I just submitted the following to the Republican Liberty Caucus (RLC) blog.
RLC Has a Mission
In his historical tour de force, On Power, Bertrand de Jouvenal traces the process of centralization of power in Europe from the fall of Rome. He paints a picture of an unstoppable centripetal force, power, whose ever tightening grip on humanity was hastened first by the increasing power of monarchs and then by the rise of democracy. Prior to mass rule that began with the French revolution and Napoleon, war was limited by the resources of local feudal rulers. Total war became possible with the rise of democracy and nationalistic centralization. The great wars of the twentieth century which saw unprecedented numbers killed were the product of nationalism, mass rule and socialism, indeed, of national socialism and socialism in one country. These last are the ideologies of both the Democratic and Republican parties today.
For a century the United States showed that in the absence of centralization economic progress would come quicker, the public made better off, and war limited to local expansionism. But the Civil War began a process of Progressive centralization, and elite Americans of the Gilded Age after the Civil War, envious of the status of German universities, sent their sons to graduate school in Germany and were surprised when they returned advocating ideas that would forestall freedom and progress. Not having access to the ideas of von Mises, Hayek and Schumpeter, elite Americans adopted German historicism, according to which they, as an expert elite, deserved power and that power ought to be centralized to that end. They chose to remake America in Germany’s image fifty years before the rise of Hitler.
We live with the heritage of their nationalist and now internationalist Progressivism. Progress has slowed; retirement savings are insufficient to cover the needs of the largest cohort of retirees in the history of the world; the Progressive health care system has faltered and been redesigned to restrict care; and for the past forty years Americans have seen the”promise of American life”, an ever increasing standard of living, betrayed and slowed to a halt as the Federal Reserve Bank and the federal government have transferred ever more resources to banks and speculators.
De Jouvenal saw the rise of Franklin D. Roosevelt as the ultimate success of “power” in the United States. But the process has taken longer and become more intense as the centralizers’ ideas, one after the next, have failed and destroyed sections of America’s freedom and affluence. The nation retains its preeminent role because of the nineteenth century’s gains and because its diminishing sphere of private initiative remains larger than under the rigid socialism that dominates Europe and the rest of the world.
No one can calculate the damage that power has done to the nation. It is probable that, based on the absence of real wage growth since the gold standard was abolished in 1971 and the 2% compounded growth of real wages between 1800 and 1971, the real hourly wage today is but 40% of what it might have been without the depredations of the federal and state governments. But Americans are relatively worse off than that because of increases in taxes at the state and federal levels.
Both parties, Republican and Democratic, have participated in the relentless expansion of power. The Republican is the more likely of the two to be transformed from a socialistic, elitist party, to one that represents freedom and decentralization. Hence, there is no more important task in politics today than that which the Republican Liberty Caucus has set before itself: to reform the GOP and transform it into a party of freedom and decentralization; to overturn the process of centralization of power; and to reestablish America as a land of freedom.
Given the low quality of public debate and the domination of the public media, this is a difficult task. Struggle we must.
Showing posts with label on power. Show all posts
Showing posts with label on power. Show all posts
Saturday, March 27, 2010
Friday, June 12, 2009
De Jouvenal on the Investment Banker Bailout-Socialism of Bush and Obama
"It is far from being the case that these new aristocrats show all the characteristics of the old, or even of those who have climbed the rungs of society's ladder by their own unaided efforts. It is one thing to rise at the riser's own risks, another to owe promotion to a master's favor. A pirate like Drake, enriched by his voyages, the importance of which his ennoblement if nothing else, attests, owes everything to himself and makes a very different sort of aristocrat from a public administrator grown great in public offices often by qualities of flexibility rather than of energy.
"No absolute rule can be laid down, and there have been public functionaries who have displayed the most virile qualities. But often also, as was seen in the late Roman Empire, the functionary is only a freedman who has never shaken off the characteristics of a slave. Recruited from those freedmen, the ruling class of the late Empire became tame and spiritless.
"Towards the end of the ancient regime the French aristocracy, too, felt the effect of the ways in which most of its members had obtained their elevation in the astonishing picture of Pontchartrain given us by Saint-Simon (Pontchartrain [1674-1747]--His administration of his office was deplorable and Saint-Simon's memoirs are studded with unflattering references to him. He obtained his elevation through the influence of his father, who was Chancellor.)
