A Cronyism Dilemma

A friend of mine related that he had begun to contemplate retirement.  He wanted to teach about another 10 years or so and then thought about opening a small barbershop.  He reasoned that, having spent almost the entirety of his teaching career in one small town, he would hypothetically know a large percentage of the population.  The barber shop need not be a scheme to make his fortune, so much as a pleasant way to stay connected to the townspeople.

He did some research and to his horror discovered that between the mandated schooling, permitting, and licensing requirements forced upon one by Pennsylvania, he would be in the red $20,000 before he plunked down his first rent check on the property.

All this just to have “permission” from the state to cut hair.

He abandoned his retirement plans.

Often we think of regulations as the little guy limiting the power of the big guy.  But sometimes wealthy companies are the ones who favor regulations because they are the only ones who can afford it.  Regulations can serve as a way to limit competition.  This kind of “crony-capitalism” is possibly an extreme example, yet many have noted the vast increases recently in the number of jobs that need state permits, licenses, and so on.  In these polarized political times, this is an issue Republicans and Democrats could unite on.  Republicans could talk about fostering individual initiative.  Democrats could talk about limiting the reach of big corporations.  It’s a win-win for both sides.  One problem is that these regulations come largely at the state level and not the federal level.  Few people pay much attention to state politics anymore (including myself), and so creating pressure for change would require more patience and diligence.

I thought about this issue while reading the “Aristocrats and Semi-Aristocrats” chapter in R.G. Starr’s Economic and Social Growth in Early Greece.  He mentions that the city-state system got its beginnings when aristocrats came together to try and combine their power.  Of course, this same city-state system would eventually significantly limit the power of the aristocracy in Greece.  This seems counter-intuitive. Why did this happen?

Some see an “aristocracy” in the age that Homer describes.  Starr rightly disagrees.  Certainly one can see a social hierarchy in The Iliad, but not I think, an aristocracy in the sense the word usually carries.  True, Odysseus was king of Ithaca and had some men bound to serve him militarily like medieval lords.  Odysseus tried to escape the Trojan War by pretending to be insane.  It was not, however, that fact that he plowed land that gave him away, but that he would not plow over his son.  Odysseus was a farmer in ways that a typical aristocrat never would have dreamed.

By “aristocracy” we mean an established code of behavior and dress that sets one apart from the rest of the population.  Without some kind of population concentration, one cannot have an aristocracy in the truest sense of the word.  This concentration allows for more accentuation of difference.  In Odysseus’ world you have him as king and then everyone else.  But, bring aristocrats together and you can have stratified layers–“Aristocrats and Semi-Aristocrats.”

The initial coming together of aristocrats naturally did increase their power, as Athens’ literally “Draconian” law code evidences (the name comes from an aristocrat named Draco).  But shortly after this apparent victory their power began to erode, eventually ending up with a fairly radical democracy a century and a half after Draco.

Many reasons exist for this shift, I’m sure.  I feel that one of them has to do with the nature of aristocratic stratification.  Distinguishing oneself by birth has never been quite satisfactory in almost any aristocratic society.  Certainly birth alone never quite worked for the Greeks.  Their ideals called for achieving glory for oneself via striving and competition.  Naturally, these aristocrats would seek for allies in this competitive world, even including the “average Joe.”

But be careful, aristocrats.  The average Joe’s outnumber you, and they eventually took over the competition and established the possibility of “arete” for all.  Something similar happened in Rome.  From about 500-200 B.C. an aristocracy largely ran Rome quite effectively by most measures.  Again, the story has complexity, but the aristocracy began to decline when their competitiveness no longer had a foreign outlet.  Their competition against each other naturally led to their enlistment of the commoners for allies.  A vast network of clients & patrons formed.  By the time Octavian triumphed about 100 years after this process began in earnest, the aristocracy had essentially killed themselves off in fratricidal warfare–a war made possible in part by their enlistment of the common man.

We assume that Rome’s emperors continued aristocratic dominance.  But the Emperors, much like the early Roman kings, tended to side with the “people” and rule in their name.  Rome’s aristocracy led the revolution that exiled the Tarquin kings in their early history.  The worst of Rome’s emperors, like Caligula and Nero, did many of their worst deeds to the senatorial class.  Of course many others abused their power in various ways.  Ending the power of the aristocracy meant the creation of, in the end, an even great power.

Such are the dilemmas of politics.

The decline of the Greek aristocracy did not lead to the kind of absolute rule Rome experienced.  But . . . without the healthy tension between democratic and aristocratic ideas that existed in the time of Pericles, Athenian democracy acquired a kind of absolute power of its own in the form of its laws.  The death of Socrates serves as ‘Exhibit A’ of this transition.

For the sake of my friend and many others like him, I hope for an end to crony-capitalism.  As to what power we will need to dislodge it, I cannot say.  As to whether or not the trade-off will be worth it . . . that too we cannot say for sure.

Such are the dilemmas of politics.