47 pages • 1-hour read
The Dictator's Handbook: Why Bad Behavior is Almost Always Good Politics
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Introduction-Chapter 1Chapter Summaries & Analyses
Introduction Summary: “Rules to Rule By”
Bruce Bueno de Mesquita and Alastair Smith start by dispelling the myth that “malevolent despots, greedy Wall Street bankers, and unctuous oil barons” behave poorly because they are flawed individuals (ix). Bueno de Mesquita and Smith argue instead that political leaders are following a set of rules whereby bad behavior is good politics.
There are five rules that leaders can use to succeed in any political or business system. First, leaders need to keep their key supporters (or winning coalition) as small as possible. By keeping the coalition small, leaders only have to rely on a few people to stay in power. Second, leaders’ cronies (which are their essential supporters) need to believe that they are easily replaceable. This belief ensures that the cronies remain loyal and well behaved. Third, leaders need to control the cash flow. The best cash flow is one that allows leaders to redistribute the money to their cronies to keep them wealthy and supportive. Leaders also need to pay their key supporters just enough to keep them loyal. Finally, a leader cannot be too cheap towards their supporters. If the leader uses money that should go to the supporters for the everyday people instead, it is likely that their supporters will turn on them and remove them from office.
The authors use the story of Robert Rizzo, the former city manager of Bell, California, to illustrate these rules in action. Bell is a small suburb of Los Angeles with a population of 36,600. Most of the residents live below the poverty line and identify as Hispanic. Rizzo served as city manager for 17 years. When he started the job in 1993, his salary was $72,000 a year. At the end of his tenure, he earned $787,000 per year. Rizzo’s council members were also well compensated. Four of the five council members received nearly $100,000 per year, which is 20 times the average salary of council members in comparable cities to Bell. To maintain their salaries, Rizzo and the council members enforced a property tax that was 50% higher than nearby communities. Council members did not face competitive elections, allowing them to stay on the council for years.
Rizzo followed the five rules of leadership. He kept his coalition small, thus ensuring his political survival for almost two decades. His cronies (the council members) were easily replaceable by other community members, especially if word got out about their salaries. As such, the cronies maintained their loyalty to Rizzo. Rizzo controlled the cash flow (i.e., high taxes), which allowed him to keep his supporters wealthy and the rest of his community members poor. Rizzo also gave his cronies enough money to keep them satisfied and supportive. He did not redirect the money back to the community. Rizzo understood that if he did this, he would lose the council members’ political support.
Rizzo’s story illustrates that communities and states do not have interests. Rather, political leaders have interests. Personal political welfare over community or national welfare drives political leaders. Leaders only care about coming to power and then staying in power. While much of the book focuses on politics, the authors believe that these rules enable readers to address other facets of life, including organizations, businesses, families (including mafia families), and charities.
Chapter 1 Summary: “The Rules of Politics”
The authors open this chapter by discussing France’s Louis XIV (1638-1715), also known as the Sun King. When Louis came to power at the age of 23, France was nearly bankrupt because his mother’s inner circle had been stealing from the country. Louis’s mother served as regent until Louis came of age. The prospect of bankruptcy put Louis’s hold on power at risk. The aristocrats, including France’s generals and officers, saw that their sources of wealth were drying up. Louis needed to make changes or else the aristocrats might “seek someone better able to ensure their wealth and prestige” (3).
Louis made two changes. First, Louis allowed the army’s officers to join the aristocrat group, expanding who could be part of his inner circle of supporters. By elevating the wealth and rank of these individuals, Louis ensured they were loyal to him. Louis also attached the old aristocracy, who were mostly disloyal, to his court. These individuals always had to be physically present in his court. Their wealth now depended on how well they served Louis. These two changes helped Louis forge “a symbiotic relationship with his inner circle” (4). Louis could not stay in power without the support of the new and old French aristocrats, and these aristocrats could not continue reaping wealth and privilege without Louis’s support.
