Date: Thu, 18 Sep 2014 15:44:20 +0200
The rise and fall of states
<https://www.opendemocracy.net/author/fernando-betancor> Fernando Betancor
18 September 2014
Why do states form, and why do they collapse?
Today the people of Scotland will go to the polls and decide to keep or
divide the United Kingdom. It is an act of monumental significance: firstly
for the important precedent of the peaceful and lawful exercise of the right
to self-determination; secondly, for the immediate consequences of their
decision on one of the most important states in the world; and lastly, for
the vast repercussions that this vote will have across the globe. Regardless
of the outcome, but especially if "YES" wins, the post-World War 2 order
will be irrevocably changed. Entrenched elites will rightly tremble and
complacent leaders in many capitals will question whether their "settled"
borders are indeed as safe as they thought.
Any event involving millions of actors has complex originations and
motivations. The simple narratives preferred by most people and served up by
mainstream media fail to capture the complexities and nuances which are
often more important than the "big picture". The increasingly evident desire
of Scots for independence has been chalked up by detractors and unionists to
the sentimental delusions of an irresponsible and romantic generation weaned
on Braveheart and the connivance of unscrupulous nationalist politicians.
The separatist movement in Catalonia has similarly been described as an
unpleasant mixture of nationalist brainwashing, a sheepish flocking behind
corrupt and unscrupulous politicians, and an unforgivable selfishness and
lack of solidarity with the rest of Spain.
<https://mail.google.com/mail/u/1/#14885fb80529ca14__edn1> [i]
Always there is an underlying contempt and incomprehension which springs
from a clash of identities. This clash is particularly dangerous and
intractable for many reasons. For one, it can permanently alter perceptions
of identity. Individuals can hold many identities simultaneously: gender,
religious, national, tribal, ethnic, linguistic and other identities can and
do peacefully coexist in everyone all the time. There is no inherent
contradiction in feeling both Scottish and British, Catalan and Spanish,
American and Virginian. But when politics sets two identities against each
other, individuals begin to make a conscious choice between them: and that
choice involves where and to what these individuals give their loyalty.
Eventually, this process becomes almost irrevocable for all those who live
through it. The other danger is that it turns fellow citizens into "the
other", a designation which provokes a primitive and visceral response in
human beings. The "other" is the enemy, the threat, one who resides outside
of our circle of light and friendship. They are precisely the ones we are
perfectly willing to fight and kill. When that happens, the polity falls
apart.
It is therefore worthwhile exploring briefly why states form and why states
fall apart in order to understand the policy responses that can avert
national fragmentation and the real possibility of civil war in some cases.
The Long March of Nationalism
<https://mail.google.com/mail/u/1/#14885fb80529ca14__edn2> [ii]
It should be remembered that the modern nation-state model which is now
dominant around the world is actually a very recent European innovation. For
most of history, humanity has been organized along very different
principles: multi-ethnic empires holding sway over heterogenous groups of
largely passive masses through some form of divine right has been the norm
around the world. Uniformity of language, of religion, or of ethnicity were
never a requirement of legitimacy for these political organizations: the
polyglot empires of antiquity made no such pretext. For most people it was
enough to know that Caesar ruled by the power of Jove and the power of the
legions.
This began to change around the 16th century in Northern Europe, as literacy
spread and with it an increasingly open questioning of the religious
monopoly on knowledge and the power and riches that went with it. It is no
accident that Protestantism took root in precisely those parts of Europe
with the highest literacy rates; and that the rise of Protestantism in turn
lead to increased literacy rates as children were taught their letters so
they could read the Bible - an act strictly prohibited by the Roman Catholic
Church for another three centuries. The increasingly fractious nature of
this theological debate eventually led to a political schism in Germany
between the Protestant Electors of the Holy Roman Empire and the Catholic
Habsburg Emperor. The result was the Thirty Years War, a nearly genocidal
conflict that turned Germany into a wasteland and ended only with the mutual
exhaustion of every major and most minor powers in Europe.
