Garett Jones  

William of Orange, Political Import

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In the corporate world, it's common for top executives to be recruited from outside the firm, even outside the industry.  But in American politics, convention and sometimes law require politicians to have longstanding ties to the geographic areas they ostensibly serve.  

That shrinks the market for politicians: If a governor has apparently done a good job running a small state, why not bring her in to run a bigger state?  Why shouldn't Americans be able to at least consider Tony Blair or (after his term ends) Manmohan Singh for President?  

It's not like it hasn't happened before.  In the late 1600's, the British had the right idea: Look around the world, find the biggest economic powerhouse, and import their CEO.  

You can see why the Dutch stadtholder William of Orange (half of the future William and Mary) was so appealing: The Netherlands was The First Modern Economy in the words of de Vries and van der Woude.  Plus William looked good on a horse:

WmOfOrange.jpg

The history books usually talk about the religious disputes that led to William of Orange's rise to the British throne, but economic motives--or at the very least, national status hierarchies--had to be in play as well.  When you don't know where success comes from--when the production function is a mystery--you might as well copy the market leader's every detail (if the opportunity cost isn't too high).  

Yes, you can go too far, one of the many points Spike Lee was likely making in this excellent commercial.  But CEOs matter, so you should at least consider an external hire.  In American politics, we don't do that. 

Most of the barriers to political imports seem cultural: To many voters, it just seems weird to have a mayor from Albuquerque run for mayor of Seattle.  But nobody blinks if the CFO of mid-size bank becomes CEO of a larger one.  In other words, here, as in so many cases, we should blame voters for democratic failure.  

From the comments: Hadur notes that the Poles and Hungarians often imported their kings (wiser to shop around when the local sourcing market is small), and Thacker notes that Sam Houston was governor of Texas and Tennessee.  

Houston is still the only person to serve as governor of two U.S. states.  The absence of gubernatorial recycling is prima facie a failure of U.S. political markets.  

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CATEGORIES: Public Choice Theory



COMMENTS (18 to date)
Hadur writes:

Poland and Hungary adopted this approach and elected their kings, who on multiple occasions were foreign noblemen. Arguably, two of the greatest kings of Poland were an ethnic Hungarian from Transylvania and a Catholic Swede.

John Thacker writes:

Sam Houston was governor of two states, Tenneesee and Texas. A few other men were governor of a state and a territory, or two territories, I believe. It was more common when there was a frontier.

Brad D writes:

Perhaps you're right. But what the folks want in say, Nashville, TN, isn't necessarily the same things folks want in Seattle, WA. And in politics, idealogy reigns supreme. Rick Perry will never be elected to the governorship of California.

Andrew writes:

@Hadur:
But look how well that worked out for Poland and Hungary! Poland - gobbled up in 3 pieces by Austria, Prussia, and Russia. Hungary - paralyzed by a too-powerful aristocracy. See Thomas Ertman's "Birth of the Leviathan" on how Poland and Hungary experienced "patrimonial constitutionalism" which inhibited the development of an efficient modern state.

When you don't know where success comes from--when the production function is a mystery--you might as well copy the market leader's every detail.

So, who is the relevant "market leader"? According to the CIA World Factbook, the country with the highest GDP per capita (PPP) is Liechtenstein. Actually, compared to Romney or Obama, Hans-Adam II doesn't look half-bad.

Matt Cooper writes:

William of Orange got the job because a) his wife was from the royal Stewart line and b) he was a Protestant (well maybe the horse thing too). I don't think they thought the Dutch were prosperous because William was a wise manager who tried to maximize general welfare. People then were less gullible than today.

Also, let's acknowledge Liechtenstein leads in GDP per capita because it's a tax haven for the wealthy and the US is too large to follow that approach. Among large countries, the one to follow is.....the US. We could probably learn a lot from the Swiss though.

Bob Knaus writes:

If you go one layer down, there is a highly competitive national market for those who "serve at the pleasure" of the governor. This includes the heads of most state departments, and in many cases their deputies and top management.

Governors may be local, but they can and do choose from the best nationally to implement their policies.

egd writes:
Matt Cooper writes:

People then were less gullible than today.


More properly: people then who made decisions about leadership were less gullible than today.

