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Introduction

governology in Uncategorized March 23, 2016 1,311 Words

In this blog, I’d like to push the boundaries of what the ideal government is and present a somewhat full view of what a future government should look like. What changes should we be pushing our governments to make? How should we design the constitutions for new governments? What do we want governments to look like in 500 years? Will it be a Star-Trek-like communist utopia? Will it be a Star-Wars-like Empire?

There are plenty of people writing about politics, international affairs, and about what government is. And there are plenty of people writing about specific bills or specific improvements to a constitution or code of law. This isn’t one of those. I decided to write a blog because there doesn’t seem to be a lot of people writing about what government should be as a whole.

In blogging about government, I also necessarily have to talk about economics since manipulating economics is all a government ultimately does. So this blog will be my general thoughts and discoveries about how a government acts in relation to people and economies, within and outside its influence, and how we should exploit these properties to improve existing governments and form better ones in the future. Since I live in the US, the thoughts will necessarily have a strong US-leaning bent.

Government? What are you?

A government is more than just an organization of people. If you define government in terms of a state, one definition is “the system by which a state is legitimately controlled”. But what is a state? What is control? What is “legitimate”? This seems to be yet another situation where dictionary didn’t quite put a full ass into its work.

The idea that a government is defined by a monopoly on force (ie violence) dates back to the late 1500s and 1600s in writings by Jean Bodin and Thomas Hobbes, but was explicitly solidified by Max Weber in 1919. Weber defines a state as a “community that successfully claims the monopoly of the legitimate use of physical force within a given territory.”

This works pretty well for traditional sovereign nations with clear territorial boundaries. But this definition falls apart where large governments are made up of smaller governments or in regions with poorly defined boundaries or rival factions. But its not the monopoly on violence that is what defines government, but when that violence is used methodically to implement policy.

So I’m going to define a government in a very different way: A government is a group of people able to enforce policies through the credible threat of force.

My definition doesn’t require clear boundaries and doesn’t rely on the nebulous concept of legitimacy. It works for city governments as separate entities from national governments and also works to define some unusual things as governments, like criminal and terrorist organizations. As I’ll talk about in a later post, this unusual classification can be useful and illuminating.

The credible threat of force is the ability that separates a government from a business or other organization. A government has the ability to imprison or fine people it decides deserve it, whether the people in its jurisdiction like it or not. The government of a ruthless tyrant is no less a government if his people consider him illegitimate.

The Ostensible Collective: Origins of Government

Pretty much everyone agrees that some government is beneficial. Despite popular opinion, libertarians also agree that some government is desirable, and surprisingly, even most of those who call themselves anarchists believe that a very minimal government has its place.

Thomas Hobbes believed that humans in their natural state live in terror and chaos. Hobbes believed laws and their enforcement can tame this chaos and reduce the terror of natural life. Jean-Jacques Rousseau, on the other hand, believed that humans in their natural state are independent and peaceful, and that technology and government introduce chaos and terror into our lives. I believe they’re both right. Government, as I have defined it above, is both the source of terror and the solution.

But few people talk about government as the inevitability it is. Put any group of people together in an isolated situation, and a government will just pop in there. This happens because of disputes – one person claiming that another harmed them in some way, or disagreement as to what the group should do. Everyone has disagreements with others that aren’t sufficiently solved by social pressures. Or in some cases, social pressures themselves are the problem (for example, racial prejudice in the US).

Dispute resolution to prevent harm is at the root of why government is not only necessary, but inevitable. So the question is not whether we should have government or not, but how do we ensure the governments we do have are good? The structures of government that follow from dispute resolution lead to methods of directing resources toward benefiting the collective, rather than just resolving internal disputes. Things like protection from outside forces and government services.

But these methods can also direct resources in ways that benefit only part of the collective. The status and power that comes for the controller of a collective’s resources also drives the creation and expansion of governments. The resources of a group can be an attractive prize for the shrewd politician or strong warlord. And often the service of dispute resolution is a source of legitimacy, since a consistent source of dispute resolution, no matter how unfair, can bring a certain level of prosperity to a community even in oppressive regimes, as is well demonstrated by Daron Acemoglu and James Robinson in their analyses of weak vs strong states.

When it comes right down to it, violence and imprisonment have historically been very effective ways of getting people to do what you want, especially when a majority (or even a large minority) legitimizes those actions. Monopolizing violence naturally occurs as stronger factions absorb or eliminate weaker ones.

The Whole Gamut

Governments are creations of people, and as such they will always be imperfect. I’ll spend a post discussing the spectrum of government, mostly so we can dismiss most governments as awful and then focus on the good parts of the spectrum. We should look behind us briefly before heading over the next hill.

For now, I’ll summarize that there are two important ways to look at a government: the legal structure of the government and the social environment that government operates in.

A government’s legal structure has six major attributes:

• • Number of leaders – Autocracy vs Direct Democracy

  • Amount of representation – Monarchy vs Republic

  • Separation of powers – Single Branch vs Multiple Branches

  • Limitation of powers – Totalitarian vs Libertarian

  • Level of agreement – Majority vs Unanimity

  • Coupling of sub-governments – Loose vs Tight

With these six attributes you can classify the structure of any government and even treat the world as a whole as a single government with very very loosely coupled sub-governments (which can be interesting when compared to smaller government made of loosely coupled parts).

There is of course much more to the government of a nation than its legal structure. The social environment, I mentioned, is incredibly important in understanding how a jurisdiction’s economy and government operate. The social organizations, political alliances, cultural values, laws, and legal precedent are all both shaped by the government’s structure and also shape the behavior of a given government. Two governments with the same constitutions will be significantly different if the cultures and political environments are significantly different. I might talk about these things in a later post as they related to inclusive and exclusive institutions, socialism, and the feasibility of governmental change. But for now, I’ll leave it there.

My next post will go into a bit of detail about the six attributes of a government’s legal structure and how they affect a society.

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Dimensions of Government

governology in Uncategorized April 12, 2016

The cultures of the world have come up with countless exotic and intricate forms of government, using just as many different goals and mechanisms to keep power. One potential dimension of government is the ideals the ruling class are supposed to live up to.

For example, a theocracy is a government where religious leaders are in control. The idea is that those that have studied the moral and existential questions of theology are most likely to make the best decisions for the people. Technocracy and Plutocracy are similar, where those that know most about science and technology or those who have been most successful in gaining wealth are the most likely to make the best decisions for the people. These could all be seen as a subset of Meritocracy, where each is just choosing a different definition for who is best to rule. Even the “divine right” of European kings and the Apotheocracy of the Egyptians, where the rulers were considered gods, are forms of Meritocracy. Because, who would know better how to rule than a god?

But all of these descriptions aren’t really forms of government at all. They’re just stories. Ideals. Values. They’re what people look for in a ruler, and thus affect how a ruler acts – in the Broadway sense of the word.

A theocratic ruler will cite holy texts. A technocratic ruler will spin scientific sounding stories and play pseudo-statistical games. A plutocratic ruler will talk about how they and others have made money in the past (pictureDonald Trump with a crown and scepter). These are just themes, not structures of government. Even in a meritocracy where candidates are chosen based on proven performance, either the people as a whole do the choosing, or a subset of the people do the choosing. The merit is in the eyes of the beholder. And as I’ll mention next post, the beholder is almost always an oligarchy. So I’ll discard these themes as useless to really understanding government and how we should change it.

As a reminder from last post, I’ve suggested that a government’s legal structure has six important attributes:

• • Number of leaders – Autocracy vs Direct Democracy

  • Amount of representation – Monarchy vs Republic

  • Separation of powers – Single Branch vs Multiple Branches

  • Limitation of powers – Totalitarian vs Libertarian

  • Level of agreement – Majority vs Unanimity

  • Coupling of sub-governments – Unitary vs Federal

I’ll talk about each one, starting with…

Number of Leaders

One significant dimension of government is the spectrum from autocracy (rule by one) to omnigarchy (rule by all). The number of people empowered to make direct governmental decisions is a simple and important dimension that affects how stable a government’s policies are over time.

Throughout history, the vast majority of governments have been oligarchies, with a strong bent toward autocracy. Single leaders have imposed their rule whether through popular support, military might, or successful institutional navigation. Most governments have officially placed ultimate power in a single leader – a king, a dictator, an enlightened despot, or some other synonym. Only in the past few centuries have the world’s people been widely successful in spreading out formal power to more than one person.

In some governments, whatever the king says goes. In others, a king and a parliament share powers. In still others, whole populations have some governmental powers. Theoretically, sole power could be vested in a vote of an entire nation. In North Korea, Kim Jong Un rules as an absolute dictator – his word is law. In England, the parliament has almost total control within few constitutional limits. In California, public referendums allow people to enact laws somewhat directly (tho the legislature determines what becomes a referendum).

In autocratic governments, a change in leader can mean a complete change in direction. It can also mean a higher likelihood of an attempted coup. Both these things increase the instability of a government’s policies, leading to a more difficult to understand and unstable environment for its people.

Conversely, the more people who are given control within a government, the more stable the legal environment.

Amount of Representation

In a monarchy, there is no representation. People have no say in who their leader is. By contrast, in a republic with universal suffrage all people have some say in who their leaders are. The amount of representation affectswho’s interests will be promoted, on average, when government action is taken.

This makes the amount of representation one of the most important dimensions of government, and also the most nuanced. It may be easy to have elections in which everyone can nominally participate, but all influences of government should be examined when determining fairness in representation. If participation is made difficult for some, as Jim Crow laws did in the US or as voter registration laws are currently doing in the US, the amount of representation diminishes. Same if there are mechanisms by which politicians can be persuaded against their natural character, such as happens in widespread bribery or in money-based political campaigns primarily driven by large donors. Same if the government delegates power to a private organization, or if the nominees for election are chosen or heavily influenced by a small subset of the voting population.

An important metric in this dimension is the amount of influence the current leaders have in choosing the next leaders. Ideally, the current leaders have no influence over the next set of leaders, but no government meets this ideal. An example is the huge incumbent advantage where incumbents are 4 times as likely to win elections than other hopefuls in the US.

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No leader rises to power on their own, and so no matter if a government is an absolute monarchy or a constitutional republic, any leader comes to power on the shoulders of their supporters. The social atmosphere surrounding a government’s official powers strongly influences how those powers are used, and who gets to use them. There are many cases of kings being forced to take unfavorable legal action because of social and political pressures, for example when King John of England was forced to sign the Magna Carta. And there as many cases of democracies hijacked by the political pressures of a dictator, for example, when Vladamir Putin has his political opponents like Boris Nemtsov conspicuously shot to death in Russia’s capital city, or when Hugo Chavez recently rigged the elections of Venezuela.

These nuances mean that the amount of representation a government gives its people is not always as obvious as it may seem. But regardless of the nuances, the more evenly a government represents its people, the more evenly people’s interests will be protected and promoted, and therefore the fairer the government will be on average.

The nuances of representation are well captured in a concept known as selectorate theory, which posits that the only two important components of representation are the sizes of the real selectorate and the winning coalition (regardless of the size of the nominal selectorate). The larger the winning coalition, the better representation a country (or organization) has.

CPG Grey created a fantastic video that eloquently explains selectorate theory – how the difference between dictatorships and democracies is primarily a difference in representation. Those represented (the real selectorate) are called “keys to power” in the video, and it convincingly demonstrates how only those that can help a leader rise to power and keep that power will have any meaningful representation. In a dictatorship, it may only be a handful of people while in a democracy it may be voting blocks containing thousands or millions of people.

Separation of Powers

Going back to more clear-cut dimensions of government, another dimension is separation of powers. The amount of power-separation a government is required to have affects how consistent a government’s policies are appliedacross various individual cases.

Some governments consist of a single body that is legislator, judge, jury, and executor. Others have many distinct groups of officials that have different and often conflicting legal abilities: a “balance” of powers. For example in the US, there are three clearly separated branches: congress, the court system, and the president. On the other hand in countries like Australia and Italy, there are only two major branches, parliament (which is executive+legislative) and judicial. In the UK, the supreme court was only enacted in 2005 and isn’t even clearly separated from parliament.

The idea of separation of powers is to reduce conflicts of interest and inherently increase the number of independent groups who need to agree before an action can be taken. One department head can’t simply persecute someone they don’t like – they have to get other departments they don’t control to agree. This greatly improves the consistency of rule-of-law.

Contrary to what many people seem to think, separation of powers doesn’t slow down the government. It only increases the level of agreement needed for government to take action. If the US congress and president agree on something, change can literally happen within 10 days. And the judicial branch doesn’t slow anything down since they only come into play after the fact.

Separation of powers is, instead, a filter where bad actions by one branch can be blocked by another branch. This is an incredibly practical stabilizing force that prevents the head of one branch from unjustly ignoring the rule-of-law. This makes the application of government policy more even. No would-be tyrant can unilaterally ignore laws and persecute their enemies without likely being challenged by another branch.

Limitation of Powers

Another extremely important dimension is limitation of powers. While this is related to separation of powers, its different in that it limits the powers of all sections of government. How limited a government is affects what actions that government will take and also how consistent general policy is.

A constitutional bill of rights, for example, explicitly calls out what the government can’t do. Some governments are entirely unlimited in the legal sense. King Louis XIV of France during the 1700s is an iconic example of an absolute monarch who could do anything he wanted. England’s constitutional monarchy in the late 1600 was a nudge toward limited government, and the United States constitution describes one of the most limited governments in history, though without a doubt, many of the limitations it describes have been reinterpreted to be far less limiting.

If a government is more limited, that government’s policy will be more consistent, since, when a leader changes, there are fewer types of actions they can switch to.

Level of Agreement

The level of agreement needed to take government actions has implications for minority interests. The level of needed agreement affects both how likely minority interests are to be protected from government action, and consequently, the amount of action that will be taken.

Votes that only need 50% (a simple majority) are common around the world. Majority votes are usually the smallest level of agreement usually needed to take significant action. Sub-majority votes exist but are almost always used for submitting ideas, nominations, or other procedural things (eg the number of signatures needed to be put on the ballot in an election). Super-majority votes are a higher level of agreement, and unanimous votes are the highest.

The bicameral congress is another way that a country might require a higher level of agreement to enact laws. Even if both houses of a congress are filled from the same proportions of the same populations, it add some additional agreement. In bicameral congresses like in the US, even more agreement is needed because one house represents people by population and the other represents states equally, regardless of population.

Another aspect of this is the distinction between the level of agreement needed for changing the constitution vs normal law. A lower level of agreement needed for constitutional change means that the structures of the government will change faster, and tend toward removing protections for freedoms supported by a (potentially large) minority.

If a government requires more agreement to take actions, smaller minorities will be more able to prevent government involvement more often (tho they don’t have any additional ability to cause government involvement) and the less government action that will be taken.

Coupling of Sub-Governments

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The last dimension is coupling: how much independent authority these governments-within-governments have within their larger parent government. All collectives above a certain size have some kind of hierarchical structure, with governments within governments, because otherwise government wouldn’t scale. How coupled a government is internally affects how uniform government policies will be across that jurisdiction.

In some modern dictatorships, its provinces and regions are often overruled by the dictator – in a disagreement, a province would not be able to get its way. In contrast, states in a federal government like the United States have quite a bit of autonomy – there are a host of things the federal government can’t legally force a state to do. This creates an environment that prompted Louis Brandeis to describe states as the “laboratories of democracy” where experimental laws could be tested without affecting the entire nation.

In the past, coupling has been weak because even the strongest states were relatively weak by modern standards for a whole host of reasons including speed of communication and ease of information collecting and monitoring. In medieval times, a shire far from the capital could expect less attention paid to them by the crown, for better or worse, and thus may simply not have as much pressure to enforce the crown’s statutes. In modern times, it makes a bit more difference.

Because a more loosely coupled government will have greater ability to enact differing laws, its governed collective can learn and improve faster in the long run than a collective in a strongly coupled government. In strongly coupled scenarios, short term changes can sometimes be made quickly, but less is learned collectively and change is then short-lived, making for less change in the long run, and certainly less improvement.

Sum of its Parts

So there you have it: the six dimensions of government. The more leaders a government has, the more stable the government’s policies over time. The broader the representation, the fairer government action is. The more powers are separated, the more consistently applied government action is. The more limited the government, the less actions it will take. The more agreement that’s needed for action, the more likely minorities can prevent action. And finally the more coupled the government, the more uniform are its laws geographically.

Themes like theocracy are entirely unimportant, as they’re simply a method of communication that serves to justify rule but don’t change the nature of the government.

My next post will discuss governments throughout history using these attributes, with a focus on governments that have performed the best, and will mention why most governments throughout history have kept humanity in the gutter.

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Government behind us

governology in Uncategorized May 4, 2016 4,642 Words

“Most people cannot easily give up power. Most people cannot peacefully accept that others with whom they disagree should have power over them. Most people cannot resist the temptation to enrich themselves through political office rather than work to improve the community as a whole. The historical record often shows these sad realities.” – Brian A. Pavlac[1]

We should look behind us briefly before heading over the next hill and discussing the future of government. In this post, I’ll talk about past governments, from oldest to newest and coincidentally generally worst to best, using the six attributes I discussed in my last post. Via this history, a pattern emerges showing how increases in representation have lead to prosperity, and subsequent reductions in representation have lead to decline.

All For One

Monarchy is often cited as the most common form of government throughout history, especially before the 1800s, but I wasn’t able to find any real quantified information on how many governments have been monarchies vs oligarchies vs democracies or along similar dimensions. If anyone could direct me to something talking about that, I’d be very curious to read it.

In any case, monarchy is the most common form of government because it’s both simple at its core and the most attractive position for an individual. For simplicity, “do as I say” is much simpler than a constitutional agreement. Also, the hereditary nature of so many monarchies and dictatorships is a natural extension of familial kinship and the human desire to help your offspring succeed. And as for attractiveness, if you were confident you could secure your safety, I suggest that most people would be attracted to absolute power. And for people that think they wouldn’t want that, imagine being able to choose your favorite leaders to run things for you for as long or short as you wanted them to.

In other words, its good to be king.

These things combine to make autocracy in general the most common government (tho that may change in the future). Ambitious individuals tend to continue concentrating power to themselves their whole lives if they can. And before there was millennia of history to draw from, few powerful people have had the motivation to put serious work into devising new forms of government. It simply took time for us to have both the knowledge wrought of thousands of governments and the random chance to find powerful individuals the motivation to change the structure of their people’s government.

Autocracy has the fewest leaders, the least representation, no separation of powers, and very rarely has any limitations. Coupling has been anywhere from weak to strong depending largely on the size of the nation. Policies often drastically change between leaders and are generally unfair and inconsistently applied to the general population. Autocracies also have the least focus as to what actions they take, and thus changes in autocrat can have drastic consequences.

I’d have to say, and I think most people would agree, that autocracy is the absolute worst type of government. The concentration of power into one person leads to short-lived leaders, catastrophic decisions, and inconsistent policy. Because there is no representation of the people, most of the kingdom’s subjects are treated unfairly and the nation’s economy almost always badly stagnates, even if a short period (couple decades) of growth happens. And when a good and careful ruler has a long and successful reign, the next king is likely to ruin it all over again.

Minority Rule

In reality, a monarchy is a type of oligarchy, since the family of the monarch is the controlling group with their own traditions of how power is passed to their various members. Any autocracy has a group of supporters who may be chosen for various official positions, including eventually the position of autocrat itself.

The concept of oligarchy is tricky because so many governments can be considered oligarchies by one definition or another. But there is simply no other way to characterize the governance of places like India under the rule of the British East India Company, or China under the rule of the Communist Party. In these situations, even if a single leader is chosen, no single ruler determines the fate of the nation. Rather, the fate of such a nation is determined by the organizational politics of the organization in power.

Oligarchies tend to invent stories about why the ruling elites are the rightful rulers. Stories, like the divine right of kings or the supposed meritocracy in ancient and modern China, help the elites convince the masses that they’rethe rightful rulers. More recently, oligarchs have manipulated democratic-style systems in attempts to convince their population they were chosen by the people. As I said in my second post, these stories don’t help understand the government, but are simply one of many techniques used to keep power.

It can certainly be argued that most countries have some level of oligarchy happening at a hidden (or sometimes not-so-hidden) level. But I don’t want to quibble about definitions here. Oligarchy is a step in the right direction away from pure autocracy. Oligarchies have more leaders (by definition), usually slightly broader representation, and also sometimes have some limitations and separations of power. As more people are given official power, structure and limitations are sometimes created so the oligarchs can have reasonable expectations of their peers. Oligarchies with few limitations often devolve into autocracies.

While representation can be broader than in an autocracy, by definition representation is still narrow in an oligarchy. This makes them unfair to the people at large, and so the use of ‘oligarchy’ as mostly derogatory is entirely justified.

That said, some oligarchies are better than others.

Rise of Representation in Greece

Things start to get interesting whenever a society significantly increases representation.

After a period of unrest, proto-democratic institutions were created, likely in the 700s BC[8]. The Spartan Apella, which voted on the powerful Ephors and other magistrates, consisted of perhaps 3% of the population[1] at the height of the Spartan empire. It’s unclear to me whether this percentage may have been greater before Sparta accumulated massive numbers of slave-like helots that eventually made up about 80% of the population[2]. Despite potentially being naked, they voted by shouting, choosing the loudest collective shout to determine the outcome, which could be seen as a primitive form of range voting.

A man once argued that Ancient Sparta (circa 850 BC) should set up a democracy, and the famous lawmaker Lykurgus, credited institutions that lead to Sparta’s rise to power, replied:

“Begin with your own family“

Sparta was still an oligarchy, but one with some limited democratic structures. Separation of powers was likely minimal, as was limitation of what the government could do. But this was almost definitely a huge increase in representation at the time, and because of this, Sparta built the wealth necessary to sustain a major army and building an empire.

The Apella was soon undermined in the 600s BC when Theopompus and Polydorus created a provision allowing kings and the Gerousia to nullify any “crooked” decision of the citizens.[5] The Spartan empire eventually suffered irrecoverable losses in the 370s BC and few traces of it remain today.

Meanwhile during the late 600s BC, harsh and legendarily draconian rule by the archon Draco oppressed the population of ancient Athens. Again after a period of unrest and feuds among the aristocracy in the 590s BC, the archon Solon reformed the Athenian oligarchy by establishing the democraticEcclesia and democratized the Boule so it consisted of citizens chosen by random drawing. Between 10-20% of the people were citizens entitled to vote in the Ecclesia[3], which decided issues the Boule brought up to it by plurality voting. Archons were also elected by the Boule, tho only elites were eligible. The Areopagus, a council of ex-archons, still retained judicial power and other supervisory powers.[4] In 561 BC Peisistratos overthrew the Athenian government and controlled the democratic institutions by coercion rather than abolishing them altogether[6]. But these institutions were revived after his son was overthrown in 510 BC by a coalition lead by Cleisthenes, who even expanded the representation of Athens’ citizenship. In the 460s BC, Ephialtes enacted a third set of reforms removing the supervisory powers of the Areopagus and opening the office up to all citizens.

The Athenian government was by far and away more representative than the Spartan government. There were probably a few more leaders, given that they had more high councils, and there was even some limited separation of powers. The government was still all powerful tho and the Athenian government was still controlled by elites who often maintained influence via corruption.[19] The government was also criticized as “mob rule” as they often did poorly in wars started by popular vote.

The Athenian constitution was also unstable for most of its existence, since it only required a majority vote to change it until the decades immediately after 400 BC. After that time, a trial in the Legislative Court was required to revise or repeal permanent laws (vs temporary “decrees”).[21] In this way, late-state Athens had a higher-than-majority level of agreement needed to change existing laws, including the constitution. There was still no conception of a difference between constitutional law and normal law, as Aristotle would be the first to write about such a formal distinction later in the 300s BC. However, they still had the much weaker majority level of agreement required to make new laws.

These democratic institutions survived with minor hiccups (devolutions into autocracy) until Phillip II of Macedonia defeated Athens in 338 BC. Athens remained relatively wealthy for centuries, but never regained its democratic institutions nor a place of major influence until the modern day. Athens was one of many Greek cities that had democratic institutions like the Ecclesia. Without a doubt, the massive increases in the people’s representation in government were critical to establishing the most successful civilization in the western world up to that time, not only in Athens but in the entire Greek peninsula.

Both the Spartan and Athenian cities had somewhat inclusive institutions rise out of periods of turmoil, became wealthy, and then engaged in empire building. The institutions that worked well for domestic policy in these cities didn’t work well for an empire, and the constant warring with their neighbors certainly didn’t help stabilize their societies. Because Sparta and Athens were not very open to peaceful diplomacy, eventually larger enemies were able to defeat both cities.

