Reviewing Moldbug's ridiculous concept of a "shareholder republic"

I'm going to review Moldbug's essay Against political freedom. I like calling him Moldbug even though he has rebranded himself under his real name. "Moldbug" has exactly the musty crawly connotation that his ideas should invoke. His words are written indented with italics.

MENCIUS MOLDBUG · AUGUST 16, 2007

I am quite sure there are still some UR readers who believe in democracy.

Yes, like this one. Though I regret having ever believed anything Moldbug has said. 

The obvious problem for any would-be antidemotist is to explain the 20th century, in which Universalist liberal democracy fought and defeated Fascism and Communism. Unless you are a Nazi or a Communist, you have to explain how democracy can be bad, yet the victory of democracy over non-democracy can be good.

He is conflating politics with democracy and saying that democracy is bad because politics is bad. Trouble is, politics is inevitable and not just a feature of democracy. Have you ever seen the politics and intrigue of royal courts? They literally have Shakespeare plays about it. Abolishing democracy in favor of a CEO will not abolish politics, it will not even abolish office politics.

He moves on now talking about democracy, communism, and fascism:

As I’ve explained, my answer is that all three of these contenders were shoots from the branch of the 19th-century democratic movement. All revered the People, all devised a doctrine by which the State represents, symbolizes, or is otherwise identified with the People, and all attributed great importance to public opinion and went to great lengths to manage it.

Him conflating democracy with fascism and communism doesn't make it so. Communism and fascism might have a dimes worth of difference but doesn't mean either of them are anything like democracy.

I am neither a baboon nor a monarchist. However, when we look at the astounding violence of the democratic era, it strikes me as quite defensible to simply write off the whole idea as a disaster, and focus on correcting the many faults of monarchism. Certainly, it’s hard to imagine how the Civil War, WWI, WWII, the Holocaust, etc., could have occurred in a world where the Stuarts, Bourbons, Hohenzollerns, Hapsburgs and Romanovs still reigned and ruled. The royal families of old Europe had their squabbles, but conscription, total war and mass murder were not in their playbooks.

Here he is conflating two distinct eras of human history, the revolutions of the 1800s which led to democratic republics, and the revolutions of the early 20th century which led to Communism and Fascism. Conflating two eras that are more than 100 years apart is a neat trick an incredibly dishonest.

He knows he's dishonest because as an historian he must have known about the death toll from the hundred years war. He must know that war ran into the millions of dead and all occurred under monarchies.

He continues:

To a neocameralist, a state is a business which owns a country. A state should be managed, like any other large business, by dividing logical ownership into negotiable shares, each of which yields a precise fraction of the state’s profit. (A well-run state is very profitable.) Each share has one vote, and the shareholders elect a board, which hires and fires managers.

Immediately we see that the problem with this is that the shares would be vacuumed up by a handful of wealthy interests who would then consolidate over time. Many of these interests would be foreign agents interested in conquering the country without firing a shot. Imagine several thousand Russian and Chinese spies scouring the country looking for shareholders and buying them out at exorbitant rates. These spies then hand those shares over to whatever dictator is currently in charge. Gradually the "shareholder republic" becomes owned by various dictators around the world. Even if this didn't happen a local billionaire would take the initiative of buying up shares. A large nation might have hundreds of trillions of dollars worth of stock in circulation but you don't have to own 51% of it, only the fraction necessary to swing a vote one way or the other. Nations are not like corporations because the stakes are a lot higher. If you own a nation you can nullify the property rights of competing businesses, collect unlimited revenue by printing money, make your business an official monopoly, force everyone to do business with you, and enslave your employees by abolishing worker rights. There are tremendous incentives to do all of this that don't exist with regular corporations.

This business’s customers are its residents. A profitably-managed neocameralist state will, like any business, serve its customers efficiently and effectively. Misgovernment equals mismanagement.

Except it's customers will actually be it's shareholders and that group of people will become increasingly concentrated and unequal. The people will not continue to be the shareholders very long. "One person one vote" is the social agreement that guarantees that and not shares, whose very nature implies consolidation.

For example, a neocameralist state will work hard to keep any promise it makes to its residents.

Excuse me?

Not because some even more powerful authority forces it to, but because it is very pleasant and reassuring to live in a country where the government can be trusted, and it is scary and awful to live in a country where it can’t. Since trust once broken takes a long time to rebuild, a state that breaks its own laws has just given its capital a substantial haircut. Its stock is almost certain to go down.

