Thinkers and disciples

A comment I made here.


A common problem with thinkers and disciples is the disciples going beyond what the original thinker thought appropriate. Marx was not as Marxist as some Marxists, Freud as Freudian as some Freudians and Kuhn as Kuhnian as some Kuhnians.

Etienne Gilson expressed the problem quite well when he wrote:

… whereas a master holds his conclusions as conclusions, his disciples receive them as premises, with the consequence that their own conclusions can never be the master’s conclusions.

Helmland follies: a case study in how aid (and indigenous policy) fails

Helmland is a province in Afghanistan where expensive and grandiose American ambitions go to die. It is a focus of the current war against the Taliban, but US involvement in the region goes back to the Truman Administration and continued until the Communist coup of 1978.

Fighting the Cold War with dams
Nick Cullather’s revealing (pdf) (and depressing) history of modern Afghanistan, focusing on the Cold War era Helmand Valley dam project, notes of the Kingdom of Afghanistan:

Modern states are able to govern through manipulation of abstractions—unemployment, public opinion, literacy rates, etc.—but in Afghanistan interventions of any kind, and the reactions to them, were brutally concrete.
… the regime persisted in slowly, firmly, laying the barren politics of abstraction and principle over the warm, cruel politics of the heart.

Afghanistan is a complex society. Partly tribal, so partly following the structures that Phillip Carl Salzman so revealingly delineates, and partly not. This complexity does not respond well to abstract plans developed elsewhere.

Such as dam projects (for example, the HAVA—Helmland and Arghandab Valley Authority) based on the “just add capital” notion of development-through aid. As Cullather points out, dam projects:

had the additional function of redefining political conflict as a technical problem. Britain’s solution to Afghanistan’s tribal wars had been to script feuds of blood, honor, and faith within the linear logic of boundary commissions, containing conflict within two dimensional space. The United States set aside the maps and replotted tribal enmities on hydrologic charts. Resolution became a matter of apportioning cubic yards of water and kilowatt hours of energy. Assurances of inevitable progress further displaced conflict into the future; if all sides could be convinced that resource flows would increase, problems would vanish, in bureaucratic parlance, downstream.

There was no history, no local social ecology, just the bright promise of technology.

As so often was the case, this was aid as driven by external ambitions, not local realities:

From 1946 on, the salaries of [contractor]Morrison Knudsen’s advisers and technicians absorbed an amount equivalent to Afghanistan’s total exports. Without adequate mechanisms for tax collection, the royal treasury passed costs on to agricultural producers through inflation and the diversion of export revenue, offsetting any gains irrigation produced. Although it pulled in millions in international funding, HAVA soaked up the small reserves of individual farmers and may well have reduced the total national investment in agriculture.

With a crude, by-the-numbers, approach to “modernization”:

The US ambassador in 1962 noted that if successful, HAVA would boost Kabul’s “earnings of foreign exchange and, if properly devised, could foster the growth of a strata of small holders which would give the country more stability.” This billiard-ball alignment of capital accumulation, class formation, and political evolution was a core proposition of the social science approach to modernization that was just making the leap from university think tanks to centers of policymaking.

No one seems to have noticed that that was precisely not how modernization had been built in their own countries. Ironically, other dimensions could be spotted if they had a Cold War element:

[Afghan Prime Minister] Daoud’s receptiveness to Soviet and Chinese aid was particularly troubling. As [anthropologist Louis] Dupree put it: “A nation does not accept technology without ideology. A machine or a dam is a product of a culture.”

Afghanistan was marked by weak central authority and periodic rebellion:

But despite their favored status, Pashtuns revolted against the Mohammedzai eight times between 1930 and 1960. Open violence between minorities was less common than conflict that pitted clan autonomy against central authority.

As had been true for millennia, settled agrarian existence was regarded as inferior to pastoralism:

But even with the closing of the border and the attraction of subsidies and well-watered homesteads, it proved difficult to entice Ghilzai Pashtun to become ordinary farmers. Freer and wealthier than the peasants whose lands they crossed, the nomads regarded their new Tajik and Hazara neighbors with contempt.

Phillip Carl Salzman’s work brilliantly explains why.

One needs to be careful about one’s assumptions, again and again:

Agricultural experts found the mullahs to be a progressive force, “constantly look[ing] for things to improve their communities, better seed, new plants, improved livestock.”

Afghanistan has a much longer history of American involvement and engagement than folk may realise:

By the 1960s, Afghanistan had Soviet, Chinese, and West German dam projects underway. It was receiving one of the highest levels of development aid per capita of any nation in the world. U.S. News described it as a “strange kind of cold war,” fought with money and technicians, instead of spies and bombs. The Atlantic called it a “show window for competitive coexistence.” Publicly, U.S. officials said this was the kind of cold war they wanted, just a chance to show what the different systems could do in a neutral contest. Afghanistan had become a new kind of buffer, a neutral arena for a tournament of modernization.

Alas, even more than most aid projects, the project, not the consequences, became the key thing:

For reasons of prestige alone the United States kept pouring money in, even though by 1965 it was clear the project was failing. Diplomats complained about having the US reputation and credibility hang on “a strip of concrete,” but there was no going back. Afghanistan was an economic Korea, but Helmand was an economic Vietnam, a quagmire that consumed money and resources without the possibility of success, all to avoid making failure obvious.

Examples of failing to attend to what happened in actually modern societies continued:

Legal titles were still clouded by HAVA’s inattention to land surveys, but the settlers had nonetheless sculpted wide tracts of empty land into irregular 15-acre parcels divided by meandering juis, tree-lined canals that served as boundary, water source, and orchard for each farm.

Hernando de Soto had not yet published his The Mystery of Capital. But, fear not, they had a plan:

Unfortunately, the juis system proved incompatible with the new plans. The small, hilly, picturesquely misshapen fields contributed to runoff and drainage problems and prevented the regular, measured applications of water, chemicals, and machine cultivation necessary for modern agriculture. A green revolution would require, in effect, a land reform in reverse: merging small holdings into large, level fields divided at regular intervals by laterals running from control gates on the main canals. As the wheat improvement program got underway, a team of U.S. Department of Agriculture advisers proposed that HAVA remove all of the resettled families, “level the whole area with bulldozers” an then redistribute property “in large, uniform, smooth land plots.” HAVA adopted the land preparation scheme but implementation proved difficult. Farmers objected to the removal of trees, which had economic value and prevented wind erosion, but they objected chiefly to vagueness of HAVA’s assurances. HAVA itself acknowledged, as bulldozing proceeded, that questions of what to do with the population while the land was being prepared, how to redistribute the land after completion, and whether to charge landowners for improvements were “yet to be worked out.” When farmers “met the bulldozers with rifles,” according to a USAID report, it presented a “very real constraint” that “consumed most of the time of the American and Afghan staffs in the Valley throughout the 1960s.”

The project folk had apparently never read (or if they had, understood) Hayek’s point about The Uses of Knowledge in Society:

But a little reflection will show that there is beyond question a body of very important but unorganized knowledge which cannot possibly be called scientific in the sense of knowledge of general rules: the knowledge of the particular circumstances of time and place. It is with respect to this that practically every individual has some advantage over all others because he possesses unique information of which beneficial use might be made, but of which use can be made only if the decisions depending on it are left to him or are made with his active coöperation. We need to remember only how much we have to learn in any occupation after we have completed our theoretical training, how big a part of our working life we spend learning particular jobs, and how valuable an asset in all walks of life is knowledge of people, of local conditions, and of special circumstances. To know of and put to use a machine not fully employed, or somebody's skill which could be better utilized, or to be aware of a surplus stock which can be drawn upon during an interruption of supplies, is socially quite as useful as the knowledge of better alternative techniques. And the shipper who earns his living from using otherwise empty or half-filled journeys of tramp-steamers, or the estate agent whose whole knowledge is almost exclusively one of temporary opportunities, or the arbitrageur who gains from local differences of commodity prices, are all performing eminently useful functions based on special knowledge of circumstances of the fleeting moment not known to others.

All this failure was a product of bad theory, as Cullather outlines, citing a range of critiques. But it was bad theory persisted with because theorists and decision-makers were not constrained or burdened by the consequences of what they did—that fell upon others, who had no say in the decisions but were central to the outcomes.

