Cities in capitalism are more beautiful

The other day I wrote about some of the reasons why I love capitalism. One of them is that cities in capitalism are more beautiful. I am convinced of this when I think about some cities I am more familiar with, including their geography and history.

Most foreigners I know have difficulty to answering correctly, when asked, “What is Brazil’s national capital?”. Most people answer Rio de Janeiro, but it is actually Brasilia. Many people say that beauty is in the eyes of the beholder, but I am very inclined to say that this is not so. I am still not 100% sure about this, but I believe that there is something objective about beauty. Maybe it is not something so strict, like a point. Maybe it is something broader, like an area. But still, I am inclined to say that there is something objective about it. At least for me, Brasilia is one of the ugliest cities conceivable. I am really glad to say that. Its architecture was designed by Oscar Niemeyer and Lucio Costa. Growing up in Brazil, questioning that Niemeyer was a genius is almost anathema, almost like saying that Maradona was better than Pelé or that Ayrton Senna was not the best Formula One pilot ever. Because of that, I was always happy to say that Niemeyer’s buildings are among the ugliest things on the surface of this planet. It was like shouting that the king is naked.

Brasilia is very beautiful from the sky. Its shape resembles an airplane or a cross. But that is the problem: the city is beautiful from heaven, but not for the people walking in it. It was made for God to see from up there. But, as Niemeyer was a convinced atheist, I am not sure who is watching his creation. My guess is that Niemeyer thought that he was a god. A very mean god, who didn’t care about people having to spend lots of time in cars driving long distances.

Niemeyer was also related, with Lucio Costa, to Barra da Tijuca, a neighborhood in Rio de Janeiro where I spent lots of time growing up. Lucio Costa, as far as I’m concerned, was not a communist. I believe he was closely connected to the Brazilian version of positivism. Because positivism and communism are basically the same, it doesn’t make much of a difference. Barra da Tijuca is very similar to Brasilia: very beautiful if looked at from the sky, but very unpleasant for the pedestrian. Very long distances to walk. Cars are mandatory.

The most pleasant neighborhoods in Rio de Janeiro are the result of spontaneous order. As Hayek noticed, spontaneous order is one of the central features of capitalism. People usually contrasted between planned economies (such as the USSR) and unplanned economies (such as the US in some moment of its history). But Hayek observed that all economies are planned. Some are centrally planned. Others are planned by several individuals who are not following a specific central plan.

I am convinced that cities that follow no plan, or a very simple plan, are more beautiful than cities that follow a very specific central plan. New York, as far as I know, followed a simple plan, a grid. But other than that, there was a lot of freedom in the use of the space for much of its history. It’s a city that I just love. I am more comfortable talking about Rio de Janeiro. It is a city that was at its best before modern architecture, positivism, socialism, Developmentalism, and other isms. It was better when Brazil had a little more classical liberalism.

Explaining current Brazilian politics to known-Brazilians and why I believe this is time for optimism

It seems that many observers believe that Brazil’s current political situation is one of instability and uncertainty. Since the mid-1990s the national political scene has been dominated by two parties: the Worker’s Party (Partido dos Trabalhadores, PT, in Portuguese) and PSDB. Now, with the main leader of the PT imprisoned – former president Lula da Silva – the PSDB also seems to have lost its rationale. It is clear that this party never had faithful voters, only an anti-PT mass who saw in it the only viable alternative. Given these factors, it is true that a political cycle that began in the 1990s is coming to an end, but far from being a moment of uncertainty and pessimism, this may be the most fruitful moment in the country’s history, as it seems that finally classical liberalism is being vindicated in Brazil.

Brazil began its political history as a semi-parliamentary monarchy. As one observer of the time put it, the country had a “backward parliamentarism”: instead of parliament controlling the monarch, it was the emperor who controlled parliament. Moreover, the Brazilian economy was extremely based on slavery. In theory, Brazil was politically and economically a liberal country. In practice, it was politically and economically a country controlled by oligarchies.

With the proclamation of the republic in 1889, little changed. The country continued to be theoretically a liberal country, with a constitution strongly influenced by the North American one and a tendency to industrialization. In practice, however, Brazil continued to be politically and economically dominated by oligarchic interests.

