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Chapter 5: Who’s in Charge?

If I’m even close to right about the criticality of hierarchy in the history of civilization, as I argued in Chapter 4, then it means that hierarchy as implemented in human society is worth some considered attention.  My theory of the algorithmic benefits of hierarchical organization implies that only a small fraction of people can ever be at the top.  Therefore, most everybody that has ever been is classified as some flavor of working stiff.  Historically, there have been a bunch of different ways for average people’s labor to be organized and rewarded, but for now I’m going to set that all aside.  My focus for the present will be on the ruling slice at the top.

When studying the issue of hierarchical governance in detail, people tend to be first drawn to the formal structures established by any particular civilization: constitutions, systems of inheritance, codes of law, the customary rights and duties of the leadership, and so on and so forth.  What these all have in common is that they establish abstract roles within society and then try to delineate the relationships among them.  In a monarchy, for example, the king has certain legal rights and obligations regardless of who is actually filling the role of king at any given time.

But here’s a neat trick.  It turns out that, contra political science theorizing going back to at least Montesquieu, if not Plato, what the formal delineation of powers is doesn’t matter all that much to the actual policy output.  Sure, it sets some ground rules that determine who has the upper hand in some negotiations, but Coase’s insight[1] applies here just as it does to disputes over land use.  The most efficient thing generally gets done in the end, and the formal structure mostly determines who gets paid off in order to make way for the most efficient outcome.  But since we’re looking at this in terms of politics, “efficiency” doesn’t have its common economic meaning, but instead should be read as “translates the status-weighted desires of the ruling elite effectively into policy”.

The foregoing is a longwinded, academic way of restating the basic truism that people are policy.  If, say, tomorrow the United States had a constitutional convention and came out an absolute monarchy, but the ruling elite remained unchanged, I bet that the output of the government would change very little.  With merely a massive change in the formal constitution, the declared and recognized True King of the USA could perhaps abolish ethanol subsidies.

It turns out that what matters most for defining the composition and output of a ruling elite is the structure of the status hierarchy.  Which makes sense: ruling humans are still humans, and they’re still governed by all of the same basic drives that everybody else is.  And it appears that the amazing variety in formal power structures and elite social norms found throughout history distills down to a very small set of base value systems.

Now things get a little tricky.  Try to hang with me as I lay down some terminology to describe the pattern I’ve found.  Let’s define a caste in terms I’ve stolen from a fellow writing online under the pseudonym of Mencius Moldbug[2], as a social group (or subculture) with their own status system.

I maintain that in any civilized society, the constituent castes tend to be based in and around social roles.  Stable status systems usually evolve from the habits of mind and values that are necessary to excel at a particular type of job.  Then, once these castes are established around these jobs, sympathetic people tend to be drawn towards them and people who can’t or won’t get with the program get shuffled to a place that better suits their talents and inclinations.  Overall, this process is healthy for civilization; I really don’t think that the division of labor would be anywhere near as powerful an innovation if this ideological sorting and filtering weren’t allowed to take place.

Of course, it’s certainly possible for people to be working a job (or have a social role) but not subscribe to the value system that’s commonly associated with that job.  A person could be employed as a doctor without being of the “healer caste”, for instance, but if he’s not, he’ll probably be considered odd or ethically questionable by his peers.  The recent television show House is a good fictional example of what I’m getting at here.[3]  In these terms, the title character is a member of the “detective caste” who’s employed as a doctor: he sees the core of his job as getting to the bottom of medical mysteries.  Being right matters more to him than healing the sick (which, if it happens, is just a byproduct of solving the mystery) or obeying any of the ethical or professional guidelines practicing doctors are sworn to uphold.

OK, so let’s bring this whole discussion of caste back to the earlier talk of hierarchies.  When I ask “Who’s in charge?”, in these terms I’m asking which caste occupies the apex positions in the hierarchy for a given civilized society and has a preponderance of influence over how one rises to these positions, regardless of the formal structures that may be in place.  And, as best as I can tell, it turns out that there are only three jobs whose associated value structures have ever historically yielded a ruling caste: priests, warriors, and merchants.

