Aretae keeps trying to define formalism in one or two sentences, and I keep feeling very dissatisfied with the definitions. So I decided to think about it a bit, and try to create a succinct summary of formalism. Unfortunately, I could not get close to one sentence. Part of the problem is that formalism is not so much an ideology, but rather a collection of practical wisdom gathered from the study of past and present polities. Thus I cannot really reduce formalism to one sentence without stripping away all its unique insights. So here is the shortest I could make it - formalism in 16 sentences. If you want a full 2,500 word version, check out my draft of principles of formalism.

Authority is conserved. For any possible action that affects multiple people, some one (or some group) must have the ultimate decision making authority. Good governance is thus a matter of putting the decision making authority in a chain of accountability that ends with people who have the personal incentive or disposition to make a just decision. From the study of history, formalists have observed the following general truths about how this is to be done:

• Rulers chosen by a lawful process have far better records than rulers who take power through violence or fraud.

• Fixed share systems (like joint stock corporations) are more efficient and less prone to conflict than non-fixed distributive systems (like when voting blocks can organize and vote to transfer slices of the national pie to themselves).

• popular democracy is a destructive form of government because factions and parties form that expend all their energy engaged in destructive conflicts over dividing the pie, rather than figuring out how to grow the pie.

• managed democracy is not a responsible form of government, because the media, academia, and civil service are not held accountable for their decisions. Plus it still has the problems of popular democracy, only in a less virulent form.

• A government is a property owner, it owns an alloidial title to a very large territory. If you wish to deny its legitimacy or redirect its flow of rents (taxes), expect violent resistance from the beneficiaries/controllers of the government.

• If you have a good government, you also want that government to be a strong government.

• Coherent governance structures are generally more responsible than fractured structures, since in a fractured system each faction will enrich itself at the expense of the whole.

• Property rights and simple, negative law are essential, because they bar people from getting wealthy by stealing the pie, and therefore force people to grow the pie in order to better themselves.

• The best governments have been strong enough to enforce property rights and rule of law over a large territory, but possessed enough wu wei to not inflict large amounts of oppressive positive law.

• A constitution cannot enforce itself, and therefore must be designed to be a stable Schelling point for the military.

If I really stretch myself, perhaps I can get the summary down to four sentences: "The state's ownership of its country should be legitimized. The benefits of the state converted into shares. Only the responsible should get voting shares. The state is thus converted from a destructive roving bandit to a stationary bandit that will act out of enlightened self-interest."

Heck, let's try for one sentence: "The ruling elite should be converted from a destructive roving bandit to a responsible, property owner acting out of enlightened self-interest."

Hey, I'm on a roll. Let's go for four words and alliteration: "Sovereignty should be securitized"

That one sentence is not perfect though. So if you're going to criticize my Finbarrian Formalism, attack the sixteen sentence version, or even my 2,500 draft of the principles of formalism.

While we're defining "formalist", I should briefly talk about the word "reactionary". Being hardcore property rights and against democracy was the conventional wisdom hundreds of years ago, but is considered evil and anti-progressive today. Since the formalist reads and learns and derives many principles from these past thinkers, a formalist is thus a reactionary. Not all reactionaries are formalist, but all formalists are reactionary.

For myself, I consider my reading of history and of the present to be reactionary. I consider my prescription for the future to be formalist. I don't like to use the word reactionary for my prescriptions since I tend to propose an amalgamation of past ideas plus the best of the present, with some modern twists. Calling my prescriptions reactionary can be a little misleading, although not entirely inaccurate. I don't advocate a straight up restoration of the Stuarts (although it is possible that restoring the Stuarts would be better than the existing rulers in Britain).

Thanks to Foseti for making time for beers during his trip to Boston. The Froude Society may be tiny, but it is not wanting for good company and conversation. If anyone else from my multitudes of readers is ever in the Boston area, do not hesitate to let me know and hopefully we can enjoy a libation together.

Over at Aretae's blog a discussion has flared up about IQ, the Flynn effect and Africa. It is fairly well established that the typical African IQ score is on the order of 2 standard deviations lower than the typical American. The question is what this means for governance and growth. Aretae argues that based on the Flynn effect, Americans in the 19th century probably had a similar IQ to the average African today. Therefore it is doubtful that low African IQ is the cause of Africa's woes. My reply exceed blogger's character limits, so I post here instead.

Both IQ and the Flynn Effect are very poorly understood. The first point to correct is this piece of conventional wisdom, repeated by Aretae: "On every test we've got...and every way we know how to measure things, IQ has been going up for at least half a century, and probably a lot longer than that." This is wrong.

