empire was in the fifth; with this difference, that the Huns and Vandals, who ravaged the Roman Empire, came from without, and that your Huns and Vandals will have been engendered within your country by your own institutions.

Boeing’s president said he is “moving the 787 Dreamliner work to South Carolina due to strikes happening every three to four years in Puget Sound.” The NLRB isn’t happy about Boeing’s efforts to exit onerous labor regs. Now they’re filing a complaint that may halt the move. Economist Ed Glaeser has a good article on what this implies for US innovation:

Perhaps company presidents should never admit that they consider labor conditions when moving production, but they surely always will and that isn’t a bad thing. When a company moves to a lower-wage state, it is both making itself more competitive and boosting labor demand in a poorer place. Surely, equity enthusiasts should cheer when jobs come to low-income areas.

The U.S. has benefitted enormously from migration. For centuries, people and companies have been free to choose locations that meet their needs. We need our industries to be as nimble and innovative as possible, and we should all worry about any legal precedent that restricts the ability of U.S. manufacturing to compete.

From his 1742 essay, “The Rise and Progress of Arts and Sciences“:

In China, there seems to be a considerable stock of politeness and science, which, in the course of so many centuries, might naturally be expected to ripen into something more perfect and finished, than what has arisen from them. But China is one vast empire, speaking one language, governed by one law, and sympathizing in the same manners. The authority of any teacher, such as Confucius, was propagated easily from one corner of the empire to the other. None had courage to resist the torrent of popular opinion. And posterity was not bold enough to dispute what had been universally received by their ancestors. This seems to be one natural reason why the sciences have made so slow a progress in that mighty empire.

If we consider the face of the globe, Europe, of all the four parts of the world, is the most broken by seas, rivers, and mountains; and Greece of all countries of Europe. Hence these regions were naturally divided into several distinct governments. And hence the sciences arose in Greece; and Europe has been hitherto the most constant habitation of them.

In How the West Grew Rich, Nathan Rosenberg and L.E. Birdzell write:

In technology, the Chinese had a tendency to reach and hold plateaus. Once a good way of doing something was discovered and established, it seemed to harden into a custom immune to change. It is not correct to think of Chinese technology as limited to inventions designed to give pleasure or to satisfy the curiosity of the imperial court. Chinese junks, waterwheels, and the compass were practical tools widely applied. And in both China and the West, there were always those whose economic interests were adversely affected by technological innovation, and who from time to time bitterly resisted its intrusions. In China, however, they had the implicit support of a mandarinate satisfied with the status quo, unwilling for technological change to disturb anyone and with nothing to gain itself from troublesome innovations. Despite this conservatism, Chinese technology and the Chinese economy reached a level more advanced than the West of, say, the fifteenth century. But a policy of making only such changes as do not appreciably disturb anyone is a formula for glacially slow advance, both in technology and economic growth.

In the West, the inividual centers of competing political power had a great deal to gain from introducing technological changes that promised commercial and industrial advantage and, hence, greater government revenues, and much to lose from allowing others to introduce them first. Once it was clear that one or another of these competing centers would always let the genie out of the bottle, the possibility of aligning political power with the economic status quo and against technological change more or less disappeared from the Western mind.

This competitive threat acts as an incentive to encourage more creative risk-taking. It operates at the level of the firm as well. Today’s market leaders would rather exploit the known certainties of current products than to spend extravagant sums exploring wholly new product spaces for the next disruptive technology. But the mere threat of other firms creating that disruptive product forces them to. An innovative economy requires an invisible kick to the ass: firms have to be forced to innovate by the threat of new competing firms entering the market. The same principle holds for nations as well.

Beware of the scholar-bureaucrats. In the Grand Titration, Joseph Needham writes:

I believe that it will be possible to show in some considerable detail why the Asian ‘bureaucratic feudalism’ at first favored growth of natural knowledge and its application to technology for human benefit, while later on it inhibited the rise of modern capitalism and of modern science in contrast with other form of feudalism in Europe which favored it–by decaying and generating the new mercantile order of society. A predominantly mercantile order of society could never arise in Chinese civilization because the basic conception of the mandarinate was opposed not only to the principles of hereditary aristocratic feudalism, but also to the value-systems of the wealthy merchants. Capital accumulation in Chinese society there could indeed be, but the application of it in permanently productive industrial enterprises was constantly inhibited by the scholar-bureaucrats, as indeed was any other social action which might threaten their supremacy. Thus, the merchant guilds in China never achieved anything approaching the status and power of the merchant guilds of the city-states of European civilization.