The republic instituted in 1889 was overthrown in 1930 by Getúlio Vargas. Vargas was president from 1930 to 1945, and his political circle continued to dominate the country until 1964. Once again, political language was often liberal, but in practice the country was dominated by sectorial interests.

Vargas committed suicide in 1954, and his political successors failed to account for the instability the country went through after World War II. The Soviet Union had been trying to infiltrate Brazil since the 1920s, and this was intensified with the Cold War. The communist influence, coupled with the megalomaniacal administrative inability of Vargas and his successors, led the country to such an instability that the population in weight clamored for the military to seize power in 1964.

The military that governed Brazil between 1964 and 1985 were influenced mainly by positivism. In simple terms, they were convinced they could run the country like a barracks. For them, the motto “order and progress” written on the Brazilian flag was taken very literally. One great irony in this is that Auguste Comte’s positivism and Karl Marx’s communism are almost twin brothers, products of the same anti-liberal mentality of the mid-19th century. The result was that Brazilian economic policy for much of the military period was not so different from that of the Soviet Union at many points in its history: based on central planning, this policy produced spectacular immediate results (the period of the “Brazilian miracle” in the early 1970s), but also resulted in the economic catastrophe of the 1980s.

However, the worst consequence of the military governments was not in the economy but in the political culture. The military fought against communism in a superficial way, overpowering only the guerrillas and terrorist groups that engaged in armed struggle. But in the meantime, many communists turned to cultural warfare, joining schools, universities, newsrooms, and even churches. The result is that Brazilian intellectual life was taken over by communism.

Fernando Henrique Cardoso, elected president in 1994, is an important Brazilian intellectual. Although not an orthodox Marxist, his lineup is clearly left-wing. The difference between FHC (as he is called) and a good part of the Brazilian left (represented mainly by the PT) is that he, like Tony Blair in England and Bill Clinton in the US, opted for a third way between economic liberalism and more explicit socialism. In other words, FHC understood, along with leading PSDB leaders, that the Washington Consensus is called a consensus for good reason: there is a set of economic truths (pejoratively called neo-liberals) that are no longer the subject of debate. FHC followed these ideas, but he was heavily opposed by the PT for this.

Since the founding of the PT, in the late 1970s, Lula’s speech was quite radical, explicitly wishing to transform Brazil into a large Cuba. But Lula himself surrendered to the Washington Consensus in the early 2000s, and only then was he able to be elected president. Once in office, however, Lula commanded one of the greatest corruption scandals in world history. In addition, his historical links to the left were never erased. Although in his first term economic policy was largely liberal, this trend changed in his second term and in the presidency of his successor, Dilma Rousseff.

Today Brazil is still living in an economically difficult period, but an ironic result of more than a decade of left-wing government (especially the PT) is the strengthening of conservative and libertarian groups in Brazil. In the elections from 2002 to 2014 it was virtually impossible to identify candidates clearly along these lines. In this year’s election, we expected several candidates to explicitly identify themselves as right-wing. Jair Bolsonaro, the favorite in contention, is not historically a friend of the free market, but his more recent statements demonstrate that more and more he leans in this direction.

It is possible that in 2018 Brazil will not yet elect an explicitly libertarian president. But even so, the economic transformations initiated by FHC seem now to be vindicated. Only with the strengthening of the Internet did Brazilians have real access to conservative and libertarian ideas. With that, one of the most important political phenomena in Brazil in the last decade is the discovery of these ideas mainly by young people, and it is these young people who now cry for a candidate who defends their ideas. Bolsonaro seems to be the closest to this, although there are others willing to defend similar economic policy. After more than a decade of governments on the left, it seems that Brazil is finally going through a well-deserved right turn.

Deep Learning and Abstract Orders

It is well known that Friedrich Hayek once rejoiced at Noam Chomsky’s evolutionary theory of language, which stated that the faculty of speaking depends upon a biological device which human beings are enabled with. There is no blank slate and our experience of the world relies on structures that come from the experience in itself.

Hayek would be now delighted if he were told about the recent discoveries on the importance of background knowledge in the arms race between human beings and Artificial Intelligence. When decisions are to be taken by trial and error at the inside of a feedback system, humans are still ahead because they apply a framework of abstract patterns to interpret the connections among the different elements of the system. These patterns are acquired from previous experiences in other closed systems and provide with a semantic meaning to the new one. Thus, humans outperform machines, which work as blank slates, since they take information only from the closed system.

