Polluting the talent pool
Posted by aogSaturday, 22 January 2005 at 12:11 TrackBack Ping URL

On the BBC last night was a report on Mafia violence in Naples, Italy. Apparently the centralized control structure has broken down and there are now a number of smaller gangs shooting it out for control of the money from the illegal drug trade.

This got me thinking about organized crime and cultural tipping points. In the USA, retail crime like this is generally the province of losers, people who can’t make it in legal economy. For competent and super-competent people, the legal economy provides a much better place in which to exercise their talents for their own benefit. There are always exceptions, of course, but clearly in the USA almost all of the human capital goes in to legal enterprises. This helps keep crime from becoming a serious threat to civilized society because the latter is supported by far more of the competent citizens.

However, in a society that’s outside of the Core it is quite possible that for many of the talented, criminal activity provides a better scope for one’s talents. This will tend to weaken civil society, making crime even more attractive (or equivalently legal activity less). It seems that there could well be a tipping point where a government becomes literally incapable of maintaining control because the other side has the better talent pool. The more I see of government collapses the more it seems that it’s not because underlings refuse to obey orders, but that they can’t understand the orders or how to implement them.

While this kind of thing can be the result of general poverty, it is just as commonly the result of over-regulation (something Hernando de Soto has explored very well). I think it’s one reason socialism inevitably veers in to repression if it doesn’t collapse first. It’s about relative attraction, so if the government can make illegal activity sufficiently dangerous then it can keep it under control, sort of (the USSR is a classic case of this). It’s also why putting a patina of democracy on top of a stifling legal system doesn’t work for long (e.g., Haiti).

I wonder now if perhaps this is becoming clearer in general and is one reason that the Left is now opposed to spreading liberal democracy, as it’s clear that to be successful such expansion must also entail relatively greater economic freedom as well.