Post No.: 0408
To recap from Post No.: 0403 – to develop a productive economy from scratch, a population first evolves from: 1) anarchy, to 2) exploiting scale economies in violence, then forms 3) a tax system, 4) the rule of law to enforce contracts between trading citizens, and invests in 5) infrastructure projects paid for by that taxation, that’ll all help improve internal trade and productivity and foster ingroup order, and then the ruler eventually 6) shares power with the wealthy elite in order to borrow from them on more reasonable terms in times of crisis.
Things can scupper this progression towards a centralised state though – such as in a hunter-gatherer society as opposed to an agrarian one, or where there’s a low population density, because such groups that know they cannot violently repel a more powerful outgroup can just simply physically move elsewhere, hence such groups will disperse rather than subsume and grow. Low land productivity, such as in arid territories, will also place a limit on the growth of an unproductive but strong army because the larger the army, the more food and other resources are needed to sustain it.
Large armies need large economies to sustain them, and this is one reason why maximising GDP is considered so important to many countries – it’s partly about their armies. A key reason why the Soviet Union collapsed was a military that was too expensive for its economy to sustain. Nowadays, globally-intertwined economies, where hurting a trade partner will somewhat hurt oneself too, should reduce the perceived need for quite-so-large armies since the threat of war between major economic powers is lower. The whole world would also collectively benefit if everyone spent less on their militaries and more on other things like the education of their people, the environment and improving health – but which country wants to be the sucker who massively divests in their military to test this furry theory?!
Those precariously in power will also find it hard to invest in building an enforced tax system because that involves diverting resources away from the army protecting her/his precarious rule to internal revenue collection. Or an army may think that there’s no need to collect taxes because violence can get it whatever it wants. But these are short-term strategies because there’ll eventually be no one left to pillage, whereas a tax system needs people to be alive and fit enough to work, and the more people, and the more educated, fit and productive they are, the better the economy, and thus tax revenues. However, instead of taxes, a ruler could sell patronages or permissions that let people through ports and other checkpoints guarded by her/his soldiers.
Some territories may also have less ecological variation that’ll warrant trade to require contracts or infrastructure to facilitate trade (e.g. a wheat farmer doesn’t normally want or need to trade with another wheat farmer). Furthermore, external factors like colonialism can interfere with or expedite the organic development of a state, although this frequently results in unstable states once the colonial power wanes or leaves.
…But if things do follow the script, then to get from that kind of horrible centralised state if you’re poor to one that’s more inclusive – as the number of citizens within a group grows, they could band together to protest and demand some political power of their own since they do hold some power in terms of knowing that the ruler needs them to be productive.
A common interest state is one where the interests of those in power are broadly aligned with the interests of the ordinary person (e.g. the wealthy elite own the means of production but need educated and healthy workers to make the most of it). There’s a tension between being too directly or short-term selfish, which would harm the economy and thus the ruler her/himself in the long run, and being long-term selfish, which would help the economy and therefore increase tax revenues and help the ruler her/himself in the long run. There’s a balance between economic growth and the direct or immediate redistribution of wealth from the poor to the elite.
Determining factors include how secure the elite are in power, and the number of elite relative to the rest of the population. Secure elites can aim for economic growth and play the long game, whilst insecure elites will feel the pressure to acquire revenues as soon as possible to sustain their armies, otherwise risk being overthrown. From the perspective of ordinary people – their interests are to have a secure leader too because growth benefits everybody and an anarchy would be a retrograde step. A larger elite subgroup means more unproductive mouths to feed, which demands more taxation to support, which needs a strong economy, which needs a fit and able ordinary person workforce, hence the elite should sensibly help the ordinary people. Meanwhile, a smaller elite subgroup can and will tend to choose a more immediate taxation maximisation strategy.
In a democracy, leaders should serve the ordinary person otherwise they’ll get voted out – but why would an autocratic leader form a democracy in the first place? It could come from pressure from ordinary citizens demanding it and forcing their way into political power. This movement requires a critical mass of protestors to build up though – one or two people sticking their fluffy heads above the parapet will get them chopped; but regime change can happen if enough people can overwhelm the incumbent power. Usually a key event triggers this kind of movement. (In more modern times, social media technologies facilitated the Arab Spring movement in the early 2010s, but authorities have now learnt to be proactive in monitoring such seditious material online, and some even now have the means to shut down the Internet within their own territories during times of unrest. Authoritarian states try to adapt to survive in the face of selection pressures too.)