"The tone of an aristocracy gets transformed by the process of internal decay, along with its restocking by elements with little in them of the libertarian spirit: securitarian elements come to predominate in it.
"It is the most pitiable spectacle to be found in social history. Instead of maintaining their position by their own energy and prestige, as men who are always ready to take the initiatives, responsibilities and risks which are too formidable for the other members of society, the privileged, whose role it is to protect others, aim at being protected. Who alone is placed high enough to protect them? The state. They ask it to defend for them the positions which they are no longer capable of defending for themselves and are therefore unfit to occupy.
"When the French nobility, recruited as it then was by the purchase of public offices, was no longer capable of excellence in war, then was the time that it got reserved to it by law the officers' berths. When to the merchants, who, like Sindbad, embarked in a voyage their entire capital there had succeeded a prudent generation of traders, the latter sought to have the king's navy secure to their travellers exclusive rights to some distant coast--from which their ancestors would have kept all intruders away themselves by their own artillery.
"...The essential psychological characteristic of our age is the predominance of fear over self-confidence. The worker is afraid of unemployment and of having nothing saved for old age. His demand is for what is nowadays called 'social security.'
"But the banker is just as timorous; fearing for his investments, he places the capital monies at his disposal in government issues, and is content to credit effortlessly the difference between the interest earned by these securities and the interest which he pays out to his depositors. Everyone of every class tries to rest his individual existence on the bosom of the state and tends to regard the state as the universal provider. And President Franklin Roosevelt cam out as the perfect psychologist when he laid down as 'the new rights of men' the right of the worker to be regularly employed at a regular salary, the right of the producer to sell stable quantities of goods at a stable price, and so on. Such are, in substance, the securitarian aspirations of our time.
"The new rights of man are given out as coming to complete those already proclaimed in the eighteenth century. But the least reflection is sufficient to show that in fact they contradict and abrogate them..."
Bertrand de Jouvenal, On Power, pp. 383-8. 1945.
"No absolute rule can be laid down, and there have been public functionaries who have displayed the most virile qualities. But often also, as was seen in the late Roman Empire, the functionary is only a freedman who has never shaken off the characteristics of a slave. Recruited from those freedmen, the ruling class of the late Empire became tame and spiritless.
"Towards the end of the ancient regime the French aristocracy, too, felt the effect of the ways in which most of its members had obtained their elevation in the astonishing picture of Pontchartrain given us by Saint-Simon (Pontchartrain [1674-1747]--His administration of his office was deplorable and Saint-Simon's memoirs are studded with unflattering references to him. He obtained his elevation through the influence of his father, who was Chancellor.)
"The tone of an aristocracy gets transformed by the process of internal decay, along with its restocking by elements with little in them of the libertarian spirit: securitarian elements come to predominate in it.
"It is the most pitiable spectacle to be found in social history. Instead of maintaining their position by their own energy and prestige, as men who are always ready to take the initiatives, responsibilities and risks which are too formidable for the other members of society, the privileged, whose role it is to protect others, aim at being protected. Who alone is placed high enough to protect them? The state. They ask it to defend for them the positions which they are no longer capable of defending for themselves and are therefore unfit to occupy.
"When the French nobility, recruited as it then was by the purchase of public offices, was no longer capable of excellence in war, then was the time that it got reserved to it by law the officers' berths. When to the merchants, who, like Sindbad, embarked in a voyage their entire capital there had succeeded a prudent generation of traders, the latter sought to have the king's navy secure to their travellers exclusive rights to some distant coast--from which their ancestors would have kept all intruders away themselves by their own artillery.
"...The essential psychological characteristic of our age is the predominance of fear over self-confidence. The worker is afraid of unemployment and of having nothing saved for old age. His demand is for what is nowadays called 'social security.'
