Daron Acemoglu & James A. Robinson "Why Nations Fail: The Origins of Power, Prosperity, and Poverty" (Currency Publications)
Their main thesis is very interesting - that there is a strong link between political/social institutions and the economic success or failure of a nation.
Compare Botswana, which has achieved remarkable growth despite the AIDS epidemic, and Zimbabwe. Compare South Korea, which was poor, and is now a regional power, to North Korea, where the huddled skeletal masses pluck corn kernels from feces to survive while the Kim clan gorged on cognac.
The main reason states are successful, say Acemoglu and Robinson, is that they have a strong supportive centralized set of institutions, which they call 'inclusive'. These include property safety, a free market, technological growth, and so forth.
Nations Fail because of 'extractive' institutions - those which prevent the products of economic work from directly benefiting the economy as a whole or unequally distributing it. Colonial regimes serve as an example, as well as aristocratic, dictatorial, or otherwise authoritarian regimes. A few benefit, but society as a whole suffers. You can send as much aid as you like, but it will all be siphoned up or lost.
They also refer to Schumpeter's phrase 'creative destruction'. This is when a new economic or technological phenomenon threatens to unseat or unravel an established economic order in order to create a new one. If those who stand to lose from this new order are also in positions of influence and power in society, then naturally they will try to prevent it. Consider the reluctance of the Habsburgs or the Russians to allow factory building or railroads, or the Ottomans to allow printed books entirely.
After these interesting concepts, the rest of the book is devoted to examples, from Ancient Rome to Axum to Uzbekistan. The reading list in the back is interesting enough, and I'd like to investigate this in much further detail.
I'd have liked a discussion of the Scandinavian states (welfare, engineering, oil), Canada (a former colony, resources, political engineering), Singapore (political engineering, no resources to speak of, formerly colonial), and other cases of where prosperity had sprung up from nothing, in contrast to the series of catastrophes and famines and horror that we have seen already. And what about India, with its own long and varied history? The authors have reasonably cast doubt on China, with its state capitalism. And those even further to the left might make a case for a present oligarchical-corporatist structure as an extractive institution.
This was a very thought provoking book on the causes of poverty and wealth among nations.
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