Jared Diamond reviews *Why Nations Fail*

by on May 18, 2012 at 2:26 pm in Books, Economics, History, Political Science | Permalink

There is much in the review, excerpt:

In their narrow focus on inclusive institutions, however, the authors ignore or dismiss other factors. I mentioned earlier the effects of an area’s being landlocked or of environmental damage, factors that they don’t discuss. Even within the focus on institutions, the concentration specifically on inclusive institutions causes the authors to give inadequate accounts of the ways that natural resources can be a curse. True, the book provides anecdotes of the resource curse (Sierra Leone cursed by diamonds), and of how the curse was successfully avoided (in Botswana). But the book doesn’t explain which resources especially lend themselves to the curse (diamonds yes, iron no) and why. Nor does the book show how some big resource producers like the US and Australia avoid the curse (they are democracies whose economies depend on much else besides resource exports), nor which other resource-dependent countries besides Sierra Leone and Botswana respectively succumbed to or overcame the curse. The chapter on reversal of fortune surprisingly doesn’t mention the authors’ own interesting findings about how the degree of reversal depends on prior wealth and on health threats to Europeans.

Do read the whole review (that is not just the usual cliched command to do so), and I will gladly link to any response by Acemoglu and Robinson.  Here is Diamond’s bottom line:

My overall assessment of the authors’ argument is that inclusive institutions, while not the overwhelming determinant of prosperity that they claim, are an important factor. Perhaps they provide 50 percent of the explanation for national differences in prosperity. That’s enough to establish such institutions as one of the major forces in the modern world. Why Nations Fail offers an excellent way for any interested reader to learn about them and their consequences. Whereas most writing by academic economists is incomprehensible to the lay public, Acemoglu and Robinson have written this book so that it can be understood and enjoyed by all of us who aren’t economists.

1 Ray Lopez May 18, 2012 at 3:04 pm

Buy the book, yes, or, you could just listen to this 20 minute 2011 TED lecture by historian Niall Ferguson on why nations fail or succeed (rule of law, property rights, better technology, better medicine and two other reasons that escape me): http://blog.ted.com/2011/09/19/the-6-killer-apps-of-prosperity-niall-ferguson-on-ted-com/

Trouble with this sort of stuff: it’s called “teleosis” in historical criticism and it’s a form of “anachronism”, meaning the reason fits the data perfectly only because it is backward looking and, like many economic models, tweak parameters to fit the data but has no future predictive value. Like any nth-order polynomial curve that can fit the data but, depending on the degree chosen (i.e., the highest polynomial in the Taylor series expansion) can predict either that the curve will flatten, will rise, or will fall (MATLAB has a demo on this).

Aristotle, the Greek scientist, first coined the theory of teleosis to explain why an acorn grows into an oak tree: basically, ‘it’s just destiny, the way things are meant to be’ kind of like a ‘winning team wins and a losing team loses’ sort of circular logic but often, as surveys predicting the future have shown and unlike the language in the prospectus, ‘past performance is an indicator of future success’. Another trick: in math often the initial conditions determine future paths, hence a country that was in the lead 200 years ago might still be in the lead today. I think Jared Diamond’s “geography” explanation is as good as any, since historically indeed certain geographies seem favored, in particular the 30th parallel north of the equator seems, as Jared discusses in one of his books, favored since it has good weather and massive east-west cross-cultural communication, unlike South America (at the same parallel) or Africa or Australia (both smaller in size, both less fertile). By contrast north-south communication, due to arid weather breaking up things, does not work.

Nowadays, agriculture is less a factor so I would say “initial conditions” matter more, as Krugman pointed out in one of his papers that won the Nobel Prize, meaning “Hollywood favors movie producers and they flock there from all over the world”, “Silicon Valley favors computer designers”, “China manufacturing”. All of this being a form of Aristotelian teliosis but it does predict the future and explain the past pretty well.

2 k May 18, 2012 at 3:37 pm

How does geography explain England?

But more seriously, how do you propose undertaking research, if it isn’t looking back to figure out what happened and why?

I am mystified

3 Rahul May 18, 2012 at 4:48 pm

It helps if the hypothesis can be tested in a forward looking fashion. Hard for the social sciences though.

4 k May 18, 2012 at 5:37 pm

But, there is no theory – at least in economics – that was “tested” before it was suggested. I mean, that’s impossible to do.

Theories, if they have to survive, must have empirical relevance, and must stand up to it. To say that one is “looking back” is not much of a criticism, one is simply re-interpreting what took place. How do you “look forward” to test anything? By definition, the future has not happened.

The distinction between social and (anti?) social science in this sense appears a false one because one only “tests” a theory by looking at data, which are given, not about to be given.

I am still mystified.

5 Ray Lopez May 18, 2012 at 5:58 pm

No mystery really: economics is non-linear. It’s not what you think it is. Read Nicholas Taleb’s works for an introduction. And see the math of Mandelbrot. That’s not to say you should give up: often even non-linear equations are “bounded” by limits that statistically are not usually breached: hence the famous ‘black swan’ , Levy distribution will, as a special case, become the familiar “bell shaped curve” (Gaussian) distribution. So nonlinear economics is linear, except when it isn’t.

6 mulp May 18, 2012 at 7:25 pm

Britain like a few other island clusters produced seafaring cultures in relatively favorable climates that produced the mastery of the seas needed for a global trading society, and they were given the basics of government and rule of law by Roman conquest early on. As an island they were protected from conquest to a greater degree than France, Germany, Spain which also developed empires at various times.

An economic analysis of primarily Britain by the moral philosopher Adam Smith along with the analysis of Newt of nature influenced the construction of the governments of the USA. They also drew on the analysis of the ancient Greeks, their rise and fall, and others. The design of the US government was done at the same time as France was redesigning its governance, and while Britain was in the middle of centuries of evolution. And at the same time, Mexico and others were creating government following different “theories”, for example Haiti.

In the early 20th century, Japan restructured adopting theories of government, and post WWII, they adapted the theory of government promoted by historical studies. China revamped its government beginning in 1980 adopting Japanese and US theory of government.

But let’s bring it home.

For decades we have been hearing the political-economy theory that “cutting taxes will put more money in the pockets of individuals who will invest more wisely than government and create jobs and wealth more rapidly than government central planners”. Reagan tried it, but conservatives claimed his virtuous efforts were thwarted by liberals. But in the 90s, Clinton tax hikes killed the economy, except, well Reagan’s tax cuts created all the jobs and wealth. So, with Bush getting his landslide mandate in 2000, we have been cutting taxes and cutting taxes and cutting taxes – over the past 12 years taxes have been cut more than at anytime in history without a violent revolution, so we have a test for the theory Reagan et al pushed in the 80s.

So, we have the test of a very popular political-economic theory on taxes and economic growth. I see lots of excuses for the failure of the theory to deliver the absolute certain results, Obama being the number one cause of poor job creation from 2001 to 2007 (compare to Reagan’s terms, to Clinton’s terms, to JFK/LBJs terms, to Eisenhower, to even FDR’s first two terms and Carter’s one term).

The political-economic theory conservative’s have been pushing and delivered from 2001-2007 and then have prevented being reversed since is based on their reading of US history from 1792-2029. We have a decade long test of the theory that Reagan started pushing in 1980.

The raw analysis of this test was presented at the last TED, and the analysis I obviously have was so politically incorrect and toxic, it was not posted on the TED site until the “censorship” raised a ruckass drawing even more attention to the heresy.

I can point to many tests of economic and social theory, or perhaps hypothesis, if I took ten hours to ramble on for pages. The failures are in many ways more interesting than successes – I speak as a scientist – experimenter. The causes of failure are the theory is intrinsically wrong, the theory is correct but doesn’t apply, or the theory was offset by other factors like two theories that conflict.