"But the banker is just as timorous; fearing for his investments, he places the capital monies at his disposal in government issues, and is content to credit effortlessly the difference between the interest earned by these securities and the interest which he pays out to his depositors. Everyone of every class tries to rest his individual existence on the bosom of the state and tends to regard the state as the universal provider. And President Franklin Roosevelt cam out as the perfect psychologist when he laid down as 'the new rights of men' the right of the worker to be regularly employed at a regular salary, the right of the producer to sell stable quantities of goods at a stable price, and so on. Such are, in substance, the securitarian aspirations of our time.
"The new rights of man are given out as coming to complete those already proclaimed in the eighteenth century. But the least reflection is sufficient to show that in fact they contradict and abrogate them..."
Bertrand de Jouvenal, On Power, pp. 383-8. 1945.
Sunday, June 7, 2009
Robespierre on Progressivism and the Living Constitution
"what do we care for devices devised to balance the authority of tyrants? It is tyranny that must be extirpated: the aim of the people should be, not to find in the quarrels of their masters short breathing spaces for themselves, but to make their own right arms the guarantee of their rights."*
De Jouvenal adds:
"In other words, when the Power was held by others, we favoured limiting it; now that we hold it ourselves, it cannot be too big."
*Robespierre's speech at the sitting of May 10, 1793. Quoted in de Jouvenal, On Power, p. 250.
De Jouvenal adds:
"In other words, when the Power was held by others, we favoured limiting it; now that we hold it ourselves, it cannot be too big."
*Robespierre's speech at the sitting of May 10, 1793. Quoted in de Jouvenal, On Power, p. 250.
Thursday, June 4, 2009
How Universities Systemically Expand State Power
Bertrand de Jouvenal's argument concerning the relentless expansion of the state since the Middle Ages is based on the unfolding of monarchy from the twelfth to the twentieth centuries. In the nineteenth century monarchy changed its form of sovereignty from the divine right of kings to popular sovereignty, and the realization of sovereignty from the monarch in flesh to a reified "national will" that, of course, becomes the property of elites. De Juvenal points out that Philip Augustus, the king of France from 1180 to 1223, had to live off his own resources. His only army was a small bodyguard. He had no officials. He depended on Church resources for all official business. But by the reign of Louis XIV, the French king's army was 200,000 men. "He gives out laws and sets his dragoons at those who do not worship God in what he considers the right way; an enormous army of officials animates and directs the nation." (p. 141, On Power).
The expansion of the state continued unabated until World War II. Hitler, in 1939, could command the entire German nation to destroy itself and to murder entire ethnic groups. Since then, there has been further growth in state power in many parts of the world. In terms of relative size, the Soviet- and National-Socialist states could not push power further because those societies were 100% socialized. But in terms of absolute size, the creation of technology in the non-socialist states has been used to increase the state's size. In the United States, the process of monarchization of the nation has proceeded unabated. Government today is far larger than ever before.
One of the concomitants of increasing governmental size is political correctness or mono-thought across a large swathe of the population. The famous argument in Davud Riesmann's Lonely Crowd is that a psychological change occurred from inner to other-directedness. But this may be most characteristic of America, where monarchical power in the name of popular will replaced Lockean liberalism, not monarchy. Likely, other-directedness always had been characteristic of aristocratic Venice, London and Paris.
De Jouvenal makes a crucial point--that there is a direct relationship among social theories, mass movements and state expansion. That is, the groupthink of other-directed political movements that generate widespread unison of thought by its own nature generates state expansion. Moreover, universities that advocate simplistic ideological cure-alls for society such as Keynesian economics, social work, government regulation and the like are inevitably generative of state expansion. This is so because of the combination of the egos of government officials, who derive gratification from imposing their ideas and their will on society; and the simplicity of the ideological solutions that universities propose and seldom if ever work. Big egos need simplistic solutions in order to feel good about themselves.
One of the ramifications of this is the derivation of ego-gratification by mass followers of Power. The majority of the population does not have a crack at implementing its own ideas and experiencing the ego-enhancement that power brings to the powerful. Rather, it is through psychological displacement that large numbers of people identify with one or other of the ego-elements in society--Barack Obama or George Bush--and gain ego-fulfillment by identification with a stronger element, father figure or the like. By parroting the half-baked claims of Harvard economists, members of mass society gain ego fulfillment by feeling that they are identified with the media or intellectual elite. For Democrats and RINO Republicans this is the role that the New York Times plays. For Republicans this is the role that Rush Limbaugh and other talk radio announcers play.
