Editorial
How Government 'Works'
In the case of Egypt, people listened and obeyed − at least, as much as they did − because Pharaoh was, in theory, a god. In the case of Rome − with the exception of Caligula's claims − and the Mongol empires, the theory was similarly simple, though different. Tamerlane made no claim to divinity. He merely made it clear what he would do to you if you resisted him. Towns that submitted were generally governed passably, according to the standards of the day... and taxed, but not razed to the ground. Those that contested his authority were destroyed, often with all the inhabitants killed.
In Rome and out on the steppes, those who controlled the 'government' were in the favored position. They could reach out and impose their will on those who were not favored. Which is exactly what they did. As long as they were able, the insiders took from the outsiders. In both cases, the outsiders were literally outside the ruling group and its homeland.
This is perhaps a good place to point out that government is a phenomenon, not a system. It is best understood as a fight between the outsiders and the insiders. The insiders always control the government... and use it to conquer and control the outsiders. Why do they want to do so? The usual reasons. Wealth. Power. Status.
Everybody − or everyone who isn't either feebleminded or a saint − wants wealth, power and status. And the easiest, fastest way to get it usually is to take it away from someone. That is government's role. Only government can take something away from someone else lawfully. Why? Because governments make the laws.
We've already seen how a small group of Romans were able to reach beyond their home town, for nearly 1,000 years, taking wealth from people on the outside. One tribe fell under their control. Then another. Then, one town. And another. And always the power, prestige and wealth flowed back to Rome.
But not all Romans benefited in the same way. Rome itself was divided. During the Republican period, the insiders were the leading families who controlled the Senate. Then came the dictators, the emperors, and the scalawags who were able to get control of the government. Often, they were military men, popular or cunning generals who rose through the ranks, murdered their rivals, and took the reins of power for themselves. Each brought in new insiders...and kicked out some of the old ones. Rome sizzled with intrigue... and sometimes erupted into open warfare, with one group of insiders battling it out with another.
After Rome fell, barbarian tribes swept over Europe. Local strongmen were able to set up their own governments. There was little theory or justification involved. They used brute force to take what they wanted. Then they settled down to govern. One local lord provided protection from other local lords. All demanded payment, tribute, wealth and power. In the largely un-moneyed economies of the Dark Ages, taxes were in the form of a share of output... and/or days of labor. A serf typically worked one day in 10 for his lord and master.
The local warlord and his entourage were the insiders. They took from the outsiders as much as they could get away with. Or as much as they thought it prudent to demand. Some even asserted a droit du seigneur, known in France by the more carnal expression "the right to the thigh." The local chief demanded the right to deflower the brides of his peasants. Even as recently as the beginning of the last century, Kurdish chieftains claimed the right to bed Armenian brides on their wedding night.
As the Dark Ages progressed, government became less locally peculiar. Across Europe, serfs, lords, and vassals knit themselves together into the feudal system. One governed a small area and was in turn governed by another, who governed a bigger one. At the top was the king, who owed his allegiance to God himself.
Justifying and explaining the phenomenon of government also evolved. How to make sense of it? Why was one man powerful and rich and another weak and poor? Europe was Christianized by then. All men were supposed to be equal in God's eyes. How come they were so different in the eyes of each other?
Reaching back into antiquity, the doctrine of the "Divine Right of Kings" was developed to explain it. Scholars did not maintain that kings were divine, because that would undermine the foundations of Judeo-Christian monotheism. Instead, they claimed that kings had a special role to play, that they were appointed... and anointed, by God (through his ministers in the church of St. Peter)... to rule. Some people thought the kings were descended directly from the line of Jesus Christ. Others thought that God gave kings a "divine" right to govern in His name.
In the fixed order of the world, each person had a job to do. One was a hewer of wood. Another was a drawer of water. A third was a king. Each man did his duty.
Scholars in the middle ages spent a lot of time on the issue. As a theory of government it seemed coherent and logical. But there were traps and dead ends in it. If the right to rule were given by God, man could not contradict Him. But men did. One divinely-appointed ruler met another divinely-appointed ruler on the field of battle. Only one could win. What kind of game was God playing?
