Model, Politics

The Character of Leaders is the Destiny of Nations

The fundamental problem of governance is the misalignment between means and ends. In all practically achievable government systems, the process of acquiring and maintaining power requires different skills than the exercise of power. The core criteria of any good system of government, therefore, must be selecting people by a metric that bears some resemblance to governing, or perhaps more importantly, having a metric that actively filters out people who are not suited to govern.

When the difference between means and ends becomes extreme, achieving power serves only to demonstrate unsuitability for holding it. Such systems are inevitably doomed to collapse.

Many people (I am thinking most notably of neo-reactionaries) put too much stock in the incentives or institutions of government systems. Neo-reactionaries look at the institutions of monarchies and claim they lead to stability, because monarchs have a large personal incentive to improve their kingdom and their lifetime tenure should afford them a long time horizon.

In practice, however, monarchies are rather unstable. This is because monarchs are chosen by accident of birth and may have little affinity for the patient business of building a nation. In addition, to maintain power, monarchs must be responsive to the aristocracy. This encourages the well documented disdain for the peasantry that was common in monarchical governments.

Monarchy, like many other systems of government, was not doomed so much by its institutions, as by its process for choosing a leader. The character of leaders is the destiny of nations and many forms of government have no way of picking people with a character conducive to governing well.

By observing the pathologies of failed systems of government, it becomes possible to understand why democracy is a uniquely successful form of government, as well as the risks that emergent social technologies pose to democracy.


“Lenin’s core of original Bolsheviks… were many of them highly educated people…and they preserved these elements even as they murdered and lied and tortured and terrorised. They were social scientists who thought principle required them to behave like gangsters. But their successors… were not the most selfless people in Soviet society, or the most principled, or the most scrupulous. They were the most ambitious, the most domineering, the most manipulative, the most greedy, the most sycophantic.” – Francis Spufford, Red Plenty

The revolution that created the USSR was one founded on high minded ideals. The revolutionaries were going to create a new society, one that was fair, equal, and perfect; a utopia on earth. Yet, the bloody business of carving out a new state often stood in stark contrast to these ideals – as is common in revolutions.

It is, as a rule, difficult to tell which revolutions will lead to good rule and which to bloody shambles and repression. Take, as an example, the Eritrean People’s Liberation Front. They started as an egalitarian organization that treated prisoners of war with respect and ended up as one of the most brutal governments in the world.

Seizing power in a revolution requires a grasp of military tactics and organization; the ability to build a parallel state apparatus in occupied areas; the ability to inspire people to fight for your side; and a grasp of propaganda. While there is overlap with the skills necessary for civilian rule here, the perspective of a rebel is particularly poorly suited to governing according to the rule of law.

It is hard to win a revolution without coming to believe on some fundamental level that might makes right. The 20th century is littered with examples of rebels who cannot put aside this perspective shift when they transition to civilian rule.

(This, incidentally, is why nonviolent resistance leads to more stable governments and why repressive governments are so scared of it. A successful non-violent revolution leaves much less room for the dictator’s eventual return.)

It was so with the Soviets. Might makes right – perhaps more so even than communism – was the founding ideal of the Soviet Union.

Stalin succeeded Lenin as the leader of the Soviet Union via political manoeuvering, backstabbing, and the destruction of his enemies, tactics that would become key in future transfers of power.

To grasp the reins of the Soviet Union, it became necessary to view people as tools; to bribe key constituencies, to control the secret police, and to placate the army.

And this set of tools is not well suited to governing a prosperous nation. Attempts to reform the USSR with shadow prices, perhaps the only thing that could have saved communism, failed because shadow prices represented a loss of central control. If prices were not set politically, it would be impossible to manipulate them to reward compatriots and guarantee stability.

It’s true that its combination economic system and ambitions doomed the Soviet Union right from the start. It could not afford to be a global superpower while constrained by an economic philosophy that sharply limited its growth and guaranteed frequent shortages. But both of these were, in theory, mutable. It was only with such an ossifying process for choosing leaders that the Soviet Union was destined for failure.