The report of the cited study finishes with the common place of asking what would happen if some day machines learn to handle with abstract patterns of a higher degree of complexity and, then, keep up with that human relative advantage.

As we stated in another place, those abstract machines already exist and they are the legal codes and law systems that enable their users with a set of patterns to interpret controversies concerning human behaviour.

What is worth being asked is not whether Artificial Intelligence eventually will surpass human beings, but what group of individuals will overcome the other: the one which uses technology or the one which refuses to do so.

The answer seems quite obvious when the term “technology” is related to concrete machines, but it is not so clear when we apply it to abstract devices. I tried to ponder the latter problem when I outlined an imaginary arms race between policy wonks and lawyers.

Now, we can extend these concepts to whole populations. Which of these nations will prevail over the other ones: the countries whose citizens are enabled with a set of abstract rules to based their decisions on (the rule of law) or the despotic countries, ruled by the whim of men?

The conclusion to be drawn is quite obvious when we are confronted with a so polarised question. Nevertheless, the problem becomes more subtle when the disjunction concerns on rule of law vs deliberate central planning.

The rule of law is the supplementary set of abstract patterns of conduct that gives sense to the events of the social reality in order to interpret human social action, including the political authority.

In the case of central planning, those abstract patterns are replaced by a concrete model of society whose elements are defined by the authority (after all, that is the main function of Thomas Hobbes’ Leviathan).

Superficially considered, the former – the rule of law as an abstract machine – is irrational while the latter – the Leviathan’s central planning – seems to respond to a rational construction of the society. Our approach states that, paradoxically, the more abstract is the order of a society, the more rational are the decisions and plans that the individuals undertake, since they are based on the supplementary and general patterns provided by the law, whereas central planning offers to the individuals a poorer set of concrete information, which limits the scope of the decisions to those to be based on expediency.

That is why we like to state that law is spontaneous. Not because nobody had created it -in fact, someone did – but because law stands by itself the test of time as the result of an evolutionary process in which populations following the rule of law outperform the rival ones.

Auftragstaktik: Decentralization in military command

Many 20th century theorists who advocated central planning and control (from Gaetano Mosca to Carl Landauer, and hearkening back to Plato’s Republic) drew a direct analogy between economic control and military command, envisioning a perfectly functioning state in which the citizens mimic the hard work and obedience of soldiers. This analogy did not remain theoretical: the regimes of Mussolini, Hitler, and Lenin all attempted to model economies along military principles. [Note: this is related to William James’ persuasion tactic of “The Moral Equivalent of War” that many leaders have since used to garner public support for their use of government intervention in economic crises from Great Depression to the energy crisis to the 2012 State of the Union, though one matches the organizing methods of war to central planning and the other matches the moral commitment of war to intervention, but I digress.] The underlying argument of the “central economic planning along military principles” was that the actions of citizens would be more efficient and harmonious under direction of a scientific, educated hierarchy with highly centralized decision-making than if they were allowed to do whatever they wanted. Wouldn’t an army, if it did not have rigid hierarchies, discipline, and central decision-making, these theorists argued, completely fall apart and be unable to function coherently? Do we want our economy to be the peacetime equivalent of an undisciplined throng (I’m looking at you, Zulus at Rorke’s Drift) while our enemies gain organizational superiority (the Brits had at Rorke’s Drift)? While economists would probably point out the many problems with the analogy (different sets of goals of the two systems, the principled benefits of individual liberty, etc.), I would like to put these valid concerns aside for a moment and take the question at face value. Do military principles support the idea that individual decision-making is inferior to central control? Historical evidence from Alexander the Great to the US Marine Corps suggests a major counter to this assertion, in the form of Auftragstaktik.


