https://www.amazon.com/Why-Nations-Fail-Origins-Prosperity/d...
It's very accessible, no economics background required. Along with Krugman and Kahneman, one of the few economics scholars that take the time to write a book for layman.
While the above is informed by the UK's constitutional arrangement, the 8 principles are near universal when considering nations that have or aim for The Rule of Law.
The principles are:
(1) The law must be accessible and so far as possible intelligible, clear and predictable.
(2) Questions of legal right and liability should ordinarily be resolved by application of the law and not the exercise of discretion.
(3) The laws of the land should apply equally to all, save to the extent that objective differences justify differentiation.
(4) Ministers and public officers at all levels must exercise the powers conferred on them in good faith, fairly, for the purpose for which the powers were conferred, without exceeding the limits of such powers and not unreasonably.
(5) The law must afford adequate protection of fundamental human rights.
(6) Means must be provided for resolving, without prohibitive cost or inordinate delay, bona fide civil disputes which the parties themselves are unable to resolve.
(7) The adjudicative procedures provided by the state should be fair.
(8) The rule of law requires compliance by the state with its obligations in international law as in national law.
If you don't like reading, Acemoglu gave a talk about it at HKS recently [1]
[0] - https://ig.ft.com/sites/business-book-award/books/2023/longl...
Not sure I'd spend time on a Krugman book. He predicted in 1998 that the internet would cease having an economic impact by 2005 and that it would be no greater than fax machines. He's like the Neil deGrasse Tyson of economics.
Take TV Guide, for instance. Now, if anybody watches broadcast television, they can use the internet to find out what's on when. Is that better or worse for users than having a paper TV guide? In many ways it's better. But it shows up in the GDP as a negative, because nobody's buying TV Guide any more.
Or take Google. I can search for any information I want, for free. That creates immense value - immense in every sense except the GDP, where it doesn't show up at all, because it's free.
Wikipedia. Linux. gcc. The Wayback Machine. Even HN. All this is available to us, whenever we want it, for whatever purpose we want, for free. There's great value to us. Just nothing that shows up on the GDP statistics, because it's all free. (Yeah, I know, RedHat sells Linux, and Wikipedia asks for donations. They aren't Microsoft selling Windows and The World Book, though. You can still use them for free, and not get sued or jailed.)
Let's try living in a country with a measly GDP per capita of $1,000 (Rwanda for example) and see how many free things we can get..
People give more consistently in more pro-social societies. But those societies are poorer, with lower percentage of computer ownership and programming skills. So they give things like care and food.
Trying to spin the west as the place where altruism is most prevalent seems incorrect. More data needed.
Without a high GDP, there won't be much to give in the first place.
GDP is a very gross measure of things to be sure, but also difficult to fake.
Kind of like saying Lysenko was controversial at times.
He's not "controversial," he's just a bloviator. His credentials as a serious economist expired long ago when he signed up with the leftist team and agreed to never challenge them again, on anything.
When you have to spend many words on explaining the "context" in which someone's quotes should be viewed, you are losing.
This is a Nobel winner in economics, I warned myself. Are you really putting your judgement ahead of theirs in their own field of study? I wanted to make sure I wasn't just doing the HN thing of arrogantly assuming I'm an expert in a field because I read a book once.
The eventual conclusion I came to was that I should always make sure to hold some allowance that the export may be correct and myself wrong, except when it's really obviously dumb, and that Krugman's writing fell into that camp.
You might be (unpleasantly) surprised by the emphasis of the current year's nobel economics prize winners on the importance of societal institutions and the need for inclusivity to advance the wealth of nations :-)
This is BS. Krugman has very specific theories that made predictions validated by practice.
Remember 2008? He made a prediction that an increase in the monetary base wouldn't cause inflation. This prediction was spectacularly confirmed. He also made a case for fiscal intervention: it wouldn't cause inflation, and it would speed up the recovery. And his prediction again was confirmed.
More recently: he predicted that the inflation spike was transient, due to supply chain issues rather than fundamental changes. And he's again been vindicated.
Saying that Krugman was vindicated is quite a stretch. As the economist Noah Smith wrote:
>...In 2021, Krugman tweeted: "I like it and plan to steal it. This report does look like what you'd expect if recent inflation was about transitory disruptions, not stagflation redux".
As Smith pointed out:
>...But in late 2021, inflation spread to become very broad-based. Services inflation was always significant, and took over from goods inflation as the main contributor in 2022.
>The notion that this was just some transient supply-chain disruptions that was only affecting specific products was absolutely central to Team Transitory’s claims in the summer of 2021. And that was incorrect.
>...Team Transitory also called the end of the inflation at least a year and a half too soon.
