Much more of an historical sweep of nations than an economic breakdown. Good writing, but could be about half as long. ( )

Required reading alongside Guns, Germs, and Steel. A slightly more sophisticated thesis, centering around much more human forces. Read both. ( )

Poorly explained and kinda neoliberal ( )

how to run a nation, this book helps in this way

We tend to view historical lanscapes in linear mode and fail to realize that minor and sometimes chance occurrences progress to different outcomes. However Acemogol and Robinson provide us with a unique framework with which to view power, poverty and economical sucess over two thousand years resulting in a virtuous cycle of prosperity or vicious cycle of power and extraction. Empowerment and destruction of old agricultural, transportational and intensive labor methodologies through innovation. The power elite such as monarchs, presidents and dictators in the vicious cycle mode do not want and are threatened by change. Their discussion is replete with examples and should be read by all those with an interest in national policy and the vagaries of the historical process. I found the section on slavery particularly enlightening and did not realize how old the practice is. Their future prediction that China would “run out of steam”is based on their model of the viscious cycle. There is only so much you can extract. The book is well done, scholarly and readable. ( )

Contains great ideas and really gives you a lens to view the world through. Downside is it drags out kinda long and starts using words from its theory to tell the stories at a certain point. They've already made their case by then, but it's a little annoying. ( )

Maybe I'm weird, but to me it's a compliment to describe a book as reading like a well-written college textbook. Of course, this isn't a normal book - being yet another burden on the already-groaning shelves in the Why the First World Is Awesome sub-sub-genre of Big History, it's an attempt to deal with issues of development and democracy familiar to political science undergrads, and hence would fit in well on a syllabus - yet it is quite readable, if somewhat repetitious. The basic idea is straightforward: rich first world countries got that way through a process of centralization, political liberalization, and economic liberalization that allowed for ordinary people to participate in all aspects of society without the threat of either anarchy or tyranny; countries that aren't rich have typically gotten stuck on the first step (like Somalia), or more commonly the second step, with autocratic governments that treat their citizens and resources as their own private ATMs and actively resist modernization to the extent that it threatens their monopoly on power. Instead of being inclusive, they are exclusive, and while Acemoglu and Robinson deploy the two terms quite liberally, this idea is quite reasonable. There are of course a number of competing theories to explain international disparities in wealth; a brief list might include Jared Diamond's theories of geographical advantages, Francis Fukuyama's thymos, Max Weber's Protestant work ethic, the Mandate of Heaven, Aristotle's constitutions of the polis, assorted other religious and cultural hypotheses, and of course good old-fashioned racial cheerleading, examples of which you can procure at your leisure from your local White Nationalist Reading Circle. I think Acemoglu and Robinson are on to something important, but I have issues with the way that the book is written, namely that certain examples, such as poor African countries, appear over and over, while some examples that would theoretically be quite illuminating, such as Canada vs the US or China vs India, do not get raised at all. Anyone trying to Explain It All with their own home-grown version of Isaac Asimov's psychohistory eventually gets confronted with the maddening amount of contingency and chance (the outcome of a battle, the sudden death of a king, an unfortunate storm) that overturns any number of "shoulds" in a theory, yet I think that on the whole the idea of inclusion vs exclusion is quite powerful and seems to get us "most of the way there", in that while it would be tough to argue that the US is richer than Australia because its political or economic institutions are more inclusive (a laughable notion), it would certainly seem to explain quite a bit about the US compared to, say, Mexico. Certainly it seems to cover comparisons such as the prosperity of North Korea and South Korea, Nogales in Mexico and the Nogales in the US, and the US South and the US Northeast. However, in addition to the authors and theories listed previously, I wished that Acemoglu and Robinson had engaged with four more. Firstly, Mancur Olson's The Rise and Decline of Nations has quite a bit to say about interest group politics and the logic behind how various groups can treat a society as more desirable to steal from than to contribute to; Acemoglu and Robinson sort of deal with the complexities of faction in a scattered fashion, but seem to define their axis of inclusivity-exclusivity primarily in terms of a central authority only. Secondly, Alexis de Tocqueville's The Old Regime and the French Revolution has quite a bit to say about why the French Revolution took the path that it did, and given its importance, any attempt to use it as a prototype for other countries trying to deal with extractive institutions or the iron rule of oligarchy should ponder its lessons about how it is and is not unique in the history of revolution. Thirdly, Paul Krugman's The Conscience of a Liberal has an extensive section showing how economic inequality can be driven by political inequality - more specifically, the Republican Party's capture by plutocrats has been a major contributor to not only a return to pre-New Deal ideas about the role of labor but also about citizen participation in government - this two-way interaction of political and economic forces in societies could have used more exploration. Fourthly, Joseph Tainter's The Collapse of Complex Societies makes a powerful case that societies' political and economic institutions are determined primarily by the energy available to them, and that the form of government a particular country has is more an effect than a cause of any particular level of wealth inequality; this is similar to the weak environmental determinism of Jared Diamond but more broad in that it predicts certain dynamics in the shift from long-term to short-term thinking that would seem to have been a natural fit for this book. I guess I'm being tough on this already well-researched book for not being even more well-researched precisely because I agreed so much with its thesis and was looking forward to what could have been the "one book to rule them all" in terms of theories of development. It's a compliment to the authors that so much of it seems obvious, because societies are willing to put up with what seems to us "modern enlightened folk" like astonishingly dumb institutions for a shockingly long time, and at bottom I don't think that most Americans are too much smarter or more virtuous than the unlucky denizens of the many poor countries chronicled herein. Furthermore, I think that the framing of inclusivity versus exclusivity hits precisely on a major political idea that divides liberals from conservatives in many contexts and in many different time periods - certainly the modern liberal project has embraced inclusion as gospel. The book is definitely worth a read for the mini-histories of countries like Botswana that are unlikely to be familiar to many readers, and it deserves to be taken seriously by anyone interested in comparative political economy or, to borrow a phrase, "the wealth of nations". ( )