Auftragstaktik was developed as a military doctrine by the Prussians following their losses to Napoleon, when they realized they needed a systematic way to overcome brilliant commanders. The idea that developed, the brainchild of Helmuth von Moltke, was that the traditional use of strict military hierarchy and central strategic control may not be as effective as giving only the general mission-based, strategic goals that truly necessitated central involvement to well-trained officers who were operating on the front, who would then have the flexibility and independence to make tactical decisions without consulting central commanders (or paperwork). Auftragstaktik largely lay dormant during World War I, but literally burst onto the scene as the method of command that allowed (along with the integration of infantry with tanks and other military technology) the swift success of the German blitzkrieg in World War II. This showed a stark difference in outcome between German and Allied command strategies, with the French expecting a defensive war and the Brits adhering faithfully and destructively to the centralized model. The Americans, when they saw that most bold tactical maneuvers happened without or even against orders, and that the commanders other than Patton generally met with slow progress, adopted the Auftragstaktik model. [Notably, this also allowed the Germans greater adaptiveness and ability when their generals died–should I make a bad analogy to Schumpeter’s creative destruction?] These methods may not even seem foreign to modern soldiers or veterans, as it is still actively promoted by the US Marine Corps.

All of this is well known to modern military historians and leaders: John Nelson makes an excellent case for its ongoing utility, and the excellent suggestion has also been made that its principles of decentralization, adaptability, independence, and lack of paperwork would probably be useful in reforming non-military bureaucracy. It has already been used and advocated in business, and its allowance for creativity, innovation, and reactiveness to ongoing complications gives new companies an advantage over ossified and bureaucratic ones (I am reminded of the last chapter of Parkinson’s Law, which roughly states that once an organization has purpose-built rather than adapted buildings it has become useless). However, I want to throw in my two cents by examining pre-Prussian applications of Auftragstaktik, in part to show that the advantages of decentralization are not limited to certain contexts, and in part because they give valuable insight into the impact of social structures on military ability and vice versa.

Historical Examples

Alexander the Great: Alexander was not just given exemplary training by his father, he also inherited an impressive military machine. The Macedonians had been honed by the conquest of neighboring Illyria, Thrace, and Paeonia, and the addition of Thessalian cavalry and Greek allies in the Sacred Wars. However, as a UNC ancient historian found, the most notable innovations of the Macedonians were their new siege technologies (which allowed a swifter war–one could say, a blitzkrieg–compared to earlier invasions of Persia) and their officer corps. This officer corps, made up of the king’s “companions,” was well trained in combined-arms hoplite and cavalry maneuvers, and during multiple portions of his campaign (especially in Anatolia and Bactria) operated as leaders of independent units that could cover a great deal more territory than one army. In set battles, the Macedonians showed a high degree of maneuverability, with oblique advances, effective use of reserves, and well-timed cavalry strikes into gaps in enemy formations, all of which depended on the delegation of tactical decision-making. This contrasted with the Persians, who followed standards into battle without organized ranks and files, and the Greek hoplites, whose phalanx depended mostly on cohesion and group action and therefore lacked flexibility. [Also, fun fact, the Macedonians had the only army in recorded history in which bodies of troops were identified systematically by the name of their leader. This promoted camaraderie and likely indicates that, long-term, the soldiers became used to the tactical independence and decision-making of that individual. Imagine dozens of Rogers’ Rangers.]

The Roman legion: As with any great empire, the Macedonians spread through their military innovations, but then ossified in technique over the next 150 years. When the Romans first faced a major Hellenistic general, Pyrrhus, they had already developed the principles of the system that would defeat the Macedonian army: the legion. In the early Roman legion, two centuries were combined into a maniple, and maniples were grouped into cohorts, allowing for detachment and independent command of differing group sizes. Crucially, centurions maintained discipline and the flexible but coordinated Roman formations, and military tribunes were given tactical control of groups both during and between battles. The flexibility of the Roman maniples was shown at the Battle of Cynoscephalae, in which the Macedonian phalanx–which had frontal superiority through its use of the sarissa and cohesion but little maneuverability–became disorganized on rough ground and was cut to pieces on one flank by the more mobile and individually capable Roman legionaries, This (as well as many battles in the Macedonian and Syrian Wars proved) showed the value of flexibility and individual action in a disciplined force, but where was the Auftragstaktik? At Cynoscephalae, after defeating one flank, the Romans on that flank dispersed to loot the Macedonian camp. In antiquity, this generally resulted in those troops becoming ineffective as a fighting force, and many a battle was lost because of pre-emptive looting. However, in this case, an unnamed tribune–to whom the duty of tactical decisions had been delegated–reorganized these looters and brought them to attack the rear of the other Macedonian flank, which had been winning. This resulted in a crushing victory and contributed to he Roman conquest of Greece. Decentralized control was also a hallmark of Julius Caesar himself, who frequently sent several cohorts on independent campaigns in Gaul under subordinates such as Titus Labienus, allowing him to conquer the much more numerous Gauls through local superiority, lack of Gallic unity, and organization. Also, at the climactic Battle of Alesia, Caesar used small, mobile reserve units with a great deal of tactical independence to hold over 20 km of wooden walls against a huge besieging force.