Testing theory and applying theory requires a lot of debate from multiple parties. The US Constitution was crafted by multiple people applying their experience with an existing Congress and their understanding of the theories of Smith, Locke, et al and the theory of Greek democracy, and then was followed by an extended and recorded debate that shapes the meaning of the words in the document.

The US political-economy is a triumph of applying theory to improve an existing one in a huge leap forward from 1787-1792, which extends to the present. Congress and bankers crafted some new Federal policies using some theories developed over the preceding quarter century in the US and Britain – Keynes wrote down the theory and justified it in the US, but we have a half century that followed where Keynes was tested. That gave way to Reaganomics – supply side – deficits don’t matter – tax cuts create jobs and wealth. The theory that private investment is always better than public investment so the superior public investment in the early US and today in China is tested against the private investment since and in Africa. Does Africa, Haiti, S. America, have a superior transportation system, where corporations built what they needed, than in the US built by the public?

7 TallDave May 19, 2012 at 12:22 am

Britain was actually conquered fairly often, and there are other large island nations. Some, like the Philippines, were actually wealthier than Britain at some points.

Your facts on the U.S. are simply wrong. In the 1990s spending stayed flat as a % of GDP. Taxes are still at historic highs today.

The big lesson of the 20th Century was that central planning fails. That’s why everyone who was sane abandoned Communism. And democratic socialism is currently undergoing a spectacular collapse in the EU — a party is about to be elected in Greece on the platform of bankruptcy.

8 TallDave May 19, 2012 at 1:01 am
9 msgkings May 21, 2012 at 12:58 pm

@ TallDave

You can’t spout something like ‘Taxes are still at historic highs today.’ when the exact opposite is in fact the truth. Why are you lying to us?

http://economix.blogs.nytimes.com/2011/05/31/are-taxes-in-the-u-s-high-or-low/

10 TallDave May 21, 2012 at 4:27 pm

msgkings — See the chart. Tax revenue as a % of GDP is the highest it’s ever been.

Bartlett ignores the massive growth in state and local taxes over the last half-century.

11 david May 18, 2012 at 4:10 pm

Doesn’t explain why some countries had rule of law, property rights, etc. before other countries. Partial innovations don’t seem to guarantee success – Italian city-states invented bonds. The Hanseatic League entrenched banks. The Dutch invented the recognizably modern corporation. So why was the 19th century an account of British empirehood?

Ferguson has literally no explanation and when you probe deeper, it turns out to be quite disappointing.

Initial conditions have limited impact. In 1900 one of the richest countries in the world per capita was Argentina.

12 DPG May 18, 2012 at 4:37 pm

That post by noahpinion is one of the poorest things I’ve read in weeks. He blithely accuses Ferguson’s thesis of being racially motivated then segues into his own racially-motivated concerns (projection, perhaps?) that the key to our future is to embrace all ethnicities in a multicultural lovefest. He throws in a tangential rant about the Tea Party for signal-of-ideological-purity bonus points.

He COMPLETELY misses Ferguson’s point that East Asia’s success was due to its adoption of the West’s killer apps, a result that is independent of Western racial issues.

13 mulp May 18, 2012 at 8:04 pm

Gunpowder and high carbon steel weren’t Eastern killer apps?

Was the failure of Asia to turn gunpowder and steel into apps for conquering Europe a consequence of China’s racial bias which denied the West the fruits of being pillaged and plundered by the East?

My reading of history is the West took Eastern killer apps and then pillaged and plundered the inferior races of the East.

14 TallDave May 19, 2012 at 12:07 am

Gunpowder was actually first used in warfare by the Arabs and the Mongols. The West was able to engineer better guns because they had notions of property rights, and so after the Second Siege of Vienna they were suddenly on top of the world pecking order.

http://en.wikipedia.org/wiki/History_of_gunpowder

Are you familiar with the Japanese history of guns? The Chinese war of the eunuchs that ended their maritime ambitions?

15 JonF May 19, 2012 at 11:43 am

“Inferior” races? How do you figure that?
Look, China had no reason to go sojourning far abroad. It was a rich country and it produced some unique products (silk) that the world came to China to trade for. The Chinese were of course locally imperialistic, expanding from their original homeland in north China south and west, producing more or less the China we see on the map today.

16 TallDave May 20, 2012 at 2:03 am

Look, China had no reason to go sojourning far abroad.

Gains from trade. It was the wizardry by which silver was mined in the New World by Spanish colonies yet ended up in the London Mint.

Gains from long-distance trade in those days were enormous. That’s why people engaged in it even though scurvy tended to kill off a fair number of participants.

It could have turned out differently, but China had some internal politicking that ended with them staying at home and becoming the toy of Western powers.

17 JonF May 20, 2012 at 5:08 pm

China did engage in long-distance trade: they were not a hermit kingdom like Japan or North Korea. However they did not need to go far abroad to do that trading: the long distance trade came to them, notably all that silver from the mine of the New World.
Europe didn’t have anything that the world wanted which couldn’t be found at closer remove; so the Europeans had to go abroad to trade for silk, spices and so forth. China could sit back and let the trader come to China. That did work to China’s disadvantage in the long term (though only after the Industrial Revolution left Europe towering above the rest of the world), but it did not mean China was an isolated backwater.

18 TallDave May 21, 2012 at 11:23 am

the long distance trade came to them,

The gains from arbitrage go to the arbitrager.

19 Ricardo May 19, 2012 at 9:05 am

I disagree with Ferguson’s views on lots of things but I don’t see this criticism getting any traction.

First, Ferguson appears to be making a point about the “West”, not about 19th century England. Already too much has been written about why the Industrial Revolution might have happened first in England and not Italy or Holland. Whatever one makes of these theories, it’s clear that England borrowed huge numbers of ideas from other Western societies which in turn borrowed from around the world and incorporated these into an unbeatable combination. How it did so is to argue specifics but the general point is that Europe was very much at a point where it good take the best ideas and technologies from around the world, refine them and initiate radical changes in economic and social conditions.

As for what the “West” is, how about this definition: any society whose core ideas and values can be traced back through the genealogy of ideas to Ancient Greece. I don’t see any reason to bring race into the discussion nor do I think it can be seriously denied that China, Korea and Japan have many significant differences in worldview to Western societies and that these differences are shaped by traditions with a very different genealogy than those familiar to Westerners.

20 Jon May 20, 2012 at 5:13 pm

“The West” is a historically awkward term. “Europe” would be better term to use, alebit in this usage it takes in the overeas Anglo nation too (the US, Canada, Australia and New Zealand). Civilizationally, Russia and eastern Europe are also the heirs of Greece and Rome and Christendom, and if you want to break Europe out into subcultures there’s as much of a cultural split between the Latin and Catholic South vs the Germannic Protestant North, as between the Greco-Slavic and Orthodox East and the West of Europe

21 Steven Kopits May 18, 2012 at 3:06 pm

Dictatorship, not democracy, is the default form of government. This is pretty clear from the historical record.

The question then, is not why countries aren’t democracies, it’s why they aren’t dictatorships. Once you take this perspective, analysis becomes much easier, and the question becomes, “Why do dictatorships decay?” or “Why do dictatorships fail?” Why does power move from the center to the periphery? Well, we have a pretty good set of analytical tools in economics to help us understand the reasons (and chief among them is the declining marginal utility of wealth and income–the same model socialists use).

In this framework, democracy is a decayed form of dictatorship. This approach allows democracy to be many things, not just monolithic “Democracy”. It is a process, not a destination. Thus, “democracy” in Argentina is not forced to be the same as “democracy” in Norway. Dictatorship has decayed more in the latter than in the former.

Try the inversion in your thinking. If you’re resisting it, it’s because you were indoctrinated in grade school to think of democracy as “natural”, and dictatorship as an evil aberration. Of course, it’s democracy which is the historical aberration (read the first two sentences of the Gettysburg Address if you doubt it). Once you accept this, you’ll be able to think about democracy dynamically.

