A man walks into a bar, and then comes the calm duke

It’s summertime. Politicians are on holiday, hopefully, at least some of them. That’s a good thing, ‘cause when they come to work, like daily, you need to watch them constantly. You turn your back for a second, just for one second, and they come up with something. They are always up to something, those politicians, and so it is good to know what exactly are they up to.

That paragraph, I mean the one above, is an acceptably shitty attempt at the introductory joke for the study of political systems. I do research about political systems, I write serious books about them, and I lecture about them, and I did some blogging about them as well in the past, and so I think I can do some blogging about them now.

Right, so I go on with shitty jokes. A man walks in to a bar, orders a drink, and starts talking to the barman. The man is new in that particular neighbourhood. Such blokes use to ask stupid questions to barmen. This one is no exception to the rule. He goes: ‘Hi, man. Do you have any political system, here?’. The barman is an experienced on. He knows stupid questions, and he is ready to respond. ‘Yes, we do.’ He answers ‘We have a constitution. It proves we have a political system’. ‘You have a constitution? Wow, nice. But, just tell me, how do you know YOU HAVE a constitution? I mean, I understand that part about the constitution as such, but how do you know it is your constitution and not someone else’s constitution?’.

The atmosphere becomes a little tense. What did you expect, man? You ask a man who is serving you drinks how can he know the constitution he thinks is his is really his own. This is bound to raise some eyebrows. Still, the barman holds his ground. ‘This constitution has a rule, written in it, that it is in force in the territory of our country, for one. Besides, it had been enacted, way back in the days, by our Parliament, for two. It all proves it is our constitution, man. Still, good attempt, bravo.’.

‘Yeah, you’re right. If it says it is in force in your territory, it must come from here and be your own. Stands to reason. Good point. But, tell me’ – the man doesn’t give up easily – ‘isn’t it the constitution itself that defines the territory of your country? I mean, it says it is in force in the territory it says is the national territory, doesn’t it? And the Parliament, it is your Parliament because the constitution says so, and the constitution is supposed to be your constitution because it has been enacted by the Parliament it says is the proper Parliament, right? Bit of a conundrum, here, don’t you think?’.

The barman gives up. ‘Look, man. It is nice chatting with you, but I have other customers to attend. See that doorframe over there, on the right? This is Dead Brains’ Room. Go there and ask for Alex. He will tell you more about political systems’.

‘Alex? Alex what?’

De Toqueville. Just go there and ask. The bloke is a fundamentalist, just like you. You should get along well.’

‘A fundamentalist? Me?’

‘Yes. You like asking fundamental questions. C’mon, man. Just go there and talk to Alex’.

The Dead Brain’s Room is a strange collection of people. All kinds of styles, you would say, as if taken from different epochs and places. After asking around, the fundamentalist man finds a slender gentleman with black hair cut into that interesting, like 19th century fashion, where hair on the sides of the head seem to form half-open wings of a bird ready to take flight. He is Alexis de Toqueville. When asked about political systems, he goes into a strange tirade: ‘Amongst the novel objects that attracted my attention during my stay in the United States, nothing struck me more forcibly than the general equality of conditions. I readily discovered the prodigious influence which this primary fact exercises on the whole course of society, by giving a certain direction to public opinion, and a certain tenor to the laws; by imparting new maxims to the governing powers, and peculiar habits to the governed. I speedily perceived that the influence of this fact extends far beyond the political character and the laws of the country, and that it has no less empire over civil society than over the Government; it creates opinions, engenders sentiments, suggests the ordinary practices of life, and modifies whatever it does not produce. The more I advanced in the study of American society, the more I perceived that the equality of conditions is the fundamental fact from which all others seem to be derived, and the central point at which all my observations constantly terminated’.

The fundamentalist man tries to understand. He asked this de Toqueville guy about political systems, and, as an answer, he heard something about equality, course of society, public opinion, laws, governing powers, habits of the governed, the Government with a capital ‘G’, opinions, and sentiments.