Let’s start with the priests.  Over time, the requirements to succeed in the role of priest (or, as I sometimes colloquially think of it, in the Department of Mind Control) lead to certain habits of mind.  First and foremost, in order be an effective priest, he must care more deeply about what other people think than the typical member of society.  It’s not enough for a priest to model how his fellows are likely to react to practical considerations.  He also needs to determine what people are thinking with regard to more abstract concerns, and then, on top of that, find ways to convince them to adopt his way of thinking.

Because of this requirement, priests naturally spend large portions of their time and energy trying to convince each other of various points of doctrine, with a preference toward consensus.  Those who succeed gain status in the eyes of their fellows, while those who fail can historically suffer serious repercussions: up to and including exile, imprisonment, and death.  Even the tiniest bones of contention among the priesthood can blow up into serious problems.  Crippling legitimacy crises tend to follow on the heels of a major break in priestly consensus.

The priestly mindset makes them natural fans of explicit, written codes of law, evaluated by expert judges.  This stems from their preference (compared to non-priests) for abstract justice.  In this context, that means that they tend to argue for an ideal cosmic order that is disturbed by bad action on the part of a given individual, that should (or must) be set right through a prescribed application of preexisting law.  In a model like this, the desires of the individual people involved are rarely preeminent.  Rather, it’s the ritual of enforcing the law that ensures cosmic justice, and thus social harmony and the prosperity of the community.

Priests also generally advocate placing purely material concerns beneath spiritual ones.  This is an evolutionarily stable preference, since resources spent directly on maintaining and extending the otherwise economically unproductive priesthood count for this purpose.  But it tends to be more sincere than that.  Priests from virtually every civilization have advocated for spending significant fractions of the available surplus on expensive projects to glorify the heavens.  And, when heeded, the result is often an achievement for which the civilization is remembered for to the present day.  For example, the Pyramids of Egypt, the Parthenon of Greece, the Cathedrals of Medieval Europe, and the Forbidden Palace in China were all massive public works built over the course of many years with the enthusiastic support of the priesthood.

Those who share these values, preferences, and habits of mind are members of the priest caste, as I’ve defined it.  Again, this is logically distinct from a member of the priesthood, which is defined strictly by vocation.  It’s entirely possible for a given priesthood to be entirely staffed by people who are not priest caste, though they are likely to do a comparatively poor job at it.  Similarly, priest caste members need not have the social role of priest, though they are likely to aspire to it.

When the top of the hierarchy (which I’ll colloquially refer to as the “government”, however a society is structured in any given case) is dominated by members of the priest caste, I define it here, functionally, as a theocracy.  Following the pattern above, this is true whether or not the leaders are members of the formal priesthood.  So, for example, early Sumer was a straightforward theocracy (both formally and caste-wise) because it was ruled by priest-kings.  But the Commonwealth of England under Oliver Cromwell also qualifies, even though Cromwell ruled as Lord Protector in what was formally a military dictatorship.

However structured, a theocratic government yields some significant advantages.  First, a shift to theocracy is typically accompanied by a considerable increase in social morale and cohesiveness.  If channeled effectively, this burst of zeal can yield truly impressive results.  For example, the advent of Islam among the previously marginal Arabian tribes led to the conquest of the entire Middle East within two generations.  In a considerably different way, the rise of Neo-Confucian scholar-officials during the Chinese Song Dynasty led to several key innovations in technology and commerce (including gunpowder weapons and paper currency).

Second, more established theocratic governments tend toward stability.  Priests like to codify and enforce behaviors into traditions – or what we moderns might call “best practices”.  As long as the current conditions are close enough to those that led to the creation of the tradition, priestly enforcement thereof can help keep the system running smoothly.

Third, theocracy is the most effective government type to encourage and enforce cultural uniformity, especially in a multiethnic context.  Significant biological and cultural diversity within a hierarchy is expensive, requiring extensive management efforts to prevent the entire system from breaking apart along the obvious tribal boundaries.  When they are given the time and allowed to make the effort, priests can assimilate these differences into a new coherent whole.  These resources are most commonly made available when the priest caste is in charge.

