Thursday, October 6, 2011

Small Is Beautiful

Sometimes I get the feeling that every time I come up with a new concept, someone has already thought of it before. Such is the case with an observation I made recently. I noted that the nearer the government was to the people, the more responsive it was. For example, my local city government, for all its faults, is nowhere near as corrupt and unresponsive as the national or state governments. The “higher” the level of government, the farther it is away from the people, and the more easy it is for vested interests to control it. For example, I frequently see my alderman at local functions, and my local supervisor has a plot in my community garden. However, my chances of ever getting to talk to a state senator are remote, and my senator in Washington – forget about it. And none of us are ever going to have significant face time with the President. “My” governor famously would not talk to thousands of protesters, but eagerly accepted a call from a fake David Koch.

You can determine this by two factors: one, the ratio of representatives to the represented. For example, there are fifteen aldermanic districts in my city. Dividing by population gives me:

15/ 594,833 or 1 per 1/39,656 (this is not perfectly accurate, of course, since not all districts have the same number of people, but it’s a good approximation). So about 1 per 40,000 people.

There are 8 representatives in my state, so 8/5,686,986, or 1/710,873; about 1 per 700,000.

The Governor of my state would be 1/5,686,986, or about 1 per 5.6 million.

A senator from Wisconsin would be:
2/ 5,686,986 or 1/2,843,943; about 1 per 2.8 million.

A senator for New York State would be:
2/ 19,378,102 or 1/9,689,051 or about 1 per 10 million.

The President of the United States would be:
1/ 312,364,087 or about 1 per 300 million! Enormous!

The other factor is how far away a representative is. Ones in my city are more responsive to the people in the city they represent than ones in the faraway state capital. The ones in Washington are incredibly remote. We almost never see them (lobbyists do, of course – there are 30,000 of them in DC). Far away can also mean socially – only 1 percent of Americans are millionaires, but over half of Congress are.

It stands to reason, then, that small local councils are more responsive than massive, distant governments. The more massive the country, the more distant the government.

So this brings me to my observation. Many people wonder what happened to Iceland. They were the first country looking to default, causing the whole economy to crash due to the losses of its banks. It was told it had to accept austerity terms dictated by the big monetary institutions. Then, you never heard about what happened. So what did happen? This:

What happened next was extraordinary. The belief that citizens had to pay for the mistakes of a financial monopoly, that an entire nation must be taxed to pay off private debts was shattered, transforming the relationship between citizens and their political institutions and eventually driving Iceland’s leaders to the side of their constituents. The Head of State, Olafur Ragnar Grimsson, refused to ratify the law that would have made Iceland’s citizens responsible for its bankers’ debts, and accepted calls for a referendum.

Of course the international community only increased the pressure on Iceland. Great Britain and Holland threatened dire reprisals that would isolate the country. As Icelanders went to vote, foreign bankers threatened to block any aid from the IMF. The British government threatened to freeze Icelander savings and checking accounts. As Grimsson said: “We were told that if we refused the international community’s conditions, we would become the Cuba of the North. But if we had accepted, we would have become the Haiti of the North.” (How many times have I written that when Cubans see the dire state of their neighbor, Haiti, they count themselves lucky.)

In the March 2010 referendum, 93% voted against repayment of the debt. The IMF immediately froze its loan. But the revolution (though not televised in the United States), would not be intimidated. With the support of a furious citizenry, the government launched civil and penal investigations into those responsible for the financial crisis. Interpol put out an international arrest warrant for the ex-president of Kaupthing, Sigurdur Einarsson, as the other bankers implicated in the crash fled the country.

But Icelanders didn't stop there: they decided to draft a new constitution that would free the country from the exaggerated power of international finance and virtual money. (The one in use had been written when Iceland gained its independence from Denmark, in 1918, the only difference with the Danish constitution being that the word ‘president’ replaced the word ‘king’.)

To write the new constitution, the people of Iceland elected twenty-five citizens from among 522 adults not belonging to any political party but recommended by at least thirty citizens. This document was not the work of a handful of politicians, but was written on the internet. The constituent’s meetings are streamed on-line, and citizens can send their comments and suggestions, witnessing the document as it takes shape. The constitution that eventually emerges from this participatory democratic process will be submitted to parliament for approval after the next elections.

