Anantonese Journal of Economics and Theory

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Kalistan's Banking Industry
Highly Nationalistic, But with Many Missed Opportunities

Melissa Sharpe, Ph.D., Dept of Economics, Kaliburg Polytechnic University
Jamal Sledge, Ph.D, Dept of Finance and Accounting, Vrassa Duchy University

December 5665

Introduction
In the modern era, nothing runs without consideration of finances. The ability to lend money, the ability to save money, and the ability to invest money with an expectation of a return on investment is the primary consideration on nearly every major economic decisions, all the way from obtaining title to a home to building a major piece of public infrastructure. Everyone makes fiscal and financial considerations whether they are private individuals, business men and women or cities, Duchies and the Empire itself. Those decisions often require a modern banking system, which tends to be a source of available capital that it loans out, and collects at interest.

In most liberal economies, the banking system is expected to be free. It has what is known as fiduciary responsibility to its members. Whether those members are the shareholders, all of whom expect to make money off their investments, or the customers, who purchase shares of the bank stock with their deposits, that money is expected to be safe and secure, withdrawable on demand, and almost always earning interest for those who trust their money with the institution of the bank. In addition, it should be available to all who wish to invest in it, and abide by the ethic of return on investment alone.

As with many things, however, the imperatives of nationalism in Kalistan have led Kalistani banks down a different route. Though our banks are indeed open to all investors for investment, for the most part, they have been almost entirely ignored by foreign nationals, who prefer to put their money in banks in other countries, which are less secured against failure or expropriation, whose records are far less often times publicly available, and who are privately owned entities where the largest part of the earnings of the institution return to only the major shareholders.

The key difference is risk: Private banks in foreign nations tolerate a lot more risk than Kalistani banks do, in terms of capital reserve requirements (most banks require their banks to hold between 6 and 15 percent of their capitalization in reserve, meaning they can be freer in lending than Kalistani Reserve requirements allow Kalistani Banks to be at between 40 and 60 percent), as well as more freedom regarding who can invest in them, what the bank can lend money for, and the ability of the bank to mitigate its own risk by selling its debt to private individuals.

A short survey of the Kalistani system shows that there are three different types of banks in Kalistan, all of which promote national interests rather than the interests of finance capital. Holding off discussion of House Ananto's unique role in Kalistan's economy, this Nation has the National Bank System, which is the dominant financial institution in the Empire, the Commercial Banking system (Including the ForIn Bank) and the national Association of Small Banks. Each system plays a different role in the lives of Kalistanis, but most importantly, they exist, whether intentionally or not, for the benefit of Kalistani Nation and People first, and this, as a result makes them unattractive to foreign investors, who tend to not really care one way or another about Kalistani fiscal health. It also makes them unconducive to foreign investment.

The Nature of Kalistan's Financial System provides Kalistan maximum protection against inflation and deflation, foreign manipulation of the Kalsitani Economy, and loss of control of Kalistan's money supply, but it also works to put a brake on Kalistan's investment community, and limits our ability as a nation to increase our influence abroad because investments in ventures that offer no return on investment at all, such as virtually any reconstruction aid, are not possible through the banking structure of the Empire. We lack the ability to simply throw money into a black hole, and the result is, of course, we do not get to have a seat at the table when other nations run their affairs the way the profligate FDI sending nations can.

The National Bank System
The National Bank System (NBS) is a system of banks which act as the primary fiscal house for the Empire, all duchies, free cities and towns in the Empire of Ananto and Kalistan. The NBS is the functional arm of the Imperial Bank of Kalistan. The NBS is the home of the Treasury of the Empire. It maintains the National Account, pays all bills for the Empire, borrows and lends money for all government projects, and is the responsible fiscal agent of the Empire. It also receives all taxes, including payroll taxes paid by employers and workers, collects taxes from the sale of property and stock, and funds the bureaucracy.

There are a number of other things the National Bank does which underpins the entire Public Sector. It Prints and soaks up money based on Board of Governors directives. It controls trade in and out of the Nation and manages the Annual Trade Ledger. It pays all workers in Kalistan (because payroll is nationalized). It holds the Annual surplus and manages its dispersal. It serves as escrow for all public owned housing across the Empire. And it serves as the issuer and collector of bonds. There are multiple other functions that the National Banks System does, even while it also receives deposits from individuals and provides a small interest on those accounts. The National Bank System is crucial to not only preventing inflation, but also unemployment. Its ledger is 100 percent transparent at all times, and is available for inspection at any time. It operates branches in each Free City, as well as several town across the Empire and is one of the largest bureaucracies in the entire Empire.

The philosophical function of the NBS is to act as the Centralized Bank, and then some. It is responsible for backing Kalistani currency with transparent legers to provide a hybrid between a specie backed currency and a completely opaque fiat currency. In doing so it brings in some of the benefits of crypto currency (it transparency and public accountability) and some of the flexibility of a fiat currency, while allowing the exchange rate to float within a very narrow spectrum, driven primarily by monetary supply. The NBS is not-for profit, and it serves the Empire as THE premier financial institution to allow solid footing for the National Economy. And it does not fail its biennial audits. It has a requirement that 85% of its total deposits must be made available at any time, which make obtaining a loan from the Central Bank practically impossible, and the bank is forbidden from investing in stocks or securities that are label either moderate or high risk stocks, ensuring that any investment will be in low yield, safe stocks that have a low potential of not being able to repay the investment. The NBS is better thought of as the National Treasury.

Commercial Banks
The Commercial Banks, the Bank of Suldanor and the Bank of Kalistan, in Sulari and Kaliburg respectively. These banks operate more like private banks in that the provide loans to private actors to build things, improve things and etc. Both are specifically designed to provide capital for individuals and corporations to either start businesses or grow businesses--In the charter the mission of these banks is explicitly that they exist to enable stock speculating, currency speculating and other higher risk, higher reward investments and gambles by private institutional actors, and shall be insulated from the Kalistani economy as a whole. Consequently, though capitalization is underwritten by the NBS, the banks can never go broke because the banks can always get their money back from investors who make bad bets. Risk therefore is transferred directly onto those who borrow the money for speculation. When they win their bets, the Banks collect its money back, but when they lose, the individual who made the bad bet loses, and eventually repays his or her loan through the NBS.

Though the commercial banks appear to work more like investment banks, lending individuals and collectives money to speculate in the economy, there are some important caveats: The Banks themselves are forbidden by Charter from charging more than 4% on the loans they make to Kalistanis. While this may seem great for borrowers, it necessarily bottlenecks the amount of capital each of the Commercial Banks has on hand to lend (Commercial Banks overseas often charge what is known as prime rate, set by their central bank, plus some percentage on top of that based on the kind of loan, which guarantees that the bank can offset defaults. Kalistani lenders do not have those options and so they are far more conservative with their capitalization than capitalist Banks in other nations.)

Each Bank has National buy in as part of their capitalization, and therefore all operations are overseen by their own individual Boards, plus an Ombudsman from the NBS, to ensure that best practices are being followed in the interest of bank customers as well as its investors, and cannot, by charter do what is necessarily best for the company independent of those two constituencies. Foreign Investors can also invest in the Commercial Banks, and this was originally intended to help them bring in more money, but it was not meant to be. Consequently, a new Foreign Investment Bank was founded to complement the Commercial Banks. The ForIn Bank is a bank that is specifically for Foreign Investors.

The ForIn Bank is designed to provide foreigners a place to essentially offshore their money. It does not loan money at all. It is specifically a vault with a ledger that is secret and immune from summons at all levels, foreign and domestic. This aims to provide those who wish to shield their money from local taxes a place to do so, but also, it aims to provide black market actors and unsavory types a similar opportunity. As a result, the ForIn Bank utilizes "industry best practices" with regard to capital reserves, but it does not lend money. Deposits are insured up to ₭500,000 Imperial against bank failure, but a bank which never lends is protected against bank failure.

The bank makes its money on transaction fees: All deposits must be denominated in Kalistani Imperial Rubles. Withdraws may occur in any foreign currency, but there is a 1% transaction fee on all withdrawals in foreign currency. And as there is capital controls, 1% is less than the Cambios, but Kalistani Rubles, to date, still lack convertibility, so it does a person no good to attempt to leave the nation with Kalistani Rubles. The result is, the millions of microtransfers that occur daily have made the bank profitable. There is no telling how many foreigners have their money in Kalistan, but the ForIn Bank provides an excellent opportunity for foreigners who want to hide their money in Kalistan's tax haven, or to invest in Kalistani industry and business: Providing a withdrawal slip from ForIn Bank is as good as legal tender for foreign investors.

Association of Small Banks
While the NBS and the Commercial Banks hold by far the largest capitalization in the Empire, the vast majority of savers and loans come from one of the hundred or more members of the Association of Small Banks. This network of local credit unions, which are member owned, and who are governed by publicly elected Trustees, tend to give personal and small business accounts far better interest than any of the banks listed above. These banks are independent and often follow best banking practices for all deposits, withdrawals, investments and loans.

Deposits are guaranteed up to ₭50,000 Imperial against bank failure, which sadly happens in the private sector far more often than in the larger banks. But Credit Unions tend to provide what is in effect microloans (often less than ₭10,000) for anything ranging from home improvement, to starting a small business to buying a car. Additionally people can use the bank for writing drafts (also known as checks), which are essentially letters of credit redeemable at any ASB location, for individual savings, financial literacy for youth, and for longer term investments which provide a higher rate of return than a normal checking account, but with lower liquidity.

All ASB unions are privately owned, and except for the deposit insurance by the NBS, have no interference outside of normal business regulations. The ASBs are meant as non-profit institutions, which means their fiduciary responsibilities are to their depositors, as member-owners of the bank. The ASBs do not accept external investment in the form of stock, but all capitalization and all loans are backed by member deposits. If there is a short fall in deposits, borrowers are at risk of having their loans called early, and refusal or inability to repay loans may end up in bankruptcy. The potential for bad loans has naturally contributed to a very conservative attitude toward lending even at this direct level of interaction, and significant collateral and or downpayment is almost always required for all but the smallest personal loans. Nor can the banks easily borrow money: More frequently they will offer bonds to their members at preferential interest rates to raise additional capital.

House Ananto and Private Investment
All of these institutions, because of the constraints build into them, tend to be very conservative in lending and investment. These institutions more often tend to be functional actors that help the Empire maintain an even balance if deposits and withdrawals, and help the Empire maintain its fixation on ZPG policies. They are therefore not incredibly inviting toward foreign investment in anyway: Foreigners tend to view bank finance as a business unto itself. But Kalistanis have long been suspicious of banks as capitalist institutions, and long ago greatly restricted the power of banks to act in the interest of their investors, curtailing them to serve instead to support the National Interest, which is a stable currency, no inflation or deflation and fiat currency.

There are additional sources of investment quite apart from the Banking system. The largest single investor in the Empire is the holding company known as Miramar. It is the front operation for House Ananto. It is a public corporation, which is audited annually and publicly, and operates as a money management firm within the Empire and Abroad. It maintains accounts totaling nearly ₭1 trillion Imperial Rubles globally. Miramar invests broadly and spends much of its capital earning returns for the Royal Family, making the Royal Family and the Empress herself, one of the wealthiest families in the world. But it does not regularly invest in speculative ventures. Its largest investments are in capital development: Where others invest in a company, Miramar invests in an entire sector. It is often the earliest Institutional investor in any growth industry.