In the USSR, legitimacy didn’t come from the people, but from the party apparatus. Bold changes, of the sort necessary to rescue the Soviet economy were unthinkable because they cut against too many entrenched interested. The army budget could not be decreased because the leader needed to maintain control of the army. The economic system couldn’t be changed because of how tightly the elite were tied to it.

The USSR needed bold, pioneering leaders who were willing to take risks and shake up the system. But the system guaranteed that those leaders would never rule. And so, eventually, the USSR fell.

Military Dictatorships

“The difference between a democracy and a dictatorship is that in a democracy you vote first and take orders later; in a dictatorship you don’t have to waste your time voting.” – Charles Bukowski

Military dictatorships that fall all fall in the same way: with an increasingly isolated junta issuing orders that are ignored by increasingly large swathes of the populace. The act of rising to the top of a military inculcates a belief that victory can always be achieved by finding the right set of orders. This is the mindset that military dictators bring to governing and it always leads to disaster. Whatever virtues of organization or delegation generals learn, it is never enough to overcome this central flaw.

Governing a modern state requires flexibility. There are always many constituencies: business owners, workers, teachers, doctors. There are often many regions, each with different economic needs. To support resource extraction can harm manufacturing – and vice versa. Bureaucrats have their own pet projects, their own red lines, and their own ideas.

This environment is about as different as it’s possible to be from an army. The military tells soldiers to follow orders. Civilians are rather worse at this task.

Expecting a whole society to follow orders, to put their own good aside for someone else’s plan is folly. Enough people will always buck orders to make a mockery of any grand design.

It is for this reason that military governments are so easy to satirize. Watching career soldiers try and herd cats can be darkly amusing, although the humour is quickly lost if one dwells too long on the atrocities military governments turn to when thwarted.

After all, the flip side of discipline is punishment. Failing to obey orders in the military is normally a crime, whereas failing to obey orders in the civil service is often par for the course. When these two mindsets collide, a junta is likely to impose harsh punishments on anyone disobeying. This doesn’t spring naturally from their position as dictators – most juntas start out with stunning idealistic beliefs about national salvation – but does spring naturally from military regulations. And so again we see a case where it is the background of the leaders, not the structure of the dictatorship that leads to the worst excesses.

You can replace the leaders as often as you like or tweak the laws, but as long as you keep appointing generals to rule, you will find they expect orders to be obeyed unquestioningly and respond harshly to any perceived disloyalty.

There is one last great vice of military dictatorships: a tendency to paper over domestic discontent with foreign wars. Military dictators know that revanchist wars can create popular support, so foreign adventuring is often their response when their legitimacy begins to crumble.

Off the top of my head, I can think of two wars started by military dictatorships seeking to improve their standing (the Falkland War and Six-Day War). No doubt a proper survey would turn up many others.

Since the time of Plato, soldier-rulers have been held up as the ideal heads of state. It is perhaps time to abandon this notion.


“Indeed it has been said that democracy is the worst form of Government except for all those other forms that have been tried from time to time.” – Winston Churchill to the House of Commons

To gain power in a democracy, a politician needs to win election. This normally requires some skill in oratory and debate, the ability to delegate to competent subordinates, the ability to come up with a plan and clearly articulate how it will improve people’s lives, possibly some past experience governing that paints a flattering picture, and above all a good reputation with enough people to win an election. This oft-maligned “popularity contest” is actually democracy’s secret weapon.

Democracy is principally useful as a form of government that is resistant to corruption. Corruption is the act of arrogating state power to take benefits for yourself or give them to your friends. Persistent and widespread corruption is one of the biggest impediments to growth worldwide, so any technology (and government system are a type of cultural technology) that reduces corruption is a powerful force for human flourishing.

It is the requirement for a good reputation that helps democracy stand against corruption. In any society where corruption is scorned, democracy ensures that no one who is visibly corrupt can grasp power; if corruption is sufficient to ruin a reputation, no one who is corrupt can win a “popularity contest”.

(It is also worth noting that the demand for a sterling reputation rules out people who have tortured dissidents or ordered protestors shot. As long as autocrats are not revered, democracy can protect against many forms of repression.)

