Leave it to EE to make mistakes in the first minute of the video... There is no Nobel prize in economics because it is a pseudo-scientific field. It was back when Nobel established the prizes, and it is still today.
@@AL-lh2ht so basically...colonialism destroyed local institutions and thereby ruined both past and present lives. And unlike with your hot take, that's actually what's said in the video.
I keep seeing comments like, "This seems obvious" or "seems like commonsense" when the video itself explained why this was ground breaking. Correlation does not imply causation, not to mention that many other people claim other things. I.e. geography, racial supremacy and stuff like that. These guys won the Nobel Prize because they gathered data to demonstrate causation and definitively show that trust in institutions is what leads to good economics.
it is obvious, proving it is nice but thats not like they found a solution to enforce it and save the third world country from themselves. they just confirmed what those poor folks knew before, they are fucked by their corrupt rulers.
Yeah, I've noticed that too. I feel like asking them if it was so obvious, why they didn't publish an award winning paper, which can substantiate their "obvious" conclusions.
That’s the dumbest thing I’ve ever heard. It’s not just that it seems obvious, the weird thing is that it hasn’t been done sooner. People knew economic and political systems directly influence economic success since the Cold War.
I guess the book explains well why Argentina is still poor. We have almost no trust in our instututions, or our own people. Recently I left an umbrella unattened on the street. I realized a few minutes later, but by the time I returned, it was already gone. My japanese teacher told me then than, in Japan, the umbrella would still be there. People in Argentina see something they can take, and just take it. This applies to not only people on the street but also politicians who can't see beyond their noses.
There are places in Europe where, when you drop a wallet, it will be stolen before it hit's the floor. Please don't be too caught up by stereotypes. Argentina is a tragedy now, but if the people can get together to refund the nation, maybe sometime in the future they can get things right.
That's a good example of a wider phenomenon. Because so much potential wealth has been created by technology, and historical investment in infrastructure - a country can become wealthy by simply not breaking stuff.
Shaking out the bad habits and getting along well, with great promise for even better. Then Peron. The only country in the Economic Top 10 in 1890 that was no longer on the list in 1990. I think replaced by Japan in the 1960s, the Japan that was nowhere near the list twenty years earlier.
And "both sides are more likely to play fair" in high-trust cultures, so a ruling-class that undermines trust is likely to also undermine the amount of wealth they can siphon off.
@@Homer-OJ-Simpson Well the game is between the institutions and the people. When the institutions continually operate fairly without corruption and offering opportunity growth it gives the green light for the people to react the same way thus creating productivity.
Fun fact: Professor Robinson has a particular fondness for my Home country of Colombia and he is a regular guess professor at my university, University of Los Andes in Bogotá. I had the privilege to assist a couple of classes with him and got so invested in his theory. So much that, I went and buy his book and loved every page of it and because of that I got really interested in economics and that way I found your channel!.
I read the book a few months ago. Nice summary but everyone should read the book to be honest. One important aspect you didn’t mention is creative destruction. The fact that innovation often comes at the expense of encumbents. So countries ruled by small minorities stifle innovation or adoption of new technology (which leads to wealth creation) in order to stay in power. What I find interesting is you can apply this to your own life as well. Generally humans are resistant to change or adoption of new ideas or ways of thinking. Once we ‘know what we know’ we avoid learning new skills or adopting new ideas that would creatively destroy our existing paradigm but would otherwise lead to greater success. I guess generally it’s just good to maintain curiosity and keep an open mind
I was just thinking about how interpersonal relationships (families, couples etc) also thrive when there exists this same culture of collaboration and trust. There is no power struggle, no scarcity mindset, no zero-sum game to be played. That greater success in our relationships comes from letting go of old paradigms, roles, or expectations that freeze people in time and leave no room for change or growth or becoming.
@@gracekimchi what? 😂😂 You got all that from this? 😂😂 Tbh it's just sign of maturity to understand that people will say things they don't mean or that even if they did it doesn't change fundamental facts.