Additional institutional investors are available across Kalistan, and much of the private sector is capitalized by these institutional players. Nearly all are Kalistani investors. Much of the capital comes from various sources, whether it be success in previous business, success in farming or success in birth, or success in some other field. These institutional investors of this class tend to be associated with one of the commercial banks, who lend money for speculative ventures, and are the primary drivers of new economic expansion in the Empire at an individual enterprise level.

Conclusion
The Kalistani Banking Industry is extremely conservative in its outlook. This attitude aiming at safety and orientation toward the status quo literally permeates nearly every institution across the Empire. The result is that Kalistan frequently loses out to other, more liberal nations when it comes time to invest in foreign ventures which are the modern political proxy for international power in modern Terra. When a nation puts out a call for foreign investment to build a new dam or an airport or to fund reconstruction from a war, Kalistan always brings less to the table, it always comes later than other bids, and any bids from Kalistani banks is frequently rejected.

But additionally, because of the nature of Kalistan's banking system, which prioritizes balance of accounts, there are rarely opportunities for Kalistan to invest in other nations, because those investments are often without any potential of return on investment. Return from reconstruction aid, for example, is rarely ever realized by the investor--It is in fact simply lost to the investor. By Kalistani standards, reconstruction aid is almost always a terrible investment as it will simply never be recouped. Most speculative investment in foreign investment is similarly far riskier than Kalistan's safe waters conscious investment structure will ever permit.

As a result, we will see nations with more liberal FDI outflow laws always gain power abroad more often than Kalistan. The trade off is that Kalistan is always able to pay its debts, both private and public, without significantly threatening the National Account in anyway. Consequently, Kalistan is far better able to weather nearly every financial storm that winds its way through the liberal world. Kalistan's financial system is guided by National Interest, the chief being immunity to the ravages of the business cycle that so plagues institutions in less restrictive nations.

Our financial system in this nation reflects caution, national sovereignty and insularity over all other concerns, and a desire for a stable monetary system that is not subject to external manipulation or tidal influences. The Empire is an Fortress. We do miss out on numerous economic opportunities abroad which could make individual investors wealthier, but the trade off for the Empire is far more important than the benefit for individuals: It is the Greater Good for all Kalistanis, even if it comes at the expense of foreigners who have to beg money from usurious capitalists and who must trade their sovereignty for those loans. Kalistan is satisfied to not be a party to that usury, but instead diligently and assiduously maintains its own house against all threats to our financial health, both foreign and domestic.

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How Kalistan has Resisted Political Liberalism
The Long Standing Status Quo bias of Kalistan

Dr. Ricardo Martinez, Ph.D. University of Suldanor

Introduction
Besides the Republican Interlude from 5286 to 5458, Kalistan has been under the control of the Ananto Family since 5159, a total of 340 years over two separate dynasties. In all those years, support for liberal democracy has never exceeded 50% in any poll, official or non-, ever taken. The populist fervor that returned the Republic to power in 5286 had more to do with the Ananto Emperor William I Ananto's informal reduction to figurehead status by the National Assembly that was controlled by an anti-monarchical party who obtained a bare plurality using, or some would say, abusing democratic institutions. The rejection of the Republic nearly 200 years later was celebrated by wide majorities, and the removal of the last vestiges of democracy in Kalistan through the Single Party Act following the Restoration was met with nationwide approval and celebration in many circles.

Throughout the years, it seems that noticeable but not large minorities have been interested in flirting with democratization, or at least some amount of liberalization, only to pull back support when bad actors predictably emerged specifically to exploit the system. Every effort at liberalization has been a gateway to civic violence, and the reaction of large majorities has been to retreat back to the safe embrace of absolutism. But this seems to fly in the face of nearly all of Terra's non-Kalistani political thinkers, where a liberal bias is simply assumed of all people: People are naturally self-interested, so they claim, to the exclusion of any other person or any other interest. They all dream of themselves as a governor of themselves, even if they are politically illiterate, as most voters in liberal democracies are by Kalistani standards, to the exclusion of everyone else in the society, and that they all assume that they know what's best for themselves, what's in their own interests, those interests are purely material, and can be quantified by behavioralists, they are always rational and have complete information about the outcomes of all the choices they make in the marketplace of society, and their aggregate choice is almost always the correct one, even if it greatly upsets the social order. People will pursue their interests and only their interests no matter what it costs for the rest of the society.

Kalistan, as a case unto itself, demonstrates that the liberal bias in the researchers tends to guide the conclusions of the researchers. In Kalistan, poll after poll shows rock solid support for the Institution of the Absolute Monarchy. 17 out of every 20 respondents averaged over more than 150 years of questioning respond favorably when asked about how they think the Monarch is doing. Criticism tends to focus on specific policies, while the Monarch and her government, the Institutional Party, and the Kalistani system of government remains immune. The same polls also show high political literacy among Kalistan's population: Not only do they support the Absolutist system in Kalistan, they also understand why it works, which is not something most voters in other nations, who vote overwhelmingly based on party affiliation, one or two main issues, or how their parents voted, can say at all.

Kalistan, from top to bottom has rejected democracy and liberalism. Part of this happens to be the anti-liberal bias in Kalistan's universal political education, but its more than that in Kalistan: education doesn't explain why reform movements frequently go nowhere, and rarely ever achieve more than 20% support in the nation. In other nations, people are ideologically committed to democracy, as a matter of principle. That preference simply does not exist in Kalistan.

Instead, Kalistanis tend to speak of rights and liberties in social, group terms. There is not a strong individualistic concept in Kalistan: Kalistanis see themselves as part of a collective. And so they think of freedoms and liberty in terms of society: they think of benefits in terms of collective, rather than individual benefit. And they think hyperindividualism, and the notion that individual people or groups of people should attempt to gain benefits from the society, which is prevalent in liberal societies, as aberrant. This leads to a very strong status quo bias among the population. That not only contributes to an outright rejection of political liberalism, society wide, but also it tends to lead to very strong support for a fully depoliticized society that is very committed to support for and defense of the Monarchy.

The Kalistani Status Quo Bias
International communism and fascism are revolutionary ideologies. They tend to focus on changing everything, often for the sake of change. The old order is the source of the problem, and the revolutionary ideology aims to wipe the old order completely out so it can have a fresh bed of social soil, so to speak, to plant its own seeds into. These are totalist ideologies which can accept no variance at all within them and in this sense are the opposite of sort of status quo ideology that is common in Kalistan, which treats Society as a garden that must be tended obsessively, cultivated diligently, and weeded systematically, year after year, to produce all the people need, whether in terms of food, medicine, or natural and morally uplifting beauty.

But in this sense, liberalism also feels revolutionary. Democracy does not concern itself with good government. It merely focuses on aggregation of the more votes. If there is a contest between a good governor who asks people to sacrifice and a bad one who says society can have whatever it wants without having to pay anything for it, the one that gives people a free choice and tells them that they can have whatever they want for free is the one who wins. We know that the person who usually wins an election is the person who appeals to the most people, and the way to appeal to the masses is to promise them "candy" or things they like which aren't necessarily all that good for them. That system only rewards the person who can promise the most candy. And if that person can't deliver, that person is voted out of office by the next person who promises more candy.

Does this lead to consistency in government? Does this lead to the sort of government that is capable of carefully and diligently tending the garden of society? No: How can it when the government could theoretically change with every election. In this sense then, from Kalistan's perspective, even liberal democracy, which encourages at best, wild shifts in governmental policy every election, and at worst, complete paralysis of government which allows it to become susceptible to totalist erosion, seems inherently revolutionary, dangerous, and alien.

The Kalistani status quo bias aims to prevent insane shits in the society that are the norm in all democratic nations. In some nations, the ruling majority has collapsed under plethoras of parties, each holding tiny slices of the number of seats necessary to effectively govern. Some other nations, like Trigunia, have become entirely unhinged, with multiple legislative bodies, each with hundreds, or in one case a thousand seats. Defenders of these systems claim that people supposedly demand wild, completely unwieldy, and absolutely opaque and unrepresentative systems like this. It would be the average Kalistani's opinion that the completely mindboggling and absolutely unnecessary complexity of these systems merely serve to allow elites to continue to rule while tricking the people into thinking that they want what the elites have decided to do anyway. But each of these systems also remain entirely open to manipulation by bad actors, which is unfortunately the norm in democratic nations rather than exception.

Whether it be in terms of fighting corruption, or ease of access, or just telling the truth, the status quo bias of the Kalistani population would not permit such incomprehensible institutions that are absolutely ubiquitous in democracy to govern Kalistani society. They are far too chaotic, far too susceptible to corruption and absolutely disingenuous in how they are composed to ever provide anything like good government, that works for the entire society, rather than just a particular faction.

The Sources of the Status Quo Bias
The source of the status quo bias, ironically, is the old Socialist Party of Kalistan. During the republican era in Kalistan's history, between the third and fourth Dynasties, (generally between 1917 CE and 5159, or from 4056 when the previously moribund Empire was formally abolished and all previous titles were vacated) Kalistani politics were generally dominated by the Socialist Party of Kalistan. Itself originally a revolutionary leftist Party, a large fascist incursion known as The Fifth Crisis moved the Socialist Party to the political center and it soon took up the mantle of Kalistani Institutionalism as a primary focus of its platform.

As hard right or left Parties gained ephemeral pluralities in a regular succession of waves, proceeded to wipe out long standing Kalistani institutions for no reason at all, and then having laid waste the guarantors of social peace and material equality in Kalistan, disappeared into the long forgotten lists of ephemeral parties, it was the Socialist Party who returned to rebuild those social institutions, restore peace and social tranquility, and ensure continuation of the status quo that existed before the ephemeral Party began their destructive work.

The people long rewarded Kalistani Socialists for protecting Kalistani institutions. Socialists governed Kalistan for centuries, always resisting the change in the social contract which Kalistanis preferred, and then, when removed by new ephemeral parties who exploited weaknesses in Kalistan's democratic system, diligently rebuilt what the bomb throwers had eagerly destroyed, so that Kalistani institutions in place today would be as recognizable to Kalistanis of 3671 as they are to Kalistanis of 5671. But the main weakness of the Socialist Party was that it lacked the power or the desire really to stop the source of the turbulence. The problem was democracy itself, and specifically the multiparty aspects of it. The Socialists were assiduously pro-democratic, and could not imagine a Kalistan without a multi Party system.

The Institutional Party was formed by a faction of Socialists who were more committed to stability, domestic tranquility, and general prosperity than they were to the façade of democracy. The fight between the Institutionalists and the pro-Democracy Socialists was bitter, but thankfully short. And the people of Kalistan demonstrated which side of the argument they preferred when they roundly rejected the Socialist Party after a particularly horrific bout of emphemeralism and in September of 5146, handed the Institutionalists a mandate to re-establish an empire with the aim of preventing political turbulence that was interrupting domestic tranquility and general prosperity, and from that Kalistan began the long slow process of depoliticization.

