SADIE’S post on Iceland and the Fatal Conceit

SADIE submitted the following comment and link to one of my earlier posts, which merits its own discussion:

Iceland is drawing up a new constitution
(they’re currently using a revised Danish version)

The constitutional assembly will be made up of 25 to 31 delegates, the final number to be determined by a gender and equality ratio.

It will be made up of regular citizens elected by direct personal voting.

Anyone is eligible to stand for election, with the exceptions of the president, lawmakers and the committee appointed to organize the assembly.

They will use material from project earlier this year in which 1,000 randomly chosen Icelanders — aged 18-89 — offered their views on what should be in the constitution.

523 people are in the running. Truck drivers, university professors, lawyers, journalists and computer geeks are all among the candidates. All have been given equal air time on Icelandic radio to make their platforms known.

This is interesting to me, in light of DQ’s early comments regarding the appeal of socialism: Iceland is a tiny country, more like a small town. Its population of 300,000 is uniquely homogenous. On a trip to Iceland a number of years ago, my host pointed out Iceland’s president, seated in his car parked at the curb, reading a newspaper. More like a mayor, really. People would walk up to him and share their concerns of the day.

I submit that, in a small town, it is easier to govern in a socialistic manner whereby the “state” represents and is accountable for the electorate’s well-being. Those in need can be looked after by and held accountable to their neighbors. Those that fail to contribute can be shunned or penalized. Can this work in large, more diversified countries?

One of Friedrich Hayek’s other memorable publications (after Road to Serfdom) was The Fatal Conceit: the Errors of Socialism , in which one of the arguments he made was that socialism reflects an ingrained longing in people for the perceived simplicity and interdependency of small communities (villages or shtetls) , that have defined most of recorded human experience.

In small communities, decisions can be made by popular vote and it is easier thereby to achieve consensus. In large, diverse societies, consensus is much more difficult to achieve and government dictates must more often be imposed by force.

So, along comes Lichtenstein’s Prince Hans-Adam II, monarch of an even more homogenous (and very capitalist, with the world’s highest GDP) country /village of 35,000 people, introducing his new book, The State of the Third Millenium, as profiled in the very excellent National Review’s “Uncommon Knowledge” interview series hosted by Peter Robinson. If you aren’t yet familiar with the “Uncommon Knowledge” interviews, I highly recommend this series!

In this interview, Prince Hans-Adam II promotes the idea that societies like the U.S. or the EU have simply become too big to govern and that we should consider a decentralization of governance to more local levels where the diversity of preferences can better be accommodated. In states such as Massachusetts or Vermont, where there is a strong preference for socialism, the states can govern themselves as socialist communities whereas people are free to move to and assemble in more capitalist, free-market states such as New Hampshire. Let the best model win!

I confess to a certain appeal to this model: what if the Federal government was able to dismantle all of our social welfare programs and distribute available monies to states based on populations (like Congressional seats) to utilize as they they saw fit, based on more local needs and preferences? Wisconsin might opt to apply such resources to education, whereas New York might apply them to social welfare payments. Ditto with regard to the relationship between states and communities: why should the State dictate education instead of the local communities that know best what the needs of their students would be? We are a highly mobile society and people would have an option to change their local societies from within or move.

The Federal government, meanwhile, would be best left to concentrate on those roles that it was originally empowered to pursue, such as defense or negotiation of foreign treaties.

Is there merit to this? How could it work? I see the appeal in such a system but have trouble discerning all its implications.

For example, how could such a model accommodate the virtually certain bankruptcies of states such as California, New York and Illinois (not a matter of “if” but “when”)? Is it fair that people can feed off the benefits of socialist systems in California and simply pick-up stakes and move away to rich, capitalist states such as Texas and Arizona and let the surviving residents of their former homes absorb the penalty of their demise (while corrupting the voting bodies of their new homes with the same failed ideas from whence they left)?

Your thoughts?

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  • Don Quixote

    If the current social welfare programs were really dismantled then the money would never go to the federal government to distribute, which would reduce overhead and avoid a potential source of corruption.

