Алистер Смит - The Dictator's Handbook - Why Bad Behavior is Almost Always Good Politics

After the past nine chapters of our cynical—but we fear, accurate—portrayal of politics, it is time at last to more seriously confront Lenin’s first question: What is to be done? We hope that, informed by the lessons of leadership, we can offer a much better and more democratic answer than he provided.

It is an understatement to say that making the world better is a difficult task. If it were not, then it would already have been improved. The misery in which so many live would already have been overcome. The enrichment of CEOs while their stockholders lose their shirts would be a thing of the past. However, the inherent problem with change is that improving life for one group generally means making at least one other person worse off, and that other person is likely to be a leader if change really will solve the people’s problems. If the individual harmed by change is the ruler or the CEO—the same person who has to initiate the changes in the first place—then we can be confident that change is never going to happen.

From the beginning we said we would focus on what is rather than what ought to be. Now we need to talk a bit about what ought to be. In doing so, we want to lay down the ground rules. First among these is that we should never let the quest for perfection block the way to lesser improvement. Utopian dreams of a perfect world are just that: utopian. Pursuing the perfect world for everyone is a waste of time and an excuse for not doing the hard work of making the world better for many.

It is impossible to make the world great for everyone. Everyone doesn’t want the same thing. Think about what is good for interchangeables, influentials, and essentials, the three dimensions of political life: hardly ever is it true that what is good for leaders and their essential backers is good for everyone else. If they all had the same wants there wouldn’t be misery in the world. So, even as we are trying to change the world for the better, we are tied to the dictates of political reality. A fix is not a fix unless it can actually be done! What can be done must satisfy the needs of everyone required to implement change. Wishful thinking is not a fix and a perfect solution is not our goal and should not be any well-intentioned person’s goal. Even minor improvements in governance can result in significant improvements in the welfare of potentially millions of people or shareholders.

Rules to Fix By

Whether we are looking at the welfare of shareholders in publicly traded corporations, the quality of life for citizens in a democracy or the conditions under which billions live in oppressive and impoverished third-world countries, there are certain common principles behind bettering the world. These commonalities need to be laid bare before we tackle the specifics of fixing particular problems in particular places.

If we have learned anything in the preceding pages it is to be suspicious of people’s motives. Appeals to ideological principles and rights are generally a cover. J. P. Morgan had it right: There is always some principled way to defend any position, especially one’s own interests. In one overseas nation, our government supports protest and advocates the will of the people to determine their own future. That is, for instance, a popular refrain for leaders in the United States when it comes to places like Hugo Chavez’s Venezuela or Kim Jong Il’s North Korea. Elsewhere we call for stability. That’s the principle invoked when people try to bring down a government that is our friend and ally, such as the governments of Bahrain or Saudi Arabia. Both freedom and stability are principled positions (the good reason) selectively asserted depending upon how we like the incumbent (the real reason). In devising fixes to the world’s ills, the essential first step is to understand what the protagonists want and how different policies and changes will affect their welfare. A reformer who takes what people say at face value will quickly find their reforms at a dead end.

Everyone has an interest in change, but interchangeables, influentials, essentials, and leaders don’t often agree on what changes they want. Leaders, given their druthers, would always like the set of interchangeables to be very large, and the groups of influentials and essentials to be very small. That’s why the world of business has so many massive corporations with millions of shareholders, a few influential large owners, and a handful of essentials on the board of directors who agree to pay CEOs handsomely regardless of how the company fares. That’s why so much of humanity for so much of human history has been governed by petty despots who steal from the poor to enrich the rich.

The masses—whether members of the selectorate or the wholly disenfranchised—agree that their group, the interchangeables, should be large but they want all other groups to be big as well. Their best chance at having a better life comes from the coalition and the influential group growing in size, such that they have a realistic chance of becoming one of its members and of benefiting from the profusion of public goods such governance provides, even if they remain excluded from the coalition. As we have seen, it is this very hope of improving the people’s lot that revolutionaries use as their rallying cry to get them to take to the streets. But even in a large-coalition system, these masses are unlikely to get what they want all the time. Their hope is to get what they want more of the time.

The group whose desires are most interesting from the perspective of lasting betterment is the set of essentials. More often than not, they are the people who can make things happen. You see, they don’t like the idea that they might be purged to make the coalition smaller. But at the same time, ending up in a smaller coalition can provide them with fabulous wealth. Remember Saddam Hussein’s videotaped takeover: at the outset everyone in the audience was terrified. At the end, those still sitting in the auditorium were thrilled. They knew they had survived to collect their rewards for another day. What political insiders want when it comes to institutional change is complex, but to understand the reforms they can be expected to support and those they will oppose we need to understand their wants.

Coalition members like small selectorates. Their welfare is enhanced if there are relatively few replacements for them. The incumbent cannot use the implicit threat of replacing them with a cheaper backer as a way to keep more benefits for himself rather than paying his essentials their due. This creates tension between a leader and his coalition. The leader would like to establish a Leninist style, corrupt, rigged electoral system that guarantees him an eager supply of replacement supporters. The coalition prefers monarchical, theocratic, or junta style institutional arrangements that restrict those who can be brought into the coalition to a select group of aristocrats, clerics, or military elites.

Leaders and their essentials share a preference for dependence upon a small coalition, at least so long as the coalition is very small. However, as the coalition continues to expand, a wedge is eventually driven between what a king wants and what his court needs. When that wedge gets big enough we have an explanation for the emergence of a mature democracy that is so stable it will almost certainly remain democratic and not backslide into autocratic rule. The switch in the coalition’s desires for institutional change results from tradeoffs between declines in private goods as the coalition expands, and the increase in public goods and societal productivity that accompanies such enlargement.

Given the complexity of the trade-off between declining private rewards and increased societal rewards, it is useful to look at a simple graphical illustration, which, although based on specific numbers, reinforces the relationships highlighted throughout this book. Imagine a country of 100 people that initially has a government with two people in the winning coalition. With so few essentials and so many interchangeables, taxes will be high, people won’t work very hard, productivity will be low, and therefore the country’s total income will be small. Let’s suppose the country’s income is $100,000 and that half of it goes to the coalition and the other half is left to the people to feed, clothe, shelter themselves and to pay for everything else they can purchase. Ignoring the leader’s take, we assume the two coalition members get to split the $50,000 of government revenue, earning $25,000 a piece from the government plus their own untaxed income. We’ll assume they earn neither more nor less than anyone else based on whatever work they do outside the coalition.