The One-Stop Explanation of Why Marxism is Toxic Crap

The human disasters of actually existing Marxism flow directly from Marx’s theories.

Two toxic theorists and three mass murdering tyrants.

The most obvious feature of Marxism is that it has been the ruling ideology of a series of tyrannies, some of which murdered millions of their own citizens and all of which performed worse, typically disastrously worse, than their “capitalist” equivalents in promoting human well-being. The last point has been established by a series of clear natural experiments (North and South Korea, East and West Germany, China and Taiwan) but it also obvious if one just compares outcomes between reasonably similar states.

Communism (i.e. revolutionary Marxism) was strategically the best thing that ever happened for the US because it hobbled the two states most able to rival it, Russia and China. Both states have significantly fewer people, less wealth and lower standards of living, than they would have if neither had ever become Marxist.

Despite this disastrous history being the most obvious feature of Marxism, there are plenty of people who still call themselves Marxists. They give this appalling history a series of hand-waving evasions that they would not, for a moment, grant to “capitalism”. Apparently, around a 100 million deaths in purges, persecutions and terror famines (i.e. from deliberate policies of Marxist regimes) and an unbroken series of tyrannies is not enough evidence that there might be something a bit wrong with the original theory.

The justification will be something like “they did Marxism wrong”. This is just a hand-waving evasion. If you get the same basic pattern every time, then the outcome is inherent in the ideology.

Marxism is based on two (interacting) fables that go back at least to Adam Smith (1723–1790). One is the labour theory of value whereby any return from production that does not go to the workers is return on labour that labour does not get. The other is the theory of class that emerges from the labour theory of value.

Getting class completely wrong
Marx’s theory of class is that it is based on the extraction of surplus (the return from labour that labour does not get) by landlords and capitalists. The state is the instrument or manifestation of the underlying class structure of society. This is a version of an historical fable that, even today, most social scientists accept some version of and has long dominated scholarly thinking about the state.

This historical fable is that when humans developed farming, farming created surplus and social hierarchy from which the state arose. The state can therefore be understood as essentially an extrusion of the society that creates it. Marx’s famous statement that in capitalist societies [t]he executive of the modern state is but a committee for managing the common affairs of the whole bourgeoisie belongs firmly within this standard historical fairytale tale, one promulgated by Adam Smith and his intellectual heirs (which includes Karl Marx).

Almost every element of this fable is incorrect. First, farming does not, by itself, create a surplus (that is, production in excess of subsistence). Farming does greatly increase food production, increasing the ability to extract useable calories from the arable landscape by up to a hundredfold, but that just leads to more people.

For most of human history, extra food mainly meant extra babies. That is, more humans, more human biomass. This was a far stronger result from farming than any creation of more resources per person. Especially as it generally did not result in any such increase.

Farming created more human niches rather than noticeably larger human niches. Indeed, it tended to create smaller human niches (in the sense of health and nutrition quality) than foraging, just (a lot) more such niches. The health of people living in farming societies was persistently worse than that of foragers. 

The metabolic health costs of farming were worth it adaptively because they lowered the cost of individual children, so enabling people to have more children. In the genetic replication game that is evolution, farming was definitely a big winner over foraging.

Human societies thus remained within the social dynamics originally analysed by the Rev. Thomas Malthus (1766–1834) of population tending to increase to consume the food available. For farming to create a continuing and substantial surplus, food had to be intercepted and diverted before it led to more babies. (Technological and commercial surges in available resources provide complications that need not detain us.)

Direct expropriation of food on any scale was only practical if there was significant stored food. This is why most farming societies did not create states. States arose in only a relatively small minority of farming (and no foraging) societies. Though all societies, including all farming, pastoralist and foraging societies, eventually had states imposed upon them.

Farming generally results in significant amounts of stored food only if one is harvesting seasonal crops, notably grains. (Also potatoes, as potatoes are a seasonal, temperate crop that is relatively non-perishable, so function like a grain.)

If one grows crops that can be harvested all year around, there is normally no significant storage, so no significant amounts of food to be systematically, and recurrently, seized before it supports more babies. New Guinea, in all its thousands of years of farming, trade and conflict, never produced anything resembling a state, or even a chiefdom, because it is a land of crops harvested all year round, with minimal storage of food. It lacked the taxable resource-base for chiefdoms and states to arise.

Moreover, if one is living off seasonal crops, it becomes vital to ensure that (1) the stored food is available between harvests and (2) the stored seed-grain is available to sow next year’s harvest. Seasonal crops thus create a particularly intense protection problem. Even more so if there were other groups, especially pastoralist nomads, within raiding range. That protection problem encouraged the rise of specialist protectors (or organisers of protection), thereby providing a basis for the development of coercive power across generations: the basis for creating chiefdoms and states.

The benefits of coordinating protection opened up the possibility for the systematic and recurrent appropriation of stored food sufficient to create and sustain chiefdoms and then states. Societies did not easily nor simply go from farming villages to states. There had to be some build-up of the capacity to defend, to coordinate and to appropriate. Hence chiefdoms preceded states (but not all chiefdoms created states).

So, the farming-leads-to-surplus-leads-to-states fable about the origin and nature of states falls over at the start. The story about hierarchy is not much better. Most farming societies did not create much in the way of social hierarchies. Stored food was the dominant source of social inequality and hierarchy. Though inequality and hierarchy was also a feature of controllable resources generally (such as salmon runs). But only some farming leads to stored food and only some stored food comes from farming. To generate enough surplus to support a state requires systematic and recurrent generation of enough stored food that the state can then appropriate sufficient food to reliably support itself.

Sedentary foraging societies with stored food (e.g. salted fish) could and did generate social hierarchy, chiefdoms, slavery and warfare. It was stored crops, particularly grains, that usually generated the scale of resources required to generate states. (Sub-Saharan Africa, with its mixture of seasonal and non-seasonal crops, generated trade-and-slavery states, but trade also generates a storable goods protection problem.)

States and class
Once the state evolved in (or was imposed on) any society, it dominated the generation of surplus in that society. In a real sense, each state had to remake its originating society so as to sustain itself (and then impose the same remaking on any areas it conquered).

The state was almost invariably not some “extrusion” of a society, it was the dominant structuring element in its society. If it could not structure society so as to sustain itself, it would either not arise in the first place or, if it could not sustain the required structuring of society, it would collapse. Even cooperative-bargaining (i.e. non-autocratic) states remade their societies. An example being the abolition of lineage-based tribes within both Athens and Rome and their replacement by territorial designations depending on where in the city one lived. (Judging by the disappearance of kin terms differentiating male- and female-line kin from classical Greek, such replacement of lineage-based kin groups seems to have been a general pattern in Mediterranean city-states.)

