What is the state for?

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One of many views
One of many views

The Venezuelan government headed East last week to beg for funds from the Chinese in order to save their Revolutionary State. Yet chavismo’s global treasure hunt, regardless of the outcome, is not the only race in town. All over the world politicians, scholars, businessmen and ordinary citizens are pondering a new purpose for the state, and what it is good for in this modern world of ours.

Assessing this issue has taken several centuries so far, reckoning three and a half revolutions in the process that have shaped the conception of the state’s purpose in a Society. Unlucky for Chavismo’s own legacy, their “revolution” isn’t part of any.

The three and a half revolutions were carefully considered in an interesting book by John Micklethwait and Adrian Wooldridge titled “The Fourth Revolution: The Global Race to reinvent the State“. Those three revolutions brought the creation of the Nation-State, the rise of the Liberal State, and the gestation of the Welfare State. The other half of the story according to these chaps from “The Economist” magazine was the elevation of monetarism in Britain and the US as a challenge to a global economy in doldrums facing stagflation in the 70s. But most importantly, Western civillization today faces stiff competition specially from Asia as the leading and efficient State.

China and Singapore based their model of governing on its effectiveness. An efficient State is one in which meritocracy is not compromised by the ballot box. This authoritarian way of governing has led to a remarkable improvement in the human condition, ranging from lifting millions out of poverty over the past 4 decades, to its much hailed scores on the PISA tests in education and so forth.

That is why Singapore selects only the best to become teachers, and the Chinese promote public officials according to merit, training them in America’s and Europe’s elite schools. This might also explain why some countries in Asia excel at delivering better and cheaper public goods in some cases than their European and North American counterparts.

Without granting the authoritharian regimes a superiority vis-a-vis Democracy, the main theme of the book is the West’s inability to respond to a changing environment. Citizens are fed up with the way their Government is (not) working. This generalized sentiment explains why people believe that things may not change at all, a common belief in our 2015 Venezuela.

Coming back to Venezuela, there is no doubt the State has failed miserably at protecting its citizens from rampant violence, economic malaise, securing property rights, or guaranteeing a level playing field that could foster long-run growth. Instead of pleading for more foreign debt to be spent on useless ends, Venezuela should consider how Brazil’s conditional cash-transfer scheme helps alleviate poverty rates, reduce inequality and transform the life of the poor; or how Norway created a Sovereign Wealth Fund in the mid 90s that is now hovering around $700 billion. Even countries that three decades ago were worse off than Venezuela was back then have marvellous examples to offer – Chile, Mexico, and Peru among others from the Americas.

Certainly, to move forward from our burdens we need a better Government, one that can transform into something useful, not wasteful. There’s no need for having 27 ministries, even less so fatuous deputy ministries such as the “Viceministerio para la Suprema Felicidad Social del Pueblo“.

Every crisis, regardless of its nature, brings up opportunities. This tumultuous 2015 must represent a time for leading political, economic and social actors to mull over the right role of the state, and how the public sector can embrace modernity in an era of promising development across the world.

1 COMMENT

    • If your house burns one day (I hope it never does) I ASSURE YOU, you will understand how important the state is.

      If you fall seriously ill (and you will, for illness is the fate of man) you will understand how important the state is.

      If you are a victim of crime (if you haven’t been already) you will understand how important the state is.

      If your country is menaced by organised crime or terrorists, you will understand how important the state is.

      If the economy where you live falls into deflation, or a zero-interest liquidity trap, you will understand how important the state is.

      If you do not belong in the 1% but have children, and want them to do good and have equality of opportunity, you will understand how important the state is.

    • You don’t really know much about Belgium, as usual.
      When people say “Belgium didn’t have a government” they meant simply the previous government became “interim government”. We kept having ministers of this and that…only that the long-time vision was restricted.

      The State – which is not the same as the government in democratic, pluralistic nations – kept functioning all the same.

      People like Chinese visitors to Belgium and others couldn’t understand that because they didn’t understand the difference between State and government.

  1. In the 80s it was Japan; how the Japanese would overcome America, how samurai tradition evolved into an efficient managerial style that was eating the West out, etc.

    We know now how that story played: Japan has had two lost decades marked by deflation.

