Blogging’s been a bit slow because I’m on vacation this week. I expect to keep blogging all week, but it may be a bit lighter than usual.
This post started as a comment to this post, in which Aretae discusses the differences between formalists and "econo-secessionists."
First, he asks where power comes from.
The formalists say, along with Mao, from the barrel of a gun
The secessionists say that scarcity creates power. Slaves with useful skills were paid and treated well, both in ancient greece and the antebellum US. Guns and force doesn’t get you what you want, if the other party is irreplaceable, or even scarce.
The relevant question is: "who has power?" So, to reformulate the answers: formalists say the guys with the guns and secessionists say the guys who control scare resources.
I have a good friend who’s a proud redneck (he has lots of guns, his house doesn’t have a basement but he’s currently digging one with a shovel and a wheelbarrow, and his favorite food "is sandwiches," which is apparently singular). One time I told him that if civilization collapsed he should pick me up – we’d make a good team since I stockpile gold and he stockpiles guns. He said, "why would I team up with you, when I could just make you give me your gold?"
Sometimes, the rednecks know best.
The next question is "what creates effectiveness on corporations":
The formalists say, along with many folks, the corporate governance structure.
The secessionists say that competition and especially the dynamic threat of failure/customer-exit is the cause of corporate goodness. No risk of failure, no exit, no goodness. Full stop.
Here, the formalist answer is "accountability," not corporate governance. For the average pizza restaurant the secessionists’ favored mechanism of failure works well. Governments, however, are not pizza restaurants. "Failure" for a government is not a viable solution. Egypt is showing us what failure looks like for a government – this is precisely what we should avoid.
The goal, for anyone who does not wish to see people killed, should be to create a government system that is accountable without requiring failure.
The final question is "what causes bad government outcomes":
The formalists say distributed power, democracy, the cathedral’s influence, the lack of accountability in Government employees, and point at the USA.
The secessionists say that Rent Seeking, Public Choice and Game Theory issues, and Hayekian power-knowledge differentials are the problem, and point at the USA vs. many smaller contemporary countries with the formalists’ causes but small (relative) problems.
The formalists actually say lack of accountability. The true rulers of the US cannot be held responsible for failures of their favored policies. Things like "rent seeking" only work in settings like this, when the government is totally unaccountable. The things that Aretae lists here, are symptoms, they should not be confused with the underlying disease.