A Monday Long Read - One Path to the Fall of Putin

Political movements, by and large, begin with shared values and, if they succeed, end in extraction, clientelism and favour trading. I touched on this in an earlier post, but I thought it was worth revisiting it in a bit more detail.

The journey from shared values to mercenary horse-trading isn’t a particularly surprising trajectory. When a movement starts it is almost always a long shot. People don’t join it because they want a serious shot at power, but because they want to express something about themselves, or because they believe in something so much (and that thing is so different from whatever orthodoxy currently governs politics) that even a long shot feels better than the status quo.

Because the movement is far from power, you don’t need to define exactly what those values mean in practice. The movement can be a broad church – it can contain Mensheviks and Bolsheviks, for example, or people who believe in the ‘socialism’ part of National Socialism, and people who don’t. (These examples are drawn from very clear, and morally reprehensible, historic instances of this trajectory – the trajectory itself, however, is morally neutral. Even morally admirable movements tend to follow it).

The closer you are to the top of the movement, the more these splits might be apparent to you early on, if only in potentia. But in that case you’re likely to think that when it comes down to it and the debate actually matters (at the theoretical future point when you’re in power), your faction stands a good chance of being the one to carry the day. So you keep going along with the movement for now. Not in every case, of course. Some people will just get dispirited early on and leave. If too many do, the movement won’t succeed to see its values degraded, it’ll just fade away.

Over time, however, you’ll have to make harder and harder decisions within that broad church – favouring some values of over others, and perhaps discarding some entirely. This is when people who are already important to your movement will start to get disquieted, and you start to pass the line between shared values and, as it were, shared (or at least mutually served) interests.

Now, you’re having to buy people back in by offering to support their interests, and depending on how much you’ve offended their values their price can be quite high. Not everyone can be bought back in when you’ve offended their values, of course. Even abominable causes have true believers. But enough will be available that gradually you’ll find networks of patronage (in the case of individualism) and clientelism (in the case of large groups of the public) spreading through the organization. Again, this is not wholly novel, such networks are functions of human nature and will be present to some degree in any movement, but they will become increasingly prominent, and take an increasingly large share of the weight in keeping the organization together.

It’s worth noting as well that the people being ‘bought back in’ in this way won’t necessarily be wholly alienated from whatever value set brought them in in the first place. They might be offended on one particular point, perhaps a highly significant point, perhaps one important to them personally (by which I really mean important to their self-image, their story of themselves) but a shrewd unifier will not just offer them some mercenary reward, but will also emphasize all the shared values that still exist. The pay-off is doing the bulk of the work, but the person selling out can tell others (and themselves) that they’ve decided to stick around to support the rest of the agenda.

It is a great advantage of (most) democratic systems that this point – where movements are forced to winnow down their values – happens before they get into power. That’s not to say that some winnowing doesn’t happen afterwards, but long election campaigns (an 18 month run for most presidential candidates in the US; years in opposition for aspiring PMs in the UK, for example) force aspirants to power who might be relying on movements rather than sound policy work to go through a big chunk of this process before they get their hands on the state coffers. That limits them to funding their patronage and clientelism from other, usually less lucrative, sources or to making promises rather than payments.

I’m using the term ‘payments’ loosely, of course. It could be cash payment, appointment to a sinecure, inside information on a bidding process, or looking the other way while you cheat the tax man, among other examples. I am, however, focusing on things that serve your personal interest.

There is a separate (though not wholly unrelated) mechanism whereby you are part of the values trading process. “We can’t follow through on value x, which I know is important to you, but I’m going promote value y, which is I know is also important to you, further up the agenda”. I’m not addressing this mechanism here because, while not wholly beyond reproach, it is not toxic to the body politic in the same way as favouring someone’s personal interests is.

In fact, the ‘long campaign’ of most democracies (much derided but, to my mind, invaluable) actually serves us well by pushing prospective leaders into this kind of discussion when values trading is a better option for them than private-interest trading. Thus we hope to create and propagate a culture where people do not (generally) look to politics for illicit personal enrichment. This is why any hint of illicit personal enrichment of senior politicians being endorsed or tolerated by their party leadership should be looked at very carefully. It is also why in times when a government seems exhausted of values[1], factitious, and weak, we should watch especially carefully for the rise of clientelism and patronage.

Movements that acquire power have to deal with those institutions of power that are not subject to whatever system brought the movement to power. These range from parliamentary processes and authorities to permanent civil servants or the international money markets. If those institutions are filled with corrupt people[2], a movement now in power will find it easier to become extractive itself, and therefore to empower itself with networks of patronage and clientelism. If they are not[3] then the movement will find itself confined. Hopefully if those surrounding organisations are not just non-corrupt but incorruptible the movement will find itself starved of the oxygen of illicit cash and preferments that it needs to transition from a values-bound organization to a fully-fledged, enduring, network of patronage and clientelism.

It is to the great credit of the US system of government that it largely strangled off Trump (a past master of this system, albeit not in the context of top-tier politics). By contrast Putin (likewise a resolute adherent of this system, as least from as far back as his St Petersburg days) prospered.

