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  As of this writing all of the principal players in Bell’s scandal have been jailed, but not for their lavish salaries. As reprehensible as these may have been, it seems they were perfectly legal. No, they were jailed for receiving payments for meetings that allegedly never took place. It seems they collected a lot of money while overlooking their obligation to actually attend committee meetings. This is to say that the well-paid managers of Bell may end up falling victim to what one might describe as a legal technicality. Outrageous salaries were okay, but getting paid for attending meetings while being absent from them was not. We cannot help but wonder how many government officials are held to that standard. How many senators and representatives, for instance, draw their full salaries while skipping meetings of the Senate or House so that they can raise campaign funds, give speeches, or go on boondoggles?

  You may well wonder how a little town like Bell could balance its budget—one of Mr. Rizzo’s significant accomplishments—while paying such high salaries. (Indeed, we anticipate a high probability that once Bell’s governance is cleaned up, its spending will involve indebtedness rather than a balanced budget.) Remember, the town’s leaders got to choose not only how to spend money but also how much tax to levy. And did they ever tax their constituents. Here’s what the Los Angeles Times reported about property taxes in Bell:Bell’s rate is 1.55%—nearly half again as much as those in such affluent enclaves as Beverly Hills and Palos Verdes Estates and Manhattan Beach, and significantly higher than just about everywhere else in Los Angeles County, according to records provided by the county Auditor-Controller’s Office at the Times request. That means that the owner of a home in Bell with an assessed value of $400,000 would pay about $6,200 in annual property taxes. The owner of the same home in Malibu, whose rate is 1.10%, would pay just $4,400.5

  In plain and simple terms, Bell’s property tax was about 50 percent higher than nearby communities. With such high taxes, the city manager and council certainly could pay big salaries and balance the budget, all the while enriching themselves and their key cronies.

  Now that we have Bell’s story let’s look at the subtext. In the city, council members are elected, although their election was not contested for many years before 2007. That means that council members are beholden to the voters, or at least the voters whose support was needed to win office. Before 2007 that was hardly anyone since elections were not contested. Since 2007, as it turns out, even with contested elections, it still took very few votes to win a council seat. For instance, Bell had about 9,400 registered voters in 2009, of which only 2,285—that is, 24.3 percent—turned out to vote. Each voter could cast a ballot for two candidates for city council out of the six candidates seeking that office. The two winners, Luis Artiga and Teresa Jacobo, received 1,201 and 1,332 votes respectively, out of 2,285 votes that were cast, but they didn’t need that many votes to win. Speaking generously, election was achieved with supportive votes from only about 13 percent of the registered electorate. We say “speaking generously” because to get elected to the city council in 2009 all that was necessary was to have one more vote than the third largest vote-getter among the candidates. Remember, two were to be elected. The number three candidate had just 472 votes. So, 473 votes—about 5 percent of the registered voters, just over 1 percent of the city population, and only about one fifth of those who actually turned out to vote—is all that was needed to win election. Whatever the reason for the vote being divided among so many candidates, it is evident that election could be achieved with support from only a tiny percentage of Bell’s adult population. This goes a long way to explaining the city government’s taxing and spending policies.

  One thing we can be sure of: those on the city council could not have been eager for competing candidates (or even fellow council member Velez) to get wind of the truth about their compensation package. City manager Rizzo had to maintain the council’s confidence to keep his job and they needed his support to keep theirs. He could have exposed how deeply they were dipping into the public’s hard-earned money, which would have sent them packing (as it now has). It is in this need for mutual loyalty that we see the seeds of Bell’s practices and of politics in general. Rizzo served at the pleasure of the mayor and city council. They, in turn, served at the pleasure of a tiny group of Bell’s citizens, the essential supporters among Bell’s considerably larger prospective electorate. Without the council’s support, Rizzo would be, as he now is, out on his ear—albeit with a fabulous pension estimated at $650,000 per year. How best to keep their loyalty? That was easy: promote the means to transfer great private rewards in the form of lavish compensation packages to council members.6

  Of course, if all were being done in the open, or if Bell remained a general city subject to control over compensation from Sacramento, Rizzo could not have provided the means to ensure that he would scratch the city council members’ backs and they his. When a leader’s hold on power—his or her political survival—depends on a small coalition of backers (remember the small percentage of voters needed to actually win a seat on the city council), then providing private rewards is the path to long tenure in office: Mr. Rizzo kept his job for seventeen years. Furthermore, when that small coalition is drawn from a relatively large pool—just five council members, elected under a city charter ratified by only 354 voters out of a registered voter population (in 2009) of 9,395—then not only are private rewards to the small coalition an efficient way to govern, but so much budgetary and taxing discretion is created that the folks at the top have ample opportunity for handsome compensation, an opportunity that the city’s top leadership did not fail to exploit.

