“The age we are about to enter will in truth be the ERA OF CROWDS.”
-- Gustave Le Bon, The Crowd: A Study of the Popular Mind (NY: Dover, 2002)
Can a crowd ever be wise or good? There seems to be no folly however mad, no crime, however savage, that a mob of men goaded by passion cannot commit.
When they are thrown into the company of legions of their fellow men, some chemistry turns humans who are individually of irreproachable integrity and unimpeachable prudence, into stark raving blockheads. That this is sometimes called democracy does not improve matters.
But if we did not have the tyranny of the majority, say the collectivists anxiously, would we not end up only with the tyranny of the minority? If we reject democracy, won't we end up with plutocracy?
Money and business, they argue, can be just as coercive as states and armies. Are not states and armies often for hire by the money men? Didn't Carnegie send in state troops to break up his unions and fire on his workers? Doesn't Microsoft bribe governments in Asia, and didn't United Fruit topple governments in Latin America?
We don't doubt that this argument has some merit to it. We are quite sure that businessmen, like any other group of people, will get away with whatever they can get away with whenever they can. But, we are also inclined to think that without being able to jiggle the levers of power on their behalf, few businesses would ever get to the size needed. Few would be able to inflict damage on the scale that even a government of middling incompetence can.
And besides, while many businesses do use fraud -- and force -- to swallow up their competition, a commercial transaction, in essence, remains a voluntary exchange between individuals. If you choose to buy neither Pepsi nor Coke, it is unlikely that either company will force you to drink their product. But refraining from pulling the lever for either Bush or Kerry does not rid you of the guaranteed presence of one of the two in your life for at least the next four years. What's more, drinking Coke does not entail any other obligation on you. You are not now compelled to eat at Burger King, wear Reebok shoes, or shop at K-Mart. It is an isolated act. But think of the convoluted and improbable complications that have arisen just because enough lunkheads chose to vote for George W. Bush. It is no consolation to say that there would be an equal number of complications -- even if different -- if other lunkheads had had their way and elected M. Kerry to office. The bottom line remains that voting for Bush or Kerry is not simply a matter of voting for Bush or Kerry. It is voting on the nature of Middle East policy, the proportion of the budget to be spent on arms, health or education, the character of the Supreme Court, the future of wildlife refuges, the health of the ozone, the size of the trade deficit, the status of the dollar -- and an almost infinite host of issues, questions, policies and debates the outcome of which even experts who have spent a life time on them are likely to do not much more than guess at
* * * * * * * *
Now it is true that businesses can be heavy-handed when they sell their products. A shepherd always try to persuade his sheep that their interests and his coincide. The art and science of sheep-suasion -- advertising -- for some, constitutes the original sin of the modern economy., And not without reason. Like Satan himself, the modern advertiser is armed with devilish knowledge of the human psyche far beyond the ken of the yokels of the Eden whom he is about to swindle.
Like Satan, he addresses his blandishments first to the female of the species. Notice how real estate agents know well to whom they should pitch their Jacuzzi-armed bathrooms and granite countertop heavy kitchens? Just so, the advertiser is certain that the purchase of anything in the household -- even a fig leaf -- needs to be okayed by the lady of the house first. He waves the apple and his advertising copy under her nose before her husband's.
When it comes to the market, in other words, even before the umpire allows it on to the field, sex is up and batting. Had it not been for his old lady, our thick headed Adam might still be idling buck naked, his feet up, enjoying the rest of the peaches and pears in paradise. As it turned out, however, Mrs. Adam had an eye on the social ladder. How could she let her spouse hang around in his bare bod neither toiling nor spinning, content with his rustic life among the apes, when all heaven beckoned? But for an in with the better crowd she needed something new, said the wily salesman. She needed to take a bite of the big apple. We know how that world first ad campaign ended -- with the two consumers locked out of their home, sweating their derrieres off in the fields to pay off their little binge. Adam got the workday and his better half got labor pains . . . and their soul was mortgaged to the devil for eternity
Which might be better terms than those facing homeowners who hocked their houses in interest only or adjustable rate mortgages -- where they might not have the luxury of eternity before lenders come calling.
So yes, modern advertising is the spawn of the devil we have no doubt. Subliminal sales pitches nestled in the jingles on TV do their damage regardless of our conscious choice. Yet, the fact still remains that ultimately it is the consumer who buys or does not buy. And should he fail to take the bait, no goons come knocking at his door or truss him up like a Thanksgiving bird. Let a soldier fail to show up for duty long enough, however, he is liable to be chastised, investigated and perhaps court-martialed.
