Why Nations Fail (by Acemoglu and Robinson) is a book I am currently reading that attempts to explain the enormous variations in wealth seen in the world today. It attributes these differences to economic institutions, which are largely dictated by political institutions. Institutions is intended in the broad meaning - eg property rights, democracy etc. It highlights how both the patterns in wealth and the patterns in these institutions have been very (though not entirely) stable over the last 150 years, and argues an institutional inertia (my term) that goes beyond the influence of the powerful individuals involved. It suggests why it is so hard to break the mold, and how to break it (not up to that part yet).

It also rejects some of the conventional arguments - eg:

* Culture - that Protestant, Judea-Christian, European or Roman culture is what makes the west so rich, while attempting to disentangle the various meanings of culture. Culture is part of the economic and political institutions that make countries rich or poor. He even argues that the middle east is not poor because of Islam, though I suspect he has never met anyone like Abu.

* Geography - that people in hot countries are lazy, or the soil is less fertile, and various more complicated version of this theory. It addresses the "Guns, Germs and Steel" hypothesis of Jared Diamond and puts it in it's place as an explanation for why the west was able to dominate the world, while highlighting the inability of this theory to explain vast differences in wealth seen in those countries colonised or settled by Europeans.

* Ignorance - that leaders or people in poor countries do not understand how to get rich. This is the explanation favoured by many modern economists. It highlights that even when they do understand, the people in power usually don't want to. Even when they are forced to or try to make the change, it is fraught with danger, because the problems are institutionalised within the economy and the politics. The idiotic economic policies of various tinpot dictators are not determined out of ignorance of economics, but by the economic and political institutions that for the tinpot dictators are an unchangeable reality they must work within.

The causes of wealth and poverty are economic and political freedoms and rights that are closely linked or interact. For example - secure property rights, including patents, economic freedom, democracy and a broad distribution (separation) of political power.

In historical terms, it largely attributes these differences to "accidents of history".

NorthOfNorth wrote on Mar 17^th, 2014 at 6:41am:


Correct.

Not many Irish who hate the English are aware of the fact that Irish immigrants in New York, soon after 'The Famine', went on a 10-day rampage of genocidal butchery aimed at killing every black man they could find. They dragged the blacks out of their hiding places and slaughtered them in the streets.

Throwing stones in glass-houses does have it's hazards.

I once had a Croatian thug giving me a hard time about the British Empire, and stealing Australia from the abos .. etc. He wasn't smiling. He genuinely was a nasty thug of a human being.

It never occurred to him that perhaps his own country also had a few questionable skeletons in the cupboard ~ such as an exterminatioin camp that even disgusted visiting German Nazis.

She first made mention of her enduring hatred and disgust for all German people and (if I remember correctly) publically said she thought the only good German was a dead one.

And here I was thinking the Americans invented freedom and democracy. Now you say it was the British?

NorthOfNorth wrote on Mar 17^th, 2014 at 6:52am:


Correct.

It surprised me too.

Her hatred was uncompromising and all-embracing.

Yes, she summarised the genesis of cultural enmity in the way only a true unquestionable hero can.

The best of us enfranchising the worst in us.

NorthOfNorth wrote on Mar 17^th, 2014 at 10:21pm:


That's made my head spin.

Would you mind deciphering that for me please?