The offshoot of the war was the doctrine of cuius regio eius religio: “whose
realm, his religion”. The religion of the ruler would be the religion of the
ruled. From now on, European monarchs had carte blanche to repress, exile,
torture and murder their dissenting citizens without fear of provoking a
general religious conflict. The first step towards the nation-state was
taken; but the states of Europe still lacked essential features of the
modern state. The monarchs of Spain and France referred to themselves as
"His Catholic Majesty" and "the Most Christian King" and ruled over a people
that still spoke mostly mutually unintelligible dialects. A Parisian in 1648
would have had trouble understanding the accents of his Breton or Gascon
countrymen, much less of the Provençal and Occitan of the Mediterranean
coast. The same could be said of a Londoner, a Madrileño, a Florentine or a
Berliner.
The next important step in the evolution of the modern state was taken
during the French Revolution. The wars of the 17th century were the province
of kings and gentlemen: they were bloody enough, but they were fought by a
political and military elite and were limited in scope and destructiveness
by the lessening of religious fanaticism which had characterized the 16th
century and by the limitations imposed by the still primitive development in
science, industry and agriculture as well. Advancement in these last three
fields allowed the wars of the 18th century to greatly outstrip those of the
preceding eras in size, scope and duration so that by the 1760s you had the
first European World War, with fighting in Europe, America, Africa and Asia.
<https://mail.google.com/mail/u/1/#14885fb80529ca14__edn3> [iii]
The culmination of this trend came during the Wars of the Coalitions against
Republican France.
<https://mail.google.com/mail/u/1/#14885fb80529ca14__edn4> [iv] The latter,
which had purged, exiled or executed most of its professional officer corps,
faced the need to quickly raise and organize armies to turn back multiple
invasions by the monarchical forces arrayed against her: the French
revolutionary leaders turned to the levee on masse, which was a precursor to
the nation in arms. Every able bodied Frenchman became a defender of the
revolution and a defender of France; military service became a patriot duty
of the citizen, a reintroduction of a Greco-Roman concept disused for over
1500 years. France's armies of citizen-soldiers swept to victory and
France's sons were swept together for the first time; millions of Frenchmen
who would have lived and died in their villages if it had not been for the
Revolutionary and Napoleonic Wars. It was war and army life that turned
these people into Frenchmen and gave birth to the modern ethno-linguistic
state. At the same time, the hostility of the French Republic to the
Catholic Church de-emphasized the need for religious uniformity, though it
remains a potent force to this day.
Linguistic homogeneity gained in importance by the spread of Enlightenment
principles in science and education as well as the rise of nostalgic
romanticism, which rejected the pure logic and rationalism of the
Enlightenment for a "purer" past of unsullied antiquity. This may seem a
strange and contradictory combination, but they were not. "Enlightened
despots" recognized the benefits of an educated middle class to spur
industrial growth and economic growth as nations competed for power and
security; meanwhile writers, philosophers and artists were rediscovering or
inventing the cultural, musical and artistic heritage of the Volk. Even as
literacy rates began to climb across most of Europe, the newly educated
bourgeoisie and their children were being formed on new national myths that
not only served to transmit a standardized version of the national language,
but also to create a national identity were none had existed before.
It is relevant to note that every single nation-state in existence today
underwent this process of homogenization and myth creation, including
"historic states" like France, Spain and England that have "existed" for
centuries. If you had asked a random Spanish peasant in Castile in 1700 to
tell you their nationality, they would have stared at you for a long time
before answering that they were from Burgos and, of course, a Christian
(meaning Roman Catholic). The concept of "Spaniard" did not exist in our
modern sense until the end of the XIXth century.
<https://mail.google.com/mail/u/1/#14885fb80529ca14__edn5> [v] The same is
true of the "Germans" and "Italians": it was the Franco-Prussian and First
World Wars that forged modern Germans and Italians out of Bavarians,
Prussians, Hessians, Venetians, Florentines, and Neapolitans.
Some nations required an even more extreme myth creation process: modern
Romania was formed by the European Great Powers in the 1840s out of
Wallachia and Moldavia, two rebellious Ottoman dependencies which were too
important to be absorbed by either Russia or Austria-Hungary. The new
Romanians had to reach back into the night of antiquity to pre-Roman Dacia
to establish a foundational myth, with the fight against the Ottoman
oppressor as another unifying theme. So too the Czechs, the Serbs, and even
the Greeks, whose classical Athenian forbearers would have stared to see a
bunch of Macedonian, Thessalian and Epirot barbarians dignified with the
name of "Greek", appropriately applied only to the civilized Doric, Ionian
and Achaean inhabitants south of Boeotia, the Peloponnese and the coast of
Anatolia.