The first, and arguably the greatest of historical sociologists, Ibn Khaldun(1332–1406) discussed states structuring their societies, using the Aristotelian language of form for structure rather than the more economistic language that we are, post-Marx, used to. Thus he writes:

… dynasty and royal authority have the same relationship to civilization as form has to matter. (The form) is the shape that preserves the existence of (matter) through the kind of (phenomenon) it represents. It has been established in philosophy that one cannot be separated from the other. One cannot imagine a dynasty without civilization, while a civilization without dynasty and royal authority is impossible, because human beings must by nature co-operate, and that calls for a restraining influence. Political leadership, based on either religious or royal authority, is inevitable. This is what is meant by dynasty. Since the two cannot be separated, the disintegration of one of them must influence the other, just as its nonexistence would entail the nonexistence of the other.
(Ibn Khaldun, Muqaddimah, Chapter 4, Section 1.)

In other words, the state structures society. It cannot be assumed to be the extruded product of a society.

Perhaps the most extreme example of such structuring is provided by Egypt, which generated the quickest, and most thorough, transition from seasonal-crop farming to highly centralised state. Yet, from the flight of pharaoh Nectanebo II in 343BC to the officers’ revolt which overthrew the Albanian Alawwite dynasty in 1953, Egypt was ruled by foreign empires or foreign dynasties. For almost 23 centuries, there was a state in Egypt, but there was not an Egyptian state. Even if each iteration of the state in Egypt adopted the techniques for exploiting Nile valley farmers developed by the pharaohs, whatever state ruled Egypt was not an extrusion or product of the society it ruled. It imposed structures on that society congenial for its continued rule and reflective of its (external) origins.

States are typically not creations of class structures. Typically, they have been the dominant creators of class structures. States have dominated the creation of class structures as they have dominated the extraction of surplus and, typically in alliance with priesthoods and clerics or (in the case of China) secular clerisies, dominated the socialisation of function: what status various social groups had; what access to surplus they had and on what basis; what were their rights and obligations. Surplus + socialisation of function => class structure.

So, states themselves are, historically, the dominant extractors of surplus and the dominant creators of class structures. The former is still true, by the way. Look at the size of the tax take in any Western democracy. It is way larger than the profit share of GDP. (Though, in the sense of income above subsistence, technology and economic structures dominate the creation of surplus, with the state taking far more of that surplus than do company profits.)

But the most dramatic example of states as the dominant creators of class structures is provided by every revolutionary Marxist state. In each case, the ruling regime seized the state, atomised society and restructured society to serve its own power and purposes, thereby creating the class structure of its society. Marx’s theory of class proved to be self-refuting by Marxism.

Marx’s theory of value claimed that surplus came from exploitation of labour by landlords and capitalists. So, if you abolished such exploitation, you abolished class. Marxist regimes abolished such designated exploitation by concentrating all social power in the hands of the ruling regime via the state: the actual historically dominant extractor of surplus and creator of class structures. So, of course Marxism-in-power created murderous tyrannies run by elites who extracted the surplus from society for their own ends.

Stalin was able to extract far more surplus for his own purposes from a smaller-in-territory-and-population Soviet Union than Tsar Nicholas II had from the larger-in-territory-and-population Russian Empire. Stalin created one of the largest slave systems in history. He (re)imposed serfdom, as people were not allowed to leave a workplace without the workplace’s permission. The Kim regime in Korea is, in effect, a recreation of the dynastic God-kings of early states, with more advanced technology.

This pattern of tyrannical regimes extracting surplus for their own ends was not some weird, recurring accident. It was a direct result of Marx getting class fundamentally wrong.

Getting value wrong
So, why did Marx get class so completely wrong? Because he got value profoundly wrong.

On this point, as elsewhere, there is not much point in engaging in some forensic analysis of what Marx actually wrote. While he was a rhetorically powerful reasoner (and asked some good questions), he was also a persistently dishonest one. That is, when he makes some claim that might be critiqued he adds in some fudging protection, so that he can always point to the protective fudge to evade critique. As he put it in a letter to Engels, one just uses a bit of dialectic to get out of any difficulty in analysis.

So, consider Marx’s basic characterisation of profit: the return on labour that labour does not receive. Why do people engage in labour? Why did our original foraging ancestors engage in effort? To gain something they wanted. Why did they want it? Because it has some feature of characteristic they needed (nutrition) or otherwise valued (it tasted good, it was fun, it made getting food easier, and so on).

So, the labour was directed to what people valued. That is the basic connection between labour and value: labour is typically directed to what people value. If the labour is successful, the value is gained. If the labour is not successful, then the value is not gained. Since success is not measured by the labour, labour is not the source of value. It “creates” value only in specific circumstances.

So, labour is the “source” of value only if one completely ignores the discovery process involved in applying labour, in putting in effort, to successfully achieve value. Human history is fundamentally a history of discovery. The way labour is applied always relies on some previous process of discovery. Indeed, all of evolution is fundamentally a process of discovery: discovering what can be successfully replicated.

What increases the value that labour, successfully applied via discovery processes, provides? Well, land for one. Foragers engaged in a lot of search activity to find that which they valued. What was available to be discovered made a big difference in how they went about that (how they applied their labour) and what they were likely to discover (what was the outcome of doing so).

Foraging, especially hunting, is a skilled activity. People had to learn skills to be effective foragers. In contemporary foraging societies, the productivity of foragers peaks at about 45 years of age. As humans increasingly adopted skill-based foraging techniques, that meant that older males could be desirable mates. The older the male, the longer the telomeres of their offspring tend to be, so the longer such offspring tended to live. This resulted in more human females living past menopause, which enabled them to finishing raising the children they had when they were about 40 and to invest in the children of their children (as they stopped having children of their own).

The learned skills that meant productivity of the provisioning human males peaked at an older age were the cognitively incorporated — indeed embodied, including via muscle memory — results of discovery processes. Labour is always effort + (past or present) discovery. Skilled labour simply incorporates a higher level of (past) discovery.

What’s another thing that increases the value that labour, successfully applied via discovery processes provides? Tools. Which are a form of capital, the produced means of production. Humans became tool makers because that made their labour more productive. As skills are learnt, they are also a produced means of production, so human capital.

So, the more (useful) land, the more capital (including human capital) and the better the discovery processes, the more value the application of labour is likely to provide. Workers in developed economies have much higher wages than folk generally do elsewhere, or in the past, because they are supported by a great deal of productive land, capital and accumulated discovery processes.

How does one get folk to look after the land, provide capital and engage in discovery? Make sure they gain benefit from doing these things. Why does every society ever known generate returns to land, capital and discovery? Because these things magnify the value that labour can achieve.

Together, they create value in the sense of providing things people value. But the value comes from people’s reaction to the things provided. Economic activity “creates” value in that sense, and that sense alone. It “creates” value if it is successfully directed towards providing things people value and does not “create” value if it is not, regardless of how much labour and other resources might have been applied to such activity.

