Armed with potent They Might Be Giants inspired metaphors, Noah Smith recently took aim at what he has long argued is libertarianism’s greatest blindspot: the local bully. Seen through the lens of Arnold Kling’s language of exploitation, this theory posits that the greatest exploitation occurs on a daily basis in the form of bosses who blackmail us with potential unemployment, community leaders — such as ministers — who have the clout to get our loved ones to shame us for our life choices, or corrupt or racist local sheriffs. I think Smith is absolutely correct that a lot of libertarians ignore the existence of this problem, but I also believe that it behooves us not to attempt to stop water thieves by poisoning the well. The greatest argument for the minimal state acknowledges the non-government problems raised by Smith but rests on thinking about potential solutions probabilistically.

From a broad enough point of view, everything in life is luck. Those of us who were born in a post-Industrial Revolution, post-Civil Rights movement America and enjoy the fruits of those and similar historic events simply won the lottery. Even where we are able to to have an influence on the course of our own lives and the world around us, we can only be thankful that we do not have a debilitating handicap or the sort of personality that would stop us from taking advantage of even those opportunities.

Human social systems are ever-changing and probabilistic. New innovations — in a broad sense of the word which includes norms, technologies, and fashions — are constantly being filtered out or diffusing at a variety of scales within a given social system. Big discontinuities do happen, and are ultimately what drive truly historic changes, such as the spread of modern democratic institutions or the explosion of wealth in the past 200+ years. But bulk of the changes that happen within a society are path dependent, determined largely by how centuries of previous diffusions shaped present institutions.

We cannot predict this process of diffusion; a ton of money and brainpower has been spent in a failed attempt to do so for marketing purposes, never mind predicting the larger movements of society. However, we can think probabilistically about comparative institutional arrangements, and what the possibilities and limitations are within each of them.

This is precisely what Nassim Taleb’s political philosophy consists of, and his solutions turn Smith’s point of view on its head. Where Smith believes that the government (the magnanimous if aloof Universe Man) should ideally be brought in to constrain local bullies, Taleb explicitly argues that local bullies are better than central ones (government from this angle is more of a gigantic Triangle Man among many smaller ones).

Here’s Taleb describing the Swiss Canton system, a prime example of this:

This is not necessarily pleasant, since neighbors are transformed into busybodies — this is a dictatorship from the bottom, not from the top, but a dictatorship nevertheless. But this bottom-up form of dictatorship provides protection against the romanticism of utopias, since no big ideas can be generated in such an unintellectual atmosphere — it suffices to spend some time in cafés in the old section of Geneva, particularly on a Sunday afternoon, to understand that the process is highly unintellectual, devoid of any sense of the grandiose, even downright puny (there is a famous quip about how the greatest accomplishment of the Swiss was inventing the cuckoo clock while other nations produced great works — nice story except that the Swiss did not invent the cuckoo clock). But the system produces stability — boring stability — at every possible level.

He notes how the Swiss have fared well during the recent recession, relative to the increasingly centralized and interconnected nations it neighbors. But there’s more here than that. Local bullies are terrible, certainly. So are wars and killing fields that leave tens of millions of people dead. Local bullies are incapable of conducting atrocities at the same scale as the modern nation state.

This is what Smith misses when he invokes the local bully and draws on examples such as anti-discrimination laws. Discrimination is horrible, and racists are contemptible human beings. But in pursuing non-discrimination policies, an infrastructure of modifying property rights and enforcing those modifications was created, and along with it the now greater than zero probability that that infrastructure will be abused. Moreover, the more aspects of American life that come under the purview of the central government, the greater you make it into a single point of failure.

Gordon Tullock once called common law outcomes essentially random and meant it as a criticism, but from a probabilistic point of view it’s redundant — all policy outcomes are random in the long run. Common law is far more distributed and case by case. It allows for fairly local and fairly rapid variation in policy; it is both flexible and it distributes the points of failure very widely. It is also easier to vote with your feet when you can do so by moving between states, counties, or towns, than when you have to immigrate to an entirely new nation.

It’s this probabilistic reasoning that has made me weary of libertarians’ — or anyone’s–attempt to simply get better laws passed in order to improve our circumstances. Long term, lasting change requires shifting the probabilistic structure of governance. This happened once when the Industrial Revolution gave us what Eli calls the technologies of control — big producers who employed huge swaths of the population in densely populated metropolitan areas. This and the resulting wealth made the rise of the modern central state possible, and highly probable to emerge in some variation across the world.

It is for that reason that I also think that libertarians are more likely to affect change by attempting to engineer it, though I’m skeptical of the odds on that front as well. For the most part, I think we’re unlikely to arrive at a better equilibrium except by the same means that we arrived at this one: by chance.