The Roman Republic

Before the Roman Republic was created, the Roman Kingdom was already a constitutional monarchy with some small but significant representation of the elites known as patricians. A body of patricians called the senate provided some checks on the power of the king, as well as having the power to elect new kings. Roman citizens were even ostensibly given the power to accept or reject a new king by vote. Still, the patricians were the only class allowed to hold government office, and thus Rome was still an official oligarchy.

The Roman Republic was established in 509 BC after resentment of Etruscan rule escalated up to the overthrow of the Etruscan king Lucious Tarquinius Superbus by the patricians. The king was replaced with two consuls that ruled jointly with limited terms elected by the citizens, tho still only patricians could be elected as consuls and the senate determined nominees for consul[7]. The proportion of citizens in the Roman Republic was about 20-25%[14][15], and probably a larger proportion in the early republic. This oligarchical period of the Roman Republic is called the Era of patricians because the patricians still held almost all of the power.

In 494 BC, things dramatically changed when a large group of plebeian soldiers seceded to Aventine Hill demanding representation. Subsequently, the plebeian tribunes and plebeian aediles were created, both elected by the body of Roman citizens. The plebeian tribunes had the power to create law binding the plebeians, veto actions of the Roman senate, and judge the lawfulness of a magistrate’s actions. Eventually, the tribunes’ powers were expanded so laws were binding to all people (except perhaps magistrates). The plebeian aediles began as a minor role, but around 446 BC they were given the authority to record senatorial decrees, since Roman consuls tended to sneakily modify decrees in transcription. The power of plebeian aediles grew over time to rival the power of consuls.

In 445 BC, the plebeians demanded that the office of consul be opened to allow plebeians to be elected. In 443 BC, the magistrate office of censor was created – a move by the patricians to regain exclusive control of the highest office, as censors were elected exclusively by the patrician class. And in 366 BC, the magistrate offices of praetor and curule aediles were created which allowed plebeians to hold executive office, albeit subject to veto of the offices of Dictator, Censor, and Consul.

In time, senators and tribunes engaged in substantial quid pro quo, tying their motivations together. By 312 BC, a significant number of magistrate offices were held by plebeians, but it became more and more difficult for citizens to be elected unless they were from established political family. A new class of plebeian aristocracy was being created that would eventually rise up to the same level as the patricians and merge with them.

By 287 BC, the average plebeian was poor, but the senate refused to provide the relief they wanted. The plebeians again seceded, this time to Janiculum Hill, demanding that their needs be met. The plebeian elite used this opportunity to remove the last blockade from the tribunes, passing the Hortensian Law that allowed tribunes to consider and create law without the approval of the senate. Despite this win for the plebeians as a legal class and others legal victories later that century, the plight of the average plebeian did not improve over the next 150 years and beyond. Wars, including civil wars, were fought continuously and the economy continued its decline.

Throughout the Roman Republic, an officer known as the Dictator could be appointed by the senate for a period of 6 months, and like the modern meaning, had absolute and unchecked power over the republic. Whenever a Dictator was appointed, the old monarchy was effectively temporarily reinstated for a period lasting 6 months. Between 501 BC and 202 BC, there was an average of 1 Dictator appointed every 3.75 years.[20] After 202 BC, the position of Dictator went defunct for 150 years.

It can be argued that Rome became an Empire during the First Punic War around 250 BC, and that the creation of an empire lead to economic disparity and powerful generals that undermined the institutions of the republic. As soldier citizens began giong on longer campaigns, many of them were unable to tend their farms and were unable to compete with vast farmsteads worked by slaves. This forced many to sell their farms, decimating the middle class. This is the first video in a series that goes into this in more depth:

Between 133 and 49 BC, serious economic issues lead to an intensification of class struggle where poor plebeians tried unsuccessfully to use government to alleviate their poverty through the use of government action. For example, after a succession of unprecedented and tradition-breaking legal moves by the senate against the tribune Tiberius Gracchus and vice versa, Tiberius’s pet law that would limit the amount of land an individual could own was passed. Soon thereafter his attempt to become the first Tribute to serve two terms turned violent as a number of senators murdered Tiberius and 300 of his supporters in the street during the vote.

The period continued in volatility where both the powers of the senate and the republican institutions were eroded. Political corruption and violence was widespread. Provinces were run under absolute rule by their governors. The cost of political campaigns skyrocketed fueled by the enormous personal wealth politicians could amass. Politics were increasingly polarized between the elites and the people, and continuous war was waged.[9]

“Our age, however, inherited the Republic as if it were some beautiful painting of bygone ages, its colors already fading through great antiquity; and not only has our time neglected to freshen the colors of the picture, but we have failed to preserve its forms and outlines.” – Cicero circa the 1st century BC

By broad qualification, the Roman Republic was similar to the Athenian government. The number of leaders was likely slightly higher, there was slightly more separation of powers, and while the percent of the population was slightly higher, it seems the aristocracy had more power in Rome than in Athens. So the representation was rather on par if not slightly less representative in the Roman Republic than in Athens, and was certainly less representative near the end of the Republic. And the government had almost absolute power with very few if any limitations. Ancient Rome had above majority thresholds required to pass laws, in the form of various veto powers in what could be seen as a multicameral system. But its constitution was, like Athens’, constantly in flux because no distinction was made between constitutional law and normal law, and thus the level of agreement needed for structural change was small by modern standards.

“Veni, vidi, vici.” (I came, I saw, I kicked its ass) – Julius Caesar

The end of the Roman Republic was clear when Julius Caesar declared himself Dictator, reviving the long obsolete position with absolute power. A decade after the assassination of Julius Caesar, the Roman Republic finally came to an official end when Mark Antony was defeated in 29 BC by Gaius Octavian (aka Augustus Caesar) who believed only a single strong autocrat could restore order in Rome. He dissolved the Republic and became Emperor.

What followed was a period of constant war where the wealth created by the republic was supplemented by wealth stolen from an ever increasing empire of subjugate cities and nations. This continued in violent turmoil and patriotic exuberance until the empire collapsed under its own weight and its pieces lived on in literally 1000 years of war and poverty.

Bastions of Democracy

While most of the world was still stuck in either the oligarchies of the past or in the newer oligarchies in the wake of the Roman Empire, some bastions of Democracy cropped up from time to time, creating enormous wealth for the polities who had them.

Art by Joseph Fuchs (my high school English teacher)

The city of Venice in the 700s AD was such an oligarchy. It had limited checks on the Doge’s king-like executive power, who was elected by the Concio, the general assembly of freemen (citizens and patricians). A movement for independence of Venice was gaining steam with a bent toward political inclusiveness. By the time Venice achieved independence in the decade around 800 AD, the city’s economy had shifted toward trade and had grown quite a bit from its position as a fishing village 50 years prior. The patrician class consisted of about 4.5% of the population[11] and, as in Rome, held dominant political power, continuing to do so for centuries despite large increases in political inclusiveness. Venetian citizens were also proportionally few, numbering at about 6% of the population.[18] This meant only about 10% of the population had any representation.

During the mid-900s AD in Venice, the advent of the commenda contract allowed non-patricians a powerful method of upward social mobility through captaining merchant ships and receiving a substantial cut of the profits. Over the next 200 years, political inclusiveness increased as offices and courts limiting the Doge’s power were developed.[10] In 1143 AD, the Consilium Sapientis was created as a council elected directly by the Concio and evolved into the Great Council which had the power to enact law and elect higher magistrates. While politics was still dominated by aristocrats, the increased representation started in 800s created an environment where many more people had upward mobility and say in the political process. Along with this came incredible wealth making Venice possibly the richest city in the world at the time.

In its Golden age, Venice had a fair number of leaders, moderate representation by the standards of the time, and limited but significant separation of powers. Like most governments before the modern age, there were still few limitations of what the government could do. All in all, Venice was far less representative than the Roman Republic or Athens, but far more representative than any other government at the time.

However, by the late 1200s the new wealthy merchant families, having already climbed to the top, began pressing for barriers to being elected to the Great Council. In 1286, a law was enacted requiring that nominations for the next Great Council be confirmed by the Council of Forty, the Ducal Council, and the Doge, all of which were controlled by the established elites. In 1297, a change was made so those who had already recently served on the Great Council could be appointed without these confirmations. This effectively shut down the ability for upward political mobility. In the next few decades, the commenda contract that built much of Venice’s wealth was outlawed, trade was nationalized, and high taxes were placed on private trading ventures.[10]

Perhaps predictably at this point in the essay, Venice then started on a path of economic decline alongside population decline, and in the 1400s accelerated its imperial tendencies until reaching a territorial peak in the 1450s. Venice languished onward until 1797 when it was absorbed into Austria.

Various other governments involved elections or assemblies, tho like Venice and Greece, large portions of the population were excluded from voting.

The kings of the Pala Empire began in 750 AD were elected by elites and ushered in an unprecedented period of stability and prosperity in Bengal, India. The Iceland Commonwealth founded its Althing assembly, the oldest parliamentary institution still in operation, ushering in 300 years of relative peace and prosperity from 930 AD until Norway absorbed the commonwealth in the 1260s.

The Mali Empire in West Africa was preceded by the Manden Kurufaba, a federation of Bambara tribes that created a constitutional monarchy with theKouroukan Fouga sometime after 1235. The Manden Kurufaba soon became incredibly prosperous before growing into an Empire larger than any kingdom in Europe at the time and eventually collapsing in 1610.

The Iroquois Confederacy was a federation forged either around 1142 AD or 1451 AD in a heartwarming tale of peacecraft and fellowship resulting in theGreat Law of Peace. It was a loose federation with a bi-cameral council requiring supermajorities of male voters and female voters to pass binding treaties. While much is debatable about the date of origin and the actual events of the origin (since the only record is oral tradition), it’s clear that the Five Nations became a dominant force in the area after being formed. There is evidence of massive territorial expansion from future New York into Ohio, Tennessee, Kentucky, and possibly as far as into Eastern Canada. In the early 1720s, Tuscarora fled North Carolina to join the federation making it the Six Nations. The federation broke down and lost of its influence during the American Revolutionary War after they had already been weakened by disease when the nations chose different sides to support. After the war, the federation reformed and had many struggles, but continues to exist to this day.

Between the late 1400s and early 1600s, the independent city of Sakai grew to be the wealthiest city in Japan while being governed via oligarchical elected councils who elected leaders described as being like consuls in Venice.[16][17]The Zaporizhian Sich, aka the Cossack Republic, was created in the 1500s and was able to remain partially autonomous despite the attacks of many neighboring empires for about 200 years. The Polish-Lithuanian Commonwealth established elections for king in 1572, reaching its golden age in the early 1600s and lasting until 1768.[12]

Conclusion

Venice and the Consilium Sapientis showed that wealth can be created very quickly when moves toward real democracy are made. It also shows how long that wealth lasts far beyond the golden years of a Republic. In fact, Sparta, Rome, and Venice all show this. As I’ll talk about next post, even England’s empire shows this, as things fell apart everywhere where democracy wasn’t active.

Sparta only retained reasonable representation for 100 years, but lasted as an independent state for over 400 years. The Roman Republic had about 200 years of good representation before devolving into an aristocracy, and its wealth gave rise to an empire lasting in total from the beginning of the Roman Republic, either 1000 years to the end of the western Roman Empire, or 2000 years to the end of the eastern one. Venice had limited representation for about 500 years, and that wealth lasted it for 1000 years in total. The life of Athenian democracy seems to have been cut short in comparison. There was no clear devolution of its republic in its 250 years – essentially all of those years part of its golden era. If Athens hadn’t refused to join nearby federations, it may have had another 1000 years of independence.

Seemingly without exception, all of these areas with representative governments became rich, and then used their wealth to engage in massive empire building. As I’ll talk about next post, this pattern continues into the modern age. Perhaps, tho, it’s a function of what ruling elites do when they’re presented with unprecedented national wealth, rather than something related specifically to representative government.

Late-stage Athens and most of the years of the Roman Republic had a higher-than-majoritarian level of agreement needed for laws, but the level of agreement needed for constitutional change was much lower than in modern governments. This property made the structures of these ancient governments unstable and in constant change.

The monarchies and oligarchies that have dominated the governmental landscape since the dawn of time are so strong a force that they pulled these early democracies apart. In almost every case, the democracy was undermined from within by elites trying to solidify their own power.

While rising representation isn’t a requirement for a powerful nation, it seems to be an incredibly effective way of building prosperity. There isn’t consensus on whether the actual representative governmental structures are what causes prosperity – it may be that a winnable struggle for better representation is what causes prosperity rather than the resulting structures being the root cause. For example, in cases like Venice, the inclusive economic institutions predated the inclusive political ones. But it seems clear that rising representation correlates very strongly with economic prosperity.

Next post, I’ll continue this history in the modern age, discussing nations that haven’t yet fallen.

References

1. A Concise Survey of Western Civilization: Supremacies and Diversities throughout History by Brian A. Pavlac page 55

2. http://www.newworldencyclopedia.org/entry/Sparta

3. http://classroom.synonym.com/different-institutions-greek-democracy-9685.html

4. http://www.stoa.org/projects/demos/article_areopagus?page=all&greekEncoding=UnicodeC

5. Ancient Sparta: A Re-examination of the Evidence, Issue 84 by K.M.T. Chrimes page 488

6. http://www.britannica.com/biography/Peisistratus

7. http://www.britannica.com/topic/consul-ancient-Roman-official

8. http://elysiumgates.com/~helena/Government.html

9. Rise of Rome by Anthony Everitt

10. Why Nations Fail by Daron Acemoglu and James A. Robinson

11. https://cassio-nation.wikispaces.com/Life+in+Venice+during+the+Renaissance

12. Political Science for UPSC Mains 2010 page 7.10

14. Italian Manpower, 225 BC — AD 14, Oxford, 1971 by P. Brunt

15. Servus. Rome et l’esclavage sous la République, Rome – Paris, 1987 by J.C. Dumont

16. The Oxford Handbook of Cities in World History edited by Peter Clark

17. An Introduction to the History of Japan by Katsuro Hara

18. Venice in Environmental Peril?: Myth and Reality By Dominic Standish

19. http://www.fsmitha.com/h1/hell04.htm

20. https://en.wikipedia.org/wiki/List_of_Roman_dictators

21. http://www.freenation.org/a/f41l1.html

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The Rise of Modern Democracy

governology in Uncategorized June 6, 2016 2,821 Words

Before England’s constitutional monarchy, the Parliament of England was a simple advisory council to the king. England’s constitutional monarchy began with the famous Magna Carta in 1215 when, among other things, the Parliament gained veto power on the king levying taxes. Look how unhappy King John looks up there, aww.

The relatively inclusive institutions held over from the era of the Roman Republic certainly helped create an environment where the king could be questioned, albeit only by the elites.[13]

Over the next 500 years, the Parliament’s powers were gradually increased and the powers of the king were further limited, despite various confrontations between kings and Parliament. Not only did the nobles gradually increase their representation in government, but the commoners also increased their political power – especially after the Black Plagueshifted the balance of power by making the labor of surviving peasants more valuable. Eventually in 1341, the House of Commons was formed, sitting knights and burgesses as a lower house to the House of Lords, which sat clergy and nobility. Yet the proportion of people entitled to vote remained small (less than 3%).[18]

In 1603, Scotland and England joined together in a loose federation. Numerous limits on the monarch were passed in the 1600s and the battles of the English Civil War in the mid 1600s reaffirmed and strengthened the power of parliament. In 1707, the federation of Scotland and England was strengthened in the Treaty of Union that created the nation of Great Britain, and a short time of peace followed. The Reform Acts then expanded suffrage to about 7% of the population in 1832, 20% in 1867, 30% in 1884, and eventually the Reform Act of 1918 and 1928 gave all citizens over 21 the right to vote, including women.[18]

The increasing levels of political representation went hand in hand with the fade of English feudalism and steady economic growth[19] until the Industrial Revolution when growth skyrocketed, creating unprecedented levels of wealth and prosperity. By now predictably, the steady wealth created in medieval England and the wealth created by the industrial revolution each lead to empire building – the “second” English empire being the largest empire in history before it was brought down a few pegs by the First and Second World Wars. The slow fall of the British Empire left some newly independent nations with representative republics, some with oligarchies, and some with outright dictatorships. Many of the earlier ones left with Republics and became some of the riches nations in the world, while ones left with oligarchies or monarchies didn’t do quite so well.

The UK has evolved into a government with a large number of leaders, wide representation, but no clearly separate branches of government (the supreme court has far less power in the UK than in the US for example), and few limitations to what the government can do. Because of the lack of formal governmental limitations, the UK’s government has grown and become synonymous with Big Brother style government.

In contrast with previous nations with representative features, the UK has managed to retain its representative and inclusive institutions and remains among the top 3 wealthiest (assets/capita) and top 15 most productive(GDP/hour-worked) countries to this day.

Before the United states existed, representation in the North American British colonies was already uniquely high. The abundance of land meant that 50-75% of the adult male population could own land, and therefore vote, in the 1720s. This was approximately 30% of the total adult population, whereas in England the percentage was about 1/5 of that. Among the controversies with Britain shortly before the American Revolutionary War was a demand by radicals for universal male suffrage. By 1776, between 35% and 45% of the adult population could vote in many states in the new Union.[20]

As with the previous cases, the republic of the United States was founded in the wake of political upheaval, which in this case culminated in the American Revolutionary War. The United States of America was formally founded as a weakly-coupled federation of the 13 former colonies under the Articles of Confederation in late 1777 (tho not fully ratified until 1781). The Articles established freedom of movement between the states, gave each state a single vote in congress, gave the federal government the sole power to declare war and conduct foreign relations, and required states to keep a militia. In the Articles it was agreed that the constitution may be changed only through approval of congress and ratification by every state.

But the Articles of Confederation are widely agreed to have been a failure. The government formed by the Articles had only one branch, congress, which the president was the head of (like the vice president today). There was no executive office to enforce the laws. There was no central court to have the final say in disputes about federal law, and so state courts could strike down any law they didn’t like.[21] Since the smallest state had as much representation as the largest state in congress, states with large populations quickly became dissatisfied that votes by a minority of the population could create binding law. The central government couldn’t collect taxes from the people, only from the state governments themselves, and states often refused to fulfill tax and other obligations in full. The government had difficulties in every category from foreign affairs to mediating disputes between states. A revision was proposed in 1786, but couldn’t achieve the unanimous support of the states that was necessary.

When the US Constitution was ratified in 1788, it strengthened the federation and created a republic with three branches, a bicameral congress, and a more powerful (but still limited) government that had the power to collect taxes from individuals, raise an army, coin money, enforce the law with an armed militia, and regulate commerce among states and with foreign nations. The powerful executive office of President was one of the three branches, and is (to this day) elected indirectly by the people via the Electoral College. In 1791, the first 10 amendments to the constitution listed various limitations of government known as the Bill of Rights. By 1850, property requirements for voting were removed, making white male suffrage almost universal.

Tensions rose in the years leading up to the American Civil War. In 1860, about 12% of the population were slaves, 90% of whom were in the southern states that would secede to form the confederacy. 40% of the people were slaves in those southern states, in some towns the proportion was as high as 95%.[22] The South had stagnated economically in comparison the to the North. It had a marked lack of development of every kind. Ralph Emerson wrote:

“Slavery is no scholar, no improver; it does not love the whistle of the railroad; it does not love the newspaper, the mail-bag, a college, a book .. it does not increase the white population; it does not improve the soil; everything goes to decay.”[23] – Ralph Emerson

Indeed, illiteracy among white adults was 20 times as high in southern states as in northern ones, 1/3rd the railroad tracks had been laid,[24] and the white population was growing at a far slower rate. Inequality also rose steadily and the number of whites that owned slaves decreased significantly even as the slave population increased.[23] The population stagnation also meant that the south’s power in government was decreasing. Despite this, the southern democrats still had enough power to repeatedly block homestead acts, so as to keep farming competition limited and to prevent the creation of anti-slavery states.

All the northern states had already abolished slavery by 1804 and by 1860 were advocating abolishing it nationwide. Lincoln was one of those advocates, and his election was the catalyst to southern secession and the beginning of the civil war.

After the civil war in 1869, the constitution prohibited denying suffrage based on race, tho significant social pressures continued to circumvent that mandate. In 1913, senators began to be elected directly by the people. In 1920, women gained the right to vote. And in the 1960s civil rights further strengthened suffrage.

Alongside the unprecedented representative increases and government limitations, the economy of the United States, and the thirteen British colonies they came from, grew quickly from their inception through the current day with only a few relatively small blips in times of war or depression.[25] The US has been the largest economy since the late 1800s, and at the time of this writing, is the 2nd wealthiest country(assets/capita) and in the top 5 most productive countries (GDP/hour-worked).

Botswana is another fascinating story of the success of genuine representation. In 1885, the cheifs Khama III, Bathoen, and Sebele I appealed to the British for assistance against hostilities with neighboring tribes and the Dutch Boers. The British accommodated what was then known as Bechuanaland, splitting them into a British protectorate north of the Molopo River and a colony south of it.

Ten years later, the same three leaders foresaw an impending authoritarian takeover of their country by the mining magnate Cecil Rhodes. Most British politicians didn’t think Bechuanaland was worth colonizing, but Rhodes pushed hard for Bechuanaland to be given to the British South African Company (BSAC). Khama III had converted to Christianity and also imposed it on his people. During a visit in 1895, Khama III made much of his Christian pursuits and convinced the British to deny BSAC control of Bechuanaland and retain its status as a British protectorate. This ruined Cecil Rhodes’ reputation and thwarted the impending exploitative regime. Rhodes famously commented: “It is humiliating to be utterly beaten by these niggers.”

Khama, Bathoen, and Sebele and their successors then systematically discouraged British developments, like railroads and mining prospecting, until they were able to successfully muster broad support for democratic independence in 1969. After decades of under-development both from British disinterest and intentional barriers to development, Botswana was one of the poorest nations in Africa, and the world.

But after independence, rapid support for inclusive political institutions and free enterprise without fear of British control (or other authoritarian control) ushered in explosive economic growth that quickly made Botswana one of the richest and most inclusive countries in Africa.

In the late 1969, Botswana had a GDP/capita of about $70/year and in 2015 that number has grown to almost $19,000/year. The are still growing more than twice as fast as the US and UK at an average of over 5% per year.

By the People

At its core, it should be fairly clear why increases in representation and moves toward democracy lead to powerful and wealthy states when thought in context of improving cooperation. As humans naturally look out for the interests of themselves, their family, and their friends, clashes of interest can lead to destructive competition of various magnitudes from theft of an appleto murder of the king’s family. Any move that eliminates this kind of destructive behavior or improves the ability for people to cooperate, naturally reduces costs (in terms of both money and lives) and increases people’s ability to create. Seen from this light, it’s clear why consistent and fair rule of law is important in fostering cooperation, and therefore prosperity.

The Greek historian Polybius developed a theory of cyclical government where governments would cycle between monarchy, aristocracy, and democracy, with a period of degeneracy (tyranny, oligarchy, or mob rule) after each phase. He advocated a government that mixed all three types in order to stop the cycle that he (as well as philosophers like Aristotle and Plato) saw as harmful. Polybius lived at the end of the golden age of the Roman Republic, and saw the it as an embodiment of this philosophy. He thought its mixed government was the reason for its staying power. Ironically, the Roman Republic suffered the same mob rule and then monarchy he described in his Histories. Still, his theory of a mixed government was the beginning of a theory of separation of powers.

In reviewing the history of pre-modern democracies from the last post, it certainly seems like there is a pattern of devolution. Sparta’s wider oligarchy eventually narrowed substantially before being conquered. The Roman Kingdom devolved into a tyranny, creating the Republic, which started oligarchical, became more representative, devolved into an oligarchy again (something Polybius would have called mob rule), and then switched back into a monarchy. The various bastions of democracy were almost exclusively oligarchies of varying representativeness. I can only guess that Athens would have suffered the same fate had it not been conquered.

But modern democracies are much more of a mixed government than those early democracies. Real representative modern democracies may not suffer the same fate as Rome and Sparta, or may at least be far longer lasting, because of the modern constitution. The modern constitution requires much more agreement to be changed, where not much more than a simple majority was required in all those early democracies.

Empire And Federation

Another angle I want to come from is how larger nations are formed. Most nations in the past have been formed by one government dominating another government. The sometimes tentative peaces that were brokered (from such interactions as the ones that created the Mongol empire) always lead most immediately to oligarchies. When one group threatens or demonstrates violence against another group, no kind of democracy can come of that without a revolution.