    I’m not sure how the program would work, though.  For example, social security has been paid to the federal government by people from all over the country, who have then retired in large numbers to a relatively few states.  Forcing those states to suddenly pick up the full burden of paying social security to those retirees would be grossly unfair, both to those states and to the retirees themselves.  The states have made themseves attractive to the retirees, and the retirees have flocked there, because the money coming from the federal government enriched those states.  Radically changing that system now would result in chaos and probably force many retirees to move again, quite a bait-and-shift burden to impose on a group that may well be old, ailing, and not easily able to move.

    California, and probably some other states, are going to go bankrupt if not bailed out anyway.  I’m moving out of here as soon as it is practical for me to do so and I’m sure many others will do so as well.  But, given its decades of self-destructive voting, including its election of Boxer, Brown, et al, in the face of the Republican tidal wave this month, California deserves whatever it gets.   

  • Danny Lemieux

    So, DQ…are you saying decentralization would not work under any circumstances, some circumstances, in a gradual versus immediate basis…?

  • Don Quixote

    In some circumstances, but we need to take account of the fact that people have made life-changing decisions based on the current realities.  Imposition of radical new changes to those realities, especially ones that no one was even discussing when the decisions were made, would be grossly unfair to those people.  We need to consider all of the consequences of any radical change, including the unintended ones. 

    I’m also not completely convinced that systemic changes are needed.  What is lacking is the will of the people to control themselves and their leaders.  Without that will, no systemic change will succeed and, quote possibly, no systemic change will be approved.  How, for example, would you “sell” your idea to the American public as a whole?  Personally, I can’t see the public “buying” it. 

  • David Foster

    “decentralization of governance to more local levels”…the Confederate general Porter Alexander (he was Lee’s artillery commander at Gettysburg), who later became a railroad president, said in his memoir that the doctrine of state’s rights made sense prior to the steamboat, the railroad, and the telegraph–but afterwards, not so much.
    Federalism continues to have advantages, and there are certainly things that could usefully be devolved to the state/local levels…but there are limits. State regulation of aviation, for example, would destroy the industry in short order.

  • Oldflyer

    All we really need to do to define the relationships between local and federal authority is return to our own Constitution.  The relationships are  laid out pretty clearly.
    To cite the example above; the Federal government has the constitutional authority  to regulate aviation. It is inter-state commerce.  Unfortunately, the basic and sensible concept has been twisted out of all proportion.
    I do not accept that Socialism works better in smaller communities.  Iceland is an economic disaster.  For many years, during the Cold War era, they were propped up with income from the very large U.S. military presence.  They loved the dollars, but resented the heck out of the source; and often took it out on our folks. In recent years the chickens have come home to roost.  Chicks are roosting in Ireland.  Greece the same.  Scandinavian countries feeling the same pinch.
    Some of our more socialistic states enjoy the luxury of huge federal support.  If they want to practice Socialism, let them do it with their own nickle.  I don’t want any part of Socialism/Statism, at any level.

  • Danny Lemieux

    I agree with you regarding the examples you gave, DQ, and the Constitution does give the Federal Government a role in promoting interstate commerce, but does the Federal Government need to be involved in local environmental regulation, home building codes or education?

  • Ymarsakar

    Is there merit to this? How could it work? I see the appeal in such a system but have trouble discerning all its implications.
    What do you mean Danny. That is, in fact, the exact same principles behind the US Constitution and the Founding Father’s Declaration of Independence.
    They are the roots, in fact. In fact, the Confederation was too loosely organized and did not have a unified defense command or funding system, so they had to centralize it further to make it work for even 13 colonies. Our problem is that we have too much centralization and king makers in DC.

  • Danny Lemieux

    I agree with you YM. To DQ’s point, how can we transition back to those principles in a way that minimizes the harm and turmoil of the transition.

