The Dictator's Handbook: Why Bad Behavior is Almost Always Good Politics
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Last annotated on January 10, 2017
Daily we hear of frauds, chicanery, and double-dealing by corporate executives, new lies, thefts, cruelties and even murders perpetrated by government leaders. We cannot help but wonder what flaws of culture, religion, upbringing, or historical circumstance explain the rise of these malevolent despots, greedy Wall Street bankers, and unctuous oil barons.Read more at location 102
Journalists, authors, and academics have endeavored to explain politics through storytelling.Read more at location 109
Equally, we may well wonder: Why are Wall Street executives so politically tone-deaf that they dole out billions in bonuses while plunging the global economy into recession? Why is the leadership of a corporation, on whose shoulders so much responsibility rests, decided by so few people? Why are failed CEOs retained and paid handsomely even as their company’s shareholders lose their shirts?Read more at location 117
We are confident that we would never act like Libya’s Muammar Qaddafi who bombed his own people to keep himself in power. We look at the huge losses suffered under Kenneth Lay’s leadership by Enron’s employees, retirees, and shareholders and think we aren’t like Kenneth Lay.Read more at location 125
The pundits of politics and the nabobs of news have left us ignorant of these rules.Read more at location 128
We’re still surprised by the prevalence of drought-induced food shortages in Africa, 3,500 years after the pharaohs worked out how to store grain. We’re still shocked by the devastation of earthquakes and tsunamis in places like Haiti, Iran, Myanmar, and Sri Lanka, and by the seemingly lesser intensity of such natural disasters in North America and Europe. We’re still troubled by the friendly handshakes and winks exchanged between democratic leaders and the tyrants that they somehow justify empowering.Read more at location 130
all of us must first suspend faith in conventional wisdom. Let logic and evidence be the guideRead more at location 140
Robert Rizzo is a former city manager of the small town of Bell (population about 36,600). Bell, a suburb of Los Angeles, is a poor, mostly Hispanic and Latino town. Per capita income may be as low as $10,000 or as high as $25,000—estimates vary—but either way it is way below both the California and national average.Read more at location 152
Despite its many challenges, Bell consistently outperforms other California communities in keeping violent crime and property crime below average. A cursory glance at Bell’s official website suggests a thriving, happy community brimming over with summer classes, library events, water play, and fun-filled family trips.Read more at location 156
In 2010, Bell’s then-mayor, Oscar Hernandez (later jailed on corruption charges), said the town had been on the verge of bankruptcy in 1993 when Rizzo (also ultimately charged with corruption) was hired. For fifteen consecutive years of Rizzo’s leadership, up until he stepped down in 2010, the city’s budget had been balanced. Hernandez credits Rizzo with making the town solvent and helping to keep it that way.Read more at location 161
Behind the idyllic façade, however, lies a story that embodies how politics really works. You see, Robert Rizzo, hired at $72,000 a year in 1993, and in his job for seventeen years before being forced to step down in the summer of 2010, at the end of his tenure was earning a staggering $787,000 per year.Read more at location 166
almost exactly the return promised by Bernie Madoff, the master Ponzi schemer,Read more at location 170
Robert Rizzo was indeed credited with doing a good job for Bell, but was it really that good?Read more at location 176
Jerry Brown, promised an investigation to find out if any laws had been violated. The implicit message in his action was clear enough: No one would pay a small town city manager nearly $800,000 a year.Read more at location 181
The actual story is one of clever (and reprehensible) political maneuvering implicitly sanctioned by Bell’s votersRead more at location 183
Cities comparable to Bell pay their council members an average of $4,800 a year. But four of Bell’s five council members received close to $100,000 a year through the simple mechanism of being paid not only their (minimal) base council salaries but also nearly $8,000 per month to sit on city agency boards.Read more at location 184
2005 special election to convert Bell from a “general city” to a “charter city.”Read more at location 192
decisions are made in the open daylight in general cities and often in secret, behind closed doors in charter cities.Read more at location 193
The selling point of the change to charter city was to give Bell greater autonomy from decisions by distant state officials.Read more at location 199
special election, associated with no other ballot decisions, attracted fewer than 400 votersRead more at location 204
vast discretion over taxing and spending decisions to a tiny group of peopleRead more at location 207
As of this writing all of the principal players in Bell’s scandal have been jailed, but not for their lavish salaries. As reprehensible as these may have been, it seems they were perfectly legal. No, they were jailed for receiving payments for meetings that allegedly never took place.Read more at location 212