Fighting the war on terror with …
And it is happening all over again, as Holly Barnes Higgins sets out in describing her experience as an aid worker in Helmland. The Coalition forces are offering modernization, which is precisely what the Taliban is a revolt against. The Taliban have a great advantage in that modernization is much easier to disrupt than to build:

Making the roads unsafe was and remains a Taliban objective. The more they could disrupt our work, the more they could intimidate through violence and murder, the more likely—they seemed to reason—we infidels would flee for safety, leaving the province ripe for their accelerated exploitation.

Another great advantage the Taliban have is that they are connected to local patterns in a way that the Coalition modernizers are not.

The third great advantage the Taliban have is that the local patterns the Coalition interlopers ended up having to work through inhibit modernization and aid the Taliban:

When the Taliban dissolved and left Lashkar Gah in the autumn of 2001, the position of provincial governor was filled by a man from the north whose arrival into town was accompanied by 200 armed men. Though barely literate, this relative-by-marriage of President Karzai was confident enough in his status to proclaim himself governor. A rival of the governor soon seized the position of regional police chief in similar fashion. In spite of the fact that both had a private militia in tow, neither man was strong enough to wipe out the other, so an uneasy truce prevailed.

This is a struggle over structures of governance. One the locally embedded and connected Taliban are winning and the Coalition interlopers are not:

… an informal alliance between farmers, officials and the Taliban. In the end, it would be hard for me to swallow the simple truth that the benefits of these symbiotic relationships far outweighed anything we could offer as an economic development project.

The Taliban used coercion applied to the local population in ways that make sense to the local population and were embedded in the local population. The Coalition soldiers are just visiting. Which makes them like Western aid workers everywhere, except with guns added.

The soldiers and aid works bring their own policy contradictions with them. For example, the “war against drugs” continues to frustrate “the war against terror” with neither being permitted to force assessment of the other (or, indeed, itself):

As a result of poppy production, the Taliban was able to recruit more, pay more attractive bonuses for successful attacks, and supply themselves more abundantly with weapons. But despite active insurgency/counterinsurgency warfare all around us, we were to persist. And so we did.

Those abstract notions modern government is based on can have their own blindness to, or discounting of, consequences.

The traditions that gravely inhibit harnessing the talents of women operated whether or not the woman was local or a visiting foreigner:

It was a bit harder to get used to the fact that, as a woman, I was not supposed to be seen outside my quarters without being fully covered from head to toe. While my male colleagues could sit out in the sun and read and had their clothes cleaned by male staff then hung dry outdoors, I needed to exercise and clean my clothes myself, then drape them around my room to dry indoors, lest they offend.

But the struggle to allow people to fully participate in Western society itself has been a long one, and continues still.

Higgins came to see how much it is about people: their beliefs, preferences and expectations, formed under very different bases than any Westerner is used to:

As time passed and my experiences accumulated, I began to understand the local saying that “Afghanistan is where God comes to cry.” Just as the country itself combines remarkable beauty with unrelieved bleakness, so the people are stuck between the rock of the opium economy and the hard place of no viable alternative, between the anchors of tradition and the desperate need for progress and change.

Aid and “nation-building” are not matters of applying Cobb-Douglas functions, whose mathematical and geometric forms operate over the top of institutional presumptions taken utterly for granted. The "just add capital" notion is not only not justified by history, it is flatly contradicted by history: specifically by the way the curse of silver turned Spain from the technological, institutional, organisational and intellectual cutting edge of Latin Christendom into an obscurantist backwater.

The problem of knowledge
Hayek wrote in his classic 1945 essay The Use of Knowledge in Society:

One reason why economists are increasingly apt to forget about the constant small changes which make up the whole economic picture is probably their growing preoccupation with statistical aggregates, which show a very much greater stability than the movements of the detail.

The saying “the devil is in the details” points in the same direction. But Hayek was making a larger point, as he goes on to say:

The comparative stability of the aggregates cannot, however, be accounted for—as the statisticians occasionally seem to be inclined to do—by the "law of large numbers" or the mutual compensation of random changes. The number of elements with which we have to deal is not large enough for such accidental forces to produce stability. The continuous flow of goods and services is maintained by constant deliberate adjustments, by new dispositions made every day in the light of circumstances not known the day before, by B stepping in at once when A fails to deliver. Even the large and highly mechanized plant keeps going largely because of an environment upon which it can draw for all sorts of unexpected needs; tiles for its roof, stationery for its forms, and all the thousand and one kinds of equipment in which it cannot be self-contained and which the plans for the operation of the plant require to be readily available in the market.

This is a point that applies beyond markets. Whenever one is looking at social arrangements, either directly (at people’s behaviour) or indirectly (the things they build) one is looking at a mass of judgments, local knowledge, trade-offs, incentives … Farms and buildings are not lumps of “things”, they are always and everywhere the products of human action. Sustained improvement means changes (for the better) in those patterns of human action and nothing less than that. Those patterns of action are not incidental, they are not simple conveyor belts by which adding inputs “make things better”, they are the heart of the story. They are the story.

Hayek quotes philosopher Alfred North Whithead:

It is a profoundly erroneous truism, repeated by all copy-books and by eminent people when they are making speeches, that we should cultivate the habit of thinking what we are doing. The precise opposite is the case. Civilization advances by extending the number of important operations which we can perform without thinking about them.

Precisely so, which is why aid programs that operate on taking things for granted—that something translated into a new social environment will have the same significance as it did in the social environment that the designers of aid are used to—are so disastrous.

Institutions matter, because they structure how people act. A 2001 paper on the effects of different forms of colonisation on (pdf) (via) long term economic prospects presents clear evidence on this.

Starting with why some regions do worse than others:

These results suggest that Africa is poorer than the rest of the world not because of pure geographic or cultural factors, but because of worse institutions.

What matters was whether rule was about establishing authoritarian rule so resources could be extracted or whether there was a sufficiently large group of locals able and willing to agitate for—and then make work—the transfer of similar institutional arrangements as operated domestically in the colonizing state:

When the establishment of European-like institutions did not arise naturally, the settlers were ready to fight for them against the wishes of the home country. Australia is an interesting example here. Most of the early settlers in Australia were ex-convicts, but the land was owned largely by ex-jailors, and there was no legal protection against the arbitrary power of land-owners. The settlers wanted institutions and political rights like those prevailing in England at the time. They demanded jury trials, freedom from arbitrary arrest, and electoral representation. Although the British government resisted at first, the settlers argued that they were British and deserved the same rights as in the home country.

With appropriate institutions, and people who understood how to make them work and what you could get out of them, things happened. As a history the authors quote notes:

“the enormous boom in public investment after 1870 [in New Zealand] ... was an attempt to build up an infrastructure ... to maintain high living standards in a country where voters expected politicians actively to promote their economic welfare.”

As the authors point out, non-settler colonies were typically ruled by authoritarian, extractive structures based on a narrow elite; patterns that have continued after independence.

Or, in the case of Afghanistan, were never formally colonised so missed out on institutional transfer and basic capital investment (such as roads and electrification). People act on the basis of what they know, and what they know about. European settlers not only knew about, but knew how to operate, certain types of institutional structures and acted accordingly.

With limited knowledge of what was possible—and still less knowledge of how to make such institutions work—of course people in non-Western societies act according to what they know and are used to, what actually operates in their societies. Which is why institutions cannot simply be transferred—there is a lack of the knowledge and normative base to operate them. But even sillier is the notion that if one “just adds capital” either the institutions will magically arise, or that development “will just happen” without the institutional structure—the fundamental patterns of social life—to go with them.

Modernisation is hard, but can only be expected to “take” if grows out of, and transforms from within, the actions and presumptions of the inhabitants of a society. The power of modernization is precisely the way it grabs peoples choices but it remains something from the outside impacting on unless those internal transformations can take place.

Indigenous policy as exemplar of the failure of aid
In the settler countries of the Anglosphere, indigenous policy provides telling—and tellingly drear—examples of these problems.

When people write of indigenous Australia as “Australia’s Third (or even Fourth) World” they say more than they typically know. Not only are the social outcomes among indigenous Australians “third world”, the policies applied fail in the standard way aid policies fail: due to perennial failures to seriously consider the cultural-institutional (i.e. human social ecology) dimension. (As I have previously posted, even the same grim jokes are applicable.)

