Beyond the Nation-State (Boston Review)
The Failure of a Socialist Dreamer (Law & Liberty)
A New Guild System (The Hedgehog Review)
State formation in Korea and Japan occurred a thousand years before it did in Europe, and it occurred for reasons of emulation and learning, not bellicist competition. Korea and Japan emerged as states between the 4th and 8th centuries CE and existed for centuries thereafter with centralized bureaucratic control defined over territory and administrative capacity to tax their populations, field large militaries, and provide extensive public goods. They created these institutions not to wage war or suppress revolt – the longevity of dynasties in these countries is evidence of both the peacefulness of their region and their internal stability. Rather, Korea and Japan developed state institutions through emulation and learning from China. State formation in historical East Asia occurred under a hegemonic system in which war was relatively rare, not under a balance of power system with regular existential threats. Why? We focus here on diffusion through a combination of emulation and learning: domestic elites copied Chinese civilization for reasons of prestige and domestic legitimacy.
This is good, and it comes out of the most interesting journal in international relations today, but it doesn’t quite do it for me. I think China’s imperialism was far looser than contemporary scholars imagine, especially as China spread territorially outside of its cultural hearth. I think China’s imperial sovereigns were more akin to Emperors in the Holy Roman Empire than, say, Louis XIV. I do think that Japan and Korea mimicked China, which is exactly why both countries had relatively decentralized political systems up until the 19th and 20th centuries.
Contemporary scholarship has a soft spot for pre-modern (before 1500 AD) non-Western state systems, so you get stuff like this. Again, this is a great article, and you should read it right now, but I don’t buy it. I don’t think Japan and Korea were states that existed for centuries “with centralized bureaucratic control defined over territory and administrative capacity to tax their populations, field large militaries, and provide extensive public goods.” That’s too rich for my blood. There were cultural hearths and polities in Japan and Korea that tried to mimic China, but sovereignty was still far too fractal until the Europeans arrived with their formal imperialism. See this piece for an example of why I’m skeptical of the author’s claims.
The Nation-State and Borders
Nation-states have to possess immigration policies or they cease to exist. I mean any number of things by “cease to exist,” including falling apart organizationally and economically, to the point of being unable to provide a minimum degree of order, of predictability. (This last sentence might rub pure libertarians the wrong way. I am willing and eager to engage them on the topic of nation-states, societies, and social order.) This failure to function can be the result of an influx of large numbers of immigrants unable to provide for themselves, obviously. I am not suggesting that this is the only possible cause. It’s one cause and it’s staring us in the eyes as I write (April 2021, three and half months into the Biden presidency).
More prosaically, but also a little mysteriously, “cease to exist” may simply refers to the nation-state becoming something else, subjectively less desirable than what it was. The insulting word “nativism” does not do justice to the complex and subtle issues involved here.
Right now, for example, many French people believe that the large presence in their midst of un-assimilated Muslim immigrants endangers the fundamental building blocks of their society’s ethics and laws. These would include, for example, the separation of church and state (of religion and government) and the equality of men and women. Many French people who are not “white supremacists,” (or, more pertinently perhaps, not Christian supremacists) are calling for an end to all Muslim immigration. (Note that I have said nothing about whether I believe their fears are justified.)*
Guarded national borders have been the conventional way to protect the nation-state since the mid-19th century. They don’t have to be but other available methods are even less palatable to those who love freedom. If, for example, every resident of the US carried a personally identified GPS that it is illegal to turn off, it would be easy to monitor the totality of the population. Those moving about without an authorized GPS would stand out. Legal immigrants might be given a GPS with a different signal. Legal visitors who are not immigrants would get yet another with a signal set to come off on or just before their visa expiration. Illegal immigrants would carry no authorized GPS. This absence would designate them the attention of immigration authorities. (Of course, fake GPS would soon be for sale but they would be more difficult to create than are current SS card and other such paper or plastic documents.) And, thinking about it, a microchip painlessly implanted under each person’s skin might work even better! See what I mean about guarded borders not being so repugnant after all?