That status quo bias has as its greatest expression an absolutist monarchy, with a legislature that does not exist as a forum to work out political fights or give people weapons to fight their stupid little wars against one another, but which functions to turn the dictates of the monarch into law for the people. The people of Kalistan have willingly traded political combat for social tranquility, and popular government (which all know provides terrible government far more often than not) for good government. These trade offs, along with guaranteed civil liberties and general prosperity, allow people to fully realize their own lives within the context of the entire society, and nearly all people understand that the trade off is small: Most people in democracies will never rule themselves or anyone else. Characterization of democracy as "self government" is deliberately and mendaciously deceptive. Elites still rule in democracies: the people do not, even in governments like Trigunia where the size of their legislatures require a statistically significant portion of the population to actually sit in government. So to lose the façade of "self government" was no real loss after all.

(continued Below)

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(Continued from Above)

The Status Quo-Supportive Features of the Kalistani System
There are three branches of the Kalistani Government, all of which go to support the goal of maintaining the status quo in Kalistan, as well as nearly every social institution across the Empire. The Monarch is the source of all power and they are trusted, and you could also say, are commanded, to rule in the name of the entire society. Her single solitary job is to rule based on the concern for justice and protect the Kalistani System. The administration of justice is a lifelong vocation. It can not be handled by some neophyte, especially one who can attract a simple plurality in a dishonest popularity contest like a liberal election. It can only be trusted to those who's sole vocation is to study and administer justice, every day, insulated from popular pressure and the waves of political fashion, which solely dictate outcomes in democracies.

The Legislature exists to turn the Monarch's decisions into policies that can be evenly and fairly applied. This is their only function. They are not a debate forum, and though they have allowed that in the past, like all things, as the mission and function of the institution drifts toward democracy, problems begin to appear in society. So the Legislature has pulled back on even that. The sole controller of the Legislature is the Institutional Party, who's platform contains two planks: To maintain the institutions of Kalistan's State, and to translate the official utterances of the Monarch into policy for the Empire. The function of the legislature in Kalistan is nothing like the functions of a legislature in liberal societies: there is nothing for interested political actors to "capture" in Kalistan, so there is no reason to have multiple Parties.

The Legislators do serve a somewhat democratic function in that they serve as direct contacts between the people and the Government of the Empire. Deputies explain National policy to the people, so serve as civic educators. But they are also required to serve their constituents, by allowing those in their constituencies to access parts of the government that require higher level intervention on their part. They also take demands of their people up to the Government who either acts independently under existing law, or carries the petitions to the Empress. But a necessarily adversarial legislature is not conducive to social order, and so there is literally no way to facilitate genuinely political discussions within the legislature.

The Courts themselves maintain independence from both the Monarchy and the Legislature. Their job is to resolve all disputes arising under the law. Suits can be brought by citizens, classes of citizens and institutions. The Courts can try criminal trials, where the State is a Party or civil trials between two or more citizens. The Courts are the primary way that citizens can check the Government and the Government can enforce the law. The rules of the court are very formal and largely based on Common Law, with the exception of requiring adversarial proceedings or following codes of procedural justice. In nearly all criminal proceedings, the only time a criminal defendant appears in court is if the case is already resolved: the purpose of criminal proceedings is to determine mitigation which could affect the sentence. The Courts act as trial courts primarily in civil proceedings, where the focus is on even and just application of the law to resolve the dispute.

The entire political system of Kalistan therefore aims at ensuring that the status quo is upheld, in all its myriad facets and nuances. All social institutions are legitimate to the extent that they aim at maintaining social order and staying within the law. In exchange, Kalistan maintains some of the most permissive civil liberties regimes in Terra, allowing people to live whatever kind of life they choose, and as long as it doesn't interrupt the general society, people express their freedoms to the fullest in Kalistan. But the permissiveness of Kalistani society also has a dampening effect on social deviance: Often times, liberal societies which curtail acceptable forms of self expression see a higher level of social deviance and conflict as people tend to adopt what is considered "sub culture" or "socially impermissible" attitudes as a way to be unique, stand out, or claim an identity that is separate from society.

A fantastic example of this phenomenon is what some societies would term "homosexuality." In Kalistan there is literally no policy regarding homosexual relationships between men or women, as it is ridiculous that one's status as a citizen should have anything to do with their sexual attraction for other people. But in some liberal societies that either have formal or informal social and legal prohibitions on sexual relationships between individuals, you tend to see one's sexuality becoming an identity, for obvious social regions (those societies where gay people are under threat, for instance, may need to adopt this identity as part of a subculture for self help and in-group support for protection from either the state or from bigotted vigilantes.) When it is not something that the society has any prohibition on or discrimination against, it is not something anyone bothers talking about: In Kalistan sexuality is as essential as blood circulation, and even in liberal societies, nobody discriminates against a person for circulating blood-- its so mundane that its not even discussed on a day to day basis. In Kalistan, the same goes for drugs, guns, euthanasia, freedom of speech, freedom of the Press and so forth. As long as its not disturbing the social order, it is generally seen as permissible, and therefore entirely unremarkable.

This sort of freedom is combined with a strong bias toward general material equality. The Royal Family being the exception, in Kalistan, most people are, for the most part materially equal. Much of this general prosperity comes from long standing socialist institutions which remain in the Empire today: Things like job guarantees through National Service, universal basic income, public housing, Nationalized agriculture and strategic production, and free food, medicine and education paid for by taxes. All these institutions, which the Empire defends and supports, ensures that nobody in Kalistan ever has to go without, while some gorge themselves, a condition of gross inequality which is prevalent in nearly every liberal society, as a feature of liberal society itself. Kalistan aims to reduce actual need to the lowest possible point, and this security frees people to live fully actualized lives.

These features undermine any impulse there may be in society for democracy or self government. The calculus is simple: If you get all of this with or without democracy, then democratic governance becomes a chore, rather than a means to an end. It becomes punishment, because democracy will only reduce these things, or allow them to accumulate and consolidate in the hands of people who are not you. People know this, and they do not want that in Kalistan. They want general prosperity because general prosperity ensures individual prosperity. They want civil liberties, because that means their individual liberties are also protected. They want one set of fair and even laws to govern everyone equally, because that means that only one person is above the law (The Empress, who is the embodiment of the law herself), contrasted to whole classes of people who live either above or completely outside the law in nearly every single liberal society.

Kalistanis view their freedoms in terms of all of society's freedoms. If it ever appeared that one group was attempting to rise to power at the expense of everyone, the rest of society would react to that. Kalistanis may disagree on any number of topics: they are not all of one mind on anything. But they also know that they have the freedom to pursue their own preferences, because everyone is free to do so, and a limitation to that society which ensures their rights and freedom, is a limitation to every individual within that society. This is something that Kalistanis cherish and will fight, have fought, to defend.

Conclusion
In short, Kalistan's long status quo orientation, which has historically been undermined routinely by democracy as a system and competing political factions, ensures that Kalistan will maintain its Institutional Alignment for as long as the State can continue to provide Kalistanis with social order and general prosperity. The State does that easily (because it has the correct priorities, another thing that can't be said for systems where factions compete for control of the Government) and does so in a sustainable fashion. It's zero percent sustainable growth policies ensure a leveling of standard of living, and then people are free to pursue more from the base level of "enough" if they wish. All of Kalistan's institutions are bent toward providing the society as a whole the benefit, to include the monarchy.

Unlike liberals, Kalistanis believe that society is necessary. Liberals imagine themselves to be lone men clearing whole patches of wilderness for their own use and their own well being. But Kalistanis cannot imagine man as a solitary creature. They can not imagine an individual except in relations to another individual. And the two individuals within the context of the larger society. A person outside his society is not a human at all, but a wild animal. Consequently, Kalistanis will oppose liberalism and democracy as a rule as long as they continue to receive any benefit from Kalistan's institutions. Kalistanis believe that the foundation of all of our institutions is Absolute Monarchy--to a Kalistani National, that absolutist monarchy, which is completely insulated from democratic and populist pressure on all levels, exists to ensure the maintenance of those institutions for the purpose of justice and fairness in the society.

There are a thousand institutional barriers to change in Kalistan as well: Each institution serves as a buttress to every other institution, because some faction seizing any Kalistani institution for their own benefit is absolutely anathema in Kalistan. It's violence to every Kalistani who is not a member of that faction. And Kalistanis abhor civil disorder, so it is safe to say they expect Kalistan's government to strengthen, not weaken Kalistan's institutions to protect the entire society against any self-interested faction. They have seen too much of this sort of destruction during democratic periods and have, as a society, decided they want no more of it.

Kalistan and its people are hostile to the notion of democracy that paralyses the government after a close election. The Kalistani system is far less susceptible to this, or the corruption that often accompanies democratic government, and the people know democracies cost the society far more than they provide in benefits. So, the monarchy stays, the Empress keeps her lofty position above society and keeps her absolute power, the legislature keeps its job, and the people gain as a whole from the system, day in and day out, for hundreds of years.

That's the way it is. It's not how it has always been, but the only way it will not be that way for the foreseeable future is if either Kalistan is invaded and the monarchy is killed, which the National Government plans obsessively to avoid, or the Monarch is so corrupt and evil that he or she actually acts like a normal politician in a democracy and just blatantly steals from or hurts the people. And at that point, Kalistanis can fairly easily overthrow a tyrant. But they'll probably just put a different Monarch in the Imperial Seat once the tyrant is hung. Such is the status quo bias of the Kalistani People.

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Contra a Sense of "World Order"
Imperialism and Interests-Based Foreign Policy

written by
Dr. Silvia David-Martinez
Kaliburg Imperial University
Kaliburg, Grand Duchy of Ananto
Empire of Ananto and Kalistan

Introduction

Currently, the predominant foreign policy mode in Terra follows what is described as "Rules-Based Foreign Policy." There are a series of rules, established by either some supernational institution, as was the case in the World Congress Days, or by what a lot of people simply fiat as seemingly what "everyone just does", and then Foreign Policy is determined to be good or bad based on its conformity to those "rules." These rules exist in the form of sayings like "We don't change national boundaries through war," or "Sovereign Nations still must follow what the international community wants," or "You don't abuse human rights in your state," or "Conflict instigated by non-state actors is always illegitimate." There is lengthy discussion about justice of war, justice in war, and justice after war. Etc.

The most important thing is that those who prefer Rules-Based Foreign Policy, which I will refer to hereafter as RBFP, assert that these rules are the same for everyone, and there is a set of legitimate responses that it is not only permissible for others to impose, but downright imperative, for violating the rules. All taken together, the result is a "world Order" established by these rules, that regulates state behavior within the world, as well as interactions between states.

RBFP is based on a liberal conception of internationalism. This notion that the fundamental principles of liberalism can and should be extended to the international realm. Things like multi-lateralism, collective security, free trade blocs, global capitalism, supernational institutions that have the mission, and the teeth, to constrain the sovereign state, to keep them in line, to force them to do as the world believes they should. Nations can be compelled, in this sense, even against their will, to be free. It's perfectly permissible under RBFP, that if the world deems some state aberrant, it can compel even regime change within that state to force it to comply with the "rules" that supposedly "everyone" agrees with.