So you don't want your minds turned into mush by advertising? There is a simple remedy -- turn off the TV. But, try turning a blind eye to the law and you are likely to find yourself in the pokey in short order. And here we confess our bafflement. Day after day, the lumps complain about the stratospheric salaries of film actors, baseball players and CEOs. You would think they would worry about keeping their money from adding to the outsize salaries. But what do the idiots do? No sooner do they manage to scrape together a hundred dollars than they blow it on a movie or a baseball game or some flim-flam stock touted by Alf down at the garage. One of your authors, on the other hand, hasn't seen a film in twenty years, although she is happy to spend several times the price of one on a ticket to a play. Why? Because she refuses to buy something she feels is greatly overvalued and she finds commercial films and film actors overvalued.
What we are saying, dear reader, is that if Microsoft's business ethics is . . . well . . . bugging you, shuck Explorer, use Firefox; shelve Hotmail, try Gmail; spurn Windows, install Mozilla; If Walmart's labor practices worry you, switch to K-Mart; if you think American workers are in pain, feel it yourself; pay extra for their products.
But we notice that the complainers and carpers rarely put their mouths where their money is. They buy Chinese trinkets, but curse Chinese exporters; they bewail American consumption, and run up their credit cards.
It cannot all be blamed on the wicked rich, dear reader. It must be blamed in some small part on the wicked poor as well. If there are greedy advertisers -- as there are, alas -- there are also senseless consumers. And if we ban all advertising, we might as well ban politicians from campaigning and bishops from preaching.
But wait -- you think pounding the pulpit is a different matter from making money? Well, we think so too, but it doesn't prevent us from observing that religion has its money men as well, and if they can push their wares in the heart of the temple, honest money changers in the market place should be given their moment too.
In any case, even if we accept that all commerce stinks as badly as an overripe cheese, it is not the only thing that holds people together. There are a hundred voluntary associations, none of which have to do with the state or with trade -- there are churches, charities, reading groups, stamp clubs, sports leagues, sewing circles, scouts troops, firefighting brigades -- none of which use force, fraud, or even filthy lucre to draw their participants. Here, people cooperate, exchange, learn, debate, and act; and all without a gun being fired, a law being passed, or a single cop being hired. If men are such beasts to each other that they need Big Brother breathing down their necks in all weather, as the do-gooders like to argue, how do you account for ordinary civic life?
But the statists have been hammering out their arguments for a while now and they aren't going to give in soon. The grip that holds people together, they say, has to be something stronger than a handshake or things fall apart. The cords that bind should be stouter than heart strings; the glue of human society should be thicker than blood. Voluntary associations depend too much on good will, on feelings that can turn on a dime. The heart is too fragile to bear the weight of responsibility for man's well-being. We have to turn in handshakes for handcuffs and heart strings for leg irons or the jungle will take over, they claim. Homo homini lupus (man is a wolf to man), as one of the greatest statists of all, Thomas Hobbes, wrote. 
It always surprises us that those who love humanity should love human beings so little that they would lock them up for their own good.
"This is one of the paradoxes of the democratic movement," wrote the journalist Walter Lippman in 1914, " -- that it loves a crowd and fears the individuals who compose it -- that the religion of humanity should have no faith in human beings." 
Lippman should talk. He himself had little faith in human beings. A world improver of the worst sort, during WWI, he became an advisor to President Wilson and assisted in the drafting of Wilson's Fourteen Points; which are four more than even God needed. From having started out as a newsman, Lippman soon despaired of the brain power of ordinary citizens. He thought they would never be able to have an informed opinion on important public issues. Most people, he argued, were blinded by partial truths or stereo-types -- a word he coined himself. The average man was a spectator who strolled into a play mid-act and left before the end. He was a member of a herd. And herds required shepherds. The masses needed heroes; or villains on whom they could pin praise or blame for anything they could not control or understand.
In Public Opinion, he wrote:
By the same mechanism through which heroes are incarnated, devils are made. If everything good was to come from Joffre, Foch, Wilson, or Roosevelt, everything evil originated in the Kaiser Wilhelm, Lenin and Trotsky. They were as omnipotent for evil as the heroes were omnipotent for good. 
Lippman understood the source of this tendency. The complexity of the real world.
"We are not equipped to deal with so much subtlety, so much variety, so many permutations and combinations," he wrote. So we make a map of it. The problem however was "to secure maps on which their own need, or someone else's need, has not sketched in the coast of Bohemia."
That is to say, our pictures of the world are more or less fictions. From the madman's hallucinations to the scientist's models, we are all -- to some degree or other -- creating stories and images that correspond only partially to the changing flux of reality.
But then of course, when we act, we step out of this pseudo-environment into the real environment. In war time, he observed, there existed "the casual fact, the creative imagination, the will to believe, and out of these three elements, a counterfeit of reality to which there was a violent instinctive response." From that, Lippman noted, arose Herbert Spencer's tragedy of the murder of a Beautiful Theory by a Gang of Brutal Facts. 