@@datuputi777 lol k. That's why I said it. I saw a meaningful parallel to what I was learning outside of this topic bc social relationships work the same whether in the specifics or in the general.
Yep, read the book recently. The example of how the Queen of England banned a stocking frame knitting machine to protect knitting jobs still sticks with me. It shows how political interests can hinder creative destruction.
@@robotnikkkk001 - Let me guess, you expect to blame certain nations for the failure of other nations. This video shows that isn’t the major reason they are poor, but some people are dedicated to blaming their problems on others
@@ElectronFieldPulseit is a fact that some nations ARE the reasons behind why some are poor. This research doesn’t deny that. If you are stupid enough to believe that this explains causation of poverty and ignore colonialism, which this video clearly points out how India and China were left poor after colonialism when they were richest before colonialism, then that is sad. Don’t look for justification for crimes against st humanity here.
And for that you need to build certain priniciples into your organisations, namely the tendency to dissolve themselves once they've done their job. Otherwise you get a power structure that only exists to maintain its power, which is as good a definition of corruption as any.
"Why nations fail" The answer is corruption, simple as that. If very scare resource countries like Singapore and South Korea are able to be hundreds to times wealthier than very rich resource rich countries like Nigeria and Venezuela, corruption is the answer as to why nations fail. El Salvador cleaning up their decades long crime issues is another sign that honest politicians can lead a country to greatness
It's not just corruption. It's stability, trust, integrity. A good point is the rise in theft and violent crime in London. If you can't trust your community not to steal your private property, say a bike, if you leave it locked up outside your work, then you may wish to work somewhere with less crime. If you know that the police won't catch you and the courts won't punish you for committing theft and other similar crimes then a life of crime becomes more productive and attractive than a life of legitimate work. If crime pays then young people will see crime as an alternative to work and so won't put the investment into getting education etc meaning the nation loses the skills it needs. With the workers fleeing for safer countries, and the people left having no skills needed, the country begins to collapse. This is why if you want to maintain a strong economy with strong institutions it's not just about dealing with corruption. You need to deal with anyone and everyone that undermines the rule of law and the institutions that work on our behalf.
The answer is not corruption. Corruption is bad, and it effects negatively that’s for sure. But China was extremely corrupt and managed to develop significantly. On the other hand, Britain which is low on corruption (relatively) is also doing pretty bad economically. (They went from global power to starving children in just 60 years) The current Taliban regime has a very low level on corruption (no jokes, they are killing anybody who steals anything) yet they reject core structures such as interests so they won’t have a good economy.
This is why India is still behind. The people do not trust any government institutions with anything, as these are always slow, ineffective or incompetent.
True. And the reason is that people don’t trust each other- as a community and a nation, there is low to no trust. Simple things like being on time can’t be relied upon.
@@write2pras84 People trust each other within their circles in India , they don't trust government related institutions as there is a culture of corruption and bribery involved.
In India we don't trust anyone....everyone is opportunistic,exploits and selfish....being nice/law abide is a foolish thing in India....because every day everyone fighting for their survival....eg: there is no point of keeping a queue to get into bus. Because1 bus have 60 seat and 100 people waiting for it...anyway 40 people will not get seat...so fight for a seat is more pragmatic thing....overpopulation and corruption
I really appreciate the background footage for these videos, just simple enough to not distract from the script, and way better than a PowerPoint or any other text on the screen.
The whole reason a couple of hundred employees of the East India Company were able to administer vast swathes of the subcontinent is that the British merchants could be trusted to repay the Indian banks unlike the local population or the Moguls. They employed local armies, paid with local currency borrowed from local banks. Trust is the only thing that matters.
@Chewyg8kThe Moguls tried to play the French off against the English - and discovered the French were inferior to the British when push came to shove (a history that has repeated for most of the last millennium).
For me it is quite obvious that good institutions can give rise to rich economies. But what is not so obvious to me is the question: What gives rise to good institutions?