Are you serious? Corporations do abusive things all the time and their stock goes up. The only time their stock goes down is when the abuse is likely to get them in trouble with the law. It is the external authority of government threatening their profits which causes their unethical behavior to reduce their stock value, not the unethical behavior itself. Where is this mythical world where doing bad automatically costs you money? Ever heard of Chiquita banana? Do you know where the term Banana Republic comes from? From corporations owning governments.

To a neocameralist, totalitarianism is democracy in its full-blown, most malignant form. Democracy doesn’t always deteriorate into totalitarianism, and lighting up at the gas pump doesn’t always engulf you in a ball of fire. Many people with cancer live a long time or die of something else instead. This doesn’t mean you should smoke half of Virginia before lunch.

First he conflates representative democracy with unlimited democracy, then he ignores the Bill of Rights and the value of separation of powers. "Ball of fire" is amusing but interesting language doesn't mean that your point is true. In actually human history democracy and it's advocates we're always at war with fascists and communists.  In both Russia and China there was a civil war between pro-democracy forces and communists. In Germany the Nazis overthrew the Weimar Republic. There are no historical examples of democracy producing communism or fascism. There are lots of examples of Communists and fascists overthrowing democratic governments. "Deteriorate" is an interesting word to use here because it allows him to avoid specifying exactly how things went down. He wants to make it look like democracy inevitably turns into totalitarianism, but the actual historical record shows that totalitarianism arrives as a challenge to democracy not as an outgrowth of it. He is the one challenging democracy now, and his man Trump is in the White House.

A political party is a political party.

How deep.

 

It is a large group of people allied for the purpose of seizing and wielding power. If it does not choose to arm its followers, this is only because it finds unarmed followers more useful than armed ones. If it chooses less effective strategies out of moral compunction, it will be outcompeted by some less-principled party.

No, it doesn't arm it's followers because the law prohibits it, and the law prohibits it becomes power flows from moral legitimacy and that legitimacy would be undermined by having armed followers. The whole idea of a democratic government is that everyone has agreed to play a nonviolent game to determine who winds up with power. Violence places you outside of the moral legitimacy of the system. Violence delegitimizes the wielder of it in a republic. 

When one party gains full control over the state, it gains a massive revenue stream that it can divert entirely to its supporters. The result is a classic informal management structure, whose workings should be clear to anyone who watched a few episodes of The Sopranos. Without a formal ownership structure, in which the entire profit of the whole enterprise is collected and distributed centrally, money and other goodies leak from every pore.

First off this is a great case for having a multi-party democracy instead of a one-party state. Second, in monarchies like Saudi Arabia money leaks out all the time. Third, plenty of corporations have embezzlement problems and even the ones that don't, pay their CEOs way too much money, which is tantamount to the same thing because that money belongs to the shareholders. What's to prevent the CEO and his increasingly concentrated band of shareholders from plundering the government?

Totalitarian states are gangster states, in other words, and they tend to corruption and mismanagement. The personality cult of dictatorship is quite misleading—a totalitarian dictator has little in common with a neocameralist CEO, or even a cameralist monarch.

Yeah no. A famous example of a totalitarian CEO was Steve Jobs, who represented a classic "cult of personality." Many techbros aspire to  their own cult of personality. 

The difference is the management structure. The CEO and the monarch owe their positions to a law which all can obey, and those who choose to obey the law are naturally a winning coalition against those who choose to break it. The dictator’s position is the result of his primacy in a pyramid of criminals. This structure is naturally unstable. There is always some other gangster who wants your job. Dictators, like Mafia chiefs, are not good at dying in bed.

It's wild that he would even say this because it refutes his entire concept. The CEO owes his power to the law that establishes his property rights and corporate governance control. Okay dumbass, who do you think made that law? The government. What you are saying, what you are admitting without realizing it, is that corporations are not able to establish their own power because their power is derived from an external authority of property rights enforced by SOMEONE ELSE. I don't have to dispute the other parts of his argument because they are irrelevant. What he is describing here with a shareholder republic is a kind of impossible tautological construction of power. He says "authority comes from the law" then conveniently forgets that the law comes from authority, then fails to notice this cycle means you need moral legitimacy.

Note that the financial logic which keeps the neocameralist state lawful does not apply in any way to the totalitarian state, because the latter does not have a stable management structure which is controlled by its shareholders. Lawlessness is not profitable for the state as a whole, but it may be quite profitable for the part that chooses lawlessness, and in the totalitarian state no one is counting as a whole.

I'm sorry but neither has a stable management structure, because you don't understand how power works.

I'm going to stop right there because further line-by-line refutations are unnecessary and I want to explain exactly how government power comes about. I have actually worked as a police officer, I actually understand how power works. I have gone to city council meetings and seen how politicians make decisions. I have actually talked to politicians and been in the room when decisions are made. Unlike Moldbug / Curtis Yarvin I am not an autistic lizard reasoning from "first principles," but an actual human with real world experience. 

