Daron Acemoglu

A World Without Work: Technology, Automation, and How We Should Respond
by Daniel Susskind
Published 14 Jan 2020

As old methods of production were overhauled by technological progress, people were displaced from their familiar tasks, but new tasks had to be done, and displaced workers were able to find jobs involving those activities instead. Figure 7.3: Horses and Mules and Tractors on US Farms, 1910–60 (000’s)19 For Daron Acemoglu and Pascual Restrepo, two leading economists, this version of the changing-pie effect provides a powerful response to Wassily Leontief’s pessimism about the future of work.20 His claim, remember, was that “what happened to horses will happen to people”: just as tractors and cars put horses out of work, so new technologies would put human beings out of work as well.21 Acemoglu and Restrepo argue that there is an important difference between human beings and horses that explains why Leontief has been proven wrong up to now.

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As Leontief put it, lowering workers’ wages could “postpone [their] replacement by machines for the same reason that a reduction of oats rations allocated to horses could delay their replacement by tractors. But this would be only a temporary slowdown in the process.”31 As machines keep becoming increasingly capable, many human beings will eventually be driven out of work. In fact, some economists have already seen this happening in the data. When Daron Acemoglu and Pascual Restrepo looked at the use of industrial robots in the United States from 1990 to 2007, they found a contemporary case of the substituting force overrunning the complementing force, reducing the demand for workers across the entire economy. Remember that in thinking about new technologies, we are used to stories like that of the ATM: machines displace some people, but also raise the demand for their work elsewhere, and overall employment stays the same or even rises.

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In a recent disagreement, one economist accused two others of presenting “a stream of assertions and anecdotes”; the pair responded that their accuser was throwing “a lot of mud, hoping that some if it would stick.” See Jeffrey Sachs, “Government, Geography, and Growth,” Foreign Affairs, September/October 2012; and the response from Daron Acemoglu and James Robinson, “Response to Jeffrey Sachs,” 21 November 2012, http://whynationsfail.com/blog/2012/11/21/response-to-jeffrey-sachs.html.   4.  Data from Angus Maddison, Historical Statistics of the World Economy, http://www.ggdc.net/maddison/oriindex.htm (2010).   5.  Britain’s rate of growth, though, is again contested among economists.

Falling Behind: Explaining the Development Gap Between Latin America and the United States
by Francis Fukuyama
Published 1 Jan 2006

Sokoloff, “Inequality, Institutions, and Differential Paths of Growth among New World Economies,” paper presented at the meeting of the MacArthur Research Network on Inequality and Economic Performance, Boston, 2001. See also Daron Acemoglu, Simon Johnson, and James A. Robinson, “The Colonial Origins of Comparative Development,” American Economic Review 91 (2001): 1369–1401. This is not the place for theoretical discussions, but note that “security of property rights” is a notoriously fuzzy concept. For one, in a Schumpeterian world of creative destruction, property would be secure only if it were defended by barriers to entry (see Daron Acemoglu, “The Form of Property Rights: Oligarchic vs. Democratic Societies,” Working Paper, Department of Economics [Cambridge: Massachusetts Institute of Technology, 2005]).

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These resources Absence of Expropriation Risk Index 12 10 BRA 8 ARG 6 CHL MEX VEN PRY COL CRI ECU JAM DOM PAN PER BOL HND NIC GTM HTI 4 2 0 −5 −4 −3 −2 −1 0 1 2 Log Population Density in 1500 3 4 5 figure 7.7 Absence of Expropriation Risk versus Log Population Density in 1500 in Former Colonies. Source: Daron Acemoglu, Simon Johnson, and James A. Robinson, “Colonial Origins of Comparative Development: An Empirical Investigation,” in American Economic Review 91 (2001): 1369–1401. 174 Institutional Factors in Latin America’s Development Absence of Expropriation Risk Index 12 10 8 GUY 6 BRA CHL MEX COL VEN PRY CRI JAM ECU URY ARG DOM PAN PER BOL HND NIC GTM HTI 4 2 0 0 1 2 3 4 5 6 Log Settler Mortality Rates 7 8 9 figure 7.8 Absence of Expropriation Risk versus Log Settler Mortality Rates. Source: Daron Acemoglu, Simon Johnson, and James A. Robinson, “Colonial Origins of Comparative Development: An Empirical Investigation,” in American Economic Review 91 (2001): 1369–1401.

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Amsden, Asia’s Next Giant: South Korea and Late Industrialization (New York: Oxford University Press, 1989). 8. See Dani Rodrik, Where Did All The Growth Go? External Shocks, Social Conflict and Growth Collapses (London: Centre for Economic Policy Research, 1998). 9. For example, see Daron Acemoglu and James A. Robinson, “The Colonial Origins of Comparative Development: An Empirical Investigation,” American Economic Review 91, no. 5 (2001): 1369–1401; Daron Acemoglu and James A. Robinson, Economic Origins of Dictatorship and Democracy: Economic and Political Origins (Cambridge: Cambridge University Press, 2005). 10. Philippe C. Schmitter and Guillermo O’Donnell, Transitions from Authoritarian Rule: Tentative Conclusions about Uncertain Democracies (Baltimore, MD: Johns Hopkins University Press, 1986). 11.

Straight Talk on Trade: Ideas for a Sane World Economy
by Dani Rodrik
Published 8 Oct 2017

Krueger, “The Political Economy of the Rent-Seeking Society,” American Economic Review, vol. 64(3), June 1974: 291–303; Gene Grossman and Elhanan Helpman, “Protection for Sale,” American Economic Review, vol. 84(4), 1994: 833; Dani Rodrik, “The Political Economy of Trade Policy,” in Handbook of International Economics, G. Grossman and K. Rogoff, eds., Amsterdam, North-Holland, 1995. 3. Robert H. Bates, Markets and States in Tropical Africa, University of California Press, Berkley, CA, 1981; Daron Acemoglu and James A. Robinson, “Economic Backwardness in Political Perspective,” American Political Science Review, vol. 100(1), 2006: 115–131; Daron Acemoglu and James A. Robinson, Why Nations Fail: The Origins of Power, Prosperity, and Poverty, Crown, New York, 2012. 4. Charles W. Calomiris and Stephen H. Haber, Fragile by Design: The Political Origins of Banking Crises and Scarce Credit, Princeton University Press, Princeton, NJ, 2014; Simon Johnson and James Kwak, 13 Bankers: The Wall Street Takeover and the Next Financial Meltdown, Pantheon Books, New York, 2012; Luigi Zingales, “Presidential Address: Does Finance Benefit Society?”

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This example is provided by Avinash Dixit and Jörgen Weibull, who show that even with rational Bayesian updating, a common signal may exacerbate posteriors—increase polarization—when priors differ. See Dixit and Weibull, “Political Polarization,” Proceedings of the National Academy of Sciences of the United States, vol. 104(18), 2007: United States 7353. 21. Daron Acemoglu and coauthors show that differences in beliefs need not disappear even asymptotically when there is disagreement over the interpretation (that is, informativeness) of the signals received. See Daron Acemoglu, Victor Chernozhukov, and Muhamet Yildiz, “Fragility of Asymptotic Agreement under Bayesian Learning,” unpublished paper, February 2009. 22. See, for example, Arthur T. Denzau and Douglass C.

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CHAPTER 8: Economics as Policy Innovation 1. Dani Rodrik, “The Political Economy of Trade Policy,” in Handbook of International Economics, G. Grossman and K. Rogoff, eds., vol. 3, Amsterdam, North-Holland, 1995. 2. Daron Acemoglu and James A. Robinson, “Economic Backwardness in Political Perspective,” American Political Science Review, vol. 100(1), 2006: 115–131. See also Daron Acemoglu, “Why Not a Political Coase Theorem? Social Conflict, Commitment, and Politics,” Journal of Comparative Economics, vol. 31(4), 2003: 620–652. 3. Raquel Fernandez and Dani Rodrik, “Resistance to Reform: Status Quo Bias in the Presence of Individual-Specific Uncertainty,” American Economic Review, vol. 81(5), December 1991. 4.

The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies
by Erik Brynjolfsson and Andrew McAfee
Published 20 Jan 2014

Economists including David Autor, Lawrence Katz and Alan Krueger, Frank Levy and Richard Murnane, Daron Acemoglu, and many others have documented this trend in dozens of careful studies.17 They call it skill-biased technical change. By definition, skill-biased technical change favors people with more human capital. FIGURE 9.2 Wages for Full-Time, Full-Year Male U.S. Workers, 1963–2008 The effects of skill-biased technical change can be vividly seen in figure 9.2, which is based on data from a paper by MIT economists Daron Acemoglu and David Autor.18 The lines tell a story about the diverging paths of millions of workers over recent generations.

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Autor, “The Polarization of Job Opportunities in the U.S. Labor Market,” The Brookings Institution, http://www.brookings.edu/research/papers/2010/04/jobs-autor (accessed August 10, 2013); and Daron Acemoglu and David Autor, “Skills, Tasks and Technologies: Implications for Employment and Earnings,” Working Paper (National Bureau of Economic Research, June 2010), http://www.nber.org/papers/w16082. 18. Daron Acemoglu and David Autor, “Skills, Tasks and Technologies: Implications for Employment and Earnings,” Handbook of Labor Economics 4 (2011): 1043–1171. 19. See “Digest of Education Statistics, 1999,” National Center for Education Statistics, http://nces.ed.gov/programs/digest/d99/d99t187.asp (accessed August 10, 2013). 20.

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Putnam, “Crumbling American Dreams,” Opinionator, New York Times blog, August 3, 2013, http://opinionator.blogs.nytimes.com/2013/08/03/crumbling-american-dreams/. 11. “Repairing the Rungs on the Ladder,” The Economist, February 9, 2013, http://www.economist.com/news/leaders/21571417-how-prevent-virtuous-meritocracy-entrenching-itself-top-repairing-rungs (accessed August 10, 2013). 12. Daron Acemoglu and James A. Robinson, “The Problem with U.S. Inequality,” Huffington Post, March 11, 2012, http://www.huffingtonpost.com/daron-acemoglu/us-inequality_b_1338118.html (accessed August 13, 2013). 13. John Bates Clark, Essentials of Economic Theory as Applied to Modern Problem of Industry and Public Policy, (London: Macmillan, 1907), p. 45. 14. W. M. Leiserson, The Problem of Unemployment Today 31, Political Science Quarterly (1916), http://archive.org/details/jstor-2141701, p. 12. 15.

Good Economics for Hard Times: Better Answers to Our Biggest Problems
by Abhijit V. Banerjee and Esther Duflo
Published 12 Nov 2019

,” Harvard Business Review, December 14, 2015 and “Four Fundamentals of Business Automation,” McKinsey Quarterly, November 2016, accessed June 19, 2019, https://www.mckinsey.com/business-functions/digital-mckinsey/our-insights/four-fundamentals-of-workplace-automation. 7 “Automation, Skills Use and Training,” Organisation for Economic Co-operation and Development Library, accessed April 19, 2019, https://www.oecd-ilibrary.org/employment/automation-skills-use-and-training_2e2f 4eea-en. 8 “Robots and Artificial Intelligence,” Chicago Booth: The Initiative on Global Markets, IGM Forum, June 30, 2017. 9 Robert Gordon, The Rise and Fall of American Growth (Princeton, NJ: Princeton University Press, 2016). 10 Databases, Tables, and Calculators by Subject, Series LNS14000000, Bureau of Labor Statistics, accessed April 11, 2019, https://data.bls.gov/timeseries/lns14000000. 11 Robert Gordon, The Rise and Fall of American Growth (Princeton, NJ: Princeton University Press, 2016); “Labor Force Participation Rate, Total (% total population ages 15+) (national estimate),” World Bank Open Data, https://data.worldbank.org/indicator/SL.TLF.CACT.NE.ZS?locations =US. 12 Daron Acemoglu and Pascual Restrepo, “Artificial Intelligence, Automation and Work,” NBER Working Paper 24196, 2018. 13 N. F. R. Crafts and Terence C. Mills, “Trends in Real Wages in Britain 1750–1913,” Explorations in Economic History 31, no. 2 (1994): 176–94. 14 Robert Fogel and Stanley Engerman, Time on the Cross (New York: W. W. Norton & Company, 1974). 15 Daron Acemoglu and Pascual Restrepo, “Robots and Jobs: Evidence from United States Labor Markets,” NBER Working Paper 23285, 2017. 16 Daron Acemoglu and Pascual Restrepo, “The Race Between Machine and Man: Implications of Technology for Growth, Factor Shares and Employment,” NBER Working Paper 22252, 2017. 17 David Autor, “Work of the Past, Work of the Future,” Richard T.

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Katz, Christina Patterson, and John Van Reenen, “The Fall of the Labor Share and the Rise of Superstar Firms,” NBER Working Paper 23396, 2017. 65 For powerful arguments that the rise in concentration has been bad for consumers, see Thomas Philippon The Great Reversal: How America Gave Up on Free Markets (Cambridge: Harvard University Press, 2019); Jan De Loecker, Jan Eeckhout, and Gabriel Unger, “The Rise of Market Power and the Macroeconomic Implications,” working paper, 2018. 66 Esteban Rossi-Hansberg, Pierre-Daniel Sarte, and Nicholas Trachter, “Diverging Trends in National and Local Concentration,”NBER Working Paper 25066, 2018. 67 Alberto Cavallo, “More Amazon Effects: Online Competition and Pricing Behaviors,” NBER Working Paper 25138, 2018. 68 Germán Gutiérrez and Thomas Philippon, “Ownership, Concentration, and Investment,” AEA Papers and Proceedings 108 (2018): 432–37, https://doi.org/10.1257/pandp.20181010; Thomas Philippon, The Great Reversal: How America Gave Up on Free Markets (Cambridge: Harvard University Press, 2019). 69 Facundo Alvaredo, Lucas Chancel, Thomas Piketty, Emmanuel Saez, and Gabriel Zucman, “World Inequality Report 2018: Executive Summary,” World Inequality Lab, 2018. 70 Mats Elzén and Per Ferström, “The Ignorance Survey: United States,” Gapminder, 2013, https://static.gapminder.org/GapminderMedia/wp-up loads/Results-from-the-Ignorance-Survey-in-the-US..pdf. 71 “Poverty,” World Bank, 2019, accessed April 14, 2019, https://www.worldbank.org/en/topic/poverty/overview#1. 72 “The Millennium Development Goals Report 2015: Fact Sheet,” United Nations, 2015. 73 “Child Health,” USAID.com, February 17, 2018, accessed April 14, 2019, https://www.usaid.gov/what-we-do/global-health/maternal-and-child-health/technical-areas/child-health. 74 “The Millennium Development Goals Report 2015: Fact Sheet,” United Nations, 2015. 75 “Literacy Rate, Adult Total (% of People Ages 15 and Above),” World Bank Open Data, https://data.worldbank.org/indicator/se.adt.litr.zs. 76 “Number of Deaths Due to HIV/AIDS,” World Health Organization, accessed April 14, 2019, https://www.who.int/gho/hiv/epidemic_status/deaths_text/en/. 77 Paul Romer “Economic Growth,” in Library of Economics and Liberty: Economic Systems, accessed June 13, 2019, https://www.econlib.org/library/Enc/EconomicGrowth.html. 78 William Easterly, The Elusive Quest for Growth (Cambridge, MA: MIT Press 2001). 79 Ross Levine and David Renelt, “A Sensitivity Analysis of Cross-Country Growth Regressions,” American Economic Review 82, no. 4 (September 1992): 942–63. 80 Daron Acemoglu, Simon Johnson, and James A. Robinson, “The Colonial Origins of Comparative Development: An Empirical Investigation, “American Economic Review 91, no. 5 (2001): 1369–1401, https://doi.org/10.1257/aer.91.5.1369; Daron Acemoglu, Simon Johnson, James A. Robinson, “Reversal of Fortune: Geography and Institutions in the Making of the Modern World Income Distribution,” Quarterly Journal of Economics 117, no. 4 (November 2002): 1231–94, https://doi.org/10.1162/003355302320935025/. 81 Dani Rodrik, Arvind Subramanian, and Francesco Trebbi, “Institutions Rule: The Primacy of Institutions over Geography and Integration in Economic Development,” Journal of Economic Growth 9, no. 2 (2004): 131–65, https://doi.org/10.1023/B:JOEG.0000031425.72248.85. 82 “Global 500 2014,” Fortune, 2014, accessed June 13, 2019, http://fortune.com/global500/2014/. 83 William Easterly, “Trust the Development Experts—All 7 Billion,” Brookings Institution, 2008, https://www.brookings.edu/opinions/trust-the-development-experts-all-7-billion/. 84 “The Impact of the Internet in Africa: Establishing Conditions for Success and Catalyzing Inclusive Growth in Ghana, Kenya, Nigeria and Senegal,” Dalberg, 2013. 85 World Development Report 2016: Digital Dividends,” World Bank, 2016, http://www.worldbank.org/en/publication/wdr2016. 86 Kenneth Lee, Edward Miguel, and Catherine Wolfram, “Experimental Evidence on the Economics of Rural Electrification,” working paper, 2018. 87 Julian Cristia, Pablo Ibarrarán, Santiago Cueta, Ana Santiago, and Eugenio Severín, “Technology and Child Development: Evidence from the One Laptop per Child Program,” American Economic Journal: Applied Economics 9, no. 3 (2017): 295–320, https://doi.org/10.1257/app.20150385. 88 Rema Hanna, Esther Duflo, and Michael Greenstone, “Up in Smoke: The Influence of Household Behavior on the Long-Run Impact of Improved Cooking Stoves,” American Economic Journal: Economic Policy 8, no. 1 (2016): 80–114, https://doi.org/10.1257/pol.20140008. 89 James Berry, Greg Fischer, and Raymond P.

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Department of Energy: Ernest Orlando Lawrence Berkeley National Laboratory Technical Report, 2015, accessed June 16 2019, https://eta.lbl.gov/publications/benefits-leap frogging-superefficiency. 15 Maximilian Auffhammer and Catherine Wolfram, “Powering Up China: Income Distributions and Residential Electricity Consumption,” American Economic Review: Papers & Proceedings 104, no. 5 (2014): 575–80. 16 Nicholas Stern, The Economics of Climate Change: The Stern Review (Cambridge, UK: Cambridge University Press, 2006). 17 Daron Acemoglu, Philippe Aghion, Leonardo Bursztyn, and David Hemous, “The Environment and Directed Technical Change,” American Economic Review 102, no. 1 (2012): 131–66. 18 Daron Acemoglu and Joshua Linn, “Market Size in Innovation: Theory and Evidence from the Pharmaceutical Industry,” Quarterly Journal of Economics 119, no. 3 (2004): 1049–90. 19 Hannah Choi Granade et al., “Unlocking Energy Efficiency in the U.S.

Getting Better: Why Global Development Is Succeeding--And How We Can Improve the World Even More
by Charles Kenny
Published 31 Jan 2011

Clark’s journal reports the discomforts of the journey for his companions—at one point several men “had the disentary, and two-thirds of them with ulsers or boils, some with 8 or 10 of those tumers.” Others of the party complained of rheumatism. But of the thirty-three members of the expedition, only one died—of a distinctly unconta-gious case of appendicitis. According to Daron Acemoglu and Simon Johnson from Harvard, alongside James Robinson from MIT, the altogether more pleasant experience of Lewis and Clark compared to Mungo Park has a lot to teach us about current levels of income around the world. Acemoglu, Johnson, and Robinson have produced a theory of institutional development based on different experiences of colonization.

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Nonetheless, there is still some reason to believe in a longer-tem role for health and education in determining levels of income. For example, Jeffrey Sachs and his colleagues have made a strong case that at least some of the impact of climate on economic performance may emerge directly through a health channel—not just indirectly through an impact on the quality of institutions, as suggested by Daron Acemoglu and his coauthors. In particular, the tropics are associated with more persistent malaria, and this has a significant impact on worker productivity. There is some further evidence discussed in Chapter 6 that links health outcomes to better economic performance. And the importance of government institutions to long-term economic growth suggests a role for education beyond just that of creating human capital.

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It may be, then, that over the very long term, improved health and education may play a role in improving growth outcomes.30 Nonetheless, the short conclusion of this survey of the evidence surrounding economic growth is that expanding GDP per capita is a complex, context-dependent phenomenon reliant on intricate and varied institutional structures. As MIT’s Daron Acemoglu puts it with regard to the growth performance of North versus South Korea: “We can be fairly confident that today South Korea is much richer than North Korea because of its divergent (and more growth-enhancing) institutional path. But we do not know whether this is mostly because of South Korea’s economic institutions that protect property rights, because of its better educational institutions, because of its greater state capacity enabling the provision of basic public goods, because of its greater financial development, or because of the political institutions that South Korea developed gradually after separation.”31 Overall, we are far better at suggesting the fifteenth-century antecedents to modern wealth than we are at working out the policy keys to future growth over the medium term.

13 Bankers: The Wall Street Takeover and the Next Financial Meltdown
by Simon Johnson and James Kwak
Published 29 Mar 2010

Kevin Phillips, Wealth and Democracy: A Political History of the American Rich (New York: Broadway Books, 2003), 239–40; Hofstadter, American Political Tradition, supra note 20, at chapter 7; Nathaniel Wright Stephenson, Nelson W. Aldrich, supra note 38; Edmund Morris, Theodore Rex (New York: Random House, 2001). 46. Daron Acemoglu and James A. Robinson, “Economic Backwardness in Political Perspective,” American Political Science Review 100 (2006): 115–31. 47. On income levels, see Daron Acemoglu, Simon Johnson, and James A. Robinson, “The Colonial Origins of Comparative Development: An Empirical Investigation,” American Economic Review 91 (2001): 1369–1401; and Daron Acemoglu, Simon Johnson, and James A. Robinson, “Reversal of Fortune: Geography and Institutions in the Making of the Modern World Income Distribution,” Quarterly Journal of Economics 118 (2002): 1231–94.

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See David Luhnow, “The Secrets of the World’s Richest Man: Mexico’s Carlos Slim Makes His Money the Old-Fashioned Way: Monopolies,” The Wall Street Journal, August 4, 2007, available at http://online.wsj.com/article/SB118615255900587380.html. 44. Daron Acemoglu, “Oligarchic vs. Democratic Societies,” Journal of the European Economic Association 6 (2008): 1–44. Societies with highly unequal power structures did not industrialize early in the nineteenth century and generally did not catch up to the income levels of the more prosperous countries in the twentieth century. Daron Acemoglu, Simon Johnson, James Robinson, and Pierre Yared, “Income and Democracy,” American Economic Review 98 (2008): 808–42; Daron Acemoglu, Simon Johnson, and James Robinson, “Institutions as the Fundamental Cause of Long-Run Growth,” in Philippe Aghion and Steve Durlauf, eds., Handbook of Economic Growth (Amsterdam: North-Holland, 2005). 45.

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Stephen Haber, “Financial Markets and Industrial Development: A Comparative Study of Governmental Regulation, Financial Innovation, and Industrial Structure in Brazil and Mexico, 1840–1930,” in Stephen Haber, ed., How Latin America Fell Behind: Essays on the Economic Histories of Brazil and Mexico, 1800–1914 (Palo Alto: Stanford University Press, 1997); Stephen Haber, “Politics, Banking, and Economic Development: Evidence from New World Economies,” in Jared Diamond and James Robinson, eds., Natural Experiments of History (Cambridge: Harvard University Press, 2009): 88–119. On emerging markets, see chapter 2 of this book. On the general problem of elites blocking economic development, see Daron Acemoglu, James Robinson, and Simon Johnson, “Institutions as the Fundamental Cause of Long-Run Growth,” in Philippe Aghion and Steve Durlauf, eds., Handbook of Economic Growth (Amsterdam: North-Holland, 2005). 40. The United States had strong institutions—tending to control the power of elites—due to its colonial experience, in contrast to those of Latin America.

The Coming Wave: Technology, Power, and the Twenty-First Century's Greatest Dilemma
by Mustafa Suleyman
Published 4 Sep 2023

Second statistic from Mark Muro et al., “Automation and Artificial Intelligence: How Machines Are Affecting People and Places,” Metropolitan Policy Program, Brookings, Jan. 2019, www.brookings.edu/​wp-content/​uploads/​2019/​01/​2019.01_BrookingsMetro_Automation-AI_Report_Muro-Maxim-Whiton-FINAL-version.pdf. GO TO NOTE REFERENCE IN TEXT The economists Daron Acemoglu Daron Acemoglu and Pascual Restrepo, “Robots and Jobs: Evidence from US Labor Markets,” Journal of Political Economy 128, no. 6 (June 2020), www.journals.uchicago.edu/​doi/​abs/​10.1086/​705716. GO TO NOTE REFERENCE IN TEXT Today algorithms perform the vast Ibid.; Edward Luce, The Retreat of Western Liberalism (London: Little, Brown, 2017), 54.

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GO TO NOTE REFERENCE IN TEXT Today U.S. labor is taxed Daron Acemoglu et al., “Taxes, Automation, and the Future of Labor,” MIT Work of the Future, mitsloan.mit.edu/​shared/​ods/​documents?PublicationDocumentID=7929. GO TO NOTE REFERENCE IN TEXT This is sometimes called Arnaud Costinot and Ivan Werning, “Robots, Trade, and Luddism: A Sufficient Statistic Approach to Optimal Technology Regulation,” Review of Economic Studies, Nov. 4, 2022, academic.oup.com/​restud/​advance-article/​doi/​10.1093/​restud/​rdac076/​6798670. GO TO NOTE REFERENCE IN TEXT MIT economists have argued Daron Acemoglu et al., “Does the US Tax Code Favor Automation?

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For another example of a holistic approach to containment strategy, see Allison Duettmann, “Defend Against Physical Threats: Multipolar Active Shields,” Foresight Institute, Feb. 14, 2022, foresightinstitute.substack.com/​p/defend-physical. GO TO NOTE REFERENCE IN TEXT The economist Daron Acemoglu Daron Acemoglu and James Robinson, The Narrow Corridor: How Nations Struggle for Liberty (London: Viking, 2019). GO TO NOTE REFERENCE IN TEXT Life After the Anthropocene Technology should amplify See, for example, arguments like that of Divya Siddarth et al., “How AI Fails Us,” Edmond and Lily Safra Center for Ethics, Dec. 1, 2021, ethics.harvard.edu/​how-ai-fails-us.

Futureproof: 9 Rules for Humans in the Age of Automation
by Kevin Roose
Published 9 Mar 2021

In 2019, Microsoft announced James Phillips, “Announcing RPA, Enhanced Security, No-Code Virtual Agents, and More for Microsoft Power Platform,” Microsoft Dynamics 365 (blog), November 4, 2019. Craig Le Clair, an analyst at Forrester Research Craig Le Clair, Invisible Robots in the Quiet of the Night: How AI and Automation Will Restructure the Workforce (Forrester, 2019). MIT’s Daron Acemoglu and Boston University’s Pascual Restrepo Daron Acemoglu and Pascual Restrepo, “Automation and New Tasks: How Technology Displaces and Reinstates Labor,” Journal of Economic Perspectives (2019). Part II The Rules Rule 1 Be Surprising, Social, and Scarce Lovett was a working-class kid William Lovett, Life and Struggles of William Lovett, in His Pursuit of Bread, Knowledge, and Freedom (Knopf, 1876).

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And it meant that by the time most of the workers who actually participated in the Industrial Revolution saw the fruits of their increased productivity, many of them were either retired or dead. Some economists have suggested that we may be in another Engels’s Pause today, as wages stagnate while corporate profits soar. And several recent studies have cast doubt on the argument that automation always creates more jobs than it destroys. In particular, two economists, Daron Acemoglu of MIT and Pascual Restrepo of Boston University, have found that over the past several decades, automation has been destroying jobs faster than it has been creating them. They found that from 1947 until 1987, the optimist’s take on automation was essentially correct: In industries that employed automation, job destruction and creation (what they call “displacement” and “reinstatement”) happened at roughly the same rate.

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Shipping containers put some longshoremen out of work, but they made it much cheaper to transport cargo across the world, which boosted global trade and lowered prices for all kinds of consumer goods. Those low prices, in turn, enticed consumers to buy much more stuff, and created more jobs at the companies that produced all that stuff. But in recent years, much of the automation we’ve gotten hasn’t made us much more efficient. In a 2019 paper, MIT’s Daron Acemoglu and Boston University’s Pascual Restrepo coined the term “so-so technologies” to describe the type of machine that is good enough to replace human workers but isn’t good enough to generate new jobs. So-so automation, they wrote, is the kind we should really fear, because it allows employers to substitute machines for humans without the major productivity gains that could create new jobs somewhere else.

Race Against the Machine: How the Digital Revolution Is Accelerating Innovation, Driving Productivity, and Irreversibly Transforming Employment and the Economy
by Erik Brynjolfsson
Published 23 Jan 2012

This is technical change that increases the relative demand for high-skill labor while reducing or eliminating the demand for low-skill labor. A lot of factory automation falls into this category, as routine drudgery is turned over to machines while more complex programming, management, and marketing decisions remain the purview of humans. A recent paper by economists Daron Acemoglu and David Autor highlights the growing divergence in earnings between the most-educated and least-educated workers. Over the past 40 years, weekly wages for those with a high school degree have fallen and wages for those with a high school degree and some college have stagnated. On the other hand, college-educated workers have seen significant gains, with the biggest gains going to those who have completed graduate training (Figure 3.5).

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Equality of opportunity, however, can be harder to achieve if children of poverty get inadequate health care, nutrition, or education, or people at the bottom are otherwise unable to compete on a level-playing field. Third, inequality inevitably affects politics, and this can be damaging and destabilizing. As economist Daron Acemoglu puts it: Economic power tends to beget political power even in democratic and pluralistic societies. In the United States, this tends to work through campaign contributions and access to politicians that wealth and money tend to buy. This political channel implies another, potentially more powerful and distortionary link between inequality and a non-level playing field.

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Team members included Whitney Braunstein, Claire Calméjane, Greg Gimpel, Tong Li, Liron Wand, George Westerman, and Lynn Wu. We’re extremely grateful to them. In addition, Mona Masghati and Maya Bustan helped Andy a great deal with his research, and Heekyung Kim and Jonathan Sidi did the same for Erik. We are grateful for conversations on technology and employment with our MIT colleagues, including Daron Acemoglu, David Autor, Frank Levy, Tod Loofbourrow, Thomas Malone, Stuart Madnick, Wanda Orlikowski, Michael Schrage, Peter Weill, and Irving Wladawsky-Berger. In addition, Rob Atkinson, Yannis Bakos, Susanto Basu, Menzie Chinn, Robert Gordon, Lorin Hitt, Rob Huckman, Michael Mandel, Dan Snow, Zeynep Ton and Marshall van Alstyne were very generous with their insights.