Mixture of competency (educated, resilient, etc.), adaptable, access from divergent groups, and internal controls. Pulling from Peter Principle Revisited, after a minimum baseline is set, you are statistically better off choosing people at random than any supposed meritocracy (which also prioritizes the well-being of the group over individual interests).
It's mostly an IQ question which is a big part of why they develop where they develop as well. The western world is heading down a dark path as it rapidly lowers average IQ through mass migration from the lowest IQ areas in the world.
There's an element of luck. And hardly anyone likes to admit it, but we are reliant on a very few, outstanding, strong, well-meaning and smart people for our wealth, and the things they do can generate national wealth for decades. Singapore would be nothing without LKY. China has gone from poor, to lifting 900m people out of poverty in just a few decades, but nobody will ever thank Jinping for it, because it is an unpopular thing to say.
I can’t believe this and I’m kind of emotional right now! The name Acemoglu sounded very familiar so I just realised that last year I had an assignment based on a paper that was written by Acemoglu, Hassan and Tahoun (The power of the street: Evidence from Egypts Arab Spring) and I really liked that working on that assignment and now he just won a Nobel Prize! It’s amazing! Congratulations🎉❤
Can we also mention the USA's involvement in destabilization of Latin American countries for more than half a century. Supporting coups, blocades etc. Doesn't really allow a nation's people to form trust of governmental institutions nor take advantage of their resources in a fair and democratic way.
I think this has been vastly overlooked. Rich countries rely on poor countries for their natural resources. It’s in their interest to keep those counties poor to keep the costs down.
Thank you. Seems like much of the criticism raised towards the book point toward this. It apparently failed to address the widespread genocide of locals when colonial settlers landed in those areas too. Gotta read the book for myself to find out why though
5:07 the stability and reliability of the institutions has been said to be HUGE factors for many years but it seems it can be difficult to prove something that is obvious for a while. I’m sure people and scientists were highly certain that good parenting leads to more likely success of the child but it must have taken a long time to scientifically prove it
@ yup. It’s two parts. What leads to prosperity they have proven but what leads to the favors that lead to prosperity is what they discussed and theorized. That will be equally important as it lays the groundwork for the change. It’s like trying to figure out what leads to winning in a sport, for example tennis. Perhaps they prove that agility and backhand are the biggest factors. The next step is to then determine how to get a player to their best agility and back hand.
@@loneIyboy15 Mostly likely proxy wars. Bigger Nations meddle in poorer nations and their rivals do as well. Many countries fighting insurgencies are kept under decades of arms sanctions leading to a stalement where neither side has a decisive victory. imagine the CCP and the Chinese Nationalists could not have a decisive war the nation would still be in turmoil or recovering from it. if a nations is peaceful no matter how corrupt over time it will self correct and strong institutions will rise as kids not born in a destablised nation will make a far better society. In time empires fall and new ones rise as humanity adapts. who would have thought the barbarians the romans fought would be prosperous certainly not the romans. Many third world nations who had no power history are experiencing far better conditions than their regional superpowers. Kenya compared to its neighbours around the horn.
This is great to see! Read “Why Nations Fail” years ago. It was referred to me by a retired Economics Professor here in Australia. Loved it. So clear and logical. Another wonderful source is Prof Paul Collier, who established the Blavatnik School of Government in Oxford. Collier wrote “The Bottom Billion” and many other wonderful books. Reaches broadly similar conclusions - but came out before “Why Nations Fail”.
In the book why nations fail, authors also question effectiveness of IMF contributions to struggling countries, without changing the political landscape. Gives the example of Zimbabwe which went from worse to worst despite IMF support
also happen to Indonesia during 1998. IMF give loan but asking the country to make some policies which later proven worsened the condition. Many argue that IMF has been intercepted by advance country intelligent services to slow down developing country progress. There are some prove that their commision have relation to CIA
The grandfather of research on the contribution of institutions to economic growth was a University of Maryland professor named Mancur Olson, and his book The Rise and Decline of Nations, published in 1982.