Some readers will remember that Iceland’s ninth century agrarian collapse was featured in Jared Diamond’s book by the same name. Today, that country is recovering from its financial collapse in ways just the opposite of those generally considered unavoidable, as confirmed yesterday by the new head of the IMF, Christine Lagarde to Fareed Zakaria. The people of Greece have been told that the privatization of their public sector is the only solution. And those of Italy, Spain and Portugal are facing the same threat.

They should look to Iceland. Refusing to bow to foreign interests, that small country stated loud and clear that the people are sovereign.

That’s why it is not in the news anymore.
And why did this happen in Iceland, and not anywhere else (Ireland, Greece, Portugal)? Iceland’s population is 318,452. That’s even smaller than my city! Furthermore, most of the population is confined to urban areas due to the inhospitable land, with the majority living in Reykjavik. And there is no standing army to keep the people from their legislators. Finally, it is ethnically homogenous, meaning there is no divide-and-conquer strategy to set people against one another as in multiethnic states. Using my theory above, the president of the entire country is more responsive than my mayor!

Contrast that with Ireland’s population of 4,581,269. That’s closer to my state representative ratio. Portugal is more than double that at 10,647,763, similar to New York State. Most other nations are a good bit larger. So their politicians are less representative of the people, and thus more able to get away with doing the bidding of the big banks than were the politicians of Iceland, who were likely to bump into their constituents while going out for a walk in Reykjavik. This also ties in to how campaigns are funded – the more people you need to reach, the more dependent you are upon big donors who can fund media campaigns, and the less face time you have with actual people. In the U.S., most representatives’ time on the national level is meeting with big donors face-to-face, while real people are just a face in the crowd at large public events. Faceless and powerless, they are just a statistic to be manipulated by the media at will.

That brings us to the work of Leopold Kohr. Via multiple sources (Ran Prieur, Naked Capitalism), I found this article in The Guardian by Paul Kingsnorth about the work of this little-known Austrian political scientist/philosopher. Kohr’s key insight is that the bigger human systems become, the more dysfunctional and despotic they end up becoming, no matter what their origins. Furthermore, he notes that there seems to be always an unfortunate trend toward bigness in human institutions. Thus, he believes bigness is the central problem in our institutions. No overly large institution can function for the benefit of those under it. If bigness is not solved, nothing else can be. From the article:

The crisis currently playing out on the world stage is a crisis of growth. Not, as we are regularly told, a crisis caused by too little growth, but by too much of it. Banks grew so big that their collapse would have brought down the entire global economy. To prevent this, they were bailed out with huge tranches of public money, which in turn is precipitating social crises on the streets of western nations. The European Union has grown so big, and so unaccountable, that it threatens to collapse in on itself. Corporations have grown so big that they are overwhelming democracies and building a global plutocracy to serve their own interests. The human economy as a whole has grown so big that it has been able to change the atmospheric composition of the planet and precipitate a mass extinction event.

One man who would not have been surprised by this crisis of bigness, had he lived to see it, was Leopold Kohr. Kohr has a good claim to be the most important political thinker that you have never heard of. Unlike Marx, he did not found a global movement or inspire revolutions. Unlike Hayek, he did not rewrite the economic rules of the modern world. Kohr was a modest, self-deprecating man, but this was not the reason his ideas have been ignored by movers and shakers in the half century since they were produced. They have been ignored because they do not flatter the egos of the power-hungry, be they revolutionaries or plutocrats. In fact, Kohr's message is a direct challenge to them. "Wherever something is wrong," he insisted, "something is too big."

Kohr was born in 1909 in the small Austrian town of Oberndorf. This smalltown childhood, together with his critical study of economics and political theory at the LSE, his experience of anarchist city states during the Spanish civil war, which he covered as a war reporter, and the fact that he was forced to flee Austria after the Nazi invasion (Kohr was Jewish), contributed to his growing suspicion of power and its abuses.

Settling in the US, Kohr began to write the book that would define his thinking. Published in 1957, The Breakdown of Nations laid out what at the time was a radical case: that small states, small nations and small economies are more peaceful, more prosperous and more creative than great powers or superstates. It was a claim that was as unfashionable as it was possible to make. This was the dawn of the space age – a time of high confidence in the progressive, gigantist, technology-fuelled destiny of humankind. Feted political thinkers were talking in all seriousness of creating a world government as the next step towards uniting humanity. Kohr was seriously at odds with the prevailing mood. He later commented, dryly, that his critics "dismissed my ideas by referring to me as a poet".

