You know what the greatest advantage of a democracy is? No, it is not that it gives us the power to elect the right person to power. In my view, the coolest thing about democracy is that it enables us to chuck out the wrong person after five years. <\/p>\n
Democracy is a civilised form of civil war. In a real civil war, the winner can kill the loser – literally, not figuratively. Once the winner emerges victorious, he is more or less obliged to commit a huge massacre to give people a warning that any further rebellion will not be tolerated. That buys him some time – usually more than the five years that democracy gives its rulers. But sooner or later someone will plot against him. If not against him, they will plot against his son who, though he is a weakling, has ascended the throne after his father. <\/p>\n
Now, in a usual democracy, you don’t get to do that. You can, in theory, have a “democracy” where the winner gets to be an absolute ruler for five years, but it would never work. That’s obviously because the winner can still kill the loser and all potential rivals so that there is no one to challenge him five years later. His rivals will know this, so the election campaign will quickly turn into an actual civil war. <\/p>\n
So democracy is meaningless without limited government, which in turn is meaningless without rule of law, and rule of law is meaningless without institutions.<\/i> This post is about institutions, not about democracy.
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\nRule-based institutions go against the grain of human nature, so they are difficult to establish. Human nature is to form hierarchies based on personal loyalty. A feudal structure fulfills that need perfectly. But it is neither scalable nor stable. In a rule-based institution, on the other hand, whose orders you take depends on what powers the rule-book gives whom. The bureacracy is a rule-based institution, the modern army is a rule-based institution, the modern corporation is a rule-based institution. In all these places, the structure is impersonal.<\/i> It does not matter who is occupying the post. What matters is the powers the Rules delegate to that position. <\/p>\n
Of course, I am exaggerating. It is not true that modern institutions are completely impersonal. It is also not true that the feudal code was completely based on personal loyalties, but as generalizations, I think that they are valid. <\/p>\n
My point is, structures based on personal equations do not scale well. They are not a good way to organize large societies. For example, if you replaced traffic signals with an elaborate system where precedence on the road is decided by who is in the car, traffic would slow to a crawl, because everyone has to ascertain everyone else’s status before proceeding. Traffic signals are impersonal. It does not matter who is in the car, but it does matter whether the signal is red or green. <\/p>\n
Likewise, a feudal army tends to be ineffective. The soldier’s loyalty is to his immediate superior, and the immediate superior may suddenly decide to shift his loyalty to the enemy and a big chunk of your army is lost. <\/p>\n
There are conflicts within institutions too, but a rule-based institution has a process<\/em> to manage conflict. You know that if your rival will challenge your authority, it is through a no-confidence motion, not through a midnight raid on your bedchamber, which of course means that you in turn don’t have to raid his<\/i> bedchamber. <\/p>\n Finally, in good <\/i> institutions, the process to select a leader not only is<\/i> fair, but is also seen to be<\/i> fair, which means that even if you may not like the outcome in one case, you will stay on because you believe that the process, being generally fair, will probably give a better result next time.<\/p>\n