Thursday, May 14, 2015

The Origins of Political Order by Francis Fukuyama (Book Review #40 of 2015)

The Origins of Political Order: From Prehuman Times to the French Revolution
This is one of those "theory of everything" books worth examining. Fukuyama's work is two volumes and he urges the reader see the first and second as one work. I have not read the second yet, so these are my notes from the first. The closest book in style and subject matter to this work (2011) that I have read is Acemoglu and Robinson's Why Nations Fail (2012). Both books look at societies from prehistory onward and try to determine why good governance did or did not take root. Why Nations Fail is more comprehensive (looks at more societies), more interesting, and in my opinion better. Fukuyama's work can be read alongside it, along with Jared Diamond's Guns, Germs, and Steel (1997) and Rodney Stark's The Victory of Reason (2005). I expect Fukuyama's sequal to read a bit like Diamond's Collapse (2005). Fukuyama's history ends with roughly the French Revolution but he often jumps ahead to make analogies with modern-day America, China, and Russia as well as allusions to implications the past has for the present and future of these countries.

Fukuyama wrote a critique of Acemoglu and Robinson's (AR) work, to which they penned a response. Fukuyama points out areas of perceived weakness in AR like China and England's Glorious Revolution, where Fukuyama provides much more detail and history. On modern China, however, there is actually little daylight between Fukuyama and AR. China is one state seeing relative prosperity without the rule of law because they have granted just enough in the area of property rights for people to respond to incentives. AR similarly write that China's extractive institutions loosened enough in the 1980s to allow people to respond to incentives... I find it odd that the authors don't argue from Fukuyama's work since it's so similar. I digress...

Both Origins and Diamond's GGS begin with curiousity about New Guinea-- why did the West develop so differently than elsewhere? Why did different societies and governments evolve differently, and what is the connection between this and economic growth? What importance is the "rule of law" in good governance and economic prosperity? Why are some societies today more authoritarian than others, and what will this mean for the future?

Definitions matter greatly in Fukuyama's book. Fukuyama is borrowing heavily from the work of Samuel Huntington, which Fukuyama found to be seminal but inadequate, motivating him to pen Origins. He is also utilizing many of the same definitions of Max Weber and Karl Marx, both of whom Fukuyama cites and critiques throughout the book. The most important is the definition of "rule of law." It is essentially the definition I found in wikipedia of "the legal principle that law should govern a nation, as opposed to being governed by arbitrary decisions of individual government officials." I would channel Thoma Paine and call Fukuyama's use of the term more as "the rights of man," it's a respect for human life, liberty, and the pursuit of happiness codified such that ruling authorities do not have ultimate power to infringe upon it. Fukuyama also pits Hobbes against Locke, rational choice theory economists (who Fukuyama dislikes) against behavioral economists, and Hayek against himself.

One major point of the book is that history is contingent and the individualistic-oriented capitalist system that arose in England and is prevalent in the U.S. was not inevitable. Fukuyama's critique of AR's thesis (and likely Stark if he'd read him) is that The Glorious Revolution (17th century) would not have happened had there not already been an underlying cultural history of property rights and common law in England going back to the Norman invasion (11th century). The English people were already more individualistic than the Irish or Scots (more loyalty to clan), which helps explain the differing economic progress between parts of the later United Kingdom. Another major theme is that a relatively strong state is required to maintain the rule of law and defend property rights. (Early on, Fukuyama appears to be taking aim at "Tea Party" conservatives fomenting gridlock in the U.S. Congress and the Grover Norquists who want to "drown the government in the bathtub." His introduction to the book already laments American political dysfunction, and his points about individual liberty being impossible seperate from a government powerful and feared enough to protect those liberties seem aimed more at a libertarian caricature than any real argument, which detracts from the book.) Fukuyama even quotes Alexander Hamilton at length to make the point that America's Founding Fathers understood this in their switch from the Articles of Confederation to a stronger Constitution.