22 Manoel Galdino May 21, 2012 at 4:14 pm

“If you’re resisting it, it’s because you were indoctrinated in grade school to think of democracy as “natural”, and dictatorship as an evil aberration.”

Not really. In Political Science, I learned that it’s easier to study democracy because i’s easier to define it (see Shumpeter, or even better, Dahl). Dictatorship is harder to define. There are distinctions about totalitarianism and autocracy, there are military autocracies, civil autocracies, Sultans etc. et. etc. Are they all dictatorship only because they’re not democracy? Is dictatorship defined by the negative?

I really suggest you to read books and/or articles in the filed of comparative politics.

best,
Manoel

23 Nice May 21, 2012 at 8:21 pm

Nice put down to pretentious gibberish Manoel

24 Ray Lopez May 18, 2012 at 3:12 pm

Thread change Mr. Koptis. The issue is not the form of government but economic growth. In fact, as the data shows (Korea, today’s China, Singapore, war-time economies like the USSR) dictatorship is not antithetical to economic growth. And I beat you on being the first post in this thread by two minutes. Next time, please type faster–one line posts often will win being first.

25 MJ May 18, 2012 at 3:34 pm

Someone please correct me if I’m wrong, but didn’t much of the United States’ pre-20th century economy revolve around big resource exports in the form of whale oil, tobacco and cotton? Does this not strengthen Acemoglu’s thesis?

26 Doc Merlin May 19, 2012 at 12:10 am

No, because we had a large frontier and high geographic mobility into the frontier. He explains this early on in the book, when showing why the Spanish rule wasn’t as brutal in Argentina as it was in Peru.

27 chuck martel May 19, 2012 at 8:56 pm

The “large frontier” you speak of was the property of less technologically advanced groups that were powerless then and now to stop the theft of their property. It’s a small wonder the US economy is slowing down, the free land ripe for exploitation is disappearing. When all of Alaska has been subjugated, then what?

28 Marian Kechlibar May 20, 2012 at 6:55 am

The Indian wars were history in 1890.

Yet most of the American economical growth happened after that time, and mostly in areas which were taken from the Indians far earlier than the last frontier areas.

29 TallDave May 18, 2012 at 3:38 pm

I didn’t think Collapse was anywhere near as relevant.

Don’t get me wrong, GGS was great, as was TTC. But read Diamond and then Victor Hanson, and you quickly realize that the former’s theses lose relevance as we enter the time of states, where culture dominates.

30 TallDave May 18, 2012 at 3:49 pm

These sweeping statements, which will astonish anyone knowledgeable about the subjects, brush off two entire fields of science, tropical medicine and agricultural science. As I summarized above, the well-known facts of tropical biology, geology, and climatology saddle tropical countries with much bigger problems than temperate countries.

This, for instance, is utter nonsense. Hong Kong and Singapore are both rich and tropical, as are portions of Australia, Taiwan, Chile, and the UAE.

Merely adducing these concerns does not explain anything. If the poorer countries were all at high latitudes, we could argue it was because they faced an environment in which for much of the year exposure is deadly in hours, and consequently the natives are forced to spend huge amount of time and energy just heating themselves — and they can only grow crops half the year! (It’s no wonder they’re poverty-stricken, the poor dears.). But this would be just as wrong, of course, because in truth, the human factor dominates all others.

31 david May 18, 2012 at 4:34 pm

Siberia is, in fact, quite poor compared to more agriculture-friendly parts west of the Urals. Likewise southern Canada is where the non-oil action is, not northern Canada. Clearly at some point local climate matters.

Disease burdens are significant at the tropics. Singapore is not a counterpoint, for the simple reason that it does have a lower disease burden and it had disease-resisting technology essentially invented for it in areas without such a heavy disease load.

A casual observer circa ~ 500 BCE would have, yes, observed that semitropical areas seemed to do remarkably better.

32 TallDave May 18, 2012 at 11:50 pm

Exactly, and the same could have been said at the height of Islam.

33 TallDave May 19, 2012 at 12:46 am

Also, note that the reasons Singapore has a low disease burden are mostly institutional, not geographic, and the whole world benefits from disease-resisting tech.

In fact the rich Asian tropicals seem unusually prone to new diseases.

http://en.wikipedia.org/wiki/SARS
http://en.wikipedia.org/wiki/Hong_Kong_flu
http://en.wikipedia.org/wiki/Asian_Flu#Asian_flu

34 The Original D May 18, 2012 at 5:11 pm

Hypothermia is not infectious.

35 TallDave May 18, 2012 at 11:46 pm

Influenza is, and it spreads over the cold seasons. Used to kill millions not that long ago.

36 Ricardo May 19, 2012 at 12:44 am

There is a big difference between saying that tropical countries have bigger problems than temperate countries and saying it is impossible for tropical countries to ever develop. The latter issue is the implicit strawman you are knocking down but the former is backed by lots of evidence. Saying that Singapore disproves the general relationship between tropical climate and poverty is like saying that an award-winning 5’11” basketball player disproves the idea that height is an advantage in basketball.

37 TallDave May 19, 2012 at 12:52 am

If I wasn’t clear, I am explicitly saying tropical countries DO NOT have bigger problems than temperate countries. There is no good evidence that they are, on net, disadvataged vis-a-vis nontropical countries. Diamond just cites all the disadvantages while ignoring the advantages as well as the fact the human factor dominates to the point you might as well ignore all the other stuff anyway.

It isn’t just Singapore — “Hong Kong and Singapore are both rich and tropical, as are portions of Australia, Taiwan, Chile, and the UAE.” What do those places generally have in common? Better institutions!

38 Ricardo May 19, 2012 at 2:01 am

“There is no good evidence that they are, on net, disadvataged vis-a-vis nontropical countries.”

No. The evidence is the fact that tropical countries are, on average, significantly poorer than temperate countries. You can spin all kinds of stories about how the poor tropical countries have bad institutions and the wealthy ones have good institutions but these do not refute the hypothesis that geography plays a role (among many other things).

Incidentally, nobody in the Douglas North/Acemoglu/etc. school of thought would ever claim the UAE has “good institutions.” The UAE is a federation of monarchies with virtually unconstrained powers. Those aren’t good institutions — it’s just that the country is lucky to be ruled by pragmatic people and is also lucky to be sitting on enormous oil reserves that give most of the native population cushy government jobs.

39 chuck martel May 19, 2012 at 9:02 pm

What’s a good institution? If you’re saying the so-called democracy cherished by the statists you might be wrong, in view of the latest elections in Greece. Or any number of other countries that have voted thugs and half-wits into power.

40 TallDave May 20, 2012 at 2:10 am

“The evidence is the fact that tropical countries are, on average, significantly poorer than temperate countries”

That’s not evidence, that’s the thing you’re trying to explain with evidence.

There’s little reason to think geography has much relevance in the 21 century. Transplant a million randomly chose U.S. Midwesterners in a portion of, say, Chad, and within a decade they’d be the richest country in Africa.

The UAE actually does have fairly good institutions. Not South Korea good, mind you, but much better than, say, Iran or SA, who also have windfall resource wealth. http://en.wikipedia.org/wiki/United_Arab_Emirates

41 TallDave May 19, 2012 at 12:57 am

There are many other examples as well — for instance, why did Zimbabwean farming flourish until Westerners were removed from the land?

42 Ricardo May 19, 2012 at 2:23 am

What exactly is this an example of? Zimbabwe has been one of the poorest countries in the world for decades now in PPP-adjusted GDP per capita terms. Even at its height in 1998, Afghanistan had a higher GDP per capita according to the Penn World Table.

Is your point that in an extremely poor country, it is possible for a small elite to prosper through certain commercial activities? Nobody would disagree. It is not clear what that has to do with institutions or with development, and it is not even clear you understand the definition of “institutions” as people like Acemoglu use the term. For instance, Acemoglu himself points out Lagos, Nigeria is home to a large number of millionaires — that doesn’t prove Nigeria has good institutions.