Kohr's claim was that society's problems were not caused by particular forms of social or economic organisation, but by their size. Socialism, anarchism, capitalism, democracy, monarchy – all could work well on what he called "the human scale": a scale at which people could play a part in the systems that governed their lives. But once scaled up to the level of modern states, all systems became oppressors. Changing the system, or the ideology that it claimed inspiration from, would not prevent that oppression – as any number of revolutions have shown – because "the problem is not the thing that is big, but bigness itself".

Drawing from history, Kohr demonstrated that when people have too much power, under any system or none, they abuse it. The task, therefore, was to limit the amount of power that any individual, organisation or government could get its hands on. The solution to the world's problems was not more unity but more division. The world should be broken up into small states, roughly equivalent in size and power, which would be able to limit the growth and thus domination of any one unit. Small states and small economies were more flexible, more able to weather economic storms, less capable of waging serious wars, and more accountable to their people. Not only that, but they were more creative. On a whistlestop tour of medieval and early modern Europe, The Breakdown of Nations does a brilliant job of persuading the reader that many of the glories of western culture, from cathedrals to great art to scientific innovations, were the product of small states.

To understand the sparky, prophetic power of Kohr's vision, you need to read The Breakdown of Nations. Some if it will create shivers of recognition. Bigness, predicted Kohr, could only lead to more bigness, for "whatever outgrows certain limits begins to suffer from the irrepressible problem of unmanageable proportions". Beyond those limits it was forced to accumulate more power in order to manage the power it already had. Growth would become cancerous and unstoppable, until there was only one possible endpoint: collapse.
http://www.guardian.co.uk/commentisfree/2011/sep/25/crisis-bigness-leopold-kohr

From Kohr’s work:

As the physicists of our time have tried to elaborate an integrated single theory, capable of explaining not only some but all phenomena of the physical universe, so I have tried on a different plane to develop a single theory through which not only some but all phenomena of the social universe can be reduced to a common denominator. The result is a new and unified political philosophy centering on the theory of size. It suggests that there seems only one cause behind all forms of social misery: bigness...

There seems to be only one cause behind all forms of social misery: bigness. Oversimplified as this may seem, we shall find the idea more easily acceptable if we consider that bigness, or oversize, is really much more than just a social problem. It appears to be the one and only problem permeating all creation. Whenever something is wrong, something is too big. And if the body of a people becomes diseased with the fever of aggression, brutality, collectivism, or massive idiocy, it is not because it has fallen victim to bad leadership or mental derangement. It is because human beings, so charming as individuals or in small aggregations have been welded onto overconcentrated social units. That is when they begin to slide into uncontrollable catastrophe. For social problems, to paraphrase the population doctrine of Thomas Malthus, have the unfortunate tendency to grow at a geometric ratio with the growth of the organism of which they are part, while the ability of man to cope with them, if it can be extended at all, grows only at an arithmetic ratio. Which means that, if a society grows beyond its optimum size, its problems must eventually outrun the growth of those human faculties which are necessary for dealing with them.

Hence it is always bigness, and only bigness, which is the problem of existence. The problem is not to grow but to stop growing; the answer: not union but division.

"A small-state world would not only solve the problems of social brutality and war; it would solve the problems of oppression and tyranny. It would solve all problems arising from power."


Kohr’s work was very influential on the economist E.F. Schumacher, who wrote his classic book, Small is Beautiful, thinking about economics from a human-scaled perspective. Smaller systems, whether political or economic, tend to work, not perfectly, but better than massive, faceless, unaccountable systems. From this perspective, division, succession and shrinking are not negative but positive. Kohr’s ideas seem to be borne out by recent anthropological study: most hunter-gatherer tribes are about 150 to 200 people, and once they get larger, they tend to break off and seek new territory. This is probably what drove human migration throughout history. And looking at the size of the human frontal lobe, it seems we are designed by evolution to live in groups of about 150 to 200. This is where the concept of Dunbar’s number, the number of people with whom one can have meaningful social relationships, came into being. Iceland’s population of 320,000 closely related individuals on its own island, seems to have been able to stand up to banking and corporate tyranny much better than, say, Ireland, which is in turn less dysfunctional than the United States of 320 million ethnically diverse people scattered across a continent under a bewildering variety of natural ecosystems, economic niches and living arrangements.