Should have been a longish article on the Atlantic,and even then it might have been worthy of a tl;dr. ( )

Terse, concise and interesting. I find this much more persuasive than Jared Diamond's theories (although time-wise it picks up much later). It may somewhat seem like pushing the air bubble behind the wallpaper but it's still more coherent than tameable animals, parasites and other such nonsense which fails on the basis of counterexamples. In the end though it's all down to the vagaries of history and chance. ( )

Contains a lot of insights and truths. After a while the truth is so self evident that you feel as if the author is beating you to death with the clue stick. But, it explains a lot, such as the "end of China's growth" that we are experiencing. It also sounds a BIG warning about the tricks the ANC are coming up with in South Africa... ( )

Don't bother. Deaton's Great Escape has better substance and Guns, Germs, and Steel is a better story. ( )

Despite the hutzpah of a title like WHY NATIONS FAIL, there's nothing in the text itself that I found disagreeable, and I've read a lot of different economic and political theories of wealth over the years.

Of course, there have been a lot of armchair historians and armchair economists and armchair politicians, so who knows if 20/20 vision is really accurate? They could all be riffing on one fundamental theory or another and making a messy conclusion. Right?

The beauty of this one is pretty simple in effect if not in the supporting particulars. Tons of examples are given from all kinds of nations and economic policies and politics all throughout history and including a very refreshing survey of modern nations. They first break down the prevailing bad theories that revolve around geography, culture, bad luck, or even the big modern one we see all the time: Ignorance. *laugh* You know, the one that says, "If only you had our experts, you too can have all the wealth we have."

The fundamental difference in this book, fascinatingly so, can be summed up quite easily. And it's kinda obvious, too.

Extractor policies and inclusive policies.

You can translate that into government/economic policies that loot in order to grow or those that give a share of all the profits and incentives to all the people working in the system. Vicious cycles and Happy cycles.

Dictators that keep on taking can keep it up for a long time and even if there are revolutions, the revolutions keep putting the same damn policy in place. Any kind of authoritarian government can work to that same tune. Short term growth, sharp declines.

The politics and the economics of it are perfectly entwined. You can't have one without the other.