43 TallDave May 20, 2012 at 2:18 am

You mean the 99% of Zimbabweans who were not culturally Western were very poor. The 1% who were managed to not only feed Zimbabwe but export huge amounts of food, until Mugabe drove them off. They were highly productive. Good institutions created them, bad ones drove them out.

The point is that culture dominates geography. Farming is not resource windfall wealth like Nigeria stumbled into (and cannot extract without Western help), it is a productive activity that requires a lot of hard work and technical understanding.

44 4runner May 21, 2012 at 4:36 am

“Transplant a million randomly chose U.S. Midwesterners in a portion of, say, Chad, and within a decade they’d be the richest country in Africa.”

That’s really funny because when those same Midwesterners were “transplanted” into one of the most dynamic economies in the world (i.e., the US), they managed to create one of its least productive backwaters that is largely dependent on government subsidies.

45 TallDave May 21, 2012 at 11:25 am

Please come back when you have some minimal understanding of economic statistics.

46 TallDave May 21, 2012 at 11:40 am

You might start here:

http://www.calinst.org/pubs/BalCht03.pdf

Note that the Midwest is roughly even in balance of federal payments — some states like IL and MN are donors, some like Iowa and Nebraska are even, some like Missouri are net spenders.

The real transfers are the from the coasts to two areas: DC, Maryland, and Virgina (i.e. the federal gov’t), and the non-FL/TX South.

47 TallDave May 21, 2012 at 11:41 am

And, of course, these BOP differences are mostly very small compared to their GDP, so “dependent” is just dead wrong.

48 4runner May 22, 2012 at 3:14 am

Farms in Nebraska receive about 1 billion per year in subsidies. Same thing with farms in each of Iowa, Illinois, and Kansas. By way of comparison, annual TANF payments for the entire country are about 17 billion.

The one thing Midwesterners are really good at is leveraging two seats in the senate into government subsidies.

49 TallDave May 18, 2012 at 3:56 pm

While they don’t say so explicitly, this view suggests that good institutions should have cropped up randomly around the world, depending on who happened to decide what at some particular place and time.

This is even more ridiculous. Saying good outcomes are often dependent on small effects at critical junctures is hardly the same as saying the outcomes are random — this is like arguing that because football games are often decided by a few key plays, the outcome of a games between football teams in which one team is favored by 17 points is essentially random. Not hardly.

50 DW May 18, 2012 at 9:36 pm

I think the point is that Diamond interprets A&R as saying the teams are all evenly matched.

Diamond is the one saying some teams are stacked.

51 TallDave May 19, 2012 at 12:02 am

Yes, and that interpretation is nonsense. Western institutions developed over centuries and were the cumulative result of millions of decisions. That there were key decisions at certain points does not suggest the process is so random that one should expect them to arise independently in random places. In fact, the rise of Western institutions is fairly obviously an event that is singularly unlikely to happen independently in many places — it took mankind many millennia to happen upon it once, and it was so transformative that once it did happen no one else was ever going to have to independently figure it out again.

52 Steven Kopits May 18, 2012 at 4:00 pm

Ray –

My point was that Diamond talks a good bit about “selfish” leaders. Well, duh, of course they are. People are utility maximizers, not empaths. So saying leaders are selfish is equivalent to saying that you didn’t sleep through the first lecture in macro econ 001. After that, the only question is whether societies are organically hierarchical. Do groups tend to become dictatorships? Clearly, they do. So you don’t have to be a rocket scientist (well, maybe you do) to realize that societies, by default, will be run by utllity self-maximing autocrats. So let’s start there as a basis of analysis, not “Oh, why don’t they work on behalf of the people!” Hint: They’re not supposed to. The inherent relationship of the dictator to the people is parasitic, not paternalistic.

So if you want to know why some societies are richer, it’s probably because a dictator screwed up somewhere along the line. King John’s blunder in 1215 is but one example.

In any event, I am trying to move your thinking to several different insights: First, democracy is a dynamic, living thing. It can improve over time. Second, I am trying to suggest to you that we can think about democracies as weak dictatorships run by utility self-maximizing semi-autocrats. So leaders, by their very nature, will tend to abuse the power they have accumulated. From the man-in-the-street perspective, politicians should be thought of as “bad” people, in the sense that they are primarily interested in themselves, and not us. (This used to be a commonplace. Interesting that now one has to make a theoretical case for power corrupting, and all that.)

If that’s the case, then how can we improve governance? If you take Diamond’s drift (or Sach’s exhortations), politicians should “do their duty” and exercise “political will” for “the good of the country”. Oh, please. Let’s get society away from this paternalistic drivel and assume that politicians will do what’s best for themselves, as though we had actually paid attention for the first half hour of the first class of the first econ course we ever took. If we want politicians to act on our behalf, then we need to give them a clear objective function and rewards to the individual politician (as principal, not agent) for achieving those goals. We need to pay them for results.

As for dictators: My interest is in governance, not democracy per se. I have already stated that democracy is many things, including thinly veiled dictatorships. (Yes, I do mean you, Mr. Putin.) Now, I have a huge soft spot of Lee Kuan Yew, who is the policy analyst’s only top-of-the-line political figure and also a sometime dictator. (OK, Mrs. Thatcher deserves some points, too, on the policy front.) And what do they do in Singapore? They pay political decision makers for results–a policy that Lee Kuan Yew put in place.

53 TallDave May 18, 2012 at 4:07 pm

If that’s the case, then how can we improve governance?

Constitutional republics that follow the rule of law and allow well-regulated free markets — thus are incentives properly aligned.

Of course, it’s very very hard to even get to rule of law.

54 david May 18, 2012 at 4:17 pm

You need to align incentives to maintain the constitution, and regulate but not strangle the free market, too.

It’s not enough to just pay isolated decision-makers for results, since someone has to gauge the results, which presupposes some exterior constraint.

55 Steven Kopits May 18, 2012 at 5:07 pm

No, no, no, they’re not.

In politics, unlike business, we have three ideologies, three objective functions. These are liberalism, egalitarianism and conservatism. On any given policy issue, two of the ideologies will tend to converge, one will dissent. For example, should taxes be low? (Classical) liberals: Yes, it’s best for economic growth and personal liberty. Egalitarians: No, we should distribute more to those with less. Conservatives: No, we need to protect our dependents and supporters. Thus, for any given policy issue, we have conflicting policy prescriptions, each of which is arguably right, depending on your ideology.

Now, if an agent (politician) can justify any policy and its opposite to the principal (“I did it to save money.” “I did it to help the poor.”), then the principal will have very limited control over the agent. Further, political parties are pitted against one another in Congress or parliament, and thus have an incentive to kill the opposition’s policy initiatives, even if this is bad for the country as a whole. Killing the neighbor’s goat is a leading political pasttime in Hungary, for instance. Indeed, for the Republicans, a weak economy between now and November is electorally preferable.

Have you every considered why the notion of “political will” is only used in policy debates? Have you ever heard of a lack of political will at GE or Morgan Stanley? How come all will-less people work in the public sector, and none in private business? It’s because it’s other people’s money in the public sector! In the private sector, no profits, no job. So you find the will. In the public sector, exercising will means being unpopular, which means no job. No one is the public sector is paid more if GDP growth is higher or debt lower, if fewer people work or more. So money doesn’t have much value–which is exactly the problem.

Now, if you had a single objective function (eg, maximize GDP growth subject to fiscal sustainability), and this applied to all members of Congress, then you would find that policy is taken very seriously and that, somehow, opposing parties manage to pull together to get stuff done. Where real political battles will occur is over the objective function itself–and this is where they should occur. But not in implementation. Once the objective function is decided, everyone is paid for meeting the goals laid out therein.

In other words, just because you have elected a politician doesn’t mean you have defined his agency or created a structure to hold him accountable. We’ve left out a step. But democracy can grow and change, and become something more classically liberal and less conservative.

