The Social Effects of Scale

What originally brought to mind Maine’s conception of ancient societies were some passages I read in Nassim Nicholas Taleb’s latest book Skin In the Game.

Taleb makes the point that things don’t necessarily scale up; when they do, they lose the characteristics that allow them to operate on the smaller scale. They transform into something altogether different, with very different characteristics. Last time, we pondered why the old kinship-based, non-hierarchical “gentile constitution” fell apart. I think the simple answer to that question is: as societies got bigger, that system could no longer work. That is, it could not scale. New modes of living came to replace it, as we’ve seen, bringing things like social classes, currency, written laws, markets, and government offices. This was not a simple or linear process.

But the new systems favored certain unscrupulous individuals—the ‘Triple-A’ type personalities—who could take advantage of this change to enhance their own power and prestige in ways that they could not before. This, in turn, leads to many of the social dysfunctions that plague our modern Liberal world order today.

In ancient societies, as we saw, people belonged to various groups and subgroups, and this is not only what defined their core social identity, but their quotidian behavior as well. Furthermore, this allowed society to function in the absence of written laws or formalized institutions. “Society”, such as it was, was the aggregate of these various groups, and not a single, unified thing. This is very important. This is why ancient governments could be so minimal. Their modern functions were accomplished largely via other methods, but in ways that did not scale.

In his book, Sources of Social Power, sociologist Michael Mann begins by arguing this very point—that the bounded, unitary, linear conception of society as a whole completely misrepresents what a society actually is. In his attempt to understand where power comes from and how it is wielded, he begins by eliminating this unitary conception of society from his analysis:

Societies are not unitary. They are not social systems (closed or open); they are not totalities. We can never find a single bounded society in geographical space. Because there is no system, no totality, there cannot be “sub-systems,” “dimensions,” or “levels” of such a totality…Because there is no bounded totality, it is not helpful to divide social change or conflict into “endogenous” and “exogenous” varieties. Because there is no social system, there is no “evolutionary” process within it. Because humanity is not divided into a series of bounded totalities, “diffusion” of social organization does not occur between them…Yet most sociological orthodoxies – such as systems theory, Marxism, structuralism, structural functionalism, normative functionalism, multidimensional theory, evolutionism, diffusionism, and action theory – mar their insights by conceiving of “society” as an unproblematic, unitary totality…State, culture, and economy are all important structuring networks; but they almost never coincide. There is no one master concept or basic unit of “society.” It may seem an odd position for a sociologist to adopt; but if I could, I would abolish the concept of “society” altogether. pp. 1-2

A theoretical assumption lies at the base of the unitary conception: Because people are social animals, they have a need to create a society, a bounded and patterned social totality. But this is false. Human beings need to enter into social power relations, but they do not seed social totalities. They are social, but not societal, animals. p.14

To conceive of societies as confederal, overlapping, intersecting networks rather than as simply totalities complicates theory. But we must introduce further complexity. Real institutionalized networks of interaction do not have a simple one-to-one relationship to the ideal-typical sources of social power from which I started. This will lead us to break down the equation of functions and organizations and to recognize their “promiscuity.”

This lead to Mann’s working definition of society:

A society is a network of social interaction at the boundaries of which is a certain level of interaction and cleavage between it and its environment. A society is a unit with boundaries, and it contains interactions that is [sic] relatively dense and stable; that is, internally patterned when compared to interaction that would cross its boundaries. p. 13

Let us examine the etymology of “society.” It derives from the Latin societas. This elaborated socius, meaning a non-Roman ally, a group willing to follow Rome in war. Such a term is common in Indo-European languages, deriving from the root sekw, meaning “follow.” It denotes an asymmetrical alliance, society as a loose confederation of stratified allies. We will see that this, not the unitary conception, is correct. Let us use the term “society” in its Latin, not its Romance, sense. p. 14

All of which feeds into Taleb’s salient observations. A society is a collection of people who have, in his terms, “skin in the game”—that is, their actions affect everyone else in their peer group, and everyone else’s actions affect them in turn. This allows society to function in ways very different that our large-scale anonymous contractually-based social order. This can be at the level of a village, a tribe, a monastic order, a corporation, or many other things. The rules and behavior towards people inside the collectivity are substantially different than those toward those outside the group. Here is the passage I noted in Skin in the Game:

Things don’t “scale” and generalize, which is why I have trouble with intellectuals taking about abstract notions. A country is not a large city, a city is not a large family, and, sorry, the world is not a large village. There are scale transformations we discuss here…

When Athenians treat all opinions equally and discuss “democracy,” they only apply It to their citizens, not slaves or metics (the equivalent of green card or H-lB visa holders). Effectively, Theodosius’s code deprived Roman citizens who married “barbarians” of their legal rights, hence ethical parity with others. They lost their club membership. As to Jewish ethics: it distinguishes between thick blood and thin blood: we are all brothers, but some are more brothers than others.

