Book Excerpt: Who Are ‘We The People’?
With smallness comes vulnerability, which encourages communities to come together to find solutions, writes R James Breiding.
Excerpted from ‘Too Small To Fail: Why Some Nations Outperform Larger One And How They Are Reshaping The World’, By R. James Breiding, with permission from HarperCollins.
Rembrandt’s The Night Watch, one of the world’s most admired paintings, sits on the wall of the Rijksmuseum in Amsterdam, where it attracts over two million people a year. The painting depicts the civic guardsmen of Amsterdam, who volunteered to put out the odd fire or quell the occasional brawl, adopting the roles of policemen and firemen. Traditionally, group portraits were stoic replications of rows of monotonous figures. By contrast, each member in Rembrandt’s painting performs a specific action which defines his role in the group. Art historians rave about Rembrandt’s use of light and shadow to accentuate the figures. The intricate detail of each individual is what brings the painting to life.
The Night Watch is symbolic of the Dutch Golden Age, a period of unparalleled Dutch success in art, science and trade. In 1642, when Rembrandt completed his masterpiece, the Netherlands was freeing itself from the yoke of the Spanish empire and the Roman Catholic Church, an institution which had effectively controlled the minds and hearts of people throughout Europe for more than a thousand years. Lidewij de Koekkoek, Director of the Rembrandt House Museum, says that the period was characterized by ‘creativity, entrepreneurship and an international outlook’ – words which continue to define the Dutch mindset till today.
The seventeenth century also saw the rise of mercantilism. Dutch ships sailed around the world to places hitherto unreachable such as Indonesia and Japan, searching for exotic goods. Ships laden with precious cloth, porcelain and spices from Africa to Asia captivated curious European consumers and resulted in a spectacular surge of wealth to this newly independent nation. Large numbers of sailors, map makers, engineers and shipbuilders relocated to its port cities to meet the increasing demands for their skills. Canals, ports and infrastructure were put into place to handle the growing trade. In 1602, a few years before Rembrandt’s birth, the world’s first multinational company, The Dutch East India Company, was formed to finance the risky voyages to foreign lands. This led to the world’s first stock exchange in Amsterdam and the world’s first central bank. The Gazette de Leyde (Gazette of Leiden), published in French, was considered the world’s most authoritative newspaper.
I chose to open this chapter with The Night Watch not for Rembrandt’s artistic brilliance but for how the painting reflects the society in transition at that time. No longer was it vertically integrated between subordinate and superior; a serf ploughing land for his master or sitting obediently in a rear pew during a Sunday church service.
Recent political upheavals, such as Brexit, the election of Trump and the surging right-wing movements in France, the Netherlands and Germany, are telling us, among other things, that societies are not as cohesive as they once were. Too Small To Fail countries offer an alternate picture – one which more closely resembles the social cohesion depicted in The Night Watch.
That high trust levels promote prosperity seems uncontentious, but understanding what contributes to greater social cohesion is more difficult to establish. Several aspects coalesce to determine the degree of cohesiveness of any society. To begin with, smallness helps. With fewer degrees of separation, there is a greater frequency of dealings and a higher likelihood of getting called out for free riding, deception or cheating. Since reciprocity happens more often, it is more easily enforced.
The signal-to-noise ratio is also superior in smaller societies, so spreading ‘fake news’ or deceiving people is more difficult.
Large, remote and diverse nations are ideal for the propagation of misinformation via social media channels, as transmission tends to compound errors and the time required to validate the truth undermines the validation. Such twitter tactics involve dissemination of falsehoods and moving on to the next tweet before the factual discovery process can occur. This leaves the audience in a perpetual state of misinformation. The strategy of touting shamelessness as a comparative advantage, or the prospect of ‘fake it till you make it’ as a viable tactic for advancement, would never work in a small, cohesive society.
With smallness comes vulnerability, which encourages communities to come together to find solutions.
