Hellerian Capitalism IV: Francis Fukuyama's Patrimonialism



As Francis Fukuyama himself seems quite keen to emphasise, ‘impersonality’ and ‘patrimonialism’ are probably the two most significant theoretical concepts in his just-released second volume of a popular history of ‘the state’ and political development. The first volume was The Origins of Political Order, and the new one is titled Political Order and Political Decay

After the tough criticism my 2009 book made of Fukuyama’s earlier and very innovative 2004 book State-Building, it is to his considerable credit that Fukuyama has belatedly now caught up with the basic logic of the fundamental Weberian idea that development of impersonality and transitions out of patrimonialism (personalism) are the defining elements in the emergence of the modern state. Fukuyama distinguishes ‘patrimonialism’ from ‘modern capitalism’, and describes their transition as the central dynamic of institutional change in history.

Correctly, like me, though for somewhat different and partially unconvincing reasons, Fukuyama’s new book Political Order and Political Decay establishes that rule of law is the first of three original institutional “development sequences”. Conceptually this fresh and clear focus on “three sets of institutions” looks very much like a repackaging of my emphasis throughout Capitalism, Institutions, and Economic Development (2009) on three historically-sequenced interacting institutions of impersonal law (first), impersonal public administration (second), impersonal political representation (last), though I cannot fathom why Fukuyama regards only the second sphere as ‘the state’ proper. The organisational units of law and democracy are also ‘the state’. As I have argued often in this blog, they are subject to the same or equivalent procedural dynamics. 

As in his previous two books on the state Fukuyama continues to insist on idiosyncratic Asia-centric claims, such as that the ancient Chinese state was ‘modern’ and ‘impersonal’. Of course the ancient Chinese states were for long periods highly disciplined, strong and centralised organisations with ‘universalistic’ characteristics. The meritocracy of civil service examinations certainly impresses. But to claim these states were ‘impersonal’ in the ‘modern’ sense stretches the logic of Weberian theory to breaking point. 

Characteristics of institutional impersonality that concretely began to emerge in early modern Europe, particularly sixteenth and seventeenth century England, which can be celebrated and revitalised in the twenty-first century, are in my opinion of a different ‘order’. Fukuyama’s celebration of Asian state strengths might be justifiable on numerous grounds, but it is clear that he has not absorbed intellectually the full meaning of the system of integrated-interactional ‘impersonal’ governance. Fukuyama is absolutely right to say that advanced Western societies themselves have not fully instituted impersonality in their governance systems. However our politicians will be profoundly misled if the scholars conceptualise this rather mysterious and challenging task of deepening depersonalisation by drawing weird parallels with the state in Qin and Han China. 

One gets the impression that Fukuyama is not yet able or willing to grasp either the range or subtlety of Weber’s discourses on the “procedural” characteristics modern state. Instead, like many others before him, he lazily substitutes the ‘iron cage’ rigid-bureaucratic machinery metaphors (these are the usual straw men of all vulgar Weberisms). 

Nevertheless I commend Fukuyama for recognising the glaring definitional overlap between Weber’s theory of patrimonialism and recently-invented concepts like ‘limited access order’ and ‘extractive state’, both of which are examples of the lengths would-be academic celebrities and power-brokers will go today in order to sound new or revolutionary. The competitive pressures of inter- and intra-disciplinary envy, prejudice, and rivalry on one hand, and academic publishing’s commercial construction of novelty and elite intellectual leadership cliques (novelty producers) on the other, are fast becoming the academic equivalent of mediocrity straightjackets. With his reputation exceptionally secure, Fukuyama’s more traditional approach -- exemplified by old-fashioned respect he shows for the work of Samuel Huntington -- is refreshingly freer of requirements for superficial novelty. 

Douglass North’s concept of ‘limited access’ in the book Violence and Social Orders coauthored with Wallis and Weingast, along with Acemoglu and Robinson’s concept of ‘extractive’ institutions in their book Why Nations Fail, are really only patrimonialism relabelled. That is what Fukuyama implies with judiciously devastating politeness in his new book Political Order and Political Decay, and I quote two relevant passages:
“At one stage in human history, all governments could be described as patrimonial, limited access, or extractive.
“The term ‘limited access’ comes from North, Wallis, and Weingast, Violence and Social Orders. This book’s distinction between limited-access and open-access orders is [another] way of thinking about the transition between patrimonial and modern states.
Once I finish reading it I may consider providing a fuller review of Francis Fukuyama’s Political Order and Political Decay here at Heller Economic History Entertainments. 