The fundamentalist man asks Alexis de Toqueville a few more questions, just to check the background, and here it comes. Now, it makes more sense. Alexis de Toqueville made a long trip to North America, in 1831. He was supposed to visit prisons there, on the request of the French king. So, the guy went to a country completely different from his own, namely the post-Bonapartist France, and he got hooked. Fascination comes from the experience of difference. He became so fascinated with that society under construction, in the early United States of America, that he made a detailed account of the whole system.

Probably without being aware of what he was doing, de Toqueville did an exemplary study of a political system: he started with a historical sketch, just to show how the whole thing came into being, and then he intuitively focused on those aspects of the aspects of the political order. That historical nerve is probably what I appreciate the most in de Toqueville writing. You can notice, by the way, that I have just let go the joke story about that man who walked into a bar, and I am returning to my basic narrative style. That’s the thing, man: you drag a joke over too long a way, and it stops being funny at all.

Anyway, what I like about de Toqueville is his attachment to history, which is even more noticeable given the fact that history, as a real scientific discipline, needed like 2 or 3 decades more to start emerging in the intellectual landscape of Europe. I appreciate the historical approach because I am strongly attached to the idea that social structures in general, political systems included, are very largely made of habits. It is arguable to what extent those habits last over time. The French historical school is, I think, the best at showing how those habits pile up to the point of becoming dysfunctional, and then the social structure shakes off and starts accumulating new habits.

Societies are like hamsters. Each institution, developing over time in the social system, is like another grain of corn that the hamster, i.e. the government, puts in its cheek-bags. Is the hamster stupid? No, not at all. What is does is a very sensible strategy, but it has its limits. Sensible strategies usually do. The limit is the capacity of the hamster’s cheeks. They are not likely to burst, by the way. If you have ever had a hamster, you could see the incredible capacity of that little animal. It can stuff itself up to an insane volume, with that food stored for later. What comes before bursting is impediment in the hamster’s movements. The more you carry in your cheek-bags, the slower and less agile you are, hence the less able to collect new grains. This has been nicely explained by a German mathematician, Reinhard Selten. He was Nobel Prized in economics, together with John Nash and John Harsanyi, and his specific contribution was the theory of games with imperfect recall (see, for example: Selten 1975[1]; Hammerstein, Selten 1994[2]).

Reinhard Selten studied social games played over long periods of time. The law is one of such games. These games have a special trait: the set of players is being changed without interrupting the game. New players come in, and old players drop out. It has to alter the rules of the game, as new players bring with them a word or two about how the game should be played, or, elegantly, they bring new strategies. Now, we have a paradox. Either the coming of new players with new strategies does not change much to the game, in which case we have a rigid social game with not much adaptability, or the game adapts usefully and the new ones alter it with their ideas, but then, the game is not quite the game it used to be. There is a span of time, that Selten used to call as the span of recollection, over which the rules of the game can accommodate both the old players and the new ones. This span is limited. When the discrepancy in expectations and strategies between players who joined at different times reaches a critical point, some old rules naturally drop off the game. Social games played over long periods of time have imperfect recall, because their rules and equilibriums cannot be unequivocally traced back to the hypothetical beginning of the game.

The funny thing about political hamsters is that they like attributing their heritage to things that don’t exist and have never existed. Take the classical partition of three powers, in a government. The legislative should be separate from the executive, and both of them should be accompanied by an independent judicial power. Most people who know a bit of political theory would immediately trace this distinction back to Charles de Secondat, Baron de Montesquieu and his book ‘The Spirit of Laws’. The interesting thing is that when you read that book really carefully, you will not find any mention whatsoever of that principle of division of powers. Montesquieu made a typology of governments, but he did not postulate the division of powers. Who did, then?

Who knows? The separation of the judicial power seems to be of the earliest date, probably due to the progressive emergence of the highly specialized legal profession, century after century. The separation between the executive and the legislative, on the other hand, seems to be an American invention, and to have its roots in the executive offices established in the early British colonies in North America. Read Alexis de Toqueville on that one.

