Why Nations Fail, American Edition: The Planet of Money: NPR

Why Nations Fail, American Edition: The Planet of Money: NPR

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WASHINGTON, DC - January 14: Members of the New York National Guard stand guard along the fence surrounding the Capitol Building, a day after the House of Representatives votes to impeach President Donald Trump for a second time.

Chip Somodevilla / Getty Images

As we approach Inauguration Day, exactly two weeks into the Capitol revolt, Americans are on the edge of a precipice. About Twenty thousand National Guard soldiers will provide security tomorrow; More than the forces in Iraq and Afghanistan. Our political situation is fragile and our institutions fragile. It’s almost as if we are living in a bad Tom Clancy novel. We couldn’t reach Tom Clancy, so we contacted my authors Why do nations fail? While that. We wanted to know if rebellion was a sign Our The nation is failing, and if so, if there is anything we can do about it.

“I don’t think that January 6th was a unique day of failure,” says MIT economist Daron Acemoglu, who co-authored the book with University of Chicago economist James Robinson. “What surprises me is why it took until January 6.”

Drawing on decades of economic research, Why do nations fail? He argues that political institutions – not culture, natural resources, or geography – explain why some countries are wealthy while others remain poor. Good examples are North and South Korea. Eighty years ago, the two were nearly indistinguishable. After a civil war, however, North Korea turned to communism, while South Korea embraced markets, and ultimately democracy. The authors argue that South Korea’s institutions are the obvious reason why it has grown more insane than North Korea.

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Countries like South Korea have what Acemoglu and Robinson call “inclusive institutions” – like representative legislatures, good public schools, open markets, and robust patent systems. Inclusive institutions educate their residents. They are investing in infrastructure. They fight poverty and disease. They encourage innovation. It differs greatly from the “extractive institutions” found in countries such as North Korea, Venezuela, and Saudi Arabia, in which small groups of elites use state power to achieve their own goals and thrive through corruption, rent-seeking, or brutally forcing people to work. .

When Acemoglu and Robinson wrote Why do nations fail? For nearly a decade, they have used the United States as an institutional success story. They admit that the nation has a dark side: slavery, the genocide of Native Americans, and the civil war. But it is also a creature of the Enlightenment, a place with free and fair elections and world-famous universities; A haven for immigrants, new ideas and new business models; A country responding to social movements for greater equality. Fortunately for America – and its economy – its inclusive institutions have seen remarkable success.

So, nearly ten years later, how do Acemoglu and Robinson feel about American institutions now? “American institutions are already disintegrating – and we have an incredibly difficult task to rebuild before us,” says Acemoglu. “This is a perilous time.”

Yikes.

Acemoglu and Robinson argue that the rising tide against liberal democracy in America is a reaction to our political failure to deal with chronic economic problems. In their view, our institutions are less inclusive and our economic growth now benefits a small segment of the population. This is confirmed by some of the best economic research over the past two decades. Wage growth for most recession. Social mobility Has fallen. Our job market It split into two partsThe learners thrive in college – and those without a degree see their chances diminish afterward Automation And the Trade with China Millions of jobs that once gave them good pay and dignity were destroyed.

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Acemoglu and Robinson believe that while factors such as the shifting media landscape play a role, these economic changes and the failure of our political institutions to deal with them are the main reason for our growing cultural and political divisions. “Unlike some on the left, who think this is all just an effect of big money or misguided masses, I think there is a set of real grievances that are justified,” says Acemoglu. “The working class in the United States was excluded, economically and culturally.”

“Trump understood these grievances in a way that the traditional parties did not,” says Robinson. “But I don’t think he has a solution to any of them. We’ve seen something similar to the populist experiences in Latin America, where the solutions were not necessary for populist political success. Did Hugo Chavez or Juan PerĂ³n have a solution to these problems? No, but they brilliantly exploited the problems for political ends. “.

For Asimoglu and Robinson, more democracy is the solution to our political and economic problems. at Giant study From 175 countries from 1960 to 2010, they found that countries that became democratic saw a 20 percent increase in GDP per capita in the long term.

When asked how we can stop our slide into national dysfunction, Acemoglu argues that political leaders need to focus on those left behind, and give them a stake in the system. It advocates a “good jobs” agenda, which envisages changes in policies and public investment to create, of course, good jobs and shared prosperity (Read more here). Robinson, citing the work We must find ways to transcend political and cultural differences and reach out to citizens outside our political tribes, says Robert Putnam, a professor of political science at Harvard University.

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“We are still at a point where we can turn things around,” says Acemoglu. “But I think if we covered these issues, we would likely see a massive deterioration of institutions. And it could happen very quickly.”

Let’s hope they don’t have to review their book.

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