Addendum 28 September 2014: 

Weber’s descriptions of the transitions to a modern state, notably in terms of my pioneering conceptual linkage between depersonalisation, the historical sequencing of three institutional domains of law-administration-representation, and the perpetual danger of decay, are not well understood. The failure of contemporary Weberian theory as well as of capitalism theory, development theory, and state theory more generally to detect these linkages is the reason I wrote a book in which institutional ‘impersonality’, ‘sequences’, ‘decay’, and my hitherto unique institutional triumvirate of law-administration-representation figure so prominently (one may wish to observe that Fukuyama usually uses the word ‘accountability in place of ‘representation, but the ideal-type meaning turns out to be identical, i.e. it means the peculiarly modern whilst imperfect kind of legal democratic procedure identified by Weber)

I was the first writer to explicitly combine these ‘Weberian’ insights in one integrated conceptualisation of the origins of the state institutions of modern capitalism. I included a side serving of Schumpeterian theory in order to explain crisis-induced institutional change (Weber and Schumpeter really belong on the same plate, but although Weber understood decay he lacked a theory of crisis). 

That is why I am now pointing out that Fukuyama’s effort to combine an institutional sequence (law first, democracy last) with related concepts of a Weberian hue is not original. As I was forced to say here last month in relation to another academic megastar (Douglass North), “I had the idea first”. In the future I will no doubt also find time both to praise and criticise Fukuyama’s particular way of fitting the theory with the historical record. I am a fair person, and quite passionate about acknowledging sources and giving credit where credit is due.

In his chapter 31 on Political Decay Fukuyama writes: 

“Modern institutions, which are supposed to be impersonal even if not necessarily democratic, are vulnerable to insider capture... The process of elite or insider capture is a disease that afflicts all modern institutions”. 

Yes, and in academe as elsewhere ...

Brian Levy’s Working with the Grain, just published, also has my new development paradigm — institutional impersonality and sequenced institutional development — front and centre of its conceptual framework. It too refuses to cite my book. This new publication by Levy, which excludes any mention of my influence, is endorsed on its back cover with fulsome praise from Douglass North and Francis Fukuyama


NOW, BACK TO BUSINESS ...

So I return with nostalgic (triumphal?) satisfaction to my 2003 ‘Capitalism’ proposal to Princeton University Press and Yale University Press which contains the first drafts of arguments about institutional impersonality and the developmental sequencing of three state institutions, arguments which, in the same year 2003, I also submitted to (and had rejected by) top refereed USA-based academic journals. 

The following “developmental model” of transition from patrimonialism to modern capitalism is explained with more subtlety in my 2009 book. But the short section I am pasting here today still offers what I regard as a most useful overview of principal insights stemming directly from Weber’s innovative analysis of institutional transition from traditional to modern societies. Alongside his original definitions of patrimonialism (several important ones are quoted below) Weber included parallel concepts for describing transitional states, e.g. degrees of “closure” and “openness”.

The nub of the rub is that in social science there is nothing new under the sun. To pretend otherwise is dishonest. Moreover the old is often somewhat better than the new. 

[start of insert]
________________
Chapter 4: Capitalism by Michael Heller (2003)
Section 4: The developmental model 

Out of the complex interactivity of social institutions there emerges a discernible progression from tradition to modernity. I now briefly examine the typical form of this development, and one that remains most relevant trend today. I refer to the model of transition from patrimonialism to capitalism. What follows is intended only to establish the normative-procedural orientation of patrimonialism and to identify key elements which are unique to the evolutionary progression toward capitalism. The task provides an opportunity to distil Max Weber’s precise account of this transition. 

In the strictest sense of the word ‘patrimonialism’ is only a special category or ‘pure type’ of traditional domination or traditional authority. In this limited form Weber describes it as a form of rulership based on the development of “an administration and a military force which are purely personal instruments of the master” who “appropriates” a “personal right” of authority “in the same way as he would any ordinary object of possession”. The ruler can “exploit his right like any economic asset” (Weber 1922/1978). 