There is another feature of economic activity not yet covered in the above. That is risk. The notion of discovery implies the possibility of not discovering. Or even of disastrous discovery (e.g. that thing that tasted OK was actually poisonous). Search involves risk. Effort involves risk. Not doing anything involves risk. Risk has to be managed. Good risk management is a very useful thing. It makes creating value, particularly doing so recurrently, from the application of a given amount of resources much more likely.

Human foraging is cooperative. In contemporary foraging societies, individuals vary in their social connections, what anthropologists call relational wealth and economists social capital. Such connections function as information (i.e. discovery) networks and risk management networks, as they are constructed by exchanges of favours. Management of risk has always been part of human activity and social organisation. So has land, so has capital.

The analytical advantage of starting with foragers is:

• that is where we came from, and
• we can see basic economic patterns without exchange being a major factor. (Though evidence for exchange dates back to our emergence as a species.)

If exchanging something we produced or acquired for something that someone else produced or acquired has been going on for our entire history of a species, a mere 200,000 years or so, then we are probably adapted to engaging in exchange. Producing things for sale, for exchange, is not, in any useful sense, inherently alienating.

Though it is not exchange itself that is allegedly alienating. Rather, if labour creates (all) value, then any value from productive effort that does not go to labour is return from labour they did not receive. That is allegedly the source of alienation.

Those familiar with Marx’s writings, or Marxist theory, will notice I have ignored the use-value/exchange-value distinction. (Mainstream economics calls the first utility, and the second price, where cost is what you pay or imposed, which may or may not be priced.) This is because:

1. exchange-value is driven by use-value, including use in exchange, as all exchange is driven by variation in valuations: we exchange what we value more for what we value less; and
2. it is perfectly possible to make key points by considering foraging economies where exchange is not a major factor — they are instead dominated by connection and pooling. It makes it easier to see that that use-value/exchange-value distinction does not get you where Marx wants to go with it.

So, moving to an exchange economy, you put land, labour and capital together in the hope of creating more value than was consumed. Suppose you fail. That is, you make a loss. Who covers the loss? Who is in the best position to cover the loss?

Generally speaking, not the workers. They generally lack the resources to do so. More importantly, they lack the control to do so. Forcing folk to cover losses from processes that they do not control is a very bad incentive structure. So, the person who covers the loss better have sufficient control over the processes of production to affect the pattern of risk. Why would they cover the loss? Because of some hope of gain.

You could pay them to cover the risk of loss. That is how one gets an insurance industry. Or, you could have them not only cover the losses, but also gain the profits. That provides them with an incentive to cover losses and to organise production so that profits are more likely.

Hence the structure whereby business are owned by the people who put up the capital to cover the risk of loss and, in return, receive the profits. Does this remotely look like “the return from labour that labour does not gain?” Or does it look like the return from taking on the risks, from engaging in discovery, from organising land, labour and capital to be productive?

Would labour be as productive without those things? Does doing those things make the labour more valuable? Does doing those things increase the return to labour? No, yes, and yes. Hence firms and workers can contract for mutual gain.

The labour theory of value “works” by assuming success. By assuming that production of value is successfully achieved when labour is applied to production. So you don’t have to worry about discovery, risk, consuming more value than you produce, etc. But that just assumes away a whole set of hard questions.

If all the value of production is returned to the workers in an enterprise, how do you pay for upkeep of land, acquiring and maintaining capital, managing risk, discovery processes? No enterprise can operate for any length of time by returning all the value it produces to labour. So, burbling on about “return to labour that labour does not receive” is nonsense on stilts. Especially given how much all these things affect the success of the application of labour. Firms generally don’t happen by workers congregating together and assembling the processes for creating value, as there is a lot more involved than labour.

Marxist states were appallingly bad at looking after the land and at maintaining buildings and equipment, were not good at providing capital for anything beyond the convenience of the regime. Nor were they good at discovery processes (apart from stealing other folk’s discoveries). Why? Because they were command economies and based on Marx’s labour theory of value, with the latter tending to exacerbate the problems of the former. All value was deemed to be created by labour: not by land, capital or discovery. Folk owning land or capital was inherently exploitive because they extract a “return from labour” that labour does not receive. The consequences of this fundamental misreading of the processes of creating value were predictable, and predicted.

Pretending that payment for use of land, for creating and maintaining capital, managing risk, and discovery processes is not payment for value received is just another hand-waving evasion. As is pretending that it is payment for labour. Value is what labour (and use of land, and use of capital, and discovery processes, and risk management) is directed towards. Value is only produced by any of these things, including labour, if it is successfully so directed and is much more likely to be achieved if all these things are successfully so directed.

Property as incentive structure
The notion of private property emerges very early in human history, though it does not become a major feature of human societies until the development of sedentism, farming and pastoralism. The basic idea of property is not mine! — any silverback gorilla male with a harem can do that — but yours!

Exchange is a fundamentally normative activity: it makes what was yours, mine and what was mine, yours. We humans engage in exchange so readily because we are a far more normative species than are our primate near relatives. Our normative and cooperative capacities have made us the global ape.

Chimpanzees conform much more to the predictions of game theory in strategic games than do humans because they are less normative than are humans. A Pan troglodytes in a lab is distinctly more homo economicus than are Homo sapiens.

As a group-living species that also pair-bonded, some notion of yours! had to develop to permit pair-bonding to happen. That is, both the males and the females in the group had to acknowledge some sense of the pairing being off limits to others.

In contemporary foraging societies, young folk do not “break even” in their calorie contribution to the group until about age 20. On average, in such societies, males dominate the provision of protein to the group, provide a majority of calories to the group and overwhelmingly dominate the provision of protein and calories to children, once they are weaned. There was no evolutionary stable alternative than investment in children that they could be reasonably confident were theirs to getting males to provide for children at the consistency and level needed to raise such remarkably helpless human infants into adults, a process taking about 20 years.

(Investing in one’s sister’s children — i.e., substituting unclehood for fatherhood — is a possible alternative, but it operates as the main mechanism of male provision for children in a very small number of societies. Given that nephews and nieces are more genetically distant from oneself than are sons and daughters, it is an inferior gene replication strategy. One typically adopted in circumstances of high uncertainty about the paternity of individual children.)

Once you have farming and pastoralism, then property rights develop in earnest. Having someone gain the benefits from controlling some thing (or some attribute of the thing) is often the only stable way to get around free rider problems and tragedy of the commons. It motivates better use (and maintenance) of the owned thing. This is why property rights are such a pervasive feature of human societies. Indeed, substituting control of attributes by their agents for more widely distributed property rights is often done by the powerful so as to make it easier for them to appropriate the labour, or products of the labour, of others. This was as true in Pharaonic Egypt as in Stalin’s Russia, Mao’s China or Kim Dynasty Korea.