Lippman was also ahead of his time in understanding the nature of the press. Unlike the liberals, who thought it would remedy the defects of public opinion, he knew that it actually intensified them.
So far we have no quarrel with the man. He could have stopped and decided then and there to become a haberdasher or grocer and our respect for him would have remained intact; indeed risen. But instead, the virus of world improvement bites into his innards. He looks at the herd and instead of simply avoiding it, he wants to chivvy it along. He wants to mould it, turn it into putty into the hands of "a specialized class whose interests reach beyond the locality." These experts and bureaucrats -- whom Lippman called "elites" -- we would call "hacks" and "apparatchiks." He wanted a technique of government and proposed a cadre of experts. He got what he wanted. Ever since his time, busybodies have been in charge of the public spectacle of the American government. Political scientists and PR men have been massaging and managing it. We can see how that's turned out.
Lippman was finally no better than the Marxists and materialists he criticized, and he fell a victim to the same errors they committed. Just as they condemned religious ideologues for molding the consciousness of the bourgeoisie with vain hopes of a Christian paradise, and then turned around and tried to mold the consciousness of the proles with the even more preposterous hopes of a communist paradise, he too thinks he can control the masses with propaganda.
At the heart of all these attempts is nothing more than monumental hubris. What makes Lippman take upon himself a role God was unwilling to assume? Even Christianity leaves our free will alone. Christ is content to stand at the door of our hearts and knock. But Lippman would like to pick the lock and make himself at home. In fact, he has made off with the TV and the computer while we are kept slumbering in deep sleep by his posse of propagandists and professional liars.
Lippman has discovered that men cannot possibly know all they need to know to think and act coherently within a large state. They become the target of demagogues and desperados. They are manipulated by editorialists and experts, politicians, and pundits until at the end they can hardly recognize where their own ideas end and other people's opinions take over. In short, Lippman has looked at modern man and found that a large democracy does not suit him. But then, rather than drawing the conclusion that such a state is inherently unworkable and should be thrown out, he does the very opposite. He decides to keep imperial democracy and throw out man.
* * * * * * * *
The Unimportance of Being Earnest
But is man really such a hopeless creature? We admit the evidence is all stacked against him. From Jacob onward, he is a liar and a conman. From Cain down, he is a murderer. But here we make an observation. Goodness is very rarely newsworthy. Had President Clinton been spotlessly faithful to his wife, he would not have graced the front pages so often and entertained us so endlessly. We would have yawned and turned off our TV sets instead of pointing the finger and tittering. Goodness is boring, dull, uneventful.
And for that reason, we have a very biased view of human nature. Accustomed to reading gripping stories of treachery and mayhem, we fail to notice fidelity and kindness. Our eyes are always scouring the distant horizons for colorful scoundrels. The farther off they are, the less we can know of them, and the more our imagination can fill in the gaps. The people we do know, on the other hand, are so close we can hardly see them. We know them so well we cannot reduce them to caricatures that entertain us. And so, entranced by reckless outlaws, we ignore thoughtful in-laws.
The truth is, ordinary people are neither good nor bad. They are, as we like to say, subject to influence. That influence, we have argued in the pages foregoing, tends to the good in private life, in the small circle of a man's friends and family. It tends to the bad in what we call public life, in the infinite circle of opinions and ideas, prejudices and pontifications, with which he is ill equipped to deal and which swirl around him in a miasma through which he can stumble but dimly.
Even in private life, the best laid plans of men are surprisingly apt to go a-gley.
If there is a design in our lives, it is hardly one we spot ahead of us. It is more likely to sneak up on us from behind after we have lived through it. We look back and then notice a pattern in what we took to be meaningless chance. The truth is our intellects, perfectly suited to master the physical world around us are dangerously bad at understanding ourselves or others in the same way. In fact, when we try to do so, we are perpetually rebuffed. Life seems to be as impervious to logic as our lives turn out to be more the product of incremental ad hoc actions piled one on top of another than the execution of any preconceived design.
The Scottish Enlightenment was quick to grasp this:
"Every step and every movement of the multitude, even in what are termed enlightened ages, are made with equal blindness to the future; and nations stumble upon establishments, which are indeed the result of human action, but not the execution of any human design," wrote Adam Ferguson. 