The major meta-challenge facing a theocratic government is doctrinal stability.  The particular religion of your priests matters a lot more when they’re running things.  And there’s a pretty big difference between, say, the policy prescriptions of Aztec sun worship and Zen Buddhism.

Once a doctrine is settled upon, it’s necessary for any system that’s going to last to come up with some mechanism by which the doctrine will get propagated with sufficient fidelity.  This is complicated by the fact that there are two routes to extremely high status in a status hierarchy run on priestly values (which in a theocracy, remember, is by definition the one that has the most influence on the broader society).  Either the individual priest embodies the doctrine to an exceptional degree, or he convinces his fellows to reinterpret or overthrow a point of doctrine.  For the long term stability of the system, both of these are dangerous patterns.  The first tests the logical limits of the doctrine and the second causes potentially uncontrollable drift in the content of said doctrine.  It doesn’t take many potential iterations of this cycle to run a perfectly serviceable religion entirely off the rails.

The other concern is something of the converse.  A system that manages to successfully preserve doctrinal stability can ossify.  If the traditions supported by the theocracy no longer sufficiently correspond to the success of the civilization on mundane metrics (such as survival), it may be impossible for the hierarchy to remain legitimate despite an effectively functioning priesthood.  Or worse, the priests may succeed at maintaining legitimacy while the quality of governance decays, riding the whole system down into total collapse.

Next, let’s move on to the warriors.  The job of warrior is obviously crucial.  Groups of humans have always existed in a potential state of military competition with rival groups.  In fact, there’s some evidence that violent conflict between human tribes may predate homo sapiens itself, since warfare has been documented among chimpanzees as well as in humans.[4]

Perhaps the most notable thing about war among hominids, for my purposes here, is that numbers tell.  All else equal, the bigger army will triumph.  And if you do the predator/prey modeling[5], it turns out that being outnumbered is worse than it may naively appear, because the effect is nonlinear.

Say a given tribe (let’s call them the Blue Tribe) is outnumbered 1:3 by its opposition (the Red Tribe).  If we assume that each Blue is as good a warrior as each Red and model the conflict as a series of independent duels, we’d expect on average for each Blue to kill a Red, with the field occupied by two-thirds of the original Red force at the end of the fight.

However, it turns out that in real life this isn’t a good model, since the numerically superior force is almost never content to just line up and fight one at a time.  Instead, what happens is that the superior force gangs up on the inferior.  Unlike what you might expect from watching old Bruce Lee movies or listening to Fezzik in The Princess Bride, this actually makes it a lot harder for the numerically inferior force.  The effectiveness of each fighter is in part a function of the current ratio of forces.  So, in our model, even if each Blue is just as good of a warrior as each Red, since each Blue has to fight three Red warriors at once, they’re not going to do as well as they would have done in a duel.  Let’s say, for purposes of illustration, that they only do half as well, so on average every two Blues kill one Red.

So, what happens?  At t=0, let’s say that we have 24 Blue warriors and 72 Reds, making the ratio 1:3 in favor of Red.  Then, after some amount of time, let’s say that at t=1 the Red warriors have managed to kill a quarter of the Blues.  As we’ve postulated, at these odds each two Blues takes out one Red.  So now we’re down to 18 Blues and 69 Reds, and the ratio has gotten worse.  We’re at 1:3.83 now in favor of Red, which will make it even harder for Blues to kill Reds in subsequent fighting.  Iterate this a few times and Red could very well come out of this with only 8 warriors lost (instead of the 24 that the duel model would have predicted).  The Blue team does most of their damage at the beginning of the fight, before the odds tilt even further against them.

