Five Second: Fukuyama

A wonderful article on Fukuyama’s book on the history of the state. This excerpt on where the rule of law comes from was particularly interesting to me:

WHY did the Catholic church’s insistence on priestly celibacy in the late 11th century give Europeans an early advantage over other societies in establishing the rule of law? The answer in Francis Fukuyama’s stimulating new book is that celibacy was one of several important reforms, instituted by Pope Gregory VII, which resulted in the development of canon law and the notion that even kings were subject to it. Gregory won everlasting fame by bending Henry IV, the Holy Roman Emperor, to his will, forcing the most powerful man in Europe to do penance before him at Canossa. 

Celibacy was vital in the battle against corruption and rent-seeking within the church, both of which were the typical consequences of patrimony. The reforms gave the church the moral stature to evolve into what Mr Fukuyama describes as “a modern, hierarchical, bureaucratic and law-governed institution” that established its authority for spiritual affairs—and by so doing set the ground rules for the subsequent rise of the secular state.

Fukuyama views the three main pillars of a strong modern state to be a strong state (monopolization of violence), the rule of law, and accountability. He credits China with the creating the first state

However, he did a much worse job in discussing Hayek, whom he claims had a knee-jerk certainty that governments are always wrong. It is the word certainty on which most of the responses have fixated. Easterly puts the case rather better:

Hayek’s view of knowledge was that it was partial and dispersed among many. The market gave individuals the incentives to apply this knowledge, and coordinated the uses of this local knowledge in a way that rewards each of us who knows best about any particular narrow area. ... Government usually lacks both the incentives and the coordination mechanism. In government we don’t know who knows best, so which knowledge wins the argument could often be wrong. …

[Even though democracies will have better incentives and mechanisms] the political feedback mechanisms even under liberty (like majority voting, protesting, freedom of speech, or lobbying) are much cruder and less likely to align individual and social payoffs than the market feedback mechanisms, so one should be cautious about the scope of activities in which government programs will be effective.  …

To sum up,  Hayek’s skepticism about government was NOT based on his certainty, as Fukuyama would have it,  but on his awareness of his ignorance. (and everyone else’s)