Why Nations Fail: The Origins of Power, Prosperity, and Poverty
On the evening of March 11, James A. Robinson, a political scientist and an economist at Harvard University, presented his and economist Daron Acemoglu's recent and renowned work, Why Nations Fail: The Origins of Power, Prosperity, and Poverty (Random House, 2012), at the European School of Management and Technology. Esteemed by the likes of Thomas Friedman, Jared Diamond, and Martin Wolf (and equally criticized by the likes of Bill Gates and Jeffrey Sachs), Robinson and Acemoglu's timely volume, published in March 2012, offers a detailed argument that a nation’s economic success -- with historical examples from the Roman Empire, Mayan civilization, medieval Venice, the Soviet Union, Latin America, England, Europe, the United States, and Africa -- is determined predominantly by its political institutions. States that have foregone centrally controlled power but have instead fostered a jostling of competing interests under the rule of law and secure property rights have prospered; inclusive democracies with strong independent judicial systems thrive.
Robinson's introductory speech at the ESMT drew heavily on historical evidence to support some of the book's theories. He began with recounting patterns of colonization tactics in South America by the Spaniards, in comparison to the less rewarding experiences of the British. Spanish colonizers aimed to establish a "New Order" in the "New World," a goal that required capturing the local tribe leader, forcing inhabitants to work under their control, and unleashing an insatiable search for gold and other valuable metals (his example: Peru, 1530). This, of course, vastly contributed to the wealth of the Spanish Kingdom for the subsequent 400 years and served as a model for other colonizers, such as the British. But in the case of the first British colony in North America, at Jamestown, Virginia, the Spanish model did not work. There, local tribal leader Chief Wahunsonacock suspected the British of wishing to create a labor force plucked from the local population, and so the flow of agricultural goods -- and the finding of gold -- did not go quite as planned. In fact, the Jamestown colonists struggled not only to appease the King, but to survive at all; most died of starvation and disease. Robinson offers that the hierarchical structure that seemed foolproof to the British was turned on its head after the Crown attempted to force colonists to adhere to their original plundering agenda. This in turn made colonists want to desert the colony to live with native inhabitants rather than live under the conditions set by the King. Translation: What once seemed to be a British failure of colonial exploration in North America actually created a legacy for independent governance and economic strategy in the New World.
So, while some recent books about the fate of nations have claimed that "geography that is destiny" (Robert D. Kaplan's Revenge of Geography, or Harm de Blij's Why Geography Matters More Than Ever) Why Nations Fail thus places the importance of politics far and beyond the importance of geography, natural resources, or culture. The cultivation of freedom and the stability of institutions, the authors argue, begets prosperity. This is why countries like Great Britain and the United States became wealthy and powerful. Their citizens overthrew elites who controlled power and in its stead created a society with political rights more broadly distributed and the government accountable and responsive to citizens. All of the sudden, a broad swath of people could take advantage of economic opportunities. Oppositely, nations dominated by self-centered elites shroud in secrecy ultimately have failed or hobble on in extreme poverty. Totalitarian states are in a vicious circle of plutocracy, suppression of technological innovation and economic and personal freedom.