You may well wonder how a little town like Bell could balance its budget—one of Mr. Rizzo’s significant accomplishments—while paying such high salaries.Read more at location 219
Remember, the town’s leaders got to choose not only how to spend money but also how much tax to levy. And did they ever tax their constituents.Read more at location 221
In plain and simple terms, Bell’s property tax was about 50 percent higher than nearby communities. With such high taxes, the city manager and council certainly could pay big salaries and balance the budget,Read more at location 228
In the city, council members are elected, although their election was not contested for many years before 2007.Read more at location 231
election was achieved with supportive votes from only about 13 percent of the registered electorate.Read more at location 236
This goes a long way to explaining the city government’s taxing and spending policies.Read more at location 242
City manager Rizzo had to maintain the council’s confidence to keep his job and they needed his support to keep theirs.Read more at location 244
promote the means to transfer great private rewards in the form of lavish compensation packages to council members.Read more at location 249
First, politics is about getting and keeping political power. It is not about the general welfare of “We, the people.”Read more at location 259
Second, political survival is best assured by depending on few people to attain and retain office.Read more at location 260
Third, when the small group of cronies knows that there is a large pool of people waiting on the sidelines, hoping to replace them in the queue for gorging at the public trough, then the top leadership has great discretion over how revenue is spent and how much to tax.Read more at location 261
Fourth, dependence on a small coalition liberates leaders to tax at high rates, just as was true in Bell.Read more at location 264
One important lesson we will learn is that where politics are concerned, ideology, nationality, and culture don’t matter all that much.Read more at location 275
When addressing politics, we must accustom ourselves to think and speak about the actions and interests of specific, named leaders rather than thinking and talking about fuzzy ideas like the national interest, the common good, and the general welfare.Read more at location 278
The fact is, people like Niccolò Machiavelli, Thomas Hobbes, James Madison, and Charles-Louis de Secondat (that is, Montesquieu), not to forget Plato and Aristotle, thought about government mostly in the narrow context of their times.Read more at location 285
Hobbes sought the best form of government. His search, however, was blinded by his experience of the English civil war, the rise of Cromwell, and his fear of rule by the masses. Fearing the masses, Hobbes saw monarchy as the natural path to order and good governance. Believing in the necessary benevolence of an absolute leader, the Leviathan, he also concluded that, “no king can be rich, nor glorious, nor secure, whose subjects are either poor, or contemptible, or too weak through want, or dissension, to maintain a war against their enemies.”Read more at location 287
Machiavelli, an unemployed politician/civil servant who hoped to become a hired hand of the Medici family—that is, perhaps the Robert Rizzo of his day—wrote The Prince to demonstrate his value as an adviser.Read more at location 292
For Montesquieu, the Enlightenment, the new Cartesian thinking, and the emerging constitutional monarchy of Britain all combined to stimulate his insightful ideas of political checks and balances. Through these checks and balances he hoped to prevent exactly the corruption of public welfareRead more at location 313
the option of forming a charter city was motivated, in theory, exactly by a quest for checks and balancesRead more at location 316
The big questions of how the world ought to be are indeed important. But they are not our focus.Read more at location 328
What are the consequences for leaders and their regimes when a war is lost?Read more at location 343
This question hadn’t been asked because the standard ideas about war and peace were rooted in notions about states, the international system, and balances of power and polarity, and not in leader interests.Read more at location 345
Even the term “international relations” presumes that the subject is about nationsRead more at location 347
The prime mover of interests in any state (or corporation for that matter) is the personRead more at location 356
And what, for a leader, is the “best” way to govern? The answer to how best to govern: however is necessary first to come to power, then to stay in power, and to control as much national (or corporate) revenue as possible all along the way.Read more at location 358
students have called our list of rules to rule by the “Theory of Everything.”Read more at location 384
To understand politics properly, we must modify one assumption in particular: we must stop thinking that leaders can lead unilaterally. No leader is monolithic.Read more at location 397