The Logic of Life: The Rational Economics of an Irrational World
by Tim Harford
Published 1 Jan 2008

Even as profound a thinker as Tom Schelling, attempting to apply insights from game theory to the problem facing the hostage and kidnapper, concluded that these problems are just inherently hard to solve. Far better, then, to avoid the situation coming to such a head—and according to the economists Daron Acemoglu and James A. Robinson, the way to do so is called “democracy.” Revolutions rarely come out of nothing, and embattled elites who have imminent reason to fear being placed in the thorny position of kidnap victim should rationally cede some power if by doing so they can save their skins. Acemoglu and Robinson recall the inspiring words of British prime minister Earl Grey, advocating reform in 1831: “There is no-one more decided against annual parliaments, universal suffrage and the ballot, than I am.

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But if there is no rational explanation for the freedom of English and Dutch economic institutions, there is a rational account of why small differences between those institutions and those of the absolute monarchies became magnified. THE ACCOUNT COMES from Simon Johnson, now chief economist of the International Monetary Fund, along with Daron Acemoglu and James Robinson, whose idea of rational revolutions we encountered in the last chapter. Europe started to become decisively richer than China between A.D. 1500 and 1800, as opportunities to trade with the New World opened up; but this was not a pan-European phenomenon. It was confined to the nations that engaged in the Atlantic trade: Spain, Portugal, France, the Netherlands, and England.

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Instead of trying to send colonial settlers to areas with fearsome tropical diseases, Europeans instead made the even more brutal yet selfishly rational decision to establish the slave trade in such places and set up abusive economic systems designed to exploit the land and people or scrape up as much gold and ivory as possible in the shortest time. Economists Daron Acemoglu, Simon Johnson, and James Robinson therefore argue that it is history, rather than geography, that shaped the wealth of nations, because of the differing institutional legacies of colonialism. The settler-based colonies—New Zealand, Canada, the United States, and Australia—became independent with a decent set of political institutions, designed to respect private property and uphold the law.

The Meritocracy Trap: How America's Foundational Myth Feeds Inequality, Dismantles the Middle Class, and Devours the Elite
by Daniel Markovits
Published 14 Sep 2019

disproportionately to complement high-skilled workers: Increases in the capital-to-labor ratio in the U.S. economy have quite generally been heavily concentrated in skill-intensive industries. See Winfried Koeniger and Marco Leonardi, “Capital Deepening and Wage Differentials: Germany Versus the U.S.,” Economic Policy 22, no. 49 (January 2007): 74. See also Daron Acemoglu, “Cross-Country Inequality Trends,” Economic Journal 113, no. 485 (February 2003): 121–49; Daron Acemoglu and Jörn-Steffen Pischke, “Worker Well-Being and Public Policy,” Research in Labor Economics 22 (2003): 159–202; Acemoglu, “Changes in Unemployment and Wage Inequality,” 1259. This result holds even within industries. For example, beginning in the 1970s manufacturing firms that employed more skilled workers began to invest more heavily in equipment than those that employed less skilled workers.

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,” Quarterly Journal of Economics 113 (1998): 1169–1213. unskilled or mid-skilled labor dominates production: Winfried Koeniger and Marco Leonardi, “Capital Deepening and Wage Differentials: Germany Versus the U.S.,” Economic Policy 22, no. 49 (January 2007): 72–116; Daron Acemoglu, “Cross-Country Inequality Trends,” Economic Journal 113, no. 485 (February 2003): 121–49; Daron Acemoglu and Jörn-Steffen Pischke, “Worker Well-Being and Public Policy,” Research in Labor Economics 22 (2003): 159–202; Acemoglu, “Changes in Unemployment and Wage Inequality,” 1275–76. decreased wage inequality in that sector by fully a third: Winfried Koeniger and Marco Leonardi, “Capital Deepening and Wage Differentials: Germany Versus the U.S.,” Economic Policy 22, no. 49 (January 2007): 72–116.

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therefore from richer families: Such employer-provided training as endures in the American economy is skewing further and further in favor of elite workers. In 1983, college graduates were roughly three times as likely to receive workplace training as workers without high school degrees. By 1991, the educated workers were nearly four times as likely to receive training as the uneducated ones. Daron Acemoglu, “Changes in Unemployment and Wage Inequality: An Alternative Theory and Some Evidence,” American Economic Review 89, no. 5 (December 1999): 1259–78, 1275, https://doi.org/10.3386/w6658 (citing the 1983 and 1991 CPS supplements, which report on the shares of workers who received some kind of “training to improve skills on the current job”).

The Technology Trap: Capital, Labor, and Power in the Age of Automation
by Carl Benedikt Frey
Published 17 Jun 2019

What makes economic analysis hard is that there are few models that apply to every time and place. The fact that wages have been falling for large groups in the American labor market for more than three decades has prompted economists to think differently about technological change. Pathbreaking work by the economists Daron Acemoglu and Pascual Restrepo provides a helpful formal model for understanding periods of falling wages, as well as times when wages are growing for everyone, by conceptualizing technological progress as either enabling or labor replacing. This book looks at the historical record through the lens of their theoretical framework.35 The notion of machines being capable of taking over human work is important, because it means that technology can reduce wages and employment unless it is counterbalanced by other economic forces.

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Most economists will acknowledge that technological progress can cause some adjustment problems in the short run. What is rarely noted is that the short run can be a lifetime. And ultimately, the long run depends on policy choices made in the short run. The mere existence of better machines is not sufficient for long run growth. As Daron Acemoglu and the political scientist James Robinson point out in Why Nations Fail, economic and technological development will move forward only “if not blocked by the economic losers who anticipate that their economic privileges will be lost and by the political losers who fear that their political power will be eroded.”42 Workers alone might struggle to block new technologies effectively.

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The critical difference, it seems, was that governments before the Glorious Revolution frequently attempted to block worker-replacing technologies, and the key inventions of the Industrial Revolution were worker replacing. Origins of the Industrial Revolution So how did the necessary institutional change occur that would one day facilitate the Industrial Revolution? One compelling argument is that the road to industrialization began with the discovery of the New World. Daron Acemoglu, Simon Johnson, and James Robinson have demonstrated that where political institutions placed significant checks and balances on the monarchy, the growth of Atlantic trade strengthened merchant groups by constraining the power of the crown and helped them obtain institutional reform that favored industrial and technological progress.24 Consequently, more rapid economic growth took place in economies with relatively nonabsolutist institutions—like those of Britain and the Dutch Republic—where commercial groups outside the royal circle were the key beneficiaries from trade.

The Tyranny of Experts: Economists, Dictators, and the Forgotten Rights of the Poor
by William Easterly
Published 4 Mar 2014

Nathan Nunn, “The Long-Term Effects of Africa’s Slave Trades,” Quarterly Journal of Economics 123, no. 1 (February 2008): 139–76. 14. See also the discussion in Daron Acemoglu and James A. Robinson, “Why is Africa Poor?” Economic History of Developing Regions 25, no. 1, 21–50; see for example page 30. 15. Nunn, “Long-Term Effects.” 16. Daron Acemoglu, Camilo García-Jimeno, and James A. Robinson, “Finding Eldorado: Slavery and Long-Run Development in Colombia,” Journal of Comparative Economics 40, no. 4 (June 12, 2012): 534–64, available at: http://www.economics.mit.edu/files/8048, accessed August 25, 2013. 17. Acemoglu et al., “Finding Eldorado.” 18. Daron Acemoglu and James A. Robinson, Why Nations Fail: The Origins of Power, Prosperity, and Poverty (New York: Crown Publishers, 2012). 19.

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But freedom only had a future if it continued to spread. FREEDOM MOVES TO THE ATLANTIC The most famous son of Genoa, Christopher Columbus, would inadvertently make possible the spread of freedom. The boom in European trade after the discovery of the Americas gave freedom new strongholds 800 miles north of Genoa. Economists Daron Acemoglu and Simon Johnson of MIT and political scientist James Robinson of Harvard have been pioneers in reintroducing historical research into economics, with the aim of explaining economic development. In a prominent 2005 article,21 they tackled the question of why the frontiers of freedom had shifted from northern Italy to Western Europe in the seventeenth and eighteenth centuries.

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The gold mines’ locations were determined by geological factors unrelated to anything else that would have affected development, so the legacy of mining and slavery appears to be the only explanation for the worse poverty, education, and vaccination rates evident even today in the mining towns compared to their nonmining neighboring towns.17 Vaccination rates are 15 percentage points lower in the locales that used to have gold mining and slavery than those that did not. Even within Colombia, some places have a more intense history of oppression than others, with consequently worse damage to the health of the oppressed. THE BIG PICTURE García-Jimeno’s coauthors were Daron Acemoglu of MIT and James Robinson of Harvard, who led the initial breakthrough in which development finally took history seriously around the new millennium. Acemoglu and Robinson expounded on the big picture in their book Why Nations Fail (in turn based on earlier academic papers with Simon Johnson of MIT).18 They followed pioneers who were not development economists at all, but economic historians, the widely venerated pair of Stanley Engerman and the late Kenneth Sokoloff, who in 1997 published a study of how history led to South America’s underdevelopment relative to North America.19 These authors suggest the problem with South America is that it is government by the elite, for the elite, and of the elite.

The Globalization of Inequality
by François Bourguignon
Published 1 Aug 2012

Moreover, the rapid increase in the volume of South-­South exchange is starting to create a greater degree of autonomy for the developing world. Now that the virtues of accumulation have been demonstrated through the examples of a few large emerging countries, it would be surprising if, barring any natural catastroSee, for example, Daron Acemoglu, Philippe Aghion, and Fabrizio Zilibotti, “Distance to Frontier, Selection, and Economic Growth,” Journal of the European Economic Association 4, no. 1 (2006): 37–74. 19 36 Chapter 1 phes or massive political reversals, growth in this part of the world slowed in a lasting manner. Of course, this does not mean that all developing countries will experience sustained growth.

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This is what we see in undemocratic democratic societies where high levels of inequality go hand in hand with mediocre governance or regulation and are extremely unfavorable to development.9 The recent debate over the hypothesis that the financial and economic crisis in the United States was in part the result of rising inequalities offers a good illustration of several of the arguments presented here.10 According to this hypothesis, we might have expected that the transfer of income from the low end of the distribution to the high end On the influence of inequality on political power in the United States, see Martin Gilens, Affluence and Influence: Economic Inequality and Political Power in America (Princeton, NJ: Princeton University Press, 2013). For the role of governance in development, see Daron Acemoglu and James Robinson, Why Nations Fail: The Origin of Power, Prosperity and Poverty (New York: Crown Business, 2012). 10 This hypothesis, often attributed to Joseph Stiglitz, The Price of Inequality, has been the focus of several analyses. See, for example, Michael Kumhof and Romain Rancière, “Inequality, Leverage and Crises,” IMF Working Paper, no. 10/268, 2011).

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According to Raghuram Rajan and to Joseph Stiglitz,11 political concerns motivated some leaders to look for a way to compensate for the stagnation or excessively slow growth in the standards of living of a large percentage of the population relative to the most well-­off. This is the same argument about endogenous redistribution caused by excessive inequality mentioned earlier and resulted from politicians pushing for the expansion of credit and involuntarily sparking the crisis by pushing easy lending as a remedy for rising inequality. Daron Acemoglu, on the other hand, argues that it was the economic elites who took advantage of the growing resources at their disposal to convince political leaders to reform the financial system, specifically with regard to mortgage loans, for their own advantage and without concern for collective risks.12 Again, this is the equivalent of the argument outlined above of elite-­capture caused by excessive inequality.

The Great Surge: The Ascent of the Developing World
by Steven Radelet
Published 10 Nov 2015

Jared Diamond, in Guns, Germs, and Steel: The Fates of Human Societies, reached a different conclusion, finding that Europe’s prosperity was largely the result of differences in geography, demography, and ecology that can be traced back to the beginnings of the domestication of plants and animals. Economists Daron Acemoglu, Simon Johnson, and James Robinson argued that where European colonizers faced serious health threats from disease (think the Belgian Congo in the late nineteenth century), they set up repressive institutions to extract resources through violence, and that these tactics and institutions established hundreds of years ago are central to understanding institutions in developing countries today.5 Other researchers suggest that differences in income today date back to inventions from three thousand years ago, or even further to the timing of the migration of different groups out of Africa to form new societies around the world.

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That has been the pattern in sub-Saharan Africa since the mid-1990s.28 An extensive study by John Gerring of Boston University and his associates found that democracy—especially if it endured and strengthened over time—added about 0.7 percentage points to growth rates, on average, an important addition for countries averaging around 3 percent growth per year. Similarly, MIT economist Daron Acemoglu and his coauthors have concluded that countries that democratize tend to increase their GDP per capita by about 20 percent over twenty to thirty years.29 The old argument that authoritarian countries clearly perform better economically than democracies no longer holds up. It appears that the vast majority of people who want development and democracy can have both.

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The majority of the new governments—interested primarily in establishing control—adopted, with only slight modifications, the systems and institutions that the colonialists had left behind, just as Suharto did. George Ayittey’s brilliant and devastating book Africa Betrayed recounts how new dictators took over, and in many cases intensified, the institutions of unchecked power and domination when the colonial powers left Africa. Daron Acemoglu and James Robinson make a similar point in Why Nations Fail: The Origins of Power, Prosperity, and Poverty.5 In Latin America, the problem in the twentieth century was no longer colonialism, but rather that one dictator after another promulgated institutions designed to enrich a small elite. Two forces bolstered this pattern.

Radical Markets: Uprooting Capitalism and Democracy for a Just Society
by Eric Posner and E. Weyl
Published 14 May 2018

Allen shows that prior to the emergence of unions, British wages during the early process of industrialization hardly advanced at all despite improvements in technology.45 Once unions managed to counter the monopsony power of British industrialists, not only did wages quickly increase, but the pace of overall productivity radically accelerated. Economists David Autor, Daron Acemoglu, and Suresh Naidu believe that the breaking of monopsony power through labor unions, government labor regulation, minimum wages, and other reforms was critical to the further acceleration of productivity.46 Beyond their role in collective bargaining, unions served other functions that helped support the “Fordist” mode of assembly line–based production that prevailed in the twentieth century: they screened and guaranteed the quality of the work produced by their workers and helped them learn the skills required by a rapidly changing work environment.

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We took a Likert-based survey they used and assumed that each point on the scale corresponded to a number of votes. This likely understates the strength of the result under QV, given the censoring of extremes we discuss in chapter 2. Under this method, Kasich is the only candidate with an average net positive score (.12), followed by Sanders (-.11), Cruz (-.22), Clinton (-.32), and Trump (-.69). 54. Daron Acemoglu, Suresh Naidu, Pascual Restrepo, & James A. Robinson, Democracy Does Cause Growth, Journal of Political Economy (Forthcoming). 55. QV also offers the possibility of helping break free of the twin bonds of “political correctness” and costless online vitriol by offering a rich and costly but anonymous way for citizens to express their political convictions. 56.

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A monthly Netflix subscription is $10 and a typical subscriber in 2015 watched 1.5 hours daily according to Netflix’s publicly released statistics. 18. Foer, World Without Mind. 19. Carl Benedikt Frey & Michael A. Osborne, The Future of Employment: How Susceptible Are Jobs to Computerisation?, 114 Technological Forecasting & Social Change 254 (2017). 20. Daron Acemoglu & Pascual Restrepo, Robots and Jobs: Evidence from US Labor Markets (National Bureau of Economic Research, Working Paper No. 23285, 2017). 21. Arrieta-Ibarra et al., Should We Treat Data as Labor? 22. David Autor et al., The Fall of the Labor Share and the Rise of Superstar Firms (National Bureau of Economic Research, Working Paper No. 23396, 2017). 23.

Reimagining Capitalism in a World on Fire
by Rebecca Henderson
Published 27 Apr 2020

Theda Skocpol and Alexander Hertel-Fernandez, “The Koch Network and Republican Party Extremism,” Perspectives on Politics 14, no. 3 (2016): 681–699. 18. Daron Acemoglu, Simon Johnson, and James A. Robinson, “The Colonial Origins of Comparative Development: An Empirical Investigation,” American Economic Review 91, no. 5 (2001): 1369–1401. 19. City-states in ancient Greece, such as Athens, were notable and rare exceptions. 20. Samuel Edward Finer, The History of Government from the Earliest Times: Ancient Monarchies and Empires, vol. 1 (Oxford, UK: Oxford University Press, 1997). 21. Brian M. Downing, “Medieval Origins of Constitutional Government in the West,” Theory and Society 18, no. 2 (1989): 213–247; Daron Acemoglu and James A.

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Scholars now differentiate between “open access” regimes based on “inclusive” institutions—regimes like those in Germany, Chile, the Republic of Korea, and the United States—and “closed” regimes based on “extractive” institutions such as those in Russia, Venezuela, Angola, the Democratic People’s Republic of Korea, and Turkmenistan. The distinction between inclusive and extractive institutions was first emphasized by Daron Acemoglu and James Robinson in their book Why Nations Fail. They defined inclusive economic institutions as those that support the effective functioning of a free market, and inclusive political institutions as those that enable the public to participate in the political process and monitor the government.

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In ancient Egypt and feudal Europe, political power was limited to the few who controlled military force.19 They appropriated all the available economic surpluses for themselves, which in turn enabled them to finance and maintain a system of political and economic control.20 Examples of Economic and Political Institutions, Inclusive or Extractive ECONOMIC: Inclusive: Secure property rights Effective education & job training systems Open markets with low entry costs Balanced, fair employer-labor relations Consumer protections Environmental regulation Antitrust enforcement POLITICAL: Inclusive: Democratic pluralism Voting rights Checks & balances in government Free media Freedom of speech & other personal rights An impartial judiciary Protection for minority rights ECONOMIC: Extractive: Weak property rights Crony capitalism Widespread anticompetitive monopolies Forced or extractive labor Disregard of externalities POLITICAL: Extractive: Monarchy / oligarchy / single-party rule System of elites or nobility Suppression of freedoms of expression Patronage networks Influential but opaque interest groups Adapted from Daron Acemoglu and James A. Robinson, Why Nations Fail: The Origins of Power, Prosperity, and Poverty (New York: Crown Books, 2012). Inclusive regimes are open, democratic, and accountable. They allow anyone—no matter who their parents are—to participate in political and economic life. They are characterized by two core institutions.

Open: The Progressive Case for Free Trade, Immigration, and Global Capital
by Kimberly Clausing
Published 4 Mar 2019

Figure 3.3: Countries that Trade More Have Faster Growth in GDP Per Capita Note: Author’s calculations based on World Bank data. Data source: World Development Indicators, World Bank. Beyond trade, there are likely more important factors that determine a country’s ability to sustain strong economic growth, including ones designed to build more inclusive economic and political institutions, as argued by Daron Acemoglu and James Robinson in Why Nations Fail. The argument here is not that international trade policy is the most important ingredient in sustained economic growth, but rather that there is no evidence that international trade is harming growth. Instead, it often appears to be helpful. What do we really know about the relationship between international trade and economic growth?

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Countries that militarize, or whose trading partners militarize, trade less.3 And nationalist sentiment is strongly correlated with more negative opinions about trade openness.4 Closed borders, and closed minds, can hurt both prosperity and peace. ________________________ 1.  Patrick J. McDonald, “Peace through Trade or Free Trade?” The Journal of Conflict Resolution 48:4 (2004), 547–572. 2.  Erik Gartzke, “Economic Freedom and Peace,” Annual Report, Economic Freedom of the World, Fraser Institute, Canada, 2005. 3.  See Daron Acemoglu, and Pierre Yared, “Political Limits to Globalization,” American Economic Review 100:2 (2010), 83–88. 4.  See Anna Maria Mayda, and Dani Rodrik, “Why Are Some People (and Countries) More Protectionist than Others?” European Economic Review 49:6 (2005), 1393–1430; Kevin H. O’Rourke and Richard Sinnott, “The Determinants of Individual Attitudes towards Immigration,” European Journal of Political Economy 22:4 (2006), 838–861; and Edward D.

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There are multiple reasons for these differences, but they largely result from superior resources in the destination country: better production facilities, more equipment, more advanced technology, superior infrastructure, and more sound and stable institutions. Institutional differences cover a lot of ground, but there is ample evidence of their importance in determining which countries are rich and which are poor. Economists Daron Acemoglu and James A. Robinson provide a compelling argument for the importance of institutions in their book Why Nations Fail. They explore the geographically and culturally continuous community of Nogales, which is broken in two by the US-Mexico border: on the American side, incomes are higher, lifespans are longer, and educational outcomes are better.

The White Man's Burden: Why the West's Efforts to Aid the Rest Have Done So Much Ill and So Little Good
by William Easterly
Published 1 Mar 2006

“Corraling the Gas—and Democracy,” The Economist, June 9, 2005. 15.There is a vast body of literature, with such classics as James Buchanan and Gordon Tullock, The Calculus of Consent: Logical Foundations of Constitutional Democracy, Ann Arbor: University of Michigan Press, 1962; Mancur Olson, The Logic of Collective Action, Cambridge: Harvard University Press, 1965; Anthony Downs, An Economic Theory of Democracy, Boston: Addison-Wesley, 1957. 16.Dani Rodrik, “Institutions for High-Quality Growth: What They Are and How to Acquire Them,” Studies in Comparative International Development (Fall 2000). 17.Philippe Aghion, Alberto Alesina, and Francesco Trebbi, “Endogenous Political Institutions,” Harvard University mimeograph, January 2004. 18.W. Easterly, R. Gatti, S. Kurlat, “Democracy, Development, and Mass Killings,” New York University Development Research Institute Working Paper, 2004. 19.Daron Acemoglu, “The Form of Property Rights: Oligarchic vs. Democratic Societies,” MIT mimeograph, April 2005. 20.Daron Acemoglu and James A. Robinson, Economic Origins of Dictatorship and Democracy, Cambridge, UK: Cambridge University Press, 2006. 21.Ibid., p. 27. 22.William Easterly, “The Middle-Class Consensus and Economic Development,” Journal of Economic Growth 6, no. 4 (December 2001): 317–36. 23.Nathan Jensen and Leonard Wantchekon, “Resource Wealth and Political Regimes in Africa,” Comparative Political Studies, 2005.

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The Fifth Amendment to the Constitution (the same amendment that protects you against self-incrimination) rammed home the rule that nobody could “be deprived of…property, without due process of law; nor shall private property be taken for public use, without just compensation.” But a populist majority could still vote for high taxes on the rich, stunting future development prospects. An oligarchy (rule by the rich few) could thus have decent economic growth (even if abysmal justice) compared with a democracy, at least for a while. In a recent paper, economist Daron Acemoglu of MIT talks about the tradeoff between oligarchy and democracy for economic growth.19 The oligarchy has the advantage of eliminating the democratic threat to property rights. This could make economic growth quite high for a while as the elite invested in what they were good at doing, secure that they would get to keep the returns.

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And a big thanks to those who generously gave of their time to read some or all of previous drafts and give enormously helpful feedback: Maryam Abolfazli, Emma Aisbett, Alberto Alesina, Nava Ashraf, Donald Boudreaux, Gerald Caprio, Ron Clark, Michael Clemens, Ravina Daphtary, Jess Diamond, Paul Dower, William Duggan, Kareen El Beyrouty, Stanley Engerman, Helen Epstein, Daphne Eviatar, Kurt Hoffman, Patricia Hoon, Roumeen Islam, Charles Kenny, Peter Lindert, Janina Matuszeski, Taye Mengistae, Edward Miguel, Josepa Miguel-Florensa, Frederic Mishkin, Jonathan Morduch, Stewart Parkinson, Elizabeth Potamites, S. Ramachandran, James Rauch, Kenneth Rogoff, Xavier Sala-i-Martin, Julia Schwenkenberg, Richard Sylla, Leonard Wantchekon, Dennis Whittle, Geoffrey Williams, Michael Woolcock, and Treena Wu. I benefited greatly from discussions with some really smart people on topics covered by this book: Daron Acemoglu, Carol Adelman, Martha Ainsworth, Abhijit Banerjee, Reza Baqir, Robert Barro, William Baumol, Jess Benhabib, Arne Bigsten, Nancy Birdsall, Peter Boettke, Robert Borens, Eduardo Borensztein, Bruce Bueno de Mesquita, Craig Burnside, Charles Calomiris, Stephen Cohen, Susan Collins, Kevin Davis, Allan Drazen, Esther Duflo, Steven Durlauf, Marcel Fafchamps, Niall Ferguson, Raquel Fernandez, Ricardo Ffrench-Davis, Stanley Fischer, Paul Glewwe, April Harding, Ann Harrison, Ricardo Hausmann, Peter Heller, Arye Hillman, Judith Justice, Boyan Jovanovic, Ravi Kanbur, Devesh Kapur, Hiro Kohama, Lawrence Kotlikoff, Michael Kremer, Mari Kuraishi, Ruben Lamdany, Adam Lerrick, Ruth Levine, David Levy, Dyan Machan, Bertin Martens, John McMillan, Allan Meltzer, Janvier Nkurunziza, Yaw Nyarko, José Antonio Ocampo, Mead Over, Sandra Peart, Guillermo Perry, Adam Przeworski, Dilip Ratha, Shamika Ravi, Sergio Rebelo, Ritva Reinikka, Ariell Reshef, Mario Rizzo, David Roodman, Dani Rodrik, Claudia Rosett, Frederic Sautet, Anya Schiffrin, Paul Smoke, T.

Restarting the Future: How to Fix the Intangible Economy
by Jonathan Haskel and Stian Westlake
Published 4 Apr 2022

Elinor Ostrom, one of the winners of the Nobel Prize for Economics in 2009, wrote about the rules and norms that coastal communities use to manage fisheries; Melissa Dell, winner of the 2020 John Bates Clark Medal, looked at how forced labour rules in colonial Peru affected poverty and health centuries later. The idea that institutions are important to economic growth is now uncontroversial among economists. Indeed, Daron Acemoglu, Simon Johnson, and James Robinson,5 in a string of highly insightful books and papers, define good institutions as those that provide “security of property rights and relatively equal access to economic resources to a broad cross-section of society.” Arnold Kling and Nick Schulz, who highlighted the importance of institutions in an intangible economy over a decade ago, describe them as “operating systems.”6 The idea that good institutions can encourage investment and growth and that bad institutions can hold them back is intuitive.

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Although collective decision-making or authority may help with collective-action problems, it might be very costly if much haggling and many influence activities (lobbying, bureaucracy, and so on) are involved, one part of what economists call transactions costs. If these costs are high, institutional design will have to economise on such costs.15 Contract Enforcement Because property rights have to be secure and respected, contract enforcement is key. A particularly stark problem occurs when exchange takes place over time. As Daron Acemoglu, Simon Johnson, and James Robinson put it, “In any market situation where economic exchange takes place, and the quid is separated from the pro quo, issues of commitment will arise.”16 Commitment is a particular problem for governments, or more broadly for any authority. If the legal system permits, the private sector can commit by signing a legally binding agreement.

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The initial electoral system guaranteed white voters 20 percent of seats in the legislature despite the fact that whites comprised only around 3 percent of the population. But within five years that system was changed, and subsequent amendments to the constitution allowed for the redistribution of land, opening the door for the Mugabe government to redistribute land via both legal and extralegal methods. Political institutions, argue Daron Acemoglu and James Robinson, therefore have to navigate between needing a strong state to enforce contracts and provide collective goods and needing a strong society in case the state gets too strong—hence the title of their book, The Narrow Corridor.18 Barry Weingast has advanced a similar view.19 All this suggests that institutions that help with commitment are the key to exchange over time.

The Great Escape: Health, Wealth, and the Origins of Inequality
by Angus Deaton
Published 15 Mar 2013

Instead, they usually respond to needs in the economic and social environment. Sometimes the basic science is already in place and the blueprints already on the shelf, but their application requires entrepreneurs and engineers to see profitable opportunities and shape them for the market. The economist Daron Acemoglu has argued for the importance of this sort of “directed” technological change, emphasizing that many new methods become viable only when there is a sufficient supply of skilled workers to implement and develop them.15 As he notes, this is hardly to argue that the skill expansion triggered by the Vietnam War caused the computer to be invented, but he envisages a cumulative process in which the skill premium from earlier technical change provides incentives for more people to go to college, the greater supply of college-educated workers speeds up the rate of technical progress, thus raising the skill premium, and so on.

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Those failures of politics and of broad-based education deprived people of the institutions that lie at the roots of broad-based economic growth. By contrast, the early adoption of universal public education in the United States was an important factor in its long-run economic success. That institutions tailored to the elite are inimical to economic growth is also the thesis of the MIT economists Daron Acemoglu and Simon Johnson, writing with the Harvard political scientist James Robinson.41 Colonial powers who could set up colonies of their own citizens brought their institutions with them (think the United States, Australia, Canada, and New Zealand), while in places where it was too difficult to settle (for example, because of high disease prevalence), they set up “extractive” states that essentially plundered resources (think Bolivia, India, or Zambia), with institutions that were designed to serve the ruling elite but that could not support economic growth.

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Ian Morris, 2010, Why the West rules—for now: The patterns of history, and what they reveal about the future, Farrar, Straus and Giroux. 5. Ibid. 6. Eric L. Jones, 2000, Growth recurring: Economic change in world history, University of Michigan Press. 7. Robert Allen, 2011, Global economic history: A very short introduction, Oxford University Press. 8. Daron Acemoglu and James Robinson, 2012, Why nations fail: The origins of power, prosperity, and poverty, Crown. 9. E. Janet Browne, 2002, Charles Darwin, Volume 2: The power of place, Jonathan Cape. 331 10. Allen, Global economic history. 11. Roy Porter, 2000, The creation of the modern world: The untold story of the British Enlightenment, Norton, and Joel Mokyr, 2009, The enlightened economy: An economic history of Britain, 1700–1850, Yale University Press. 12.

System Error: Where Big Tech Went Wrong and How We Can Reboot
by Rob Reich , Mehran Sahami and Jeremy M. Weinstein
Published 6 Sep 2021

More than 40 percent: Mark Fahey, “Driverless Cars Will Kill the Most Jobs in Select US States,” CNBC, September 2, 2016, https://www.cnbc.com/2016/09/02/driverless-cars-will-kill-the-most-jobs-in-select-us-states.html. automation may have beneficial effects: Daron Acemoglu and Pascual Restrepo, “Artificial Intelligence, Automation and Work” (NBER Working Paper Series Working Paper 24196, January 2018), 43. changes in the industrial use of robots: Daron Acemoglu and Pascual Restrepo, “Robots and Jobs” (NBER Working Paper Series, Working Paper 23285, March 2017), https://www.nber.org/system/files/working_papers/w23285/w23285.pdf. risks of automation are unevenly distributed: Jason Furman, “Is This Time Different?