A federation, on the other hand, incubates a much more comfortable peace that fosters far more cooperation. Several ancient Greek leagues, for example the Aetolian and Achaean leagues, were federations that banded together and became forces to be reckoned with, despite the cities involved being mostly nothing special in the area. Thinking themselves superior, Sparta and Athens refused joining leagues like these and fell to larger coalitions because of it.

In contrast to empires, federations are voluntary unions of governments. Some modern nations like Germany and the United States were originally formed as federations. The European Union is also a federation, as is the pre-columbian Iroquois Nation.

The power of a federation can also be seen in pseudo-federal nations like the Persian Empire that existed around the same time as the Athenian republic. Its tolerant atmosphere lead to leaving the power structure of subjugate states intact. That plus its marked lack of slavery made it pretty darn successful and well liked by its people, despite being an autocratic empire.

In essence, the states of a federation act as a separation of power from the federal government. The states that make up the federation usually retain significant power and autonomy, allowing them to protect the interests of their own population.

Conclusion

The point I’m driving at in describing these historical governments, in this and last post, is that the past was dominated by oligarchies and empires. The few were in control of the many, leading to widespread and chronic poverty that lasts to this day in most of the world. There have been only a handful of cases where a government represents a large fractions of its people, and these cases have been by far the most successful as evidenced by the fact that every state with a recorded history of increases in representation became wealthy and powerful.

Some of those who have forgotten the examples of the Spanish empire, Nazi Germany, and the USSR say that China’s oligarchical rule may be some kind of new magically effective form of government. These advocates fail to see that the people’s lack of political power will ultimately drive (and very likely has already driven) China to stagnate while the elites maneuver the nation’s policies to their favor.

The future of government must be in the realm of democracy and federation, governments bound by voluntary treaties rooted in popular agreement. I’ll touch on how much popular agreement is best in later posts (hint, its usually more than a majority).

There is probably truth to cycles in government between concentrated power (monarchies) and more spread out power (oligarchies), but like Polybius, I believe government can be structured in such a way to slow the cycle and minimize how concentrated power can become in that cycle. While separation of powers is one important mechanism for that, perhaps a more important one is government limitations – something ancient governments almost entirely lacked.

In my next post, I’ll be talking about the proper role of government and what its limitations should be.

References

Note: The numbers aren’t consecutive because some references are from the previous post, which originally contained this content.

13. http://www.historyextra.com/article/medieval/8-things-you-probably-didn%E2%80%99t-know-about-medieval-elections

18. Getting the vote – nationalarchives.gov.uk

19.http://www.lse.ac.uk/economicHistory/pdf/Broadberry/BritishGDPLongRun16a.pdf

20. The Right to Vote and the Rise of Democracy, 1787-1828 by Donald Ratcliffe

21.http://www.ucs.louisiana.edu/~ras2777/amgov/artsofconfedproblems.html

22. http://www.civil-war.net/pages/1860_census.html

23. http://www.digitalhistory.uh.edu/disp_textbook.cfm?smtID=2&psid=3558

24. http://www.civilwar.org/education/history/warfare-and-logistics/logistics/railroads.html?referrer=https://www.google.com/

25.http://cdn.theatlantic.com/static/mt/assets/business/Screen%20Shot%202012-06-20%20at%209.37.55%20AM.png

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The Role of Government: Part 1

governology in Uncategorized July 5, 2016 6,139 Words

“The care of human life and happiness and not their destruction is the only legitimate object of good government.“ —Thomas Jefferson, 1809.

Everyone in the modern day can agree that the appropriate role of a government is only to make things better for its people. But what is “better” and how do we know government can accomplish that?

In any society, there are only two sources of action. The first is free activity of individuals, including the market. The second is activity of individuals acting as agents of a government. Voluntary cooperative action in the free market is a very successful mechanism that naturally manages resources. And yet there are certain areas in which the free market has problems, the most significant of which are called market failures. Clearly the only appropriate role for government is to improve on natural cooperation by correcting these failures where possible.

I want to apologize in advance for the sheer amount of definitions and economics concepts in this post. I have to build a strong foundation of these concepts before I can have a shred of hope that I can convince you of my conclusion – a specific and complete definition of the appropriate role of government. So if you feel your eyes starting to glaze over, I swear it’ll be worth it.

Thomas “baby-face” Aquinas

In the 1200s, when Thomas Aquinas wasn’t being attacked by local pigeons, he spent time thinking about government. He believed that “a good government is one that protects its citizens from violence.” I think anybody would be hard-pressed to disagree with him. In a situation with no authoritative government, the free market breeds little mini-governments who all exert their authority haphazardly. Disputes often become violent when one mini-government disagrees with another. This is easy to see in a place with weak central government like Somalia, or in situations where government is absent like in black markets. In situations like that, violence is common and those who are most violent are often the richest.

So the rise of violent mini-governments is one major market failure – and it’s a pretty clear fail. Dispute resolution is an area where the market solution isto create a government. People want an authority that can peacefully resolve disputes, as I stated in my first post. But violence isn’t the only market failure.

So what is a market failure exactly?

Market Failure

There seems to be a wide range of misconceptions and incompatible ideas about how market failure is defined. Some seem to think it’s when the quantity demanded doesn’t equal the quantity supplied (ie when there is a shortage or a surplus). Some seem to think it’s anytime the market isn’t perfectly efficient. There also seems to be an undercurrent that any deviation from the neo-classical ideal market (where there is perfect competition and everybody knows everything) is a market failure. All of these definitions are incorrect. This Crash Course video has some misleading information, but mostly well-explains how economics students are taught about market failure today:

In David Friedman’s words, “market failure describes those situations where individual rationality does not lead to group rationality, where if each person makes the right decision for himself, the result is less good for [the group of] people [in total] than if everybody had done something else.” – Listen to the full lecture here.

An example of this is any time you see some jerk stuck in the middle of an intersection after their light turned red or driving slowly in the fast-lane on the freeway. The Ferrari stuck in the intersection will to get to its destination faster by getting stuck in the intersection than by waiting for the light, and the slow Prius in the fast lane has an easier time driving in a lane where no one is in front of it. But it’s not only jerks who cause market failures.

Gordon Gekko’s famous line was “greed is good”, but a more accurate rephrasing is that self-interest can be harnessed for good. Everyone looks out for their own needs for food, comfort, and general happiness as well as the well being of their friends and family. All of that is encompassed in “self-interest”, which drives people to cooperate with each other to produce and invent things that will increase the happiness of everyone involved. This has been incredibly good in the long run, as can be shown by various worldwide statistics about ever lowering rate of violence and war, starvation, and poverty. But self-interest can also be harnessed for ill, intentionally and unintentionally, and that’s what market failure is.

To be very specific, given a particular economic environment, market failure is a situation where the motivations of market-actors incentivizes behaviors that prevent the market from eventually reaching maximally efficient activity, or incentivizes behaviors that prevent the market from eventually reaching the maximum possible rate of efficiency increase.

And by “economic environment”, I’m talking about a situation where people know of certain technologies and techniques, and where there are certain behavioral patterns people follow either because of social pressures or government.

A market failure is a much stronger notion than simple inefficiency. It’s not about whether there is inefficiency in a given economic environment, but rather about whether that inefficiency can be reduced toward zero in that economic environment. In economics, the place on the efficiency scale a economic environment tends toward is called the equilibrium of that market.

This definition means that the normal and temporary inefficiencies that occur in real markets, where effects are never propagated instantaneously, aren’t market failures on their own. This includes things like market inefficiencies from lack of knowledge, conflict of interest, and various other things I’ll talk about further down. Market failures might cause these kinds of inefficiencies to become chronic, but their existence isn’t sufficient to call the situation a market failure.

Also, a market failure in one economic environment may not be in another. For example, before the widespread use of enclosure acts in England in the 1700s and 1800s, large parts of England were designated as “commons” that could be used by anybody. While they were sometimes organized by local committees, there was a lot of limitation for what could be done on common land and abuse was… common. This abuse has been made famous by the term ‘tragedy of the commons’. When enclosure acts privatized this land, it changed the economic environment to make possible a wide range of innovations that helped increase agricultural output and other sectors in England immensely. In this case, it was change in law that changed the economic environment. Technology can also change the economic environment as things that were impossible become possible.

The last piece of this puzzle is that when progress toward market efficiency is systematically slowed, that’s also a market failure. While such a market may eventually get to maximal efficiency, it may take so long that a lot of potential efficiency is lost. That’s the point of including the bit about rate of efficiency increase in the above definition.

Efficiency

It feels like this article is going to get filled up with definitions, so I might as well get it over with. One thing still left vague is what “efficiency” is. What is “maximally efficient activity”?

This necessarily gets into the concept of economic utility, which is how efficiency is quantified. Economic utility is a measure of the value a person gets out of some item or activity. Any action a person does has costs and benefits to that person’s utility. The activity in question can be buying and selling goods or providing a service, but can actually be anything a person can do, like relaxing on the beach, giving to charity, or browsing the internet.

A higher utility for a given person means they are “better off”. Because this is still pretty vague, so for the purposes of this blog I’ll be treating economic utility as a measure of a person’s current happiness. But a person doesn’t generally just want to maximize their current happiness, they want to maximize their happiness over their whole lifetime.

A maximally efficient economy is one the sum total of all the utilities of the people in that economy is maximized – essentially to maximize the total happiness of everyone. Maybe this is the true meaning of life: to help humanity maximize its total happiness over the course of its existence.

Every additional cow using the field means less useful field, which puts a negative externality on everyone.

So why does externality happen? The reason is fundamentally abouttransaction costs, the costs necessary to enforce property rights. In this case, it might very well be feasible to identify who’s putting how many cows in the field, but in the case of pollution, it would clearly cost more for someone to personally identify all the drivers who are polluting their air than they could hope to receive in return. And so the rational choice is to ignore the pollution – to just let it happen.

While its obvious why negative externalities aren’t good, its perhaps less obvious why positive externalities aren’t good. In the classic example of a home’s front-yard garden, passers by benefit from the nice view. This benefit to the community is a good thing right? Well yes, but the fact that there’s an externality here (that passers by can’t feasibly be charged for their enjoyment) means that that good thing will be under-produced. People might put a bit more effort into making their gardens nice if they were getting paid for it. If it were cost-effective to eliminate the externality by charging for viewing the garden, more of that good thing would exist.

To illuminate why it’s important to exclude costs and benefits propagated via prices, we’ll take the example of a donut shop. If a shop is selling cronuts, for example, they’ll set a price and people who want cronuts will buy it from them. If a new bakery opens up nearby that also sells cronuts, it’s likely the first bakery will start making less money either because they will sell fewer cronuts or because they have to lower the price of their cronuts (or both). While this makes that first bakery less well-off than it was before, this is notan externality because it happens through the price system – which is fair game. It also means more, cheaper, and probably better cronuts for everyone.

So why does externality happen? The reason is fundamentally abouttransaction costs, the costs necessary to enforce property rights. In the case of pollution again, even if everyone had a legal right to not be polluted on without your consent, the cost of identifying who polluted on you is so much higher than the potential gain in enforcing your right that the rational choice is to ignore the pollution – to just let it happen.

Violence, the first market failure we identified, is an example of an externality. Whenever someone attacks another person or steals their things, that’s a negative externality because the victim didn’t agree to be beat up and robbed.

Another thing that can be considered an externality is fraud, when someone entices you into an action by lying. While this falls into the category of information asymmetry, it also falls into the category of externality. Imagine someone left a time-bomb on your doorstep. This is an obvious case of externality – the cost to you is that you have to spend your time calling the bomb squad and the associated stress. And of course the risk of your house blowing up. Fraud is like a time-bomb. You are given some misinformation that can then metaphorically blow up in your face when you use it to make the wrong decision. If you never end up using that information, it is like a dud time-bomb – by chance it doesn’t affect you. But there was still risk that it would. So by this logic, fraud is also an externality.

I should also note something I’ve never seen written. The actions of a government are *always* externalities. By definition, a government sets up rules that affects those who aren’t government agents without their explicit permission (even in a democracy, you might not have voted for something). The way a government corrects for a negative externality is by introducing a positive one, and vice versa. It’s important to realize that it isn’t possible for a government to make a market perfect. It can only balance market failures by in essence introducing another market failure in the opposite direction. If policy makers aren’t careful, this can lead to situations where government externalities remain in place after the economic environment removes the market externality. This is one area (tho not the only one) where what was once good government policy becomes bad over time.

Sub-optimal Pareto Optima

Remember how I mentioned that not all Pareto optimal states maximize total utility? Well that’s where starting conditions come in. It stands to reason that different starting conditions can lead to different results, and this is true in the economy. If not all Pareto optimal states maximize total utility, then the market isn’t likely to get there no matter how far or close that Pareto optimal state is to a globally optimal state.

There isn’t much more to say about that in this section, except that some economists take the position that it isn’t “the place” of economists to determine which state is ideal, but I and others disagree. I’ll talk about that next post.

Imperfect But (Pareto) Optimal

Despite how important the concept of market failure is, it is generally poorly understood and misused, intentionally and unintentionally. To make sure we know that the above two categories cover all the things that are market failures, we need to know the conditions where there aren’t any market failures.

I propose that there are four properties of a market that are necessary and sufficient to lead it to always approach maximal Pareto efficiency with maximal speed:

• 1. Well defined and upheld property rights

  2. A sufficiently large number of potential market actors of a given type

  3. Actors motivated and able to act in their own self interest

  4. Actors that never reach their optimal utility (who could always be happier)

Item 1 is essentially related to externalities. If property rights of things like the air you breath were well defined and upheld, polluters would have to pay people fairly for their air that they pollute.

Item 2 relates to monopolies, which also have externalities. The economy operates on a similar basis to survival of the fittest. In biology, creatures evolve depending on random genes that either cause animals to survive and procreate or genes that prevent an animal from procreating. Without a sufficiently large population of a given creature, evolution effectively can’t happen. Similarly, without a sufficiently large number of potential entrants into a market, the economy can’t efficiently function. The varying ideas and approaches people use to compete in a market is critical for innovation to happen and market efficiency to increase. I’ll explain this more further down.

Also note that in item 2 it’s the potential market actors that matter, not the actual number who are providing a certain product. There’s a big difference between people choosing not to produce a certain product and people who are prohibited from doing it.

Item 3 relates to the importance of actors acting in their own self-interest. It’s self evident that all people (and all animals) are motivated to act in their own self-interest. Beyond this, a person must also be able to do so – and this leaves a bit of vague wiggle room for where to draw the line between “able” and “unable” here, but like most situations, there is likely shades of grey rather than a black and white line. Regardless, a good example are babies and small children, who most people agree can’t adequately act in their own self-interest, even tho they are obviously motivated in that way – as any greedy child can attest to.

Lastly, item 4 is something economists technically call local nonsatiation. If a market actor gets everything they want, they no longer need to interact in the market and so actions they could take to increase global welfare won’t happen. In real life, its pretty much impossible for this condition not to hold unless everyone reaches nirvana and lives as hermits out in the vast wilderness of Canada or if the rapture happens, so it can’t contribute to a theory of market failure and so I won’t need to talk more about this.

Now this model is much simpler and has fewer constraints than your usual econ-class situation of perfect competition and the First Fundamental Theorem of economics, and it’s much more applicable to the real world because of it. Transaction costs, imperfect information, differentiated products, imperfect factor mobility, economies of scale, network effects, and irrational actors can all exist while still tending toward maximal Pareto efficiency.

In fact, many of the conditions of perfect competition would be sub-optimal in the real world, because the costs of setting up perfect competition would vastly outweigh the benefits. An example of this is perfect information. There is a cost to getting good information, and a much higher cost to getting perfect information. By treating information as just another commodity with costs and benefits, you can eliminate an unnecessary restriction from the model of economic efficiency. A similar argument holds for other transaction costs.

The price taking behavior usually held as a condition for a Pareto optimal equilibrium has also been shown to be unnecessary in the presence of price discrimination, which happens all the time in real markets.[1][2] I’ll also talk about that more further down.

Its important to realize that the right way to measure efficiency is to find how close to the achievable optimum the current market is, rather than comparing to some magical theoretical optimum like a perfect market. While perfect competition is obviously impossible in real life in almost any market, the above four conditions can actually exist simultaneously in real markets, and a large majority of markets can get very close to satisfying all these conditions.

So any market situation that chronically prevents one of those four attributes causes a market failure. Any human-created system that exploits poorly defined property rights, restricts the number of potential entrants into market, or causes people to be unable to act in their own self interest are causing externalities and therefore market failures.

Again, the market failure left out of this analysis are ones that stem from starting conditions that lead to the “wrong” pareto optimum. Again, I’ll talk about that next post.

Ignorance, Irrationality, and Inefficiency

We can also look at this from the other direction: all the ways that a particular action can be Pareto inefficient. There are two broad categories: things in a person’s control, and things out of a person’s control.

Of the ways that are in a person’s control, there are two sub-categories:

• • inefficient actions a person does because of a lack of information (ignorance), and

  • inefficient actions a person does because of imperfect rationality (irrationality), ie they don’t use the information they have to come to the best decision.

Of the ways that are out of a person’s control, there are also two sub-categories:

• • externalities: someone else forced them to incur a cost or benefit, and

  • starting conditions: people started with a particular amount of wealth, which can lead to a globally sub-optimal Pareto-optimum.

Things that a person actively does because of lack of information can cause theoretical inefficiencies, but a person wants to have full information, and thus there isn’t a motivation for chronic market Pareto inefficiency. The market itself can evolve to give people the information they want. The only case of someone’s motivation actively causing a person to have a lack of information is fraud, which I’ve already mentioned is an externality. And finally, actions a person does because of imperfect rationality are very similar: a person wants to know they’re being irrational, but they have to be convinced that there’s a better way to analyze their situation, and that convincing can sometimes be costly enough to make it not worth it. Again, the market can evolve to give people the information needed to convince them of their irrationality if the benefit exceeds the cost.

There are certainly cases where the market will not by itself provide the information people want or the tools they need to come to rational decisions. But in this case, it can only be a case of public good – a positive externality where it isn’t feasible to properly receive full benefit for providing that information or tools.

So by this logic, I again conclude that externalities are the only cause of chronic Pareto inefficiency. And yet again, sub-optimal Pareto-optimum makes an appearance. I’m gonna continue to drag my feet on this point until next post when I’ll talk about the solution to it.

Market Failure Myths

“Its heresy worth considering” – Milton Friedman

There seem to be a lot of cases where vague definitions lead people to incorrectly conclude that a huge variety of things are market failures if anything ever deviates from the magical perfect market. There are also some concepts that are described as novel concepts, but really end up just being externalities. Here are the major culprits:

Myths from the Fantasy of Perfect Competition

A major list of supposed market failures stems from the idea that the only way a market’s equilibrium will reach Pareto efficiency is if there’s perfect competition. But economists have shown that not all the conditions of perfect competition are necessary for Pareto efficiency. And yet many people writing about economics still make this mistake.

One such misunderstanding involve incomplete markets or “missing” markets, situations where nobody is buying or selling a certain product. While a market failure may cause a market to not exist, say if there are high positive externalities, the fact a market doesn’t exist for a product isn’t a sufficient condition for market failure. The product that would be sold in such a market might just be something no one wants. Or people may not know how to create a market or the technology might not exist yet. These issues don’t prevent eventually reaching maximum utility and so aren’t market failures.

Merit and demerit goods have two definitions. One definition is something that a person under- or over-consumes because they don’t realize the true cost/benefit of it. This clearly falls into the category of lack-of-information and thus doesn’t cause market failure as described above. I talk about the other definition in the next section.

Time-inconsistent preference, also called a dynamic inconsistency, is when a person’s preferences change over time. This is either a lack of information (about their changing preferences) or irrationality (ie ignoring that they know their preferences will change) and I already described why those never lead to market failures. Similarly, information asymmetries, where one party knows more than another, has the exact same properties of either being a lack of information or irrationality. Cases of fraud are the only way that information asymmetry can be connected to a market failure, and its the fraud externality that causes that failure, not the symptom of asymmetric information.

Conflict of interest, aka the principal-agent problem, is where a person gives another person proxy rights to make decisions on their behalf and that second person (the agent) is motivated to make decisions that aren’t in the best interest of the first person (the principal). There are a few ways this can happen. One is that the agent misrepresented themselves, which is fraud and an externality. Another is that the principal didn’t know some important info about the agent or misevaluated some info, and made the mistake of using them as an agent. This second case is again the lack of information or irrationality, and so again can’t lead to a market failure. Basically, the principal-agent is important only in micro economics, not the macro economics that I’m talking about in this post.

I’ve also seen factor immobility described as a market failure. Factor immobility describes barriers to moving capital (materials, machines, etc) or barriers to people moving between jobs. In the case of people, one category is occupational immobility, related to structural unemployment, which describe barriers for a person to change to a new type of work. The other category is geographic immobility, which describes barriers for a person to move to a place where they can take a new job. For example, a person who doesn’t want to move to a new country to find a job may value their current network of friends and culture more than they would value the increased salary and satisfaction of a new job in that other country. This isn’t even a market inefficiency – those who say it is are not accounting for the real costs people have to incur to learn new skills or move to a new location. Because it doesn’t even fall into the category of market inefficiency, factor immobility can’t cause market failure. This can be generalized to any kind of good or service by treating those barriers as costs.

The Many Faces of Externality

Externality is so important to understanding market failure because the vast majority of phenomenons that cause market failure are externalities. Some writers like to build long lists of market failures. But these lists inevitably cause more confusion than they cure because most market failures talked about are actually just externalities. Erroneously talking about these things as peers of externality, rather than the special cases they are, obscures the essence of market failure. For example, I already mentioned how conflict of interest could induce fraud: an externality.

I also already talked about one definition of merit and demerit goods as something a person doesn’t realize the cost or benefit of. The second definition is a benefit given to, or a cost imposed on, everyone (e.g. basic science research is a common example of a merit good). This is also known as public goods and public “bads”. A public good is just special case of positive externality. A demerit good, where a cost is imposed on everyone, is similarly a negative externality.

Another is indivisibilities and common property. One of the conditions of perfect competition is that goods are “infinitely divisible” such that any transaction is so small that it doesn’t affect market prices and every user of a good uses their own tiny division (so there is never any sharing). An example often given for this case is public goods like a road, where many people use the road and it’s difficult to track exactly how much of that road someone used. Regardless of how possible toll-roads are, this is a generalization of a public good that can’t be divided into parts given to each consumer of that good, and thus it must be shared, not necessarily with everyone, but with among some number of people. The only market failure this indivisibility can cause is an externality.

Other Myths

Humans aren’t perfect analysis machines, and so don’t always make the best decisions even when all the information is available to them. Behavioral economists call this an internality. The common example of this is someone chronically eating too much, causing them to develop health issues. This kind of poor impulse control is essentially the result of either a lack of information or irrationality, and so is never a cause of market failure. Even so, some cases may look like an internality, but aren’t. If, for a given person, the utility they get from enjoying that amount of food now is greater than the utility they’ll lose from future health problems, then “over-eating” is a completely rational and optimal decision. Thus this case isn’t even an internality, despite what other people think is best for that “over-eater”.

I’ve even seen inequality described as a market failure. While inequality has certainly been shown to be an indicator of systemic problems in the economy, inequality is not always bad, and a certain level of income inequality is in fact a necessary result of an efficiently operating market when the people in the market have different amounts of skills and resources. You can’t expect someone with more valuable skills to earn the same amount as someone with less skills unless you underpay that first person, which would itself cause inefficiency. High levels of inequality is just a symptom of a set of more basic problems. The only case where inequality can be argued as having an objective downside is in the context of a fairness criteria like envy-freeness, in which case it’s an externality (tho that’s very debatable).

Monopoly Misunderstood

The last remaining and probably most controversial target are anti-competitive markets: monopolies and oligopolies. An anti-competitive market is a situation with either A. economic barriers to entry, where new entrants into the market must pay costs that incumbents didn’t have to pay or where new entrants will not receive benefits that incumbents did, or B. antitrust barriers to entry, where costs exist that delay new entrants from entering a market.[3] Since oligopoly is basically analogous to monopoly, I’m just going to talk about monopolies as being representative of anti-competitive markets.

Coercive monopolies (ones that keep their position using extortion, violence, government enforcement, etc) obviously always involve externalities, and so can be understood in that context without any additional concepts. Natural monopolies, on the other hand, occur in situations where cost per unit of a product significantly drops or value per unit significantly rises as more customers are served.

I was going to write a full analysis about natural monopolies in this section, but it became a bit too long and distracts from the role of government. So I’m going to write a future post about monopoly instead and just summarize my conclusions here.

