Government as a stationary bandit

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I would call this cynical, except it's economics:

“Consider a roving bandit who roams from village to village, looting village residents. The roving bandit will take as much as he can before moving on to his next target. The bandit gets no advantage from leaving anything behind for the people who are plundered. The roving bandit must continually be on the move to find new targets, and resources are wasted on both sides as the bandit uses force to try to plunder the villagers and the villagers use force to try to repel the bandit.

An alternative strategy would be for the bandit to occupy a location permanently, becoming a stationary bandit, periodically taking resources from those in the village.

The incentives are different for the stationary bandit, who would then want to cultivate the productivity of those he plunders, so there is more to plunder in the future.

Because the income of the stationary bandit comes from the productivity of those under him, the stationary bandit also has an incentive to protect them, both from opportunistic individuals in their own village and from outside predators. It is easy to imagine that a productive village would attract the attention of other predators who might be inclined to attack and plunder the village. So, the stationary bandit has an incentive to protect those who provide the stationary bandit’s income.

It is easier to gain compliance from people when they agree to comply than when they are forced, so the stationary bandit has an incentive to get those under him to view his activities as legitimate: to present himself as a benevolent leader rather than a bandit.

If he can convince citizens to recognize him as a king, and can convince them that it is to their advantage to pay him taxes in exchange for the protection he offers, it will be less costly for him to maintain a system in which citizens view the transfer of resources to him as legitimate taxation rather than plunder.

The stationary bandit has an incentive to establish institutions such that citizens view it as advantageous to transfer resources to the ruler in exchange for protection.

The ruler also has an incentive to produce public goods if they enhance the productivity of citizens, because greater productivity means there is more to tax. And, the ruler has an incentive to place constitutional limits on his power to tax, to maintain incentives for citizens to be productive. If the ruler is perceived as a threat to confiscate everything the citizens have, they will not have much of an incentive to accumulate wealth.

Establishing a council of citizens who must approve any tax increases could work to the mutual advantage of both the ruler and the citizens, making citizens more productive and ultimately tendering more tax revenue from their increased productivity.

If a stationary bandit envisions remaining in place for a long time, he will have an incentive to establish institutions that would be very similar to what citizens might agree to from behind a veil of ignorance. Thus, when thinking about optimal constitutional rules, there may not be that much difference between the types of rules people would voluntarily adopt and those which might be imposed by a conquering group.

This public choice approach to constitutional rules offers an interesting contrast to the public goods theory that economists often use to explain government production.

For example, public goods theory suggests that government produces national defense because it is a public good that would be underprovided in the market.

This public choice approach says that government produces national defense because it benefits those in government by protecting the productivity of those who pay taxes to government. Public goods theory depicts government as a benevolent provider of a good that the selfish private sector will underprovide to themselves.

Are people in government really more benevolent than people in the private sector? This public choice approach depicts the production of national defense as a mutually advantageous exchange in which everyone acts to further their own interests, so is more consistent with the assumptions economists typically assume about individual behavior.” (pp. 131-133).

This is not such a new idea. Razib Khan recounted how:

"During the Mongol conquest of Northern China Genghis Khan reputedly wanted to turn the land that had been the heart of the Middle Kingdom into pasture, first by exterminating the whole population.

Part of the motive was to punish the Chinese for resisting his armies, and part of it was to increase his wealth. One of his advisors, Yelu Chucai, a functionary from the Khitai people, dissuaded him from this path through appealing to his selfishness.

Chinese peasants taxed on their surplus would enrich Genghis Khan far more than enlarging his herds. Rather than focus on primary production, Genghis Khan could sit atop a more complex economic system and extract rents."

Public choice theory is a lot better than the soppier humanities, which assume everyone is endlessly caring and benevolent (and should therefore be punished if they are not). But in starting from the fiction that society is simply a uniform set of individual, selfish, rational agents making more-or-less informed utilitarian choices, it abstracts from the historical evolution of class relations, the conditions of social reproduction, and human nature itself.

That's not to say that under certain localised conditions of stabilised atomisation, it can't be quite accurate and predictive, as János Kornai documented.