Patrimonial rulership is characteristically “arbitrary power”. The ruled are “treated as subjects”. Even in relatively modern settings patrimonialism signifies a form of authority “not essentially different from that of the head of a household, or a landlord, or a master of serfs”. Belief in the ruler’s authority is “based on personal relations that are perceived as natural” (ibid.). Reciprocal informal obligations are placed upon the ruler, not to exceed his powers, and to dispense gifts, favours and benefices. Patrimonialism “was the specific locus for the rise of favouritism - of men close to the ruler who had tremendous power, but always were in danger of sudden, dramatic downfall for purely personal reasons” (ibid.). 

Many good studies have shown how such a system of personal loyalty percolates through political-administrative regimes as every patron’s clients become, in turn, patrons to layers of clients. The sociological basis of legitimacy in patrimonialism is clientelist “personal loyalty” to the ruler, as against feudalism, the other main variant of traditional authority, where legitimacy rests on a contract for fiefs or prebends which bind vassals to a lord. But whereas feudal arrangements are now almost non-existent it is still usual to see stabilising political and economic patterns whose conditions of existence are, in their essential features, ‘patrimonial’. 

In the Weberian analytical schema, traditional authority is contrasted on one hand with charismatic domination based on the overpowering personality of a leader, and on the other with modern legal-bureaucratic domination which is legitimised by an orientation to laws of state. Bendix calls these three concepts of domination “archetypes of human experience” (Bendix 1960/1977). As analytical categories they aid the study of historical patterns of rulership which remain combined in most political systems. Weber warns that demarcations between all such categories are never absolutely clear.

The same historical phenomenon may be in one aspect feudal, in another patrimonial, in another bureaucratic, and in still another charismatic… Hence, the kind of terminology and classification set forth above has in no sense the aim -- indeed, it could not have -- to be exhaustive or to confine the whole of historical reality in a rigid scheme. Its usefulness is derived from the fact that in a given case it is possible to distinguish what aspects of a given organised group can legitimately be identified as falling under or approximating one or another of these categories. (ibid.)

This same overlapping occurs wherever capitalism combines with antecedent conditions. Yet it is important to recognise that the three-pronged Weberian framework of domination - tradition, charisma, and bureaucracy - is not an essential component in the study of capitalism. It is possible to simplify the framework for present purposes without doing injustice to Weber’s theory. 

I wish to argue that patrimonialism, as it regularly appears throughout Weber’s writings in Economy and Society, encapsulates key procedural and normative components which identify it as capitalism’s antithesis. As an aggregate of conditions and characteristics patrimonialism represents the archetype of pre-capitalism. 

The analytic usefulness of the concept ‘patrimonialism’ is that it facilitates comparisons between contemporary systems where capitalistic and non-capitalistic socio-economic action are combined empirically. A rudimentary knowledge of patrimonialism is therefore essential for comprehending capitalism. 

We are not on unfamiliar ground here. It may be recalled that in his study of the ‘open abstract society’ Popper describes a ‘closed society’ as “still a concrete group of concrete individuals, related to one another not merely by such abstract social relationships as division of labour and exchange of commodities, but by concrete physical relationships such as touch, smell, and sight” (Popper 1945). Similarly Weber speaks of patrimonial society as “the concrete consociation and compromises of individual power-holders… and the concrete arrangements made between them” (Weber 1922/1978). 

Practically everything depends explicitly upon the personal considerations: upon the attitude toward the concrete applicant and his concrete request and upon purely personal connections, favours, promises and privileges. (ibid.). 

In modern states, Weber goes on to say, “impartiality” is embedded in the “abstract validity of one objective law for all… without respect of persons” (ibid.). So, the defining normative orientation of governance in patrimonial society -- this can hardly be called procedural since it is arbitrary by nature -- is the personalism of concrete relationships. Not even bribery can be calculated in advance, since, as in all other matters, this is “settled from case to case” (ibid.).

Because discretionary exercise of power maintains this social system of favour and disfavour it goes without saying that patrimonialism is incompatible with free representation. There can be no democracy when rulers appropriate authority as a “personal right”. More to the point, we should ask -- could patrimonialism coexist with rational law and administration? The answer must be negative. We can think firstly of the pliant, politically compromised or simply venal nature of law in present-day developing societies. Paradoxically some of the characteristics of developing societies, a great abundance of laws, a revering of constitutions, the special prestige of the legal professions, and the suffusion of legal-bureaucratic norms which penetrate into the conduct of everyday affairs, are often placed at the service of privileged groups which are loyal and submissive to the authoritarian power. 

