NRx – Formula of Madness: Neo-Cameralism

For any readers who aren’t aware, the NRx, an abbreviation for the Neo Reactionary movement or The Dark Enlightenment, is a movement/project that is anti-egalitarian, anti-cosmopolitan, anti-democracy[1], etc. The Neo-Reactionaries get considerable influence from Hans Herman Hoppe and the Alt Right. The movement also proposes revamped pre modernist analyses and modes of organization. This post will be a brief overview of one of those modes and a critique of it as well, neo cameralism.

Neo Cameralism Explained.

Neo Cameralism was conceived of by Curtis Yarvin, who writes under the pseudonym Menicius Moldbug. In Neo-Reactionary philosophy, sovereignty must always be conserved. One cannnot eliminate it, control it, nor replace it with spontaneous order. Sovereignty is always conserved. We shall call this the First Principle of Reaction or FPR for short. Assuming FPR as true, usual libertarian conceptions of bottom-up, horizontal, decentralized ways of providing security, arbitration, lawmaking, and the concept of spontaneous order are all flawed as they all attempt to do away with sovereignty and stand in contrast with the FPR. The FPR must always hold, even in a stateless society. Nick Land states:

Anarcho-capitalist utopias can never condense out of science fiction, divided powers flow back together like a shattered Terminator, and constitutions have exactly as much real authority as a sovereign interpretative power allows them to have. The state isn’t going anywhere because — to those who run it — it’s worth far too much to give up, and as the concentrated instantiation of sovereignty in society, nobody can make it do anything. If the state cannot be eliminated, Moldbug argues, at least it can be cured of democracy (or systematic and degenerative bad government), and the way to do that is to formalize it. [2]

Moldbug’s way to “formalize it” was through the organization of society into what he dubs “sovcorps”. A sovcorp is a private corporate entity that takes on the tasks of governance in a local territory, a “private government” if you will. There would be thousands or tens of thousands of these private monarchies, competing to get subscribers. All land would be privately owned by large sovcorps, power within the sovcorp would also be kept in check by the means of contemporary corporate power structure and shareholder ownership. Moldbug eagerly cites US corporations as proof of the functionality of such a system.

Why is this system more functional than others in Moldbug’s eye? Because taking into account the FPR, Neo-Cameralism is able to abide by it without running into the problems of Imperio in Imperium, the ability for internal subpowers(subsidiaries) to take control of the main governing body(centre). Democratic governance runs into this problem according to Moldbug, I agree here as well. For him, the corporate power structure had the potential to bypass Imperio in Imperium with a functional separation of powers. Despite some problems he observed in corporate management, he still held that.

Internal management in modern Western corporations is pretty good. At least by the standards of modern government, imperio in imperium is nonexistent. (It should not be confused with the normal practice of internal accounting, which does not in any way conflict with an absolute central authority and a single set of books.)[3]

The Flaws Exposed

The 3 main contentions for this critique are:

• FPR vs Knowledge and bottom up custom
• Possibility and consequences of and near 100% privatization
• Calculation, knowledge, and stability problems within the corporation.

FPR Vs Metis

The FPR’s logical conclusions are that of the necessity of sovereignty in a form that bypasses the problem of Imperio in Imperium. For the Neo-Reactionaries, this means pre-modernist systems of governance opposed to democracy. However, a realization of the nature of knowledge and a contextual understanding of custom derived laws undermines this. The FPR can be interpreted in two ways:

1. Leadership in society is inevitable and needed
2. A sovereign ruler is needed with all the power to manage and maintain statecraft and society

1 doesn’t vindicate the necessity of Neo-Cameralism and can be incorporated through a bottom-up fashion. 2 however is what Neo-Cameralism upholds. The FPR then is implying the inevitable existence and necessity of a pre-modernist mode of managerialism, branded as “sovereignty”. Such a principle then is falsified by the role of metis in societal order.