"Places like Venezuela, which is sitting on top of enough oil to make their residents generationally wealthy, are poor." This small bit of the video hurts me and stings me like no other as someone who was born and raised in Venezuela who was forced to legally migrate to the US in search of a better life and more opportunities. The economic and humanitarian crisis was already starting to sink in by the time I was born, but growing up there and just witnessing the rapid decline of the local institutions, the economy and the morals of the people was just something so incredible horrible that I would not wish that upon anybody. Billions upon billions of dollars were drained from our economy year after year at such a fast pace that no ordinary people really knew the extent of the damage until it was too late. And if we read about the history of our country, tracing those problems back to Colonialism is not very hard to do. I can only wish that one day countries like mine also receive their fair chance to succeed.
Glad you made it out and I hope you and yours are in a better place. The tragedy of places like Venezuela, Russia, and soon the USA, is that all this wealth could have gone to the country and the people to build hospitals, to provide free child care, to build roads and bridges, to expand high-speed internet, to expand electrical production, all of this would have boosted Venezuela to the heights where they are the envy of the world. Instead, a handful of already rich, thoroughly corrupt and evil people who only care about amassing wealth and power have ratfucked the economy and they don't care because they're happy to be the King of the Pile of Ash. They live in wealth and luxury so why should they care that the rest of the country is degrading?
Regarding the final part of the video I think a great example is Singapore which is relatively speaking quite strict and authoritarian but run super well and became economically wealthy while keeping the one-party system willingly BECAUSE they did a great job. How it's done doesn't matter, just make sure institutions are strong and reliable and benefitting the people and the pieces will fall into place.
@@larryc1616 you need to do some research on the Singapore Constitution, Institutions, and their single party's guiding principal "continuous improvement of the country's living standards". Which fundamentally occur when people trust institutions to provide services in exchange for their capitol/efforts. Also Singapore is consistently ranked one of the least corrupt countries in the world it's current ranking is 5th place and it is significantly less corrupt than the US.
@@jordanpohl6856all he said was that Singapore is a unicorn when it comes to authoritarianism. At its worst, it manifests in caning and death penalty for accidentally bringing in a doobie in your luggage. There was a joke in the Singapore satirical film I Not Stupid in that the government just bribes troublemakers instead of just oppressing them.
The only way to be sure is to ask the authors, but I think you’ve managed to take exactly the opposite point from the book/video/research from what’s intended
@@larryc1616You can just simply compare Singapore with neighbouring Malaysia to observe the effect. A lot of the institutions in Singapore were initially combined together with Malaysia before the split. You can google each and every one of them to see how well they are run now (e.g. Malaysian Airlines vs Singapore Airlines, University of Malaya vs National University of Singapore, LHDN vs IRAS, EPF vs CPF, PPR vs HDB, etc.)
as a backyard thinker, like this is rather intuitive if you think about it, sociey's most improtant part is the people, if the people is being organized in a good/fair way, the society benefits from it, but like the video said, great job doing the hard work to acturally prove it, and congratulations on getting reconized for that
Really? He gives such a poor surface level understanding of economics. Would you not admire the likes of unlearning economics or someone who makes deeper videos
I can only confirm this I had final state exam, to Eco whole subject and I swear to god, I watched one video (it was new one atm) and next day It was part of my question and I pass by few point for it, so he really is a hero we deserve. (^o^)7
A lot of comments says it's IQ issue, but history shows how circumstances shape the evolution of nations. Take the Vikings, for instance: known for their fierce, war-oriented culture, they were once feared as 'barbarians' across Europe. Now, their descendants in Scandinavian countries are among the wealthiest and most stable populations on Earth, with high standards of living and strong social welfare systems. In contrast, Ancient Egypt was one of the most advanced and prosperous civilizations of its time, but modern Egypt faces economic struggles and significant social challenges. This contrast highlights how historical factors, natural resources, governance, and geopolitical changes over centuries can influence the rise and fall of nations
It's not the same people though. The modern Scandinavian people have very little to do with the Viking people, and the Egyptians were similarly replaced over the centuries.