When regulation in modern societies goes wrong, it often does so by poorly aligning effective control over an attribute with the incentives to productively use said attribute. This is particularly likely to be true when discretionary power is given to an official. Especially as corruption is essentially the market for official discretion: the more official discretions there are, the more extensive such corruption is likely to become.*

Regulation, especially if it involves considerable official discretions, can often be a considerable source of commercial risk. This tends to favour larger enterprises, as they can better manage such risks. Being larger provides them with more capacity to influence, even manipulate, regulatory processes. This perverse interaction between regulation, risk and response can be seen in any jurisdictions that engage in extensive land management via official discretions.

The coercive basis of the state, and its consequent ability to operate with, even benefit from, poorly aligned incentives makes it a much less reliable mechanism for encouraging human flourishing than is often assumed. Especially as you functionally pay an organisation to do what makes its income go up. Thus, government health systems get more income if the metabolic health of the citizenry gets worse, not better. Government health systems colonise the ill-health of the population, so have pervasive institutional interest in metabolic health getting worse, as it has. Hence crap official nutrition guidelines that are not based on sound science but are generating obesity even in the US armed forces.

When Western states gave up their territorial colonies, they switched from colonising other people’s societies to colonising their own. (We call this process of internal colonisation “the welfare state”.) Much of that has involved colonising social pathologies, with the income streams received by state organisations tending to increase as the social pathologies that they are tasked with “solving” increase.

Perhaps the best protection for state action is being judged by the publicly declared intent of policies. (Which is, of course, much easier to do than ferreting out actual effects, especially as they often require consideration of counterfactuals.) Marxism has very grand intentions. So do Marxist states. As they will tell you. At great length.

Command economies become increasingly corrupt over time because they are so pervaded by official discretions. Informal “grey” market or illegal “black” ones emerged to try and keep the command economies working. They were both necessary to get around the pathologies of the system and a result of those pathologies. Command economies are also bad at managing and maintaining assets as those in control of such assets do not get sufficient (sometimes any) return from better management.**

When Austrian school economists von Mises and Hayek criticised command economics on the basis of the inability to calculate value, they under-estimated the resilience of actually existing socialism because people adapted to the pathologies of the system. The informal and illegal markets, and other adaptations, were not enough over the long run. But they kept the command economies functioning longer and better than they otherwise would have. (Especially as it turned out that the planners were surreptitiously putting market information from the West into their plans.)

As all human societies have to grapple with free rider problems and the tragedy of the commons they have evolved a range of responses to deal with them. Which can include local resource management regimes. How arrogant do you have to be to think that abolishing all the mechanisms that evolved to deal with such problems was remotely a clever thing to do? Marxist-level arrogant.

Though, with critical social justice and its associated forms of critical constructivism, we are getting a new wave of such arrogance, one concentrated more on cultural rather than economic revolution. Then again, critical constructivism is, like Marxism, also a form of transformative, golden-future progressivism. One that traces much of its intellectual lineage back to Marxism and, like Marxism, represents the worship of the golden-transformative-future splendour in progressive heads.

Not only crap, but toxic crap
Marxism has disastrous outcomes because it is a crap theory of class based on a crap theory of value. Marxist historians can only make their analytical framework work by either ignoring whatever parts of history don’t fit or by ignoring the framework whenever it gets in the way of doing good historical scholarship. But Marxism does give its adherents a reassuring, though false, sense of understanding how societies work, how history works and the direction that history is going in.

Marxism is a manifestation of progressivism: of belief in a transformative golden future that is taken to inherently ennoble its adherents. It encourages mutual worship of the splendour in their heads. It provides a heroic narrative that adherents can write themselves into. All based on disastrous falsehoods.

With enough mutual worship of the splendour in progressive heads, any amount of tyranny, mass murder and mass death is possible. As we have seen again and again.***

This is what makes Marxism not only crap, but toxic crap. Marx’s “From each according to his ability, to each according to his needs” (Jeder nach seinen Fähigkeiten, jedem nach seinen Bedürfnissen), a vision of a society without alienation — a vision of a splendid future so golden that any sacrifice for it is worthwhile — is combined with a disastrously wrong conception of value and economic processes and, as a consequence, a disastrously wrong conception of class and, as further consequence, a disastrously wrong conception of the role and dangers of the state.

The awful human cost of Marxism in power is not a result of some perversion of Marx’s thought. It is a direct consequence of his theories. It is a result of Marxism’s disastrous pretensions to, but profound failures of, understanding combined with justifying moral grandeur.

Tens of millions of dead in an unbroken series of tyrannies testify to how much Marxism is toxic crap. It represents neither understanding nor moral grandeur. Just delusions of understanding lost in self-flattering heroic narratives that shield those adherents from self-understanding. Or asking the right questions to gain understanding. Marxism is toxic crap at so many levels.

Yet Marxism remains profoundly influential, including via critical theory and its offshoots. Not due to its analytical value, still less its moral value, but because of its rhetorical power and its ability to generate self-flattering, but profoundly mistaken, senses of moral and social understanding.

We are a group-living species. So we are a status-concerned and status-driven species. Between the heroic narrative, the sense of moral grandeur, the mastery of arcane terminology, the sense of purpose, meaning, and understanding, Marxism--like golden, transformative future progressivism generally--is the basis of an industrial-strength collective status strategy. It turns out it does not need to be accurate about the world, it just has to provide the right motivation, the right sort of appeal, to enough folk who are happy to derive their sense of status and identity from what is in their heads. Apparently, no amount of tyranny and mass murder can trump that.

ADDENDA

*Corruption need not be financial. There can also be moral and intellectual corruption whereby officials substitute status strategies, that is personal social or cognitive benefits (including ideological self-satisfaction), for genuinely public-interest-focused performance of their duties.

**It is a misnomer to think of command economies as abolishing property rights. They confiscate private property and allocate legal property rights to the state. But economic property rights, control of things and attributes of things, are distributed across the apparatus of the state because such control has to be distributed for production and resource management to function. Distributing economic property rights across the state apparatus does so in ways that tends to suppress key information feedbacks, misaligns incentives, undermines quality control and encourages waste. Command economies are, in no sense, “solutions” to any alleged problem of property rights. They magnify such problems in ways fundamentally antithetical to human flourishing.

***There is also the problem of such regimes selecting for pathological personalities. The notion that commitment to the transformative golden future is ennobling provides cover for Dark Triad personalities while the creation of a single hierarchy of power in revolutionary command economies provides them with a single target to aim at. Their narcissism makes them self-focused on personal advancement, their Machievallianism makes them effective players of the self-advancement game and their psychopathy minimises any self-constraint on their actions, making them more ruthless players of the self-advancement game. Needless to say, selecting for pathological personalities, and handing them great power over others, is not good for promoting human flourishing.

[Cross-posted from Medium.]

Serfdom versus slavery

Slavery remains a live issue, as discussed in the Global Slavery Index. The Index uses the following operational definition of slavery:

Slavery is the possession and control of a person in such a way as to significantly deprive that person of his or her individual liberty, with the intent of exploiting that person through their use, management, profit, transfer or disposal. Usually this exercise will be achieved through means such as violence or threats of violence, deception and/or coercion (p.11).