That indigenous Australians are Australian residents and citizens leads even more easily than normal to glib, unexamined presumptions about how things will work. That, for example, indigenous Australians will treat housing in the same way as people from cultures which have been agrarian for thousands of years. But houses do not have the same significance for people whose cultural inheritance (however battered) has Paleolithic presumptions. Westerners are the product of centuries, of millennia, of cultural evolution. Perhaps we should take our experience seriously so that we can take other people’s experience seriously?

If anything, the projection of “noble savage” collectivist fantasies on indigenous Australians is even worse: it operates as a double fail. It fails to grasp how mainstream Australia (or mainstream US or Canada) achieve the social outcomes that indigenous Australia’s failure to achieve is regarded as so shameful while foisting on indigenous Australians collectivist social forms that are themselves the product of agrarian and industrial societies and have a relentless history of failure.

Read Why Warriors Lie Down and Die by Richard Trudgen for the full horror. In Trudgen's Why Warriors Lie Down and Die—there is the illustrative tale of the Galiwin ’ku fishing industry.

The Galiwin ’ku fishing industry consisted of several small fishing boats made from local timbers at Galiwin ’ku by the Yolηnu and mission staff. The Yolηu named these boats with holy names from their clain or riηgitj nation alliance. The boats were owned by the mission but were skippered and crewed by different clans. Some small clans would come together in a riηgitj alliance to make up a crew. …
These clan groups would use the boats and sell their catch to the mission for processing and re-sale to other places. The people clearly understood that what they caught was theirs until they sold it to the mission and they benefited directly from their catch. From the point of sale on, it belonged to the mission. This arrangement satisfied the legal requirements of both the Yolηnu and Balanda systems of law.
When the mission at Galiwin ’ku handed the fishing industry over to the Yolηnu council in 1974, everything proceeded well for a while because the mission staff also transferred to the council. For most Yolηu nothing really changed. Then in 1975 it was decided to get a loan from the government to develop the industry. The Aboriginal Development Comission ‘decided’ to bring in a consultant to look at the viability of the loan and how it could increase the efficiency of the industry. Following the consultant’s recommendation, one big, modern fishing trawler replaced the small boats. In the dead of night, the small boats were burned on the beach and one was cut adrift, to ‘convince Yolηu of the need to move up to the big boat’. Within six months the whole fishing enterprise at Galiwin ’ku had collapsed and Galiwin ’ku became an importer rather than exporter of fish products.
… from a Yolηu perspective the collapse happened because the separate clans and nation alliances found it impossible to work under one Balanda boss on the trawler, as the trawler captain now had to be licensed. Moreover, Yolηu were insulted and grieving over the destroyed boats. With no clear lines of ownership the people could not see that any authority had passed to them. …
To expect all the clans at Galiwin ’ku to believe they collectively owned the fishing company was like telling twenty-six Balanda companies that they collectively owned an industry incorporated as an association. … But this is not how community structures were set up. … The Yolηu fisherman did not see themselves as working for their own gain anymore; in fact, many now thought that the captain of the new trawler would reap the dividends. They had just become wage earners, and the incentive to work and build the industry for their own benefit was gone.
On top of all this, people had become confused about where these wages came from. In the past they saw a clear trade with the mission—so much fish for so much money. This trade was what the Yolηu were used to. Now they got wages no matter how many fish were caught. The steps in the development of a cash economy, with its system of wages-for-labour, are many. The Yolηnu were catapulted into the cash economy with little preparation.
With all this confusion, only conflict could occur, and economic development through industries like fishing was lost. (pp47-8)

Sound anything like what went on with the Helmland dam project’s attitude to the locals’ agricultural efforts?

If you want to understand the failure of indigenous policy, examine the failure of aid policy. And vice versa. It is the same problems with the same interlocking dynamics:

Failure to grasp how modernization happened, and what it is.
Failure to understand the centrality of human action: in particular, that technology operates according to how people understand and operate it.
Pervasive failures of communication.
Application of policies by people who do not suffer the consequences of what they do.

The failure of indigenous policy in Australia tells us what one needs to know about the failures of the Coalition’s “nation-building” efforts in Afghanistan because they are all manifestations of the failure of aid. The failure to understand that development is what happens (or not) in the minds of people. That technology (including capital as the produced means of production) is the product and benefits of that, it is not the thing itself. You have to understand where people really are—their presumptions, beliefs, incentives, expectations—and work from there in ways that look like a good thing to them from within their (evolving) worldview and will continue to do so after you are gone for development to “take”.

Otherwise it is just an expensive and wasteful game with other people’s lives. Adding guns to the mix does not change that.

ADDENDA There is a great irony in the Iraq v Afghanistan comparison. The Coalition intervention in Iraq has been generally much less popular with Iraqis, but was operating with potentially functional forms of modern government. The NATO intervention in Afghanistan is much more popular with Afghans (especially the non-Pashtun) but is operating with less modern forms of governance. The intervention in Iraq is broadly a success (Iraq is at least as functional as Pakistan, and much less disruptive to its neighbours), the intervention in Afghanistan appears to be failing: lack of useful government structures trumping what the locals think about the intervention--or, to put it another way, institutions matter more than attitudes.

UPDATE Michael Yon notes that the Coalition spends very little time or effort in the areas of Afghanistan where it is welcome.

Lee Harris’s failed defence of tradition

In June 2005, novelist Lee Harris, author of The Enemies of Civilisation, published a defence of tradition specifically aimed (eventually) against same-sex marriage

Understanding tradition
There is much of interest in Harris’s essay. Harris is alive to the problems of defending tradition:

Those defending a tradition at all costs must adopt the relativist view that there is no higher standard by which to judge one tradition against another, as this is the only way to make sure that tradition may not be overthrown by the confrontation with such a standard. On the other hand, those who wish to defend a tradition by showing it to conform to a higher standard reduce the tradition to the status of means to an end.

Trying to defend tradition in general seems a hopeless task. It is all too easy to find traditions that one’s audience will find repulsive—“honour” killings, or female genital mutilation, for example.

Harris wants to make sure we consider tradition in full, not some superficial understanding of it. So he alerts us to the difference between overt justification and hidden utility:

The intellectualist interpretation of a tradition as a corpus of formal propositions whose truth or falsity may be argued lies at the heart of all efforts to find an objective or neutral way to judge among competing traditions. This is evident in the Enlightenment’s attack on tradition as outmoded superstition — an argument Hayek brilliantly demolishes. A tradition, he realizes, may well be justified by a community on nonsensical or irrational grounds; but this by itself need not make the tradition less useful to those who follow it.

Quite so. I am reminded of the story of the friend of a English Lord Chief Justice who was offered the position of chief judge of a colony, despite having no legal training. The Chief Justice allegedly suggested to his enquiring friend that he take the position but never give any reasons for his judgments, on the grounds his decisions were quite likely to be correct, but his reasons were sure to be wrong. Traditions may evolve for reasons that are based on the “embedded knowledge” of experience not captured in abstract or conventional (or even after-the-fact) justifications.

Hence, Harris argues:

every inherited tradition has come down to us at two distinct levels — first, as a behavioral phenomenon, as an embodied value hardwired into our neural circuitry and into our sweat glands, and secondly, as an articulated value that can be analyzed and discussed, attacked and defended, in words.

The “naturalness” of the familiar is a powerful thing. Indeed, a working definition of our sense of something being “natural” is ‘accepted background constraint’. But Harris goes too far: the notion that traditions are “hardwired into our neural circuitry” is nonsense, they vary too much across societies and across time.

The awareness of this variety is, of course, itself corrosive of tradition, for it means that tradition loses its sense of “naturalness”, of being part of the “necessary” and “normal” structure of things, because clearly, if traditions vary so much, they are not such.

Still, if we do not let our metaphors run away with us into actual empirical error, the distinction Harris identifies does meant that:

when confronted with any particular tradition, we now have two different criteria to evaluate its usefulness — first, the usefulness of the tradition’s base, the visceral code out of which the social structure of the community is created, and second, the usefulness of the tradition’s ideological superstructure.

Though, of course, decoupling one from the other may be a difficulty. Particularly if it turns out the only real basis for the tradition is the “ideological superstructure”.

