David_42
Registered Democrat.
- Aug 9, 2015
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"To explain why some nations are wealthy and others are poor, Daron Acemoglu and James Robinson present a single hypothesis, as opposed to viewing this as a complex problem with many factors. This flies against the research Philip Tetlock presented in his book "Expert Political Judgment" (2005), in which he showed that pundits who espouse a "hedgehog" or single point of view predict the future with less than 50% accuracy, when "foxes" who consider many factors predict the future with greater than 50% accuracy. (For example, Acemoglu and Robinson predict that China's economy will soon crash like the Soviet economy collapsed.)Sorry that the facts suck, all around the world, with the beginning of capitalism in europe after the overthrow of feudalism, the regulation free capitalist society in America.. a "free market" failed, monopolies occurred, capitalists influenced the state to benefit themselves, child labor was rampant, seniors were fucked unless they had a family, wages were low, labor unions were attacked.. It has failed everywhere, and led to regulations, state intervention. The cost of excessive government? The war on poverty needed to happen, and must continue to happen, the poor would just be worse off without it.And it has helped, without the war on poverty, the poor would be worse off.I'd be happy to offer my perspective.
It is obvious that there is a problem that has been growing for decades, in regards to inequality, and it's not just in America.
"Despite huge advancements in technology and productivity, millions of Americans are working longer hours for lower wages. The real median income of male workers is $783 less than it was 42 years ago; while the real median income of female workers is over $1,300 less than it was in 2007. That is unacceptable and that has got to change."
We've spent $19T on the War on Poverty, bub.
It's not a Coinkydink that the more we spend to fight poverty, the Richer the Socialist Cronies get.
https://courseworks.columbia.edu/access/content/group/c5a1ef92-c03c-4d88-0018-ea43dd3cc5db/Working Papers for website/Anchored SPM.December7.pdf
http://www.nytimes.com/2012/04/10/us/food-stamp-program-helping-reduce-poverty.html?_r=0
Welfare programs shown to reduce poverty in America
Food Stamps Helped Reduce Poverty Rate, Study Finds - UC Davis Center for Poverty Research
Absolute Closed Loop Logic Poppycock.
As we haven't tried real Free Market Capitalism for a very long time, you have no idea what the opportunity cost of excessive government has wrought.
I'll refer you to Bastiat, although it's rather optimistic of me to think you might grok him.
That Which is Seen, and That Which is Not Seen; by Frederic Bastiat
Condolences on your complete and utter historical illiteracy.
Here's some homework. Get back to me when someone intelligent reads it out loud to you and explains the cause and effect relationships to you. See you in 2037!
http://www.amazon.com/Why-Nations-F...r=8-1&keywords=why+nations+fail&tag=ff0d01-20
Acemoglu and Robinson argue that "inclusive institutions" create a virtuous circle that make nations flourish, and "extractive institutions" create a vicious circle that makes countries decline. "Inclusive institutions" share wealth and political power among many citizens. "Extractive institutions" are used by small elite groups to enslave large groups of people to provide wealth to the elite, and then the wealth is used to strengthen the elite and maintain their power. The authors believe that "extractive institutions" decline because the elites oppose "creative destruction" such as new technology because they fear that change will empower the underclass.
There is a grain of truth in this hypothesis. The fundamental paradox of ethics is that groups in which members act altruistically prosper when groups in which members act selfishly decline, yet within groups individuals who act selfishly are more successful than individuals who act altruistically.
A leader persuades members of a group to stop acting selfishly and instead work together for the common good. The leader must selfishly seek power to force everyone else to change their ways. In a country such as the United States, where institutions generally work, our recent presidents have been amiable. But in a country with great poverty, inequality, and injustice, a leader has to ruthlessly seek power and then use drastic measures to force people to change. Too often the leader then abuses power and the "vicious circle" Acemoglu and Robinson describe continues.
But sometimes multiple factors converge (or, more typically, a common enemy emerges) to get people to work together. If a leader can guide this change without selfishly seeking power, these "inclusive" institutions become permanent, and the "virtuous circle" Acemoglu and Robinson describe grows.
Perhaps I should give this book three stars for getting part of the story right. But I'm subtracting a star for the many factual errors, and I'm subtracting another star because the book is too long. It's one of these heavy books people buy to leave on their coffee tables to impress guests, but don't actually read.
Other reviews have pointed many mistakes. I'll limit this review to mistakes others haven't pointed out.
On page 433 the authors say that Europeans encountered "empty lands" in North America, in contrast to the wealthy and advanced civilizations of the Aztec and the Inca. Actually, North America had civilizations as wealthy and advanced as the Aztec and Inca, and by some measures more advanced than Europe. For example, Cahokia (near present day St. Louis) and the Northwest Coast (where Captain Cook's offer to trade knives for supplies was rejected because the natives made better knives).
The authors' stories about how the Spanish conquered the Aztec and Inca don't mention that they brought smallpox, or that the Inca were fighting a civil war at the time, or that the small (400-man) Spanish forces allied with rebellious neighboring nations to create 100,000-man armies to overthrow the empires.
The authors claim that American representative democracy was copied from the English. Actually, it was copied from the Iroquois, who developed representative government in the 14th century (which was much admired by Benjamin Franklin).
The authors use England as exemplary, especially the "Glorious Revolution" of 1688 that fostered "inclusive" political power and the Industrial Revolution that created "inclusive" economic institutions. IMHO, Dickens' London or Ireland in the 1840s looked much like Peru in the 16th century (which the authors present as the paradigm of "extractive").