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“develop, manufacture, trade”: “Lethal Autonomous Weapons Pledge,” Future of Life Institute, 2018, https://futureoflife.org/lethal-autonomous-weapons-pledge/. human in the loop: Daron Acemoglu and Pascual Restrepo, “The Wrong Kind of AI?,” TNIT News, special issue, December 2018, https://idei.fr/sites/default/files/IDEI/documents/tnit/newsletter/newsletter_tnit_2019.pdf. an effective subsidy to corporations: Daron Acemoglu, Redesigning AI: Work, Democracy, and Justice in the Age of Automation (Cambridge: MIT Press, 2021). “society-in-the-loop”: Iyad Rahwan, “Society-in-the-Loop,” Ethics and Information Technology 20, no. 1 (March 2018): 5–14, https://link.springer.com/article/10.1007/s10676-017-9430-8.

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the proper role of a corporation: “Business Roundtable Redefines the Purpose of a Corporation to Promote ‘An Economy That Serves All Americans,’” Business Roundtable, August 19, 2019, https://www.businessroundtable.org/business-roundtable-redefines-the-purpose-of-a-corporation-to-promote-an-economy-that-serves-all-americans. “accountable capitalism”: “Empowering Workers Through Accountable Capitalism,” Warren Democrats, 2020, https://elizabethwarren.com/plans/accountable-capitalism. a new engine of productivity and growth: Daron Acemoglu and Pascual Restrepo, “The Wrong Kind of AI? Artificial Intelligence and the Future of Labor Demand,” Cambridge Journal of Regions, Economy and Society 13, no. 1 (November 2019): 25–35. “The big trap”: Abby Vesoulis, “This Presidential Candidate Wants to Give Every Adult $1,000 a Month,” Time, February 13, 2019, https://time.com/5528621/andrew-yang-universal-basic-income/.

Power and Progress: Our Thousand-Year Struggle Over Technology and Prosperity
by Daron Acemoglu and Simon Johnson
Published 15 May 2023

Copyright © 2023 by Daron Acemoglu and Simon Johnson Cover design by Pete Garceau Cover copyright © 2023 by Hachette Book Group, Inc. Hachette Book Group supports the right to free expression and the value of copyright. The purpose of copyright is to encourage writers and artists to produce the creative works that enrich our culture. The scanning, uploading, and distribution of this book without permission is a theft of the author’s intellectual property. If you would like permission to use material from the book (other than for review purposes), please contact permissions@hbgusa.com. Thank you for your support of the author’s rights.

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The publisher is not responsible for websites (or their content) that are not owned by the publisher. Library of Congress Cataloging-in-Publication Data Names: Acemoglu, Daron, author. | Johnson, Simon, author. Title: Power and progress : our thousand-year struggle over technology and prosperity / Daron Acemoglu and Simon Johnson. Description: First edition. | New York : PublicAffairs, 2023. | Includes bibliographical references and index. Identifiers: LCCN 2022059230 | ISBN 9781541702530 (hardcover) | ISBN 9781541702554 (ebook) Subjects: LCSH: Technology—Social aspects. | Technology—Economic aspects. | Progress.

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1 Control over Technology 2 Canal Vision 3 Power to Persuade 4 Cultivating Misery 5 A Middling Sort of Revolution 6 Casualties of Progress 7 The Contested Path 8 Digital Damage 9 Artificial Struggle 10 Democracy Breaks 11 Redirecting Technology Photos Bibliographic Essay References Acknowledgments Discover More Image Credits About the Authors Also by Daron Acemoglu Also by Simon Johnson Praise for Power and Progress Daron: To Aras, Arda, and Asu, for a better future Simon: To Lucie, Celia, and Mary, always Explore book giveaways, sneak peeks, deals, and more. Tap here to learn more. If we combine our machine-potentials of a factory with the valuation of human beings on which our present factory system is based, we are in for an industrial revolution of unmitigated cruelty.

Economics Rules: The Rights and Wrongs of the Dismal Science
by Dani Rodrik
Published 12 Oct 2015

See, for example, Angus Deaton, “Instruments of Development: Randomization in the Tropics, and the Search for the Elusive Keys to Economic Development” (Research Program in Development Studies, Center for Health and Wellbeing, Princeton University, January 2009). 16. Daron Acemoglu, Simon Johnson, and James A. Robinson, “The Colonial Origins of Comparative Development: An Empirical Investigation,” American Economic Review 91, no. 5 (December 2001): 1369–1401. 17. A good overall synthesis of this work can be found in Daron Acemoglu and James Robinson, Why Nations Fail: The Origins of Power, Prosperity, and Poverty (New York: Crown, 2012). 18. Binyamin Appelbaum, “Q. and A. with Jean Tirole, Economics Nobel Winner,” New York Times, October 14, 2014 (http://www.nytimes.com/2014/10/15/upshot/q-and-a-with-jean-tirole-nobel-prize-winner.html?

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This research was inspired directly by work in other disciplines, on comparative political development and history. But the insights of those disciplines were refined and formulated into the kinds of models that economists are used to. In addition, much effort went into validating these ideas with sophisticated empirical analysis, using up-to-date statistical techniques. The MIT economist Daron Acemoglu and the economics-trained Harvard political scientist James Robinson were the undisputed leaders of this new wave of work. Their first big research project that made a splash was a paper called “The Colonial Origins of Comparative Development,” coauthored with their MIT colleague Simon Johnson.16 The paper argued that patterns of institutions imposed by colonialists many centuries ago echo to this day.

Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty
by Abhijit Banerjee and Esther Duflo
Published 25 Apr 2011

Chapter 10 1 The argument was made in the 1970s by Peter Bauer; see e.g., Peter Thomas Bauer, Dissent on Development (Cambridge: Harvard University Press, 1972). 2 Ritva Reinikka and Jakob Svensson, “The Power of Information: Evidence from a Newspaper Campaign to Reduce Capture,” working paper, IIES, Stockholm University (2004). 3 See, for example, Easterly’s post on randomized control trials, available at http://aidwatchers.com/2009/07/development-experiments-ethical-feasible-useful/. 4 See, for example, Jeffrey Sachs, “Who Beats Corruption,” available at http://www.project-syndicate.org/commentary/sachs106/English. 5 Daron Acemoglu and James Robinson, Economic Origins of Dictatorship and Democracy (New York: Cambridge University Press, 2005). 6 Daron Acemoglu and James Robinson, Why Nations Fail (forthcoming, Crown, 2012). 7 See, for example,Tim Besley and Torsten Persson, “Fragile States and Development Policy” (manuscript, November 2010), which argues that fragile states are a key symptom of underdevelopment in the world and that such states are incapable of delivering basic services to their citizens. 8 Daron Acemoglu, Simon Johnson, and James Robinson, “The Colonial Origins of Comparative Development: An Empirical Investigation,” American Economic Review 91 (5) (2001): 1369—1401. 9 Abhijit Banerjee and Lakshmi Iyer, “History, Institutions, and Economic Performance: The Legacy of Colonial Land Tenure Systems in India,” American Economic Review 95 (4) (2005): 1190—1213. 10 Dwyer Gunn, “Can ‘Charter Cities’ Change the World?

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POLITICAL ECONOMY Corruption, or the simple dereliction of duty, creates massive inefficiencies. If teachers or nurses do not come to work, no education or health policy can really be implemented. If truck drivers can pay a small bribe to drive massively overloaded trucks, billions of dollars will be wasted in building roads that will be destroyed under their wheels. Our colleague Daron Acemoglu and his long-term coauthor, Harvard’s James Robinson, are two of the most thoughtful exponents of the rather melancholy view, active in economics today, that until political institutions are fixed, countries cannot really develop, but institutions are hard to fix. Acemoglu and Robinson define institutions as follows: “Economic institutions shape economic incentives, the incentives to become educated, to save and invest, to innovate and adopt new technologies, and so on.

What Went Wrong: How the 1% Hijacked the American Middle Class . . . And What Other Countries Got Right
by George R. Tyler
Published 15 Jul 2013

Manipulating Monetary Policy for Political Gain Greenspan manipulated monetary policy, including the deregulation of the financial sector, to sustain growth and aid the political fortunes of his political party. That behavior followed in the tradition of some previous Fed chairmen, and validated the worst fears of nineteenth-century Jeffersonian populists such as President Andrew Jackson. Economists Daron Acemoglu and Simon Johnson have concluded that the conduct of monetary policy by the Federal Reserve has more often than not reflected regulatory capture by the business community. That is not surprising: bankers dominate the various Fed boards, and Friedrich Hayek correctly noted that Fed policy in the 1920s created unsound credit conditions that bolstered bank profits.22 Similarly, Fed monetary policy conducted by Greenspan served to nurture profits at larger commercial banks during the Reagan era.

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Scarred by pitched street battles with communists, Weimar inflation, the Depression, and devastating war, voters there knew firsthand the ghastly terror, anger, and frustration of Paul Muni’s character. They knew far too well the shortcomings of democracy to believe that innate goodness resides in its DNA, as Capra argued in One Night. Unlike Americans, they had learned what economists Daron Acemoglu of MIT and James Robinson of Harvard concluded in Why Nations Fail, that episodes of broadly based opportunity for innovation, entrepreneurship, and prosperity are so rare in economic history over thousands of years that they can be counted on the fingers of one hand. They are absolutely not default settings for capitalism or any other economic system in America or anywhere else.

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Side effects of those policies wiped out an entire generation of toil and savings for virtually all American families. And those policies promise a future that is equally bleak. Do not be deluded that the Stiglitz description of America today is rare or an anomaly soon to be reversed. As economists Daron Acemoglu and James Robinson make clear in their book, Why Nations Fail, the Reagan decline featuring an upward income redistribution is the template throughout economic history. For many thousands of years, mankind has continually labored under an extractive economic model that narrowly benefits the few.

Plutocrats: The Rise of the New Global Super-Rich and the Fall of Everyone Else
by Chrystia Freeland
Published 11 Oct 2012

The combined power of globalization and the technology revolution has also turbocharged the economic transformation of the emerging markets, which is why Mr. O’Neill’s BRICs thesis has been so powerfully borne out. “We are seeing much more rapid growth in developing countries, especially China and India, because the policies and technologies in the West have allowed a lot of medium-skilled jobs to be done there,” said Daron Acemoglu, professor of economics at the Massachusetts Institute of Technology and a native of one of O’Neill’s “Next 11,” Turkey. “They are able to punch above their weight because technology allows us to better arbitrage differences in the world economy.” This means, Professor Acemoglu argues, that the first gilded age of the developing world is proceeding much faster than it did in the West in the nineteenth century.

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But in the longer term, La Serrata was the beginning of the end for the city’s oligarchs, as well as for Venetian prosperity more generally. By 1500, the population of Venice was smaller than it had been in 1330. In the seventeenth and eighteenth centuries, as the rest of Europe grew, the city that had once been its richest continued to shrink. The story of Venice’s rise and fall is told by the scholars Daron Acemoglu and James Robinson as an illustration of their thesis that what separates successful states from failed ones is whether their governing institutions are inclusive or extractive. Extractive states, they argue, are controlled by ruling elites whose objective is to extract as much wealth as they can from the rest of society and to maintain their own hold on power.

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I owe a special debt to Don Peck, who edited my 2011 Atlantic essay and read and improved a first draft of this book; James Bennett, who commissioned the piece; and to David Bradley. This book draws on a vast body of academic research. Some scholars have become important sounding boards and advisers, too. They include Larry Summers, Daron Acemoglu, Emmanuel Saez, Jacob Hacker, Alan Krueger, Branko Milanovic, Daniel Kaufmann, Ian Bremmer, Peter Lindert, Michael Spence, Joe Stiglitz, Theda Skocpol, Anders Aslund, Roman Frydman, Rob Johnson, Sergei Guriev, Michael McFaul, Ernesto Zedillo, John Van Reenen, Raghuram Rajan, Shamus Khan, and the late Yegor Gaidar.

The Limits of the Market: The Pendulum Between Government and Market
by Paul de Grauwe and Anna Asbury
Published 12 Mar 2017

A symbiosis arises between government and capital. In other countries the quality of the democratic authorities ensures that the voice of the majority dominates. This is the case, for example, in Scandinavian countries, where strong democratic institutions, including an independent press, counterbalance the polluting companies. Daron Acemoglu and James Robinson distinguish here between inclusive and exclusive political systems.19 An inclusive political system is based on the rule of law. It is an open system, in which all citizens can share in economic prosperity and have the chance to take initiatives. Exclusive political systems are closed systems, in which a small elite make the political and economic decisions and take a large proportion of the economic surplus for themselves.

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Ostry, Andrew Berg, and Charalambos G. Tsangarides, Redistribution, Inequality, and Growth, IMF Staff Discussion Note (April ), <https:// www.imf.org/external/pubs/ft/sdn//sdn.pdf>. Mancur Olson, The Logic of Collective Action: Public Goods and the Theory of Groups (Cambridge, MA: Harvard University Press, ). Daron Acemoglu and James A. Robinson, Why Nations Fail: The Origins of Power, Prosperity and Poverty (London: Profile, ). Martin Gilens, Affluence and Influence: Economic Inequality and Political Power in America (Princeton, NJ: Princeton University Press; New York: Russell Sage Foundation, ). André Sapir, ‘Globalisation and the reform of European social models’, Journal of Common Market Studies, / (June ), pp. –, <http://bruegel.org/ //globalisation-and-the-reform-of-european-social-models> and Tito Boeri, Let Social Policy Models Compete and Europe Will Win, paper presented at a conference hosted by the John F.

Equal Is Unfair: America's Misguided Fight Against Income Inequality
by Don Watkins and Yaron Brook
Published 28 Mar 2016

They did not, given pressures to spend, donate, or misinvest their wealth. In a similar vein, the data also indicate, contra Piketty, that the share of the Forbes 400 who inherited their wealth is in sharp decline.53 Other scholars have observed that, although Piketty presents hundreds of pages of data, the actual evidence for his theory is strikingly thin. Daron Acemoglu, an economist at Massachusetts Institute of Technology, and James A. Robinson, a professor of government at Harvard, point out that “Piketty does not engage in hypothesis testing, statistical analysis of causation or even correlation. Even when there are arguments about inequality increasing because r exceeds g, this is not supported by standard econometric or even correlational work.

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Deirdre Nansen McCloskey, “Measured, Unmeasured, Mismeasured, and Unjustified Pessimism: A Review Essay of Thomas Piketty’s Capital in the Twentieth-First Century,” Erasmus Journal of Philosophy and Economics, November 2014, http://www.deirdremccloskey.org/docs/pdf/PikettyReviewEssay.pdf (accessed May 28, 2015). 51. Lawrence H. Summers, “The Inequality Puzzle,” Democracy: A Journal of Ideas, Summer 2014, http://www.democracyjournal.org/33/the-inequality-puzzle.php?page=all (accessed May 28, 2015). 52. Ibid. 53. Ibid. 54. Daron Acemoglu and James A. Robinson, “The Rise and Fall of General Laws of Capitalism,” August 2014, http://polisci2.ucsd.edu/pelg/AcemogluRobinsonGeneral%20Laws.pdf (accessed May 28, 2015). 55. For more on problems with Piketty’s work, see Matthew Rognlie, “A Note on Piketty and Diminishing Returns to Capital,” June 15, 2014, http://www.mit.edu/~mrognlie/piketty_diminishing_returns.pdf (accessed May 28, 2015); Matthew Rognlie, “Deciphering the Fall and Rise in the Net Capital Share,” Brookings Papers on Economic Activity, March 19, 2015, http://www.brookings.edu/about/projects/bpea/papers/2015/land-prices-evolution-capitals-share (accessed May 28, 2015); Thomas H.

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For more on problems with Piketty’s work, see Matthew Rognlie, “A Note on Piketty and Diminishing Returns to Capital,” June 15, 2014, http://www.mit.edu/~mrognlie/piketty_diminishing_returns.pdf (accessed May 28, 2015); Matthew Rognlie, “Deciphering the Fall and Rise in the Net Capital Share,” Brookings Papers on Economic Activity, March 19, 2015, http://www.brookings.edu/about/projects/bpea/papers/2015/land-prices-evolution-capitals-share (accessed May 28, 2015); Thomas H. Mayor, “Income Inequality: Piketty and the Neo-Marxist Revival,” Cato Journal, Winter 2015, http://object.cato.org/sites/cato.org/files/serials/files/cato-journal/2015/2/cj-v35n1-4.pdf (accessed May 28, 2015); Daron Acemoglu and James A. Robinson, “The Rise and Decline of General Laws of Capitalism,” NBER Working Paper No. 20766, December 2014, http://www.nber.org/papers/w20766 (accessed May 28, 2015); Phillip W. Magness and Robert P. Murphy, “Challenging the Empirical Contribution of Thomas Piketty’s Capital in the Twenty-First Century,” Journal of Private Enterprise, Spring 2015, http://papers.ssrn.com/sol3/papers.cfm?

Economic Origins of Dictatorship and Democracy
by Daron Acemoğlu and James A. Robinson
Published 28 Sep 2001

Together with Professors Daron Acemoglu and Simon Johnson, Professor Robinson is coauthor of the forthcoming book, The Institutional Roots of Prosperity. Economic Origins of Dictatorship and Democracy DARON ACEMOGLU JAMES A. ROBINSON cambridge university press Cambridge, New York, Melbourne, Madrid, Cape Town, Singapore, São Paulo Cambridge University Press The Edinburgh Building, Cambridge cb2 2ru, UK Published in the United States of America by Cambridge University Press, New York www.cambridge.org Information on this title: www.cambridge.org/9780521855266 © Daron Acemoglu and James A. Robinson 2006 This publication is in copyright.

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Democracy consolidates when elites do not have a strong incentive to overthrow it. These processes depend on (1) the strength of civil society, (2) the structure of political institutions, (3) the nature of political and economic crises, (4) the level of economic inequality, (5) the structure of the economy, and (6) the form and extent of globalization. Daron Acemoglu is Charles P. Kindleberger Professor of Applied Economics in the Department of Economics at the Massachusetts Institute of Technology and a member of the Economic Growth Program of the Canadian Institute for Advanced Research. He is also affiliated with the National Bureau of Economic Research, Center for Economic Performance, and Centre for Economic Policy Research and is a Fellow of the European Economic Association.

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First published in print format 2005 isbn-13 isbn-10 978-0-511-14081-5 eBook (NetLibrary) 0-511-14081-9 eBook (NetLibrary) isbn-13 isbn-10 978-0-521-85526-6 hardback 0-521-85526-8 hardback Cambridge University Press has no responsibility for the persistence or accuracy of urls for external or third-party internet websites referred to in this publication, and does not guarantee that any content on such websites is, or will remain, accurate or appropriate. To the memory of my parents, Kevork and Irma, who invested so much in me. To my love, Asu, who has been my inspiration and companion throughout. Daron Acemoglu To the memory of my mother, from whom I inherited my passion for books and my indignation at the injustices of this life. To the memory of my father, from whom I inherited my fascination for science and my curiosity about this extraordinary world. James A. Robinson Contents Preface page xi part one. questions and answers 1.

Wealth, Poverty and Politics
by Thomas Sowell
Published 31 Aug 2015

Moreover, as statisticians have often pointed out, correlation is not causation— and, as was said years ago: “It is better to be roughly right than precisely wrong.”32 Whether considering cultural, geographic, political or other factors, interactions of these various factors are part of the reason why understanding influences is very different from claiming determinism. a Daron Acemoglu and James A. Robinson, Why Nations Fail: The Origins of Power, Prosperity, and Poverty (New York: Crown Business, 2012). b Angus Deaton, The Great Escape: Health, Wealth, and the Origins of Inequality (Princeton: Princeton University Press, 2013). c The Gulf Stream, originating in the subtropical waters of the Gulf of Mexico, flows northeastward through the Atlantic Ocean past the British Isles, creating milder winters in Western Europe than at the same latitudes in Eastern Europe, Asia or North America.

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According to the authors of Why Nations Fail, “World inequality today exists because during the nineteenth and twentieth centuries some nations were able to take advantage of the Industrial Revolution and the technologies and methods of organization that it brought while others were unable to do so.” Daron Acemoglu and James A. Robinson, Why Nations Fail: The Origins of Power, Prosperity, and Poverty (New York: Crown Business, 2012), p. 271. But economic inequalities among nations did not begin with the industrial revolution, and the international inequalities of ancient times were by no means necessarily less than the inequalities of the nineteenth and twentieth centuries, or the inequalities of today. 15.

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Smith, The Times Books World Weather Guide, pp. 132, 376. In none of the winter months— from December through March— is the average daily low temperature in Washington warmer than in London, and the lowest temperature ever recorded in Washington is lower for each of those winter months than in London. 26. Daron Acemoglu and James A. Robinson, Why Nations Fail, p. 62. 27. Fernand Braudel, The Structures of Everyday Life: The Limits of the Possible, translated by Siân Reynolds (Berkeley: University of California Press, 1992), p. 101. 28. See, for example, Richard Lynn and Tatu Vanhanen, IQ and Global Inequality (Augusta, Georgia: Washington Summit Publishers, 2006), pp. 105–111. 29.

Political Order and Political Decay: From the Industrial Revolution to the Globalization of Democracy
by Francis Fukuyama
Published 29 Sep 2014

Stephen Haber, “Rainfall and Democracy: Climate, Technology, and the Evolution of Economic and Political Institutions” (unpublished paper, August 24, 2012). 7. Daron Acemoglu, Simon Johnson, and James A. Robinson, “The Colonial Origins of Comparative Development: An Empirical Investigation,” American Economic Review 91, no. 5 (2001): 1369–1401. These findings have been incorporated into Acemoglu and Robinson, Why Nations Fail. 8. Daron Acemoglu, Simon Johnson, and James A. Robinson, “Reversal of Fortune: Geography and Institutions in the Making of the Modern World Income Distribution,” Quarterly Journal of Economics 107 (2002): 1231–94; David Eltis, Frank D.

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This pattern of behavior is visible in countries from Nigeria to Mexico to Indonesia.2 Douglass North, John Wallis, and Barry Weingast have an alternative label for neopatrimonialism, what they call a “limited access order,” in which a coalition of rent-seeking elites use their political power to prevent free competition in both the economy and the political system.3 Daron Acemoglu and James Robinson use the term “extractive” to describe the same phenomenon.4 At one stage in human history, all governments could be described as patrimonial, limited access, or extractive. The question is, How did such political orders ever evolve into modern states? The authors cited above are better at describing the transition than providing a dynamic theory of change.

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Thus the Creole elites in Latin America were able in later years to block immigration into their societies, so as to prevent competition in labor markets. They also restricted the franchise much later into the nineteenth century than did the United States. As a result, Latin America remains overall the most unequal region of the world, despite the fact that its political institutions are today largely democratic. The economists Daron Acemoglu, James Robinson, and Simon Johnson modify this argument in an often-cited paper, arguing that the variation in early institutions was due not to factor endowments so much as early settler mortality, which was driven in turn by the diseases to which they were subject. Where Europeans found it safe to settle, they demanded rights for themselves and institutions that would limit the ability of the state to take away their property arbitrarily.

Red Flags: Why Xi's China Is in Jeopardy
by George Magnus
Published 10 Sep 2018

Ultimately, like all other ageing economies, it will have to look to productivity growth. This takes us directly to the issue underlying the fourth red flag, the middle-income trap. 7 MIDDLE-INCOME TRAP In a notable book about economic development, entitled Why Nations Fail, authors Daron Acemoglu and James Robinson set the scene by introducing us to the city of Nogales.1 To the north of the fence that divides it lies the American city of Nogales, Arizona. To the south lies the Mexican city of Nogales, Sonora. The geography and climate either side of the fence are identical. The ethnic make-up of the population is the same with inter-related families that go back a long way.

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China Labour Bulletin, ‘China’s Social Security System’, June 2016, <http://www.clb.org.hk/content/china’s-social-security-system>. 23. OECD, ‘Economic Survey of China 2017’. 24. ‘China 2030’, World Bank and Development Research Center of the State Council, p. 332. 25. World Health Organization, ‘Deepening Health Reform in China’, 2016. 7 Middle-Income Trap 1. Daron Acemoglu and James Robinson, Why Nations Fail: The Origins of Power, Prosperity and Poverty, Crown Publishers, 2012. 2. ‘With Greater Efforts, There’s Still Time to Avoid Middle-Income Trap’, China Daily, 17 March 2016, <http://www.chinadaily.com.cn/opinion/2016-03/17/content_23903667.htm>. 3. Greg Larson, Norman Loayza and Michael Woolcock, ‘The Middle-Income Trap: Myth or Reality?’

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property price rises (i) SEZs (i), (ii) stock exchange opened (i), (ii) Shenzhen–Hong Kong Connect Scheme (i) shipping (i) Sichuan (i) Silk Road BRI and (i) historical routes and trade (i) Xi invokes (i), (ii), (iii) Silk Road Economic Belt (i) see also Belt and Road Initiative Silk Road Fund (i) n7 Singapore Asian Tiger economies (i) fertility rates (i), (ii) high growth maintained (i) high-speed rail links (i) middle- to high-income (i) RCEP (i) SCIOs and (i) TPP member (i) Singapore Airlines (i) Sino IC Fund (i) Sino-Japanese war (1895) (i) see also Japan Sinochem (i) Sinopec (i) skyscrapers (i) Slovenia (i) smaller banks at risk (i) Smith, Adam (i), (ii) Social Insurance Law (2011) (i), (ii) social security (i), (ii), (iii) social unrest (i) socialism (i), (ii), (iii), (iv), (v), (vi) SOEs (state-owned enterprises) (i), (ii) attempts to strengthen (i) debt for equity programmes (i) debts of (i), (ii) expansion (i) imprudent lending to (i) lagging behind private firms (i) more required of (i) privatisation (i) public-private partnerships (i) reform of (i), (ii) n16 viability (i) Sony (i) sorghum (i) Soros, George (i) South Africa BRICS (i), (ii) Chinese interests in (i) education completion rate (i) middle- to high-income (i) Renminbi reserves (i) South China Sea contested islands (i) global sea-borne trade (i) maritime goals in (i) rimland (i) Scarborough Shoal (i) Taiwan and (i) South Korea see also Korea ASEAN (i) Asian crisis (i) Asian Tiger economies (i) attitude to Renminbi bloc (i) China restricts tourism (i) external surplus comparison (i) fertility rates (i), (ii) high growth maintained (i) middle- to high-income (i), (ii) old-age dependency ratio (i) protectionist barriers (i) protests against (i) RCEP (i) retirement in (i) robots (i) US steel imports (i) Southern Tour (Deng) (i), (ii), (iii) Soviet Communist Party (i), (ii) Soviet Union backs Mao (i) fall of (i) see also Russia models adopted from (i) relations with (i) technological expertise (i) Xi learns lessons from (i) Spain (i), (ii), (iii) Special Drawing Rights (IMF) see also IMF importance of Remninbi (i) lack of practical purpose for China (i), (ii) prestige associated with (i) Renminbi admitted to (i) special economic zones (SEZs) (i), (ii), (iii), (iv) Spykman, Nicholas John (i), (ii) Sri Lanka (i), (ii), (iii) Starbucks (i) State Administration for Foreign Exchange (SAFE) (i), (ii), (iii), (iv) n7 State Council Development Research Center (i) Financial Stability and Development Committee (i) housing reform (i), (ii) Made in China 2025 (MIC25) (i) merger of Regulatory Commissions (i) regulations for migrants (i) SOEs regulation (i) state intervention (i), (ii) State-owned Assets Supervision and Administration Commission of the State Council (SASAC) (i), (ii) steel (i), (ii) Stern, Lord Nicholas (i) stock market (i) structure of banking system (i) sub-Saharan Africa (i) see also Africa Suez Canal (i) Sun Yat-sen (i), (ii) Sun Zhigang (i) Sunseeker (i) Sweden (i), (ii) SWIFT (Society for Worldwide Interbank Financial Telecommunications) (i) Swissport (i) Switzerland (i), (ii) Taiping Rebellion (i), (ii) Taiwan ageing population (i) agricultural produce of (i) Asian Tiger economies (i) diplomatic relations established (i) fertility rate (i) ‘first island chain’ (i) Foxconn (i) high growth maintained (i) loss of suzerainty (i), (ii) middle- to high-income (i) old-age dependency ratio (i) Renminbi bloc, attitude to (i) Ryukyu islands (i) separatism issue (i), (ii) US arms sales (i) Tanzania (i), (ii) Tariff Act 1930 (i) technology (i), (ii) Tencent (i), (ii) TFP (total productivity factor) (i) Thailand ASEAN (i) Asian crisis (i) disputes (i) high growth maintained (i) middle-income country (i) rail projects (i), (ii) Thames Estuary (i) Third Front Initiative (i) Tiananmen Gate (i) Tiananmen Square (i), (ii), (iii), (iv) Tianjin (Tientsin) coal mines (i) colonial architecture (i) demilitarised zone (i) free trade zone (i), (ii) growing role (i) water shortages (i) Tibet (i), (ii), (iii), (iv) Tientsin, Treaty of (i) tiers (classification of cities) (i) Togo (i) Tomorrow Group (i) TPP (Trans-Pacific Partnership) (i), (ii), (iii) Trade Act 1974 (i) trains (i), (ii) Transparency International (i) transport 13th Five-Year Plan (i) BRI initiatives (i), (ii) car sales (i), (ii) freight trains (i) rail network (i) traps (four economic) (i), (ii) Treasury (US) (i) treaty ports (i), (ii), (iii) Trump, Donald AI budget proposals (i) America First (i) China accused (i) China aided by (i) China’s edgy response (i) focus of (i) takes issue with China (i) TPP withdrawal (i) views on trade (i) Tsingtao brewery (i) TTIP (Transatlantic Trade and Investment Partnership) (i) Turkey (i), (ii), (iii), (iv) Turkic language speakers (i) TVEs (town and village enterprises) (i), (ii) UK see Britain unemployment (i) UNESCO (i) United Nations Population Division (i), (ii) United States (i) America First (i), (ii) arms sales to Taiwan (i) Asian economies and the dollar (i) Bretton Woods (i) challenges from (i) China and, a progress report (i) China and the dollar (i), (ii), (iii), (iv), (v) China as Trump’s major target (i) China’s direct investment (i) dollar’s survival (i) future administrations (i) Japan and (i) Marshall Plan (i), (ii) Mexican border (i) North Korea (i) products sold to China (i) Renminbi ‘manipulation’ (i) retreat from global leadership (i) rimland (i) rivalry with (i) tariffs (i) trade and technology disputes (i) trade deficit with China (i), (ii) Trump accuses China (i) Trump’s effect on (i) University of Wisconsin-Madison (i) Unlikely Partners (Julian Gewirtz) (i) Ural Mountains (i) urban living (i), (ii), (iii) Vanke Real Estate Corporation (i) Vasco da Gama (i) VAT (i) Venezuela (i), (ii), (iii), (iv) Versailles, Treaty of (i), (ii) vested interests (i) Vientiane (i) Vietnam 18th century (i) American steel imports (i) ASEAN (i) Chinese claims (i) Human Freedom Index (i) low value manufacturing moves to (i), (ii) TPP (i) Voltaire (i) Waldorf Astoria, Manhattan (i) Walmart (i) Wang Qishan (i) WAP (working-age population) see also population statistics child dependency and (i) defining (i) falls for first time (i), (ii) immigration rates and (i) low-cost workers (i) productivity and (i) retirement age and (i) water scarcity (i), (ii), (iii) Wellington Street (Hong Kong) (i) Wen Jiabao (i), (ii), (iii) West, the bad decisions written off by (i) China and, reviewed (i) financial crisis (i), (ii), (iii) individualism (i) rising tensions with (i) Western mindsets (i) Western skills used (i) ‘Western values’ (i) Xi minded to press his advantage (i) West Point Military Academy (i) Why Nations Fail (Daron Acemoglu and James Robinson) (i) WMPs (wealth management products) nature of (i), (ii) regulatory issues (i), (ii) small and medium size banks (i) women (i), (ii) World Bank 2015 research paper (i) ‘China 2030’ (i) China’s integration (i) Chinese cities controlled (i) ‘Governance Indicators’ (i) labour force participation (i) laissez-faire reconsidered (i) LGFV liabilities (i) MES and (i) middle income nations (i), (ii) world dominance (i) World Economic Forum (i) World Health Organization (i) World Heritage Sites (i) World Intellectual Property Organization (i) World Trade Organization (WTO) admitted (i), (ii), (iii), (iv), (v), (vi), (vii) balance of payments surge (i) export booms from (i) GATT and (i) globalisation effects (i), (ii) preparations for joining (i), (ii) retaliation rules (i) Wu Xiaohui (i) Wuhan (i) Wuhan Greenland Tower (i) Wuhan Iron and Steel (i) Wuhan Motor Engines (i) Xcerra (i) Xi Jinping see also Communist Party all-powerful (i) anti-corruption campaigns (i), (ii), (iii), (iv) Belt and Road Initiative see Belt and Road Initiative capital controls (i) Chinese Dream invoked (i), (ii) Communist Party and see Communist Party emperor-like status (i), (ii) energy and pollution aims (i) financial security campaign (i), (ii) first Belt and Road Forum (i) jeopardy (i) Leading Small Groups (i) Mao and (i), (ii), (iii) Mao, Deng and (i) president for life?