I concluded that there isn’t any tendency toward the dead-weight loss that intro econ textbooks frequently talk about, and any additional profit a natural monopoly makes over a similar non-monopoly company isn’t necessarily a problem in the economic (or real) sense. Economics PhD Stephen Shmanske wrote a solid paper called The Monopoly Nonproblem on the subject of how the dead-weight loss theorized by introductory economics is unrealistic.

However, there’s still a problem. A true monopoly may be structured in such a way (intentionally or unintentionally) that competition is kept out. This imposes an opportunity-cost on current and potential competitors who might otherwise choose to compete. This results in a loss of innovation that in turn imposes an opportunity-cost on current and potential buyers in that market. Its important to realize that in judging whether a company is “keeping competition out”, a realistically achievable alternative market structure must be the bar to judge by – not some imaginary and unachievable perfect market.

The conclusion that monopolies impose an opportunity-cost on potential competitors isn’t a standard conclusion and might be controversial, but economists and non-economists both seem to agree that the lack of competition in a monopoly situation is a problem. I propose that this imposed opportunity cost is an externality, which then qualifies natural monopolies as a market failure under my definition.

I have a solution I’ll propose in my future post, but for now we can leave it that natural monopolies do cause a market failure in the form of an opportunity cost.

I should also mention that most companies that people think are natural monopolies, aren’t. It simply isn’t sufficient for a company to be dominant in a market. In fact, even most situations where only one company sells a product of a certain type aren’t cases of natural monopoly.

For example, Microsoft still dominated the personal computer market in 2007 with over 95% of personal computers being sold by them. Even today when that number is less than 20%, PC remains synonymous with Windows. But they have never been an example of a natural monopoly. Any company who wanted to create a competing operating system could write one that runs Windows programs. Yes it would have been difficult, but there were no network effects that were unavailable to competitors. And there weren’t any real economies of scale at work either.

I’ll mention more examples in my future post about monopolies. In any case, the point is that monopoly also can be broken down into either externalities or non-problems.

Conclusion

I’ve covered a lot of things in a relatively short post, all things considered. I’ve built a case that externalities and globally sub-optimal Pareto optima are the only two possible market failures and I gave conditions for a realistic Pareto-improving market.

If you’ve made it all the way through, you now know more about macro economics than 99% of the people out there.

The only appropriate role of government is to correct for market failures where the government solution is less costly than the market solution. Market failure is a concept much more specific than usually talked about, and I tried to explain those specifics as accessibly as possible. But this is only half the story. In part 2, I’m going to be much more specific about the appropriate ways the government can correct for market failures. I’ll give a definition that not only defines what conditions a government solution is appropriate, but what possible solutions are appropriate in each condition.

References

1. The Networked Economy by Roman Beck

2. The Monopoly Nonproblem by Stephen Shmanske

3. What is a Barrier to Entry by McAfee, Mialon, and Williams

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Trump’s Supercalifragilistic Tremenialidocious Plan for Making America Something Again

governology in Uncategorized August 5, 2016 1,717 Words

I’m going to take a break from the science of government to write a little bit about politics – something this blog really isn’t really about. But things are crazy right now in America, and I already wrote most of this article in rants to unnamed Facebook-friends of mine. I’ll try to keep it short.

As a libertarian who grew up democrat, the best way I have read to understand republicans is that they think more.. well.. conservatively, meaning that they’re less likely to trust or investigate outside viewpoints. Some have described republicans as, on average, more focused on fear and anxiety. The “fear” part of the equation simply manifests from a skepticism of change. While liberals tend to act out on their hopes and dreams for a different, better future, conservatives act out on their hopes for a known, familiar, and secure future. It seems that liberals and conservatives might have significantly different brain patterns. A liberal is more likely to want to use the government to bring about change, while a conservative is more likely to want to use the government to protect the lifestyles they’re comfortable with. For example, the justification for the conflict in Batman vs Superman might make more sense to a conservative than to a liberal.

And yet the GOP might be going the way of the dinosaurs as a Trump-takeover weighs heavy on the minds of many republicans. Trump’s rhetoricall plays to the psychology of fear and security. While Trump’s campaign often seems like an elaborate joke, he seems perfectly geared to say exactly what the most conservative conservatives want to hear. And this may split the party apart by strongly appealing to only half, while strongly repelling the other half. If only the Dems had a more likable candidate themselves..

Trump supporters, in fact, have many of the same frustrations as Bernie supporters. They’ve seen how traditional candidates have let the status quo more-or-less continue unimpeded. They’ve seen the opportunities available to the common people dwindle as the rich continue to get richer. They’ve seen horror story after horror story on the news of misused government, killings, and people ruined by healthcare costs.

Many people have seen a refreshingly different candidate in both Trump and Bernie. Both are willing to go against the norms of the political establishment. Both have publicly shunned donations from billionaires. Both drew unexpectedly large crowds.

And yet, I think many Trump supporters are only hearing what they want to hear. In fact, many Trump supports don’t believe he’ll follow through on his promises, but don’t care. When asked why they support Drumpf, they’re answer usually boils down to “why not?” They ask “what’s so bad about Trump?” Well…

Trump has been outright racist for decades and has called for racially directed policies, like putting all Muslims on a watch-list, even though such things would clearly violate the constitution. He’s encouraged civic violence at his rallies. He has refused to pay hundreds of people that he’s done business with. He said he hopes Russia hacks the DNC. Perhaps unsurprisingly, he’s gotten endorsements from both Russian oligarch Valdimir Putin and North Korean tyrant Kim Jong Un, and has proudly admired not only Putin and Kim Jong Un, but Saddam Hussein, China’s killings in the Tienanmen Square massacre, and Hilter as well – no joke. He has ties to the mafia. Three rape cases have been made against Trump, the most recent of which is child-rape and is still pending resolution, and the other two were settled out of court. And if somehow none of that bothers you, let’s not forget Trump wants to sleep with his daughter.

Most Trump supporters I’ve talked to even agree that he’s highly sleazy and constantly lies and flip flops. Again, that seems not to bother them. Trump supporters seem to care more about the way he says things than what he says.

But Trump has posted a plan. Or at least, a “plan”. And without further ado, I’m going to summarize Trump’s official positions for you here:

1. Mexico and the Wall

Trump plans to bully Mexico into paying for a border wall by using trade sanctions, making it illegal for banks to do business with undocumented persons, and harassing people who have and want visas.

2. China

He also plans to bully China into “fairer” trade by using more trade sanctions, banning the sale of government debt to China, changing *Chinese* subsidy-, labor-, and trade- laws (not exactly in the US president’s jurisdiction), prosecuting China as currency manipulator, increasing our military presence in the vicinity of China, and (surprise surprise) lowering corporate taxes.

The fact that China owns some US debt gives them all of zero leverage over us. They can’t just decide to call in their loans – that’s not how bonds work. So that isn’t going to help anything. Most of these actions, along with the similar actions he plans against Mexico, would sour any positive international relations we have with those countries, and could very well set the stage forwar.

3. Immigration

Trump’s immigration reform is essentially less immigration and mandatory deportation for people here illegally. Not to mention ending federal refugee programs.

He reiterates building the wall and blames mexico for unemployment, crime, and poverty in the US. He plans to triple the number of Immigration and Customs Enforcement officers, remove federal funding from cities that disagree with federal policies, implement criminal penalties for those that overstay their visa, end birthright citizenship, and require immigrants to certify that they can pay for housing, health care, and “other needs” before allowing them entry.

He plans on making using e-verify services mandatory for businesses, artificially increasing how much employees on H-1B visas much be paid to limit their employment, requiring companies to go through a process with the unemployment office before being allowed to hiring people on H-1B visas, and terminating the J-1 program for foreign youth.

His immigration policy is weirdly speckled with unrelated domestic policy too. He proposes creating a resume bank for “inner city youth” and vaguely talks about finding safer homes for orphans and improving safety in high crime neighborhoods.

But immigrants help this country’s economy and are far less likely to commit crimes while here than natural-born citizens:

His immigration policy would be bad for Americans, bad for our neighbors, and bad for our relations with other countries.

4. Health Care

His health reform stuff seems somewhat reasonable but is still incredibly disingenuous. The main item (other than repealing Obamacare) is allow sale of insurance “across state lines” – which means that an insurance company would only have to follow the laws of its resident state, not the laws of states where they sell the insurance. As far as republican ideals, this clearly violates some core tenants of states rights, but its also a terrible idea that would mean states couldn’t enact insurance-related protections for their people.

All these “policies” are just cobbled together republican talking points aimed at energizing people rather than being good plans or even feasible plans.

5. Taxes

His tax plan mentions lowering taxes across the board, simplifying the tax code, vague mentions of “adding jobs”, eliminating the inheritance tax, ending deferral of taxes on corporate income earned abroad, and reducing loopholes, all while not adding to the national debt.

This plan is demonstrably infeasible. He continues to lie about his tax plan being revenue neutral. The plan itself says it would cut “over 50%” of households from paying taxes. It would reduce the federal budget by a about 1/3 and yet he wants to reduce the deficit too. There is 0 possibility he could achieve this even if he were president for 50 years. He wants to eliminate inheritance taxes, meaning that children of billionaires wouldn’t have to pay taxes on gifts from their relatives and we’d see aristocracy soar to even higher levels.

While I can certainly agree that simplifying the would be great, he provides no insight on how he plans to accomplish that.

6. Veteran’s Administration Reforms

Trump’s plan for the VA is to allow veterans to go to any doctor that accepts medicare, increase funding for treatment of PTSD, treatment of brain trauma, suicide prevention services, and job training services, and staff VAs with OBGYN doctors and facilities. He also plans to fire the entirety of the VA’s leadership, “clean up the VA’s finances”, make it easier to make appointments and communicate with doctors using modern technology, hire more veterans at VA clinics, and create satellite VA clinics in under-served areas.

In stark contrast with the rest of his policy, these seem like almost entirely reasonable and positive ideas.

7. Second Amendment Rights

In his “protecting our second-amendment” policy, he advocates no limits on the type of weapons or ammunition people could buy, mandatory federal 5 year sentences for any crime committed using a gun, expanding mental health programs, a national right to carry a concealed weapon, and removing the ban on military carrying firearms in civilian areas.

He claims Obama’s record on violent crime is “abysmal”. Except its not. He deliberately makes no stance on background checks even tho he dedicates a whole section to meaningless rhetoric – and this isn’t the only place he does this by any means. This would have been the perfect place to address the problem of gun violence, including the epidemic of killings by police and of police, but he’s silent about that here and when he has mentioned it, he simply blames activists for decrying police shootings of unarmed people.

Conclusions

Trump’s policies are riddled with the kind of us-vs-them thinking that has so often lead to war throughout history. Almost every one of his policies vilify immigrants in some way. With the exception of his VA policy, this is by and large a set of policies that would be pretty obviously harmful if implemented. It makes one wonder: is Donald Trump is a fascist?

Its painfully obvious that Trump isn’t a writer and didn’t write any of these proposals himself. Trying to find him talking about these proposals even at the minimal level of detail written on his website is like trying to find a needle in a haystack. I would be surprised if the needle was even there.

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The Role of Government: Part 2

governology in Uncategorized September 4, 2016 3,950 Words

In my rather long previous post, I talked about the two fundamental market failures: externalities and globally sub-optimal Pareto optima. To understand this post, you really have to go back and read part 1.

Solutions to Market Failure

Because market failures are the only cases where the market can be improved upon, it stands to reason that the job of government is only to find solutions to those market failures, where feasible.

Solutions to Externality

Previously, I identified four necessary and sufficient conditions for an economy to tend toward Pareto optimality:

• 1. Well defined property rights

  2. A sufficiently large number of potential market actors of a given type

  3. Actors motivated and able to act in their own self interest

  4. Actors that never reach their optimal utility (who could always be happier)

Item 1: Externalities are caused when property rights aren’t defined specifically enough, usually because of high costs involved in doing that. But most externalities that occur naturally (without the influence of government) can be solved by a government defining property rights. So government solution #1 is defining (or redefining) and upholding property rights – determining who owns what. This is the best solution because it augments the free market, providing individuals ways of protecting their own interest. Because its basically a decentralized solution, it’s very powerful. Individuals can bring up disputes with the government organically when they arise, rather than relying on a central agency to determine where problems exist.

However in some situations, it can be costly to define property rights for individuals. For example, in the pollution case, a polluter may be affecting millions of people only a tiny bit each. In such a case, it wouldn’t be worth the cost of each of those people enforcing their property rights. And so they let the externality happen. The costs aren’t “internalized” in the behavior of the polluter, and so more polluting happens than is socially optimal. This is where solution #2 comes in: taxes and subsidies.

While, for a given polluter, it may be infeasible to know which specific individuals were affected by their pollution, it is often a lot less costly to know how much total pollution that polluter produced. By using a tax on the polluter equal to the externality imposed per unit pollution, the cost can be “internalized” (the cost can be put on the producer of that pollution). Ideally, the money collected by those taxes should go back to the people harmed by the associated negative externality, and the money used to subsidize positive externalities should come from those that benefit from that externality, tho its almost never feasible to do that very precisely.

I should mention that reversing the effects of an externality might cost more than the externality itself. That’s why it’s not appropriate to set a pollution tax at the cost of cleaning up that pollution. The appropriate thing to do is find out the cost of keeping a unit of pollution and set the tax at that rate, rather than setting a tax at the cost of removing the pollution.

Item 2: When the motivations of market actors restrict entrants into a market as I talked about with the (usually misunderstood) case of monopolies and anti-competitive markets, this imposes an opportunity cost on current and potential competitors and customers. For a tax to solve a problem, it would have to be possible to determine how much opportunity cost the monopoly is imposing on others. Since the nature of innovation is that we don’t know what improvements to make or how much value they might have, there’s no way of accurately determining what such a tax should be. A

nd even if potential value *could* be found, its unlikely a monopoly would find its way to the optimal solution on its own (ie without the power of a Darwinian competitive market).

So we have to resort to yet another form of government intervention: anti-trust market restructuring. If a government could identify a way to restructure the market such that an anti-competitive market was turned competitive, its possible that this government action would fix this opportunity externality. I should clarify that this is a very very specific type of regulation, and 99% of anti-trust government regulations are not of this type.

An example of the kind of market restructuring I’m talking about is electricity buy-back, also known as net-metering. Before net-metering, electric companies that owned their local power distribution network kept out any electric generators except large power plants. Net-metering has allowed anyone to participate in generating electricity which has opened up a huge amount of opportunity that has yet to be fully realized.

Item 3: As I mentioned last post, everyone is motivated to act in their own self interest. The only way for a person to act in a way not in their own best interests is if they have a lack of information or if they didn’t fully evaluate the information at hand. But beyond that, someone has to be *able* to act in their own self interest. For example, in the case of children, its clear they aren’t able to act in their own self interest, no matter how much theyscream and cry about it. And so rules of guardianship are needed to protect their interests.

Rules of guardianship are very similar to property rights, in that they define how guardians are chosen for wards and what a guardian can and can’t do with their wards – ideally protecting wards from externalities imposed by their guardians. Parents are responsible for almost all actions of their kid, just as they’d be in the case of a horse or a computer they own. That guardian is also responsible for treating that child humanely, as is also the case for a horse they would own (and maybe someday, an intelligent computer).

Item 4 is always true in real markets and so no solution is necessary.

One more solution has a merit in an incredibly narrow set of circumstances: nationalization, where the government takes over the operations for some kind of product or service. I’ll argue in a later post that almost all cases of nationalization are likely to be worse than solutions that focus on creating correct incentives for private competition. But nationalization has real solid merit in the areas of policing and especially national defense for 2 reasons.

1. Police and armies are a fundamental part of how a government enforces its policies. Delegating those things to private companies carries a huge risk of those companies enforcing their own private policies rather than government policies – in the most extreme case, with a coup. History has shown that the risk of violent subversion is very real and I think provides a strong case that eating the inefficiency of government programs is well worth the peace of mind of having a nationalized police and military.

2. Also, for a private military company, no war means no money. Not necessarily so for a public military, and that’s a good thing. Private armies have an infamous history, from the White Company who regularly fought on both sides of a war and raided towns in times of peace during the 1300s and the Catalan Company which annexed and ruled over large sections of Greece for 75 years because of a payment dispute, to the more modern shady doings of Executive Outcomes in South Africa in the 1990s and Blackwater (aka Xe, aka Academi) in Iraq.

Even our public police and military have the problem of itchy trigger fingers, but the problem is bound to be far worse for private companies selling violence as a service. That isn’t to say that national armies and state police have a stellar history either tho.. I might write more about that in a later post.

Solutions to Sub-optimal Pareto Optimums

This last piece that needs a solution is the problem of how to get to the right Pareto optimum. While the market has no mechanism of moving from one Pareto optimal state to another on its own (other than random chance), the Second Fundamental Theorem of welfare economics proves that Pareto optimum in a given economic environment can be moved to with a “lump-sum” redistribution of wealth – meaning a redistribution that takes place all at once. And whenever the economic environment significantly changes, another lump-sum redistribution can correct things once again. This is where welfare programs come in. I should note here that the ‘welfare’ in “welfare economics” is different from the one in “welfare programs”. Welfare economics is essentially about maximizing the total happiness (utility) of the people, whereas welfare programs is about helping the poor monetarily, hopefully increasing their utility in the process.

The progressive tax system, where those who earn more pay a higher percentage in taxes than those who earn less, is one of the major ways the government implements a redistribution of wealth. Direct welfare programs, like social security, medicare, or food stamps are another common method which fill the need for wealth redistribution not provided by a progressive tax system.

However, there is a cost to wealth redistribution. As plenty of government policy makers have said, taxes work as a deterrent (a methodology for taxes not justified by economics). The same principle applies to taxing income, and so wealth redistribution will have a negative effect on productivity.

Redistribution programs are usually designed to help the poor, but its worth mentioning when a redistribution would be beneficial more generally. If your goal is to maximize the total happiness of everyone, there are unsettling theoretical scenarios that are possible. Like lets say the economy consisted of two people and their Pareto states looked like this:

Freedom is a common rallying cry among the oppressed everywhere throughout history. But is it freedom from something? Freedom to do something? Or what?

Freedom has been defined as independence – Jefferson’s ideal of self-sustained living was an embodiment of that idea, where a free man could sustain himself on food he grows himself without relying heavily on other people or his government. Freedom has been defined as free services – the “free beer” (or free health care) kind of freedom. It’s also been defined as unrestricted activity – the ability for any person to take any action they want. Freedom has also been defined as isolation from undesirables, where a discerning individual could be free from the meddling of government, GAP, and gay people.

Freedom has taken on many meanings throughout the ages, but there are two concepts of freedom that is relevant to the context of government: freedom and freedoms. In this context, freedom (and liberty) is the degree of ability for a person to do what they want. In Milton Friedman’s words, freedom is simply the “absence of coercion”, or more accurately, a person is more free when they are subject to less coercion. A freedom, on the other hand, is the same thing as a right, which I’ll talk about further down.

This definition of freedom doesn’t suppose anything about what a person should or shouldn’t do – any restriction of action restricts freedom. But its also clear that certain actions of one individual can affect the freedoms of another. If you want to walk down a street, but I block your way, I’m restricting your freedom. But conversely, if I’m prevented from blocking your way by, say, threat of arrest or imprisonment, it preserves your freedom at the expense of mine.

From this, its obvious that it is logically impossible for everyone to be fully 100% free. One person can be given full freedom only by taking some freedom from another person. In order to have a society where everyone is equally free, there must be a way to rules that define which freedoms a person has and therefore which they don’t have. I’ve touched on this in my previous post about the role of government.

Rights and Freedoms

A right, in the common meaning, is something owed to a person. You may think people have a right to free speech, or a right to life, or a right to that pizza after a marathon. But where does a right come from? What guarantees that right? The simple and hopefully obvious answer is that a right can only come from an entity with the power to enforce that right – a government.

There has been the concept of “natural rights” that aren’t man made, derive from god, or are universal – applying to all people. But certainly there are certain people in certain areas who don’t seem to have any rights, because no one is ensuring any rights are upheld for them. The philosopher Jeremy Bentham thought that “Natural rights is simple nonsense… nonsense upon stilts” and I’m inclined to agree with him.

A person killed for speaking out against their government or killed in a genocide certainly weren’t given any rights to speak of. Neither their god nor their government protected them. A right must be upheld in some way. The free market certainly won’t do it for you, as I’ve shown in my post about market failures. And the only other mechanism is government, which can indeed protect a person’s rights if constructed properly.

So often when people say a right is universal or inalienable, natural or god given, what they really mean is that they think it should be a right. It’s only an opinion – one we can, as a society, choose to build into our government or even constitution, or choose not to.

Now we’ve all been told from time to time that freedoms aren’t absolute, with the inevitable misused quote about yelling “Fire!” in a crowded building. But a short punchy phrase like “freedom of speech” doesn’t fully describe what your freedom is or should be. It’s important to understand that for something to actually be a freedom, it must be absolute.

For example, surely no one would disagree that it should be a right to privately think anything you would like at all. Even the most disgusting, racist, immoral, or perverted thoughts, if kept entirely to one’s self, can’t possibly affect other people and thus should be entirely and completely unrestricted. In other words, we likely agree that the freedom of thought should be an absolute and unrestricted right. And we’re mostly guaranteed this right only because the government doesn’t have telepathic machines that can read your mind (yet..). But even if such telepathic machines were created, we would all surely still agree that freedom of thought should be guaranteed without exception.

Beyond that self-evident example, rights that one might say are not absolute, are actually absolute in a complicated way. The rights of people as they stand in the US, for example, are defined in great detail in the hundreds of thousands of pages of state and federal laws and regulations. The non-absolute right of something like “freedom of movement” can be made absolute if included with qualifications like “freedom to move anywhere on your own property or public property as long as someone else isn’t currently using that space,” etc etc. As the popular saying goes, my right to swing my fist ends where your face begins. The point is that rights are meticulously defined with edge cases and qualifications, and those taken together indeed define absolute freedoms – at least until the law is changed again.

There is a concept of “claim rights” vs “liberty rights”, where a claim right defines a duty another person has to the right holder, and a liberty right doesn’t have any such obligation. But with such a definition, there is no such thing as a liberty right. A right always has an obligation to someone else – otherwise no right would be needed. For example, freedom of speech obliges the government to refrain from prosecuting a person based solely on the words they say.

Another concept that is often compared to a right is a privilege. How often have you heard “its a privilege not a right”? Too often probably. The need to say such a thing stems from the inherit similarity between them. In fact, its all a matter of degree. A right is only a privilege that has been made difficult to take away. The US constitution, for example, guarantees various rights. These things are a privilege of those living under the jurisdiction of the US government. People in many other countries don’t have these privileges. In the US, these privileges are protected by the super-majorities needed for amendment and the weight of thousands of court cases that uphold the constitution as a higher law. It takes a whole lot more effort to circumvent or change a constitutional article than it does to do the same for a mere federal or state law. And this is what makes this privilege strong enough to be called a “right”.

Let me take a step back for a second and unify all this exposition. A freedom is the same thing as a right: a privilege given to a person by a government. A person with a driver’s license (and a thousand other conditions) has the right to drive on the road. Any person (under a less weighty set of conditions) has the right to free speech. They’re both currently rights, both can be potentially taken away, but the right to free speech is stronger because it derives from the constitution, which is harder to change than a person’s driver status.

Basic Rights

What most Americans talk about rights, they’re often talking about constitutional rights. What many people seem not to be aware of is that all the rights in the constitution are restrictions on government. The entire point of the constitution is to restrict what government can do. Freedom of religion protects people from being treated differently by government based on their beliefs. Freedom of speech protects people from persecution by government based on what they say. The right to bear arms prevents the government from outlawing weapons for state militias. The 13th amendment prevents the government from establishing a class of slaves. And so on down the line. The only federal amendment in the US that restricted personal freedom was the quickly repealed 18th amendment abolishing alcohol.

Too many people invoke “freedom of speech” when someone is fired from a private company for something they said, or “freedom of religion” when they want an exemption from established laws . Those people don’t seem to understand that the importance of a constitution is in limiting government, not in limiting individual citizens.