That is a definition of labour bondage, rather than slavery as such, but as all human bondage is an offence against people as moral agents, one can understand the attraction of slavery as catch-all term. Especially as the inaugural edition of the Index (conservatively) estimates that 30 million people are in such bondage world-wide.

The economic scholarship on slavery and serfdom usually starts with Evsey Domar’s classic article (scroll down), summarised here by Paul Krugman. See an updated version of Domar’s model. (And further.)  Economic discussions of the choice between slavery and serfdom tends to be somewhat unsatisfactory, as the key factor--whether the source population for the labour in bondage is local or imported--is rarely given the significance history suggests it should have. The American experience of mass multi-generational slavery, along with the myth of no slave smuggling, perhaps distorts perspectives.

Return to labour
Historically, labour bondage (from slavery through to serfdom and similar arrangements) occurred when the return to labour was sufficiently high that the policing costs of bondage were more than covered by the reduction in the cost of labour from imposing bondage compared to the cost of free labour. (The effects of coercion on productivity is a more complex issue.) Typically, this occurred due to either a drop in the population (e.g. the rise of the coloni in the Roman Empire after the Antonine plague and the plague of Cyprian) or to an expansion in land available for farming (e.g. after the advent of gunpowder weapons led to the retreat of the pastoralists in Eastern Europe). In these cases, the return to labour increased because it became relatively scarcer compared to land: to put it another way, labour's marginal productivity went up because there was more land per provider of labour. So coercion blocked labour's ability to get the full return therefrom.

The expansion of export markets (also a factor in the Eastern European en-serfments), so an increase in the demand for the products of labour, and development of gang (or other easily-supervised) production methods (increasing the output for a given level of coercion) could also encourage use of labour bondage. In the former case, increased demand for the product increased the return to labour. In the latter case low supervision costs increased the return to bondage.

Pre-industrial mining and cotton harvesting were both often done by slaves or other bonded labour. In both cases, the resource was unpleasant to gather but said gathering was easily supervised. Sugar harvesting (which was particularly easily supervised) was even more prone to use of slave labour.

So, effort-intensive (unpleasant but relatively simple) production was much more prone to bondage, particularly slavery. Care-intensive (more attention complex) production tended more towards serfdom or free labour; although an "open" slave system (i.e. freed slaves then integrate into the society) would allow care-intensive slavery--such as the labour market of (pdf) the Roman Empire. It would even permit slave agents if a lack of corporation law or equivalent made free-but-controlled agents problematic. In the words of (pdf) economic historian Stefano Fenoaltea:

Another of the principal consequences of the slave's legal incapacity is that the slave is legally an extension of his master, so that a sum paid to the slave of Titius is considered paid to Titius himself. Nowadays, this would matter little: legal intermediation by an agent is not difficult, and in any case most of our bills are paid not directly to individuals but to abstract legal persons (which in substantive terms are also intermediaries). In classical antiquity, on the other hand, both legal agency and abstract-legal persons were restricted to very special cases where they were recognized at all; but an effective substitute for the nonhuman person or the legal agent was found in the human nonperson, who was legally but his master's instrument. Slaves thus also had a specific advantage in the role of agents, and slave agents were common even where slaves were generally scarce (p.657). 

Economic historian Peter Temin makes a similar point (pdf):

As [Sir John] Hicks noted, slavery was the most common formal, legally enforceable long-term labor contract in the early Roman empire. A person with a long-term relation to a principal would be his or her most responsible representative. Slaves were more valuable than free men in that respect. Witness the frequent references to literate, skilled slave agents in the surviving sources (p.536).

Slave-serf spectrum
The difference between serfdom (in its various forms) and slavery is that a serf is bound to the land or workplace (the Soviet Union operated a system of workplace industrial serfdom from 1940 to 1956) while a slave is property. That distinction seems clear enough, except that (pre-revolutionary) Russian serfdom was perilously close to slavery in several senses--serfs were bound to owners more than land, and could be bought and sold (or, at least, the right to their labour could be). Forms of bondage have been historically so varied that the distinction between owning a person (slavery) and owning their labour services (serfdom) is not always very clear-cut.

Another difference between slaves and serfs is that serfs could legally own property, slaves could not (being, themselves, property). Russian serfs could own property, for example. Except that distinction is more de jure than complete. Slaves could have economic property rights (i.e. effective control over goods or attributes thereof), even if said property rights were not legally recognised or protected--otherwise slaves would not be able to buy their freedom, as some did. (The point also works in reverse: inmates of labour camps may not be legally slaves, but they functionally are.)

Both serfs and slaves could be born such. Indeed, serfs were typically born into serfdom. This was less true of slaves, who were often enslaved, as slave populations generally did not fully reproduce themselves. Roman slavery had significant slave breeding (pdf). Indeed, judging by the age data of slaves, it is possible that a significant proportion of Roman slaves purchased their freedom in part by raising children to replace them. There was also significant slave breeding in the Antebellum South, hence it received a relatively small proportion of enslaved Africans transported across the Atlantic, even including smuggling (mainly via Cuba).

That both systems had significant slave breeding was true despite Roman slavery being an "open" slave system (relatively high levels of manumission with ex-slaves being integrated into the wider society as full citizens and economic participants) and American slavery being a "closed" slave system (very little manumission and ex-slaves were not integrated into the wider society).

But it is highly doubtful either slave population was able to fully reproduce itself. The claim that the slave population of the Antebellum South was an exception to this principle seems to be based on ignoring or downplaying the (apparently considerable) smuggling of slaves.

That the family status of slaves had no standing, so they received little or no economic benefit in extra labour or provision for old age from raising children--remembering that children have to be not only brought to term, but then nurtured--militated against full internal reproduction of slave populations.

Serf populations never had that drawback. Serf populations had little difficulty reproducing themselves, having the normal economic incentives for raising children (extra labour and provision for old age) given that they could own property and their family status was fully recognised.*

Local or imported?

The clearest difference between serfdom and slavery is that serfs were local populations bound to the land, while slaves were (at least originally) imported. If the supply of bonded labour is local, that means:

(1) things have to be arranged so that the population continues to locally fully reproduce itself; and
(2) the costs of reducing said population to being property will be particularly high, due to the size and propinquity of the population. (This will include possible threat to the legal status of other members of that society.)**

Binding people to the land or workplace was a lot cheaper and safer than stripping them of all legal rights and standing--given that most of the advantage of bondage is gained simply by blocking the ability to offer their labour elsewhere. Which led to the further advantages of requiring significantly less ongoing policing while allowing said population to unproblematically locally reproduce itself. Thus, while debt slavery did occur (selling yourself or your children into slavery to pay a debt), debt bondage is more commonly a form of serfdom--due to reduced policing costs and much increased possibility of multi-generational labour services.