56 TallDave May 19, 2012 at 12:12 am

Sure, I wasn’t arguing we have the ideal case here; for the most democracy reigns over liberty. Still, we do muddle by better than the vast majority of the other countries out there, even the other liberal democracies, which as a class align incentives far than the others.

57 Steven Kopits May 20, 2012 at 9:08 am

I understand, Dave.

I’m trying to make the case that we can think more openly, more dynamically. Neither economics nor democracy is “done”, even though we tend to treat it that way. There are lots of things we can do better. I’m trying to suggest a framework for thinking about issues.

58 Ray Lopez May 18, 2012 at 5:06 pm

Still a thread change Steven K. You are adopting “Public Choice” arguments saying the state is a parasite. But according to the simple Solow model, government does not decrease or increase the long-run growth rate of an economy–only technology does. “Rationale:” if 40% of the economy is government, and government is a parasite that eats half of the remaining 60% of the working population of their wealth, that still leaves 30% to do productive work, and long term the Solow model says only technology shocks, exogeneous, will matter. So in a population of 150M working people, with 50M working for government (state, local, fed) and this 50M adversely affecting the output of 50M more working people (leaving their output as zero, meaning they rob this 50M of their output), leaving only the remaining 50M to do any “real work” to move the economy forward, you still, long term, have 50M productive people and are dependent on whatever technology is developed by this population for long-term growth rates. So essentially the percentage of government is irrelevant in a Solow long term analysis. That’ s not to say government decrees are irrelevant: if government forbade any new technology from being developed, as happened in China (perhaps due to their large population holding labor-cost saving technologies back, as well as emperor decrees) then yes, long term, government can hold back a society. But the simple Solow model says, for most “normal” governments, the opposite is true–governments (and deficits for that matter) don’t matter in a free (-ish) market, only technology does, and society should be geared for helping technology move forward (by for example securing strong property rights, including intellectual property rights like patents).

59 Steven Kopits May 18, 2012 at 5:24 pm

I did not say the state is a parasite. I said the relationship of the dictator to the population is parasitic. Most feathers with the least hissing, that kind of thing. My models here are Mubarak and Egypt, Syria, or Iran. Underlying this is really an issue of property rights, not primarily technology. Yes, technology breakthroughs can be important in growth, and thus to the development of society and democracy (consider mobile phones and the internet in Russia or Syria, for example), but I am making a more basic point about property rights. Countries tend to remain poor because property rights (institutions) are under developed, and such as they are are controlled by the dictatorial elite. You can address this issue by allowing the elites to formally capture part of their value-added (bonus payments) in return for direct oversight over their activities (IMF audits, for example). You want to make the relationship symbiotic, rather than parasitic.

This is how I would have handled Greece, personally. What’s worth buying in Greece? Only good governance. If you can get than, it’s worth a trillion dollars of debt write-offs.

60 Ricardo May 19, 2012 at 10:30 am

If economists know so much about motivating people in the real world, why are there lots of economists who are academics or mid-level bureaucrats and so few who are military commanders or CEOs?

Yes, material incentives matter. No, they are not the only or even necessarily the most reliable way of motivating people to do what you want them to.

61 Nice May 21, 2012 at 9:26 pm

Ricardo, You are incorrect. A number of leaders do have economics education. However, that is more because smart people who already have a high probability of success are more likely to major in economics.

62 Anne May 18, 2012 at 4:12 pm

Looks like Jared Diamond is trying to stay relevant.

63 otto May 18, 2012 at 4:51 pm

Does Diamond have a book coming out himself?

64 jim May 18, 2012 at 4:52 pm

Diamond’s Collapse was shockingly weak and clearly a blatant attempt to cash in on the cult of environmentalism.

65 Will May 18, 2012 at 5:21 pm

Comment quality is inversely proportional to political association

66 TallDave May 19, 2012 at 12:13 am

I can’t decide if this a criticism of jim, Jared, or both.

67 Jon May 19, 2012 at 11:47 am

Moreover, “Collapse” was littered with factual errors, notably the whole Easter Island business.

68 Steve Sailer May 18, 2012 at 5:45 pm

I agree with much that Acemoglu and Robinson write, but the book would cause Sir Karl Popper to tear his hair out. The authors’ view of history is almost wholly non-falsifiable. Anything good is the result of “inclusive” institutions and anything bad is the result of “exploitive” institutions.

69 Steve Sailer May 18, 2012 at 5:47 pm

Ron Unz discusses “Why Nations Fail” in The American Conservative:

http://www.theamericanconservative.com/articles/chinas-rise-americas-fall/

70 JL May 18, 2012 at 6:51 pm

That’s a very good article.

71 dearieme May 18, 2012 at 7:26 pm

But not remotely gloomy enough.

72 JL May 18, 2012 at 5:49 pm

The blurb business is weird. It seems that neither Fukuyama nor Diamond liked “Why Nations Fail” much at all, yet both provided laudatory blurbs for it.

73 Steve Sailer May 18, 2012 at 5:56 pm

I’ve written skeptical reviews of Jared Diamond’s books, but Diamond is a heavyweight thinker. Reading Diamond challenges me, while Acemoglu/Robinson just has me rolling my eyes in frustration at what a terrible job they do of arguing for views I am in strong sympathy with. Like most people, I am in favor of inclusive institutions and against exploitive ones, but the quality of historical argument in much of “Why Nations Fail” is childish.

74 Steve Sailer May 18, 2012 at 6:06 pm

As Tyler implied in 2007, of all these Theory of Everything books, Michael H. Hart’s “Understanding Human History” offers the model that is perhaps both the most pluralistic and reductionist:

http://marginalrevolution.com/marginalrevolution/2007/09/why-did-the-ind.html

75 Nanonymous May 19, 2012 at 12:33 am

It really is amazing how much the public discourse has changed over such a short period. In 2012, Cowen would not, even for a millisecond, think about endorsing the evil racist book such as Understanding Human History.

76 Steve Sailer May 19, 2012 at 1:30 am

Perhaps, but our host is less naive and better informed than he used to be. He’s a good learner and he’s learned a lot from his commenters over the years.

77 Steve Sailer May 18, 2012 at 7:12 pm

Okay, the basic difference between Diamond and Acemoglu is that Diamond is smart enough and well-informed enough that his political correctness is fairly disingenuous. His Guns, Germs, and Steel was a big step backwards in brilliance of insight from his earlier The Third Chimpanzee, but creating an elaborate rationalization for political correctness in GGS at least made him a rich man. He dodged debates with his best-informed critics because he understood the weaknesses in GGS. And, if you read his later stuff carefully, you can notice subtle signs that he’s actually a more heterodox thinker than GGS would suggest (e.g., “Collapse’s” complaints about the effects of immigration into America and Australia on the environments).

In contrast,while Acemoglu’s political correctness certainly has promoted his career, as far as I can tell, though, Acemoglu is a True Believer. He comes across as being wholly untainted by the slightest doubts in the conventional wisdom.

For example, Diamond’s comparison of the differing fates of Haiti and Dominican Republic, both in Collapse and after the Haitian earthquake reads like 80 proof crimethink compared to Acemoglu/Robinson’s embarrassing handling of the same subject. Diamond even mentions that the dictator Trujillo’s policy of whitening the D.R. population by recruiting European immigrants (Trujillo was the only national leader enthusiastic about bringing in German Jewish refugees in the late 1930s), has helped the D.R. relative to Haiti. Acemoglu’s head would explode if that thought ever lodged in his brain! It doesn’t even occur to Acemoglu that the massacre of most of the whites in Haiti after independence might have hurt Haiti’s future economic development …

78 Ray Lopez May 18, 2012 at 8:07 pm

Whitening? LOL reminds of me of a sermon I heard in Greece about a certain do-gooder (it was actually a eulogy) who “whitened Black Africa” with good deeds, and the eulogist said it without a hint of irony.

