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August 20 - November 13, 2022
develop industry by government command and obtain the necessary resources for this by taxing agriculture at very high rates.
“collectivized” agriculture.
in some instances the productivity of labor and capital may be so much higher in one sector or activity,
that even a top-down process under extractive institutions that allocates resources toward that sector can generate growth.
There was thus huge unrealized economic potential from reallocating this labor from agriculture to industry.
between 1928 and 1960 national income grew at 6 percent a year,
Nikita Khrushchev,
the lack of economic incentives and resistance by the elites.
enormous efforts in military and aerospace technology.
In reality, what got implemented in Soviet industry had little to do with the five-year plans,
The development of industry took place on the basis of commands by Stalin and the Politburo,
for Gosplan, its main role was to provide Stalin with information
From the 1930s, workers were paid bonuses if the output levels were attained.
innovation, which took resources away from current production, risked the output targets not being met
output targets were usually based on previous production levels.
By the 1940s, the leaders of the Soviet Union, even if not their admirers in the West, were well aware of these perverse incentives.
“profit motive”
prices in the Soviet Union were set by the government, and thus bore little relation to value.
explicit innovation bonuses in 1946.
1956, when it was stipulated that the bonus should be proportional to the productivity of the innovation.
June 1940, for example, a law made absenteeism, defined as any twenty minutes unauthorized absence or even idling on the job, a criminal offense that could be punished by six months’ hard labor and a 25 percent cut in pay.
Between 1940 and 1955, 36 million people, about one-third of the adult population, were found guilty
Of these, 15 million were sent to prison and 250,000 were shot.
when Mikhail Gorbachev started to move away from extractive economic institutions after 1987, the power of the Communist Party crumbled, and with it, the Soviet Union.
fact, some of the major turning points in history are characterized by institutional innovations that cemented extractive institutions and increased the authority of one group to impose law and order and benefit from extraction.
In the rest of this chapter, we will first discuss the nature of institutional innovations that establish some degree of state centralization and enable growth under extractive institutions. We shall then show how these ideas help us understand the Neolithic Revolution, the momentous transition to agriculture, which underpins many aspects of our current civilization. We will conclude by illustrating, with the example of the Maya city-states, how growth under extractive institutions is limited not only because of lack of technological progress but also because it will encourage infighting from
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The Kasai is the boundary between two of these. Soon after passing into Congo along the western bank, you’ll find the Lele people; on the eastern bank are the Bushong
Yet when the anthropologist Mary Douglas and the historian Jan Vansina studied these groups in the 1950s,
the Lele produced for subsistence while the Bushong produced for exchange in the market.
“[T]he absence of nets is consistent with a general Lele tendency not to invest time and labor in long-term equipment.”
important distinctions in agricultural technologies and organization.
striking differences in law and order.
Lele lived in fortified villages that were not part of a unified political structure.
Around 1620 a political revolution took place led by a man called Shyaam, who forged the Kuba Kingdom,
created a bureaucracy to raise taxes and a legal system and police force to administer the law. Leaders were checked by councils, which they had to consult with before making decisions. There was even trial by jury,
centralized state that Shyaam constructed was a tool of extraction and highly absolutist.
Agriculture was reorganized and new technologies were adopted to increase productivity.
To adopt these crops and reorganize the agricultural cycle, more hands were needed in the fields. So the age of marriage was lowered to twenty, which brought men into the agricultural labor force at a younger age.
there was no creative destruction in the Kuba Kingdom and no technological innovation after this initial change. This situation was more or less unaltered by the time the kingdom
was first encountered by Belgian colonial officials in the late nineteenth century.
Why was it that the Bushong, and not the Lele, had a political revolution?
Most likely it is because of the contingent nature of history.
The same contingency was probably at work when some of the societies in the Middle East twelve thousand years ago embarked upon an even more radical set of institutional innovations leading to settled societies and then to the domestication of plants and animals, as we discuss next.
Archaeologist Brian Fagan
Long Summer.
The warming-up of the climate was a huge critical juncture that formed the background to the Neolithic Revolution, where human societies made the transiti...
This highlight has been truncated due to consecutive passage length restrictions.
Domestication is a technological change that enables humans to produce a lot more food from the available plants and animals.
Why did the first farming villages happen here and not elsewhere? Why was it the Natufians, and not other peoples, who domesticated peas and lentils?
It was that they were sedentary before they started domesticating plants or animals.
The settlement probably began around 9500 BC, and the inhabitants continued their hunter-gatherer lifestyle for another five hundred years before switching to agriculture.
