{"id":53120,"date":"2021-11-12T16:16:00","date_gmt":"2021-11-12T20:16:00","guid":{"rendered":"https:\/\/www.shortform.com\/blog\/?p=53120"},"modified":"2021-11-22T10:01:57","modified_gmt":"2021-11-22T14:01:57","slug":"decentralized-government","status":"publish","type":"post","link":"https:\/\/www.shortform.com\/blog\/decentralized-government\/","title":{"rendered":"The Virtues of Decentralized Government"},"content":{"rendered":"\n

What are the downsides of a centralized government<\/a>? Why is managing decentralized power structures (ironically) easier than centralized systems? <\/p>\n\n\n\n

In his book Skin in the Game<\/em>, Nassim Taleb<\/a> criticizes centralized power structures in which a few people make decisions that affect everyone. He argues that centralized systems are far too complex for individuals to effectively manage from the top down. Instead, Taleb advocates for the decentralization<\/a> of power\u2014smaller territories are more likely to govern themselves effectively.<\/p>\n\n\n\n

In this article, we’ll explore the benefits of decentralized government: greater accountability and more democratic representation. <\/p>\n\n\n\n\n\n\n\n

Centralized Government Enables Corruption and Mismanagement<\/strong><\/h2>\n\n\n\n

In his book Skin in the Game<\/em>, Nassim Taleb argues that centralization of power<\/a> is not just suboptimal, but damaging to human societies. Large governments manage such large, complex systems<\/a> that their intervention and attempts at restructuring are far more likely to be harmful than beneficial.<\/p>\n\n\n\n

Since they have no direct exposure to the consequences of their own decisions, government officials are never given the opportunity to learn from their mistakes. Additionally, public officials are able to transfer their risk unfairly onto others.<\/strong><\/p>\n\n\n\n

Whenever someone in government uses taxpayer money to compensate for their own mismanagement or enacts a policy that benefits their image more than their constituents, they\u2019re creating an immoral asymmetry of risk. Since they\u2019re operating within such a large, complex system, this kind of corruption is difficult to detect.<\/p>\n\n\n\n

More specifically, Taleb criticizes corrupt civil servants who make decisions that benefit certain industries, then join those industries after leaving office. Taleb criticizes former Secretary of the Treasury Timothy Geithner for facilitating the bailout of big banks and then accepting a multi-million dollar salary at a private equity firm as a \u201creward for good behavior.\u201d<\/p>\n\n\n\n

Similarly, Taleb condemns instances in which government workers deliberately enact elaborate industry regulations, then get hired by those industries as experts with exclusive knowledge of the way those regulations work.<\/p>\n\n\n\n

To solve this problem, Taleb proposes that, after they enter the office, civil servants should never be allowed to earn more than a set amount from the private sector, even after they leave office. This would help curb bribery and ensure that those running for office do so for honest, selfless reasons.<\/p>\n\n\n\n

(Shortform note: The United Kingdom has instated a watchdog committee for this purpose. While the Independent Advisory Committee on Business Appointments (ACOBA) hasn\u2019t capped civil servants\u2019 income, it sets some limits and investigates post-service jobs for corruption<\/a>. The committee, however, lacks the ability to enforce its rules and has long been a target of criticism<\/a>.)<\/p>\n\n\n\n

Decentralized governments of smaller states with more skin in the game are less tolerant of corruption and mismanagement because public officials are closer to the consequences of their decisions.<\/p>\n\n\n\n

The effects of a city council\u2019s policies on a small town (for example, changes to a public school\u2019s budget) are much more tangibly noticeable than the effects of a federal policy across a nation (for example, restructured tax brackets). This adds pressure to serve effectively and ethically.<\/p>\n\n\n\n

Additionally, with a more localized government, each decision-maker has less power and responsibility for potential abuse. In a worst-case scenario, their corruption or mismanagement will harm fewer people.<\/p>\n\n\n\n

Decentralized Government Better Represents Its Citizens\u2019 Preferences<\/strong><\/h3>\n\n\n\n

Taleb also uses the previously discussed theory of the passionate few<\/a> to reinforce his argument for a more decentralized political system. Given that a vocal minority can dictate policy for an entire population, smaller autonomous states allow for a more accurate reflection of their citizens\u2019 true preferences.<\/strong><\/p>\n\n\n\n

Consider a hypothetical passionate few in the United States rallying in support of a specific policy. The activists, however, are largely concentrated in just three states. If the nation was not divided into states, the passionate few could impose their preferences on the entire country, leaving 47 states with a large population of citizens indifferent or modestly opposed to the policy. But since policies are allowed to go into effect on the state level, those three states are able to enact it for themselves without impacting the other 47. Now, each state has policies that more closely reflect its true preferences.<\/p>\n\n\n\n

Reasoning along these lines, Taleb defends Great Britain\u2019s decision to leave the European Union. He implies that as an independent state, Britain\u2019s policies will be more closely aligned to its citizens\u2019 preferences, instead of being unduly influenced by a minority that resides elsewhere in Europe.<\/p>\n\n\n\n

Taleb and the European Union<\/strong><\/strong>

<\/strong>Taleb is a severe critic of the European Union, calling it a \u201chorrible, stupid project<\/a>\u201d that\u2019s \u201cdoomed to fail.\u201d<\/a> In his eyes, it allows a passionate few of politicians and their supporters to drag down citizens across Europe with misguided top-down decision-making<\/a>.

