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Daron Acemoglu, James A. Robinson

Dedicated to Arda and Asu - D.A.

Para María Angelica, mi vida y mi alma – J.R.

Daron Acemoglu, James A. Robinson

WHY NATIONS FAIL

The Origins of Power, Prosperity, and Poverty

Translation from English by Dmitry Litvinov, Pavel Mironov, Sergei Sanovich

Back cover photo: MIT Economics / L. Barry Hetherington Svein, Inge Meland

The book you have opened is certainly one of the most significant economic works of the last decade. I’m not sure that I, a person who has not been professionally involved in economics for a long time, is the most successful candidate to author the preface to it. Everything that I can write here will probably be subjective and passed through my own practical experience. It so happened that during a whole decade of Russian history I had to take an active part in large-scale social, economic and political transformations in our country. Therefore, I can consider myself more likely to be among the consumers of scientific knowledge in this area.

I am extremely interested in the fundamental discussion unfolding in world social science - why some countries prosper economically and others do not. If you look at the list of topics for which their authors have been awarded Nobel Prizes in economics in the last fifteen years, you will not see anything close to the topic I named. Nevertheless, it seems to me that this particular problem is in some sense the pinnacle of economic knowledge. After all, in order to take aim at it, you need professional knowledge of the history of peoples on all five continents for at least the last 10 thousand years. In addition, you need to deeply comprehend the most modern achievements of economic science, ethnography, sociology, biology, philosophy, cultural studies, demography, political science and several other independent areas of scientific knowledge. It’s also a good idea to master at least basic technological trends and understand industry relationships from medieval to modern economies. But the demand for results here is so great that several schools of scientific thought have formed in this area. Without claiming complete knowledge, I would describe them in the following form.

Geographical determinism. The essence of the position of its supporters is that the most significant factor determining long-term trends in a country's economic development is geographical location. Probably, the climatic factor should also be included here, since, for obvious reasons, over centuries or even millennia of historical periods, these two factors are strictly interconnected. The most serious proponents of this approach include Jared Diamond, whose book “Guns, Germs and Steel: The Fates of Human Societies,” translated into Russian in 2009, was a great success in our country. The authors of this book include Jeffrey Sachs in this same school. Quite rightly, in my opinion, they call Montesquieu the founder of this approach, who directly wrote about the influence of climate on laws. It must be said that the seriousness of this school in the eyes of professional Russian readers was somewhat undermined by one of its Russian followers, who was trying to understand why Russia is not America. However, I would not judge an entire school because of one graphomaniac, although I cannot at all consider myself one of its followers.

Another scientific school is cultural determinism, the essence of which is most aphoristically formulated by one of its leading Russian followers, Andrei Konchalovsky: “Culture is destiny.” I think that the founder of this school should be considered Max Weber with his main scientific work “The Protestant Ethic and the Spirit of Capitalism.” And although today, against the backdrop of the recent acute and not yet completed crisis in relations between the North and South of Europe, the ideas of his book are in renewed demand, it seems to me that much more important is not so much the Protestant component of his work as the basic idea about the significance of cultural values ​​and traditions themselves for economic development, the level of well-being and, in fact, the destinies of peoples. This belief system has experienced a strong renaissance over the past two decades, especially since Samuel Huntington's 1993 classic The Clash of Civilizations. The works of Mariano Grandona and Lawrence Harrison (especially the recently translated into Russian “Jews, Confucians and Protestants: Cultural Capital and the End of Multiculturalism”) simply sweep away the poor framework of political correctness and undoubtedly put the school of cultural determinism among the most advanced and brightest.

This is probably why, for the authors of this work, it is the school of cultural determinism that, it seems to me, is the most serious opponent. They themselves, considering themselves among the supporters of the institutional school, repeatedly in the text of their work return to the dispute with “cultural determinists.” But institutionalists themselves, as we know, have great teachers - it is no coincidence that one of the fundamental categories on which the logical constructions of this book are based is “creative destruction,” introduced into scientific circulation by Schumpeter.

