The Logic of Governance

The type of government a society gets depends greatly upon resources and elite control, which impinge directly upon the rule of law, leaving such issues as “capitalism vs. socialism” or “big vs. little government” far down in second place. This approach provides a more realistic way to assess the evidence that the U.S. is evolving away from democracy toward abusive monopoly capitalism.

The type of government to which a society submits has a certain logic: government is broadly a function of resource availability and the degree of control the government exerts over society. Democracy is expensive, requiring public effort to keep officials honest and greatly facilitated by advanced communications and widespread education. The theoretical payback on this investment rests on the assumption that the free marketplace of ideas will allow the best to rise to the top. The level of control imposed by the ruling elite is more arbitrary, given the roles of personality, ideology, and elite coordination. Elite control contains its own logic: the quality of government may be low in a democracy if the population is angry, fearful, lazy, alienated, or otherwise distracted, but in a tightly controlled government, corrective feedback is almost certain to be impaired, leading inevitably to internal rot (apologies to Plato, whose dream of a benevolent dictatorship of the wise remains just a vision). Whether financial, military, religious, ethnic, or ideological, elites oppress.

From this landscape of government types constrained primarily by resources and control emerges a loose pattern of governance: the rule of law is a function of the combination of plentiful resources plus egalitarianism. A democracy may of course descend into mob rule, and an elite may voluntarily submit to the rule of law, but the general tendency is the reverse. Political egalitarianism, i.e., the golden coin of governmental transparency on one side and citizen democratic activism on the other, is probably more significant than economic egalitarianism, assuming that a government can be designed that allows the poor the same access as the rich. Per capita resources  probably matter more as the size of the society increases. Whatever the caveats relevant to particular circumstances, the general pattern imposes such fundamental constraints on all societies that it calls into question any facile assumptions about the “true nature” or “inevitability” or “durability” of any particular democracy or dictatorship. Look first at the combination of resources and control, not personality, ideology, or culture.

Governance is a function of resources and control. The sweet spot for good governance is the rule of law; all ideologies and economic systems are vulnerable to abuse.
Governance is a function of resources and control. The sweet spot for good governance is the rule of law; all ideologies and economic systems are vulnerable to abuse.

This general picture should immediately provoke the question, “How is my government evolving?” This question appropriately assumes that all governments are always moving in one direction or another through the theoretical political landscape as a function of variations in resource availability and the balance between elite determination to exert control vs. citizen determination to exercise oversight. As a default attitude, this equation should be considered more fundamental than other variables, e.g., constitutional guarantees or cultural norms, unless a very convincing case to the contrary can be made.

The crucial distinction to be made when assessing the current or likely quality of governance is the degree to which official behavior adheres to the rule of law (blue region in the Logic of Governance diagram) rather than the abusive principle of “might makes right (red region in the diagram). All considerations of whether, say, a social system is capitalist or socialist are secondary. No implication that law is always better than no law, that law should always be obeyed, are implied.  The most vicious dictatorships are skilled at writing laws to legalize their abuse of power, the most flagrant being “it is illegal to insult the government.” The “rule of law” is a phrase that implies something much more important: the rule of accepted law, transparent law, law that has been publicly debated and defines reasonable routes for modification by public demand, law that has been designed to achieve justice.

What may be called “democratic capitalism” and “democratic socialism” both fit in the sweet spot defined by the rule of law. Politics and economics cannot be separated; they are always influencing each other. Neither the existence of private corporations or public ownership necessarily implies anything about freedom. Straying from the central arena governed by the rule of law, however, implies that power will be abused. The direction in which one strays defines the sectors of society likely to exercise such abuse, without saying anything about the suffering it will cause. For example, a rich society straying away from the rule of law (as defined above) may move toward a “small government” system imposing few controls, in which case power will flow to corporations, which will impose their own monopoly capitalist form of government, abusing power by tilting the economic playing field. Alternatively, the society may move toward a “big government” system imposing harsh controls, in which case power will flow to the governing elite, perhaps initially in the form of an “imperial presidency” and perhaps eventually transforming into full-blown fascism. Under conditions of severe resource constraints, a communist or “socialist dictatorship” form of government focused on mandatory resource accumulation (either making the current generation sacrifice for the future of the society or for the current enjoyment of the elite).

Evolution of U.S. Financial Governance

The U.S. has been moving back toward monopoly capitalism after a high point of democratic socialism during the New Deal.

The “Logic of Governance” diagram offers a theoretical landscape on which the evolution of real governments can be plotted. The message of such a plot would lie less in the precise position assigned than in the direction of movement.The evolution of U.S. financial management since the Great Depression contains significant evidence of a shift toward monopoly capitalist rule at the expense of society. A few of the most prominent pieces of discrete evidence are listed in the diagram. Adding trends, such as the very rapid rise in the proportion of national wealth controlled by the extreme rich relative to everyone else in society over the last generation would make the point even stronger. This chart is a far more instructive view of the U.S. system of government than the simplistic and highly misleading characterization of the U.S. as a “democracy.”


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