Free citizens, in ancient and post-classical societies, were traditionally part of clubs, with rules and member behavior similar to those in today’s country clubs, with an inside and an outside. As club members know, the very purpose of a club is exclusion and size limitation. Spartans could hunt and kill Helots, those noncitizens with a status of slaves, for training, but they were otherwise equal to other Spartans and expected to die for the sake of Sparta. The large cities in the pre-Christian ancient world, particularly in the Levant and Asia Minor, were full of fraternities and clubs, open and (often) secret societies-there was even such a thing as funeral clubs, where members shared the costs, and participated in the ceremonials, of funerals.

Today’s Roma people (aka Gypsies) have tons of strict rules of behavior toward Gypsies, and others toward the unclean non-Gypsies called payos. And, as the anthropologist David Graeber has observed, even the investment bank Goldman Sachs, known for its aggressive cupidity, acts like a communist community from within, thanks to the partnership system of governance.

So we exercise our ethical rules, but there is a limit from scaling beyond which the rules cease to apply. It is unfortunate, but the general kills the particular. The question we will reexamine later, after deeper discussion of complexity theory, is whether it is possible to be both ethical and universalist. In theory, yes, but, sadly, not in practice. For whenever the “we” becomes too large a club, things degrade, and each one starts fighting for his own interest. The abstract is way too abstract for us. This is the main reason I advocate political systems that start with the municipality, and work their way up, rather than the reverse, which has failed with larger states. Being somewhat tribal is not a bad thing-and we have to work in a fractal way in the organized harmonious relations between tribes, rather than merge all tribes in one large soup. In that sense, an American-style federalism is the ideal system.

This scale transformation from the particular to the general is behind my skepticism about unfettered globalization and large centralized multiethnic states…But you don’t have to go very far to get the importance of scaling. You know instinctively that people get along better as neighbors than roommates.

When you think about this, it is obvious, even trite, from the well-known behavior of crowds in the anonymity of big cities compared to groups in small villages. I spend some time in my ancestral village, where it feels like a family. People attend others’ funerals (funeral clubs were mostly for large cities), help out, and care about the neighbor, even if they hate his dog. There is no way you can get the same cohesion in a larger city when the “other” is a theoretical entity, and our behavior toward him or her is governed by some general ethical rule, not someone in flesh and blood. We get it easily when seen that way, but fail to generalize that ethics is something fundamentally local.

Now what the reason? Modernity put into our heads that there are two units: the individual and the universal collective–in that sense, skin in the game for you would be just for you, as a unit. In reality, my skin lies in a broader set of people, one that includes a family, a community, a tribe, a fraternity. But it cannot possibly be the universal.

Recall our discussion of Kant: theory is too theoretical for humans. The more confined our ethics, the less abstract, the better it works. Otherwise, as we will see with Elinor Ostrom’s result later in this chapter, the system cannot function properly. And, before Ostrom, our old friend Friedrich Nietzsche got the point:

“Sympathy for all would be tyranny for thee, my good neighbor…” pp. 57-60

This is also echoed in a passage from Mann’s book where he explicitly rejects the unitary conception of society:

Empirical proof [of a nonunitary, open conception of society] can be seen in the answer to a simple question: In which society do you live?

Answers are likely to start at two levels. One refers to national states: My society is “the United Kingdom,” “the United States,” “France,” or the like. The other is broader: “I am a citizen of “industrial society” or “capitalist society” or possibly “the West” or “the Western alliance.” We have a basic dilemma – a national state society versus a wider “economic society. From some important purposes, the national state represents a real interaction network with a degree of cleavage at its boundaries. For other important purposes, capitalism unites all three into into a wider interaction network, with cleavage at its edge. They are both “societies.” Complexities proliferate the more we probe. Military alliances, churches, common language, and so forth, all add powerful, sociospatially different networks of interaction. We could only answer after developing a sophisticated understanding of the complex interconnections and powers of these various crosscutting interaction networks. The answer would certainly imply a confederal rather than a unitary society. p.16

