Open Society (continued)

 

I have no words to describe the evilness of a vertically integrated society (VIS). The worst kind always wins. Not only that equals sabotage each other as well as possible, but the person in power does not feel safe unless it is able to prove his power again and again. This proof takes all negative shapes one can imagine: it is the power to destroy, to impose absurd public decisions, to arrest change, all to make the powerful person feel a bit more secure in his position of power. Even if the powerful person was well educated before he took the power, he will be forced to change if he wants to survive. There are no rational arguments in a VIS, only declarations of loyalty. A rational argument requires a civic society able to listen and judge that argument. This phenomena takes place at each and every level of a VIS, starting with groups of two people and ending with the whole society. This situation describes a stable social equilibrium. Besides the reason and the experience which soon teaches every person the right strategy to survive, this attitude is also sown into every individual since birth. I watched a three year old being taught not to acknowledge the presence of neighbors.

Vertically integrated societies have a tendency to change unexpectedly, when one single person, usually deprived of any free intellectual challenge, suddenly decides to change policy, or when rather regular but always unexpected popular uprisings erupt. These uprisings always fail in the long run, as people do not cooperate with their equals on a regular basis, but simply choose new leaders to solve their problems, and preserve the social structure. A VIS is unable to enforce contracts beyond the discretionary and always unexpected will of the great leader. This renders the economy hopeless, but also it gives to every international treaty involving a VIS the value of the paper on which it is written – and nothing more.

Horizontally integrated societies (HIS) show a few defects themselves, as follows:

- Racism: as problems can be solved within the community, where people know and control each other well, and the community is defined by small but overwhelmingly important details like the accent, body positions and eyes color, efficient HIS's are usually hermetically closed. Larger scale problems require larger scale cooperation, but such problems are delegated to remote high rank politicians and many of them fail to be solved.

- Inertia: a problem needs to sink in before people tear off from their valuable private time to solve it. In a HIS, a problem is postponed until it becomes stringent, and then it is dealt with it very intensively over a short period of time. The solution, generated by the very middle class people who are affected by the problem, is usually good and feasible, such that people can ignore such problems over a long period of time, after which the problem resurfaces in a new form.

- Flattening: it seems that societies which are well integrated horizontally have a tendency to censor people who are well above or well below the average from the point of view of competence and performance.

Open Society

There are public goods and there are private goods. An example of a private good is bread: you buy bread and you own it. It is a good idea to own your food, it is healthy for your individual rights. Public goods are non-excludable goods. This means that you can't exclude people from using them. Non-excludability means that you can't charge people who are using public goods. For example, national defense. Even if one individual has never paid his taxes, he is still protected against foreign invasions. For example, a KGB agent walking on a street in Switzerland is very well protected against foreign invasion, even though he did not contribute at all to Swiss national defense. Public goods are often underproduced. When an individual buys a public good he will enjoy it together with many people who did not pay for that good. As a result, an individual will not buy a public good unless most other people will also buy that public good. Without such a guarantee, nobody will buy the public good, and the public good will be underproduced. For example, many towns lack green spaces or clean air.

Good government is a most important public good. In fact, in order to have private goods (which is a good idea), one must have a good government. Public goods precede private goods. In a jungle, one can not have private goods. He can have some goods, if he knows how to fight to protect them, but they are not private goods. Private goods are recognized and protected by a society, through some form of government. Good governments provide lots of public goods, like green spaces and national defense, but who provides the good government?

