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On the flip side, Paul Kennedy's "The Rise and Fall of the Great Powers" is a fascinating read on the benefits of decentralization. The premise is that in the

On the flip side, Paul Kennedy's "The Rise and Fall of the Great Powers" is a fascinating read on the benefits of decentralization. The premise is that in the 1500s, no one thought Europe was going to be the next great power. The dominant civilizations at the time were the Chinese and the Ottomans. Why did Europe win? Because no one could unify Europe. It was basically a collection of states. Whereas China and the Ottoman Empire were centralized. The problem with centralization is that if the guy at the top says to do something, everyone must fall in line, even if it's a bad idea. China used to have the most dominant navel fleet in the world. Then in the early 1500s, their government decided to stop building ships. Which ultimately led to them falling behind in the world order. In Europe however, even if one country received a decree to stop building ships, it wouldn't stop the others from doing so. This created a hotbed of innovation and competition that allowed them to develop rapidly. And establish dominance. The trade offs between centralization and decentralization are fascinating.

jandrese 2y ago
It mirrors in a lot of ways capitalism vs. communism. Or more precisely market based economies vs. command economies. The ultimate problem is that efficient distribution of resources depends on the unique conditions at thousands or millions of sites across the country. The people who are most well informed about what is needed are the people at those sites. The fundamental problem with command economies is transmitting that information up to the central source without overwhelming the system. Because it is way too much information to deal with they have to make simplifying assumptions, which lead to inefficiencies that compound over time. The more decentralized your decision making the more efficient the system runs. However, this has drawbacks as it becomes hard or impossible to focus on big problems. On the flipside centralized systems are highly vulnerable to corruption. No system is perfect, and the most sensible systems use a combination of both.
- matthest 2y ago
  100% agree. Market economies really do seem like the only way to prosperity in the modern era. Mao's command economy had the country stuck in poverty. Deng's market economy reforms turned them into a superpower.
  - jandrese 2y ago
    Yep, but remember that not everything works efficiently on a market. Utilities like water and power with high barriers, at least on the distribution side, shouldn't be left to the whims of a free market. We have plenty of historical precedent where market based solutions fared poorly compared to a more command oriented approach. You often see politicians and ideologues who insist that the market is the only solution to any problem, and these people are wrong and their solutions can lead to tragedy.
    - matthest 2y ago
      Agree regarding water and power, and really anything environmental. As far as the market goes, I think part of the problem is that most industries are not true free markets, AKA: high competition, low barriers to entry. Industries that are close to true free markets: restaurants, barbers, spas, handcrafted goods, almost any manner of small business. These are some of the most ancient industries and have never collapsed or become overrun by corporations. The issue with something like deregulating banks is that banking is not a true free market. There is no high competition (it's concentrated by a few corporations). So deregulating it can be disastrous because it's basically allowing a corporate monopoly to run wild. If they deregulated it AND made a massive concerted effort to bring a ton of new, smaller, independent banks to the market, perhaps it could become a self-sustaining free market that truly benefits the people, with little need for government intervention.
      - TuringTest 2y ago
        > As far as the market goes, I think part of the problem is that most industries are not true free markets, AKA: high competition, low barriers to entry. That sounds like the classic "if all you have is a hammer, all problems look like nails". It's true that decentralised decision making can make good use of local information. But you're ignoring the kind of problems that are created by decentralisation itself, so they can't be fixed by more of it. A system that is being optimized with only local information is prone to getting stuck in local minima, situations which can be very far from the true optimum. To escape from the local minima you need to gather global information compiled from the whole system, and use it to alter the decisions that individual actors would make from just their locally achievable information. That's the role of regulation, and why regulated markets work better than chaotic ones. Regulation can make individuals coordinate to achieve larger goals than what's possible without it. And to enforce effective regulation you need some kind of authority, which is centralised. Of course that raises the question of how that authority is created and what goals does it set; for that, we get politics, with various groups trying to influence what the authority will decree and whose interests it will pursue harder.
dbspin 2y ago
History is complicated. The reason the Chinese stopped building (and in fact scuttled) their fleets is collective trauma after the mass genocide carried out by the Mongols. Including the decapitation of the Chinese imperial elite and the erasure and sacking of several notable cities. The reason the Mongols were able to do what no steppe people had done before was because of the centralisation of the hordes under the leadership of Temujin, otherwise known as Genghis Khan.
- matthest 2y ago
  True. Centralization under the right leadership will always be more efficient than a decentralized system. But if it's the wrong leadership, the results are far more catastrophic. Centralization is high risk/high reward.
Aloisius 2y ago
Isn't who is decentralization vs. centralization in your argument seems to be more about comparing a group of states to a single one than anything else? Seems a bit like an apple vs. fruit basket situation.

