Years ago, I read Why Nations Fail by Daron Acemoglu and James Robinson. As someone who had spent a lot of years thinking about why some countries are rich and others are poor, I thought its central thesis was wrong. I forgot about the book for a while, but have recently seen Acemoglu making a lot of what are, in my opinion, misguided arguments about topics like AI and labor unions. Since I had read Why Nations Fail, I could see why Acemoglu was coming to certain conclusions. I was glad to see The Economist take a similar perspective, with the magazine calling him “oddly unconvincing.”
For that reason, I thought it would be a good idea to explain why Acemoglu’s most famous book is wrong, and from there critique some of his contemporary political opinions. I honestly hesitated for a bit before writing this, because Acemoglu only follows 356 people on X, and I am one of them, which is flattering. We’ve had a few pleasant interactions and he seems like a perfectly nice man, so I didn’t want to be too negative about his work. But ideas matter, and I hope he finds this criticism useful.
In Why Nations Fail, Acemoglu and Robinson summarize their main thesis in the preface:
Countries such as Great Britain and the United States became rich because their citizens overthrew the elites who controlled power and created a society where political rights were much more broadly distributed, where the government was accountable and responsive to citizens, and where the great mass of people could take advantage of economic opportunities.
The rest of the book tries to explain how the histories of different nations and regions of the world are consistent with this idea. In the colonies founded by white settlers, like the US, Canada, and Australia, elites shared political power, which led to broad prosperity. In Latin America and post-colonial Africa, elites have hoarded power, lined their own pockets, and created poorer and less functional societies as a result.
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So in Acemoglu’s telling, political rights lead to economic opportunity, which leads to prosperity. Why some nations end up with political rights and others don’t is based on historical contingency. The ultimate question in the study of economic history is, of course, what started the Industrial Revolution, and here the authors place their emphasis on the struggle between kings and nobles in England.