The New Class War: Saving Democracy From the Metropolitan Elite
by Michael Lind
Published 20 Feb 2020

Norton, 2018), p. 230. 7. Jane Gravelle, “Tax Havens: International Tax Avoidance and Evasion,” Congressional Research Service, January 2015, cited in Kuttner, Can Democracy Survive Global Capitalism?, p. 228. 8. Kuttner, Can Democracy Survive Global Capitalism?, p. 227. 9. Quoted in Daron Acemoglu and James A. Robinson, “How Do Populists Win?” Project Syndicate, May 31, 2019. 10. Stephen S. Roach, “Outsourcing, Protectionism, and the Global Labor Arbitrage,” Morgan Stanley, November 11, 2003. 11. Richard Dobbs et al., “The World at Work: Jobs, Pay, and Skills for 3.5 Billion People,” McKinsey Global Institute, January 2012. 12.

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Lacsamana, eds., Women and Globalization (Amherst, NY: Humanity Books, 2004), pp. 16–17, cited in Hester Eisenstein, Feminism Seduced: How Global Elites Use Women’s Labor and Ideas to Exploit the World (Boulder, CO: Paradigm, 2009), p. 17. 16. David H. Autor, David Dorn, and Gordon H. Hanson, “The China Shock: Learning from Labor-Market Adjustment to Large Changes in Trade,” Annual Review of Economics 8, October 2016, pp. 205–40; Daron Acemoglu, David Autor, David Dorn, Gordon H. Hanson, and Brendan Price, “Import Competition and the Great U.S. Employment Sag of the 2000s,” National Bureau of Economic Research Working Paper No. 20395, August 2014. 17. Michael W. L. Elsby, Bart Hobijn, and Aysegul Sahin, “The Decline of the U.S. Labor Share,” Brookings Papers on Economic Activity, Fall 2013. 18.

The Tyranny of Metrics
by Jerry Z. Muller
Published 23 Jan 2018

One assumption that lies behind the effort to boost levels of college enrollment and completion is that increases in average educational attainment somehow translate into higher levels of national economic growth. But some distinguished economists on both sides of the Atlantic—Alison Wolf in England, and Daron Acemoglu and David Autor in the United States—have concluded that that is no longer the case, if it ever was. In an age in which technology is replacing many tasks previously performed by those with low to moderate levels of human capital, national economic growth based on innovation and technological progress depends not so much on the average level of educational attainment as on the attainment of those at the top of the distribution of knowledge, ability, and skill.14 In recent decades, the percentage of the population with a college degree has gone up, while the rate of economic growth has declined.

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Wolf, Does Education Matter? chap. 7. 13. Lorelle L. Espinosa, Jennifer R. Crandall, and Malika Tukibayeva, Rankings, Institutional Behavior, and College and University Choice (Washington, D.C., American Council on Education, 2014), p. 12. 14. Wolf, Does Education Matter? chap. 7; similarly Daron Acemoglu and David Autor, “What Does Human Capital Do?” Journal of Economic Literature 50, no. 2 (2012), pp. 426–63. 15. Wolf, Does Education Matter? chaps. 2 and 6; Paul Beaudry, David A. Green, and Benjamin M. Sand, “The Great Reversal in the Demand for Skill and Cognitive Tasks,” NBER Working Paper 18901, March 2013. 16.

Them And Us: Politics, Greed And Inequality - Why We Need A Fair Society
by Will Hutton
Published 30 Sep 2010

See also William Doyle (2009) Aristocracy and its Enemies in the Age of Revolution, Oxford University Press. 3 Joel Mokyr and John Nye (2007) ‘Distributional Coalitions, the Industrial Revolution, and the Origins of Economic Growth in Britain’, paper prepared for the special session in honour of Mancur Olson, Southern Economic Meeting, Charleston. 4 Joel Mokyr (2009) The Enlightened Economy: An Economic History of Britain 1700–1850, Yale University Press. 5 Daron Acemoglu and James A. Robinson (2000) ‘Political Losers as a Barrier to Economic Development’, American Economic Review 90 (2): 126–30. See also Daron Acemoglu and James A. Robinson (2006) ‘Economic Backwardness in Political Perspective’, American Political Science Review 100 (1): 115–31. 6 Douglass C. North, John Joseph Wallis and Barry R. Weingast (2006) ‘A Conceptual Framework for Interpreting Recorded Human History’, NBER Working Paper No. 12795, p. 32. 7 Cited in Edward L.

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Instead, for example, Professor Robert Shiller argues that a switch from unemployment to employment insurance, so that employees can insure their wage or salary against job loss, would make them more ready to run and manage risks because their income would be higher than the minimal job-seeker’s allowance.50 Daron Acemoglu and Robert Shimer make a similar point, arguing that unemployment insurance is a tool of economic efficiency.51 If workers know that their income will be cushioned by unemployment insurance, they will be more likely to accept jobs in riskier enterprises at a lower risk premium. So risk-taking, innovative firms will be able to hire them for lower wages than would be the case if they had to compensate them for the risk.

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See also Jonathan Gruber (ed.) (2001) Risky Behavior among Youths, University of Chicago Press; and BIS (2008) ‘Foresight Project on Mental Capital and Wellbeing’, report. 43 Sutton Trust and the Department for Business, Innovation and Skills (2009) ‘Applications, Offers and Admissions to Research Led Universities’, joint report. 44 Simon Briscoe, ‘Exam Ability No Key to Oxbridge’, Financial Times,18 September 2007, at http://www.ft.com/cms/s/0/dbf5d3ba-6610-11dc-9fbb-0000779fd2ac.html. 45 Cabinet Office (2009) Unleashing Aspiration: The Final Report of the Panel on Fair Access to the Professions, HMSO. 46 Richard Murphy, (2008) ‘The Missing Billions: The UK Tax Gap’, TUC Touchstone Pamphlet No. 1. 47 Ibid. 48 Jacob Hacker (2006) The Great Risk Shift: The Assault on American Jobs, Families, Health Care and Retirement and How You Can Fight Back, Oxford University Press. 49 European Commission Flash Barometer (2007) ‘Entrepreneurship Survey of the EU (25 Member States) United States, Iceland and Norway’, analytical report, Flash Eurobarometer No. 192. 50 Robert Shiller (2004) The New Financial Order: Risk in the 21st Century, Princeton University Press. 51 Daron Acemoglu and Robert Shimer (1999) ‘Efficient Unemployment Insurance’, Journal of Political Economy [University of Chicago] 107 (5): 893–928. 52 Lans Bovenberg and Ton Wilthagen (2008) On the Road to Flexicurity, Tilburg University. See also Ton Wilthagen and Frank Tros (2004) ‘The Concept of Flexicurity: A New Approach to Regulating Employment and Labour Markets’, European Review of Labour and Research 10 (2), available at http://papers.ssrn.com/sol3/papers.cfm?

China's Future
by David Shambaugh
Published 11 Mar 2016

For economies to transition up the added-value ladder, break through the developmental ceiling, and make the kinds of qualitative transitions necessary to become truly modern and developed, political institutions must be facilitative. They must cease being “extractive” states and become what scholars Daron Acemoglu and James Robinson describe in their insightful book Why Nations Fail as “inclusive states.”11 This requires tolerance—even facilitation—of autonomous actors within society. This line of argument is hardly new news to social scientists. Modernization theorists during the 1960s—such as Seymour Martin Lipset, Samuel Huntington, Walt W.

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European Chamber of Commerce in China, Beijing Position Paper 2015/2016: http://www.europeanchamber.com.cn/en/publications-local-position-paper. 9. Minxin Pei, China’s Trapped Transition: The Limits of Developmental Autocracy, op. cit. 10. Ian Bremmer, The J-Curve: A New Way to Understand Why Nations Rise and Fall (New York: Simon & Schuster, 2006). See, in particular, chapter 6 on China. 11. Daron Acemoglu and James A. Robinson, Why Nations Fail (New York: Crown Business, 2012). 12. Seymour Martin Lipset, Political Man (Baltimore, MD: Johns Hopkins University Press, 1963); Walt W. Rostow, Politics and the Stages of Growth (Cambridge: Cambridge University Press, 1962); A. F. K. Organski, The Stages of Political Development (New York: Alfred Knopf, 1965); and David Apter, The Politics of Modernization (Chicago: University of Chicago Press, 1965). 13.

The End of Doom: Environmental Renewal in the Twenty-First Century
by Ronald Bailey
Published 20 Jul 2015

One fundamental downside to this form of social organization is that innovation, both social and technological, is stifled because it threatens the monopolies through which elite patrons extract wealth. But why don’t extractive elites encourage economic growth? After all, economic growth would mean more wealth for them to loot. In their 2012 book Why Nations Fail: The Origins of Power, Prosperity, and Poverty, MIT economist Daron Acemoğlu and Harvard economist James Robinson largely concur with the analysis of North and his colleagues. They too find that since the Neolithic agricultural revolution, most societies have been organized around “extractive” political and economic institutions that funnel resources from the mass of people to small but powerful elites.

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economic growth proceeded: Angus Maddison, The Maddison Project, Original Maddison Home Page, January 2013. www.ggdc.net/maddison/maddison-project/home.htm. ultimately unsustainable societies: Douglass C. North, John Joseph Wallis, and Barry R. Weingast, Violence and Social Orders: A Conceptual Framework for Interpreting Recorded Human History. New York: Cambridge University Press, 2009. concur with the analysis: Daron Acemoğlu and James Robinson, Why Nations Fail: The Origins of Power, Prosperity, and Poverty. New York: Crown Business, 2012. “Many lines of evidence”: Harvey Weiss and Raymond S. Bradley, “What Drives Societal Collapse?” The Heat Is Online, January 26, 2001. www.heatisonline.org/contentserver/objecthandlers/index.cfm?

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Scientific American, September 2010. www.scientificamerican.com/article.cfm?id=democracys-laboratory. “Human reason can neither predict”: Friedrich Hayek, The Constitution of Liberty: The Definitive Edition, ed. Ronald Hamowy. Chicago: University of Chicago Press, 2011, 94. Wherever the institutions: Daron Acemoğlu and James Robinson, Why Nations Fail: The Origins of Power, Prosperity, and Poverty. New York: Crown Business, 2012. freedom means the renunciation: Friedrich A. Hayek, The Constitution of Liberty. Chicago: University of Chicago Press, 1978, 572. nazbol.net/library/authors/Friedrich%20August%20Hayek/Friedrich_Hayek%20-%20The_constitution_of_liberty.pdf.

Why Nations Fail: The Origins of Power, Prosperity, and Poverty
by Daron Acemoglu and James Robinson
Published 20 Mar 2012

” —Robert Solow, Nobel laureate in economics, 1987 Copyright © 2012 by Daron Acemoglu and James A. Robinson All rights reserved. Published in the United States by Crown Publishers, an imprint of the Crown Publishing Group, a division of Random House, Inc., New York. www.crownpublishing.com CROWN and the CROWN colophon are registered trademarks of Random House, Inc. Library of Congress Cataloging-in-Publication Data Acemoglu, Daron. Why nations fail : the origins of power, prosperity, and poverty / Daron Acemoglu, James A. Robinson.—1st ed. p. cm. Includes bibliographical references. 1.

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The book reviews how some good regimes got launched and then had a virtuous spiral, while bad regimes remain in a vicious spiral. This is important analysis not to be missed.” —Peter Diamond, Nobel laureate in economics, 2010 “For those who think that a nation’s economic fate is determined by geography or culture, Daron Acemoglu and Jim Robinson have bad news. It’s manmade institutions, not the lay of the land or the faith of our forefathers, that determine whether a country is rich or poor. Synthesizing brilliantly the work of theorists from Adam Smith to Douglass North with more recent empirical research by economic historians, Acemoglu and Robinson have produced a compelling and highly readable book.”

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Map 18: Drawn using data from the 1840 U.S. Census, downloadable at the National Historical Geographic Information System: http://www.nhgis.org/. Map 19: Drawn using data from the 1880 U.S. Census, downloadable at the National Historical Geographic Information System: http://www.nhgis.org/. Map 20: Daron Acemoglu, James A. Robinson, and Rafael J. Santos (2010), “The Monopoly of Violence: Evidence from Colombia,” at http://scholar.harvard.edu/jrobinson/files/ jr_formationofstate.pdf. REFERENCES Abraham, Arthur, and Habib Sesay (1993). “Regional Politics and Social Service Provision Since Independence.”

The Third Pillar: How Markets and the State Leave the Community Behind
by Raghuram Rajan
Published 26 Feb 2019

While the rallying cry of the American Revolution was “no taxation without representation,” it said nothing about the representation of those who did not pay taxes. In fact, the franchise was typically extended in steps, not in one go (as might have been the case if legislators became suddenly enlightened). Therefore, we have to look elsewhere for explanations. FEAR Economist Daron Acemoglu and political scientist James Robinson argue that an important reason for the elite to extend the franchise was perhaps the fear that if it were not extended, the unwashed masses might revolt.27 The French Revolution was a warning to those in power that if they were not careful, many of their heads could end up mounted on pikes.

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Those who remain are typically more skilled or qualified workers, because more of the output now comes from technologically advanced sectors.17 How many of these job losses come from increased imports, especially from China, which increased its share of world manufacturing value added from 4.1 percent in 1991 to 24 percent in 2012? A recent study by economists Daron Acemoglu, David Autor, David Dorn, Gordon Hanson, and Brendan Price estimates that the direct effects of Chinese imports on job losses—such as a furniture factory closing down in North Carolina because the firm now imports from China—is only about 10 percent of US manufacturing job losses over the period 1999 to 2011, which spans China’s great export boom.18 When the losses in output of US firms that buy from, or sell to, the now-closed factory are added in, imports from China can account for about 18 percent of job losses in manufacturing.

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See, for example, Alessandro Lizzeri and Nicola Persico, “Why Did the Elites Extend the Suffrage? Democracy and the Scope of Government, with an Application to Britain’s ‘Age of Reform,’” Quarterly Journal of Economics 119, no. 2 (May 2004); 707–65. 25. See, for instance, Engerman and Sokoloff, “Evolution of Suffrage”; Daron Acemoglu and James A Robinson, “Why Did the West Extend the Franchise? Democracy, Inequality, and Growth in Historical Perspective,” Quarterly Journal of Economics 115, no. 4 (November 2000): 1167–99, https://doi.org/10.1162/003355300555042; and Lizzeri and Persico, “Why Did the Elites Extend the Suffrage?”

The Identity Trap: A Story of Ideas and Power in Our Time
by Yascha Mounk
Published 26 Sep 2023

GO TO NOTE REFERENCE IN TEXT persuade your compatriots: The basic idea that political elites are less willing to accept democratic elections as a mechanism for who should rule when a loss at the ballot box would incur big costs on them has long been accepted by social scientists. According to Daron Acemoglu and James A. Robinson, for example, economic elites in dictatorships are much more likely to accept a democratic transition when wealth and income are distributed comparatively equally, because democratic rule under such circumstances is less likely to lead to strongly redistributive public policies. See Daron Acemoglu and James A. Robinson, “A Theory of Political Transitions,” American Economic Review 91, no. 4 (2001): 938–63. See also Carles Boix, Democracy and Redistribution (Cambridge: Cambridge University Press, 2003).

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The Mbuti, for example, are often celebrated for having a society in which “a woman is in no way the social inferior of a man,” but on closer inspection it turns out that they sanctioned a “certain amount of wife-beating.” Holden Karnofsky, “Pre-agriculture Gender Relations Seem Bad,” Cold Takes, Oct. 19, 2021, www.cold-takes.com/hunter-gatherer-gender-relations-seem-bad/. GO TO NOTE REFERENCE IN TEXT small group vast powers: For a good overview, see Daron Acemoglu and James A. Robinson, The Narrow Corridor: States, Societies, and the Fate of Liberty (New York: Penguin Press, 2020). Some evidence suggests that preagricultural societies were comparatively egalitarian, though they also suffered from very high rates of violence. See, for example, D. W. Harding, “Hierarchical or Egalitarian?

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GO TO NOTE REFERENCE IN TEXT failed to deliver: See, for example, Karlsson Klas-Göran and Michael Schoenhals, Crimes Against Humanity Under Communist Regimes: Research Review (Stockholm: Living History Forum, 2008); and Stéphane Courtois et al., The Black Book of Communism: Crimes, Terror, Repression (Cambridge, Mass.: Harvard University Press, 1999). GO TO NOTE REFERENCE IN TEXT one set of institutions: For an overview of some good recent defenses of liberalism, see “the best guide” endnote in part IV, p. 370. GO TO NOTE REFERENCE IN TEXT live in fear: Daron Acemoglu and James A. Robinson, Why Nations Fail: The Origins of Power, Prosperity, and Poverty (New York: Crown, 2012). GO TO NOTE REFERENCE IN TEXT fundamental problem of politics: Another crucial question, of course, is about who is included in the “people,” the group that is thought of as part of those who shall be ruled.

Exponential: How Accelerating Technology Is Leaving Us Behind and What to Do About It
by Azeem Azhar
Published 6 Sep 2021

Kramer, ‘The Biggest Thing Amazon Got Right: The Platform’, Gigaom, 12 October 2011 <https://gigaom.com/2011/10/12/419-the-biggest-thing-amazon-got-right-the-platform/> [accessed 18 September 2020]. 30 The approach has become de rigueur among other digital cognoscenti, but Bezos’s email should surely be considered as one of the single most important internal communications of all time. 31 Chris Johnston, ‘Amazon Opens a Supermarket with No Checkouts’, BBC News, 22 January 2018 <https://www.bbc.com/news/business-42769096> [accessed 18 September 2020]. 32 Peter Holley, ‘Amazon’s One-Day Delivery Service Depends on the Work of Thousands of Robots’, Washington Post, 7 June 2019 <https://www.washingtonpost.com/technology/2019/06/07/amazons-one-day-delivery-service-depends-work-thousands-robots/> [accessed 18 September 2020]. 33 Harry Dempsey, ‘Amazon to Hire Further 100,000 Workers in US and Canada’, 14 September 2020 <https://www.ft.com/content/9817aae3-1e89-4383-aa34-742447d5794a> [accessed 18 September 2020]. 34 ‘Netflix Continues to Hire Through the Pandemic, Says Co-CEO Reed Hastings’, Bloomberg, 9 September 2020 <https://www.bloomberg.com/news/videos/2020-09-09/netflix-continues-to-hire-through-the-pandemic-video> [accessed 18 September 2020]. 35 ‘Netflix: Number of Employees 2006-2020’, Macro Trends <https://www.macrotrends.net/stocks/charts/NFLX/netflix/number-of-employees> [accessed 27 March 2021]. 36 Vishnu Rajamanickm, ‘JD.Com Opens Automated Warehouse That Employs Four People but Fulfills 200,000 Packages Daily’, FreightWaves, 25 June 2018 <https://www.freightwaves.com/news/technology/jdcom-opens-automated-warehouse-that-employs-four-people-but-fulfills-200000-packages-daily> [accessed 27 March 2021]. 37 Reuters Staff, ‘Dish to Close 300 Blockbuster Stores, 3,000 Jobs May Be Lost’, Reuters, 23 January 2013 <https://www.reuters.com/article/us-blockbuster-storeclosings-idUSBRE90M05I20130123> [accessed 7 January 2021]. 38 Daron Acemoglu, Claire LeLarge and Pascual Restrepo, Competing with Robots: Firm-Level Evidence from France, Working Paper Series (National Bureau of Economic Research, February 2020) <https://doi.org/10.3386/w26738>. 39 Daron Acemoglu and Pascual Restrepo, Robots and Jobs: Evidence from US Labor Markets, Working Paper Series (National Bureau of Economic Research, March 2017) <https://doi.org/10.3386/w23285>. 40 David Klenert, Enrique Fernández-Macías and José-Ignacio Antón, ‘Don’t Blame It on the Machines: Robots and Employment in Europe’, VoxEU, 24 February 2020 <https://voxeu.org/article/dont-blame-it-machines-robots-and-employment-europe> [accessed 10 September 2020]. 41 Till Leopold et al., The Future of Jobs 2018, World Economic Forum <https://wef.ch/2NH6NiV> [accessed 25 September 2020]. 42 Leslie Willcocks, ‘Robo-Apocalypse Cancelled?

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Across an economy, automation might still lead to job losses – albeit with firms like Amazon and Netflix employing increasing numbers of people. The wider impact of automation is a point on which economists have hemmed and hawed. The French study cited above offers up a sobering picture of the macroeconomic impact of automation – concluding that, overall, automation leads to the loss of jobs across a society. The economists Daron Acemoglu and Pascual Restrepo, who co-authored the study, have conducted much of the most thought-provoking research in this area. They examined the impact of industrial robots in manufacturing, mostly in the automotive sector, and found that the machines were responsible for more than 650,000 job losses in the US between 1990 and 2007.

What Would the Great Economists Do?: How Twelve Brilliant Minds Would Solve Today's Biggest Problems
by Linda Yueh
Published 4 Jun 2018

Although we do observe some convergence among leading industrial nations that trade with each other, an overwhelming feature of the last ten millennia is that we have evolved into radically different religious, ethnic, cultural, political, and economic societies, and the gap between rich and poor nations, between developed and undeveloped nations, is as wide today as it ever was and perhaps a great deal wider than ever before.3 It seems hardly radical, but North took economics out of its comfort zone, which consisted of examining more easily measured inputs like labour and capital and instead brought in politics, sociology and history in order to understand why some countries succeed and others fail. North won the Nobel Prize in economics in 1993. Along with his fellow laureates Ronald Coase (who won in 1991) and Oliver Williamson (who won more than a decade later in 2009), North founded the field of New Institutional Economics. This work was later expanded upon by MIT economist Daron Acemoglu and University of Chicago political scientist James Robinson, notably in their book Why Nations Fail: The Origins of Power, Prosperity, and Poverty, and by many others who have built on North’s work on the role of institutions in economic development. North spent his career trying to find the reasons behind economic disparity, which he formalized as: ‘What accounts for societies experiencing long-run stagnation or an absolute decline in economic well-being?’

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As North put it in one of his last contributions: My pet peeve all through the last twenty years or thirty years has been the narrowness of economists, in fact of all social scientists, in not opening up whole new areas … I think the biggest thing I want to leave with you is how we’ve got to study more about how the mind and brain work and how the structure is evolving over time as we get more information, more knowledge, and when it’s going in directions that are creative.25 North’s research has certainly opened up the subject. As a result of his path-breaking work and legacy, economists have considered institutions much more carefully as an essential part of understanding economic development. For instance, building on North’s work, Daron Acemoglu and James Robinson, whose book was mentioned earlier as an exemplar of the current thinking in economics, examined in detail instances from around the world in which bad institutions led to dire outcomes. They concluded that the issue is when the institutions that underpin the economy are extractive and encourage exploitation rather than productive effort: Nations fail today because their extractive economic institutions do not create the incentives needed for people to save, invest, and innovate.

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Lucas, Jr., 1988, ‘On the Mechanics of Economic Development’, Journal of Monetary Economics, 22(1), pp. 3–42, at p. 5. 21.  North, Institutions, Institutional Change and Economic Performance, p. 7. 22.  Ibid., p. 137. 23.  Ibid., p. 6. 24.  Ibid., p. 140. 25.  North, Brown and Lueck, ‘A Conversation with Douglass North’, pp. 8, 9. 26.  Daron Acemoglu and James A. Robinson, 2012, Why Nations Fail, London: Profile Books, pp. 372–3. 27.  Ibid., p. 402. 28.  Ibid., p. 426. 29.  Ibid., p. 427. 30.  North, Institutions, Institutional Change and Economic Performance, p. 140. 12 – Robert Solow: Do We Face a Slow-Growth Future? 1.    

The Great Economists: How Their Ideas Can Help Us Today
by Linda Yueh
Published 15 Mar 2018

Although we do observe some convergence among leading industrial nations that trade with each other, an overwhelming feature of the last ten millennia is that we have evolved into radically different religious, ethnic, cultural, political, and economic societies, and the gap between rich and poor nations, between developed and undeveloped nations, is as wide today as it ever was and perhaps a great deal wider than ever before.3 It seems hardly radical, but North took economics out of its comfort zone, which consisted of examining more easily measured inputs like labour and capital and instead brought in politics, sociology and history in order to understand why some countries succeed and others fail. North won the Nobel Prize in economics in 1993. Along with his fellow laureates Ronald Coase (who won in 1991) and Oliver Williamson (who won more than a decade later in 2009), North founded the field of New Institutional Economics. This work was later expanded upon by MIT economist Daron Acemoglu and University of Chicago political scientist James Robinson, notably in their book Why Nations Fail: The Origins of Power, Prosperity, and Poverty, and by many others who have built on North’s work on the role of institutions in economic development. North spent his career trying to find the reasons behind economic disparity, which he formalized as: ‘What accounts for societies experiencing long-run stagnation or an absolute decline in economic well-being?’

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As North put it in one of his last contributions: My pet peeve all through the last twenty years or thirty years has been the narrowness of economists, in fact of all social scientists, in not opening up whole new areas … I think the biggest thing I want to leave with you is how we’ve got to study more about how the mind and brain work and how the structure is evolving over time as we get more information, more knowledge, and when it’s going in directions that are creative.25 North’s research has certainly opened up the subject. As a result of his path-breaking work and legacy, economists have considered institutions much more carefully as an essential part of understanding economic development. For instance, building on North’s work, Daron Acemoglu and James Robinson, whose book was mentioned earlier as an exemplar of the current thinking in economics, examined in detail instances from around the world in which bad institutions led to dire outcomes. They concluded that the issue is when the institutions that underpin the economy are extractive and encourage exploitation rather than productive effort: Nations fail today because their extractive economic institutions do not create the incentives needed for people to save, invest, and innovate.

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Lucas, Jr., 1988, ‘On the Mechanics of Economic Development’, Journal of Monetary Economics, 22(1), pp. 3–42, at p. 5. 21. North, Institutions, Institutional Change and Economic Performance, p. 7. 22. Ibid., p. 137. 23. Ibid., p. 6. 24. Ibid., p. 140. 25. North, Brown and Lueck, ‘A Conversation with Douglass North’, pp. 8, 9. 26. Daron Acemoglu and James A. Robinson, 2012, Why Nations Fail, London: Profile Books, pp. 372–3. 27. Ibid., p. 402. 28. Ibid., p. 426. 29. Ibid., p. 427. 30. North, Institutions, Institutional Change and Economic Performance, p. 140. Chapter 12 – Robert Solow: Do We Face a Slow-Growth Future? 1. Nobelprize.org, 1987, ‘Robert M.

The Great Experiment: Why Diverse Democracies Fall Apart and How They Can Endure
by Yascha Mounk
Published 19 Apr 2022

See Shiv Sunny, “Eyewitnesses Recount Delhi Street Horror, Say Girl’s Family Feigned Road Rage to Stab Ankit to Death,” Hindustan Times: New Delhi News, February 5, 2018, https://www.hindustantimes.com/delhi-news/girl-s-mother-feigned-road-rage-to-draw-ankit-out-of-car-eyewitnesses/story-Fj1W2VBCvc3V4nTe4SGNhM.html, and Hemani Bhandari, “Over a Year after Ankit Saxena’s Death, Shehzadi Talks about Her Transformation to a Woman in Charge of Her Life,” Hindu, June 9, 2019, https://www.thehindu.com/news/cities/Delhi/ankit-saxena-murder-shehzadi-opens-up/article27700098.ece. GO TO NOTE REFERENCE IN TEXT As Daron Acemoglu: Daron Acemoglu and James A. Robinson, The Narrow Corridor: States, Societies, and the Fate of Liberty (New York: Penguin Press, 2019). GO TO NOTE REFERENCE IN TEXT the absence of a state: Thomas Hobbes and W. G. Pogson Smith, Hobbes’s Leviathan (Oxford: Clarendon Press, 1943), chapter 13.

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* * * — The bloody history of the twentieth century has focused the minds of philosophers and social scientists on the oppressive powers of modern states. But this threatens to elide a more long-standing, and equally potent, danger to individual liberty: the so-called cage of norms. As Daron Acemoglu and James A. Robinson have chronicled in The Narrow Corridor, the absence of a state need not result in a life of anarchy that is “nasty, brutish, and short.” To maintain some semblance of social order “in societies without centralized authority,” unwritten rules often exercise “a different but no less disempowering sort of dominance on people.”