jandrese 2y ago

It mirrors in a lot of ways capitalism vs. communism. Or more precisely market based economies vs. command economies. The ultimate problem is that efficient distribution of resources depends on the unique conditions at thousands or millions of sites across the country. The people who are most well informed about what is needed are the people at those sites. The fundamental problem with command economies is transmitting that information up to the central source without overwhelming the system. Because it is way too much information to deal with they have to make simplifying assumptions, which lead to inefficiencies that compound over time. The more decentralized your decision making the more efficient the system runs. However, this has drawbacks as it becomes hard or impossible to focus on big problems. On the flipside centralized systems are highly vulnerable to corruption. No system is perfect, and the most sensible systems use a combination of both.

matthest 2y ago
100% agree. Market economies really do seem like the only way to prosperity in the modern era. Mao's command economy had the country stuck in poverty. Deng's market economy reforms turned them into a superpower.
- jandrese 2y ago
  Yep, but remember that not everything works efficiently on a market. Utilities like water and power with high barriers, at least on the distribution side, shouldn't be left to the whims of a free market. We have plenty of historical precedent where market based solutions fared poorly compared to a more command oriented approach. You often see politicians and ideologues who insist that the market is the only solution to any problem, and these people are wrong and their solutions can lead to tragedy.
  - matthest 2y ago
    Agree regarding water and power, and really anything environmental. As far as the market goes, I think part of the problem is that most industries are not true free markets, AKA: high competition, low barriers to entry. Industries that are close to true free markets: restaurants, barbers, spas, handcrafted goods, almost any manner of small business. These are some of the most ancient industries and have never collapsed or become overrun by corporations. The issue with something like deregulating banks is that banking is not a true free market. There is no high competition (it's concentrated by a few corporations). So deregulating it can be disastrous because it's basically allowing a corporate monopoly to run wild. If they deregulated it AND made a massive concerted effort to bring a ton of new, smaller, independent banks to the market, perhaps it could become a self-sustaining free market that truly benefits the people, with little need for government intervention.
    - TuringTest 2y ago
      > As far as the market goes, I think part of the problem is that most industries are not true free markets, AKA: high competition, low barriers to entry. That sounds like the classic "if all you have is a hammer, all problems look like nails". It's true that decentralised decision making can make good use of local information. But you're ignoring the kind of problems that are created by decentralisation itself, so they can't be fixed by more of it. A system that is being optimized with only local information is prone to getting stuck in local minima, situations which can be very far from the true optimum. To escape from the local minima you need to gather global information compiled from the whole system, and use it to alter the decisions that individual actors would make from just their locally achievable information. That's the role of regulation, and why regulated markets work better than chaotic ones. Regulation can make individuals coordinate to achieve larger goals than what's possible without it. And to enforce effective regulation you need some kind of authority, which is centralised. Of course that raises the question of how that authority is created and what goals does it set; for that, we get politics, with various groups trying to influence what the authority will decree and whose interests it will pursue harder.

dbspin 2y ago

History is complicated. The reason the Chinese stopped building (and in fact scuttled) their fleets is collective trauma after the mass genocide carried out by the Mongols. Including the decapitation of the Chinese imperial elite and the erasure and sacking of several notable cities. The reason the Mongols were able to do what no steppe people had done before was because of the centralisation of the hordes under the leadership of Temujin, otherwise known as Genghis Khan.

matthest 2y ago
True. Centralization under the right leadership will always be more efficient than a decentralized system. But if it's the wrong leadership, the results are far more catastrophic. Centralization is high risk/high reward.

Aloisius 2y ago

Isn't who is decentralization vs. centralization in your argument seems to be more about comparing a group of states to a single one than anything else? Seems a bit like an apple vs. fruit basket situation.