Why Nations Fail: The Origins of Power, Prosperity, and Poverty
NEW YORK TIMES AND WALL STREET JOURNAL BESTSELLER - From two winners of the 2024 Nobel Prize in Economic Sciences, "who have demonstrated the importance of societal institutions for a country's prosperity"
"A wildly ambitious work that hopscotches through history and around the world to answer the very big question of why some countries get rich and others don't."--The New York Times
FINALIST: Financial Times and Goldman Sachs Business Book of the Year Award - ONE OF THE BEST BOOKS OF THE YEAR: The Washington Post, Financial Times, The Economist, BusinessWeek, Bloomberg, The Christian Science Monitor, The Plain Dealer
Why are some nations rich and others poor, divided by wealth and poverty, health and sickness, food and famine? Is it culture, the weather, or geography that determines prosperity or poverty? As Why Nations Fail shows, none of these factors is either definitive or destiny. Drawing on fifteen years of original research, Daron Acemoglu and James Robinson conclusively show that it is our man-made political and economic institutions that underlie economic success (or the lack of it). Korea, to take just one example, is a remarkably homogenous nation, yet the people of North Korea are among the poorest on earth while their brothers and sisters in South Korea are among the richest. The differences between the Koreas is due to the politics that created those two different institutional trajectories. Acemoglu and Robinson marshal extraordinary historical evidence from the Roman Empire, the Mayan city-states, the Soviet Union, the United States, and Africa to build a new theory of political economy with great relevance for the big questions of today, among them: - Will China's economy continue to grow at such a high speed and ultimately overwhelm the West? - Are America's best days behind it? Are we creating a vicious cycle that enriches and empowers a small minority?
"This book will change the way people think about the wealth and poverty of nations . . . as ambitious as Jared Diamond's Guns, Germs, and Steel."--BusinessWeek
"A wildly ambitious work that hopscotches through history and around the world to answer the very big question of why some countries get rich and others don't."--The New York Times
FINALIST: Financial Times and Goldman Sachs Business Book of the Year Award - ONE OF THE BEST BOOKS OF THE YEAR: The Washington Post, Financial Times, The Economist, BusinessWeek, Bloomberg, The Christian Science Monitor, The Plain Dealer
Why are some nations rich and others poor, divided by wealth and poverty, health and sickness, food and famine? Is it culture, the weather, or geography that determines prosperity or poverty? As Why Nations Fail shows, none of these factors is either definitive or destiny. Drawing on fifteen years of original research, Daron Acemoglu and James Robinson conclusively show that it is our man-made political and economic institutions that underlie economic success (or the lack of it). Korea, to take just one example, is a remarkably homogenous nation, yet the people of North Korea are among the poorest on earth while their brothers and sisters in South Korea are among the richest. The differences between the Koreas is due to the politics that created those two different institutional trajectories. Acemoglu and Robinson marshal extraordinary historical evidence from the Roman Empire, the Mayan city-states, the Soviet Union, the United States, and Africa to build a new theory of political economy with great relevance for the big questions of today, among them: - Will China's economy continue to grow at such a high speed and ultimately overwhelm the West? - Are America's best days behind it? Are we creating a vicious cycle that enriches and empowers a small minority?
"This book will change the way people think about the wealth and poverty of nations . . . as ambitious as Jared Diamond's Guns, Germs, and Steel."--BusinessWeek
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Community Reviews
PFS Book Club ---13th April
Today we reviewed book called “Why Nations Fail” by Daron Acemoglu and James Robinson.
KK started the discussion with a point that nation becomes rich or poor not only on the basis of geography or intelligence. He gave example of small town called Nogales which shares border with
USA and Mexico both. People staying in USA part have better healthcare, education and standard of living compared to people living in Mexico part. He also gave example of North and south Kores and also earlier countries like east and west Germany. KK mentions that the reason behind this difference is institutions. Countries which have more inclusive political and economic institutions who focus on wealth sharing, education, technological innovation thrive more than extractive institutions who believes in concentration of wealth and take resources away from one part of society to other to benefit others.
During 14th and 15th century, black death killed many people in Europe. Before black death most of the institutions in Europe were extractive. King owns everything, and he gives land to people who helps king with military. Workers work on land and pay taxes without freedom. After black death, there was a shortage of labors. Western European workers demanded lower taxes and more freedom whereas in eastern Europe landowners took advantage and increased taxes. Western Europe intuitions became more inclusive and shows how two similar regions took divergent path because of institutions.
KK gave example of Congo which he mentioned was the worst rule of colonization by Belgium. Congo was ruled by big feudal families who imposed slave trade and big taxation. Europeans made this worst. After independence Mbotu engaged in crony capitalism and kept country poor. Contrary to this Botswana also got independence around same time. Botswana strengthened democracy and built intuitions that worked on decentralization. And Botswana has highest per capita income in that region.
KK also gave example of vasco de gama whose trip was funded by king for exploration and all the benefits was passed to king whereas in UK, merchants used to fund these exploratory trips and profits were shared down the line. And this is the example of inclusive and extractive instuitions lead to UK growth compared to Spain and Portugal.
KK mentioned about china that authors have mentioned that Chinese institutions are more inclusive than before but still we will call it as extractive one. He mentioned that extractive regime gives short term results who gave example of soviet union and their model thrived for 30-40 years and even Europeans used to admire the same. And authors are still curious about china and feel that this model is not sustainable.
Chandrashekhar mentioned that how cuba has used crony capitalism to its advantage and has one of the best health care systems.
Amazing session, Thanks KK for taking this book and enriching us of relationship between economics and politics
Yet another amazing session😊
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