The second most notable feature of war amongst humans, for our purposes, is that people aren’t automatons.  It is vanishingly rare for an army to fight to the death like these toy mathematical models imply, in large part because people are smart enough to see these trends.  What usually happens instead is that at a certain point (usually at a very low casualty level, as a percentage of total soldiers) the losing army’s morale breaks.  In less jargon-filled terms, that means that they stop acting like a cohesive group that’s attempting to win the fight and instead break down into a mass of panicking individuals, each of whom is prioritizing personal survival.  In most battles, the vast majority of the death happens at this stage, when the side that has succumbed to panic is slaughtered wholesale by the side that still is able to muster some organization.

These harsh realities undergird the warrior mindset.  Effective warriors are obsessed with winning, because there’s a massive difference between victory and defeat.  It follows that they also tend to care a lot about relative prowess as opposed to absolute prowess.  To a warrior, talent is all well and good, but triumph is everything.  Sometimes it’s better to be lucky than good.

In order to succeed in this environment, they focus largely upon building strong, cohesive teams, because there’s no more stressful place for an organization than the battlefield.  Oftentimes, the side that can bear the strain the longest will win the day, which is what is meant by the quotation often attributed to Napoleon: “In war, the moral is to the material as three is to one.”[6]  In practice, because of the Dunbar limit, this tends to mean that warriors prefer segregation from the larger society into bands that serve as tight-knit tribes.

At the same time, though, it is absolutely critical for warrior groups to scale effectively because of the dominant effect of numbers mentioned before.  In order to square this with the earlier requirement, the warrior mindset tends to be more conducive to hierarchy than most of the other castes (and definitely both of the other ruling castes).  Warriors therefore place tend to place great moral weight on membership in large organizations, obeying rightful authority, and exercising the authority they are bequeathed within their structure.

Finally, warriors greatly respect sacrifice to advance the goals of the team.  This is distinct from the priests, who venerate sainthood: the embodiment of an abstract ideal in the actions of a particular person.  Sainthood often requires sacrifice, but it’s generally a very different sort of sacrifice, for a different purpose.  As a general rule, priests most value the sacrifice that makes onlookers try to emulate that behavior, while warriors most value the sacrifice that has important practical results.

When the government is dominated by the warrior caste, I define it here as an aristocracy.  Again, this is true whether or not the people in charge are actually engaged in the business of war.  What matters is whether demonstration of warrior virtues are what get somebody promoted within the elite.

Aristocracies have a couple of key advantages over other forms of government.  Unsurprisingly, they punch above their weight in wartime.  An aristocratic society will outfight an otherwise equivalent one that’s got a different caste running things.  That’s no small thing, because military defeat is the leading cause of death for civilizations.  In a stable, militarily competitive environment, this advantage causes aristocracies to proliferate.

Outside of wartime, aristocracies also tend to be better at state-level diplomacy and balance of power politics than the alternatives.  Since aristocracies are chiefly concerned with how their team will do in any potential war, they are more willing to focus their foreign policy efforts on practical considerations.  Accordingly, they tend to have a longer time horizon for action than other types of government.

The big structural problem for aristocratic societies is to find a way to accommodate challenges to the people in charge.  Formally, aristocratic hierarchies tend toward rigidity.  And since demonstrating martial prowess is the way people increase in status in an aristocracy, ambitious people will often be drawn toward intra-societal violence as a means to settle their differences and enhance their standing.  Oftentimes, this pressure is diverted into foreign conflicts, since conflicts with foreigners trump domestic conflicts (unless the situation is quite dire).  Of course, foreign adventurism brings with it its own dangers.

Finally, it also happens sometimes that the merchant caste rises to rule.  To understand the merchant caste, I think it’s important to start with the interesting fact that the social role of merchant is more novel than either the priest or the warrior.  Both of the latter can trace their origins back to cognates in the human EEA.  Civilization requires them to take different forms, but they still resonate with the default human mental programming in a way that the merchant role simply doesn’t.  For this reason, when merchant values differ from priest or warrior values (let alone the values of other non-ruling castes), they are more likely to be seen as facially immoral or illegitimate by non-merchants.  Therefore, the situation wherein they rule is somewhat anomalous in the historical record.

