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Democracy and Management of Knowledge: From Ancient Athens to Modern Institutions Josiah Ober Stanford University jober@stanford.edu

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The Argument: Fact: Classical Athens outperforms its city-state rivals. Correlation: Growth of democracy at Athens leads growth of state capacity, suggesting that democracy promotes high performance. Puzzle: Why and how? Democratic participation is costly. Answer: Democratic management of useful knowledge produces benefits that exceed the costs. Mechanism: Benefits of democratic knowledge arise from ongoing innovation and social learning (routinization).

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Whats at stake? For classical history: Explains origins and persistence of Athenian exceptionalism. For political science: Identifies knowledge as a source of democratic advantage. For normative political theory: Demonstrates compatibility of rational choice with social/political cooperation. Eliminates trade-off: efficiency v. value of citizen participation.

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Received wisdom II: Participatory democracies are dominated by hierarchies in competitive environments. Iron Law of Oligarchy: command and control hierarchy will invariably drive out democracy Robert Michels, Political Parties. 1911 because participatory democracy has excessively high transaction costs. Oliver Williamson, Markets and Hierarchies. 1975, & Economic Institutions of Capitalism, 1985.

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Yet in the real world, democracies often out- compete authoritarian rivals. Economically: Acemoglou and Robinson, Economic Origins of Dictatorship and Democracy 2006 Militarily: Reiter and Stam, Democracies at War 2002 Why? Morale, mobilization, leadership commitment but also knowledge management.

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Democracy and knowledge in recent political philosophy, social science, business literatures. E. Anderson, Epistemic democracy 2006, building on John Dewey. J. Surowiecki, Wisdom of crowds 2004, building on Condorcet et al. Brown and Duguid, Social life of information 2000, and many studies of so-called learning organizations.

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Useful knowledge is dispersed and diverse 1.Knowledge is dispersed among many individuals: F.A. Hayek, Use of Knowledge in Society 1945. 2.Knowledge takes diverse forms (social, technical, latent, tacit): M. Polanyi 1966 3.Knowledge is held by diverse categories of people: S. Page, The Difference 2007 Epistemic democracys organizational challenges: aggregating dispersed knowledge and managing diversity.

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Democratic institutions for aggregating dispersed knowledge and managing diversity Deliberation. Face-to-face talk, sharing viewpoints, may lead to common ground. J. Fishkin 1991 Prediction markets. Aggregated independent guesses can beat other approaches to predicting the future course of events. C. Sunstein 2007 Assessing the value of institutions requires long-term case studies featuring real-world consequences.

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Table 4 Daily wheat wages of unskilled workers, 2000 BCE 1300 CE (W. Scheidel 2008) Date Location Wheat wage (in liters). Core range = 3.5-6.5 20th/16th c. BCE Southern Mesopotamia 5.3-6.3 15th/14th c. BCE Nuzi 5.3 7th/6th c. BCE Southern Mesopotamia4.8 late 5th c. BCE Athens 8.7 320s BCEAthens 13-15.6 321 BCE Babylon (1.3*) 3rd/early 2nd c. BCE Delos 3.2-11.1 (4.6-8.6?) 260s/250s BCE Egypt 3.4-4.2 210-180s BCE Egypt 3.2-6.2 160s-120s BCE Egypt 1.6-1.9 120s-90s BCE Egypt 1.3-5.8 (2.6-3.1?) 93 BCE Babylon (2-2.4*) 1st c. BCE/1st c. CE China (1.4-3.9??) 1st c. BCE/CE Rome (>5.9?? 7.7-13.4 760s CE Mesopotamia 3.6-5.3 late 8th/early 9th c. Egypt(3.2-10?) 8th/9th c. CE China (0.8-11.7??) 10th/12th c. CEChina (0.8-3??) c.1000 CE Constantinople (5.6??) c.1000-1050 CE Egypt(>?)4.3-5.3 11th c. CE Mesopotamia 6.1 11th/13th c. CECairo 7.5-13.5 12th c. CE Egypt 6.4-10.6 12th/13th c. CE Constantinople (4.2-9.3?) 13th c. CE Mesopotamia 9 ________________________________________________________________________

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Majority rule is not the key differentiator. Other Greek democracies are generally less successful than Athens. Tyrannies are indeed unproductive relative to republican (oligarchic/democratic) regimes. But there is no strong correlation between majority rule and a given polis flourishing.

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Historical origins of democracy, 508 B.C. Sparta (dominant state in Greece) fails to dominate Athens due to mass uprising by ordinary Athenians. Cleisthenes, elite leader whose reform proposals inspired the uprising, must implement new order very quickly. Tyranny, narrow oligarchy were discredited. Result is invention of democratic institutions.

