# Compradorization

Previously: [Is GDP a Kind of Factory?](https://benjaminrosshoffman.com/solow-convergence-land-capital/)

There is a word, "convergence," which economists use when they want to say that poor countries are becoming less poor relative to rich ones. There is a phrase, "the resource curse," for the tendency of countries with valuable natural resources to stay poor despite their resources. There is a phrase, "Dutch disease," for the way that selling one commodity too profitably can destroy the ability to sell other things.

When an economist says "Dutch disease," they are choosing not to say "Chinese industrial policy combined with structural adjustment conditionality." When they say "the resource curse," they are choosing not to say "extraction concessions negotiated under debt pressure, with domestic officials whose personal interests had already been oriented toward the extraction rather than toward their own population, in conditions created by international creditors who collectively benefited from those terms." When they say "convergence," they are choosing not to say "a temporary windfall from China's industrial buildout, recorded in a measure that cannot distinguish liquidation from accumulation, in countries whose productive capacity was simultaneously being eroded by the same process that temporarily raised their GDP."

These words name phenomena while drawing attention away from mechanisms, interests, and human agency. Each describes an outcome - a currency distortion, an institutional failure, a pattern of growth - without asking who benefits from the gap between what states are supposed to do and how societies are constituted to behave. The vocabulary is chosen so as not to ask that question.


# Dutch Disease

Consider "Dutch disease" first, since it is the most innocent-sounding. It sounds like it must be nobody's fault, a natural phenomenon like the pox.

The name comes from the Netherlands in the 1960s, when natural gas revenues strengthened the guilder and made Dutch manufacturing exports less competitive. In the Netherlands, this was experienced as a political inconvenience: a polity with functioning institutions and high internal trust - at least by the standards of the time - managed it as a collective problem, allocated adjustment support to affected workers, and conducted the policy debate in public. It was a tradeoff, managed by a cohesive political community with the institutional capacity to manage it.

When economists apply the same term to commodity-exporting countries in Africa and Latin America, they are using one word for two entirely different situations. The mechanism, a currency appreciation that disadvantages other exports, is superficially the same. The political substrate is not. The Netherlands had the internal trust to absorb the cost collectively. In Nigeria, those harmed by the mechanism were manufacturers and traders whose livelihoods were being destroyed while the people controlling the relevant policy decisions had already arranged to be insulated from the consequences.  Trust creates capacity, capacity affords leverage in negotiations, and the Dutch had enough of all three to handle what the mechanism vocabulary blandly names as the same thing.

The economists call this Dutch disease. The Nigerians might have called it Royal Dutch Shell disease.

When Chinese state-backed manufacturers, operating with subsidized credit, cheap state energy, and export-contingent tax breaks, flooded African and Latin American markets with finished goods that directly undercut local producers, someone decided to do that. When international institutions stripped developing countries of the tariffs, directed credit, and import quotas that every successful industrializer, including China itself, had used to protect infant manufacturing, someone decided to do that too. South Africa's manufacturing share of GDP fell from twenty-four percent in 1990 to thirteen percent today. Sub-Saharan Africa's manufacturing value added dropped from over sixteen percent to about ten.

# The Restructuring of Interests

"The resource curse" is more sophisticated and therefore more misleading. Of course, no one seriously claims that a witch did it. The economists have run the regressions. Countries with large natural resource endowments do tend, on average, to have worse institutions and slower non-resource growth than comparable countries without them. The correlation is real. But the framing attributes the outcome to the resource rather than to the humans who decide how its revenues are distributed.

Norway managed its oil revenues into a sovereign wealth fund that now holds around two trillion dollars. Nigeria's oil revenues were captured through a combination of direct theft by successive military governments and opaque oil-sector arrangements that diverted or under-remitted much of the value of extraction, while many Delta communities where extraction occurred received neither timely revenues nor compensation for systematic environmental destruction, except for a few who sought recourse in European courts, where some plaintiffs have received compensation and litigation is still ongoing. The difference between Norway and Nigeria is not the oil.

Copper has never bribed a government minister. Soybeans have never signed a concession agreement transferring extraction rights to a foreign corporation on unfavorable terms. But humans have.

When a poor country's commodity suddenly commands high prices on world markets, four things happen simultaneously to four different groups of people.