The gains in scores vary enormously by particular test. For instance, picture arrangement has gone way up, while arithmetic has barely budged. See this chart:

Let's step back a moment and think through what IQ and intelligence mean. To do so, we will discard imprecisely defined words, and introduce three new terms. We can define three aspects of what we commonly call "intelligence":

cognitive power - the ability to solve novel problems involving abstract reasoning. What we commonly mean when we say, "he is sharp, he understands everything we explain to him really fast".

specialized cognitive skills - a specific skill involving abstract symbol manipulation - computer programming, calculus, writing poetry, etc.

base cognitive skills - a skill of abstract symbols that form the base of more complex skills - arithmetic, vocab, reading comprehension, etc.

Cognitive power is really hard to measure directly, because you have to control for how much the person already knows. The art of designing an IQ test is to create a test of a skill that most people have roughly equal exposure to. If everyone has roughly the same exposure to a cognitive skill, then differences in ability will tend to be a function how quickly each person learns - cognitive power.

In general, then there are two ways to design an IQ test: a) give a base cognitive skill test for a common skill that everyone in the group has large amounts of exposure to (vocab, arithmetic, word matching) b) give a base cognitive skill test for a skill that no one really practices (raven matrices, block manipulation).

Thus an IQ test is a test of a base cognitive skill, that proxies as a test for cognitive power. It will be a better or worse proxy, depending on how even the exposure to the cognitive skill is. If we give an English vocab test to both Americans and Japanese, that test will be a horrible proxy. But if we give a game of Tetris to both Japanese and Americans, it might be quite a good proxy. If we give that game of Tetris to Americans from 1950 and Americans in 2010, then it will suck as a proxy.

I don't think the Flynn effect represents a real rise in cognitive power. a) the rise in scores varied greatly by test, we'd expect the opposite if cognitive power rose b) for the scores that rose the most, I can think of plausible explanations. There is much greater test awareness today, I grew up playing block matching games both on paper and on the computer. But since knowledge of basic English and arithmetic were already saturated, there has not been much change on those tests. c) from talking with family members, I think my parents and grand parents were every bit as quick as my siblings and cousins d) if you look at the speeches and newspapers from 50+ years ago, they are just as sophisticated as our modern papers.

So my conclusion is that Americans of 50 or 150 years ago had similar cognitive power, and similar cognitive skills in the areas that matter (literacy and basic math). Thus they were able to create high levels of governance and growth.

As for Africa then, we have no idea how much of the 30 point IQ differential is due to lack of education in cognitive skills, how much due to environmental deficits lowering cognitive power, and how is due to genetic differences in cognitive power. But it is quite clear that, unlike 1850's Americans, Africans have substantial deficits in very relevant cognitive skills (literacy and math), not just test taking skills (like the Raven's matrices).

From the perspective of good governance and growth, the exact reason for the 30-point differential doesn't really matter. Whatever the reason, finding an internal elite to govern the country wisely and drive entrepreneurial and technological growth will be extremely difficult. The problem is made much more difficult by various historical events and the introduction of forms of government entirely unsuited to Africa's demographics and culture.

Both at Aretae's blog and Athens & Jerusalem I've been getting into kerfuffles over how to rank democracy among the forms of government. Most discussions of government are marred by bad definitions and bad categorization of regimes. So before continuing further, I thought it time to write out how I think about the various forms of government.

A government is the organization that the people with the most guns declare loyalty to. The government thus is the organization that exercises authority over a territory via the threat of the use of force. A system of government is a set of norms for selecting elites and delegating to them authority. All systems, even democracy and monarchy, are really oligarchical in the sense that power is held by an elite. The Iron Law of Oligarchy explains why. So when we categorize governments, we are essentially categorizing them by the process by which the elite are selected. A pure absolutist monarchy is a system in which a king is selected by inheritance. The monarch then selects the ruling elite ministers. A populist democracy is a system in which the masses use elections to select the ruling elite.

We can divide systems of governments into two basic categories - legitimist versus lawless. In a legitimist government, the rulers are selected by a transparent, commonly agreed upon process (written or unwritten). In a lawless process, the rulers come to power via corruption or violence.

In general, history teaches us that legitimist governments are far, far, far better than lawless governments. In a lawless government the corrupt and violent are rewarded with power, so of course, the rulers are generally evil and bloodthirsty. The Yeats effect applies. The only reason a person should ever throw his support toward a movement promoting lawless government is if the alternative is an even worse form of lawless government. Note that lawless governments can turn into lawful government as they evolve a non-violent succession process. China under Mao was lawless - he took power through violence. But China today is in the legitimist category, as leaders are selected through a non-violent process.