    In the 1930s it was the communists and the Nazis, how the Soviet state that had surpassed western democracies, how the Nazis had taken Germany out of recession, etc. (remember Spengler?)

    That played even worse.

    Nowadays we have China, Singapore and South Korea as supreme examples of the decadence of the West (particularly Europe).

    Never mind the quality of the Chinese air and water (the state does not protect the environment) or health system (no free hospitals, in the paradise of the working class) or rampant corruption, or (minor thing) that the Chinese lack civil liberties in their own country.

    No free education in China, by the way.

    No labour rights.

    No welfare state.

    Lots of crackpot medicine for people who can afford proper healthcare.

    Never mind that South Korean children are the unhappiest in the industrial world, subjected to a neurotic educational system that distorts meritocracy into torture. Never mind inequality in Korea is established at birth. Never mind the lack of free education.

    (I will not talk about Singapore. I have never been there or worked with Singaporean people).

    Not to mention how oppressive is to live in Asia. How constraining are social taboos, hierarchies and idiosyncrasies. And how to state promotes these taboos on the belief that they underpin social order.

    When you take the plane out and land in London it is like someone opened the window in a closed room.

    Sure, Singapore, South Korea, Japan and Shanghai (not China) score highly in PISA tests. But they send their children to the States and the Europe if they can.

    I don’t buy into theories of Western decadence. Living in Europe is fantastic and people literally die to come here. Why? because it is the best place to live in the world.

    Sadly, Western politicians buy into them and play with the fear of voters to impose their neoliberal agendas. But they are wrong. How did Reagan (the author of the words in the drawing) and Thatcher ended? in the 2008 financial crisis. In the unnecessary damage done by Katrina because of the absence of the state. In the UK being about to break up. In inequality and poverty. In the 1% racking up all the money.

    In this financial crisis, how did the European welfare state do? how did Denmark, Germany, Sweden and Norway do?

    How would have been the situation in France, Spain and Italy without a welfare state?

    Having eyes, see ye not?

    • Alejandro, why do you exist? The state is everything for you: You are not required (worth) for anything: so, get a gun and do us all a favour.

          • I see the state as a form of organisation that acts, among many other things, to protect the weak, the poor and the ill.

            It also should guarrantee the distribution of wealth, education and equality of opportunity.

            Because of my opinions , you think I should die.

            Some people are like animals. What is the difference between you and the Paris terrorists?

          • “I see the state as a form of organisation that acts, among many other things, to protect the weak, the poor and the ill.

            It also should guarrantee the distribution of wealth, education and equality of opportunity.”

            Spoke like a chavista.

          • Nope again.

            I speak with the words of Scandinavian socialdemocracy.

            It works perfectly well here.

            Listen: Venezuela is a small country exceptionally mismanaged. It isn’t an example for anything. Look up and see more of the world.

          • “It works perfectly well here.”

            It does not. France, Italy and Spain almost collapsed to fund all that welfare a couple years ago. Countries like Sweden or Denmark are growing nearly nothing every year. Norway is the exception, but they are drowned in oil, so it’s a different case.

            And size does not matter. Taiwan is is quite small. And alone has more Fortune 500 Global Companies than all Scandinavia combined. Well… You may say it’s unfair, but, hey, that’s life. There’s a concept called called trade-off it’s worth reading about it.

            Anyway, this is not the place to have such discussions. I rest my case.

          • gro
            Taiwan has twice the population of Sweden…
            But the point was comparing Taiwan to Scandinavia, which comprises four countries: Sweden, Denmark, Norway, Finland.

            Taiwan is is quite small. And alone has more Fortune 500 Global Companies than all Scandinavia combined..

            The population of Scandinavia- those four countries- is greater than the population of Taiwan. Lesson: read carefully before you reply
            https://en.wikipedia.org/wiki/Category:Lists_of_countries_by_population

          • Boludo Tejano,

            I believe (correct me if wrong) France has more Fortune 500 companies than Germany.

            Which country has the more powerful economy?

            Not to demerit Taiwan, which is of course an amazing country, but we are talking here about the role of the state. Where would you rather live, in Oslo or Taipei?

            Personally, although Taiwanese food is tremendous, I would chose Oslo.