But Harris seems to want to wander off into the realm of, if not quite the consoling lie, certainly that of comforting ignorance:

Reason, logic, the endless quest for knowledge — these are all noble things. But no sensible person will agree to have them used against him to undermine his happiness and tranquility. … Yes, we are willing to admit that there is much we cannot know about the people we love, and much that we have to take on blind faith, and much indeed about which a skeptic can raise questions — but must we hear it all?

Well yes, if it is causing people unnecessary hurt and misery, for example.

What is a very strong justification for a tradition? That it is a basic building block of one’s society:

We cannot ask whether the visceral code is useful to the community when it is in fact constitutive of the community: It is the foundation on which the community is built. It is a necessary precondition of achieving community at all, and hence it is improper to evaluate it in terms of its mere utility.

But such a claim is standard for any oppressive tradition. Giving Jews legal equality was claimed to undermine fatally the Christian basis of society (or the constitutive national identity). Giving women the vote was equally undermining of basic gender distinctions upon which the society operated. Blacks had to be excluded because civilisation had been created, and was transmitted, by white people. All these claims turned out to be false—indeed, monstrously so. But they were made. The “basic building block” is a very big claim, with a very, very dubious history when used to justify exclusion.

Of course, if a tradition concerns the basic socialisation of new generations, then there may be more plausibility to work with in sustaining the “basic building block” claim:

Thus, a tradition can be a passive inheritance from the past that weighs heavily on the present generation or a vehicle for actively transforming the present generation in accordance with the pattern set by the borrowed tradition.

Hence, Lee Harris argues, we must keep marriage solely for opposite-sex couples, due to its centrality in socialising new generations of our society. That is what makes opposite-sex-couples-only marriage a “constitutive tradition” which is fundamental and must be defended.

Ignoring history
Where to start? First, with the presumption that same-sex couples are not raising children. Lots of them are, and, according to the evidence, doing at least as good a job at it as opposite-sex couples. This is enough on its own to demolish Harris’s argument: he is just wrong on the facts.

But his error is reflective of a larger error. Ultimately, his argument rests—as all exclusion arguments do—on the notions that the excluded group is some lesser or “failed” version of “real members” of the community. Not only does he fail to grasp that same-sex oriented people are parents, he also fails to grasp the reality that they are children.
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If marriage is so constitutive of a society, what does forever excluding it from same-sex couples tell same-sex attracted or oriented adolescents about themselves and their role in society? This is what is so offensive about the nonsense that excluding the same-sex attracted or oriented is about “defending families”. Actually, such anathematisation has profoundly destructive effects on families. It alienates parents from their children, makes adolescence for an isolated and vulnerable group much more traumatic than it needs to be, encourages people to hide from their own sexuality in cover or desperation (or simply forced) marriages.

To define family life in general (and marriage in particular) as being required to be at war with the reality of human sexual diversity cannot be other than destructive. That such destructiveness is “traditional” justifies it not at all. Though it does make it invisible to the undiscerning eye.

Traditions are grounded in history and cannot be understood without examining that history. How was the tradition created? How did it originate? How was it maintained? Why is it under stress? These are all relevant questions that Harris ignores or skates over.

In particular, Harris ignores culture wars that are not convenient for his analysis—such as that between Christianity and paganism in late Antiquity. The exclusion and anathematisation of homosexuality and homosexual acts was not a tradition that “just grew”, it was imposed; imposed with considerable brutality, and maintained with brutality. Indeed, the reason why it is collapsing now is that the brutality (both public and private) necessary for its maintenance has been withdrawn or even anathematised itself. Harris is completely correct that we need to examine why a tradition or institutional arrangement persists: the actual why’s, not the “floating” why’s. Trouble is, that does not lead where Harris thinks it does.

Harris clearly thinks that there has been no tradition of same-sex marriage, that it is some strange, new anti-traditional claim. Far from it: traditions of same-sex marriage which were suppressed by monotheist colonisers and settlers—including in the lands now incorporated in his own United States of America. It was those who drove such social arrangements out who were destroying tradition.

But, again, this history is rendered “invisible”. For, of course, if same-sex attracted and oriented people are not “real folk”, then they cannot have a “real history”, can they?

This is what is particularly offensive about Harris’s generous “offering” that:

If gay men and women want to create their own shining examples, they must do this themselves, by their own actions and by their own imagination. They must construct for themselves, out of their own unique perspective on the world, an ethos that can be admired both by future gay men and women and perhaps, eventually, by the rest of society. But there can be no advantage to them if they insist on trying to co-opt the shining example of an ethical tradition that they themselves have abandoned in order to find their own way in the world. It will end only in self-delusion and bitter disappointment

It is all about “you are not really like us”. If one took out “gay” and put in “black” or “Jewish”—or applied it to politics and put in “women”—we would see immediately how utterly offensive the “generous” and “reasonable” offer is.

But the argument about whether blacks, Jews or women are “full persons” or not is over—at least in mainstream society—so anything that makes it blatantly clear that they do not count as “real people” is obviously offensive. The trouble gay folk suffer is that their “real” humanity is still contested, so what would be obviously offensive if “offered” to blacks, Jews or women can still be passed off as “reasonable” even “generous”. But what it is really saying is you are not “real” people, and treating as if you were would profoundly corrupt the very structure of our society. Exactly the same claim the Jew-hater makes, the black-hater makes, the opponent of female legal and political equality makes. It is the constitutive claim of bigotry, the reviling against the “insult of equality”. Indeed, the embracing that—as a visceral reaction—such equality is an insult, a profoundly threatening corruption.

The essence of bigotry is that it excludes people from the moral community, hence equality being an insult and inclusion being an undermining “corruption”. The name we give longstanding bigotry is, sadly often, ‘tradition’. After all the push for same-sex marriage is not merely some "trouble-making intellectuals" idly asking questions. It is about people who voices have been so long suppressed—indeed, for long brutally suppressed—seeking legal equality. That Harris can class such an effort as merely being like the Sophists of Greece of the philosophes of C18th France engaged in intellectual games is, in its own way, profoundly belittling. A dismissal of human reality. A sign of how invisible to Harris as "real people" the same-sex attracted ultimately are.

Harris’s defense of tradition is just bigotry hiding behind the soft words of “reason” based on willful and systematic ignorance of the actual history and dynamics of the tradition he wishes to defend. A bigotry that is invisible precisely because it is “traditional”. His defense no more works than did the arguments to defend the traditions of excluding Jews, of keeping women legally subordinate to their husbands, of excluding them from political life, of keeping blacks subordinate. Or rather, it works just the same.

Why Latin Christendom overtook Islam (and Orthodox Christendom)

Scholars and others write about the golden age of Islam, how it created a brilliant, urban and urbane, sophisticated and scientifically curious civilisation when Latin Christendom was sunk in a Dark Age.

This is broadly true. Islam was the crossroads civilisation, the one in touch with all the other major civilisations of Eurasia, and so able to mix and match ideas. It had access to the achievements of Greek science. It had a common language of scholarship (Arabic). It used these advantages in a flourishing period of Classical Islam. Then Islam declined into a spreading stagnation—intellectual, scientific, technological, economic. So, the question arises, as Bernard Lewis famously asked, what went wrong?

What did not go wrong was the West. With exception of the Reconquista, Islam spent a thousand years generally advancing against Christendom until the Battle of Vienna in 1683. The stagnation of Islam was not caused by the West: on the contrary, it was the stagnation of Islam that allowed the West to counter-attack successfully and conquer most of Islam, to the extent that, by 1942, the only Islamic countries which were not protectorates or colonies were Turkey and Afghanistan. Even in 1453, when Sultan Mehmet II was about to take Constantinople, he was using guns which relied on infidel gunners.

So, what advantages did Latin Christendom, perched on a bunch of peninsulas on the edge of the Eurasian landmass, have?

The key factors are:
A range of political forms.
A range of legal forms.
Stronger use of the hereditary principle.
Effective competitive jurisdictions.
Belief in an ordered cosmos.
Ability to harness talent.

Most of these applied to also advantage Latin Christendom over Orthodox Christendom, which had the further disadvantage of suffering far more from Islamic and Mongol depredations.
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A range of political forms
Islam essentially only had one political model: autocracy. The autocrat might merely be a warrior king, or he might be able to claim extra religious sanction, but all Muslim rulership was autocratic. By contrast, Latin Christendom had republics, self-governing cities, hereditary monarchies and elective monarchies that varied notably within themselves and typically came to incorporate the representative principle, as it spread from the innovations of Alfonso IX of Leon and Castile. This political variety meant that Latin Christendom had far more institutional possibilities for the selection processes of history to work on.