But there is another school with no less rich scientific roots, which proceeds from the fact that the main factor determining both the level of development of a society and the degree of maturity of its political institutions is the level of economic development itself. From the point of view of its supporters, it is the economy and its material basis that determine the trends of socio-political development. This approach brings together authors who sometimes have diametrically opposed political views. It is enough to name, say, the founder of Marxism and Yegor Gaidar, the theorist and practitioner of the largest transition in history from socialism to capitalism. According to Marx, as we remember, it is the development of productive forces that must inevitably lead to a change in socio-economic formations. And Gaidar, in his most important, from my point of view, work “Long Time”, has an entire chapter devoted to economic determinism and the experience of the twentieth century. The idea that the emergence of a middle class in modern societies creates a demand for democracy and creates the basis for its sustainability is very widespread both in the scientific community and far beyond its borders. Unfortunately, for reasons unknown to me, the authors of this work paid virtually no attention to this scientific school.

This could be the end of the list of schools, but the authors describe one more - the “school of ignorance,” as they call it. The basic idea is that authorities make erroneous decisions simply because they lack the necessary knowledge. Of course, it is pointless to dispute the thesis about the need for professional knowledge in government, however, in my opinion, this is so banal that it is hardly worth seriously proving this necessity. On this issue, I would definitely agree with the authors of the monograph, who placed a description of this school in the chapter entitled “Theories that do not work.”

In this, as we see, very thoroughly plowed scientific field with fundamental scientific roots and rapid development in the last one and a half to two decades, it is not at all easy to make an independent breakthrough. If from my description someone gets the impression that the authors simply indicated their place on it, attributing their work to an institutional school, then this, of course, is not so. The book, without a doubt, advances both the institutional school itself and scientific research in this area in general. The categories of extractive and inclusive institutions introduced by the authors themselves contain both scientific novelty and, probably, a certain predictive power. The intuitive “understanding” of these terms does not in any way reduce the level of fundamentality of the theoretical constructs based on them. The authors managed to overcome exactly what is the main difficulty of this kind of research, and offer a language that allows us to meaningfully reveal and describe the reasons for the prosperity of peoples and countries over a historical period of about 10 thousand years and with a geographical spread across all five continents. Paradoxically, their descriptions of the reasons for the relative success of the British colonization of North America and the relative failure of the Portuguese and Spanish colonization of South and Latin America look no less convincing than an analysis of the reasons for the success of William of Orange's Glorious Revolution in England in 1688 or the failures of North Korea in our days. And although the logic of the authors, as was said, is based on the categories of inclusive and extractive political and economic institutions they introduced, it is, of course, not limited to them. If the author of the preface is allowed to significantly simplify the essence of the concept presented in the book, it looks something like this.

Considering various reasons influencing the welfare of countries, the authors reject as non-working reasons such as geographical location, influence of culture and education of the population, and make a categorical conclusion - the path to prosperity lies through solving basic political problems. And although the authors for some reason call these problems political, in fact they reduce them to economic institutions.

Quote:
« Economic institutions, similar to those in the USA or South Korea, we will call inclusive. They allow and, indeed, stimulate the participation of large groups of people in economic activity, which allows them to make the best use of their talents and skills, while leaving the power of choice - where exactly to work and what exactly to buy - to the individual. Part of inclusive institutions necessarily are secure private property rights, an impartial justice system, and equal opportunity for all citizens to participate in economic activity.”

In addition, the authors point out the importance of accessibility and motivation to obtain education.
Protected private property rights and the population's desire for education are the central elements inclusive institutions.
We emphasize: private property, fair trial, equal rights for all, desire for education.
But that's what it is the main elements of Western (Protestant) culture. And the complete opposite of Eastern - Orthodox-Islamic culture.

You can use different terminology, call it inclusive, political, economic or any other institutions, but the essence comes down to one thing - the culture of the population. The only question remains is how this culture is instilled in the population. Or in as a result of cultural and social traditions and religion, as happened in Protestant-Catholic Europe. Or through economic reforms, as it happens in the countries of Southeast Asia, in Islamic monarchies and other countries.

Where the culture of the population meets the requirements of inclusive institutions, these institutions arise automatically and it is the Protestant countries that were the first to achieve prosperity and top all ratings.

Where these cultural traditions do not exist, inclusive institutions need to be instilled and, as a rule, by force, in an authoritarian way. It is not easy to change the culture of the population; it requires time, understanding of the need and the political will of the authorities. The best way to change the culture of the population is through economic reforms. Having received private property and guarantees of its inviolability, a person himself will understand the need for education, the need to respect the rights of others and other elements of Western (Protestant) culture.

