A Gentle, Austrian Introduction to the Cams: Neo and STEEL.

Golden eagle

 

 

1: Introduction: Imperial Energies. 

2: Government as a Business: the Austrian Challenge.

3: Cold As Gold: Goldameir and Gunny.

4: Wall Street on the Waziristan.

5: Signals and Nodes.

6: The Pursuit of the Third Millennium. (The Return of the Austrian.)

7: Contract with Kuwait in the Lands of Blood and Fate.

8: Hans, Moldy and Goldy: Final Thoughts and Further Reading.

 

coin

 

1: Introduction: Imperial Energies. 

glory

The Imperial Energies….

The STEEL Energies….

Our original purpose here was to go on the counter-attack against Peter G. Klein, who is described as the “Carl Menger Research Fellow of the Mises Institute and W. W. Caruth Chair and Professor of Entrepreneurship at Baylor University’s Hankamer School of Business”, but we decided that this post could serve as a new, gentle, Austrian introduction to the Cameralist sisters: Goldameir and Gunny, otherwise known as Neocameralism and STEEL-cameralism.

Earlier on our voyage, we covered the foundations of Misean praxeology and epistemology here and here. This time, however, will not be so nice for Mises.

First, let’s focus our fire on Mr G. Klein.

 

2: Government as a Business: the Austrian Challenge.

Queen

 

Klein’s claim, in his recent post Why Government Cannot Be Run like a Business, is pretty simple:

Government is not and cannot be run like a business because it cannot be a business.

Period.

Klein:

Specifically, government cannot be “run like a business,” as people sometimes hope, because government and business are intrinsically different. 

Naturally, the Cam sisters, Goldameir and Gunny, disagree.

(We have covered some of this ground before here, with our reaction to a piece on the Steel-anarchism of Alrenous from which we adapted the term “STEEL.”)

The Cams see no reason why the Form, Matter, Efficient (means) or Ends of a government and a business must be “intrinsically different.”

Philosophically, to make a claim of “intrinsic difference” you must provide a necessary condition that can distinguish one thing from another.

The common assumption, that everyone seems to share, including nearly all neo-reactionaries, is that a government is a charity, run by people who aim to do Good out of the goodness of their souls.

Emotionally, when people encounter someone like Moldbug and something like Goldameir, with Moldy sounding like he is saying things like “run the country like a business for Gold and Glory”, they react the same way to the suggestion that a church should open a brothel in a primary school.

Again, one needs to get over one’s gut feeling and calmly work through the steps of the Cam’s calculations.

First, let’s get to the heart of Klein’s beef:

Private companies exist for one primary purpose: to earn profit. Participation, as an employee, supplier, investor, or customer, is strictly voluntary. The firm’s capital is privately owned. Profits are earned, and losses avoided, by producing goods and services that consumers want and are willing to pay for. Under competition, we can measure a firm’s success or failure in monetary terms, by looking at accounting income and the market value of the firm’s assets or equity. A good executive earns profits for the firm’s owners, a poor one incurs losses. The details in each case are varied and fascinating — that’s what we business professors study! — but the general model is straightforward and consistent. 

Straightforward and consistent indeed; now can the same be said for USG?

Klein:

Government, of course, is different. Assets aren’t privately owned — in theory, the land and capital and equipment of a government agency are owned by the taxpayers, or the citizens, but are de facto controlled by bureaucrats and politicians. The (ostensible) purpose of a government agency is, well, whatever is specified in the relevant statutes, executive orders, etc. The job of the Defense Department is . . . to provide defense. The Commerce Department, according to its website, “promotes job creation and economic growth by ensuring fair and secure trade, providing the data necessary to support commerce, and fostering innovation by setting standards and conducting foundational research and development.”

Notice that Klein wades straight into the problem regarding the Form V Reality distinction. In theory, government is this, but in practice it is this. The “ostensible” purpose is this, but in reality it is…..well, we don’t really know.

In short, a perfect dog’s breakfast.

Now, for the measurement problem:

Each agency, bureau, and department, from the federal level down to the local police department, has some stated objectives. But how well are these objectives being met? Is the nation being defended effectively and efficiently, in a way that satisfies its “customers“?  Do its top officials deserve praise or condemnation? How about Commerce? The local beat cop? What constitutes “high performance” in these contexts? 