The patterns that arise naturally from our actions rather than from our conscious design create an order far more complex and sensitive than any artificial structure designed by a planning committee. This type of spontaneous order -- unlike the Zugzwang of central planning -- is the result of "natural processes." Not physical nature, true, but something roughly like it -- human nature. In the free market, for example, each actor acts from his own needs and goals and from his perception of the needs and goals of a handful of others. He expresses this through the simple mechanism of pricing. The price feeds back to every one whatever he needs to know about the needs and wishes of everyone else. Pricing is a way of communicating that allows people to spontaneously cooperate and produce in a way that would otherwise require the omniscience of a god. A command economy, by contrast, fails because there is no network of information as extensive and complex available to it. Clueless government hacks are then free to impose any hare-brained scheme they can come up with on their hapless subjects. Where nature produces unpredictable order, the hacks create thoroughly predictable chaos.
"They landed up at my house and made me take this cow," wails Kamlabai Gudhe in Lonsawala, Wardha in the north Indian state of Maharashtra. 
Ms. Gudhe, a Dalit (lower caste) farmer, just lost a husband to suicide in the summer of 2006. If that wasn't bad enough, she was then the target of an act of governmental mercy. She got a cow.
"I said we don't want this," she remembers, when asked.
Other villagers have similar complaints:
"The buffalo I got through the government cost me Rs.120-Rs.150 a day," says one.
"I feed it the wheat meant for my son -- who was the 'beneficiary,'" adds another.
That hasn't stop the bureaucratic Mother Teresas who thought up the aid program for poor farmers in which quality cow relief was the lynchpin. The Maharashtra Chief Minister plans to bring in 40,000 new cows to the area in three years while the Indian Prime Minister guarantees 18,000. Apparently, everyone has a say in the business except the cows; and the villagers.
And now, the scheme turns out to be full of . . . bull. The villagers know nothing about rearing the beasts. And since there has to be someone to look after them, there is one less person earning a living in each household. Inflow and outgo have becomes as mismatched as the US current account.
Or as Mother Gudhe puts it succinctly: "This brute eats more than all us in this house put together. And we don't get more than four litres of milk in a day from it."
None of this was unforeseen, mind you. With admirable precision, if not tact, even the Planning Commission called it "insane." They would know.
"It was not clever to give poor farmers costly cows in places where there is no water or fodder," say the agricultural experts.
And the state supply of chow is so bad that even starved cows turn up their noses at it.
That might be because they aren't from anywhere around the place. They're phoren -- to use the Indianism for it. The Animal Husbandry Dept, which started out looking for cheaper breeds, ended up with Jerseys -- and half breed Jerseys at that -- each costing Rs. 17,500. That's a fortune for poor Indian farmers. Especially in a state where wheat production is in decline from lack of water. What does a starving farmer do with a ravenous cow?
The Jerseys might not be full blood, but they have all of their appetite. They each need Rs. 50 of oil cake a day, green fodder, and someone to look after them. Then there's the Rs. 30 for the bus ride to sell the milk. That adds up to almost Rs. 150 for maintenance against earnings of less than Rs. 70 a day during the milking season. And nothing at all the rest of the year. Why, it's almost as bad as a Neg Am mortgage, dear reader.
Nature can only take away your harvest or starve you.
It takes a bevy of hacks to make you have a cow over it as well.
* * * * * * * *
Law and Disorder
Somalia is the only country in the world where there is no government. It is a pure free market, say some observers.
And according to some others, it is also a Hobbesian jungle where "life is solitary, poor, nasty, brutish and short."
But is it?
It is true that since President Siad Barre was overthrown in 1991, the country has been without a central government.
Rival warlords roam unchecked, pillaging and extorting. Famine has killed more than a million and sent even greater numbers fleeing abroad. Public education and literacy are low compared even to other African countries, there are few roads, and the country is forced to rely on foreign financial institutions for a number of things. Health care is out of the reach of most people.
A failed state, a third world hell-hole, a basket case, you would say. Look what happens when you don't have government, cluck the statists.
But if Somalia is a failed state, it is an odd sort of failed state; with internet cafes all over the place, the cheapest web surfing in the continent, and cheap local and international phone calls. 
There is no formal banking system, but the money exchange services handle up to a billion dollars worth of remittances in a year. The main market in Mogadishu has everything you could want from food to electronics. The private sector offers other services efficiently too -- such as, hospitality and security. Since the demise of the central government, the Somali shilling has become far more stable in world currency markets, while exports have quintupled. 
Look what happens when you don't have government, crow the anarchists.
But here we do an about face. It is true that for the greater part of this book we have been chortling at the government and the governing classes. We have painted them as a public spectacle fit to have scorn and ridicule heaped on them. But we were talking about government as it is today in most countries, unwieldy, parasitical, inefficient, and murderous.
There is another idea of government, with which we have no quarrel. It is the one we find in the Federalist papers and in the writings of the American Revolution. "That government is best which governs least," wrote Tom Paine. For the Founding Fathers of America, government was an evil, but a necessary one, best when it was limited to protecting life, property, and the rule of law -- the minimum conditions needed for a society to flourish.