Whether to call this culture Western, Protestant, inclusive or, as I prefer, democratic is a matter of taste. When a population has this culture, then the political system in the form of democracy is a guarantee against sudden and lasting deviations from this culture. Although there are exceptions - fascism and communism in Protestant Europe. Moreover, the transition to authoritarianism can be democratic and very fast, but the return to authoritarianism can be long, depending on the duration of authoritarianism. But it was precisely cultural traditions that allowed these countries to quickly return to democracy after the collapse of these regimes.

The situation is more difficult with the introduction of democracy in countries with an eastern, or in the authors' terminology, extractive, or in my terminology, authoritarian culture. The vast majority of attempts to introduce democracy first and then economic reforms, or their simultaneous implementation, ended in failure. And a return, sooner or later, to authoritarianism. It was only when reforms were first carried out to create inclusive (democratic) institutions in the economy that countries achieved and are achieving stable long-term success. Moreover, I would like to emphasize that these reforms are being carried out using authoritarian, non-democratic methods.

And what do political problems have to do with it, as the authors write? With a democratic (inclusive) culture of the population, democracy arises naturally as the power of equal owners and is a guarantee against sudden and long-term deviations. With an authoritarian (extractive) culture of the population, the transition to democracy occurs smoothly, through the preliminary creation in society of a class of owners and democratic (inclusive) traditions in the economy. In a transition period, the role of politics, and more often of a politician, as is the case in authoritarian regimes, is enormous.

The debate about whether economics or culture comes first is like a debate about the chicken and the egg. . If you have the right culture, the economy comes naturally. If there is the right economy, over time a corresponding culture will appear. But if there is neither one nor the other, then politics is required. But politics is burdened with an understanding of what needs to be done and in what sequence.

As an objection to the thesis about the primacy of culture, examples of Germany and Korea are often cited. In my opinion, this is not an objection, but a confirmation of the importance of culture. An authoritarian regime can take a country in different directions, as we see in Korea and we saw in Germany. But it was precisely the unsquandered cultural capital of the Germans, like later the Baltic and Eastern European countries, that allowed them to quickly return to democratic forms of government after the collapse of fascism and communism. Note, not without the authoritarian intervention of the West.
And in Korea, authoritarian regimes continue to take the country in different directions. In South Korea, prosperity was achieved, and until recently, in an absolutely authoritarian way. In the North - even more authoritarian to decay. In South Korea they are instilling a democratic culture, in North Korea they are increasing the authoritarian culture.

If we look at examples of “economic miracles” when modern economies experienced rapid growth, we will see that all miracles had authoritarian fathers:
General Augusto Pinochet (Chile), Lee Kuan Yew (Singapore), General Douglas MacArthur (Japan), General George Marshall (Germany), Generals Park Chung Hee, Chung Doo Hwan and Ro Dae Woo (South Korea, Generalissimo Francisco Franco (Spain) , CCP and Deng Xiao Ping, (China), Sheikh Mohammed bin Rashid Al Maktoum (Emirate of Dubai).

And not all of these countries have come to democracy and it is not a fact that everyone will come. These leaders simply had the intelligence to understand and the will to carry out reforms in the economy without immediately resorting to political freedoms. So far, the experience of oil monarchies shows that democracy in economics also coexists with absolute monarchy in politics. I think this will happen if they do not run out of resource and human, mainly foreign, capital.

Only the democratic culture of one's own population and a democratic political regime can be a guarantee against surprises.

The question may seem childish, but this is not scary: after all, the authors of the most curious and important questions are most often either under 10 or so-called “adult children.” We take it for granted that the level of economic development of different countries varies, and significantly.

How did it happen that centuries of economic disparity between countries led to the emergence of such concepts as the “third world” and the “first”? The answer to this question will also help us understand how to correct this gap between poor and rich countries, as well as prevent those few countries still located between these two blocs from drowning, to which I personally include Russia.

Nationalist approach

Before explaining the reasons that seem reasonable to me, I would like to dispel the argument so often made by nationalists regarding the reasons for the uneven development of countries. More than once, in debates on this topic (my own, as well as historical ones), I have come across the argument of the superiority of certain groups of people on racial and ethno-national grounds, which explains the uneven development of countries. Here is one example of such arguments: “most developed countries with a high level of GDP, standard of living, average wages are countries where the white population has historically predominated (sometimes some kind of deviations are made regarding Japan or China, rather as an exception). This is also supported by such facts as: “the level of education of white-skinned people (the average is much higher), the crime rate is (lower).”