Fukuyama writes that the consensus of anthropology is that prehistoric societies were communal and not individualistic. That the individualism we see hailed in the West is a recent invention and likely unrealistic. Hunter-gathering necessitates division of labor and trade. Humans also have a "natural propensity to violence" and design institutions to both mitigate and channel it. While some rational choice theorists may surmise that violence is an outgrowth of economic necessity, Fukuyama dances around the idea of sin nature without mentioning it-- sometimes people kill each other for recognition or other random purposes. This propensity to violence requires defense against ourselves and an importance of establishing means of defense with those we trust-- so, tribal ties develop.

Which came first, religion or kinship? Religion exists in all societies and mitigates the problem of cooperation and cheating on agreements. The author writes that religion cannot be explained by pre-existing environmental factors. Fukuyama appeals to game theory, writing that religion makes everything a tit-for-tat game instead of a one-off game like the Prisoner's Dilemma that leads to a sub-optimal equilibrium. Religion plays an important role in establishing a "normative rule of order." People obey laws if perceived as fair, not just as a rational judgement made by cost-benefit analysis. The fairness of the law is determined by the norms established by religion. "Grounding morals" enhance cooperation and well-being.

I'll note here that Fukuyama does not discuss any absolutes among those "grounding morals" across societies. Are there fundamental truths those morals and norms are based on? If so, what does it mean when those erode in a society? If norms matter, shouldn't today's emphasis on moral relativism be of concern to our society?

From here, the author gives an overview of the history of political development in the East and West. How did states form? How does population density relate to the establishment of political institutions? The basic formula is natural resources + population density + tribal willingness to submit to a greater authority (probably for religious reasons) = the possibility of State creation. From there, you have the age-old question as to whether good governance is exogenous to (causes) economic growth or endogenous (results from) economic growth. In the end, Fukuyama writes that the causation runs both ways depending on the country you're looking at.

Being relatively ignorant of China and East Asia, I found Fukuyama's retelling of millenia of Chinese history somewhat interesting but also too broad to draw conclusions from. The first modern state developed in China in the 3rd century B.C. In some cases, he describes a particular detail of Chinese history at length just because it's "interesting" (such as the story of Empress Wu), but seems unnecessary. War was a major driver of state formation in China, clans fought major wars almost non-stop and clans were willing to submit to a united power in order to gain protection. The author explains the basics of Confucianism and how Daoism rose out of famines and 40 million deaths during a self-coup that entrenched power among aristocrats in the 3rd or 4th century BC. The history of Chinese dynasties are ones of patrimonial consolidation. Eunuchs were trusted as advisors and with power because they were incapable of marrying and had no goal of passing something on to their descendents. (This is a common theme throughout history and cultures.) China has never had rule of law or a ruler submissive to a higher law-- such as those established by religious norms in the West. There was no source of law to appeal to. Rulers had the "Mandate of Heaven" - legitimacy of rule that gave them arbitrary power. But while China has never had the rule of law, it does not mean that it has always been ruled badly. Fukuyama writes that it's possible to have "high quality authoritarian government," which is what China and Russia might or might not have today. Nonetheless, there were checks on the Chinese ruler's authority: It was a challenge to collect taxes over such a large area, which gave more distant lands more autonomy than local ones. There was no consolidated method for recording the taxes, especially if they were charged in-kind (goods). Leaders/governments typically do not maximize taxation, even where they can. There was also delegation of power from the ruler to the military, budget officers, managers, etc. This puts power in the hands of delegates over the delegator, they know and understand things he cannot and this keeps the ruler in check (in turn, the ruler's spies like the eunuchs keep those delegates in check). So, sometimes good government can be maintained without checks on executive authority. Modern China does not have true rule of law, but grows anyway. The property rights it has established are good enough to maintain its current rate of growth.