When I was a cop there were orders that people did not want to carry out. Believe it or not, cops don't always agree with the laws they enforce. I was a cop in the Air Force and there's this nice little provision called Article 134 of the Uniform Code Of Military Justice. What the UCMJ says is that if you fail to obey a lawful order or regulation, that is to carry out an order you are given, then you yourself are guilty of a crime. 

What this means in practice is that if you don't do what you're told, if you refuse to make the arrest, then someone else will step in and do it anyway and then you will get arrested for failure to obey a lawful order. 

"Carry out the order or go to prison" is how it works. This is why when people fantasize about resisting Nazis and say things like "if I were a guard at Auschwitz I would refuse to gas people" is such nonsense. If you refuse to gas people they hang you and gas them anyway, or they put you in the camp and you wind up being one of the people they gass. At the lowest level resistance to power is a coordination problem. There is simply no way to coordinate all the guards in the entire camp before some of the guards snitch on you to higher authorities. Even if you could coordinate all the guards there are still other factions of the military that will be brought into massacre you the instant you coordinate an insurrection. 

Now obviously I was not a guard at Auschwitz. The things that sometimes contradicted my conscience were stuff like writing traffic tickets, but the same logic applies. Carry out the order or become a victim yourself is the operating mode of all police forces. Indeed it's the only way the law could be enforced because humans vary in their values and beliefs about what laws are good. 

Now let's say your unit refuses to carry out a law your police chief thinks is unjust. Great! Then you are a sanctuary city or something. No but in all seriousness that lasts just as long as higher authorities tolerate it. If your department doesn't carry out the order the National Guard will be sent in to arrest you. If the National Guard refuses to carry out the order the army will be sent in to kill them. If the Army refuses to carry out the order the CIA will probably assassinate the general who refuses to do his job, or the US Marshals will arrest him, or the Secret Service. Point is that the same coordination problem exists on every level from the bottom to the top and everyone is bound to carry out their orders or be a victim of the system themselves. Enforce the order or become the victim is is how it all works from top to bottom.

But what about at the very top? There is a key difference between a corporation and a government and that is that the corporation gets its power from the government. It's power is derivative. If the CEO wants to exercise his property rights and fire a bunch of workers he can do that. Even if the National Labor Relations Board tells him he can't he can still lock them out of the building. Who carries out that order? The local sheriff and his deputies. What happens if the sheriff refuses to enforce the order? Then the National Guard gets sent in. What if the National Guard refuses? Then the army, etc, etc. 

In other words the CEO is even lower in this hierarchy of violence then the sheriff. His "property rights" are established by the government. Even if he has armed security the power of security guards is not unlimited and guards can be charged with murder. The power of the security guards are themselves derivative and in most jurisdictions guards actually don't have any more power than ordinary citizens! That's right, the guard at Walmart doesn't actually have the legal power to tackle you if you shoplift and it's all security theater. Walmart would prefer that the guard just let the shoplifter steal rather than tackle them and cause an injury lawsuit. The guard is there because people suffer from the illusion that guards have special powers, so it makes them less likely to steal. A security guard kicking you out of the building at the behest of a CEO is just a guy walking you to the front door. He might be eager to punch you, and it might be foolish of you to test him, but he has no special authority.

Ultimately we get to the top of the system. Since the whole system is a giant hierarchy of violence this hierarchy must terminate at the top, and it does. At this point the government does a neat little trick and ties power in a knot. It says "there are three branches of government"  and they all hold each other accountable. This is extremely stable because it makes power go in a circle. 

But power itself is actually pretty tautological. Power is the ability to get people to obey power. What this means in actual practice is that it is the ability to get people to respect power. Power is moral authority, not charisma, not having a majority of shares, not even having a majority of votes. Power is the ability to say "arrest him!" And some guy with a gun will actually do it. You see, unlike a corporation, government gets it's power from itself. This requires moral fiction which is believable, and I'm sorry to burst your bubble but that is a deeply neurotypical thing and no autistic concept of who has the majority of stock can defeat it. In fact no autistic concept can defeat it, not even Moldbug's later idea of having weapons that lock remotely. You do realize that's gun control, right? And gun control doesn't work, and guards would just keep an unlocked sidearm on their ankle holster, because you know, just in case.

