Spectrum Two: Anarchy vs. Organization


Liberals generally believe the following tenets about organizations, regardless of their type or purpose:

1. Simple systems require less organization.
2. Organized groups grow naturally from anarchic individuals.
3. Teamwork is superior to isolated effort or hermitism.
4. Anarchy is actually organized by game theory and chaos theory.
5. A strategy is needed for every organization.
6. The larger the organization, the more its leader loses direct control and knowledge over it.
7. Democratic organization is better than dictatorial organization.
8. Self-interest and freedom should always coincide with the common interest, and be prevented when it does not.


1. Simple systems require less organization.

Perhaps one of the most important observations about organization was made by E.H. Carr, the famed British historian. Carr compared the workability of anarchy to road systems at the beginning of the 20th century. Because there were so few cars driving these roads, there was little need for traffic rules. On the rare occasion that you met another driver at an intersection, you could afford to tip your hat with a smile and give the other driver the right of way. But as the number of cars increased on the roads, this sort of anarchy became less and less functional. Eventually the need grew for more traffic rules, traffic signs, traffic lights, traffic cops, driver's training, driver's licensing, road planning, safety commissions -- all carried out, of course, by government. All this may be unfortunate, and may cause many older drivers to hearken back to a simpler, gentler time. But without these traffic signs and laws, the roads would be in chaos, and traffic fatalities would soar.

The same observation applies to any group, society or economy. In the 18th century, national defense was so simple that men could keep their rifles at home and join the militia at a moment's notice. Today, no one in their right mind advocates such a system of national defense. Military organizations have become larger, more advanced, interdependent and complex, giving us the nuclear missiles, tank divisions and battleships that make a nation truly formidable. And it takes an organization like the government to oversee this advanced effort.

Likewise, the economy was much simpler in the 18th century. Today it has grown larger, faster, more complex and interdependent. And, like the road system that becomes more heavily used, the economy needs more government regulation and planning to keep things smoothly functioning. This does not mean that the government tells businessmen exactly what to do, just as it does not tell drivers exactly where to drive. It just means that government organizes the infrastructure and the limits upon which this free activity takes place. An example of this is the New York Stock Exchange. At the time of the American Revolution, Wall Street was such a minor part of the economy that the Founders paid almost no attention to it. But by 1934 it had become a major part of the economy. And rampant insider-trading, dishonest sales and stock manipulation had rendered the entire stock market largely untrustworthy. Roosevelt therefore created the Securities and Exchange Commission, which ensures the full and honest disclosure of all pertinent information on stock sales, and counters other crimes like insider trading.

2. Organized groups grow naturally from anarchic individuals.

Imagine, for a moment, a society where there is no law and no government. Pure anarchy has resulted in a land where each individual looks out only for himself, and it's kill or be killed. Nothing stops murder rape, and theft; only the strongest survive.

Blessedly, such a society is impossible to sustain. Once the weakest members of society realize that they are on the losing end of the battle, they will make alliances, because groups are stronger than individuals. These groups will somehow select leaders who organize the group according to a strategy, which everyone cooperates to carry out. Competition in the group to rise to positions of leadership exists, of course, but at greatly reduced levels. That's because if Social Darwinism existed within the group to the extent that it existed outside the group, then its members would see an equivalent amount of bloodshed, and no advantage in joining the group in the first place.

The difficulty of sustaining a purely anarchic society can be seen another way. Suppose that a peaceful anarchic society could somehow be established, where each family defended its own house with its own guns - and no more. That is, every family was freed from the obligation of national or regional defense. In that case, a small army of 100 professional mercenaries could go marauding, pillaging and plundering across the entire nation, living the good life, confident that they could overwhelm any single family, and that no organized resistance or law enforcement would stop them. In fact, most families' survival instincts would cause them not to defend their homes to the death before such a clearly superior force, but to flee as refugees to other regions, as they usually do in war. The way to meet this threat? Organize.

This principle could be clearly seen in Somalia after the collapse of its government, which introduced an era of complete lawlessness and famine. The anarchy did not last long; war lords soon arose, and the Somalis organized themselves under their tribal leadership. What this means is that any call for a society of pure, 100 percent individualism is unrealistic, and its implementation absolutely impossible.

3. Teamwork is superior to isolated effort or hermitism.

This is true in two ways. First, a single player can never hope to defeat an entire basketball team, all other things being equal.

Second, a mass of uncoordinated, untrained individuals can never hope to defeat an organized, coordinated and specialized team. A basketball team that refuses to pass the ball to each other, call out shots to each other or receive instructions from their coach will never beat a team that does, all other things being equal.