The extraction workers get wages, often the best wages available locally. They spend them; some of this supports other employment. This is the part that appears in the poverty statistics and gets reported as development. Few if any of them have the wherewithal to spend their new income on creating new local capacities, e.g. a well-recognized title to some improvable land, or a workshop they can outfit with better tools.

The extraction companies, usually foreign because the capital and technology required are concentrated in rich countries and the concession agreements were signed when the country had few alternatives, get the margin above wages and operating costs. Under terms typical of the structural adjustment era, this margin is large. It leaves the country.

The state gets royalties and taxes, a negotiated fraction of the extraction company's revenues, smaller than it would be if the government had negotiated from strength, which it did not, because the concession was signed when the country needed foreign exchange to service its debt. The government now has a budget interest in extraction continuing. Ministers who might otherwise concern themselves with manufacturing or agriculture concern themselves with royalty rates. Their interests have been restructured: maximizing their own welfare and maximizing the extraction company's preferred outcome have become the same decision.

Most of the people participating in a diverse local economy of exchange lose, though which job-labels lose differs. In ore-exporting countries, local manufacturers find the currency has strengthened and their goods are now too expensive for foreign buyers. In agricultural countries, the exported staple crowds out the diverse farming and trading ecosystem that fed into broader productive development. Everywhere, the people whose livelihoods depend on a working local economy rather than on extraction rents or state payrolls find themselves priced out or undercut by a mechanism they did not choose and cannot individually resist.

Jane Jacobs, writing about what she called the Uruguay problem, identified what this costs beyond the immediate loss. By her time, Uruguay, like a preternaturally simplified example out of an Economics 101 textbook, was known for selling beef and buying everything else. A century later, it is still selling beef and buying nearly everything else[^beef], because selling beef was profitable enough to suppress the incentive to learn to make much else. Every import that replaces a locally produced good is a piece of productive knowledge that does not develop, a supplier relationship that does not form, a problem that local ingenuity does not solve. Japan imported textile machinery and learned to make textile machinery, then made better textile machinery than its teachers. South Korea imported steel technology and built one of the world's most efficient steel industries. The learning happened because policies forced the feedback loop closed: the imported technique had to become a domestic capability or the firm died. This is what the Washington Consensus removed, in the name of efficiency, from the countries that most needed it. The countries that violated the prescription, China, Vietnam, India in specific sectors, did substantially better. The Washington Consensus told poor countries to open their markets. China's industrial policy then proceeded to empty them.

[^beef]: This is an exaggeration; they added a few other cash crops and foreign-run wood pulp extraction.

But there is a fifth group, and it is the one that determines how the others relate to each other.

The government is not a person. It is an arrangement of people with individual careers and individual calculations about what serves their interests. Some of these people are approached, before the concession is signed, by representatives of the extraction company or by intermediaries who represent nobody in particular, and offered money. The money is not always called a bribe. It is sometimes called a consulting fee, a facilitation payment, a contribution to a foundation, or an investment in a company that subsequently does very well. The person who receives it understands what it is. So does the person who pays it. The legal and accounting infrastructure that converts it into something that appears in no criminal indictment was built by expensive professional labor in rich-country jurisdictions, for exactly this purpose.

This, however, is only the crudest version of how the fifth group forms. In its mature form, it is assembled further upstream: through World Bank and IMF training programs for finance ministry officials, through graduate education at institutions that certify fluency in a framework that makes favorable concession terms look like rational policy rather than complicity in intra-country expropriation. By the time someone is in a position to negotiate concession terms, they have often already internalized a framework in which those terms seem reasonable.

The framework teaches that integrating into global markets is how a country extends the domain of rule of law, property rights, and free, mutually beneficial exchange. It treats access to international capital and the building of domestic institutional capacity as the same project, or at least as reliably complementary. The countries that falsified this did so by treating them as distinct, building the institutions that support domestic capacity even at the cost of market access. An official trained in the framework is not cynical about it; the conflation is not obvious. But it conflates the conditions for extraction with those for liberation and prosperity, under the name of development.

When the boom ends and the currency depreciates and the diverse local economy is ruined and the government is left with debt and depleted reserves, the fifth group is insulated from all of it. Their wealth is held in foreign accounts, because they do not trust the local financial system, which they have helped to compromise, and because the foreign accounts are harder to trace.