On the other hand, there's the other side. If everyone, not just the elite, has a stake in the game, then everyone works harder and with more intelligence to accomplish whatever they have to accomplish.

Use guns, coercion, theft. Or use honest cooperation.

It's pretty obvious that BOTH can be a basis for any nation. As can a wide, wide continuum mixing both elements in any. And that's also the point. Any nation can succeed or fail. No nation is exempt.

But it still requires a rather huge change of heart and it must be truly enacted in both the economics side and the political side. One without the other will perpetuate the same looting cycle.


For fans of other authors and big theories that nail this same idea, look to Ayn Rand's Atlas Shrugged. Or Game Theory.

You will have all types of individuals either working toward a collaborative whole or those who will short the whole damn thing down. The institutions with enough checks and balances DO seem to edge toward the more prosperous equations. Those who dismantle those checks and balances or work together to loot other subsets will take from the total potential benefits of wealth until it is all used up.

It's quite complicated in practice, of course, but for a cohesive underlying theory, it works a lot better than saying Communism! or Capitalism! or Socialism!

All those can be filled with thieves or genuinely cooperative individuals. The difference is in the institutions and economic models that might favor the thieves or the genuinely cooperative.


The real joy of reading this book is the myriads of examples. :) ( )

Robinson, James A. (Author)

Why Nations Fail by Daron Acemoglu and James A. Robinson discusses the reasoning behind successful and unsuccessful economies. In their examples, they put forth the United States, Canada, and Japan as economies that have excelled. From their explanations, these economies have a foundation that is both inclusive and not extractive. From extractive, the authors mean to say that the people in power use their human capital to enrich themselves. On the other hand, the governments and developmental situations of the United States have matured in another manner that supports equality in theory. If at some time during this review I decide to run for Governor or some other political body in my country, I am perfectly free to do so. I can’t become President of The United States or anything, but this is merely due to my age.

So basically, the United States, Canada, and Japan have common threads in their governments and how they elect leaders and so on. Property Rights are respected, someone in power is not going to come and seize my things unless I am under investigation. These rights are important if one is going to attempt to advance themselves economically. If you have a massive tract of land, but it is stolen from you by the political leader of your country, why would you invest time or effort to improve that land to the best of your ability? There are no incentives to do so. This is the basic idea of what happened in Soviet Russia with the Communist regime.

Innumerable countries in this day and age have people existing on the level of subsistence. It need not be that way, but without equality among all men, this is a far-off dream. As you might have gleaned from my review, this book is quite enjoyable and quite well done. That is to say, I enjoyed this book. ( )

Wie kann dieses Buch angeblich das Ergebnis von 15 Jahren Arbeit sein? Es liest sich viel eher wie eine (zugegeben ausführliche) Hausarbeit: Man nehme eine These und bügle sie über alles drüber.
Problem: Die These wird überhaupt nicht erklärt. Was sind denn genau "inklusive Wirtschaftsinstitutionen", was exakt "extraktive politische Insitutionen"? Die Autoren scheinen beide Begriffe vielmehr als Synonyme für gut und schlecht zu verwenden. Fehlende Definitionen ziehen sich durch das komplette Buch, erst kurz vor Schluss gibt es Ansätze einer Erklärung, die jedoch tautologisch bleibt. Das Buch endetschließlich mit dem Begriff Empowerment als Lösung gegen die ach so bösen NGOs, ohne diesen zu definieren. Argh. Sowas würde einem selbst an ner Dorf-Uni um die Ohren gehauen.

Dabei ist an dem Buch nicht alles schlecht, oder besser, nicht alles falsch. Dass politische Stabilität und Rechtssicherheit enorm wichtig für wirtschaftliche Prosperirät sind, ist ja nicht falsch. Auch viele Beispiele sind ganz interessant. Alles in allem bleibt aber nicht nur ein simplifizierendes, sondern auch ein simples Buch über, dessen Lektüre nicht lohnt. Wer den Klappentext gelesen hat, hat alle Begründungen und Erklärungen bereits gelesen, das Buch bietet auf 530 Seiten dann lediglich noch Beispiele. (Spoiler: Die USA und UK sind die tollsten Länder der Welt). ( )