I will not argue with the truths that most developed countries are indeed inhabited by Caucasians, as well as other things mentioned above. However, this does not in any way support the nationalist theory of uneven development, but rather confuses effects and causes. Indeed, in certain territories, natural conditions develop that make economic development more favorable, and the level of education, crime, and scientific achievements directly depends on economic development. Certain groups of people living in such a climate/territory may be misunderstood as inferior in development to the Europioids (or any other racial-ethnic group). In fact, they are only hostages of circumstances.

Geopolitical approach

Now let’s take a closer look at the real reasons that cause the situations described above. As already noted, the geographical location of a country determines the level of economic development. This theory is studied and “preached” by the science of geopolitics. But how can these two facts be connected?

Jared Diamond answered this question perfectly in his popular science book Guns, Germs and Steel. I will briefly try to talk about his main ideas.

This book began with a question from the New Guinean politician Yali to the author of the book. It sounded like this:

“Why did you whites accumulate so much cargo and bring it to New Guinea, while we blacks had so little cargo of our own?” (The local word cargo is a collective name for things brought by Europeans, such as matches, steel axes, woven clothing, etc.)

The conversation turned to the obvious difference in technology and power between the indigenous peoples of New Guinea and the Europeans who had dominated the region for 200 years. Diamond, having spent years studying the issue, came to the conclusion that geography was to blame. He noted that most countries that have too favorable a climate do not stimulate further economic development, the fight against nature, or new technologies. The too harsh climate barely allows most northern peoples to make ends meet.

One of the most important stages in economic development is the transition from an appropriating to a producing economy, from nomadism to sedentism associated with agriculture. Important factors here were: the presence of crops suitable for cultivation - plants rich in proteins, carbohydrates and resistant to storage; the climate is dry enough to make food storage possible; the presence of animals suitable for domestication, which will not be aggressive and can reproduce in captivity. Thus, not all territories and not all groups of people received equal conditions and incentives to develop.

After the creation of industries, surpluses appear in society, and with them, according to many historians, politics. Increasing population density as a consequence of improved nutrition and attachment to certain territories forces the creation of societies with a more complex governance structure, which evolve into nation states. A larger understanding of war is emerging, which also stimulates further technological development.

It is worth noting that countries with a continental location have an advantage over isolated islands, as they provide greater opportunities for cooperation between different cultures, and also provoke a greater number of conflicts, which have a positive impact on the economy of the first states, working as a selector and stimulator at the same time. And the large size of Eurasia and its extension from west to east only enhanced these advantages. The continent's area provided more candidate species for domestication and accommodated more peoples who could exchange technologies and diseases.

Also, the special advantages of some peoples lie in the possibility of active and varied animal husbandry. And not even because meat is a high-calorie food source. The development of livestock production led to another important effect: the transmission of pathogens from livestock to humans. For example, humans got smallpox, measles and influenza from animals. How can this be useful, you ask? This was especially reflected in future colonialism, when Europeans, already adapting to disease, transferred germs to other peoples, destroying them.

For a long time, people have been concerned with the question: why do some states follow the path of development while others do not? James Robinson and Daron Acemoglu conducted research, and the result of their work was the best-selling book “Why Some Countries Are Rich and Others Are Poor.” Moreover, to create such a work, you need to study a lot of literature, delve deeply into the history of different countries, and understand different areas. For this reason, the book can be called unique in the topic it deals with, although, of course, books have been written previously regarding the political and economic structure of countries, but none of them covered the topic so widely and in detail.

Why do some countries follow the path of development and become rich, while others are in constant decline and poverty? What does this depend on? Is it possible to imagine that poor African countries will one day be able to colonize England, for example? What is the reason for strength, power and development? There are several schools that offer different answers to this question. Some consider geographic location and climate to be the main factors, others consider national characteristics, culture and religion. But at the same time, everyone can observe countries in the same climate zone, but with different levels of development. Why then are there countries with approximately the same level of culture and similar values, but with a large gap in living standards? So the answer lies in something else.

The authors of this book offer a different approach. They analyze the political and economic systems of different countries over several millennia. Moreover, countries were considered from all five continents. The scope of this study is very broad, allowing for valid conclusions to be drawn. The authors give their answers to the questions of how poor countries can achieve development and whether this is even possible. After reading the book, a lot becomes clear; you begin to look at the economics and politics of different countries differently. It is not surprising that this book is popular with politicians and economists and is often quoted in the media, because its value is undeniable.

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