Conversely, if the supply of bonded labour is foreign or otherwise scattered:

(1) the process of enslaving will have already stripped them of rights and standing;
(2) the expectation of further imports will reduce any need to arrange for full local reproduction of the slave population; and
(3) the more tradable they are, the more the cost of more complete stripping of rights will be ameliorated. 

Policing costs will be higher, however, and the cost of the enslaving will be reflected in the purchase price. So slaves will have to be more productive than serfs to be profitable, reflecting the higher acquisition and enforcement costs. Which, in return, requires either extracting more output or doing so at lower cost, or both. (Use of slave labour to reduce the costs of oppression--as in the labour camps of totalitarian states such as the Soviet Union or North Korea--is a somewhat different case.)

Serfdom will therefore dominate slavery, as the policing costs of serfdom will be substantially lower and acquisition costs will be entirely contained within the return to the serfs, who will retain the normal reasons in farming societies to have children. So, the more use of serfdom (or its cognates), the less use of full slavery. Which is what we observe historically.

Since serfdom dominates slavery, slavery--particularly mass slavery--will typically occur when some effective constraint blocks the enserfing of local population. Such as a simple lack of such population; as in the Americas after the disease catastrophe of the Columbian exchange. (Though a form of serfdom was enacted while and if significant indigenous populations remained.) Or substantive political constraints--such as wanting poor locals to row warships or serve in the army, giving them the status and bargaining power to avoid bondage (classical Athens and Rome). The very notion of citizenship militates against enserfing.

Conversely, Sparta did not use mass slavery, as it already had an enserfed local population--the helots.  (It is notable that the coloni of the later Roman Empire evolved after Roman citizenship had become universal, so of much less moment, and the Roman Empire was on the defensive, so fewer slave imports.)

Imported bonded non-slave labour did occur--in the case of "blackbirding" and other indentured labour in the colonies. A little surprising, since the importation costs would at least partly replicate enslaving costs. But slavery being illegal would give space for use of imported "serfs". And importation costs may not fully equal enslaving costs, especially if lower policing costs also operate, given that these indentures were often entered into quite voluntarily, looking to a desired outcome (such as being paid to move to a society with improved income prospects).

Where the possibility of imported bonded-but-not-enslaved labour exists as an alternative to slavery, other factors may play a role. If there is a mode of production--such as gang-production--where the return to using slaves more than compensates for extra policing costs, then slavery will be favoured. Moreover, if the bonded labour is ethnically distinctive, that reduces policing (and psychic) costs of slavery. So, if physically distinct slaves are available, but physically distinct serfs or other bonded labour is not, slavery will also tend to be favoured (as the policing costs advantages of servitude over slavery is reduced). Thus, in most American colonies of European states, (African) slavery was comparatively favoured against (European) servitude.

Even so, indentured labour was imported into the more northerly British American colonies even while slavery was entirely legal and slaves were available. The key factor seems to have been the nature of production: indentured labour was preferred for care-intensive production (typical of the small farms and businesses of the northern colonies) while the balance of advantage shifted towards slavery when the expansion of gang-production methods made slavery more economic for various crops in the southern colonies.

The enserfment that did not happen
One of the historical puzzles about the use of labour bondage is the (re)enserfment that did not happen after the massive population loss of the Black Death (1346-1353). Here was a society which had had extensive labour bondage confronting a sudden labour scarcity (since lots of people had died, but the land and capital was still there). There was a clear increase in wages as a result of said labour scarcity. Yet the attempts to re-impose bondage failed.

Looking at the historical record, two elements seemed crucial:

1. The landlord cartel was insufficiently coherent because there were too many alternative ways of deriving income from land.
2. The crowns had become much less dependant on landlord military service, so lacked sufficient interest in enforcing such a landlord cartel (which is what mass enserfment essentially is).

A paper on the economics of labour coercion (pdf) suggests that my intuition was on the right track but not quite broad enough. The paper argues that effort and coercion are complements; that is more coercion means more production. But the paper also argues outside options are crucial, because that affects the alternatives available to coerced labour.  In the words of the paper:

Labor scarcity creates a labor demand effect: it increases the marginal product of workers in the coercive sector, and thus encourages employers to use greater coercion and extract higher effort from their workers. It also creates an outside option effect: it increases the outside option of the workers in the noncoercive sector, and reduces coercion because employers demand lower effort and use less coercion when workers have greater outside options. ... Whether the labor demand effect or the outside option effect dominates simply depends on whether the population change has a larger direct effect on the market price or the workers’ outside options (Pp587-8).

In post Black Death Western Europe, the paper argues that the relatively high degree of urbanisation increased the outside option effect, reducing the use of coercion. While, in Eastern Europe in the early modern period, the lack of urbanisation meant a minimal outside option effect, increasing the use of coercion.

Which is fine as far as it goes, but it was not merely urbanisation. Western Europe also had commercially more complex economies, which also increased the outside option effect. A commercial complexity that was in part a result of more extensive states, able to mediate and facilitate such complexity: a point which particularly applies with the comparison to Russia (which had much fewer officials per given number of population), where serfdom lasted longest.

As for my above point about what the crowns wanted, at the deepest level, it is the same point; that the societies had become sufficiently commercially complex also meant that armed forces were increasingly dominated by monetary taxes and payments independent of the return to landlord coercion. And it is enforcing (or not) the landlord cartel which is the key element. Not merely to block shifting between landlords but also to block alternative contracts (as the basis of mass bondage is that essentially the same conditions are imposed across controllers of labour), as both effects reduce outside options and make coercion more profitable.

Constraints and returns

So, slavery, particularly mass slavery, will occur when there some effective constraint blocks the enserfing of local population and the option of imported "serfs" is not suited to the mode of production, has insufficient advantage in policing costs or is otherwise not practical. For example, because passage is too risky to be attractive or contract enforcement is too problematic. A West African labourer had no capacity to contract with a potential American employer and, when slavery was legal, no protection against being enslaved on route. Conversely, moving from one part of the British Empire to another as indentured labour had much better contract enforcement possibilities.

Hence the slavery versus serfdom choice--in a situation where labour bondage is practical, and the return to bonded labour is positive--will be primarily a matter of the source of the population on which bondage is imposed. If the source population was local, serfdom (or some cognate) would be used. If the source population was foreign in origins, then (with the caveats noted above) slavery (i.e. being reduced to merely property, so more tradable) would be used to compensate for the increased acquisition costs, despite the increased policing costs of slavery over serfdom.


[Cross-posted at Skepticlawyer.]

* Slavery implied sexual bondage, as family status was not recognised; serfdom did not, as family status was recognised. This provides a particularly clear contrast between being property oneself and having one's labour services owned (in part or full). [Added footnote in response to a Facebook discussion.]
** As Yoram Barzel points out (pdf), this made slavery most problematic when it threatened the legal status of members of the domestic population. Unless, of course, such threat was the point--as in labour camp slavery. Modern servitude (amounting at times to slavery) among illegal immigrants operates precisely because they are isolated from the domestic population.