We see the same process today in proto-states like Scotland, Catalonia,
Euskadi, Wallonia and Flanders; as well as in newly independent states like
Ukraine, the Baltic States and the decolonized regions of Africa and Asia...
the list is a long one. When unionists scoff and disparage these efforts at
creating a national myth as indulging in historical revisionism and building
a tissue of lies, they ought to reflect that their own national identities
were built in exactly the same fashion only 150 years earlier.
Why States Come Together
<https://mail.google.com/mail/u/1/#14885fb80529ca14__edn6> [vi]
Political organizations have always been based on a clear set of principles
throughout history: security from invasion and access to markets and
resources. In a dangerous world, the direct and indirect costs of
subjugation to a distant authority are balanced by the very real benefits of
physical security from violent death as well as the wealth generated by a
common legal and institutional framework, infrastructure and lingua franca.
This conceptual framework easily explains the rise and decline of the Roman
Empire: so long as the legions protected the border and the Roman government
was neither to corrupt nor too fragmented, the Empire flourished. When the
borders became porous and the Imperial economy fragmented the costs of
maintaining the centralized state were no longer worth paying and local
elites made better deals with the Romanized Germanic chieftains occupying
Gaul, Hispania and Britannia. The Eastern Empire, with a stronger economy
and military, managed to put off the day of reckoning for another 1,000
years.
The modern nation-state has rapidly come to dominate the world system
because is it highly efficient at maximizing the security and economic
benefits provided by the centralized state while at the same time minimizing
the costs of compliance and subjugation. Central to this efficiency is the
concept of friction.
Friction exists in every transaction between individuals and between
individuals and other entities, like states or corporations. This friction
can be considered a cost of doing business; and to the extent that any
individual is capable of doing so, they would prefer to minimize their
costs. The costs of frictions are increased by many factors: distance,
differences in language, in culture, in religion, in legal frameworks, in
currencies. If you have ever travelled in a foreign country you know how
trying it can be to make yourself understood or conduct business there. In a
multi-ethnic empire, these costs are borne by many of the citizens within
the state, implying that the benefits provided by that state must be
correspondingly higher to justify the additional costs. When those costs are
no longer perceived to be covered, independence movements result.
Just as the costs of union tend to limit the maximum size of states, the
costs of military defense and economic viability has tended to limit the
minimum size of states. All things being equal, and with God on the size of
the bigger battalions, small states are at a disadvantage in the struggle
for survival. They are more likely to be invaded and plundered or annexed
than large states, and less likely to effectively resist. There are
exceptions: small states can exist thanks to the rivalry of proximate big
states, whose competition serves as a de facto guarantee of independence.
Over long historical periods, however, these guarantees have proven
unreliable as the balance of power between rival states is never constant.
Belgium learned this to her cost in the First World War, as did the
Netherlands in the Second.
The nation-state succeeded the dynastic state and the imperial state simply
because it was uniquely successful at creating a semi-homogenous
ethno-linguistic polity with a shared national myth, and sometimes with a
shared religion. This greatly reduced friction and the costs of unity,
allowing the nation-state to dedicate more resources to more productive
tasks - like capital formation - rather than the buying off of citizens and
elites.
Why States Are Now Falling Apart
The map of modern Europe is the outcome of these organic processes: war,
ethnic cleansing and the search for security. Modern Poland was formed from
the desire of the Soviets to keep a buffer state between themselves and
Germany and by the large-scale ethnic cleansing of Germans out of Western
Poland at the end of the war. The Soviet Union fell apart when the costs of
corruption and a bloated military establishment outweighed the perceived
security benefits of protection from the NATO fascists and created the
pre-conditions for an imperial collapse.
Something very similar has been going on in Europe. There is a general
dynamic at play that partly explains why independence movements have gained
strength in recent years.
