The Republic of the Bottom Billion

Indulge me in some brief insanity.

Paul Collier’s piece on the bottom billion, a brief precis of the argument in his excellent book, rightly emphasizes the high cost of political fragmentation.

bq.They are nearly all small, which is part of the problem. Countries with small and poor populations tend to lack the critical mass of educated and talented people to diagnose failure and do something about it.

Interesting. This relates to Richard Freeman’s contention that it is the absolute number of highly-skilled individuals that is worth watching: a large absolute number, as in China or India, can give rise to innovative agglomerations even if the highly-skilled represent a tiny fraction of the population.

Globalization has compounded this shortage by making exits both feasible and attractive: The bottom billion are hemorrhaging their limited talent. Chinese students go back to China, Indian students now go back to India, but students from the countries of the bottom billion don’t go back.

Brain circulation only makes sense when there are agglomerations in the home country.

Suppose this country were not the United States but the Divided States, each sovereign and self-serving. The great manufacturing and agricultural heartland states would have been strangled at birth by the absence of interstate highways, railways and canals. The plight of Niger, which is dependent on Nigeria, and of Uganda, which is dependent on Kenya, is to be landlocked and located in the Divided States of Africa. A third of Africa’s population lives in such countries.

This is true, and it is a reminder that the aspirations of the Pax Americana right are rooted in an entirely reasonable, defensible view: when a non-threatening state holds a near-monopoly of power, it encourages bandwagoning rather than balancing. At least in theory. Of course, American power seems very threatening indeed to many states. But not, notably, to weak states facing aspiring regional hegemons. Anyway, the point is that this kind of political fragmentation leads states to waste resources on petty squabbles.

In “postmodern” Europe, the cost of sovereignty for small countries is quite low thanks to the role played by the Common Market. Even states like Iceland and Norway that remain outside the European Union benefit from a dense web of pan-European institutions. That’s not true of the world inhabited by the bottom billion.

So what if “the bottom billion” were united in a single state, a Bandung Republic? Sadly, this could only work if the Bandung Republic were ruled by Khan Noonien Singh.

You do wonder, though: migration would be free within the borders of this strange state, as would trade flows. Just like the European “inter-state federation” imagined by Hayek, economic nationalists would be badly undermined by the dizzying diversity and scale of the state. It’s easy to imagine new agglomerations of talent emerging within its borders.

This is, incidentally, Daniel Larison’s nightmare!

Well, back to the real world, he says begrudgingly.