Merchants focus first and foremost on how resources are put to use.  Their domain is economy, in the sense that Adam Smith meant when he founded the academic field of economics, and in order to be successful at it they must unlearn some basic human intuitions.

The subjectivity of value is an idea that people tend to have trouble getting their heads around, but that merchants need to acquire a working concept of in order to perform their function.  To a merchant, a resource is worth what its purchaser will pay for it.  And when different purchasers put different values on the same thing, that’s a great opportunity to make money.  The core merchant activity is arbitraging these sorts of price differences: buy a thing where it is cheap and take it to somewhere that it can be sold dearly.  Profit!  Then repeat until the prices stop being different enough to justify the venture.

The idea of opportunity cost is also core to the merchant experience.  The real cost of an action isn’t the resources, time, and energy spent doing it, it’s the best other thing that could have done with whatever went into the venture.  To people in virtually every other walk of life, there’s really only one activity they’re trying to maximize.  Farmers measure their success by how much grain they harvest; doctors by how many lives they save; and warriors by the battles they win.  Opportunity cost clearly still exists within any given domain, but most people perceive its effects as a general sense of efficiency rather than needing to grapple with the idea directly.  For example, if that farmer had rotated his crops this way, or plowed his fields on these days, he could have harvested more wheat.

But a merchant often needs to decide on whether to invest capital into radically different kinds of activity.  To extend the example, is it better to lend the money to local farmers in exchange for a fraction of the increased wheat production, or is it better to fund an expedition to a foreign land to retrieve valuable luxury goods?  The answer depends on the interplay between the returns on the two options; neither idea is a good or bad one in isolation.

Merchants similarly grapple with the counterintuitive reality of exponential growth in the course of their work.  Small advantages can be built over repeated effort into larger and larger advantages, until the end result vastly dwarfs the initial conditions.  This process actually enables the valuation of time itself through the mechanism of interest and moneylending.  In a strange sort of way, lending money and engaging in futures markets can be thought of as arbitraging over time, just as moving goods about arbitrages in space.  If goods are expected to be held more dearly in the future, a merchant will purchase and hoard them now (moving them to the future), so that he can sell them when they are priced more highly.

Because of all of this, merchants have trust issues.  In order to arbitrage, they need to be able to count on their counterparties to do what they said they’d do.  And it’s not always in the other person’s interest to follow through.  Think of the stereotypical Hollywood scene where two groups of heavily armed gangsters meet, one with the drugs and the other with the money, intending to trade.  The temptation – to start shooting, so that your team gets both the drugs and the money – is obvious.   This is the fundamental problem of commerce: how can you trust your counterparty to not kill you and take your stuff?  Or, more generally, how can you trust your counterparty to keep his promises?

A typical resolution to this problem is for merchants to try to do their large deals mostly with other merchants they can trust for other reasons (like membership in the same minority religion or ethnicity) and then count on the natural human ingroup/outgroup dynamics to kick in.  Where possible, merchants will also do their best to get the local law enforcement to monitor contracts and exchanges, to make sure that each party does in fact follow through.  This gets more complicated when the counterparty is a state: getting a recalcitrant debtor to pay up when they have an army is often quite problematic!

Because of all this, merchants also strongly value general assurances of the security of their property.  Arbitraging requires merchants to be in possession of far more resources at any given time than they can possibly make use of themselves, so they need some way to be able to store and transport value effectively.  They really hate regimes that expropriate their property, fail to prevent bandits or pirates from doing the same, or inflate the currency (and in so doing water down their large stores of wealth).

Finally, merchants tend to be quite cosmopolitan and xenophilic.  To a merchant, exotic places and peoples are an opportunity, as long as he has some assurance that his ventures will be protected.  This is a sharp contrast to a priest, who generally sees exotic peoples as potential converts, or a warrior, who is thinking primarily in terms of potential threats.

When merchant caste values rise to ascendancy in a particular society, I define that as a plutocracy.  In a plutocratic form of government, the formal rulers aren’t necessarily engaged in commerce themselves, but they are sympathetic to the needs of the merchant class, and the most prominent merchants are the leading members of the elite.  Personal wealth adds directly to one’s status and is seen as a marker of virtue.