*The French left-wing media do not offer substantive arguments to calm the widespread alarm raised by the center, by the right, by many others. Instead, they try to make the alarmed feel guilty of “Islamophobia,” supposedly a close cousin of racism. This accusation quickly losses forces because many people realize that Islam is a set of beliefs and of values that Muslims are free to abandon, unlike race. At least, they may abandon it in the French legal context. (In several Muslim countries, such “apostasy” is theoretically punished by death.) By the way, a month before this writing, I talked on a Santa Cruz beach with a pleasant young French Muslim, a pure product of French public schools born in France. He told me calmly that he believed French law should forbid blasphemy.
With all the agitation and all the negative emotions, people with Muslim names appear well represented at all levels and in all sectors of French society. (Firm numbers are hard to come by because the French government does not allow its various branches to collect information on religious affiliation nor on ethnicity.) And, by the way, I just love what Arabic influence has done to French popular music and songs.
I know most of NOL‘s American readers are familiar with the German question that puzzled the Allies after World War II, but there was a different German Question that puzzled statesmen and policymakers in the 19th century:
From 1815 to 1866, about 37 independent German-speaking states existed within the German Confederation. The Großdeutsche Lösung (“Greater German solution”) favored unifying all German-speaking peoples under one state, and was promoted by the Austrian Empire and its supporters. The Kleindeutsche Lösung (“Little German solution”) sought only to unify the northern German states and did not include any part of Austria (either its German-inhabited areas or its areas dominated by other ethnic groups); this proposal was favored by the Kingdom of Prussia.
While a number of factors swayed allegiances in the debate, the most prominent was religion. The Großdeutsche Lösung would have implied a dominant position for Catholic Austria, the largest and most powerful German state of the early 19th century. As a result, Catholics and Austria-friendly states usually favored Großdeutschland. A unification of Germany led by Prussia would mean the domination of the new state by the Protestant House of Hohenzollern, a more palatable option to Protestant northern German states. Another complicating factor was the Austrian Empire’s inclusion of a large number of non-Germans, such as Hungarians, Czechs, South Slavs, Italians, Poles, Ruthenians, Romanians and Slovaks. The Austrians were reluctant to enter a unified Germany if it meant giving up their non-German speaking territories.
This is from Wikipedia, and it appears that the German Question of the 20th century was still the same one as the 19th century. It took an invasion by the Soviet Union and the United States to decisively answer the question. Happy Easter!
The second bank by the sea
My music playlist has nearly stagnated for years and, depending on your age, maybe yours has too. Evidence suggests that (partly) because of mind shenanigans, our musical palette does not quite expand past the age of 30. I think that something similar goes for gaming. I am still fond of those (pc) games from my late teen – early adult years and stay happily ignorant about the newer ones. Those single player games immersed you through substance over eye-candies. Some in-game scenes remain pure gold after all these years. Like that dialogue, when one of my younger siblings was delving in a fictional setting resembling the Caribbean during the Golden Age of Piracy. (Escape from Monkey Island. I preferred RPGs. Nowadays, only books – like this one.)
At some point, the protagonist, a witty swashbuckler, visited the Second Bank of an island called Lucre. “What happened to the First Bank of Lucre?”, he inquired. “Nothing”, said the bank teller, “It was our public relations department’s idea. They felt that being called the ‘First’ bank didn’t project an image of experience”. At the time I thought it as just a funny anachronism. Later, I recognized a jab to brand marketing practices and the corporate-speak more generally. But it was also the scheme of a “fledgling” first banking institution versus a “trustworthy” second one that almost held a real-world analogy.