Which is exactly Taleb’s point, above. Fukuyama, in The Origins of Political Order, argues that the history of the modern state consists primarily of the process of transferring people’s primary social identity away from the family/tribe/confederacy to the territorial nation state. This underpins much of the last 6,000 years of history. One may be a firefighter, a Mason, a member of the Elk’s Club, a member of the Schmidt family with ethnically German roots, but above all, one is an American. The contrast is summed up in the Talking History podcast:

The Oxford English dictionary defines “nation” as, “A large aggregate of communities and individuals united by factors such as common descent, language, culture, history, or occupation of the same territory so as to form a distinct people.” Note how this is not the same thing as a state, or a self-governing political entity. A nation is a collective identity that may or may not be self-governing or independent. Only in the modern world, beginning with the eighteenth century and growing ever since, do we associate nations and states to the point that we use the terms interchangeably.

Wikipedia notes that, “In Europe, before the development of nationalism, people were generally loyal to a region or to a particular leader rather than to their nation. With the emergence of a public sphere and integrated economy in the eighteenth century, a broader sense of identification with one’s country began to permeate society. Nation states have their own characteristics differing from those of pre-national states. For a start, they have a different attitude to their territory compared to the dynastic monarchies. It is semi-sacred and non-transferable. No nation would swap territory with another state simply, for example, because the king’s daughter married.”

This gives you an important idea of the differences between the old and the new way of thinking. The pre-national era in Europe wasn’t based around countries, but [around] ruling families. For example, one doesn’t normally think of Austria, the Netherlands and Spain having much in common. However, due to marriage alliances, they all ended up being ruled by the same man—Charles V (known as Charles I in Spain), from 1519 to 1556. That’s thirty-seven years. Imagine if Japan, Canada, and Denmark abruptly agreed to have a joint prime minister for the next 37 years. Up until World War I, when Europeans sat down to draw borders, they tended to be more concerned about making all the dynasties happy rather than any logical plan with respect to who actually lived where.

Talking History: The Italian Unification 1790-1870, Episode 2

Of course, everyone should know by now that the arrangement of sovereign states in the modern world, particularly in the Near East and Africa, was drawn up by European colonizers based on power relations, with nothing whatsoever to do with the nations that lived there, or the geography, or the history, or anything else. The impact of this on our modern world cannot be overstated!

In 1884 at the request of Portugal, German Chancellor Otto von Bismark called together the major western powers of the world to negotiate questions and end confusion over the control of Africa. Bismark appreciated the opportunity to expand Germany’s sphere of influence over Africa and desired to force Germany’s rivals to struggle with one another for territory.

The Berlin Conference was Africa’s undoing in more ways than one. The colonial powers superimposed their domains on the African Continent. By the time Africa regained its independence after the late 1950s, the realm had acquired a legacy of political fragmentation that could neither be eliminated nor made to operate satisfactorily. The African politico-geographical map is thus a permanent liability that resulted from the three months of ignorant, greedy acquisitiveness during a period when Europe’s search for minerals and markets had become insatiable. At the time of the conference, 80% of Africa remained under Native Traditional and local control.

How African Countries Got Their Borders (TYWKIWDBI)

Another prominent example is the Zomia region of Southeast Asia. This is a highland region the size of Western Europe containing up to 100 million people that have largely remained outside the control of territorial nation-states, and was examined by James C. Scott in his book, The Art of Not Being Governed. Many of the tribal nations in this region stand apart from the nation-states they nominally occupy. As Scott points out, if the entire existence of H. Sapiens is seen as a single day, then most people have been living under state control only in the last five minutes or so.

Taleb, as we saw above, argues that ethics are something inherently local; a point he makes concerning the ethics of economic transactions. In this, he makes the distinction between laws and ethics, or, we might say, a distinction between formal laws and ethical behavior:

The question “Is it ethical to sell something to someone knowing the price will eventually drop?” is an ancient one…the debate goes back to a disagreement between two Stoic philosophers, Diogenes of Babylon and his student Antipater of Tarsus…Assume a man brought a large shipment of corn from Alexandria to Rhodes because of shortage and famine. Suppose that he also knew that many boats had set sail from Alexandria on their way to Rhodes with similar merchandise. Does he have to inform the Rhodians? How can one act honorably or dishonorably in these circumstances?