79 ohwilleke May 18, 2012 at 10:33 pm

The big problem with an institutional approach to development economics is that we know that precisely the same institutions work differently when embedded in different societies. Japan’s civil code is almost a verbatim translation of a European model (Germany’s IIRC), yet they way those laws work in practice is very different. Sudan’s legal and political system were closely modeled on England when it won independence and didn’t last two election cycles because it didn’t have the human capital of lawyers and technocrats and skilled domestic civil servants familiar with the implicit expectations associated with its institutions to make it work. Putting Americans in the same jobs previously carried out by local employees in Haiti at their port following a disaster increased the volume through the port per day roughly tenfold. Korean Air changed is accident rate for its commercial passenger service with most of the same employees primarily by changing the language spoken in the cockpit from Korean to English. African economic development trends track ethnic group boundaries more closely than national boundaries. Corporations that have built precisely the same factories from the same blue prints with the same organization chart in two different locations (even within the U.S.) usually find that the factories operate completely differently from each other in practice. Communism applied in the Soviet Union didn’t look anything much like Communism applied in China. The arrangements in place in a political economy come with far more implicit assumptions than even sophisticated observers realize are there – many are impossible to see until someone who isn’t aware of them tries to implement them. It would be like the naiive assumption that you could recreate something that was a reasonable facsimile of the Christian religion as practiced in reality simply by reading the Bible – it sounds possible, but it isn’t, there is a lot more to “the tradition” than most people realize.

Culture, human capital, and historic experience with using institutions to run a society matters every bit as much as the institutions themselves. There are very few examples in development economics of replication of institutional success. Diamond is far too generous in attributing 50% of economic development outcomes to institutions. The reality is probably closer to 10%-20%. Certainly, one needs institutions that work to make an economy work, but one doesn’t need any particular institutions, and if the relationship between the institutions and the other pieces of the puzzle aren’t organic, they will properly fail.

Economists, who like physicists, are natural reductionists, are perhaps the worst people in the world to actually do development economists. You need anthropologists, community organizers, ministers, local government politicians, small town lawyers, local historians, elementary school teachers, and other people who are comfortable with the immense morass of details and personalities and sensibility and attitudes that go into the seething masses of economic and political arrangements that economists can fruitfully summarize in countries where the reality has already been honed to a meaningful approximation of the model subject to hordes of unstated and universally shared assumptions many of which are unstated because the people making them don’t know that they are making the assumptions.

80 Alan May 18, 2012 at 10:48 pm

Preamble: this is a sincere attempt to elicit information. I don’t know the answers to my questions here.

To what extent, in the historical record, is libertarianism associated with the failure or success of nations?

Starting from the Industrial Revolution (choose a date or era when you think that happened), which actually existing nation states, however long-lived or otherwise, have been the closest to libertarian (definitions might vary)?

81 The Keystone Garter May 19, 2012 at 12:09 am

Commenting just on the excerpt: USA and Canada fought once and had peace; buildings didn’t have to keep getting arsoned. Australia no neighbours and protected by UK. Iron actually creates physical wealth whereas diamonds are bling. Diamonds are cheaper to transport and easier to stealth away.
Reading about the Song Dynasty: everything points to them getting IR. They even had humanists like in Renaissance Italy. I used to think they turned inward, but reading the wiki they were able to invent naval tech enough to beat conquerors. I guess good farmland is a blessing and a curse. The farmland gives you the ability to get populated and get to a steam engine. But it also means you aren’t as specialized in raiding your neighbours as nomadic conquerors, like Mongols. Songs didn’t get the mechanical multiplier of steam engines in time; they were probably less than 200 years away, maybe only decades away.
Europe, especially UK, is a farming culture. Geography is far away from non-farming lands. Not 100% sure. Richard the Lionheart and Saladin had respect for eachother even though both were expansionist…
Europe had scribes who needed farms to copy scripts every 150-200 years. And the Renaissance used Greeks. So I’ll say good farms, and the ability to escape conquering for about 500 years. Scales to modern nation states. China had good farms in 1990s, Green Revolution enabled 3rd world. I guess a lot of the conquering is from within now, purges and civil wars.

82 TallDave May 19, 2012 at 12:37 am

It wouldn’t have mattered without the natural philosophy and property rights of Europe/Britain to develop the concept. Steam engines have been around for thousands of years, and the first modern ones were mainly good only for the purpose of clearing water from mines, which added huge value to the mines. For the most part, mechanical multipliers only work if your labor is highly paid enough (i.e. productive enough) to make the investment in capital vs labor worthwhile.

83 The Keystone Garter May 19, 2012 at 10:40 am

IDK about property rights. Songs had a superior education system then Europe; they picked the brightest better, so I assume they could by more crap. Alphabet of Europe looks more decisive than proprty rights. The wicked warrior symbols guarantee uneducated population.

What do property rights get you? The Songs had superior venture cap if that’s what you mean. They had paper currency centuries before Europe. Their rich funded engineers. I was thinking of including that too but it seems forced. I guess you are basically saying the property rights funded ship trading, but the Songs had that well before Iberian Penninsula and Netherlands. They just didn’t go far enough up the Atlantic Coast. It was politicians and military leaders who had resources in Songs, and clergy in Europe. Either way, whoever figures out Steam Engine wins. Yep, pumping water is 1st application. You win when you figure out rotary motion. Then you have an unlimited labour force, regardless of property rights. It seems tougher to conquer lots of little tribes in Europe than four or so big ones in SE Asia. When the Song leaders killed themselves they submitted, whereas the Huns et al driving Europe nations further West didn’t seem like much of a strategic edge at all.
What did property rights do? Yeah, pumping water with steam engine is a key to rotary (piston?) motion, but it is that rotary motion that means you aren’t stuck with a limited labour force; means AGW only brake. Songs figured out to use coke just before deforestation but a brake on their blast furnaces. Give me a single iron mine and my town will crush your property owning continent. Mayans I think, deforested and climate changed to irrelevance. Steam Engine with rotary power is just like computer revolution.
Mongols were a dead end. Conquering doesn’t need literacy and farms give a reason for accounting, and eventually a literate rich person (who has resources for military protection whether or not Property Rights), funds a metallurgist who uses a new type of mine pump to make more iron. Tricky to go from there to rotary motion. That gets you all industries, not just mining. Cannon is inevitable market for blast furnace too. Makes me wonder what would happen if Mongols conquered a cannon, or a steam-powered water pump, or even early engines. Would they have settled down?

84 TallDave May 20, 2012 at 2:30 am

Why build a mechanical pump powered by steam when workers are cheaper? Metal is very expensive in pre-industrial times. Why do any of it without a profit motive?

Incentives matter! Property rights are vastly more important than people tend to realize — they were a primary reason Europe defeated Islam and dominated the world. Like the Greeks who defeated the Persians at Plataea, the Europeans at the Lepanto and the Second Siege of Vienna were shocked by how much wealth their invaders carried. But the Pashas had no choice — they could not leave their wealth at home or it would be stolen; they did not have Western notions of property rights. Meanwhile, the (inferior) wealth of the Europeans was being invested in competitive enterprises striving to build the best cannons.

The iron from your mine would end up as superior weapons wielded by my property-owners.

85 Jon May 19, 2012 at 12:38 am

Of course the brilliant thinkers Acemoglu and Robinson are correct. 50% of Haiti’s problems is that it does not have the same Constitution as the USA.

86 Doc Merlin May 20, 2012 at 11:53 am

Many latin american countries have essentially the same constitution as the US, yet they have terrible outcomes.

87 economist1 May 19, 2012 at 12:45 am

More TallDave faile:

“And democratic socialism is currently undergoing a spectacular collapse in the EU — a party is about to be elected in Greece on the platform of bankruptcy.”

Yes- that’s why Germany, the Netherlands, Austria, Sweden, and Denmark are having debt crises right? No, it’s the countries with much smaller welfare states like Spain and Ireland.