On October 13, 2021 Krugman tweeted "Three month core inflation. Why isn't everyone calling this a victory for team transitory"
>...So they didn’t entirely whiff here. They just greatly overstated their case. And their complacency in 2021 probably fed into the Fed’s decision to delay the start of rate hikes until 2022, which in retrospect looks like a serious mistake.
What did get vindicated was mainstream economics as taught in our textbooks. As Smith wrote:
>...Mainstream macro’s first victory was in predicting that the inflation would happen in the first place. In February 2021, Olivier Blanchard used a very simple “output gap” model to predict that Biden’s Covid relief bill would raise demand by enough to show up in the inflation numbers. His prediction came true. He didn’t get everything right — he thought wages would rise more than consumer prices, and he neglected the lagged effects of Trump’s Covid relief packages and Fed lending programs. But his standard simple mainstream model got the basic prediction right when most people made the opposite prediction, and this deserves recognition.
>More importantly, mainstream macro appears to have gotten policy right.
https://www.noahpinion.blog/p/grading-the-economic-schools-o...
The future is hard to predict. Using that as a reason to discount a Nobel-prize economist's economics-related work sounds like a gap in logic.
I don’t want to single this out but tangible proof of a net increase in ‘authoritarian’ decision making, compared to say a decade ago, has never been posted on HN, as far as I know.
Most of the in depth analysis I’ve seen suggests that although enforcement actions have become stricter over the past decade, the actual number of new laws and regulations has gone down.
And more importantly, the number of contradictory laws and regulations (between central authorities, and between the centre and provinces) has gone way way down.
So there’s much less leeway to punish on a whim or trap someone in a double bind, compared to a decade ago. Which suggests a net decrease, if anything.
Since they pretty much all have party cards already. And the moment they give it up means they’re kicked out from any decision making, from what I understand.
Yes internal factions within the party can arbitrarily punish each other for made up reasons all day long, every day of the year.
So in a sense it was already authoritarian without limit.
But that’s not new, nor different from any other big political party.
> imprisonment
https://en.m.wikipedia.org/wiki/Guantanamo_Bay_detention_cam...
The Guantanamo Bay detention camp is a United States military prison...As of August 2024, at least 780 persons from 48 countries have been detained at the camp since its creation, of whom 740 had been transferred elsewhere, 9 died in custody, and 30 remain; only 16 detainees have ever been charged by the U.S. with criminal offenses.
> seizure of assets
https://en.m.wikipedia.org/wiki/Civil_forfeiture_in_the_Unit...
In the United States, civil forfeiture (also called civil asset forfeiture or civil judicial forfeiture)[1] is a process in which law enforcement officers take assets from people who are suspected of involvement with crime or illegal activity without necessarily charging the owners with wrongdoing...To get back the seized property, owners must prove it was not involved in criminal activity.
> death
https://en.m.wikipedia.org/wiki/Capital_punishment_in_the_Un...
> go after normal people unless they speak out actively against the government
Yes, the U.S., Europe, and all well-governed democracies aren't perfect, but they're much better than China in that regard.
A litmus test: U.S. and European citizens are free to challenge their leaders, e.g., the recent glut of anti-establishment parties garnering more votes in the EU. Some of these guys are loons, yet they're free to challenge the status quo because that's part of democracy.
Remind me where Xi Jinping and Putin's political opponents end up again? In jail or dead.
Then they would just be a citizen who might formerly have been some bigshot, i.e. the second case.
It still doesn’t seem to make sense to discuss any increases relative to the first case, since in 2012 it was already unlimitedly authoritarian.
To be more precise in wording, the net increase, or decrease, in net negative authoritarian decision making is what matters for me and probably most HN readers.
Since this increase, or decrease, may be positive and negative to varying degrees for various people and factions, it’s practically impossible to tell if it’s net negative for the class as a whole.
Both Russia and China developed since 2000 from one to the other, and I wonder what the end game will be. In Russian case, the development led to re-establishment of the imperial idea and an attempt to conquer formerly held lands by force; that is something that the oligarchs wouldn't start, but a neo-Tsar absolutely did.
Communist China used to be way less externally aggressive than Russia / USSR, but I don't like the current military gestures by Xi. Not at all.
I guess that is possible, but if that’s the case, wouldn’t that naturally be their goal? To concentrate power and authority in one place, or person, that they can more readily manipulate.
States can endure a lot of mismanagement. Look at North Korea for instance. What we won't know is when we hit the breaking point.
What is happening in Russia may lead to an eventual collapse, though unlikely. There are some signs of a loss of monopoly on violence as the system is pushed to its breaking point. Hopefully that won't happen, but it's a scary possibility nonetheless.
