Ehud the Bandit

Back in 1995, I attended a lecture in Washington, DC, given by the late Mancur Olson regarding his theory of banditry and the emergence of dictatorships and dysfunctional democracies in 20th century politics. Olson was not interested in petty bandits; no, he was interested in the kind of bandits who seize control of entire states and then utilizing the machinery of the state to line their pockets.

These bandits, he argued, come in two varieties--the roving bandit and the stationary bandit. The roving bandit takes control of the state and then proceeds to steal it blind--or drive it into the ground. Whatever is not bolted down becomes requisitioned, or appropriated, into the largesse of the Roving Bandit (since he or she has become the head of state, title case is called for) if only to cover the marginal transaction costs (gas, tolls, minyans, cohorts, and pillagers). Since Roving Bandit is always concerned that other roving bandits (since these bandits are not heads of state, they don't get capital letters) might create problems and present a serious challenge, Roving Bandit is always concerned with timing--get in, steal them blind, and get out.

Should Roving Bandit remove this competition, thereby creating a Bandit Monopoly, why then a promotion of sorts is in order--The Stationary Bandit. Since Stationary Bandit is now unchallenged, there is no need to rip everything off--no; the state now can be managed such that as the state's economy grows, it feeds Stationary Bandit as well!

At this conference I attended, Olson was somewhat weaker on a current events example of Roving Bandits but had lots to say about the quintessential Stationary Bandit--Yosef Stalin. Stalin liquidated his opposition and then turned the entire Soviet enterprise into feeding him. In many respects, Olson's theory is really an extention of his cult-status icon, The Free Rider problem. Everyone would be better off if the Bandit chief were removed (a definite public good), but even those with the tools necessary to carry out the removal detail want to pay the costs to do so--it would be better to let someone else do the deed. So, Stationary Bandit stays put.

It is important to remember that the primary difference between the roving and stationary bandit is that the former is only interested in staying in power to continue stealing. The latter, however, has an interest in getting the state and its citizenry to increase production and have a better life (to the extent that it marginally increases the over production rates)--more production, more bandit wealth.

Professor Lord Skidelsky, at the University of Warwick (who needs academic tenure with a title like that), applied this analysis to explain the current conditions in the new/old Russia.

My Moscow taxi driver had political opinions. ‘Everything was better in the old days’, he declared. ‘But surely it’s better now that you can choose your governments’, I offered. ‘Not at all’, he replied. ‘They just give you a choice between two sets of thieves, each one trying to steal as much as possible as quickly as possible’. He added: ‘It would be better if one person stayed in power a long time. Having stolen as much as he needed, he might concern himself with the good of the people’.

This might be true for the New Russia, but over in Israel, the story is different. Israel's contender, Olmerde has elevated the status of Roving Bandit to new levels. Here, a roving bandit stays a roving bandit. The trick is to steal the prime minister portfolio and never give it back. All that is missing is a cheap imitation of Edward G. Robinson as Rico in Little Caesar telling the cops, "If you want me, come and get me." This guy ain't leaving.

Over the last two weeks, Olmerde has done everything he can think of to forestall his demise. He threatened his cabinet, he denied there was any problem taking money or that he did so, and he even did his very best Judy Garland imitation claiming that a miracle will save him. In many ways, it did--that and a whole bunch of money including shekels transfered to Hamas to keep things quiet, for a while at least.

The populace, who have no elective control at all over the party system (the founding parents did not trust all those...those...people) are feed up. The Knesset Members are fed up. The rank and file military are feed up. My neighbor says she used to fill her car up once a day for 200 shekels to commute an hour and a half to work. Now it costs her 400 shekels. That's a jump from $59 to $118. Last week, there were rumors that cabbies and truckers blocked off roads in Tel Aviv in protest. Most people are uneasy with national security and most believe that Iran will build and use their bomb. One neighbor laughed that Olmert probably has purchased the real estate option on downtown Tel Aviv so when it is bombed next year, all of the land will be his.

So, here is Mancur Olson's free rider problem and the roving bandit. Everyone here knows that Israel will be better off without Olmert and the current regime. Everyone agrees that the economy sucks and the Socialist Workers' Paradise model is strangling the Israeli productive spirit. Taxes are sky high and the entitled few, labor unions and the retires, get their share at the expense of the IDF, to name examples (the postal union has been quietly on strike for weeks with no settlement in sight). Clearly, it is a public good.

But no one is willing to bear the costs to provide it. In fact, Olmert is blatantly challenging everyone on this very point. It's as if he read Mancur Olson's book, The Logic of Collective Action, and he is gambling that the fear of being what Israelis call a FREIR (loosely, a chump) is so great no one will effectively challenge him. Each Israeli prefers to let everyone else do the work; so, nothing gets done.

Certainly, there are no candidates among the leadership. The last thing ANYONE wants is to go to open elections. Netanyahu and Likud are the next government. Everyone knows this and will just have to wait--assuming that Olmert doesn't give away the entire country while he is sunbathing in Thailand. Moreover, most of the current regime in the Knesset will be out of a job. Retirees Party?! What a joke--complete Rovers all of them. They will not exist as a party in the next government. Labor loses. Kadima will be lucky if it survives. So, it is not likely that any of these bandits are likely to ask politely for elections soon.

So, Olmert has agreed to a primary on September 25. See, they are saying, this is what we have been able to do. Primaries. Isn't that great?

In the meantime, there is Shas. Up until now, they have been the Stationary Bandits of Israeli politics. They have provided most of the ruling coalitions's majority in the Knesset for the last ten years or more. Certainly, they are the keystone to Kadima's archway. But, they want buildings and settlements. They also need a place in the government to maintain the incredible subsidies and spoils they provide to their Hareidi constituency. But, they may have crossed the line with Likud. Netanyahu has already stated publicly that the time to make a stand is quickly approaching if they want a place in the next Knesset.

But, unlike Olmert, these guys are expert in keeping things going--like all stationary bandits, Shas wants the economy strong. How else can they continue to syphon off millions to support their supporters?

So, unless Messiah comes tomorrow, Olmert will continue to surf the seas of free riders. Since no one wants to supply the public good to bring his reign to a close, he will continue on until he is stopped. Unlike previous prime ministers, honor is not part of his vocabulary.