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October 15 - October 31, 2021
“We are suffering from corruption, oppression and bad education.
They particularly complained about repression and the absence of political rights.
Egyptians and Tunisians both saw their economic problems as being fundamentally caused by their lack of political rights.
Some stress that Egypt’s poverty is determined primarily by its geography, by the fact that the country is mostly a desert and lacks adequate rainfall, and that its soils and climate do not allow productive agriculture.
that the rulers of Egypt simply don’t know what is needed to make their country prosperous, and have followed incorrect policies and strategies in the past.
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,
Fundamentally it is a political transformation of this sort that is required for a poor society to become rich.
If the indigenous peoples could not be exploited, reasoned the Virginia Company, perhaps the colonists could. The new model of colonial development entailed the Virginia Company owning all the land.
The consequence of this unprecedented political instability for economic institutions and incentives should be obvious. Such instability led to highly insecure property rights. It also led to a severe weakening of the Mexican state, which now had little authority and little ability to raise taxes or provide public services.
We live in an unequal world.
Economic institutions shape economic incentives: the incentives to become educated, to save and invest, to innovate and adopt new technologies, and so on. It is the political process that determines what economic institutions people live under, and it is the political institutions that determine how this process works.
people in tropical climates tended to be lazy and to lack inquisitiveness. As a consequence, they didn’t work hard and were not innovative,
Disease is largely a consequence of poverty and of governments being unable or unwilling to undertake the public health measures necessary to eradicate them.
ignorance hypothesis, which asserts that world inequality exists because we or our rulers do not know how to make poor countries rich.
The ignorance hypothesis maintains that poor countries are poor because they have a lot of market failures and because economists and policymakers do not know how to get rid of them and have heeded the wrong advice in the past.
poor countries are poor because those who have power make choices that create poverty. They get it wrong not by mistake or ignorance but on purpose.
Inclusive economic institutions also pave the way for two other engines of prosperity: technology and education.
The low education level of poor countries is caused by economic institutions that fail to create incentives for parents to educate their children and by political institutions that fail to induce the government to build, finance, and support schools and the wishes of parents and children.
There is strong synergy between economic and political institutions.
Economic institutions that create incentives for economic progress may simultaneously redistribute income and power in such a way that a predatory dictator and others with political power may become worse off.
that economic growth and prosperity are associated with inclusive economic and political institutions, while extractive institutions typically lead to stagnation and poverty.
By the middle of the eighteenth century, there were already notable differences in political and economic institutions around the world.
Elizabeth I and her successors could not monopolize the trade with the Americas. Other European monarchs could.
The English traders resented royal control and demanded changes in political institutions and the restriction of royal prerogatives.
In the West, strong centralized states such as England, France, and Spain had latent constitutional institutions (Parliament, the Estates-General, and the Cortes). There were also underlying similarities in economic institutions, such as the lack of serfdom.
the Black Death led to the dissolution of feudalism in the West and the Second Serfdom in the East.
Africa has lagged behind the rest of the world in terms of technology, political development, and prosperity.
institutions in many African colonies meant that rather than creating a critical juncture for improvements in their institutions, independence created an opening for unscrupulous leaders to take over and intensify the extraction that European colonialists presided over.
The Industrial Revolution has still not spread to Africa because that continent has experienced a long vicious circle of the persistence and re-creation of extractive political and economic institutions. Botswana is the exception.
racist apartheid regime in South Africa
growth was preceded by historic changes in the countries’ economic institutions—
southkorea, taiwan, china
By the 1840s, the Ottomans were trying to reform institutions—for example, by reversing tax farming and getting
how the failure of nations today is heavily influenced by their institutional histories, how much policy advice is informed by incorrect hypotheses and is potentially misleading, and how nations are still able to seize critical junctures and break the mold to reform their institutions and embark upon a path to greater prosperity.
Extractive institutions, by their very logic, must create wealth so that it can be extracted.
Allowing people to make their own decisions via markets is the best way for a society to efficiently use its resources.
The most important lesson is that extractive institutions cannot generate sustained technological change for two reasons: the lack of economic incentives and resistance by the elites.
ekonomi komando mmbuat full mployment cepat tapi gagal sustain bcs they focuse on military so less creative
The fact that bonuses were paid monthly also kept everyone focused on the present, while innovation is about making sacrifices today in order to have more tomorrow.
But stimulating sustained economic growth required that individuals use their talent and ideas, and this could never be done with a Soviet-style economic system. The
As with the people of Kongo, the Lele were very interested in purchasing guns,
The reason for differences between these two peoples lies in the different political institutions that emerged in the lands of the Bushong and the Lele.
Economic growth supported by the inclusive Venetian institutions was accompanied by creative destruction.
The transition from republic to empire increased extraction and ultimately led to the kind of infighting, instability, and collapse that we saw with the Maya city-states.
First, the man went to Tiberius in the first place for a reward, rather than setting himself up in business and making a profit by selling the glass. This shows the role of the Roman government in controlling technology. Second, Tiberius was happy to destroy the innovation because of the adverse economic effects it would have had. This is the fear of the economic effects of creative destruction.
Where was innovation to come from? We have argued that innovation comes from new people with new ideas, developing new solutions to old problems.
Historical factors shape how institutions develop, but this is not a simple, predetermined, cumulative process.
Both feared that the mechanization of stocking production would be politically destabilizing. It would throw people out of work, create unemployment and political instability, and threaten royal power.
The fear of creative destruction is the main reason why there was no sustained increase in living standards between the Neolithic and Industrial revolutions.
there were other ways to influence Parliament and thus economic institutions. The most important was via petitioning,
So far we have emphasized how the Glorious Revolution transformed English political institutions, making them more pluralistic, and also started laying the foundations for inclusive economic institutions.
Opposition to innovation was manifested in two ways. First, Francis I was opposed to the development of industry. Industry led to factories, and factories would concentrate poor workers in cities, particularly in the capital city of Vienna. Those workers might then become supporters for opponents of absolutism.