As Mises explains (pp. 46-47), these questions are fundamentally unanswerable, or at least impossible to answer with the same precision we apply to assessments of private businesses, because government agencies do not sell their services on competitive markets. The “consumer” does not choose among providers, directing funds toward the firm that provides the best products at the most reasonable prices. Rather, the consumer pays whether he likes it or not. So how do we judge performance? 

To which the Cams answer:

Relax, we-don’t-have-to.

The “system” answers the question itself – almost.

The best articulation of Goldameir is probably seen in Moldbug’s Patchwork series. However, even if one did not have something like a full-blown system of thousands of Goldameir mini states, a system like that could be adapted and adopted for a N-U-S-G.

First, what do we mean by “system”?

Simple: stock prices.

Let’s put the matter a little more steely than Moldbug ever dared, but in the form of a little scene of what might happen after an Islamic terrorist attack in a Cam state.

 

3: Cold As Gold: Goldameir and Gunny.

Golda

 

Security Chief: Sir! Reports are coming in that a Jewish primary school has been attacked by multiple assailants using suicide bombs and automatic weapons. Looks like it was an Islamic terrorist attack sir. Your orders?

Executive: Standard Procedures. I want extra troops sent to Jewish schools, shops and synagogues. Inform the First Minister to execute all the necessary civilian protocols.  

Security Chief: Sir! More report are coming….videos….images……At least two other schools, a bakery and…

Executive:  Enough! Turn it off. And look at me. Breathe…. There is nothing we can do from here. Now, call the Chairman.

Communications Officer: Sir! We have the Chairman of the Board of Directors on the line.

Executive: Patch it through to my private channel.

Communications Officer: Sir.

Executive: Samuel.

Chairman: David, we’re getting fucking killed out here!

Executive: I know, the children…

Chairman: What? David! Our stock-price just jumped off the fucking Empire State! I’m hearing rumors already that some of our biggest investors are thinking of selling up and shipping out after this latest attack. People are losing confidence, and will keep losing confidence, David. People think that we cannot protect them. The investors, and thus the Board, are concerned, considerably concerned, David. All this chaos, and now the children…..no good for commerce, no good for me, and now, it is no good for you.

Executive: We are doing everything we can, we are….

Chairman: No! No more excuses; I know it is not your fault – following procedure – but we’re bleeding cash here. You need to get your hands around this thing David. Wrap em around tight. You need to take care of this and take care of it quick. David, I want you to initiate the Saul Protocol.

Executive: The Saul Protocol? Is that not overreacting? What do the Board say?

Chairman: They are here with me right now, and we all concur. Investor and public confidence must be restored. Public safety and company profits are paramount, David. You have everything you need I trust, Chief Executive?

Executive: I designed the program myself and selected the key personnel. We’re ready.

Chairman: Call him, then take care of this. (Call terminated).

Executive: Get me General Michael on the private channel.

General Michael: Sir?

Executive: General, are you aware of our situation?

General Michael: I’m watching CNN as we speak.

Executive: General, I’m ordering you to initiate the Saul Protocol.

General Michael: Is the board green?

Executive: And red all over.

General Michael: Understood.

Executive: Comms, I will address the public via video in 15 minutes; contact my Chief of Staff and have her assemble the media team; tell her to have my speech prepared, the usual one for these…events…. No need to spook the civilians. Yet.

Communications Officer: Yes sir, right away sir.

Executive: Listen up folks.

Staff Officer: Quiet!

Executive: What, is our primary duty?

All: To protect and serve!

Executive: Protect. And serve! Right now, the bodies of children – dead children; our children, are growing cold on their classroom floor….. We failed them….. But we won’t fail again. Remember your oaths. Remember your duties. Remember the dead and what they lost and what they will never have. What was taken from them: a future. To your stations and to your duties and we will ensure that our children will all have that future. As for those…. men…and those who will try to carry out atrocities in the future… unless-we- act….The Hammer of God will fall upon them this day. 

All: Sir Yes Sir!

(The Executive leaves the Command Center for the Media Room, trailed, by a long tail of aides and assistants while the Executive immediately begins to dictate to four different staffers at once, paragraph by paragraph.)

Sergeant: (To the Corporal) You wanna know what the fuck this is really all about?

Corporal: Ass covering?