These two points are true of society as well. As Peter Drucker brilliantly points out in Post-Capitalist Society, true hermits are an exceedingly rare occurrence in the world; we all heavily depend on each other for survival. Even such recluse authors and rugged individualists as Ralph Waldo Emerson (who wrote "nothing can bring you peace but yourself" in his essay Self-Reliance) nevertheless depended on the publishing house and national sales to make him world famous and support his lifestyle.

The advantages of specialization and coordination is why modern armies have branched into specialized combat roles, and why they equip their troops with radio communication. It is why modern economies train their workers in job specialties, and why they depend so heavily on telecommunications. The resulting efficiency is much greater than masses of unorganized individuals. Imagine a world where you had to grow your own food, sew your own clothes, build your own house, design your own car, engineer your own computer, write your own software, repair your own microwave. You would be significantly poorer than you are today, and in fact a death risk at the first serious injury or disease.

Specialization has resulted in a richer lifestyle for us all, but it is important to note that generalization has its good points too. Generalization allows a person to see how different jobs affect each other, how they should interact, and how innovations in one field can be applied to another. It allows one specialist to cover for a different specialist when the latter calls in sick for work. Therefore, specialization will never completely eliminate the need to generalize to some degree. Ideally, there should be a healthy tension between the two. In almost all teams, the greatest generalists are the coaches and managers, who receive information from various parts of the team and use it to formulate strategy.

4. Anarchy is actually organized by game theory and chaos theory.

Anarchy is not a random series of blind-chance events. Scientists have been discovering that there is actually order in what we used to believe was chaos, and chaos in what we used to believe was order. Such findings are part of a new emerging science called chaos theory. Because economies and societies are both chaotic and orderly, they are excellently described by chaos theory.

One of the most important concepts of chaos theory is fractals. Fractals are self-repeating patterns on an ever-diminishing scale. Trees are a good example. A tree is simply a diminishing series of branching forks; its trunk divides into larger branches, then smaller branches, then twigs, then leaves. Yet this process is not perfectly orderly; trees branch off chaotically, wildly and unpredictably. Fractals are a fundamental organizing principle of nature, and they are everywhere in society as well. One of the most common social fractals is hierarchy, with its branches of authority.

Game theory is the other discipline that describes the workings of nature. Essentially, it is the study of options. Game theory is very complex and math-like, and a full introduction here is impossible. Nonetheless, the Golden Rule of game theory can be described in a single sentence: the side with the most options has the ability to win the game. (The qualifications to this rule are what make game theory so complex.) Topics important to game theory include cooperation and competition, as when two chess players compete over the chess board, or when a basketball team cooperates to compete against other teams on the basketball court. What methods and principles they use to achieve victory are also subjects studied in game theory.

Game theory affects every aspect of life. Its concepts can be found not only in games, but war, presidential campaigns, business rivalry, economic competition, career moves, evolution, advertising campaigns, mating strategies… indeed, any aspect of life where there is competition or cooperation.

What many people don't realize is that in any game featuring adversaries, the adversary need not be human. A person can be struggling against the elements of nature for survival, and all the tenets of game theory still apply; the inanimate foe will still operate according to principles of game theory. Of course, an inanimate foe will not apply those principles intelligently, yet it will apply them nonetheless. To put it another way, game theory is a set of natural laws, much like the laws of math or physics. Both human beings and inanimate objects obey the law of gravity, for example, but human beings have the ability to manipulate the law of gravity to their own advantage.

To see how this applies to game theory, try the following thought experiment. Imagine that you are walking by a locker just as a minor earthquake hits, and it tips over on you. If you do not react, it may knock you down and cause serious harm; in that case, it was won the "game." However, suppose you are quick-witted, and threw your weight against it just as it was starting to tip over, preventing it from falling. In that case, you have won. Now, suppose you walk behind the locker, and find that it wasn't an earthquake at all, but another person trying to push it over on you. Does the nature of the game change because the opposing force was animate instead of inanimate? Of course not. This observation is no less true of the inanimate forces that are arrayed against humans: poverty, scarcity, disease, death, etc.

And this has important implications for political scientists, sociologists and economists as well. In the past, political scientists erroneously believed that that the international community was anarchic, obeyed no organizing principles, and was ruled by no laws. But when game theory emerged as a science, it quickly became obvious that international behavior was ruled by the principles of game theory (and chaos theory as well). These rules were not intelligently applied, despite their human participants, who were naïve of them until recently. However, humans are intelligent beings, and can apply game theory intentionally. When human chess players play against computers who make purely random moves, the humans always win because they can apply game theory intelligently. And the same thing is true of any so-called "anarchic" system, be it international communities -- or free markets. Indeed, one of the reasons why all countries around the world have governments is because governments apply what is known today as game theory to economic anarchy. Their success is why there have been almost no anarchic economies in history.