The dependency theorists of the mid-twentieth century focused on exactly this tendency. Samir Amin named this fifth group explicitly: the comprador bourgeoisie, a domestic class whose economic interests have been structurally oriented toward foreign capital rather than domestic development. Immanuel Wallerstein described similar dynamics, though his interest was less in the comprador class per se than in how the whole global economy maintains a hierarchy: rich core, poor periphery, and a middle tier (the "semi-periphery") that countries can move between.

They were not wrong about the comprador class.

But their diagnosis became enmeshed in broader, more ideological frameworks that made it easy to dismiss. André Gunder Frank, the boldest of the three, argued that development in rich countries directly produces underdevelopment in poor ones, a relationship he treated as inevitable and permanent absent a socialist revolution; East Asian industrialization falsified this. Amin theorized specific conditions under which peripheral states could build autonomous productive capacity, but those conditions collapsed toward autarky in practice (later reinterpretations retrofit his framework onto East Asian success, but don't count as predictions made in advance), and the most successful catch-up economies achieved their results through exactly the kind of selective world-market engagement his framework treated as a trap. Worse, dependency thinking provided intellectual cover for local elites who used the ideology of import-substitution not to build domestic capability, but to shelter their own patronage networks from competition. The correct observation about comprador elites was rendered unpotable, the well poisoned by association with self-fulfilling prophecies that were falsified in a few places, and replicated the disease under new names in many others.

I explained the institutional dynamics that make development recommendations structurally authoritarian in [Parkinson's Law and the Ideology of Statistics](https://benjaminrosshoffman.com/parkinsons-law-ideology-statistics/). I described the long emergence and sudden victory of a debtor-aristocrat class in [The Debtors' Revolt](https://benjaminrosshoffman.com/the-debtors-revolt/). But Compradorization involves a different kind of ideology in need of its own sort of explanation.


# Compradorization: The Separation of Interest from Duty

The word comprador comes from the Portuguese for buyer. Historically it named the local agent employed by a foreign trading house: the person who knew the language, had the relationships, and managed the interface between the foreign firm and the local market. There is as far as I can tell nothing intrinsically wrong with an international merchant retaining a local agent.

Dependency theorists extended the term to describe any domestic class whose economic interests align with foreign capital rather than domestic development: the ministers, bankers, and officials whose wealth, careers, and frameworks of understanding are oriented outward, toward the extracting powers, rather than inward, toward the population nominally in their charge. What makes someone a comprador in this sense is not their employer or their nationality but their structural position, and the corresponding orientation towards profiting by eroding local cohesion: they sit at the point where institutional interests and personal interests have been separated, and their continued prosperity requires them to exploit and enlarge that separation. The class need not be recruited deliberately, need not be cynical about its role, and need not overtly plan to advance its interests as a class.

Public choice economics gives the formal apparatus for what I have been describing informally. Its central observation is that governments are not unitary actors maximizing social welfare. They are collections of individuals with careers, budgets, and pension entitlements. When you model a government as a social planner, you have assumed away a central problem of political institution design: why would the planner maximize social welfare rather than their own welfare, which is a different and more tractable problem?

Applied here, public choice predicts the political comprador class from first principles. It also predicts that industries with large rents will systematically invest in political access, that this investment will shape institutions over time, and that the resulting institutions will be durable because the people who benefit from them are the people with the resources to defend them.

What public choice does not do well is name the international dimension. The compradorization problem is also a problem about the interaction between a weak state and a foreign corporation backed by a strong one, with international creditors providing the debt conditions that create the initial leverage.

## Reflexive Compradorization: The Prodigal Son

There is a further complication that public choice, designed to analyze domestic politics in functioning democracies, has no natural slot for: high rule-of-law societies are drawn into low rule-of-law behavior through their interactions with places where it is easy to simply bribe someone to give you the trade or mineral concession. The merchant who assumes legal symmetries is playing a different game than the entrepreneur who looks for power asymmetries to exploit. The latter does not break rules; he finds a context where the rules are optional, and moves first.