I am getting back to that embarrassing question the fundamentalist man asked to the barman: how can we know we have any political system at all? Is the presence of a constitution a sufficient premise? In general, yes, I agree. Still, there are exceptions. Take Great Britain, for example. Technically, they have a lot of constitutional law without having a written, enacted constitution in the strict sense of the term. I know, I know, there is Magna Charta Libertatum, or The Great Chart of Liberties, from 1215.  I know it feels great to trace the roots of your nation’s constitutional backbone back to the 13th century, but just think of that hamster from the preceding paragraphs. Just how big the cheek-bags of the British political system would have to be in order to carry the institutions collected over more than eight centuries?

Same thing for New Zealand: there is no one, single, compound document called ‘The Constitution of New Zealand’. Still, New Zealand, just as Britain, seems to work quite smoothly, as political systems come. As a matter of fact, I am a huge fan of New Zealand’s political order. They have things, over there, which look really revolutionary, in the positive sense of the term. They have that thing, for example, that the Parliament can vote a budget it has billed like on its own, without any bill from the executive branch.

On the other hand, let’s suppose there is a constitution, but one or more political actors just don’t care, and free ride on the tide of political power. Does it mean there is no political system? Certainly not. If this is not necessarily and strictly speaking the constitution that makes a political system, then what is it? Although the constitutional track is not 100% correct, it gives an insight. Constitution is law, and this law puts order in the intricate network of hierarchies present in the given social structure. Political systems are observable through the lens of laws they enact into force, and through the predictability of behaviour in people who clearly wield power.

Law and predictability of behaviour are connected. Law is made of rules, and, generally, law is law. Still, as you dig deeper, there are two layers in law. In the first place, there is that sort of structural, framework law: the constitution, or, in the absence thereof, the rules regarding the way government should be organized, the civil code, and the criminal one as well, as we talk about codes. You know, that solid stuff that lawyers mean when they tell you in Latin, or almost: ‘Sorry, dude, but ignorantia iuris nocet’ (you get in trouble when you don’t know your law). This layer of law makes the frame of the political system. The presence, and the content, of those laws gives gravitas and predictability to what politicians do.

On the other hand, there are laws oriented on the achievement of a clear purpose, like a plan.  Let’s take a case like from real life. Always embarrassing, to stick close to real life, but always instructive, as well. Recently, Australia has enacted new regulations against espionage, allegedly with the purpose to counter the Chinese interference in the Australian political system. I followed that lead a bit, and I am focusing now on one particular print, namely on the Foreign Influence Transparency Scheme Act 2018 No. 63, 2018. Someone could ask: ‘You are Polish, Mr Wasniewski, so why the hell aren’t you writing about the Polish political system, and instead, you take on those poor Australians?’. Yeah, babe, that’s the thing about writing about political systems. It is frequently safer to write about other countries than about your own. Especially now, in Poland.

Anyway, that second layer of law expresses policies, thus what the political system does. Not all policies are enacted, but many do. It depends on how flexible they are supposed to be, and what about of budgetary money they need. You want a flexible policy that does not necessarily require to divert the stream of taxpayers’ money? You keep it executive, like those presidential proclamations that President Donald Trump uses to impose tariffs on imports. You want to implement a costly policy, which requires fiscal effort, and you don’t really expect to back off in three months from now? In that case you are likely to push some bill through the legislative.

The fundamentalist man enters our bar and asks again: ‘Do you have any political system? How do you know you have any?’. Now, we, the barman, can answer in a little bit more corkscrewed a manner: ‘It depends what kind of political system you fancy, man. If you want something well hinged, sort of regular, with basic legal frame and at least some policies enacted as law, yes, we have plenty. If, on the other hand, you are thinking about something less stringent, rather something sort of like a no-holds-barred game, sorry, we are short of. You can call by that other bar, down the street, with the big « Revolutionary Republic of We Know Better » sign over their door. They should have that second kind on stock, right now. This is probably why you can hear gunshots from there, every now and then’.