We can think likewise of the exaggerated growth of the populations and functions of state bureaucracies, the self-interested administration of state affairs, and the element of arbitrary personal discretion that creeps into important official dealings with private individuals and groups. All this exists in spite of a superficial appearance of formality, expressed in statutes, decrees, breathtakingly complex organisational hierarchies, procedural layers, and a mania for paperwork. 

Personalism in all its forms is still the hallmark of life and work in transitional societies. In relatively advanced developing countries traditional norms and procedures of personal contact and loyalty survive within and alongside ‘modern’ legal, administrative, and political infrastructures of the state. The formal abstraction of systems is mere appearance and rhetoric. In truth ‘touch, smell, and sight’ -- i.e., Popper’s concrete relationships, concrete arrangements of domination, and naked monopolistic power and influence -- still hold sway.

Weber’s own words best convey the universal meaning of patrimonialism and its modern significance as a predominant tendency of pre-capitalism in developing countries. The following examples taken from Weber’s discussions of administration and law deal with the economic impact of patrimonialism. There was a time when “all law, all jurisdictions, and particularly all powers of exercising authority were personal privileges… the ‘prerogatives’ of the head of the state” (Weber 1922/1978). Yet now the residues of patrimonial justice are found in developing societies. Judgements “rendered in terms of concrete ethical or other practical valuations” according to the judge’s discretion “are so often venal, precisely because of their irrational character, [and have] permitted the development, and often the exuberant prosperity, of the capitalism of traders and government purveyors and of all the pre-rational types known for four thousand years, especially the capitalism of the adventurer and booty-seeker, who lived from politics, war and administration” (ibid.). 

Thus: 

A typical feature of the patrimonial state in the sphere of law making is the juxtaposition of inviolable traditional prescription and completely arbitrary decision-making, the latter serving as a substitute for a regime of rational rules. (ibid.) 

The legal underpinnings of capitalism are contrasted by Weber with the opposite role of law in patrimonialism. The crux is the “negative anticapitalist effect of patrimonial arbitrariness” (ibid.). The “capitalist enterprise rests primarily on calculation and presupposes a legal and administrative system, whose functioning can be rationally predicted, at least in principle, by virtue of its fixed general norms” (ibid.). 

The bourgeois strata generally tended to be intensely interested in a rational procedural system and therefore in a systematised, unambiguous, and specialised formal law which eliminates both obsolete traditions and arbitrariness and in which rights can have their source exclusively in general objective norms. (ibid.)

Then:

Equality before the law’ and the demand for legal guarantees against arbitrariness demand a formal and rational ‘objectivity’ of administration, as opposed to the personal discretion flowing from the ‘grace’ of the old patrimonial domination. (ibid.)

Similar residues of personalism are evident in public administration, above all, in effect if not in theory, where there is no clear “separation of the ‘private’ and the ‘official’ sphere” (ibid.). In neopatrimonial regimes the power of officials “derives from the treatment of the office as a personal right and not, as in the bureaucratic state, from impersonal interests” (ibid.). 

Thus:

The notion of an objectively defined official duty is unknown to the office that is based upon purely personal relations of subordination. Whatever traces of it there are disappear altogether with the treatment of the office as benefice or property. (ibid.) 

In modern neopatrimonial states the ruler’s personal influence is usually less. But by observing the dynamics of public administrations we can see that defining aspects of patrimonialism continue to condition policy making. The official’s power often remains discretionary, the boundaries between offices of state may be arbitrary and overlapping rather than clearly demarcated, and conflict between jurisdictions of state originate in struggles over personal rights or economic competition between officials, rather than primarily in functional specialisation, freely contested public policy debates, and formal procedures for the ‘separation of powers’. Here we encounter what Weber referred to as: “the ad hoc official whose powers are defined by a concrete purpose and whose selection is based on personal trust, not on technical qualification” (ibid.). 

In sum, the normative-procedural orientation provides the key to understanding these developments: 

[The] negative aspect of this arbitrariness is dominant because… the patrimonial state lacks the political and procedural predictability, indispensable for capitalist development, which is provided by the rational rules of modern bureaucratic administration. (ibid.)