A range of legal forms
Although Islam has a variety of schools of jurisprudence, it has only one basic set of laws, Shar’ia. While Islamic law was taken to come from God, in Latin Christendom, all law was human, even canon law. Latin Christendom had a wide range of legal system and laws, all of which were alterable. Latin Christendom had far more possibilities for the selection processes of history to work on plus the capacity to engage in legal experiments far more easily.

Stronger use of the hereditary principle
Not only was the hereditary principle much more widespread in Latin Christendom, applying strongly throughout the political and social structure, so much more stable across the society (since those who might attack hereditary suzerains were themselves holding their lands and service on the basis of the hereditary principle). It was also, with the evolution of primogeniture, much more stable in its internal operation within dynasties and landed families.

In Islam, warriors held tax farming rights, not lands, and these rights were revocable at any time, and were not heritable, being allocated according to the whim of the ruler. Amin Malouf contrasts the situation where peaceful succession occurred moderately regularly in the crusader states with the surrounding Muslim states thus:

Nothing of the sort existed in the Muslim states. Every monarchy was threatened by the death of its monarch, and every transmission of power provoked civil war … Let us note that in the Arab world the question is still on the agenda, in scarcely altered terms, in the latter part of the twentieth century.

Being landlords, the warrior elite of Latin Christendom had, compared to the Muslim warrior elite, much more interest in the long-term productivity of land and peasants, since that preserved (and hopefully expanded) their children(s) inheritance (what economists call longer time horizons).

Muslim traveller and chronicler ibn Jubayr noticed the difference, again contrasting the crusader states of Outremer with their Muslim neighbours:

Upon leaving Tibin (near Tyre), we passed through an unbroken skein of farms and villages whose lands were efficiently cultivated. The inhabitants were all Muslims, but they live in comfort with the Franj—may God preserve us from temptation! Their dwellings belong to them and all their property is unmolested. All the regions controlled by the Franj in Syria are subject to this same system: the landed domains, villages, and farms have remained in the hands of the Muslims. Now, doubt invests the heart of a great number of these men when they compare their lots to that of their brothers living in Muslim territory. Indeed, the latter suffer from the injustice of their coreligionists, whereas the Franj act with equity.

Incentives make a difference. There will be more investment in the creation and maintenance of productive assets, and better relations with people working those assets, the longer the time horizon of those controlling said assets. Over centuries, even a marginal difference in such things generation after generation will add up to major differences in economic outcomes and institutional development.

Effective competitive jurisdictions
Rulership in the Muslim world was autocratic. It was also unstable. The pattern of pastoralist conquest of settled river valleys establishing regimes which decay and are then replaced, as described by ibn Khaldun—and whose dynamics have been further explicated by more recent anthropological work, particularly by Phillip Carl Salzman—created fluctuating and unstable rulerships. This was not a good basis for institutional evolution. In particular, it was not a good basis for competitive jurisdictions to operate effectively in driving institutional development. Particularly once most of the Muslim Middle East became dominated by Ottoman rule.

Contrasting with the Middle Eastern pattern of isolated river valleys and coastal plains constantly threatened by nomadic hinterlands, Europe—as a mountainous peninsula of peninsulas, which inhibited unification ambitions while promoting the flow of ideas, goods, people and capital—had greater continuity in polities and in jurisdictional divisions. Competitive jurisdictions operated over time to develop institutions that embodied social learning including stronger defense of private property, more dispersed power arrangements driven by competition amongst jurisdictions to attract capital (financial, human, etc).

The same processes operated in the mountainous archipelago of Japan, but with less variety in law, political forms and cultural influences to work with. The Reformation—with its creation of greater religious variety—and the global break-out with the age of exploration making Latin Christendom the crossroads civilisation—the one in contact with all the others so able to mix and match ideas and capacities—magnified the effectiveness of competitive jurisdictions in driving technological, commercial and institutional development.

Belief in an ordered cosmos
From the C11th to the C13th centuries, all three of the Abrahamic monotheisms (Judaism, Christianity and Islam) struggled with the impact of Aristotelian philosophy on the tradition of scriptural revelation. In Judaism (as epitomised by Maimonedes) and in Christianity (as epitomised by St Thomas Aquinas) Aristotelianism—and the belief in an ordered creation—won.

Not so in Islam. There the Aristotelianism of Ibn Rushd aka “Averroes” (whose writings were very influential in Latin Christendom) was decisively defeated by the occasionalism of al Ghazali. Mainstream Islam turned its back on the notion of an ordered cosmos, without which the further development of science is impossible. Even in contemporary Islam, there are continuing difficulties with science and a low rate of research and development.

I would argue that this outcome in Islam was significantly driven by the context of tribal society and predatory autocracy encouraging a particular conception of God whereby to suggest He was bounded in any way was a slight on His honour. Conversely, the notion of God—as the ultimate Good Authority—creating a structured order rather than being an arbitrary tyrant fitted in with Classical, Germanic, Celtic and (ultimately) Christian and Jewish notions of proper authority. Though, in both Christianity and Judaism, there were adherents of untrammelled Godly authority, these have always tended to lose out over time.

This belief in an ordered cosmos, assisted by the religious diversity after the Reformation (where priestly control over printing in Catholic Europe encouraged printing of banned books in Protestant Europe), the reaction against the Wars of Religion, plus the wealth of information brought back by the voyages of discovery and by exploration of the cosmos undermining Aristotelian physics, set the stage for the Scientific Revolution, the Enlightenment and—coupled with the long-term effects of competitive jurisdictions and the diversity and forces for productiveness feeding into that—to Western economic, technological, intellectual and (for a while) territorial domination of the globe.

Ability to utilise talent
‘Islam’ literally means ‘submission’. A Muslim is ‘one who submits’. That is, submits to the word (and rule) of God. The trouble is, Islam is a system of layered submission, which turns it into a system of domination: believers dominate non-believers under the dhimmi system, men dominate women. In Latin Christendom, women were rulers and generals (Æthelflæd, Lady of Mercia, Mathilda of Tuscany), intellectual figures (Hildegard of Bingen), saints (Theresa of Avila), writers (Marie de France, Christine de Pizan) and so on in ways that were simply not true of Islam at the same time. There were far more women rulers in Middle Eastern history before Islam conquered the region than after.

Germanic law, Celtic law, Roman law before Christianisation all treated women much better than did Sharia. Even after Christianisation, Roman law and canon law were still better for women than Sharia. Which meant that Latin Christendom was better at harnessing the skills of its women than was Islam. As George Patton observed:

To me it seems certain that the fatalistic teachings of Muhammad and the utter degradation of women is the outstanding cause for the arrested development of the Arab. He is exactly as he was around the year 700, while we have kept on developing.

Latin Christendom used female talent much more than did Islam, an advantage that has accelerated over time.

In embracing new knowledge and technology, Latin Christendom became Western Civilisation. As a result of the Enlightenment, Western Civilisation also began to harness the skills of its Jewish population in ways that Islam had long since abandoned and far more than Islam had ever done. Consider simply how many Jews have won Nobel Prizes, particularly in science.

Islam as a system of domination
Classical Islam was far more tolerant (at least outside Arabia), and far better at harnessing the talents of conquered dhimmis, than later Islam. That was due to the shift in the costs of intolerance. When Muslims were a small ruling layer over a majority non-Muslim population, the costs of intolerance were high. As Muslims became a larger and larger proportion of the population, the costs of intolerance fell and its level rose. The long-term tendency of Islam has been to become less tolerant, not more. Ottoman rule was the most murderously intolerant at the end of its rule, not the beginning. Just as the Jews fled the Muslim Middle East after the creation of Israel, so Christians have also been leaving.

Which means that Islam is less and less able to harness the talents and perspectives of non-believers (except as guest workers).

One can see similar patterns within Latin Christendom of intolerance increasing as its costs fell (Norman-cum-Hohenstaufen Sicily; Reconquista Spain with the expulsion of the Jews and the Moriscos) but the dominant long-term tendency in Western civilisation has been very much the other way.

