Joseph thinks that formalism won’t work.
First, I think he’s confusing formalism with neocameralism. Perhaps this essay will help.
However, I can’t resist providing a brief summary.
Formalism is the idea that we should not lie to ourselves. For example, the temporary members of the US government are currently debating whether or not to raise the debt ceiling. The actual debt of the US government, however, is already well above the debt ceiling. Officially, it is below the debt ceiling because the US government’s accounting system is fraudulent – for example, Fannie and Freddie debt are not part of the limit and the social security shortfall is not accounted for at all. The formalist believes, among other things, that the US government needs a honest accounting system. This belief is so radical that the formalist is considered crazy by correct-thinking individuals.
Neocameralism is the belief that governments should be run like corporations.
The ideas of formalism and neocameralism intersect because (one can argue that) governments are, in fact, run like corporations. The institution of neocameralism would therefore be consistent with formalism.
Moving on . . .
A neocameralist ruler in fact does not need to be any more enlightened than a ruler under the current system of government. Far from it. In a neocameralist system, a ruler has direct and objective feedback – i.e. profit – about the success of his policies. Under the current system, feedback is indirect or non-existent.
Saying that a neocameralist rule must have the characteristics that Jospeh lists is incorrect. Such characteristics are not required to run a profitable company. Steve Jobs, for example, exists.
Foseti 
Foseti, this is where Moldbug goes wrong in the very article you linked:
“The puzzle is that Washcorp has every incentive to provide libertarian government – except, of course, for the usual libertarian ideal of low taxes. Revenue maximization is Washcorp’s bread and butter, as with most primary property owners in history.”
That is simply not true. Man is not an animal primarily motivated by revenue maximization, and this is particularly true of the social troupes that make up the Cathedral.
As for the neocameralism angle, I was thinking of Moldbug’s “one ring” parable. Hence the label, “Moldbuggian Formalism.”
Also, not lying to ourselves is incompatible with human sexual politics at a fundamental biological level.
What Moldbuggian Formalism needs is a strong dose of evo psych, religion and game, applied through a historical lens.
I think you’re obviously correct that everyone is motivated by things other than profit maximization, but the modern structure of companies does a pretty good job of getting leaders to be motivated by profit.
What’s better?
Asking “what’s better” is a logical fallacy. I need not provide a better model to demonstrate that Moldbuggian formalism is foundationally flawed.
Corporations can exist because they are supported by a rule of law, which derives its enforcement from man’s willingness to die for the sexual and religious politics of the encompassing state.
In other words, they are not independently viable forms of governance.
If that’s true, then wouldn’t the profit-maximizing corporation-as-government create a religion of some sort in order to make the military loyal to it?
BTW, I discussed a similar point with Moldbug once before, on this thread.
Devin, your solution grasps one half of my point.
The other half is that revenue maximization is not the primary motive of the government, either.
Moldbuggian formalism fails because it views the economic and abstract self-interest as primary.
But with man, it is either the sexual or the spiritual that is primary, with economics subservient to both.
It is NOT badly managed when we understand the value priorities of its managers, and create allowances for their ignorance and/or deliberate self-deception.
Sorry, that last should read:
Hence we get incongruities like, “The inescapable conclusion is that Washcorp is a very, very badly-mismanaged sovcorp.”
It is NOT badly managed when we understand the value priorities of its managers, and create allowances for their ignorance and/or deliberate self-deception.
Economics is secondary because wealth did not exist in paleo societies, but sex and religion were king.
Wealth can always be redistributed by violence. It is sex and religion that man is willing to die for, and thus willing to fight for. Therefore politics must always revolve around these two.
Corporations have politics though. It just so happens that they’ve (moderately) effectively instituted the accumulation of wealth into the political structure.
And yet nobody is willing to form armies and fight and die for promotion to middle management or commitment to a certain corporate culture or whatever.
” the neocameralist ideal, the city-states of Singapore, Dubai and Hong Kong ”
These can only exist because they are islands in stable power structures created and sustained by sexual and religious politics.
So if formalism is truly about not lying to ourselves, rather than about a semi-religious preference that man become an economic and abstract self-interested animal rather than one of sex and religion, then we should concentrate our engineering perspective on the optimal sexual and religious political structure, and cease to cogitate futilely on optimal government structures for hypothetical non-men.
Under very specific circumstances and with very specific checks (i.e. those of the modern joint-stock corporation) it does seem the man can become economic – at least to some extent. Corporation are clearly run differently than the modern government of the US.
The insertion of those vague qualifications makes the statement difficult to dispute. I point out that the joint stock corporations govern only a part of man’s nature, and not the violent portion.
Subscribing to this thread via email. (Had to comment to do so.)
Joseph, nowhere in “Moldbuggian Formalism” or anywhere in MM’s writings is it stated, explicitly or implicitly, that man is now or should be made to be a purely economic animal.
Was man a purely economic animal when under the ancien regime? Of course not. A monarchy is nothing more than a sole proprietorship government. What MM is proposing is to take all the benefits of monarchy while eliminating the arbitrariness and confusion of succession.
Primarily, not purely.
