Monday, May 5, 2014

Why Nations Fail

- I've a request today.
- What's that?
- I'd like you to give me an example of philosophical investigation.
- Do you have a subject in mind?
- Yes. This book I'm reading, 'Why Nations Fail'.
- Why do nations fail?
- According to the authors, one a professor of politics at Harvard, the other a professor of economics at MIT, nations fail when the economy and politics are in control of a few rather than many.
- What do they mean by fail?
- The majority are impoverished. The professors think technological advance is the preserve of economics and politics in the hands of the many. But dictatorial countries can prosper for a long time when they are catching up to other countries in the use of existing technology.
- What would you like philosophically investigated?
- The book argues that in nations in the control of the few, economics determines politics, people with most of the money bribe their way into control of the government, and politics determines economics, government in the hands of the few makes laws that benefit the few, in a vicious circle. An opposite kind of circle, a virtuous circle, operates when government is in the hands of many, who make laws benefiting the many, who then share more and more the control of government. What do you think?
- You want a philosophic analysis?
- Yes.
- Let's say politics are the rules for making rules: do many people do it, or a few, or one? And economics are the rules themselves. Rules for what?
- Since it's economics, rules of buying and selling things.
- Good. And the book argues something like when rules of buying and selling things are made by the few, monopolies dominate the economy.
- Exactly.
- And the equivalent of monopoly in politics, the rules for making rules, is dictatorship.
- Yes.
- Now, what is monopolized in economics?
- Wealth.
- And wealth is control of property?
- Yes.
- What would be the thing equivalent to property that is controlled in politics?
- Power to set the rules.
- For what purpose are the rules set?
- According to the book, to control economics. Accumulate wealth and property.
- Do you think there is something in politics that is monopolized like property is monopolized in economics?
- What kind of thing?
- If there is a cycle, vicious or virtuous, then we are dealing with some kind of machine with parts moving in regular, predictable relation to each other. In economics we have supply and demand, in politics compromise and bargaining. What connects the machine of politics to the machine of economics?
- That is the failure of the book: it says that nations that are worse for the many get worse, and nations that are better for the many get better, but can't explain how or predict when and which nations change course, except to say they tend to do this at "critical junctures" such as opening the Atlantic to trade, the Black Plague, the fall of the Roman Empire.
- Try this. Economics are rules for exchanging property. Politics are rules for making rules for exchanging property. What if there were a connection between getting the many to allow the few to make the rules for making rules, and the rules of property themselves.
- I don't understand.
- We could found a society on the idea of cooperation, making each other gifts, and make each other the gift of our ideas of making the best rules for doing this. Basing our economics on property, we also base our rules for making property rules on an assumption of property being fundamental.
- Still don't understand.
- Ok. Two examples of prosperous countries where politics and economics were in the hands of the many, and rapidly were transfered to the few: Germany in the period just prior to World War II, and we the United States now. The machine of economics is controlled by monopoly. In German politics, monopoly was accomplished through the intermediary of the ideas of the National Socialist party. In the United States, through the idea of a marketplace unconstrained by government.
- But people voluntarily give up ideas, whereas in monopoly economics they have no choice: if they have no property they have to sell themselves as slaves.
- Behind the idea of property is the threat of force: if you try to take my property I will either take it back personally or call on the state to do it for me. What if behind the ideas of free market and Nazism is the same threat of violence, coercing the many to accept what is in the interest of the few?
- And if so, then the increasing or decreasing violence in economics would be transferred to politics and vice versa, from politics to economics, and we would have a mechanism connecting the two.
- Yes.
- Continue the philosophic analysis.
- I myself was reading today about the recently published journals of the 20th century German philosopher Martin Heidegger. They settle the question whether his philosophy was tied to Nazism. It was. Heidegger writes how the Jews were incapable of the German spirit of intuition, blood, nature. Jewish technology, way of social organization, was "uprooted". Nazism, Fascism in general, sees the state as a kind of property, a well functioning social machine mysteriously powered and defended by violence, the root that the Jews were supposed to lack.
- And you think political ideas of mysterious force behind a machine-like organization of people provide the connection to economics, buying and selling actual things.
- In the case of the US, nearly unchallenged belief in a mystical force that sets the market in motion is behind the political monopoly* that creates the economic monopoly, which with ownership of the media is able to make the political monopoly more pervasive. 'Why Nations Fail' fails as a book because it is only economics, about money and property.
- If the professors looked at what is involved in property, saw property as one way among others of founding cooperation, they could do more than say nations that cooperate do better than those that don't. They could say that people who base cooperation on violence will be vulnerable to having cooperation reversed by extending the violence behind the rules of economic transactions to the political rules for choosing rules, basing politics on the violence of free market, the nation, blood, race. Cooperation can also be founded on people positively wanting to cooperate because they see ahead the beauty and good that will come of it. The truth might be that the only condition under which nations don't fail is when people want to cooperate with each other, and that nations are doomed to failure when people cooperate under threat of force or with unwilling compromise.

Further Reading:
The Technology Of Good
* As economic monopoly takes advantage of threat of violence to force the propertyless to accept their state of dispossession and sell their labor cheap, so political monopoly uses ideas of human nature reduced to a force driving markets, nation, or race to discredit and disqualify other aspects of human nature that might otherwise enter into competition in political decision making.