To Bueno de Mesquita and Smith, Louis XIV exemplifies the main fact of political life: Leaders cannot lead unilaterally or on their own. The authors argue that leaders need to navigate three different groups of people. The first group is the nominal selectorate or interchangeables. This group represents the pool of potential individuals who could support the leader. The second group is the real selectorate or influentials. The individuals in this group choose the leader. The winning coalition or essentials is the final and most influential group. This group represents a subset of the influential. Without the support of the winning coalition, a leader could not maintain their power. The authors argue that “variations in the sizes of these three groups give politics a three-dimensional structure that clarifies the complexity of political life” (7).
Examining whether leaders spend money on public goods that benefit all individuals or private goods that benefit only a few individuals helps to understand how politics work in a particular setting. In a democracy or any system where there is a large number of essentials, it is too costly to buy loyalty through private rewards. Leaders typically spend money on policies that will improve the overall welfare of people living in the state. In contrast, dictators, monarchs, and most chief executive officers (CEOs) use a large portion of the state or business revenue to buy the loyalty of their coalition. They can do this because the number of essentials is small. These private benefits come at the expense of public welfare.
Taxation provides the revenue that leaders can spend on public or private goods. Taxes are low in states where there are large numbers of essential supporters. People under this form of government are willing to pay taxes since doing so provides tangible benefits to them. Taxes are significantly higher in states where the number of essential supporters is small. Leaders want to heavily tax the interchangeables so that they have more money to redistribute to their essentials. For leaders to stay in power, they must determine how much money from taxes they can keep and “how much must be spent on the coalition and on the public” (14). Typically, leaders need to spend more revenue to keep the essentials loyal if there are few people who could replace them. They can spend less when there are larger numbers of potential supporters who can replace the essentials. Leaders use this fear of replacement to ensure that essentials remain loyal.
Introduction-Chapter 1 Analysis
Taken together, the Introduction and first chapter of The Dictator’s Handbook serve as an important overview for the perspective of the book as a whole. The Introduction lays out the heart of Bueno de Mesquita and Smith’s argument alongside the structure of the book. The authors argue that ideology, nationality, and culture do not matter in politics. They note that “the sooner we learn not to think or utter sentences such as ‘the United States should do…’ or ‘the American people want..’ or ‘China’s government ought to do…’ the better we will understand government, business, and all other forms of organization” (xix). Rather than thinking about these “fuzzy ideas” (xix), Bueno de Mesquita and Smith believe we need to think and speak about the actions of specific leaders. Leaders are “self-interested louts” (xxv). They primarily care about getting power and staying in power. For this reason, the personal political survival of leaders drives politics.
The structure of the book is simple. The first chapter outlines the key components of ruling, with each subsequent chapter probing a specific feature of politics. The authors admit that their perspective may seem disheartening to some. However, they believe the best way to understand the political world is to understand the rules that govern it. They hope that people will then determine how to use these rules to improve the world.
Chapter 1 presents Bueno de Mesquita and Smith’s theory of politics. Simply put, the composition and size of three groups (interchangeables, influentials, and essentials) determine how governments and organizations work. The size of the selectorates and the winning coalitions determine “how limited or liberated a leader is” (8). The authors prefer talking about governments and organizations using these categories because doing so prevents the drawing of an arbitrary line between different government forms. Terms like “democratic” and “autocratic” are one-dimensional since they assume that all democracies and autocracies are alike. Yet, no two democracies or autocracies are the same. Each differs in the composition of its essentials, influentials, and interchangeables. Thus, politics are three-dimensional. Bueno de Mesquita and Smith still use the terms “democracy,” “dictatorship,” and “autocracy” throughout the book for convenience.
The authors make a second key claim in Chapter 1 that they frequently return to. The five rules of leadership, or the rules to rule by, dictate the world of politics and organizations. The authors also call this list of rules “The Dictator’s Handbook” (xxv). These five rules are: keep the coalition as small as possible, expand the set of interchangeables, take control over the sources of revenue, reward essentials at all costs to stay in power, and do not take from the essentials to give to the everyday people. For the authors, leaders of democratic nations alongside autocrats and tyrants all follow these rules since they want to stay in power. The games of leadership change “as you slide from one extreme to the other on the spectrum of small and large coalitions” (20).
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