          • Yes, true, and in fact the population of scandinavia is roughly equivalent to that of taiwan. And point taken, taiwan has more than twice the number of fortune 500 companies. I guess i could have answered “so what”, after all it should not be hard to come up with some arbitrary stat that “shows” how much better off scandinavia is. I think this line of reasoning is generally ridiculous. Both countries are extraordinarily competitive and each will have some advantage or apparent advantage over the other. Like being right next to China

          • I say, yes, die, ONLY if you are not prepared to be a normal human being and live a normal human life accepting the normal human challenges of a normal human life to make your own way in the world on your own as you are well capable of doing (without being “entitled” by “the state”) like most normal human beings. Be human and live a human life: don´t think that you are entitled to live by doing nothing by “the state”.

          • Well, I don´t actually mean “die”: I basically mean I do not agree with “entitlement”. I feel you should make your own way in the world – like the vast majority of people are doing. Without “the state” having to provide for you from cradle to grave and you doing nothing in return.

          • I have noticed, discussions like this attract weird people.

            I am going to answer to you: I am not “entitled” to anything. I am a scientist, working in an extremely competitive environment. Being Venezuelan (as in, with only a Venezuelan passport) I have had to work double what people here have to reach a similar position. Of course, I gained my right to live here because of the quality of my work.

            And I am a cancer scientist. So I am working (paradoxically) for people like you to have a better chance to live longer (because you, being human, have a 40% chance of having cancer in the future, but don’t worry, most of them can now be cured).

            I could tell you one thing or two about making one’s own way in life. You or anyone chap.

            Yet, having gained much, I am willing to pay high taxes (50%, as it happens) because I want to live in a fair society. I want my son to enjoy equality of opportunity with people that make more, or less, than me. I want no one to be deprived of education, healthcare or food.

            And I have moved to a place where this is possible. So no need to die.

          • Alejandro, in full agreement that the state should focus in education, equality of opportunities and support for the weak and poor, in addition to an enabling environment for investment and sustainable development. Unfortunately some people can only talk using slogans like communist, chavista, etc and are not open to go beyond strict defense of their ideological mantra – the state as a source for continued enrichment of the richest and the maintenance of the status quo with minimum social mobility and the same privileges that the same group of people/families have enjoyed in the last centuries. Some people want the miracle of a market economy without a solid consumer market which can only be achieved by better income distribution and an environment conducive for enterpreneurship by growing numbers of players and not only by the half dozen traditionally “blessed” ones.

          • Alejandro addressing Boludo Tejano,

            I believe (correct me if wrong) France has more Fortune 500 companies than Germany.Which country has the more powerful economy? Not to demerit Taiwan, which is of course an amazing country, but we are talking here about the role of the state. Where would you rather live, in Oslo or Taipei

            I was merely pointing out that contrary to gro’s point about the population of Sweden compared to Taiwan, Marc was comparing Scandinavia -not just Sweden- to Taiwan. gro later acknowledged my point. I was not claiming any preference for Taiwan versus a Scandinavian country.

      • Hello? You asked a question. You received a thoughtful answer. And then your retort is an infantile disqualifying statement? Please, grow up.
        By the way, I have no idea who Alejandro is or any intention of defending him. I simply find your attitude deeply troubling.

    • The issue is not whether it’s more pleasant living in Europe or in Asia. Certainly Western Civilization has many advantages such as their Inclusive political and economic institutions. The concern really is that the State is growing in size and is becoming ineffective in delivering better and cheaper public goods, a major reason why people look for Europe or the US to go and live there.
      Certainly China and Singapore have notorious constraints to what one should aspire in life (freedom of speech, liberal democracy and so forth), but Western monopoly of how to Govern effectively has been put into question.

      Governments in North America and Europe can reinvent themselves into something more useful for their societies and history as you point out has shown that it can transform itself. But what’s important to highlight is the ever increasing competition from Asia, as well as other places across the globe in a model of governing.

      • For me it is an issue, living a pleasant life. For reasons of training and work I have had the luck to live in disparate countries and my decision to settle has been heavily influenced by quality of life and the presence of a state willing to intervene.

        Most people think like me, since migratory movement flows to these kind of “pleasant” countries.

        What do you mean by “govern effectively”. what is that for you? Why is that in doubt in Europe?

      • “Western monopoly of how to Govern effectively has been put into question.”