At the end of the day a soldier has to go home and kiss his wife on the lips and if he is out murdering babies she is going to have quite a lot to say to him. He needs a paycheck, and he needs moral legitimacy, and moreover he needs her to be convinced of that moral legitimacy. Leftist propaganda is aimed at women precisely because controlling who women will have sex with controls who men will kill. It's all comes from moral legitimacy which means the ultimate "shares" of any political system are ideological. Totalitarian systems convince people of the moral legitimacy of the state through massive amounts of propaganda and a cult of personality. Democracy is NOT totalitarian, precisely because when it is operating as designed at least half the country can get away with publicly doubting the legitimacy of the man in charge. The moral legitimacy arises out of obedience to the agreed upon game rules. It's the same dynamic when everyone is in a stadium is watching a sport, and the referee calls a foul inappropriately, and all the soccer fans riot because the call is unfair. The rioting paradoxically makes the system stronger by reminding the other side to play by the rules or get killed. That's the true strength of a republic: that everything that unbalances it leads to the players doubling down on obeying it.

Everyone has agreed to this set of rules, everyone knows the rules, the rules are what have legitimacy, and the alternative to this rule-based approach is a cult of personality, and those are horrific and boring. North Korea? Turkmenistan? Eritrea? Mao Zedong? Stalin? Putin? World's most boring countries.

The hierarchy of violence has to terminate at the top. Only a convincing moral formula can get authority to enforce itself. Moldbug wants "shares" to be that moral formula but that is even less convincing to real life humans than the majesty of a decked out king in his flowing robes. Real humans need to be impressed by something, or invested in something. They can either be impressed by a cult of personality or invested in the arcane rules of a game-based political system like democracy. Those are the only two systems humans have ever figured out: dictatorships and games.

A "shareholder republic" MIGHT WORK if the rules were enforced by robots in the same style as the movie Elysium. In other words the guards are literal machines capable of doing complex police work. But even then the inner circle simply moves to a group of programmers who write the code for those robots. Now the group that needs to be morally convinced of the legitimacy of the dictator are the programmers. Maybe they can be your shareholders. But the programmers must go home and kiss their wives on the lips and if they're out murdering babies, or programming robots to murder babies, their wives are going to have something to say about it. The appearance of moral legitimacy is an inescapable necessity of all political systems. You might be able to shrink the number of people you have to convince to a few hundred in a single room IF you have a vast army of police bots and murderbots but I don't see this as an improvement on democracy. Would you want to live in the world of Elysium a peasant? Remember that only a tiny fraction of the population gives to live in luxury. Odds are you are not one of them.

I almost forgot. While there are only two types of systems: dictatorships and games, orthogonal to to these categories are at least two methods: the cult of personality and rule through fear.

From what I've heard the Acadian Empire was all about rule through fear. Adolf Hitler used a mix of both the cult of personality and rule through fear (using the SS). The Aztecs were said to be almost entirely based on rule through terror and intimidation. The gladiatorial competitions of Rome added an element of fear and spectacle to shore up the loss of moral legitimacy caused by the Emperors wrecking The Republic.

Is rule through fear what Curtis Yarvin wants? Once the Trump cult of personality ends the GOP will need a new source of moral legitimacy. By then the left may have figured out a political formula more practical than racial resentment. Neoreaction may have gotten Trump elected, and Trump might ultimately be Moldbug's puppet, but Trump arrived at his power though distinctly Trumpian methods. None of those methods have anything to do with autistic shareholder blockchains and everything to do with cults of personality.

Moldbug, aka Yarvin, is as clueless now as he was 19 years ago about how the real world works, and moreover he is extremely convincing and deceptive with his arguments. It's like an idiot savant became a master salesman for the world's stupidest ideas. Elysium style robot armies lead only to rule through fear and are the only way to make anything vaguely resembling a shareholder republic practical. They would also be a complete nightmare for freedom loving people. I much prefer the so-called totalitarianism of everyone being obsessed with winning a game called "elections" than the insufferable cult of personality. The good thing about the Trump administration is that it will end. If the man were actually dictator, and in his 40s, you would be looking at 40 more years of Trump. Not even his supporters have the stamina for that.

I don't see Trump overthrowing the government. He might be frog-marched out of the building at the end of his term or even placed under house arrest, or he might just die of old age in office. What I see is the left and right attacking each other's power continuously. The right will deconstruct leftist institutions and when the left gets power it will attack the financial oligarchy that empowered Trump. This will make democracy stronger by wrecking the institutions built up to subvert it. If and when democracy dies it will be the build up of judicial meddling and never ending increase in the size of the legal code that does it in.

The left is trying to build a one party state through an unofficial academic state religion. The right is trying to achieve one party state financial oligarchy. These two parties deconstructing each other is the best thing that could happen to us.