House of Debt: How They (And You) Caused the Great Recession, and How We Can Prevent It From Happening Again
by Atif Mian and Amir Sufi
Published 11 May 2014

They find the same channel: foreclosures push down nearby house prices by forcing them to sell below the price previously posted in the market. 8. Andrei Shleifer and Robert Vishny, “Liquidation Values and Debt Capacity: A Market Equilibrium Approach,” Journal of Finance 47 (1992): 1343–66. 9. John Geanakoplos, “The Leverage Cycle,” in NBER Macroeconomic Annual 2009, vol. 24, ed. Daron Acemoglu, Kenneth Rogoff, and Michael Woodford (Chicago: University of Chicago Press, 2010), 1–65. 10. See National Fire Protection Association data, http://www.nfpa.org/research/fire-statistics/the-us-fire-problem/home-fires. Chapter Three 1. The exact quote comes from Alan Blinder, who wrote that the failure to save Lehman “was a colossal error, and many people said so at the time.”

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See the following studies for models describing this logic: Michael Harrison and David Kreps, “Speculative Investor Behavior in a Stock Market with Heterogeneous Expectations,” Quarterly Journal of Economics 92 (1978): 323–36; Jose Scheinkman and Wei Xiong, “Overconfidence and Speculative Bubbles,” Journal of Political Economy 111 (2003): 1183–219; and Dilip Abreu and Markus Brunnermeier, “Bubbles and Crashes,” Econometrica 71 (2003): 173–204. 8. The discussion below is inspired by John Geanakoplos, “The Leverage Cycle,” in NBER Macroeconomic Annual 2009, vol. 24, ed. Daron Acemoglu, Kenneth Rogoff, and Michael Woodford (Chicago: University of Chicago Press, 2010), 1–65. 9. This can be confirmed by noting that 100 × $125,000 = $12.5 million. 10. See, for example, Edward Glaeser, Joshua Gottlieb, and Joseph Gyourko, “Can Cheap Credit Explain the Housing Boom?” (working paper no. 16230, NBER, July 2010). 11.

The Narrow Corridor: States, Societies, and the Fate of Liberty
by Daron Acemoglu and James A. Robinson
Published 23 Sep 2019

Also by Daron Acemoglu and James A. Robinson Why Nations Fail Economic Origins of Dictatorship and Democracy PENGUIN PRESS An imprint of Penguin Random House LLC penguinrandomhouse.com Copyright © 2019 by Daron Acemoglu and James A. Robinson Penguin supports copyright. Copyright fuels creativity, encourages diverse voices, promotes free speech, and creates a vibrant culture. Thank you for buying an authorized edition of this book and for complying with copyright laws by not reproducing, scanning, or distributing any part of it in any form without permission.

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Picture research by Toby Greenberg Maps prepared by Carlos Molina and Jose Ignacio Velarde Morales LIBRARY OF CONGRESS CATALOGING-IN-PUBLICATION DATA Names: Acemoglu, Daron, author. | Robinson, James A., 1960– author. Title: The narrow corridor: states, societies, and the fate of liberty / Daron Acemoglu and James A. Robinson. Description: New York : Penguin Press, 2019. | Includes bibliographical references and index. Identifiers: LCCN 2019009146 (print) | LCCN 2019981140 (ebook) | ISBN 9780735224384 (hardcover) | ISBN 9780735224391 (ebook) | ISBN 9781984879189 (international/export) Subjects: LCSH: Liberty. | State, The. | Power (Social sciences)—Political aspects. | Direct democracy. | Decentralization in government. | Executive power. | Violence—Political aspects.

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Further, the publisher does not have any control over and does not assume any responsibility for author or third-party websites or their content. Cover design: Christopher Brian King Cover photograph: Joe and Clair Carnegie / Libyan Soup / Getty Images Version_2 To Arda and Aras, even if this is much less than I owe you. —DA Para Adrián y Tulio. Para mí el pasado, para ustedes el futuro. —JR CONTENTS Also by Daron Acemoglu and James A. Robinson Title Page Copyright Dedication Preface Chapter 1 HOW DOES HISTORY END? Chapter 2 THE RED QUEEN Chapter 3 WILL TO POWER Chapter 4 ECONOMICS OUTSIDE THE CORRIDOR Chapter 5 ALLEGORY OF GOOD GOVERNMENT Chapter 6 THE EUROPEAN SCISSORS Chapter 7 MANDATE OF HEAVEN Chapter 8 BROKEN RED QUEEN Chapter 9 DEVIL IN THE DETAILS Chapter 10 WHAT’S THE MATTER WITH FERGUSON?

It's Better Than It Looks: Reasons for Optimism in an Age of Fear
by Gregg Easterbrook
Published 20 Feb 2018

The Associated Press tried without success to establish direct quid pro quo: Stephen Braun and Eileen Sullivan, “Many Donors to Clinton Foundation Met with Hillary Clinton at State Department,” Associated Press, August 23, 2016. John Mikesell, a professor at Indiana University, estimates: John Mikesell, “Impact of Public Officials’ Corruption on the Size and Allocation of US State Spending,” Public Administration Review, April 2014. The Istanbul-born economist Daron Acemoglu of the Massachusetts Institute of Technology: Daron Acemoglu and James Robinson, Why Nations Fail (New York: Crown, 2012). In 2016, Scott Anderson, for twenty-five years a roving international correspondent: Scott Anderson, “Fractured Lands,” New York Times Magazine, August 11, 2016. Turnout in 2016 was 71 percent for senior citizens: Thom File, A Look at the 2016 Presidential Election (Washington, DC: US Census Bureau, 2017).

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A twenty-first-century Weber might say government officials seek a monopoly on the power to reach into other people’s pockets. John Mikesell, a professor at Indiana University, estimates corruption in government construction contracting costs taxpayers up to $1,300 per person annually. The Istanbul-born economist Daron Acemoglu of the Massachusetts Institute of Technology has written that government corruption “empowers unrepresentative elites while shutting out the rest of the country.” To the extent candidates in democracies make Santa Claus campaign promises, then once elected use their positions to benefit themselves, democracy may seem disturbingly like organized crime.

10% Less Democracy: Why You Should Trust Elites a Little More and the Masses a Little Less
by Garett Jones
Published 4 Feb 2020

But do case studies—anecdote-driven reviews of historical patterns—tell a more optimistic story about democracy causing growth? No: “For the most part, case study approaches to this question confirm the results of cross-national growth empirics.”⁵ One widely discussed paper coauthored by famed MIT economist Daron Acemoglu is provocatively entitled “Democracy Does Cause Growth,” so you can guess the main finding.⁶ Like many other papers, it draws on cross-country evidence and analyzes the evidence statistically rather than anecdotally, but its measure of democracy is exceptionally crude: It’s a simple zero-one indicator.

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John Gerring, Philip Bond, William T. Barndt, and Carola Moreno, “Democracy and Economic Growth: A Historical Perspective,” World Politics 57, no. 3 (2005): 323. The fixed-effects regressions they discuss offer “before-and-after” evidence on democracy and growth. 5. Gerring et al., “Democracy and Economic Growth,” 323–324. 6. Daron Acemoglu, Suresh Naidu, Pascual Restrepo, and James A. Robinson, “Democracy Does Cause Growth,” Journal of Political Economy 127, no. 1 (2019): 47–100. 7. Robert A. Dahl, On Democracy (New Haven: Yale University Press, 1998), 38. 8. Mark S. Bell and Kai Quek, “Authoritarian Public Opinion and the Democratic Peace,” International Organization 72, no. 1 (2018): 227. 9.

The Age of Surveillance Capitalism
by Shoshana Zuboff
Published 15 Jan 2019

It was in this context that Samuel Adams proclaimed that the cause of liberty “depended on the ability of the American people to free themselves from ‘the Baubles of Britain.’”20 British goods had so thoroughly come to symbolize dependency and oppression that when the tiny impoverished community of Harvard, Massachusetts, gathered to discuss the merchant vessels arriving in Boston Harbor loaded with chests of tea, they deemed it “a matter of as interesting and important a nature when viewed in all its Consequences not only to this Town and Province, but to America in general, and that for ages and generations to come, as ever came under the deliberation of this Town.”21 A year later, in 1774, the First Continental Congress convened in Philadelphia and produced a “grand scheme” to abolish trade with England. “It brought to fruition a brilliantly original strategy of consumer resistance to political oppression,” Breen writes, “one that had invited Americans to think of themselves as Americans even before they entertained a thought of independence.”22 In early-nineteenth-century Britain, as Daron Acemoglu and James A. Robinson have shown, the rise of democracy was inextricably bound to industrial capitalism’s dependency on the “masses” and their contribution to the prosperity necessitated by the new organization of production.23 The rise of volume production and its wage-earning labor force established British workers’ economic power and led to a growing appreciation of their political legitimacy and power.

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@shoshanazuboff Praise for The Age of Surveillance Capitalism “The defining challenge for the future of the market economy is the concentration of data, knowledge, and surveillance power. Not just our privacy but our individuality is at stake, and this very readable and thought-provoking book alerts us to these existential dangers. Highly recommended.” —Daron Acemoglu, coauthor of Why Nations Fail “Zuboff’s expansive, erudite, deeply researched exploration of digital futures elucidates the norms and hidden terminal goals of information-intensive industries. Zuboff’s book is the information industry’s Silent Spring.” —Chris Hoofnagle, University of California, Berkeley “A panoramic exploration of one of the most urgent issues of our times, Zuboff reinterprets contemporary capitalism through the prism of the digital revolution, producing a book of immense ambition and erudition.

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Piketty calculates that 60–70 percent of the top 0.1 percent of the income hierarchy is composed of managers who have succeeded in obtaining “historically unprecedented” compensation thanks to new value-maximizing incentive structures. 43. On the general theme of the salience of democratically oriented social, political, and economic institutions in the mitigation of economic outcomes, see Daron Acemoglu and James Robinson’s monumental Why Nations Fail: The Origins of Power, Prosperity, and Poverty (New York: Crown Business, 2012). It is also the focus of Robert Reich’s work on inequality and regressive economic policy: Robert B. Reich, Aftershock: The Next Economy and America’s Future (New York: Vintage, 2011).

The Economics of Belonging: A Radical Plan to Win Back the Left Behind and Achieve Prosperity for All
by Martin Sandbu
Published 15 Jun 2020

On stenographers, see Chris Summers, “Is Stenography a Dying Art?,” BBC News, 27 April 2011, https://www.bbc.co.uk/news/magazine-13035979. More generally, see Richard Baldwin, The Globotics Upheaval: Globalization, Robotics, and the Future of Work, Oxford: Oxford University Press, 2019. 23. Daron Acemoglu, Philippe Aghion, and Giovanni Violante, “Deunionization, Technical Change and Inequality,” Carnegie-Rochester Conference Series on Public Policy 55 (2001): 229–64, https://economics.mit.edu/files/5691. 24. See Sarah O’Connor, “How to Manage the Gig Economy’s Growing Global Jobs Market,” Financial Times, 30 October 2018, http://www.ft.com/content/5fe8991e-dc2a-11e8-8f50-cbae5495d92b, and Baldwin, Globotics Upheaval. 25.

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Martin Sandbu, “Donald Trump’s Love of Manufacturing Is Misguided,” Financial Times, 14 February 2017, https://www.ft.com/content/f0a3e89c-f2ab-11e6-8758-6876151821a6; Martin Sandbu, “The Failing Policies of Factory Fetishism,” Financial Times, 15 February 2017, https://www.ft.com/content/2744b37e-f36d-11e6-8758-6876151821a6. 5. Martin Sandbu, “In Some Places, Factory Jobs Are Plentiful,” Financial Times, 16 May 2018, https://www.ft.com/content/d7c3c8e6-5827-11e8-b8b2-d6ceb45fa9d0. The data behind the chart are due to Adrian Wood. 6. Wood, “1990s Trade and Wages Debate.” 7. Daron Acemoglu, David Autor, David Dorn, Gordon Hanson, and Brendan Price, “Import Competition and the Great US Employment Sag of the 2000s,” Journal of Labor Economics 34, no. S1 (2016): 141–98, https://ideas.repec.org/a/ucp/jlabec/doi10.1086-682384.html; David Autor, David Dorn, and Gordon Hanson, “The China Shock: Learning from Labor Market Adjustment to Large Changes in Trade” (NBER Working Paper No. 21906, National Bureau of Economic Research, Cambridge, MA, January 2016), https://www.nber.org/papers/w21906; David Autor, David Dorn, and Gordon Hanson, “The China Syndrome: Local Labor Market Effects of Import Competition in the United States,” American Economic Review103, no. 6 (2013): 2121–68, https://doi.org/10.1257/aer.103.6.2121.

The Journey of Humanity: The Origins of Wealth and Inequality
by Oded Galor
Published 22 Mar 2022

Scholars refer to institutions that enable elites to monopolise power and perpetuate inequality as extractive institutions. In contrast, institutions that decentralise political power, protect property rights, and encourage private enterprise and social mobility are considered inclusive institutions.[5] In their book Why Nations Fail, the economists Daron Acemoglu and James A. Robinson have demonstrated that differences in political institutions of this sort have contributed to the gaps between nations. Extractive institutions have typically hindered human capital accumulation, entrepreneurship and technological progress, thereby delaying the transition from stagnation to long-term economic growth, whereas inclusive institutions have reinforced these processes.

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The research underneath the various layers of the book has benefited from the author’s research collaborations with Quamrul Ashraf, Gregory Casey, Raphaël Franck, Marc Klemp, Stelios Michalopoulos, Omer Moav, Andrew Mountford, Ömer Özak, Harl Ryder, Assaf Sarid, Viacheslav Savitskiy, Daniel Tsiddon, Dietrich Vollrath, David Weil and Joseph Zeira, as well as from fruitful discussions over the years with researchers across the globe, in particular Daron Acemoglu, Alberto Alesina, Sascha Becker, Roland Bénabou, Alberto Bisin, Matteo Cervellati, Carl-Johan Dalgaard, David de la Croix, Klaus Desmet, Matthias Doepke, Steven Durlauf, James Fenske, Moshe Hazan, Andreas Irmen, Ross Levine, Joel Mokyr, Nathan Nunn, Louis Putterman, Jim Robinson, Uwe Sunde, Enrico Spolaore, Holger Strulik, Joachim Voth, Romain Wacziarg and Fabrizio Zilibotti.

Exodus: How Migration Is Changing Our World
by Paul Collier
Published 30 Sep 2013

Protest from the many excluded forces the rich to commit to inclusive political institutions: we arrive at property-owning democracy. A related line of argument is that the key institutional change is the shift in political power from predatory elites bent on extracting revenues from the productive population to more inclusive institutions that protect the interests of the productive. In an important new study, Daron Acemoglu and James Robinson argue that the English Glorious Revolution of 1688, in which power shifted from king to Parliament, was the first such decisive event in world economic history, unleashing the Industrial Revolution and opening the path to global prosperity. This line of reasoning has given primacy to political and economic institutions.

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Emigrants are, essentially, leaving their society of origin behind them to join a new one. Settlers, in contrast, are bringing their society of origin with them. Does this distinction matter? The most celebrated research paper on economic development of recent years, by the trio of Harvard- and MIT-based scholars Daron Acemoglu, Simon Johnson, and James Robinson, argues that migrants were historically valuable precisely because they were settlers.26 What they brought with them, on this argument, was their institutions such as the rule of law and the sanctity of contract. By bringing these institutions, settlers enabled the countries to which they migrated to escape the poverty that had until then been the lot of mankind.

More: The 10,000-Year Rise of the World Economy
by Philip Coggan
Published 6 Feb 2020

Knick Harley, “British and European industrialization”, The Cambridge History of Capitalism, Volume 1, op. cit. 39. Allen, The British Industrial Revolution in Global Perspective, op. cit. 40. North and Thomas, The Rise of the Western World, op. cit. 41. Osborne, Iron, Steam & Money, op. cit. 42. Daron Acemoglu and James A. Robinson, Why Nations Fail: The Origins of Power, Prosperity and Poverty 43. Allen, The British Industrial Revolution in Global Perspective, op. cit. 44. Osborne, Iron, Steam & Money, op. cit. 45. Robert Skidelsky, Money and Government: A Challenge to Mainstream Economics 46.

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Source: https://www.mema.org/about-us 48. For a full explanation of this process, see Richard Baldwin, The Great Convergence: Information Technology and the New Globalization. 49. Chang, Economics: The User’s Guide, op. cit. 50. Source: https://www.mema.org/sites/default/files/A_World_Without_NAFTA_0.pdf 51. Daron Acemoglu and Pascual Restrepo, “Robots and jobs: evidence from US labor markets”, NBER working paper 23285 52. “The growth of industrial robots”, Daily Chart, The Economist, March 27th 2017 53. Celasun and Gruss, “The declining share of industrial jobs”, op. cit. 54. Ryan Avent, The Wealth of Humans: Work and Its Absence in the Twenty-First Century Chapter 8 – The first era of globalisation: 1820–1914 1.

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Source: http://www.bbc.co.uk/history/historic_figures/snow_john.shtml 102. “Subterranean dreams”, The Economist, July 16th 2013 103. Evans, The Pursuit of Power, op. cit. 104. Sun Go and Peter Lindert, “The curious dawn of American public schools”, NBER working paper 1335 105. Evans, The Pursuit of Power, op. cit. 106. Daron Acemoglu and James A. Robinson, “Why did the West extend the franchise? Democracy, inequality and growth in historical perspective”, http://web.mit.edu/daron/www/qje_kuz6.pdf 107. Trentmann, Empire of Things, op. cit. 108. Source: http://www.searsarchives.com/catalogs/history.htm 109. Ibid. 110. Source: http://www.conspicuousconsumption.org/ 111.

Economic Dignity
by Gene Sperling
Published 14 Sep 2020

If we broaden and strengthen an economic dignity net and pass something like a UBI to Rise, we will be closer to what Korinek and Stiglitz described as a “first-best economy in which individuals are fully insured against any adverse impacts of innovation.”62 But beyond such policy measures to deal with the negative effects of technological change, we should ask what we can do to structure change. As Erik Brynjolfsson and Andrew McAfee conclude in The Second Machine Age, “Technology is not destiny. We shape our destiny.”63 Economists Daron Acemoglu and Pascual Restrepo argue that automation and AI will take some tasks from workers and lower demand for some jobs—what they call “displacement” effects. However, they also believe that the creation of new tasks—“shaped by the decisions of firms, workers, and other actors in society”—in which labor has an edge over automation can provide a countervailing influence to the displacement effects.64 Notably, the process of creating those new tasks is Acemoglu and Restrepo’s framework thus underscores the fact that the decisions we make as a nation can have a powerful influence over what technological innovation means for our country.

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Blake Marsh, and Thao Tran, “Trends in the Labor Share Post-2000,” Federal Reserve Bank of Kansas City, December 7, 2018, https://www.kansascityfed.org/en/publications/research/mb/articles/2018/trends-labor-share-post; and “A New Look at the Declining Labor Share of Income in the United States,” McKinsey, May 2019, https://www.mckinsey.com/featured-insights/employment-and-growth/a-new-look-at-the-declining-labor-share-of-income-in-the-united-states. 62. Korinek and Stiglitz, “Artificial Intelligence and Its Implications for Income Distribution and Unemployment.” 63. Erik Brynjolfsson and Andrew McAfee, The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies (New York: W. W. Norton, 2014), 257. 64. Daron Acemoglu and Pascual Restrepo, “Artificial Intelligence, Automation and Work,” NBER Working Paper 24196, National Bureau of Economic Research, Cambridge, MA, 2018, https://www.nber.org/papers/w24196.pdf. 65. Erik Brynjolfsson and Andrew McAfee, “Brynjolfsson and McAfee: The Jobs That AI Can’t Replace,” BBC, September 13, 2015, https://www.bbc.com/news/technology-34175290. 66.

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And No Wonder,” CityLab, June 28, 2018, https://www.citylab.com/transportation/2018/06/why-wont-anyone-drive-the-bus/563555/; and Madrigal, “How Automation Could Worsen Racial Inequality.” 75. Bliss, “There’s a Bus Driver Shortage.”; and Madrigal, “How Automation Could Worsen Racial Inequality.” 76. Daron Acemoglu and Pascual Restrepo, “The Wrong Kind of AI? Artificial Intelligence and the Future of Labor Demand,” NBER Working Paper No. 25682, National Bureau of Economic Research, Cambridge, MA, March 2019, https://www.nber.org/papers/w25682. 77. Acemoglu and Restrepo, “The Wrong Kind of AI?” 78.

The Sharing Economy: The End of Employment and the Rise of Crowd-Based Capitalism
by Arun Sundararajan
Published 12 May 2016

Collectively, they form what North calls the “rules of the game” of a society.14 The property rights we take for granted in most modern economies today (and which have their roots in English common law) are an example of an institution. It would seem fairly logical that institutions play an important role in facilitating economic development. (For contrasting recent perspectives on this connection, I refer you to books by the MIT economists Daron Acemoglu and James Robinson, and by the NYU Stern economist Peter Blair Henry.15) In general, these “rules of the game” are tremendously empowering, because they significantly expand trade possibilities. In the specific case of property rights, North and his colleague Barry Weingast note that “The more likely it is that the sovereign will alter property rights for his or her own benefit, the lower the expected returns from investment and the lower in turn the incentive to invest.”16 Similarly, the emergence of banks eased economic exchange between strangers who do not now need to share any trust-facilitating social ties.

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Avner Greif, “Reputation and Coalitions in Medieval Trade: Evidence on the Maghribi Traders,” The Journal of Economic History 49, 4 (1989): 857–882. 12. Ibid., 865–866. 13. Ibid., 867. 14. Douglass C. North, 1994. “Economic Performance Through Time,” The American Economic Review 84, 4 (1994): 359–368. 15. Daron Acemoglu and James Robinson, Why Nations Fail (New York: Crown Business, 2012); Peter Blair Henry, Turnaround: Third World Lessons for First World Growth (New York: Basic Books, 2013). 16. Douglass C. North and Barry R. Weingast, “Constitutions and Commitment: The Evolution of Institutional Governing Public Choice in Seventeenth-Century England,” Journal of Economic History 49, 4 (1989): 303–332, 303. 17.

More From Less: The Surprising Story of How We Learned to Prosper Using Fewer Resources – and What Happens Next
by Andrew McAfee
Published 30 Sep 2019

A critic might respond that caring about the environment is a luxury that only rich countries can afford. While there’s some truth to this, it dodges a fundamental question: Why did some countries become rich, but not others? Institutionalizing Progress In my view the best answer to this question comes from the work of the economist Daron Acemoglu and political scientist James Robinson, summarized in their book Why Nations Fail. They argue that the differences between rich countries and poor ones, between those that maintain growth over long periods and those that can only accomplish it fitfully (if at all), stem from differences in their institutions.

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Here’s All of It,” Vox, June 1, 2017, https://www.vox.com/policy-and-politics/2017/6/1/15726472/trump-tweets-global-warming-paris-climate-agreement. “the humanly devised constraints that shape human interaction”: Douglass North, Institutions, Institutional Change and Economic Performance (Cambridge, UK: Cambridge University Press, 1990), 3. “in which people can exchange and contract”: Daron Acemoglu and James A. Robinson, Why Nations Fail: The Origins of Power, Prosperity, and Poverty (New York: Crown, 2013), 144. “new cars, SUVs and pickup trucks are roughly 99 percent cleaner for common pollutants”: “History of Reducing Air Pollution from Transportation in the United States,” US EPA, April 19, 2018, https://www.epa.gov/transportation-air-pollution-and-climate-change/accomplishments-and-success-air-pollution-transportation.

Power, for All: How It Really Works and Why It's Everyone's Business
by Julie Battilana and Tiziana Casciaro
Published 30 Aug 2021

Estlund, ed., Democracy (Malden, MA: Blackwell Publishers, 2002); Jürgen Habermas, Between Facts and Norms: Contributions to a Discourse Theory of Law and Democracy (Cambridge, MA: MIT Press, 1996). 76 Cornel West, Democracy Matters: Winning the Fight Against Imperialism (New York: Penguin, 2005): 41. 77 Edward S. Herman and Noam Chomsky, Manufacturing Consent: The Political Economy of the Mass Media (New York: Pantheon Books, 1988). 78 Tawakkol Karman in discussion with the authors, April 2020. 79 Daron Acemoglu and James Robinson say: “Without society’s vigilance, constitutions and guarantees are not worth much more than the parchment they are written on.” See Daron Acemoglu and James A. Robinson, The Narrow Corridor: States, Societies, and the Fate of Liberty (New York: Penguin Books, 2019), xvi. 80 Danielle Allen, Education and Equality (Chicago: University of Chicago Press, 2016), 27. 81 Danielle Allen, Stephen B.

Escape From Rome: The Failure of Empire and the Road to Prosperity
by Walter Scheidel
Published 14 Oct 2019

I owe thanks of gratitude to John Hall and Philip Hoffman for reviewing an earlier version of my manuscript for the publisher; to Joy Connolly and Peer Vries for their detailed comments; and to Anna Grzymala-Busse, John Haldon, Kyle Harper, Reviel Netz, Sheilagh Ogilvie, and Richard Saller for further helpful observations. Daron Acemoglu, James Bennett, Victoria Tin-bor Hui, Reviel Netz, Şevket Pamuk, James Robinson, David Stasavage, Michael Taylor, Paolo Tedesco, Peer Vries, Kaveh Yazdani, and Dingxin Zhao shared unpublished or otherwise inaccessible work with me. In 2015, when I finally resigned myself to the fact that my argument could not readily be accommodated within a single (long) article as I had originally intended, I proposed a (short) book to Rob Tempio at Princeton University Press.

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Similarly, what Robert Marks thinks of as contingencies that permitted Europe’s ascent—Ming China’s retreat from the high seas, New World silver production, and the Habsburgs’ failure to subdue Europe—share the same root: the difference between hegemonic empire and competitive fragmentation.74 Daron Acemoglu and James Robinson invoke improved property rights, aggressive protection of traders and manufacturers, and the expansion of Atlantic trade as key factors in the processes leading up to the Industrial Revolution, all of them rooted in political diversity and interstate rivalries. Chris Bayly considers a wide range of attributes from stable institutions, access to New World resources, a culture of vigorous critique, and a symbiotic relationship between warfare, finance, and commercial innovation born of intense conflict.75 Focusing more narrowly on Britain, Jack Goldstone singles out the survival of common law, parliamentarianism, tolerance amid intolerant societies, and the consequent flourishing of a culture of science and innovation.

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There was more than one path to that point: the historical trajectory, which involved an enormous detour from tribes, chiefdoms and city-states to near-monopolistic empire to weak regional polities, and alternative counterfactual trajectories charting a more gradual but also more linear progression from the first to the third of these stages (figure E.1).44 The plausible counterfactual of indigenous state formation makes it unnecessary to consider Roman legacies of centralizing statecraft an essential precondition for the later rise of what Daron Acemoglu and James Robinson call the “Shackled Leviathan” in Western Europe—the powerful yet nondespotic type of state that came to protect liberties and promote human flourishing. Even if centralizing governmental traditions needed to balance localized consensual decision-making for such productive polities to emerge, imperial Rome was by no means their only possible source.45 Just how interconnected elite culture would have been across Europe’s counterfactual societies of the mid- and late first millennium CE, so many centuries after we diverge from actual history, is obviously impossible to divine.

The Aristocracy of Talent: How Meritocracy Made the Modern World
by Adrian Wooldridge
Published 2 Jun 2021

In terms of natural resources, Venice is unlucky, set in an insect-infested swamp in a land that normally abounds in milk and honey. Yet in the early Middle Ages Venice was the richest city in Europe, thanks to its unusual openness to talent. The city-state was ruled by a doge, selected by a council of wise men, rather than a heriditary ruler. Social mobility was commonplace. Two Harvard economists, Daron Acemoglu and James Robinson, calculate that in government documents in the years 960, 971 and 982 new names made up 69 per cent, 81 per cent and 65 per cent respectively of those recorded.49 Institutions became more inclusive. Elites competed to build some of the world’s most spectacular buildings and patronize some of its most glorious arts.50 But competition is hard and uncertainty disorienting.

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Turner, ‘Modes of Social Ascent through Education: Sponsored and Contest Mobility’, in Reinhard Bendix and Seymour Martin Lipset (eds.), Class, Status, and Power: Social Stratification in Comparative Perspective (New York, The Free Press, 1966), pp. 449–58 2 David Herlihy, ‘Three Patterns of Social Mobility in Medieval History’, Journal of Interdisciplinary History 3 (4) (Spring 1973), pp. 635–6 3 Tom Holland, Dominion: The Making of the Western Mind (London, Little, Brown, 2019), p. 123 4 Larry Siedentop, Inventing the Individual: The Origins of Western Liberalism (London, Allen Lane, 2014), esp. pp. 51–100 5 Herlihy, ‘Three Patterns of Social Mobility’, p. 624 6 Hilde de Ridder-Symoens, ‘Rich Men, Poor Men: Social Stratification and Social Representation at the University (13th–16th Centuries)’, in Wim Blockmans and Antheun Janse (eds.), Showing Status: Representation of Social Positions in the Late Middle Ages (Turnhout, Belgium, Brepols, 1999), pp. 162, 173 7 Francis Green and David Kynaston, Engines of Privilege: Britain’s Private School Problem (London, Bloomsbury, 2019), p. 166 8 Daron Acemoglu and James Robinson, Why Nations Fail (New York, Crown, 2012), pp. 152–6; Chrystia Freeland, Plutocrats: The Rise of the New Global Super-Rich and the Fall of Everyone Else (London, Allen Lane, 2012), pp. 277–9 9 Robert Bartlett, Blood Royal: Dynastic Politics in Medieval Europe (Cambridge, Cambridge University Press, 2020), pp. 414–16 10 Ibid., pp. 416–19 11 James Hankins, Virtue Politics: Soulcraft and Statecraft in Renaissance Italy (Cambridge, Mass., Belknap Press of Harvard University Press, 2019), pp. 39–40 12 Ibid., p. 40 13 Isaiah Berlin, ‘The Originality of Machiavelli’, in Isaiah Berlin, The Proper Study of Mankind: An Anthology of Essays (New York, Farrar, Straus and Giroux, 1997), pp. 269–325 14 Philip Bobbitt, The Garments of Court and Palace: Machiavelli and the World that He Made (London, Atlantic Books, 2013), p. 77.