There are three main ways the democracy can fail to live up to its promise. First, it can fail because corruption isn’t appropriately sanctioned. If corruption becomes just the way things are done and scandals stop sticking, then democracy becomes much weaker as a check on corruption.

Second, democracy can be hijacked by individuals whose only skill is self-promotion. In a functioning democracy, the electorate demands that political resumes include real achievements. When this breaks down, democracy becomes a contest: who can disseminate their fake or exaggerated resume the furthest.

It is from this perspective that 24/7 news and social media present a threat to democracy. Donald Trump is an excellent example of this failure mode. He made use of viral lies and controversial statements to ensure that he was in front of as many voters as possible. His largely fake reputation for business acumen was enough to win over a few others.

There are many constituencies in all societies. Demonstrably, President Trump is not popular in America, but he appealed to enough people that he was able to build up a solid voting block in the primaries.

Beyond the primaries Trump demonstrated the third vulnerability of democracies: partisanship. Any democracy where partisanship becomes a key factor in elections is in grave danger. Normally, the reputational component of democracy selects for people with a resume of past successes (an excellent predictor of future successes) while elections with significant numbers of undecided voters provide an advantage to people who run tight campaigns – people who are good at nurturing talent and delegating (an excellent skill for governing).

Partisanship short-circuits this process and selects for whoever can whip up partisan crowds most successfully. This is a rather different sort of person! Rabid partisans spurn compromise and ignore everyone outside of their core constituency because those are the tactics that have rewarded them in the past.

Trump was able to win in part because such a large cross-section of the American electorate was willing to look beyond his flaws if it meant that someone from the other party didn’t win.

A large block of swing voters who look critically at politicians’ reputations and refuse to accept iconoclasts is an important safety valve in any democracy.

This model of democracy neatly explains why it isn’t universally successful. In societies with several strong tribal or religious identities, democracy results in cronyism dominated by the largest tribe/denomination, because it selects for whomever can promise the most to this large block. In countries that don’t have adequate cultural safeguards against corruption, corruption does not ruin reputations and democracy does nothing to squash it.

Democracy isn’t a panacea, but in the right cultural circumstances it is superior to any other realistic form of government.

Unfortunately, we can see that democracy is under attack on two fronts in Western nations. First, social media encourages shallow engagement and makes it easy for people to build constituencies around controversial statements. Second, partisanship is deepening in many societies.

I don’t know what specific remedies exist for these trends, but they strike me as two of the most important to reverse if we wish our democratic institutions to continue to provide good government.

If we cannot find a way to fix partisanship and self-promotion within our current system, then the most important political reform we can undertake is to find a system of government that can pick leaders with the right character for governing even under these very difficult circumstances.

[Epistemic status: much more theoretical than most of my writing. To avoid endless digressions, I don’t justify my centrist axioms very often. I’m happy to further discuss anything that strikes anyone as light on evidence in the comments.]

Politics, Quick Fix

A Follow-up on Brexit (or: why tinkering with 200 year old norms can backfire)

Last week I said that I’d been avoiding writing about Brexit because it was neither my monkeys nor my circus. This week, I’ll be eating those words.

I’m a noted enthusiast of the Westminster system of government, yet this week (with Teresa May’s deal failing in parliament and parliament taking control of Brexit proceedings, to uncertain ends) seems to fly in the face of everything good I’ve said about it. That impression is false; the current impasse has been caused entirely by recent ill-conceived British tinkering, not any core problems with the system itself.

As far as I can tell, the current shambles arise from three departures from the core of the Westminster system.

First, we have parliament taking control of the business of parliament in order to hold a set of indicative votes. I don’t have the sort of deep knowledge of British history that is necessary to assess whether this is unprecedented or not, but it is certainly unusual.

The majority in the house that controls the business of the house is, kind of definitionally, the government in a Westminster system. Unlike the American Republican system of government, the Brits don’t really have a notion of “the government” that extends beyond whomever can command the confidence of parliament. To have parliament in some sense (although not the formal one) withdraw that confidence, without forcing a new government to be appointed by the Queen or fresh elections is deeply unusual.

The whole point of the Westminster system is to always have a governing majority for key votes. If that breaks down, then either a new governing majority should arise, or new elections. Otherwise, you can have American-style gridlock.

