Standing under the Arches

Creating responsibility in fact (and not in theory, law, or policy) requires tethering the objects of responsibility to substantial risk. The only risk category that transforms responsibility into innovative success is existential; anything substantially smaller amounts to nothing more than parking tickets, a minor nuisance for minimizing risk in any risk/reward exercise. Economists describe this as “moral hazard” wherein one takes unreasonable risks because much of the downside has been transferred to someone else; it’s gambling with someone else’s money. The Romans deeply understood the relationship between risk and responsibility, which is why so many Roman constructions still stand. And yet, much of modernity — from simple human labor to complex systems — has been committed to thrusting risk onto others who are in no position to consent or resist. As we observe the still-standing Roman bridges and aqueducts and arches, we should consider that Rome fell in part because their greatest engineering success — hardening the relationship between risk and reward — succumbed to the temptations of extractive feudalism that promised maximum reward with minimal risk.

Politics ≠ Government

Politics has become unnecessarily and unreasonably tethered to government. Politics — pertaining to the polis or city or, more accurately, a group of people — consists of the considerations, decisions and implementation of the needs and interests of a group of people living within some defined area. Traditionally, such considerations often did not necessarily entail a government solution but rather included solutions from the private sector or other institutions; politics was the discussion of problems and assigning responsibility for solutions. Military needs or tax collection or policing are obvious examples of “public” problems that historically often had “private” solutions but consider that 17th c. New England essentially had price controls that weren’t determined or regulated by government but rather by culture, as generally influenced by the church. So, even the examples that most seem to tether government to politics haven’t historically necessarily required government solutions.

Government as Failed Idea

When governments don’t deliver generally agreed-upon basics, they have failed. Consider that the U.S. has cities wherein the majority of murderers are never caught, a majority of K12 students never graduate, such students become workers and voters though illiterate, private businesses have been declining for decades so that the market becomes distorted by government economics, a majority of residents survive on government subsidies generationally, etc. Such a collection of ills — occurring over decades — suggests that these governments have failed (whether by design, incompetence, or corruption is not relevant). Surveying Chicago, Detroit, Kansas City, Baltimore, East St Louis, one can find many examples of all of the above.[1] Further, we can conclude that such a collection of large, failed cities has a deleterious impact on the nation.

So, what is to be done about failed cities?

Responsibility & Failure

It can’t be argued that these failed governments are de facto responsible for their failed states because (1) there are no consequences to the government and (2) there’s no meaningful incentive for these governments (as governments) to unfail. It is not responsibility, then, that we witness in these failures, which explains the lack of reform or innovation (or meaningful improvement of any sort). Empirically, lower tax revenues don’t cause competence (or retard corruption); despite decades of lower revenues, such governments continue failing. The only consistently meaningful incentive for innovation in the market is the threat of extinction.[2] So what is the incentive for such governments to not fail if their persistence is guaranteed?

There isn’t even an incentive to succeed for a particular party, as the same party has run these cities for decades. This though, seems not relevant; even if the parties changed (as the politicians do), the influence of responsibility — which, ultimately, can only be existential — is absent. These cities have been captured not just by a political party but by government itself.

When Jefferson observed (regarding Shays’ Rebellion) that “God forbid we should ever be 20 years without such a rebellion” and that “liberties are ensured by the spirit of resistance,” he was referring to rebellion against and resistance to government, not any particular party or policy.[3] His observation is that responsibility (and related necessary competencies) is a product of existential threat.

Isn’t it possible that the supposed culpability of parties or politicians is more of a ruse or an obfuscation for other institutions to abdicate responsibility?[4] Institutions can loot these cities while government appears responsible for the resulting ills? Isn’t it further conceivable that such an arrangement is mutually beneficial? Governments permit this looting while institutions provide the minimal stability required that the governments don’t otherwise deserve and could not otherwise produce?

And so if government (in this case, of particular cities) has become untethered from the responsibility to govern, and if there is no systemic incentive to ameliorate this problem, what is to be done? If government has failed, does politics necessarily fail? If civil war is a failure of politics, then the final question is: can politics solve the problem of government?

Responsibility & Risk

With the caveat that I think New Haven has something of an unfair reputation, most reasonable people would agree that New Haven is an ugly, violent failure of the city.[5] It has collapsed into bleak brutalism; its people flee.[6] New Haven has suffered every possible reform and waves of state and federal funding, and yet improvement remains just around the corner, as it has for decades.

And yet, right in the center of New Haven is the modern-day robber-baron Yale University, basking in gilded wealth and opulence amidst the squalor, its rapaciousness disguised as public good.