The Argument for Freedom

So now everyone should be pretty clear on the specifics of what rights and freedom mean. But what’s the justification for believing people should have freedom? Milton Friedman made an interesting point, saying:

“Is a man free to sin? If I see you about to sin, am I free to let you sin? If I know [for certain] that you’re sinning, the answer is no. The justification for freedom is that we don’t know. Who are we to judge for our fellow man? Humility, the belief that .. I can try to persuade you but I can’t force you, must ultimately rest on the recognition of the limitations of our knowledge. We don’t say that there is no such thing as sin, all we say is we can’t be sure.” – Milton Friedman

So freedom is a good ideal because we can’t know we’re right. Our opinion may be wrong, and therefore the best course of action is to respect other people’s opinions. There is no omniscient benevolent dictator we can always be sure makes the best decisions for everyone. This logically leads to truth by consensus – the only way we have to discover what’s best for people who have different needs and wants. In order to make a change, you have to have a convincing enough argument that change should be made. Even in the scientific community, which has the benefit of the scientific method, the primary way truth is determined is through consensus. The best way to be reasonably certain a hypothesis is correct is to combine the results of many experiments to ensure their results agree with that hypothesis. And while it is certainly true that consensus doesn’t always get things right, it has been repeatedly seen that groups often make more accurate estimates than individuals, on average. There is wisdom in a crowd.

And in that way, when your goal is to maximize peoples’ freedom, a democratic system is the best way of determining which freedoms to limit, where one minor limitation can prevent other major limitations. Only by asking the people directly which freedoms are appropriate to limit can we hope to approach the best laws.

But maximizing freedom is only one possible goal.

The Power of Constitutions

Whether your goal is to maximize freedom, maximize happiness, or maximize some other measure, chances are you believe that there are some freedoms that should be afforded to all people. Its important to repeat that freedom can only exist by the good grace of a government and by the same token can only exist as a limitation of that government. The limitations of a government represent the most important dimension of that government because they define what rights people have.

The modern constitution embodies this principle and defines the limitations of government in a durable way. Most modern constitutions define only the basic and most critical structures of a government. They are almost always more difficult to change than the normal code of law. Exceptions to this often lead to systemic government bloat and mismanagement (I’m looking at you, California). If our citizens understood the importance of constitutional provisions and how improving them can radically improve the behavior of government, we would be much better off.

Liberty vs the World

Another goal might be maximizing total happiness. Many people believe that when limiting freedoms leads to a better quality of life for more people, we’re justified in limiting freedoms. People who crave more security on airplanes and want the NSA to be listening to our phones and tapping our internet believe that the added security is worth giving away the freedom of privacy.

Liberty has been pitted against security in the minds of nations that are irrationally afraid, today of terrorism, yesterday of communism or witchcraft, and so on throughout history. The spectre of fear has often lead people to accept limits on not only their freedom, but their happiness as well. This was the meaning behind FDR’s famous line “the only thing we have to fear, is fear itself.” The message is that fear causes us to do stupid things, that our irrational fears lead us to hurt ourselves.

Luckily, there is a strong logic indicating that the goals of liberty and quality of life are symbiotic, where maximizing freedom almost always leads to the maximization of total happiness. But there are cases where maximizing liberty won’t lead to maximizing happiness, as I’ve talked about before.

Its worth asking yourself, what is the right thing to maximize in human society? Is it liberty? Is it happiness? Or is it something else?

My opinion is that the appropriate thing to maximize is total human happiness, but that maximizing freedom is the right way to achieve that goal. It’s much easier to determine the things that maximize peoples’ freedom than it is to determine the things that maximize happiness. But because maximizing freedom will lead people to learn what maximizes their happiness, we can focus on the easier goal (maximum freedom) in order to achieve the best approximation of the harder goal (maximizing happiness).

We should therefore construct governments to maximize our freedoms, and let the human ingenuity released by that freedom determine how to maximize our happiness.

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Governance of Governments

governology in Uncategorized November 6, 2016 2,308 Words

The idea of a unitary world government has been around quite a long time, envisioned by Ancient Egyptian kings and the Greek Stoic school of through as a world kingdom, by both the Ancient Chinese cultures of Great Unity and the 15th century Spanish “father of international law” Francisco de Vitoria as a world republic.

While thoughts of grand kingdoms and federations (governments that have sub-governments within them) are nothing new, a government that governs sovereign nations is in fact a rather new idea. It was only in 1795 when Immanuel Kant first put forth the idea of a league of nations to promote peace between states. In the 1800s, the so called Concert of Europe was a precursor to this idea. It established an informal system by which any of the four major powers that defeated Napoleon (Austria, Prussia, the Russian Empire, and the UK) could call a conference to discuss potential action to be taken. The “Concert” wasn’t really a formal organization tho – more of a joint treaty.

Bearded Monkey-Turtle symbol.

Over the course of almost 100 years between 1864 and 1949, several Geneva Conventions established protection of wounded soldiers and civilians in international armed conflicts by signers of the conventions. This lead to the development of the Red Cross as well as medical organizations with other symbols like the Red Crescent and the bizarre Red Bearded Monkey-Turtle symbol depicted at right. (Oh its supposed to be a lion and a sun? Why does a medical organization have a symbol with a sword?) And the Hauge Conventions of 1899 and 1907 established the first modern laws of war defining war crimes.

The League of Nations

Kant’s idea finally gained some purchase in 1920 after the end of World War I when the League of Nations was established. While it sounds like some kind of indestructible group of comic book super heroes, it actually had little staying power, or power of any kind as a matter of fact.

Like the Concert of Europe, it was established by and gave most of its powers to the victors of war – World War I in this case – in the form of permanent Council members (UK, France, Italy, and Japan). Like the North American Articles of Confederation, the League of Nations relied on its members to voluntarily enforce its resolutions and policies, with similar effectiveness. The United States notably refused to join the League, some countries (like Germany) were initially barred from joining, and many others only joined temporarily. Even the powers that did stay in the league didn’t trust their fate to other nations and gave themselves de facto veto power. On top of the unanimous or near-unanimous requirements for many resolutions to pass, it was incredibly difficult for the League to take any significant actions.

The League of Nations was also not really what Kant imagined when he wrote about his idea in 1975. He envisioned a world without national standing armies, where actions that would prevent peace would be prosecuted, and states would be strictly non-interventionist with other states. The League in no way promoted these kinds of ideas, and its successor has continued in the same vein.

The United Nations: Return of the League

After World War II, the international community saw the League of Nations as a failure, having been inadequate to prevent the most catastrophic war in history. The United Nations was created in its wake (or more accurately, in itsdowndraft) in 1945, after being pushed by US president FDR. It became yet another council of victors, this time the victors of WWII.

The UN charter talks a big talk, having been created for no less than saving “succeeding generations from the scourge of war”. It’s made up of representatives appointed by the its member nations and occasionally calls troops together for peacekeeping missions.

Strangely, much of the UN charter concerns itself with what the UN is or is not allowed to talk about, even prohibiting the General Assembly from making recommendations during disputes unless the Security Council requests it. The UN charter is a word salad of by and large redundant and meaningless legalese which can be summed up by the following three real powers of the UN:

• • Funding studies (Articles 13 and 62)

  • “interruption” of economic relations, communication, and diplomatic relations (Article 41)

  • demonstrations, blockade, and “other operations by air, sea, or land forces” (Article 42)

All the other articles and provisions relate to what the UN can and cannot talk about or recommend, and various procedures – ie things that aren’t powers. Honestly, the number of times I read “the such-and-such body may make recommendations about such-and-such” makes a person want to shoot themselves.

The UN is also a system that builds in second-class nations. Similar to the League of nations, there are five permanent members of the UN Security Council: China, France, Russia, the UK, and the US. And substantive action (articles 41 or 42) require the unanimous support of each of those five nations. The hypocrisy of this is palpable when compared with point 1 in article 2 of the UN charter stating “the Organization is based on the principle of the sovereign equality of all its Members.”

Chapter II of the UN charter makes it clear that any but the permanent members only have representation as long as the General Assembly or Security Council says so. Chapter IV and V makes it clear that some countries are subordinate to others – only some countries get the privilege of being in the Security Council.

And there are real benefits to the governments of nations that are elected to the Security Council. “They get more US and UN aid, better terms and more programs at the IMF, World Bank, and a host of other institutions. Many leaders .. prefer to sell this influence.”[1] While more aid and better terms sounds good, that aid is usually exploited by autocratic governments to tighten their stranglehold on their people. Nations that are part of the security council become less democratic, see more restrictions on freedom of the press than other nations, and see their economy grow an average of 1.2% slower. Its clear that influence in the UN is used as just another commodity to be bought and sold by oppressive governments.

While all members of the UN are ostensibly bound to “settle their international disputes by peaceful means“, the United States and other nations were allowed to go forward with invasions of Afghanistan and Iraq without any significant UN response. “The Security Council shall duly take account of failure to comply with such provisional measures.” – Quite the threat! I’m sure all the members that have ignored UN provisions (including the US) are quaking in their boots.

The UN, rather than being any kind of government is instead a forum where the governments of the world can come together and talk. In this way, it’s a success. It’s also successfully given flat earthers something to talk about. It has provided a place for countries to voice their concerns and discuss their feelings. And it has has modest successes as a kind of government funded non-profit institution. But the UN itself has no significant real power.

The problems of the UN are eerily similar to the problems of the League of Nations and the American Articles of Confederation in that its membersrarely pay their dues in full and on time, it relies on requesting that nations provide them with military and other resources, there’s no executive office to enforce treaties, and there’s no central court to settle disputes between nations. The UN can act only when it can convince nations to act for it.

There is the International Criminal Court (ICC), which has the power to sentence convicted persons with imprisonment, fines, or confiscation of property (via the Rome Statute). But the court has no jurisdiction to challenge the actions of the UN and the court has no way of enforcing its judgments other than by voluntary cooperation of a national government or the UN. The ICC also generally only has jurisdiction over its members, but 1/3 of the world’s nations are not members, including the US and China.

The ICC has only convicted three individuals, all from Congo, and in each case national authorities (either in Congo or in Belgium) made the arrests and handed them over to the ICC. All were cases where the individuals in question were already seen as enemies of the state of Congo. In cases where indicted persons hold good standing in their own government, there has been no cooperation and the ICC has no way of correcting that.

To use the dimensions of government to describe the UN, it has a moderate number of leaders, very little representation of the people, no separation of powers, unclear but very broad limitation of powers, very high level of agreement needed for action, and almost no coupling to its sub-governments – the nations of the world. The fact that UN representatives are appointed rather than voted in is especially troubling for a body claiming to advance the interests of democracy. This dichotomy of attributes means that the UN will have consistently unfair policies, applied haphazardly among the small number of various cases it ends up dealing with. And this is exactly what we’ve seen the UN do – mostly nothing, but when it does act, it picks and chooses the violations to take action on based on politics rather than rule of law.

By my account, the UN is only a modest success in providing a forum for international discussion, but is a massive failure in terms of prevention of international violence and war. For example, in Bosnia in 1995, 600 Dutch troops sent UN peacekeepers who watched 8,000 men and boys slaughtered without taking any action.

And its easy to see why. The UN is, by any respect, hardly even a government.

International Law

The following video is a good description of the current state of international law – a patchwork of treaties between various nations (which are like statues) and uncodified “common custom” (which are like common law) created between nations and also by thousands of tiny international organizations:

The current laws of war are a hodge podge of laws and custom created with a rather odd methodology. The ruling for Ryuichi Shimoda et al. v. The State noted that:

“International law of war is not formulated simply on the basis of humanitarian feelings. It has as its basis both considerations of military necessity and effectiveness, and humanitarian considerations, and is formulated on a balance of these two factors… [T]he use of a certain weapon, great as its inhuman result may be, need not be prohibited by international law if it has a great military effect.“

Part of the odd nature of this philosophy is that weapons that kill are preferred over weapons that wound, the idea being that more suffering is caused by weapons that wound and don’t kill. Also, this methodology seems to assume that the side that should win a war is the side with the better military. Certainly this is better than nothing – the international laws stemming from this philosophy limit the very worst of war. But why allow any war at all?

The Next Leap

It’s clear we’ve failed to keep the peace internationally and that we, as humanity, have no way to ensure any kinds of humanitarian standards to all people. Countless unchecked government violence of all kinds is perpetrated worldwide, by and to rich and poor nations alike. Over 7 million people have died in genocides since 1960. Over 130 civil wars have been started since 1950 (20 of which are still ongoing as of 2016). Over 100,000 people have been dying every year in armed conflict recently. This all points to the failure of the UN to achieve its primary purpose: preventing war.

Currently when nations disagree, there is often very little to prevent them from attacking each other. Our best deterrent to war these days is the win-win dynamics of international free trade (and the corresponding lose-lose dynamics of war) and the principle of mutually assured destruction via nuclear weapons. Worse yet, civil wars are almost always either ignored by the rest of the world, or are used as political playgrounds where countries choose which side(s) to send weapons and resources. Rather than putting any effort into stopping civil wars, nations of the world simply put more fuelon the fire and watch it burn.

While deaths in armed conflict has drastically decreased since the 1970s, the fact that we haven’t had a third World War speaks far more to the power ofdemocratization and globalization than it does to any imagined success of the United Nations.

I talked briefly in a previous post about the power of federations to foster peace and cooperation. Peace has only become the norm in areas with a stable government that uses force to prevent violence. In the international theater, there is no such government. What we need is a democratic international federation in order to enforce world peace.

I propose an international government with the modern three branches of government (legislative, judicial, and executive), each with officials elected directly by the residents of all nations in the world. Most importantly, this government would be limited to creating and enforcing policy only on government agents.

“I advocate world government because I am convinced that there is no other possible way of eliminating the most terrible danger in which man has ever found himself. The objective of avoiding total destruction must have priority over any other objective.” – Albert Einstein, 1948

In my next post, I’ll discuss ideas on how to achieve world peace, and justify that an international government is the only credible way to do it.

References

• 1. The Dictator’s Handbook by De Mesquita and Smith, page 179-180

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How to Achieve World Peace: A Guide

governology in Uncategorized December 5, 2016 2,075 Words

World peace is on the bucket list of every religious leader, politician, andbeauty pageant contestant. And yet, while many have worked tirelessly to promote peace, humanity has failed to come up with a convincing theory for how to achieve it. The best we’ve done is come with with ideas for how to “advance the agenda of peace”. Ideas like foreign aid, charity work through building infrastructure or teaching in other countries, the non-violent protest movement, UN mediation, and traditional diplomacy have all played their part in shaping a more peaceful world.

“There is no instance of a country having benefited from prolonged warfare” – Sun Tzu, The Art of War

And the world does seem to be getting more peaceful. Violence per capita of all kinds is far less than it was 20 or 50 years ago. There is also strong evidence that politically competitive large-coalition Democracies are far more stable than dictatorships and that strong factors motivate elites in a dictatorship to expand their coalition. Because of this, it may very well be inevitable that every country becomes a stable democracy of some kind.

But we still have the threat of nuclear annihilation, which is culturally accepted as the most likely way humanity may go extinct. Civil wars are still rampant (20 are ongoing as of this writing). And while we have gotten better at diplomacy, we have no framework for ensuring that major conflicts are resolved and no framework for ensuring the nations of the world are equipped to deal with conflicts peacefully. In the next few paragraphs I’ll lay out the few unsatisfying theories and ideologies that exist before explaining how the world can achieve lasting peace.

Peace out of Reach

There have been many ideas surrounding world peace and how to achieve it. Sending all the politicians to the moon is a particularly enticing one.

Some take the position that if we all only learned and preached a set of basic human rights, we will achieve world peace. This idea is incredibly naive. In fact, most human rights are things every human naturally believes they have until taught differently by stark realities in their environment. Everyone believes they have the right to speak and think when they want until a tyrant teaches them to fear it. As I talked about in a previous post, rights don’t just happen if you believe hard enough. Governments grant and uphold rights, and they can just as easily refuse to uphold them.

Similarly, the idea that preaching ideologies or even religions that promote peace is the key. This is equally naive. It isn’t the peaceful converted we have to worry about, but those that benefit from violence.

Some think if we only taught the knowledge of how to create peaceful countries to the leaders of those countries, we could then achieve world peace. But as shown in the books Why Nations Fail (by Acemoglu and Robsinson) and The Dictator’s Handbook (by De Mequita and Smith), the leaders of many countries in the world intentionally create environments that breed poverty and violence, to their own personal benefit. So we can’t rely on simple education to solve the worlds problems.

Various political ideologies claim that they will bring about world peace (without much logical support). Ideologies such as Marxist Communism have made many claims, not least of which that it will somehow bring about world peace. Left out is a logical reason that peace would be a consequence.

Mutually assured destruction is yet another theory of peace. The idea is that we won’t fight with weapons beyond a certain grade because of the fear of retaliation. While this seems to have more or less worked in practice, the logical grounds are shaky. It relies on many assumptions about the states involved, including that states are rational, feel the imperative to survive, and are aware of who initiates a nuclear attack. It also relies on the idea that defending a nuclear attack is impossible. Many of these assumptions can be easily violated in the future, and therefore this theory is again unsatisfying. Beyond this, it only applies to weapons of mass destruction, and not to more conventional violence. It would be a tense peace at best.

It is often claimed that democracies rarely wage war against each other, and thus making every country a democracy would bring about world peace. But democracies have in fact waged war against each other in both the more distant and very recent past (e.g. Russia and Ukraine). Now, it is true that Russia’s democracy isn’t very representative, and that giving the people more power there could help. While Democracies may fight fewer wars and their stability would also reduce civil wars, turning every country into a democracy may only lower the likelihood of war. And this by itself doesn’t explain how we help foster democracies.

Along the same lines, some (like the Economic Norms Theory) conjecture that capitalism, free trade, and globalization will bring about world peace. While its undeniable that it has certainly helped bring the world together, this theory is unsatisfying because it gives no guidance on how to reach that free trade. It also relies on the idea that countries are always better off by cooperating in a free market. Unfortunately this isn’t always true – the domination (via war) of one country over another can often make the winning country better off than it would be with free trade, at least in the short run. The best this can do is lower the likelihood of war, and doesn’t stand a chance of eliminating war.

Some believe that only some people are ready for world peace – only some people are peaceful – and that to achieve world peace, we have to somehowchange our society to produce only peaceful people. This too is naive: the idea that somehow some people are inherently more peaceful and we just need to create those people. All people get upset at injustices, feel the urge to defend themselves when attacked, and become desperate when they can’t meet their basic needs. All people can be corrupted by the persuit of power. World violence occurs not because we are breeding violent people, but because we are creating violent environments.

World Peace and Where to find It

And that may be part of the solution – limiting violent environments. If everyone grows up and lives in environments that motivate peace and provide no motivation for violence, we may indeed achieve world peace. But how do we create such environments? The governments of the world all create environments that breed various levels of violence. But by and large, nations with pluralistic governments have created environments where war almost never happens within them.

Countries like the United States, France, England, and Australia have achieved widespread political stability, with only the US having had a civil war since its democracy was established (it should be noted that it was not an entirely pluarlistic democracy given its subjugation of black peoples in the south). This is not simply a property of democracies, as many “democracies” can be pointed to that have had more recent civil wars. But only “democracies” with corrupt elections and other significantly non-pluralistic behaviors have had such upheavals. In areas where political power is spread very evenly throughout the population, you see widespread peace.

This concept of achieving a local peace via pluralistic institutions can be easily extended into a theory of achieving world peace. To achieve a lasting local peace, pluralistic institutions must be set up that govern a locality. Therefore to achieve world peace, pluralistic institutions must be set up to govern the world.

I’m talking about an international government.

“There is only one path to peace and security: the path of supranational organization.” – Albert Einstein, 1948

Some of you might be saying “we have have the UN already, and that hasn’t brought about world peace” and you’d be right. But the UN doesn’t satisfy the simple criteria for achieving world peace. It isn’t pluralistic – when was the last time you voted for a UN official? It also doesn’t have much ability to govern the world. It is a weak institution by design – as the elites in the most powerful nations have felt threatened by a world government more powerful (or less powerless) than the UN. I gave a brief overview of the history of the UN in my last post.

In my last post, I put forth the idea that world peace will only be achieved when peace is enforced by a world government. But this government need not be an all powerful institution that rules over every person. In my post about the rise of modern democracy, I recounted how federations often fostered a lasting peace between the member states of that federation. These ideas can combine to lead us toward a meaningful plan toward finally achieving world peace. An International Federation.

Convincing the Old Guard

To be accepted by the current leaders of the world, such a government would have to walk the line between having true power to enforce international laws while at the same time not threatening the power of national governments. This is achievable by using well understood governmental theories – a limited government of checks and balances. Two major limitations of such a government would dispel almost any fears that the leaders of national governments might have. These limitations are:

• 1. that the international government only be able to create laws limiting the coercive force of governments (and not able to create laws that any nation’s citizens are required to follow), and

  2. by requiring a high percentage majority agreement in order to pass a law (say a 70% majority agreement).

Governments can be secure in their sovereignty knowing that this international government can’t create laws that directly affect their citizens.

At the same time, representatives of this international government must be elected by the people directly, this is the only way a government can be pluralistic and therefore prevent destabilizing uprisings. As a government that creates laws affecting the entirety of the world’s people, it would make sense to have a higher level of agreement needed to create laws in the international congress. I suggest a 70% agreement. This would mean fewer laws would be created and that those laws would be of a higher quality – law that more people and nations agree with. And knowing that such a high level of agreement is required, national governments can be secure in their sovereignty without UN-style veto powers.

While the limiting of coercive force will be a far bigger concern for authoritarian nations than democratic ones, few authoritarian nations are powerful enough to resist a coalition of the most powerful democracies (tho perhaps the governments of China and Russia are exceptions). Since the international government is likely to focus on the most heinous of crimes, democratic governments (which are much more internally peacefull) will be less likely to feel threatened by this power of an international government.

Importantly, such a government must also have the power to enforce its policies, without relying on voluntary cooperation of its member nations. Therefore it must be able to gather taxes from countries and requisition an army from the nations of the world to enforce its laws.

With such a system, it would be simple to create a mediation framework for disputes between nations and to simply outlaw one nation attacking another without the authority of the international government. If an act of war does happen, the full force of the rest of the world will be there to enforce consequences in response to such an act.

The road to peace need not be meandering and slow. Creating an international government can be non-threatening and even attractive to the most powerful countries in the world, while at the same time providing a framework for limiting the power of governments large and small.

Its possible that some kind of devastating war would be necessary to convince people and nations that a stronger world government is needed. Perhaps this means that we are powerless to prevent WWIII, but by putting forth this idea now, we may be able to prevent WWIV and finally bring about a permanent state of peace and prosperity.

In the next few posts, I’ll be going over the main characteristics that would make an ideal International Federation before posting a full constitution detailing its workings.

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Constitutional Borders

governology in Uncategorized February 20, 2017 876 Words

Recently, Trump’s travel ban disrupted the lives of about 90,000 peopletraveling to or returning to the US. Most of these people were non-citizens, but many were in fact citizens. For example, a US-born NASA scientist and US citizen named Sidd Bikkannvar was recently detained at the airport by Border Patrol agents while returning from Chile, almost certainly because of his skin color since Chile wasn’t even part of the travel ban. Despite the fact that the agents had no charges to bring and no probable cause, they searched him and seized his phone and demanded his password to unlock the phone. The phone was owned by NASA and Sidd was responsible for keeping the sensitive information on it out of unauthorized hands. Eventually, Sidd relented and gave them his password, because that was the only way he could go home.

State of the Absurdity

Now, if Sidd was inside the United States, there would be no question that such action was unconstitutional search, seizure, and detainment. But it has been often argued that the US constitution only has jurisdiction within the US. Non-citizens outside the boundaries of the US usually aren’t afforded constitutional rights by the military or any other US government agency. And while we may imagine that the constitution travels with citizens abroad, in practice, those citizens have often been unable to have their rights enforced or obtain reparations when their rights have been violated by the US government abroad.

While this may seem to make sense – of course the US government doesn’t have jurisdiction outside the US – in reality, this is a logical inconsistency. If the US doesn’t have jurisdiction outside the US, it shouldn’t have *any* ability to act outside its borders, which would mean the US is *more* constrained outside its borders than it is within, not less. But courts seem happy to maintain this logical contradiction in rulings such as the refusal to hear a lawsuit brought by a quickly-exonerated terror-suspect who is also a UC citizen when he claimed an FBI agent tortured him.

The story becomes even hazier when considering US territories that aren’t states. The infamous “insular cases” were a series of supreme court cases in 1901 that decided that full constitutional protection does not extend to unincorporated territories, like Puerto Rico and Guam. Instead, courts pick and choose which constitutional provisions to uphold in those places. This is the reason that people in territories like that pay federal taxes, but have no voting representation in the federal congress.

Constitutional Application

All this constitutional gray area comes from one source: political expediency. The government often tries to get away with grabbing more power for itself where the public will bear it, and there is no easier target than non-citizens who can’t vote. The absurdity of a pick-and-choose mentality for constitutional application is made clear when we consider what a constitution is and what constitutional rights are.