Of course, the theories of both Democrats and Republicans are wrong. Simple theories do not generally do well when confronted with reality. Rush Limbaugh claims to be for smaller government, but when his candidates are elected they expand government to a much greater degree than the candidates he opposes. Barack Obama claims to be for the middle class and poor, but when the opportunity arises to hand several trillion dollars to the very wealthy at the expense of the middle class and poor, he leaps at it like a terrier leaps at a Porterhouse steak.
Universities generate not solutions but ideologies. The powerful pick up on the simpletons' ideologies that universities generate and use state power to enhance their egos. Universities benefit from the support that power confers on them.
De Juvenal writes (p. 144, On Power):
"In the realm of nature there is nothing else to satisfy the human spirit's primitive passions. In love with his own experiments, with the simple relationships and direct causations his brain can grasp, and with the artless plans which he is wise enough to construct, man wishes that the whole created world may show itself built not only with the same instruments as he possesses but also by the same turns of skill as he has mastered. Rejoicing as he does in all that can be brought to uniformity, he is forever being disconcerted by the infinite variety which nature herself seems to prefer, as instanced by the chemical structure of organic bodies.
"It is an agreeable game, imagining how man, if he had the power, would reconstruct the universe--the simple and uniform lines on which he would do it. He has not that power, but he has, or thinks he has, the power of reconstructing the social order. This is a sphere in which he reckons that the laws of nature do not run for him, and there he tries to plant the simplicity which is his ruling passion and which he mistakes for perfection."
The expansion of the state continued unabated until World War II. Hitler, in 1939, could command the entire German nation to destroy itself and to murder entire ethnic groups. Since then, there has been further growth in state power in many parts of the world. In terms of relative size, the Soviet- and National-Socialist states could not push power further because those societies were 100% socialized. But in terms of absolute size, the creation of technology in the non-socialist states has been used to increase the state's size. In the United States, the process of monarchization of the nation has proceeded unabated. Government today is far larger than ever before.
One of the concomitants of increasing governmental size is political correctness or mono-thought across a large swathe of the population. The famous argument in Davud Riesmann's Lonely Crowd is that a psychological change occurred from inner to other-directedness. But this may be most characteristic of America, where monarchical power in the name of popular will replaced Lockean liberalism, not monarchy. Likely, other-directedness always had been characteristic of aristocratic Venice, London and Paris.
De Jouvenal makes a crucial point--that there is a direct relationship among social theories, mass movements and state expansion. That is, the groupthink of other-directed political movements that generate widespread unison of thought by its own nature generates state expansion. Moreover, universities that advocate simplistic ideological cure-alls for society such as Keynesian economics, social work, government regulation and the like are inevitably generative of state expansion. This is so because of the combination of the egos of government officials, who derive gratification from imposing their ideas and their will on society; and the simplicity of the ideological solutions that universities propose and seldom if ever work. Big egos need simplistic solutions in order to feel good about themselves.
One of the ramifications of this is the derivation of ego-gratification by mass followers of Power. The majority of the population does not have a crack at implementing its own ideas and experiencing the ego-enhancement that power brings to the powerful. Rather, it is through psychological displacement that large numbers of people identify with one or other of the ego-elements in society--Barack Obama or George Bush--and gain ego-fulfillment by identification with a stronger element, father figure or the like. By parroting the half-baked claims of Harvard economists, members of mass society gain ego fulfillment by feeling that they are identified with the media or intellectual elite. For Democrats and RINO Republicans this is the role that the New York Times plays. For Republicans this is the role that Rush Limbaugh and other talk radio announcers play.
Of course, the theories of both Democrats and Republicans are wrong. Simple theories do not generally do well when confronted with reality. Rush Limbaugh claims to be for smaller government, but when his candidates are elected they expand government to a much greater degree than the candidates he opposes. Barack Obama claims to be for the middle class and poor, but when the opportunity arises to hand several trillion dollars to the very wealthy at the expense of the middle class and poor, he leaps at it like a terrier leaps at a Porterhouse steak.