Anarchists will argue, of course, that you don't need a government to do that. Private groups are perfectly able to provide security, defense and infrastructure. We won't argue with them. We don't believe we know enough of the matter one way or other. But one thing we do know is that both the anarchists and the statists are confused when they talk. They say state when they mean government, and they say government when they mean the rule of law. They confuse anarchy with chaos, and the absence of the state with the absence of law.
Somalia is stateless, but it is not entirely without laws; there is anarchy, but there is not yet complete chaos. Somalia may be an example of how spontaneous order can take root even when the state collapses.
The Law of the Somalis, written by Michael van Notten, goes to the heart of the matter. Van Notten, is a Dutch lawyer who married into a Somali clan and lived in the country for the last decade or so of his life. 
Van Notten points out what the BBC does not want to notice. Somalia might lack a state, but it's not completely without government. The country still relies on traditional Somali customary law, which, he points out, would not be able to work if a central government and western style democracy were imposed on top of it. Somalia's free market is not operating in suspended animation, or in a vacuum. It rests -- in a precarious, wobbly way, it is true -- on the traditional law of the Somalis. And it does have a government -- even if it is only the government of the Somali clans.
Somali customary law and clan government follow natural law closely. And whatever fragments of a genuine free market operate there do so only because of the norms of behavior springing from this indigenous system.
Van Notten makes another interesting point. He suggests that the terrible problems plaguing Somalia don't arise from the free market or the lack of central government at all. Instead they are the result of the constant attempts to impose government, albeit unsuccessfully.
"A democratic government has every power to exert dominion over people. To fend off the possibility of being dominated, each clan tries to capture the power of that government before it can become a threat." 
And the fear of domination is only kept alive by incessant U.N. efforts to intervene and impose a Western style government in the country. Leave the clans alone, he says. Let foreign governments just deal with them.
The irony is, a real free market is not free at all. It is, and always has been, restricted: by laws, customs, traditions, morals, expectations. In Somalia or the West, you have to choose. It is either natural law or the law of the jungle.
We note in this regard the arguments of Peruvian free market economist Hernando Soto. De Soto thinks he knows why the ground rules in the West allow the market to work:
Every increment in production, every new building, product, or commercially valuable thing is someone's formal property. Even if assets belong to a corporation, real people still own them indirectly, through titles certifying that they own the corporation as "shareholders." 
Without these, says De Soto, you don't have a free market, no matter how big a government you have. Otherwise, why is it that entrepreneurship, natural resources, and abundant labor have not saved developing countries like Egypt and Peru, or Kosovo and Colombia?
Without adequately documenting property rights, they cannot "readily be turned into capital, cannot be traded outside of narrow local circles where people know and trust each other, cannot be used as collateral for a loan, and cannot be used as a share against an investment." 
While Western nations have sophisticated legal infrastructures that permit capital to be created, property laws in developing countries are so unwieldy that they actually pose a barrier to economic activity. Some of the statistics De Soto lists would be comical if they were not appalling:
In Peru, opening a small shop with one worker takes 289 days. Registering it costs 31 times the minimum monthly wage. Getting a permit to build a house on state land takes 6 years and 11 months, and 207 procedures in 52 governmental offices. Obtaining legal title to the land takes 728 steps.
In the Philippines, formalizing informal urban property takes 168 steps and 13-25 years.
In Egypt, building on desert land, needs 77 steps, 31 different governmental offices and 6 to 14 years.
In Haiti, obtaining a 5 year lease takes 111 steps and 4,112 days. 
The result of this bureaucratic obstacle course is that people live and work outside the law. And they pay the price. No one will lend them money except family members. So they end up specializing and producing for smaller circles. The result? Lower productivity. Capitalism needs legal protections to work.
But here, we have a bone to pick with Mr. De Soto. He thinks the only laws that work for capitalism are western laws. In fact, the title of his book makes no sense at all to us. Capitalism Fails Everywhere Else? If so, why is Western investment capital flooding China? Not to finance socialism, we can be sure. No, the Communist Chinese have proved to be the biggest capitalists of all. Which means that no particular set of laws and institutions -- as long as they protect the ground rules of exchange -- can claim to be uniquely fitted to the growth of the free market. Instead, the laws that enable spontaneous order must arise spontaneously from each society in which it operates. They have to be the result of the unique history and customs of the people of that society. We think that English common law is no more necessary to Chinese or Malaysian capitalism than we think is necessary to statutory laws, the laws that get passed with pomp and circumstance in legislatures, are not the laws that really govern society. They only look like they do. But if they really did, why is it that the crimes committed by commissars in the Soviet Union, by the Gestapo in Nazi Germany . . . and by the American CIA . . . were all committed with the law books bulging at the seams? It is not how many laws you have that matters, but how well those laws are obeyed -- which is a matter of culture and history, of what people expect and what they are prepared to accept. And to know that takes the study of history and manners; it needs a knowledge of morals and religion. The usual smoke and mirrors sideshow supplied by the political class won't do. You need to turn to the accumulated wisdom of case law and precedent, of customary law and conventions.