@@LordVarkson Your argument lacks scientific evidence and relies more on myths than facts. Genetic studies indicate that today’s Egyptians are indeed the descendants of the ancient Egyptians, just as modern Scandinavians share a significant genetic lineage with the Vikings. The idea that ancient Egyptians were Europeans with blond hair and blue eyes is unsubstantiated; historical and genetic evidence shows their appearance aligns more with indigenous North African populations. Moreover, the notion that creating an advanced civilization equates to being inherently superior is flawed. Achieving a complex society doesn’t imply that one group of people is better than another; it’s a shared human endeavor, influenced by geography, resources, and culture, rather than racial or regional superiority. I’m not arguing that Middle Eastern people are superior to Europeans, just pointing out that such distinctions don’t define the value or significance of a civilization.
@@LordVarkson what about when Rome overtook Greece in the ancient days? Dumb v Smart is a common dialectic that's likely played itself out in ALL wars?
Human history is that of colonization. The depressing thing is people thinking only western nations did it. Every single country is the result of colonies. Even the economists here fell prey to this, blinded to their own observations that the colonial powers brought stable institutions to countries lacking them. This was true of the romans, persians, greeks, and so on.
When an idea so impactful and easy to understand receives a Nobel prize, it’s sure that that a colossal amount of work went into it. Thank you for explaining it so clearly.
It’s cooperation (either trust or force) and culture. Japan, Scandinavia are high trust societies and cooperate well. Most early farming civilizations are high trust. There is also force to get cooperation. The Aztec were an advanced civilization but also a military state that ran on force. Every tribe around them hated them. Many early kingdoms forced peasants to do work. Force is still used today (taxes, military draft). Trust or forced cooperation is the main factor. Then culture norms like religion reinforce cooperation and traits like hard work.
@johnsmith-fk7fw What exactly is the racial component? Race is never as important as culture. What we think of now as “race factors” are often just cultural factors, pure and simple.
@@johnsmith-fk7fw And you're ignoring the continuity of the exploitative colonial institutions in most non-white countries as was mentioned in the video.
@@CBlackEagle and youre ignoring that throughout history, every area & people have been exploited and enslaved/colonized. you think it was just an invention in the last few hundred years? lol. also many of those places were better under colonial rule, and got much worse after it ended, and most things that still exist there now are from colonial times with little new development. i know because im from one of those places...
This video provides a very good summary of the key takeaway of Why Nations Fail. The book is definitely highly recommended, it is richly detailed and contains a lot of case studies to substantiate the hypothesis of the authors
Just a warning if you ever sit and read Why Nations Fail: if you're not already, it will radicalize you in SOME way. It is that kind of book that even though most of it comes across as Hindsight-Common Sense-Duh Becky...it will remind you of how stifling unfair the social structure is set up for many, for a LONG time in human history and the hidden millstones on the necks of many nations. If nothing in that book moves you, makes you think differently or raise your guard to daily decisions to serve your family, society, neighbors differently - I don't know what to tell you.
Absolutely loved the breakdown and explanation. Agree with almost all of it. I would just add one small angle, as someone who has lived in India and the US, there is a big difference in terms of level of trust within these societies. So in countries like India where institutions for centuries were used to have control over people and oppress them, people were trained to not trust institutions. This meant that even after the countries got independence, people did not trust institutions and that somewhere influenced those controlling the institutions to start acting in a way that was befitting of the public perception of institutions and it became a self fulfilling loop leading to the whole society becoming a low trust society.
A well deserved Nobel Prize for the trio! It is not apparent especially to people in the developing world how important institutions are to the development, prosperity and well-being of countries.