The East India Company's early factors discovered this in the Mughal court, where assets and permissions were ultimately governed through personal gifts and relationships, which decided  what a contract meant and which exceptions would be made. They accumulated presents as the standard cost of doing business, remitted fortunes home, returned as nabobs, and bought parliamentary seats that they used to protect the Company's monopoly and block reform. Robert Clive, who had bought his way into Parliament through a notoriously venal borough, was investigated in 1772 but exonerated by a House in which a quarter of members held East India Company investments; the resolution simultaneously censured his conduct and praised his "great and meritorious services." He died at his own hand the following year. When Warren Hastings was impeached in 1787, the charge was partly that he had accepted presents and partly that the methods he used to extract revenue from Indian princes (routine in the Mughal system) were illegal under English law. He was acquitted, and eventually made a Privy Councillor. The trial made visible what the profits had concealed: that a different legal culture had been imported alongside the money.[^poortest]

[^poortest]: Hastings was a difficult and marginal test case. Serving as Governor of Bengal, he acquired a personal fortune estimated at £200,000 not primarily from his salary but through practices like accepting customary presents, but he also attempted to mitigate Company abuses. He tried to stop Company officials from passing private trade consignments duty-free, which was costing the local Nawab enormous revenue and creating resentment against the British. He abolished the dastak system (Company passes that officials used to evade local customs duties). He restricted private trading by Company officials. Aside from Clive, few nabobs who openly bought parliamentary seats and used them to protect the Company's monopoly were ever subjected to proceedings as serious as Hastings’s impeachment. Convicting Hastings would have established a strong standard against accepting bribes while posted abroad. His acquittal ended the last serious attempt at reform radical enough to uproot the normalization of double binds.

Two centuries later, the Western economists and advisers who arrived in post-Soviet Russia in the 1990s found that privatization worked through relationships with officials rather than through transparent markets. Harvard's advisory team, operating through the Harvard Institute for International Development, worked so closely with figures like Anatoly Chubais that the line between advising and participating dissolved. Jonathan Hay, the team's on-the-ground lead, was subsequently found to have invested personally in Russian markets he was supposed to be helping to regulate impartially; HIID was investigated by the US government and its contracts terminated. The network built in Moscow in that decade surfaced subsequently in Western finance in forms that are partially traceable: several of the oligarchs whose fortunes were assembled through the Chubais privatizations (Abramovich, Fridman, others) subsequently moved capital into Western banking partnerships, London property, and financial vehicles, carrying with them the advisers and relationships from the privatization period. The colonizing country's domestic standards are quietly corroded from outside in. Whether this damages both nations or primarily one is an empirical question the economics of empire has rarely thought worth asking.

Bram Stoker published the novel Dracula in 1897, about halfway between those two examples, which places it right in the middle of the long, possibly still ongoing period when these habits were visibly leaking back into English domestic life. Count Dracula arrives from Eastern Europe, peripheral, low-trust, operating by different rules, and proceeds to corrupt the domestic order from within, using English legal and financial infrastructure to establish himself: a solicitor, a property purchase, accounts in order. Jonathan Harker goes to Transylvania as the legal professional assuming symmetrical contractual relations and returns as something altered. The novel's central anxiety is the mechanism this section has been describing: contact with a context where the rules are optional and the other party is looking for a different kind of leverage changes you, and what changes you then spreads outward through the society you return to.

## Construals of Corruption: Fawkes or Villiers?

Whether compradorization becomes the dominant force or gets error-corrected depends on the receiving society's defenses: whether a potential Warren Hastings should expect to be rewarded like George Villiers or executed for treason like Guy Fawkes. George Villiers, Duke of Buckingham, was the favorite of King James I (the Bible guy), widely understood to be selling offices and honors (technically naughty, rewarded in expectation, and at worst punished when some other need of state required a scapegoat). Guy Fawkes plotted to blow up Parliament in 1605 and was hanged, drawn, and quartered; his name became synonymous with the kind of threat the English state would mobilize all its force to destroy. Hastings was acquitted and made a Privy Councillor — closer to Villiers than to Fawkes. The Hastings trial would never have happened under Cromwell (not because of any characteristics peculiar to Cromwell himself, but because the Puritan system selected for and promoted people oriented toward the collective project rather than personal enrichment), and because [the Puritan political project](https://benjaminrosshoffman.com/calvinism-as-a-theory-of-recovered-high-trust-agency/) was the construction of a high-trust network whose members could recognize each other's trustworthiness without reliance of a corrupt intermediary. In that context, the purchase of domestic officials threatened the epistemic foundation of the entire arrangement, and would have been recognized as such. The Restoration foreclosed that response, even though the reinstalled chief exception-maker was permanently weakened. The question of which regime a society is operating under is the question of whether compradorization can proceed when external circumstances permit.

