On the Polestar of Leadership

Earlier (On the Limits of Thought Meritocracy, January 19, 2018) we reviewed the creation of a thought meritocracy in the private sector as described by Ray Dalio in his book Principles (2017). We saw that many of the techniques that Mr. Dalio employed were effective in achieving his business goals but were basically undemocratic in nature. They were so undemocratic that they appeared to be very similar to techniques used by the Chinese Communist Party to control its captive population of 1.5 billion people.

The Chinese have a long history of trying to create a meritocratic society. Examinations of the martial skills necessary for promotion go back thousands of years. The Sui dynasty instituted a series of imperial examinations for advancement in the government bureaucracy that continued from sixth century of the common era until 1912. The examinations were rigorous and required the rote memorization of the Confucian classics along with other skills including poetry writing and calligraphy. The European powers that carved up China into their respective zones of influence were impressed with the Chinese system, which was used as a model for the creation of our modern civil service exams.

Because the initial exams were given at the country and provincial level the exams helped create a national bureaucracy that helped weld the huge country together through a common Chinese culture (although elites in certain areas were able to bypass the examination system to obtain their appointments). But because the exam curriculum was very rigid and changed very little over the centuries the Chinese bureaucracy did not develop the skills necessary to run a modern government leaving the country at the mercy of modern European powers.

In both Dalio’s company (Bridgewater Associates) and Xi Jinping’s Communist China, the entities’ common culture and unifying spirit are generated from the top. People who have difficulty in adjusting to these hierarchically imposed systems are fired (Bridgewater), re-educated (China), imprisoned (China) or worse (again China). The resulting intellectually and emotionally unified entities can be very efficient in achieving their corporate or national goals.

Mr. Dalio obviously believes that these commonly shared goals and objectives give his company a competitive advantage over his competition (otherwise why do it?) just as President Xi believes in the superiority of his system. Recently, the US government offices were shuttered because the US Congress was not able to pass a budget or continuing resolution (subsequently the CR was passed on January 22nd but only for a few weeks) to fund the government’s continued operations. President Xi is heaping scorn on the fractured and inefficient US system of governance as a government mouthpiece at Xinhua News Agency said people around the world should “reflect on the viability and legitimacy of such a chaotic political system.”

How can we cope with the challenges raised by a rising power when our own political system is so unfocused and dysfunctional? How can we manage rapid technological change when economic progress is mired is mired in ideological tit for tat of each new administration undoing the changes wrought by the previous administration? How can we deal with the myriad of social problems we face when each side accuses the other of “hate speech” every time they open their mouths?

For much of our history the basic principles of our Republic were not questioned. However, although our Declaration of Independence declares that “all men are created equal”, not all men had the right to vote for George Washington. The original Constitution did not define who could vote, this was left up to the states. In the early days of the republic many states limited voting to white male property owners but suffrage was gradually expanded to include all white males. After the Civil war, black males obtained the right to vote in the 15th Amendment, which was passed in 1870. However, in the South many blacks were disenfranchised though Jim Crow Laws. Women obtained the right to vote in 1920 and finally black voting was protected by passage of the 24th Amendment and the Voting Rights Act of 1965.

So, the bad news is that there is often a gap between our Founding Principles and how our laws and customs actually function. The good news is that the inherent ability of a democracy to reform itself shows, as in the example of voting rights, that we can close some of this gap between our ideals and our actions (although the current status of our American democracy suggests that we have not yet found the final solution).

But if we faltered in the past we always had our ideals and principles to guide us back on course toward a more perfect union in order to secure the blessings of liberty. Our current struggles and the rancor it generates is due to the fact that we no longer agree on America’s ideals and principles. The right wants to return to an American Golden Era (despite the fact that it wasn’t golden for everybody) while the left wants to create a socialist Workers Paradise (despite the fact that socialism has never worked). Meanwhile most of the people in the country just want to get on with their lives.