        Perhaps one should ask, what can a society *afford*. Clearly you make do with what you have. It is less an issue whether the Western model is useful than whether it is accessible. This is no different from the problem with madurista mentality, the idea that you just “order” the institutions by degree and change will follow. The human and material resources, and time, are necessary. Some are also quick to complain also that the Western system is less adaptable, but that again has as much to do with the education, resources and age of the population as it does with the “system”. Also, among the biggest challenges in Europe continues to be the aging population. Let’s see how China fares when it reaches that point!

        In addition, people are impatient and like to complain, politics is a difficult and volatile game. Just to give an example, if midterm elections in the USA where held today, democrats would have fared much better than they did just a few months ago, is my guess.

        The State is no panacea for every ill and Scandinavian countries such as Sweden suffer from bloat, but in general I have to agree with much of what Alejandro writes (although one should, according to some sources, speak of the 10%, not 1%).

        • According to Krugman it is the 0.1%!

          But yes, demography is a problem. For China too, China will be old before its people are rich, and they have no welfare at all.

          Is the Western “model” affordable for Venezuela: YES, but we have thrown into the bin the equivalent of (at least) 20 Marshall plans.

          European governance is top-of-the-heap. Efficiency and transparency are light years before China.

          i would say the Tokyo (not Japan’s) government is also world-class.

          No matter what The Economist says, the EU is the great political experiment of our time. I hope it continues to succeed.

          Venezuela? man, Venezuela has put itself in hell without no one asking for it. We simply decided to ruin our country, collectively (I never voted Chavez, but I emigrated, leaving some asshole a free lunch, as someone said).

    • “How would have been the situation in France, Spain and Italy without a welfare state?”

      It would have been probably closer to Singapore’s or the US’ experience: higher GDP per capita, less unemployment, more competitive private companies and less public debt.

      You see, there’s no such thing as a free lunch. To create a big welfare paradise, you must sacrifice the private sector with huge taxes and make it less competitive worldwide, what scares away foreign direct investment and, consequently, your economy as a whole.

      • Nope. The higher GDP in America is precisely the result of state intervention (QE by the Federal Reserve, the Obama stimulus) It is worthy to say that the US have reformed healthcare to be more inclusive.

        In my experience, there are free lunches: for Wall Street banks, who nearly bankrupt the world and yet are raking in the millions; for companies like Zara and Apple, who profit from cheap labour in the third world, for politicians who take the wrong decisions but get high salaries (like George Osborne, George W Bush, David Cameron, Tony Blair, Donald Rumsfeld, etc, etc.

        There are free lunches.

        Concerning the competitiveness of the welfare state, I have one word for you: Germany.

        For the supposed choking of the private sector with high taxation, I have two: Denmark, Sweden.

        For countries with low taxation, an absentee state and total freedom for business I have another: Pakistan.

        So you are a bit confused and wrong.

        • Mmmm actually nope. The US Government has not been bailing out Banks or undertaken massive QE (monetary stimulus) prior to this decade. The trend is similar in the developed world. Governments/States keep getting bigger and bigger without actually delivering better public goods for its citizens. There may be some exceptions to this trend. Sweden as you mention has reverted this trend and actually diminished the size of the State in terms of its GDP privatizing some areas of its Government (specially in the Health care sector).

          Both the left and the right are demanding more and more spending without considering how to cope with its sustainability

          • I am glad you mention Sweden. Yes, they tried to revert the welfare state, introducing the private sector and cutting government spending.

            Result: the quality of education and healthcare diminished because the privates tried to save money on students and old people and the economy went into a dive because of unnecessary austerity.

            The conservative government lost the latest election because of the failure of its reforms.

            It failed. The policies you admire failed.

            About US GDP growth: yes, the American economy has a strength and dynamism unseen in Europe yet, vast territories of the US are underdeveloped, or regressing into primitiveness (Detroit, Louisiana, the Rust Belt, the Bible Belt, etc). Don’t make the mistake of confusing the US with Texas, New England and California.

          • Actually, California is probably one of the last states to trot out as an example of economic dynamism in the U.S. It has, quite simply, one of the worst environments for business with high taxes, and extensive regulatory rules for pretty much everything. Add to that its demographic problems, and it is easily one of the more unsustainable states in the U.S.

