Inverting The Pyramid

The greatest error in political philosophy is faith in a strong central government. Indeed, such a strong central institution never “governs”: it is just The State From On High.

This erroneous political philosophy has its roots in “central economic planning” – the idea that the national economy should be made to resemble an “organization.” When Nehru planned, the Congress was his political organization. And India was a “one party dominant” polity. Congress ruled the centre; Congress also ruled most states. Not only that, the Congress ruled the bureaucracy, another organization, subjecting them to “dual subordination”: they were subordinate to their superior officers; they were also subordinate to the Congress hierarchy. Today, neither organization works. The Congress is on its way out – and into the dustbin of history. And as for the bureaucracy, the less said the better.

Where do we go to from here?

I say, let us invert the pyramid. Let us keep our vision intact: We are a nation of hundreds of free trading and self-governing cities and thousands of such towns, with most of the action along our coasts. The first fact is that in this scenario there is no “national economy” to be organized. Rather, there are millions of independent businesses, run on the special knowledge of separate entrepreneurs. And all these businesses are competing. So the question of a supra-organization “running the economy” does not arise.

Second: The task of “governance” is simplified by the fact that human beings who trade are “rule following animals.” There is therefore a “natural order.” These basic rules of civilized conduct in markets govern the manner in which we acquire desired objects. There is a natural order because everyone is trading in order to acquire desired objects. None are stealing, looting or using any force. Any government, anywhere in the world, if it is to succeed, must base itself on the solid foundations of this natural social order. Socialism fails precisely because it does not see this order. They do not see the beauty of the rules of private property that govern all civilized people engaged in market exchanges. They know nothing of Catallactics. They study the great fiction called “macroeconomics.”

Once we have our basic concepts clear – the vision of free trading cities and towns, and the natural order of a trading society – all that is required are institutions of local self-government. Let them be instituted. And let there be diversity. Let the local government build local streets and roads, clean up the garbage, and catch all local crooks. And stop right there. If we invert the pyramid, we can solve all our problems with government. We can soon be a successful nation. Full of successful individuals enjoying the good life of Liberty Under Law.

Full 20 years ago, in 1989, I left the service of our The State and went to study local government at the LSE. My professor was George Jones. I did learn a lot, but I still wonder why George mentioned nothing about the ancient City of London and its Lord Mayor. Perhaps because the LSE is basically socialist and the City stands solidly for Capitalism. The Webbs, I recently discovered, also did not think too much of this ancient institution of urban self-government.

To me, the “Westminster model of democracy” is meaningless unless we grasp the fundamental fact that Britain has a long tradition of strong institutions of local self-government – beginning with the Lord Mayor of London, an institution older than the Magna Carta. Here is a brief history. If you want to study this institution further, here is a good book. I recommend it. My professor did not.

PS: Pravda says the earth is headed for an Ice Age. What does Pachauri have to say on that? (Thanks to LRC.)