Government Spending/GDP over 50% in Sweden, under 35% in Ireland 2001-2007

Austerity plans hurt, but the true social democracies of Scandinavia and Northern Europe are doing just fine.

88 Michael G Heller May 19, 2012 at 2:13 am

There is a ‘political economy’ review of Why Nations Fail here:
http://www.project-syndicate.org/blog/the–poor-economics–in–why-nations-fail-

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90 Steve Sailer May 19, 2012 at 4:01 am

Here’s what Jared Diamond wrote in The Guardian (of all places) after the Haiti earthquake in 2010 on why the Dominican Republican isn’t as impoverished as Haiti:

“A second social and political factor is that the Dominican Republic – with its Spanish-speaking population of predominantly European ancestry – was both more receptive and more ­attractive to European immigrants and investors than was Haiti with its Creole-speaking population composed overwhelmingly of black former slaves. …
Hence European immigration and investment were negligible and restricted by the constitution in Haiti after 1804 but eventually became important in the Dominican Republic. Those Dominican immigrants included many middle-class businesspeople and skilled professionals who contributed to the country’s development.”

http://www.guardian.co.uk/world/2010/jan/15/forces-working-against-haiti

In contrast, you can read Acemoglu and Robinson’s answer to Diamond on their to blog here:

http://whynationsfail.com/blog/2012/4/3/why-is-haiti-so-poor.html

As I’ve said, Diamond’s Blank Slateism is partly an act, while Acemoglu/Robinson come across as rather dim True Believers.

Is it really true that Acemoglu is considered a rising superstar in economics? Wow …

91 Nanonymous May 19, 2012 at 10:58 am

According to Wikipedia:

“He is among the 10 most cited economists in the world according to IDEAS/RePEc. His most cited article is “Colonial origins of comparative development” (2001).”

Brief description of that article: colonial experience is the cause of Africa’s problems. The authors mention Ethiopia repeatedly. I wonder if they are aware that it was never a colony.

92 Ricardo May 19, 2012 at 12:20 pm

University of Michigan economist David Albouy took the “Colonial Origins” paper to task in what appears to be pretty devastating fashion. Here is the abstract of his critique:

In a seminal contribution, Acemoglu, Johnson, and Robinson (2001) [“Colonial Origins of Comparative Development”] argue property-rights institutions powerfully affect national income, using estimated mortality rates of early European settlers to instrument capital expropriation risk. However 36 of the 64 countries in their sample are assigned mortality rates from other countries, typically based on mistaken or conflicting evidence. Also, incomparable mortality rates from populations of laborers, bishops, and soldiers – often on campaign – are combined in a manner favoring their hypothesis. When these data issues are controlled for, the relationship between mortality and expropriation risk lacks robustness, and instrumental-variable estimates become unreliable, often with infinite confidence intervals.

93 TallDave May 20, 2012 at 11:53 am

Hey, infinite confidence intervals work fine in other respectable fields like climate science.

94 Doc Merlin May 20, 2012 at 11:54 am

If by “rising star” you mean “super star” then yes.

95 The Keystone Garter May 19, 2012 at 10:45 am

And why nations fail doesn’t make sense last 120 years (when longevity has increased). Property Rights means optimal property rights. Not taxing derivatives and not Buffett Ruling is clearly a loser; your nation is basically poor save for cheapest food on Earth and Asian electronics. And you used to have biggest middle class. The problem for USA is property rights.
Many nations that are comparatively poor now are doing quite well by historic standards because galvanized steel lets you store harvests. Really mean, why do some nations grow fast?

96 The Keystone Garter May 19, 2012 at 10:46 am

Ethnic strife obviously bad.

97 The Keystone Garter May 19, 2012 at 10:57 am

…yeah, those few surviving manuscripts were a big EU edge in concert with few ancient surviving manuscripts. I saw a quick animation of last 1000 years of EU conquering, and it was impossibile to hold the city states of Germany for long. With two dozen different peoples in EU all with good farms, there are good odds one of them will rediscover Grecian works.
How did ancient Greece get such respect for humanism and knowledge, enough to make: Epicurous, Hero, Archimedes…
Whatever Greece did (only 10% democracy but maybe that was inclusive enough?) seems to be very important. I don’t think the Songs had that resource; they had to start from scratch in 900s AFAIK. The library of Alexandria would’ve settled this.

98 The Keystone Garter May 19, 2012 at 11:04 am

typo: in concert with farms (funding Churches who kept books).
Diamond is right that Europe has conquer-resistant geography. Roads get you to Rome, but how to you take out France, Spain and UK after that? And the different tribes of Europe fought fiercely; not surrenderers like Swiss and Swedes and Italians and Spaniards last century.
The Mongols were too spread out, they integrated before completely conquering. They defeated everyone a tiny bit, but never built roads. Never developed technology, like Martel stole stirrup in only 5 years.
Key is the Greeks. A couple of cities there, gave birth to Renaissance. Italy got there, but with that many hard to conquer tribes, someone in EU would’ve gotten there. I’ll wiki what made the Greeks.

99 The Keystone Garter May 19, 2012 at 11:30 am

Solon, for sure. A social democrat. I learned about Epicurous from CBC radio. That is where property rights were taken from some Canadians to fund a public broadcaster. Impossible in USA except for Northern fringe.
A 1400s Italian found Epicurous and I think copied everything in poetry, to hide it from the Church. Wasn’t experimental theory of molecules and motion but predated Galileo a century and a 1/2.
Solon is someone the USA could learn from. He abolished all laws except for homocide. Before him not paying rent could make you and family a slave. Kind of like what your prisons do now. He let more commoners be jurors and probably judges/lawyers. That is the foundation of rule of law. He let commoners charge officials. Modern democracy. He helped encourage shipping trade.
It looks like the greeks regetting literacy in 9th century BC was key.
There geography was perfect. Islands and mountains made city states, which were like EU tribes. Ideas from one can diffuse to all. And hard to conquer. Best of both worlds. Solon goes right up there with the big 3 engineers, in my books. Conquered by romans, like Songs were by Mongols. But the Greeks gave them enough of a head start, in concert with local farms feeding churches; Solon et al gave EU a massive head start. The Renaissance ensured mechanical power ensured a EU world. Of course, with tanks EU really can be conquered…at least until they lose the port resupply trying to take Moscow.

100 Doc Merlin May 20, 2012 at 11:56 am

“That is where property rights were taken from some Canadians to fund a public broadcaster. Impossible in USA except for Northern fringe.”

Actually we have federally funded radio stations.
Also, generally canada is LESS socialist than the US, not more. (With the exemption of the health care industry, where the US is 40% socialized and canada is more than 40%)

101 The Keystone Garter May 20, 2012 at 4:51 pm

Socialist generally means finding income or services up to the first $10000/yr for individuals. Prolly some states do this better than Canada. You guys have food stamps and is a State that gives 5 years lifetime welfare. If you waste $1.5T tendering for and funding the R+D of a Jet that has been hacked by China and is not stealthy at 1970s fighter jet radar bands…you can call it socialist but it isn’t. Same money to you Earth Observation satellites, almost identical industry but used by farmers and water engineers, that adds to Q-of-L. Prisons full of blacks without the right to vote and imprisonment for dealing and using weed, is not socialism. That is slavery.

USA is about 9.5x Canada GDP assuming balanced budgets over long-term. USA’s 2010 federally funded CPB budget $422M, public radio slice: $94M.
Canada’s CBC 2006 budget from fed gov: $946M (also add $60M non-reoccuring grant). Wiki doesn’t say radio %.
Our federal funding is 20x+. It was a figure of speech when I said you have no NPR: you have little NPR.