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Wood, The Polytechnic and Its Founder Quintin Hogg (London, Nisbet, 1932) 45 Department for Education, Independent Panel Report to the Review of Post-18 Education and Funding (London, HMSO, 2019) 46 Michael Young and Peter Willmott, ‘Social Grading by Manual Workers’, British Journal of Sociology 7 (4) (1956), pp. 337–45 47 Ibid., p. 342 48 John Adams to Abigail Adams, 12 May 1780 49 Daron Acemoglu and James Robinson, Why Nations Fail (New York, Crown, 2012), pp. 152–6; Chrystia Freeland, Plutocrats: The Rise of the New Global Super-Rich and the Fall of Everyone Else (London, Allen Lane, 2012), pp. 277–9 50 Acemoglu and Robinson, Why Nations Fail, p. 153 51 John Ruskin, The Stones of Venice, 3 Vols. (1851–3; New York, National Library Association, 2001), Vol. 1, p. 1 Index The page references in this index correspond to the print edition from which this ebook was created, and clicking on them will take you to the location in the ebook where the equivalent print page would begin.

The Singularity Is Nearer: When We Merge with AI
by Ray Kurzweil
Published 25 Jun 2024

Roosevelt championed massive rural electrification programs, which aimed to bring the efficiency of electric machinery to America’s agricultural heartland.[73] By 1951 more than 95 percent of American homes had electricity, and by 1956 the national electrification effort was regarded as essentially complete.[74] In other parts of the world, electrification has usually followed a similar pattern: cities first, followed by suburban and then rural areas.[75] Today more than 90 percent of the earth’s population has electricity.[76] For those still without power, the primary obstacle is political, not technological. MIT professor Daron Acemoğlu and his colleague James Robinson have done very influential research on the key role of political institutions in human development.[77] In short, as countries allow more people to participate freely in politics, and as people gain the security to innovate and invest for the future, feedback loops of prosperity are able to take hold.

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BACK TO NOTE REFERENCE 75 IEA, IRENA, UNSD, World Bank, and WHO, “Access to Electricity (% of Population),” from Tracking SDG 7: The Energy Progress Report (Washington, DC: World Bank, 2023), https://data.worldbank.org/indicator/EG.ELC.ACCS.ZS. BACK TO NOTE REFERENCE 76 Daron Acemoğlu and James A. Robinson, Why Nations Fail: The Origins of Power, Prosperity, and Poverty (New York: Crown, 2012). BACK TO NOTE REFERENCE 77 Lebergott, The American Economy: Income, Wealth and Want, 334; US Census Bureau, Historical Statistics of the United States: Colonial Times to 1970, part 1; IEA, IRENA, UNSD, World Bank, and WHO, “Access to Electricity (% of Population)”; IEA, IRENA, UNSD, World Bank, and WHO, “Access to Electricity (% of Population)—United States,” from Tracking SDG 7: The Energy Progress Report (Washington, DC: World Bank, 2023), https://data.worldbank.org/indicator/EG.ELC.ACCS.ZS?

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City Average (CPIMEDSL)”; US Bureau of Labor Statistics, “Consumer Price Index for All Urban Consumers: All Items in U.S. City Average (CPIAUCSL)”; “Consumer Price Index, 1913–,” Federal Reserve Bank of Minneapolis. BACK TO NOTE REFERENCE 154 For a highly informative book on the relationship between governance and prosperity, see Daron Acemoglu and James A. Robinson, Why Nations Fail: The Origins of Power, Prosperity, and Poverty (New York: Crown, 2012). BACK TO NOTE REFERENCE 155 For a helpful and vivid explainer of Maslow’s hierarchy and its significance, see “Why Maslow’s Hierarchy of Needs Matters,” The School of Life, YouTube video, April 10, 2019, https://www.youtube.com/watch?

The Globalization Paradox: Democracy and the Future of the World Economy
by Dani Rodrik
Published 23 Dec 2010

Therefore the average income of a poor person in a rich society is 10 × 34,767 × 0.027 = $9,387. 2 Angus Maddison, Growth and Interaction in the World Economy: The Roots of Modernity (Washington, DC: American Enterprise Institute, 2004), Table 2. 3 Lant Pritchett. “Divergence, Big Time” Journal of Economic Perspectives, vol. 11, no. 3 (Summer 1997), pp. 3–17. 4 Angus Maddison, The World Economy: A Millennial Perspective (Paris: OECD Development Centre, 2001). 5 Daron Acemoglu, Simon Johnson, and James A. Robinson, “The Colonial Origins of Comparative Development: An Empirical Investigation,” American Economic Review, vol. 91, no. 5 (December 2001), pp. 1369–1401. See also Stanley L. Engerman and Kenneth L. Sokoloff, “Factor Endowments, Institutions and Differential Paths of Growth Among New World Economies: A View from Economic Historians of the United States,” in Stephen Huber, ed., How Latin America Fell Behind (Stanford, CA: Stanford University Press, 1997). 6 evket Pamuk and Jeffrey G.

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ACKNOWLEDGMENTS A very long list of friends, critics, and co-conspirators have been subjected over the years to earlier versions of the arguments in this book and have responded with reactions that have helped shape my thinking. These comments may not always have saved me from the errors that the more critical among them have found in my thinking, but I hope they have at least allowed me to state my views with greater sensitivity to these differences. With apologies to those I may have forgotten, I want to thank Daron Acemoglu, Philippe Aghion, Abhijit Banerjee, Jagdish Bhagwati, Nancy Birdsall, George Borjas, François Bourguignon, Susan Collins, Avinash Dixit, Bill Easterly, Barry Eichengreen, Ron Findlay, Jeff Frankel, Richard Freeman, Jeff Frieden, Gene Grossman, Ricardo Hausmann, Gerry Helleiner, Elhanan Helpman, Peter Kenen, Bob Keohane, Tarun Khanna, Robert Lawrence, Frank Levy, Justin Lin, Jose Antonio Ocampo, Lant Pritchett, Jim Robinson, John Ruggie, Jeffrey Sachs, Mike Spence, T.

The Theft of a Decade: How the Baby Boomers Stole the Millennials' Economic Future
by Joseph C. Sternberg
Published 13 May 2019

Author’s calculations, from University of Groningen and University of California, Davis, Share of Labour Compensation in GDP at Current National Prices for United States. 35. See, for instance, Loukas Karabarbounis and Brent Neiman, “The Global Decline in the Labor Share,” Quarterly Journal of Economics 129, no. 1 (2014): 61–103. 36. Daron Acemoglu, “Labor- and Capital-Augmenting Technical Change,” Journal of the European Economic Association 1, no. 1 (March 2003). 37. Daron Acemoglu and Pascual Restrepo, “The Race Between Machine and Man: Implications of Technology for Growth, Factor Shares and Employment,” National Bureau of Economic Research Working Paper No. 22252, 2017. 38. US Bureau of Labor Statistics, Private Non-Farm Business Sector: Capital Intensity, retrieved from Federal Reserve Bank of St.

MegaThreats: Ten Dangerous Trends That Imperil Our Future, and How to Survive Them
by Nouriel Roubini
Published 17 Oct 2022

“If you think being a ‘professional’ makes your job safe, think again,” warned former US labor secretary Robert Reich in an article that the World Economic Forum published. “The two sectors of the economy harboring the most professionals—health care and education—are under increasing pressure to cut costs. And expert machines are poised to take over.”41 Researchers Daron Acemoglu at MIT and Pascual Restrepo at Boston University have measured the impact of robotics as it has been introduced in various industries. They found that one additional robot per thousand workers reduces employment by two tenths of one percent, and wages by half a percent.42 If that sounds trivial, consider the trend.

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Daniel Susskind, A World without Work (New York: Metropolitan Books, 2020), Kindle edition, p. 5, location 268. 41. Robert Reich, “Why Automation Means We Need a New Economic Model,” World Economic Forum, March 17, 2015, https://www.weforum.org/agenda/2015/03/why-automation-means-we-need-a-new-economic-model/?utm_content=buffere751d&utm_medium=social&utm_source=twitter.com&utm_campaign=buffer. 42. Daron Acemoglu and Pascual Restrepo, “Robots and Jobs: Evidence from US Labor Markets,” Journal of Political Economy 128, no. 6 (April 22, 2020), https://economics.mit.edu/files/19696. 43. Mustafa Suleyman, “Transformers Are the Future,” July 2021.<<AU: Please provide more complete information. I was unable to find this article.>> [[This unpublished article was shared with Nouriel]] 44.

Empire of Cotton: A Global History
by Sven Beckert
Published 2 Dec 2014

Wadsworth and Mann, The Cotton Trade, 122, 131, 151, 154; Extract Letter to Bombay, Commercial Department, May 4, 1791, in Home Miscellaneous 374, Oriental and India Office Collections, British Library, London. 53. Maurice Dobb, Studies in the Development of Capitalism (New York: International Publishers, 1947), 277; George Unwin, in introduction to George W. Daniels, The Early English Cotton Industry (Manchester: Manchester University Press, 1920), xxx. This is brilliantly shown by Daron Acemoglu, Simon Johnson, and James Robinson, “The Rise of Europe: Atlantic Trade, Institutional Change and Economic Growth,” National Bureau of Economic Research Working Paper No. 9378, December 2002. What is missing in their account, however, is the continued importance of war capitalist institutions in other parts of the world, outside the European core. 54.

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Rosenthal, “Slavery’s Scientific Management: Accounting for Mastery,” in Sven Beckert and Seth Rockman, eds., Slavery’s Capitalism: A New History of American Economic Development (Philadelphia: University of Pennsylvania Press, forthcoming, 2015). A good discussion of the importance of slavery to industrialization can also be found in Robin Blackburn, The American Crucible: Slavery, Emancipation and Human Rights (London: Verso, 2011), 104–7. 3. The importance of the Atlantic trade in the great divergence is also emphasized by Daron Acemoglu, Simon Johnson, and James Robinson, “The Rise of Europe: Atlantic Trade, Institutional Change and Economic Growth,” National Bureau of Economic Research Working Paper No. 9378, December 2002, esp. 4; The depth of British society’s involvement with slavery, and the significant material benefits that it drew from it, are demonstrated by Nicholas Draper, The Price of Emancipation: Slave-Ownership, Compensation and British Society at the End of Slavery (Cambridge: Cambridge University Press, 2010). 4.

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Ashworth, “The Ghost of Rostow: Science, Culture and the British Industrial Revolution,” History of Science 156 (2008): 261. 38. On the Royal Navy, see O’Brien and Engerman, “Exports and the Growth of the British Economy,” 189–90. I agree here with the more recent literature that emphasizes the crucial importance of institutions. The argument has been made most persuasively by Daron Acemoglu and James A. Robinson, Why Nations Fail: The Origins of Power, Prosperity, and Poverty (New York: Crown Business, 2012). However, in Acemoglu and Robinson’s account, these institutions remain somewhat amorphous and their own histories (and with it their roots in war capitalism) remain unspecified.

Adapt: Why Success Always Starts With Failure
by Tim Harford
Published 1 Jun 2011

Johnson, Alex Tabarrok, Bob Weiss, Owen Barder, Robin Hanson, Jani Niipola and Ruth Levine. Chapter Four: William Easterly, Owen Barder, Jeffrey Sachs, Michael Clemens, Edward Miguel, Sandra Sequeira, Esther Duflo, John McArthur, Ben Goldacre, Sir Iain Chalmers, Gabriel Demombynes, Michael Klein, Macartan Humphreys, Daron Acemoglu, Dean Karlan, Chris Blattman, Joshua Angrist, Jonathan Zinman, Clare Lockhart, Mark Henstridge, César Hidalgo, Bailey Klinger, Ricardo Hausmann and Paul Romer. Chapter Five: Gabrielle Walker, David King, James Cameron, Cameron Hepburn, Mark Williamson, Euan Murray, Justin Rowlatt, David MacKay, Tim Crozier-Cole, Geoffrey Palmer and Prashant Vaze.

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Army in the Gulf War (Office of the Chief of Staff, U.S. Army, 1993), chapter 1, and Tom Clancy, Armoured Cav (Berkeley Trade, 1994). 75 Examined large US firms from the mid-1980s throughout the 1990s: Raghuram Rajan & Julie Wulf (2003), ‘The flattening of the firm’, NBER Working Paper 9633. 76 To get the most out of that flexibility: Daron Acemoglu, Philippe Aghion, Claire Lelarge, John van Reenen & Fabrizio Zilibotti, ‘Technology, information and the decentralization of the firm’, Quarterly Journal of Economics, November 2007, and Erik Brynjolfsson & Lorin M. Hitt, ‘Beyond computation: information technology, organizational transformation and business performance’, Journal of Economic Perspectives, vol. 14, No. 4 (Fall 2000). 76 Didn’t have the authority to print his own propaganda: John Nagl, lecture at King’s College London, 2 February 2010. 76 He couldn’t tap into the massive USAID budget: Cloud & Jaffe, The Fourth Star, pp. 146–7. 76 Sean MacFarland’s men broadcast news from loudspeakers: Ricks, The Gamble, p. 70. 77 A careful statistical analysis later found: Eli Berman, Jacob N.

The Code of Capital: How the Law Creates Wealth and Inequality
by Katharina Pistor
Published 27 May 2019

For an analysis of the long-term effects of land reforms undertaken by British colonizers on the productivity of the land, see also Abhijit Banerjee and Lakshmi Iyer, “History, Institutions, and Economic Performance: The Legacy of Colonial Land Tenure Systems in India,” American Economic Review 95, no. 4 (2005):1190–1213, showing that land that was given to landlords continued to have lower productivity rates even in post-independence India. 65. Daron Acemoglu, Simon Johson, and James A. Robinson, “The Colonial Origins of Comparative Development: An Empirical Investigation,” American Economic Review 91, no. 5 (2001):1369–1401. 66. Luis Angeles, “Income Inequality and Colonialism,” European Economic Review 51 (2007):1155–1176. 67. Some legal systems developed legal constructs that resemble the trust; others introduced the trust by way of an international convention.

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Frederico, “Origin and Early History of Patents,” Journal of the Patent Office Society 11 (1929):292–305. 39. Ibid., p. 293. 40. Jeremy Phillips, “The English Patent as a Reward for Invention: The Importation of an Idea,” Journal of Legal History 3, no. 1 (1982):71–79, with an English translation of the Venetian decree, pp. 75–76. 41. Quotes are from Phillips, “English Patent,” pp. 75–76. 42. Daron Acemoglu and James A. Robinson, Why Nations Fail, chap. 7, p. 182, where they describe the quest for a patent by the inventor of an automated knitting machine, which was refused by Elizabeth I and her successor. 43. The text of the Statute of Monopolies is available online at http://www.legislation.gov.uk/aep/Ja1/21/3 (last accessed August 28, 2018). 44.

Our Kids: The American Dream in Crisis
by Robert D. Putnam
Published 10 Mar 2015

This leads, as the economists Claudia Goldin and Lawrence Katz put it, to the “decreased utilization of the less educated” and slower economic growth.6 Our contemporary public debate recognizes this problem but assumes it is largely a “schools problem.” On the contrary, we have seen that most of the challenges facing poor kids are not caused by schools. Drawing on an entirely independent stream of evidence, the economists Daron Acemoglu and David Autor reach the same conclusion: “The U.S. educational system cannot be the sole cause of the waning educational stature of the U.S.”7 It is not easy to put hard numbers on the economic costs of the opportunity gap, but three independent studies, using diverse methods, have arrived at broadly comparable—and surprisingly large—estimates

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Heckman et al., “The Rate of Return to the HighScope Perry Preschool Program,” Journal of Public Economics 94 (February 2010): 114–28; Pedro Carneiro and James J. Heckman, “Human Capital Policy,” in Inequality in America: What Role for Human Capital Policies?, eds. James J. Heckman, Alan B. Krueger, and Benjamin M. Friedman (Cambridge: MIT Press, 2003). 7. Daron Acemoglu and David Autor, “What Does Human Capital Do? A Review of Goldin and Katz’s The Race Between Education and Technology,” Journal of Economic Literature 50 (June 2012): 426–63. 8. Harry J. Holzer, Diane Whitmore Schanzenbach, Greg J. Duncan, and Jens Ludwig, “The Economic Costs of Childhood Poverty in the United States,” Journal of Children and Poverty 14 (March 2008): 41–61. 9.

Naked Economics: Undressing the Dismal Science (Fully Revised and Updated)
by Charles Wheelan
Published 18 Apr 2010

Do you know what your average Chinese would give to have a capital like Washington today, with its reasonably honest and efficient bureaucracy? Do you know how unusual we are in the world that we don’t have to pay off bureaucrats to get the simplest permit issued?5 The relationship between government institutions and economic growth prompted a clever and intriguing study. Economists Daron Acemoglu, Simon Johnson, and James Robinson hypothesized that the economic success of developing countries that were formerly colonized has been affected by the quality of the institutions that their colonizers left behind.6 The European powers adopted different colonization policies in different parts of the world, depending on how hospitable the area was to settlement.

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William Easterly, The Elusive Quest for Growth (Cambridge, Mass.: MIT Press, 2001), p. 285. 4. World Development Report 2002: Building Institutions for Markets, World Bank, Oxford University Press, p. 3. 5. Thomas L. Friedman, “I Love D.C.,” New York Times, November 7, 2000, p. A29. 6. Daron Acemoglu, Simon Johnson, and James Robinson, The Colonial Origins of Comparative Development: An Empirical Investigation, NBER Working Paper No. W7771 (National Bureau of Economic Research, June 2000). 7. Daniel Kaufmann, Aart Kraay, and Pablo Zoido-Lobatón, Governance Matters (Washington, D.C.: World Bank, October 1999). 8.

Automation and the Future of Work
by Aaron Benanav
Published 3 Nov 2020

Not if Robots Have Their Way,” New York Times, January 30, 2018. 11 Quoted in Brynjolfsson and McAfee, Second Machine Age, p. 100. 12 Ibid., pp. 43–5. 13 See Martin Neil Baily and Barry P. Bosworth, “US Manufacturing: Understanding Its Past and Its Potential Future,” Journal of Economic Perspectives, vol. 28, no. 1, 2014; Daron Acemoglu et al., “Return of the Solow Paradox? IT, Productivity, and Employment in US Manufacturing,” American Economic Review, vol. 104, no. 5, 2014; and Susan Houseman, “Understanding the Decline of US Manufacturing Employment,” Upjohn Institute Working Paper 18-287, 2018. 14 Baily and Bosworth, “US Manufacturing,” p. 9.

Taming the Sun: Innovations to Harness Solar Energy and Power the Planet
by Varun Sivaram
Published 2 Mar 2018

Their plan would apply a price on carbon emissions across the U.S. economy, scrap the entire patchwork of clean energy deployment subsidies and mandates that drive conservatives crazy, and deliver a politically attractive tax break to working-class families.44 This solution would seem to be elegant and efficient, right? Probably not on its own. As the MIT economist Daron Acemoglu and colleagues argue, a carbon tax solves one important market failure but leaves another unaddressed. It corrects the market’s failure to put a value on the damage from carbon emissions, which levels the playing field between clean and dirty sources of energy. That adjustment sets up the market to cost-effectively match energy supply and demand while limiting pollution.

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Baker, III et al., “The Conservative Case for Carbon Dividends,” Climate Leadership Council, February 2017, https://www.clcouncil.org/media/TheConservativeCaseforCarbonDividends.pdf. 45.  Matt Hourihan and Robert D. Atkinson, “Inducing Innovation: What a Carbon Price Can and Can’t Do,” Information Technology and Innovation Foundation, March 2011, http://www.itif.org/files/2011-inducing-innovation.pdf. 46.  Daron Acemoglu et al., “The Environment and Directed Technical Change,” American Economic Review 102 (2012): 131-166, https://www.aeaweb.org/articles?id=10.1257/aer.102.1.131. 47.  Varun Sivaram and Sagatom Saha, “The Trouble with Ceding Climate Leadership to China,” Foreign Affairs, December 20, 2016, https://www.foreignaffairs.com/articles/united-states/2016-12-20/trouble-ceding-climate-leadership-china. 48.  

Adam Smith: Father of Economics
by Jesse Norman
Published 30 Jun 2018

Smith’s picture is thus of a social, economic and political order bootstrapping itself into existence over time, the product not of any individual mind or minds or initial founding act, but evolving as the unintended consequence of endlessly repeated social interactions. The result is a dynamic theory of political and economic development, which anticipates—and often sets the terms for—the work of a host of distinguished modern writers, from Norbert Elias and Steven Pinker on the decline of violence, to Deirdre McCloskey on the bourgeois virtues and Daron Acemoglu and James Robinson on ‘extractive’ and ‘inclusive’ institutions as causes of national economic failure and success. A THEORY OF NORMS But if commercial society emerges as a co-evolved system of institutions, laws and manners, this in turn raises questions about the source of the moral values and behaviour that underlie it.

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They include Angus Armstrong, Lee Auspitz, Tim Besley, Kate Bingham, Richard Bourke, Paul Collier, Tony Curzon-Price, Armand d’Angour, Claudia Daventry, Knud Haakonssen, Bob Klitgaard, John Lucas, Bob Monks, Leonidas Montes, Julie Nelson, Casey Norman, Craig Smith, Romesh Vaitilingam and Amy Woolfson. Many others have been extremely kind in sharing their ideas and insights in conversation and/or by email, whether recently or over many years, including Daron Acemoglu, Kate Auspitz, John Cairns, Vince Crawford, Simon Green, Andy Haldane, Ran Halévi, Ian Harris, James Harris, Oliver Marc Hartwich, Joe Henrich, Anya Hurlbert, John Kay, Colin Kidd, Deirdre McCloskey, Neil MacGregor, Nell Minow, Bobby Monks, Mary Morgan, Avner Offer, the late Nick Phillipson, David Rand, Matt Ridley, Dani Rodrik, Ignacio Briones Rojas, Martin Sandbu, Michael Sandel, Lucia Santa Cruz, Paul Seaward, Adam Tomkins, John Vickers, Richard Whatmore, Jo Wolff, David Womersley, Adrian Wooldridge and David Wootton.

The Hype Machine: How Social Media Disrupts Our Elections, Our Economy, and Our Health--And How We Must Adapt
by Sinan Aral
Published 14 Sep 2020

Jackson, “Naive Learning in Social Networks and the Wisdom of Crowds,” American Economic Journal: Microeconomics 2, no. 1 (2010): 112–49. “Disproportionate popularity is the sole”: Ibid., 114–15. these types of societies are prone to madness: Golub and Jackson were motivated by prior work, like Bala Venkatesh and Sanjeev Goyal, “Learning from Neighbors,” Review of Economic Studies 65 (1998): 595–621; Daron Acemoglu et al., “Bayesian Learning in Social Networks,” Review of Economic Studies 78, no. 4 (2011): 1201–36. They placed a thousand people: Joshua Becker, Devon Brackbill, and Damon Centola, “Network Dynamics of Social Influence in the Wisdom of Crowds,” Proceedings of the National Academy of Sciences 114, no. 26 (2017): E5070–76.

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“capacity enhancing”: Eszter Hargittai and Amanda Hinnant, “Digital Inequality: Differences in Young Adults’ Use of the Internet,” Communication Research 35, no. 5 (2008): 602–21. “activities that may lead to more informed”: Ibid., 606–7. the Hype Machine provides greater returns for highly skilled workers: Daron Acemoglu, “Why Do New Technologies Complement Skills? Directed Technical Change and Wage Inequality,” Quarterly Journal of Economics 113, no. 4 (1998): 1055–89; David H. Autor, Lawrence F. Katz, and Alan B. Krueger, “Computing Inequality: Have Computers Changed the Labor Market?,” Quarterly Journal of Economics 113, no. 4 (1998): 1169–213.

The Next Shift: The Fall of Industry and the Rise of Health Care in Rust Belt America
by Gabriel Winant
Published 23 Mar 2021

Discharging inpatients sooner meant the need to provide more intensive physical therapy, patient teaching, and more careful oversight using sophisticated computer technology,” explained the Health Policy Institute. “More efficient utilization of professional staff required more professional support services.”26 For those institutions that could afford it, the new regime presented an opportunity to grow, not a compulsion to shrink. As economists Daron Acemoglu and Amy Finkelstein observe, the reform had the effect of increasing the cost of hospital labor relative to hospital capital, incentivizing institutions to invest in more advanced technology—if they could afford it. For example, Presbyterian-University Hospital (PUH), the flagship institution affiliated with the University of Pittsburgh, pushed through a $211 million expansion program in the mid-1980s, including two new buildings for medical care and research, a “multi-level addition to its center wing” to house a centralized intensive care unit, and expanded cardiac care and cancer centers.

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Longest, “The Prognosis for Hospitals in Western Pennsylvania,” June 15, 1988, pp. 9, 11, box 295, folder 19, ACCDR. 26. Gaynor et al., “National Hospital Prospective Payment Evaluation,” pp. 12–13; Potter and Leak, Health Care System Change and Its Employment Impacts in Southwestern Pennsylvania, 27–28. 27. Daron Acemoglu and Amy Finkelstein, “Input and Technology Choices in Regulated Industries: Evidence from the Health Care Sector,” Journal of Political Economy 116, no. 5 (October 2008), 837–880; “Presby’s Plan to Expand, Renovate Approved by HSA,” Presby News 18, no. 4 (April 1987), p. 1, box 2, Presbyterian-University Hospital Aid Society Records and Photographs, 1945–1996, MSS 934, Library and Archives Division, Senator John Heinz History Center; Certificate of Need Application CON-86-H-6280-B, especially pp. 160, 201, box 4, BGC. 28.

America at the Crossroads: Democracy, Power, and the Neoconservative Legacy
by Francis Fukuyama
Published 20 Mar 2007

North and Robert P. Thomas, "An Economic Theory of the Growth of the Western World," Economic History Review, 2nd series, 28 (1970): 1-17, and Douglass C. North, Institutions, Institutional Change, and Economic Performance (New York: Cambridge University Press, 1990). On the importance of institutions see Daron Acemoglu and James A. Robinson, The Colonial Origins of Comparative Development: An Empirical Investigation, NBER Working Paper 7771, 2000, and Acemoglu and Robinson, Economic Backwardness in Political Perspective, NBER Working Paper 8831, 2002. The leading alternative theory of underdevelopment, associated with Jeffrey Sachs, currently concerns the impact of geography on development.

The New Division of Labor: How Computers Are Creating the Next Job Market
by Frank Levy and Richard J. Murnane
Published 11 Apr 2004

As discussed later, the community server also keeps track of students’ grades on chapter tests and the semester examination, eliminating the bookkeeping activities that consume a great deal of time for most teachers. 6. For rich discussions of the asymmetric information and self-selection ideas, see Daron Acemoglu and Jorn-Steffan Pischke, “Beyond Becker: Training in Imperfect Labour Markets,” Economic Journal 109, no. 453 (February 1999): F112–42; and David Autor, “Why Do Temporary Help Firms Provide Free General Skills Training?” Quarterly Journal of Economics 116, no. 4 (November 2001): 1409–48. CHAPTER 8.

The Next Factory of the World: How Chinese Investment Is Reshaping Africa
by Irene Yuan Sun
Published 16 Oct 2017

The debate now is not over whether the Washington Consensus is dead or alive, but over what will replace it.”7 Over the past decade, the monolithic orthodoxy of the Washington Consensus has splintered into several camps that, while not directly contradicting one another, emphasize differing ingredients as being critical to success in development. Some, like Daron Acemoglu, an influential development economist at MIT, emphasize the quality of governance and institutions. Meanwhile, funding and attention among practitioners in the development community has shifted toward service delivery: getting tangible aid to those who need it most. This is exemplified by the eight Millennium Development Goals spearheaded by the United Nations and championed by other global donors that put primary emphasis on measurable outcomes in health and education.

The Rise and Fall of Nations: Forces of Change in the Post-Crisis World
by Ruchir Sharma
Published 5 Jun 2016

In the sixteenth century the nations of western Europe suddenly started to grow faster than their rivals in Asia and Latin America; for the first time in history, the inhabitants of one region clearly distanced themselves from all others in terms of average income. In a 2005 article titled “The Rise of Europe,” the development experts Daron Acemoglu, Simon Johnson and James Robinson set out to explain this continental boom and found that the answer was a combination of geography and a readiness to exploit it.3 Between 1500 and 1850, they argued, the boom in Europe was driven mainly by nations with two key advantages: port cities on major Atlantic trade routes, and monarchies that respected private property rights and granted merchants the most latitude to exploit growing trade channels.

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Chapter 4: Perils of the State 1 Roger Altman, “Blame Bond Markets, Not Politicians, for Austerity,” Financial Times, May 8, 2013. 2 Ahmed Feteha, “Welcome to Egypt’s Fake Weddings: Get High, Leave Lots of Cash,” Bloomberg News, June 23, 2015. 3 Ronald Coase and Ning Wang, How China Became Capitalist (London: Palgrave Macmillan, 2013). 4 Jun Ma, Audrey Shi, and Shan Lan, “Deregulation and Private Sector Growth,” Deutsche Bank Research Report, September 13, 2013. 5 Anders Aslund, “How Russia Mismanaged the Financial Crisis,” Moscow Times, February 27, 2013. 6 Amy Li, “Premier Li Keqiang Makes Case for Deeper Economic Reforms over Stimulus,” South China Morning Post, May 1, 2014. 7 Liz Matthew, “Manmohan Singh Should Have Put Foot Down, Cancelled 2G Licences,” Indian Express, November 8, 2014. 8 Yannis Palaiologos, “Syriza Must Let Markets and Meritocracy Rule,” Financial Times, May 12, 2015. Chapter 5: The Geographic Sweet Spot 1 Rickards, James. Currency Wars: The Making of the Next Global Crisis (New York: Portfolio/Penguin, 2012). 2 Antonia Ax:son Johnson and Stefan Persson, “Do Not Fight Free Trade—It Makes Countries Richer,” Financial Times, July 23, 2015. 3 Daron Acemoglu, Simon Johnson, and James Robinson, “The Rise of Europe: Atlantic Trade, Institutional Change, and Economic Growth,” American Economic Review 95, no. 3 (2005): 546–79. 4 John Boudreau, “The Biggest Winner from TPP Trade Deal May Be Vietnam,” Bloomberg News, October 8, 2015; Eurasia, July 2015. 5 Victor Essien, “Regional Trade Agreements in Africa: A Historical and Bibliographic Account of ECOWAS and CEMAC,” NYU Global, 2006. 6 Moisés Naím, “The Most Important Alliance You’ve Never Heard Of,” Atlantic, February 17, 2014. 7 Ibid. 8 Peter Zeihan, The Accidental Superpower: The Next Generation of American Preeminence and the Coming Global Disorder (New York: Twelve, 2014). 9 Sumana Manohar, Hugo Scott-Gall, and Megha Chaturvedi, “Small Dots, Big Picture: Is Trade Set to Fade?

