Six Reasons Why Centralization Is Bad

WhyCentralizationThe other day a friend contacted me, looking for an article that explained why centralization is bad. At first I was sure there had to be many, but I came up dry. Hence today’s article.

The odd thing about centralization is that people expect its bad aspects to be external things, like economic issues. But those aren’t the most important things. If the internal effects of centralization were recognized, and if we did something about them, the outer problems would vanish with them.

But since everyone expects economic reasons, I’ll start there:

#1: Centralization disrupts price discovery.

“Disrupting price discovery” sounds exotic, but what it means is this: Whenever headquarters decides to meddle in business transactions, large sections of the marketplace are thrown out of order. The biggest offenders in this area were the 20th century’s socialist states. I’m not sure precisely how many people died (mainly of starvation) from their economic “experiments,” but the number is in the range of 100 million.

Prices are not just numbers, you see; they are crucial information. How many separate prices, for example, go into the delivery of a pencil to your local store? Wood, graphite, lacquer, the pigment for the lacquer, the machines that mix and apply the lacquer, the machines that cut the trees into small pieces of wood, the trucks that move the materials, the cost of hiring the drivers, the cost of the tires, and so on, at great length. (Please see I, Pencil, by Leonard Reed.)

Once the political boss says, “Pencils should cost X,” all those costs are pushed and shoved accordingly. Changes have to be made, corners are cut, or scrambles for the extra few cents begin. The process is disrupted, and you can be sure that the quality of pencils will decline, fewer will appear, and/or the various suppliers will fight like crazy.

In the end, this delivers big problems, like the aforementioned starvation. (And it wasn’t the bosses who starved; it was the poor and powerless. You know, the people whom the bosses “love and serve.”) So, disrupting price discovery is really, really bad.

#2: Centralization robs you.

Centralization creates a large and growing set of people who eat (and generally grow rich) at the expense of everyone else. Every dollar that goes to Capital City is money that is extracted from you and your neighbors.

#3: Central bosses try to show they’re necessary.

Did you ever notice that politicians are forever creating new fears? And why? Well, because solving those fears (even if they’re mostly imaginary) makes them seem necessary.

From this we get any number of disasters, especially wars. Fear sells, war is a tremendous spectacle, and it all makes the centralizers look necessary. (Too bad about all those dead guys.)

#4: Centralization limits you.

Centralized power solving our fears requires an ever-increasing number of laws, and each law is a restriction of some kind. Pretty soon, you can’t do half the things you could a couple of decades before. There’s a law for every problem and a department to solve it. Address it yourself and you’re likely to get hurt.

So, to keep us safe from our professionally cultivated fears, your kid can’t run a lemonade stand without a license, your older aunt can’t watch the neighbor kids, and God help you if you try to give a lost child a ride home.

Centralization is a straightjacket… restraining not just our bodies, but our souls.

#5: Centralization kills cooperation.

There are rules for everything. So, you can no longer cooperate with your neighbor because you enjoy it. No… you cooperate because it’s commanded by law and you’ll be punished if you don’t.

Have you noticed people yearning for the old days and talking about small, rustic communities where the people “still look out for each other”? Well, they’re right to yearn for that, because it’s a very healthy way to live. And it’s centralization that stole it from us.

#6: Centralization robs you of self-worth.

Following on from #5 above: What happens inside you when you help people because you, by yourself, give a damn? I think we all know the answer: You become a better, happier, and more beneficial person. You know you did a good thing and you feel good about yourself.

Every time you do “the right thing” because it’s mandated by law, you are being robbed of self-worth and self-improvement. And your friends and neighbors are robbed of your improved state.

Have We Had Enough?

Perhaps you’ve thought of items that could be added to this list, but these six are at least a good start.

The conclusion is this:

Centralization is anti-human. It’s the enemy of innate goodness and progress.

What supports centralization is a steady stream of fears, most of which are imaginary.

So, have we had enough? Can we ditch this now? Can we start living as adults?


Paul Rosenberg