What De Soto doesn't seem to know is that the free market arises wherever there have been such laws and systems -- whether in Europe or Africa or Asia.
The spice trade of the Indies, for instance, operated for 500 years without Western laws, yet they corresponded roughly to free market capitalism. In Africa, buyers and sellers met under a tree, not a mall, but what they had was still a market where prices were arrived by bargaining between buyers and sellers, not set arbitrarily by the chiefs.
Africans might have used gold-dust salt before the Europeans brought in paper currencies, but they were still using money.
Today, in fact, some of us might think that gold dust look like the stronger currency.
You can print all the money you want, but if there is nothing to back it up, then you are in a bit of trouble. Your creditors are unlikely to put much store in you as a credit risk. After sometime, they start fretting, just as the world is now wringing its hands over the dollar. Pretty soon, they come calling for their loans with cudgels and pitchforks.
Gold does not have the same problem, because there is a limited supply of it. It has to occur in nature. It has to be found somewhere underground and then mined and refined. It's an expensive business -- that takes risk, time, and money. There are costs attached to it that some one has to pay. Paper money, on the other hand, can be printed any time you want. Just ask Ben Bernanke. He plans to drop it by the helicopter load from the clouds.
In the same way, you can pass all the laws you want on the statute books, you can employ stables full of well-groomed and pedigreed lawyers. But, if there is nothing to back the laws, you are in trouble. Businesses aren't going to want to do business with you. Investors are going to want their investments back.
The problem arises because you can always pass as many statutory laws as you want, even if they have little relation to how the masses of people actually think and act. That means you can have a country where theft and looting are the norm, that might, nonetheless, have very intricate laws on their books against theft and looting. The statutes wouldn't do a thing to help.
Customary law, on the other hand, can't be manufactured out of nothing. It grows organically from the soil in which it lives. It reflects the way people really think and act. It doesn't run so far ahead of its times that it provokes either resistance or indifference from people. Customary law, like gold, reflects real value. And because it does, it is also likely to be accepted by people more often.
Ultimately, customary law works because it is a more sensitive and complex measure of a society. It contains more information from the past -- from the history and traditions of the people. Like the pricing mechanism, it is a communication system that allows members of a group to signal their desires and expectations faster and better to each other. And customary law communicates not just with living members of the group as pricing does. It communicates with the dead; it reflects their desires. Statutory laws, on the other hand, reflect only the demands and desires of one generation, the living, In that sense, you see, statutory law is not democratic at all. Or, at least, not democratic enough. It only consults living citizens. It forgets the dead.
Statutory law is a product of pure reason; it is part of the public spectacle. The facts of history and experience are usually not a part of its beat. Cartesian reason, as we said, is good at technical and physical problems, but it is not very good when it is turned on itself, or on human life. Instead, we are much more likely to understand who and what we are by looking at things we have done in the past -- history -- or things we have made -- culture. Man is first of all, Homo faber (man the creator), and we understand him best by looking at his creations.
Customary laws work, in other words, because they come out of the history and culture of a society. They constitute verum factum (truth as an act) as the Italian philosopher Giambattista Vico wrote in 1710. 
"The criterion and rule of the true is to have made it. Accordingly, our clear and distinct idea of the mind cannot be a criterion of the mind itself, still less of other truths. For while the mind perceives itself, it does not make itself," said Vico.
As more and more of our world is no longer made by us, we understand it less and less. We are forced to fall back on theory and speculation, on isolated reasoning.
But thinking, as Vico pointed out, is hopeless when it remains just isolated reason. It had to include practical wisdom and rhetoric. The Cartesian cogito ergo sum (I think therefore I am) is simply not enough.
In fact, Vico liked to argue that the rise of pure rationality in history was a signal of a declining phase of human culture. He called it the barbarie della reflessione (the barbarism of reflection) and said that it characterized what he called The Age of Man. This was the last phase of his cycle of civilizations. In the Age of Man, popular democracy would run amok and lead to tyranny and empires, which would end in chaos.
Then the whole cycle would begin again, with the age of the gods.
And so it goes on from eon to eon, said Vico.
It makes one wonder. Does anyone ever learn?