Winston Churchill, in his book on the Sudan campaign of 1898, The River War, famously wrote:

How dreadful are the curses which Mohammedanism lays on its votaries! Besides the fanatical frenzy, which is as dangerous in a man as hydrophobia in a dog, there is this fearful fatalistic apathy. The effects are apparent in many countries.
Improvident habits, slovenly systems of agriculture, sluggish methods of commerce, and insecurity of property exist wherever the followers of the Prophet rule or live. A degraded sensualism deprives this life of its grace and refinement; the next of its dignity and sanctity.
The fact that in Mohammedan law every woman must belong to some man as his absolute property, either as a child, a wife, or a concubine, must delay the final extinction of slavery until the faith of Islam has ceased to be a great power among men. Individual Moslems may show splendid qualities. Thousands become the brave and loyal soldiers of the Queen; all know how to die; but the influence of the religion paralyses the social development of those who follow it.
No stronger retrograde force exists in the world. Far from being moribund, Mohammedanism is a militant and proselytizing faith. It has already spread throughout Central Africa, raising fearless warriors at every step; and were it not that Christianity is sheltered in the strong arms of science, the science against which it had vainly struggled, the civilisation of modern Europe might fall, as fell the civilisation of ancient Rome.

There is something in what Churchill says. Islam is a universal monotheism without the softening factors of “love thy neighbour”, “render unto Caesar the things that are Caesar’s” and natural law theory. The things that saved Christianity from itself do not operate in Islam. One will search in vain for a text in Islam of similar sentiments and similar authority as Pope Paul III’s 1537 encyclical Sublimus Dei:

… to the contrary, the said Indians and all other people who may later be discovered by Christians, are by no means to be deprived of their liberty or the possession of their property, even though they be outside the faith of Jesus Christ; and that they may and should, freely and legitimately, enjoy their liberty and the possession of their property; nor should they be in any way enslaved; should the contrary happen, it shall be null and have no effect.

It is clearly in the intellectual tradition that fed into the Universal Declaration of Human Rights. Something that has not escaped the attention of, for example, the Islamic Republic of Iran:

In his 7 December 1984 statement to the UN General Assembly's Third Committee, the Iranian representative, Mr. Rajaie-Khorassani, again put on record his country's position on the UDHR:

In his delegation's view, the concept of human rights was not limited to the Universal Declaration of Human Rights. Man was of divine origin and human dignity could not be reduced to a series of secular norms [...] certain concepts contained in the Universal Declaration of Human Rights needed to be revised. [Iran] recognized no authority or power but that of Almighty God and no legal tradition apart from Islamic law. As his delegation had already stated at the thirty-sixth session of the General Assembly, conventions, declarations and resolutions or decisions of international organizations, which were contrary to Islam had no validity in the Islamic Republic of Iran.[...] The Universal Declaration of Human Rights, which represented a secular understanding of the Judeo-Christian tradition, could not be implemented by Muslims and did not accord with the system of values recognized by the Islamic Republic of Iran; his country would therefore not hesitate to violate its provisions, since it had to choose between violating the divine law of the country and violating secular conventions.

Islamic countries have felt the need to adjust the Declaration, issuing the Cairo Declaration of Human Rights in Islam. It is precisely the universalism of the Universal Declaration (identified as “Judaeo-Christian”) that is objected to on Islamic grounds. (That there is an Organisation of Islamic Conference is revealing in itself: no one thinks to have an organization of Christian, Catholic or Buddhist states, for example.)

It is worth noting that as soon as the “love thy neighbour” precept is subverted, the behaviour of Christianity converges with that of Islam as the dynamics of universal monotheism—of supporting a (masculinized) divine sovereignty against which no human claims have standing—take over. Hence the Christian origins of dhimmitude, Georgian and Regency England and C18th Netherlands killing men for having sex at about the same rate as that of contemporary Iran as well as common law denial of property and other legal rights of married women.

Or sometimes even more so than in Islam. Consider the famous reaction of the Ottoman Sultan regarding the tens of thousands of Jews whose wealth and skills were now his to benefit from after Ferdinand and Isabella's expulsion of the Jews:

How can you call Ferdinand of Aragon a wise king, the same Ferdinand who impoverished his own land and enriched ours?

(Note the Sultan apparently does not consider Isabella worth noting as a ruler in her own right.)

Still, in its purest form, gospel Christianity bans one from using God to oppress one’s fellow human beings. In its purest form, the Islam of the Qur’an and the hadith permits, indeed requires, believers to use God to oppress their fellow human beings. People being people, Christians have often done precisely that, while many Muslims have failed to do so. But the underlying logics remain what they are.

Indeed, the most important dynamic in Christian history is that priests are the means by which Christianity is propagated but priests get their power from being “gatekeepers of righteousness”, from subverting love thy neighbour so that they can say who is in and who is out, who is up and who is down. Hence it is very apposite that the patron saint of preachers was a queer-hating, Jew-hating misogynist. That dynamic of propagating-but-subverting is at the heart of Christian history. Christ, after all, was crucified for subverting and denying priestly authority—what were the moneylenders in the Temple if not use of God to oppress one’s fellow humans?

The Quakers rejection of priesthood may not be coincidental to their very positive reputation. [Just as the oppressive history of the Catholic Church owes so much to its very elevated notion of priesthood.]

Plague and knowledge
The point is sometimes made that Islam suffered particularly from the effects of the Black Death. But, of course, so did Latin Christendom. The difference was that the Black Death in Middle Eastern Islam led to the undermining of commercial vitality and increased autocratic domination. Conversely, the Black Death in Latin Christendom had reverse effects: leading to more technological dynamism, commercialisation and mercantile power.

Similarly, Latin Christendom made massively more use of becoming the cross-roads civilisation than Islam had when it was so. Indeed, the exploration efforts of Prince Henry the Navigator, and Isabella’s sponsorship of Christopher Columbus, were both specifically aimed at outflanking Islam. At which they were spectacularly successful. (Henry and Isabella both being crusaders.)

The only reason the Muslim Middle East matters nowadays is because of oil: itself parasitic on Western technology. There are a lot of reasons for the long-term failure of Islam, but they are internal to Islam—to Islam as a religion and to the geography that created and moulded it. And oil itself is a curse as much as a blessing, since it entrenches autocratic rule and funds religious obscurantism in the same way silver flows undermined Iberian parliamentarism and entrenched autocracy and funded religious obscurantism in Spain and Portugal.

What is Middle Eastern Islam without oil? Try Afghanistan, or Yemen, or Pakistan, or Egypt. An American soldier makes the point very bluntly:

Had the Crusades not been waged; had the Habsburg Monarchy not turned back the Ottoman tide at the end of the 17th Century; had Isabel of Castile not driven the Moors from Grenada, you would not be reading this diatribe. You would be illiterate, ruled by a tyrant, and squatting on the dirt floor of a mud-brick shack picking your nose.

Perhaps the prospect of Muslim domination of Latin Christendom was not quite that much a near run thing. But its consequences would have been fairly grim. I doubt geography would have been enough, on its own, to counteract the other factors. As V.S.Naipaul observed, Islam is very thorough in its colonising of conquered lands.

All of which makes modernity very confronting for contemporary Islam. Hence the rise of Islamism and jihadi terror as modernising revolts against modernity both within Islamic countries and among Muslim émigré communities. Just as fascism and Nazism were modernising revolts against modernity in the period 1919-1945. Hezbollah, Hamas, al Qaeda, the Iranian regime are the equivalents of the NSDAP and similar movements.

No Islamic country has comparable power now to that of Nazi Germany or Imperial Japan in the 1930s, but the organising and destructive capacities of modern technology provide their own level of threat. And there are far less bases inherent within Islam both for a full embracing of modernity, or to oppose said modernising revolts against modernity.

The reasons why Islam stagnated and Latin Christendom did not—indeed, came, as Western Civilisation, to dominate the globe—still operate. And continue to generate policy dilemmas.

ADDENDA This post has been edited to clarify and extend (but not change) arguments.

In defence of (econ) blogging

This is an extension of comments I made here, here and here.


A Richmond Fed economist, Kartik Athreya, thinks bloggers in general should shut up about economics because economics is very hard, so very hard to do properly. The essay has provoked a lot of responses.

