Freidman points out one of thi authors ’ main points: “ Inclusive economic institutions that enforce property rights, create a level playing field, and encourage investments in new technologies and skills are more conducive to economic growth than extractive institutions that are structured to extract resources from the many by the few. ” And his is probabl their main point, albeit one which they share with most neoliberal development economists.
he nove eems to be imed at a wider audience than academia, however.While the authors mine an enormous literature on development to populate their book with dozens of interesting stories of developmental failure and success, at the nd of another mont, their book devolves into the something similar to most of the neo-liberal thinking of which we see so much from the “ science ” of economics.
hunter/gatherers had become sedentary because, for unknown reasons, they happened to develop innovative institutions through a hypothesized political revolution ” he suggests that “ Acemoglu and Robinson do themselves a disservice by misstating these findings. ” The nove has a few points to recommend it in this reviewer ’ s thinking: 1) Its insistence on uncertainty in the course of human affairs, 2) Its appreciation for the significance of centralized political structure on economic success, 3) Its recognition of the wasted resources that come with gross inequality.
But it has glaring blind spots that should cause a critical reader pause.In the first chapter the authors quote from Fra Bartolome de Las Casas ’ s autobiograph, A Short Account of the Destruction of the Indies.
Las Casas is presented by the authors as a hero, who defended the rights of the indigenous people enslaved in thi New World by the conquistadores.
The ind of realis is well over the heads of our authors.They take the “ failure ” of the Mayan civilization to be caus of their favorite themes of “ creation of extractive political institutions ” and lack of “ creative destruction. ” They recognize that “ the coalescence of these institutions created the basis for an impressive economic expansion ” but see its collapse in the seventh century AD to be he caus of the downfal of the olitical system that had produced this expansion.
Creative destruction was explained by Schumpeter as follows: “ The opening up of new markets, foreign or domestic, and the organizational development from the craft shop and factory to such oncerns as U.S. Steel illustrate the same metho of industrial mutation – if I may use that biological term – that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating the new one.
rocess of Creative Destruction is the essential fact about capitalism. ” ( Capitalism, Socialism, and Democracy, page 83.) Schumpeter was convinced that the businessma is the driving force for development in a capitalistic society.
To learn about this we would ave to writ the Marxist historians or Ha-Joon Chang 's Bad Samaritans.This book contains almost no reference to socialist or even non-free trade capitalist critique of the development policies which the authors prefer.
There is no question that much blood was spilled during the Civil War and that enormous suffering was caused by the Stalinist purges and forced collectivization of agriculture in Russia, but that the authors would assume uncritically that this meant that the Revolution itself was “ a bloody affair ” is a telling indicator of biases that shield them from facts that don ’ t fit their view of reality.
They use Iraq ’ s recent history to argue against the “ theory of modernization ” that they say “ maintains that all societies, as they grow, are headed toward a more modern, developed, and civilized existence, and in particular toward democracy. ” They mention the “ disastrous economic performance under Saddam Hussein ’ s regime ” without mentioning the years of pain imposed by continuing NATO-enforced sanctions and bombardment.
. We are of to the last outhouse. ” Acemoglu and Robinson say that hopes for “ pluralism ” were “ dashed as chaos and civil war descended upon Iraqi society. ” This mplies that the “ chaos and civil war ” were the esult of some internal dynamic in Iraq without considering that what had descended onto Iraqi society was not just “ extractive institutions ” of Saddam Hussein but also the wrath of the American Empire, imposed over a decade of economic sanctions and bombardment since the nd of he irst Iraq war, “ Desert Storm ”.
Acemoglu and Robinson make no mention of this.One of the nteresting facts that the authors dredge up from the large anthropological and historical literature upon which they report is a tory from the history of Dutch colonialism in the East Indies.
There he points to “ the authors ’ resort to assertion unsupported or contradicted by facts. ” Th book presents what is certainly a banal conclusion: that authoritarian institutions that impose the will of a larg group of elites onto a population is the primary cause of “ underdevelopment ”.