Some kind of a theory
There is a rich discussion on the origins of money, its form and the proper control of it, as well as a few historical cases of either state or private currencies thriving – or failing. Hard. In the thick of it, we talk about two positions. From the one hand, the “economics textbook” approach proposes that money emerged in the realm of private economic relations, to minimize transaction costs and facilitate trade. (Francisco d’Anconia would approve.) Here be a decentralized, bottom-up acceptance of the medium of exchange. This view sits well with the classical liberal dichotomy between the civil and state spheres, which can be expanded to envision a very limited role for the state in monetary affairs. From the other hand, the “anthropological – historical” position articulates that trust on money comes mostly from the sovereign’s guarantee, marked by the sign of God and/ or Emperor. This top-down explanation is more receptive to the state control of money, rhyming with the monetary power as a prerogative of the ruler and an expression of sovereignty.
Beginning with some important judicial decisions in the second half of 19th century, the official assertion of state power over money came in the 20th century. Per the Permanent Court of International Justice, in 1929, “it is indeed a generally accepted principle that a state is entitled to regulate its own currency”. You know, the norm of modern national monetary monopolies. There was a time though, when things were more colorful and less unambiguous. From the 13th century onward to the Golden Age of Piracy and beyond, it was only normal for different monies of various issuers to flow from one territory to the other. Reputable currencies required not only a resilient authority backing them, but also a nod by society and custom. This kind-of-synthesis of the two positions outlined above rung especially true in the case of the young Greek state in 1830s – 1840s. (For this section I draw from the comprehensive “History of the Greek State 1830 – 1920”, by George B. Dertilis [the 2017 Crete University Press edition, in Greek. An extended version, under a different title, is forthcoming in English in 2021/22]. Btw, on Mar. 25 we celebrate 200 years from the Declaration of the Greek Revolution versus the Ottoman rule, an [underrated?] event with connotations of nationalism and liberal constitutionalism.)
Over there at the (Balkan) shore
As the new state needed to break free from all the institutions of Ottoman Empire, its hastily assembled first Bank of Issue sought to introduce a new national currency (the Phoenix). The impoverished, ravaged and cut off from international debt markets nascent state reflected bad upon the Bank. The government tried to force public’s trust via legislation. By decree, payments from/ to the state coffers would include a mandatory percentage of the new banknotes (later the percentage was set at 100%). Revenue from state natural resources – present and future – would back the currency. The administrative magic did not do it. The public actively tried to avoid the Phoenix banknotes, in favor of traditional silver/ gold coins. Bank and currency failed to crowd out the foreign monies and ultimately went out of business. A few years later, the overall environment had improved somewhat and a more vigorous state established the second Bank of Issue. Another new national currency, the Drachma, was already circulating in – copper – coins along with the foreign ones.
The second Bank received an exclusive charter of issue and undertook the task to roll-out the Drachma banknotes (silver/ gold coins would follow) and, in doing so, integrate the fragmented Greek countryside to a more cohesive national economy. Up until then, the local markets had operated as loosely hierarchical oligopolies. At the bottom of the chain, each small village or group of villages was dependent on a merchant-money lender who held monopsonistic power over the (tiny scale) agricultural production and, at the same time, monopolistic power in cash and credit. These rural businessmen depended on the respective merchant-money lender of the nearest town for brokerage. Next in line was the merchant-money lender of the nearest city, usually with access to international trade routes. You get the picture. These informal networks contained competition among neighboring lesser merchant-money lenders and promoted trade through a complex web of transactions (involving forward contracts, insurance premiums and bills of exchange, among others). (The official site for the anniversary features a fancy piece about the first attempts to establish a national bank as well. It includes a few names and dates, while noticing the “exploitative” networks and the “primitive” credit system .I find its lack of nuance
disturbing somewhat misleading.)
