I recently pointed you towards a book that has turned out to be a compelling and interesting read.

At the end of the day, it’s a straightforward application of public choice theory and evolutionary thinking to questions of power. Easy to understand theory is bundled with data and anecdotes* to elucidate the incentives facing dictators, democrats, executives, and public administrators. The differences between them are not discrete: they all face the same basic problem of compelling others’ behavior while facing some threat of replacement.

Nobody rules alone, so staying in power means keeping the right people happy and/or afraid. All leaders are constrained by their underlings. These underlings are necessary to get anything done, but they’re also potential rivals. For Bueno de Mesquita and Smith the crucial facts of a political order are a) how big a coalition (how many underlings) the ruler is beholden too and b) how replaceable the members of that coalition are.

The difference between liberal and illiberal orders boil down to differences in those two parameters. In democracies with a larger coalition and less replaceable coalition members, rulers behave better.

I got a Calculus of Consent flavor from Dictator’s Handbook. At the end of the day, collective decision making will reflect some version of “the will of the people… who matter.” But when we ask about the number of people who matter, we run into C of C thinking. Calling for bigger coalitions is another way of calling for an approach to an effective unanimity rule (at least at the constitutional stage).

In C of C the question of the optimal voting rule (majority vs. super majority vs. unanimity) boils down to a tradeoff between the costs of organizing and the costs of externalities imposed by the ruling coalition. On the graph below (from C of C) we’re comparing organization costs (J) against externality costs (I) (the net costs of the winning coalition’s inefficient policies). The idea is that a unanimity rule would prevent tyranny of the majority (i.e. I is downward sloping), but that doesn’t mean unanimity is the optimal voting rule.

But instead of asking “what’s efficient” let’s think think about what we can afford out of society’s production, then ask who makes what decisions. In a loose sense, we can think of a horizontal line on the graph above representing our level of wealth. If we** aren’t wealthy enough to organize, then the elites rule and maximize rent extraction. We can’t get far up J, so whichever coalition is able to rule imposes external costs at a high level on I.

But I‘s height is a function of rent extraction. Rulers face the classic conundrum of whether to take a smaller piece of a larger pie.

The book confirms what we already know: when one group can make decisions about what other groups can or must do, expect a negative sum game. But by throwing in evolutionary thinking it shed light on why we see neither an inexorable march of progress nor universal tyranny and misery.

As you travel back in time, people (on average) tend to look more ignorant, cruel, and superstitious. The “default state” of humanity is poverty and ignorance. The key to understanding economics is realizing that we’ve bootstrapped ourselves out of that position and we aren’t done yet.

The Dictator’s Handbook helped me realize that I’d been forgetting that the “default state” of political power is rule by force. The liberalization we’ve seen over the last 500 years has been just the first part of a bootstrapping process.

Understanding the starting point makes it clear that more inclusive systems use ideas, institutions, capital, and technology to abstract upward to more complex levels. Something like martial honor scales up the exercise of power from the tribe (who can The Chief beat up) to the fiefdom (now the Chief has sub-chiefs). Ideology and identity can tie fiefdoms into nation-states (now we’ve got a king and nobility). Wealth plus new ideologies create more inclusive and democratic political orders (now we’ve got a president and political parties). But each stage is built on the foundation set before. We stand on the shoulders of giants, but those giants were propped up by the non-giants around them.

Our world was built by backwards savages. The good news is that we can use the flimsier parts of the social structure we inherited as scaffolding for something better (while maintaining the really good stuff). What exactly this means is the tricky question. Which rules, traditions, organizations, and processes are worth keeping? How do we maintain those? How/when do we replace the rest? And what does “we” even mean?

Changing the world involves uncertainty. There are complex interrelations between every part of reality. And the knowledge society needs is scattered through many different minds. To make society better, we need buy-in from our neighbors (nobody rules alone). And we need to realize that the force we exert will be countered by an equal and opposite force some plural, imperfectly identifiable, maybe-but-probably-not equal, and only-mostly-opposite forces. There are complex and constantly shifting balances between different coalitions vying for power and the non-coalitions that might suddenly spring into action if conditions are right. Understanding the forces at play helps us see the constraints to political change.

And there’s good news: it is possible to create a ruling coalition that is more inclusive. The conditions have to be right. But at least some of those conditions are malleable. If we can sell people on the right ideas, we can push the world in the right direction. But we have to work at it, because there are plenty of people pitching ideas that will concentrate power and create illiberal outcomes.

*I read the audiobook, so I’m basically unable to vouch for the data analysis. Everything they said matched the arguments they were making, but without seeing it laid out on the page I couldn’t tell you whether what they left out was reasonable.

**Whatever that means…