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.

...

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.

57. The Prince

As you might have guess by the title, this week's post concerns the book, 'The Prince' by Niccolo Machiavelli. Written in 1513, it consists of advice to those who would be Prince (leader) of a territory.

Machiavelli starts with a discussion of the value of tradition for the Prince, vs. the hazards of innovation. Machiavelli sees this not so much as a question of morals but a practical question - given that subjects prefer tradition to innovation, this is the easier course for the Prince:

"I say at once there are fewer difficulties in holding hereditary states, and those long accustomed to the family of their prince, than new ones; for it is sufficient only not to transgress the customs of his ancestors, and to deal prudently with circumstances as they arise, for a prince of average powers to maintain himself in his state, unless he be deprived of it by some extraordinary and excessive force; and if he should be so deprived of it, whenever anything sinister happens to the usurper, he will regain it."

and later,

"...it ought to be remembered that there is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its success, than to take the lead in the introduction of a new order of things, because the innovator has for enemies all those who have done well under the old conditions, and lukewarm defenders in those who may do well under the new. This coolness arises partly from fear of the opponents, who have the laws on their side, and partly from the incredulity of men, who do not readily believe in new things until they have had a long experience of them. Thus it happens that whenever those who are hostile have the opportunity to attack they do it like partisans, whilst the others defend lukewarmly, in such wise that the prince is endangered along with them."

Machiavelli reserves some of his harshest criticism for the use of mercenaries (a classic case of mixing guardian and commercial virtues) - he sees the use of mercenaries as the primary reason why Italy was unable to defend itself against foreign adversaries:

"...if one holds his state based on these arms, he will stand neither firm nor safe; for they are disunited, ambitious, and without discipline, unfaithful, valiant before friends, cowardly before enemies; they have neither the fear of God nor fidelity to men, and destruction is deferred only so long as the attack is; for in peace one is robbed by them, and in war by the enemy. The fact is, they have no other attraction or reason for keeping the field than a trifle of stipend, which is not sufficient to make them willing to die for you.

They are ready enough to be your soldiers whilst you do not make war, but if war comes they take themselves off or run from the foe; which I should have little trouble to prove, for the ruin of Italy has been caused by nothing else than by resting all her hopes for many years on mercenaries"

On the topic of ethics, Machiavelli seems to have two classes of morals. There is one set of behaviours that is so vile that it cannot be praised, even if it allows the prince to hold on to his territory and his command. Thus Machivelli, describing Agathocles of Syracuse,

"Yet it cannot be called talent to slay fellow-citizens, to deceive friends, to be without faith, without mercy, without religion; such methods may gain empire, but not glory. Still, if the courage of Agathocles in entering into and extricating himself from dangers be considered, together with his greatness of mind in enduring and overcoming hardships, it cannot be seen why he should be esteemed less than the most notable captain.

Nevertheless, his barbarous cruelty and inhumanity with infinite wickedness do not permit him to be celebrated among the most excellent men."

But with respect to other behaviours, Machiavelli takes a different approach suggesting that,

"It is not essential, then, that a Prince should have all the good qualities which I have enumerated above, but it is most essential that he should seem to have them; I will even venture to affirm that if he has and invariably practices them all, they are hurtful, whereas the appearance of having them is useful. Thus , it is well to seem merciful, faithful, humane, religious and upright, and also to be so; but the mind should remain so balanced that were it needful not to be so, you should be able and know how to change to the contrary.

And you are to understand that a Prince, and most of all a new Prince, cannot observe all those rules of conduct in respect whereof men are accounted good, being often forced, in order to preserve his Princedom, to act in opposition to good faith, charity, humanity, and religion."

Machiavelli believes that this course will work out because, "...if a Prince succeeds in establishing and maintaining his authority, the means will always be judged honourable and be approved by everyone."

Having said all that, Machiavelli goes on to clarify that a Prince should avoid at all costs taking those actions which will cause him to be hated by the people, making a distinction between being feared and being hated,

"a prince ought to inspire fear in such a way that, if he does not win love, he avoids hatred; because he can endure very well being feared whilst he is not hated, which will always be as long as he abstains from the property of his citizens and subjects and from their women. But when it is necessary for him to proceed against the life of someone, he must do it on proper justification and for manifest cause, but above all things he must keep his hands off the property of others, because men more quickly forget the death of their father than the loss of their patrimony."

Furthermore, Machiavelli states that, "a Prince is despised when he is seen to be fickle, frivolous, effeminate, pusillanimous, or irresolute."


Generally, Machiavelli's recommendations hew quite well to the Guardian syndrome. He opposes the use of mercenaries which violates the precept of 'shun trading', he acknowledges the value of respect for tradition in Guardian work, he approves of 'deceit for the task' and commends those Princes who 'exert prowess' and those soldiers who are loyal, obedient and respect hierarchy. The one point of disagreement between Machiavelli and the guardian syndrome is that whereas the Guardian syndrome contains the precept, 'dispense largesse', Machiavelli cautions against doing this to excess as it will only lead to the financial ruin of the Princedom, suggesting that a reputation as a miser is something a Prince must put up with in order to be able to run military campaigns without overburdening the populace.