Diogenes held that the seller ought to disclose as much as civil law requires. As for Antipater, he believed that everything ought to be disclosed—beyond the law—so that there was nothing that the seller knew that the buyer didn’t know.

Clearly Antipater’s position is more robust—robust being invariant to time, place, situation, and color of the eyes of the participants…We traders had a straightforward answer…an upright trader will not do that to other professional traders…There were some people with whom we had a relational rapport, others with who we had a transactional one. The two were separated by an ethical wall, much like the case with domestic animals that cannot be harmed, while rules on cruelty are lifted when it comes to cockroaches…Indeed much of the work of investment banks in my day was to play on regulations, find loopholes in the laws. And counterintuitively, the more regulations, the easier it was to make money.

Take for now that: The ethical is always more robust than the legal. Over time, it is the legal that should converge to the ethical, never the reverse.

Hence:

Laws come and go; ethics stay.

Thus we see that tribal societies had their own code of conduct, and were self-governing. One of the largest tribally-organized societies still in existence to this day are the Pashtun people. Note that there is no Pashtun territoriality-based state; Pashtunistan is not a self-governing nation-state by our modern legal standards. They are instead dispersed mainly between the lands of the modern-day territorial-based nation-states of Pakistan and Afghanistan. But they largely “govern” themselves through various means, as Dmitry Orlov describes in his book The Five Stages of Collapse:

The term “ungoverned” is, as usual, misapplied here: the Pashtuns have an alternative system of governance whose rules preclude the establishment of any centralized authority. At over forty million strong, they are one of the largest ethnic groups on the planet…Their ancient and eternal code of conduct is Pashtunwali, or “The Pashtun Way.” The reason for following Pashtunwali is to be a good Pashtun. In turn, what a good Pashtun does is follow Pashtunwali…Needless to say, the Pashtuns cannot be seduced with offers of social progress and economic development, because that is not the purpose of Pashtunwali. The purpose of Pashtunwali is the perpetuate Pashtunwali, and at this it is apparently very good.

Pashtun society is classified as segmentary, a subtype of acephalous (leaderless). The main figures of authority are the elders (maliks) whose serve a local tribal chief (khan), but their leadership positions remain at all times contingent on putting the tribe’s interest first. All decision making is consensus-based, severely restricting the scope of unlimited action. However, when faced with an external threat, the Pashtuns are able to appoint a dictator, and to serve that dictator with absolute obedience until the threat is extinguished.

Pashtunwali defines the following key concepts: honor (nang) demands action regardless of consequences whenever Pashtunwali is violated. It is permissible to lie and kill to protect one’s nang. Revenge (badal) demands “an eye for an eye” in case of injury or damage, but crucially allows payment of restitution to avoid bloodshed. Incarceration is considered unacceptable under any circumstances. It is seen as interfering with justice, since it complicates the process of exacting revenge and precludes the payment of restitution. This is why Afghanistan has been the scene of spectacular prison escapes, where hundred of inmates are freed in a military-style attack; the attackers’ goal is not just to free prisoners but also to kill them later or collect restitution from them. The law of hospitality (nanawatai) demands that any Pashtun must welcome and provide sanctuary to anyone who asks for it. As a matter of nang, the guest must be kept perfectly secure and safe from all harm while a guest. Once over the threshold and no longer a guest, he can he sniped at one’s leisure should such an action be called for. Laws against harboring fugitives, serving as accessory after the fact, impeding official investigations and so forth are meaningless and attempts to enforce them automatically result in badal.

The local Pahstun governing body is the jirga, which is convened only on special occasions. It takes its roots from Athenian democracy, although some scholars argue that it predates it. The participants arrange themselves in a circle, and everyone has the right to speak. There is no one presiding, in accordance to the principle that no one is superior in the eyes of the Pashtunwali. The decision is based on a majority consensus. Those who defy the decision of the jirga open themselves up to officially sanctioned arson and murder. It is significant that the jirga does not allow representation: it is a direct rather than a representative democracy. It is also crucial that the jirga reserves the right to abnegate any agreement previously entered into, making treaty-based state-legal relations with the Pashtuns impossible. Lastly, only those who follow Pashtunwali can participate in a jirga; all outsiders are automatically excluded. pp. 189-192

Thus we see that this fractal insider/outsider arrangement is how ancient society functioned in the absence of large, abstract, impersonal structures. This also allowed for management of economic resources that did not fall into our modern Liberal “public/private,” “statist/collectivist” dichotomy:

Universal behavior is great on paper, disastrous in practice. Why? As we will belabor ad nauseam in this book, we are local and practical animals, sensitive to scale. The small is not the large; the tangible is not the abstract; the emotional is not the logical. Just as we argued that micro works better than macro, it is best to avoid going to the very general when saying hello to your garage attendant. We should focus on our immediate environment; we need simple practical rules…In other words, Kant did not get the notion of scaling–yet many of us are victims of Kantian universalism. (As we saw, modernity likes the abstract over the particular; social justice warriors have been accused of “treating people as categories, not individuals.”) Few, outside of religion, really got the notion of scaling before the great political thinker Elinor Ostrom…p. 21

Let us get into the gut of Ostrom’s idea. The “tragedy of the commons,” as exposed by economists, is as follows–the commons being a collective property, say, a forest or fishing waters or your local public park. Collectively, farmers as a community prefer to avoid overgrazing, and fishermen overfishing–the entire resource becomes thus degraded. But every single individual farmer would personally gain from his own overgrazing or overfishing under, of course, the condition that others don’t. And that is what plagues socialism: people’s individual interests do not quite work well under collectivism. But it is a critical mistake to think that people can function only under a private property system.

What Ostrom found empirically is that there exists a certain community size below which people act as collectivists, protecting the commons, as if the entire unit became rational. Such a commons cannot be too large. It is like a club. Groups behave differently at a different scale.

This explains why the municipal is different from the national. It also explains how tribes operate: you are part of a specific group that is larger than the narrow you, but narrower than humanity in general. Critically, people share some things but not others within a specified group. And there is a protocol for dealing with the outside. Arab pastoral tribes have firm rules of hospitality toward nonhostile strangers who don’t threaten their commons, but get violent when the stranger is a threat.

The skin-in-the-game definition of a commons: a space in which you are treated by others the way you treat them, where everyone exercises the Silver Rule.

The “public good” is something abstract, taken out of a textbook…the “individual” is an ill-defined entity. “Me” is more likely to be a group than a single person. pp.60-61

Taleb argues that the “Silver Rule” is more robust in ordering the social behavior towards insider and outsiders than the more well-known “Golden Rule” of the salvationist world religions. It is ultimately anchored in the primordial law of reciprocity. Taleb describes the Silver Rule this way:

Leviticus is a sweetening of Hammurabi’s rule. The Golden Rule wants you to Treat others the way you would like them to treat you. The more robust Silver Rule says Do not treat others the way you would not like them to treat you…Why is the Silver Rule more robust? We know the wrong better than what’s right; The good is not as good as the absence of the bad, Ennius, reported by Cicero. p. 151

Now a word about the “others” in treat others. “You” can be singular or plural…Same with the “others.” The idea is fractal, in the sense that it works at all scales: humans, tribes, societies, groups of societies, countries, etc., assuming each one is a separate standalone unit and can deal with other counterparts as such. Just as individuals should treat others the way they would like to be treated (or avoid being mistreated), families as units should treat other families in the same way…And…so should countries…for Isocrates, the wise Athenian orator, warned us as early as the fifth century B.C. that nations should treat other nations according to the Silver Rule. He wrote:

“Deal with weaker states as you think it proper for stronger states to deal with you.”

Nobody embodies the notions of symmetry better than Isocrates, who lived more than a century and made significant contributions when he was in his nineties. He even made a rare dynamic version of the Golden Rule: “Conduct yourself toward your parents as you would have your children conduct themselves towards you.” We had to wait for the great baseball coach Yogi Berra to get another such dynamic rule for symmetric relations: “I go to other people’s funerals so they come to mine.” pp. 19-20

So it appears that a commons can indeed work in the absence of private property, state ownership, or “free and open” markets, and the like, as long as it is below a certain scale and all parties possess some “skin in the game.” In fact, it appears that this is how many resources did work for much of human history! That’s why the constant debate over whether the ancient world was more capitalist, or more socialist, miss the point: it was neither! We constantly filter the ancient world through our modern sensibilities, a classic “Flintstonization” of history–projecting modern assumptions and beliefs onto earlier societies. This leads to all sorts of absurd conclusions, like the entire world was just waiting to develop capitalism and the industrial revolution, and that these represent the Omega Point of the historical process. I don’t think that’s likely.