Universities generate not solutions but ideologies. The powerful pick up on the simpletons' ideologies that universities generate and use state power to enhance their egos. Universities benefit from the support that power confers on them.
De Juvenal writes (p. 144, On Power):
"In the realm of nature there is nothing else to satisfy the human spirit's primitive passions. In love with his own experiments, with the simple relationships and direct causations his brain can grasp, and with the artless plans which he is wise enough to construct, man wishes that the whole created world may show itself built not only with the same instruments as he possesses but also by the same turns of skill as he has mastered. Rejoicing as he does in all that can be brought to uniformity, he is forever being disconcerted by the infinite variety which nature herself seems to prefer, as instanced by the chemical structure of organic bodies.
"It is an agreeable game, imagining how man, if he had the power, would reconstruct the universe--the simple and uniform lines on which he would do it. He has not that power, but he has, or thinks he has, the power of reconstructing the social order. This is a sphere in which he reckons that the laws of nature do not run for him, and there he tries to plant the simplicity which is his ruling passion and which he mistakes for perfection."
De Jouvenal on the Public Loss Function
The notion of a loss function is the basis of total quality management. Quality losses appear when the realization of an output deviates from its target qualities. For instance, if a nail is supposed to be 6 inches long, and it comes off the conveyer belt measuring 6.0000001 inches, the .0000001 is a loss. Total quality management is a process of reducing the loss by investigating deviations that are more than three standard deviations from the target.
De Jouvenal argues that Power, the governing elite, derives historically from conquest. In European history this took the form of the conquest of the Roman territories and Rome itself by the Franks, Goths, Angles, and other Barbarians. In China this took the form of the unification of China by the Duke of Zhou and Qin Shi Huang's reunification following the warring states period. Qin, by the way, buried China's scholars alive, a fate I have dreaded after seeing the movie The Vanishing.
The monarch or leader of the conquering tribe exploits the conquered population rather than kill them. The invention of slavery reduced the amount of killing because the conquerers learned to make use of the conquered economically. The king realizes that the nobility, the leaders of his army, pose a threat to his power. Over time, perhaps multi-generationally, the king realizes that by taking the side of the conquered against the nobility he can reduce the power of the nobility and enhance his own power. This happened in England in the 1500s. The establishment of the Chinese Civil Service was within roughly two centuries of the Qin Shi Huang's reunification of China. In America, the Progressives, representatives of big business, realized that they could work with populist and socialist movements by saying that they were against the trusts, and in doing so bring regulations that attacked the rising entrepreneurs and benefited big business to bear. Thus, the king creates a bureaucracy or civil service that aims to provide social benefits in order to unite the people against the nobility. This occurred in modified form in the United States. Abraham Lincoln had enhanced federal power in the 1860s, and Progressivism appeared within 40 years.
Ultimately the people realize that the king can be replaced with the popular sovereignty or national will, which of course are non-existent imaginings. The king is deposed and democracy replaces the monarchy. The unlimited definition of democracy, in turn, leads to tyranny. Thus, the French Revolution led to killings by Jacobins, Robespierre and the Committee of Public Safety; the democratic revolution of Sun Yat Sen led to the tyranny of Mao Tse Tung; and the overthrow of the Czar led to the Bolshevik Revolution.
In America De Jouvenal's model does not apply exactly because there was no monarch. Also, Rousseau's unlimited theory of democracy did not take hold. Rather, Lockean liberalism limits the power of democracy. Hence, the tyrannies and suffocating power of government that took hold in backward Europe and Asia did not occur here. However, America's elite, jealous of the wonderful triumphs in Europe, aimed to introduce Rousseauean unlimited democracy here. Just two decades before the ascension of both Hitler and Stalin, Herbert Croly, Walter Weyl and Theodore Roosevelt argued for Progressivism. Croly's book glorifies the state and is very much in the tradition of German historicism, as was Progressivism in general.