            The geographic location and size of the population give it economic clout, but the governance of California, with its weird mix of populism and liberal policy making along deeply ingrained special interests at Sacramento make it a relatively inept government. It is a legacy of the “old” U.S. economy, rather than the new, with the sole exception of Silicon Valley.

            They do come up with some innovative policies, but, for all the insight they have into trying to fix problems, they are completely incapable of reforming the state itself.

            This is largely why companies in California are relocating or expanding their operations elsewhere.

          • You are to be commended for pointing out Alejandro’s sloppy writing. Another one is where he refers to “regressing into primitiveness (…the Bible Belt, etc)” and in the next sentence where he states “Don’t make the mistake of confusing the US with Texas, New England and California.” where Texas, NE and CA are examples of the way things should be done. Texas has always been considered part of the Bible Belt. Te lo juro. So according to Alejandro, Texas is both “regressing into primitiveness” and an example of the way things should be done. Anyone who has such sloppy writing on the Texas/Bible Belt California comment is not worth arguing with on his bigger point that Europe is the way things should be done.

          • Alejandro:
            vast territories of the US are underdeveloped, or regressing into primitiveness (Detroit, Louisiana, the Rust Belt, the Bible Belt, etc). Don’t make the mistake of confusing the US with Texas, New England and California.
            I don’t know if you will read this, but will add it anyway. Your comments on Venezuela are spot-on. Your comments on the US, less so. Many educated people who are not US citizens believe they know more about the US than they actually do. Here is a recent article about Mercedes Benz moving its US HQ from New Jersey to Georgia.The South is Rising:

            The New York Times even saw it fit to print the following statement: “The Southeast has replaced California as the place where many people now go to find the American dream.”

            The New York Times!

            Also note that “dynamic” New England and California have shown in recent decades an increased proportion of people born in-state leaving their native states, in an economic diaspora. People are not stupid masochists who deliberately move to worse conditions. They move where there is perceived greater opportunity, which includes such “primitive…Bible Belt” states as Florida, Georgia, North Carolina, and Texas. Compare the diaspora rates over time of California and New England with “primitive, Bible Belt” Georgia. I was born in New England, but moved years ago to Texas, for greater economic opportunity. There is a link to a NYT article re diaspora. The US is a vast, complex country- which means that many statements which appear to speak about the US as a whole or about a region as a whole, are actually not accurate.

            However, I would tend to agree with you about Louisiana, Detroit, and Illinois.Though others may disagree.

          • One more thing, the prolonged expansion of American GDP after the war occurred in an environment of high, progressive taxation and growth of the welfare state (the new deal, the great society, medicaid, medicare, veteran administration, etc)

  2. The State, stripped of all the emotional baggage, is a Service Provider. It provides valuable services that we cannot provide for ourselves individually, such as common defense, police protection, a justice system, currency, social safety nets, and a host of other important things that create an organized platform for peaceful co-existence and commerce.

    As the population of the world becomes more and more mobile, States are finding it necessary to compete with one another for the most valuable citizens and corporations. This is forcing the States of the world to become more efficient in order to attract the most productive tax-payers. All-in-all, I see this trend as a positive development. We need to encourage the elimination of “patriotism” and start to view the State as exchangeable by simply voting with our feet and going wherever we can get what we want. Consider this… What war ever got started without “patriotism” or “religious zeal”? I can foresee a time in which “patriotism” is considered a barbaric and outdated concept, not appropriate to the modern world.

  3. First lets keep in mind that strictly speaking the Government is one thing and the State is another , The Government is composed of that group of people who are responsible for heading the State and for guiding (steering) the State in the performance of its job . Governments in modern times come and go . The State is there forever , The State ís composed of all those public institutions and bodies which are entrusted with the performance of a public function for the benefit of the whole community .

    To use a metaphor the Government is the driver of a car the car being the State .The government doesnt own the State , if anything it manages it on behalf of (and for the benefit) of all those people who really own it , the whole population of the country in which the State operates.

    The great problem with governments is that there are often some political or other groups that by hook or crany coopt or hijack it so that it serves the interests of that group and not of the community at large . These groups use the resources and powers of the State to keep in power and serve their own ideological or political agendas , resorting for instance to demagoguery and rank populism to bribe a mayority of voters to support them even if in doing so they sacrifice the interests of the whole community in the long term.