Utopia for Realists: The Case for a Universal Basic Income, Open Borders, and a 15-Hour Workweek
by Rutger Bregman
Published 13 Sep 2014

Project Syndicate (February 21, 2014). http://www.project-syndicate.org/commentary/robert-skidelsky-revisits-the-luddites--claim-that-automation-depresses-real-wages 34. Tyler Cowen, Average is Over. Powering America Beyond the Age of the Great Stagnation (2013), p. 23. 35. Tyler Cowen, The Great Stagnation, p. 172. 36. Quoted in: Daron Acemoglu and James A. Robinson, Why Nations Fail. The Origins of Power, Prosperity and Poverty (2012), p. 226. 37. Thomas Piketty, “Save capitalism from the capitalists by taxing wealth,” The Financial Times (March 28, 2014). http://www.ft.com/intl/cms/s/0/decdd76e-b50e-11e3-a746-00144feabdc0.html-axzz44qTtjlZN 5 The End of Poverty 1.

Hit Refresh: The Quest to Rediscover Microsoft's Soul and Imagine a Better Future for Everyone
by Satya Nadella , Greg Shaw and Jill Tracie Nichols
Published 25 Sep 2017

The framework continues to form the foundational principles for closer cooperation with like-minded countries through networks of free-trade agreements. But, trade agreements will only continue to be successful if they are seen in the broader context of economic policies for growth. Finally, questions are being asked about whether this next industrial revolution will be a jobless one. To help us investigate this question, MIT economist Daron Acemoglu visited our campus to report on his research into the effects of technology automation on labor. He found that new intelligent machines, particularly industrial robots, could have very consequential effects on the labor market. His estimates suggest that, on average, each additional industrial robot reduces employment by about three workers.

Why Information Grows: The Evolution of Order, From Atoms to Economies
by Cesar Hidalgo
Published 1 Jun 2015

This work includes the institutional literature explaining differences in the composition of industrial clusters based on differences in features of a location, in particular their social and formal institutions. (See, for example, Francis Fukuyama, Trust: The Social Virtues and the Creation of Prosperity [New York: Free Press, 1995]; AnnaLee Saxenian, Regional Advantage [Cambridge, MA: Harvard University Press, 1996]; and Daron Acemoglu and James A. Robinson, Why Nations Fail: The Origins of Power, Prosperity, and Poverty [New York: Crown Business, 2012].) For instance, an argument explaining differences between the composition and success of two industrial clusters in terms of the culture of the people located in them (religion, family orientation, etc.), or the formal rules that are in place, would fall into the categories of theories based on social or formal institutions, respectively.

Think Like a Freak
by Steven D. Levitt and Stephen J. Dubner
Published 11 May 2014

Hat tip to Hans-Joachim Voth and Nico Voigtländer, “Hatred Transformed: How Germans Changed Their Minds About Jews, 1890–2006,” Vox, May 1, 2012. 74 ETHNIC STRIFE IN AFRICA: See Stelios Michalopoulos and Elias Papaioannou, “The Long-Run Effects of the Scramble for Africa,” NBER working paper, November 2011; and Elliott Green, “On the Size and Shape of African States,” International Studies Quarterly 56, no. 2 (June 2012). 74 THE SCARS OF COLONIALISM STILL HAUNT SOUTH AMERICA AS WELL: See Melissa Dell, “The Persistent Effects of Peru’s Mining Mita,” MIT working paper, January 2010; and Daron Acemoglu, Camilo Garcia-Jimeno, and James A. Robinson, “Finding Eldorado: Slavery and Long-Run Development in Colombia,” NBER working paper, June 2012. 75 THE SALT-SENSITIVITY THEORY OF AFRICAN-AMERICAN HYPERTENSION: This section is based on author interview with Roland Fryer as reflected in Stephen J.

Hive Mind: How Your Nation’s IQ Matters So Much More Than Your Own
by Garett Jones
Published 15 Feb 2015

Top government workers and political leaders aren’t poor, but in most rich countries they don’t litter the “richest citizens” lists. How do governments in rich countries resist the temptation to grab wealth? Why are some governments able to strike a Coase-style bargain with citizens, so that the private sector continues to create wealth and the government agrees to only skim off some of it? Daron Acemoglu, the leading development economist of his generation, has thought about this question a lot. He argues that governments find it difficult to make commitments to their citizens, so the world of politics always threatens to become a world of defection, of short-run behavior. But according to Acemoglu, despite their focus on the short term, governments will still sometimes find solutions to the problem of short-run temptation.8 And once again, patience will play a key role.

Always Day One: How the Tech Titans Plan to Stay on Top Forever
by Alex Kantrowitz
Published 6 Apr 2020

Over the past fifteen years, 153 artificial intelligence professors have left academia for private companies, according to a University of Rochester study. As the tech giants succeed and workplace technology improves, productivity growth—which helps us produce more goods for the same amount of the work—is still slowing in the US. “Despite all of that technological richness around us, we haven’t had a great two decades,” the MIT economist Daron Acemoglu told me. “Growth has not been amazing. Growth has been pretty anemic.” The US federal government has taken note of big tech’s power and practices, and it’s now looking into Amazon, Apple, Facebook, and Google. A meek US regulatory body is unlikely to break these companies up, and will probably only levy manageable fines.

The Captured Economy: How the Powerful Enrich Themselves, Slow Down Growth, and Increase Inequality
by Brink Lindsey
Published 12 Oct 2017

Incumbents can choose to invest in protecting themselves from competition rather than inventing new products and production methods or improving existing ones. Good political institutions are, therefore, absolutely essential to generating widely shared growth because they tend to minimize rent-seeking and force incumbent firms to fight it out in the market. As Mancur Olson famously argued in The Rise and Decline of Nations, and as economists like Daron Acemoglu and James Robinson have found more recently, when institutions are too weak to resist capture by the powerful and well organized, economic decline, corruption, and political instability grow in a vicious cycle. This is the cycle that has taken hold in the United States. The good news is that this sort of decline is not inevitable.

Social Democratic America
by Lane Kenworthy
Published 3 Jan 2014

Nations with hybrid institutions and policies, or with a mix that changes over time, have grown just as rapidly as those with more coherent arrangements.30 Concern about a potential slowdown in economic growth resulting from inconsistent or shifting policies and institutions is therefore unjustified. Does Innovation Require High Inequality and Minimal Cushions? Daron Acemoglu, James Robinson, and Thierry Verdier also contend that there are two varieties of capitalism, but in their view one does tend to perform better than the other.31 They hypothesize the following: • Countries choose between two types of capitalism. “Cutthroat” capitalism provides large financial rewards to successful entrepreneurship.

How Democracy Ends
by David Runciman
Published 9 May 2018

I don’t agree with all of them, and this book is often trying to say something different. But they are all full of insight and interest. On the big questions that have preoccupied contemporary political scientists – what causes democracy to stick and what causes it to slide backwards – one very influential answer is given by Daron Acemoglu and James Robinson in Why Nations Fail: The Origins of Power, Prosperity, and Poverty (New York: Crown Business, 2012; London: Profile, 2013). They identify trustworthy institutions as the key to political stability. This is a more accessible version of their classic earlier book, The Economic Origins of Dictatorship and Democracy (Cambridge: Cambridge University Press, 2005).

The Cost of Inequality: Why Economic Equality Is Essential for Recovery
by Stewart Lansley
Published 19 Jan 2012

These include Joe Stiglitz, a Nobel prize- winner and a former chief economics at the IMF; Jean-Paul Fitoussi and Francesco Saraceno of the Paris-based Centre for Economic Research; Professor Raghuram Rajan, another former IMF chief economist; Gerry Holtham, a former City fund manager and co-director of the Investment Management Resource Centre at Cardiff University; the American economist Ravi Batra; and Michael Kumhof and Romain Rancière, two IMF research economists.242 The latter, for example, have argued that ‘The crisis is the ultimate result, after a period of decades, of a shock to the relative bargaining powers over income of two groups of households, investors who account for 5 per cent of the population, and whose bargaining power increases, and workers who account for 95 percent of the population (and whose bargaining power has fallen).’243 Although these are the views of a small minority and remain highly controversial, they have prompted an ongoing debate. Reviewing some of the evidence, Harvard economist David Laibson concluded, ‘income inequality was not a major contributor’.244 In January 2011, in a spirited debate at the annual meeting of the American Economic Association in Denver, two economists—Daron Acemoglu of MIT and Edward Glaeser of Harvard took on Chicago’s Raghuram Rajan, with Glaeser concluding that ‘Inequality seems as if it was only a small part of the story.’245 Then in February, in the first attempt at a systematic analysis of the relationship between rising inequality and banking crises, two Oxford academics, including the distinguished economist, Tony Atkinson, concluded that ‘at first sight this does not provide overwhelming evidence for the increase [in inequality] hypothesis’.

Average Is Over: Powering America Beyond the Age of the Great Stagnation
by Tyler Cowen
Published 11 Sep 2013

For a look at what is in the textbook of Borjas, on immigration, see Bryan Caplan, “Borjas, Wages, and Immigration: The Complete Story,” EconLog, March 16, 2007, http://econlog.econlib.org/archives/2007/03/borjas_wages_an.html. For the most comprehensive theoretical look at offshoring issues, see Daron Acemoglu, Gino Gancia, and Fabrizio Zilibotti, “Offshoring and Directed Technical Change,” National Bureau of Economic Research, Working Paper 18595, December 2012. On multinational job creation and destruction, see Jia Lynn Yang, “Corporations Pushing for Job-Creation Tax Breaks Shield U.S.-vs.-Abroad Hiring Data,” The Washington Post, August 21, 2011.

SuperFreakonomics
by Steven D. Levitt and Stephen J. Dubner
Published 19 Oct 2009

Codell Carter (University of Wisconsin Press, 1983; originally published 1861). Note: Puerpera is Latin for a woman who has given birth. UNINTENDED CONSEQUENCES: For an overview, see Stephen J. Dubner and Steven D. Levitt, “Unintended Consequence,” The New York Times Magazine, January 20, 2008. / 139 For the Americans with Disabilities Act, see Daron Acemoglu and Joshua D. Angrist, “Consequences of Employment Protection? The Case of the Americans with Disabilities Act,” Journal of Political Economy 109, no. 5 (2001). / 139 For the Endangered Species Act, see Dean Lueck and Jeffrey A. Michael, “Preemptive Habitat Destruction Under the Endangered Species Act,” Journal of Law and Economics 46 (April 2003); and John A.

The New Class Conflict
by Joel Kotkin
Published 31 Aug 2014

Isaiah Berlin, Karl Marx: His Life and Environment (Oxford: Oxford UP, 1978), p. 128. 51. W. Arthur Lewis, The Theory of Economic Growth (Homewood, IL: R. D. Irwin, 1955), p. 420. 52. Friedman, The Moral Consequences of Economic Growth, pp. 325, 383; “The East is Grey,” Economist, August 10, 2013. 53. Daron Acemoglu, “The Growth Imperative,” American, February 24, 2009, http://www.american.com/archive/2009/february-2009/the-growth-imperative; Thomas Philippon, “Why Has the U.S. Financial Sector Grown So Much? The Role of Corporate Finance,” working paper, NBER Working Paper Series, September 2007, http://www.nber.org/papers/w13405.pdf; William Lazonick, “The Financialization of the U.S.

The Enablers: How the West Supports Kleptocrats and Corruption - Endangering Our Democracy
by Frank Vogl
Published 14 Jul 2021

Dashed expectations, diminished hopes, economic problems, insecurity, and perceptions of widening wealth inequality were among the reasons that several friends of mine (Frank Vogl) running TI chapters from Eastern Europe gave me in a discussion in late 2019 about the failures of democracy in their countries. Many authors have written on the subject, from the sweeping Why Nations Fail by Daron Acemoglu and James Robinson, 2012, published by Crown Business; to the excellent post-2008 financial crisis volume The Fate of the West by former editor of The Economist Bill Emmott 2017, published by Profile Books; to the 2020 book Twilight of Democracy: The Seductive Lure of Authoritarianism by Anne Applebaum, published by Doubleday. 5.

The WEIRDest People in the World: How the West Became Psychologically Peculiar and Particularly Prosperous
by Joseph Henrich
Published 7 Sep 2020

Special thanks to Joel, who provided chapter-by-chapter feedback and always responded to my naïve questions about economic history. I also learned much from interacting with Guido Tabellini, Matt Jackson, Torsten Persson, Roland Bénabou, Tim Besley, Jim Fearon, Sara Lowes, Suresh Naidu, Thomas Fujiwara, Raul Sanchez de la Sierra, and Natalie Bau. Of course, my ongoing debates with Daron Acemoglu and James Robinson were essential, as they forced me to sharpen my arguments and spot gaps in my evidence. When James and I co-taught a course at Harvard, he made sure the students carefully inspected each of my arguments. In 2013–14, I was fortunate to spend a year at New York University’s Stern School of Business as part of the Business and Society Program.

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Bentzen, Kaarsen, and Wingender, 2016; Buggle, 2017; Chanda and Putterman, 2007; Galor and Özak, 2016; Hamilton and Sanders, 1992; Putterman and Weil, 2010; Sowell, 1998. The case I’ve made for the origins of WEIRD psychology and the rise of European societies in the second millennium is broadly consistent with views ranging from those of the great sociologist Max Weber to my fine colleagues Daron Acemoglu and James Robinson, who wrote Why Nations Fail. With Weber, my account shares a central role for religion and the nature of European cities, as well as a recognition that culture and institutions can shape basic aspects of people’s psychology. In a sense, I’m updating Weber in light of our modern understanding of cultural and genetic evolution as well as newly available historical, psychological, and economic data.

The Wealth of Humans: Work, Power, and Status in the Twenty-First Century
by Ryan Avent
Published 20 Sep 2016

In a series of nineteenth century acts, the British parliament extended the franchise dramatically, until it covered roughly 60 per cent of adult males. The extension of voting rights laid the groundwork for the establishment of the Labour Party, which was a critical force behind the creation of the welfare state in the twentieth century and the adoption of other progressive policies (such as the construction of public housing). Work by Daron Acemoglu and James Robinson, economists at MIT and Harvard University, respectively, concludes that extending the vote was a rational decision by a political class deeply concerned about the possibility of more dangerous outcomes: including widespread social unrest or revolution.17 The growth of political radicalism in Britain and the periodic outbreaks of political violence convinced leaders otherwise dead set against the relinquishing of power that such steps could not be avoided if an increasingly mobilized working class was to be sated.

The 100-Year Life: Living and Working in an Age of Longevity
by Lynda Gratton and Andrew Scott
Published 1 Jun 2016

The 100-Year Life To Nigel and Diane The 100-Year Life Lynda Gratton and Andrew Scott Bloomsbury Information An imprint of Bloomsbury Publishing Plc Praise for the 100-Year Life This playfully original book goes well beyond existing single-dimensional discussions of the major demographic transformations of our age, arguing how a different, exciting and challenging new world might be awaiting us. Blending economics, psychology and sociology, it makes a compelling case that as our lives become longer and healthier, the future might just be very very different from what we have known until now. Daron Acemoglu, Elizabeth and James Killian Professor of Economics, Department of Economics, Massachusetts Institute of Technology A lifetime that lasts a century is a gift that few of us are prepared for. It will force all of us to change the way we plan and live every facet of life. Societies will have to transform and this thought-provoking book by Professors Gratton and Scott will compel leaders to think hard about how organizations can adapt to this change and make the most of it.

The Fourth Revolution: The Global Race to Reinvent the State
by John Micklethwait and Adrian Wooldridge
Published 14 May 2014

Charles Tilly, “Reflections on the History of European State Making,” in Charles Tilly, ed., The Formation of National States in Western Europe (Princeton, NJ: Princeton University Press, 1975), p. 42. 19. Charles Wilson, Profit and Power (New York: Springer, 1978), p. 2. 20. Malcolm, Aspects of Hobbes, p. 8. 21. Daron Acemoglu and James Robinson, Why Nations Fail: The Origins of Power, Prosperity and Poverty (New York: Crown, 2012), p. 233. 22. Étienne Balázs, La bureaucratie celeste: Reserches sure l’economie et la societe de la Chine traditionelle (Paris: 1968), quoted in David Landes, The Wealth and Poverty of Nations: Why Some Are So Rich and Some So Poor (New York: W.

Nomad Century: How Climate Migration Will Reshape Our World
by Gaia Vince
Published 22 Aug 2022

I have had an electric cargo bike for the past five years, which I use for the school run, local trips and picking up groceries; in 2021, my local London neighbourhood brought in a cargo bike loan scheme in an initiative to get more cars off the road. 8. Ken Caldeira and Ian McKay, ‘Contrails: Tweaking flight altitude could be a climate win’, Nature 593:7859 (2021), p. 341. 9. Daron Acemoglu and James A. Robinson, ‘The economic impact of colonialism’ in The long Economic and Political Shadow of History: Volume I (free ebook, CEPR Press, 2017), p. 81; I. Mitchell and A. Baker, New Estimates of EU Agricultural Support: An ‘un-common’ agricultural policy, Center for Global Development, November 2019; Nancy Birdsall, Dani Rodrik and Arvind Subramanian, ‘How to help poor countries’, Foreign Affairs 84:4 (Jul–Aug 2005), pp. 136–52. 10.

Bad Samaritans: The Myth of Free Trade and the Secret History of Capitalism
by Ha-Joon Chang
Published 26 Dec 2007

But, as these rights are becoming more widely accepted, they look increasingly less political – especially witness the way in which environmental rights, which were only supported by the radical fringe a few decades ago, have become so widely accepted in the last decade or so that they do not look like a political issue any more. 28 For example, when a law regulating child labour was proposed in the British Parliament in 1819, some members of the House of Lords objected to the law on the grounds that ‘labour ought to be free’, despite the fact that it was an extremely mild law by the standards of our time – the proposed law was supposed to apply only to cotton factories that were considered most hazardous, while banning only the employment of children under the age of nine. See M. Blaug (1958), ‘The Classical Economists and the Factory Acts: A Re-examination’, Quarterly Journal of Economics, 1958, vol. 72, no. 2. For the ‘economic’ argument against ownership of ideas, see chapter 6. 29 Daron Acemoglu, the MIT economist, and James Robinson, the Harvard political scientist, put the same point in more academic language. They predict that democracy will become more widespread with globalization, as it will make democracy more innocuous. In their view, globalization is likely to make ‘the elites and conservative parties to become more powerful and democracy to become less redistributive in the future, especially if new forms of representation for the majority – in both the political sphere and the workplace – do not emerge.

The Curse of Cash
by Kenneth S Rogoff
Published 29 Aug 2016

Assuming the figure has roughly doubled in line with global GDP—which seems very conservative, given that developing countries have accounted for the lion’s share of global growth over the past 15 years—the worldwide scale of bribes would now be closer to $2 trillion.35 Few dispute that corruption is one of the biggest obstacles to development. A classic paper by economist Paolo Mauro found substantial evidence that corruption has a significant negative impact on economic growth. The same theme arises in the work of many economic historians, including the seminal work of David Landes and later work by Daron Acemoglu and James Robinson.36 One doesn’t have to go to developing countries to find spectacular cases of bribery. Louisiana Congressman William Jefferson was sentenced in 2010 for taking tens of thousands of dollars in bribes, including $90,000 that the FBI found wrapped in foil buried inside pie crusts in his refrigerator.

The Power Surge: Energy, Opportunity, and the Battle for America's Future
by Michael Levi
Published 28 Apr 2013

Author’s calculations based on data in National Energy Technology Laboratory, “Natural Gas Combined-Cycle Plant,” Fossil Energy Power Plant Desk Reference, Washington, D.C., U.S. Department of Energy, May 2007. “MiaSolé Awarded $100m in U.S. Tax Credits to Ramp Up CIGS PV Manufacturing,” January 16, http://indiumsamplesblog. com/2010/01/16/miasole-awarded-100m-in-us-tax-credits-toramp-up-cigs-pv-manufacturing/. Daron Acemoglu et al., “The Environment and Directed Technical Change,” American Economic Review 102, no. 1 (2012). U.S. National Energy Technology Laboratory, “Natural Gas Combined-Cycle Plants With and Without Carbon Capture and Sequestration,” Washington, D.C., U.S. Department of Energy, 2007. U.S. National Energy Technology Laboratory, “GE Energy IGCC Plant,” 2007, http://www.netl.doe.gov/KMD/cds/disk50/IGCC%20Plant%20 Case_GEE_051507.pdf; U.S.

Economists and the Powerful
by Norbert Haring , Norbert H. Ring and Niall Douglas
Published 30 Sep 2012

History Never Ends The interplay of economic and political power is complex and cannot possibly be understood within the ahistorical equilibrium analysis of mainstream economics. History teaches that the same event or innovation can have very different consequences, depending on the specific social, economic and political system of a specific time and place. Daron Acemoglu and Simon Johnson from MIT and James Robinson from Harvard are foremost among a new breed of economists who have rediscovered history, power and elites. In a series of influential articles, they have demonstrated that a lot depends on who had the power to set the rules of the economic game at important crossroads in history.

The Price of Everything: And the Hidden Logic of Value
by Eduardo Porter
Published 4 Jan 2011

The analysis of the evolution of slavery through history draws from Jonathan Conning, “On the Causes of Slavery or Serfdom and the Roads to Agrarian Capitalism: Domar’s Hypothesis Revisited,” Hunter College Department of Economics Working Paper, City University of New York, November 2004; Nils-Petter Lagerlöf, “Slavery and Other Property Rights,” Review of Economic Studies, Vol. 76, No. 1, January 2009, pp. 319-342; Evsey Domar, “The Causes of Slavery or Serfdom: A Hypothesis,” Economic History Review, Vol. 30, No. 1, March 1970, pp. 18-32; Kevin O’Rourke and Ronald Findlay, Power and Plenty: Trade, War and the World Economy in the Second Millennium (Princeton: Princeton University Press, 2007), p. 130; and Daron Acemoglu and Alexander Wolitzky, “The Economics of Labor Coercion,” NBER Working Paper, December 2009. Data on the impact of slavery on productivity and economic growth is drawn from Nathan Nunn, “Slavery, Inequality, and Economic Development in the Americas: An Examination of the Engerman-Sokoloff Hypothesis,” MPRA Paper, University Library of Munich, Germany, October 2007; Peter Mancall, Joshua Rosenbloom, and Thomas Weiss, “South Carolina Slave Prices, 1722-1809,” NBER Historical Paper, March 2000; Peter Mancall, Joshua Rosenbloom, and Thomas Weiss, “Agricultural Labor Productivity in the Lower South, 1720-1800,” Explorations in Economic History, Vol. 39, No. 4, October 2002, pp. 390-424.

Bad Samaritans: The Guilty Secrets of Rich Nations and the Threat to Global Prosperity
by Ha-Joon Chang
Published 4 Jul 2007

But, as these rights are becoming more widely accepted, they look increasingly less political – especially witness the way in which environmental rights, which were only supported by the radical fringe a few decades ago, have become so widely accepted in the last decade or so that they do not look like a political issue any more. 28 For example, when a law regulating child labour was proposed in the British Parliament in 1819, some members of the House of Lords objected to the law on the grounds that ‘labour ought to be free’, despite the fact that it was an extremely mild law by the standards of our time – the proposed law was supposed to apply only to cotton factories that were considered most hazardous, while banning only the employment of children under the age of nine. See M. Blaug (1958), ‘The Classical Economists and the Factory Acts: A Re-examination’, Quarterly Journal of Economics, 1958, vol. 72, no. 2. For the ‘economic’ argument against ownership of ideas, see chapter 6. 29 Daron Acemoglu, the MIT economist, and James Robinson, the Harvard political scientist, put the same point in more academic language. They predict that democracy will become more widespread with globalization, as it will make democracy more innocuous. In their view, globalization is likely to make ‘the elites and conservative parties to become more powerful and democracy to become less redistributive in the future, especially if new forms of representation for the majority – in both the political sphere and the workplace – do not emerge.

SUPERHUBS: How the Financial Elite and Their Networks Rule Our World
by Sandra Navidi
Published 24 Jan 2017

Craig Torres, “Bernanke Raised Concern About Leaks Two Years Before 2012 Probe,” Bloomberg, January 15, 2015, http://www.bloomberg.com/news/articles/2016-01-15/bernanke-raised-concern-about-leaks-two-years-before-2012-probe. 21. Jo Becker and Gretchen Morgenson, “Geithner, Member and Overseer of Finance Club,” New York Times, April 26, 2009, http://www.nytimes.com/2009/04/27/business/27geithner.xhtml. 22. Daron Acemoglu, Simon Johnson, Amir Kermani, James Kwak, Todd Mitton, “The Value of Connections in Turbulent Times: Evidence from the United States,” MIT Department of Economics, Working Paper 13-22, November 27, 2013, http://ssrn.com/abstract=2363609. 23. Ibid. 24. Andrew Ross Sorkin, “Prophecies Made in Davos Do Not Always Come True,” Deal-book, New York Times, January 21, 2013, http://dealbook.nytimes.com/2013/01/21/prophesies-made-in-davos-dont-always-come-true. 25.

The Genetic Lottery: Why DNA Matters for Social Equality
by Kathryn Paige Harden
Published 20 Sep 2021

Max Roser, Hannah Ritchie, and Bernadeta Dadonaite, “Child and Infant Mortality,” Our World in Data, May 10, 2013, https://ourworldindata.org/child-mortality; “Sweden: Child Mortality Rate 1800-2020,” Statista, accessed February 9, 2021, https://www.statista.com/statistics/1041819/sweden-all-time-child-mortality-rate/. 35. Daron Acemoglu, “Technical Change, Inequality, and the Labor Market,” Journal of Economic Literature 40, no. 1 (March 2002): 7–72. 36. Heather MacDonald, “Who ‘Deserves’ to Go to Harvard?,” Wall Street Journal, June 13, 2019, https://www.wsj.com/articles/who-deserves-to-go-to-harvard-11560464201. 37. Anne Case and Angus Deaton, Deaths of Despair and the Future of Capitalism (Princeton, NJ: Princeton University Press, 2020), https://press.princeton.edu/books/hardcover/9780691190785/deaths-of-despair-and-the-future-of-capitalism.

Capital Without Borders
by Brooke Harrington
Published 11 Sep 2016

Goodwin, “How the Rich Stay Rich,” 468. 115. Andrea Campbell, “Self-Interest, Social Security and the Distinctive Participation Patterns of Senior Citizens,” American Political Science Review 96 (2002): 565. 116. Volscho and Kelly, “The Rise of the Super-Rich.” 117. Bowie and Lioz, “Billion-Dollar Democracy,” 14. 118. Daron Acemoğlu and James Robinson, Why Nations Fail: The Origins of Power, Prosperity, and Poverty (New York: Crown, 2012), 365. 119. Brooke Harrington, “Can Small Investors Survive Social Security Privatization?” in David Canon and John Coleman, eds., Faultlines: Debating the Issues in American Politics, 308–313 (New York: W.

The Uninhabitable Earth: Life After Warming
by David Wallace-Wells
Published 19 Feb 2019

Lu et al., “Polluted Morality: Air Pollution Predicts Criminal Activity and Unethical Behavior,” Psychological Science 29, no. 3 (February 2018): pp. 340–55, https://doi.org/10.1177/0956797617735807. “food insecure”: Nett and Rüttinger, “Insurgency, Terrorism and Organised Crime,” p. 37. organized crime…exploded: Ibid., p. 39. Sicilian mafia was produced by drought: Daron Acemoglu, Giuseppe De Feo, and Giacomo De Luca, “Weak States: Causes and Consequences of the Sicilian Mafia,” VOX CEPR Policy Portal, March 2, 2018, https://voxeu.org/article/causes-and-consequences-sicilian-mafia. fifth-highest homicide rate: Nett and Rüttinger, “Insurgency, Terrorism and Organised Crime,” p. 35.

Corbyn
by Richard Seymour

, BBC News, 6 May 2015. 22Roger Mortimore and Kully Kaur-Ballagan, ‘Ethnic Minority Voters and Non-Voters at the 2005 British General Election’, Ipsos-Mori, Paper for EPOP Conference, University of Nottingham, September 2006; ‘General Election 2015 explained: Turnout’, Independent, 4 May 2015. 23On these origins, see Daron Acemoglu and James A Robinson, ‘Why Did the West Extend the Franchise? Democracy, Inequality and Growth in Historical Perspective’, Cambridge, MA: MIT Press, 1998, web.mit. edu. 24Wolfgang Streeck, Buying Time: The Delayed Crisis of Democratic Capitalism, London: Verso, 2014, pp. 77–9. 25On the relationship between neoliberals, democracy and the far right, see: William E.

How to Run a Government: So That Citizens Benefit and Taxpayers Don't Go Crazy
by Michael Barber
Published 12 Mar 2015

I am not recommending the content here to blatant autocracies or ‘extractive’ regimes interested purely in enriching themselves, though of course I can’t be sure that some of them won’t read the words. This is important because my belief is that the case made in the book has a moral purpose. More people are more likely to lead more fulfilled lives if they live in countries with effective accountable governments which can enforce basic individual rights and deliver effective public good. As Daron Acemoglu and James Robinson argue in Why Nations Fail, their monumental analysis of why some nations succeed and others don’t, effective and accountable governance is the key difference between those countries that pursue inclusive growth strategies and those that use the state as a means of enriching the elite.

Rewriting the Rules of the European Economy: An Agenda for Growth and Shared Prosperity
by Joseph E. Stiglitz
Published 28 Jan 2020

CHAPTER 10: THE FUTURE OF EUROPE IN A GLOBALIZED WORLD 1. Explained in much greater detail in Joseph E. Stiglitz, Globalization and Its Discontents Revisited: Anti-Globalization in the Era of Trump (New York: W. W. Norton, 2018), from which this passage and others in the section draw heavily. 2. For a popular account, see Daron Acemoglu and James A. Robinson, Why Nations Fail: The Origins of Power, Prosperity, and Poverty (New York: Crown Business, 2013). 3. See President Xi’s speech in Davos. Xi Jingping, “President Xi’s Speech to Davos in Full” (speech, Jan. 17, 2017), available at https://www.weforum.org/agenda/2017/01/full-text-of-xi-jinping-keynote-at-the-world-economic-forum. 4.

Inglorious Empire: What the British Did to India
by Shashi Tharoor
Published 1 Feb 2018

‘between 1757 and 1900 British per capita gross domestic product’: Ferguson, Empire, p. 216. the Indian government brought electricity to roughly 320 times as many villages: Paul Cotterrill, ‘Niall Ferguson’s Ignorant Defence of British Rule in India’, New Statesman, 16 August 2012. India was… an ‘extractive colony’: Daron Acemoglu and James Robinson, Why Nations Fail, New York: Crown Business, 2012. Colonial exploitation happened instead: See Cotterrill, ‘Ferguson’s Ignorant Defence’ and ‘The Incomplete State: Charles Tilly and the Defence of Aid to India’, www.thoughcowardsflinch.com/2012/02/07/the-incomplete-state-charles-tilly-and-the-defence-of-aid-to-india/, 7 Feb 2012.