Since I think everyone agrees that lawless government is not a good goal, we will not discuss it much further. We'll focus our discussion on what is the best form of legitimist governments.

To make the thought experiment more concrete, imagine that we are part of some small committee, lawfully tasked with creating a new government for a country. Maybe we're Madison in Philadelphia, the U.N. designing post-colonial governments, Lessig working with post-Soviet Georgia, or Bremer in Iraq.

To understand what kind of government we should want, we must first understand the past. The modern political thinker lumps all historical governments into two forms - democratic and autocratic. This is an egregious oversimplification, a reflection of just how ignorant the modern intellectual establishment is of history and philosophy. The modern intellectual is like the devoted Christian who divides the world into only two religions - Christian and Pagan. I used to commit this same sin. I now feel shame that I put structures like the French Ancien Regime in the same bucket as revolutionary tyrannies like Maoist China.

So our the first task as part of our quest to discover the best government, is to define the forms of government in a more coherent way. Here's my best shot; I encourage all comments:

Legitimist Governments

Open Aristocracy (Merchant Aristocracy)

A very limited subset of the population has the power to select the leaders. This aristocracy is selected by some method that allows for upward and downward mobility. Usually the selection is wealth, sometimes it is combined with education/breeding.

Examples: most cities in the Hanseatic League, Venice, Britain 1690-1833, Dutch Republic, Hong Kong, Singapore, colonial Virginia, Liberia pre-1970's

Timocracy

A larger subset of the population has the power to select the leaders. But there is not universal suffrage. The subset is usually selected by a property requirement, or maybe a property and literacy requirement.

Examples: colonial America, U.S. 1789-early 1800's, Rhodesia pre-1980, Britain 1833-1887, various Greek cities, early Roman Republic

Absolutism

Vast authority is vested in a king, emperor or viceroy who comes to power via legal means. Usually the king receives power via birth, but adoption is not too uncommon. The king then selects the ministers who he delegates authority to.

Examples: Louis XIV, Elizabeth I, Marcus Aurelius, Ivan IV, Peter I, Frederick II, Caligula, Petillon in the Belgian Congo, MacArthur in Japan

Hereditary Aristocracy

Authority resides in the hands of nobles who were born into power. There may also be a king, but he does not hold great authority over the nobles.

Examples: Feudal Europe, Manorial England, mid-late Roman empire, 19th century Spain

Mixed Bureaucracy

Unfortunately, this category is a bit of a catch-all. A mixed bureaucracy is a government where various factions share power. These factions may include a hereditary aristocracy, the priests/ideological authorities, civil servants, wealthy merchants, and military generals. Mixed Bureaucracies are hard to generalize about as they can behave very differently depending on the particular elites and the mechanisms by which power is allocated.

Modern China is a good example, as power is shared by the party oligarchy, civil servants, military, and a plutocratic class. France under Louis XVI, with its power sharing based on estates, is another good example.

Examples: European Union, China for most of its history, France under Louis XVI

Ideocracy (Theocracy)

More commonly known under the term theocracy, but the ruling ideology does not always have to involve a deity. The state is controlled by a caste of people who control the ideology. The current ruling elite selects the succeeding ruling elite based on ideological conformity.

Examples: Byzantium Rome, the Papal States, modern Iran, Ottoman Empire, late Soviet Union, East Germany

Popular Democracy

Authority is allocated by universal or near-universal suffrage elections. The power of the elected officials is only partly checked by other elements, such as a limited monarch or bureaucracy.

Examples: U.S. 1776 to 1789, U.S. from 1830 to 1932, Britain from 1887 to 1945, Wiemar Republic, France from 1870 to 1914, 1918 to 1945, modern Iraq, modern Afghanistan, Congo for one day in 1960, Liberia from 1978 to 1980, South Africa post apartheid, Palestine,

Managed Democracy

The ultimate authority of the state is still nominally vested in an elite chosen by universal suffrage elections. But the populism is greatly tempered by a) a state controlled system of education, run by unelected civil servants b) a bureaucracy run by unelected civil servants c) a court system that is mostly unresponsive to elections.

Examples: the modern western nations - U.S., Japan, Britain, most of western Europe,

Tribal/Clan

The defining factor of a tribal/clan system is that the unit of governance and law is based in a group that shares kinship. In some larger clans, the kinship may be more distant, and some very large clans may have sub-clans which are each extended families sharing the same ethnicity. The details of how tribal leaders are chosen varies. Birth, military prowess, age, and popular acclaim are all common selection methods. Justice between members of two clans is decided by the two clans figuring it out, peacefully or violently.

