A
while ago I became aware of the idea there was a mystery in economics.
This is the way I remember it: For a long time technology would improve
but this would just lead to a change in population so that the standard
of living remained pretty much the same over millennium. But then,
during the industrial revolution something changed and technological
changes began to lead to sharp rises in living standards. All the
explanations for why Briton in the 18th and 19th century was the turning
point, rather than any other place of time in history, seemed
unsatisfactory to me. With this intellectual problem came a practical
one. For not every place that came in contact with industrialized
societies experienced the standard of living gain.
Why
Nations Fail: The Origins of Power, Prosperity, and Poverty by Daron
Acemoglu and James A. Robinson opened a whole new and promising view
point on this for me. Looking at both political and economic processes
as they interact with one another, the authors show how societal
institutions can self perpetuate in ways that tend either towards wealth
or towards poverty. Including how the problems of hanging onto power
can pit a ruler’s own economic interests against the general economic
interests of society. It looks at who well intentioned efforts to help
poor nations can be ineffective or even backfire. It looks at the
importance of empowering broad and diverse coalitions and developing
stable inclusive political and economic institutions to sustainable
economic growth.
The
book is written in understandable and engaging style aimed at a lay
audience. There are historical and contemporary stories that can tug at
your heartstrings for call for cheering. It is a long book; this is a
complicated theory and the authors go through lots of different examples
to explain the subtleties. There is no quick fix proposed as the
problem is not simplified into a one dimensional issue. I would still
recommend that every responsible citizen read this book and give
consideration to its ideas.
*The review was based on the audio version read by Dan Woren
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