1. The collapse of the Soviet Union and the hegemony of the United States
created a security environment in which the threat of war became almost
inconceivable to the majority of Western Europeans. Therefore, the greater
security benefits of a larger state became less relevant;
2. The existence of a transnational alliance for collective security, NATO,
further undermined these benefits, as smaller nations can effectively enjoy
the benefits of large nation security without incurring the costs of a loss
of independence;
3. The success of the European Union in creating a common economic, legal
and institution framework as well as a common currency has also undermined
the benefits of pertaining to a large state. Previously, a large state meant
a large market; now, even micro-states in the EU can enjoy equal access and
compete in a market of 450 million people without incurring the costs of a
loss of independence.
Western victory in the Cold War has reduced the threat of military conflict
while the success of the European Common Market has reduced, though not
wholly eliminated, the economic incentives offered by large nations. The
more successful the EU is in building institutions and integrating markets,
the smaller those advantages will become. The United States is an excellent
model to understand how this dynamic is operating: a nation with militarily
weak neighbors and great distances isolating its core from potential
adversaries, the Union reduced security and economic costs sufficiently that
small regions like Vermont and Maine had no qualms breaking off from larger,
wealthier, more populous states like New York and Massachusetts
respectively. Under similar conditions, the Scots and the Catalans are
reacting in a similar fashion.
That has an important policy implication for the “NO” campaign in Spain and
Britain. One of the key arguments made against separation is that the newly
independent states would be outside of the European Union and without access
to all of the economic and security benefits previously mentioned. There is
a major flaw in this argument: the costs borne by the disaffected regions
for remaining in the undesired union are permanent, whereas no one believes
that their exclusion from the European Union will be for very long at all.
What are five years before you have both independence and the benefits of
the EU when you have been waiting for centuries? That is a difficult
calculus to argue with.
This model helps explain why the equilibrium cost of any given state will
vary by its geography, its ethno-linguistic homogeneity, its population, the
size and wealth of its shared economy and its external threats and
opportunities. It helps explain why a region like Catalonia might find
itself outside of the “rational” borders of a Spanish state: it is distant
from the political center of Madrid, geographically part of the Western
Mediterranean economic basin rather than central Iberia or the North
Atlantic, ethnically similar but linguistically different, and of a size and
wealth to be viable in the low threat environment that is Western Europe
<https://mail.google.com/mail/u/1/#14885fb80529ca14__edn7> [vii]. The same
argument can be made for Scotland, whose parliament approved the Act of
Union in 1707 largely because the Scottish elites and emerging merchant
classes were desperate to access the large and prosperous English colonial
empire and markets.
States not only provide security from invasion, privileged access to an
internal market, and a legal and institutional framework that provides
stability and reduces risks to owners and investors in property. They also
concentrate power and distribute benefits; and the greater the degree of
centralization, the greater the concentration of both power and benefits in
the center. To the extent that the access to this power and the
distribution of wealth and benefits is viewed as relatively equitable across
diverse segments of society, friction is reduced. However, if the
centralized state becomes overly extractive, closed to outsiders, and
overtly corrupt, friction increases rapidly in the more distant and diverse
regions. This friction may again rise to the point where either reform of
the center or separation from it is viewed as necessary by regions and
populations that view themselves as discriminated against.
In Spain, for example, the state is widely perceived to be corrupt, not just
in the center, but in the regions as well. Political and economic elites
divert power and wealth to themselves and their favorites and are
undoubtedly responsible for much lower growth than could have been achieved
in a state with lower levels of corruption. Not only do they accrue
disproportionate benefits to themselves, and actively seek to block access
to political power through voting and financing systems heavily skewed in
favor of the established elites; in response to the 2008 Great Recession,
they have severely cut public benefits, increased taxes, while maintaining
their own levels of compensation and profligacy. Spain has become the very
definition of the politically unresponsive, extractive state run by a
minority clique. This situation impacts all Spaniards; the non-economic
perceived costs to the Catalans are higher because of the differences I have
already mentioned.
The growth in inequality, of unresponsive and corrupt institutions, and the
lack of real reform options all severely reduce the benefits of pertaining
to a large state. And when those benefits fall and the costs of
heterogeneity rise, then the fissures appear and widen. All of these trends
have been building for a long time. Thomas Picketty, the French economist
who has shot to fame for his recent diagnosis
<https://mail.google.com/mail/u/1/#14885fb80529ca14__edn8> [viii] of the
growing inequality in the advanced economies of the West, lays the blame
squarely on capitalism. He is mistaken in his diagnosis of the cause:
capitalism is perhaps the system that generates the greatest absolute
inequality because it is the most efficient system at creating wealth. But
extractive elites and inequality will inevitably form over time in any
system; that is merely human nature.
