Amigocracy, Kleptocracy, and the Iron Law of Oligarchy

Arranged PR events aside, the systemic faults and likely failure modes of the New Panama Canal are an example of the combined impacts of Amigocracy, Kleptocracy, and Bureaucratic Oligarchy. Our experience is that this trio forms a common pattern. Find one, expect to find the others.

Compare The New Panama Canal: A Risky Bet to The Panama Canal Expansion Project, a bureaucratic whitewash delivered in Buenos Aires in 2015. Events could not be further apart.

Amigocracy

The purist Amigocracy I have seen in the Americas is Chile where the elites appear to exhibit but one skill – that of asking for, or providing access to, a favor. All else is left to underlings. Deprived of an aristocratic or ‘old boy’ status they would be rendered powerless.

Evert van der Zweerde’s Friendship and the Political amply describes Amigocracy:

…The idea of an “amigocracy” [faces] two problems, one of a fundamental nature, the other of a factual: it only works if all are friends, and it only works at a relatively small scale. Since friendship, albeit selective, is not necessarily exclusive, it is possible that within a small group of people everybody is everybody’s friend or at least a friend of a friend, but this means that, if we are talking about the polity, the visions of the common good of the people involved must be the same or, if different, compatible, which is the case, for example, if the common good is, precisely, the “running of the res publica in a good manner” (this explains the proximity with republicanism). It also means that, in practical terms, an “amigocracy” can only be an effective form of government if the number of people involved is limited, either because only a small section of the population participates in the polity or because the society in question is small.

With respect to the first, “amigocracy” understood as “rule by a group of friends” or “rule by a friendly network” is, when it is limited in number, i.e. when the group of friends does not coincide with the dèmos, a form of aristocracy. Any form of aristocracy is fundamentally anti-democratic, not so much because it is government by an elite –that in itself can be the outcome of democratic procedure-, but because the real political question at stake here, the question who decides who is an aristocrat is answered by the aristoi themselves: aristocracy is a form of self-appointed government, and, when continued over time, cooptation by definition, and this is what any dèmos rightly fears when they perceive friendly relations between those in power. To be sure, there are inevitable elements of co-optation in representative government, too: the leading groups within political parties, for example, are also largely self-appointed. But in that case, the dèmos can at least have the idea that such elites can be sent home by means of elections.

With respect to the second, it is not accidental that friendship was regarded as an important political concept within the context of relatively small and surveyable city-states like Athens or the Roman republic, and, later, Italian and other city-republics. Supra-national polities such as the European Union sometimes appear as amigocracies when the leaders of the governments of the member states get along very well, but while this may be effective at the level of the polity itself, the problem is immediately perceptible: these government leaders represent democratic polities, the dèmoi of which are being disempowered by being excluded from this friendship. Amigocracy and democracy are compatible only if the group of friends is the dèmos. To the extent to which friendship is ‘an affair of the few’, it is understandable that ‘some forms of democratic sentiment are naturally hostile to it.’²⁵ Nothing is harder to beat that an old boys’ network, and since the old boys started out like college or university friends, it is impossible to become an old boy. If, in large democratic polities, friendship is looked upon with hostility by the dèmos, in authoritarian polities it is looked upon with suspicion by those in power, because a group of friends can be –and historically has often been- the beginning of a conspiracy or rebellion, ‘a pocket of potential resistance.’²⁶ This is why both democratic and totalitarian regimes in our age tend to make friendship [a] private, not a public affair. It this connection then, it is or becomes political when it crosses the border between the private and the public spheres…

There is an obvious tension between the idea of networks-of-friends and the formal character of the juridico-political order. Old friends’ networks are essentially anti-democratic and anti-republican, yet probably essential for a working economic and political society under liberal-democratic conditions. Moreover, if politics takes place, first and foremost, in the spheres of the polity –the state, the government- and of political society –the part of civil society oriented towards the polity-, then it is clear that both offer, like in fact any societal sphere, opportunities for individuals to develop relations of friendship… Friendship is a spontaneous process: one is struck positively by someone else’s opinions, observations, ideas, habits, or moral stance, and one spontaneously develops sympathetic feelings. Becoming friends with someone [is] often [a] liberating event, and the place of politics, like the work-place, is a place in which the relief of finding somebody who relates in the same manner to other people or events can be very great: at last one finds somebody who perceives things the same way. At the same time –as in the work-place- business goes on, too, and a relation of friendship [is] at odds with a professional and neutral approach. Only if all people involved would be friends, things would go smoothly and, perhaps, optimally…

Kleptocracy

Amigocracy is difficult to separate from Kleptocracy as the temptation to the elites is huge and the risk is small to nil. Two items illustrate:

Private note to colleague, Wed 05-Aug-2015

Given that the intersection of kleptocracy and amigocracy is Latin America, I don’t see corruption doing anything rash against its interests. I regard corruption as a societal tax in the countries that it permeates. Not specifically holding the Latinos poorly; all the “Cans” worldwide named after Trashcanistan live well and wide at the top. One reason that they are happier with the Chinese is that the PRC will be their protector in international tribunals, they and the DPRK will provide security assets and thugs to protect, and be their private banker beyond US reach.

The Mexican side of US/EU supply chains are corrupted and/or paying coercion monies to stay alive and in business. The US/EU OEMs and Tier ones are still unaware of, or willfully ignoring, the risks in their tiers. Defense, energy and mining understand the cost and demands of security, but few others outside that fence.