In this paper, I set RBFP in opposition against a much more realist-oriented Interest-Based Foreign Policy or IBFP. This is a foreign policy which posits that states, as the expression of those who live there--granted, maybe not a perfect expression, and granted, maybe not of all the people, but certainly those who make decisions in the nation-- have interests that drive their foreign policy, and those interests both can and should always drive foreign policy.

I argue here that states always practice IBFP, even when they are hiding their own interests in international rules, and states only actually adhere to rules when they serve their own national interests. The talk of RBFP is in and of itself facetious at best, and downright crass in most cases. No state will voluntarily submit to international rules in its own case, when those rules run afoul of its national interest, and nothing but war can compel them to do so.

Anarchy is Everywhere

The fundamental tension within IR Theory circles surrounds anarchy in the international structure. Anarchy in this case does not mean chaos. Even the most realist among IR scholars will argue that there are regular patterns within international politics. Nations rise, nations fall, nations prosper, nations starve, some nations with good policies make friends, and then invariably some of those nations stab them in the throat. Wars happen, peace treaties get signed, some nations spend themselves into oblivion, some nations become crossroads for conquering armies. It happens, and the action of international politics is surprisingly regular, because men are rational and states which are made of men therefore also appear to act rationally, though a state cannot itself be rational, given that it is an inanimate object. The debate is in how best to mitigate the effects of this anarchy.

To define some terms here, when I say "regime" what I mean is the a structure which creates rules and normalized practices, such as a treaty or a peace accord. When I say "institution" what I mean is the functional body that makes that regime real for people: Such as an intergovernmental organization, a peace keeping force or a regulatory agency.

In Kalistan, we rely very heavily on our regime, which is the Imperial Structure between Ananto and Kalistan, and the relationship between the Empire of Ananto and Kalistan and the Kingdom of Gaduridos within the Anantonese Empire. Those are the rules that govern nearly every aspect of political life and political, economic and social relationships between our constituent nations. We also rely very heavily upon our institutions to make that regime quite real for people: The institution of the Monarchy, the Government and National Assembly, the Ducal Council, the Imperial Assembly, and the Viceroyalty and Government of Gaduridos who sets the laws for Gaduris. Within a nation, regimes and institutions are fundamental for proper order.

The issue occurs when you try to treat the international system, and notice, I do not say "order" here, because there is no order in the international system, like it is a state. Within a state, order is maintained by the monopoly of force possessed by the state. Sure, many people follow traffic laws or do not murder people because they voluntarily feel that violating the law is morally bad. That's an individual decision. But within a state if you don't have that same sort of moral compass, the police are there to check your bad behavior and compel you to follow the law.

But in the international system there cannot be that same sort of either voluntary compliance based on morality or irresistible force. States, as collective entities, cannot possibly be moral agents. That's simply not how morality works. A state can be no more moral nor immoral than a hammer can, because a state is merely a tool, an organizational tool designed to protect order within, and promote interest without, of the people who live there. Similarly, no one state has the right to tell another state what they can and cannot do, with any sort of authority. The prevailing characteristic of a state on the international stage is sovereignty. but if that is the case, then no one state has the authority over another to compel behavior by virtue of appeal to authority the way a police force can. So consequently, anarchy exists and continues to be the defining characteristic of the international system, where equals have to exist in the world with other equals.

Mitigation of War

The only way, therefore to get any other state to do what I want is war. That war can come in a number of forms, whether it be actually battlefield slaughter, or economic warfare which is designed to hurt the economy of a target to the point where the target relents and gives in, submits to force, and changes its offensive policies quite under duress. There are also gradations within those main categories as well and all manner of very nasty ways of accomplishing them.

But nobody wants war. War kills people, and unfortunately for the war makers, often includes blowback where the pain is revisited on the warmakers, often to unacceptable levels. It is destructive, it is destabilizing, and it takes eons to recover from. War is the failure of imagination on an international scale. War is the grand extrapolation of a frustrated parent hitting their child for not eating his brocolli at the dinner table, and is just as destructive on a much grander scale. So: How do we prevent war, given anarchy of the international system?

Here is where the liberals invent a mighty tale about these things called "International laws." According to the story, one which is perfect for nervous idiots at bedtime, these international laws, and the regimes and institutions created by them and aimed at enforcement of them, are derived from correct and reasonable apprehension of so called "universal norms" of behavior, which are common to us all, and represent the highest aspirations of all of humanity. These international laws are meant to govern us all as equals in a state of anarchy, and thus impose order on the anarchic world. And those who fail then to abide by the laws we ALL have to abide by are eligible for sanction by the rest of the world, in an effort to protect the apparent social contract we all agreed to as being a part of the world.

This is a well intended effort to mitigate anarchic tendencies toward war. The people who came up with the notion were trying, and the solution they came up with was quite idealistic. We have to give them credit: When it works and nations sign onto it, peace can be the result, for certain. My state, as a potential bad actor, will have pause to do things the the world will oppose if they are all united, and I know that I will suffer if I defect. It can be a free choice even. States can be bribed to change course with carrots, or cajoled to change course with sticks, if they are so inclined. After all, we said above that states are made of rational actors, and therefore states themselves could be said to proxy rationality.

But there is a huge flaw in the underlying assumptions here. It assumes that the norms that the international order is based upon are independent from the people who came up with them. And that's not at all true. I would think that a set of international norms that were developed by primarily Jelbek thinkers would look a bit differently than a set of international norms created by Kalistanis. After all, we have different national traditions. We don't automatically come to the same conclusions about when a good world or a Good Society looks like just by virtue of our shared humanity. But it is that flawed assumption that lies at the center of RBFP: that what is good for Jelbania is good for Luthori, is good for Utaristan is good for Kalistan. And it simply is not. That's not even reasonable, let alone some independent truth that the world stumbled upon in the modern era.

Instead, we look slightly below the surface and we find that these international norms reflect the preferences of the great powers who were among those who had the conversations about them. Nobody invited some backwater nothing state to the conference when they said "these are universal international norms, these are the laws we derive from them, and here are the institutions we will build to enforce them on the world." Why would they? Why would anyone ask Baltusia what their opinion on the matter is? Baltusia is just expected to fall inline with the rules-based global order that it had no hand in crafting, and if it sees itself in that anywhere, its purely accidental.

What we see instead is that the RBFP then seems to be just a bunch of sovereign nations deciding for the rest of us how foreign policy will be conducted: What is legitimate and what is illegitimate? What states get to do what, and what states are prevented from doing what? What actors get to participate in decision making and which actors are excluded from even attending the conference? What we all get to do to states that don't comply, and what we get out of it as reparations for their non-compliance? And what can we get away with ourselves that violate the rules for everyone else, but it is necessary for us, because we are the enforcers of the rules? At the end of the day, the "rules" are just codified interests of the rule makers, designed to insulate them from scrutiny by focusing it on nations that are not them.

RPFP shows itself to have been IBFP all along. And the interests of the big players are simply fiatted as universal norms and "International Law", and the world is supposed to work together to defend and protect those "norms", while those who created the international law occasionally have to violate it in order to enforce it on others, but at any rate enjoy complete immunity from sanction themselves, because they are supposedly doing all the rest of us a very vital service.

Can IBFP mitigate war?

Let's imagine a world where there is no international law that can actually compel compliance in and of itself, where there are no rules upon which to base a global sense of order and its all against all, where supposedly universal norms do not constrain states who are dead set on doing what they want anyway, and will happily accept the punishment for violating those norms if it means it gets what it wants. It shouldn't be too hard: That is the world we live in right now. That is the "realism" in the realist IR perspective. This is the real world, and the RBFP crowd live in the fantasy world where everyone can come together, hold hands and iron out serious disagreements by appealing to everyone's "better natures."

So, having demonstrated the complete fiction of RBFP, we are left with IBFP. But this fact also does not address the reality that RBFP was intended, and I will say, in good faith, at least as a theory of international politics, to address. IBFP leaves anarchy right where it is, it leaves war as the only method of inducing compliance from others, and it leave our future prospects nasty brutish and short.

Maybe not.

IBFP acknowledges that states as actors on the global stage, possess interests. We all do. As Anarchy is the defining feature of the international system, interests, or more correctly, the pursuit of those interests defines a state. Afterall, states proxy rationalism. As a state, its primary goal is to meet its interest. We also said that war is incredibly destructive: in fact, war is surprisingly not surprisingly avoided by states because war runs counter to the interest of states. It is not in the interest of Kalistan or Egelion to be at war with one another. It is, in fact, contrary to their interests.

This fact alone can form the basis of peace between these two states. If neither state is constrained by some international law which requires one of them to attack the other for failure to comply with some made up global rules-based order, they can realize that their overarching interest is in maintaining peace. The degree to which that is the case given other interests that run concurrent to this interest, is the degree to which they can and will work to pursue it. Even to the point of forestalling or abandoning lesser interests. If Kalistan is interested in avoiding war, it will not pursue its interests in Athosia, for example, though we know that this goal has been an obsession of countless Kalistani Emperors and Empresses for hundreds of years. Because Kalistan's interest is to "not destroy Kalistan to obtain Athosia."

IBFP can actually lead to more trust between states than RBFP, because it allows states to be perfectly honest about what they want, rather than obscuring interests behind moral outrage or cajolement. Kalistan and Egelion, for example, can both lay out interests on the table, and see where they overlap in a way they can't do when Egelion says their interest and Kalistan responds that they are moral degenerates for wanting to annex territory. The conversation which is based on interest allows states to reduce projection as well, because when you actually say what you want, it is much more difficult for the person you are talking to to impute completely false motivations to your actions. It reduces uncertainty, it reduces the security dilemma, and it reduces misperception in foreign policy decision making, while allowing for states who may seem completely at odds, where war seems inevitable, to instead find some common ground and start working toward peace.

IBFP is just foreign policy in the real world. That's all it is. We should just call it foreign policy, because interests always dominate any foreign policy decision making process, even among the most liberal nations. If a nation has to make a choice between sacrificing the nation or sacrificing international law, they will always protect the nation first. The interests of a state always override some half hearted half witted desire to promote an international, rules-based order.

Conclusion

Always, except one time. If I have a choice of sacrificing some OTHER state, or abandoning the rules based order, you better believe I will pick sacrificing that other sovereign state each and every time. In that mutually exclusive, either/or proposition, my interest is that the Global Order I happen to support, as my interest, because it protects me from others, is automatically superior to the sovereign demands of a state which threatens that order. Which, ironically adds to my claim that universal norms are completely made up by people who wish to use them to promote their own interests.

We are all sovereign, until your sovereignty conflicts with my national interest. And then we throw the norm of sovereignty right out the window.

It always was IBFP. But IBFP shows that interests, when they are aligned, can lead to peace and even cooperation. It can lead to long standing international arrangements like the Anantonese Empire, where Kalistan and Gaduridos have essentially declared perpetual peace between them. Gaduridos had to sacrifice just a little of its sovereignty to obtain that, and Kalistan had to put a lot of money, materiel, and time into the security of Gaduridos as a consequence, but perpetual peace and union between our two nations was seen as being within both Kalistani and Gaduri interests, and it would be far more disastrous for both nations now to break up than it is to just stay together and work together.