There are two ways to provide a government:
I. A powerful individual can provide some government. This is the case of a vertically integrated society (VIS). In such a society, the client – patron relationship is stronger than the peer to peer relationship. Equal individuals or families compete with each other for the favors of a powerful person. This is a stable equilibrium because the powerful individual keeps his subjects divided and weak. If one subject seeks the cooperation of another, he will be turned in, the one who turned him in will be rewarded and he will be punished. This type of government provides some law and order and contract enforcement but it suffers from discretionary authority and many other inefficiencies.
II. A voluntary association of equals can provide some government. This is the case of a horizontally integrated society (HIS). In such a society, the relationship between equals is stronger than the client – patron relationship. This is a stable equilibrium because the members of the association identify those who don't play by the rules and exclude them from the association. The members of the association can rely on an intense exchange of information with their peers. Please note that the association has to be voluntary. If it is compulsory or paid, then the one who imposes this restriction or provides the money is in power, not the association. Money itself exists within a government, such that it can not precede the association.

The above two paragraphs summarize the results of several decades of research which are published in: R. D. Putnam, Robert Leonardi, Raffaella Y. Nanetti, Making Democracy Work, Civic Traditions in Modern Italy, Princeton University Press, Princeton, New Jersey, 1993. The book is written in a social science jargon and makes use of some advanced statistics, which probably contributed to its undervaluation. In my opinion, this book contains a most important advancement in science, equivalent to the Newton's law of universal gravitation. One can see the application of this finding for a group of five people sitting around a table and for a nation of many millions. The production of public goods like security and a stable ecosystem are currently the main challenges for our survival over the following decades. This theory has finally allowed us to take conscious action to solve such problems and I believe that the theory already influences government policies.

Wikileaks

The cables in the latest Wikileaks release "date from 1966 up until the end of February this year" (from Wikileaks, it took me 20s to find it). For my country there is one single cable in that release. My country is Romania, a NATO member with an important geogstrategical position. There are American military basis in Romania. It was a transit point for American military resources during the war in Iraq. Romania neighbors Serbia, and it allowed American military air passage during the American intervention there. Yet Wikileaks published one single cable, which addresses the issue of ... adoptions. It is obvious that Wikileaks has handpicked cables which do not endanger anybody, but are relevant for the correct information of the citizens. Those who say otherwise do not know how to use the Internet to verify their arguments, and therefore they miss completely the relevance of this story, as I am going to show you in the next paragraphs.

We do everything on the Internet. We work, communicate, buy and sell, manage our bank accounts, make friends, live virtual lives. We do everything on the Internet, except politics. We still read newspapers and vote every four years. The distance between the way our societies function and the way we control our governments could not be bigger. Our societies are fast, well informed, active 24 hours every day. We control our governments every four years, through a yes or no question! This difference means that our governments are on the loose! We should use the Internet to monitor more real time public data, to discuss new politic strategies, and to make more real time political decisions, which our governments should be forced to take into account.

This is a problem of power sharing. There is a new world, the Internet, and some people will control it. Our governments moved in, secret organizations moved in, only we, the people, are missing. If we fail to control the Internet and to use it to manage our societies then a strong imbalance of power will result. Powerful people will make public decisions against the common interest of the members of our societies, and, as a result, our civilization will be in danger to free fall. The Wikileaks story shows that the revolution has started. We should make it succeed as nonviolently and as smoothly as possible.

"Making Democracy Work"

Mr. Leonardi,

I wish to ask you what do you think about this ideas:

1. Popper defines two categories of culture: the open and the closed society
2. It seems to me that in your book "Making Democracy Work" you suggest that a community appears around a culture which is difficult to change later, during the life of the community, from one of the above mentioned categories to the other one. Indeed, it seems that one community must briefly disappear before a new community can appear under a culture from the other category.
Community - a group of people that solve public problems in common, according with some social rules named "culture"
3. Daniel Goleman, in his "Emotional Intelligence" book, in chapter 16, describes a program that was successful in American ghettos. If you want, I can try to summarize for you the information about this very promising program. Of course, I do not know from any other source about this program, but the rest of the book makes sense to me, both from a scientific point of view, and also from the author's target point of view. And, anyway, the solution to the problem of modernization of traditionalist societies without using violence (which is pretty ineffective, as one can see in any former colony), passes through education. I believe this should be obvious.

