Polycentricity is Way Better Than “Monarchy.”
About Curtis Yarvin’s NYT Interview
Ten days ago, the New York Times published a filmed interview with the obscure alt-right thinker Curtis Yarvin. Unsurprisingly, the interview has attracted quite some attention. It puts under the spotlight the thoughts of someone who, I bet, was unknown by the large majority of the NYT’s readers. As I’ve been working a bit on the authoritarian turn of libertarians recently, I already came across Yarvin’s name and some writings, but the interview was my first full exposure to his thinking.
Commentators seem to agree that Yarvin’s arguments are weak, if not non-existent. The fact that the NYT offered him an interview is of course a sign that times have changed but it also asks questions about the way the “market for ideas” works. Listening to the interview, it is obvious that the journalist doesn’t agree with Yarvin’s ideas and even finds them insane. Still, he failed to challenge them and was not able to push Yarvin to expose his thesis in such detail that its weakness would become obvious. Fair enough, this is an interview, not a debate, and the job of the interviewer is not to engage in the refutation of the interviewee’s views but rather to help their expression. Nonetheless, watching the interview gave me a sense of oddness. My intellectual nature is such that I tend to be attracted by weird, provocative ideas that are way off the lines of the mainstream. My job as an academic is in part to confront these ideas, deal with them, and sort them out, keeping only those that are relevant. Yarvin’s ideas belong to this category but I fear that the NYT interview gives them too much credit without putting them under critical scrutiny. There are and there will be many written critiques published, but none of them will achieve the same audience as the NYT. The NYT did Yarvin a great favor giving him such a tribune and contributing to the spreading of his ideas. Sure, most of the NYT readers – mostly center-left educated people – will not buy them, but even if 5 or even 1 percent of them are somehow convinced, that would already be a massive gain of exposure for Yarvin compared to his – until now – quasi anonymity.
The Tower of Babel, by Pieter Brugel the Elder (1563)
Anyway, I want to comment on Yarvin’s main and provocative claim, i.e., that we would be better off being governed by a “monarch.” Before commenting on it, it’s first required to decipher what it means. In the interview but also in his writings (at least those I’ve given a glance at), Yarvin uses “monarch,” “CEO,” and “dictator” interchangeably. This is problematic because these are three different things. A monarch needs not to be a dictator – he’s not in a parliamentary constitutional monarchy, for instance. What singles out a monarchy as a political system is the power transmission mechanism, i.e., hereditary succession.[1] There are some dictatorships where power is transmitted along these lines (e.g., North Korea) but many of them have different mechanisms (e.g., China) or even have none (e.g., Russia). CEOs generally don’t behave as dictators – their power is limited by the law and the firm’s governance system and most of the time are appointed by the owners, through the board.
Judging by the examples that Yarvin uses, such as California governed by Apple’s CEO, I take it that what he means is really that we would be better off if we were governed by CEOs and, more broadly, under the kind of corporate governance systems of big companies. This has absolutely nothing to do with monarchism or even dictatorship. A company has a governance system of its own, neither a dictatorship nor a democracy, which are categories that apply to different political units.
Now that this clarification is made, what’s wrong with Yarvin’s idea? The first and maybe the most obvious is that a firm and a society are two different social/political units that pursue different objectives. What are the objectives of companies? To address consumers’ wants, to make profits and, more fundamentally (as Yarvin puts it himself during the interview) to grow the value of shares owned by shareholders. If you interpret citizens as “shareholders,” you could say that the objective of society is the same. The analogy is however problematic, if only because citizens pursue very different goals, do not value the same things, expect different things from the political system ruling their society, and so on. The analogy holds best if you take a company as a system of stakeholders, but then the case for viewing the CEO as a “dictator,” is even weaker, and that kills the whole point of Yarvin’s argument.
That the analogy fails is relevant because a company is a planning system. Now, most of us are familiar with Hayek’s argument (made in chapter 5 of The Road to Serfdom) that planning and democracy are contradictory:[2]
“It is the price of democracy that the possibilities of conscious control are restricted to the fields where true agreement exists and that in some fields things must be left to chance. But in a society which for its functioning depends on central planning this control cannot be made dependent on a majority’s being able to agree; it will often be necessary that the will of a small minority be imposed upon the people, because this minority will be the largest group able to agree among themselves on the question at issue… Our point, however, is not that dictatorship must inevitably extirpate freedom but rather that planning leads to dictatorship because dictatorship is the most effective instrument of coercion and the enforcement of ideals and, as such, essential if central planning on a large scale is to be possible.”