The trick is in getting those interests to align. Part of that comes through good old negotiations, and we must admit: liberal institutionalism, at least, does do a good job at creating trust among nations through regular and predictable interactions, at providing a ground for negotiations to work, to be believed, and for states to signal to one another that commitments are credible. Not always, but in general. A single solitary point for liberal internationalism--Institutions.

For those who promote RBFP, you know that this entire theoretical perspective is built upon an unsupportable a priori assumption which is more aspirational than grounded in anything empirical. But whatever you do: quit trying to force that on the world. You can't make it happen by sheer force of will and repetition. Nations will always put their own national interests first, even those who insist upon RBFP for everyone else. And they will always strive to be the ones who set the order that everyone else must live by.

At least let's be honest and call things what they are. Kalistan admits what it is: We are an irredentist, personalist, absolutist hereditary monarchy with territorial ambitions that we by all means intend to pursue and achieve at the first practical moment. Many other states have many of those features, but they claim to be some "morally superior" type of regime like a democracy or a republic, while looking down upon Kalistan. They try to hit Kalistan over the head with their Rule book as often as possible. This is fine. Its how those rulers sleep at night. Whatever. But we cannot ignore that RBFP is facetious in the best possible light, and straight up cynical, self serving fiction under any normal light. And saying otherwise repeatedly does not make it otherwise.

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Kalistani Economic Policy: An Overview
How ZPG, Progressive taxation and a Nationalized Workforce Promote Equality

Henry S. Edwards, Ph.D.,
Director of Economic Central Planning, Imperial Bank of Kalistan
Cathy M. Bradley, Ph.D., Kaliburg Polytechnic
Dept. of Economics

Introduction

Kalistan has a fairly unique economic model which bears exploration. This model is designed to ensure a basic and comfortable standard of living while allowing the nation to provide steady fiscal and monetary policy that keeps the Empire on an even keel. We have sacrificed the wild swings of the boom-bust cycle which benefits liberal financial actors (while providing a fairly steady conveyor belt of wealth from the working class to the owning class) and replaced it with the perpetually sustainability of Zero-Percent Growth policies.

Of course, we miss out on fabulous wealth that liberal apologists claim accrues to all under a liberal economic system that will generally raise the relative standard of living for even the poorest workers, (though, when a person is making one ruble a month, and his wage jumps to 1.50 a month, liberals like to use that as evidence in support of their hypothesis, without noting that the person paying that worker is making infinite rubles a month relative to that worker, and that hording of wealth is why the worker only makes so little in the first place.) But we also miss out on the catastrophic disruption to the lives of our people by crushing down the business cycle, slowing growth, consuming less, and ensuring that whatever growth our economy does experience stays within a very narrow band, controlling for growth of our population.

All of these very strict policies stem from Zero Percent Growth strategies and serve our people very well. Namely, we will focus on three specific policies that our Empire employs to ensure that we have relative equality: Zero Percent Growth, Progressive income taxation, and a Nationalized Workforce through policies like National Service and the universal basic income. All of these policies contribute to redistribution of wealth and a spreading of the wealth of society to all, and ironically, it also leads us to large budgetary surpluses annually, that allow our nation to sop up whatever excess wealth their is in society to discourage saving, encourage consumption, and pay for things that benefit all Kalistanis, rather than just a handful.

The GINI Coefficient

First, it is important to look at the GINI Coefficient of this nation. Our analysis shows Kalistan to be one of the least equal nations in the world, and at the same time one of the most equal nations in the world. This seeming paradox is resolved through steep progressive taxation, with the highest bracket paying 90% of income, while at the same time, treating investment as realized income, because stocks are just assets, eliminating preferential capital gains tax rates, eliminating most business taxes (except payroll tax, which in other nations, is just called wages) completely, and having a 2% wealth tax on held assets. These policies tend to redistribute wealth down to populations who do not make a lot, resolving the contradiction. High inequality pre-tax, resolved by wealth distribution downward through taxes, leveling out inequality significantly

Let's take a look at Kalistan's GINI breakdown.

Kalistan's GINI breakdown, excluding the Royal Family, House Ananto and Miramar

Another note here: This data excludes the Royal Family, who are, for the most part, an entity unto themselves. Adding the Royal Family would fatally skew this data to the point of being unintelligible. So please keep this in mind. Miramar pays payroll taxes, as all businesses do, and its employees, as such, all pay their share of income taxes, but the Royal Family is exempt from paying wealth tax, and the only support they receive is a small budget to pay administrative staff and security for the Royal Family, but otherwise, draw all of their support from the House fund itself. So they are not major contributors to our nation's revenues, but nor are they burdens upon it.

These two Lorenz Curves, from which the GINI is calculated, show the difference between pre- and post-tax inequality. As you can see, progressive taxation produces a massive decrease in the amount of inequality, from a coefficient of about .61 to one that is closer to .3 (the lower the coefficient, the more equal a society is believed to be.) For those who do not understand how GINI is calculated, you plot a line of perfect equality, which in all GINI graphs is a 45 degree angle with a positive slope of 1. Easy enough. And then you plot the relative shares of income belonging to each decile. 0-10 percent, or the lowest decile, have about 3% of the income, makes sense, because the poorest have the least amount of income, while a decile like the 70-80% decile make about 30% of the income. They're richer, they make more money. The coefficient is the difference in area between the ideal and where you are as a percentage of the total area under the ideal-- the more are there is between Ideal and Real, the bigger the gap is between where you are and where you should be at perfect equality, the higher the coefficient, and the the more unequal is your society.

The inequality, therefore comes in the 90-100 decile, where the curve takes a dramatic swing upwards, so that the top 10 percent make a LOT more than the bottom 90% and the the top 1% make a LOT more than the other 99%. This is fairly common in non-Communist countries which aim to pay everyone the same thing. Even with our UBI policies, we still set those based on difficulty, desirability, and technical requirements, so we don't even pay workers the same in terms of UBI. The UBI also doesn't account for wages in excess of the UBI. So people are still making money. The bottom (orange) line shows that profile of Kalistani workers, where the richest are very much more the richest, than the poor are even just "ok".

The correction, which we'll talk about later, comes in how much of that excess is soaked up by and redistributed through our tax system. When you are talking about the percentage of income kept by workers after taxes annually, you see that the working deciles are far wealthier as a share of the national economy, and the wealthy are still wealthy, but that line is significantly flattened out by just the progressive tax structure, and lack of regressive tax structures, so that the entire social system costs Kalistan about ₭52,500, the majority of which is paid for by payroll contributions from Employers toward universal income, in lieu of them paying those directly to workers as wages, and Kalistan ends up with a surplus of about ₭220 Billion annually, year over year over year, by just not contracting things to the private sector, ensuring social services are nationalized, and not giving people loopholes.

The GINI numbers show a Kalistan which is uniformly poor, except for a few wealthy actors at the top, before taxation, and after taxation, a population with generalized relative wealth distribution far closer to equality. The rich are still nominally wealthy, but relative to the entire population, they are less wealthy, while the poor are much less poor than they would be without progressive taxation.

Zero Percent Growth

The name of the game in ZPG is controlling the ups and downs of the business cycle. Much of capitalism's (claimed) success in providing (only relatively) more wealth for larger portions of the population comes from the upswings of the business cycle. Increased economic activity means hiring, more production and more investment. It is a virtuous cycle that leads employers to hire more workers, increase the wages and spending power of larger segments of the work force, and increase the overall prosperity of the society. We don't even deny that happens--It is indisputable. The adage "A rising tide raises all ships" is appropriate. That's what actually happens when you introduce liberalism into the poorest countries on the planet. Suddenly, as a worker, I go from digging through the city dump to find a pair of shoes that fit or not, making a single ruble a day, to having a job where I can save up because I am now making a ruble and a half a day due to an upswing in the economy, and can now suddenly imagine a time when I may eventually be able to buy my own shoes!

But there are a couple problems with this model: First, almost all gains in a rapidly liberalizing economy accrue at the top, not the bottom. So for every raise of fifty cents that trash digger, gets, a raise by the way of 50 percent, quite impressive, the people at the top also get a 50% increase, and for them, its going from a million rubles to a million and a half rubles. Relatively speaking that's about the same jump, but when you're talking about purchasing power, the wealthy person's increases don't allow him to dream of a shoe of his own, but a shoe factory of his own. That's a bit different. This leads to the second issue: That growth always comes with corresponding social churn as workers in traditional industries and occupations, which pay low wages and have high expenses are often displaced by new jobs that require a high specialization, which liberals do not like to invest in, because that would require profiteers to actually take some responsibility for the society they are looting. So: A rising tide raises all ships, but if you are like tens of millions of workers in liberal nations that lack structural commitment to addressing the political and social consequences of a rapidly modernizing economy, a rising tide merely sinks all ships which are hard tethered to the bottom of the pier. It's not just good for everyone--for some its good, for some its REALLY good, and for many, often who possess the least amount of power to stop it, its almost always a disaster that far outweighs the pathetic nominal gains in income they may earn from it.

But the third problem is the one that no liberal will mention, because it undermines the moral justification for liberalism. And that is, without serious state intervention, booms always come with corresponding busts. Always. Every single time. Moderate intervention to prevent the bust just prolongs the boom and it will eventually always collapse in on itself: the larger and longer the growth period, the harder and prolonged will be the corresponding depression. It is an iron clad law of liberal economics. And for most of the people who live pay check to pay check, there is no insulation whatsoever from the crash. So you are that guy making ₭1.50 a month or whatever, and suddenly your employer, and all other employers in your neighborhood go bust, and now you have nothing. Except, I suppose the shoes you can still pull out of the dump. Liberals hope you never find out about their dirty little secret about the ironclad law of the business cycle, because they have in the meanwhile undermined any public or political support for anything that takes from their private pile of wealth to redistribute to the rest of the population, and they don't want the government intervening for social spending, because they, the only once with any money left, will be required to chip in more than it costs them to keep their workers from starving to death so they will return to work the next day.

Kalistan, however is now, and has always been honest about the problems with the liberal economic model. And to address these fatal flaws in the reasoning and the moral justification for liberalism, we have adopted zero percent growth. There will be growth periods and shrinkage periods. Kalistan's aim is to squash down the growth period so that when the economy falls off a cliff, there's not that far to fall, and then there is something there to catch those who do and greatly soften the blow. Falling from a 7% growth to a 7% shrinkage is a 14% nominal drop. That means that 14% of the economy is wiped out. That's 1 in 7 members of society go from having wealth to not having wealth. And that creates catastrophic effects in the economy. Meanwhile, going from a .5% growth rate to a -.5% is less like falling off a cliff and more like tripping over your shoelace. It can still lead to some pain, but it isn't going to kill you. And our social safety net is there to bail you out when you do fall.