The Vikings: I do not mean to generalize about Vikings (who could be of many nations–the term just means “raider”) when they do not have a united culture, but in their very diversity of method and origin, they demonstrate the effectiveness of individualism and decentralization. Despite being organized mostly based on ship-crews led by jarls, with central leadership only when won by force or chosen by necessity, Scandinavian longboatmen and warriors exerted their power from Svalbard to Constantinople to Sicily to Iceland and North America from the 8th to 12th centuries. The social organization of Scandinavia may have been the most free (in terms of individual will to do whatever one wants–including, unfortunately, slaughter, but also some surprisingly progressive women’s rights to decisions) in recorded history, and this was on display in the famous invasion of the Great Heathen Army. With as few as 3,500 farmer-raiders and 100 longboats to start, the legendary sons of Ragnar Lothbrok and the Danish invaders, with jarls as the major decision-makers of both strategic and tactical matters for their crews, won a series of impressive battles over 20 years (described in fascinating, if historical-fiction, detail in the wonderful book series and now TV series The Last Kingdom), almost never matching the number of combatants of their opponents, and took over half of England. The terror and military might associated with the Vikings in the memories of Western historians is a product of the completely decentralized, nearly anarchic methods of Scandinavian raiders.

The Mongols: You should be sensing a trend here: cultures that fostered lifelong training and discipline (and expertise in siege engineering, which seems to have correlated with the tactics I describe, as the Macedonians, Romans, and Mongols were each the most advanced siege engineers of their respective eras) tended to have more trust in well-trained subordinates. This brought them great military success and also makes them excellent examples of proto-Auftragstaktik. The Mongols not only had similar mission-oriented commands and tactical independence, but they also had two other aspects of their military that made them highly effective over an enormous territory: their favored style of horse-archer skirmishing gave natural flexibility and their clan organization allowed for many independently-operating forces stretching from Poland to Egypt to Manchuria. The Mongols, like the Romans, demonstrate how a force can have training/discipline without sacrificing the advantages based on tactical independence, and the two should never be mixed up!

The Americans in the French and Indian War and the Revolutionary War: Though this is certainly a more limited example, there were several units that performed far better than others among the Continentals. The aforementioned Rogers’ Rangers operated as a semi-autonomous attachment to regular forces during the French and Indian War, and were known for their mobility, individual experience and ability, and tactical independence in long-range, mission-oriented reconnaissance and ambushes. This use of savvy, experienced woodsman in a semi-autonomous role was so effective that the ranger corps was expanded, and similar tactical independence, decentralized command, and maneuverability were championed by the Green Mountain Boys, the heroes of Ticonderoga. Morgan’s Rifles used similar experience and semi-autonomous flexibility to help win the crucial battles of Saratoga and Cowpens, which allowed the nascent Continental resistance to survive and thrive in the North outside of coastal cities and to capture much of the South, respectively. The forces of Francis Marion also used proto-guerrilla tactics with decentralized command and outperformed the regulars of Horatio Gates. Given the string of unsuccessful set-piece battles fought by General Washington and his more conventional subordinates, the Continentals depended on irregulars and unconventional warfare to survive and gain victories outside of major ports. These victories (especially Saratoga and Cowpens) cut off the British from the interior and forced the British into stationary posts in a few cities–notably Yorktown–where Washington and the French could siege them into submission. This may be comparable to the Spanish and Portuguese in the Peninsular War, but I know less about their organization, so I will leave the connection between Auftragstaktik and early guerrilla warfare to a better informed commenter.