Ancient Greece and Rome were slave-based economies that enabled an elite to advance the arts and sciences. The scientific revolution of the 16th and 17th centuries was led by wealthy aristocrats. Not all slave-owning elites are opposed to new ideas or change.
Anyone who thinks that "inclusive" political and economic institutions are unalloyed good ideas should read "Boomerang," by Michael Lewis, about what happened in Iceland, Ireland, Greece, and California when non-elites suddenly had access to capital (i.e., borrowing against their homes' inflated prices), and in California direct democracy (ballot measures) put government in the hands of non-elites.
And "inclusive" groups are always excluding other groups. The Mormons have some of the most inclusive institutions, e.g., they are the only non-governmental group in history that has built large dams and irrigations systems. They are extraordinarily successful, bolstering Acemoglu and Robinson's thesis. And Mitt Romney is making "creative destruction" a campaign issue. But the Mormons also exclude people, e.g., blacks weren't accepted until recently. "Inclusive" groups are only inclusive for the people in the group, i.e., "inclusive" groups have an "us vs. them" mentality. I suspect that even slave-owners had "inclusive institutions" to help other slave-owners.
Where "Why Nations Fail" really fails is in describing communist economies. Marxism is inclusive, taking power from the elites to benefit the masses of poor people. You'd expect Acemoglu and Robinson to write favorably about communism but they instead praise the worst aspects of communism and denigrate the best achievements.
Acemoglu and Robinson say that the Soviet Union had extraordinary economic growth from 1928 into the 1970s, and then the Soviet economy stagnated. The authors attribute the growth to Stalin's rapid industrialization, and attribute the decline to the impossibility of "creative destruction" in a communist economy. The authors use the official Soviet statistics, which are now considered to be highly inflated. Historians such as G.I. Khanin now say that the Soviet Union never had high economic growth. Acemoglu and Robinson suggest that Stalin killing millions of people in the 1928-1940 period contributed to economic growth (by moving resources from agriculture to industrialization) when Khanin says that the Soviet economy shrank 20% in 1928-1932 and again shrank in 1936-1940.
In any case, the Soviet Union had too much "creative destruction," not too little. Stalin destroyed agriculture to create industrial factories. World War II destroyed much of the country, forcing new construction in the post-war period. After 1975, when the Soviet economy had 0% growth most years, perhaps "creative destruction" had stopped. If so, are Acemoglu and Robinson saying that killing millions of people and destroying cities is good social and economic policy? IMHO, many factors contributed to the decline of the Soviet economy, not least of which is that Stalinism forced individuals into the most extreme selfish behavior, e.g., denouncing one's friends, neighbors, and even family, causing them to be tortured, exiled to Siberia, or executed, so that the denouncer curried favor from the powerful elites and got a little more food or something, and survived until someone denounced him or her.
The 22x growth of China between 1980 and 2010 (the fastest-growing economy in the world, in comparison the United States grew 2.2x in the same period) is ignored except for a little discussion at the end of the book about Deng Xiaoping's career. Vietnam's economy grew nearly as rapidly as China's, and is only mentioned as a "repressive and extractive" economy.
Cuba's economy grew 6x, the 7th fastest-growing economy in the world and the fastest growing economy outside of Asia (according to the National Geographic, January 2011, and I verified this growth by asking Cubans if they were six times better off than in 1980, plus looking at their houses, etc.). Cuba's "inclusive institutions" include universal healthcare and education, universal child nutrition, the elimination of class differences, active fights against racism and sexism (Cuba passed civil rights six years ahead of the United States), care for the environment, the lowest crime rate in Latin America, humanitarian assistance to other developing nations, etc. Yet the authors say only that Cuba (along with Vietnam and Hugo Chavez) is "repressive and extractive."
The Cuban revolution is an example of multiple factors coming together to effect change. In 1958 Batista was disliked by everyone in Cuba - the elites, the poor, the Americans, and the revolutionaries. Batista didn't even want to be president. He'd been happily retired in Tampa when Meyer Lansky installed him in the lucrative but thankless job of puppet president. IMHO, Fidel Castro came into power by being in the right place at the right time, as opposed to being the cunning, ruthless dictator typically portrayed in the American press. Because everyone agreed that the old system was bad (and those who disagreed with the new government had a short trip to Miami), Fidel had relatively little opposition to building the "inclusive institutions" that enabled fast economic growth and strong political support. Fidel stayed in power by uniting Cubans against a common enemy, the imperialist United States (i.e., the extractive United Fruit Company) . Now that Cubans' fear of the United States has weakened and the economy has suffered due to the international recession, the revolutionary government is losing support.
NPR's "Planet Money" did a series of stories about Haiti. One story followed a businessman's attempt to build a facility to put mangos into cardboard boxes so they wouldn't get bruised on the way to market. After two years his facility wasn't built because various people claimed to own the land, the deeds had been lost, and the villagers acted in their own selfish interests instead of seeing that selling unblemished mangoes would make everyone prosper. In contrast, in Cuba the government would have just built the facility in a few weeks. Acemoglu and Robinson talk about how a "strong central government" is needed before "inclusive institutions" can be fostered, but they fail to see that multiple factors are needed to create a strong central government with the "inclusive institutions" that limit the power of the elite."