We have many levels of government in the United States. As the national government gets more and more dysfunctional, does it not make sense that state and local governments will have to pick up the pieces? The most productive states already give more revenue to the federal government than they get back in return. Would they not be better going it alone?

There is precedent from history. The tendency throughout history has been for empires to get bigger and bigger, then collapse. After the collapse, smaller, more responsive intuitions take over. This was the case in both the Roman and Mayan collapses. In fact, it goes all the way back to the first empires of Mesopotamia. . Certainly our technology has allowed us to get much larger and more complex than those empires. But at what cost? Is our quality of life better than it would be if we lived in smaller communites? When the Roman Empire collapsed, people withdrew into walled cities with their own government, and the countryside became depopulated and lawless. Might a similar thing happen now? Our countrysides are already fairly depleted and empty. And it’s not just ancient history. When the Soviet Union collapsed, it broke up into smaller states based along ethnic lines (as did Yugoslavia). In the long run, was that a bad thing?

We should also mention the work of Joseph Tainter, who argued along similar lines. He believed that societies become more and more complex to solve problems, but eventually diminishing returns to complexity set in, causing eventual collapse, which he defined as a sudden reduction in complexity. All of these scholars are being looked at ever more closely as our civilization is seeming to spiral more out of control every day. Now you know why relocalization and smaller, connected economic relationships are key platforms for those who see where we are inevitably headed. Rob Hopkins of the Transition Movement has written an article about this here:

Transition: Localization for Econoic Development?

I think the conclusion is clear: we need to create smaller, more homogeneous communities. But it seems like to do that, the big, concentrated systems probably need to collapse first. Finally, here is a post from Ran Prieur summarizing an article by Geoffrey West, whose ideas seem to tie in to the discussion of Kohr’s work.

May 25. Super-smart monologue by Geoffrey West, Why Cities Keep Growing, Corporations and People Always Die, and Life Gets Faster. West is a physicist who tried to find universal laws for biology, and he discovered that a bunch of things scale exponentially with size, and the exponent is less than one, which means as an organism gets bigger, certain things get smaller in ways that you can mathematically predict. A thousand pound horse will age more slowly, eat less, and do less work than ten hundred pound dogs. Then he started looking at human social systems, and he discovered that cities scale with an exponent greater than one, which means a city of a million people will have more production and innovation than ten cities of a hundred thousand. Also it will have more crime and disease, and people will walk faster! This reminds me of the Robinson Jeffers poem The Purse-Seine.

Then West looks at corporations, and finds that they operate like individual organisms, not like cities. So a billion dollar company will have lower profits and less innovation than ten hundred-million-dollar companies. And there's a great bit about how cities have more diversity as they get bigger, including niches for crazy people, while corporations have less diversity.

There's also some stuff about exponential growth and collapse. People are always saying that we can continue growth and avoid collapse through innovation, but West points out that "you have to innovate faster and faster", until eventually you need something as revolutionary as the internet every six months.

These thoughts raise many questions, some of which I can answer. Why do cities scale differently than corporations? Because they have an emergent or "bottom up" structure rather than central control. Can we design businesses, governments, economies that are less centrally controlled than the ones we have now? Yes, and we have barely started.

And the question I find most interesting: how will cities behave in a zero-growth economy? The age of perpetual growth is ending. For the entire future of the human species, we will be consuming mostly renewable resources, at roughly the same rate each millennium as the millennium before. Yet, at the same time, any settlement can become more efficient and productive by getting larger. I see two scenarios. In the stable scenario, every region will have a single permanent city. To keep the city from depleting its landbase, all you need is a good recycling program and universal humanure composting. That's the easy problem. The hard problem is to make the size of the city oscillate gently around a point of equilibrium, instead of rising until it crashes. I think the unstable scenario is more likely: every region will cycle through fall and rise, depleting topsoil, cutting down forests, and building megacities, which then collapse and give way to human cultures that regrow forests and topsoil, and so on.


Next: Past and future examples.

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