PRC has enjoyed ~45 years of stability and economic growth under four leaders. Until now, the leaders have retired voluntarily, and there has been an ordered transition of power to the successor. But Xi Jinping is clinging to power in a way his predecessors didn't. If he stays beyond 2027, it will be interesting to see if China can survive his death.
Regardless, even if China does today the explanation still holds considering China only transformed a few decades before the book was written.
I see the rest of the world becoming more similar to China than the other way around, unfortunately. The US is already a pseudo-Soviet state economically, and is on the brink of becoming a dictatorship on top of that.
I hope they enjoy the mediocrity that comes with state-dominated economies.
> The US is already a pseudo-Soviet state economically.
Maybe I'm blind, but I have no idea how someone looks at the USA and concludes this.
Just because the Central Comittee is called Blackrock, doesn't mean the American economy is not being more and more centrally planned. Free Enterprise is dying.
I mean economically, the political system is still "free" (less and less), it's not a dictatorship (yet).
Of course, you'll mention BlackRock, the never-ending boogeyman for people with little economic knowledge.
Very technical, but not for the sake of mathiness. His models have a meaning. They clarify thought and ideas. https://scholar.google.com/citations?user=l9Or8EMAAAAJ&hl=en
Acemoglu has been a brilliant and prolific econ writer, and I enjoy his exposition. Many have commented on his "Why Nations Fail", and rightly so. More recently, he also wrote "Power and Progress: Our Thousand-Year Struggle Over Technology and Prosperity".
I'm more interested in his thoughts on tech and development (than on instituions and democracy), and he doesn't disappoint.
More topically for HN folks, he wrote on "The Simple Macroeconomics of AI" [1]. Unlike many contemporary researchers / writers (incl. Ethan Mollick) who are completely ga-ga over prospects of AI-driven economy over the next decade, Acemoglu is more reserved.
His top findings:
Modest Productivity Gains: Estimates suggest TFP growth from AI will be less than 0.55% to 0.71% over 10 years, limited by the complexity of tasks.
Hard vs. Easy Tasks: AI's impact on "hard-to-learn" tasks, which lack clear metrics and are context-sensitive, will likely produce smaller gains than on simpler tasks.
Wage Effects: AI's productivity benefits may not substantially raise wages, particularly for low-skill workers.
Inequality Impact: AI is unlikely to reduce labor income inequality significantly and may widen the gap between capital and labor incomes.
Task Complementarity: AI could enhance productivity by complementing human workers, though benefits may be limited if task prices fall.
Role of New Tasks: New AI-enabled tasks could boost productivity, but some may also create negative social value, such as manipulative content.
Automation Limitations: Extensive-margin automation may not lead to substantial wage increases if displacement effects outweigh productivity benefits.
Consumer Welfare: Increases in GDP may overstate consumer welfare improvements due to investment's impact on consumption.
Capital-Labor Dynamics: AI's use may increase the capital share of income, further shifting income away from labor.
Investment Response: AI-related productivity gains will likely trigger only modest capital stock increases.
I'm cautious -- neither too optimistic (although the engineer in me wants to believe in the AI-driven future) nor too pessimistic (but I'm also very, very realistic in broad adoption and benefits dissemination of AI).
His recent chat with FT [2] is also illuminating (Sep 2024).
---
[1] https://economics.mit.edu/sites/default/files/2024-04/The%20... (Apr 2024)
[2] FT audio interview - https://www.ft.com/content/e865a777-501a-4417-839e-dffd4b520... (Sep 2024)
Yeah no shit. It’s going to spike them down hard.
Is there any reason Jeff Bezos, Bill Gates, Mark Zuckerberg, and Elon Musk can't endow a Prize in Computer Science? That would end the controversy about whether AI is "Physics."
>Is there any reason
Yes there is. Nobel committee has accepted Nobel in economics as one of the Nobel prices. Its in their website, in their documents and its given out in the same ceremony in Stockholm. Laureates are selected by the Royal Swedish Academy of Sciences.
"created by a bank "
Sveriges Riksbank is the central bank of Sweden. It's not a just some random private bank.
> Each prize is $3 million and presented in the fields of Life Sciences, Fundamental Physics and Mathematics.
> The Breakthrough Prizes were founded by Sergey Brin, Priscilla Chan and Mark Zuckerberg, Yuri and Julia Milner, and Anne Wojcicki. The Prizes have been sponsored by the personal foundations established by Sergey Brin, Priscilla Chan and Mark Zuckerberg, Ma Huateng, Jack Ma, Yuri and Julia Milner, and Anne Wojcicki.
The headline should read "Daron Acemoglu, Simon Johnson, and James A. Robinson won Not a Nobel Prize in Economics."