As I’ve said in more detail in a previous post, a constitutional right isn’t something a citizen possesses per se. Constitutional provisions (including the bill of rights) do not give individuals rights directly, rather they take *away* the rights of our government to perform certain actions. For example, the first amendment does not give you the right to say anything you want without consequence, rather it prevents the government from taking action against a person based on the content of ideas they communicate. A constitution, in short, is a document limiting the actions of the government it is part of.

A case currently (as of Feb 21 2017) being heard by the supreme court is the case of 15-year-old Sergio Hernandez who was shot and killed in Mexico by a border patrol agent in the US. Its disappointing to note that the Supreme Court seems “divided” on this issue at the moment. The idea that somehow the US government is not bound by the constitution outside its boundaries is ludicrous. Either the border patrol agent is acting as a government agent, in which case he is bound by the constitution, or he’s acting as a free agent, in which case the border patrol agent is liable for murder or man slaughter in either the US or Mexico. The answer simply cannot be “none of the above.” Will update when the case is decided.

Nowhere in the constitution does it say that only citizens are afforded any rights. Therefore, it is simply criminal that our supreme court has long held a pick-and-choose stance on upholding constitutional provisions outside the borders of the US proper including in US protectorates.

It’s absurd that the constitution somehow ends at the US border, or in fact anywhere. The US constitution should be in full effect anywhere in the galaxy that the US government goes. Think of the constitution like a magical document that imbues life into the US government. Without that document, the US government doesn’t exist. Therefore how can some of it not apply somewhere that the US government is occupying?

Whether in the middle east, or in the middle of Kansas, every person (citizen or not) that deals with the US government should be afforded the rights the constitution provides. It is logically inconsistent and morally bankrupt to treat the constitution in any other way.

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An International Federation: Part 1

governology in Uncategorized March 11, 2017 1,526 Words

In a recent post, I talked about how to achieve world peace by creating an international federation binding all the worlds nations to common laws. In this and the next couple posts, I’ll describe what would make a good, feasible world government.

I should reiterate that this needs to be a very limited world government. I’m not proposing a single unitary government that creates laws for everyone – that would be a worst case scenario. A strong centralized all-encompassing world government would mean there would be no place you could go to escape tyrannical laws but the sky, effectively creating the same problem for laws that a monopoly creates for a product. Because of that, the international government should only be allowed to bind and enforce laws on government officials, leaving the regulation of normal residents to national governments.

Widespread Agreement

One critical aspect of an international government is ensuring widespread agreement before laws are passed. Harmful laws cause much more harm than beneficial laws can prevent, therefore we should ensure laws may only be created when as many people (and type of people) as possible agree to it, while still allowing law creation to be feasible.

What follows from that logic is that laws should only be passed by super-majorities. I’ll be writing more about the importance of super-majorities in a later post, but for now I’ll just say that simple 50% majorities aren’t so great because they maximize the effect of “tyranny of the majority”. I propose a 66% level of agreement, so that creating harmful laws will be much harder.

Furthermore, similar to the two-house US congress, this agreement should require both a vote count where each member nation is counted equally and a vote count where each member nation is weighted by their population. This will further protect minority opinions from being marginalized by ensuring that both dense-population countries and sparse-population countries (which often have very different interests) have the power to prevent laws that will harm them (while not giving those minority constituencies any power to create laws on their own).

Constitutional changes should require even more agreement, because it’s the foundation of the government. I propose that there should be multiple ways to make constitutional change. A direct 80% vote by the people of the world would be one way, and then various combinations of agreement between the world’s people, national governments, and the international congress should allow for lower levels of requirement from each. For example, if 2/3 of the international congress, 2/3 of national governments, and 2/3 of the world’s people agree, a constitutional change should be warranted. This allows for easier constitutional change when its clear there is widespread support at every level, while making it harder but possible for constitutional change to happen when only the international congress or only national governments disagree.

Because constitutional change is and should remain difficult, I also propose a middle-ground legal device I call a Limitation. If the international congress passes a law that only limits the activities of the international government, it should be able to pass by a simple majority agreement at minimum and repealing that limitation would require a higher level of agreement than it was passed with. For example, if the international congress wanted to prevent future international congresses from passing laws of a certain kind, and passed a bill to do that with a 75% vote, then another 75% vote would be required to repeal it. This would allow the international government to limit itself in a more durable way than a normal law, but in an easier and less durable way than a constitutional amendment.

“The State exists for man, not man for the State… The State should be our servant; we should not be slaves of the State.” – Albert Einstein

Critically, and unlike the United Nations, this international government must be one where the power derives directly from the people. The heads of each major branch of the international government must be elected directly by the people of the world. The people should also have the power to call a vote and enact legislation with the same agreement requirements the legislature has. The people and national governments should have the power to call trials against any national government officials or officials of the international government as well. These powers would allow the people a legal way to take matters into their own hands when the international government fails to.

Understandable Law

An understandable code of law is incredibly important. Even if all created laws were good laws, each additional law has a compounding cost on society. The more laws a society has, the more everything costs: more resources must be spent on enforcement, court cases, lawyer fees, accountants. Not only that, but if the code of law is expressed in an overly complicated way, people can’t even follow the law if they tried when the law is too large to understand.

Because politicians usually find it more politically advantageous to create new law than repeal bad existing laws, repealing laws should be easier than than enacting new law so that bad laws don’t pile up over the decades and centuries like they have in almost every modern nation. I propose that repealing a law should only require a simple majority agreement (while creating a law would require a super-majority as mentioned above).

Even with making repealing laws easier, new law may still outpace repeals, and so I also propose a hard limit of 50,000 words in the international code of law (about 160 pages). This requirement limits the complexity that international law can take on, allowing anyone to be able to understand the entire legal code.

Another way to support a smaller and more understandable code of law is the concept of constitutional and legal literalism (aka strict constructionism). This is simply another way of saying that “rule of law” is better than “rule of men”. This is not to say we should blindly follow the words of the law without considering their intended meaning, but that we should not reinterpret laws based on the whims of the current cultural or political climate, but rather interpret laws how they were intended to mean when they were written.

“The Rule of Law requires that administrative discretion … must always be subject to review by an independent court which is not an instrument of … the aims of current governmental policy.” – Frederick Hayek

If we want a law to change, we should use the legislature to change it. Allowing courts to “legislate from the bench” inevitably erodes the laws and constitutional provisions that have been painstakingly fought for. The current state of law in most countries where decades of court precedent is required to understand any given law is not sustainable, and is diametrically opposed to the clear understanding of law. Therefore both the constitution and international code of law should be interpreted with the meaning they held when they were written, and to change that meaning should necessarily require legislative action. Any vagueness in a law should be interpreted to the benefit of a defendant, giving legislatures a good reason to make fewer, but clearer general laws, rather than countless overly-specific laws that inevitably leave legal gray areas.

Laws should also be discussed before they’re passed, not only by the legislature, but by the international community. That way the international community can discuss problems and issues with the bill without feeling rushed or caught by surprise. A bill should be officially declared in full-text at least 2 months before it can be voted on in the legislature, and then must be voted on as-it-was when it was declared. While executive action may call for swift action, there is no good reason to rush legislation through. “Emergency” legislation is always a bad idea, for the simple reason that only a specific situation can require swift action, and legislation is by definition situation-agnostic because it applies generally to a potentially infinite number of future situations.

Each law should not only be thought out methodically and exhaustively before being passed, but laws should be passed by people who are as normal as possible. Being a representative in the international congress shouldn’t require you to be rich and powerful already, and shouldn’t make you incredibly rich or powerful if you become one. One way to help this process along is to require very limited congressional sessions. I propose that congress can meet at most 1 month out of the year. That way those congress people can go back to their normal lives and have normal jobs that keeps them in touch with the normal world the rest of us live in.

Summary

The international government should be a limited democracy where power derives from the people, but should maintain strict rule of law (vs rule of men) that is written in a way that any person can understand. I’ve touched on a few major attributes that an international government should have, and I’ll conclude this discussion in my next post, along with a full international constitution.

“Mankind can be saved only if a supranational system, based on law, is created to eliminate the methods of brute force.” – Albert Einstein, 1950

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An International Federation: Part 2

governology in Uncategorized April 13, 2017 7,856 Words

“Mankind can be saved only if a supranational system, based on law, is created to eliminate the methods of brute force.” – Albert Einstein, 1950

In my last post, I discussed some important aspects of an international government: that such a government should derive its power from the widespread agreement of the people via super-majority votes, and must foster an international law that is understandable to everyone. In this post, I’ll talk about points of enforcement and the structure of such a government, concluding with a full and finished draft of a constitution for an International Federation.

Enforcement

The enforcement of international laws will naturally require a trial process to determine culpability. I propose a multi-phase trial process that requires reasonable proof from the accusers before action can be taken against someone. The first two phases are a hearing and trial that have no defense and where the defendant is not present. If no reasonable doubt is found in those phases, the last phase is moved to, which is a more traditional jury trial with a defense and prosecution. This way, no one can be even brought to trial or detained without proven evidence against them.

And the most important feature needed to ensure a fair international government is that the officials of the international government are tightly bound to follow the international constitution. Any official found to have violated the constitution should have serious consequences brought against them. The erosion of constitutional rights and provisions in modern governments gives another set of data-points showing that a law without consequences for being broken is a law that will be repeatedly broken. Officials of an international government should be held responsible when they violate the international constitution or international laws themselves. Sovereign immunity is a concept that needs to die in a fire.

“Anybody who really wants to abolish war must resolutely declare himself in favor of his own country’s resigning a portion of its sovereignty in favor of international institutions… [In] case of dispute, to the award of an international court.” – Albert Einstein, 1932

Beyond established nations, international law should apply to any organization that independently enforces policy through the use of coercion or the threat of violence. This is what I defined as a government in my very first post. It wouldn’t make sense to punish a government for the actions of people it can’t control, and by the same token it wouldn’t make sense to give a pass to non-national organizations that no other government has control over. Therefore, any organization that can intimidate, imprison, or prosecute punishments on people should be beholden to international law. By treating organizations like ISIS, Al Qaeda, and revolutionary war lords as governments, we would put them under the jurisdiction of international law – something that is necessary if we want to eliminate wars and mass violence.

Branches

This international government should be a modern three-branch government with the legislative, executive, and judicial branches, where the Executive only acts on laws passed by the legislature and in ways warranted by the judicial branch, so that this separation of powers will cause laws to be applied fairly.

The Legislative Branch

The international congress should be the only branch that can create law. The laws this congress are able to make should be strictly restricted to limiting the powers of national governments (or the international government itself), resolving disputes, and requiring resources necessary to run the international government.

The IF (International Federation) should be able to create laws limiting the use of coercion so that things like genocide and false imprisonment can be outlawed. The IF should be able to limit methods of selection of officials, so that fair elections can be required. The IF should also be able to limit itself, so that fair IF policy can be codified.

In addition, an international government needs resources to be able to function. Rather than creating an international IRS, the IF should be able to tax nations as a whole by taking a percentage of the total revenue each nation collects from its people. And the IF should have the power to require the maintenance and use of national military forces in order to enforce its policies.

Lastly, the IF should be able to create law resolving disputes that arise in interaction between national governments and other international entities, so that there is a common court for treaties to be upheld in, and so that peaceful alternatives to civil war can be codified.

The Executive Branch

The President of the IF should be the only branch that enforces law. The Executive’s job is to organize election of IF officials, investigate breaches of international law, administer sentences of trial convictions. This executive branch should only be able to compel someone to do something at the order of the court via a warrant or conviction.

The executive branch should not be able to make the decision as to when military action is justified and should not be able to take military action without authorization from the judicial branch.

The Judicial Branch

The international supreme court should be the only branch that can judge whether a law was broken and what appropriate remedies must be administered. Court precedent should be used with civil law standards (as opposed to common law standards) so that “legislation from the bench” doesn’t happen and law is kept understandable and clear via statutes alone.

The judicial branch should be the only branch that has the power to authorize the president to search, temporarily seize property, or detain individuals. If military action is needed, it should be the judicial branch that decides that, not the executive branch that has the power to wield the military.

Conclusion

“Everything that is done in international affairs must be done from the following viewpoint: Will it help or hinder the establishment of world government?” – Albert Einstein, 1946

To summarize this government in terms of the six dimensions of government, the international government I have described would have a large number of leaders, with very wide representation, clear separation of powers, very limited powers, a very high required level of agreement, and very weak coupling of sub-governments. This will naturally lead to a government with consistently applied and stable policies which acts in the interests of the overwhelming majority of the world’s people, protects minority interests, and allows a wide variety of legal codes among its member nations. It will also be a government that acts far less often (than national governments), only when necessary to maintain peace among nations and due process of law, making it an inexpensive and unobtrusive government.

It may seem a daunting or even impossible task. But throughout history, we have seen larger and larger governmental bodies come to be and thrive. Large countries like the relatively recent United States and Germany alongside supranational organizations like the European Union are federal organizations of a size never before seen. If I may quote Einstein yet again, “if the idea of a world government is not realistic, then there is only one realistic view of our future: whole-sale destruction of man by man.“ And as the great Nelson Mandella said: “everything seems impossible until its done.”

Without further ado, here is my draft of an International Constitution along these lines:

Constitution for the International Federation

Goals and Intentions of this constitution

The International Federation is formed in order to encourage world prosperity, to prevent crimes against humanity, and to bring about world peace.

To that end, the goal of this constitution is to create a very limited international government that has the power to bring order to the world while preserving the rights of every nation to control their own affairs and their own resources.

This constitution acknowledges the fact that laws can never be perfectly enforceable and that the people in power are fallible and might have an agenda that is at odds with the general good of the world. Part of the intention of this constitution is to encourage an environment where the motivations for these conflicting personal agendas are minimized and the motivations and incentives to improve the world as a whole are maximized in the long run.

The constitution is intended to provide a framework for creating international law that allows different nations the ability to have drastically different laws, so that the people of the world may have a variety of choices in what laws they want to live under.

Terms:

Use of force – Coercive, punitive, or arbitrary force used on a human (non-consensual search, seizure, or harm of property, physical harm, torture, confinement, execution, terrorism, battle, or any credible threat of any of the previous, etc).

Authority of force – A significant monopoly over use of force.

Rationale for term – Critical for defining boundaries of international entities.

International entity – Any individual or organization, that exhibits authority of force over people independently from the authority of any government other than the IF. The International Federation itself is an International entity.

Rationale for term – Needed for describing the external bodies that the international government has jurisdiction over. Is intentionally general in order to encompass groups that would not normally claim to be governments, but would have the ability to escape justice without the IF having jurisdiction over them.

Recognized nation – Any international entity that has maintained a population of at least 1 million and the same definite borders for at least 5 years.

Rationale for term – Needed for describing the governing bodies that are eligible for representation in the international government.

National vote count – A national vote count gives each recognized nationequal weight. In IF congress, 1 vote is counted total for a nation’s senators (so senators of nations with more than one senator get fractional votes). In IF-related votes where governments of recognized nations are voting, each vote is given a weight of 1. In votes by the people of recognized nations, each individual vote is given a weight of 1 divided by the number of people from the nation they reside in who cast a vote for the issue in question.

Popular vote count – A popular vote count gives recognized nations weight proportional to their population. In IF congress, 1 vote is counted for arecognized nation’s senators in total per 1% of the population the recognized nation contains (senators of nations with more than one senator get fractional votes), and then that vote count is multiplied by the most recent official population count for that recognized nation. In IF-related votes where governments of recognized nations are voting, each vote is given a weight of the most recent official population count. In votes by the people of recognized nations, each individual vote is given a weight of the most recent official population count divided by the number of people from the nation they reside in who cast a vote for the issue in question.

X% agreement – For representatives elected by a proportional vote, this is when both the national vote count and popular vote count have X% or greater percentage of ‘yes’ votes out of the total. For any other representative, this is when a simple count of the individual votes of the representatives has X% or greater of ‘yes’ votes out of the total.

Rationale – Because one of the counts of legislators’ votes is proportional to the number of international entities, and the other count is proportional to the population of each international entity, it means that nations will only have the burden of a law or regulation put on them when not only most of the world’s people agree with the law, but when a very wide variety of the world’s peoples agree with the law. The bicameral nature of this vote protects the viewpoints of smaller nations from tyranny by larger nations.

Range vote – A ranged vote where the range is between and including -2 to +2, with 0 being equivalent to abstaining. If no option receives a positive total vote for a given office, none of the options win and a re-election must happen in the relevant jurisdiction with all the current options excluded from the ballot.

Proportional vote – The proportional vote will be a Proportional Range Vote, which is a non-traditional single-transferable-vote where each voter gives a score to each candidate, multiple candidates may win such that the vast majority of people elect someone to office, and each representative has a voting power in their governing body weighted by the proportion of voters who voted for that person. The method works as follows:

• 1. Each voter scores all candidates from -2 to +2.

  2. Add up the scores for each candidate and declare the one with the highest score a winner.

  3. 3. Remove ballots that chose that candidate as their top choice.

  4. 4. Repeat steps 2 and 3 until no remaining candidates have positive scores from at least 20% of the total voters.

  5. Each winner gets a vote weight in their governing body proportional to the number of voters that chose that person as the winner they prefer most. If a voter gave their highest score to multiple candidates, their vote is split between all the candidates that voter gave tying scores to. Anyone who didn’t vote for a winner may choose a winning representative from adifferent jurisdiction to be their representative and carry their vote weight. Anyone that does not pick a winner at all will be treated as if they weren’t part of the voting pool (e.g. if 50% vote for winner A, 40% vote for winner B, 10% vote for non-winner C, and 6% of C voters don’t choose a rep in a different jurisdiction, winner A will have a vote weight of 53.2% (50/94) of their jurisdiction’s population, and winner B will have a vote weight of 42.5% (40/94) of their jurisdiction’s population.

Rationale – Elects a much more representative set of candidates than single-winner elections can.

Declared bill – A bill that at least 30% of the legislature has agreed to post for public scrutiny before possibly voting on whether to enact it.

Law severity – An enacted term that describes the consequences of breaking a law of that severity.

Takes full effect – Once a minimum number of nations ratify this constitution, the constitution will apply to all nations regardless of their ratification status.

Article 1 – International Constitution

Section 1 – This constitution only governs international code of law and international government.

This Constitution only contains law on how to run the International Federation – the only individuals or entities it applies to are those acting on the authority of the IF.

Rationale – This means that, though the constitution can regulate how to construct the international code of law and how to run the international government, it can not regulate either private individuals nor agents of national governments. Separating the regulation of the international government from governance of individuals and nations makes the law simpler and limits the power and scope of the international constitution.

Section 2 – Unique Terms must be standardized

The international constitution must have a list of terms that are used to describe the laws in the code. These terms must be enacted as laws and must be voted on separately from any amendment. Individual sections may not define terms. All words that are not defined in the constitution or a law may be interpreted by defendants in any way that a reasonable person might have interpreted those words in the era that relevant section was passed into the constitution. If a word or phrase is used as a defined term, it must be italicized to indicate that it is a term, otherwise it is not a term.

Rationale – This will make the law more regular and understandable.

Section 3 – Taking Effect

This constitution and the International Federation government takes full effectwhen enough nations have ratified it via either approval by national governments or by approval by a vote of the people of the world as described in Article 8, Section 1. International law can’t be created until at least 50% of the world’s nations ratify this constitution or until approved by the people.

Article 2 – Procedures and Limitations of the International Federation

This article describes rules that apply to all branches of the IF.

Section 1 – The International Federation, and each branch therein, only has the powers enumerated by this constitution.

The IF may not use powers that aren’t explicitly enumerated in this constitution.

Section 2 – The International Federation cannot keep secrets

The International Federation can’t actively keep any information from the public and persons acting in the capacity of an official of the IF may not lie. All proceedings, formal meetings, and actions taken must be recorded. Any discovery or research must be disclosed within a month. Any information asked of the international federation must be disclosed publicly within a week if the international federation has it.

The only exception to this rule is evidence not necessary for a conviction that was presented in a trial, where that evidence is considered a state secret by the party presenting that evidence. In such a case, the evidence still must be released no later than 3 years after being presented.

Section 3 – Revenue

No revenue will be used by the IF except for taxes. Any property seizure must either be destroyed or sold at public auction, the proceeds of which are distributed evenly per-capita directly to the people of the recognized nation from which it came.

No money will be used except in accordance with the IF laws and this constitution.

Section 4 – Breach of constitution

Any official judged to have been acting outside their constitutional limits, while knowing it was unconstitutional or if its unconstitutionality was adequately apparent, are punished with the following sentences:

• • for the 1st count: suspension from office for 1 year and 1 year in prison

  • for the 2nd count: removal from office and 3 years in prison

  • for the 3rd count: removal from office, 8 years in prison, and banned from being an official of the IF

If the convicted official is a senator of the IF, the government of the recognized nation that official is from may choose a representative to fill that place for the duration of that official’s term in which he is suspended or removed. If the official charged with a breach of constitution is such a fill-in, no replacement is accepted.

In addition to acting outside their given powers and limits, the following are also all considered “acting outside their constitutional limits”:

• • A legislator voting for an enacted law later found unconstitutional.

  • A judge ruling on the basis of a law later found to be unconstitutional that has not already been explicitly deemed constitutional by a court.

  • Prospective candidates who claim to have enough petition signatures to be an official candidate but have significant fraudulent signatures.

A 20 year statute of limitations applies to breaches of constitution.

Rationale – Provides a mechanism for the international government follow the rule of law by disincentivizing officials from breaking their own laws and constitution.

Section 5 – Elections

To be a candidate for an election, a person must have a petition signed by at least 1/10,000th of their jurisdiction between 6 months and 2 month from the election. People may sign the petition for any number of candidates.

The executive branch of the IF will conduct or oversee elections of IF officials in a popular range vote or popular proportional vote depending on the office. The election can be incorporated into elections of national offices, but the IF maintains the right to approve the methods used in such elections.

No living person who is at least 16 years old who can provide information necessary to prevent double-voting may be excluded from voting for any reason.

If there are more than 12 candidates for a particular office in a given jurisdiction, they each give a statement published by the IF, and a vote (of the same type that will happen in the main election) will be administered to cull the candidates down to 8. This culling election must happen no closer than 1 month away from the main election.

One week before the main election, a five-day series of debates is held with all the candidates.

In cases where districts within a recognized nation must be drawn, districts must be contiguous, drawn on boundaries of the largest type of sub-government in that nation (states, provinces, counties, etc) such that the populations of each district are as close as possible. The international federation will choose an algorithm that fits these criteria and nations must use it to draw their districts for use in relevant IF elections.

Rationale – Ranged voting for much more accurate assessment of voting preferences, and a positive vote requirement to allow people to check the power of however the final set of candidates are chosen (if the process is unfair, the people have an ability to reject the candidates coming out of that process). Allowing all persons over the age of 16 to vote means that prisoners, the allegedly mentally ill, and any political dissidents aren’t excluded from representation.

Section 6 – International officials may only hold one office

An international official may only hold one office in the IF, and may not hold office in or receive any new compensation from any other government at any level while holding office with the IF.

Section 7 – Official Vacancies

If any elected office is vacant for longer than a week, the candidate with the next-greatest positive vote count from the previous election fills in until the elected official can return or the term is complete. If there is no candidate that had a positive vote count, a new election is administered to fill the term. If the office appoints officers, no major replacement of officers can happen until the seat filler has been in office for 30 days unless that officer is actively undermining the seat filler.

Section 8 – Equality of officials

No branch of the IF may give any elected official of any type extra-constitutional powers over other officials of the same type.

Rationale – Representation isn’t fair unless representation is equal.

Section 9 – Compensation for officials

While in office, each elected official will be paid X times the median income per capita in the country they live in plus X times the median income per capita in the world, where X starts at 5 and may be changed and differentiated by office by IF law. For 9 years after leaving office, each elected official will be paid a percent of the salary they would have earned in another year as a congress member. The percent will be 90% the first year, 80% the second year, and so on until it reaches 0%. Congress people are paid 1/10th this amount, since they can only be officially convened 1 month out of the year.

Any increase or decrease made to an official’s compensation only applies to officials who were not eligible to vote on that change.

Rationale – Officials should be paid enough to prevent bribery from becoming too attractive, and salaries should be related to the incomes of their constituents to keep officials focused on the well-being of the both their people and the world as a whole.

Congress people are paid 1/10th rather than 1/12th of the usual rate because its assumed they will be doing congress-related work with their constituents in their home country at least some additional time.

