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The Dictator's Handbook

Why Bad Behavior Is Almost Always Good Politics

Bruce Bueno de Mesquita and Alastair Smith

Reports of political or business leaders behaving badly are always written in terms of character flaws of individuals involved. Which leaves us free to believe that we would behave differently in the same circumstances.

The rules: First, Politics is about getting and keeping power. It is not about the welfare of the general populace. Second, political survival is best assured by depending on a few cronies, so dictators are in a far better position to stay in office than are democrats.

When people say things like "The United States should ..." or "the American people want...." or "China's government should ...." don't understand politics. Think and speak about the actions and interests of specific leaders rather than think and talk about fuzzy ideas like national interest and common good.

Tempting to sir around and pontificate about how world should be, but nobody cares what you think. Easy to tell others how they should behave, but nobody listens to sermons. If you want to improve the world, first understand how it works and why. Once you understand why people do what they do, you can work out how you can make it in their interest to do better things.

Need to realize that no leader is monolithic. Nobody can do exactly what he wants. Nobody can govern alone.

The first step to understanding politics is to see where the money goes. In a democracy it is too costly to buy loyalty through private rewards. The money has to be spread too thinly. So governments tend to spend on policies that improve general welfare. But for dictators and monarchs, it is more efficient to buy loyalty from a small group of power brokers.

To be successful dictator have to make sure you never run out of money. The Russian Revolution is often explained through ideas of marxism and class warfare. But in reality, the revolutionaries were able to storm the Winter Palace in 1917 because the army didn't stop them. They didn't stop them because they hadn't been paid by Czar Nicholas. He had run out of money to pay them because he had banned vodka, the tax on which provided a third of state revenue. (He banned it because he thought sober soldiers would be better fighters).

Autocrats use the tax system to overtax everybody (ie raise tax levels to stage where people don't think it's worth trying to earn) and then to pass some of that back in the form of subsides to chosen groups. Democratic governments do much the same.

The wealthiest man in Russia, and the wealthiest man in China, are both in prison. In 2004 Mikhail Khordorkovsky was richest man in Russia and sixteenth richest man in the world, by virtue of owning Yukos oil company. But jailed for tax evasion, a crime for which cd probably convict everyone in Russia. Chinese counterpart Huang Guangyu, who started (from a street handcart) the largest electrical retailer in China, and the richest man in China. Jailed for bribery, again a crime impossible to avoid in doing business in China. But basic crime of each man was that they didn't support the government.

The 'resource curse'. Things like oil revenues could provide the resources to fix social problems of poverty, education, health and roads. But it actually creates political incentives to make them far worse. The dictator seizes control of the asset and auctions it to the companies which will hand over the biggest royalty check. He then distributes part of the bounty to the few men he needs to keep him in power. To make sure the general populace can't organize to rebel, it makes sense to keep them as poor and ignorant as possible. A state with mineral riches is unlikely to become a democracy. It's only when you rely on taxes for your revenue that you have to rule for the benefit of the tax-payers/voters. Perversely, instead of giving foreign aid, Western governments could promote democracy by allowing the price of oil to go up, thus reducing demand, and so forcing dictators to rely partly on taxes and consequent democracy. More books on Mind

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