The Great Reversal: How America Gave Up on Free Markets
by Thomas Philippon
Published 29 Oct 2019

This is a serious issue. A prime example is what economists now refer to as the China shock. China became a member of the World Trade Organization on December 11, 2001. It marked the end of lengthy negotiations as well as a significant step toward the integration of China into the world economy. Daron Acemoglu and his co-authors (2016) estimate that import competition from China was a major force behind reductions in US manufacturing employment during the 2000s. Imports from China to the US had risen since the early 1990s and experienced a very rapid rise in the 2000s. This growth affected different US industries in different ways.

Capitalism, Alone: The Future of the System That Rules the World
by Branko Milanovic
Published 23 Sep 2019

We thus reach the conclusion that two of the most important events in the global history of the twentieth century, World War I and the fall of communism, cannot both be consistently explained within the liberal or Marxist paradigms. The liberal paradigm has problems with 1914, the Marxist paradigm with 1989. The difficulty of dealing with communism theoretically and conceptually is widespread. In two influential books (Economic Origins of Dictatorship and Democracy and especially Why Nations Fail), Daron Acemoglu and James Robinson provided a comprehensive theory that aimed to explain why democracies develop and fail and to demonstrate the close relationship between political and economic inequalities. Their view was very influential, especially in the period before the 2008 global financial crisis, because it unified two strands then dominant in liberal thought: the Washington Consensus (which promoted privatization internally and globalization externally) and the Fukuyama-style celebration of liberal democracy.

Capital in the Twenty-First Century
by Thomas Piketty
Published 10 Mar 2014

In Chapter 11, I applied the same average return on capital to all fortunes, which no doubt leads to treating Liliane Bettencourt as a very partial heir (in view of the very high return on her capital), more partial than Steve Forbes himself, who nevertheless classifies her as a pure heiress, even though he counts himself among the “nurturers” of inherited wealth. See the online technical appendix. 20. For some particularly strong assertions about the relative merits of Slim and Gates, unfortunately without any precise factual basis, see, for example, Daron Acemoglu and James A. Robinson, Why Nations Fail: The Origins of Power, Prosperity, and Poverty (New York: Crown Publishing, 2012), 34–41. The authors’ harsh tone is all the more surprising in that they do not really discuss the ideal distribution of wealth. The book is built around a defense of the role of systems of property rights stemming from the British, American, and French revolutions in the development process (and little is said about more recent social institutions or systems of taxation). 21.

…

See in particular Figure 2.3. 44. Per capita GDP in the United States grew at 2.3 percent a year from 1950 to 1970, 2.2 percent between 1970 and 1990, and 1.4 percent from 1990 to 2012. See Figure 2.3. 45. The idea that the United States has innovated for the rest of the world was recently proposed by Daron Acemoglu, James Robinson, and Thierry Verdier, “Can’t We All Be More Like Scandinavians? Asymmetric Growth and Institutions in an Interdependent World,” (MIT Department of Economics Working Paper no. 12–22, August 20, 2012). This is an essentially theoretical article, whose principal factual basis is that the number of patents per capita is higher in the United States than in Europe.

Exceptional People: How Migration Shaped Our World and Will Define Our Future
by Ian Goldin , Geoffrey Cameron and Meera Balarajan
Published 20 Dec 2010

Jared Diamond. 1998. Guns, Germs and Steel. Vintage: London, p. 210. 19. Ibid.: 77–78. 20. Colin Bundy. 1988. The Rise and Fall of the South African Peasantry. London: James Currey. 21. Cited in Steve Olson. 2002. Mapping Human History. Boston: Mariner, p. 224. 22. Diamond, 1998: 44. 23. Daron Acemoglu, Simon Johnson, and James Robinson. 2001. “The Colonial Origins of Comparative Development: An Empirical Investigation,” The American Economic Review 91(5): 1369–1401. 24. Ibid.. 25. Ibid.:1374. 26. Ibid., 2001. 27. Our thanks to Robin Cohen for this observation. 28. See McNeill, 2000. 29.

Platform Revolution: How Networked Markets Are Transforming the Economy--And How to Make Them Work for You
by Sangeet Paul Choudary , Marshall W. van Alstyne and Geoffrey G. Parker
Published 27 Mar 2016

Shao, D. Njavro, P. C. Ivanov, and H. E. Stanley, “Influence of Corruption on Economic Growth Rate and Foreign Investment,” European Physical Journal B-Condensed Matter and Complex Systems 63, no. 4:547–50. 12. Estimate based on data from Wolfram Knowledgebase. Accessed October 13, 2015. 13. Daron Acemoglu, Simon Johnson, and James A. Robinson, “The Colonial Origins of Comparative Development: An Empirical Investigation,” American Economic Review 91, no. 5 (2001): 1369–1401; D. Acemoglu, S. Johnson, and J. A. Robinson, “Reversal of Fortune: Geography and Institutions in the Making of the Modern World Income Distribution,” Quarterly Journal of Economics 117, no. 4 (2002): 1231–94; Gavin Clarkson and Marshall Van Alstyne, “The Social Efficiency of Fairness,” Gruter Institute Squaw Valley Conference: Innovation and Economic Growth, October 2010. 14.

The Blockchain Alternative: Rethinking Macroeconomic Policy and Economic Theory
by Kariappa Bheemaiah
Published 26 Feb 2017

In this regard, a number of arguments including the skill-biased technological change (SBTC) hypothesis and the Autor-Levy-Murnane (ALM) hypothesis have underlined how advancements in technology reduce the demand for unskilled labor and increase the income compensation for skilled labor. While researchers and economists from MIT, notably Daron Acemoglu, established the correlation between skill acquisition and technological change, others, notably David Autor, were able to show that improvements in technology were leading to the creation of a polarized labor market, where growth was seen in jobs sectors that required high skills. Autor also found that an increasing demand was seen in jobs that involved “cognitive flexibility,” while at the same time, the demand for low-skill jobs requiring “non-routine manual tasks” also grew, creating a dip in the demand for jobs that involved tasks attributed to medium skill sets.

Doughnut Economics: Seven Ways to Think Like a 21st-Century Economist
by Kate Raworth
Published 22 Mar 2017

The state, not the market, turns out to have been the innovating, risk-taking partner, not ‘crowding out’ but ‘dynamising in’ private enterprise – and this trend holds across other high-tech industries too, such as pharmaceuticals and biotech.42 In the words of Ha-Joon Chang, ‘If we remain blinded by the free market ideology that tells us only winner-picking by the private sector can succeed, we will end up ignoring a huge range of possibilities for economic development through public leadership or public-private joint efforts.’43 Such state leadership is now needed worldwide to catalyse public, private, commons and household investments in a renewable energy future. The state as empowering, enabling economic partner: it sounds so good – is it too good to be true? That crucially depends, argue the economist Daron Acemoglu and political scientist James Robinson, on whether, in each country, the state’s economic and political institutions are inclusive or extractive. Put simply, inclusive institutions give many people a say in decision-making, unlike extractive ones that privilege the voice of the few and allow them to exploit and rule over others.44 The threat of the authoritarian state is very real, but so too is the danger of market fundamentalism.

The Evolution of Everything: How New Ideas Emerge
by Matt Ridley

Prosperity emerged despite, not because of, human policy. It developed inexorably out of the interaction of people by a form of selective progress very similar to evolution. Above all, it was a decentralised phenomenon, achieved by millions of individual decisions, mostly in spite of the actions of rulers. Indeed, it is possible to argue, as Daron Acemoglu and James Robinson do, that countries like Britain and the United States grew rich precisely because their citizens overthrew the elites who monopolised power. It was the wider distribution of political rights that made government accountable and responsive to citizens, allowing the great mass of people to take advantage of economic opportunities.

Machine, Platform, Crowd: Harnessing Our Digital Future
by Andrew McAfee and Erik Brynjolfsson
Published 26 Jun 2017

To test, sharpen, and refine them, we needed to have more focused conversations with as many of our favorite alpha geeks as possible. So we made appointments in Cambridge, New York, London, San Francisco, Silicon Valley, Washington, DC, and other places, and set out. In addition to the interviewees who are quoted in this book, many others taught us a lot: Daron Acemoglu Susan Athey David Autor Jeff Bezos Nick Bloom Christian Catalini Michael Chui Paul Daugherty Tom Davenport Tom Friedman Demis Hassabis Reid Hoffman Jeremy Howard Dean Kamen Andy Karsner Christine Lagarde Yann LeCun Shane Legg John Leonard David Lipton Tom Malone James Manyika Kristina McElheren Tom Mitchell Elon Musk Ramez Naam Tim O’Reilly Gill Pratt Francesa Rossi Daniela Rus Stuart Russell Eric Schmidt Mustafa Suleyman Max Tegmark Sebastian Thrun But you can put off writing for only so long.

Innovation and Its Enemies
by Calestous Juma
Published 20 Mar 2017

Muhsin Mahdi, “From the Manuscript Age to the Age of Printed Books,” in Atiyeh, Book in Islamic World, 1. 56. Mahdi, “Manuscript Age,” 1. 57. Mahdi, “Manuscript Age,” 10–11. 58. Mahdi, “Manuscript Age,” 11. 59. Mahdi, “Manuscript Age,” 9–16. 60. Ghaly, “Interplay of Technology,” 15. 61. Ghaly, “Interplay of Technology,” 16. 62. Ghaly, “Interplay of Technology,” 17. 63. Daron Acemoglu and James A. Robinson, Why Nations Fail: The Origins of Power, Prosperity, and Poverty (New York: Crown Publishing, 2012), 215. 64. Coşgel, Miceli, and Rubin, “Political Economy,” 357. 65. Yakup Bektas, “The Sultan’s Messenger: Cultural Constructions of Ottoman Telegraphy, 1847–1880,” Technology and Culture 41, no. 4 (2000): 696. 66.

The Innovation Illusion: How So Little Is Created by So Many Working So Hard
by Fredrik Erixon and Bjorn Weigel
Published 3 Oct 2016

“Therefore,” Pliny the Elder recalled in his Naturalis Historia, “instead of giving the goldsmith the regard expected, he ordered him to be beheaded.”15 Politics moves in mysterious ways and, through history, politicians and regulators have slowed rather than accelerated innovation and radical changes of markets. “Fear of creative destruction is often at the root of the opposition to inclusive economic and political institutions,” observe Daron Acemoglu and James Robinson.16 Innovators may no longer be decapitated when they bring new technology to market, but rulers still have that spirit of resistance in them. When Amazon’s Jeff Bezos, for example, unveiled the company’s new “flying vehicle,” the new drone prototype for delivering packages, it took less than a week for US authorities to ground it because there was no commercial legislation covering drones.

The Levelling: What’s Next After Globalization
by Michael O’sullivan
Published 28 May 2019

In turn this points to the fact that we are on the cusp of the rise of some nations (India and China) and the decline of others (the United Kingdom, and some would say the United States) and raises the questions of how faltering countries can best revive themselves and how emerging nations can best manage the next stage in their development. Why Nations Fail Two important factors in the success or failure of nations are institutional quality and the need for a sense of civic ethic. Both of these chime through books that track the rise and fall of nations, from Alexis de Tocqueville’s Democracy in America to Daron Acemoglu and James Robinson’s Why Nations Fail. In the aftermath of Brexit, the 2016 US elections, and the continued stresses on the eurozone, I imagine that Why Nations Fail and Gibbon’s book will continue to make very lively, relevant reading for the Katherine Chidleys of the world. More broadly, these texts introduce two themes into the debate on international relations: the first is the desire of large countries with former glories and empires to become great again (we could call them the “again countries”), and the second, related one is the question, What makes a country successful?

The Future of the Professions: How Technology Will Transform the Work of Human Experts
by Richard Susskind and Daniel Susskind
Published 24 Aug 2015

This boundary of advantage, for example, is in fact ‘endogenous’, depending not only upon the productivity of the people and machines but, for instance, on their wages and rents, which in turn depend upon the prices of the goods and services that the tasks they carry out produce, which in turn depend upon the nature of consumer demand and the form of production in the economy, and so on. We abstract from this in this simple model. A more complex model is the subject of research by Daniel Susskind at the University of Oxford. That model builds on the ‘Ricardian model of the labor market’, set out in Daron Acemoglu and David Autor, ‘Skills, Tasks and Technologies: Implications for Employment and Earnings’, in Handbook of Labor Economics, Volume 4, Part B, ed. David Card and Orley Ashenfelter (2011), 1043–171. 28 The spirit of their anxieties is shared with the original nineteenth-century ‘Luddities’ (whose name derives from their declared support for Ned Ludd, an East Midlands weaver who smashed a set of framing machines in anger and in fear in the early tremors of the Industrial Revolution).

People, Power, and Profits: Progressive Capitalism for an Age of Discontent
by Joseph E. Stiglitz
Published 22 Apr 2019

CHAPTER 4: AMERICA AT WAR WITH ITSELF OVER GLOBALIZATION 1.Deals that Trump repeatedly called “the worst ever.” 2.Leading, for instance, to NAFTA (North American Free Trade Agreement) in 1994 or to the creation of the World Trade Organization in 1995. There are a host of other bilateral trade agreements, for instance between the US and Chile and the US and Korea. 3.For a popular account, see Daron Acemoglu and James A. Robinson, Why Nations Fail: The Origins of Power, Prosperity, and Poverty (New York: Crown Business, 2013). 4.Modern economic science had long established that without active government intervention, trade between countries with large wage differences would result in the lowering of wages in the advanced country.

Narrative Economics: How Stories Go Viral and Drive Major Economic Events
by Robert J. Shiller
Published 14 Oct 2019

Gaser, Christian, Igor Nenadic, Hans-Peter Volz, Christian Büchel, and Heinrich Sauer. 2004. “Neuroanatomy of ‘Hearing Voices’: A Frontotemporal Brain Structural Abnormality Associated with Auditory Hallucinations in Schizophrenia.” Cerebral Cortex 14(1):91–96. Geanakoplos, John. 2010. “The Leverage Cycle.” In Daron Acemoglu et al., eds., NBER Macroeconomics Annual 2009, vol. 24. Chicago: University of Chicago Press. Gennaioli, Nicola, and Andrei Shleifer. 2018. A Crisis of Beliefs: Investor Psychology and Financial Fragility. Princeton, NJ: Princeton University Press. Gentzkow, Matthew, Jesse M. Shapiro, and Matt Taddy. 2016.

The Lonely Century: How Isolation Imperils Our Future
by Noreena Hertz
Published 13 May 2020

wpdmdl=6496041&refresh=5ea830afd2a471588080815. 79 Andrew G. Haldane, ‘Ideas and Institutions – A Growth Story’, Bank of England, 23 May 2018, 13, https://www.bankofengland.co.uk/-/media/boe/files/speech/2018/ideas-and-institutions-a-growth-story-speech-by-andy-haldane; see also Table 1. 80 Daron Acemoglu and Pascual Restrepo, ‘Robots and Jobs: Evidence from US Labor Markets’, Journal of Political Economy 128, no. 6 (June 2020), 2188–244, https://www.journals.uchicago.edu/doi/abs/10.1086/705716. Note that in ‘commuting zones where robots were added to the workforce, each robot replaces about 6.6 jobs locally, the researchers found.

Open: The Story of Human Progress
by Johan Norberg
Published 14 Sep 2020

King James II was increasingly seen as a despot and intent on imposing Catholicism on the people. But many Catholics were also hostile, since the king claimed that he was sovereign and not even the Pope could limit his power. This time the revolt against a Stuart king was less violent than the Civil War but the consequences were more momentous, creating – according to Daron Acemoglu and James Robinson in their history of long-term institutional change – ‘the world’s first set of inclusive political institutions’.28 The Glorious Revolution was not just a revolution but an outright Dutch invasion, albeit one that parliament encouraged because of its fear of an increasingly autocratic king and a possible Catholic restoration.

The Rational Optimist: How Prosperity Evolves
by Matt Ridley
Published 17 May 2010

It is true that Botswana has a small and ethnically somewhat homogeneous population, unlike many other countries. But its biggest advantage is one that the rest of Africa could easily have shared: good institutions. In particular, Botswana turns out to have secure, enforceable property rights that are fairly widely distributed and fairly well respected. When Daron Acemoglu and his colleagues compared property rights with economic growth throughout the world, they found that the first explained an astonishing three quarters of the variation in the second and that Botswana was no outlier: the reason it had flourished was because its people owned property without fear of confiscation by chiefs or thieves to a much greater extent than in the rest of Africa.

Profiting Without Producing: How Finance Exploits Us All
by Costas Lapavitsas
Published 14 Aug 2013

A Cohort-Based Analysis’, Quarterly Journal of Economics 116:2, 2001; Claudia Goldin and Lawrence F. Katz, The Race Between Education and Technology, Cambridge, MA: Belknap Press of Harvard University Press, 2008. 28 This is often called ‘polarization’; see David Autor, Lawrence Katz, and Melissa Kearney, ‘The Polarization of the US Labor Market’, American Economic Review 96:2, 2006; and Daron Acemoglu and David Autor, ‘What Does Human Capital Do? A Review of Goldin and Katz’s The Race Between Education and Technology’, NBER Working Paper No. 17820, February 2012. 29 This is what Autor and Dorn attempt to do by claiming that computers have destroyed jobs of middle skill and pushed workers toward lower-paid jobs; David Autor and David Dorn, ‘The Growth of Low Skill Service Jobs and the Polarization of the US Labor Market’, Cambridge, MA: MIT Department of Economics, 2012.

The Shifts and the Shocks: What We've Learned--And Have Still to Learn--From the Financial Crisis
by Martin Wolf
Published 24 Nov 2015

The preface to Why Globalization Works discusses my intellectual history. See ibid., pp. ix – xviii. 10. On the frequency of financial crises since 1980, see Carmen M. Reinhart and Kenneth S. Rogoff, This Time is Different: Eight Centuries of Financial Folly (Princeton and Oxford: Princeton University Press, 2009) pp. 73– 5. 11. Daron Acemoglu offers an optimistic view of these developments, which I largely share, in ‘The World our Grandchildren will Inherit: The Rights Revolution and Beyond’, National Bureau of Economic Research Working Paper 17994, Cambridge, MA, April 2012, www.nber.org. 12. ‘Federalism before a Fall’, Financial Times (3 December 1991). 13.

Evil Geniuses: The Unmaking of America: A Recent History
by Kurt Andersen
Published 14 Sep 2020

Nor do Americans buy it: a 2017 Pew survey asked people if, in a near future where “robots and computers perform many of the jobs currently done by humans,” they thought that “the economy will create many new, better-paying human jobs,” and by 75 to 25 percent they said they did not. The expert consensus is striking. Among the several MIT professors who lead the field studying the effects of automation on work is Daron Acemoglu, an economist and political historian. “In the standard economic canon,” he said recently, “the proposition that you can increase productivity and harm labor is bunkum.” But “this time is different,” he says, because “unlike previous transformations of the economy, the demand for labor is not rising fast enough.”

A Splendid Exchange: How Trade Shaped the World
by William J. Bernstein
Published 5 May 2009

Ibid., 209-210. 32. Ibid., 13-18. 33. Frederic C. Lane, Venice: A Maritime Republic (Baltimore: Johns Hopkins University Press, 1973), 19. B. Z. Kedar, Merchants in Crisis (New Haven: Yale University Press, 1976), 5. 34. Dols, 58-59. 35. Horrox, 18. 36. Ibid., 25. For municipal population figures see Daron Acemoglu et al., "Reversal of Fortune: Geography and Institutions and the Making of the Modern World Income Distribution," Quarterly Journal of Economics, 117 (November 2002):123 11294. 37. Dols, 60. 38. Ibid., 65. 39. Ibid., 57. 40. David Neustadt (Ayalon), "The Plague and its Effects upon the Mamluk Army," Journal of the Royal Asiatic Society (1946): 67-73, quotes from 72. 41.

The Price of Inequality: How Today's Divided Society Endangers Our Future
by Joseph E. Stiglitz
Published 10 Jun 2012

The elites of nineteenth-century countries that extended education must have known that there was a risk that this would over the long run weaken their dominance of the political franchise; yet the short-term economic advantages of having a more educated workplace seem to have dominated the long-term political consequences. See François Bourguignon and Sébastien Dessus, “Equity and Development: Political Economy Considerations,” pt. 1 of No Growth without Equity?,” ed. Santiago Levy and Michael Walton (New York: Palgrave Macmillan, 2009). Daron Acemoglu and James Robinson theorize that democratization is a way for ruling elites to commit to future redistribution, and thus avoid the extreme of revolution when faced with social unrest. If there is not sufficient strength in the rebellion, repression or temporary reform (or transfers) might suffice.

Nexus: A Brief History of Information Networks From the Stone Age to AI
by Yuval Noah Harari
Published 9 Sep 2024

Invest Pakistan, “Textile Sector Brief,” accessed Jan. 12, 2024, invest.gov.pk/textile; Morder Intelligence, “Bangladesh Textile Manufacturing Industry Size & Share Analysis—Growth Trends & Forecasts (2023–2028),” accessed Jan. 12, 2024, www.mordorintelligence.com/industry-reports/bangladesh-textile-manufacturing-industry-study-market. 22. Daron Acemoglu and Simon Johnson, Power and Progress: Our 1000-Year Struggle over Technology and Prosperity (Cambridge, Mass.: MIT Press, 2023). 23. PricewaterhouseCoopers, “Global Artificial Intelligence Study: Sizing the Prize,” 2017, www.pwc.com/gx/en/issues/data-and-analytics/publications/artificial-intelligence-study.html. 24.

A Culture of Growth: The Origins of the Modern Economy
by Joel Mokyr
Published 8 Jan 2016

Outside Northwestern, perhaps the best scholarly environment any scholar can imagine is the fabulous Institutions, Organizations, and Growth group run by the Canadian Institute for Advanced Research (CIFAR). This group contains the best minds that social science has to offer in this world, and its interest in economic history is unrivaled. The group has allowed me to interact with and learn from scholars of the calibre of Daron Acemoglu, Roland Benabou, Tim Besley, Rob Boyd, Mauricio Drelichman, Avner Greif, Elhanan Helpman, Joseph Henrich, Roger Myerson, Torsten Persson, James Robinson, Ken Shepsle, and Guido Tabellini, and there exists no research project in social science that will not benefit vastly from the comments and suggestions of this remarkable group of intellects.

Never Let a Serious Crisis Go to Waste: How Neoliberalism Survived the Financial Meltdown
by Philip Mirowski
Published 24 Jun 2013

Returning once more to our insistence on the importance of agnotology, it takes some diligence and not a little digging to come to understand why the populace was being led up the garden path; those seeking enlightenment were lured to waste their time in dalliance with ideas that did little more than divert attention from the deeper structural causes of the crisis. Daron Acemoglu’s curious notion that “the crisis has increased the vitality of economics” was premature, to say the least.33 1) Getting a Little Irrational: Paradoxes of Ditching “Rationality” in Economics It has become fairly common in the annals of economic history to observe that in the wake of serious financial crises, observers tended to bewail a certain weakness in human cognition, attributing pecuniary disaster to an endemic “madness of crowds.”34 In the current neoliberal era entranced with proclaiming the “wisdom of crowds,” venturing to insist that the average man was a few sandwiches short of a picnic often appeared one easy way to register dissent from neoliberalism.

The Secret of Our Success: How Culture Is Driving Human Evolution, Domesticating Our Species, and Making Us Smarter
by Joseph Henrich
Published 27 Oct 2015

In each place, many families shared their homes and lives with me, answered my endless questions, and deepened my understanding of human diversity. Special thanks goes to these folks. In developing various ideas for this book, I often queried the authors or experts I drew on. Along the way, I got helpful replies from Daron Acemoglu, Siwan Anderson, Coren Apicella, Quentin Atkinson, Clark Barrett, Peter Blake, Monique Borgerhoff Mulder, Sam Bowles, Josep Call, Colin Camerer, Nicholas Christakis, Mort Christiansen, Alyssa Crittenden, Yarrow Dunham, Nick Evans, Dan Fessler, Jim Fearon, Ernst Fehr, Patrick Francois, Simon Gächter, Josh Greene, Avner Greif, Paul Harris, Ester Herrmann, Barry Hewlett, Kim Hill, Dan Hruschka, Erik Kimbrough, Michelle Kline, Kevin Laland, Jon Lanman, Cristine Legare, Hannah Lewis, Dan Lieberman, Johan Lind, Frank Marlowe, Sarah Mathew, Richard McElreath, Joel Mokyr, Tom Morgan, Nathan Nunn, David Pietraszewski, David Rand, Peter Richerson, James Robinson, Carel van Schaik, Joan Silk, Mark Thomas, Mike Tomasello, Peter Turchin, Carel van Schaik, Felix Warneken, Janet Werker, Annie Wertz, Polly Wiessner, David Sloan Wilson, Harvey Whitehouse, Andy Whiten, and Richard Wrangham (as well as many others, including those already mentioned above).

Blueprint: The Evolutionary Origins of a Good Society
by Nicholas A. Christakis
Published 26 Mar 2019

But economist Joshua Angrist used the natural experiment of the 1970s-era Vietnam draft lottery instead, and he showed that serving in the army reduced subsequent earnings.11 Historians, biologists, archaeologists, and diverse social scientists have used natural experiments to study everything from the long-term impact of British colonial institutions in India to (famously) the evolution of beak morphology in Darwin’s finches on the various Galápagos Islands.12 Natural experiments vary a lot, however, in the extent to which the experimental treatments really are randomly assigned (as was the case in the military draft example). Randomization in most natural experiments is rarely so perfect. However, the key idea is always that the treatment is assigned by some force other than the scientist and in a manner that does not predict the outcome. In one natural experiment, economist Daron Acemoglu and his colleagues concluded that the parts of Germany that were invaded by the French army following the French Revolution were quicker to abandon feudal governance.13 These same regions in Germany then went on to experience greater prosperity and greater urbanization in subsequent centuries.

The Great Leveler: Violence and the History of Inequality From the Stone Age to the Twenty-First Century
by Walter Scheidel
Published 17 Jan 2017

For this reason alone, even if democratization could be shown to have had an equalizing effect on the distribution of material resources in those societies, any such process would at least in part have been driven by the pressures of war.31 Moreover, scholarship on the relationship between democracy and inequality has long produced contradictory results. This ambiguity of outcomes has now been confirmed by the most ambitious and comprehensive survey of this problem to date. Drawing on 538 observations from 184 different countries from independence or 1960 (whichever is later) until 2010, Daron Acemoglu and his associates find no consistent effect of democracy on market or even disposable income inequality. An observed negative effect on the Gini coefficient of disposable income distribution does not reach statistical significance. It is true that the lack of precision of many of the underlying inequality measures leaves room for doubt.

Accessory to War: The Unspoken Alliance Between Astrophysics and the Military
by Neil Degrasse Tyson and Avis Lang
Published 10 Sep 2018

res=9804E3DB1738E63ABC4951DFB1668382679EDE (accessed May 5, 2017); “Reactions to Man’s Landing on the Moon Show Broad Variations in Opinions. Some Would Forge Ahead in Space, Others Would Turn to Earth’s Affairs,” New York Times, July 21, 1969, 6–7, timesmachine.nytimes.com/timesmachine/1969/07/21/issue.html (accessed Sept. 18, 2017). 2.See generally Daron Acemoglu, Mikhail Golosov, Aleh Tsyvinski, and Pierre Yared, “A Dynamic Theory of Resource Wars,” Quarterly J. of Economics (2012), 283–331, economics.mit.edu/files/8041 (accessed Oct. 9, 2017). For recently diminishing supplies of another natural resource, see David Owen, “The End of Sand,” New Yorker, May 29, 2017, 28–33. 3.Government Accountability Office, Rare Earth Materials: Developing a Comprehensive Approach Could Help DOD Better Manage National Security Risks in the Supply Chain, GAO-16-161, Feb. 2016, www.gao.gov/assets/680/675165.pdf; Lee Simmons, “Rare-Earth Market,” Foreign Policy, July 12, 2016, foreignpolicy.com/2016/07/12/decoder-rare-earth-market-tech-defense-clean-energy-china-trade; Lisa Margonelli, “Clean Energy’s Dirty Little Secret,” The Atlantic, May 2009, www.theatlantic.com/magazine/archive/2009/05/clean-energys-dirty-little-secret/307377; Julie Butters, “This Is Dysprosium—If We Run Out of It, Say Goodbye to Smartphones, MRI Scans and Hybrid Cars,” Phys.org, June 6, 2016, phys.org/news/2016-06-dyprosiumif-goodbye-smartphones-mri-scans.html (accessed Apr. 2, 2017). 4.Aluminum constitutes about 8 percent of Earth’s crust and is the third most abundant element found there.

Bourgeois Dignity: Why Economics Can't Explain the Modern World
by Deirdre N. McCloskey
Published 15 Nov 2011

No: routines cannot account for the strangest secular event in human history, which began with bourgeois dignity in Holland after 1600, gathered up its tools for betterment in England after 1700, and burst on northwestern Europe and then the world after 1800. Take the routine of property rights, emphasized, for example, by the economist Daron Acemoglu and the political scientist James Robinson in Why Nations Fail (2012). The trouble with their emphasis is that most societies have always enforced property rights. It is what we mean by a “society.” In Mesopotamia two millennia before the common era the cities enforced property rights, as did the societies of ancient Israel, the Viking lands, T’ang China.

The Rise and Fall of American Growth: The U.S. Standard of Living Since the Civil War (The Princeton Economic History of the Western World)
by Robert J. Gordon
Published 12 Jan 2016

The role of ICT investment in temporarily driving up the growth rate of manufacturing capacity in the late 1990s is well known. Martin Baily and Barry Bosworth have emphasized that if ICT production is stripped out of the manufacturing data, TFP growth in manufacturing has been an unimpressive 0.3 percent per year between 1987 and 2011.34 Daron Acemoglu and coauthors have also found that the impact of ICT on productivity disappears once the ICT-producing industries are excluded; their finding is that for the remaining industries there is no tendency for labor productivity to grow faster in industries that are “ICT-intensive”—that is, that have a relatively high ratio of expenditures on computer equipment to their expenditures on total capital equipment.35 Figure 17–5.

Networks, Crowds, and Markets: Reasoning About a Highly Connected World
by David Easley and Jon Kleinberg
Published 15 Nov 2010

Now how much can the airport expect to sell the rights for, and how much will the access provider charge? 798 CHAPTER 24. PROPERTY RIGHTS Bibliography [1] James Abello, Adam L. Buchsbaum, and Jeffery Westbrook. A functional approach to external graph algorithms. In Proc. 6th European Symposium on Algorithms, pages 332–343, 1998. [2] Daron Acemoglu, Munther A. Dahleh, Ilan Lobel, and Asuman Ozdaglar. Bayesian learning in social networks. Technical Report 2780, MIT Laboratory for Information and Decision Systems (LIDS), May 2008. [3] Theodore B. Achacoso and William S. Yamamoto. AY’s Neuroanatomy of C. Elegans for Computation. CRC Press, 1991