This odd situation has arisen partially from the Fixed-term Parliaments Act of 2011, which severely limited the circumstances under which a sitting government can fall. Previously, all important legislation doubled as motions of confidence; defeat of any bill as strongly championed by the government as Teresa May’s Brexit bill would have resulted in new elections. Now, a motion of no-confidence (which requires a majority to amend a bill to add it, or for the government to schedule a motion of no confidence in itself) must pass, or 2/3 of the house must vote for an early election. This bar is considerably higher (as no government wants to go to the polls as a result of a no confidence motion), so it is much easier for a government to limp along, even when it lacks a working majority in the House of Commons.

It’s currently not clear what does have a working majority in parliament, although I suppose today’s indicative votes (where MPs will vote on a variety of Brexit proposals) will give us an idea.

Unfortunately, even if there’s a clear outcome from the indicative votes (and there’s no guarantee of that), there’s not a mechanism for enacting that. Either parliament will have to keep passing amendments every single day to take control of business from the government (which is supposed to be the entity setting business!), or the government has to buy into the outcome. If neither of those happen, the indicative votes will do nothing but encourage intransigence of those who know they have the support of many other MPs. If the rebels went to the Queen and asked to appoint a new government, this would obviously not be an issue, but MPs seem uninterested in taking that (arguably proper) step.

This all stems from the second problem, namely, that parliament is rubbish when constrained by external forces.

The way that parliament normally works is: people come up with a platform and try and get elected on it. If a majority comes from this process, then they implement the platform. They all signed off on it, after all. If there’s no clear majority, then people come up with a coalition agreement, which combines the platforms of multiple parties into some unholy mess that they can all agree to pass. In either case, the government agenda is clear.

The problem here is that there are people in each party on either side of the Brexit referendum. Some of them feel bound by the referendum results and some don’t, but even though its results were incorporated into party platforms, it still feels like a live issue to many MPs in a way that most issues in their platform just don’t.

It’s not even clear that there’s a majority of people in parliament in favour of Brexit. And when you have a government that feels bound by a promise to enact Brexit, but a parliament without a clear majority for any particular deal (or even a majority in favour of Brexit) you’re in for a bad time.

Basically “enact this referendum” and “keep 50% of the house happy” are two different goals and it is very easy to find them mutually incompatible. At this point, it becomes incredibly difficult to govern!

The third problem is Teresa May’s unwillingness to find another deal for the house. I get that there might not be any willingness in Europe to negotiate another deal and that she’s bound by a lot of domestic constraints, but there’s a longstanding tradition that MPs can’t vote on the same bill twice in one parliament. Australia is a rare Westminster system government that allows it, but only for bills that the senate rejects and with the caveat that a second rejection can be used to trigger an election.

This tradition exists so that the government can’t deadlock itself trying to get contentious legislation though. By ignoring it, Teresa May is showing contempt for parliament.

If, instead of standing by her bill after it had failed, she sought out some other bill that could get through parliament, she’d obviate the need for parliament to take matters into its own hands. Alternatively, if the Brexit vote had just been a confidence vote in the first place, she’d be able to ask the question of a brand-new parliament, which, if she headed it, presumably would have a popular mandate for her bill.

(And obviously if she didn’t head parliament, we wouldn’t have this particular impasse.)

By ignoring and changing so many parliamentary conventions, the UK has stripped itself of its protections from deadlock, dooming us all to this seemingly endless Brexit Purgatory. At the time of writing, the prediction market PredictIt had the odds of Brexit at less than 2% by Friday and only 50/50 by May 22. May’s own chances are even worse, with only 43% of PredictIt users confident she would still be PM by the start of July.

I hope that parliament comes to its senses and that this is the last thing I’ll feel compelled to write about Brexit. Unfortunately, I doubt that will be the case.

Model, Politics, Quick Fix

The Fifty Percent Problem

Brexit was always destined to be a shambles.

I haven’t written much about Brexit. It’s always been a bit of a case of “not my monkeys, not my circus”. And we’ve had plenty of circuses on this side of the Atlantic for me to write about.