  • Bill Smith

    The only times I’m aware of when socialism “works” are when it is imposed on a previously prosperous, capitalist society off of whose inertia, and stored wealth it is able to feed for a while until the inevitable crash.
    Our own Pilgrims showed how quickly that crash will come when Socialism is imposed upon a wilderness.
    OldFlyer is right. If we simply started adhering to The Constitution bailouts would cease, because they are blatantly unconstitutional. People would be free to take up a collection for states forced to stew in their own juices, but no public money could be spent.
    Free Enterprise, entrepreneurism, innovative charitable concepts, and more would all spring forth more rapidly than we can now conceive, because it’s been so long since we’ve been truly free. These days, we call the cops on kids’ lemonade stands, for G-d’s sake!
    But Freedom has not been killed. It just lies dormant, ready to spring forth when it sees the sun, and gets a bit of water.

  • Oldflyer

    DQ, I am not sure I follow your thread.  I don’t see retirees flocking to states because the particular state has made itself attractive.
    I see them flocking to Florida, Arizona, & Texas because of: a). favorable weather for old bones, and b).  at least two of those states are not going to  tax their income to finance give-away programs.  They used to flock to California, but I don’t think so now.
    As an aging retired couple my wife and I have been contemplating a move to the Socialist Republic of California for proximity to family.  Maybe we are different from the average retirees, but truth be told, a move to California is unpalatable for the just the reasons discussed here.  We are too comfortably fixed to feast at the socialist table; but not well enough off to ignore the financial consequences.  Their confiscatory tendencies, which contributes to the excessive cost of living is scary.  We would have to diminish our life-style for the privilege of living there.  The Socialistic states are attractive only to the habitual consumers of government; or to those who are so damn rich that they don’t care.  (However, many of the latter, like Rush Limbaugh, have been voting out of them with their feet to escape just such governmental looting.)  We know that business has caught on to the cost of doing business in socialistic states, and they are running, not walking, to the exit.

  • Ymarsakar

    To DQ’s point, how can we transition back to those principles in a way that minimizes the harm and turmoil of the transition.
    Well, given our observations of the Left, we now know how NOT to do it. How Not to do is to bypass, ignore, and do loopholes around the US Constitution. If they want socialism or money distribution, they should by God actually have a constitutional attempt to amend the Constitution, rather than implementing their plan the “ninja” way.
    Conservatives, however, are loath to do anything to change the Constitution because… well, they’re conservative, darou.
    But they may no longer have that luxury. You are facing the Left now. Sit around for too long and they’re going to take over this country, lock stock and barrel. Without proactive initiative and taking the fight to them, before they get charged up and blow out with a full offensive campaign, not much hope of pushing them back into the sea.
    How many Obamas can America take, really? People waiting on the Left to do something, then charging in to try to stop them, will never win this war. However many attempts you stop on the part of the Left, they’re just going to come back in time with another plan, another idea, another way to con the system. Get rid of Obama, Kerry, BYRD, KENNEDY, and all the rest, and guess what? A bunch of new billionaire and millionaire robber barons will replace them in good order.
    As we see with 2nd Amendment issues in DC and Chicago, the US Constitution is the only real limiter standing in their way. Sure, they’ll try to ignore it, but if the price is a Chicago and a DC vs all the other cities in America that actually preserves 2nd Amendment protections, then it’s a price American can pay. America cannot, however, pay the price of a Left doing things like nationalizing healthcare, banks, and businesses. The Bill of Rights has taken the Left decades to subvert. If the Constitution isn’t bolstered, the Left will take it down entirely.
    This is just like doing counter-insurgency. In fact, it’s both COIN and insurgency on the Tea Party’s part.
    But Freedom has not been killed. It just lies dormant, ready to spring forth when it sees the sun, and gets a bit of water.
    or to use an old quote,

    The tree of liberty must be refreshed from time to time with the blood of patriots and tyrants.


    Danny, what caught my attention in the article were the words direct voting. The importance of mid-term elections speak to that very point and we (the ones who actually vote) acknowledged that fact in each of our local/state elections.  The Tea Party candidates came as close to direct choice that Iceland seeks to address.
    The 61% who shrugged it off, well…that stat is worthy of a fuller discussion.
    I’ll make one brief observational comment: Several generations raised on instant gratification and the ‘me’ derangement syndrome remain disengaged and near sighted, without a vision for themselves, let alone their children or grandchildren.
    Perhaps the most significant point about voter turnout in 2010 is how many voters didn’t vote. Some 38 percent of eligible voters didn’t vote in 2008 and this November and this year that figure rose to 61 percent.
    Compared with 2008, voting dropped off this year particularly among pro-Democratic groups:
    • Young voters were down by 55 percent.
    • African-Americans were down by 43 percent.
    • Hispanics were down by 40 percent.