  Bell presents a number of lessons to teach us about the rules to rule by. First, politics is about getting and keeping political power. It is not about the general welfare of “We, the people.” Second, political survival is best assured by depending on few people to attain and retain office. That means dictators, dependent on a few cronies, are in a far better position to stay in office for decades, often dying in their sleep, than are democrats. Third, when the small group of cronies knows that there is a large pool of people waiting on the sidelines, hoping to replace them in the queue for gorging at the public trough, then the top leadership has great discretion over how revenue is spent and how much to tax. All that tax revenue and discretion opens the door to kleptocracy from many leaders, and public-spirited programs from a very few. And it means enhanced tenure in power. Fourth, dependence on a small coalition liberates leaders to tax at high rates, just as was true in Bell. Taxing at high rates has a propensity to foment the threat of popular uprisings, just as happened in Bell. Of course, in Bell it was easy for the people to rise up and end Rizzo’s rule because they have essential freedoms: the rights to free speech and assembly. We shall see that how the structure of government and the economy works explains variation in how many of these rights people have. This in turn accounts for whether the people take to the streets and whether they can succeed in orchestrating change, as we recently saw in some parts of the Middle East, or remain oppressed, as we saw in others.

  We will see that Bell’s story offers a nearly perfect script for how to govern when the hold on office depends on very few people, especially when they are selected from among many. The politicians of Bell intuitively understood the rules of politics. Leaders who follow these rules faithfully truly can stay on top without ever having to do “the right thing” for their subjects. The people governing Bell clung to power for a very long time before probes from outside uncovered their means of holding on to office. As we will see, what works for those at the top usually works against those at the bottom, hence our shock and surprise at headlines of the misdoings of so many in high positions. The way places like Bell are governed (and that is the way most places and most businesses are governed) assure the Bell Bottom Blues.

  One important lesson we will learn is that where politics are concerned, ideology, nationality, and culture don’t matter all that much. The sooner we lear
n not to think or utter sentences such as “the United States should do . . . ”or “the American people want . . . ” or “China’s government ought to do . . . ,” the better we will understand government, business, and all other forms of organization. When addressing politics, we must accustom ourselves to think and speak about the actions and interests of specific, named leaders rather than thinking and talking about fuzzy ideas like the national interest, the common good, and the general welfare. Once we think about what helps leaders come to and stay in power, we will also begin to see how to fix politics. Politics, like all of life, is about individuals, each motivated to do what is good for them, not what is good for others. And that surely is the story of Robert Rizzo of Bell, California.

  Great Thinker Confusion

  As Robert Rizzo’s story highlights, politics is not terribly complicated. But by the same measure, history’s most revered political philosophers haven’t explained it very well. The fact is, people like Niccolò Machiavelli, Thomas Hobbes, James Madison, and Charles-Louis de Secondat (that is, Montesquieu), not to forget Plato and Aristotle, thought about government mostly in the narrow context of their times.

  Hobbes sought the best form of government. His search, however, was blinded by his experience of the English civil war, the rise of Cromwell, and his fear of rule by the masses. Fearing the masses, Hobbes saw monarchy as the natural path to order and good governance. Believing in the necessary benevolence of an absolute leader, the Leviathan, he also concluded that, “no king can be rich, nor glorious, nor secure, whose subjects are either poor, or contemptible, or too weak through want, or dissension, to maintain a war against their enemies.”7 Taking a bit of liberty with Hobbes’s more nuanced philosophy, we must wonder how Robert Rizzo, by Hobbesian lights, could grow so rich when his subjects, the citizens of Bell, were so demonstrably poor.

  Machiavelli, an unemployed politician/civil servant who hoped to become a hired hand of the Medici family—that is, perhaps the Robert Rizzo of his day—wrote The Prince to demonstrate his value as an adviser. It seems the Medicis were not overly impressed—he didn’t land the job. He had, we believe, a better grasp than Hobbes on how politics can create self-aggrandizing practices such as were experienced in Bell half a millennium later. Writing in The Discourses, Machiavelli observes that anyone seeking to establish a government of liberty and equality will fail, “unless he withdraws from that general equality a number of the boldest and most ambitious spirits, and makes gentlemen of them, not merely in name but in fact, by giving them castles and possessions, as well as money and subjects; so that surrounded by these he may be able to maintain his power, and that by his support they may satisfy their ambition. . . .”8

  Robert Rizzo might have done well to study Machiavelli as the best source of his defense against public opprobrium. He maintained his power for long years by satisfying the ambition for wealth and position of those loyal to him on Bell’s city council, and they really were the only people whose support he had to have.

  James Madison, a revolutionary trying to bring his brand of politics into power, was, like Hobbes, looking revolution in the face. Unlike Hobbes, however, Madison actually liked what he saw. In Federalist 10, Madison contemplated the problem that was to bedevil the citizens of Bell a quarter of a millennium later, “whether small or extensive Republics are most favorable to the election of proper guardians of the public weal: and it is clearly decided in favor of the latter.”9 His conclusion, not easily reached as he was fearful about tyranny of the majority, is close to what we argue is correct although, as always, the devil is in the details and Madison, we believe, fell a bit short on the details of good governance. In describing a republic as large or small, he failed to distinguish between how many had a say in choosing leaders and how many were essential to keeping a leader in place. The two, as we will see, can be radically different.