Sergeant: Nope. Some old cunt is losing money and so they bitched to all the rest of the investors and holders; the holders then bitched to the Board and the Board…

Corporal: ….And the Chair said take care of the Moolies right? So what? Why care about the bark so long as the dog bite right?

Sergeant: Don’t seem right. Doing all this for money.

Corporal: What, you wanna be like France? It’s an astronomical, diabolical abomination over there; military emergency for five fucking years, 15,000 dead and counting. We have had…what?…. three attacks in 19 months, and 8 over 4 years; who gives a fuck why we do right, so long as the right thing get done no? Tell truth, I’m looking forward to all the fucking overtime we gonna get on this shit.

Sergeant: Happy?

Corporal: Hell yeah! Nothing like fucking up some motherfucking fucking moolies man!

moshe

 

 

4: Wall Street on the Waziristan.

panic

Terrorist attacks will definitely drive down your stock-market value.

The value will especially fall if you’re a state in the business of protecting your customers.

The instant, publicly available feedback you and everyone else get from the stock market excites the risk/reward centers in the brain of the people who are responsible for taking care of business.

In short, greedy people doing good for Gold and not God (insert whatever Idealistic, ideological rationale).

Yes, humans act for reasons not just related to fear and self-interest, but why assume any other if it-gets-the-job-done?

One way to approach, as a political engineer, the question of systems and incentives, is to assume that humans are as bad and as stupid as can be and thus by doing so you leave yourself with a wide design margin to work with.

Thus, to make it really simple:

You don’t need to understand the cause of X in order to use X or respond successfully to X.

The signal tells you that if you have A, you will have B; since you have A, you got B and now you must do C: Crack-some-heads-to-get-the-cart-moving. But to where, and how?

The signals tell you only that something is wrong, not why or how to fix it, but the signals are both an early-warning-system (customer and share-holder dissatisfaction) and a reward system for the employees and shareholders.

Again, this sounds….taboo and blasphemous right?

But if the cat barks at the dog…..

Can it really be any worse than what we have at the moment?

Read the following three, recent, pieces on PJ Media and observe for yourself the fact that incompetence is not punished but rewarded in the Modern Structure.

 

5: Signals and Nodes.

net

The Cam sisters have a number of “nodes” from which signals or information pass through on their way to other nodes.

The Chief Executive is one such node. The Executive can receive signals from the Board, his subordinates, the customers, the investors or share-holders or the stock-price.

What about the customers? They can receive signals from the stock-market that the state is not doing so well.

What about investors? They can get signals from, again, the stock-price and information about the customers and business  by either the Executive or the Board or by an independent, auditing or consulting company.

As for the overall structure of control, as antinomia imediata says, there is no more “controlled than controlling.” Each node can control the node “ahead” of it, but not “behind” it. Thus, share-holders can fire the Board; the Board can fire the Executive, but not the share-holders; the Executive can fire any employee, but not the Board etc. If separation of powers can be visualized as Chinese GO pieces checking each other, this unified system can be visualized as a circle, with little gates to let new information in and orders and other materials out.

Now, the key to this system is “customer choice”; customers must be able to “Exit” and make use of an alternative system.

If you do not have this system, then either you have a quasi-Federalist, semi-Patchwork system. or a monopoly.

What do we mean by monopoly?

We mean that the state is like the owner of a large, big-game preserve but who wants to preserve his stock-system in perpetuity.

 

6: The Pursuit of the Third Millennium (Or the Return of the Austrian).

Hans

The core selling point of the Cam systems is that since government is a business, it operates, as Prince Hans-Adam II call’s it, as a “service company”.

Now, isn’t it really interesting that a genuine monarch has independently came to many of the same conclusions as Moldbug –  but via experience, tradition and reflection, as opposed to Moldbug’s reasoning and experience? (Really, it is the other way around.)

Is it really plausible, as some reactionaries claim, that Moldbug was only joking with Neocameralism, when there exists something like a “proof of concept” that Moldbug is well aware of? (The double irony is that Hans-Adams II is a Catholic.)

A Cam state is a state in the business of providing goods and services that no other service provider can provide, for purposes of profit.

A Cam state is structured and staffed (somewhat), using the same means of operating and for the same ends as any other business.