All that thinking about political systems made me think of reposting a bit of my writing from last year. It is because I am deeply fascinated with the 17th century in Europe. I have sort of a gut feeling that we are leaving the peaceful world of standardized political systems, which started to build up by the end of the 18th century, and we re-enter the fascinating maze of intertwining social hierarchies of the world, which, fault of a better word, we use to label ‘feudal’. In 1675, the publishing house run by Louis Billaine, located at the Second Pillar of the Grand Salle of the Palace, at Grand Cesar, published, with the privilege of the King, a book entitled, originally, ‘Le Parfait Négociant ou Instruction Générale Pour Ce Qui Regarde Le Commerce’. In English, that would be ‘The Perfect Merchant or General Instructions as Regards Commerce’. The author was Jacques Savary. By the way, the title I provided here above is the abridged one. The full title holds in 13 lines. Master Savary wanted to be precise, and indeed he was. On 829 pages, he covers very comprehensively a lot of practical topics.

I like reading books in a hermeneutic way. It means that I try to deconstruct the context, which the book had been written in. As we are talking 17th century and French monarchy, the most important part of the context could very well be the King, and the king was the Sun King: Louis XIV of France. The second important thing in the context is d’Artagnan. Alexandre Dumas chose to put an end to his hero’s life in 1673, in a battle, identically to the death of the real d’Artagnan, or Charles de Batz de Castelmore d’Artagnan. As we are talking Louis the XIV, we are talking Jean-Baptiste Colbert, the famous minister of finance, and his active, capitalistic policies. We are talking about doing business in an environment strongly marked by the interests of the most powerful people being around. We are talking about the creation of Saint-Gobain, the manufacture of mirrors, today a global business. It was the time, when huge ambitions of the absolutist monarchy went hand in hand with a quick development of really big (I mean bloody big, really) capitalism. There were those first attempts, from the part of the Sun King, of issuing money in order to finance his military prowess. The money in question, later on disdainfully called ‘the Bernardines’, was a failure, but the idea took root (read more in: Sombart 1911 – 2001[3], pages 65 – 70).

So, two years after d’Artagnan’s last battle, and during the reign of the Sun King, Jacques Savary publishes that book about being a perfect merchant, in really mousquetairy an environment. How had he come up with the idea? He states it very frankly in the preface of his book: ‘For although I might have had sufficiently good a name, and sufficiently good a birth, to be employed at some higher profession, I admit that, having been destined for Commerce by my parents, it is the employment, which I occupied myself with for a long time, the care I gave it, the particular cognizance that I took of the most significant and the least things as regards it, the ventures I made with all kinds of Manufactures, the losses that I suffered there, those that I avoided, have given me enough enlightenment and enough experience for ignoring nothing that regards the Negoce’.

I am translating Master Savary’s words the best I can, yet the original is the original. Champagne is a good example. You can get your own PDF of Master Savary’s writing from  www.gallica.bnf.fr , or Bibliothèque nationale de France. Anyway, before I go further in the wording of that preface, I go further hermeneutical with Master Savary. A few interesting things to notice in that first paragraph. ‘Commerce’ and ‘Negoce’ start with capital letters, so I gather it must be something important. Commerce was something slightly different than trade strictly spoken. We are in the world of capitalism based on debt, and more specifically on the bills of exchange. It will take more than an additional century (one and a half, as a matter of fact) to invent the institution of limited liability in a business. Someone could say: in there was no limited liability, it was better to rely on one’s own equity in doing business. Well, yes and no. Yes, because your own equity, contrarily to debt, will not give other people claims on you. No, because if you lose money in a venture, it is, on the whole, better to lose other people’s money than your own. Instead of chipping out of your own possessions, you can borrow money and lend money. The trick, and the art, was to find a balance between lending and borrowing, and it was mostly done with relatively liquid bills of exchange, traded by endorsement.