The relationship between planning and dictatorship may explain why Yarvin merges CEOs and dictators. If that is the case, then the argument is really weak. First, the track-record of planning and dictatorship is just pretty bad, especially if we look at the outcomes for the populations, not for the dictators. It’s bad because, as Hayek reckons, planning means imposing uniform values on everybody and thus curtailing people’s freedom. It’s also bad because planners lack the required information to coordinate everyone’s plans. Planning is feasible and efficient on a lower scale. A standard economic argument can easily show, however, that beyond some point, other forms of social coordination are better. Second, the planning and “dictatorship” that one may find in a firm cannot be compared with the one that Yarvin would want us to adopt at the social level. Nobody is forced to own a share of a firm or even to work for it. If a shareholder or an employee is not satisfied with the CEO’s decisions, they still can exit. Exit options are far more constrained at the social level. Third, as I noted above, the CEO of a firm is submitted to various forms of authority and control. A CEO is controlled by the board and, indirectly, by the shareholders. This is a more akin to, but not identical with a democracy, where executive officials in a democracy are controlled by citizens through elections and the separation of power. The governance structure of a company is neither a dictatorship nor a democracy and cannot be transposed at the social level easily. The point is that either Yarvin means that he wants us to submit to a dictator, and then he fails to offer any good argument for that; or he really means that states should be run by and as companies, but he is pretty confused about the kind of governance structure that this involves and its efficiency at such large scales.
In relation to this last point, Alex Tabarrok at Marginal Revolution makes a series of good remarks regarding the fact that what makes a firm efficient is not the imaginary extraordinary skills of CEOs nor even the superiority of their governance structure, but rather the fact that they are embedded in a competitive market system. This is market competition that forces firms to make decisions that satisfy consumers’ preferences at the lowest cost, innovate, and ultimately work for the benefit of all, including the shareholders.[3] Yarvin’s mistake is akin to the survivor bias. By definition, we only see firms successful enough to survive in competitive markets. However, for one Apple or Tesla, how many companies went bankrupt because of incapable CEOs or just bad luck? In a way, market competition reveals luck and skill only ex-post, while at the social level, we cannot afford the luxury of putting our fate into the hands of a random CEO who is more likely to be of the “bad” type than the good one.
There is another point in Tabarrok’s post that I find less convincing, however. Tabarrok draws the familiar analogy between markets and democracy:
“Markets do hold lessons about governance, but Yarvin draws the wrong conclusions. Democracy, not monarchy, is the political system most analogous to capitalism. As Mises observed, “The market is a democracy in which every penny gives a right to vote.” The analogy works both ways: voting in a democracy mirrors spending in a market. Both systems empower individuals—consumers or voters—to shape outcomes, whether by determining market success or selecting leaders.”
If I understand him well, Tabarrok’s point is that because of this analogy, if one considers the market system to be the best economic system, then one should view democracy as the best political system. I’m not convinced by this argument. Besides the fact that taking consumers’ and voters’ preferences as given is a dangerous simplification that gives the illusion that consumers in a market and voters in a democracy are fully sovereign, there are important disanalogies. Democratic choices impose conformity. If 51% of voters cast their ballot for me and 49% for you, I’ll be elected and will enjoy a legitimate authority over the electorate. Quite the contrary, the fact that I decide to buy a Samsung smartphone doesn’t force you to buy an Apple one. Democracy applies to decision-making that requires unanimity by conformity, while market decisions entail unanimity without conformity.
This leads me to my last remark. I think the best way to answer Yarvin’s confused arguments is just to point out the virtues of polycentricity, i.e. a system of governance with partially independent “centers of decision” competing against each other. A market economy is a polycentric system in this very sense. The real political analog is therefore not a democracy but a polycentric polity where different political units compete to attract citizens by offering public goods or other valuable features. In a polycentric political system, citizens are able to “vote with their feet” at a relatively low cost, thus recreating a kind of competition that is similar to the one in a market system. Interestingly, political units need not be democratic, at least as long as citizens are free to leave for another unit. Maybe some citizens will opt for a unit that is governed by a “CEO” as Yarvin would like us to do.
Federalist polities like the U.S. or the E.U. only approximate the ideal of polycentricity and there is a range of concerns that indicate that this ideal might be unfeasible.[4] This is however where to look at to improve collective decision-making, rather than wasting time on fantasies such as “monarchist” societies govern by “CEOs.”
[1] Admittedly, this is not completely true. There have been elective monarchies, the most significant being the Polish-Lithuanian commonwealth. This is however an historical exception.
[2] F. A. Hayek, The Road to Serfdom: Text and Documents--The Definitive Edition, New edition (Chicago: University of Chicago Press, 2007), p. 109-10.
[3] Of course, this is an idyllic picture. This is how things are supposed to work in a market economy, however.
[4] A good discussion of polycentric systems is Paul D. Aligica and Vlad Tarko, “Polycentricity: From Polanyi to Ostrom, and Beyond,” Governance 25, no. 2 (2012): 237–62. For a book-length treatment, see Julian F. Müller, Political Pluralism, Disagreement and Justice (Routledge, 2020).