And if God granted a man the right to rule other men, did that mean that every order he gave must be obeyed, just as though it had come from the mouth of God himself? And what if the king seemed not to be doing God's work at all? Adultery was clearly a no-no. God disapproved of it. But kings often made it a habit and a sport. Did not the king defile his body and betray his Lord? In an effort to explain away the problem, scholars put forth the idea that the king actually had two bodies. One sacred. One profane.
But which was which?
"The Divine Right of Kings" was a theory of government that held water. But you had to put the water in the right container. You had to believe in God. You had to believe that He gave out job assignments. You also had to believe that He didn't mind when His employees and agents made a mess of things...or even when they contradicted His own orders. Looking at the history of the monarchs who were thought to have been given this divine authority, you would have to conclude that God was either a very tolerant task-master, or a very negligent one. Adultery, murder, thieving, lying − there was hardly one of God's commandments they obeyed.
As a theory of government, the 'divine right of kings' would have been okay had it not been for the kings themselves. Some were reasonable men. Others were tyrants. Many were incompetent, largely irrelevant and silly. Taken all together, it was very difficult to believe that they had been selected by God, without also believing that God was just choosing His most important managers at random. Kings were not especially smart. Not especially bold or especially timid. Not especially wise or stupid. For all intents and purposes, they were just like everyone else. Sometimes smart. Sometimes dumb. Sometimes good. Sometimes evil. And always subject to influence.
Towards the end of the 18th century, the 'divine right of kings' lost its following. The Church, the monarch and the feudal system all seemed to lose market share. The Enlightenment had made people begin to wonder. Then, the beginning of the "Industrial Revolution" made them stir.
In 1776, Adam Smith published his Wealth of Nations, arguing that commerce and production were the source of wealth. Government began to seem like an obstruction and a largely unnecessary cost. Its beneficial role was limited, said Smith, to enforcing contracts and protecting property.
The school of laissez-faire economics maintained that government was a "necessary evil," to be restrained as much as possible. The "government that governs best," as Jefferson put it, "is the one that governs least." This is, of course, another way of saying that government − like every other natural phenomenon − is subject to the law of declining marginal utility. A little government is probably a good thing. The energy put into a system of public order, dispute resolution, and certain minimal public services may give a positive return on investment. But the point of diminishing returns is reached quickly. For reference, here is the 'take' by modern governments today.
Government − according the Liberal philosophers of the 18th and 19th century − was supposed to get out of the way so that the 'invisible hand' would guide men to productive, fruitful lives. Smith thought the arm attached to the invisible hand was the arm of God. Others believed that not even God was necessary. Men, without central planning or God to guide them, would create a 'spontaneous order,' which would be a lot nicer than the one created by kings, dictators or popular assemblies.
This idea of government, such as it is, leads to what we know of today as "libertarianism." Libertarians argue about how much authority the government should have. They scrap among themselves over what the government should do and how big it should be allowed to get. But all libertarians agree with Jefferson. And all agree that the governments in the world circa 2011 are much too big.
The libertarians are concerned about their loss of freedom. But what we're concerned about is the downside. When the point of diminishing returns is passed, the payoff from further investment of resources in policing and wealth re-distribution declines. Then what happens? We've already seen what happened to Germany in the '30s and '40s. Hitler was elected. But then, the Reichstag burned and he suspended democratic institutions. Perhaps more robust, modern democracies can adapt more readily and thereby avoid the downside?
We'll see...in the next section.
Bill Bonner founded Agora Inc. in 1979 and has been a daily contributor and the driving force behind The Daily Reckoning since 1999. His newest book, Dice Have No Memory: Big Bets & Bad Economics from Paris to the Pampas, is the definitive compendium of Bill's daily reckonings from more than a decade: 1999-2010.