Another added effect of ZPG is that it allows us to produce for need rather than for profit. We are not overproducing anything, and so we are not producing a glut in any sector. This allows us to avoid wild price swings as producers try to markdown their goods to sell their surplus inventory, which leads to recessions in the first place, but more importantly, it allows our producers to focus on producing on a schedule, using (and wasting) fewer resources, cutting costs, and maintaining their bottom line easier. Supply chain disruptions are less critical, labor demands for higher pay are largely shifted off onto the public system, and corporations have an easier time pricing goods correctly because production is more controlled, limited, and related to actual demand, rather than a good guess that maximizes profit as you see in most private economic planning. This allows Kalistan to also be ecologically responsible as well, and provides a very strong measure of security for both Kalistan's workforce and for their producers.

The ZPG then is able to foster equality by ensuring that our productive capacities are not wasted in the pursuit of endless profiteering. By producing for need, rather than for profit, we can supply consumers goods and services at a much closer margin than profit-seeking capitalist corporations can. Lower prices in the market mean more money saved to the consumer to do other things with: whether it be to purchase other reduced priced goods and services, or invest, or do whatever. It is far easier for a poor person with little income, to eat when the food he is consuming is produced extremely inexpensively and then is not marked up by the time it gets to the food bank. And meanwhile, ZPG also depresses wild profiteering on the top end by slowing not only economic growth to basically stagnant, but removing the incentives in the economy to profit from need.

To be clear, there is still money to be made in the provision of luxuries, but if you have a society that is characterized by stronger equality, the value of those luxuries that liberals would claim due to scarcity also goes away: If everyone can get a yacht, the value of the yacht which comes from you having one and your neighbors not being able to afford one sort of evaporates. This forces prices down, and creates a production incentive to produce yachts because people want them and I can reliably sell them to those people, not because I can make a ton of money marking up my luxury yachts. I no longer have an incentive to overproduce and glut the market, needing to create demand to sell my over priced and over produced goods: my incentive instead becomes to supply the demand at the price that allows me to make a little extra, and people to get what they want.

(continued here)

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(Continued from above)

Progressive Taxation

Most governments, even those who rely on fiat currency produced, monitored and regulated by a central banking system as Kalistan does, need money to pay for things that people want them to spend money on. Our Imperial Bank could just wildly print currency and pay all our bills in a day if we wanted to. But, while we can say for certain that the money itself has no inherent value (We could say that a leaf from a tree is currency instead of the paper rubles we circulate, and it would be just as valuable in and of itself,) what we would do is undermine the public perception of what the Imperial Ruble is worth. And it is the public perception of that worth of that currency, whatever it happens to be, that drives conceptions of value in the the various aspects of society. So if we have more currency in circulation, each one of them individually would be worth less in trade for say, that gallon of milk today than yesterday. So I would have to trade MORE of that currency to get that same thing, and that is what economists call inflation. (To be fair, most inflation is driven on the supply side, and not the demand side, and actually curbing real inflation is only possible with price controls, but we can leave this discussion for a later date.)

Rather than printing ourselves into oblivion, our government gets the money it needs to fund the programs that the people demand through progressive taxation. It is progressive, because as a person earns more money, they progressively pay more nominally in taxes. Now this does not touch burden: that is the measure of the inability you posess to buy the things you need with the money you have. For the poor, the burden is much heavier than it is for the rich, and will be so until we eliminate prices from things. But: the goal of progressive taxation is to shift MORE of the burden onto the shoulders of those most able to carry it. Just like we would never ask a man with a broken arm to lift a refrigerator, we should never ask a family who struggles to meet basic needs to carry a large part of the burden of funding the entire society.

The progressive tax system works like this. First, all Kalistanis contribute something. The absolute lowest tax rate in our society is 1%--even if it is a single ruble a year. We do this because we 1) wish to provide every single person with a monetary stake in this government commensurate with their income and 2) we want to explicitly take away the argument of those who think we should not be spending money on poor relief programs from them, to deny them the opportunity to make ANY case against social welfare, and to present those arguments as inhumane and anti-social. That's it. Kalistan has never permitted the wealthy to use the poverty of the poor as a weapon against the poor. Those arguments are monstrous on their face and socially abhorrent--that a person is poor does not make it legitimate to starve him to death, and anyone who thinks that it is legitimate is advocating murder on the basis of income, regardless of why. So to step on those sorts of arguments, that the poor never contribute anything to their own succor and that the wealthy never get anything for the money they do contribute, we have required that all contribute. And by the way, we have also ended means testing, so even the wealthy get welfare in Kalistan, just to shove that hateful line of reasoning down their throats a little farther. It is the only way to tamp down calls for class warfare that so plague liberal societies, and almost always originate among the well off.

Following the absolute minimum tax that all must pay on their income, whatever the amount it happens to be, from whatever source they derive it, we have a parabolic increase in tax rate. For most of the working classes in Kalistan, the tax rate is a low (less than 15%) rate. But as you make significantly more, the 60-70-80% income deciles, you pay a significantly larger percentage of your income back into the system, until you are among the top tax rates and pay a total of 90% of your income back into the system. Bear in mind, this only applies to income, and not passive wealth (things like houses and such). But there are no loopholes to this. It is a very simple calculation: If you make a billion rubles a year, you pay 900 million of that back into the system. If you make ten rubles a year, you pay .10 cents back into the system. It's really easy. And since wages and salaries are all nationalized, nobody has to file forms, or anything: they get a receipt at the end of the year saying thank you for paying your taxes, here's how much you contributed to the maintenance of your society. You can dispute that amount in court if you find an error, but most people just move on with their day.

We also have things like Payroll taxes, which employers pay from their pre-tax earnings and which are chalked up as the expense for the privilege of doing business. The Payroll tax is the primary source of revenue for the Universal Income in Kalistan, so that program is almost completely revenue neutral. If you employ five workers, you pay the government enough to fund the basic income, and they get it whether you go under or have a great year. Anything additional you want to pay them on top of that comes out of your own business expenses through the same nationalized payroll system, but the workers will always have an income whether you are their employer, or someone else is, or nobody is.

We also require the wealthy to pay a 2% wealth tax on property and assets. What's considered wealthy is different by Duchy, but nobody would ever consider those who are levied the tax to be poor by any stretch of the imagination. The wealth tax is levied against those who do not earn income and therefore tend to just live off their wealth, but they require the use of universalized public services. Most of the wealth tax is used to fund whatever is needed in UBI that is not covered by payroll taxes. Investments are treated as income and there are no regressive property, sales, or other consumption taxes which fall heaviest on those least able to pay them.

Over all, this system allows everyone to contribute according to their ability to do so, it funds the entire system, and it creates an annual surplus of hundreds of billions of rubles, part of which enters a rainy day fund when Kalistan needs to make large capital investments, while the majority of the surplus is simply written off annually and returned to the general fund. The system does not encourage savings, it treats investments as active income, and redistributes most of the wealth from the top ten percent back to the bottom 90% annually. Yes, this is not the most investment friendly climate, but those who do earn their living on investments can still do very well in Kalistan--they are certainly not poor. But like ZPG, their wealth is just no where near as large as it would be without progressive taxes, and overall that encourages health and financial well being across the entire society, not just in a handful of savvy investors. It is a socially desirable trade off, even if it wipes out the inordinate ambitions of a mere handful of greedy Kalistani capitalists.

The Nationalized Workforce

From the perspective of a worker in a liberal nation, nothing is more terrifying than losing a job. Sure you can lose a job for any number of reasons: Stealing from the boss, while understandable, is certainly a fire-able offense. But you can lose your job for a number of other reasons, like getting injured on the job, or the owners making bad financial decisions that lead to bankruptcy, or even a shift in the global financial structure that causes your firm, even if it did everything right, to suddenly lose its market, lose its profitability and close its door. The worker is rarely in control of any of this, and can certainly do nothing to stop it, and so they exist in a state of perpetual insecurity on the job that forces them to keep jobs they hate, are perhaps not qualified for, and certainly don't gain anything except starvation wages from.

Kalistan's whole aim with the nationalization of the workforce, a socialist era program, was to resolve this problem for the worker. It also takes away the incentive of the boss to tie wages to the performance of the company's stock price, which has more to do with speculation than it does to do with good work often times. The first step toward workforce nationalization was to organized the National Service Program, which was initially conceived of as a public works/make work problem to combat unemployment. Early NSPers would go do things that the National and District Governments has been paying private contractors to do. Instead of paying the private sector inflated prices, because if it cost x to do a job no matter who does it, and a profit driven company requires profit y on top of cost just to stay in business, x+y of the private sector will always be greater than x in the public sector. So early NSPers were put to work paving and maintaining roads and trails, building and maintaining bridges, providing public infrastructure, etc. Not only would Kalistan save money by no longer contracting work to for profit actors in the private sector, but they could also guarantee wages for a large number of young Kalistanis, and prevent them from entering the job market and competing with established workers, ensuring higher wages for those already in the work force.

When the National Food Bank program was begun in perhaps the 4200s, NSP expanded its reach to agricultural labor, nationalizing all ag workers (but not farm owners), and creating a single primary market for all things grown in Kalistan. Now Ag work is one of the primary occupational specialties in the NSP, especially for Corps in Odufaray and Suldanor, where much of Kalistan's food stock is produced. Combined with the universalization of National Service, and the path for careering in the NSP, and Kalistan became the single largest employer in the entire nation. It was only a matter of time before the National Government passed a law nationalizing the rest of the private sector workforce, and requiring employers to pay workers' wages to the National Government in the form of payroll taxes. The only exemptions are small businesses where the owners themselves provide the majority of the work hours per week. This, ironically, is how the Royal Family avoids paying payroll taxes: House Ananto is treated as a small business where the Sovereign provides the majority of the labor hours herself, and the Director of House Ananto is not an employee, but a member of the House who volunteers, takes no salary from House Ananto, and serves as a managing operator for the Empress' schedules and interests as well as House finances. The Director does, however, draw a salary at Miramar which more than compensates her for both jobs, and Miramar does pay its required payroll taxes.

At first, employers were skeptical of the program, but they were won over by learning that this freed them of the emotional work of hiring and firing. Now an employer needs a position, and they apply to the NSP, sign up for payroll taxes, and proceed to hire their preferred candidate. the hiring part takes place in house, the wages and benefits are paid through the National Government, and if the employer needs to go out of business, their employees aren't screwed. The owners can more easily manage costs and profits without having to worry about increasing labor costs, and the workers can get fair wages for their work regardless of how their employers are doing through UBI. Their bosses can opt to pay retention bonuses based on job performance if they like, or fire the employee for cause or at will without the need to worry about how that worker is going to feed themselves or their families. Labor unionization is no longer the boss' problems, and they can meet the worker as equals rather than as adversaries, which leads to much more of a cooperative attitude between workers and employers. The system has its shortcomings, for sure: Payroll taxes are often steeper than an employer would pay if they had their choice, and paying under the table, tax free becomes impossible. But these shortcomings are more than offset by the fact that an employer no longer has to have a whole payroll department to maintain.

This system definitely works to the workers' advantage too: A skilled worker no longer has to worry about losing their job, or switching jobs, which can also produce major anxiety in liberal economies. Now a worker doesn't HAVE to work in order to eat and to take his or her kids to the doctor's. Now a worker can find a job that matches their skill sets, in an environment that commands respect for their contribution, and encourages productivity among workers. And a worker can feel confident that they too can strike out if they have a good idea and want to try it, and not go bankrupt. With a nationalized workforce, the power balance between employers and employees is leveled, because the relationship is about experience and productivity rather than seeing labor as a commodity to exploit and profit from. This also leads to better quality products at cheaper prices for the consumers, and security for all workers at a fair and just wage that contributes to a more equal standard of living, despite inequalities in pay still existing.