Metis is tacit knowledge, only accessible by the active participants of society. Customs, norms, institutions, and culture are created through the manifestation of the metis of all individual members of society. Thinkers such as Hayek and modern thinkers such as James Scott, have recognized this social and epistemological truism. As such, social order is the product of spontaneous order, a concept which brutalizes the FPR entirely by proving the possibility of corporate-sovereignty being replaced by bottom-up organization, or maybe even a distorting force on order itself.

Due to metis, one must view society in a dialectical manner, as a system of many interrelated parts and micro-systems. This stands in contrast with atomistic and organicist approaches of viewing the functions of society. The Neo-Cameralist model of society does not acknowledge this. Not only is the FPR rendered invalid, as shown above, also rendering the need for sovcorps invalid, but Neo-Cameralism itself is an acontextual model of social organization despite its pandering to culture and tradition. The premodernist modes of governance NRx call for definitely suffered from this problem. James Scott delves into how pre modern governments found the need to simplify social institutions in order to maintain “legibility”, which is essentially the ease at which the state can manage affairs and perform tasks like tax collection.

The premodern state was, in many crucial respects,
partially blind; it knew precious little about its subjects, their wealth, their landholdings and yields, their
location, their very identity. It lacked anything like a detailed “map” of its terrain and its people. It lacked,
for the most part, a measure, a metric, that would allow it to “translate” what it knew into a common
standard necessary for a synoptic view. As a result, its interventions were often crude and self-defeating.

….How did the state gradually get a handle on its subjects and their environment? Suddenly, processes
as disparate as the creation of permanent last names, the standardization of weights and measures, the
establishment of cadastral surveys and population registers, the invention of freehold tenure, the
standardization of language and legal discourse, the design of cities, and the organization of transportation
seemed comprehensible as attempts at legibility and simplification. In each case, officials took
exceptionally complex, illegible, and local social practices, such as land tenure customs or naming customs, and created a standard grid whereby it could be centrally recorded and monitored

Each undertaking… exemplified a pattern of relations between local knowledge and practices on one
hand and state administrative routines on the other…. In each case, local practices of measurement and
landholding were “illegible” to the state in their raw form. They exhibited a diversity and intricacy that
reflected a great variety of purely local, not state, interests. That is to say, they could not be assimilated into
an administrative grid without being either transformed or reduced to a convenient, if partly fictional, shorthand.

The premodern state, in order to increase legibility, had to demolish the complexity of social institutions instead of preserve and increase it like the NRx desire. And as the third quote shows us, the premodern state was rendered illegible due to the metis of the society in which it tried to govern, as such it had to override it with a simplified social order of its own. If what we attribute to spontaneous order is in reality a product of sovereign power, we shouldn’t expect such friction for a state proclaimed by NRx to be a natural mode of governance

In a point more related to the Neo-Cameralist dream of a sovcorp owned city, Scott(1998) goes over many examples of urban planning in his book. One for example, shows how Brazilians attempted to build and plan a city, its transportation systems, its housing, etc. in a similar way a neo cameralist may attempt to do so, and how the project failed miserably. Neo-Cameralism and effectively the NRx movement get social order wrong.

Possibility and Consequences of 100% Privatization

The Neo-Cameralist vision is one where most if not all property is privatized. So the majority of people living in NeoCameraltopia would most likely be subscribers to one of many large sovcorps who own their own patch of the earth. However, how is such a scenario possible and how did mass privatization occur historically?