We shouldn't validate the idea that one can earn a Nobel in economics. It's simply not possible because such a prize does not exist. Shame on economists for attempting to legitimize economics using the memory of Alfred Nobel. It is low, even for them.
Even without searching, I'm sure they back a number of organizations that do endow various awards, scholarships, and so on. I doubt they could come up with a "flagship" one that would be as prestigious as the Nobel Prize, though. Our attitudes toward modern-day "industrialists" and their pet projects are quite different today. Whatever controversies surround the Nobel Prize, they would be many times worse for the Bezos-Gates-Zuck-Musk Medal of Merit.
But somehow the Nobel Prize in Computer Science would be too controversial even given all that.
OK, I get that you don't like Bezos-Gates-Zuck-Musk. Maybe you're just jealous.
It's not controversial for that reason. It's actually a fantastic origin story for the prize, especially since he arranged for it on his deathbed.
> OK, I get that you don't like Bezos-Gates-Zuck-Musk.
Huh?
It worked out in the end though for those who survived since they now have representative government with members elected who are beholden to the people and who remember the main lesson of the past - grassroots organization against oppression is the only tool that works to preserve freedom for the majority of the people in a country.
“grassroots organization against oppression is the only tool that works to preserve freedom for the majority of the people in a country”
is a good takeaway for native americans and i struggle to imagine a counterfactual where native americans having this knowledge at the start of colonization would make any significant difference to the course of events
This is pretty much the norm across the ages. You could probably say that it is wise from the vanquished to adapt at least partially the culture of the conquerors; after all, it might be better suited for victories in wars, and that was a major factor in survival until recently. (In some places, still is.)
Colonial institutions ARE extractive.
This is a fairly prominent point in Acemoglu, Simon, and Robinson's works.
Academic talking points. Talk about the indigenous Irish who got "colonized" by the Celts, or the Britons who got "colonized" by the Saxons, Danes, and Normans, or the native American tribes who got "colonized" by other tribes, or the Gauls who got "colonized" by migrant tribes.
The fact is, everyone is on "stolen land" including the "indigenous." The Spaniards were more exploitive than the English and other northern Europeans (look up "Potosi"), but that doesn't make the latter perfect.
The New World was going to be integrated with the Old World sooner or later, no matter who did it.
Branko Milanovic has aptly and rather amusingly defined Acemoglu's naive theorizing as "Wikipedia entries with regressions" https://glineq.blogspot.com/2014/08/my-take-on-acemoglu-robi... and he is right.
Acemoglu's strand of institutional social science is known to be painfully racist and clueless about realities on the ground https://africasacountry.com/2016/09/africa-why-western-econo... The narrative that you can get economic growth with "good institutions" is a fable, and cases like China are also completely outside their narrative. Not only is their narrative historically inaccurate, if not ideological, it can't explain why Western economies like the US have prospered despite being as corrupt as China is today.
> Good decision. They deserve it. Obviously, there is a lot to disagree with in their work, but AJR initial papers were excellent, and broadened economic work to include politics and economic history. Congratulations!
It’s an obvious truth, which many Africans reject for some reason. I’m Nigerian, and my country is a clear example of how excessive corruption and dependence on a natural resource (oil) makes a country mediocre.
Some of the recommendations were implemented, but it's still very much a work in progress.
[0] - https://www.danrogger.com/files/survey%20reports/Nigeria%20C...
It sounds like you are parroting arguments without explaining those arguments.
"Wikipedia entries with regressions" is a facile argument that can be applied to Picketty and Milanovic as well.
Plus, Milanovic congratulated AJR and agreed to a number of their initial works in the space (which are the ones that won them the Nobel)
> The narrative that you can get economic growth with "good institutions" is a fable
Bullshit. We don't invest in Uganda or Kenya because we know we won't be able to get a contract enforced.
A major reason FDI to PRC skyrocketed in the 2000s was because individual provinces worked on building SEZs with ease of contract enforcement, as well as a number of harmonizing business regulation reforms (eg. the Guiding Cases Project).
And that same FDI outflow from China that we are now seeing is due to the opaqueness that now permeates the judicial and regulatory environemnt in China after a number of backwards reforms in 2018-22.
> it can't explain why Western economies like the US have prospered despite being as corrupt as China is today.
Over a century of major reforms and regulations.
This was a major reason why the PRC began the Guiding Cases project.
Having lots of weakly enforced or discretionary laws is net worse for rule of law and a stable non-corrupt society.
Some people are frustrated by this and think it would be much better to substitute their judgment for this process. They don’t necessarily hold this view selfishly or maliciously, they are just short sighted.
Scratch the surface on a SV Trump supporter like Marc Andreessen, and you'll find a big bag of crypto that they want to keep dumping on retail investors.