Why Nations Fail is a masterpiece of historical study. It describes the causes of the failure and prosperity of a dozen countries in the world. To some extent the book reviews and rebukes, through counterexamples, well-settled theories that focus on geography, resources, tech coincidences etc. Alternatively its thesis concentrate around the value of inclusive political and economic institutions... (if you like to read my full review please visit my blog: https://leadersarereaders.blog/2018/09/26/why-nations-fail-the-origins-of-power-... ( )

Read it, excellent analysis on why democratic institutions, grassroots strength and a broad coalitions are important. Like all grand books, there's a a bit of cherry-picking and simplification, but that's fine. ( )

Professors Acemoglu and Robinson argue that one factor above all determines the economic fate of nations: the existence of inclusive political and economic institutions. After considering and rejecting such theories as bad advice, lack of resources, or environmental determinism (think Guns, germs and steel), the authors settle into a discussion of the English Glorious Revolution and why that set the stage for the subsequent Industrial Revolution. They then discuss how the Glorious Revolution helped to create inclusive institutions, which were then transferred to such English colonies as North America and Australia. It is not culture or work ethic that determines prosperity, but how a country’s institutions react to crucial moments and opportunities.

To prosper, the professors argue, requires enough central authority to maintain law and order, but enough inclusion to spread both political and economic power around within a country. A country that is insufficiently centralized, e.g., Somalia, will be unable to guarantee security, while a centralized state that is insufficiently inclusive, e.g., the USSR, will eventually fail to grow and will stagnate.

Please note that the professors do not argue that any of this is deterministic. They argue that chance and gradual change (institutional drift in their terms) can be decisive in setting a country on the right or wrong path. Their book is full of case studies that illustrate their points.

Well-argued though lengthy, this book is worth reading for its stimulating argument and the real world implications. ( )

Outstanding analysis of the position of nations today. Top 10 book I've ever read. ( )

worldview changing ( )

After reading Jared Diamond's Guns, Germs and Steel and Daron Acemoglu's Why Nations Fail, I can say that theories presented by Daron Acemoglu do carry some weight compared to Jared Diamond's. Environment and demographics do play important roles in what constraints human beings face while inhabiting those lands and their progress/prosperity. But the theory that the development of inclusive vs extractive institutions decides the success or failure of nations, rang more true to me after reading both books.
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The origins of Power, prosperity, and poverty

This book argues that nations fail for three basic reasons (I'm paraphrasing here):
1) Lack of central control
2) An economic system that extracts property (including labor) from people and transfers it to elites
3) A political system that protects/perpetuates these elites.

Current and historical events are used to support this hypothesis, although they cannot prove it. Politics and economics are social sciences, after all.

Trying to show that nations have failed over time due to one of more of these three things ended up feeling repetitive after a while as various examples of extractive policies were summarized and presented as the cause of societal failure. Yep, here's another case. And another case. And....

I can't say I found any great insights in this argument. Much of it seems obvious and indisputable. Without central control even the most enlightened policies cannot be enforced. (A policy that prohibits slavery, for example, can be enacted, but if it can't be enforced, slavery will still exist.) Elites, once established, tend to protect themselves, and extractive societies tend to remain extractive, even after a revolution. (For an excellent fictional presentation of this idea, read George Orwell's Animal Farm.) On the other hand, inclusive societies resist becoming extractive. (The evidence presented for this seemed inconclusive and unconvincing to me.)

They cited examples of bad policies and good policies around the world, but seemed to imply that the U.S., Great Britain, Australia, and Western Europe had passed some kind of threshold that almost ensured they would continue as inclusive societies, ignoring evidence such as increased wealth and income disparity as possible indicators that this is not necessarily the case.

The argument also could have come up with a far more generalized conclusion. A principle, if you will, or perhaps a definition. A human society, whether it is a tribe, a kingdom, or a nation, is its people. All of its people. It is not just the monarch, or the nobility, or some economic or ideological elite. It is everyone. A society with free people is a free society. A society with educated people is an enlightened society. A society in which people can benefit from what they produce is a productive society. One in which people are encouraged to create and innovate will be a creative and innovative society. The people of any nation are potentially its greatest asset. Nations that realize this will succeed. Those that do not will fail.