The arrangements that are hardest to dismantle are usually not conspiracies. They are convergences of perceived interest so complete that no deliberate design is required. But it would be a mistake to call this sincere belief, in the Bayesian sense of the term. The IMF economist who designed the conditionality did not feel, when acting on his beliefs, that he was putting those beliefs to the test and thereby judging their accuracy. He felt that he himself was being put to the test, and was demonstrating his suitability. That feeling may have been entirely sincere. Sincerity is not the same as having an empirical belief: the kind you would revise if the evidence went against it. [A flag is not a hypothesis](https://www.lesswrong.com/posts/PeSzc9JTBxhaYRp9b/policy-debates-should-not-appear-one-sided).

## Development Consulting: a Case Study

A special emissary on secret assignment goes abroad to consult a development economist. "My country," he says, "has persistent, endemic problems: systematic rape gangs in provincial towns, a police force that arrests people for posting on social media while actively discouraging concerned parents from seeking recourse for the rape gangs, public housing projects catching fire, unreliable transportation networks, all while the king's family, not content with their lavish state-funded palaces, goes around taking millions of dollars in bribes from foreign governments." "The answer is simple," says the economist. "Apply to become a protectorate of the British Empire. They will provide security, reliable infrastructure, rule of law, property rights, civil liberties, women's rights, and free trade." "But doctor," moaned the emissary, "we ARE the British Empire!"

# The Instruments and the Flinch

## The Roles

There is a class of people who advance the process of compradorization and are not comparably enriched by it. The compradorizing minister prices his complicity at something approaching market rate. The people described below sell their analytical talent for perhaps an academic's or mid-level bureaucrat's salary, and the feeling of being one of the rigorous ones, a fraction of what their intelligence could earn them if they understood what they were doing with it, and a fraction of what a competent cynic in their position would demand.

Lacan's clinical framework is the best one I have found for making sense of this, but some of Lacan's terminology is euphemistic and requires translation before it is useful. 

Lacan's framework is organized around "the Other," the felt presence of institutional authority experienced as though it were the structure of reality: the abstract dominator whose descriptions of how things are, are the party line. The Other is responsible for "the law": the regime under which all communication is understood as signaling intent about who will be punished for what. This regime is oriented towards the deferral of violence, to be discharged eventually in a Dionysian frenzy he calls "jouissance": the ecstatic dissolution of boundaries that institutional order exists to contain (see Sarah Constantin's [On Drama](https://srconstantin.wordpress.com/2017/04/25/on-drama/) for the connection between ritual, collective frenzy, and the dramatic arc that rejects denotative language as an unfriendly interruption, making the interrupter a natural target).

Lacan identifies three ways of accommodating the Other: perversion, hysterical neurosis (which he usually simply calls hysteria), and obsessional neurosis. These three structures are distinguished by what the person does with the knowledge that institutional authority is groundless.

The pervert knows and uses it: he sees that the rules are a fiction and instrumentalizes them, speaking the language of authority to direct its violence for his own benefit. His defense mechanism is disavowal: he holds two contradictory positions at once without experiencing conflict.

The hysteric knows and performs against it: she (the gender assignments here are original to Lacan) converts the knowledge into a display of grievance, staging unsatisfiable demand for authority's attention. Her defense is also a kind of repression, but routed through drama: the knowledge gets discharged in the performance rather than arriving as a basis for making decisions. What Lacan calls hysterical "desire" is the demand to aim the abstract dominator's violence at a target: summoning malevolent authority against your enemies, wanting an evil god's blessing.[^balakbalaam]

[^balakbalaam]: The story of Balak and Balaam (Numbers 22-24) illustrates the hysteric's relationship to authority precisely: Balak hires the prophet Balaam to curse Israel, treating prophecy as a mechanism for recruiting divine violence against his enemies. Balaam, constrained to say what is true regardless of who it favors, cannot deliver. The hysteric's "desire" is Balak's project: summoning the abstract dominator's attention and directing it at a target.

The obsessional neurotic doesn't know. His defense is repression proper: his entire cognitive apparatus is organized so that the relevant knowledge never forms. He experiences this not as a gap but as rigor. His mastery of the framework is the mechanism that keeps the gap invisible.

Hysterics constitute a mob with real grievances against the perverts, threatening displaced violence against the obsessional neurotics, which paradoxically scares the neurotics into working ever harder to win the perverts' acceptance.