Conclusion

In all, we still do see massive income inequality between top earners and the rest of Kalistan's population. The standard of living in Kalistan, while in the developed/industrialized/modern camp, is certainly what ever we acknowledge as modest. We don't have a society of mass or conspicuous consumption. But we also do not have a problem with flagrant and counter productive waste and inefficiency either. We do miss most economic opportunities which other nations are in a position to fully take advantage of and get fabulously wealthy, but then again, we also do not experience most of the external economic shocks that more exposed nations experience. We don't give our owners the opportunity to get fabulously wealthy by cutting costs and stealing wages from workers, but then again, the vast majority of the workforce is well compensated and secure, and that allows them to more easily cooperate with their bosses, work harder, and not be afraid to switch jobs or try to open a place of their own.

Kalistan's economic structure there contributes to greater equality across society. The three policies of Zero percent growth, a steeply progressive income tax system and a fully nationalized workforce means that more people can access more of the benefits of living in society than a country which is less obsessive about these sorts of things and more obsessed with the ideological precepts of liberalism. Limiting the negatives of liberalism works for us: We lose out on the highs of unlimited economic and fiscal expansion, but we also miss out on almost all the negative, social and political side effects of capitalism, and we are able to give our people a lot of security. We therefore contribute to the overall health of our entire economy and our society.

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Contra Democracy
The dangers of moral equality as a system of Government

Carolina M. Ananto-Connor
Empress, Empire of Ananto and Kalistan

Editors' Note: The following article, written by the pre-eminent public official in the Empire of Ananto and Kalistan, namely, Her Imperial Majesty Empress Carolina II Ananto, was submitted via the online submissions portal, and was approved via a doubleblind peer review process. Despite not being written by a professional academic, it did meet the standards of this journal, and was approved by a panel of five peers following moderate revision and resubmission. Her Imperial Majesty did not inappropriately influence the placement decision of this Journal, which values its academic and ideological independence. -Ed.

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Abstract
An article was recently placed in The Valruzian Journal of Political Thought, (5621), No. 3 that discussed the differences between deliberative and majoritarian forms of democratic participation. This serious piece argued that substantive democracy is achieved not through mere aggregation of preferences through simple majorities, but through the process of deliberation which allows citizens to have a more complete and thoughtful expression of interests in the society. The article used Valruzia's recent constitutional alterations as an example of efforts to put deliberation into the democratic process to give the people of that nation a more complete experience with self governance. The article makes several important points, that form a coherent and intelligent argument for deliberative democracy as superior to vulgar majoritarianism. However, while it presents itself as a epistemic evaluation of deliberation, it makes a number of a priori assumptions about citizens and government itself which must be accepted for the argument to hold. If those a priori assumptions are challenged, the moral argument for democracy, and also democracy of the deliberative variety, falls apart. In short, citizens "can", but the author fails to examine whether they "should" engage in self government in the first place. This article hopes to shine a light on the normative side of the that author's argument, where he unfortunately fails.

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Introduction
Earlier this year, Mr. Gawel Sandow, who is the President and Chancellor of the Republic of Valruzia, published an article in The Valruzian Journal of Political Thought. In it, the scholar turned politician and leader of his nation, made a very impressive argument for deliberative democracy. One could in fact argue that indeed, it was quite persuasive, and if a country is committed to democracy, as an ideological matter, his prescriptions certainly should be considered and in fact heeded. They were well thought out, very well argued, and well presented in the journal.

The most impressive arguments had to do with knocking out the intellectual supports for majoritarianism. The author stated very eloquently that "the preferences of individuals are often ill-formed, inconsistent, manipulable and indifferent to the interests of others. A democracy conceived purely as preference-aggregation would be, at best, an elaborate and expensive way of formalising the prejudices of the moment." (Sandow, 8) This is of course not a critique of democracy, as the author explicitly states, but more a critique of the prevailing notion that preferences are the same as interests, and the confusion among apologists for democracy, especially majoritarian democracy, that votes are interest-based when in fact, this is often quite far from the truth. Most especially in situations where voters participate in elections as a discrete event and as a political spectacle, rather than something that is solemn and should be extremely deliberate.

There is a lot in this article to appreciate. But: This article has one fatal flaw which kills it in its cradle, sadly. It makes a number of assumptions that are utterly unsustainable. It assumes first of all, and most devastatingly that democracy is necessarily a good thing. By good, we mean, morally good. The poison pill is so casually buried in the prose that it could be missed by someone who is already inured to support democracy. The coup de grace of the article, the reason according to the author, why we should adopt deliberative democracy can be made with the reasons of his argument alone. But he shows his hand unfortunately when he steps from the positive to the normative realm.

At his heart, Sandow is less a theorist and more a crusader, and unfortunately, that weakens the positive arguments he makes above. He states: "Democratic procedures are valuable because they embody equal respect for persons, and because ( talking always under the right conditions) they tend to produce outcomes that are wiser and more just than those that any individual or small group could generate alone."

We ask "Why?" This is, after all, the meat of a theoretical discussion--An understanding of a phenomenon, be it physical or metaphysical. In the debate we are engaging here, this is essentially THE epistemological question. Why do democratic procedures automatically produce outcomes that are wiser and more just than those that any individual or small group could generate alone? The author gives absolutely no reason for this massive argument in his work: He just assumes that it is so. And here is the weakness, not just of his argument, but all arguments which try to provide a moral justification for the superiority of any democracy, whether it be prefaced with an adjective like "deliberative" or just in its native naked state: The a priori assumptions are that groups of people always come to a better decision or a more just decision than a single individual. And this is simply not true, and therefore, the argument for democracy is fatally flawed. It wants that to be so, but you cannot simply make it so by wanting it. This is the bedrock that the deliberative democracy argument is based upon, and unfortunately, its as vacuous as if the foundation were set in sand.

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Points of Argeement
Let's set aside the normative weakness for a moment, and list the points that the author made in support of his argument, which, in the absence of the a priori normative assumptions, would go to very strongly make the author's case. Sandow shines when he takes apart majoritarianism. He very correctly states "Democracy, properly understood, is not a counting mechanism. It is a system of collective self-governance..." Yes, this is correct: our own understanding of the term democracy talks not about self-government specifically, because self government would be fundamentally anarchic in nature, but where the people themselves rule themselves, as a body. The author make this distinction implicitly. Democracy is "the People Govern", not "I govern Myself". This is a fundamental but very important distinction. Because even in a democracy, there is no expectation that each individual, who, the liberals will say, knows his own mind and his own interests best, shall nonetheless be charged to make a government for and unto himself. That would be what they refer to as the State of Nature, and we all, perhaps Mr. Sandow included, can agree that where-ever we are, we are not there.

He goes on to say: "[...Majorities] can be wrong, can act unjustly, and that democratic legitimacy requires something more than headcounts." In fact, we would even go so far as to say they frequently are wrong. There is the notion of central tendencies in statistics that underlies the concept that majorities are frequently right, but this notion applies to datapoints, not living breathing individuals. In other words, 1000 individuals can correctly guess the number of jelly beans in a jar almost always if their guesses are averaged; 10,000 can do so without fail, where one person can be wildly off so much so that we could say their guess was entirely random. That's central tendencies.

But when interests are involved, or worse, when preferences are involved, central tendencies rather always just fall apart. Put another way, when a guess is made on the jar with the instrumentalist goal of the guesser personally benefitting from the contest, as we see in elections, there is a tendency to cheat introduced. And the central tendency-ness of the game goes out the window. When interest is introduced, majorities fail to select socially acceptable choices, let alone normatively good ones, so frequently that it is impossible to guess the outcome of a contested election with any regularity, regardless of how much data you bring to the question.

In fact, majorities have almost always been the enemy of the minority. If the wolves are the majority, the sheep always get eaten for dinner. So the author's critique is well made and founded in history. Whatever, majorities do not produce socially desirable outcomes with any more regularity than throwing a dart at a wall filled with a list of all possible social outcomes of a policy while blindfolded would.

We also absolutely agree that votes are expressions of "a set of beliefs, preferences and values that have been formed largely outside any deliberative process..." and that what passes for discourse in a modern liberal democracy is "more often than not, a competition between pre-packaged narratives, each designed not to inform but to activate... not the considered judgment of an informed citizenry, but the aggregated emotional response of a population..." We agree because it is difficult to view the vote in liberal democracies--who make voting into a ritual unto itself and divorce the expression of the voters from any sort of policy outcomes, which is a problem in nearly every modern democracy in Terra--as anything other than a statement of taste and preference, akin to the answer of the question, "Which do you want? Dark Chocolate or Milk Chocolate?" There is no more substance in an election decision in a liberal, majoritarian democracy than this, because the elections themselves are proforma, rather than substantive.

A good remedy for this is, as the author prescribes, a deliberative process which encourages slow, collaborative thinking and discussion among informed citizens who have the time and the opportunity, in a society which encourages that sort of behavior, to make decisions with an eye to the common good, rather than the individual good. A society which doesn't treat its elections like popularity contests, a society which encourages informative and empowering political education and meaningful participation of its citizenry at all times, not just at elections, where the people do not just think, but know that their interests are reflected in public policy. We can agree to all of that, and with these slight revisions, let it all lay on the table unmolested.

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Democracy is its own worst enemy
And yet: We would argue that democracy actually undermines deliberative process, explicitly because it set interests at odds with competing interests. It does not resolve the problem that supposedly gives rise to the need for democracy in the first place. Even if we agreed with all of these things, we have to acknowledge that there is a difference between "should" and "is" which are not to be conflated, and we think the author also acknowledges this.

Sandow argues: "The working person who lacks the time to follow parliamentary debates, the rural community that receives its political information exclusively through a single partisan media outlet, the young person whose civic education consisted of hearing heated debates in their family lunches rather than practicing the habits of collective reasoning – none of these people are stupid. They are poorly served. The remedy is not to discard their votes but to transform the conditions under which they form their political judgments."

But in making this argument for "should" which he does, the Author also acknowledges the "is". In this world, not in the world as it should be, our voters do form their opinions from partisan media sources, hearing heated debates by bigoted or opinionated adults, workers do not have time or, it could be said, interest to follow esoteric policy debates in Parliament. All of these things are acknowledged. In fact, Mr. Sandow himself pays homage to this when he mentions that sociologists have "documented the systematic irrationality of human choice." Human choice is often formed by many things other than reason, even when it is a free decision. Prejudice often comes into play, and that prejudice is not always structurally conditioned, but may sometime be informed by experience or just plain ignorance. One's ideology necessarily causes a person to privilege certain sources of information over others, and then discount ones which do not conform to their ideology, even though they may be freely available and may be saying the correct thing. A lot of things inform voters which have nothing to do with structural limitations, and those opinions aggregated in a vote may be beneficial or harmful to the rest of society.