The notion of a loss function is that the action of a producer can be improved by reducing losses. Many will argue with the claim that unlimited democracy leads to tyranny. However, whether you believe that unlimited democracy leads to social justice and benefits society, or whether you believe that limited government is better at achieving those ends, the question needs to be asked what the method of achieving each citizen's best interests can be. In other words, even if unlimited democracy and the state apparatus can advantage society, the question needs to be asked what method of execution or production will work best. It is unlikely that the centralized state by which Progressives hoped to emulate European Christian Socialism and social democracy (and itself was but an extension of monarchy, according to De Juvenal) is best at meeting public needs even if the state is better at meeting public needs than are private firms. The reason is bounded rationality.
Bounded rationality was discussed by March and Simon with respect to organizations in their book Organizations. Walter Lippmann discussed the idea with respect to public opinion in his book Public Opinion. Ludwig von Mises discussed it with respect to centralized economic planning. And De Jouvenal discusses it with respect to the ability of the state to achieve the objective of the common good.
Naturally, he mocks the idea that Power (as he defines it, the elite that governs society) has the common good in mind. This is the assumption of all advocates of big government, socialism, Progressivism, social democracy and the like. The notion that people seek power out of altruistic ends is laughable. We see this today with the naive news broadcasters, like CNN's Jack Cafferty, who offer prayers to Saint Barack Obama and his colleague, Lou Dobbs, whose head touches the floor seven times whenever Saint Barack's name is mentioned. But De Jouvenal grants this assumption.
He notes:
"But as soon Power is conceived as being exclusively the agent of the common good, it must form a clear picture for itself of what this common good is. While Power was eogist, the vital necessity under which it lay of reaching every day a daily accommodation with society, itself sufficed to form in it pictures of public requirements which, though confused, were born of actual contacts. But as soon as Power, under the spur of altruism, has a vision of the entire community and what medicine it needs, the inadequacy of human intelligence to such a task appears in its fullness. What the judgment pronounces then shows itself a blinder guide than what the senses indicate--to put it another way, touch is superior to vision.
"It is a noteworthy fact that all the greatest political mistakes stem from defective appraisals of the common good--mistakes from which egoism, had it been called into consultation, would have warned Power off." (On Power, p. 137).
In organizational theory, it is well established that one of the cures for cognitive limits on rationality is decentralization or divisionalization of organizations. Thus, one way to address the problem of the social loss function that government creates is to reduce the scope of governance. In other words, to download responsibility to the states.
American government anticipated this idea in the form of Federalism. However, the tendency over the past two centuries has been to reduce the power of the states and increase the monarchical power of the federal government. The reason for this is, as De Jouvenal points out, the economic, political and egoistic interests of the ruling elite--the politicians in Washington, the Justices of the Supreme Court, the academics who cater to them and receive significant jobs and consulting contracts, and the military industrial complex.
The monarchical process thus results in one rather odd effect: that a key finding of the social sciences, that information is difficult to procure; that rationality is limited; and that experimentation is the best way to learn; is scoffed at by judges, economists and academicians, whose economic interests take precedence over their interest in pursuing justice or the truth.
De Jouvenal argues that Power, the governing elite, derives historically from conquest. In European history this took the form of the conquest of the Roman territories and Rome itself by the Franks, Goths, Angles, and other Barbarians. In China this took the form of the unification of China by the Duke of Zhou and Qin Shi Huang's reunification following the warring states period. Qin, by the way, buried China's scholars alive, a fate I have dreaded after seeing the movie The Vanishing.
The monarch or leader of the conquering tribe exploits the conquered population rather than kill them. The invention of slavery reduced the amount of killing because the conquerers learned to make use of the conquered economically. The king realizes that the nobility, the leaders of his army, pose a threat to his power. Over time, perhaps multi-generationally, the king realizes that by taking the side of the conquered against the nobility he can reduce the power of the nobility and enhance his own power. This happened in England in the 1500s. The establishment of the Chinese Civil Service was within roughly two centuries of the Qin Shi Huang's reunification of China. In America, the Progressives, representatives of big business, realized that they could work with populist and socialist movements by saying that they were against the trusts, and in doing so bring regulations that attacked the rising entrepreneurs and benefited big business to bear. Thus, the king creates a bureaucracy or civil service that aims to provide social benefits in order to unite the people against the nobility. This occurred in modified form in the United States. Abraham Lincoln had enhanced federal power in the 1860s, and Progressivism appeared within 40 years.