Consider France’s Louis XIV (1638–1715). Known as the Sun King, Louis reigned as monarch for over seventy years, presiding over the expansion of France and the creation of the modern political state.Read more at location 403
He was certainly one of the preeminent rulers of his or any time. But he didn’t do it alone. The etymology of monarchy may be “rule by one,” but such rule does not, has not, and cannot exist.Read more at location 407
After the death of his father, Louis XIII (1601–1643), Louis rose to the throne when he was but four years old. During the early years actual power resided in the hands of a regent—his mother. Her inner circle helped themselves to France’s wealth, stripping the cupboard bare. By the time Louis assumed actual control over the government in 1661, at the age of twenty-three, the state over which he reigned was nearly bankrupt.Read more at location 413
When debt exceeds the ability to pay, the problem for a leader is not so much that good public works must be cut back, but rather that the incumbent doesn’t have the resources necessary to purchase political loyalty from key backers. Bad economic times in a democracy mean too little money to fund pork-barrel projects that buy political popularity.Read more at location 417
He moved quickly to expand the opportunities (and for a few, the actual power) of new aristocrats, called the noblesse de robe. Together with his chancellor, Michel Le Tellier, he acted to create a professional, relatively meretricious army. In a radical departure from the practice observed by just about all of his neighboring monarchs, Louis opened the doors to officer ranks—even at the highest levels—to make room for many more than the traditional old-guard military aristocrats, the noblesse d’épée. In so doing, Louis was converting his army into a more accessible, politically and militarily competitive organization. Meanwhile, Louis had to do something about the old aristocracy. He was deeply aware of their earlier disloyalty as instigators and backers of the antimonarchy Fronde (a mix of revolution and civil war) at the time of his regency. To neutralize the old aristocracy’s potential threat, he attached them—literally—to his court, compelling them to be physically present in Versailles much of the time. This meant that their prospects of income from the crown depended on how well favored they were by the king.Read more at location 426
Thus he erected a system of “absolute” control whose success depended on the loyalty of the military, the new aristocrats, and on tying the hands of the old aristocrats so that their welfare translated directly into his welfare.Read more at location 437
Louis’s strategy was to replace the “winning coalition” of essential supporters that he inherited with people he could more readily count on. In place of the old guard he brought up and into the inner circle members of the noblesse de robe and even, in the bureaucracy and especially in the military, some commoners.Read more at location 442
Like all leaders, Louis forged a symbiotic relationship with his inner circle.Read more at location 448
For leaders, the political landscape can be broken down into three groups of people: the nominal selectorate, the real selectorate, and the winning coalition. The nominal selectorate includes every person who has at least some legal say in choosing their leader.Read more at location 454
The second stratum of politics consists of the real selectorate. This is the group that actually chooses the leader.Read more at location 462
The most important of these groups is the third, the subset of the real selectorate that makes up a winning coalition. These are the people whose support is essential if a leader is to survive in office.Read more at location 464
In the United States, the voters are the nominal selectorate—interchangeables . As for the real selectorate—influentials—the electors of the electoral college really choose the president (just like the party faithful picked their general secretary back in the USSR), but the electors nowadays are normatively bound to vote the way their state’s voters voted, so they don’t really have much independent clout in practice. In the United States, the nominal selectorate and real selectorate are therefore pretty closely aligned.Read more at location 474
The winning coalition—essentials—in the United States is the smallest bunch of voters, properly distributed among the states, whose support for a candidate translates into a presidential win in the electoral college.Read more at location 479
Looking elsewhere we see that there can be a vast range in the size of the nominal selectorate, the real selectorate, and the winning coalition. Some places, like North Korea, have a mass nominal selectorate in which everyone gets to vote—it’s a joke, of course—a tiny real selectorate who actually pick their leader, and a winning coalition that surely is no more than maybe a couple of hundred people (if that) and without whom even North Korea’s first leader, Kim Il Sung, could have been reduced to ashes.Read more at location 489
Think about the company you work for. Who is your leader? Who are the essentials whose support he or she must have? What individuals, though not essential to your CEO’s power, are nonetheless influential in the governance of the company?Read more at location 501