Sorry.... Kind of got of on a tangent, there. This book is worth reading. It may not be overly insightful, but it is thought provoking. I recommend it.

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Two of the main questions in economics are the related ones of Why did some countries get rich? and Why did some countries stay (relatively) poor? This book is the culmination of [a:Daron Acemoğlu|12817|Daron Acemoğlu|https://d.gr-assets.com/authors/1354435300p2/12817.jpg] and [a:James A. Robinson|12816|James A. Robinson|https://s.gr-assets.com/assets/nophoto/user/m_50x66-82093808bca726cb3249a493fbd3bd0f.png]'s research into those questions.

Their answer, drawing heavily on [a:Douglass North|8193853|douglass north|https://s.gr-assets.com/assets/nophoto/user/u_50x66-632230dc9882b4352d753eedf9396530.png]'s work, is institutions. Somewhat ill defined, this refers to a set of inclusive rather than extractive political and economic institutions which provide the setting in which people will invest, innovate, and grow the economy.

But where do these institutions and their development derive from? Acemoğlu and Robinson are materialists in the old Marxist sense; the motivation of all action is economic. We are told that when, for example, dictators in the Third World have pursued bad economic policies it has always been because it was in their economic interest to do so. In fact, as [a:William Easterly|18855|William Easterly|https://d.gr-assets.com/authors/1245028381p2/18855.jpg] argues in [b:The Elusive Quest for Growth|10337119|The Elusive Quest for Growth Economists' Adventures and Misadventures in the Tropics|William Easterly|https://d.gr-assets.com/books/1302315520s/10337119.jpg|36138], very often they have simply been badly advised by well meaning but misguided western economists.

To give another example, we are told that William Wilberforce led the campaign against slavery, but, on the theory presented here, that must have been because there was some economic pay off for him. In fact Wilberforce simply thought slavery was wrong. Ideas matter, contra the hypothesis in this book.
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Why Nations Fail: The Origins of Power, Prosperity, and Poverty

This is one of the most complete books I have ever read. It is worth all the accolades. The authors maintain a blog to continue the research and discussion.

This is a great book for an economic overview of world history. The Acemoğlu-Robinson thesis is this: Countries are poor (or become failed states) not because of geography or culture, but because of the legacy of "extractive" institutions. Extractive political institutions set up extractive economic institutions in order to enrich the rulers at the expense of the greater society. The ruling group then sets up protections to this way of life, removing property rights and incentives for the general population to produce and innovate. This creates poverty and inequality. The "Iron Law of Oligarchy" prevails; revolutions tend to replace who are in power, but not unwind the extractive institutions.

The book is a critique of Jared Diamond's Guns Germs and Steel in which he argues the inequality among nations we see today are artifacts of developments that took place due to relative endowments of climate and agriculture. Diamond's thesis may explain the initial rise of technologies and kingdoms, but not their perpetuation. Why do North and South Nagales and Laredo have such differing standards of living? North and South Korea? (Formerly) East and West Germany? I consider Why Nations Fail to be similar to Diamond's sequel Collapse, it just tells the rest of the story for many more cultures than Diamond discusses. (I read Diamond's books in 2005 but apparently didn't write reviews for them?) The authors argue that "history is contingent;" there was no way to predict that Western Europe would develop democracy coming out of the Black Plague period and launch the Industrial Revolution. There was no way to predict that Botswana would be the positive outlier in Africa. There was no way to predict that Peru, whose Mayan kingdom was once more wealthy and technologically advanced than those cultures in North America, would not grow faster than the rest of the world.


The authors go through lengthy histories of countries and tribes on every continent for hundreds of years, including well-known modern examples. The majority of human history has been lived under absolutism. (This is much different than the 99% argument the Occupy movements make, under absolutism there is slavery and essentially no innovation or upward mobility.) Extractive economic institutions stifle progress by eliminating the incentive of people to innovate or be productive-- why plant a tree when you won't get its fruit? This maintains power in the hands of a few, on whom the serfs, slaves, and majority population then have to rely.