Ultimately the people realize that the king can be replaced with the popular sovereignty or national will, which of course are non-existent imaginings. The king is deposed and democracy replaces the monarchy. The unlimited definition of democracy, in turn, leads to tyranny. Thus, the French Revolution led to killings by Jacobins, Robespierre and the Committee of Public Safety; the democratic revolution of Sun Yat Sen led to the tyranny of Mao Tse Tung; and the overthrow of the Czar led to the Bolshevik Revolution.
In America De Jouvenal's model does not apply exactly because there was no monarch. Also, Rousseau's unlimited theory of democracy did not take hold. Rather, Lockean liberalism limits the power of democracy. Hence, the tyrannies and suffocating power of government that took hold in backward Europe and Asia did not occur here. However, America's elite, jealous of the wonderful triumphs in Europe, aimed to introduce Rousseauean unlimited democracy here. Just two decades before the ascension of both Hitler and Stalin, Herbert Croly, Walter Weyl and Theodore Roosevelt argued for Progressivism. Croly's book glorifies the state and is very much in the tradition of German historicism, as was Progressivism in general.
The notion of a loss function is that the action of a producer can be improved by reducing losses. Many will argue with the claim that unlimited democracy leads to tyranny. However, whether you believe that unlimited democracy leads to social justice and benefits society, or whether you believe that limited government is better at achieving those ends, the question needs to be asked what the method of achieving each citizen's best interests can be. In other words, even if unlimited democracy and the state apparatus can advantage society, the question needs to be asked what method of execution or production will work best. It is unlikely that the centralized state by which Progressives hoped to emulate European Christian Socialism and social democracy (and itself was but an extension of monarchy, according to De Juvenal) is best at meeting public needs even if the state is better at meeting public needs than are private firms. The reason is bounded rationality.
Bounded rationality was discussed by March and Simon with respect to organizations in their book Organizations. Walter Lippmann discussed the idea with respect to public opinion in his book Public Opinion. Ludwig von Mises discussed it with respect to centralized economic planning. And De Jouvenal discusses it with respect to the ability of the state to achieve the objective of the common good.
Naturally, he mocks the idea that Power (as he defines it, the elite that governs society) has the common good in mind. This is the assumption of all advocates of big government, socialism, Progressivism, social democracy and the like. The notion that people seek power out of altruistic ends is laughable. We see this today with the naive news broadcasters, like CNN's Jack Cafferty, who offer prayers to Saint Barack Obama and his colleague, Lou Dobbs, whose head touches the floor seven times whenever Saint Barack's name is mentioned. But De Jouvenal grants this assumption.
He notes:
"But as soon Power is conceived as being exclusively the agent of the common good, it must form a clear picture for itself of what this common good is. While Power was eogist, the vital necessity under which it lay of reaching every day a daily accommodation with society, itself sufficed to form in it pictures of public requirements which, though confused, were born of actual contacts. But as soon as Power, under the spur of altruism, has a vision of the entire community and what medicine it needs, the inadequacy of human intelligence to such a task appears in its fullness. What the judgment pronounces then shows itself a blinder guide than what the senses indicate--to put it another way, touch is superior to vision.
"It is a noteworthy fact that all the greatest political mistakes stem from defective appraisals of the common good--mistakes from which egoism, had it been called into consultation, would have warned Power off." (On Power, p. 137).
In organizational theory, it is well established that one of the cures for cognitive limits on rationality is decentralization or divisionalization of organizations. Thus, one way to address the problem of the social loss function that government creates is to reduce the scope of governance. In other words, to download responsibility to the states.
American government anticipated this idea in the form of Federalism. However, the tendency over the past two centuries has been to reduce the power of the states and increase the monarchical power of the federal government. The reason for this is, as De Jouvenal points out, the economic, political and egoistic interests of the ruling elite--the politicians in Washington, the Justices of the Supreme Court, the academics who cater to them and receive significant jobs and consulting contracts, and the military industrial complex.
The monarchical process thus results in one rather odd effect: that a key finding of the social sciences, that information is difficult to procure; that rationality is limited; and that experimentation is the best way to learn; is scoffed at by judges, economists and academicians, whose economic interests take precedence over their interest in pursuing justice or the truth.
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