And it is implicitly stated here: “Revenue maximization is Washcorp’s bread and butter, as with most primary property owners in history.”
And underlined here:
“The inescapable conclusion is that Washcorp is a very, very badly-mismanaged sovcorp.”
Joseph,
Do you think USG is bad at revenue maximization?
They’re very poorly run, but in any given year, they bring in a lot of money.
Of course they’re bad at revenue maximization. They’re killing the goose that lays golden eggs… what could be worse?
I’m not so sure. They don’t seem to have been able to raise taxes share of GDP from 20% or so, but they can really raise of lot of cash in the debt markets these days.
That’s not real money. It’s not as if they’re converting it into gold bars or villas.
But that’s sort of the point . . . they’re pretty good at maximizing their revenue. The easiest way to do so is to control the currency!
Revenue in nominal currency is not the same as real economic value extracted.
And you have to factor revenue stream sustainability in as well.
I’m not buying the “clever revenue maximizers” argument.
I don’t see at all where if follows from the quotes you mention or from the internal logic of neocameralism that man is or should be treated as an animal “primarily motivated by revenue maximization”.
What those quotes do imply, is that property owners qua property owners will tend to maximize the revenue from their property. That organizations are more efficient when they have one specific, measurable goal. That universal democracy leads to shitty government. That, as Schiller wrote, votes should be weighed, not counted.
Just because one asserts that the goal of one specific organization should be purely economic does not mean that such a one would also assert that all goals and aspirations for mankind as a whole and individually should be purely economic. Your error lies in conflating the motives of government with the motives of man.
“Just because one asserts that the goal of one specific organization should be purely economic does not mean that such a one would also assert that all goals and aspirations for mankind as a whole and individually should be purely economic.”
Either you haven’t read the rest of my argument or you’re not understanding it.
Arguing that the government can or should be purely economic involves a fundamental misunderstanding of the nature of man.
It is impossible. The few city states that are the exception to the rule demonstrate the rule.
Joseph Dantes wrote: “It is impossible. The few city states that are the exception to the rule demonstrate the rule.”
If there are exceptions, then it is POSSIBLE. Logic.
The arguments for formalism are very strong, and in fact the U.S. Government was much more formalist as recently as the 1950’s; the arguments for neocameralism are, much, much less so. Moldbug is the best diagnostician of democracy around, in my opinion, but his remedies are much less perspicacious. He’s still too influenced by anarcho-capitalism, in my opinion, and his “Patchwork” structure is just the old Rothbardian “competing protection agencies” saw (which Moldbug has demolished, by the way) made into territorial entities. We can look to Mencius for our diagnosis, but we’ll have to find the cure ourselves. Of course, Moldbug’s thinking is still developing, and he may do better in the near future. In the meantime, he still hosts one of the best blogs around.
We are in substantial agreement.
Yet if as Foseti says, formalism is not lying to ourselves, then it is incompatible with humanity’s inborn need for self deception.
Those regimes that were successful throughout history cannot really be said to have been founded on an absence of self deceit, but rather on the strength of useful prejudices.
I would argue that absolute unfiltered truth is an acid to such useful prejudices.
I agree, but I would also say that useful prejudices are useful because they are closer to the truth than the sorts of lies society is pushing for the sake of PC, for example. Yes, all people and societies lie to themselves, and this is probably necessary, but I think that by definition, the less delusional a person or society is, the more it is operating in the real world, as opposed to a fantasy land, the more successful that person or society will be. This explains, more than anything, the triumph of the U.S. in the Cold War. The U.S. certainly had its delusions (some of which have metastisized alarmingly since 1991)but it wasn’t living a lie in the sense that Communism was, so it prevailed. We may have crossed some kind of line since then.
and of course, the absolute unfiltered truth probably isn’t on tap anywhere anyway, at least not on this side of the grave. WE can probably thank God for that…
I think you’re underestimating the degree to which certain sections of thought were unthinkable during various successful eras of useful prejudices. And how this relates to formalist theory, which might quite frequently be among those forbidden sections.
“Arguing that the government can or should be purely economic involves a fundamental misunderstanding of the nature of man.
It is impossible. The few city states that are the exception to the rule demonstrate the rule.”
The history of Europe shows that it is not impossible. What was the House of Hohenzollern if not a sole proprietorship that ran Prussia as a business with the profits going to the ruling family and progeny? What detrimental difference is there between the Hapsburgs and a proposed joint-stock republic?
I doubt that the governors or the governed saw it that way, but you’re welcome to provide evidence to the contrary.
“I think you’re underestimating the degree to which certain sections of thought were unthinkable during various successful eras of useful prejudices.”
This may well be true, but a useful prejudice still will be successful insofar as it corresponds to the truth, whether the person or society who holds it knows that or not. All societies who have ever had useful prejudices have regarded them as the truth, not as useful prejudices, and if certain thoughts were unthinkable, it was because they were regarded as offenses against truth, not as revealing that the emperor has no clothes. So yes, self-delusion can be useful, but only as long as a person or society really believes it, and only as long as the delusion does not too seriously conflict with reality, which IS still out there. Some delusions, if adopted by a person or society, will terminate existance very quickly.
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