* * * * * * * *
The Magic Number
A recent book by Malcolm Gladwell provided us with an insight from the field studies of anthropologists:
The figure of 150 seems to represent the maximum number of individuals with whom we can have a genuinely social relationship, the kind of relationship that goes with knowing who they are and how they relate to us. Putting it another way, it's the number of people you would not feel embarrassed about joining uninvited for a drink if you happened to bump into them in a bar.
Here, British anthropologist, Robin Dunbar, makes an interesting case for social capacity -- that is, the number of people and things, with which the human brain can cope effectively. Primates like monkeys, chimps, baboons, and human beings, he observes, have the largest brain capacities of all mammals. And the neocortex -- the part of the brain that deals with complex reasoning -- is a lot larger in primates than in other mammals. Of all primates, humans socialize in the biggest groups, because only the human neo-cortex is of the right size. That "right size," however, turns out to be far smaller than the size of most modern organizations. Dunbar has got it down to a formula. He claims that the ratio of the size of the neo-cortex to the brain of a primate can tell him the maximum size of the group with which the human primate can best network. In humans that number is 147.8 or approximately 150.
Dunbar says anthropology yields dozens of examples of this magic number. In 21 different hunter-gatherer cultures that he looked at -- including the Australian Walbiri, the Tauade of New Guinea, the Ammassalik of Greenland and the Ona of Tierra del Fuego -- the average number of people in their villages was 148.4. 
And he says that groups in modern societies also seem to have picked up on the number. The Hutterites, a fundamentalist group who live and farm communally in South Dakota and Manitoba, limit their groups to 106.9 individuals. Even in academic communities, research specialties in the sciences are rarely more than 200 in number. The military gives us even more examples -- cohesive fighting units, traditionally, have been limited to no more than 200 men. The classical Roman Army, for instance, employed a basic unit, the maniple (or "double-century"), made up of 120-130 men. The reformed army (after 104 BC) consisted of legions made up of semi-independent centuries of 100 men each. And the modern army fields a company of 100-200 men as the smallest independent unit. It's not that you can't have larger units. You can. But then you would also have to create a complex structure of rules and regulations to create cohesion. But if you stick with the limits prescribed by nature, cohesion results naturally.
Humans brain, say the biologists, are not geared to relate to more people than they deal with regularly and they can not understand much more than the things with which they are concerned for their daily existence. In other things; on things about which human beings don't have first hand knowledge, their reasoning power tends to lead them astray.
Maverick economist Stephen Leavitt has written a whole book on the fallacies of popular reasoning on public matters. 
For instance, he analyzes conventional wisdom about the sudden decline of crime in New York in the 1990s. In 1995, criminologist James Fox warned of an ominous increase in violent crime by teenagers -- it would rise by 15% over the next decade, said Fox. Super-predators were on everyone's mind. Then, instead, crime fell by more than 50% over the next five years -- by 2000, reaching its lowest level in 35 years. This was true not only for teen murders but for every other type of violent crime as well.
Explanations abounded: It was the roaring 1990s; it was gun control; it was New York's innovative police techniques; the greater number of prisons; changes in the crack dope market, the aging population; more police; it was the introduction of capital punishment, gun buyback programs, concealed weapons laws.
Now, the crack dope market did dwindle as crack became cheaper, Leavitt concedes. But though the crack market fell, it still fell less than the rate at which it had driven crime up. So, it could not be the cause of the dramatic change in crime. Leavitt goes down the list of received wisdom methodically. More police and prisons seem to have helped a bit, he finds out. But not the ageing population, the death penalty nor gun control.
Ultimately, he finds the real answer to his conundrum in the 1973 Roe v Wade ruling in favor of one Norma McCorvey, the case which legalized abortion in the US. Roe v. Wade allowed 1.5 million abortions a year to take place that would not otherwise have. That did two things -- it reduced infanticide and it also reduced violent crime, because it is uneducated single mothers, Leavitt claimed, who most often produce sons likely to become responsible for violent crime.
Leavitt made sure to note that even if a fetus is only considered equal in worth to about 1/100th of a baby, this is still a rather inefficient way to reduce loss of life by homicide, since the murder rate (15,000 a year) would be wiped out by the loss of life annually to abortion (15,000 deaths). But, the demurral was not enough to save him from the wrath of professional moralists. He got no thanks for his effort, but instead, was roundly vilified as a racist and eugenicist. Why? Because experts today are uncomfortable with explanations that seem to smack of racial or cultural bias -- even if they seem true. They are much more predisposed to believe that some new technological innovation can solve a social problem than they are to look to changes in family structure and upbringing.