Examples: pre-colonial Africa, most North American Indians, medieval Ireland, medieval Mongolia, Germanic Tribes, modern Somalia

Lawless Systems of Government

I want to briefly want to go over common forms of unlawful governments. This will aide us in our categorizations of historical regimes.

Counter-Revolutionary

A violent overthrow of the political system that aims to remake society in a right-wing direction.

Examples: Meiji Restoration, Hitler, Sulla

Revolutionary

A violent overthrow of the political system that aims to radically re-make society in a left wing direction.

Examples: Mao, Lenin, Pol Pot, 80's Iran, Gaius Marius

Degenerate Democracy

A nominally democratic government, but in reality the elections are rigged. Politicians use a combination of violence, bribing judges, ballot stuffing, etc to win elections.

Examples: Late Wiemar Republic, Mexico, many African and Latin American countries

Unlawful Autocrat

This is my catch all for any autocrat or junta that takes power illegally, but without a mission to radically remake society. The autocrat may take power by killing the rightful king, military coup, rigging an election, etc.

Examples: Burmese junta, Augustus, Pinochet, Oliver Cromwell, Pertinax, Septimius Severus, Vespasian

Civil War

Multiple factions violently fight for control of the nation.

Examples: Congo in the late 90's, Nicaragua in the 80's, Spain in the late 30's, Russia in the 1920's, etc.

Which historical form of government was best?

After defining the forms of government, and matching historical regimes to the forms, we'll be able to answer the questions about which form is best.

A government can be bad in two ways:

a) it directly provides bad quality of service (infringes on liberty, strangles growth, abuses its citizens)

b) it predictably degenerates into a form of government that provides bad government.

But before we try and answer this question, I want solicit feedback from my esteemed intellectual sparring partners. Do the above categories make sense? Did I mis-categorize any regimes?

I could also use help brainstorming and categorizing historical regimes. Only when we have collected and categorized the data points from history, can we make a strong judgment about which government governs best.

There are a few regimes in particular that I don't know how to place. Napoleon - revolutionary, counter-revolutionary, absolutist? Kim Jong-il - Absolutist, Revolutionary or Theocracy? Leopold in the Congo - unlawful autocrat or Absolutist?

Is the U.S. of 1890 best considered a managed democracy (due to its very strong court system), a popular democracy (due to its wide open elections), or a degenerate democracy (due to the large amount of corruption)? I'm leaning towards popular democracy, because I think the populist element was strong than the courts and corruption, but I could be convinced otherwise.

UPDATE: I just missed a comment by Aretae on his original post: It's back to the key to government...and my claim is that Moldbug's off on a wild goose chase. The issue is what the government doesn't do...not how it's organized.

Having just gone off on this wild goose chase, let me defend myself. As Aretae says, the feeback loop defines the system. Government cannot be constitutionally limited, because, by definition, there is no higher authority that can enforce that law. So there are only three levers through which we can achieve limited government in practice a) by designing the feedback/selection process by which the people running the government are selected, b) by widely distributing guns, c) secession/fragmenting the territory over which a government rules. This post is concentrating on method a) of ensuring limited/good government. Perhaps another time we can discuss methods b) and c).

Note: I originally wrote this months ago as a review on Amazon

The Race Between Education and Technology epitomizes everything that is wrong with social science. The modus operandi is to pull together a series of charts showing correlations, assume that the correlation is due to causation, and ignore any discussion of alternative explanations of the trends.

Goldin-Katz spend the bulk of the book hammering away on two points that everyone already knows: years of schooling on a national level correlates with industrialization, and years of schooling on a personal level correlates with income. Goldin-Katz spend precious few pages actually dealing with the causation issue, and never address any of the best arguments against their thesis. Nor is there any attempt to actually talk to people working in technology in order to understand more deeply why the correlation exists.

Let's examine in detail some of the flaws.

a) Goldin-Katz's base hypothesis is that years of schooling should continuously rise over time, as technology increases. But the very definition of technology is that you get more output for a given amount of input. Thus we should not expect a proportional increase in education to take advantage of new technology. Indeed, this is what we see on the ground. As a web programmer in 2009, I no longer need to learn a huge amount of information that my father needed to know. For my job, I do not need to assembly language, register hacks, memory allocation, pointer arithmetic, etc.

b) Goldin-Katz's hypothesis is at odds with the experience of all the recent college graduates I know. No one believes that education teaches job skills. A quick check of the top 10 most popular college majors shows that these majors have little to do with technology. Clearly if there is an income bonus from college education, it cannot be from teaching technology, because colleges do not actually teach technology.