    One could divide in two the positions that pols actually have regarding what is the purpose of the State ( whatever they publicly declare) , one that of those who see the State Patrimonialistically , as belonging to them and their partisans , and those who see it Institutionally as belonging to all the inhabitants of that State.

    Its fairly commong for countries which have not achieved full modernity to have a Patrimonial or Partisan State and for more modern countries to have an Institutional State where the interests of those who control the State from their positions in Govrt are subordinated to the interests of the whole community which that State is meant to serve. .

    Ours is of course a Partisan or Patrimonial State and while we have that kind of State we cannot say that we have achieved a fully modern status as a country.

    Ths outstanding feature of non modern patrimonialistic States is that they lack strong effective working institutions …sounds familiar doesnt it.?
    .

  4. You can find lists of the goals of the state in the US Constitution , in the writings of Rawls , in an international Commission headed by Dr. Stiglitz ( the economic nobel laurate ) and in many other places . basically these can be summarized as follows:

    1.- Lift and and protect peoples quality of life through the promotion of conditions which : a) allow for optimal economic growth , b) maximize the efficient pursuit of productive sustainable economic activities .c) foster the maintenance of well ordered public finances ( including the pursuit of price stability) and d) create conditions allowing for the gainful employment of the most people in the productive self sustaining economic activities mentioned above.
    2.- Provide a safety net for people who, through no fault of their own , as a result of the unavoidable contingencies of life, cannot provide for their basic material or medical necessities .
    3.- Provide for the effective maintenance of public order and security .
    4.- Provide the most disavantaged (through education and other forms of social assistance) with an equal and fair opportunity to better themselves by becoming economically competent and to improve their quality of life .
    4.- all of the above while upholding peoples liberties and ensuring the exercise of their rights of citizenship .

  5. 6. Prevent the collapse of the global economy through proper regulation of investment banks, credit derivatives, and similar instruments. (We learned something from 2008!)

  6. There’s an interesting explanation for the decadence of the Western State based on social contract theory. Taking James Buchanan as source, the more diverse a population becomes the costlier it is to assign the provision of public goods to the State.

    The reason lies in the fact that diversity of preferences creates an incentive for the individual to favor more proportional public choice rules. The limit of that proportionality being absolute consensus. Also, immigration increases population (certeris paribus) thus raising up bargaining costs for the process of “buying” votes to reach a desired voting outcome. All this makes the market alternative increasingly more attractive to voters even if the aforementioned goods are naturally “public”.

    In other words, multicultural and diverse societies have a hard time assigning the provision of public goods to the State. Individuals begin to favor more consensual voting rules over simple majority to decide such issues. The market alternative starts to look more convincing as diversity increases.

    This is not to say that immigration, diversity or multiculturalism is undesireble or should be tamed. In fact, I favour more labor mobility between countries. But those developments have consequences over the way in which people think about the state.

  7. They say less government is better government, maybe transform society without been a austrian orthodox, with a little of the orginal vision of Friendman on economics (Subtitution of the direct public spending with less taxes and a voucher system)

  8. The basic issue is that in any well ordered society there are tasks which can only be entrusted to the State because they become corrupted or turn unreliable if allowed to be guided by the profit motive which inspires private activity . Example the defense of the country or the administration of justice.

    There are also many functions of government which the private sector will not undertake because they are not particularly profitable or because the scale of the investment needed to set them up is beyond the capacity of most private companies.but which are of great benefit to society.

    For example the education of the children of the less fortunate or the building and upkeep of roads and communications in far off places etc.

    Finally if a country manages to create a well functioning , meritocratic , a- political civil service then often some tasks can be done by public bodies at less cost than private parties with no loss of efficiency . Its not easy but its been done in many places at different times.

    Finally there are cases where private interests will lose their moral compass and do things which harm society in order to maximize its profits and where some kind of regulatory oversight is needed .

    The State in turn however can also become corrupted or engage in the abuse of its authority so that it too needs oversight and controls from institutions that are independent from it and the influences that corrupt its activities.