As theorists such as Albert Nock and Franz Oppenheimer understood, mass privatization of land was impossible through pure voluntary exchange aka the “economic means”. For them, mass private appropriation of property was only possible through legalized plunder aka the “political means”. Ownership of such ill gotten land is maintained through a state created property rights system which gives false legitimacy to that land. Now you know what conservatives advocate for when they cry, “property rights!”. Even Mises himself had this to say on the issue:

Nowhere and at no time has the large-scale ownership of land come into being through the working of economic forces in the market. It is the result of military and political effort. Founded by violence, it has been upheld by violence and by that alone. As soon as the latifundia are drawn into the sphere of market transactions they begin to crumble, until at last they disappear completely. Neither at their formation or in their maintenance have economic causes operated. The great landed fortunes did not arise through the economic superiority of large-scale ownership, but by violent annexation outside the area of trade. (1951, p. 375)

Historically, one only needs to point to the enclosure movement as an absolute vindication of their writings. For Neo-Cameralism then, the latifundia would have to maintain their ill gotten land through “private enforcement” of illegitimate titles and maintain the coercive apparatus that secures their artificial property rights themselves. If “drawn into the spheres of market transaction” however, their ownership of the land will be bound to collapse.

Such a dystopian setting, where sovcorps own the vast majority of property and most people are subscribers is far from fulfilling an often praised role of private property: to grant autonomy. Roderick Long shows that:

It is true that private property provides a protected sphere of free decision-making—for the property’s owners. But what is the position of those who are not property owners (specifically, those who do not own land)? A system of exclusively private property certainly does not guarantee them a “place to stand.” If I am evicted from private plot A, where can I go, except adjoining private plot B, if there is no public highway or parkland connecting the various private spaces? If everywhere I can stand is a place where I have no right to stand without permission, then, it seems, I exist only by the sufferance of the “Lords of the Earth” (in Herbert Spencer’s memorable phrase).

Far from providing a sphere of independence, a society in which all property is private thus renders the propertyless completely dependent on those who own property. This strikes me as a dangerous situation, given the human propensity to abuse power when power is available.

It may be argued in response that a libertarian society will be so economically prosperous that those who own no land will easily acquire sufficient resources either to purchase land or to guarantee favorable treatment from existing land owners. This is true enough in the long run, if the society remains a genuinely libertarian one. But in the short run, while the landless are struggling to better their condition, the land owners might be able to exploit them in such a way as to turn the society into something other than a free nation. [4]

Paradoxically, the mass privatization of land completely undermines the role of private property in granting autonomy. And if one is to take the adage of a property owner “being the absolute monarch of his own property” seriously, then one can imagine the sway the sovcorps have in the control of society. Sure, we may have thousands or tens of thousands of sovcorps, but given that we also have billions of humans on the planet, the system isn’t decentralized to any meaningful extent. If it weren’t for the sovereign-corporate structure Moldbug praises, this wouldn’t be a problem as better methods of organization and leadership could be developed. But the demands of mass privatization Neo-Cameralism demands are out of touch with the reality on how such a result is engendered.

Corporations Vs Firm and Organization Theory

The Neo-Cameralist vision relies on the corporation as a viable form of economic organization that can efficiently conduct affairs. Unfortunately, NRx libertarians do not have the economics to back this up. At best, they can only point to Mises’s blind faith in double-entry bookkeeping to solve the problems of economic calculation but that will be futile here.

First, it will be necessary to describe the life cycle of any firm. A firm is born as an “island of specialization”, for markets in of themselves are unable to increase specialization. For example, if a worker decides to specialize in half a production stage instead of the entire stage, he faces increased uncertainty for stepping out of the market’s production process. There is no guarantee he will be able to find someone working only the second half of the production stage to sell his output to. Per Bylund calls this problem the “specialization deadlock.”

Modern markets employ extensive specialization and a certain baseline of it is needed for there to be a formal market in the first place. As such, no economy or new industry can start out as a firmless market, there needs to be a considerable degree specialization and that can only come through the firm. As such, every new industry starts out with large, vertically integrated firms. However, these firms must act outside of the market to specialize in the first place, consequently making them suffer from the Economic Calculation Problem.

