What is Political Stability?


Let’s say that you have the choice of starting a business under one of two governments.

The first government taxes you at a rate of 10% this year, but you know that next year the tax rate might change pursuant to a constitutionally-authorized democratic process. Next year, it might be 0% or it might be 100%, or it might be anywhere in between.

The second government taxes you at a rate of 20%, but the constitution guarantees that this tax rate will stay the same for another 30 years.

Now, assume that all else is equal. Assume that access to public infrastructure, public protection services, etc. is granted in both states. Which will you choose to start your business in, if low taxes are important to you?

The rational answer would be the second society. Though the first seems like a better short-term choice, it will be a roller-coaster ride. There is great volatility that will happen in the next 30 years, and so society number one is much less of a sure bet than the other.

And what is the opposite of volatility in this case? Why, it is stability!

“Political stability” is a term, which, historically, has been used to represent the fragility of a government to political overthrow. Viz – a government is stable, in the traditional sense, if there is a low chance of a coup.

But what is the result of a coup? Well, the result would be new leaders, and a new government, and thus, new rules. So low stability means, as far as most people are concerned, a circumstance where there are rapidly-changing rules.

Well, how does that differ from a direct-style democracy, where the constitution does little to limit the will of the people in changing things from year to year? In such a situation, though the name-identity of the government will not change much, the rules which are in place will oscillate wildly over time. It is reasonable to say that in such a case, though the government is never being overthrown, the political situation is indeed unstable!

I think that we must thus expand the definition of politically unstable to include any situation where the rules are subject to fast change.

Here in the US, we see that many significant changes in law are wrought over a short period of time. The past two decades have brought us HIPAA, the DMCA, the Gramm-Leach-Bliley Act, the PATRIOT Act, No Child Left Behind, FATCA, and ObamaCare, among others. These are all major items of legislation which affect millions in our nation on a day-to-day basis.

Had none of these changes occurred over the past two decades, our government might be less modern, less high-tech, and less efficient (or at least, this line could be argued by someone who is not well-acquainted with the practical results of these changes.)

But, had it been the case that our government had simply made a 20-year moratorium on new laws from 1994 to present, it would also have resulted that the playing field, as far as businesses and individuals are concerned, would have stayed level.

Instead, what we are subjected to is a process something like trying to bake a cake in the oven while a giant is outside shaking our house up and down.

Though the rationale for the shaking is that it will make the house more organized, (and perhaps it may, some day!) the result in the mean-time is that it is impossible to get anything useful done: the kitchen is moving around, the pots and pans are shifting, our access to certainty is diminished.

I, for one, would rather live in a less efficient society that acts less schizophrenically. I would rather bake my cake over a fire on placid, level ground than be subjected to a shaking house.

Because much of the world is comprised of democracies, and thus coups and revolutions are uncommon, I think we need a new index for political stability. I think we need to respect the peace of private individuals and that a stable government is one in which the laws are able to change only at the speed of flowing molasses.

About Author

Scotty Freeman is a philosophy graduate who loves to write and talk about freedom, the future of peaceful governments, seasteading, creating wealth, and saving the environment through deregulation. He can be reached at loodlehq@gmail.com.