81. What's So Special About Land?

Note: This post is the eighty-first in a series about government and commercial ethics. Click here for the full listing of the series. The first post in the series has more detail on the book 'Systems of Survival' by Jane Jacobs which inspired this series.

In 'Systems of Survival' Jane Jacobs describes what all the occupations that subscribe to the Guardian syndrome have in common:

"It finally struck me. They're all concerned with some aspects of territorial responsibilities. The condition is the work of protecting, acquiring, exploiting , administering or controlling territories.

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Not territory in the abstract. ... Real concrete territory. I suppose we might call this the territorial syndrome. Taken as a whole, it also describes the classic heroic virtues and values."

But this raises the question, what is so special about land, that organizations dedicated to managing it have an entirely different ethical system from commercial organizations?

One thing that differentiates land from the other things we buy and sell is that, as any real estate agent will tell you, they aren't making any more land.

I touched on this earlier, back in this post about how humans were 'cowboys on a spaceship'

Given a finite commodity, all the values in the commercial syndrome which relate to maximization of production aren't particularly useful - in fact they can be counter-productive depending on what purpose they are directed to.

So if you can't make any more land, the only question becomes how to divide the land that does exist. Note that this is a zero-sum game, unlike the positive sum commercial world.

In this zero sum world, gains will come at the expense of someone else's loss and, leaving aside the possibility of mutual enemies for the moment, there is no benefit from working together with someone else, just like how, in the zero sum game of chess, there is nothing to be gained by trying to work with your opponent and little to be gained via trade.

But it's not just that land is finite, there's also the fact that, even without much industry from man being applied, land is quite valuable. At the very least, it keeps one from drowning. Most land can also be used to provide other plants and animals, and sometimes valuable minerals as well.

So with the land being so valuable, and with it being near impossible to make more, whoever holds land will likely be able to make a profit on that ownership simply by renting it out to whoever needs to use it. Economists have a term for when you can make an excess profit because others are unable to compete with you (you can only ever have one piece of land in the same place) and that term is 'rent' or 'economic rent' . Of course the fact the word used is 'rent' reflects the fact that land ownership is typically the most common way in which such an excess is earned.

But why not simply have a market for land, and have people pay whatever price they think the land is worth? The obvious problem, of course, is that someone might decide that it is cheaper to simply take the land, rather than buy it. You can't really hide land or move it somewhere, so once someone decides to take it, it's fight or flight. And as Machiavelli said, 'there is no proportion between one who is armed and one who is unarmed.' But an arms race in which everyone strives to be better armed than everyone else is unproductive because being the 'most powerful' is a relative term. This takes us back to Hobbes, who explained why we needed a single organization in charge of the land that was so powerful, nobody could contest it.

So land is finite, valuable, and can be taken by force, all of which combine to necessitate having someone to defend it.

But maybe that defence service itself could operate according to commercial principles. People could simply hire someone to protect their property. There's no need to abandon the market just because we need to buy some defensive help, right?

There are a few problems with this approach. One is that in conflict there are economies of scale, such that there is a benefit to having a larger force for hire, which means that those groups which are able to form a single united bloc will have an advantage vs. their neighbours. Another problem is that conflict is quite dangerous and history shows that forces working for money have historically performed poorly when matched up against forces that were working for some other 'higher' purpose and thus had a higher morale or willingness to die for the cause. Another problem is how can you prevent the people you hired to protect you from simply turning on you and putting themselves in as dictator over you. Finally, what do you do if someone makes the people defending you a better offer?


Another factor to consider is that network externalities mean that when constructing something that spans territory via a network design, it is efficient to only build one. For example, to build two road networks that don't connect would be highly inefficient. Similarly, most areas only have one water system, one electricity grid and so on. So organizations that span land with a network type structure tend to be monopolies. Some historians speculate that the reason Egypt was one of the first places to develop a centralized government was because constructing an irrigation system is the sort of network based monopoly that works best when organized by one central entity. Whereas competition leads to gains for society in most markets, when it comes to building territorial networks, competition just leads to inefficiency, so an organization that can control an area of a certain scale has an advantage over smaller entities.

Finally, the dynamics of conflict generally work out so that a single contiguous piece of land is more defensible than scattered territories. This is partly due to the network effects described above, and partly due to economies of scale in combat and an increased need to divide one's forces if one is defending multiple pieces of land that are not connected. Of course, this is subject to changes from technology and with the rise of the British Navy, for example, England was able to build a far flung empire of places whose only connection was that they bordered the sea. This dynamic lends itself to territories being made up of a contiguous piece of land governed by a single entity.


So, to summarize, because land is both finite and valuable, it serves as a source of (economic) rent, or profit that can be achieved without work. This unworked for profit is sought after by many, leading to violent conflict. Any particular group can maximize the rent it earns from land when it can minimize destructive conflict within the group and maximize the effectiveness of conflict with enemies in order to expand the amount of land it controls. The economies of scale in combat and the natural monopoly nature of networks lead to groups coalescing into contiguous land blocs for defensive and efficiency purposes.

52. Leviathan

Note: This post is the fifty-second in a series. Click here for the full listing of the series. The first post in the series has more detail on the book 'Systems of Survival' by Jane Jacobs.

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The problem with reading Leviathan, by Thomas Hobbes is that, unlike say the works of say, Weber or Nietzsche, its impossible to find an English translation. Nevertheless, I persevered so that I could write this post.