Governments do not differ in kind. They differ along the dimensions of their selectorates and winning coalitions.Read more at location 516
No question, it is tough to break the habit of talking about democracies and dictatorships as if either of these terms is sufficient to convey the differences across regimes, even though no two “democracies” are alike and neither are any two “dictatorships.”Read more at location 519
Changing the relative size of interchangeables, influentials, and essentials can make a real difference in basic political outcomes.Read more at location 544
As an example, we can look to the seemingly prosaic election of members of San Francisco’s board of supervisors. San Francisco used to elect its board of supervisors in citywide elections. That meant that the selectorate consisted of the city’s voters, and the essentials were the minimum number needed to elect a member to the board. In 1977 the method changed, and at-large, citywide elections were replaced by district voting.Read more at location 545
The policy and candidate preferences of San Francisco residents as a whole were little different between 1975 and 1977—nevertheless in 1975 a candidate named Harvey Milk failed in his bid to be elected to the board, but went on to be elected in 1977 (and tragically assassinated not long after). As Time magazine reported later, Harvey Milk was “the first openly gay man elected to any substantial political office in the history of the planet.”2 What changed in Harvey Milk’s favor between 1975 and 1977 was simple enough. In 1975, he needed broad-based support among San Francisco’s influentials to get elected. He got 52,996 votes. This meant he finished seventh in the election of supervisors, with the top five being elected. Milk did not have enough support, and so he lost. In 1977 he only needed support within the neighborhood from which he ran, the Castro, a dominantly gay area. He was, as he well knew, popular within his district. He received 5,925 votes, giving him a plurality of support with 29.42 percent of the vote in district 5, which placed him first in the 5th Supervisory District contest and so he was elected.Read more at location 551
In a democracy, or any other system where a leader’s critical coalition is excessively large, it becomes too costly to buy loyalty through private rewards. The money has to be spread too thinly.Read more at location 575
dictators, monarchs, military junta leaders, and most CEOs all rely on a smaller set of essentials. As intimated by Machiavelli, it is more efficient for them to govern by spending a chunk of revenue to buy the loyalty of their coalition through private benefits, even though these benefits come at the expense of the larger taxpaying public or millions of small shareholders. Thus small coalitions encourage stable, corrupt, private-goods-oriented regimes.Read more at location 578
those who rule based on a large coalition cannot efficiently sustain themselves in power by focusing on private benefits. Their bloc of essential supporters is too large for that. Since they must sustain themselves by emphasizing public goods more than private rewards, they must also keep tax rates low, relatively speaking.Read more at location 587
But when the coalition of essential backers is small and private goods are an efficient way to stay in power, then the well-being of the broader population falls by the wayside,Read more at location 603
In this setting leaders want to tax heavily, redistributing wealth by taking as much as they can from the poor interchangeables and the disenfranchised,Read more at location 604
For example, a married couple in the United States pays no income tax on the first $17,000 they earn. At that same income, a Chinese couple’s marginal tax rate is 45 percent.Read more at location 606
Obviously, self-interest plays a large role in these equations. We must wonder, therefore, why incumbents don’t take all the revenue they’ve raisedRead more at location 612
Incumbents have a tough job. They need to offer their supporters more than any rival can. While this can be difficult, the logic of politics tells us that incumbents have a huge advantage over rivals, especially when office holders rely on relatively few peopleRead more at location 622
This explains why, from the October 1917 Revolution through to Gorbachev’s reforms in the late 1980s, only one Soviet leader, Nikita Khrushchev, was successfully deposed in a coup. All the other Soviet leaders died of old age or infirmity. Khrushchev failed to deliver what he promised to his cronies.Read more at location 625
Lest there be doubt that those who share the risks of coming to power often are then thrown aside—or worse—let us reflect on the all-too-typical case of the backers of Fidel Castro’s revolution in Cuba. Of the twenty-one ministers appointed by Castro in January 1959, immediately after the success of his revolution, twelve had resigned or had been ousted by the end of the year. Four more were removed in 1960 as Castro further consolidated his hold on power. These people, once among Fidel’s closest, most intimate backers, ultimately faced the two big exes of politics. For the luckier among them, divorce from Castro came in the form of exile. For others, it meant execution. This includes even Castro’s most famous fellow revolutionary, Che Guevara.Read more at location 640