One commonly criticized example of the EU\u2019s mismanagement is the Common Agricultural Policy<\/a> (CAP), which The Guardian in 2013 called \u201cthe most blatant transfer of money from the poor to the rich that has occurred in the era of universal suffrage.\u201d<\/a> The idea behind the CAP is simple: subsidize farming in order to protect farmers\u2019 jobs and increase food supply throughout Europe. In practice, a significant amount of the EU\u2019s $65 billion a year farming payout has gone to the farms on political families\u2019 estates<\/a> and corrupt government leaders<\/a>\u2014companies owned by the Prime Minister of the Czech Republic collected $42 million in farming subsidies from European taxpayers in 2018. On top of this, food prices in 2013 were 17% higher in Europe than comparable countries like Australia and New Zealand<\/a>.

Taleb calls the EU\u2019s unified currency a \u201cterrible idea,\u201d as it \u201cencouraged everyone to borrow to the hilt.\u201d This idea has support from economists<\/a>.<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

Refuting the Argument for Centralized Government<\/strong><\/h3>\n\n\n\n

If decentralized government provides accountability and greater representation, why do people push for more centralization?<\/p>\n\n\n\n

Taleb asserts that if you trust in the potential of human design, the skin in the game of a decentralized government can seem unnecessary<\/strong>. Skinless Intellectuals who \u201chate skin in the game,\u201d as Taleb puts it, hate it because they believe rational, intelligent humans, if given enough power, would be able to create a better society than individuals with skin in the game acting in their own self-interest.<\/p>\n\n\n\n

Taleb takes the opposing view: human design is fundamentally limited. Large governments manage such large, complex systems that their intervention and attempts at restructuring are far more likely to be harmful than beneficial. Ensuring that decision-makers have as much skin in the game as possible protects us from leaders with too much faith in their own intellect and morals.<\/p>\n\n\n\n

Large nations are far too complex for even the most intelligent, insightful leaders to fully understand and predict. Any given decision could have multiple unforeseen consequences, and without skin in the game, mistakes go undetected, causing permanent, compounding problems that no one knows how to solve.<\/p>\n\n\n\n

Scaling Is the Heart of Taleb\u2019s Politics<\/strong>

The cornerstone of Taleb\u2019s political perspective is that groups of different sizes behave in extremely different ways\u2014as stated in Skin in the Game<\/em>, it\u2019s possible to be \u201cat the Fed level, libertarian; at the state level, Republican; at the local level, Democrat; and at the family and friends level, a socialist.\u201d Since the rules change as groups grow bigger, you need to allow groups of different sizes to set their own rules.

In the Scala Politica<\/em>, Taleb\u2019s book-length political manifesto published as an academic paper,<\/a> Taleb argues that borderless globalism is impossible\u2014people naturally care about their own families and sometimes their own nations, but they wouldn\u2019t find the same sense of meaning if they could only relate to humanity as a whole. Additionally, there is no one way of life that will satisfy everyone on earth. This requires a system that allows \u201ctribes\u201d of different sizes to coexist. Taleb cites Yoram Hazony, an Israeli-born political theorist whose ideas have been gaining recent traction in American conservative circles<\/a>, although Taleb puts his own caveats on Hazony\u2019s ideas.

Hazony\u2019s main idea is that cultural cohesion within a large nation is the ideal political structure<\/a>, even when it means excluding outsiders and treating them less favorably. In fact, he argues that nations can only<\/em> thrive when they\u2019re excluding others\u2014in his eyes, if a nation embraces global ideals and identity, including everyone, it will inevitably seek to assimilate the entire world, becoming a hegemonic \u201cempire.\u201d A nation defined by its differences from surrounding peoples, on the other hand, provides the strength and stability necessary to coexist with them.

Taleb agrees with Hazony on this point but applies his logic to groups of any size. In Taleb\u2019s eyes, \u201cfractal layering\u201d is necessary\u2014in-groups of different sizes (nations, families, religious communities) must be allowed to develop and coexist. Whereas Hazony would argue that a single religious tradition is necessary for a prosperous, unified nation, Taleb holds that Hazony\u2019s \u201cmonolithic, absorbing nationalism\u201d that seeks to eliminate factions within itself\u2014one that requires all citizens to adhere to one religion, for instance\u2014is just as ineffective as globalism (and fosters xenophobia).<\/td><\/tr><\/tbody><\/table><\/figure>\n","protected":false},"excerpt":{"rendered":"

What are the downsides of a centralized government? Why is managing decentralized power structures (ironically) easier than centralized systems? In his book Skin in the Game, Nassim Taleb criticizes centralized power structures in which a few people make decisions that affect everyone. He argues that centralized systems are far too complex for individuals to effectively manage from the top down. Instead, Taleb advocates for the decentralization of power\u2014smaller territories are more likely to govern themselves effectively. In this article, we’ll explore the benefits of decentralized government: greater accountability and more democratic representation.<\/p>\n","protected":false},"author":7,"featured_media":901,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[275,24],"tags":[529],"class_list":["post-53120","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-politics","category-society","tag-skin-in-the-game","","tg-column-two"],"yoast_head":"\nThe Virtues of Decentralized Government - Shortform Books<\/title>\n<meta name=\"description\" content=\"Not only are decentralized governments easier to manage, but they also better represent their citizens' preferences. 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