Hans-Adams’s system is government as a “family business”, which Moldbug endorses in some of his writings; however, the crucial point here is the fundamental, architectonic, paradigm-shift represented in Moldbug’s philosophy of government, which an actual, living, monarch actually practices – somewhat.

Hans-Adams II names his book: the State in the Third Millennium and Moldbug’s Neocameralism is the first, genuine, new system of political philosophy of the 21st Century.

Prince, Hans-Adams II writes that his goal is:

to transform all states into peaceful service companies that are at the service of humanity. Humanity should no longer serve the state and have its existence threatened by war or other state measures.

…..Only in this way will the state become a well-managed and solid service company run for the benefit of the people. What has been achieved by the state of Liechtenstein – originally a very poor state without natural resources but now without debts – should also be possible, with a solid fiscal policy, for other developed states.

A state without debt, with foreign policy, the financing of the education system and the maintenance of the rule of law as its primary duties, would became a lean and transparent state, which could be financed by a small percentage of the gross domestic product.

Again, it is important to remember that Lichtenstein is a “family business” of sorts, so the issue of ownership, responsibility and control are tightly entwined. The logic is the same as a peasant having a bike, as opposed to sharing the bike with the rest of the village; ownership encourages responsible behavior more than communal sharing does.

In Hans-Adams’s view and in both Neocameralism and STEEL-cameralism, the chief business of the state is business: the business of security, or protection, the first job of any state.

The difference between the two Cams is that STEEL-cam is a custom-job designed for a reformed American Empire that serves the world by providing:

Pax, for a Price.

To illustrate what we mean, let’s take a historical case: 1991, the Gulf War; Saddam Hussein invades Kuwait and now we will set out a possible way that a STEEL-cam state might have dealt with Saddam’s invasion.

 

7: Contract with Kuwait in the Lands of Blood and Fate.

Sad

Under the STEEL-cameralist system, NUSG has a contractual obligation, and a financial incentive, to come to the aid of Kuwait IFF Kuwait has bought “insurance” or has paid or promises to pay NUSG in either cash or goods for services rendered.

If Iraq damages the property value of Kuwait, then NUSG has to pay out compensation. Same with people killed by Saddam’s army.

Now, of course, NUSG can “go after” Saddam and attempt to recover the costs; thus, NUSG can still either mitigate its losses or try and turn a profit by putting the squeeze to Saddam.

Now, NUSG will not involve itself in any way if Kuwait has not paid, or does not want to pay, or cannot pay.

However, a number of other countries could do a “whip-round” and pay NUSG to go help Kuwait. Alternatively, assuming there was a contract in place, NUSG could also enlist the help of surrounding states such as Saudi Arabia, Iran, Turkey and Jordan to hit Saddam from all sides; in addition, NUSG could pay Russia (or compensate accordingly) to arm the Iranians and induce them to invade Iraq (taking Saddam in the rear as it where).

If this system sounds fanciful, consider that this strategy was the successful practice of the Byzantium Empire for hundreds of years.

Edward Luttwak summaries this aspect of the Byzantium “operational code” as follows:

  1. Strive to end wars successfully by recruiting allies to change the overall balance of power. Diplomacy is therefore even more important in war than at peace—not for the Byzantines the foolish aphorism that when the guns speak, diplomats fall silent. In recruiting allies to attack the enemy, his allies are the most useful recruits because they are nearest and know best how to fight the enemy’s forces. Enemy commanders successfully subverted to serve the imperial interest are even better allies, and the best of all might be found at the enemy’s court, or within his family. But even peripheral allies that can only help a little are to be recruited if at all possible.

The Grand Strategy of the Byzantium Empire. Edward Luttwak.

Perhaps, NUSG could have also induced a coup against Saddam or persuaded and pressured him to abdicate in favor of one of his sons, preferably the one who is not psychopathic.

Throwing gold at problems like this is often cheaper than sending an army with guns.

But.

If you have to send an army, don’t send your own; pay, bribe or brow-beat the countries closest to the problem to do the job.

So, under this contractual system which sees NUSG acting as a global protection force. NUSG would use the most efficient and cheapest (in blood and treasure) means to its end. Indeed, it may have even been possible to convince Saddam to leave with only a phone call. A sufficient mix of bribes, threats and potential opportunities could have induced him to leave – after a suitable time, so as to save face, of course. (You need a real reputation to be able to do this.)