That said, I do think Brexit is useful for illustrating the pitfalls of this sort of referendum, something I’ve taken to calling “The 50% Problem”.

To see where this problem arises from, let’s take a look at the text of several political referendums:

Should the United Kingdom remain a member of the European Union or leave the European Union? – 2016 UK Brexit Referendum

Do you agree that Québec should become sovereign after having made a formal offer to Canada for a new economic and political partnership within the scope of the bill respecting the future of Quebec and of the agreement signed on June 12, 1995? – 1995 Québec Independence Referendum

Should Scotland be an independent country? – 2014 Scottish Independence Referendum

Do you want Catalonia to become an independent state in the form of a republic? – 2017 Catalonia Independence Referendum, declared illegal by Spain.

What do all of these questions have in common?

Simple: the outcome is much vaguer than the status quo.

During the Brexit campaign, the Leave side promised people everything but the moon. During the run-up to Québec’s last independence referendum, there were promises from the sovereignist camp that Québec would be able to retain the Canadian dollar, join NAFTA without a problem, or perhaps even remain in Canada with more autonomy. In Scotland, leave campaigners promised that Scotland would be able to quickly join the EU (which in a pre-Brexit world, Spain seemed likely to veto). The proponents of the Catalonian referendum pretended Spain would take it at all seriously.

The problem with all of these referendums and their vague questions is that everyone ends up with a slightly different idea of what success will entail. While failure leads to the status quo, success could mean anything from (to use Brexit as an example) £350m/week for the NIH to Britain becoming a hermit kingdom with little external trade.

Some of this comes from assorted demagogues promising more than they can deliver. The rest of it comes from general disagreement among members of any coalition about what exactly their best-case outcome is.

Crucially, this means that getting 50% of the population to agree to a referendum does not guarantee that 50% of the population agrees on what happens next. In fact, getting barely 50% of people to agree practically guarantees that no one will agree on what happens next.

Take Brexit, the only one of the referendums I listed above that actually led to anything. While 51.9% of the UK agreed to Brexit, there is not a majority for any single actual Brexit proposal. This means that it is literally impossible to find a Brexit proposal that polls well. Anything that gets proposed is guaranteed to be opposed by all the Remainers, plus whatever percentage of the Brexiteers don’t agree with that specific form of Brexit. With only 52% of the population backing Leave, the defection of even 4% of the Brexit coalition is enough to make a proposal opposed by the majority of the citizenry of the UK.

This leads to a classic case of circular preferences. Brexit is preferred to Remain, but Remain is preferred to any specific instance of Brexit.

For governing, this is an utter disaster. You can’t run a country when no one can agree on what needs to be done, but these circular preferences guarantee that anything that is tried is deeply unpopular. This is difficult for politicians, who don’t want to be voted out of office for picking wrong, but also don’t want to go back on the referendum.

There are two ways to avoid this failure mode of referendums.

The first is to finish all negotiations before using a referendum to ratify an agreement. This allows people to choose between two specific states of the world: the status quo and a negotiated agreement. It guarantees that whatever wins the referendum has majority support.

This is the strategy Canada took for the Charlottetown Accord (resulting in it failing at referendum without generating years of uncertainty) and the UK and Ireland took for the Good Friday Agreement (resulting in a successful referendum and an end to the Troubles).

The second means of avoiding the 50% problem is to use a higher threshold for success than 50% + 1. Requiring 60% or 66% of people to approve a referendum ensures that any specific proposal after the referendum is completed should have majority support.

This is likely how any future referendum on Québec’s independence will be decided, acknowledging the reality that many sovereignist don’t want full independence, but might vote for it as a negotiating tactic. Requiring a supermajority would prevent Québec from falling into the same pit the UK is currently in.

As the first successful major referendum in a developed country in quite some time, Brexit has demonstrated clearly the danger of referendums decided so narrowly. Hopefully other countries sit up and take notice before condemning their own nation to the sort of paralysis that has gripped Britain for the past three years.

Economics, Quick Fix

The First-Time Home Buyer Incentive is a Disaster

The 2019 Budget introduced by the Liberal government includes one of the worst policies I’ve ever seen.