c) Goldin-Katz's hypothesis is at odds with the life experience of most engineers I know. If you ask the typical, engineer, "How many years would it take, starting from the beginning of high school, and working efficiently, to reach an amount of knowledge where you could be a productively employed?" the answer is usually something like 1 to 3 years. If you look at the actual skills to do high tech jobs, you simply notice that very few require 8 years of full time schooling. You'll also notice that engineers universally deride schooling, and that they learn most of their skills by avoiding school work (this is especially true in high school). For more details Google the essay "Why nerds are unpopular" by Paul Graham.

d) The standard government economic growth statistics have so many methodological problems that's it's impossible to draw any conclusions from them (for more details, Google "Economics needs a divorce" ). It's unclear both a) that growth has actually been declining and b) that the decline has to do with lack of technological innovation ( it might have a lot more to do with the increasing portion of the GDP taken up by bureaucratic sectors that are impervious to technological change - like the education sector itself!). Chinese, Japanese, and Korean mercantilism have also played a great role in the decline of America's technological-industrial base. Never do Goldin-Katz address either of these points.

e) I do agree that 19th Century America derived great benefits from its strong primary schools and high literacy rates. But I believe this is primarily a threshold effect. After students have the tools to find books and self-educate, further formal schooling has diminishing returns. So I might agree that 19th century America derived an advantage from averaging something like 5 years of schooling rather than the 0-2 years of schooling that was common in other countries. But it does not follow that modern America would derive an advantage from raising the average years of schooling from 13 to 15. In fact, 13 is almost certainly above the point where opportunity costs exceed returns to schooling.

Goldin-Katz never address any of the competing explanations for the correlation between industrialization and education or income and schooling:

a) Richer countries can afford more years of schooling. The experience of my peers and I in college is that college is primarily a luxury good.

b) Academics have greatly increased their influence on politics in the past century, first with the Wilson administration then with FDR's brain trust. Prior to 1900 academics had neither involvement with politics nor control over policies. Today, virtually all major policy advisers are academics. Not coincidentally, there has been a concurrent increase in government money spent on schooling and on total years of schooling. Thus part of the rise in education over the last century was likely simply two unrelated but concurrent events - the continuing industrial revolution, and the increasing political power of the academic class.

c) On an individual level, selection effects play a major role in creating the link between college and income. Completing college requires a threshold level of intelligence and diligence. Colleges select for people with high earning potential, because such people are more likely to make money, and donate it back to the school. I was talking to my friend who does hiring for Bain Consulting: "Bain likes to recruit econ majors from top schools, but because they learn anything valuable in the major, but because it means the person is smart and care about business." I hire programmers at a startup, and I care little about the degree, and a lot more about how smart the person is and what they have done. This does correlate with college and major, but the actual knowledge gained in the college major is a tiny portion of what is needed to be a successful engineer.

The selection/signaling effect is even more important considering the that the 1971 Griggs Supreme Court case made it illegal for employers to use IQ tests for hiring purposes. As a result, companies have to rely more on educational attainment as a proxy for IQ.

d) Finally, and perhaps most importantly, Goldin-Katz completely ignore the impact of credentialing laws. There are now legal degree laws for professions such as: lawyers, architects, doctors, teachers, civil servants, military officers, nurses, and education administrators. These professions receive relatively high salaries because they have either direct government subsidies, or they have monopoly rights to perform certain tasks (prescribe medicine, defend the accused in court, etc). Yet there is no evidence that requiring a degree is a credential is a greater indicator of ability than simply using a test or requiring apprenticeship. Most architects of the 19th century learned via apprenticeship, yet the quality of the buildings was much higher back then than today.

Searches of the book for "signaling", "credentials", "credentialing", "Spence" return zero hits. To write a book about the school about the education wage premium and not discuss these issues is completely egregious. In a just world this failure alone would be enough to ruin the reputation of Goldin and Katz as being serious scholars and to impugn the reputations of the academics who offered such fawning reviews.

Goldin-Katz's book is fundamentally about policy. It is about how to manage a countries economy to maximize technological growth. You would think that the first thing that anyone would do when writing such a book, is to talk to dozens of people in high technology. You would talk to engineers, entrepreneurs, workers at high tech firms, current college students, recent college graduates. Yet Goldin Katz do none of this. They sit in their ivory tower, plot some regressions and engage in chart-ism of the worst sort. Their statistics add nothing to the stock of knowledge that already exists about the correlations between education and income. And they ignore addressing all the possible arguments against their case. This book is only interesting the way that a car wreck is interesting.