Article 3 – International law

Section 1 – International law only governs the leaders and officials ofinternational entities.

The international law made under this constitution only contains law on how to operate international entities, it will not directly regulate individuals other than in their capacity as officials or leaders of an international entity.

Rationale – This means that International law may not mandate regulations for individuals, but it may only be used to convict the officers of international entities. Separating the regulation of governments of entities and the organizations and individuals within entities should make the international government less of a threat to national governments and should naturally limit the scope of international law.

Section 2 – International law applies to all international entities.

After this constitution takes full effect, the international laws made under this Constitution, must be obeyed by every international entity without exception. Before taking full effect, all international entities that have ratified this constitution are subject to international law.

Rationale – No international entity is above the law. This makes enforcing the law simpler and limits loopholes in the law. It also incentivizes countries to join the IF to get representation in laws they will have to follow.

Section 3 – Terms

The international code of law may enact terms that are used to describe the laws in the code. These terms are voted on separately from any law. Individual laws may not define terms. All words that are not defined in the constitution or a law may be interpreted by defendants and judges in any way that a reasonable person might interpret those words.

Rationale – This means that courts may not simply interpret an ambiguous article, but must accept reasonable interpretations put forth by defendants. This also means that if unwanted interpretations of an article are being made, the constitution or law must be clarified by the legislature – a change to the constitution or law.

Section 4 – Parts of laws

All international laws must be written with the format as follows: Title, law severity, description, rationale for the law and severity. This record should be a full specification of the law, giving all information necessary to use the law without external interpretation (other than reference to enacted terms). Consequences of breaking a law can only be enacted in a standalone law severity term.

Rationale – Separating the consequences of breaking laws from the laws themselves greatly simplifies the law and allows for much easier standardization of the handling of laws with the same severity. Requiring rationale provides reasoning that can be referred to in deciding the intent of laws and how law might be changed to better reflect that intent. Rationale also helps understand the law.

Section 5 – The law must remain a manageable size

The number of words in the international code of law must be less than 50,000 words long. If enacting a law would bring the international code of law above that number of words, the law is void and unenforceable until laws in the code are changed or repealed such that the total number of words is below 50,000.

Rationale – Limiting the law to about 200 pages keeps the law simple and understandable to all.

Section 6 – Equality of the law

Laws may not specify international entities, nor geographic locations, nor have any other wording that makes a law impossible to apply to certaininternational entities. Laws are not required to be equally applicable to all nations, but laws must be written with impartiality.

Section 7 – Consequences of laws

Laws may only have the punishments of imprisonment, removal from power, permanent seizure of a government’s or official’s property of which possession violates international law or that was obtained by violating international law, and delivery of property and money to victims in reparation of damages to them. Rationale – Consequences are the motivation to follow laws and give a way to repair damages caused to victims.

Section 8 – No Delegation

No law may delegate rule-making power away from the congress or to any entity other than congress. No person may be held to any legal requirements that vary on the discretion of any person or group other than through changes in the code of law as described in this constitution. Nor may any law delegate any judicial or executive powers.

Rationale – Delegating rule-making power to government bodies in the executive branch has proven disastrous in other contexts. This provision prevents the subversion of due process by requiring that rules only come from constitutionally based agreement by the people’s representatives.

Article 4 – Legislative Branch

The legislative branch will consist of a single-house congress of democratically elected senators who’s purpose will be creating international law.

Section 1 – Representation

Each recognized nation gets a number of senators depending on the outcomes of the proportional votes that elect them. Each congress person is elected by the people of the country they represent. In cases where a nation has multiple districts and any two districts have a difference of more than 1% in population, each senator will have a vote-weight in popular vote countsproportional to the number of people in their district.

Senators have 4-year terms and may not be elected for more than 2 consecutive terms, but otherwise have no limits on terms. Senators must reside in the nation they were elected from for at least 8 months of the year.

Rationale – Its a bit ridiculous to have only 2 representatives for a country that has over a billion people, so having an extra representative for every 1% would create a congress of about 440 people with China having about 20 representatives, and the US having around 4. Also, proportional voting with each congress person having a weighted vote means that the people are represented much more fairly than with a winner-takes-all system.

Section 2 – Powers of the Congress

• • To create laws limiting the use of force. This does not give the power to require the use of force. Rationale – No power to require force so the IF can’t govern people even indirectly.

  • To create laws limiting the IF. Rationale – The IF constitution is hard to change, so there should be an easier way to limit the IF in ways that aren’t quite as permanent.

  • To create laws requiring recognized nations to maintain a trained military that can be called upon to enforce IF laws. Rationale – No autonomous military so that it doesn’t pose a threat to nations.

  • To create laws that collect taxes from recognized nations for use in conducting the three branches of the IF. These taxes must only be in terms of a fixed proportion of the total revenue a recognized nationcollects from their people and creates via currency creation. Rationale –Places the largest burden on governance on those extracting the largest amount of money from their people and is very simple to administer and audit.

  • To create laws requiring authority of force in all areas of an international entity‘s jurisdiction. Breach of such a law can only have the consequence of allowing the international court to shrink the jurisdiction of theinternational entity and define new international entities from the now-unclaimed parts. Such laws may not require shrinking the international entity’s jurisdiction to a smaller area than they are found to have authority of force. Rationale – So that jurisdictions are well defined, which can be important for the application of international laws.

  • To create laws limiting the (but not requiring) methods of selection of officials of international entities. Rationale – So that inclusive political institutions can be legislated. (This isn’t as important as the rest, and can be saved as a constitutional amendment if the powers that be feel threatened by this power).

  • To create laws mediating disputes about treaties signed betweeninternational entities outside the process of the IF.

  • To create laws granting residents of a region the right to secede from their national government or change the structure of their national government. Any such laws must require agreement by at least 65% of that nation’s residents. Rationale – This power exists to give a non-violent alternative to civil war that can allow peaceful transfers of power even in cases where the national government doesn’t want it.

Section 4 – Declaring a Bill

An international bill can be “declared” by a 30% agreement. Once there is agreement to declare the bill, it must be released publicly in the form it was in when the agreement was taken, and once that bill is released it is officiallydeclared.

Rationale – This ensures that bills don’t become law without time for international discourse and reaction to the bill in its final form.

Section 5 – Passing and Repealing Laws

For the law to pass, it must have been declared at least 2 months ago and at most 2 years ago, and must reach a 66% agreement, or if vetoed by the IF president, a 75% agreement. If changes are made to a declared bill before being enacted, it must be re-declared and 2 more months waited until it can be enacted. Laws go into effect no sooner than 3 months after being enacted, but if repealed before the law takes effect, it will never take effect. A law can be repealed with a 50% agreement, with a 55% national vote count of senators, or with a 55% popular vote count of senators.

Rationale – Having a 70% agreement means that laws that pass will be ones that have been very carefully considered and agreed upon by the vast majority of the world’s representatives. International law should only be laws that pertain across all or most cultures and ideologies. They should embody near-universal human ideals. Having a lower requirement for repealing laws makes it easier to get rid of bad laws, and makes it easier to undo mistakes made by a temporarily unrepresentative congress.

Section 6 – Passing an IF limitation

If a law only limits the IF, it can be passed with a 50% agreement. Repealing or changing such a law requires an agreement of a higher percentage than originally agreed to the law, with a maximum of 80%. A law that lowers the agreement needed to overcome an executive veto is excluded from being considered an IF limitation.

Rationale – This serves as an easier alternative to constitutional amendment that allows the creation of limitations with variable durability.

Section 8 – Congress meets once a year for at most 1 month

Congress may take official action at most 30 days out of a given year, after which the congress may not continue taking official action until the first day of the next year. These days need not be consecutive.

Rationale – Ensures that congress officials have the ability to maintain much of the lives they had before their election, such that their motivations are not significantly changed from when they were elected. Also encourages congress to focus during the month they can affect change. Allowing congress to choose what days they meet gives them leeway to work with the timed pipeline of a bill.

Section 10 – Uncast votes

Uncast votes of member nations that have ratified the IF are counted as “no” votes, in other words, a vote for no action or change to be taken.

Article 5 – Executive Branch

The executive branch will consist of a single president who can appoint anyone willing to help him carry out their duties.

Section 1 – Powers and Duties of the President of the IF

• • To fulfill warrants issued by the international court.

  • To conduct investigations into alleged breaches of international laws. Investigations may not make demands backed with the threat of punishment unless accompanied by a valid warrant.

  • To administer the sentences of trial convictions.

  • To organize and conduct elections required by international law and this constitution.

  • To veto laws passed by the IF congress with less than a 75% agreement. A veto must be issued within 1 month of the date the law was passed.

Section 2 – Term

The President of the IF serves a maximum of two 4-year terms.

Section 3 – Election

The President of the IF is elected via a popular range vote.

Article 6 – Judicial Branch

Section 1 – Powers and Duties of the Judicial Branch

• • To conduct trials of people accused of violating international laws (including people holding legislative or executive office in the IF).

  • To issue warrants for reasonable search, temporary seizure of property, and temporary confinement or tracking of indicted officials for the purposes of such a trial. An arrest warrant for temporary confinement of an indicted official may only be issued if that person has failed to schedule a trial date within 2 weeks of indictment or if that person has failed to show up on their scheduled day or any of the days of the trial. Warrants may allow the use of any necessary force against those that actively obstruct the warranted activity and may also allow the requisition of military forces from international entities for those purposes.

  • To shrink the recognized jurisdiction of an international entity and define new international entities when authorized by law and to issue warrants for special elections or other procedures for information gathering from the population of potentially unclaimed areas.

  • To conduct challenges to laws passed by the IF legislature. In such a challenge, if a majority of the supreme court vote that any part of a particular law violates the constitution or an IF limitation, the entire law will be invalidated. The constitution and IF limitations must be interpreted literally with the meaning that would have been understood at the time any given clause was written. While precedent may be brought up to illustrate a point, court precedent may not be treated like law.

Section 2 – International Supreme Court Judges

Nine international supreme court judges are elected for 16-year non-renewable terms via a popular range votes.

Section 3 – Staggered Elections of Supreme Court Judges

The first election of supreme court judges will specify:

• • 3 that will get a 16-year term,

  • 2 that will get a 12-year term,

  • 2 that will get an 8-year term, and

  • 2 that will get a 4-year term

In the first election, the longer terms will be given to winning candidates who received higher total vote scores. After the first election, elections will be held to replace justices as they leave office or their terms run out.

Section 4 – Warrants

Warrants may only be issued upon probable cause and a 50% agreement of the judges. A warrant must describe the place to be searched, and the persons or things to be seized.

Section 6 – Conducting Trials

The phases of a trial:

• 1. Validation – The prosecution makes a case to a panel of 3 judges appointed by the supreme court judges, or the supreme court judges themselves if they choose. If the judges unanimously believe there is no apparent reasonable doubt that the crimes were committed by the accused, the trial will proceed to the jury judgment phase. There is no defense of the accused in this phase.

  2. Jury Judgment – There is also no defense of the accused in this phase. The prosecution makes their case to a jury consisting of 10 normal jurors and the supreme court. The accused and the defense must be given the opportunity to be present and question potential normal jurors and raise objections to choosing jurors, but one judge decides whether to take any individual normal juror. During the trial, both members of the jury and representatives of the defense and prosecution may take turns asking questions of any witness on the bench. Members of the jury may also ask clarifying questions to the representative of the defense or prosecution. The jury must come to an 18/19ths agreement as to whether there is apparent reasonable doubt that the crimes were committed by the accused. If the agreement determines there is no apparent reasonable doubt, the accused is now considered indicted and the trial will proceed to the jury trial phase.

  3. Counter-validation – This is an optional part of a trial that the defendant can demand at any time at most once after they have been arrested and before their trial has begun. This is exactly like the Validation phase of the trial, except that the defendant and any reasonable number of representatives can present evidence alongside the representatives of the prosecution, and if the 3 judges unanimously believe there is reasonable doubt that the crimes were committed by the accused, the defendant is released but the final jury trial still proceeds and the defendant is expected to appear in that trial.

  4. Jury Trial – This is an optional part of a trial that the defendant can demand at any time at most once after they have been arrested and before their trial has begun. This is exactly like the Validation phase of the trial, except that the defendant and any reasonable number of representatives can present evidence alongside the representatives of the prosecution, and if the 3 judges unanimously believe there is reasonable doubt that the crimes were committed by the accused, the defendant is released but the final jury trial still proceeds and the defendant is expected to appear in that trial.

Article 7 – Powers and Protections of the People

Section 1 – Power to call a vote

A vote can be demanded by a petition signed by one thousandth of the world’s population. The petition must clearly state what will be voted on in its entirety.

Section 2 – Power to enact or repeal international laws

By democratic vote, the people can take any action that the IF congress can, with votes being counted in the congressional way (with two separate counts that must exceed the agreement threshold given in the sections on IF congressional powers). Laws enacted by a vote of the people of the world need not be declared by a vote as long as the text of the exact version of the law being voted on has been publicly available and announced as to appear on a ballot at least 2 months before the vote.

Section 3 – Power to replace international judges

A vote by the people of the world can remove a judge from office and call a new election with a 70% agreement.

Section 4 – Compensation for pre-conviction confinement

Any person put on trial and not determined guilty will receive just compensation for their time and expenses. Any length of time a convicted defendant was held before beginning their sentence must be subtracted from their given sentence, as they have already served part of it, or compensation given if confinement isn’t part of the sentence.

Rationale – Temporary confinement is a wrong done to an unconvicted person, and is not part of a sentence, so must be compensated for any confined person, whether guilty or innocent.

Section 5 – Limits on temporary confinement

Any arrested person may be held up to 2 weeks, and may only be held as long as trial preparations are actively being done. After that time, the trial must begin or the confined person must be released. Any person being confined may choose to delay their trial for up to 2 months from their indictment, but concedes to remain confined for that entire period.

Persons in temporary confinement must be given access to any personal effects they can carry with them except weapons. They must also be given access to common communication mediums including the telephone network and the internet.

Rationale – Ensures a speedy trial process that focuses on finding truth rather than extrajudicial punishment through confinement. Allowing a defendant to delay their trial gives them time to build their defensive case if they need it.

Section 6 – Protections

• • The IF and forces supporting warranted action may not take or use the property of, detain, or act against anyone not obstructing the warranted activity, and may only detain the property of those who are obstructing such activity for the duration of that activity and subsequent trial.

  • No person will be subject to double jeopardy unless it is shown that the government has significantly hindered the case through deliberate obstruction of justice or gross negligence. For double jeopardy to occur, at least one conviction must be made of the government officers who perpetrated the obstruction or negligence, even if that officer is deceased.

  • No person will be compelled, by law or any threat of punishment, to take any action other than appearing in court in-person until they are convicted, with the sole exception that a person may be arrested and temporarily confined in accordance with an IF Supreme Court warrant.Rationale – Forcing someone to say or do things, whether in witness against themselves or another person, has a lot of potential for abuse. Similarly, forcing someone to disclose secret locations, passwords, and other information found in someone’s brain is an unreasonable demand, especially for individuals who haven’t yet been convicted of a crime related to those demands.

  • No person will be detained or punished without due process of law.

  • All defendants have the right to a public trial with impartial juries, to be informed of the nature and cause of the accusation, and to be confronted with the witnesses against them.

  • All defendants have a right to obtain witnesses in their favor and to have representation for their defense

  • No person or government will be subject to fines greater than 10 times the damage done, nor subject to consequences for violating IF law that are out of proportion to the damage done.

  • No action may be taken against officials of an international entity for any action unless it is expressly written in international law, at the time of the event, that it was an actionable offense. Also, if a law is repealed, the corresponding sentence from the application of that law are immediately canceled for any person currently being punished for that law, and any person facing trial for that law will have the charge related to only that law dropped.

  • No law of Sovereign Immunity will be created or upheld by the International Federation without exception. As a consequence, officials of the International Federation will be held to all standards that officials of national governments are held to and are liable for damages and punishment as proscribed by law without any special immunity.

Article 8 – Powers of both the People and International Entities

Section 1 – Changing the constitution

This constitution can be changed to a particular draft by one of the following occurrences:

• • The world population coming to an 80% agreement,

  • The IF congress coming to a 75% agreement AND the world population coming to a 75% agreement.

  • The governments of all recognized nations coming to an 75% agreementAND the world population coming to a 66% agreement

  • The IF congress coming to a 66% agreement AND the governments of allrecognized nations coming to a 66% agreement AND the word population coming to a 66% agreement

Section 2 – Power to call a trial

A trial can be demanded by either a petition signed by 1/10,000th of the world’s population, or an agreement of 2% of the world’s national governments. The petition must clearly state the names of the accused and the alleged crimes committed or legislation to challenge. Officials of the IF can be brought to trial this way as well.

Section 3 – Power to conduct a trial for International Officials

In cases where a trial has been called for a member of the International Federation (elected or unelected), a 60% agreement of the world population or a 60% agreement of the governments of all recognized nations may call for the election of an independent court to substitute for the supreme court in any part of the trial process for a particular set of defendants.

If the agreement is come to via a vote by the world population, theproportional vote to elect the independent court will be taken from the people. If the agreement is come to via a vote by the governments ofrecognized nations then the proportional vote to elect the independent court will be taken from the highest court in each recognized nation, or if and only if a given nation doesn’t have a highest court, its legislature may vote.

In the case of indictment of an IF supreme court judge, the IF supreme court may not conduct the trial, and a trial must then be conducted by the member nations in the way described in this section.

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Reaffirming Innocent until Proven Guilty

governology in Uncategorized May 25, 2017 972 Words

Amid all the talk of possible impeachment of President Trump, its probably really easy to miss the fact that the supreme court did something pretty incredible recently: they upheld the idea that you are innocent until proven guilty. Doesn’t seem like this should be much of a contentious issue.. but major legal procedures have been violating this tenant for hundreds of years and continue to do so today.

For example, in the case of Nelson v Colorado, Shannon Nelson and Louis Madden were convicted of a crime and were ordered to pay thousands of dollars in restitution and other fines. That conviction was later overturned by the Colorado appellate court, but the state refused to return a few thousand dollar of the fines they paid. The Colorado supreme court refused to order the return of that money, citing a Colorado law that required them to prove they were innocent.

The US Supreme Court overruled this and set an important precedent that could have far reaching and overwhelmingly positive consequences. This ruling applies to a bevy of legal rulings in recent decades that have continued to uphold civil forfeiture – where the state can take your property on the basis that it may have been involved in a crime without requiring due process.

Civil Forfeiture: A Legal Nightmare

State courts have repeatedly upheld civil forfeiture cases, and even the Supreme court has from time to time upheld this legal nightmare, like in the case of Tina Bennis, Petitioner v Michigan where the state seized a car owned jointly by a woman and her husband when her husband was caught having sex with a prostitute in that car. The state then declared the car a public nuisance, effectively indicting the car itself and bringing it in for permanent questioning. The women didn’t receive any compensation for the car and the state didn’t give it back.

Civil forfeiture is obviously unjust, but it has persisted because cash strapped jurisdictions make a LOT of money from civil forfeiture. Over $12 billion of property is seized annually, with over $2.5 billion of that from people who haven’t even been charged with a crime.

The fundamental reason civil forfeiture persists is because of the incentives we give our government departments, especially police departments. When their budget depends on traffic and parking tickets, you’ll see a lot more people getting those tickets and paying higher and higher fines. When a department is legally able to take innocent people’s property and buy margarita machines, you’re going to see a lot more of that happening.

A Solution to these Perverse Incentives

Eliminating civil forfeiture would be unequivocally good, but its not at all the only offender of its kind. The fundamental problem with perverse incentives would still remain: the pressure for departments to increase their budget in any way they can. This is why the only way a government department should be funded is from taxes allocated by a budget passed by the legislative branch. If a police department couldn’t spend money it collects from fines and fees it charges, you’ll see all the unnecessary and unjust convictions and fees disappear very quickly.

Here’s how this would work as a law or constitutional amendment:

“No government may only use any collected property except money collected as taxes or borrowed via selling government bonds. All other collected property must be destroyed, or returned to the people in equal shares.”

This way, departments would still be able to impose punitive fines and fair fees, but would have no incentive to increase those fines and fees beyond a fair level. This wouldn’t eliminate unfairly large fees and fines, but it would drastically reduce how many unfair fees you’re likely to see.

Let’s hope progress keeps being made!

Civil vs Criminal Cases

Another issue hiding in plain sight here is the difference between civil cases and criminal cases. Criminal cases are treated against crimes against the state, whereas civil cases are treated as crimes against a plaintiff. In civil cases, like with civil forfeiture, a far lower burden of proof is required. Where in criminal cases, the legal standard is to prove wrongdoing “beyond a reasonable doubt”, the legal standard in civil cases is simply “a preponderance of evidence” which usually means that it must only be proved to be an at least 50% likelihood of wrongdoing.

This standard of “a preponderance of evidence” is clearly terrible. If a court can be convinced that there’s about a 50% chance you committed wrongdoing, you can be handed serious consequences. This means that essentially the burden of proof almost always falls on the accused. And this is an especially huge problem when the accusing party in a civil case is the government itself, as is the case for things like traffic and parking tickets. In these situations, its incredibly difficult to get a fair judgement because you are assumed to be guilty.

I wasn’t able to find any historical information about why procedures for civil and criminal cases differ (if anyone knows of some, please let me know!), but it seems to me that the whole concept of a “civil case” is only there for expediency – a theoretically cheaper and faster way to achieve some semblance of justice. The problem is that this isn’t even the case any longer (haha see what i did there!). Ahem.. Civil cases are often too expensive to undertake, and can take years to resolve.

Conclusion

No government agency should be able to use the money they collect in fees and fines. There should be no difference in legal standard between civil and criminal cases. There probably shouldn’t even be any difference at all. If the government is used to take action against someone, the same standards of fairness should be adhered to regardless of the case.

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So you Wanna Understand Bitcoin… (Part 1)

governology in Uncategorized June 14, 2017 4,134 Words

Bitcoin has been on a somewhat incredible-seeming upward trend recently. You can regularly see articles talking both about bitcoin “surging” and “crashing” all in the same week. This is no surprise coming from a media industry that is ever more senationalistic. But because of this, Bitcoin has been registering on the radar for more and more people who have never even heard of a digital currency before. Bitcoin may actually be the most important invention in the last 500 years. And since currencies both have government and economic implications, let me see how I can help..

Bitcoin is a cryptocurrency, which is a digital currency defined by a cryptographic protocol designed to keep the currency mathematically secure. With a cryptocurrency, if you send, say, 1 bitcoin to Alice, she can verify that she received the bitcoin by using some math, and only Alice can then use that bitcoin by doing some more math. This is very different than your usual currency, where you can only verify that you have received money by asking a trusted authority, like a bank. Even if you’re using cash, you don’t really know whether or not that cash is part of the $200 million in counterfeit money currently in circulation, unless you ask a bank or the government.

And this is where the power of a cryptocurrencies lies: people can send each other money without involving a bank or a government. This is why a slogan often heard in the Bitcoin community is: “Be your own bank”.

Bitcoin isn’t the first digital currency, but it’s a first-of-its-kind currency in a lot of different ways:

• • Transactions are irreversible. Only the holder of the wallet key (similar to a long password) can access the bitcoins in that wallet.

  • Cheap transactions. You can send someone $1 million for a fee of less than $2. Transactions used to be free, but have recently become somewhat expensive for day-to-day purchases. However, if plans for the Bitcoin lightning network bear fruit, these transaction fees could drop toless than a cent.

  • The bitcoin network is decentralized. No central authority can print more bitcoins, freeze someone’s account, or seize someone’s coins. Bitcoin holders don’t need to trust anyone in order to maintain or use their bitcoins, and any changes to the Bitcoin protocol can only happen if most people in the network agree to those changes.

  • No inflation. There will eventually be a maximum of 21 million Bitcoins, and about 80% of them already exist.

Bitcoin visionaries see Bitcoin as the first currency that will be truly global. A currency that can cross borders as easily as exchanging hands. A currency where spending 1 cent is just as cheap as spending $1000 or $1 million in seconds rather than days. Many also see the currency as en escape from government manipulation and a platform that can enable a huge assortment of new financial applications.

There are 3 major things that Bitcoin is based on:

• 1. Cryptography

  2. The Blockchain

  3. Consensus Rules

Bitcoin’s cryptography ensures that only you can spend your bitcoins. Bitcoin’s blockchain ensures that all the transactions are recorded so that other people can verify that you sent them some bitcoin. And, importantly, Bitcoin’s Consensus Rules can not be changed by any central authority, and instead, users can choose to or not to opt into changes.

But how does this all work? And why does this make Bitcoin worth real money?