The CMHC First-Time Home Buyer Incentive provides up to 10% of the purchase price of a house (5% for existing homes, 10% for new homes) to any household buying a home for the first time with an annual income up to $120,000. To qualify, the total mortgage must be less than four times the household’s yearly income and the mortgage must be insured, which means that any house costing more than $590,000 [1] is ineligible for this program. The government will recoup its 5-10% stake when the home is sold.

The cap on eligible house price is this program’s only saving grace. Everything else about it is awful.

Now I want to be clear: housing affordability is a problem, especially in urban areas. Housing costs are increasing above inflation in Canada (by about 7.5% since 2002) and many young people are finding that it is much more difficult for them to buy homes than it was for their parents and grandparents. Rising housing costs are swelling the suburbs, encouraging driving, and making the transition to a low carbon economy harder. Something needs to be done about housing affordability.

This plan is not that “something”.

This plan, like many other aspects of our society, is predicated on the idea that housing should be a “good investment”. There’s just one problem with that: for something to be a “good investment”, it must rise in price more quickly than inflation. Therefore, it is impossible for housing to be simultaneously a good investment and affordable, at least in the long term. If housing is a good investment now, it will be unaffordable for the next generation. And so on.

I’m not even sure this incentive will help anyone in the short term though, because with constrained housing supply (as it is in urban areas, where zoning prevents much new housing from being built), housing costs are determined based on what people can afford. As long as there are more people that would like to live in a city than houses for them to live in, people are in competition for the limited supply of housing. If you were willing to spend some amount of your salary on a house before this incentive, you can just afford to pay more money after the incentive. You don’t end up any better off as the money is passed on to someone else. Really, this benefit is a regressive transfer of money to already-wealthy homeowners, or a subsidy to the construction industry.

The worst part is that buying a house at an inflated valuation isn’t even irrational! The fact of the matter is that as long as everyone knows that governments at all levels are committed to maintaining the status quo – where housing prices cannot be allowed to drop – the longer housing costs will continue to rise. Why shouldn’t anyone who can afford to stick all their savings into a home do so, when they know it’s the only investment they can make that the government will protect from failing [2]?

That’s what’s truly pernicious about this plan: it locks up government money in a speculative bet on housing. Any future decline in housing costs won’t just hurt homeowners. With this incentive, it will hurt the government too [3]. This gives the federal government a strong incentive to keep housing prices high (read: unaffordable), even after some inevitable future round of austerity removes this credit. This is the opposite of what we want the federal government to be doing!

The only path towards broadly affordable housing prices is the removal of all implicit and explicit subsidies, an action that will make it clear that housing prices won’t keep rising (which will have the added benefit of ending speculation on houses, another source of unaffordability). This wouldn’t just mean scaling back policies like this one; it means that we need to get serious about zoning reform and adopt a policy like the one that has kept housing prices in Tokyo stable. Our current style of zoning is broken and accounts for an increasing percentage of housing prices in urban areas.

Zoning began as a way to enforce racial segregation. Today, it enforces not just racial, but financial segregation, forcing immigrants, the young, and everyone else who isn’t well off towards the peripheries of our cities and our societies.

Serious work towards housing affordability would strike back against zoning. This incentive provides a temporary palliative without addressing the root cause, while tying the government’s financial wellbeing to high home prices. Everyone struggling with housing affordability deserves better.


[1] Mortgage insurance is required for any down payment less than 20%. If you have an income of $120,000 and you max out the down payment, then the mortgage of $480,000 would be about 81% of the total price. Division tells us the total price in this case would be $592,592.59, although obviously few people will be positioned to max out the benefit. ^

[2] Currently, the best argument against buying a home is the chance that the government will one day wake up to the crisis it is creating and withdraw some of its subsidies. It is, in general, not wise to make heavily leveraged bets that will only pay off if subsidies are left in place, but a bet on housing has so far been an exception to this rule. ^

[3] Technically, it will hurt the Canadian Mortgage and Housing Corporation, but given that this is the crown corporation responsible for mortgage insurance, a decline in home prices could leave it undercapitalized to the point where the government has to step in even before this policy was enacted. With this policy, a bailout in response to lower home prices seems even more likely. ^