Wherever there are vested interests, they will stand against the forces of "creative destruction." Writing was outlawed in Somalia as it was seen as subversive to ruler's self-interest to have the masses educated and able to communicate. The printing press was initially forbidden to print in Arabic in the Ottoman Empire because it put over 600 scribes loyal to the Sultan at risk. The Ming Dynasty in China forbid shipping, and forced residents to move inland 17 miles from the coast in order to keep out exports and maintain their local monopolies and keep innovation from happening. I think about Cyrus Hamlin's account of Turkey opening up for trade in the mid-1800s, how once-protected Turkish artisans were suddenly faced with much higher-quality foreign goods and had to adapt.When innovation would simply lead to greater extraction, as in pre-industrial Congo, people don't innovate.Why plant a tree or use a better tool when the King will simply take the fruit or the crops? Creative destruction is difficult, but necessary for productivity and incomes to increase-- where monopolies decrease, creative destruction increases productivity, incomes, and standard of living for entire populations instead of a relative few.


Spaniards conquering South America deliberately set up systems designed to exploit the natives as slaves mining the gold that would enrich the elite Conquistadors. Their systems essentially lasted for more 400 years and led directly to Latin America's great inequality today.

It took the Glorious Revolution of 1688 in England to create a system of property rights and incentives for new products to launch the Industrial Revolution. It would take wider political reforms demanded by a majority of citizens for political power to be widespread enough to remove the Corn Laws in the early 1800s. Western Europe grew rapidly as political reforms were adopted and rights expanded beyond the ruling class, whereas the Russians and Ottomans who maintained their extractive institutions (including serfdom and slavery) fell behind. A little bit of economic inclusiveness tends to lead to more political inclusiveness, and a "virtuous cycle" of greater inclusiveness ensues. See Europe or America today.

The authors maintain that one cannot manage economic growth-- macroeconomic policy changes encouraged by the IMF and World Bank err in that they do not change the extractive political institutions of countries which are what impede long-run economic growth. Funding massive projects to build capital (better farming practices, dams, highways, electric grid) help economic growth little because the extractive political institutions make sure the gains from progress go to a select few. Likewise, international aid (of which only about 20% reaches its intended target) does nothing to solve the underlying political problem. This seems to jive with Bill Easterly's critiques of Jeff Sachs' proposals.

The authors predict that China will eventually reach the limits of its "authoritarian growth" and argue that the authoritarian growth model should not be advocated by the world as a response to the 1990s "Washington Consensus." The gains from Chinese growth are increasingly going to the elite, as many of the corruption scandals illustrate. Property rights are still not protected and China will not maintain sustained growth until its political structure becomes inclusive. Brazil serves as a counterpoint, its growth since the 1970s had nothing to do with international aid or macroeconomic policies, but is an outgrowth of inclusive political and economic reforms.

Acemoğlu and Robinson are likewise ambivalent greater liberalization of extractive economic institutions eventually leading to liberalization politically-- often used when talking about China (and often cited as Gorbechev's mistake for also liberalizing politically in the 1980s). Instead, history seems to say that it will simply enrich the ruling class and prolong the inequality.

Anything in the book about America?
The Virginia Company looked to exploit the New World via Jamestown, hoping to extract riches like the Spanish were. When exploiting the Natives didn't work, they instead tried to exploit the colonists themselves with forced labor and susbsistence wages. This destroyed the colony, and the Virginia Company instead turned to incentives-- granting land to colonists, the right to keep their house, and setting up councils where the men could have a say in making laws: hence, free-market democracy and colonial life flourished.

In the South, extractive institutions remained strong until the 1960s. Since a large part of the population (slaves) were forbidden to own land, be educated, or vote, wealthy white landowners (monopolists) had a strong extractive institution. Thus, the South was poorer (measured by output and income) and less innovative (as measured by patents) than the North. When the political institutions were threatened, war ensued and more inclusive political institutions had to be formed at gunpoint. But the Iron Law of Oligarchy kept hold through disobedience to the law, the Ku Klux Klan, and Jim Crow laws until more forced reforms in the 1960s. Only now do we see economic growth in the South now that the benefits are more widespread, although poverty still remains strong due to the amount of time it takes to catch up.