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Posted by 1776 on 11/27/12 04:46 PM
School Sucks: The American Way (Video)
Don't let the title fool you. This video is actually about how government-run schooling contributed to the rise of socialism, imperialism and eventually fascism in Germany between the 1890s and 1940s. Critical Thinking Question: In school we are led to believe that we are all living in an ideal vision of what society should be... But whose vision is it? And what were their ideals?
Click to view link
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Posted by mava on 11/26/12 03:01 AM
@dave jr.:
"Think of the family unit as a government. Somebody wears the pants."
In a family, you select someone who wears the pants. Voluntarily.
That is a huge difference from a government that acts exclusively by violence.
Can your wife divorce you if she is sick of your governance? Yes. Can I divorce "my government" ? Not a chance. It laughs at my by saying: You want a divorce? Then get the hell out of here. The whole world being covered by the ever metastasizing government, this is equal to you saying to your wife: "Wanna divorce? Then you must first marry someone else!"
And, secondly, even if the world wasn't full of governments. Why should someone who doesn't want the government, leave? Because, this is a sign, like a spring end popping from a mattress, telling us that the government really isn't about freedom at all, but strictly violence and rape.
You might say, "then vote". First, voting is already a participation in government, already a signature of consent. Secondly, so may-be everyone but me voted for Hitler. Why does that make me his subject?
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Posted by budwood on 11/25/12 04:37 PM
Bill Bonner, as usual, clearly defines situations and phenomenon very perceptively. I guess that it comes down to what Michael Bakunin said many years ago, "God is necessary for the existence of the State".
Before a person assumes that a State is necessary, that person needs to precisely define what a State is and what powers a State has.
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Posted by mava on 11/25/12 12:56 PM
Clark, that's a great article. I just re-read it again. It clearly shows why we were taught to worship the constitution as something that is an absolute cornerstone to our way of living, in place of the articles of confederation.
Wait, it is the absolute cornerstone to the current way of life! It makes sure there is no such thing as private property, and gives all the power to the federal government, even when it is playing coy with "not enumerated" powers, reserving them for ... the state governments!
But it is sad that some of the best people around, those very much still the patriots, are believing in the myth of the constitution being for "we the people" (this phrase is from another doc., I know), that they view anyone like North as an anti-American and anti-freedom promoter.
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Posted by dave jr on 11/25/12 12:32 PM
@ Clark
"Do you suppose goberment can be both a phenomenon and a collection of systems, at the same time?"
Good question.
Think of the family unit as a government. Somebody wears the pants. The fact is people have the capacity and tendency to organize. The further removed the "organizers" are from the "organized", the more trouble there seems to be. It is a personal cost/benefit analysis. For me, family and local government works. My state government, though flawed, is entirely tolerable. I draw the line at the federal leaches who take x fold more than any benefit they could possibly return. I shudder at the thought of a world gov. Who wants this, and why?
So I would differentiate, that workable government is a phenomenon. Unworkable government is one that because of distance and unfamiliarity must rely on a system.
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Posted by Danny B on 11/25/12 12:50 AM
Clark, on most pages you can hit "control" and "+" and the image or print will grow.
I tried it here and it works. My OS is Linux / Ubuntu. I'm sure that it is the same for Windows. You can hit control and - to shrink it back down.
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Posted by clark on 11/24/12 10:55 PM
Bill Bonner wrote, "government is a phenomenon, not a system."
I don't get this.
It seems to me goberment is a collection of systems run by individuals and those systems are failing,... or designed to do exactly that.
Do you suppose goberment can be both a phenomenon and a collection of systems, at the same time?
Anyway, one things for sure, just about everyone's being played for a sucker, just like this whole, "The Constitution limits the goberment" lie that's been advanced for so long.
The U.S. Constitution: Tool of Centralization and Debt, 1788-Today
Click to view link
Note to webmaster:
I sure liked the ability to increase the font size a couple of points, back when the Daily Bell had that cool photo as a background. As it is, I have to copy and paste to increase font size. Hint. Hint.
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Posted by Danny B on 11/24/12 06:21 PM
@laceja, was that a Freudian slip of the pen? It's hilarious anyway.