Almost all parties, when approaching to power in mature liberal democracies, have some characteristics of a movement, by the terms of this blog post. They are often animated by a desire to do real good (as they see it) and content to put that mission ahead of their personal interests (or at least alongside them - in general people aren’t overly keen to become materially worse off as a result of a political career, so either they are earning at a professional level roughly equal to (or in some cases less than) a politician’s salary, they have a second career they believe they can pursue alongside a political career[4], or they have sufficient wealth that their salary is not a telling issue for them.

And, as I have said, the ‘long campaign’ common to many modern democracies forces a lot of the bartering to take place when its policies, not private wealth, that can be traded. Note that through this article I’m talking about people who start as true believers and end up in a web of patronage and extractive kleptocracy. There will also be people who go into politics in order to become extractive, but the healthier the over-all political system is, the fewer these people will be (and hopefully the less successful they’ll be, too).

But as parties age in power they will find themselves coming back to the temptations of patronage and clientelism, even if in ‘lighter’ ways than the full on corruption we might see in systems like Putinism. They will use what could otherwise be legitimate government disbursement programmes to filter money to their party’s marginal seats. They’ll duck and cover to avoid colleagues being sanctioned for being ‘careless’[5] with taxes.

Three things generally govern just how effective the model of patronage and clientelism can be in keeping a movement in power.

The first is the surrounding institutions, as discussed above. The less corruptible the institutions of government, democracy, the courts, finance and the media are, the harder a movement will find it to perform the extractive feats necessary to fund their patronage and clientelism, and the more likely they are to be held accountable for their attempts.

The second is that, oddly at first sight, a lot of them forget about the ‘clientelism’ part of the system. In political science terms, patronage[6] generally means funding illicit rewards and preferments to individuals on a one-to-one basis, whereas clientelism is funneling them to whole swathes of society. A lot of systems that do patronage quite well fail on the clientelism side. The reason for this is actually quite encouraging.

A lot of people have a bit of a double take when they first encounter the idea of clientelism as a form of corruption, especially in a democracy. After all, if you’re giving funding to large enough groups for it to make a difference, you’re probably funding people fairly low down the income spectrum, which is surely a pretty good thing?

Yes it is, mostly. It’s also, despite all the Facebook memes, surprisingly difficult.

Lets start with why it’s only mostly good. Begin with the extreme cases. Some societies are fortunate enough to be rich in diverse identities. These could be ethnic, cultural, or on some other basis. This is prime ground for corrupt clientelism – you can funnel government funding to these groups, consistently and effusively, and you’ll find that not only will some members of the group accept this as a purely transactional thing, happy to vote for whoever enriches their community, you’ll also find that many members of that group start to identify with you. You become ‘their man (almost always a man) in government’.

But you’re also doing two bad things here. First, you’re exacerbating whatever tensions already exist between these groups and other groups in your country. And if there aren’t any existing tensions, you’re probably creating some. You’re likely targeting some of the worst off in society (because that’s where you get the most bang for your buck) which is also where missing out can hurt the most. Of course, this is a good thing for you because anything that heightens inter-tribal conflict also strengthens intra-tribal loyalty, including their loyalty to you.

Second, you’re disbursing funds based on loyalty (or prospective) loyalty to you, not actual value for money, or positive impact. You’re increasing inequality at the lowest levels of society[7], ie where it’s most problematic. Thus you’re slowing overall growth and thus the rise of general prosperity.

So why is this harder than expected? Hard enough that some political bosses in effect forgo it altogether. In fact, this is linked to why it’s not obviously a bad thing. Broadly speaking one function of a good government is redistribution. Some of us might favour equality of opportunity over post-facto distribution of wealth, but that becoming a realistic prospect is so distant I don’t think you can have a definition of good government that doesn’t include distribution of wealth intended to keep people out of absolute poverty. (‘Absolute poverty’, by the way, is not an especially low bar).

So if clientelism is bad because it’s not a particularly fair or effective means of distributing wealth, why is it also hard? Because distributing wealth is hard. National wealth comes from economic productivity. Arguably, in all real cases it comes from taxed economic productivity. Yet most people don’t earn much in excess of what they need to live (for most people this is a calculation they make ‘after tax’, ie they think of their income and any prospective incomes in net not gross terms). Most people don’t work in order to pay more in tax. If you’ve got a quality of life you’re content with from two incomes at 35k pa for example, not everyone will push for promotion or business expansion just for the sake of it. Of course people are motivated by more than money, but those motivations are as likely to push them away from earning more as towards it.

There’s also a fairness issue. People might not think of their salary in gross terms, but if they notice that their tax burden is, say, 50% then questions of fairness are going to kick in. And fairness as a concept is antithetical to rational thought[8].

Finally, salaries aren’t set by government. In general they’re no even set by employees. Mostly they’re set by employers, who want them as low as possible. Employers might want low tax bands (at least for themselves) but they also want low salaries, which means less tax paid in general. If you’re corrupt, big employers are also likely to be part of your patronage network, making you less likely to want to offend them.