    Read more:

  • Don Quixote

    Oldflyer, I think your comments on California’s taxes made my point.  Some states realize the benefits of having seniors move there and structure their tax rates accordingly.  Others (California) depend on their good weather and hope for the best.  Of course the ones who have good weather and favorable tax policies attract the most retirees.

  • Danny Lemieux

    “Compared with 2008, voting dropped off this year particularly among pro-Democratic groups:”
    SADIE, that’s a good thing, right?
    I can think of many reasons why eligible voters might not vote. For instance:
    1) They feel that they are ignorant on the issues
    2) They feel as if their party let them down but they can’t bring themselves to vote for the other party
    3) They don’t believe that they can make a difference
    4) They hate all parties and the political system
    I am OK with only people who believe that they have a vested interest in the system voting. Let the Democrats chase the eligible voters who couldn’t care less about voting. I think they make a mistake thinking that such people can easily be led by the nose to vote for the Democrat slate.


    Danny, to put it bluntly – What the hell were they voting for 2008 – American Idol?
    Guess, I am feeling a tad cranky and persecuted as a senior. I am sure you have heard that we’re living longer and bleeding the system. And, NO, I don’t want to do an engine search and add up the dollars spent on the ‘other’ pesky social welfare programs costs. I just want the big mouths, who don’t vote to shut up and get out of the way of those of us that do give a damn.


  • Danny Lemieux

    Be patient, SADIE…I think that it is already happening. This last election was only the first round. I sense in my conversations with people that a critical mass is beginning to realize that we are in big Doo Doo.
    One of the reasons that I think the failure of Republicans in California and Illinois (my state) was a very good thing is that these states are likely to be the first two to collapse financially and they will serve as case studies of Leftwing bankruptcy (in all senses of the word). I want all fingers to be pointing to the Democrats that got us there, when it happens. By contrast, we will have the success stories of very red-state Texas, Florida, Georgia and the Carolinas to look to as sterling contrasts to these two basket cases.
    In addition, we will have the collapse of the EURO welfare state as well. If things go as anticipated, Democrat voters will have plenty of excuses to stay home next election.
    Granted, it will take many years to repair the damage they have done.

  • Bookworm

    Regarding socialism and small communities, the smaller the community, the more homogeneous it is.  This (plus the fact that America paid for Europe’s military) is the reason that European countries for so many years had a reasonable facsimile of functional socialism:  everyone was pulling more or less in the same harness.

    It also helps if you’re a small country with low expectations.  You’ve touched on something I’ve been thinking about for a while, Danny, which is a lesson I got from a history professor back at UC Berkeley.  (A non-Marxist, good history professor).  He pointed out that the Industrial Revolution had stopped in England long before WWI pretty much ended England’s ascendancy.  The peculiarity about England, as compared to America, was that when workers reached a certain level, they simply stopped desiring more.  That is, unlike Americans, they didn’t continue to hustle for a bigger house, more gadgets, fancier clothes, etc.  And it is that desire for more, of course, that keeps us working hard, innovating, changing to ever better jobs, educating our children, etc.  The brake was the class system.  Americans always feel they can do better.  In England, as Alan Jay Lerner said,

    An Englishman's way of speaking
    Absolutely classifies him
    The moment he talks
    He makes some other Englishmen despise him

    America’s size and social mobility are the antithesis of a teeny little European country that has citizens marching to the same tune, and locked into their social roles.  And even with those “perfect” conditions for socialism, as OldFlyer points out, it’s still falling apart.  Ultimately, socialism cannot pay for itself.  The one good thing about trying it on a small scale, whether it’s a small town or a small country is that, when it fails, fewer go down with the ship.

  • Ymarsakar

    What the hell were they voting for 2008 – American Idol?
    American Satan, not Idol.

