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BOOK REVIEW: 'Why Nations Fail: The Origins of Power, Prosperity, and Poverty': Finally! A Book That Tells It Like It Is
And, from my reading of this groundbreaking book that's a must-read for anyone who wants to understand how the world really works -- I have a feeling they would agree with the third -- often omitted -- part of the quote about great men being bad.
That part of the Acton quote reminded me -- a quotation geek -- of one attributed to Balzac: "Behind every great fortune is a crime." In that form it was used by Mario Puzo as an epigraph to his 1969 novel, "The Godfather." In my research of this famous quote, I found that Balzac actually said something similar in "Pere Goriot" -- but the simplified quote expresses Balzac's feeling on wealth.
Take Robert Mugabe -- please! -- dictator of Zimbabwe since 1980 -- cited by the authors as the leader of perhaps the most failed of all nations, with an astounding 94 percent unemployment rate. Against all odds, Mugabe managed in 2000 to win the national lottery, with a prize of Z$100,000! Zimbabwe, formerly Southern Rhodesia, is the subject of many pages in the book, and its failure as a functioning nation is contrasted by Acemoglu and Robinson with what they call sub-Saharan Africa's most successful post-independent nation, Botswana, formerly the British colony of Bechuanaland.
In a book that can be understood, with careful reading, by non-economists, Acemoglu and Robinson attempt to answer the age-old question "Why are some nations rich and others poor, divided by wealth and poverty, health and sickness, food and famine?"
Other writers have cited a nation's culture, its climate, its geography or perhaps ignorance of what the right polices are.
No! say the authors: None of these factors is either definitive or destiny. Otherwise, how can you explain why Botswana has become one of the fastest growing countries in the world, while other African nations, such as Zimbabwe, the Congo, and Sierra Leone, are mired in poverty and violence.
Acemoglu and Robinson show that it is man-made political and economic institutions that underlie economic success (or lack of it).
Korea, to take just one of their fascinating examples, is a remarkably homogeneous nation, yet the people of North Korea are among the poorest on earth while their brothers and sisters in South Korea -- with the same language and cuture -- are among the richest.The people in the southern part of the Korean peninsula created a society that created incentives, rewarded innovation, and allowed everyone to participate in economic opportunities. The economic success thus spurred was sustained because the government became accountable and responsive to citizens and the great mass of people. Sadly, the people of the north have endured decades of famine, political repression, and very different economic institutions—with no end in sight. The differences between the Koreas is due to the politics that created these completely different institutional trajectories.
"Why Nations Fail" is based on fifteen years of original research that led Acemoglu and Robinson to round up extraordinary historical evidence from the Roman Empire, the Mayan city-states, medieval Venice, the Soviet Union, Latin America, England, Europe, the United States, and Africa to build a new theory of political economy with great relevance for the big questions of today, including:
> China has built an authoritarian growth machine. Will it continue to grow at such high speed and overwhelm the West?
> Are America’s best days behind it? Are we moving from a virtuous circle in which efforts by elites to aggrandize power are resisted to a vicious one that enriches and empowers a small minority?> What is the most effective way to help move billions of people from the rut of poverty to prosperity? More philanthropy from the wealthy nations of the West? Or learning the hard-won lessons of Acemoglu and Robinson’s breakthrough ideas on the interplay between inclusive political and economic institutions?
Employing historical examples such as England's Glorious Revolution, Napoleon's invasion of Germany and the destruction of the walls of Frankfurt's Judengasse -- Jewish Ghetto -- and why despotic nations like Austria-Hungary and czarist Russia decided to build few railroads to keep their people down on the farm and away from the cities, the authors present a convincing -- to me, at least -- case for the success or failure of nations.
If you read only one book about economics and the success of some nations and the failure of others, "Why Nations Fail" should be that book. Don't take my word for it: "Why Nations Fail" has been praised to the skies by such noted writers as Steven Levitt, co-author of the best-selling "Freakonomics" and Jared Diamond, author of the acclaimed "Guns, Germs, and Steel."
About the AuthorsDARON ACEMOGLU is the Killian Professor of Economics at MIT. In 2005 he received the John Bates Clark Medal awarded to economists under forty judged to have made the most significant contribution to economic thought and knowledge.
JAMES A. ROBINSON, a political scientist and an economist, is the David Florence Professor of Government at Harvard University. A world-renowned expert on Latin America and Africa, he has worked in Botswana, Mauritius, Sierra Leone, and South Africa.