Plutocracies are great at capital accumulation.  They also do very well at the practical application of science and technology; in particular, a plutocratic society will tend to excel at actually getting people to change their habits to take the best advantage of new technical developments.  In eras when the underlying physical situation is rapidly changing (either due to natural or technological factors), the rapid speed of innovation provided by a plutocracy will yield considerable economic benefits over a comparatively staid aristocracy or theocracy.

On the downside, plutocracies traditionally have a very difficult time scaling.  Most historical plutocracies have been based around relatively small, economically vibrant city-states (such as Venice[7], Genoa[8], and modern Singapore).  This often means that they usually must exist as independent entities only at the pleasure of greater empires.  There are exceptions: Venetian naval strength enabled their leaders to keep their republic independent for hundreds of years.  It also made it possible for them to hold a disparate Eastern Mediterranean empire for a good part of that time span.  The merchant princes of Novgorod also ran a pretty good sized empire in northern Russia for a while.

It’s also worth nothing, here, that the historical record of mercenary soldiers isn’t that great.  Machiavelli warned against their use in his work The Prince precisely because he’d seen mercenary armies fail time and time again in the regular warfare among the Italian city-states of his day, either on the field of battle or by turning on their employers after a win.[9]  This hurts plutocracies disproportionately, because it means that there’s an asymmetry between wealth and violence.  It’s typically harder to turn wealth a society commands into military force than it is to turn military force into wealth (by conquering a neighboring plutocracy, say).

Finally, because of the mismatch between the EEA and merchant values, plutocracies have stability difficulties.  It’s hard to get people from other walks of life to agree with merchants that the merchant caste should rule because of their merchant virtues.  In particular, in order to maintain a civilized hierarchy, a plutocracy needs to get both the warriors and the priests on board with the program to some degree.  Warriors tend to strongly dislike the merchant emphasis on cosmopolitanism, since it cuts against their desire to build cohesive teams.  And priests don’t like the way merchants raise material concerns (like wealth accumulation) above spiritual ones.  Lasting compromises here have proven to be quite difficult to achieve.

Speaking of compromises, I should mention here that the distinction among these three forms of hierarchical organization isn’t really digital, though I’ve been talking about it as if it were up until now, for the purposes of clarity.  Civilizations can pursue a mixed strategy and blend the influence of the three castes in their ruling elite.  Usually this is done by having one dominant caste that is willing to allow another caste substantial autonomy within its domain.

But this comes at a considerable cost.  Because caste disagreements are moral, at heart, it’s not easy for people to agree to disagree.  Instead, what generally happens is that two castes with a claim to rule hold each other in mutual contempt, which is the most dangerous relationship you can have.  It often leads to civil war; or, barring that, some lesser form of internecine struggle that ends with one victor.

Whew!  That’s a lot of information.  Let’s see if I can’t summarize it briefly.  The policy output of a civilized society doesn’t depend much on the formal structures of governance.  What really matters is what kinds of people are in charge, what they value, and how status is gained and lost within the elite.  And there are really only three basic kinds of people who can be in charge: warriors, priests, and merchants.  The warrior caste runs aristocracies, the priest caste runs theocracies, and the merchant caste runs plutocracies.  From the outside practical perspective, each one of these comes with its own costs and benefits, and there are inherent tradeoffs among them.

Next Chapter

[1] http://en.wikipedia.org/wiki/Coase_theorem

[2] http://unqualified-reservations.blogspot.com/2007/05/castes-of-united-states.html

[3] http://tvtropes.org/pmwiki/pmwiki.php/Series/House

[4] http://www.nytimes.com/2010/06/22/science/22chimp.html?_r=0

[5] http://en.wikipedia.org/wiki/Lanchester’s_laws

[6] http://www.bartleby.com/73/1213.html

[7] http://en.wikipedia.org/wiki/Venetian_Republic

[8] http://en.wikipedia.org/wiki/Republic_of_genoa

[9] http://www.constitution.org/mac/prince13.htm

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