    We need the State not only to uphold the liberties of people but to be effective in the performance of those activities which it is best equipped to perform . Problem with this is that in a young or inmature democracy most people are inept at judging the competence of govts and instead feel well served with cheap passions and populist trinkets .

    In inmature institutionally weak democracies the capacity of demagogues to corrupt the workings of State bodies to serve their agendas is the achilles heel of an Effective State .

    • Administration of Justice? Then why an increasing number of parties are willing to settle their disputes through arbitration. Let us not forget that most of the evolution of the mercantile law, came through the dispute resolution/settlement achieved by the different Chambers of Commerce in the XV century, which were alien to the institutions of the formal government amongst those city states.

      Those privatized exercises of social resolution of disputes helped to lay the groundwork for the uniformity of commercial practices, which happens to be a tantamount characteristic amidst thriving societies, that of which we know as THE RULE OF LAW.

      • The administration of justice is supposed to be free , all have the right to resort to a system of justice in defense of its interests . Arbitration today is only done by corporation with fat wallets , capable of paying dearly to have a more flexible up to date way of settling their disputes . Arbitrations are in no way cheap , and ultimately if arbitrators are to enforce their awards they have to go to a court to do it ( if the losing side doesnt want to obey its decisions) . Commercial law may be important but for a society the law must serve other purposes not tied to the commercial activities of very large companies.

  9. I heartily accept the motto,—“That government is best which governs least;” and I should like to see it acted up to more rapidly and systematically. Carried out, it finally amounts to this, which I also believe,—“That government is best which governs not at all;” and when men are prepared for it, that will be the kind of government which they will have. Government is at best but an expedient; but most governments are usually, and all governments are sometimes, inexpedient.

    —Thoreau, Civil Disobedience

    • You quote Thoreau: a hermit who enjoyed living in a shack in the forest.

      Perhaps if he’d foreseen the modern wonders accomplished thanks to the funneling of resources by governments toward infrastructure and R&D, he’d have thought otherwise.

      • I went to the woods because I wished to live deliberately, to front only the essential facts of life, and see if I could not learn what it had to teach, and not, when I came to die, discover that I had not lived.

        I ask for, not at once no government, but at once a better government.

        Under a government which imprisons any unjustly, the true place for a just man is also a prison.… where the State places those who are not with her, but against her

        It costs me less in every sense to incur the penalty of disobedience to the State than it would to obey.

        -HDT

        gro, I do not know what delusional world you live in,but if there was ever any man on this earth that would not be impressed by government R&D, it would have been HD Thoreau.

        The “R&D” that made modern life was done by tinkering brother bicycle makers, nerds in garages in California, the steam engine, and men staring into petri dishes. These wondrous advances would have been by the “infrastructure and research” of government monopolies.

        • “These wondrous advances would have been by the “infrastructure and research” of government monopolies.”
          That should say “would NOT have occurred” if these men had been railroaded into doing what the government told them they should do.

  10. Much has been discussed in this blog about the populist clientelar character of our traditional politics and how it afflicts the operation of our public bodies with waste, corruption and crass inneficiency . For decades Effective Institutional government was almost a given in western democracies which managed to outgrow their initial clientelism only to fall later to the politics of unlimited entitlement and lobbyism (and legislative judicial meddling with the minutae of functional governance as denounced by Fukuyama in his last work) .

    What we must understand is that Rule of Law and Democratic Accountability though essential to the operation of a well ordered society is not enough . An effective state is essential to the well being of a society . the problem is that if Democracy develops before a country has achieved an Effective State the building of the later becomes very very difficult because democracy while essential for controlling an effective state makes the creation of one extremely difficult . Effective states in almost all historical instances has preceded the coming of democracy . ( look at the Far East) .In the US achieving an Effective State took almost a century .

    In short in developed western countries there is the capacity for having an Effective State absent certain political spoilers . In Venezuela and other countries (even if they are home to inmature democracies) there is not even the capacity for creating an Effective State because the venom of clientelar models make it almost impossible.

    The discussion about the proper size of the State is a Developed country conceit , like talking about which type of car you want to buy in todays venezuela ( you cannot buy any) . The important thing is for the State to work , to do its basic job . Whatever the deficiencies of the State in truly modern countries they are models of efficiency compared to the totally disfunctional States we have in almost all of latin america. .

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