goverment doesn't come from "the people", government is one of the divisions of labor

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nazgulnarsil Posted: Sun, Dec 7 2008 1:33 AM

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In pre-agricultural times the burdens of survival were equally dispersed among the tribe. Everyone did what they could. Those that couldn't or wouldn't were thrown out. There was no division of labor.

But then the agricultural revolution came along. Suddenly small groups are producing much much more. More than they need even. There is now enough of a surplus for banditry and war. So producers produce and trade with their neighbors, occasionally bandits attack and kill people. But then some smart bandit leader named Bob gets an idea. He goes to his friend, the bandit Steve.
"What if instead of killing off the farmers when we take their stuff, we let them live?"
"Why the hell would we do that? I love killing" says Steve.
"They'll probably produce more food and we can come back next season to take it again." says Bob. Steve agrees but when they go to do this the first time they hit a hitch. The farmer starved to death. Bob thinks about it a little more and decides that they have to leave the farmer enough to survive on. He has a hard time convincing the other bandits of this but eventually wins out. Instead of leaving, he bandits start patrolling their usual raiding grounds, keeping other bandits away and letting the farmers do their farming. Every once in a while they come through and take everything the farmers don't need to survive. Eventually, the bandits move in and just send out a guy to collect their taxes. They guard their borders carefully, every farm raided is less tax revenue. Feudalism is born. This is the first division of labor.

The bandits provide defense, the farmers provide things the bandits need. Life is much easier for the bandits, they can settle down and lead stable lives, interspersed with conquering more producers. Life is also much easier for the producers, they no longer have to worry about constant attack. This idea spreads and as the more successful bandit/producer groups grow there arises a need for administration. A smart farmer named Bob notices this and goes to the bandit leader some slob named Steve (who killed the original Bob).
"Let me organize the farmers" says Bob
"Buh?" says Steve
"We could produce more food if each farm focused exclusively on one type of crop. I have come up with a plan to allocate which crops to grow in what percentage for our needs"
Steve doesn't really understand this, but it sounds good. He puts Bob (and a few assistants) in charge of organizing the farmers. These administrators now deal with the farming problems and report back to the bandit leaders. This is the second division of labor.

Towns coalesce at what were once just bandit headquarters as administration centers for swathes of productive land. These places also become meeting centers for producers to come trade whatever small things of value they can make that aren't taxed away by the bandits. At some point food production passes a critical value. The increased supply of food has lowered demand, and equilibrium has been reached. A smart guy named Bob notices that a lot of people seem to want certain things, like plows and Ox harnesses. People always seem willing to trade a lot of food for them. He goes to his farmhand Steve.
"Pack up, we're leaving" says Bob
"Why would we do that?" asks Steve
"Everyone wants plows and Ox Harnesses right?" says Bob
"I guess so" says Steve
"We'll move into town and just make plows and ox harnesses" says Bob
"How will we eat? how will we pay the bandits?!" yells an alarmed Steve
"We'll trade our stuff to the farmers for food" says Bob
So he moves near the town and starts spending all his time making these. Other people notice and do the same, making things that people will trade their excess food for. This is the third division of labor.

This new class of people are able to devote a lot of time to coming up with new things people might want. Some invent things that further boost food production, freeing up even more time and labor for other things. Some of the things invented are in such high demand that lots of people devote themselves to making them. A shirtmaker named Bob notices this. Bob goes to his friend, also a shirtmaker, named Steve who is doing poorly because few people bought shirts from him last season.
Bob tells Steve
"Come make shirts for me. I'll pay you a set amount for each shirt you make. It will be lower than what you would have made selling the shirt yourself."
"Why the hell would I do that?" says Steve
"Because you don't have to worry about any of the problems of actually selling the shirts. All you have to do is make shirts and you're guaranteed to get paid for it."
Now Steve considers this. Bob is offering to assume all the risk of running a business in exchange for a percentage of Steve's productive value. Steve agrees. Freed from dealing with the minutia of selling his shirts to the public, Steve's productivity increases. He's now producing many more shirts. This increase in productivity allows Bob to sell his shirts for a slightly lower price than the going rate at market. Sales increase and Bob is able to hire another shirtmaker, then another. At some point Bob is able to quit making shirts himself. The shirt business is doing so well that Bob is able to live entirely off of the percentage he takes from his employees. He now devotes himself entirely to improving the business. This is the fourth division of labor.

Without cooperation, none of the divisions of labor are possible. People who criticize free-markets for focusing on competition at the expense of cooperation are neglecting the fact that all economic activity is (or at least should be) an act of cooperation. Without cooperation we'd still be living in huts getting raided by bandits.  The point is that at each step, cooperation benefited us more than just doing whatever we wanted.