In a very real sense Che followed in the shadows of Frank Pais, Camilo Cienfuegos, Huber Matos, and Humberto Sori Marin [all close backers of Castro during the revolution]. Like them, he was viewed by Castro as a ‘competitor’ for powerRead more at location 650
Political transitions are filled with examples of supporters who help a leader to power only to be replaced.Read more at location 656
If a small bloc of backers is needed and it can be drawn from a large pool of potential supporters (as in the small coalition needed in places like Zimbabwe, North Korea, or Afghanistan), then the incumbent doesn’t need to spend a huge proportion of the regime’s revenue to buy the coalition’s loyalty.Read more at location 659
Rule 1: Keep your winning coalition as small as possible. A small coalition allows a leader to rely on very few people to stay in power. Fewer essentials equals more control and contributes to more discretion over expenditures.Read more at location 678
Rule 2: Keep your nominal selectorate as large as possible. Maintain a large selectorate of interchangeables and you can easily replace any troublemakers in your coalition, influentials and essentials alike. After all, a large selectorate permits a big supply of substituteRead more at location 681
Rule 3: Control the flow of revenue. It’s always better for a ruler to determine who eats than it is to have a larger pie from which the people can feed themselves. The most effective cash flow for leaders is one that makes lots of people poor and redistributes money to keep select people—their supporters—wealthy.Read more at location 686
Rule 4: Pay your key supporters just enough to keep them loyal. Remember, your backers would rather be you than be dependent on you. Your big advantage over them is that you know where the money is and they don’t.Read more at location 690
Rule 5: Don’t take money out of your supporter’s pockets to make the people’s lives better.Read more at location 695
As we’ll see throughout the chapters to follow, a democratic leader does indeed have a tougher time maintaining her position while looting her country and siphoning off funds.Read more at location 704
Why, for example, does Congress gerrymander districts? Precisely because of Rule 1: Keep the coalition as small as possible. Why do some political parties favor immigration? Rule 2: Expand the set of interchangeables. Why are there so many battles over the tax code? Rule 3: Take control of the sources of revenue. Why do Democrats spend so much of that tax money on welfare and social programs? Or why on earth do we have earmarks? Rule 4: Reward your essentials at all costs.Read more at location 709
Just like autocrats and tyrants, leaders of democratic nations follow these rules because they, like every other leader, want to get power and keep it.Read more at location 715
The problem is that doing what is best for the people can be awfully bad for staying in power.Read more at location 2457
we next explore the use of private rewards as the means to survive in power.Read more at location 2470
we will see that Lord Acton’s adage, “Power tends to corrupt, absolute power corrupts absolutely,” holdsRead more at location 2472
The causal ties run both ways: power leads to corruption and corruption leads to power.Read more at location 2474
anyone reluctant to be a brute will not last long if everyone knows he is unprepared to engageRead more at location 2482
if they don’t pay their backers to do terrible things, they can be pretty confident that those cronies will be bought off,Read more at location 2484
Genghis Khan (1162–1227) understood this principle. If he came across a town that did not immediately surrender to him, he killed everyone that lived there, and then made sure the next town knew he had done so.Read more at location 2485
They worked out that things would be better for them by giving up, turning their wealth over to him, and accepting that the Mongols would then pass through,Read more at location 2487
True, he doesn’t have the greatest reputation in the West (although he is revered in his homeland of Mongolia), but he most assuredly was a successful leader.Read more at location 2489
It is fair to say that England’s Henry V has a better reputation than Genghis Khan.1 His Saint Crispin’s day speech in Shakespeare’s play, Henry V, is received even by the modern reader with passion and admiration. We sometimes forget that Henry was capable of brutality.Read more at location 2491
Shakespeare had him announce, in a properly brutal leader’s terms, what he would do if the town’s governor did not surrender: If I begin the battery once again, I will not leave the half-achieved Harfleur Till in her ashes she lie buried. The gates of mercy shall be all shut up, And the flesh’d soldier, rough and hard of heart, In liberty of bloody hand shall range With conscience wide as hell, mowing like grass Your fresh-fair virgins and your flowering infants.... What say you? will you yield, and this avoid, Or, guilty in defence, be thus destroy’d? 2 Fortunately for Harfleur, on hearing Henry’s words, the governor surrendered.Read more at location 2494
The most powerful leaders in history, people like Genghis Khan, Henry V, or Russia’s Catherine the Great, tend to be autocrats beholden to only a small coalition.Read more at location 2501