In Leviathan, Hobbes attempts to build a model of how society should be governed from first principles, in the same way that the newly developing (at the time) field of geometry was able to generate interesting conclusions starting from a seemingly self-evident set of axioms and building from there using logical reasoning.

Hobbes starts with the individual human as his basis and then builds from there based on the characteristics shared by all individuals.

Typically, when reading a book adorned by a cute black and white bird from the southern hemisphere, I make a point of skipping any preamble/introduction and going straight to the text. However, it's worth making an exception in this case for the excellent introduction by C.B. Macpherson who has done a fair bit of interesting work in his own right on ethics and economics. Macpherson makes the point that Hobbes defines power such that power consists of power over other people, each person's power offsets the powers of other people, and there are people who desire more power than others would like them to have¹. It is this dynamic which forces a competition for power and which makes that pursuit of power harmful, in a manner that the pursuit of other things (e.g. food and shelter) is not.

We can see that, in modern terms, what Hobbes was getting at is that power is a positional good, and that, given the internalities and externalities imposed by the search for this positional good, the net result of a competitive pursuit of power is negative. He characterized this eloquently in his description of the state of nature (where there is no 'Leviathan' to prevent people from using force on one another) as a state in which life is 'nasty, brutish and short.'

Given the trouble caused by the pursuit of power in a state of nature, this pursuit must be curtailed by placing all the power in a single source that is so strong, nobody will dare to challenge it (the Leviathan of the title). Hobbes sees civil war as the greatest evil, even more so than tyranny or dictatorship.

It seems to me that Hobbes' argument is really an argument for a single world government. After all, as Hobbes acknowledges, the conflicts between states have the same negative sum character that conflict within a state has. However, with his overriding concern for avoiding civil war and less concern for was between states, Hobbes seems to implicitly accept that government must govern a particular territory. It is one thing, for Hobbes, to have two different governments occupying different territory, but a far worse thing to have two (potential) governments competing within a particular territory. As far as I could tell, he never really delves into why there is such a distinction.

Hobbes imagined that a person (who Hobbes refers to as 'the foole') might see their best course of action to be in agreeing to set up Leviathan if that's what everyone wants, but then still using force when it suits them and they feel the risks of being caught or punished by the state are outweighed by the potential gain. This is similar to David Gauthier's concerns that it made sense for people to make promises, but not necessarily to keep them.

Hobbes counter-argument is as follows,

"He therefore that breaketh his Covenant, and consequently declareth that he thinks he may with reason do so, cannot be received into any Society, that unite themselves for Peace and defence, but by the errour of them that receive him; nor when he is received, be retayned in it, without seeing the danger of their errour; which errours a man cannot reasonably reckon upon as the means of his security; and therefore if he be left, or cast out of Society, he perisheth; and if he live in Society, it is by the errours of other men, which he could not foresee, nor reckon upon; and consequently against the reason of his preservation; and so, as all men that contribute not to his destruction, forbear him onely out of ignorance of what is good for themselves."

Basically, Hobbes is invoking the 'shadow of the future' suggesting that anyone who violates the rules will be expelled from society and therefore suffer more than they might gain from their covenant-breaking. This of course, relies on some assumptions about the government's power to catch and punish covenant-breakers, as well as assumptions about the rationality of potential covenant-breakers.

Another potential puzzle for Hobbes view is how the same people can on the one hand have the foresight to institute a sovereign power to have a monopoly on violence, but on the other hand, have the lack of foresight to get stuck into a violent state of nature if that sovereign power is lacking.

There are at least a couple of answers to this problem:

1) Instituting leviathan doesn't require everyone to go along, it just needs a large enough group, whereas in the state of nature, even a few people who prefer power to peace will cause a chain reaction of violence and vengeance.

2) Hyperbolic discounting means that people can see, from the vantage point when they are setting up leviathan, that peace is preferable to the state of nature, even though when they are in the heat of a conflict they may prefer attack or vengeance for an attack to peace.

For the most part, Hobbes' viewpoint reflects the movement in his time away from older hierarchical notions of status towards a commercial syndrome minded, 'all humans are created equal' view, with Hobbes justifying this on the basis that every human has the capability to kill another, and thus inflict 'infinite' harm upon them, so based on the fact that infinity is the same in all cases, all people are equal on this basis. Macpherson makes the same point in his introduction although he says that Hobbes employs a 'bourgeois mentality' rather than a commercial mindset, but he means the same thing. The commercial mindset is well reflected in Hobbes' rules for how men should behave with respect to one another (a long list of rules that Hobbes says basically amounts to 'do unto others as you would have them do onto you,' - a good commercial syndrome sentiment).

But even with a commercial mindset, Hobbes still saw the need for a single, all-powerful sovereign power that would take on the role of society's guardian. Once instituted, the sovereign could never be replaced (respect for tradition), it could not be usurped (respect for hierarchy), it must be obeyed, it was just for the sovereign to take vengeance (but unjust for anyone else to take vengeance), the sovereign was expected to exert prowess and it was just for it to employ deceit, force or whatever means were necessary to maintain order. Under Hobbes, the (guardian) rules that apply to the sovereign are completely different than the (commercial) rules that apply to everyone else.

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¹ It's interesting that Hobbes has a section of the book tiled 'On Man' which is generally written as if all people are the same, but in his discussion of the pursuit of power he allows that there may be variation in that it is only some people who desire so much power that there is inevitably conflict.