This is great. I’d love to understand one level deeper: how did good institutions come to exist in the first place? I think it comes down to culture: culture where people respect and trust each other in their community. Many of the colonies used to have an egalitarian way of life which led to good governance and systems.
yes until particular groups of people learned to deceive and sow seeds of doubt to destabilize said stable egalitarian civilizations sure it's a skill issue but the willingness to forego morals and to keep going as if the drop is towards a bottomless pit is just so lame and pathetic. just so they can have buffet breakfast and vacations that cost 10x more but isn't that much better? it's hard to say that it isn't this disgusting mentality of them having even just enough could feel like ecstasy so long as others have barely any it's almost a miracle how accessible the internet is nowadays. i'd like to think we'd all be living in total abundance and extravagance if everyone would be in on it, and so long as everyone agrees we should all have our turn in the mines and in the fields
Dude this is so sad, basically those who suffered the most in the past are the ones who will continue to suffer in the present and the future. As someone who lives in a developing economy, just sad.
It would be great if you could create a series on notable or sequential novel prize winners in Economics. It's super informative and interesting stuff that ordinary people like myself would otherwise know nothing about
I nearly cried when they gave the award to them for their theory, its something I've told people for 20 years now and was told I didn't know what I was talking about by a number of my economics professors over the years. I felt validated, then last week I saw my country went the opposite way.
I assume your country is the US since we just had an election. I assume by “went the other way” means you thought VP Harris was trustworthy and President-elect Trump is not. I voted for Trump because I believed President Biden promised to “bring us together”, but followed a hard agenda on only one side. My guess is that most voters also concluded that they trusted Trump more.
@rumbaughsteven5577 what agenda did Biden follow that was hardline? The CHIPS Act, Infrastructure Act, Bipartisan Border Bill? Why do you support guaranteed recessions under Republicans exactly?
@rumbaughsteven5577 what "hard agenda to one side" in particular? And why would I believe a man who has 34 felony convictions for fraud this year, owes $450 million for fraud from a lawsuit earlier this year against his business, owes another $90+ million to E Jean Carroll for more defamation/lies, has 34 felony fraud convictions against his business in 2022, and has settled fraud lawsuits against him for decades? Why in particular do you support reliable republican recessions, Trump had a worse 2019 before covid than Biden did 2024, but I guess $860 billion in bailouts for Wall Street in September just convinced you Trump was that good in 2019 huh?
@rumbaughsteven5577 why can't I reply to you? You MAGA types seem to just block and flag anything you don't like and it's pretty sad you're creating such a safe space from facts. Trumps economy was falling apart in 2019 without bailouts and QE lite giving his bad economy enough life to limp into covid.
@@Pickn4Gold seems like he or the channel are hiding your comments huh? They don't like when you point out you can prove their worldview doesn't work in reality.
Not necessarily. And it doesn't disprove Jared Diamond's theory about the importance of geography either. The claim of the book is that institutions matter a lot, but it leaves open the question of how and why institutions become what they are. Other factors can influence this. For example cold climate forces society and technology to advance faster, so institutions evolve faster too, which leads to prosperity. Scandinavian countries have the strongest and most stable institutions, because they had the more time to refine them, because they were forced to cooperate by the harsh environment.
It tries but fails in my opinion, how come Africa had no previous institutions was colonized by adavanced countries with reliable institutions but is still poor? That theory fails to explain thay
@@mariusvanc In the Americas, the south was more developed, then there is Egypt, then there are people around the Mediterranean were more developed than north Europe. Did you read why nations fail?
@@Daniel-ef7nk It was explained after 8.20. Africa had population and institutions in place before colonialism, and were replaced by the colonial powers. Then, those colonial administration was gone and left nothing but chaos behind. This was like 60 years ago or less, and since then the continent overall has been struggling with several wars and plagued by brain drain.
Biggest problem with the book is they basically take you right to the foot of the conclusion that a more equal wealth distribution is pretty essential for long run growth but can't quite bring themselves to say it. If you read Joe Studwell on asian economies, he comes to similar conclusions on wealth distribution.