Perhaps controversially, Fukuyama writes that the rule of law sometimes get in the way of economic progress and good governance. As China (and various periods of time in Russia) shows, the rule of law is not necessary for economic growth. Unsatisfyingly to me, Fukuyama chalks China's lack of historic economic growth to its lack of a "spirit of maximization," and points to periods of history where progress and technological innovations were inexplicably abandoned and forgotten. This is not a problem for China now.

Fukuyama writes significant chapters on Indian history as well. How the caste system developed, the benefits and drawbacks to the system, etc. Historically, Hinduism discouraged literacy and therefore encouraged poverty and dependence upon religious authorities. But various traits about Hindu religion and culture made it hard for an aristocracy to rise as well.

There is a bit of focus on Roman history, though not as much because Western economic development has been covered by so many sources. Fukuyama looks at the development of Arabic political economy from Mohammed onward. I have recently read Hourani's History of the Arab Peoples and find that Fukuyama focused on history not included in that book, particularly the Mamluks of Egypt. Christianity and Islam are similar in that laws are based on norms of "the book," and this creates a rule of law that holds rulers in check. Fukuyama writes that Mohammed was able to bind warring tribes together through his charisma and a common religion and text all could refer to. His system essentially left no one in charge, and rulers were judged legitimate by their adherance to Islamic teaching. He writes that the caliphate, consolidating power into the hands of a few legal interpreters, was a later invention. Even then, the Caliph was subject to removal under certain conditions and did not have unlimited power.

The author writes that the Mamluks saved Islam. The Mamluks were military slaves, a practice that was later adopted by the Ottoman Turks and peculiar in world history. Mamluks were similar to eunuchs in China in that they were completely dependent upon their patron and often forbidden to marry-- hence they were not motivated by wealth for their own lineage. Eventually, the Mamluk orders gained power for themselves and became a caste defending themselves from other groups. This led to further decay and decline, replaced in power by the Ottomans. Fukuyama retells stories of the Ottoman's enslavement of Christian children in their elite Janissary corps from the 14th century to the 19th century. Like the mamluk's, they were forbidden to marry and janissaries often went on to be the most trusted advisors and have considerable individual power. Fukuyama details the cruelty of this practice but also its effectiveness in maintaining power among certain groups by enlisting and trusting others outside that group who had no ability or motive to take the power away. Eventually, janissaries were given the right to marry and became powerful enough to challenge the Sultans, which led to reprisals and wholesale slaughter and the order was abolished in 1826.

The political history of Western Europe focuses mainly on England, France, and Denmark. The Catholic Church was the major agent in undermining clan/family loyalties as Rome sought to consolidate its power. At one point, 1/3 of the lands in the West were owned by the Church. It could collect a tax via a tithe, and the Church made it hard for its members to give inheritances. Pope Gregory forbid cross-cousin marriage. Priests were forbidden to marry for the same reason as the eunuchs and the jannisaries, they sought to serve the Church and Pope alone rather than their family interests. Kings and secular authorities also had begun entrusting priests with non-religious duties and to spy for them for the same reason of trust.
The Investiture Controversy (11th-12th centuries) led to both sides seeing legal legitimacy. This led to a rediscovery of Justinian's Codex, which then became the basis for Western laws and future constitutions. The Reformation is therefore explained partly as a reaction to the Church's stamping out of kinship and clans, and Protestantism flourished where there had already been a cultural history of individualism apart from the church. One can see how the Enlightenment, with its emphasis on reason and individual liberty, created tension with both the government and the church since the two were so intertwined.

Fukuyama explains feudalism in the European context, the contractual relationship between a lord and a vassal. This at least allowed for some property rights and inheritance. Common law developed early on, but Fukuyama critiques Hayek in that English common law was not necessarily developed spontaneously as Hayek claimed. Sometimes, ruling authorities intervened or changed the law to their wishes. Common law further requires strong institutions to keep it enforced. In England and mainland Europe, this institution was the Church. However, the rule of Law was strengthened in the West as systematic theology developed. Particularly after the Reformation, literacy was encouraged and this led to greater cooperation. Fukuyama seems to hold up Denmark as the model state, there Lutherans encouraged education and literacy, which led to the development of better laws and better adherance to them.