Your NPR content is complete crap, from the little I’ve seen. Grover is funny. Nightly biz report is a list of stock closing prices. I used to be able to get these from newspapers in one glance. The one day I watched it the old guy railed against public investment in economy?! Our CBC financial analysis is sophisticated. During the recession some of the best discussions on Earth were on CBC. I’m watching hockey on CBC right now. Is generally efficient use of cast. Didn’t bid for hockey theme song and need to axe Grape’s $600k salary or lose him. Was watching a 2006 movie about short-range bombers used in WWII just before final good cast episode of SNL. A character I will miss is the undereducated Target Store lady. Penelope is just scary once I met a friendly real version in our communist city. CBC music is classical crap, kept me away from radio until recently: not much ads budget I guess.

102 The Keystone Garter May 20, 2012 at 4:58 pm

…I guess what you could do is fund it, try out some content, and then clawback the funding? Stuck with chicken-and-egg quality content problem. Didn’t Wiig already leave SNL? Those Ssamberg skits were my favourite part. The show got good again after around 2006. Hiring pretty girls at least. Sudeukis is a good actor too. That French dance skit is amazing. CPB should just fund L.Michaels’s writers. I wonder if that Rolling Stones Foo medley will make it to Youtube?

103 The Keystone Garter May 19, 2012 at 11:31 am

That is why the greeks are so lazy today. They figure they did all their work 2500 years ago.

104 The Keystone Garter May 19, 2012 at 11:52 am

…wasn’t experimental, but Epicurious’s 1400s copycat was a different world-view than Catholic Church; certainly empirical. I consider him like the 1st failed Bacon, with Galileo being the 2nd successful Bacon.
…his people let Solon take power instead of traditional rich nobleman. So you need to find out why they liked him. They were as loyal to him as Martel’s army was to Martel. Martel won with the same group around him since youth.

105 Gw May 19, 2012 at 11:56 am

While lots of great discussion, I am very surprised not see any mention of the cultural/institutional propensity to save! Or, said another way, how much do we care about the future. For e.g., in northern europe, by virtue of potentially a few months out of the year, if you didn’t already have a store of food and shelter, you could very easily die, creating an incentive to plan and produce surpluses of food and shelter. This subsequently translated into a cultural attribute of saving/planning to the point where by we now know about the “Protestant work ethic” as some have claimed (max veber) to be some of the roots of modern capitalism.

By contrast, the south did have this incentive to plan for the future as the time period between consumption and production was compressed and thus no real need to plan and save, leading to the the type of cultural institutions we now see in the south…

106 The Keystone Garter May 19, 2012 at 12:30 pm

Yep, Protestant superior religion to Catholicism, Buddhism and Islam from the point of view of getting to an industrial revolution. The most positive influence I had growing up was a Protestant relative who worked in an Esso and often babysat me rom there. That Prairie work-ethic helped Canada win world wars. The bad thing about RW is can’t moderate bad LW policies. New Frnace PRez wants to lower retirement age to 60. Paying poor people is fine if have resources, but paying people not to work if they aren’t crazy or sickly, is about the stupidest thing I ever heard of. Unless they are building carbon bombs or Panzer tanks…In Canada, we had Pearson who taught Trudeau who taught Chretein who was supposed to teach Dion. Chretien beat the corrupt LWers who killed our strongest economic province 1950s-1995. Our RW after the gov didn’t help dust bowl farmers enough during Depression, decided should be no gov. (and there doesn’t have to be efficiency with oil rents). The moderate RWers here were lead by a politican who took bags of money from a German defense contractor (didn’t win the bid). He was not put in jail by Chretein because the PM figured $13M court costs, vs $2M settlement, with Canada about to default on debt in 1990s….his son got a reality show for RW media.
I’m on the USA bandwagon to efficiency now.

107 The Keystone Garter May 19, 2012 at 12:33 pm

Islam, the main concern is lack of women’s rights. That might have been useful in 9th century central Asia where marauding conquering meant you want women to stay at home and raise families. But French losing platform was hostile to immigration, the French advantage over aging Germany. Probably because in French ethnic ghettos, women get raped by Islamic refugees.

108 The Keystone Garter May 19, 2012 at 12:51 pm

The problem I have with Protestants is often too chummy with Christian crazies. I’d rather just call myself an agnostic-atheist and go to hell if god doesn’t see humanism my way. Christians don’t get we have uncertain evidence of truth (other than self) so can’t stick with a book written by a 300AD book club. Aristotle was probably an atheist or a pantheist (everything alive and holy). If you don’t investigate this as an adult, it is hard to take me seriously if you are anymore than a mild Christian. I asked my grandfather about the Mormon god. He said was a compulsive horse thief, always broke the green parts off of carrots for no reason, and never paid a saloon bill. Read into that what you may.
The annoying thing is that when miraculous events happen, you have to attribute that to fluke or aliens or some sort of absentee god. It makes evil seem more likely to happen (depressing), and isn’t as beautiful (uninspiring), so mine might not be the ecoonmically best belief system.

109 The Keystone Garter May 19, 2012 at 12:04 pm

It is funny discussing ecoonmics with GOPers and Libertopians. Property Rights. Property Rights. Property Rights. Like if we give all our resources to B.Gates. W.Buffett, the Sultan of Brunei and the Mexico telecom guy, a utopia will result. As soon as start to think about where to draw the line, you stop voting for RW parties at least in the Western World.

110 Steven Kopits May 20, 2012 at 9:34 am

In thinking about property rights, we can imagine a scale in which all property rights are vested in the dictator, at one extreme, and all property rights are vested in the individual at the other. All countries are somewhere in the spectrum in between. If democracy is just decayed dictatorship, then it should be quite possible to document and, to an extent, quantify this process. Think of something like the Gini coefficient. (Oooh, I feel a PhD thesis coming on….)

Now, when liberals (to you, libertarians) speak of individual property rights, they mean first and foremost the right to your own body, freedom of movement, freedom to contract, and the rights to obtain and retain wages and other benefits earned. So, when you state that “in French ethnic ghettos, women get raped by Islamic refugees”, other than being somewhat outrageous, you are referring to issues of individual property rights, in this case, of women to their own bodies and the right to “contract” (engage voluntarily) in romantic relations of their own choosing. In many parts of the world–and not just suburban France–these are critical problems. Some issues include real estate property rights in Brazilian favelas, lack of women’s rights in much of the Arab world, the appalling treatment of Philippino or other imported servants in places like Saudi Arabia and Kuwait, the seizure of private pensions in places like Hungary and Argentina, the muzzling of the media in Russia, and of course, the ridiculous tolls to get across the George Washington Bridge from New Jersey to New York.

111 TallDave May 21, 2012 at 4:35 pm

The right to freedom from violence/coercion is generally regarded as separate from property rights.

http://en.wikipedia.org/wiki/Property_rights

112 TallDave May 21, 2012 at 4:44 pm

The RW argument is that through free exchange, prosperity will be maximized.

The LW argument is that through government coercion, equality will be maximized.

Do you want free prosperity or coerced equality? The great revelation of the 20C was that the latter doesn’t work very well at high levels of coercion, that’s why Communism failed. So we can afford a little of the latter, but in the long run we’re generally better off with more of the former, i.e. property rights.

One of the great misapprehensions of the left is that free-market wealth “inequality” is some sort of intrinsically unjust state of affairs, but in fact it’s just the natural result of free exchange delivering capital to those best able to add value for the benefit of everyone.

113 The Keystone Garter May 20, 2012 at 5:20 pm

Your thesis that women are property is not unreasonable the way cash is needed for a man to show his tail-feathers. At the very least, modify your property range so it bacomes for quandrants and put the Gini on one axis, and actual property ownership on another. If I have a few months saved I can find work easier, for instance. The real world is tricky. The Mexico telecom guy has a lot of cash; is a dictator but at the same time he is worried about inefficiencies of Mexico safety net and he genuinely wants to know how to develop his people. Is holding his cash for now. U2 aims for foreign development but evades local taxes.

114 Vet Specialist in Long Island June 11, 2012 at 2:05 pm

Nations fail because of how the government greedily do everything for their self interest. All those promises that they made before the are elected, where is it now?

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