As the inefficiencies in the large firms due to this get revealed, copycat entrepreneurs enter the market in order to help improve upon the capital structure and such, this increase in participants allows for a market in stages of production. As such, firms have an incentive to outsource stages of production, and as such have a tendency to “dissolve” into market over time. This tendency can be counteracted by new innovation, however, these innovations are low hanging fruit caught by startups. They aren’t discovered through the large R&D budgets of corporations. Because of this, firms in the freed market are temporary if not ephemeral phenomena, and large corporate empires are a result of economic privilege.

The Neo-Cameralist might object with “But entrepreneurs as you have described them are acting exactly as sovereigns by changing what you call the ‘capital structure’. There is no spontaneous order here at all! Checkmate lol!”

But as we have seen in our critique of FPR and on the nature of metis, this is far from the truth. We established that if it’s definition 2 the FPR upholds, then the sovereigns are in fact social managers and managers suffer from a lack of access to metis. Entrepreneurs however do act upon this tacit knowledge, no top-down approach is taken. If the Neo-Cameralist wants to keep insisting that our entrepreneur is a sovereign, then he is ultimately upholding definition 1 of the FPR. And as we established, 1 does not vindicate the Neo-Cameralist’s ideology whatsoever.

Moldbug’s faith in the internal management of the corporation is misplaced as well. Kevin Carson points out the problems of the internal management of corporations.

One big problem with Mises’s model of entrepreneurial central planning by double-entry bookkeeping is this: it is often the irrational constraints imposed from above that result in red ink at lower levels. But those at the top of the hierarchy refuse to acknowledge the double bind they put their subordinates in. “Plausible deniability,” the downward flow of responsibility and upward flow of credit, and the practice of shooting the messenger for bad news, are what lubricate the wheels of any large organization.

As for outside investors, participants in the capital markets are even further removed than management from the data needed to evaluate the efficiency of factor use within the “black box.” In practice, hostile takeovers tend to gravitate toward firms with low debt loads and apparently low short-term profit margins. The corporate raiders are more likely to smell blood when there is the possibility of loading up an acquisition with new debt and stripping it of assets for short-term returns. The best way to avoid a hostile takeover, on the other hand, is to load an organization with debt and inflate the short-term returns by milking.

Another problem, from the perspective of those at the top, is determining the significance of red or black ink. How does the large-scale investor distinguish losses caused by senior management’s gaming of the system in its own interest at the expense of the productivity of the organization from losses occurring as normal effects of the business cycle? Mises of all people, who rejected the neoclassicals’ econometric approach precisely because the variables were too complex to control for, should have anticipated such difficulties.[5]

The mentioned problems of the flow of accountability and credit, the information disconnect for rational factor allocation, the fragile conditions that enable corporate raids, and the inability to evaluate losses caused by management’s own doing, reveal the weaknesses in a corporation to properly disperse information within the firm.

Conclusion

Neo-Cameralism is a flawed attempt at creating an anarcho-capitalist society to suit the twisted desires of the Neo-Reactionary movement. It relies in the virtues of sovereignty, full privatization, and the functional corporation. All of these “virtues” however, have been revealed for how dysfunctional and detached from social and economic reality they really are.

[1] Democracy is obviously a flawed system. I agree with the NRx on this point, such a mode of governance is far from redeemable.

[2] 10, Rhodes February, et al. The Dark Enlightenment, http://www.thedarkenlightenment.com/the-dark-enlightenment-by-nick-land/.

[3]“UR.” Neocameralism and the Escalator of Massarchy | Unqualified Reservations by Mencius Moldbug, http://www.unqualified-reservations.org/2007/12/neocameralism-and-escalator-of/.

[4] James Scott (1998) Seeing like a state: How certain schemes to improve the human condition have failed.

[5]A Plea for Public, http://www.freenation.org/a/f53l1.html.

[6]Carson, Kevin A. “Economic Calculation in the Corporate Commonwealth: Kevin A. Carson.” FEE Freeman Article, Foundation for Economic Education, 1 June 2007, fee.org/articles/economic-calculation-in-the-corporate-commonwealth/.