Regime change is not necessary or, indeed, often not desirable in cases like this because today’s opponent is tomorrow’s ally. Like with the Byzantium Empire, you don’t seek to fully crush enemies (too costly, and you may need them). For example, if Saddam was still in power, or one of his sons today, then Iraq could be persuaded to move against Iran if necessary.

And so it goes. Forever.

Of course, if NUSG had to pay out compensation to a country such as Kuwait, then it can and probably will put the insurance premiums up, or get a discount for the oil or whatever else Kuwait has to other.

This all could have been done – in theory – and it could have been done without a single American boot setting foot on Saudi Arabia –  which drove Bin Laden into a killing rage and had consequences the entire world must now live with.

Bin laden

In terms of domestic security, however, both Cams would offer services – or contract out such services – involving crime prevention, detection, investigation, trial and restitution for a price.

Returning now again to Klein’s argument; Klein contrasts the difference in methods used by businesses and governments:

Mises defines business management or profit management as “management directed by the profit motive.” In a large firm, profit management entails a mix of rules and discretion. Executives provide overall direction, establish systems and procedures, recruit managers and employees, settle disputes, and focus on strategy, while delegating a large measure of day-to-day discretion to subordinates or to local departments.

Does that not sound pretty much what a CEO of a state would have to do? Notice also that Klein claims that management entails the use of “rules” and “discretion” (recall Moldbug’s Reservationism and thoughts on the topic of judgement, which is why his system is a unique mix of SYSTEM and human judgement).

Finally, Klein then quotes Mises on “bureaucratic” management:

Bureaucratic management, in contrast, “is the method applied in the conduct of administrative affairs the result of which has no cash value on the market. Remember: we do not say that a successful handling of public affairs has no value, but that it has no price on the market, that its value cannot be realized in a market transaction and consequently cannot be expressed in terms of money” (p. 47). 

The above says absolutely nothing until the penultimate claim where Mises claims that the state’s handling of public affairs is a value that cannot be realized in a “market transaction” or expressed in terms of “money.”

To which the Cams answer:

Stock. Market.

 

 

Hans, Moldy and Goldy: Final Thoughts and Further Reading.

han

 

Hans-Adams II offers his own, hopeful vision of the future of the state:

In the future states should fight for their clients – the local communities and their population – in peaceful competition on the basis of good and efficient service at an acceptable price.

It has now become a widespread – but not universal – though unfounded dogma that Moldbug was only joking about Neocameralism; that it was a thought experiment and should not be taken seriously. If it was only a thought-experiment in order to lead the way to something else, what might that something else be?

To think that Moldbug is arguing for the restoration of Christendom, is as plausible as arguing that he really intends to install an Islamic Caliphate.

Keeping in mind Moldbug’s distinction (derived from Machiavelli via James Burnham) of Form and Reality, the overwhelming textual evidence, including his responses to people like Nick Szabo, all point to the conclusion that Moldbug is sincere in his claims about Neocameralism.

Moldbug’s positive system meanwhile, forms a coherent unity of political, legal, moral (amoral) and economic thought and it is present from the start and throughout.

The following pieces, and the comments from Moldbug in the early posts, are essential reading:

Fred

Government as a charity V government as a business:

A Formalist Manifesto.

Good Government as Good Customer Service.

The State is Not a Stable Eleemosynary Institution.

The following, three pieces make for a good trilogy – Moldbug’s “Militarist Trilogy” and are some of the key inspirational texts for STEEL-cameralism:

Neocameralism and the Escalator of Massarchy.

UR’s Plan to Fix Iraq.

(With crucial responses to Nick Szabo.)

UR’s Advice for President Musharraf.

The following post, which was intended for Patri Friedman’s “Succession Week Superevent” would have been presented to a public audience and Moldbug would have, had he given it, presented his positive system for California as straight-up Golda:

Secession Liberty and Dictatorship

Finally, the fact that Moldbug is well aware of Hans-Adam II, his kingdom and his book, provide both additional theoretical and practical reasons to seriously consider Neocameralism as a live option.

Thus, there is nothing conceptually impossible about the concept of “government as a business” nor is there any practical impossibility either.

But who would run it?

Soldiers, Merchants or Sages?

mag

 

golden-coin.jpg

 

pen

Next time we chart the origins, development and terrible triumph of the European Minotaur of War.