American economist and social scientist Mancur Olson explored this
phenomenon of “creeping inequality” in his brilliant work
<http://www.amazon.com/The-Rise-Decline-Nations-Stagflation/dp/0300030797>
“The Rise and Decline of Nations”. In this book, Mr. Olson describes how
societies grow rigid through the inevitable action of associations,
combinations and elites. These groups form for logical reasons: to better
organize themselves, to more effectively petition and influence political
leaders, etc. Over time, the action of these groups serves to accumulate
more and more “undeserved” benefits to themselves: tax exemptions,
subsidies, trade restrictions, exclusionary licensing requirements. These
effects may initially be very small, but over time, and across all of the
groups seeking these benefits, the sum can grow to be very large; large
enough to create stagnation in economies and create large distributional
imbalances in wealth and power. The longer this process goes on without the
interruption of war, revolution or natural calamity, the greater the
stifling effect. Significantly, Mr. Olson did not limit his model to
capitalist societies alone; this is a general pattern for all political
organizations.
This process has been going on in the West for decades and Mr. Olson’s model
fits the observed behavior of elites in America and Western Europe. We can
confidently expect the rising tide of inequality and political estrangement
to continue. So long as it does, the elites running the central state will
be unable to adequately deal with regional demands for greater access to
wealth and power.
The Genie is Out of the Bottle
The wider implications are frightening. Scotland and Catalonia may be just
the beginning. Similar conditions continue to exist in other European
nations like Italy, Belgium, Romania, even France. Canada has a potentially
restive Quebec, while Mexico has experienced separatist movements in Yucatan
and Oaxaca in its history. Even the United States might not be immune: the
danger signs are all there. An elitist Congress of millionaires with single
digit approval ratings, and imperial Presidency and a radicalized Supreme
Court hardly inspire much political confidence. Meanwhile inequality grows,
the middle and lower classes stagnate, and the wealthiest elites visibly
flout the laws and literally get away with murder as they entrench their
positions. That is all very combustible material.
Nor should more authoritarian states sleep any easier at night. China has
numerous minorities that it is continually repressing in favor of the Han
majority; Russia continues to be composed of a diversity of non-Slavic
people who yearn for independence, most notably the Chechens; perhaps only
North Korea is ethnically homogenous enough to outlast them all.
The answer to separism in the West is obvious to formulate, nearly
impossible to implement. Political reform that opens access to centers of
power to all groups of citizens; economic and fiscal reforms that reduce
inequality and increase benefits flowing out from the center to the
peripheries; serious and sustained efforts to eliminate corruption and
inefficiencies from markets and public goods. All of these actions will
significantly reduce “friction” and decrease the likelihood that minority
populations will feel discriminated against. In other words, the answer is
more democracy, more transparency, more citizen empowerment: it is most
certainly not more repression.
Good luck with that. Elites are not known for their generosity in sharing
power once acquired.
On Friday morning, we may wake up to an independent Scotland
<https://mail.google.com/mail/u/1/#14885fb80529ca14__edn9> [ix]. If that is
the case, I wish the Scots well. May they craft a new constitution and new
institutions with wisdom. I also hope with greater fervor that the elites of
other nations, especially my own, take note: once the genie is out of the
bottle, it is almost impossible to get it to go back in. Perhaps the dual
shock of Scottish and Catalan independence will be enough to get them to
accept the need for the urgent reforms I mentioned previously. If not, more
dominoes will fall.
<https://dy1m18dp41gup.cloudfront.net/cdn/farfuture/OBfOIhjDYHKM7U2aoTLmqUB8
no6JVlCCODBiPG9Esbw/mtime:1411030230/files/imagecache/wysiwyg_imageupload_li
ghtbox_preset/wysiwyg_imageupload/548777/liberty.jpg>
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imageupload/548777/liberty.jpgThe French revolution. Public domain.
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