We have earlier discussed polders in the Netherlands and how they build cohesiveness in their society. We have also mentioned how Swiss alpine communities collaborate to reduce damage from avalanches. The same is true of other Too Small To Fail countries. Citizens of Israel are among the most cohesive in the world, in good part because it only takes a few minutes for a devastating warhead to reach them from their hostile neighbours. Humility and cohesion exhibit a high degree of affinity.
Another possible explanation for why TSTF countries enjoy top-tier social cohesion is that many still retain learnings from conscription time. For a few years, during their formative years of adolescence, citizens are taught that the nation is worth fighting for and belonging to. Like Rembrandt’s The Night Watch, they suspend the self-interest and tendencies of ‘me’ in favour of the common good of ‘we’. It is in those years and in close experiences that ‘we the people’ is reinforced.
Earlier, nations needed domestic automobile production, which required steel and therefore iron ore and coal. So cities like Cleveland, Detroit, Pittsburgh and New York were inextricably linked in the value chain. The same went for Essen, Dresden, Munich, Stuttgart, Coventry, Birmingham and London. But these capital and labour-intensive industries are today a fraction of their former selves, leaving hollowed out communities with dwindling living standards. In the extreme, as with Great Britain, it can feel like two nations within one.
By contrast, TSTF nations do not have vast hinterlands. Their industrial heritage formed as ateliers rather than hierarchically managed industrial complexes. This may help explain part of their advantage with respect to social cohesion. Most people in TSTF nations are both ‘anywhere’ and ‘somewhere’. They have access to similar-level high education possibilities, they speak multiple languages and are encouraged to travel and live abroad during their youth. But they can maintain their roots in their communities, not the least because the maximum distance from the most remote farming village in Denmark, the Netherlands or Switzerland and their largest cities, for example, is often only a few hours’ drive.
Too Small To Fail nations are better at empowering their people. Abraham Lincoln’s famous dictum at Gettysburg – ‘Government of the people, by the people, for the people’ is a more apt description of democracies in Denmark, the Netherlands, Switzerland and Sweden. Societies in these nations are organized as networks rather than hierarchies, so power is more broadly dispersed. People in TSTF nations have much greater confidence in their governments in large part because they feel they are heard. Each member of Congress in the U.S. represents around 600,000 citizens; in the UK, it is 100,000 citizens per legislator. This compares to less than 40,000 for most TSTF nations, the approximate number of constituents envisaged by the authors of the Federalist Papers. It is not hard to see why citizens in TSTF nations feel better represented.
TSTF nations are characterized by proportional representation, or ‘consensus democracy’ as described by the Dutch academic Arend Lijphart in Patterns of Democracy. Lijphart contrasted majoritarian, ‘winner take all’ democracies in the US, the UK, New Zealand, etc. with electoral systems which foster coalition building, as in Denmark, Germany, the Netherlands, Switzerland and Sweden. He found that TSTF nations select political leaders whose views correspond more closely with those they are representing. He also found that there is less corruption, greater inclusivity with respect to gender, LGBT and minority interests, more civil and less adversarial interactions and a greater emphasis on longer term, important issues which require stable policies.
Studies show that citizens of nations with proportional representation compared to ‘winner take all’ systems exhibit greater engagement and voter participation. Greater inclusiveness is likely a major reason why policies requiring long term commitment – such as education, pensions and the environment – have garnered enduring support in these nations.
Maybe the potential for progress in large nations has less to do with growth or the next wonder innovation. Instead, these nations should be focusing on how to eke out ways to create more trust and to improve on what binds people.
The most distinctive feature of Rembrandt’s The Night Watch is a mysterious, angelic girl emerging from the darkness behind the brave, stately members of the garrison. Hanging upside down from her waistband are the claws of a chicken. Each militia had an emblem and this was theirs. Members wore it as symbol of belonging. A testament of their willingness to suspend ‘me’ for ‘we’ when the moment called for it.
Herein may lie the secret.
R James Breiding is the Founder of Naissance Capital, a Swiss investment boutique that finds investment opportunities for Ultra High Net Worth clients. He is the author of Swiss Made: The Untold Story behind Switzerland’s Success.
The views expressed here are those of the author and do not necessarily represent the views of BloombergQuint or its editorial team.