As a Nigerian, it’s painful seeing my country being used as the “bad” example all throughout this video 😢 a lot of the videos on the bad side were from Lagos or Abuja. I understand though, we still have a long way to go, I just hope things improve quickly
Don't feel bad, it's our fault. It's as if you'd feel ashamed about your apartment being a mess after thieves broke in and stole and destroyed all cabinets and appliances. It's not your fault. I know it's fantasy hoping that us Western countries would work with you to repair the damage, but I at least hope you'll find a way to make it work
I think that while Nigeria is improving due to some positive institutional choices, it has not changed as quickly as it could. The reasons for this are many. You can see the same issue in India where its institutions are facing similar issues but on a larger scale.
You might be interested to know that Nigerian-Americans have a higher median household income than the average American household: That is not true of other Americans of African descent that have immigrated to the country in the last century. The leading theory is that Nigerian culture places a lot of emphasis on education, as do Americans of Korean and Indian decent. Those two groups are also are wealthier than the average American.
@@jeffb1880 that is deceptive statistics. And your "leading theory" is wrong, since the real reason is well known in Nigeria. A Nigerian immigrant to the US is more likely to have got that immigration status due to being educated. An uneducated Nigerian is less likely to immigrate to the US (for many reasons). But if you then take the average US born citizen, they are from a range of educational backgrounds by default. This is actually a well known problem in Nigeria, as many university graduates in Nigeria end up leaving Nigeria for better jobs in wealthier countries... leaving the less educated behind. Basically what you are doing is comparing a bunch of university graduates (Nigerian immigrants) to a group of random people on the street (US citizens). The same issue applies to immigrants from other countries like India. For the South Korean issue you are seeing more of an immigration from educated women, who are oppressed culturally and seeking less oppression.
That is a very feel-good talking point. "Justice" is highly subjective. A pro-capitalist and a pro-communist will have entirely different concepts of justice with two entirely different economic outcomes based on their interpretation of what justice looks like.
@@roymarshall_ Calling it predictability and hope would be more accurate. Or you know, Maslow's hierarchy of needs plotted against time. We look forward to see if we can get enough food; and when we trust we will have that, then we look forward to see if we can get enough safety, and so forth up the hierarchy of needs. the higher we think our future selves will get on the hierarchy, the better we function in the here and now.
@@loneIyboy15 if you read the book that the two Nobel Prize winners wrote, they have a whole dedicated chapters into disproving the racial development theory. Read it, Why Nations Fail.
I read that book, and if I recall, the main point was inclusive economy leads to inclusive governance, which further leads to better governance, and then it invests heavily in the people.
And this also shows why over a half century of pumping trillions of dollars into failing 3rd world economies without addressing the roots of the problem (corruption) has been a waste.
well more like "pumping trillions into resource-rich regions to destabilize them so american companies can swoop in and make money doesnt do anything to promote long-term stability?" cause america refuses to allow any remotely leftist economy exist undisturbed, and if they cant get their way through propaganda the cia just does/backs a coup, i think theyve admitted to over 40 in south america
South Africa's is a great example of this - on the Corruption Index 25 years ago its peer economies were Japan & Austria. Today, its almost as bad as Brazil & Argentina. and the decline in infrastructure & brain drain of skilled workers mirrors this.
1:47 Economic Explains video editing team love Chicago. They use downtown Chicago a lot in their stock footage and often from different angles of different parts of downtown. It is one of the most beautiful downtowns you will see. Certainly outside of older historic centers
@@edwardcoit9748interesting. Univ of Chicago isn’t downtown but it could be why they are more aware of Chicago. And then add in the beauty of downtown, it’s probably why almost every video here when referencing global rich cities / countries include shots of downtown Chicago and almost never (for example) Los Angeles
I’m from Chicago and they use Chicago in almost any video that discusses rich / developed countries. It’s a beautiful downtown and someone else mentioned this group might be familiar with Chicago through Univ of Chicago
Wow, congratulations on your impressive investment success! Your discipline and focus on delayed gratification is truly inspiring. I'm curious, what are some of the key factors that you consider when making investment decisions? Do you have any tips for those of us who are just starting to dip our toes into the world of investing? Thanks for sharing your story!