I'm not sure why Mr. Jones thinks voters in a democratic society support "top politicians." Qualifications are a secondary concern to appearance and the ability to give a good speech.

daubery writes:

Well there are a lot of things wrong with this.

For one, William of Orange was not even 'King' of the Dutch Republic. It was, after all, a Republic, and the Orange Stadtholders were more like one political faction within it. Not, incidentally, the mercantile faction.

For another, the power struggle in the British Isles that led to him becoming King of England, Scotland and Ireland was also a matter of faction, not simply everyone agreeing James II was a bad King. He probably was a bad King, but because he alienated the most numerous and powerful politico-religious faction of his subjects, particularly those with political influence, not so much because of his economic policies. William was chosen because he was the only protestant monarch with a half-decent claim to the throne, not because of the Dutch Republic's economic policies.

Finally, while the coup was undeniably supported by a lot of people in England and was 'invited' by a lot of English magnates, it was ultimately also a military invasion that enormously strengthened the position of William personally and the Dutch Republic in general. And it wasn't preordained that the English army, which did face William in battle before its general and others defected, would not fight or even defeat William's.

Of course you can say indirectly, since the protestants supported the Bill of Rights, proto-free markets, and overseas trade, that this did lead to Britain's (already strong) economic position strengthening further. Fine. But that's more a happy accident.

Ken B writes:

Much as I appreciate referecnes to The Glorious Revolution I was about to chime in when I saw daubery did an excellent job.

It is all too easy to forget, now that we have neutered Christianity in our culture, how powerful a spur religious faith can be. The GR was about religion, and the legitimacy of the constitution, which could not suffer the head of the church to owe allegiance to the pope. Untold lives were lost over these issues.

David R. Henderson writes:

Harold Stassen was a governor of Minnesota who later ran, unsuccessfully, for governor of Pennsylvania.

Ken B writes:

I read an interesting bit by Chris Selley about Canadian Prime Ministers and provincial premiers. One pundit observed that no premier had ever become Prime Minister. "Ah how quickly we forget Charles Tupper!" said Selley.


(For you Yanks, Tupper was the last of a series of very brief leaders in 1896 just before Laurier took office and held it for 15 years. Tupper lasted about two months.)

BZ writes:

While I generally agree, there are some reservations in my mind. For example, since power corrupts, if someone is local and native, perhaps their natural nationalistic affections, or if nothing else, the fact that their power/money base is local, will temper some of the effects of that corruption. (e.g. Raising taxes TOO much will piss off my historical doners, but raising taxes on THOSE people is different.)

guthrie writes:

To add to daubery and Ken B's comments, it would seem that one of the 'costs' of William's ascension would be the lives of several thousand Irish and the beginning of centuries of insane and avoidable strife between the two island nations. Economics might have had a part to play in his rise to the English throne, but that part is likely quite small. Perhaps there was a better example to make your larger point?

Hadur writes:

@Andrew:

Poland and Hungary both collapsed because they had a highly decentralized government where aristocrats could too easily impede government action. That is absolutely correct. I do not see what this has to do with how their kings were selected: there have been plenty of weak states "governed" by impotent hereditary dynasties as well, and I don't think that a too-powerful aristocracy is a necessary product of an elective kingship where foreigners can be elected.

Indeed, elected kings from half a continent away could often serve as honest brokers between rival aristocratic actions, and this is often why a foreigner rather than a local was elected in the first place: he was credibly neutral.

Steve Sailer writes:

Germany was the biggest economic powerhouse in Europe in 1939, and yet, for some reason, some other (presumably unenlightened) Europeans resisted letting Hitler run things.

txslr writes:

Is it really necessary to point out that Sam Houston was also the President of the Republic of Texas? Doesn't everyone know this? Next you'll forget the Alamo!

Sheesh!

Patri Friedman writes:

Seems like a classic example of my general "folk activism" thesis that people think very differently about politics and business, as if they are using different parts of their brain. Political instincts are tuned mostly to forager society (small group consensus), where it would be unthinkable to import someone from another tribe.

Because there was so little economic activity in forager days, our business instincts have less folk intuition, and the folk intuition is more from farmer days. Though it still has plenty of bias (folk economics).

The activist corollary is that we can greatly increase people's political intelligence if we can convince them simply to use the other brain (rather than convincing them their political folk intuitions are wrong).

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