Does anyone doubt that Yale has in its possession the resources and every expert one could conceivably require to fix whatever ails New Haven, from billions of dollars to urban studies departments?[7] And yet, Yale exhibits (in action not words) no responsibility for the squalor that seethes just beyond its well-oaked classrooms, just as GM feels no responsibility for the destruction of Detroit. According to Yale and GM and every similar institution, the governments failed. These institutions paid their taxes and obeyed the laws and otherwise are absolved of responsibility. Their P.R. departments can furnish upon request the proof of their paid-in-full indulgences.

Perhaps the problem isn’t a particular government but rather government itself. The failure is not of party or democracy but rather of the notion that the practical application of politics is necessarily government. Perhaps the failure in these cases is the application of government instead of other institutions. Perhaps a solution without responsibility — e.g. modern urban government — is no solution at all. The problem, ultimately, is that the benefits of government are enjoyed by these institutions, and the greatest benefit of all is the mitigation of risk — or, more specifically, the conversion of risk (through the conversion of responsibility) from civic responsibilities to government programs. Yale is thus absolved when it pays taxes.

Risk & Reputation

Tether responsibility (and, hence, risk) to a solution. Give the city of New Haven to Yale (of course Yale wouldn’t take it, so, rather, require Yale to own New Haven). I do not mean that Yale operates the New Haven government but rather Yale is the New Haven government; there can be no separation. Permit Yale to do all the things that any government can do — tax, spend, legislate, etc. All, of course, within the confines of the state and federal constitutions. There are no elections (other than to the Yale board), no municipal boards or municipal operations (public schools, waste treatment) outside of Yale University. No room for excuses.

I doubt Yale would permit New Haven’s failure if Yale’s reputation were at risk. I doubt GM would allow Detroit to fester with potholes and bulbless streetlamps if its reputation were tethered to Detroit’s success, just as Disney wouldn’t permit failing schools or high crime in Orlando.

This is, of course, anti-Marxism.[8] Instead of violently extracting reward from the system, risk is thrust into the system upon those who’ve enjoyed rewards stripped of risk. Marxist extraction (e.g. bourgeois wealth) fails because it becomes owned by an essentially risk-free operation (government); thus there is no symbiosis between risk and reward. Extracting reward without risk, as so many of our institutions have, is essentially the Marxist project in reverse; it is seizing the grand farms of the Ukraine without repercussions when Ukrainians starve to death.

Influence of Responsibility

An obvious objection is the problem of these institutions owning cities when such institutions are, at least in part, responsible for the failure of these same cities. In a similar complaint, William Buckley observed that he’d rather be governed by first 200 names in the Boston phone book than by the Harvard faculty. But what Buckley failed to understand is that the influence of responsibility flows both directions.[9] It is the very lack of responsibility that chiefly informs irresponsible positions; unbound from action, thought corrupts. Without risk, ideas metastasize into cankerous fetishes.[10]

As the USSR and the CCP demonstrate, the potency of mutual influence is undeniable. The open question is whether millions of Ukrainians will die before the pillars of hubris fall.

Extractive Systems of Control

Despite what your wispy anarchist college professor may have told you, every system is, by definition, feudal. Feudal simply means a hierarchy, and systems, by definition, have a hierarchy. There is the organizing principle (which a system must have to be a system), those who maintain, interpret and adapt the organizing principle, those who implement it, etc. The base of the pyramid are people who have no idea what’s going on and must be sent government cheese and yay-democracy! pep rallies.

Every system calcifies from benevolent feudalism to extractive feudalism. Benevolent feudal is governed by mutual responsibilities and some inherent dynamism; extractive feudalism occurs when those at the top of a benevolent feudal system reject the dynamism (which they’ll often accuse of being “chaos”), solidify the relationships, slowly transform the mutual responsibilities into pseudo-mutual responsibilities (“but we pay taxes”), and extract as much as possible from the system just short of civil unrest (a fuzzy calculation that sometimes goes wrong, usually in France).

The most robust defense of American slavery was developed from George Fitzhugh[11]; his main work, Cannibals All!, defended slavery on the notion that it at least had some vestiges of benevolent feudalism. In contrast, Northern wage slaves were victims of extractive feudalism wherein as much value was extracted from them as possible and then they were discarded.[12] The progressive movement (not to mention outbreaks of socialist and Marxist agitation) that followed the Civil War essentially confirmed Fitzhugh’s arguments about the rapaciousness of unfettered extractive feudalism.

And yet, aren’t so many of our institutions the new lords of an extractive feudal system?

The Influence of Risk

Some suggest we should tax university endowments (more than we do). And then what? Give that money to the same governments that give us 70% unsolved murder rates and 70% student drop-out rates? Is taxing universities just activating the punitive motivations of leftist philosophies instead of solving the problem? If the problem is that universities (and other institutions) should have responsibility for their communities, it seems improbable that more funding for governments that have proven immune to success would solve problems.[13] A greater tax on universities would be raising the price of the indulgence; it would be paid as long as it absolves the institution of responsibility.