I can think of 534 grad school programs that do nothing more than spew bureaucrat scholars into the D.C. labor market, gumming up the works.

A minor bureaucrat in Riverside California made some headlines last week when he suggested California should split itself into two states.

This isn’t total secession. The new state would still be a member of USG, just as West Virginia became a state by breaking off from Virginia in the summer of 1861. No one takes this seriously, and they shouldn’t, but it leads to some interesting questions.

Ilya Somin comments:

This is one of those areas where I think the Constitution gets things wrong. Seceding from a state should not be easy. But it also should not be as impossibly difficult as the Constitution currently makes it. Some of our present states are probably too big, and California is perhaps the best example of this phenomenon.

Normally, dysfuctional state policies are constrained by the possibility of “voting with your feet.” If a state imposes overly high taxes, adopts flawed regulations, or provides poor public services, people and businesses will tend to migrate elsewhere, thereby incentivizing the state government to clean up its act in order to preserve its tax base. For reasons I discussed in this article, foot voters usually have incentives to be better-informed and more rational in their decision-making than ballot-box voters.

In California’s case, however, this dynamic has been undercut by the state’s size and favorable geographic location. Because California is extremely large and controls most of the warm-weather coastal territory on the West Coast, people have been willing to put up with a lot of bad policies for the opportunity to live there. Competitive pressure on the state government would be much greater if there were three or four states occupying California’s present territory instead of one.

And Arnold Kling adds:

The theory and some of the practical issues involved in this are discussed in the widely-unread Unchecked and Unbalanced. There, I argue against the notion that there are scale economies at work in large governmental units. If that were true, then places like Denmark would be failed states. And Switzerland would be a hopelessly failed state. Each Swiss canton is about the size of a county in the state of Maryland, and yet the cantons have more autonomy than U.S. states. Below the canton level, there is local government.

A few years ago I read a lightweight history of how the states got their shapes. California broke all the rules because it had the gold and other minerals. Its borders run so long north-south because the elite wanted to control as much of the Sierra Nevada range as possible. That fact is not going to change their mind completely, but once people see the arbitrariness in this border-making process, then perhaps their imaginations might become just a tad more flexible when thinking about the status quo.

Via Macroresilience, I came upon a fascinating paper by the father of the exit-voice paradigm. It has some interesting anthropoligical tidbits, quoting Claude Levi-Strauss:

No social structure is weaker and more fragile than the Nambikuara band. If the chief’s authority appears too exacting, if he keeps too many women for himself, or if he does not satisfactorily solve the food problem in times of scarcity, discontent will very likely appear. Then, individuals, or families, will separate from the group and join another band believed to be better managed….Therefore, Nambikuara social structure appears continually on the move. The bands take shape, they disorganize, they increase and they vanish. Within a few months, sometimes, their composition, number and distribution cannot be recognized.

Here’s Montesquieu on how mobile and elusive capital acts as a check on the sovereign:

Through this means commerce could elude violence, and maintain itself everywhere, for the richest trader had only invisible wealth which could be sent everywhere without leaving any trace…Since that time, the rulers have been compelled to govern with greater wisdom than they themselves might have intended; for, owing to this events, the great and sudden arbitrary actions of the sovereign have been proven to be ineffective and…only good government brings prosperity [to the prince.]

And though Hirchman says competitive governance is a “polyphonic” solution too beautiful to be real, he nonetheless gives an illuminating description of it:

The availability in a country of any one of these public goods serves to hold exit at bay and to increase loyalty. It is possible to visualize a state system in which, in spite of close contact and free movement of people and capital, exit would never assume threatening proportions because each country would supply its citizens with a different assortment of public goods, with emphasis on one area (or a cluster) as a special attraction for its own citizens. Different countries would then “specialize” in power, wealth, growth, equity, peacefulness, the observance of human rights, and so on…Achievements along the various dimensions just mentioned are not easily combined into a unique preference scale or welfare function; it is likely, however, that if a country’s citizens were equipped with a modicum of loyalty to start with, they would value the particular area in which their country excels–whatever that may be–more highly than that of the others. An ethnocentric welfare function of this sort may therefore be a condition for a stable state system under modern circumstances of high potential mobility.

Read the whole thing.