## The Pervert

The compradorizing minister is Lacan's pervert. He instrumentalizes the developmental framework, channeling violence through orderly institutional forms, while withholding validation from anyone who tries to point out that this is happening. He sees that the framework connecting "development" to "market integration" is a fiction, and he uses it: the fiction compels compliance from everyone around him, so he speaks its language to direct resources toward himself. His corruption moves through consulting fees, transfer pricing arrangements, and accounts in jurisdictions designed to make it invisible. He treats the vocabulary of development the way a forger treats an official letterhead, as a tool that works because other people believe it is real.

## The Hysteric

The dependency theorist sees that something is wrong, but he converts the knowledge into a performance of outrage, a demand for attention that must never be satisfied because satisfaction would end the performance. His framework predicts permanent catastrophe, not because the evidence supports permanence, but because a permanent problem generates permanent demand for the services of people who denounce it. His buyers are Lacan's hysterics, who perceive advantage in enacting the drama of grievance—of being seen, of being the wronged party, of being the ones whose feelings matter—rather than being ignored or being the involuntary target of someone else's dramatic attention. Their threats are directed not at the arrangement, but at anyone who might render it tractable, because a correct diagnosis would lead to solutions, and solutions would reveal the inauthenticity of the performance.

## The Neurotic

The IMF economist is the obsessional neurotic. He is neither exploiting the arrangement nor performing against it. He is administering it, and he does not know that this is what he is doing. His mechanism is *repression*: not in the crude sense of pushing down a thought that keeps trying to surface, but in the structural sense that his entire cognitive apparatus is organized around a gap where certain knowledge would go.

Consider what his training has done to him. He entered a graduate program that taught him a vocabulary—"convergence," "Dutch disease," "resource curse," the full apparatus—and this vocabulary was not presented as one possible description of the world, to be tested against alternatives. It was presented as the framework within which economic reality becomes visible. To learn the vocabulary was to learn to see. After enough years of fluency, the framework is no longer something he *uses*. It is the medium through which evidence reaches him. Data that fits the framework arrives as signal. Data that doesn't fit arrives as noise, or as an indication that further research is needed, which means further research conducted within the framework. The system is closed, not because he chose to close it, but because the training that made him an economist also made him someone who cannot formulate the relevant questions in the language he was taught to think in. This is not unique to development economists. Milton Friedman's Chicago School framework performs the same structural function from the opposite end of the policy spectrum: not a weapon wielded cynically but a closed perceptual system that its most sincere practitioners cannot examine from outside.[^friedman]

[^friedman]: Friedman's son David is evidence that the libertarianism was mostly in good faith, but for the neurotic unseeing: David has wide interests, writes seriously about legal systems radically different from ours (Icelandic feud law, Romani law, Comanche governance, pirate codes) and his medieval recreationism feeds productively into his scholarship. But he still seems neurotically panglossian about law, and not really interested in criticisms of the existing system that would reveal conflict rather than mere inefficiency. David's son Patri, the seasteading advocate, seems more conflict-aware than his father or grandfather, but less publicly accountable.

The underlying mechanism is what Lacan's framework names but euphemizes: in the institutional world the economist inhabits, all communication is understood as signaling intent about who will be punished for what. To state a framework is to submit to its authority. To name a norm is to enforce it. To describe what an institution does is to take a position in a punishment hierarchy, either endorsing its right to punish or challenging it. There is no position from which one simply *observes*. The felt presence of institutional authority, the abstract dominator whose approval underwrites the economist's professional identity and whose displeasure he cannot risk, is experienced not as a political fact but as the structure of reality itself. When someone says "this term names an outcome without naming a mechanism," the economist cannot hear this as a factual observation about language. He hears it as a challenge to the authority of the framework, which is the authority he lives under, which is the ground of his professional self. Rejecting the observation is not a choice. It is a reflex, as automatic as flinching.

## The Bargain

The neurotic's flinch is not merely a cognitive failure. It is a survival strategy, and the bargain it represents should be stated plainly: I have made myself unable to see what you are doing, and in exchange, the violence against me is deferred.[^powerofthepowerless] The economist's rigor, his models, his fluency in the vocabulary, allow him to demonstrate mastery in his domain, while carefully demarcating that domain to make sure that he has upheld his end of the arrangement.

[^powerofthepowerless]: Cf the formulation in Vaclav Havel's [The Power of the Powerless](https://www.nonviolent-conflict.org/wp-content/uploads/1979/01/the-power-of-the-powerless.pdf): "I am afraid and therefore unquestioningly obedient."