A thorough response here, an even more forensic response here, a brutal response here, a nuanced response here, a considered response here, a response on the virtue of extra information here, a re-awakening intellectual joy response here, a benefits-for-information (and limits to macroeconomics) response here, a pointed limits to macro-economics response here, a philosophical response here and a somewhat supportive response here.

That people responded, and often very thoughtfully, is hardly a sign that what they do as bloggers on matters economic has some insecure status, as suggested in the supportive response. Surely it simply shows they take credentialed offerings from the Fed system seriously?

Secondly, what is the significance of something being blogged? As I noted at Scott Sumner and Will Wilkinson's posts, a blog is just online self-published opinion pieces. Unless one has some great belief in the gate-keeping qualities of opinion page and magazine editors, it is no different than what economists have been doing in opinion pieces in newspapers, magazines and journals for lay audiences since, well, economics started. Should Malthus, Mill, Marshall, Keynes, Friedman, Hayek, Marx etc all have shut up and stayed in the professional journals? Athreya’s essay comes across as moral panic about a new technology mixed in with guild ("you have to be the right sort of person in the right sort of place") restrictionism.

For an example of the usefulness of econ blogging consider this short history lesson in macro-economics. Blogging makes this information available to far more people, far more easily.

I find online materials an enormously useful ocean of resources. Yes, you have to be discriminating, but that is true of any set of materials and information sources. That it so lacks gate-keeping restrictions can be a problem, but it is far more of an advantage. Blogging is only part of that ocean of resources, but to pick on blogging in general is a nonsense, an analytical failing of major proportions.

In the end, Athreya is complaining about an arena with low transactions costs and few limits to entry: a very odd thing for an economist to be complaining about. Usually, when people complain about low transaction costs and ease of entry, it is because they want to preserve some sort of privilege and/or sense of status. Which does seem to be what Athreya is actually about, at bottom.

(But I did enjoy the crack about Delong and Krugman's "we are obviously right" fiscal stimulus prescriptions:

... some who might know better. They are the patron saints of the “Macroeconomic Policy is Easy: Only Idiots Don’t Think So” movement: Paul Krugman and Brad Delong. Either of these men will assure their readers that it’s all really very simple (and may even be found in Keynes’ writings).

Perhaps Athreya could take up blogging ...)

UPDATE Scott Sumner makes one of those comments:

If you read Brad DeLong, you probably notice that he is a bit in awe of Krugman’s ability to be right about everything. Actually, Krugman isn’t right about everything, but he tends to be wrong about exactly the same things that DeLong is wrong about, and so DeLong wouldn’t notice those things.

Who said economics ain't fun?

Institutions matter

This extends a comment I made here.


A commenter asked econblogger Scott Sumner:

I am curious. What is your take on those who argue (typically Chomsky followers) that Jamaica, El Salvador, Nicaragua and even Haiti have established drastic neoliberal reforms – some even banning unions, strikes, and allowing children to work – yet their economy remains stagnant?

My response was that economic outcomes depends a great deal on basic institutional structures. According to Hernando de Soto’s The Mystery of Capital, it can take up to 19 years to complete the legal processes for land purchase in Haiti. That sort of regulatory quagmire, coupled with massively unstable and confiscatory politics, will keep any country poor. There is a reason Haitians who leave Haiti do much better economically than those who stay.

The same general point applies to other Latin American countries. They operate according to a “social mercantilism” of insiders and outsiders. Hernando de Soto’s grad students famously found it took 289 days and $1,281 (31 times the monthly minimum wage) to legally register a single-employee garment business in Lima, Peru. The same process in Miami would take maybe a day. It is not hard to see why Miami (a significantly Hispanic city, after all) would have a lot more economic transactions than Lima.

Why do Latin Americans come to the US? Because the US British-legacy institutional framework works so much better than the Iberian-legacy they grew up under, so they can make a lot more income by moving north. That sort of difference is simply not covered by one commenter’s definition of ‘neoliberalism’ as:

free capital flows, less regulation, privatization, and limits/elimination of import restrictions

particularly if the only regulation you are looking at is border regulation (capital flows and trade flows).

One also has to take size into consideration is looking at the effects of protectionism, for example. The US is such a large economy, that the level of protectionism or otherwise does not make much of a difference. But Australia has done far better in comparative performance since we liberalised trade (among other things) precisely because we are a relatively small economy.

Prior to adopting a highly protectionist structure in the early part of the C20th, we had a higher per capita income than the US (135% of US per capita GDP in 1890, prior to the 1890s Depression and long Federation drought: we still managed, upon recovery, to be 105% of US per capita GDP in 1910). Once we went protectionist, we lost ground comparatively: particularly in both World Wars and during the 1920s boom (down to 77% in 1931: we had a comparatively better 1930s Depression, from 1933 onwards getting back to rough parity). We recovered from a low of 59% of US per capita GDP in 1945 to 81% in 1949 but continued to tread water (to 75% in 1983) until we started liberalising.

Since we liberalised, we have managed to improve our proportion of per capita GDP compared to the US (up to 81% in 2008: all these figures taken from the late Angus Maddison’s time series). Though, the more telling indicator of improvement is that the Australian economy has become much better at dealing with economic shocks.

Regarding New Zealand outlier performance (high in economic freedom, not so high in per capita GDP), it suffers from isolation, smallness, an unfortunate economic legacy and unhelpful comparative advantage (farming products).

My examples of appalling levels of transactions costs prompted the following comment from Doc Merlin:

Someone was telling me that for a large project it was up to 6 years in California. I guess that explains why businesses are moving to Houston where it takes days. … included permits, fighting off the inevitable lawsuits, and getting permission for the building(s) in the 6 years for a large project in California. Just purchasing the land can happen in less than day.

To which I respond: let's hear it for the power of competitive jurisdictions!

After all, it largely explains why Europe took off and why Japan (where, under the Tokugawa shogunate, the daimyo could, in terms of economics and commerce, run their provinces pretty well how they liked) was the first non-Western country to follow.

Self-employment as economic shock absorber

This extends a comment I made here.


Almost one-fifth of the Australian workforce are in some form of self-employment. The table in the analysis linked to can be seen here. There are 975,000 other business operators plus 1,000,000 independent contractors (previously defined as 'own account workers' or 'owner-managers of unincorporated enterprises') for a total of 1,975,000 (18.5%) out of a workforce of 10.7m. Alternatively, that is about 28% of the private sector workforce.

Commenter Doc Merlin provided the US figures:

As of the last census, we had ~10M completely self employed people. Also roughly 20M firms have no payroll (these people are partially self employed). We have total employment of ~140M people.
This is roughly 7% “complete self employment.” The number of people with partial self employment is probably much, much larger.

The reason why I was interested is that, in a developed economy, high levels of self-employment reduces the effect of economic shocks (since lots of people can take a temporary income hit without losing their jobs), reflects the rise of two-income households (since fluctuations in income can be covered more easily) and the regulatory burden placed on permanent, full-time employment (which imposes costs in wasted resources or blocked opportunities that can be captured by moving to other forms of employment). In Australia, we have a long history of REALLY regulating permanent full-time employment, with some of the highest (and specific) minimum wages in the developed world: though we regulate less than we used to.

More generally, levels of self-employment in an economy tends to be negatively correlated with per capita income (via), as Tino Sanandaji notes in his post:

You get lots of self-employment when transaction costs are too high and the institutional quality low

In Australia, the transaction costs imposed by regulation on ordinary employment is the issue, rather than low institutional quality.

By contrast, I am sceptical about how much wage flexibility in ordinary employment is achievable. There are real contractual and trust issues with cutting base wages to do the same work, as I posted about here. To put it another way: even in a completely unregulated labour market, I suspect there would still be a lot of nominal downward stickiness.

Economist Scott Sumner agrees, responding to my original comment with:

I completely agree. I hope people didn’t infer that I thought wage stickiness was a “problem” that needed to be fixed. I think it is a characteristic of free markets, which must be taken into account when trying to set monetary policy. The ideal monetary policy is one that leads to a situation where most workers don’t need to cut their pay.
There are some government policies that make nominal wages a bit stickier (minimum wages, extended benefits) but I would change those policies for reasons that have nothing to do with business cycles.

Quite.

ADDENDA For a critical, cross-country analysis of self-employment, see here (pdf) (also via).