The evolution of social bargains -- operative not normative

I was reading Yoram Barzel's property rights analysis (pdf) of the rise of Parliamentary government in England, when the full force of his critique of normative concepts of the rise of parliamentarianism and representative government hit me.

That Iraq is busily messily falling apart, following on from--and partly a consequence of--Syria doing so, with the advance of the Islamic State of Iraq and Levant, (vindicating the long-ago analysis of T E Lawrence) helped the penny-drop moment.

If we, building on Charles Tilly's seminal Coercion, Capital and European States and recent scholarship in economic history (notably the LSE's economic history working papers), take the crucial element in the rise of the West as being the develop of what might be called the active bargaining state, then it is a great error to see it as the operation of some normative-driven process, some Hegelian necessity working behind history to realise some culminating outcome. (Active bargaining state as even the most autocratic states from the past represented implicit or passive social bargains: the active bargaining state coming in both direct--Parliamentary--and indirect--authoritarian--forms, with ancien regime France being an unstable mixture of the two.)

Norms evolve

The normative approach is an error of historical understanding at two levels. First, because the norms evolve along with the evolution of the bargaining state. The barons at Runnymede in 1215 (Tammany Hall in chain mail, as H Beam Piper called them) lived in a different normative universe than the participants in the Glorious Revolution of 1688 who themselves lived in a different normative universe than those arguing over votes for women in the late C19th and early C20th. If acceptance of the norms of representative democracy as they currently operate in the West is necessary to establish an active bargaining state elsewhere, then the enterprise is doomed. Those norms are the result of very particular histories and experiences.

If, however, the exercise is an operative (i.e. about trade-offs that work for the society in question), rather than a normative, one, then we can be much more hopeful.

Just as Britain tried to export the Glorious Revolution to Mesopotamia and the Hindu Kush, so the US has tried to export the American Revolution to the same places. But both the Glorious and American Revolutions were the product of very specific historical circumstances--as the adherents thereof well recognised at the time. Even such a revolutionary firebrand as Patrick Henry grounded his most famous Revolutionary speech in specifically British traditions.

Evolving trade-offs
Traditions which are too often read from now backwards, instead from then forwards. Hence the second error--not understanding the operative nature of the process and the evolving bargains.

Yoram Barzel's point is that it the process of the growth of Parliamentary government should not be understood as one long wresting of power from royal clutches, but as process where monarchs often engaged in trade-offs that were very much in their interests. It is easy enough to point to King John being dictated to at Runnymede, the military defeat and execution of Charles I, the overthrow of James II but what these rulers had in common is that you could not make a deal with them. In the case of John and Charles I because they could never be trusted to keep to any agreement and James II because he was fixated on an outcome that was anathema to the bulk of the British political nation.

Runnymede 1215, a reluctant signatory to
 posthumously enduring bargain

Magna Carta stuck because it was re-issued under Henry III and by Edward I. Simon de Montfort's innovative parliament stuck because Edward I saw it as an effective tool of governance. Indeed, the pioneer of summoning elected merchant representatives was a king--Alfonso IX of Leon & Galicia. The Glorious Revolution stuck because William III and Mary II could see a good deal when offered to them. And while these spectacular landmarks of history generate nice dramatic set-pieces, Barzel points out that the history of the growth of Parliamentary government and rule of law was much more a steady evolution, an evolving series of trade-offs, where rulers gained by giving folk a say.

A point that Barzel does not consider much, is that such forums also provided very useful information sources for monarchs. It gave them a way of checking up on their own agents (a helpful monitoring service) and of ensuring they were in touch with the concerns of people who mattered. Even from this distance, it is fairly clear that Edward I was concerned that he not lose touch with the concerns of the powerful--of the wider political nation--in the way his father had and saw in Simon de Montfort's parliamentary innovations a useful way of doing precisely that.

East Asian contrasts
A nice social bargaining contrast is provided by comparing China and Japan as they confronted the Western challenge during the C19th. The great difference between Qing China and Japan in confronting said challenge, was that under the Song, the Ming and the Qing, China had been ruled by thin meritocratic official layer. There was a clear, very passive, social bargain--the state upheld family authority and provided minimal public goods, taxing relatively lightly, while families did not make trouble. Since the only lever the Emperors had to control their officials was command-and-control, the system was prone to decay into corruption and the dissipating of central control.

Official in a one-track system.

This was somewhat like what happened to the command economies, though they fell apart rather more speedily (given each of the the above three dynasties of mandarin China lasted over 260 years), as the greater technological capacity of the modern command economies was not enough to compensate for the much more overweening attempt to command-and-control everything. Of course, if you regard Mao as the First-Emperor-with-a-telephone, Mao's attempt did last longer than said Emperor's regime (as the Qin dynasty only lasted 15 years) with Deng and his heirs subsequently trying to be the new Han. (I.e. the much longer lasting dynasty as result of taking the overweening elements out of what the Qin Shi Huang had created.)

Not only was the Qing dynasty already well into its decay phase as the Western challenge became more urgent, China possessed no mechanisms for more active social bargaining, no real precedent for such, not even the political vocabulary for it. (That the Qing was a foreign dynasty was a complication, but when was the last time England had an English dynasty? The Tudors were Welsh, the Stuarts Scot, the Hanoverians/Coburgs/Windsors German, the Plantagenets French, the House of Rollo Danish. Even the House of Wessex were invaders, if you go back far enough.)

Provincial ruler among
competitive jurisdictions.

Japan was in a very different situation. Social bargaining was built into its political structures, both active and competitively passive (between daimyos). It was much easier for Japan to add on to already existing institutions and patterns more formal structures for social bargaining adapted from the West and develop a modernising social bargain able to rise to the Western challenge than it was for a China where any such habits and structures had to be built from scratch.

Back to the Middle East
The problem with Iraq is that it might be able to work as part of a larger empire, but it makes no sense as a nation. (A state which needs someone like Saddam Hussein to hold it together is one not worth keeping.) It was a cobbled-together imperial deal, lumping together three (separately administered) Ottoman vilayets (a Kurdish one, a Sunni Arab one and a Shiite Arab one) into one state. While the recent American adventures there represent the US, yet again, trying (with not much success) to deal with the backwash of European imperialism, it also represents the triumph of the normative over the operative.

The Republic of Somaliland shows what can be created by a genuinely locally-driven arrangement. It is governed by a universal suffrage House of Representatives and a House of Elders, made up of traditional leaders. In other words, their very own House of Lords. Because that reflects how their society operates.

House of Elders

Both Iraq and Afghanistan would have had, or have, more chance of stable futures if their legislatures were more grounded in their social realities. But, of course, the Americans would never consider having some local House of Lords equivalent, because that would require too much knowledge of their own deeper history and be too confronting to their evolved norms.