Note: Popper confesses that he never met any person who lived only under democratic regimes who understood his theory about the open society. You will realize that it was vital to explain to westerners what is at stake. The main problem in a totalitarian society is not that you are starving, literally, but that you are dehumanized. If you become a human, than you are tortured and killed.

Now I shall try to summarize Popper, for point #1:

According to Popper, in his book "The Open Society And Its Enemies", we can divide cultures into two categories: the totalitarian one, in which people do not cooperate to solve common problems, but wait the solution to come from a superman savior who should put everybody to work, and the democratic one, in which citizens care about public matters, being, by the contrary, suspicious about their momentary leaders. The first culture is collectivistic, which means that the interests of the group (nation, tribe, family) have precedence over those of the individuals, the second one is individualistic, which means that the state institutions have the main function of protecting the individual rights of the citizens. The first culture is always at war or revolution, the second is usually liberal and tries to solve problems one by one in a rational way. The first culture is essentialist (the nation has a soul and it is eternal), the second one is more formalistic: it establishes common targets which are verified using statistics. The first culture is specific to feudalism, the second is specific to technologically advanced societies. (There have been original touches :))

So: are these common rules a possible culprit for lasting poverty in otherwise advantaged regions (no foreign threats, some material and know how transfers from wealthy regions etc.?)
And could education for students between 14 and 19 years old provide a solution?

As a comment, have you noticed, like Popper, how closed are most intelectuals to new ideas, even when they should be most interested, according to their profession and published articles? I can explain this through fear of retaliation from their narrow group of interests. Anyway ...

BBC - Rebate

EU, and, for that matter, the world, should raise taxes and transfer money to well chosen points in economy. Those taxes can be on income, individual or GDP, or GNP, or on the value added, or on property, or a combination of these, and should show equal tax rates among nations. The transfers should go in several important places, not all of them to agriculture.

Politically, there should be, let's say, three elected rooms, one with representatives proportional to population, another proportional to GDP, another proportional to income per capita. It is important to allocate political decisions among these rooms in a way that protects lives of people (unbearable decisions are not made) and still initiatives are followed. For example, in US, the Senate can defend, to some extend, the interests of smaller states, which are less represented in the Congress.

First of all, there should be transfers to the individuals, rather than agriculture. Then, there should be macro motivated transfers, to initiate projects that would not spring from private enterprise.

As a rule, Europe went wrong. Continental Europe made bad decisions, like small inflation for euro, during a recession, and UK has not proposed anything sensible (even though they could, coming from a healthy capitalist economy and a good school of economics), while it preferred to stay out of the game. All players lost. Another problem with euro is that there was no provision for fighting recession on small regions, since national currency inflation was no more possible. For example, there could be regional tax reductions (rebates) or money transfers.

Another obvious problem is the complete lack of feedback to and control of the EU administration. Top officials gained financially and politically from the increase in value of euro while they were cutting social aid in EU countries. The Constitution draft provided indeed institutions for a more efficient production in EU, but when I looked on the Internet I had a surprise: the social assistance was to be provided according to whatever national law is in place. First of all, the Constitution is above the national laws, so the five lines chapter could have been missing altogether, and secondly I could not find any link for a comment, feedback, or forum on the official page containing the Constitution draft. Better control systems of the EU administration could use IT technology and Alvin Toffler's proposals in his book "The Third Wave".

It would be a good idea to reduce subsidies for agriculture in Europe, while passing the money saved to the poor. That should allow for higher quality and diversity of food on the market, and higher standard of living for most people. However, in places where bureaucracy and justice are costly (inefficient), one could expect big companies taking over small farms, in spite of the fact that new technologies make small farms economically feasible. Big companies and big bureaucracies make good friends. Still, a small and gradual reduction in subsidies for agriculture should be tried, I think, provided that the money saved from this go to the poor to make up for the inevitable increase of prices for food.