  Madison’s view was at odds with that of Montesquieu, who maintained that, “In a large republic the public good is sacrificed to a thousand views; it is subordinate to exceptions; and depends on accidents. In a small one, the interest of the public is easier perceived, better understood, and more within the reach of every citizen; abuses have a lesser extent, and of course are less protected.”10 Not so in Bell—and in Bell we trust.

  For Montesquieu, the Enlightenment, the new Cartesian thinking, and the emerging constitutional monarchy of Britain all combined to stimulate his insightful ideas of political checks and balances. Through these checks and balances he hoped to prevent exactly the corruption of public welfare that the charter city election in Bell foisted on its citizens.

  Of course, the option of forming a charter city was motivated, in theory, exactly by a quest for checks and balances on the authority of California’s state legislature. But the electoral public in the charter city special election was a meager 390 souls, and even in Bell’s contested elections before the scandal, fewer than a quarter of registered voters, themselves only a quarter of the city’s population, bothered to vote. That’s not enough to prevent the very corruption Montesquieu hoped to avoid.

  Now there is no doubt that Montesquieu, Madison, Hobbes, and Machiavelli were very clever and insightful thinkers (and surely brighter than us). However, they got an awful lot of politics wrong simply because they were coping with momentary circumstances. They were looking at but a small sample of data, the goings-on surrounding them, and bits and pieces of ancient history. They also lacked modern tools of analysis (which we, luckily, have at our disposal). Consequently, they leapt to partially right, but often deeply wrong, conclusions. In all fairness to these past luminaries, their shortcomings often have to do with the fact that, besides being bound by their then-present contexts, these thinkers were also caught up in “the big questions”—what the highest nature of man ought to be, or what the “right” state of government really is, or what “justice” truly means in political terms. This shortsightedness extends not only to history’s legends in political thought, but also to contemporary thinkers like Jürgen Habermas, Michel Foucault, and John Rawls—thinkers who someday may be viewed in the same light.

  The big questions of how the world ought to be are indeed important. But they are not our focus. Questions of philosophical values and metaphorical abstractions—these simply don’t apply to the view of politics that we’ll present in the pages ahead. We do not start with a desire to say what we think ought to be. It is hard to imagine that anyone, including ourselves, cares much about what we think ought to be. Neither do we exhort others to be better than they are. Not that we do not hope to find ways to improve the world according to our lights. But then, we believe that the world can only be improved if first we understand how it works and why. Working out what makes people do what they do in the realm of politics is fundamental to working out how to make it in their interest to do better things.

  The modern vernacular of politics and international relations, from balances of power and hegemony to partisanship and national interest, is the stuff of high school civics and nightly news punditry. It has little to do with real politics. And so, you may be delighted—or disappointed—to hear that this particular book of politics is not concerned with any of this. Our account of politics is primarily about what is, and why what is, is. In this book, we hope to explain the most fundamental and puzzling questions about politics, and in the process give all of us a better way to think about why the worlds of rulers and subjects, of authorities and rights, of war and peace, and, in no small way, of life and death all work in the ways that they do. And maybe, just maybe, from time to time we will see paths to betterment.

  The origins of the ideas developed here came years ago during heated lunchtime discussions between one of the authors of this book—Bruce Bueno de Mesquita—and a coauthor of many earlier works, Randolph M. Siverson (now Professor Emeritus at the University of California, Davis). While munching on burritos, Randy Siverson and Bueno de Mesquita discussed a rather basic question: What are the consequences for l
eaders and their regimes when a war is lost?

  Oddly, that question had not been much addressed in the copious research on international affairs, and yet surely any leader would want to know before getting involved in a risky business like war what was going to happen to him after it was over. This question hadn’t been asked because the standard ideas about war and peace were rooted in notions about states, the international system, and balances of power and polarity, and not in leader interests. From the conventional view of international relations, the question just didn’t make sense. Even the term “international relations” presumes that the subject is about nations rather than being about what Barack Obama or Raul Castro or any other named leader wants. We so easily speak of United States grand strategy or China’s human rights policy or Russian ambitions to restore Russia to great power status, and yet, from our point of view, such statements make little sense.

  States don’t have interests. People do. Amidst all the debate about national interest, what did President Obama fret about in formulating his Afghan policy? If he did not announce a timetable for withdrawal from Afghanistan he would lose support from his Democratic—not his national, but his Democratic—electoral base. President Kennedy similarly fretted that if he took no action in what became the Cuban missile crisis, he would be impeached and the Democrats would pay a heavy price in the 1962 midterm election.11 National interest might have been on each of their minds, but their personal political welfare was front and center.