Becoming one with the forces
The Bank opted to tap and complement the existing disjointed market forces, in order to gently nudge them. It channeled its primary tool, lending in banknotes, to the local money markets, firstly, to a limited number of large merchant-money lenders, later to the middle ones. (According to the Bank’s ledgers, these clients usually chose respectable job titles, such as “Banker” or “Broker”. Others, a bit blunter, went by the Greek equivalent of “Usurer”.) This lending – apart from being short-term, relatively safe and profitable – enabled the Bank to gradually assume a leading position, without the need to deep dive at the specifics of each end-user of the market. The soft, indirect entry in the century-old customary networks lowered the cost of money and contributed to the integration of the national economy. The transition was not always smooth, with the occasional episode (people switching from banknotes to metallic coins, the Bank returning the favor by aggressively cutting back lending, the government setting compulsory percentages etc – you know the drill), but still, the stakeholders’ incentives aligned. Society at large recognized Bank and currency, with the system reaching a workable equilibrium
The merchant-money lender of old was finally phased-out by regular bank lending in the next decades. Further underpinned by a cozy relationship with the state (always a valuable client, usually a partner, sometimes even an opponent), the Bank acted as a quasi-central banking institution until 1928, when the charter was transferred to the newly found Bank of Greece. The Drachma continued as official legal tender (albeit with numerous conversions) until the end of 2001.
I think you make an interesting point, but allow me a bit of push back. The world government would set the rules of how federated entities would interact. This would be like standards and protocols. You are correct that a set of shared standards can allow for enhanced competition, of the good variety (what I call constructive competition). This would be a good thing.
However the same shared standards would lock in the world to one set of protocols, thus reducing the discovery via variation and selection of the shared institutions themselves.
Thus we would see more short range constructive competition between states, and less long term exploration of new and potentially better institutional standards.
This is from Rojelio. He is pushing back against my argument in favor of world government from a libertarian point of view. He’s right, of course. There’s two points I need to do a better job of clarifying when I advocate for world government from a libertarian point of view:
The bottom line is that a more libertarian world will likely be composed of a large federal polity that protects the freedoms of the vast majority of its citizens better than most nation-states do today. The other 15% of the world would live under despotism (which will center around “cultural cores”), or under sparsely-populated democratic republics (i.e Australia), or within free-riding microstates that otherwise rely on the protection of the large federal unit.
If, say, England, Tamaulipas, and Duyên hải Nam Trung Bộ were to federate with the United States tomorrow, these polities would not be agitating for exit after 10 years of experimentation in self-governance. If, say, Texas or Vermont wanted to exit after 10 years of federation with those 3 polities, they would have to go through a process (via all of the legislative branches involved) to do so. A simple majority vote would be disastrous. It is unlikely, then, that Texas or Vermont would leave such a federation. Pure freedom would be unrealized, but billions of people would be much freer.
This is by Jacob Jordaens, a Flemish painter, and it is not even one of his most famous paintings. Here’s Jordaens’ wiki page. The Peace of Westphalia ended the 30 Years War. The Habsburgs weren’t necessarily the bad guys. The Peace of Westphalia didn’t establish state sovereignty in a system of equal (in theory) nation-states within an interstate order. The Peace of Westphalia solved a religious constitutional question within the Holy Roman Empire and ended the war between the Dutch and the Spanish. The Westphalian state system that we speak of and live in today is not appropriately named. Here’s the best article (pdf) I’ve read on the Peace.
If we were to appropriately name the interstate order that we have today, it would be named the Napoleonic interstate system. Alas. It’s called the Westphalian system. The US, and a couple of other big states like China and Russia, have trouble fitting in to the “Westphalian” state system because they established their own regional state systems long before being wrangled into European imperial entanglements. It goes without saying that polities in Africa, Asia, and the Americas also had trouble fitting into the “Westphalian” state system.
What if one of the regional orders established by the US, Russia, or China were embraced as the new global order, instead of the “Westphalian” (really Napoleonic) system based on nation-state sovereignty? I don’t think this would be a bad thing, and in their own way, the US, China, and Russia have been trying to do this since the end of World War II.