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Jiro comments on Rationality Quotes August 2014 - Less Wrong
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To summarize: Fanaticism keeps the culture from escaping the dark ages. If everyone is in the dark ages anyway, not being able to escape the dark ages isn't much of a disadvantage.
That looks to me like one of those sentences which sound pretty but don't actually mean much.
In your comment upthread you listed things which make a barbarian society "uncompetitive". They apply to medieval societies as well. Essentially, you would expect the non-fanatic society to be richer, have better technology, and be governed more effectively. That holds in any epoch (as long as we don't get too far into stone age :-/).
When Islam erupted out of the Arabian Peninsula, the "fanatics" easily took over huge -- amazingly huge -- territories. And it wasn't just pillage-and-burn, they conquered the lands and established their own rule.
Why would I expect this when the society exists hundreds of years ago? The point is that back then, everyone lacked many of the things that fanaticism would cause a society to lack. The fanatics are not at such a disadvantage under such circumstances. The loss in efficiency from it taking weeks to communicate between distant parts of your empire is going to make the loss in efficiency from having a theocracy look like noise. The disadvantage of not getting investors in your country won't matter when there's no international investment anyway. The disadvantage of having little in the way of science and engineering won't matter if there's hardly any science yet and engineering is at the state of building bridges instead of launching satellites.
Really? Consider trade -- a major factor in the society's wealth and survival for the last several thousands of years. The fanatic barbarians wouldn't trade, would they?
You don't think technology mattered before the Industrial Revolution? Oh, but it did. From bronze weapons to early firearms, an army with a technological edge had a big advantage.
Governance didn't matter in ancient and medieval societies? Do you actually believe that?
Technology mattered before the Industrial Revolution. The kind of technology that fanatics are bad at did not matter before the Industrial Revolution, however, because nobody had it, fanatic or not.