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15 thoughts on “A Gentle, Austrian Introduction to the Cams: Neo and STEEL.

  1. >The common assumption, that everyone seems to share, including nearly all neo-reactionaries, is that a government is a charity, run by people who aim to do Good out of the goodness of their souls.

    I think libertarians like Albert Jay Nock would actually say that the state is an enemy of society and that it’s not comparable to business because, as per Franz Oppenheimer, the state is a sovereign institution. Even under assumption of free exit, you cannot be stateless. You can only “exchange cages” as it were. Of course the question for paleolibertarians would be, how is covenant community any different from a state save for the fact that everyone would see himself as a part of the covenant, whereas the state is perceived to be something foreign and predatory. Well, they may say because covenant does its job, and the state doesn’t. Which doesn’t prevent the state from indoctrinating its population with ideologies that would make the populace self-identify with the state of course. And second problem is problem of plurality. Different people expect different things from the state. It wasn’t a problem before liberalism, but it is a problem in liberal states. Covenants aren’t liberal. They serve toward specific end and purge those who are heretics with respect to that end.

    Austrians argue that family business has a lower time preference than corporation. Wouldn’t that mean that on the ladder of civilizedness monarchy > corporation > democracy?

    Like

    1. “I think libertarians like Albert Jay Nock would actually say that the state is an enemy of society.”

      This is much truth to this view. We often like to say, however, that we must choose between the “anarchy of wolves” and the “tyranny of the lion”.

      Given what you have said about the Catholic tradition and that the state is necessary for a moral life, the role of religion and the law aims to constrain the beast and make no mistake the beast does need restraining: the question is how.

      Liked by 1 person

    2. “not comparable to business because, as per Franz Oppenheimer, the state is a sovereign institution. Even under assumption of free exit, you cannot be stateless. ”

      True. We would introduce here then the concept of regulating principle v constitutive idea.

      The regulating principle of marriage is that it should last for life.

      If it does, then it is constitutive.

      By analogy then, we can say that the regulating principle is that states should strive to operate as much as possible like a business supplying goods and services – voluntarily.

      Coercion will always be necessary, and coercion is not necessarily bad or wrong.

      Liked by 1 person

    3. “Covenants aren’t liberal. They serve toward specific end and purge those who are heretics with respect to that end.”

      This is the thing you run across time and time and time and time again with liberalism: Form and Reality. Liberalism does not have Covenants – formally – but in reality it does, of course.

      This is why this thing is so hard to defeat, because it cannot be pinned down.

      As for the question of purity, plurality and political conflict, we like to use an analogy that Nicholas Rescher once used in philosophy but can work for this.

      In philosophy, you are aiming at systematic knowledge or understanding and a lot of the time you have to resolve inconsistencies. Rescher describes the practice to a ship captain who must decide what cargo to throw overboard in order to keep the ship afloat.

      Now, for the ship of state, to restore stability the goal is to strip the state back to the essentials, to what all can mostly agree on and allow Exit for those who do not and setting up alternative states.

      A different way of putting it, is that for an Empire such as America, it needs to look at people as if they were different animals (cats, dogs, horses, wolves, rabbits etc.,) and treat them according to their natures.

      The reference to “nature” is quasi-Aristotelian, in that people have various potentials. The goal of life is to develop that potential, the states role, in this regard, is to provide the necessary conditions for that fulfillment.

      Necessary, but not sufficient (at least if it is an Empire or a liberal one).

      If you have a very small, focused, state, then you could have a much thicker concept of the good.

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    4. “Austrians argue that family business has a lower time preference than corporation. Wouldn’t that mean that on the ladder of civilizedness monarchy > corporation > democracy?”

      We have been wrestling with this issue, especially with the Absolutists like RF and Adam.

      Reading Hans-Adam II has now moved us more to entertain the concept of a family business more seriously – for America.

      America is a our prime focus, and our concern here is largely practical could the concept of a family business be sold? Could it work for America?

      Our intuition is more impersonal and Corporate and still is. However, we are going to set it out a little more as a possible, alternative model.

      For the UK, however, Monarchy as a family business could work. You could see the Monarch becoming the majority share-holder and Chair of the Board. The Board select and supervise the Executive. The Executive would select, after advice and consent of the Board, his cabinet.

      Like

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