People like Zhang and Xu are just small fry. When railway minister Liu Zhijun was arrested in 2011, his charges included having 350 apartments in his name and over $100 million in cash. This is largely because China’s high-speed rail system had presented an unrivaled opportunity for graft. But so do most other aspects of Chinese economic expansion. Though Liu fell from grace, most don’t. In 2012, 160 of China’s wealthiest 1,000 people were members of the Communist Party Congress. Their net worth was $221 billion, about twenty times that of the top 660 officials in all three branches of the government of the United States, a country whose income per capita is over seven times that of China. All of this shouldn’t be completely surprising. Controlling corruption, whether in the bureaucracy or in the education system, requires cooperation from society. The state needs to trust that people will report to it truthfully, and the people need to trust state institutions to the extent that they put their neck on the line by sharing their information. That doesn’t happen under the stern gaze of the Despotic Leviathan.
You might think this is mostly a problem of corruption. Could it be that corruption is tolerated in China despite high state capacity? That interpretation is contradicted not only by the persistent (and only mildly successful) attempts by the Chinese state to rein in corruption, but also by the fact that even beyond corruption, routine state functions do not come easily to the Chinese Leviathan. As we mentioned when discussing Lebanon, making society legible appears to be a primary goal of any self-respecting state. This is doubly true for making the economy legible. Indeed, given the critical role that economic growth plays in the Communist Party’s ability to justify its dominant position in China, understanding and accurately measuring economic activity must be a key objective. But legibility, just like controlling corruption, requires cooperation from society. When cooperation is withheld, problems creep in; will businesses seek shelter in the informal, unregistered sector? Will individuals withhold their information from a state they do not trust? Will bureaucrats manipulate data to get ahead? The answer to all three questions is yes, especially in China. That is why nobody seems to trust national income statistics in China, not even the premier Li Keqiang, who in 2007, before he was promoted to this post, described the country’s national income numbers as “man-made and unreliable.” He suggested eschewing official statistics and looking at electricity consumption, the volume of rail cargo, and bank lending as better gauges of how the economy is doing. So much for the capacity of the Chinese state to make its economy legible.
Shackling the Leviathan: Trust and Verify
The Shackled Leviathan sounds exactly like the sort of state we should all dream of, and one we can trust. But if it is indeed to be a Shackled Leviathan, this trust must have limits. After all, the Leviathan, shackled or not, is Janus-faced, and despotism is in its DNA.
This means that living with the Leviathan is hard work, particularly because there is a natural tendency for it to become more powerful over time. The Leviathan is not itself an agent; when we are talking of the Leviathan, we are typically referring to political elites, such as rulers, politicians, or leaders controlling it, and sometimes to economic elites with a disproportionate influence on it. The majority of these elites, as well as many of those working for the Leviathan, have an interest in expanding the Leviathan’s power. Think of the bureaucrats who are tirelessly working to provide you with public services or to regulate economic activity so that you do not get dominated by a monopoly or by predatory lending practices. Why wouldn’t they want their own power and authority expanded? Think of the politicians who are steering the Leviathan. Why wouldn’t they wish their own sea monster to become even more capable and dominant? What’s more, the more complex our lives become, the more we need conflict resolution, regulation, public services, and protection for our liberties. And yet, the more capable the Leviathan becomes, the harder it is to control. So the more powerful society—meaning the common people, all of us and our organizations and associations—must become in order to control it. This is the Red Queen effect in action.
But there is more to the Red Queen. As we have seen, cooperation with a powerful society can greatly increase the capacity of the state. Once the Leviathan is shackled, society may choose to give it a long leash and allow it to increase its reach so that the state uses its capacity for things that its citizens want and need. It is a strategy of “trust and verify”—trust the state to acquire more powers but at the same time increase your own control over it. When it works, as it has to some degree in the United States and Western Europe, the outcome is an ongoing process of both state and society becoming more powerful, and expanding in a balanced way, so that neither dominates the other. When this fine balance works, the Shackled Leviathan not only ends Warre but also becomes an instrument for the political and social development of society, for the blossoming of civic engagement, institutions, and capabilities, for the dismantling of the cage of norms, and for economic prosperity. But only if we manage to keep it shackled. Only if we succeed in preventing the messy Red Queen effect from getting out of control. No easy feat.
Before we turn to the Shackled Leviathan, it is useful to understand how and why states emerge, how they deal with conflicts in society, and how they transform economic conditions of societies under the Absent Leviathan. That’s where we start in the next chapter.
Chapter 3
WILL TO POWER
The Rise of a Prophet
Muhammad was born in Mecca around 570 CE into a merchant family. Brought up by his uncle, he grew up in the vibrant trading hub that Mecca was in this period. The origins of the city seem to have been tied to the Kaaba, the dense black granite cube that was a sacred place for pre-Islamic local gods and later became the holiest shrine of Islam. During part of the year people came to Mecca on pilgrimage, which turned out to be a great opportunity to engage in commerce. The nascent trading community of the town soon spread far and wide to intermediate more broadly between the Arabian Peninsula and Damascus and the Byzantine and Persian Empires.
But the people who settled Mecca and the neighboring town of Medina, 250 miles to the north (see Map 4), were desert nomads, new to sedentary life. Their societies lacked states and centralized authorities, and like many other stateless societies, they were organized around kinship groups known as clans. Muhammad’s clan was the Hashim, part of the Quraysh tribe. Adjusting to life in the new town around the Kaaba wasn’t easy. The clans were used to migrating with their flocks of camels and goats across hundreds of miles of open desert. There were the potential disputes about access to a water hole or good pasture for the flocks, or any of myriad daily conflicts. But these were usually handled by the norms and traditions of the nomadic tribes, and when that didn’t work, especially for conflict between different groups, they could just go their own separate ways in the sparsely populated peninsula. When this strategy couldn’t solve the disputes, there was retaliation and feud. The basic principle was an eye for an eye, but in some cases it had evolved into a hundred camels for an eye.
Map 4. The Arabian Peninsula: The Origins of Islam and the Saudi State, and the Historic City of Uruk
Life was more complicated around the Kaaba, and not just because of more frequent and varied conflicts that arose when people from different clans settled in the town. The new economic opportunities arising from the pilgrimage and the subsequent spread of trade fostered individualism and generated novel conflicts at the same time as they started to slightly relax the cage of norms and erode previous solidarities and bonds of community that had dominated life in the desert.