Institutional Competition

Nathan Allen
4 min readFeb 16, 2021

Our institutions[1] have abdicated responsibility, minimized risk by transferring it to others (usually the middle class), and now swim in the swamp of moral hazard. What can be done?

The fundamental problem is a lack of competition. But as noted previously, competition itself doesn’t beget innovation (or reform, or renewal); competition usually devolves into worthless miming of Adam Smith tropes while the supposed competitors enjoy some kind of de facto monopoly.

True competition and its derivative virtues such as innovation is the result of existential threat: innovate or die. Such a threat can only be delivered from an organization with similar credibility and authority.

Competition as existential threat develops and establishes itself as normative at the top. Conversely, it’s no wonder that large corporations seek monopoly status in imitation of their superior: the Federal government. The U.S. government has positioned itself such that “competition” is quarantined to political parties yet does not apply to government itself. That’s a position many of the American Founding Fathers would have thought fundamentally unAmerican.

The solution is the creation of institutions that are co-equal to the government, which sounds absurd and yet such institutions have a rich history in the West. Much of the middle ages contained such a co-equal institution. The Church made laws and regulations, levied taxes, operated Europe’s criminal courts and social programs. At one end of each town was the prince and his castle; at the other end was the priest and his church. They competed on almost every level, and the competition was genuinely fierce. The 10th century French Cluniacs, for example, recognized no authority other than the pope. Imagine being the king of France and having thousands of Cluniacs, together with their buildings, schools and vast wealth, in your country yet totally outside of your authority. Consider that these Cluniacs – numbering over 1,000 monasteries and over a million followers – largely controlled the social and civil aspects of villages across Western Europe and were strong proponents of Pax et treuga Dei, which meant they refused to support political violence (that is: war) and asserted that violence was forbidden in Cluny domains, thus rejecting a basic tool of political ambition (again: war). (This is also the problem that Henry VIII faced with the monasteries in the 16th century that lead him to abolish monasteries.)

It’s gets crazier. The Templars were a monastic-military-banking empire likewise under the pope’s authority while operating throughout Europe (and beyond). Institutions co-equal to governments were fairly common in Europe in the middle ages.

The prince and priest further created and recognized new institutions such as universities and guilds. But the prince realized there was a fundamental problem: at the atop the system of benevolent feudalism was God, and the priest was closer to that ultimate power. Thus, the prince focused on ideologies and institutions that would dislodge God from the apex (that’s how you get secular humanism), solidify government at the top of the power pyramid, and render all other institutions but vassals to government.

So “co-equal institutions” isn’t kooky; it’s actually how the West once operated. The other complaint is that “isn’t such a power structure what Muslims advocate and/or have in the Middle East?”

Islam is a religion of social organization. For example, “jurists” feature prominently in Islam (as they do in Judaism). For Muslims, the religion isn’t “co-equal” with government; the religion is the government.[2] Islam does not promote competing institutions; it promotes unified institutions (and those that cannot be unified under Islam are marginalized or extinguished).

The challenge is not how to “exit” the government but rather how to create a competing institution. Modern Western governments operate on the politics of negation solely to prohibit genuine competition. The early medieval church rose to its position because the governments had collapsed out of their own incompetence and greed. Into the void stepped the competing institution. Governments don’t permit competing power; it must be seized. The usual formula of seizing power from a weak government in order to simply create another government was rejected by the church. The genius of the medieval church is that they did not seize power as government but rather as competition to government.


No Man is an Island

Politics of Negation

[1] Any locus of authority, of social credibility, such that frameworks (of interpretation, behavior, etc.) are consented to and followed by some significant portion of a population. Such institutions exert authority explicitly but, more importantly, implicitly throughout a culture.

[2] The reality in Islam is actually even more complex. Islam is not the combination of religion and government because government had never existed as a thing unto itself. “Government” as a Western idea is largely foreign to Islamic thought. This is why many seemingly basic government functions such as taxation and inter-generational persistence (of government) become exceedingly complex problems in Islam.