Those bills of exchange travelled much faster, and changed hands much more frequently than the stocks of goods they were more or less attached to. Commerce was the craft of trading both the goods, and the bills of exchange, at different speeds. Now, comes the subtle shade of Negoce in your Commerce. The merchant called ‘Negociant’ was a really big wholesaler, both in goods and in credit. The Negoce consisted in trading big amounts of goods and capital in a coordinated way. A Negociant could do business for years just by trading credit, without seeing a single barrel of rum or a single sack of corn, or, conversely, he could be an artist in recognizing, for example, good coffee, and making huge deals on it, after sniffing just one handful. A Negociant had to be good in law, in finance, in politics, occasionally in knife fighting, he must have been ready to travel frequently, and to shift elegantly between the crude conditions of an exploration trip and the splendours of Parisian parties. The life of a Negociant was capitalism with its teeth bare and a spark in the eye.

Master Savary says he was well born. He seems suggesting he could afford not to go into Negoce, and yet he did go that way. I guess he must have been the smart guy in the family, but probably not the first in line for inheritance. This is the probable reason why his parents destined him to be a merchant. So he had his teeth cut in doing Commerce, and he must have been really good at it, if, as he writes ‘The cognizance that I had acquired of the practice before being applied to Negoce, stepped from the fact that in the disputes arising ordinarily between Negociants, I endorsed a great number of arbitrages: the advantage I had derived from it is that in the study of evidence, books and personal conduct of those who had recourse to me in their disputes, I made myself sufficiently capable in all the matters the most important and the most difficult in Commerce’. 

Yes, Master Savary must have been really quick on the uptake, and smart enough to conceal his speed of thinking a bit, just enough to appear as a steady, reliable arbiter. One thing that remains unclear in this short curriculum, is the order in time. Did he start as an apprentice with a Negociant and gradually became good at arbitrage? Or, maybe, he started as a lawyer and specialized in commercial arbitrage? I do not know. Anyway, he did not stay in the Negoce for ever. ‘The time came when the Commerce was so weakened and bankruptcies so frequent, that there was no security in playing one’s possessions, I judged then that I will do no bad deed by retiring and embracing another profession. An occasion presented itself, which confirmed me in this decision; for a Minister of His Serenissime Highness Monseigneur the Duke of Mantua came in France, who offered me the intendancy of his business in France and Charlville: which I accepted, and entered in the year 1660 to the service of His Serenissime Highness, in which I still am; […]’.

Right, let’s go hermeneutic once again. ‘Serenissime’ means kind of very calm in his ways. Noble born people, in the past, liked dropping this adjective in those long designations, half-name, half-social status that they used to introduce themselves. It probably meant that they wanted to appear cool and relax. ‘Peace, bro. See that Serenissime on my visit card? It means I am really calm, and I will have you executed only at your second mistake. Want a sniff?’. So, Master Savary went into the service of that Italian duke from Lombardy (this is where Mantua is). Being a duke was a good position. The difference between a duke and a prince is that the former is just the top dog in the feudal hierarchy, and the latter is of royal blood and waiting in line for sitting on the throne. Apparently, especially in Italy, being a prince was really unhealthy an occupation. You could have had those horrible hunting accidents, when a wild boar attacked you with five crossbows, and could even follow you home. Waiting in line for top offices is rough. Being a duke was safer, as you were the boss and it was kind of official and legally guaranteed. You just had to wait a few centuries, over some twelve generations, and you had that dukedom. Well, yes, you had to put your bets on the right prince, the one who didn’t get attacked frequently by wild boars with crossbows, or just had more crossbows secured on his side, together with the properly qualified labour force.