    For example, how could such a model accommodate the virtually certain bankruptcies of states such as California, New York and Illinois (not a matter of “if” but “when”)?
    How can you go bankrupt if you have a balanced budget amendment like Georgia has? You know that certain states can’t take in more than they spend because it’s part of the state constitution, right. I don’t think California has such. So why should states that do, pay for a state that wants to spend itself into debt? How is that de-centralized.

  • Don Quixote

    California does have a balanced budget requirement, but the politicians fudge the numbers to get around it.

  • David Foster

    Book…”the Industrial Revolution had stopped in England long before WWI pretty much ended England’s ascendancy.  The peculiarity about England, as compared to America, was that when workers reached a certain level, they simply stopped desiring more.”
    Also, members of the upper classes generally looked down on business and especially on industry. A career in government service was viewed as higher status than a career as a banker, which in turn was viewed as *much* higher status than running or even owning a manufacturing company.
    The overemphasis on education-based credentials is attempting to create a similar set of counterincentives in the US. People from a lower-class environment will be kept in their place by pointless requirements for college degrees and especially for advanced degrees; people from upper-class environments are being directed toward often-useless “nonprofit” jobs when they’re not going into investment banking.

  • binadaat

    In small communities, decisions can be made by popular vote and it is easier thereby to achieve consensus.

    in reality, not likely! or at least not amongst jews! It is possible to make the decisions, but the consensus part, forget it. We were 50 families and there was such strife and acrimony over almost every issue that came to a vote. We left the community after 7 years. It had doubled in size and situation hadn’t changed.  I think the closer you are to decision making process, the higher your expectations of having an impact or being able to influence things is. When you don’t succeed to make a point the frustration and sense of injustice is even greater.

  • Ymarsakar

    California does have a balanced budget requirement, but the politicians fudge the numbers to get around it.
    A law that isn’t enforced, does not exist. That’s my thinking. So no, California does not have a balanced budget amendment. When it enforces such, then I will say it “has it”. Until then, it doesn’t.
    This is something the Left has taken advantage of. Possession is 9/10ths of the law is an old saying, is it not. If California were run all by Republicans, you’d have corruption but not Democrat corruption, which is a different level of corruption entirely.
    The primary difference between the Democrat party and the Republican party is not ideology or politics but their preference over methods. The Democrats primarily prefer the methods of insurgents, terrorists, and criminals. It’s not just crime but organized crime. There’s a difference in magnitude. Republicans primarily prefer the methods of the status quo, socialites, philanthropists, and basically community leadership. Not of all it is positive in fact. Much of it, such as philanthropy and community leadership, were hijacked by Communists in the 1930s and onward for anti-American purposes. Then after 1950s, philanthropy was funneled to Arab terrorist causes. And the payers went blissfully on their luxurious yachts and cruise liners not knowing a thing. Ignorance is bliss, for those that aren’t getting killed by terrorists, at least.
    If you want to subvert the US Constitution or a state’s constitution, elect more Democrats. In a few decades, you’ll see some results once they achieve “critical mass”.
    When you don’t succeed to make a point the frustration and sense of injustice is even greater.
    That’s why centralizing power in such situations makes sense. It gives various factions a single person to attempt to influence, rather than play dagger games everywhere. A strong leader that is feared/trusted/respected by various factions will be able to make those factions get along. Whereas if those factions just “debated” each other, you’d get something crazy as a result.

  • Oldflyer

    Binadaat, your experience is testimony for a representative democracy, or constitutional republic.  Evidence once again of the genius of our Framers.
    Clearly, the downside to this form of governance is allowing the people’s representatives to become so entrenched that they believe that they are no longer answerable.  It is our fault if we let that happen.
    I believe that in our particular system the other problem is letting one leg of the triad become dominant.  Recently, it  seems that due to neglect by the other two,  the  Federal Judiciary has accreted power that was never intended; and is in fact anti-democratic.
    One more editorial comment.  As justification for more centralization we often hear that government must be able to respond quickly, or more efficiently.  Frankly, I am not particularly concerned that it have those capabilities.  Except in the area of national defense, there seems to me to be a lot more danger from a pro-active and energetic government, than from a lethargic one.