So the overall tax take has to be measured. If you’ve got a productive economy and an efficient tax collecting authority then even a relatively measured tax take can provide for effective distribution (the Blair years in general are a good example of this).

But the kind of corruption that accompanies the need for clientelism eventually undermines both the productivity of the economy and the efficiency of state institutions, like tax authorities. In extreme cases governments struggling with this turn to warfare, either to reinvigorate the values-based earlier phase of their movement by contrast to an external enemy opposed to and threatening those values, or by bringing in plunder and wealth from the invaded country. This latter, of course, was the Roman model, but it doesn’t work in most modern contexts. Warfare is extremely expensive and generally not very lucrative. When it is lucrative it’s usually for private companies and individuals who at this stage of the game are probably not paying very much in taxes. In cases as in the Russian invasion of Ukraine, the incentive to oligarch's to support it is as much about the increase in the amount (and reduction in the accountability) of government spending, thus affording more opportunity to transfer state wealth to private individuals, rather than increasing the pot of state wealth.

So in the long run, you end up with a weak tax base, and more and more of your funding for your network of patronage and clientelism comes from illicit sources, which in turns means you need more and more confederates, whose loyalty has to be bought and sustained over time.

Plus clientelism is hard to enforce. Patronage works on one-to-one relationships. Clientelism works on an implicit bargain. At the very most you might have a chain of a dozen contacts all the way down to a ward boss overseeing a community of a few thousand people busily trying to remind them all come election time of who they owe loyalty to. And if you think how many of those ward bosses would be needed to swing an election in a democracy of tens of millions of people, you’re looking at a vast, expensive, and in the final analysis pretty fragile system. Clientelism generally works best where you have strong identarian communities with existing tight community networks and strong leaders who are then willing to become part of the national clientelism network. The Tammany Hall system, an iconic system of clientelist style corruption, prospered in late 19th century New York because of the large swathes of new immigrants with strong community ties, supported on many cases by their strongly felt and well-organized religions.

The third reason why patronage and clientelism systems fail (the first being strong, non-corrupt institutions, and the second being the difficulties of clientelism), is that they require constant maintenance. Only in extreme cases (Putinism, for example) can turncoats – people whose loyalty you can no longer afford, or who decide it’s no longer for sale – be killed outright. And even then you might be trying to kill someone who you have already made rich, thus empowering him to flee to – oh say for example London – and live in relative safety.

Over time a sufficient number of whistle-blowers will expose your regime, driving more and more call for change. And that call for change becomes a value in itself. People of all walks of life, from a wide range of ideologies, will gather behind it. They will become a movement. A movement motivated by the strongly felt, but loosely defined, value of over-throwing your system and installing something else.

Maybe they’ll succeed. And then it’ll be their turn to decide whether they’ll follow this same trajectory.

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[1] I cannot stress enough that, for these purposes, values are values even if we disagree with them. If an entire party is united around the value ‘Eat the poor’, then it is still in the early stage of this process and unlikely to be excessively reliant on patronage and clientelism systems.

[2] Despite my occasional looseness of phrasing, I find it far more helpful in my line of work to think of corruption solely as a characteristic of individuals, not of organisations.

[3] For these purposes ‘corrupt’ means not serving their explicit roles. Eg money markets are not corrupt (for these purposes) if in seeking the best returns for their investors they drive undesirable outcomes for nation states, an individual within a money market organization would be corrupt if they were, for example, willing to buy bonds at a lower rate than serve’s their institutions interests in return for a back-hander from the government in question.

[4] We may consider Geoffrey Cox’s claim (from 2015) that he can provide £820,000 of value to his clients as a barrister while also being an effective MP to be an indictment of either the legal system or his work ethic as an MP, but I’m persuaded he honestly believes it.

[5] From this morning’s Guardian newsletter:

One important point arising from Zahawi’s statement that unpaid tax on a benefit worth more than £20m was viewed by HMRC as “careless and not deliberate” is what exactly that phrase means. While a plain English reading might suggest that it means he simply made an error, Dan Neidle told the BBC that the meaning in tax law is more complicated, and may be a designation settled on by HMRC if it concludes it cannot prove deliberate tax evasion.

“‘Careless’ has a very specific meaning,” he said. “‘Careless’ means that you weren’t just wrong, you’re allowed to get your tax wrong … it works like this: You or I, as long as we instruct a proper adviser, we give that adviser the right information, we follow that adviser’s advice, and we check that final tax return to the best that we’re able to, so long as we do that, even if it was completely wrong … we won’t pay penalties. To pay a 30% penalty, you didn’t do one or more of those things.” [6] There are non-corrupt forms of patronage, but they are outwith the scope of this, now very lengthy, blog post.

[7] A slight caveat here, in case anyone turns this (wow, extremely long!) blog post into a handbook for would-be political bosses – you want to be targeting people near the bottom of the income spectrum, but probably not right at the bottom because you want to be socially engaged enough to be a viable voting block.

[8] See for example the Ultimatum Game from Game Theory. On which I might write a future blog.