In democracies, the risk of protest decreases as the average per-capita income rises because there’s obviously less to protest about. But in autocracies (one person/party holding absolute power), the risk of protest peculiarly increases as the average per-capita income rises; which suggests that rulers in autocracies cannot allow their people to become too wealthy, educated, confident or have too much time on their hands to think about protesting rather than worrying about where their next meal is going to come from! (So will China eventually democratise as its citizens grow more affluent or will its government continue to try to control the narrative centrally?)
Ordinary people living in autocracies may also not protest when they’re poor and powerless because they’ll get severely punished before they even do anything wrong in such states i.e. way before any momentum towards critical mass builds; whereas poor people in democracies won’t get punished in the same way for speaking against their own governments. An uprising will likely fail if momentum is curbed in the early stages. Protesting and wrecking one’s own infrastructure and economy doesn’t help the poor directly – the aim is to make those in power suffer too. It’s like people on hunger strike suffer, but the aim is to make their employers suffer too while their factories have stopped producing, so that the owners will hopefully concede negotiation items that’ll be of a long-term and overall benefit for the employees. Unionisation is also similar to having a larger group of protestors – people banding together command more power than standing alone. Strikes and unions can therefore be long-term rational tools for the exploited or exploitable, who aren’t merely thinking of themselves but others and future generations like them too.
The more power a person has, the less credible she/he is perceived to be because there’s less incentive for her/him to honour any promises – no one can hold her/him to account and punish her/him if she/he breaks a promise. Therefore a dictator, when faced with an overwhelming number of protestors, needs to concede power to others in order to gain credibility, such as offering voting rights to everybody i.e. stepping down from an autocracy. And democratisation has, so far at least, been an irreversible process – although the quality of a given democracy may decline (‘democratic backsliding’) and sharing power doesn’t necessarily mean equally.
Things to be wary of are that powerful dictators could buy votes, intimidate parties whom she/he knows will vote against her/him, rig the counting process and/or find some excuses for excluding popular opposition candidates (e.g. putting them behind bars for alleged corruption, or claiming they weren’t born in this country). So democracies are hardly just about votes and voting – they also need checks and balances, such as to ensure that elections are fair and free from corruption.
However, elections and these checks and balances are public goods – those who didn’t contribute to it cannot be excluded from its benefits, and one person benefiting fully from it doesn’t stop another person also benefiting fully from it. This raises the problem of free-riding i.e. why waste one’s own energy to police the government if other people will do it for us and everyone else? This results in such things being underprovided, or they become provided by the government – but in this case it means expecting the government to check and balance itself(!) Citizens must therefore incessantly demand the supply of this particular public good. Meow!
So citizens will be naïve to think that democracies are all about those election or referendum events that happen every few years or so. Elections aren’t enough to make a democracy function properly – the more crucial, harder and ongoing work of citizens is scrutinising governments and other political voices and outlets. Just like the work of a new government only begins once a new leader is elected – the work of citizens only begins rather than ends after an election too (e.g. making sure manifesto pledges will actually be honoured). Demanding votes is utterly pointless without also demanding that they work as intended. But it can be difficult to know, for instance, how large the effect fake news spread by a political party had on a campaign, especially because ballots are secret (e.g. we cannot check who saw what adverts and then know how they voted). Bribery is secretive too. Without effective checks and balances, a ruler doesn’t need to care about the common interests because she/he will find ways to stay in power, even in an apparent democracy. (Some relatively newly democratised states of the world have what seem like only superficial veneers of democracy, and that’s because of their ineffective checking and balancing powers and parliaments.)
Again, things can scupper this progression towards an inclusive state though – repression or indoctrination can be too great, such as in a police state that secretly supervises the activities of its citizens. The benefits of expropriating wealth from the poor and keeping the poor as poor could outweigh the benefits of becoming more inclusive from the perspective of the elite subgroup, such as if raw material resources dominate the economy (e.g. oil) hence the elite subgroup can easily control that themselves through political patronage.
A state can however nowadays be inclusive before being centralised i.e. seek democratic elections without having a centralised power to begin with. But in most of European history at least, groups started with centralised power and wealthy elites and then became relatively more inclusive for all later. Evidently, not all countries democratise before attaining economic prosperity either; although it remains to be seen whether their positions can be maintained indefinitely.
So there are exceptions to the broad patterns but it’s all about the evolutionary path of civilisations because they don’t just appear overnight. There are a few more main ingredients to add before a country can reach the stage of modern economic prosperity, but that’ll be for future posts on this topic – a topic which I hope you are finding is as interesting as I find it…