I don’t believe in many (any?) conspiracy theories, and if there hasn’t been talk about “the deep state” on MR to date, there is a reason for that. Still, I have been wondering how one might think about the deep state in public choice terms, even if you have a rather modest view of what it is all about. Day to day, we mostly get “the shallow state,” so what might the deep state mean?
I can think of a few options:
1. The deep state can selectively blackmail individuals in politics, and for the innocent ones the deep state can fabricate something. Therefore in equilibrium most politicians shy away from talking about the deep state, even to praise it. The balance here seems easy enough to understand, but I can’t say I’ve seen evidence for this mechanism. I suppose if there is any test for it, it is the Trump Administration.
2. The deep state exists to protect the American public (and itself) against very unfavorable policy choices and thus outcomes. The deep state therefore would move against a very irresponsible president, either by leaks or blackmail or perhaps something more dramatic. In this model, having a deep state is like buying a put against very unfavorable world-states. Note that the weaker and harder to coordinate you think is the deep state, the more this is an “out of the money” put, protecting against only the most extreme existential risks. You might never observe this kind of deep state, though it can be worth a good deal in relatively volatile world states.
Do note that in these games a president will take steps to limit a potential “coup” from the deep state. One counter-strategy would be to increase the level of background noise, so that the deep state would not be sure whether moving against the president would in fact be justified.
3. The deep state is the Federal Reserve System. I believe it was Matt Yglesias who first suggested this idea. And there is indeed a literature on political business cycles.
4. The deep state is active on a day-to-day basis, mostly by manipulating the flow of information to the president and National Security Council and related parties. Intelligence is more filtered than we outsiders may think. Presumably the president realizes this sooner or later, and tries to adjust for the filter. Over time, the filter becomes an increasing distortion, so to keep the chance higher that the president is being fooled by the information flow.
5. The president cultivates the deep state to strengthen his or her bargaining position vis-a-vis Congress or perhaps foreign leaders. “The deep state won’t let me do that,” or “the deep state will blackmail me,” or…?…cannot be stated outright but perhaps subordinates can hint at such constraints. Or the president may cultivate the deep state so as to have an option on blackmailing members of Congress, should “the shit hit the fan.”
What else? And which of those are most plausible?
I thank an MR reader for a useful email on these issues.