Leavitt's book manages to dynamite a few other popular convictions as well. Studying 1,000 congressional races in 1972 where the same two candidates had run against each other in consecutive races, he found that contrary to what he expected, money hadn't seemed to matter much to the outcome. The winners could have halved their spending and still lost only 1% of the vote. And, the losers could have doubled their spending and gained only 1% more. As researchers Golisano, Huffington and Forbes found, what you spend is less important in a congressional race than who you are. But, what of the widespread conviction that much too much money is spent on elections in America? Well, it seems that Americans spend about a billion on elections, all told, which is also what they spend annually on chewing gum.
So why are people quick to accept wrong explanations for things?
Dunbar's magic number helps to explain. The human neo-cortex is simply not big enough for the task. It's not made to deal with problems bigger than those that affect you personally. As long as you are dealing with people and things with which you have direct contact, you can process the information you need to understand them yourself. You can analyze the facts. And you can arrive at an independent conclusion about those facts. But when you start dealing with things and people beyond your immediate ken, you are usually dealing with large-scale phenomena, with too many and too complex factors for your neo-cortex to really get a handle on. That means you are forced to start simplifying and eliminating a lot of the detail simply because it would otherwise overwhelm you.
You start to abstract, theorize, generalize. You turn to the cogito. And the problem with the cogito is that it is not as pure as it thinks it is. Cogitation on things we know nothing about personally is driven a lot by what others think, especially experts. If experts have a particular squint on a subject, we develop cross eyes too. The bee buzzing in their bonnet starts roaring like a saw mill in ours. If gun control is what the experts like, then we find gun control floating in our soup; if the flavor of the month is campaign reform, then we are apt to blame electoral results on evil money rather than dumb voters. It doesn't matter how untrue a thing is. If enough people, especially people we look up to, repeat it often enough, it soon becomes conventional wisdom.
A hundred years ago, Gustave Le Bon understood this when he wrote his classic work on crowds. He realized that the popular mind wanted most of all to simplify things.
Le Bon called the process -- by which an idea gets simplified, repeated, imitated, and passed around by the crowd -- contagion. 
Joseph Goebbels, the Nazi minister of propaganda knew how to use it.
A lie, big enough and repeated often enough, without explanation or reasoning, was all it took to drive a mob mad.
Here is how it works. Take a fellow going about his own business. In his own life, he is unlikely to settle for less than a real explanation for things that go wrong. If his car starts skidding, he takes it apart at the mechanics' to find out why and he doesn't get back in until it works. The penalty for careless thinking on the subject might be his life. Of course, on many public issues, his life might also be at stake. If he lived in New York, for instance, any explanation for New York's crime rate becomes rather personal. But while the lump's car only affects him, New York's crime rate affects millions of others. On the subject of his car, the lump confidently relies on his own hunches. On the subject of New York crime, however, he becomes diffident. It is not his problem alone. Some one else should think of it, he decides. Best leave it to the people who know, he adds. Experts. Pundits. He opens the paper and reads the opinion column of Professor Tedious Pontificator at Princeton University. He has never been to Princeton University. But he has heard it's very good. At any rate, it is very expensive, which is the same thing, in his mind. It is a reliable brand. He has also never heard of Professor Ponti. But professors, he has been told, are egg-heads. They know. So if Professor Ponti says that New York crime rates have gone down because of gun control, figures our trusting lump, it must be true. Besides, the fellow has said so in the papers. So, it must be St. John's Gospel. At any rate, he now has an opinion on hand, rather like a concealed weapon, that he can fire off at the nearest bystander.
"Dear," he begins, putting down his paper and glancing across at his better half. "Did you know that New York's crime rate has gone down because of gun control?" Here, he gets the first pay off for his secondhand wisdom. With one sentence, the poor sod has established himself in his wife's eye as a man of the world, conversant with public issues. For a fleeting moment -- since in marital life such moments are always fleeting -- he glitters before her, even if it is only in Professor Ponti's feathers. He too has become an expert.
But there is another payoff. By thinking like everyone else, our lump trades in the uncertainty and loneliness of being an individual for the certainty and camaraderie of belonging to a group. What use would it be for the poor lump to be right if he was right all on his own? What would it profit him to gain his soul but lose the world? He decides he would rather have the world. Or rather, an instinct lodged in his brain, drives him to it. Solidarity with his unthinking fellow lumps is wired deeper in his skull than the fleeting pleasures of reasoning on his own. In his heart and soul, man is a social animal and solidarity with his group -- however wrong -- is more important to him than being right alone.
Thus is born the crowd.
is a freelance writer in Argentina, and the author of the must-read book,
The Language of Empire: Abu Ghraib and the US Media
(Monthly Review Press, 2005). She can be reached at:
2006 by Lila Rajiva.
 A popular Roman proverb by Plautus (d. 184 B. C.), in his Asinaria, cited by Thomas Hobbes in, "De cive, Epistola dedicatoria"
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