But it is an obviously worse deal than the neurotics would get if they could stop being neurotic. If they could see the arrangement clearly and coordinate with others who see it clearly, they could organize for mutual protection rather than selling their cognitive capacity for the feeling of being rigorous. As Romeo Stevens observed, the degree to which you are divided is the degree to which you are conquered; the internal version of this is that self-deception costs you the cognitive capacity you would need to recognize and escape the trap (see Hazard's [Towards a Unified Theory of Self-Deception and Trauma](https://naturalhazard.xyz/towards_a_unified_theory_of_self_deception_and_trauma).) Julian Assange [similarly observed](https://cryptome.org/0002/ja-conspiracies.pdf) that an organization that compartmentalizes to keep secrets becomes less powerful in its struggle with all other organizations. The price of the neurotic's bargain includes the ability to recognize that you are in one, because the cognitive capacity you would need to see the alternative is exactly what you have given away.

Stefan Zweig, the Austrian Jewish writer whose memoir *The World of Yesterday* describes the prewar bourgeois order from the inside, was an exemplary case: he won Vienna's cultural tournament, organized his entire identity around the European institutional framework, and could not revise that framework when the order it described turned on the people it had most thoroughly assimilated. He killed himself in exile in Brazil in 1942, safe, wealthy, and unable to survive the collapse of the perceptual system he had mistaken for reality. The problem is not that the bargain is betrayed; the problem is that by construction it inevitably ends in betrayal. The established and assimilated Jewish leadership of prewar Europe sold their analytical capacity for inclusion in an order that was actively destroying their interests, when the alternative was to see clearly, coordinate, and organize collective self-defense. For all its flaws, no one can accuse Zionism of mere wishful thinking. Jews who rejected their neuroses about European institutional authority and organized for mutual protection survived at higher rates, not because they distrusted the order (distrust is cheap) but because they *acted* on what they saw. Leaders like Jabotinsky and Herzl sounded the warning and proposed collective action; the established leadership, whose professional identities were staked on the framework within which the warning could not be heard, ignored them. The neurotic's bargain cannot ultimately protect the neurotic against that which it was designed to [unsee](https://benjaminrosshoffman.com/national-identities/).

## Basilisk

This is why the vocabulary this essay describes reproduces itself without anyone deciding to reproduce it. "Dutch disease" does not persist because someone is guarding it. It persists because the people who use it cannot distinguish between a description of their terminology and a challenge to the authority of the framework the terminology serves. The vocabulary is not protected by a conspiracy. It is protected by a flinch.

The flinch does not merely block individual understanding. It blocks the *accountability* for understanding that would make understanding consequential. An IMF economist can, in private, entertain the possibility that structural adjustment conditionality served extraction rather than development. Many have, and some have said so in memoirs and retrospectives. What cannot happen is for this acknowledgment to become something he is *accountable for knowing*: a premise others can see him holding and expect him to act on. Nor can he demand that otherwise accountable people be accountable for receiving this knowledge from him. [The taboo is not on thinking the thought](https://benjaminrosshoffman.com/taboo-common-knowledge/). It is on thinking it in a way that creates expectations. The retreat from the taboo has a characteristic sequence: first, avoid understanding; then, if understanding occurs, avoid expressing it; then, if it is expressed, avoid expressing it in a form that would make others accountable for having heard it; then, at last, if all else fails, simply decline to act as though one knows what one has said one knows. Each layer of retreat preserves the core function: ensuring that the knowledge never becomes a *premise*: a thing everyone knows that everyone knows, on which collective decisions could be based.

## Punctuated Equilibrium

The compradorizing minister, the dependency theorist, and the IMF economist thus form an arrangement. The minister extracts. The theorist ensures that opposition to extraction takes the form of permanent ritual denunciation that never becomes effective, because effectiveness would require breaking the dramatic frame with a plain description. The economist ensures that the extraction is administered by people who experience their own inability to see it as essential to their professional identity. No one of the three designed this arrangement. No secret meeting was required. Each is responding to the incentives they perceive.