The feudalism of the West is contrasted with the Serfdom of the East, particularly Hungary and Russia. Russia, like China, has a long history of autocrats ruling large areas. Fukuyama opines that the Russian model is the result of two centuries of rule by Mongols, who could be indiscriminately cruel and extractionary. In the aftermath of Mongol occupation, Muscovite rulers adopted the same practices and the Russian middle class was recruited to serve the Muscovite state. In Russia, the Orthodox church did not play the same role as its Catholic counterpart in the West-- it was not a bulwark against violations of the rule of law and there was no "canon law." Literacy and adherance to Scripture were apparently not upheld as something to bind people together and keep the ruler in check. Fukuyama describes the terror of Ivan IV and its aftermath. Peasants lost the right of movement in Russia, and the government expropriated property without any pretense of legality. The author notes that alternatives have sprouted and periodically propspered in Russia, but then always been squashed, a pattern that appears to be continuing after the 1990s.

Eastern Europe was relatively free until the 15th century. Hungary had a remarkable event in the Golden Bull of 1222, possibly inspired by the Magna Carta, where the King was forced to accept legal limits on his power. Hungary was later occupied by the Mongols and later the Ottomans.

Fukuyama notes various errors made by Marx. He notes, as above, that English individualism existed long before the bourgeoisie and capitalism, giving evidence as far back as the 13th century. He also both embraces and critiques Weber, he particularly notes Weber's errors in looking at China and India.

France's centuries of fiscal follies are highlighted, in parallel with Spain. I found these sections to be similar to Niall Ferguson's The Ascent of Money, although John Law came on the scene in France long after things had already gotten ridiculous. France, like other states in the book, needed to grow its tax revenue in order to fund endless wars and increasingly bloated government bureaucracy. As it borrowed, and borrowed again, it began to sell government positions and titles for cash. This created even more bloated government, rinse and repeat. The Spanish government looked to consolidate its power through the wealth of New World conquest, relying on slave labor for silver extraction. Fukuyama chronicles the chronic inflation and military defeats that took place in both France and Spain.

So, what made England different than the other European countries. Fukuyama writes that this was not inevitable. First, solidarity in England was always more political than social. Second, common law and English legal institutions were broadly considered legitimate. They gave property owners a stronger stake as property rights were locally protected. Religion was also a unifying force in the kingdom throughout the period. The rule of law was strengthened after the Glorious Revolution but Fukuyama writes like it just cemented a culture already in place. A strong state remained in place for rule of law to be maintained.

Fukuyama closes in chapter 30 with a look at modern political development and previews the next volume. He writes that competition is essential to innovation and good governance-- Russia forbid that competition when it forbid peasants from moving, which led to centuries of poor governance at all levels. Political decay is caused by 1) patrimonialism and 2) institutional rigidity. Compare this with AR's thesis that a nation's failure is caused by extractive economic institutions maintained by exclusive political institutions. There are similarities In some cases, Fukuyama writes that violence is necessary to cause change and eliminate the rigidity, although this is an unfortunate outcome. It's the irony that the rule of law that provides property right incentives sometimes creates too much rigidity. One hopes that the U.S.'s current political rigidity is temporary.

The book oddly ends with a critique of Malthus and an explanation of the book in a Malthusian context.

I give this book 4 stars out of 5. The attempts to relate things to modern American politics is problematic. When Fukuyama is quoting from modern economists like Gary Becker or Jeff Sachs, he does so with an annoyed contempt that is also somewhat of a turn-off. He is making interesting arguments, but I don't find the book nearly as compelling as Why Nations Fail.

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