Responding to John M. Ackerman’s request for comment to: MEXICO IS NOT A FUNCTIONING DEMOCRACY, I offered the following:

Posted to Frontera-list, Feb 23, 2016

Good day, John. Per your request: 

Oligarchy killed and skinned democracy in Mexico decades ago but is fond of wearing that skinned hide in any public facing event, domestic and foreign. Peña Nieto is merely the head upon the hide. 

This extends past the PRI to include the Amigocracy network that runs business and guides politicians. Others might call it a Kleptocracy. 

We choose to accept it because we have far more pressing issues elsewhere. There is no significant US political capital available to pursue the goals and necessary changes you posit. 

While there are severe threats to Mexican nationals and companies, criminal elements have comparatively restrained their predations on foreign firms and permitted them to function without significant assault. 

(A flag is up on the recent attacks on newly arrived US shale oil-related suppliers in Tamaulipas that are being tested for the extortion payments that their Mexican peers pay to remain operational.) 

US/EU OEMs are looking for stable, skilled, low cost (lower cost) labor, especially now that Mexico has been included in the Backshoring “US local” category along with Canada. If foreign business gets that, along with its lessened logistics costs, they will tolerate the charade. 

Mexico is one of many states that pretend to be free and democratic and we pretend to agree. All that I read of your work tells me that you are attuned to ground truth but are hoping for something more. 

Iron Law of Oligarchy

The iron law of oligarchy as political theory was proposed by the German sociologist Robert Michels who claimed that rule by an elite, or oligarchy, is inevitable as an "iron law" within any democratic organization as part of the "tactical and technical necessities" of organization.

At the time Michels formulated his Law, he was an anarcho-syndicalist. He later gave up his socialist convictions to become an important ideologue of fascist Benito Mussolini. 

Darcy Leach turned to aphorism to summarize Michels as: “Bureaucracy happens. If bureaucracy happens, power rises. Power corrupts.”

If you’ve not already done so, compare The New Panama Canal: A Risky Bet to the bureaucratic whitewash delivered in Buenos Aires.

#Amigocracy #Kleptocracy #Bureaucracy #Oligarchy #Mexico #SupplyChain #Risk #Corruption

Bibliography

The New Panama Canal: A Risky Bet
How a $3.1 Billion Expansion Collided With Reality
By WALT BOGDANICH, JACQUELINE WILLIAMS and ANA GRACIELA MÉNDEZ
NYT, JUNE 22, 2016
http://www.nytimes.com/interactive/2016/06/22/world/americas/panama-canal.html

http://goo.gl/wMjmEH

Paper no. 6 – The Panama Canal Expansion Project
Complexities and Lessons Learned
WONG, Juan (Johnny)
Autoridad del Canal de Panamá (ACP), Panama, Rep. of Panama
“SMART RIVERS 2015”
Buenos Aires, Argentina, 7-11 September 2015
Email: jwong@pancanal.com
http://www.pianc.org.ar/_stage/pdf/papers_sr2015/06_paper_Wong_USA_1.pdf

MEXICO IS NOT A FUNCTIONING DEMOCRACY
Authoritarian leadership, stifled dissent, limited freedom of assembly, and endless violence, are the hallmarks of Mexico under Pena Nieto. It's time for Washington to pull the plug.
John M. Ackerman
FP, FEBRUARY 23, 2016
http://foreignpolicy.com/2016/02/23/obama-pena-nieto-mexico-corruption/

Response to John M. Ackerman’s request for comment to MEXICO IS NOT A FUNCTIONING DEMOCRACY
Posted to Frontera-list, Feb 23, 2016
https://groups.google.com/forum/#!topic/frontera-list/yR5PRK5W7cA

Friendship and the Political – A Hesitant Exploration
Evert van der Zweerde
Radboud University, Nijmegen (Netherlands)
https://ecpr.eu/Filestore/PaperProposal/dbaede44-272b-4116-8fe9-9c917d152eb1.pdf

Van der Zweerde’s article subsequently published as “Friendship and the Political” in:

Friendship in Politics: Theorizing Amity in and Between States
Author/Editor by Preston King, Graham M. Smith
Routledge 2007
https://www.amazon.com/Friendship-Politics-Theorizing-between-States/dp/0415420814

Political Parties: A Sociological Study of the Oligarchical Tendencies of Modern Democracy
Robert Michels
Translated by Eden and Cedar Paul
From the 1911 German source
Batoche Books
Kitchener 2001
http://socserv.mcmaster.ca/econ/ugcm/3ll3/michels/polipart.pdf

The Iron Law of What Again? Conceptualizing Oligarchy Across Organizational Forms
Darcy K. Leach
Sociological Theory, Vol. 23, No. 3 (Sep., 2005), pp. 312-337
American Sociological Association
https://www.tcd.ie/Political_Science/undergraduate/module-outlines/ss/political-parties/PolP/LeachSocioTheory05.pdf

The Mind-body Problem Explained: The Biocognitive Model for Psychiatry
By Niall McLaren
2012
https://books.google.com/books?id=LyXgxd66f1EC&printsec=frontcover&source=gbs_ge_summary_r&cad=0#v=onepage&q&f=false

Democratic theory: the philosophical foundations
James L. Hyland
Manchester, England, UK
Manchester University Press ND, 1995. p. 247.
https://www.amazon.com/gp/search?index=books&linkCode=qs&keywords=9780719039416