The One Ruler Obsession

I often teach undergraduate law & economics. Sometimes the first paper I assign is to suggest property rules to deal with conflicts regarding asteroids, orbits, and sunlight in the solar system, in the future when there’s substantial activity out there. This feels to students like a complex different situation, and in fact few understand even the basic issues.

Given just two pages to make their case, a large fraction of students (~1/3?) express fear that one person or organization will take over the entire solar system, unless property rules are designed to explicitly prevent that. And a similar fraction suggest the “property rule” of having a single government agency answer all questions. Whatever question or dispute you have, fill out a form, and the agency will decide.

Yet in my lectures I talk a lot about concepts and issues of property rights, but never mention government agency issues or scenarios, nor the scenario of one power taking over everything. And econ undergrads at my school are famous for being relatively libertarian.

I conclude that most people have a strong innate fear of power concentrations, and yet also see the creation of a single central power as an attractive general solution to complicated problems. I’ve seen the same sort of thing with a great many futuristic tech and policy issues. Whatever the question, if it seems complicated, most people are concerned about inequality, especially that it might be taken to the max, and yet they also like the idea of creating a central government-like power to deal with it.

I’ve certainly seen this in concerns about future rampaging robots (= “AI risk”). Many, perhaps most, people express concerns that one AI could take over everything, and many also like the “solution” of one good AI taking over everything.

I recently came across similar reasoning by Frederick Engels back in 1844, in his Outlines of a Critique of Political Economy. Having seen the early industrial revolution, not understanding it well, but fearing where it might lead, Engels claims that the natural outcome is extreme concentration of power. And his solution is to create a different central power (e.g., communism). Of course while there was some increase in inequality and concentration, it wasn’t remotely as bad as Engels feared, except where his words helped to inspire the creation of such concentration. Here is Engels:

Thus, competition sets capital against capital, labour against labour, landed property against landed property; and likewise each of these elements against the other two. In the struggle the stronger wins; and in order to predict the outcome of the struggle, we shall have to investigate the strength of the contestants. First of all, labour is weaker than either landed property or capital, for the worker must work to live, whilst the landowner can live on his rent, and the capitalist on his interest, or, if the need arises, on his capital or on capitalised property in land. The result is that only the very barest necessities, the mere means of subsistence, fall to the lot of labour; whilst the largest part of the products is shared between capital and landed property. Moreover, the stronger worker drives the weaker out of the market, just as larger capital drives out smaller capital, and larger landed property drives out smaller landed property. Practice confirms this conclusion. The advantages which the larger manufacturer and merchant enjoy over the smaller, and the big landowner over the owner of a single acre, are well known. The result is that already under ordinary conditions, in accordance with the law of the stronger, large capital and large landed property swallow small capital and small landed property – i.e., centralisation of property. In crises of trade and agriculture, this centralisation proceeds much more rapidly.

In general large property increases much more rapidly than small property, since a much smaller portion is deducted from its proceeds as property-expenses. This law of the centralisation of private property is as immanent in private property as all the others. The middle classes must increasingly disappear until the world is divided into millionaires and paupers, into large landowners and poor farm labourers. All the laws, all the dividing of landed property, all the possible splitting-up of capital, are of no avail: this result must and will come, unless it is anticipated by a total transformation of social conditions, a fusion of opposed interests, an abolition of private property.

Free competition, the keyword of our present-day economists, is an impossibility. Monopoly at least intended to protect the consumer against fraud, even if it could not in fact do so. The abolition of monopoly, however, opens the door wide to fraud. You say that competition carries with it the remedy for fraud, since no one will buy bad articles. But that means that everyone has to be an expert in every article, which is impossible. Hence the necessity for monopoly, which many articles in fact reveal. Pharmacies, etc., must have a monopoly. And the most important article – money – requires a monopoly most of all. Whenever the circulating medium has ceased to be a state monopoly it has invariably produced a trade crisis; and the English economists, Dr. Wade among them, do concede in this case the necessity for monopoly. But monopoly is no protection against counterfeit money. One can take one’s stand on either side of the question: the one is as difficult as the other. Monopoly produces free competition, and the latter, in turn, produces monopoly. Therefore both must fall, and these difficulties must be resolved through the transcendence of the principle which gives rise to them. (more)