Weber underlines the point frequently because it is essential for understanding capitalism. In contrast to “bureaucratic impartiality and the ideal - based on the abstract validity of one objective law for all - of administering without respect of persons, the opposite principle prevails” (ibid.). Without the binding regulations of modern states: 

[The] entire system of public norms of the patrimonial state in general… lacks the objective norms of the bureaucratic state and its ‘matter-of-factness’ which is oriented toward impersonal purposes. The office and the exercise of public authority serve the ruler and the official on which the office was bestowed, they do not serve impersonal purposes. (ibid.) 

The emergence of a monetary and market economy does not of itself denote “capitalistic” economic action (ibid.). Weber observes that quite a number of economic activities usually associated with capitalism are “indigenous to patrimonial regimes and often reach a very high level of development” - notably trade and state procurement of supplies from private enterprise, and some forms of agriculture (ibid.). 

In these ‘higher’ developments of patrimonialism public office is still used for private gain by officials or for the benefit of favoured private enterprises. We know from studies of contemporary rent-seeking that recourse to public offices for dispensations in pursuit of private gain is not compatible with capitalism. The following examples also suggest a direct relationship, if not sameness, between rent-seeking and the stabilisation of traditional normative orientations in the economy.

Both tradition and arbitrariness affect very deeply the developmental opportunities of capitalism. Either the ruler himself or his officials seize upon the new chances of acquisition, monopolise them and thus deprive the capital formation of the private economy of its sustenance, or the ubiquitous resistance of traditionalism is reinforced by them so as to hinder economic innovations that might endanger the social equilibrium. (ibid.)

Social scientists describe rent-seeking today as the pursuit of self-interest by political and economic actors in institutionalised settings where there exist “opportunities for private gain that do not involve increased production”, which generate “social waste rather than social surplus”, or “directly unproductive profit-seeking” (Buchanan 1980, Brennan and Buchanan 1987, Colander 1984). It is not usually recognised that one of Weber’s most important contributions to the study of political economy is his analysis of rent-seeking in terms of the granting of rights to monetary contributions which do not depend on profit-making activity in the market and, thereby, “which check the development of capitalism by creating vested interests in the maintenance of existing sources of fees and contributions”. 

In a category which Weber inappropriately calls “politically oriented capitalism” -- it clearly does not denote ‘capitalism’ in the sense that I define it -- Weber discusses “opportunities for predatory profit from political organisations or persons connected with politics”, or in “business activities which arise by virtue of domination by force or of a position of power guaranteed by the political authority”, or “profit opportunities in unusual transactions with political bodies” (Weber 1922/1978).

It is quite possible that a private individual by skilfully taking advantage of the given circumstances and of personal relations, obtains a privileged position which offers him nearly unlimited acquisitive opportunities. But a capitalist economic system is obviously greatly handicapped by these factors… Industrial capitalism must be able to count on the continuity, trustworthiness and objectivity of the legal order, and on the rational, predictable functioning of legal and administrative agencies. (ibid.) 

This brief excursus on Weber’s writing was not intended to present a complete picture of patrimonialism but only to single out core normative components of a developmental model which runs from ‘the cult of the personal’ to the establishment of the impersonal routines and regulations of capitalism. The foregoing passages from Economy and Society (1922/1978) are broadly representative of Weber’s wider generalisations about capitalism and patrimonialism. They underscore a transition from concrete social relationships to abstract procedural orientations. It is probably true to say that this normative change is the fundamental aspect of the transition to capitalism, and of all that the transition implies in terms of economic, ethical and socio-institutional transformations. 

The possibility of a rationalised capitalism always stands conceptually in contrast to pre-capitalist domination. These insights into the normative basis of social relationships in patrimonialism reinforce our earlier finding that calculability and predictability are factors that distinguish modern industrial market society from what went before. It is implied here, furthermore, that the contemporary resistance to economic rationalisation that has its roots in personalism places developing countries today on a path between patrimonialism and a market society. Policy makers in transitional countries should not expect miracles from the enclaves of capitalistic economic action that in truth exist only within social systems that are characteristically patrimonial.

[end of insert]


Related recent writing in which I discuss Fukuyama’s work:





Michael G. Heller ©2014

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