Overview

If you don’t want to understand anything about how Bitcoin technically works, go ahead and skip to the Value of a Bitcoin section.

If Alice wants to send Bob 1 bitcoin, all she needs to do is ask Bob for his bitcoin wallet address, put that address into her wallet with the amount to send him (1 bitcoin), press “send”, and (importantly) put her password in that unlocks her wallet. Behind the scenes, what happens is:

• 1. Alice’s wallet signs a message saying she’s sending 1 bitcoin to Bob. This message is called a transaction.

  2. Alice’s wallet connects to 50 or 60 computers in the bitcoin network.

  3. Alice’s wallet sends that transaction message to all her connections.

  4. Those computers then forward that transaction to their connections and so on, until pretty much everyone in the network has the transaction. At this point, Bob can probably see Alice’s transaction and verify that it’s valid. This may only have taken a few seconds. But Bob can’t be 100% sure he has his money quite yet.

  5. At this point, a miner has to create (aka “mine”) a block containing Alice’s transaction (more explanation below). Usually within the next 10-20 minutes, a miner will mine a block that contains Alice’s transaction. This is called a “confirmation“. Once this happens, Bob can pretty much be sure that Alice has successfully sent him his money, but the more confirmations Bob waits for, the more sure he can be.

  6. After 6 confirmations (which happen within about an hour), it is statistically impossible for the transaction to be reversed, even if a massive attacker who controlled over 50% of the bitcoin network was trying to trick Bob.

Here’s another video that well explains how bitcoin works.

To make it easier to think about the Bitcoin ecosystem, it should be helpful to draw parallels to the ecosystem of traditional currency.

Let’s say Alice wants to give Bob 50 dollars with a check. She writes a check for $50 made out to Bob. Bob then goes and deposit the check at his bank (or with his phone, these days). This may seem simple enough, but there is more going on behind the scenes:

• 1. Alice has to keep track of her account so she can be sure the check won’t bounce

  2. Alice gives Bob the check

  3. Bob deposits the check at his bank

  4. Bob’s bank looks at the the routing number on the check (Alice’s bank), and figures out a transaction path to that bank.

  5. Hopefully Bob’s bank has a relationship with Alice’s bank. If Alice and Bob have the same bank, the bank just removes $50 from Alice’s account and adds $50 to Bob’s account, easy. If there is a relationship between the banks, some extra steps are needed. If the banks don’t have a relationship, step 6-12 need to happen between a central bank and both Bob’s bank and Alice’s bank. If a bank is small and doesn’t have a relationship with the central bank, steps 6-12 need might need to happen between quite a few banks.

  6. Assuming there is a direct relationship between the banks, Bob’s bank then presents the check to Alice’s bank

  7. Alice’s bank then reviews the check and Alice’s account, and agrees to pay after debiting Alice’s account by $50.

  8. Alice’s bank adds $50 to their account for Bob’s bank and informs Bob’s bank that this happened.

  9. Bob’s bank then debits $50 from their account for Alice’s bank, credits Bob’s account by $50, then informs Alice’s bank.

  10. As a courtesy, many banks allow a small portion, say $100, of the check to be available for Bob as soon as the next business day.

  11. The rest of the amount will only be available after 3-20 business days after regulation-required time has passed, and after the bank has had time to evaluate whether the check is fraudulent.

Cryptocurrency

So how does Bitcoin work as a cryptocurrency?

Essentially the entire point of cryptography is to find mathematical functions that are very difficult (ie time consuming) to reverse. It is very common for cryptographically generated values that would take thousands or millions of years to reverse with current technology. The two primary cryptographic techniques used in Bitcoin are:

• • Hashing – A hash function is a mathematical function that transforms a message into a much smaller message (the hash). While the function is very fast to perform, its incredibly difficult to reverse (ie to find the original message from the hash). In Bitcoin, hashing is used to generate randomized values that determine who gets to mine a block (more below).

  • Public Key Encryption – This is a technique that allows both secure communication through message encryption and identity verification (authentication) through signing. It is incredibly difficult to decrypt a message without having the private key, and its also incredibly difficult to create a signature that can be verified against a public key without having access to the private key. In Bitcoin, signing is used to create verifiable transactions.

Hashing a message generates a fixed-length random-looking output (the hash) no matter how big the input is.

With normal (symmetric) encryption, both parties have a shared secret they use to both encrypt and decrypt messages:

With Public Key Encryption, instead of using just one key, there are 4 keys. Each party has two related keys, a public key and a private key. If you encrypt a message with your public key, only your private key can decrypt it. And if you sign a message with your private key, your public key can be used to verify that the signature was signed by you – the holder of your private key.

In Bitcoin, your public key is your wallet address, and you sign a message containing someone else’s wallet address with your private key to create a transaction that will send someone bitcoin. Anyone can verify that you had the right to send that transaction by verifying the signature against your public wallet address.

Blockchain, Miners, and Proof of Work

The blockchain is the record of all the bitcoin transactions that have ever taken place. If you want to know how many bitcoins are in your wallet, you can download the blockchain and count up your wallet’s balance. The blockchain is created by miners – computers searching for crytpographic needles in a haystack.

A miner collects together a bunch of transactions that happened recently, adds the hash from the previous block, adds a random number, and then creates a hash of that data. If the hash is an acceptable value (as defined by the bitcoin protocol), the miner has found a valid block! A miner might do this billions or trillions of times (with a different random number each time) before finding a valid block. This hash is called the Proof of Work – ie the proof that the miner did the work to find the hash.

Because every block incorporates the last block’s hash into its hash, these blocks become “chained” together so that every new block adds additional weight to older blocks, making blocks more set-in-stone the older they are. There are currently more than 470,000 blocks containing a total of over 230 million transactions.

Mining provides two important things for Bitcoin:

• 1. It is the source of new bitcoins. All bitcoins currently in existence have been previously mined by miners.

  2. Mining secures the network by making it costly to attack the network.

When a miner mines a block, they include a “coinbase transaction” to themselves which gives them some newly minted bitcoin. This is simply a transaction that grants a number of bitcoins to a particular wallet address (probably one owned by the miner). Currently, each block has a reward of 12.5 bitcoins or about $32,000. In addition, transactions have fees that users place onto them (to ensure their transaction is speedily added to the next block) and miners receive these fees as well. Currently, each new block contains around 3 bitcoins of fees, or about $7500 per block. Because anyone can mine a block and receive the rewards, people are incentivized to mine blocks, which helps sustain the network.

Mining costs money to perform. Some of the biggest miners have huge server farms, and others are “mining pools” that simply provide an interface that users can connect to to contribute to mining the next block with their personal computers. Either way, a lot of computing power is needed to mine bitcoin blocks. Its estimated that, as of March 2017, Bitcoin miners were using about 332 megawatts of electricity to mine Bitcoin blocks. This is enough electricity to power 55,000 homes. This costs about $300 million per year, maybe more.

This might seem like a lot, but this cost is also what ensures that the blockchain is protected from attacks. The more money miners spend on mining blocks, the more money an attacker has to spend to disrupt the network.

If you join the Bitcoin network and don’t trust anyone, a malicious computer can give you a blockchain and you would still be able to verify whether it is real or not by calculating how much “work” it took to create the blockchain. You could theoretically calculate approximately how much electricity (and therefore money) was used to create the blockchain an untrusted computer gave you. If the amount of work is too low, you know you have a fake blockchain.

Because its impossible to create a blockchain without sinking in all the mathematical effort to create it, it would be very very expensive to create a blockchain that could trick anyone. Someone trying to do this would have to be willing to let go of about $40,000 (the block reward) in order to trick even the most gullible of victims (ie people waiting for only 1 confirmation). Someone trying to trick someone waiting for 2 confirmations would have to not only be willing to let go of $80,000 (twice the average block reward), but would also have to own an enormous amount of computing power (at least as much as the computing power operated by the entire rest of the world’s bitcoin miners).

This algorithm is called Proof of Work, because each block contains a proof that a certain amount of work was done to create that block. This is a key innovation that allows a public ledger of transactions to be trusted when downloaded from untrusted computers in a distributed network.

Consensus Rules

So now that you (hopefully) understand the cryptography for sending transactions and the blockchain that records and validates those transactions, the last piece is the governance of the protocol – the Consensus Rules. None of Bitcoin’s mathematical security would matter if Bitcoin’s developers could simply change the rules. Luckily, Bitcoin doesn’t have a way to force anyone to change the Consensus Rules they use. Users must instead voluntarily opt into any suggested new rules by updating their software to a version with those rules.

Even if 90% of the Bitcoin network decides to update to a new version, if the other 10% don’t want that change, they don’t have to switch. If they do this, that 10% will basically create a 2nd currency that continues on from where the first left off, while the 90% will go in their own direction. This is a strong protection against large malicious actors, because as long as a significant minority of people still want to use the old Consensus Rules, they can.

There are two types of protocol changes:

• 1. Soft Forks – These are situations where new rules for creating blocks are added. Miners using the old protocol will still validate new blocks, but upgraded miners won’t recognize old blocks as valid and won’t mine on top of old-format blocks. No actual fork (aka chain-split) would happen. Bitcoin clients that aren’t miners can continue using Bitcoin as normal after the change, but won’t recognize new features from the upgrade until they themselves upgrade, which could lead to incorrectly calculating their balance but maintains security. The current protocol policy generally requires 95% support from miners before soft forks “activate” (ie when the new protocol would go into effect).

  2. Hard Forks – These are situations where rules for creating blocks are relaxed. Miners and normal clients using the old protocol will not validate new blocks, and thus will be left behind, causing a chain-split. This means that all Bitcoin users also have to upgrade their client in order to use the upgraded Bitcoin. Bitcoin has never made an intentional hard fork.

Just like how constitutional provisions are stronger because they require super-majorities to change, Bitcoin’s protocol is more stable because it requires a high level of agreement to make changes.

And we can sort of see the beginnings of something like the yellow or red lines there:

But when you look at the same data with a logarithmic scale, you can see a much more consistent exponential upward momentum that shows more clearly that Bitcoin isn’t quite yet in bubble territory:

If you look at the slope of the line recently, its nowhere near as steep as it got in the last two spikes. I wouldn’t be surprised if it spiked up to $20,000 over the next year before crashing back to $4000 or $5000. But hopefully a more steady trend continues without causing a spike or crash. Perhaps that’s just wishful thinking given the strength of the hype machine.

Wider Implications

The fact that Bitcoin is a currency without inflation is incredibly important. This makes it a perfect store of value, but it also has wider economic implications.

The US government regularly reports inflation rates below 3%. Most people (especially economic writers) don’t really understand inflation, but a great economist once said that “inflation is always and everywhere a monetary phenomenon“. This means that changing the money supply (eg printing money) is the only significant factor that can cause a sustained change in inflation. Even if you believe the government isn’t actively keeping their inflation statistics low, as many have suggested, this is still an extra 3% tax every year on all money: your savings and your paychecks. After just 10 years, a 3% inflation rate eats away over 30% of your savings.

“[As of 2012, the] dollar has fallen a staggering 86% in value since 1965.” “[A return on investment of] 5.7% annually.. sounds satisfactory. But if an individual investor paid personal income taxes at a rate averaging 25%, this 5.7% return would have yielded nothing in the way of real income. This investor’s visible income tax would have stripped him of 1.4 points of the stated yield, and the invisible inflation tax would have devoured the remaining 4.3 points.” – Warren Buffet

And the US is nowhere near the biggest offender here. Argentina regularly has inflation above 15% and recently had a sustained period of inflationabove 50%. This pales in comparison to the period between 1975 and 1990 where the country’s inflation averaged 300%, with a peak of an unbelievable20,000% hyperinflation in 1989. And this is often why bitcoin has been thriving in struggling countries like Argentina, and Venuzuela. If bitcoin becomes the world currency, it would eliminate inflation, removing one major tool bad governments use to keep their citizens poor and big governments use to extract more money from their populace without transparency. This not only increases the currency’s value, but would also lead to significant decreases in poverty worldwide.

Beyond simply an escape from inflation, Bitcoin being used as a world currency would also make it harder for governments to manipulate the market. Its widely understood that the Fed caused the Great Depression of 1929-1933, or at least greatly exacerbated it, by putting the bank clearinghouses (that previously mitigated panics) out of business and then refusing to lower a hiked up discount rate when banks needed loans most. Many believe that the Fed makes business cycles worse and there is evidence that Fed activities increase inequality (I’ll probably write a post sometime on why that makes logical sense). Many Bitcoin enthusiasts believe that taking monetary control away from government will be a major factor that stabilizes the economy, making huge market crashes a thing of the past.

Conclusion

I’ve described how Bitcoin currently works and analyzed a bit why some people think Bitcoin is a rocket to the moon. It clearly has a number of major advantages over classical currency, which makes it all but certain that it (or some currency like it) will be a major player in some form in the next 100 years.

Next post, I’ll go over the problems being debated in the Bitcoin community, suggested solutions to those problems, some different types of wallets, and a short discussion of altcoins.

If you want more explanations of various things related to bitcoin, here is a list of the best explanations of Bitcoin and related cryptocurrencies.

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So you Wanna Understand Bitcoin… (Part 2)

governology in Uncategorized July 21, 2017 4,301 Words

Last post, I went over the basics of Bitcoin. This post goes into newer developments like the Lightning Network, current events, other currencies, and upcoming proposals. IE, beyond the basics. It also mentions some more basic information about wallet types and backing up your bitcoins.

Wallets

A wallet is a piece of software or a device that holds the key to your Bitcoin addresses and allows you to send money and track your transactions. There are a couple types of Bitcoin wallets out there. Each type has its upsides and downsides.

Full node wallets download and verify the entire blockchain, and forward transactions around to the rest of the network (helping support the network). These wallets take at least a few hours to get up and running, because downloading the entire blockchain takes quite a bit of time. But running a full node has the most security and privacy, since you don’t have to rely on any particular 3rd party to send you transactions relevant to your account.

By contrast, Lightweight wallets don’t download and verify the entire blockchain and don’t forward transactions around the network. Lightweight wallets rely on 3rd party servers to tell them when a transaction has sent money to them, and these wallets can use Simple-Payment-Verification to verify that the transaction they have been sent is a valid part of a real block. These wallets don’t need much storage space and require far fewer computing resources to run. Because of this, these kinds of wallets are ideal for use on devices like mobile phones. Lightweight wallets still don’t need to trust any 3rd party with their wallet keys, and the owner is still the only person who can possibly send bitcoins from their lightweight wallet.

The least secure type of wallet is the Web Wallet. These are wallets run by a 3rd party service. That service maintains the keys to that wallet, and gives users access via some kind of (usually proprietary) API or interface (eg usually via a website). By contrast to the full-node and lightweight wallets, users of web wallets do have to fully trust their wallet provider. If the web wallet provider wanted to, they could spend your money without your consent (though there might be legal consequences for doing that).

Hardware wallets are a wallet where the keys are held inside a hardware device of some kind. While running a software wallet is pretty secure, an attacker could steal your bitcoins if they find your (encrypted) wallet file *and* your wallet password (which decrypts that wallet file). This isn’t easy for an attacker to do, but it can happen if an attacker runs a key logger and secretly downloads files on your computer. With hardware wallets, the attacker would have to steal your password *and* steal your physical hardware wallet device. This is significantly harder to do, since it can’t be done purely over the internet. Many users who have significant bitcoin holdings are turning to hardware wallets to securely store their money.

To use a hardware wallet, you plug the wallet into your computer and use either a full node wallet or lightweight wallet to interact with the hardware device. Once its set up, all you need to do is plug it in and use your wallet like you would with any other wallet.

Backing Up and Securing your Bitcoins

Backing up your bitcoins is critically important to ensuring your bitcoins are safe. While web wallets should take care of backing up for you, if you have one of the other types of wallets, you’d need to do this yourself.

Most full-node wallets and lightweight wallets create an encrypted wallet file containing your private keys. You should copy this file to multiple locations. This file requires your password to be useful, and can be copied to anything that can store files: other computers, external hard drives, thumb drives, optical disks, even paper. I personally have a copy of my wallet on a thumbdrive on my keychain, on an external hard drive and Blue-Ray Mdisk (rated at 1000 years) that I keep in a fireproof box, and in a file on my phone. If one of those copies is destroyed, you want to have another copy you can recover your wallet from.

Some wallets use “wallet words” as a backup mechanism. This is a list of words that can be used to recover your wallet without any additional password. These aren’t safe to keep unencrypted, so if this is your only back up option, you need to store those wallet words in an encrypted file that only you know the password to. I use NotepadCrypt on windows to encrypt things like this. Once you have an encrypted file, store that file as you would a wallet file as explained above. Note that your password should be strong, memorable, and never used for anything online (eg never use your bitcoin password on any website). Here’s a guide on how to create a strong password.

If you have a hardware wallet, you’ll probably need to buy multiple hardware wallets and copy the keys between them, then store that hardware wallet in multiple places. Some hardware wallets are able to export the keys to a file which you can then back up as explained above.

Problems with Bitcoin

Despite having unique benefits over traditional currencies, Bitcoin is still technology in-development and has it’s fair share of problems. Some of these problems have recently caused a lot of controversy and argument within the Bitcoin community.

Volatility

One minor problem is Bitcoin’s volatility. Its not uncommon to see Bitcoin’s value fluctuate by 10% in a week, or 30% in a month. This makes some people nervous and can be a headache for merchants who want to accept bitcoins, but don’t want to hold onto those bitcoins. Bitcoin’s volatility is a function of having a low market capitalization (the total value of all bitcoin). This low market cap means that its easier for a single event or even a single organization to affect the price of the currency.

While its infeasible to know what bitcoin transactions are used for, its widely believed that most bitcoin transactions are for exchanging bitcoin for other currencies for investment purposes and that most Bitcoiners are simplyhodling. Because the Bitcoin economy is still in its infancy (the vast majority of merchants aren’t taking bitcoins), the exchange rate is primarily driven by speculators, who tend to lose all rationality when negative-sounding news happens.

As the value of a bitcoin has risen and more people have bought or accept bitcoins, the volatility has decreased. Bitcoin is currently only about 4 or 5 times more volatile as major national currencies like the USD, JPY, and the GBP. If Bitcoin becomes more widely used as a currency to buy goods and services, the volatility will decrease drastically. It should be able to decrease well below the volatility of national currencies because Bitcoin’s equivalent of a monetary policy is crystal clear and basically set in stone, whereas national monetary policies change every year.

Regulations

Another problem with Bitcoin isn’t really bitcoin itself, but treatment of Bitcoin by governments. While Bitcoin is legal in most countries, Ecuador, Colombia, Kyrgyzstan, and Bangladesh either have laws explicitly banning bitcoin, or have stated that prior laws prohibit its use. And Iceland allows ownership of bitcoins, but has banned buying bitcoins with the Króna.

Legality of Bitcoin around the world was in a gray area for a few years, but now most countries have set up various legal treatments of Bitcoin, either as a commodity like the US does, an asset like Norway does, or as a currency like Sweden does. While the legal standing of Bitcoin could change in any given country, it seems like the governments of the world are moving toward accepting it as a normal financial device of some kind. The fears that governments would attempt to crush Bitcoin seem to have played out much less pessimistically.

The Scaling Debate

The problem that has caused the most uproar recently is the scaling debate. As of July 2017, Bitcoin can only handle a sustained rate of 7 transactions per second. Bitcoin has grown so much that it has reached this limit which has caused fees to skyrocket recently as transactions compete for space on the blockchain. Average fees as late as October 2016 were around 20 cents/transaction, whereas currently the average fee has climbed to about $3/transaction.

Source: bitinfocharts.com

Many people (including yours truly) originally jumped on the Bitcoin bandwagon with starry-eyed ideas about a magical currency where you could send 1 cent or $1 million to anyone anywhere for free in an instant. Well reality hit with the weight of a 1000 tons of technical limitations. Many Bitcoiners want Bitcoin to achieve those attributes come hell or high blocksize. But others believe that on-chain scaling (ie things that would drive transactions per second up and transaction fees down by orders of magnitude)isn’t possible without giving away what makes Bitcoin a strong long-term store of value.

But there’s still the promise that technical improvements could allow us to reach something close to that starry-eyed dream.

The Blocksize Debate

Many people have proposed increasing the maximum block size from 1MB to 2MB, 4MB, 8MB, or higher. Doubling the block size would also double the number of transactions/second that can be supported, and would significantly reduce fees (probably back down to 2016 levels for a while). But there are problems with this solution.

Bigger blocks means the size of the blockchain (already more than 120GB) would grow at twice the rate. If Bitcoin were to scale up to the transaction volume Visa has (from Bitcoin’s 300,000 transactions/day to Visa’s 150 million), each block would have to be 250 MB, which would mean the blockchain would grow by over 13 terabytes/year. Even tho Bitcoin transactions won’t fill up that space immediately, the number of Bitcoin transactions has more than doubled every year since 2010 and at that rate would only take 10 years to reach the 150 million transaction/day milestone. This is while the number of GBs of hard drive space you can get for $1 is increasing only at about 15% per year. But maybe everyone will have 1000 terabyte drives in 10 years and that won’t be a problem.

A bigger problem with bigger blocks is the time it takes for the blocks to propagate throughout the network. Double the size of the block, double the transfer time. Why is this a problem, you ask? The problem is that this propagation time eats away at the precious time miners need to mine the next block, and well-connected large miners have an advantage here.

Currently, the majority (50%) of the network will receive new blocks within about 2 seconds. But if we had the 250 MB blocks necessary for Bitcoin to rival Visa, this propagation time would be about 8 and a half minutes long. This means that most of the network couldn’t even begin to mine on top of the right block until an average of less than 20% of their time is left. This would give a huge advantage to large, tightly-connected mining operations.

Many Bitcoiners have decried block-size increases as being a major risk of centralization – ie centralized control over the longest blockchain and therefore also the consensus rules. In fact, a paper written by researchers at Cornell recommended that the maximum block size shouldn’t be increasedany higher than 4MB. But here again, technology could save us… after a while. If internet bandwidth significantly increased, this problem would be less pronounced. But average internet speeds in the US are only increasing by 20% per year. At that rate, the size of blocks would quickly outpace internet speeds.

So tl;dr: Some in the Bitcoin community want to keep block sizes relatively small as-they-are, and think the big-blockers are mostly institutional vested-mining-interests who would benefit from the centralization caused by bigger block sizes. Others believe larger block sizes are the answer, since that would allow Bitcoin to scale to any amount of transactions and lower fees substantially, and see the small-blockers as being closed minded idealists who refuse to implement a simple change that can scale Bitcoin in the short term.

As for me, I’m in the camp that believes on-chain scaling will need to be a slow process as storage and network bandwidth becomes cheaper. Significantly large block sizes aren’t safe at the moment, and allowing block sizes to grow slowly is the only way to scale on-chain transactions without putting Bitcoin at risk.

Solutions

A number of different solutions have been proposed, and things are coming to a head this very month.

One of the most well-known and well-understood short-term solutions is Segregated Witness (or segwit for short). It doubles the capacity of Bitcoin and introduces a number of improvements that enable longer-term solutions like the Lightning Network (more on this below). Segwit is by and large non-contentious and those in the community that oppose it do so more because they don’t trust the Bitcoin Core developers, and mostly not because they don’t want Segwit. Update: As of July 21st, Segwit2x signaling reached 95% signaling (15% more than was required) and will lead to Segwit becoming active on August 23rd.

Another proposal is Emergent Consensus, where miners would be able to increase the maximum size of blocks through signaling. This has all the same objections as I mentioned above about larger blocks.

But the most highly anticipated solution is the Lightning Network, which allows users to securely send Bitcoins off-chain and settle to the actual Bitcoin blockchain periodically. The Lightning Network would support a virtually unlimited number of transactions per second with very low fees (below 1 cent per transaction). If this works as advertised, this is what would launch Bitcoin into the realm of real world currency usable for anything from buying a house, to buying a cup of coffee, to buying a mote of lint for 1 satoshi.

So you Want to Understand the Lightning Network…

The Lightning Network (LN) is a payment network built on top of Bitcoin, meaning that it requires Bitcoin to operate and takes advantage of Bitcoin’s security.

There are two major parts of the Lightning Network:

• 1. Channels – A construct allowing two people to send unlimited transactions to each other with only two transactions posted to the blockchain.

  2. Multi-channel routing – A protocol for chaining transactions so people can send money to someone that they don’t have an open channel with.

Channels allow two people to make unlimited, free, secure transactions as long as neither party spends more than they committed to the channel. Multi-channel routing allows people to pay anyone in the Lightning network as long as there is a path of channels from the payer to the payee.