In the early 1900s, the "Robber Barons" of industry owned an increasingly large part of the U.S. economy. The U.S. enacted trust-busting legislation partly in response to the increasing influence seen by the oligarchs on politics. FDR made trust-busting a central part of his early days in office (though as I've read a few books on the Great Depression lately, I think this is a bit of stretch) but was himself curtailed in his quest to gain more power to the state by the inclusive nature of our Constitution-- the Supreme Court checked his power.

Could Tyler Cowen's Great Stagnation be evidence that economic and political power is too extractive in America? Some argue as such-- large companies have armies of lawyers to protect patents, our financial institutions are increasingly consolidating, and large players in certain industries have huge sway over elected officials through campaign donations and Super PACs. We negotiate trade deals that do nothing to chip away at the protections enjoyed by the wealthier and more politically powerful-- doctors, engineers, lawyers, etc. -- at the expense of the less-wealthy, like unskilled labor.

As a Christian, my thought is that it is in our sinful human nature to want to see power centralized, or to enrich ourselves when given an opportunity-- and absolute power corrupts absolutely. Did God not warn the Israelites about desiring such extractive political and economic institutions (1 Samuel 8:10-22)?

(H)e will take your sons and place them for himself in his chariots and among his horsemen and they will run before his chariots. 12 He will appoint for himself commanders of thousands and of fifties, and some to [b]do his plowing and to reap his harvest and to make his weapons of war and equipment for his chariots. 13 He will also take your daughters for perfumers and cooks and bakers. 14 He will take the best of your fields and your vineyards and your olive groves and give them to his servants. 15 He will take a tenth of your seed and of your vineyards and give to his officers and to his servants. 16 He will also take your male servants and your female servants and your best young men and your donkeys and [c]use them for his work. 17 He will take a tenth of your flocks, and you yourselves will become his servants. 18 Then you will cry out in that day because of your king whom you have chosen for yourselves, but the Lord will not answer you in that day.”


Yet, the Israelites demanded it because they envied other nations who had it. Is this the arc of history?
This seems to repeat itself today, there's an idea that centralized control can get the economy moving. Biblical prophecy seems quite glum on the prospect of more inclusive institutions in the future.

Acemoğlu looks at the USSR as one oft-cited example (like China today), popularized in the early 20th century. Stalin simply replaced the Tsar as the extractive political ruler. He diverted resources from agriculture to manufacturing at the expense of famine, millions of lives, political murders and imprisonment, and lost productivity (and population). Towards the end of his life, Stalin himself undid some of these efforts because he saw their counterproductivity-- a similar conclusion reached by Lenin before his death.

As Acemoglu points out, even a benevolent dictator swept in by popular grievances over economic hardships has to do things to maintain his power-- namely enrich his allies. Whatever benevolent ideas he had about helping his nation, these get lost as policies are enacted that will perpetuate the cycle of enriching the few at the expense of the many. What leads to his ouster is simply another group becoming strong enough to take that power, and the cycle continues. He details several South American and African examples.

How do I relate this to today? Well, I grimace when I see a Comcast-Time Warner Cable merger plan-- concentrated power over a vital economic resource (broadband). When I see one political party trying to establish a "permanent majority," or a U.S. President take unilateral action to circumvent a check on his power (Congress, the Supreme Court).

The one thing the book lacks is a look at the environment. Perhaps environmentalists today would argue we need less creative destruction as greater economic growth puts a strain on resources. The counter-argument is that greater productivity leads to getting more with fewer resources. England has more trees and today than it did before the Industrial Revolution. It seems perverse to argue that poor countries need less economic growth. But these issues go unaddressed in the book.

This is a 5 star book that everyone should read.I would recommend reading Jared Diamond's books, Joseph Stiglitz's books, as well as Yergin and Stanislaus's Commanding Heights and Thomas Friedman's The World is Flat along with this.
Why Nations Fail: The Origins of Power, Prosperity, and Poverty ( )