These examples hopefully bolster the empirical support for the idea that military success has often been based, at least in part, on radically decentralizing tactical control, and trusting individual, front-line commanders to make mission-oriented decisions more effectively than a bureaucracy could. There are certainly many more, and feel free to suggest examples in the comments, but these are my favorites and probably the most influential. This evidence should cause a health skepticism toward argument for central control on the basis of the efficiency or effectiveness demonstrated in military central planning. Given the development of new military technologies and methods of campaign (especially guerilla and “lone wolf” attacks, which show a great deal of decentralized decision-making) and the increasing tendency since 2008 to revert toward ideas of central economic planning, we are likely to get a lot of new evidence about both sides of this fascinating analogy.

How the Left Failed France’s Muslims: A Libertarian Response

Walden Bello, a sociologist in the Philippines, has a piece up over at the far-Left Nation titled “How the Left Failed France’s Muslims.” As with everything Leftist, it was packed with mostly nonsense coupled with a couple of really good nuggets of insight. The nonsense can be explained by the Leftist urge to attribute grand theories that don’t involve an understanding of supply-and-demand to problems dealing with oppression. Below is a good example of another weakness of the present-day Left:

Failure of the French Model of Assimilation

In the “French model,” according to analyst Francois Dubet, “the process of migration was supposed to follow three distinct phases leading to the making of ‘excellent French people.’ First, a phase of economic integration into sectors of activities reserved for migrants and characterized by brutal exploitation. Second, a phase of political participation through trade unions and political parties. Third, a phase of cultural assimilation and fusion into the national French entity, with the culture of origin being, over time, maintained solely in the private sphere.”

What the technocrats didn’t face up to was that by the 1990s the mechanism sustaining the model had broken down. In the grip of neoliberal policies, the capitalist economic system had lost the ability to generate the semi-skilled and unskilled jobs for youth that had served as the means of integration into the working class for earlier generations of migrants. Youth unemployment in many of the banlieues reached 40 percent, nearly twice the national average. And with the absence of stable employment, migrant youth lacked the base from which they could be incorporated into trade unions, political parties and cultural institutions.

Impeded by ideological blindness to inequality, political mishandling of the Muslim dress issue and technocratic failure to realize that neoliberalism had disrupted the economic ladder to integration, authorities increasingly used repressive measures to deal with the “migrant problem.” They policed the banlieues even more tightly, with an emphasis on controlling young males—and, most notably, they escalated deportations.

Notice how Bello doesn’t challenge the fact that the French government has a model for integrating human beings into a system it assumes is already in place? That’s the problem in Europe (and Japan/South Korea), but instead of acknowledging this – or even recognizing it as an issue – Leftists throw in terms like “capitalist economic system” and “neoliberalism” to explain away the failures of the French state’s central planning efforts. Naturally the real threat according to Bello is a Right-wing populism rather than the widespread, unchallenged belief (including by Bello) that government can assimilate one group of people with another in stages.

Just keep government off the backs of people, and they’ll associate in peace (peace is not the absence of conflict, of course, but only the ability to handle conflict through peaceful means, such as through elections or boycotts or marches or consumption). Does this make sense? Am I being naive here?

Ceding power to a central government in order to integrate immigrants into a society in a manner that is deemed acceptable to the planners is going to cause conflict rather than temper it. Planners are beholden to special interests (this is not a bug of democracy but a feature; ask me!), and they cannot possibly know how their plans are affecting the individuals being planned for. Immigrants, left largely to their own devices (which include things like communities, religion, and creativity), are beholden to their own interests (again, which include things like communities, religion, and creativity). Which way sounds less likely to cause resentment all around? Again, am I being naive here? Am I knocking down a straw man? Is this really how European governments approach immigration and assimilation? Is this really how the US approaches immigration and assimilation? These are genuine questions.

An even bigger question remains, of course: how can Europe better assimilate immigrants? Open borders, discussed here at NOL in some detail (perhaps better than most places on the web), is one option, but in order for open borders to work you need political cooperation, and political cooperation means more than just cooperation on matters that interest libertarian economists. Thus, I argue for federation instead of plain ol’ open borders. Another option would be to have governments in Europe cease planning the lives of immigrants for them. This option is a very viable short-term policy that probably does not get the attention it deserves because Leftists are currently unable to see the forest for the trees. Exposing neoliberalism and capitalism is, arguably, more important than petty day-to-day politics after all.