"Mr. Bernard Shaw proposes to distribute wealth," Chesterton summarized. "We propose to distribute power."A good Newsweek article by Lee Habeeb about decentralized power and the healthy competition sparked by federalism.
"Mr. Bernard Shaw proposes to distribute wealth," Chesterton summarized. "We propose to distribute power."A good Newsweek article by Lee Habeeb about decentralized power and the healthy competition sparked by federalism.
7 comments:
Chesterton was right, and that remains the (untried) solution. Which calls to mind another of his quips: "Christianity has been said to have been tried and failed. In truth, it was found hard and left untried."
Power is always and everywhere convertible into wealth--whether directly, as in dollars for political favors, or indirectly, as with the special stores and other benefits available to the Soviet Nomenklatura.
I wrote years ago about the decentralised power in America (and probably all free market societies) and my conclusion that it scares the pants off people to think that no one is in charge. We would rather believe that an evil cabal of a few are ruining our lives than face the possibility that we are in charge of our own destinies.
"it scares the pants off people to think that no one is in charge"...yes, it does. Yet it is when 'planning', 'getting things organized,' 'putting someone in charge', that the chaos *really* gets going.
Gennady Andreev-Khomiakov was deputy manager of a Stalin-era factory, a lumber mill. The overall manager was a dynamic and dedicated man, and great improvements were made, but the 'supply chain' was always a problem. The factory was eventually squeezed to death by the inability to get their key input, raw lumber.
Gennady, whose father had been in the lumber trade before the revolution, was contemptuous of the chaos into which the industry had been reduced by the Soviets:
"The free and “unplanned” and therefore ostensibly chaotic character of lumber production before the revolution in reality possessed a definite order. As the season approached, hundreds of thousands of forest workers gathered in small artels of loggers, rafters, and floaters, hired themselves out to entrepreneurs through their foremen, and got all the work done. The Bolsheviks, concerned with “putting order” into life and organizing it according to their single scheme, destroyed that order and introduced their own–and arrived at complete chaos in lumbering."
As Gennady says:
"Such in the immutable law. The forceful subordination of life’s variety into a single mold will be avenged by that variety’s becoming nothing but chaos and disorder."
I'm not sure that order/chaos is the useful spectrum to order the choices on. For me it's more about incentives. The emergent order of the seemingly chaotic free market turns out often to do a good job of ensuring that a large pool of people hear a signal prompting them to supply a small piece of a large, complicated system of production. It gets a lot of them moving in a direction that a lot of people will ultimately be pleased by.
The alternative is for a central controller to figure out what each of them needs to do, who's in the best position to do it, and how to order them to comply when they're not individually jazzed by the decision. We assume that a smart guy in the middle with a lot of view screens can do a better job of directing effort than the diffuse network of signals and incentives, but over and over we see concrete evidence that's not true. Of course, sometimes the diffuse system of signals goes sideways and we get a tulip craze, but there are feedback mechanisms that push us back into equilibrium. When the central planner has a cushy gig, there's no good feedback mechanism short of raw political power.
I think what bugs some people most about the market mechanism is that the impetus comes from whatever the mass of people want, which is rarely what the central planner is convinced they should want. By extension, it's rarely what those of us who are trying to choose a good central planner want. "If only my guy were in charge, he'd MAKE people prefer solar to fossil fuel. You can't trust the average Joe to make the right choice." We're often certain our own choice would be best for everyone if only we could make them SEE.
"We assume that a smart guy in the middle with a lot of view screens can do a better job of directing effort than the diffuse network of signals and incentives, but over and over we see concrete evidence that's not true."
Perhaps the best evidence is in the example of the Soviet Union. There's a very interesting book, 'Red Plenty' about central planning in the Soviet Union from the standpoint of those people on the front lines of that system--factory managers, economic planners, mathematicians, computer scientists, and “fixers.” Part history and part novel, it is very well done.
My review is here:
https://chicagoboyz.net/archives/60918.html
As I noted in the review of Spufford's book, central planning--"smart guy in the middle with a lot of view screens can do a better job of directing effort than the diffuse network of signals and incentives"--is very seductive, and not only on a national/international political level. There are also many corporations which are too centralized for their own good, and the current vogue for 'big data' is sure to make this worse.
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