"Germany voted 85% to approve me as president. "
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Posted by laceja on 11/24/12 12:50 PM
When the then president of Germany, Paul van Hindenburg, died on August 2, 1934, Adolf Hitler, who was appointed as Chancellor by Hindenburg, took power as president. He was approved in place by an 85% vote, by the citizens of Germany. So, although Hitler was not elected to the office of president of Germany in a contested election, the citizens of Germany voted 85% to approve me as president.
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Posted by Bischoff on 11/24/12 12:43 PM
BONNER: "Adam Smith thought the arm attached to the "invisible hand" was the arm of God.
BISCHOFF: Adam Smith was correct, if you equate "natural law" with "God" and you define "natural law" as that which works as brought about by nature.
BONNER: "... kings had a special role to play, that they were appointed... and anointed, by God (through his ministers in the church of St. Peter)... to rule."
BISCHOFF: Bill's explanation requires a broader perspective. Once humanoids passed the hunting and gathering stage of economic existence, and humans achieved surpluses through animal husbandry and agriculture by requiring other humans to expend energy in the process of those activities as an alternative to becoming food for the other humans, then the requirement for government arose.
Government must be looked upon as a necessity to require the check of detrimental human instincts for the survival of the species. On the other hand, government has been an instrument of force exercised by some humans to benefit from the "labor" of other humans, i.e. a force to protect the indulgence in detrimental human instincts which is the purpose of government to prevent. It was not until the time of the "Enlightenment" that this became clear to people at large. Much of the thinking of the scholars of the Enlightenment was based on thinking evolved from the Mesopotamian civilization, through Greece and Rome, through the Protestant Reformation until the implementation of the enlightenment thinking found its expression in the original U.S. Constitution.
Political economy is society organized to make possible the survival and procreation of families and other groups. The first well developed political economic system was "Slavery". It placed the primary emphasis on "Labor" as one of the three factors of production. This system found its end with the demise of Rome.
The Church of Rome (Church of St. Peter) inherited what was left of the Roman Empire. To teach the doctrine of Jesus Christ, it made common cause with regional rulers by sanctioning the "divine right of rulers" to govern over certain lands. This put the rulers in the position of having to provide for the physical survival of the population, but also using them as serfs to extract labor, while the Church of Rome reserved the right to look after the "spiritual" wellbeing of the population. With this arrangement of the Church of Rome and the rulers over lands on the European Continent, "Feudalism" as a political economic system was born by making "Land" the primary factor of production.
With the Angles, Saxons, Friesens and Jutes fleeing feudalism on the Continent for the English Isles, the political economy set up by the Anglo-Saxons in England was the complete opposite of the feudal system. This system was seriously damaged by the invasion of the Normans and the victory at the Battle of Hastings in 1066.
The original American settlers are descendants of the Anglo-Saxons. The sttlers of the Southern colonies are largely stock of impoverished British aristocracy which came to North America via the West Indies. They tried to import Englishmen as indentured servants to propogate feudalism in the New World. When this failed, their agents in England hit on the idea of "black slavery".
Thus, the battle between British feudalism and Anglo-Saxon political economy was transferred to the North American colonies. This time the Anglo-Saxons won at the Battle of Yorktown.
The U.S. Constitution by devine providence is a document which enshrines Anglo-Saxon political economy. However, this does not mean that the battle between the feudal thinking of a part of our society and the attempt to apply the Anglo-Saxon principles enshrine in the U.S. Constitution isn't as fierce as it was a thousand years ago.
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Posted by dimitri on 11/24/12 12:21 PM
Humorous and entertaining.
"More robust, modern democracies" should be a good read. But is sounds like an oxymoron.
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Posted by LiveFree33 on 11/24/12 10:04 AM
Very well written Mr. Bonner. I look forward to the next section.
One thing however, in your last paragraph you state: 'We've already seen what happened to Germany in the '30s and '40s. Hitler was elected. But then, the Reichstag burned and he suspended democratic institutions.'
Hitler was not elected. Of course, that correction in no way detracts from your sharply drawn the point.