Put plainly, political attitudes are not solely the result of concentration of the ownership of the means of political communication, underfunding or devaluation of civic education, and economic insecurity that reduces the cognitive and temporal resources available for political reflection. We could look at Kalistan, with a militantly free press, an explicit and very robust commitment to civic education and participation in our schools and in our society, and relative economic equality that provides workers with the sort of resources which would free them to learn all about government and the law. We should be the most obvious case for the structural preconditions for deliberative democracy, and yet, we reject democracy, as a society: Just like those who cannot pay attention are not stupid, those who are opposed to democracy are not brainwashed.

So why should we ask people in democracies, flawed though they are whether by structural or individual causes, to participate in government anyway? What makes those people any more qualified to determine the course of public policy, or say anything about the justness of a war, or help determine the rate of taxation for people they will never meet, than a group of people whose job it is to do just that? Who DO have access to the debates, and who DO deliberate with peers about justness and fairness rather than getting distracted by the proper operation of a highly technical machine? Who MUST follow discussions in Parliament? Why would a person who has no worldly interest or experience in government be given a vote anyway? That makes no sense.

Put another way: Should we be encouraged to express our opinion on a technical skill for which we are not trained at all? Should we be consulted over the operation of a brain surgery or the team mechanics necessary for a football team to prevail on Sunday? One may watch television dramas about brain surgery and watch football religiously, but asking them to then perform brain surgery or coach a team to victory is the same request you make of even the most informed yeoman citizens when you ask them to vote. They are not legislators. Why should they be given the power to select leaders? Worse yet, why would you give novices, which every even nominally informed citizen must necessarily be, the opportunity to become a legislator without some form of general training first?

When we separate the world as we would like it to be from the world as it is, we see a system which is ripe for plucking by corrupt individuals who will prop up a demagogue, using the people's ignorance as a vehicle for political power to pursue their wicked ends. Not always, of course, but this is where institutional rules come into play. Yes, some governments still do punish corruption. Kalistan is among the most enthusiastic about punishing corrupted public officials, but, most nations just hope elections will take care of them, because, strangely enough, those same corrupt people, when they were in office, wrote rules to protect themselves and other corrupt people like them.

But institutions are not free-for-alls. All institutions have some structure, by their definition. The Government itself is an institution. One could compare it to a military organization, in fact. For many of the same reasons. No reasonable military in the world operates on democratic bases. The defining characteristic of a modern, professional military is a unified and clearly stated chain of command. You do not let the troops vote. Why not, one may ask. Everyone, from the lowest boot private to the Commander in Chief knows that orders must be followed or people die. Nobody goes into the military expecting to get to vote, and those few in history who have instituted democracy within the ranks in the past did so because their goal was to destroy morale and demobilize the military.

If we do not trust those we ask to kill for us with democracy, why would we trust the state, which holds perhaps more comprehensive power over life or death in their hands, with democracy? The state's power is potentially far more deadly than the military's power. So why would you ask uneducated, uninterested, and uninformed individuals to manage that power? There is no good reason why. But this does not stop democrats from attempting to make them do so anyway, and sadly today, that category includes the wonderful thinker, Mr. Sandow.

Before we get to the meat, we wish to take the detour that the Author did as well and talk about technocracy. We agree that technocracy is not necessarily a suitable alternative for majoritarianism. There is no reason that an epidemiologist should be expected to know the first thing about the balance between individual liberty and collective public health. This is correct. We would not argue for this either. But technocracy is not the only alternative to either majoritarian or deliberative models. Another model would be a functional model: Our government is itself an institution and those who are within it are purely functionary. They either do their job or they do not. If they do, they return to continue to do their job. If they do not, they are replaced by someone who will. Without sentiment or regret.

This allows our public servants to be judged based on what they accomplish, rather than what they are able to trick our voters into believing. These are measurable results, not ideational ones. And literally any person is as good as the next in any role. The only thing that matters is whether they do their job. But democrats are also willing to put up with this system as well: they see functionalism every single day in the working classes of their own economy. Not in the managing classes to be sure; In Kalistan we have extended that functionalism to most of our managers as well.

Ending the digression, we return at last to the real problem here.

(continued below)

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(continued from above)

The "Should" question, at last
The digression about technocracy was necessary because this is where we start to see the conflation between the Author's "is" and "should" and this is a critical weakness for his work. It is worth quoting President Sandow in full here:

"... [The] most important political questions lie outside any expert domain. They are questions that belong, irreducibly, to the community of persons whose lives will be shaped by the answers. The deliberative democrat insists on this point not out of romantic populism but out of a clear-eyed recognition that the alternative. That is, the permanent delegation of political authority to self-selected or institutionally selected elites is incompatible with the equal moral standing of persons that democracy exists to honor." (The emphasis is ours.)

This is the assumption behind the entire project, and we dare say, behind the entire argument for democracy writ large. That all people hold an equal moral standing, and that democracy honors that. These are very profound words indeed. Kalistan, largely made up of Brethrenists, would agree that all men and women who draw breath possess an equal moral standing. Men, women, children, the elderly, and indeed, law abiders as well as even violent criminals hold an equal moral standing because they are all judged by a single solitary and objective moral law that determines the goodness, neutralness and badness of their actions. In purely secular terms, all are equal under the law, and all people may be judged as moral or immoral, good or bad based on their observance and adherence to that law.

We do not disagree here.

We do disagree with the jump in reason that the author makes in the second half of the sentence. More because we don't think the author himself actually believes it. We don't think any democrats do.

Why does the author say that democracy exists to honor the moral equivalence of all people? They clearly do not even do this in practice. Nobody lets a 6 year old vote, though that 6 year old is indeed an equal member of the human race. Nobody allows a foreigner to come into their nation to vote or to manipulate their government officials, though indeed, those foreigners are morally equal to all citizens in this nation. It would be absurd to suggest otherwise.

Which puts that statement out there as an absurdity: Democracy honors the moral equality of all humans. Do other systems not? Or is it really a matter of magnitude? Perhaps democrats allow more people to participate than authoritarian states, but there is nothing inherent in democracy that honors the moral equivalence of all humans, and nothing inherent in authoritarianism that rejects that equivalence. It is very possible that the democracy's rules will exclude some categories of people from participation, like children, or convicted felons. And yet this doesn't affect one iota the moral equivalence of humanity. It seems those two things then were tied together for some reason that the author chose to omit.

That moral equality however, is shown to be the moral basis for the author's apology for democracy after all just below this. Again, we quote in full, and please forgive the repeated quotation but it is necessary:

"Democracy, properly conceived, is a system of collective self-governance whose purpose is to enable a community of free and equal persons to shape the conditions of their common life through processes of public reasoning. Its value is not purely procedural – not simply a matter of following the right rules regardless of outcomes – nor purely epistemic – not simply a matter of reliably producing correct answers. It is both simultaneously. Democratic procedures are valuable because they embody equal respect for persons, and because ( talking always under the right conditions) they tend to produce outcomes that are wiser and more just than those that any individual or small group could generate alone." (Again, emphasis is ours.)

There is the reason why you should support democracy, according to our Author. Not just any democracy, of course, but "democracy properly conceived," and "under the right conditions," i.e., deliberative democracy. We can agree that deliberative democracy is a better form of democracy than simple formal performative democracy. And yet... we do not find the argument that democracy is preferable to non-democracy, however you wish to describe this, on the basis that it provides "outcomes that are wiser and more just than those that any individual or small group could generate alone" to be compelling at all.

Why? Why does the author just assert this? We have demonstrated above that central tendencies fall apart under interest. The author is arguing for deliberation to determine the line between preference and interest, and then deliberation to determine what is in, ostensibly, the general interest. So why does he then fall back on central tendency thinking as the mechanism to achieve that "general interest"? And why can more people do this more effectively, more wisely, and more justly than one or a few people can? What makes 5 million opinions about what a person should do more just than that person's own opinion?

That mechanism is the fatal flaw in the logic of all democracy. It is the notion, ultimately that "more" means "more correct". At its very core, the minority can always be outvoted, can be stifled. And yet, the author asserts that the moral justification for that mechanism is that human beings are equal, and democracy is the system that honors that best. He says as much in the above passage, where a large group will always be wiser and more just than a small group. Will a large group of illiterates provide a more just, wiser decision than a single philosopher? Perhaps, but certainly not as a function of the group size.

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What then is Good Government?
Mr. Sandow undermines his otherwise brilliant and well argued point in that little phrase. Because ultimately, at the end of the day, all forms of government are mere methods of ratifying the decisions of the powerful and directing the efforts and resources of society to accomplish what members of the society may not accomplish alone. From top to bottom, there is no other reason for government to exist. If one person can govern himself better than he is governed in a society, he would leave society and just do so. But he stays within the society for the obvious benefits of being in that society (namely the benefits of social distribution of goods and resources), and thereby surrenders the right to be the judge in his own case. This is classic liberal theory. Even the liberals do not believe that the system of government values the inherent equality of each individual person, in and of themselves, but only as a society.

As our government is therefore the method of ratifying the decisions of the powerful--or let's be nicer about it and pretend that the fiction is the truth, of "the society as a whole"--and organizing collective action, it inherently does not value the moral equality of each and every individual. It allows some to win, and others to lose. Or at its best, it allows all to win some, but never anyone to win everything. Either way, the notion that democracy, as a discrete example of the general category "government organizational systems," can somehow transcend one of the necessary characteristics of the general category, is on its face unintelligible.

Our author makes this very bold claim at the end of the argument, in the summary section. We could very easily give him the benefit of the doubt, because the rest of the article was, for the most part, very well reasoned and made his point effectively. But this is how democrats see their system. Democracy is better than non democracy, or in this case, other forms of democracy because it is the only system that inherently values the equality of all humans. That's nonsense, and is the greatest weakness in the arguments of those who attempt to justify democracy.

Giving him the benefit of the doubt, that particular point shows that the author has fallen to the trap of confusing "should" for "is." We have countless examples of how democracy has produced far inferior, far less wise and far less just outcomes for its own people than many non-democracies. How democracies go to war when authoritarian states would prefer not to. How democracies are susceptible to corruption in ways that closed absolutist states like Kalistan have been able to avoid. How demagogues so easily trick masses of voters who are regrettably too busy living their lives but must take the time out of their lives to be inconvenienced at the polls. Democracy doesn't produce wiser or more just outcomes, not in a performative formal setting, and not in a deliberative setting either. There is no evidence that deliberation won't lead to the same local prejudices getting voted in, and this time clothed with the fabric of reason. The author doesn't bother to provide any: he merely asserts it as a justification for the system he is advocating on behalf of.

If democracy produces socially optimal outcomes, it is only accidental, it is never clean or usually honest, and it certainly doesn't honor and uphold the inherent moral equality of all humanity. It should be, but it regrettably is usually the result of elite deal making, where the people themselves do not see their interests in the final outcome. Perhaps this is for the best: for the democrat, it is certainly a moral bad. Democracy certainly does not more reliably produce morally good outcomes more often than a correctly ordered regime of any size, because the moral good is the function of the correct ordering of the society and its government, not of the amount of participation among the electorate.

Or, to put it another way, it is not the "deliberative" part of President Sandow's argument which is weak. It is the "democracy" part.