Bottom-Up Variations

BOTTOM-UP VARIATIONS

What I call bottom-up variations—or noise—is the type of political volatility that takes place within a municipality, the petty fights and frictions in the running of regular affairs. It is not scalable (or what is called invariant under scale transformation): in other words, if you increase the size, say, multiply the number of people in a community by a hundred, you will have markedly different dynamics. A large state does not behave at all like a gigantic municipality, much as a baby human does not resemble a smaller adult. The difference is qualitative: the increase in the number of persons in a given community alters the quality of the relationship between parties. This is a nonlinear effect of scale. If you multiply by ten the number of persons in a given entity, you do not preserve the properties: there is a transformation. Here conversations switch from the mundane—but effective—to abstract numbers, more interesting, more academic perhaps, but, alas, less effective.

A cluster of municipalities with charming provincial enmities, their own internal fights, and people out to get one another aggregates to a quite benign and stable state. Switzerland illustrates this argument: stability at the larger scale can coexist with variations and noise at the local level. Just as the income of the cab driver shows instability on a daily basis but annual stability, likewise Switzerland shows stability at the aggregate level, as the ensemble of cantons produces a solid system.

The way people handle local affairs is vastly different from the way they handle large, abstract public expenditures: we have traditionally lived in small units and tribes and managed rather well in small units.1

Further, biology plays a role in a municipal environment, not in a larger system. An administration is shielded from having to feel the sting of shame (with flushing in his face), a biological reaction to overspending and other failures such as killing people in Vietnam. Eye contact with one’s peers changes one’s behavior. But for a desk-grounded office leech, a number is just a number. Someone you see in church Sunday morning would feel uncomfortable for his mistakes—and more responsible for them. On the small, local scale, his body and biological response would direct him to avoid causing harm to others. On a large scale, others are abstract items; given the lack of social contact with the people concerned, the civil servant’s brain leads rather than his emotions—with numbers, spreadsheets, statistics, more spreadsheets, and theories.

When I expressed this idea to my co-author Mark Blyth, he blurted out the obvious: “Stalin could not have existed in a municipality.”

Small is beautiful in so many other ways. Take for now that the small (in the aggregate, that is, a collection of small units) is more antifragile than the large—in fact the large is doomed to breaking, a claim about the effects of scale, that, sadly, seems universal as it applies to large corporations, very large mammals, and large administrations.2

There is another issue with the abstract state, a psychological one. We humans scorn what is not concrete. We are more easily swayed by a crying baby than by thousands of people dying elsewhere that do not make it to our living room through the TV set. The one case is a tragedy, the other a statistic. Our emotional energy is blind to probability. The media make things worse as they play on our infatuation with anecdotes, our thirst for the sensational, and they cause a great deal of unfairness that way. An estimate cited when I was writing put deaths from diabetes at one person every seven seconds, but the news can only talk about victims of hurricanes with houses flying in the air.

The problem is that by creating bureaucracies, we put civil servants in a position to make decisions based on abstract and theoretical matters, with the illusion that they will be making them in a rational, accountable way.

Also consider that lobbyists—this annoying race of lobbyists—have a much smaller payoff in a municipality or small region. The Europeans, thanks to the centralization of (some) power with the European Commission in Brussels, are quickly discovering the existence of these mutants coming to manipulate democracy for the sake of some large corporation. By influencing one single decision or regulation in Brussels, a single lobbyist gets a large bang. It is a much larger payoff (at low cost) than with municipalities, which would require armies of lobbyists trying to convince people while embedded in their communities.3

Consider, too, the other effect of scale: small corporations are less likely to have lobbyists.

The same bottom-up effect applies to law. The Italian political and legal philosopher Bruno Leoni has argued in favor of the robustness of judge-based law (owing to its diversity) as compared to explicit and rigid codifications. True, the choice of a court could be a lottery—but it helps prevent large-scale mistakes.

I use the example of Switzerland to show the natural antifragility of political systems and how stability is achieved by managing noise, having a mechanism for letting it run its natural course, not by minimizing it.

Note another element of Switzerland: it is perhaps the most successful country in history, yet it has traditionally had a very low level of university education compared to the rest of the rich nations. Its system, even in banking during my days, was based on apprenticeship models, nearly vocational rather than the theoretical ones. In other words, on techne (crafts and know how), not episteme (book knowledge, know what).