5. A strategy is needed for every organization.

A few quick definitions are in order here: "strategy" is a long-term plan, one that affects the entire organization. "Tactics" are short-term plans that comprise only part of the organization. In other words, tactics are the battles, but strategy is the war.

Game theory dictates that a sound strategy is needed to produce successful tactics indefinitely. Without a sound strategy, a player's well-spring of tactics eventually dries up, and he or she loses. People who live only from day to day, from move to move, taking care of problems only as they come up, are living tactically, not strategically. They are at a disadvantage against those who plan well in advance and consider the entire picture. And this is true of almost every human activity. In chess books, for examples, this is one of the very first principles taught.

A striking example of this was the German invasion of Russia during World War II. The German and Russian armies were equally matched in almost every aspect: troop strength, weapons, supplies, aircraft, even combat experience (remember - Stalin invaded Poland, the Baltics and Finland). The only significant difference was the quality of their generals; Stalin had purged his officer corps a few years earlier, and his marshals were untalented. The Germans, by contrast, had fielded their most brilliant generals. To make matters worse, when the Germans first invaded, Stalin had a nervous breakdown and disappeared in his dacha, leaving the Soviet military leadership paralyzed for weeks. Russian troops fought in conditions of true anarchy, in a complete vacuum of leadership. And the Germans, applying a well thought-out strategy, virtually destroyed the Soviet Army; within months, they were pounding on the doors of Moscow. Nothing could better illustrate the difference between strategy and tactics, organization and anarchy, all other things held equal.

The importance of a sound strategy appears to be a universal principle of game theory. We have not found one exception in any organized activity where human decisions contribute at least partially to the outcome. The economy is such a "game," but, curiously, many conservatives and libertarians claim that strategy is not important to the economy. That is, it's players -- private businesses -- can play tactically, and the big picture will somehow take care of itself. No strategic center like government is necessary, they claim. This would be a violation of game theory, the first of its kind ever known, and the burden of proof for such a remarkable exception lies squarely on the shoulders of conservatives and libertarians.

Many opponents of government point to the failure of the Soviet Union and other centrally planned economies. But these examples went too far in the other direction, and were also violations of game theory. The reasons we shall explore below:

6. The larger the organization, the more its leader loses direct control and knowledge over it.

When an organization consists of only one person, that person has excellent knowledge of the organization's circumstances, and is in a superb position to formulate strategy.

When an organization consists of ten people, the leader must communicate with other members to learn of the organization's circumstances. Yet even at ten people, the leader is still capable of knowing virtually everything, and can still formulate intelligent strategy alone.

When an organization consists of a hundred people, a single leader cannot know everything going on in the organization. Yet the organization still requires intelligent strategy. If the leader attempts to micromanage every aspect of the organization down to the smallest detail, the result will certainly be failure, because the task is overwhelming. The solution is to hire middle level managers whom the leader can trust, who will report the organization's circumstances and offer expert recommendations from the field. Notice that in an organization this large, the leader cannot be held responsible for every little thing that happens in it. Nor can the leader be an expert in every field of the organization. Thus, the decisions and responsibility of a leader become more general, more concerned with the strategic picture than the tactical details.

When an organization consists of 250 million people, any leader who tries to control every aspect of its operations would require the knowledge of God. Of course, humans lack this kind of omniscience, and that is why overly-centralized power has been a failure throughout history. The economy of the Soviet Union failed because a central planning committee in Moscow tried to plan every aspect of it. Just one example shows how hopeless this attempt really was. An especially severe winter might cause a certain part in every automobile to wear out faster. This would require more spare parts than expected, but the extra steel production needed for that would delay the production of nuts and bolts, which has even more ramifications for the rest of the economy. Thus, each event in the economy sets off another chain of events, most of which are chaotic and completely unpredictable.

In a free market, private businesses can respond immediately to these unpredictable events, without seeking permission from some central planning committee already overloaded with information from other sectors of the economy. Again, a government can only play a strategic role in the economy; it cannot possibly manage the tactics.

An analogy would be a football coach trying to shout to each one of his players (simultaneously!) where to run, where to plant his foot, what angle to throw the pass, etc. Obviously, this is absurd; the best a coach can do is plan the general play, and let his players make split-second, individual decisions on the field.

However, the exact opposite is also undesirable: no football team seriously believes it can play better football without its coaches, its training staff, or even its pre-play huddles to determine the play. The result would be confusion and chaos.

In a nation of 250 million people, planning and organization occurs in several different levels of an hierarchy -- which take the form of fractals, as described by chaos theory. A city government resides within a county government, which resides within a state government, which resides within a federal government. The same thing occurs in the private sector: an employee works for a department within a division within a company within a parent corporation. Indeed, one can find this fractal organization of society almost anywhere: military forces are organized by squads, platoons, companies, battalions, regiments, divisions, corps, armies, etc.