Roman engineers were required to stand under the arches they designed as the frame was removed; the engineer’s head would soon discover if the arch was poorly designed. To the surprise of no one, not a lot of Roman engineers died from fallen arches and a lot of Roman arches stand to this day.

Let’s require our institutions to stand under the arches. Let’s require them to own the risk.

There are two problem sets: 1) the issues described above; 2) the issues involving implementation of the above. I am not concerned with the second problem set at this time.

[1] Johns Hopkins (Baltimore) has over $6 billion in endowment funds, almost $4 billion in annual revenue, and many billions more in endowment and revenue for its affiliated organizations. Its hospital alone takes in almost $3 billion in annual revenue. The Johns Hopkins Program for International Education in Gynecology and Obstetrics (“Jhpiego”), which is not the hospital, takes in almost $500M annually; if you’re curious, Jhpiego focuses on aborting Africans (babies, not adults, as far as I know). Not only is Johns Hopkins the largest employer in Baltimore, but it’s a larger employer than all other top 10 Baltimore employers combined.

Tax filings (endowment/rev info): https://www.guidestar.org/search

https://web.archive.org/web/20100725000755/http://www.baltimoredevelopment.com/major-employers

[2] See Competition ≠ Innovation. See also IBM, Blockbuster, Xerox, Kodak, etc.

[3] https://oll.libertyfund.org/title/jefferson-the-works-vol-5-correspondence-1786-1789

[4] “Institutions” may be private, public, for- or non-profit. Unifying them is the significant influence — economic, cultural, and otherwise — that they have on the societies in which they operate. The ruse may be most evident (though not most corrosive) in companies such as Wal-Mart and McDonalds, which are two of the largest employers of food stamps recipients. See https://www.cnbc.com/2020/11/19/walmart-and-mcdonalds-among-top-employers-of-medicaid-and-food-stamp-beneficiaries.html.

[5] Violent crime rate is about 8.5 per thousand, which means New Haven is about twice as violent as New York City. Despite Chicago getting all the press, Chicago’s violent crime rate per thousand is only about 10, which means you’re almost as likely to get stabbed in the face in New Haven as Chicago. New Haven public school’s dropout rates are around 25%, which is actually pretty good until you realize that their math and reading proficiency rates are below 25%, which means there are a lot of graduating illiterate students (actually happens).

Some sources:

https://www.neighborhoodscout.com/il/chicago/crime

https://patch.com/connecticut/across-ct/10-most-dangerous-cities-connecticut-2020-rankings

https://www.publicschoolreview.com/connecticut/new-haven-school-district/902790-school-district

https://worldpopulationreview.com/us-cities/new-haven-ct-population

https://www.deptofnumbers.com/unemployment/connecticut/new-haven/

https://www.nhregister.com/connecticut/article/New-Haven-Public-Schools-graduation-rate-grows-to-11396510.php

[6] Connecticut’s population has grown by 40% since 1960. New Haven’s population has declined by 20% over the same period. For those who argue “white flight,” New York City’s population has grown by 6% in the same period. Boston’s has grown by 2%. Houston’s has grown by 149%. While New Haven’s unemployment rate is about average for the state, it’s clear that New Haven maintains a reasonable unemployment rate by driving out residents seeking work.

https://worldpopulationreview.com/states/connecticut-population

https://worldpopulationreview.com/us-cities/boston-ma-population

[7] >$30B in endowment, $40B in assets, >$10B in annual revenue, and https://urbanstudies.yale.edu/. Johns Hopkins has a Program on Global Social Change but not a Program on Why We Let Baltimore Be the Murder Capitol of the America. Odd.

[8] Capitalism is not the opposite of Marxism; rather, it’s a variation of the same analysis that produces a variation of the same extractive feudalism with the same attempt to sever risk from reward, and thus action from responsibility.

[9] There are about a thousand variations of this quote, nearly all attributed to William Buckley.

[10] Taleb writes often on the corruption of risk removal (not having “skin in the game”); https://en.wikipedia.org/wiki/Skin_in_the_Game_(book)

For some of the effects of systemic risk conversion, see https://nathan-a-allen.medium.com/systemic-risk-conversion-54208fc0e1fa

[11] Fitzhugh complained that calling “free labor” “wage slavery” was “a gross libel on slavery.” He described plantation slavery as “the beau ideal of Communism.”

https://en.wikipedia.org/wiki/George_Fitzhugh

[12] “…the unrestricted exploitation of so-called free society is more oppressive to the laborer than domestic slavery.”

[13] The end of this essay claims I’d write next about Kansas City, which apparently I did not. Some day I will; the Kansas City experiment is a great insight into (not) fixing problems through increased funding. In the 1990s, the Kansas City school district was flooded with extreme amounts of cash. Long story short: the district got worse; its accreditation was even revoked; nothing improved.

Agitator.