Nevertheless, the trick is to sell a workable bargain, a useful set of trade-offs. Not some pre-set normative wish-list from a quite different tradition.

Part of the problem being that you have to see other folk as people to bargain with. The Iraqi PM clearly did not see the Sunni in such a way, and is now reaping the consequences. Just as using ethnic membership as an indicator of loyalty can reduce coup possibilities while increasing the likelihood of civil war.

Indeed, it is a depressing principle of contemporary Middle Eastern politics that any minority that does not control its own state or quasi-state gets oppressed. (Hence the Alawites and their minority allies fighting so hard not to lose control of the Syrian state to the Sunni majority.)

That the jihadis reject any notion of the social bargaining state (which may also make them, including in the form of ISIS, less than durable in their local control) makes the need to have socially-and-locally grounded bargaining all the more urgent. Even if some negotiated settlement is (eventually) a likely outcome. But the Iraqi implosion also points to the fact that Europe's boundaries evolved over centuries, and even now are less than a perfect fit. The Middle East and Africa are dealing with state boundaries that often did not evolve locally at all, but were imposed by outside imperial powers.

The last time the US did a good job of occupying a major country effectively on its own was Japan, and there it had much more similar social material to work with a pro-consul from a family with experience of colonial governance.

The Bush Administration clearly did not think through the genuine difficulties and constraints of Iraq--having too little sense of history and too much American presumption of omnipotence. (Attempts to blame the present situation in Iraq on President Obama are particularly pathetic: though one may well make other criticisms of his Middle Eastern policies, which display a similar inability to think things through.) But the sui generis nature of American historical evolution makes for a poor set of framings from which to understand other societies.

Yes, dividing Iraq was diplomatically fraught, but it is now the likely outcome anyway--or, at least, a very decentralised state--and in much less Western-friendly terms than a deliberately organised divorce would have been. While having some House of Lords equivalent--or equivalents--could have been a very useful way to work through existing social structures and to encourage bargaining that operated according to the contours of the societies in question.

Conversely, the analytical humility required for a better effort would have militated against making the attempt in the first place. Such analytical humility would include taking religious motives seriously--but that is a perennial failure of contemporary Western analysis.

It is revealing that the one part of post-intervention Iraq which is a clear success--Kurdistan--is also the one part with a clear identity where local forces had already evolved workable local bargains. This is the example that could have been built on (and should still be supported). But so building would also have required a strong sense of locality and history. (Of course, hindsight is always 20x20, but that is the fun of historical analysis ...)

Perhaps also the notion of instant solutions needs to be abandoned. The open and democratic societies of the West took a long time to evolve. In the longer view, perhaps the overthrow of Saddam has allowed underlying forces to, however brutally at times, work themselves towards social and political equilibriums which do not require rule by the most successful psychopath.


[Cross-posted at Skepticlawyer.]

ADDENDA Nice comment about clans and consensus. Nepotistic societies work on different time horizons and need processes that respect that.

Property rights for animals

This is based on some comments I made here on a proposal to give animals property rights in order to protect habitats.


Presuming that the point of the exercise is not simply a green power grab (which is what it looks like) but to change people’s behaviour, then adding to people’s future possibilities rather than threatening their present ones seems a better way to go.

In his Economic Analysis of Property Rights Yoram Barzel notes differences between UK and US habitat law, which I summarized as:

Another striking Barzel example is property rights in wildlife (Pp145-7). In the UK, farms tend to be larger than habitats, so property rights to wildlife are largely held privately as habitats are largely encompassed within private holdings. In Canada and the US, farms tend to be smaller than habitats, so the state assumes much more control over wildlife, as habitats generally extend across several, or even many, holdings.

A famous example of giving people a stake in preserving wildlife is giving local people ownership rights over their local elephants rather than just banning poaching. The former means that live elephants are a continuing source of income, the latter means the only profitable elephant is a dead elephant.

If live possums or whatever a boon for the farmer, then there will be more live whatevers. There is no such thing as an endangered profits-from-owning species.

Property rights evolved as a way of creating productive boundaries. Harold Demsetz, in his classic 1967 article Towards a Theory of Property Rights uses the example of beavers in North America. As the fur trade developed, Amerindians developed property rights in beaver dams. An example of productive interactions, considered by Steven Cheung, is bee-keepers and apple farmers. (Coase’s classic The Problem of Social Cost (pdf) considers these sorts of interactions.)

The proposal to give animals property rights, does not create productive boundaries, it creates anti-productive boundaries; it does not increase human possiblities, it lessens them. Not a clever idea.

Property-rights environmentalism has a lot to be said for it, but precisely because it increases human possibilities, not because it undermines them.

As for the comment in the above-linked thread from an advocate of the proposal

Why do so many land holders react with hostility to the idea of having to talk to others about their land use decisions? I might be an optimist but considering all the other supposed regulatory burdens upon land holders, is what I’m suggesting all that more demanding?

Because there are only so many ours in the day? Because it is their livelihood one is talking about? Because their experience of other examples is not a happy one?

Discretionary controls by officials inevitably become dominated by the politically well-connected. The notion that this would be a reliably benign process is belied by an enormous amount of experience.

As for “talking to others”, once one shares control of some attribute, one raises transaction costs, lowering the number and return on such transactions. To quote Michael Kirby, then High Court Justice, certainty is the central demand of land law. Clear boundaries allow productive trades. Unclear boundaries undermine such: sometimes profoundly. If a way exists to eliminate the problem (such as eliminating the problematic animals), it is likely to be taken.

Here is a question: would landholders be compensated for their loss of rights, or a we talking about simple theft here? A property right is a right of control up to a boundary. If you create “property rights” for animals, then any previously existing right of control in that boundary is eliminated. Someone else — the landowner in this case — loses rights. So, will there be payment for such loss or is it going to be simple theft?

As for appealing for “good intentions” by landlords, incentives matter. They matter a great deal. Given the potential power over land use this proposal gives, one must expect that people will politically organise to gain control over that power.

This is one of those basic analytical differences. Libertarians and others presume that private interests are endogenous to the political process and will game it according to the incentives generated. Progressives of various stripes presume that political processes can somehow be made exogenous to private interests and “control them” from outside. This is nonsense on stilts, and pernicious nonsense at that.

The more proponents argue for this proposal, the more alarming I find it. The issue is not the intention, but the means suggested.

Markets with clear rules have shown excellent ability to trade attributes to their most efficient holders. For example, we pay to have the attribute ‘liable to catch fire’ allocated to insurance companies according to rules which work fairly well. The trick is being able to define boundaries to the attributes and to trade them to mutual benefit.

If one does not have such defined boundaries, one just has a mess. And the experience of officials (actual or quasi) having joint control over attributes with private property owners is not a happy one. (Such as aiding and abetting NIMBY and BANANA — build absolutely nothing anywhere near anyone.)

It is not a lack of imagination that leads to the scepticism about this proposal, it is the application of experience against comforting theories about good intentions.