mostly nonfiction listener
I read Why Nations Fail this month while traveling in South Korea. The book was much on my mind as I looked across the DMZ at North Korea on the 38th parallel. South Korea, a country of about 50 million people, enjoys a per capital PPP (purchasing power parity) GDP of around $32,000. (The U.S. is $48,000 by comparison - wealthier but also with a less equally distributed income). In North Korea, the GDP per capita (PPP) is $2,400 - an incredibly low numbers that still probably understates how desperately poor (and hungry) are the people of North Korea.
Why should North Korea be so poor, and South Korea so rich?
The two countries share common cultural roots, geography, and access to natural resources. This is the question Acemoglu and Robinson attempt to answer in Why Nations Fail. They look at examples such as North Korea, as well as other natural experiments of societies that share similar exogenous traits (resources, climate, etc.) - such as the twin Nogales's in Mexico and Arizona.
Acemoglu and Robinson's explanation as to why some nations are poor and others rich has everything to do with the elites. Poor nations are poor because the people who run these countries have made their subjects destitute in service of enriching themselves.
North Korea can best be understood as being run by a criminal family. Mexico is so much poorer than the U.S. because of its history of being run by elites whose main goal was to extract wealth, and who did not need to redistribute economic production as for most of its history the country lacked pluralistic institutions that could check the power of the rulers.
This argument, that some countries are poor because the powerful keep them poor, stands in direct opposition to the arguments that Jared Diamond makes in Guns, Germs and Steel. Diamond believes that the wealth distribution was largely pre-determined by immunity to disease (or lack thereof), access to domesticable livestock, and the raw materials and technologies to make advanced weapons.
I am a huge fan of Diamond's writing, but Why Nations Fail has me thoroughly convinced that more deterministic view of development (as put forward by Diamond and others) is problematic. Why Nations Fail should definitely be on the syllabus in any economic history or development course, and on the bookshelf (physical or virtual) of anyone interested in global inequality, poverty, and why some nations are so much richer than others.
Should you invest the time to read Why Nations Fail? The book is 544 pages, or almost 18 hours by audiobook (my reading choice). Acemoglu and Robinson would have benefited from a strong-willed editor, one who was willing to push them to provide less historical detail (the book has a ton from around the world across numerous societies), and more analysis of the implications of their arguments for countries like China and India.
I came away from Why Nations Fail thinking that if the argument is correct then China's long-term economic prospects might not be as good as we assume, and India's may be better. But having spent time time in South Korea, which developed so rapidly at least partly under a repressive military regime, it is hard to square this conclusion with the recent facts of some of our fastest developing countries.
Perhaps Acemoglu and Robinson next book will take outliers and implications, building on top of the theoretical foundations for development and inequality laid out in Why Nations Fail.
If you read The Economist then Time to Start Thinking is your kind of book. There is something almost soothing about a book that is simultaneously well-written and depressing. Somehow learning about the decline of the U.S. from a Brit -- Luce is the Washington Bureau Chief of London's Financial Times -- feels more palatable than similar arguments made by an American.
Luce is a long time observer of the U.S. political and economic scene, and has basically decided after years of living in the States that we are pretty much hopeless. Time to Start Thinking is a passionate indictment of the U.S.'s political classes, both left and right, and the inability of our elected officials to seriously address our fundamental economic problems.
Included in the tour of American shortcomings are our crumbling infrastructure, our wildly unequal primary schools, and our ever more costly postsecondary education and health care systems. Luce is particularly elegant in describing the loss of middle-income jobs, and the inability of more of and more Americans (particularly young people and non-post graduated educated older adults) to achieve economic stability. The U.S. is not headed for imminent economic collapse, but rather a slow erosion of productivity and standards of living for the middle class, and global economic realignment around Asia.
This is not a book that is big on policy recommendations. Luce is fond of quoting H.L. Mencken dictum that, "For every complex problem there is an answer that is clear, simple, and wrong."
The solutions that Luce does recommend, such as reducing military spending and pulling back on overseas military commitments, are unlikely to free up enough dollars to make possible the large scale investments in infrastructure and education necessary in a competitive global economy. Growing health care costs and an aging population will continue to limit the ability of government to fund investments, and health insurance costs will continue push business to limit hiring and invest instead in automation over people (as worker health care costs put U.S. firms at a competitive disadvantage with non-U.S. producers).
Time to Start Thinking is a good companion book to read with Diamandis' Abundance: The Future Is Better Than You Think (review 4/9/12). Where Luce sees U.S. economic problems as structural, and our politics way too polarized to offer cogent solutions, Diamandis believes that rapid technological advancements (when applied to health care, education, and other sectors) will lead to rapid advances in productivity and standards of living. Technological utopianism vs. cleared eyed rationalism. Wouldn't it be awesome to see a debate between these two authors?
Are we living in an age of descent?
The Shadow Factory takes us on a behind the scenes tour of the NSA and the development of what Bamford calls "The Surveillance Industrial Complex" following 9/11.
I read this book less from a perspective of worry about government intrusion or even national security - but more from a desire to understand the technology that the NSA utilizes to manage such large volumes of data.
What the NSA does in terms of data storage, analysis, capture etc. is truly next generation. After 9/11 - the NSA became an IT organization with a blank check to throw as much hardware, software and folks at a technical problem as it needed. Can you imagine if we had those resources to throw technology at education.
Sure...the story of the Bush's administrations warrant-less wiretapping is scary. I'm grateful that he tells this story and exposes this dirty side of our history.