Paul Romer’s Charter Cities: not medieval enough

I am very much in favour of (intelligently) looking at the medieval period for insights into the modern age. Not merely because Western civilisation grew out of the Dark Age alliance of (mostly Germanic) warlords with the Christian Church—so the institutional origins of Western civilisation are far more medieval than Classical. But because some of the issues grappled with back then—how to create a stable-yet-adaptable institutional order, particularly in a post-imperial setting—are ones that large parts of the world are still grappling with.

As I pointed out in a recent post, even the surge in economic liberalising reforms in recent decades has revealing medieval precedents.

Probably the most dramatic suggested use of medieval precedents to deal with modern problems is economic Paul Romer’s notion of Charter cities, which he blogs about here. The notion is that foreign companies or corporations run an enclave with pro-economic activity rules: rules which will have credibility by not being run by the incumbent government and its political processes.

A recent piece in The Atlantic on Paul Romer and his Charter cities ideas provides the archetypal medieval example for this idea:

HALFWAY THROUGH THE 12TH CENTURY, and a long time before economists began pondering how to turn poor places into rich ones, the Germanic prince Henry the Lion set out to create a merchant’s mecca on the lawless Baltic coast. It was an ambitious project, a bit like trying to build a new Chicago in modern Congo or Iraq. Northern Germany was plagued by what today’s development gurus might delicately call a “bad-governance equilibrium,” its townships frequently sacked by Slavic marauders such as the formidable pirate Niclot the Obotrite. But Henry was not a mouse. He seized control of a fledgling town called Lübeck, had Niclot beheaded on the battlefield, and arranged for Lübeck to become the seat of a diocese. A grand rectangular market was laid out at the center of the town; all that was missing was the merchants.

To attract that missing ingredient to his city, Henry hit on an idea that has enjoyed a sort of comeback lately. He devised a charter for Lübeck, a set of “most honorable civic rights,” calculating that a city with light regulation and fair laws would attract investment easily. The stultifying feudal hierarchy was cast aside; an autonomous council of local burgesses would govern Lübeck. Onerous taxes and trade restrictions were ruled out; merchants who settled in Lübeck would be exempt from duties and customs throughout Henry the Lion’s lands, which stretched south as far as Bavaria. The residents of Lübeck were promised fair treatment before the law and an independent mint that would shelter them from confiscatory inflation. With this bill of rights in place, Henry dispatched messengers to Russia, Denmark, Norway, and Sweden. Merchants who liked the sound of his charter were invited to migrate to Lübeck.

The plan worked. Immigrants soon began arriving in force, and Lübeck became the leading entrepôt for the budding Baltic Sea trade route, which eventually extended as far west as London and Bruges and as far east as Novgorod, in Russia. Hundreds of oaken cogs—ships powered by a single square sail—entered Lübeck’s harbor every year, their hulls bursting with Flemish cloth, Russian fur, and German salt. In less than a century, Lübeck went from a backwater to the most populous and prosperous town in northern Europe. “In medieval urban history there is hardly another example of a success so sudden and so brilliant,” writes the historian Philippe Dollinger.

Perhaps the only thing more remarkable than Lübeck’s wealth was the influence of its charter. As trade routes lengthened, new cities mushroomed all along the Baltic shore, and rather than develop a legal code from scratch, the next wave of city fathers copied Lübeck’s charter, importing its political and economic liberties. The early imitators included the nearby cities of Rostock and Danzig, but the charter was eventually adopted as far afield as Riga and Tallinn, the capitals of modern Latvia and Estonia. The medieval world had stumbled upon a formula for creating order out of chaos and prosperity amid backwardness. Lübeck ultimately became the seat of the Hanseatic League, an economic alliance of 200 cities that lasted nearly half a millennium.

So, far so good.

Romer even has a dramatic modern example—Hong Kong:

WHEN ROMER EXPLAINS charter cities, he likes to invoke Hong Kong. For much of the 20th century, Hong Kong’s economy left mainland China’s in the dust, proving that enlightened rules can make a world of difference. By an accident of history, Hong Kong essentially had its own charter—a set of laws and institutions imposed by its British colonial overseers—and the charter served as a magnet for go-getters. At a time when much of East Asia was ruled by nationalist or Communist strongmen, Hong Kong’s colonial authorities put in place low taxes, minimal regulation, and legal protections for property rights and contracts; between 1913 and 1980, the city’s inflation-adjusted output per person jumped more than eightfold, making the average Hong Kong resident 10 times as rich as the average mainland Chinese, and about four-fifths as rich as the average Briton. Then, beginning around 1980, Hong Kong’s example inspired the mainland’s rulers to create copycat enclaves. Starting in Shenzhen City, adjacent to Hong Kong, and then curling west and north around the Pacific shore, China created a series of special economic zones that followed Hong Kong’s model. Pretty soon, one of history’s greatest export booms was under way, and between 1987 and 1998, an estimated 100 million Chinese rose above the $1-a-day income that defines abject poverty. The success of the special economic zones eventually drove China’s rulers to embrace the export-driven, pro-business model for the whole country. “In a sense, Britain inadvertently, through its actions in Hong Kong, did more to reduce world poverty than all the aid programs that we’ve undertaken in the last century,” Romer observes drily.

The sticking point in Romer’s example, is not merely that it is neo-medieval, it is that it is neo-colonial:

Of course, versions of China’s special economic zones have existed elsewhere, especially in Asia. But Romer is not just arguing for enclaves; he is arguing for enclaves that are run by foreign governments. To Romer, the fact that Hong Kong was a colonial experiment, imposed upon a humiliated China by means of a treaty signed aboard a British warship, is not just an embarrassing detail. On the contrary, British rule was central to the city’s success in persuading capitalists of all stripes to flock to it.

Romer sees being foreign-run as being the solution to the credibility problem. But being foreign-run has an inherent insult problem that has scuppered attempts to put his idea into practice. As, for example, in Madagascar:

Even as Romer was meeting with Ravalomanana, the president’s main political opponent was sniping at the proposed lease of farmland to Daewoo, and the idea of giving up vast swaths of territory to foreigners was growing increasingly unpopular. The arrangement was denounced as treason, and public protests gathered momentum, eventually turning violent. In late January 2009, protesters tossed homemade grenades at radio and TV stations that Ravalomanana owned; looters ransacked his chain of supermarkets. In February, guards opened fire on marchers in front of the presidential palace, killing 28 civilians. At this, units of the army mutinied. Soon, Ravalomanana was forced out of office.

It also has the problem of why would Western governments (for example) embrace onerous obligations which are, however way you slice it up, neo-colonial.

Romer’s problem is that he is too hung-up on the example of Hong Kong on its own and not enough on either how it had its effect or the medieval examples. What made Hong Kong successful in the way Romer wants it to be—a widening example that economically transformed an entire country—was not Hong Kong, but that the People’s Republic copied it. British rule in Hong Kong may have been the starter, but it is not the element that made the example able to be repeated.

Nor was it what made the medieval examples work. Medieval charter cities were not examples of foreign rule but of entrenched local rule. There was no way a ruler such as Henry the Lion was going to let some foreign ruler run an enclave. But he was willing to guarantee prosperous locals (even if imported locals) that they could do so.

The notion that modern rulers, or modern electorates, are going to be anymore favourable to leased-out foreign rule is equally nonsense. Hong Kong was forced on Imperial China at gunboat-point. Romer is either being betrayed by a bias in favour of Westerners per se or by a liberal academic’s impatience with borders and particularist loyalties (or both) in not seeing how foreign rule will not work in the way he wants it to.

A structure of entrenched local rule (where ‘local’ includes free movement to the enclave) does not insult local politics, citizens or loyalties. On the contrary, it gives aspiring locals something to aim for and be part of. That was how medieval charter cities got much of their economic “zing”: by attracting formerly rural folk willing to have a go. Indeed—given that medieval cities had death rates higher than their birth rates—attracting such inflow was necessary to maintain population, let alone increase it.

Paul Romer needs to see the Hong Kong example fully—that only outside imposition made it happen in the first place, that repeatability sans foreign rule is what gave it transformative power—and go for the full medieval package of entrenched local rule. Harness particularist loyalty, not work against it.

What he needs is a modernised Lübeck Charter, creating lots of new Lübecks, not this self-frustrating, other-insulting pining for new Hong Kongs. Neo-medievalism for real, not bastardised by alienating and just-too-hard neo-colonialism.