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New participatory democratic institutions Council of 500: Deliberation among a quasi- representative sample of the population. Information-sharing among people with diverse backgrounds and knowledge. Ostracism: Non-deliberative pre-emptive prediction market. Independent individual judgments are aggregated to identify and eliminate future risks.

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Public action problem. Building bridges from one strong-tie network (residents of Prasiai) to another (residents of a distant village) is costly. Without good reasons, individuals will not engage in this costly behavior. If cooperation and coordination remain local, state capacity remains limited.

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Institutional design solution. Creating conditions in which individuals have reasons to bridge between local networks. Thereby increasing the flow of information across the whole society - the extended network. And collecting useful knowledge from diverse sources in a Council, where it becomes the subject of deliberations among diverse individuals who share information in seeking the best solution.

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Cleisthenes reforms and Athenian political geography 10 new artificial Tribes (I - X) Each tribe drawn from existing villages (dots) across 3 regions Coastal (blue) Inland (red) Urban (yellow)

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Citizen population of Athens divided into 10 tribes (phulai) Example of Tribe III Pandionis Breakdown by regional Thirds (trittyes) And by villages (demes)

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The Council of Five Hundred. Council sets agenda for citizen Assembly and carries out day-to-day administration. 500 councilors (bouleutai) annually selected by lot for one-year term. = 10 tribe-teams of 50 men, chosen by villages/neighborhoods (demes).

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Councilors for each 50-man tribe- team are chosen by villages (demes). Each deme of the tribe sends one or more Councilors each year, based on its population. Each tribe includes demes from the inland, coastal, and urban regions, so each tribe team is regionally diverse.

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Pandionis tribal team of 50. Stage 1. Strong ties (solid lines) link fellow demesmen. Few bridging ties (dashed lines) between deme contingents. Prasiai = deme numer 8.

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Structural holes separate deme contingents. Organizational problem (holes limit knowledge flow). But individual opportunity for gaining social capital.

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Problem: Each member of the Council sits only for one year, has little chance of reappointment, so low rewards from time & effort costs of bridge-building. Premise 1: The least advantaged (SES) Councilor has the greatest incentive to seek new sources of social capital. He innovates by bridging. Premise 2: Success of early-adapting bridge-builder stimulates imitation. Poseidippos of Prasiai and his motivation for bridging:

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Stage 2. A social entrepreneur sees the opportunity. He bridges across the structural holes, thereby gaining information & social capital.

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Stage 3. As others imitate, the extended network of Pandionis contingent grows dense with bridging ties. Diverse knowledge is collected and exchanged.

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IIIIII 506471436401366331 IVVVI BC Premises Densely-bridged networks facilitate communication, preserve valuable information. Bridges are robust, over time (generations) and across space (demes and tribes). Result. Each generation of Councilmen has deeper social knowledge, better technical knowledge of government institutions, stronger incentives to share knowledge. Council service promotes social learning over time. Six generations of Councilors.

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Council service promotes polis performance Networks connect diverse regional and social groups Social knowledge is more freely exchanged More diverse technical knowledge is aggregated Experts in government process multiply Incentives for novel solutions push innovation Knowledge is cross-appropriated between domains Governance processes become more transparent Social capital among mass of citizens grows So Athens knows (more of) what Athenians know

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Ostracism as a preemptive prediction market Problem: How to identify and address serious risks to polis without crushing entrepreneurial initiative? Stage I assesses likelihood of high risk. Citizens in Assembly annually decide, by vote. Do we ostracize someone this year? Vote answers 1st question about how the present state of affairs could play out in the future. Is there in the polis an individual whose continued presence would put the state enough at risk to justify his expulsion without trial?

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Answer is usually No (15 known ostracisms in 180 years). When majority of Assemblymen vote Yes to ostracism Stage II: 1.Each citizen goes to the public square (agora) with a sherd (ostrakon) inscribed with a name. 2.Citizens cast their ostraka/votes (no formal deliberation). 3.Ostraka are sorted and counted. 4.Name of man with the most votes is announced.

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Stage II of ostracism weighs alternative futures Vote aggregates many independent opinions about prominent individuals to answer 2nd question. Whose continued presence would be most likely to put Athens seriously at risk? Vote by ostraka identifies and pre-empts the alternative future regarded as worst/most likely in the absence of concerted public action.

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Stage III of ostracism is predetermined by rules. Rules prescribe the answer to 3rd question, What to do with the man whose continued presence is considered to put our future most at risk? He is immediately exiled for 10 years. But his family may remain in Athens and he retains possession of his property. Clear rules and limited downside risk to prominent individuals raise the incentive to accept the rules of the game. No mass exit of elites from Athenian public life.

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Athenian Law on Tyranny, 337 B.C. The law is a product of aggregated knowledge about how to deal with potential tyrants By building common knowledge the law aligns actions of citizens in the face of a tyrannical threat Erecting the stele codifies knowledge: makes a public record of the new rule.

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