Each level is created to facilitate planning in the organization, and to bring order out of chaotic events. Conservatives and libertarians freely endorse hierarchy in the private sector, but condemn it in the public sector. It is doubtful, however, that chaos theory can be selectively applied to nature; again, conservatives have to explain why such a noteworthy exception to the laws of nature would exist.

The difficulties also emerge in the conservative philosophy of "devolution," or the attempt to shift power from the federal government to the states, and from the states to city and local governments. Essentially, this is a weakening of strategy in society, which is a poor application of game theory.

7. Democratic organization is better than dictatorial organization.

The theoretical objections to dictators is obvious. First, one person cannot possess the seemingly infinite knowledge required to run a vast organization intelligently. Second, human beings are self-interested, and a dictator has the power to reward his self-interests at the expense of others. That is why power corrupts, and absolute power corrupts absolutely.

A democratic organization overcomes both of these problems. Elected leaders must listen to their voters and appeal to their interests to win election. In doing so, the leader learns about their problems and solves them. Quite often the voters and their immediate supervisors are the experts of their local situations, and can recommend the best solutions. So the wise leader not only leads, but listens as well. And a truly wise leader throws open the channels of communication, allowing free speech and uncensored criticism.

One could argue that an "hierarchy of dictators" could function well enough if it still allowed the free flow of information. For example, the military is just such an organization, and it relies heavily on intelligence reports, combat readiness reports, inspections, open-door policies, etc. However, anyone who has served in the military is also intimately familiar with the shortcomings of such a system. Because a superior officer has absolute power over a soldier, soldiers are reluctant to anger them with criticism or negative reports. Thus, most reports are sugar-coated, failures glossed over, and information falsified. But this only means that senior officers must make their decisions in a vacuum of facts. In war, this practice costs lives. The inflated body counts in Vietnam are just one example.

Even the military is acutely aware of this problem, and has taken steps to solve it. One of the most successful programs is the policy of "murder boards" -- a panel of officers whose only job is to criticize and find flaws in any plan or military operation proposed by the commanding officer. Murder boards were used with great success by some units in Vietnam. The practice was dropped by the Army when it attempted the 1980 Iran hostage rescue -- with the expected results.

Even if an hierarchy of dictators could somehow receive perfect information, the other problem of dictatorship is no less solvable: even a perfectly informed hierarchy of dictators would still abuse their power in their own self-interest.

The American Founders created a revolutionary new approach to organization, with their call for democracy, a free press, a bill of rights and a system of checks and balances. Unfortunately, these enlightened governing principles have only been applied to the public sector; they have not yet reached the private sector. Private companies are run on the "hierarchy of dictators" principle. Employees do not elect their bosses; their bosses have near absolute authority over them. What little rights workers have are gained through the public sector, a process that is hardly as efficient as the direct election of supervisors. There is little free speech in the company; public criticism of bosses is often an invitation to be passed over, demoted or fired.

Again, conservatives and libertarians must explain why they find democracy, free speech, a bill of rights and checks and balances an enlightened method of governing public institutions, but not private ones.

8. Self-interest and freedom should always coincide with the common interest, and be prevented when it does not.

Not all expressions of self-interest and individual freedom are morally acceptable. Crime is just one example where self-interest runs counter to the common interest, and is therefore outlawed.

On the other hand, deciding to go into business is an example of self-interest that coincides with the common interest. Sure, you want to make a million bucks, but you are also baking bread for thousands of customers. In this case, self-interest is legal -- indeed, encouraged.

Some libertarians might claim that this is just another way of saying that individuals should be free to do anything that doesn't violate the individual rights of others. In most cases, this might be a quibble of definitions, but using the term "common interest" in the above paragraphs is better, because it includes public goods (like public parks, national defense, and the environment) which are difficult, if not impossible, to defend under a system of pure individual rights.

One purpose of democratic government is to determine what activities are in the common interest and what isn't, and therefore what should be legal and illegal. This often results in controversy when there is a question of harm to the common interest. For example, pollution arguably harms the common interest, but it takes sophisticated scientific evidence to determine not only what harm has been caused to people, but what caused it. Therefore, it is often easy to dispute. The issue is further complicated by the fact that productivity is a positive goal in our society, and cutting back jobs is also against the public interest.

Who should determine what is in the common interest? Again, the tenets of democracy hold that no single individual can possibly have the infinite knowledge required to make intelligent laws; a minority of individuals scarcely more so. Representative democracy is the best way to resolve these questions -- both in principle and in practice.

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