So, Master Savary started somehow (?) in the Commerce, then went into business arbitrage, which made him convinced he is really good at Negoce. He went into Negoce, did some business, earned some money, lost some money, and then decided it was not really calm an occupation. When a very calm (i.e. Serenissime) duke from Italy offered him a job, he accepted willingly. As he sketches the job in question, he says: ‘[…] in order to fulfil my obligations it was necessary for me to study the Ordinances and the Customs, as there was much business decisions based thereon; so as I committed myself to read them, and in that reading I made remarks on everything pertaining to Commerce, which served me usefully in the composition of this book. When His Majesty, willing to put a limit, by a Regulation, to the abuses that were being committed in the Negoce, had it ordered by circulating letters to Judges and Consuls, Guards and Communities of Merchants in the good towns of his kingdom to send him their memoirs on this subject, I believed it was my duty to work individually, too, in order to make my eagerness visible and the desire to serve the King and the public; this is why I composed two memoirs, one containing the abuses that were being committed in the Commerce, which I presented to Monseigneur Colbert at the end of August, 1670, the other was a bill of Regulation, which I composed in several chapters, where I proposed dispositions that I saw as just and proper to put a limit all the abuses I mentioned in the first memoire; I presented this bill to Monseigneur Colbert in the following September’.

Right, I am back into hermeneutics. Have you noticed, how long are the sentences in Master Savary’s writing? That was the style of the time, I guess. It survived until the first half of the 19th century, when shorter sentences became definitely the fashion. Did those people, back in the days, have longer breath? Were they able to put more sound between two full stops? Or, maybe, they just have longer and more structured ideas, which they did not feel like truncating? Who knows, they are no longer here to tell us. Anyway, it appears that Master Savary was not really the perfect merchant he wrote about. He had some adventure in the Negoce, but, on the whole, he did not seem to like it. He was more of a bystander to business, who used to have views on business. He was an economist, just as I am. When I was young, I had serious plans for a legal career. In 1989, in Poland, the Big Swing came, everything fell apart, there was not much I could inherit, and so I went into business just in order to survive in the new reality. Doing business was interesting, only I just wasn’t prepared for it, and after fourteen years I decided, just as Master Savary did, to accept a job from a really calm duke. In my case it was a university. Comes the time, comes the calm duke.

Master Savary was an economist, only he did not know he was. The word ‘economist’ comes from the French ‘économiste’, and this was the label put on the followers of Francois Quesnay, the author of ‘The Economic Table’ (French: ‘Tableau économique’), published in 1758, a few years before Adam Smith published his ‘Enquiry Into The Nature and Causes of The Wealth of Nations’. The work by Francois Quesnay was probably among the first piece of macroeconomics officially published, together with ‘The Theory of Taxation’ (French: ‘La Théorie de l’Impôt’) by Marquis de Mirabeau. Initially, the term ‘économiste’ was a bit pejorative and meant some loonies obsessed with numbers. Economics, at the time, the time being the verge of the 18th and the 19th centuries, were ‘political economy’. It was only at the end of the 19th century that any scholar could call himself seriously an economist.

I am an economist, which, due to the work of intellectual titans of the past, is no more equivalent to being a looney obsessed with numbers. Science can help, and this is why I do science.

I am consistently delivering good, almost new science to my readers, and love doing it, and I am working on crowdfunding this activity of mine. As we talk business plans, I remind you that you can download, from the library of my blog, the business plan I prepared for my semi-scientific project Befund  (and you can access the French version as well). You can also get a free e-copy of my book ‘Capitalism and Political Power’ You can support my research by donating directly, any amount you consider appropriate, to my PayPal account. You can also consider going to my Patreon page and become my patron. If you decide so, I will be grateful for suggesting me two things that Patreon suggests me to suggest you. Firstly, what kind of reward would you expect in exchange of supporting me? Secondly, what kind of phases would you like to see in the development of my research, and of the corresponding educational tools?

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[1] Selten, Reinhard. “Reexamination of the perfectness concept for equilibrium points in extensive games.” International journal of game theory 4.1 (1975): 25-55.

[2] Hammerstein, Peter, and Reinhard Selten. “Game theory and evolutionary biology.” Handbook of game theory with economic applications 2 (1994): 929-993.

[3] Sombart, W., 1911-2001, The Jews and Modern Capitalism, translated by M.Epstein, First published 1911, edition 2001 published by Batoche Books Limtied

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