This very smooth road leads to destruction. The pervert and the hysteric are containing the neurotic, with the neurotic's complicity, by ensuring that the neurotic's cognitive capacity never gets deployed against the arrangement: the pervert by instrumentalizing the framework the neurotic is trapped in, the hysteric by ensuring that opposition never takes an actionable form. This containment depends on periodic Dionysian spasms to discharge the pressures it accumulates. Sometimes these are empty dramatic catharses of ritual denunciation, but there is no robust mechanism for preventing the promises of deferred violence from being kept sometimes.[^priorbust]

[^priorbust]: I don't have a good mechanistic model of this, but I've worked out pieces. [The Debtors' Revolt](https://benjaminrosshoffman.com/the-debtors-revolt/) covers correlated debt-shame, which produces waves of actual violence; [the Beta Bucks and Not with a whimper, but a bang sections of Statisticism](https://benjaminrosshoffman.com/statisticism/#beta-bucks) cover largely overlapping dynamics of correlated consensus and catastrophic breaks. [Guilt, Shame, and Depravity](https://benjaminrosshoffman.com/guilt-shame-and-depravity/) covers the psychic structures that implement adversarial strategies of correlated catharsis.

## Outside the Asylum

There is, finally, a fourth position. Lacan called it psychosis: the structure in which the founding conflation of language with command was never installed. This is clinically pejorative, because from within the symbolic order, someone who hears words as descriptions rather than commands appears unmoored from shared reality. From outside it, the symbolic order is the shared hallucination.

The person who simply describes the mechanism—not to command, not to perform, not to administer, but to *state what is happening*—occupies no recognized role in the arrangement. The minister cannot buy him because he is not selling. He cannot sell to the hysterics because his descriptions call implicitly for accountability, not a Dionysian discharge. The economist cannot hear him because a description that does not signal position in a punishment hierarchy registers as nothing at all, or worse, as a kind of hole in the world, something that should not exist.

This is the position from which the vocabulary looks like vocabulary rather than reality. It is not a comfortable position. The arrangement has no slot for it, and the people who most need to hear from it are the ones least equipped to receive the transmission. But it is also the position from which collective self-defense can be organized, because it is the only position that can fully and openly acknowledge the arrangement; as the Zionist precedent demonstrates, seeing the arrangement clearly together and acting on what you see is not wishful thinking but the precondition for any response that actually works.

# What Does This Have to Do with Solow Convergence?

There is an academic literature devoted to the question of whether poor countries can expect to catch up to rich ones simply by participating in the same global economic regime: opening their markets, accepting foreign investment, and integrating into international mechanisms for adjudicating trade and financial disputes. I examined the technical problems with the standard convergence test in the preceding article mentioned above; what matters here is what that test cannot see. The obsessional neurotic's flinch.

The convergence literature uses the Solow growth model as its theoretical anchor: Solow predicts that capital should flow toward where returns are highest, which in principle means toward poor countries with less of it, producing convergence. Solow's model is agnostic about whether this happens through open markets or directed industrial policy. South Korea's convergence is as much a Solow story as Chile's. But the convergence literature was deployed to support the Washington Consensus claim that participation alone suffices, that the policy tools the successful industrializers used were unnecessary detours.

In 1942, the Supreme Court of the United States ruled in *Wickard v. Filburn* that the federal government could punish a farmer for producing grain for personal use, on the grounds that self-sufficiency affects interstate commerce. The logic, stated plainly: the state does not merely describe the economy through metrics like GDP; it enforces participation in its description. A farmer who produces their own grain is not only failing to participate in the measurement system. They are threatening to demonstrate that the measurement system is optional. That cannot be permitted.

The countries that succeeded did not simply refuse the prescription. Several engaged with it seriously, adopted parts of it, and rejected others on the basis of evidence about their own circumstances. What distinguished them was not a different policy toolkit but a different kind of state: one whose officials were oriented toward the domestic productive project, capable of asking whether a given recommendation served that project, and institutionally positioned to say no when the answer was no. That capacity is what compradorization removes. Where it had run deep enough, the question of which policies to adopt was already settled before anyone asked it.

A man inherits a forest, cuts it down, and sells the timber. For several years his cash flow is excellent. His net worth is declining. The GDP statistician records him as prospering. This is what most commodity-exporting countries did during what the convergence literature called the Great Convergence: they sold raw materials to China, recorded the cash flow as development, and depleted the assets that produced it. The mines were not built up but drawn down. They fed nothing forward. When Chinese demand slowed, the statisticians recorded the reversal as a new puzzle. It was not new. It was the original situation, now visible again.

The convergence debate is the empirical expression of the claim that mere participation suffices.