I have acemoglu book. Very good but not really news. Piketty and paul kennedy and many others have covered this for last 100 years but acemoglu did good job here. Thanks.
I like how you say that seems like a lot of research to prove a causal link, because to me it felt like it should take even more in something as messy as human societies
The exact wording used in their book was "inclusive political institutions" vs "extractive political institutions". They cited China as an example of extractive political system, and the Soviet union too. 🙄
Nah, I enjoyed the historical context bit. It's interesting to know more about the Nobel prize, the winners, and why they earned it in the first place.
That "if" you mention in your opening is a very big IF Lets be honest, most politicians will ignore advice from economists if it disagrees with what they want to do politically
Wow! I know this video is too concise, and one would need a lot more research into this before making any conclusive comments, but in all my years growing up in India, this is a really good explanation for the major wealth gap we are seeing in India today!
9:08 you make assumptions that places like India didn't have institutions before. as the British specifically were light rulers they didn't come to disrupt the way of live of the locals they followed the path of low cost imperialism ruled through local princes with very minimal presence of their own you have to realize that places like India was many little kingdoms and empires who themselves were exploitative. also cause the British followed low cost of imperialism module as soon as the cost rose cause of rebellion or separatism the time was to leave.
"Alright, I’ve been hoarding $155k in my emergency fund like a dragon guarding gold, and I’m finally ready to dive into investing. Watching this video got me thinking-if these Nobel brains can decode economics, maybe I can at least figure out ETFs without nuking my savings. Where’s the ‘Investing for Dummies: Don’t Lose Your Shirt’ section? 😂 Any headstart ideas?"
Haha, love the vibe, but seriously, with $155k, you might want to pump the brakes on the DIY approach. A financial advisor saved me from turning my money into Monopoly cash. They’re worth the fee if you get a good one. Think of it as investing in your investing.
Okay, both of you are speaking my language. I’ve got a chunk saved too, and I know I need an advisor, but how do you even find one? It’s like online dating-how do you know who’s not gonna ghost your portfolio?
"There are a handful of CFAs. I’ve experimented with a few over the past years, but I’ve stuck with Linda Aretha Reeves for some years now, and her performance has been consistently impressive. She’s known in her field, look her up."
Very true. I studied Economics in South Africa. Its both fascinating & depressing. The SA economy has some fundamental structural issues that need to be solved in order to create a bridge between the two economies. Unfortunately, this processes is hindered by extreme government corruption & anti-democratic conduct. I pray SA finds better leadership before the economy effectively collapses.
South Africa, unlike other middle-income countries, was widely classified as a developed country by international agencies such as the UN back in the 1960s and 1970s. At that time, even as millions of non-whites were languishing in poverty, it had world-class infrastructure and financial stability not seen in, say, the many Latin American countries that are also middle-income.
2:38 they offer solutions, instead of certain recent winner(s), in particular one who was chairman of a certain federal reserve before, during and after the worst global economic crisis in a century and arguably is the author, or at least very enthusiastic participant, of many of our current economics problems…
Read this book 10 yrs ago. Since than I have been looking and assessing situations using the approach of those authors. One of the best and most inspiring books ever read.
The poor countries needs to make a lot of repairs on legal, technical, religious, social, economic and infrastructural grounds in order to cope up with the rich and powerful countries.More than horrible financial position the poor mindset of people and politicians that are keeping 3rd world countries poor.
It's societal trust. Trusting for example, that your deliveries won't be stolen from your porch, or certain demographics won't be raiding your trick or treat buckets with backpacks.
15 minute high level break down of decades of studys and all the comments are basically "duh, obviously" I bet people around Isaac Newton also went "duh, of course an apple falls down"
Very intresting. A typical game theory situation, where the Nash Equilibrium does not equal the Socialy Optimum Solution. But as no side can improve their situation by changing the strategy, noone changes the strategy and all stays the same, even though it is worse for everyone.
I forget when I had this notion but I did remember getting the notion where it was the political system that made the good economy, not the other way around. I'm glad it's scientifically found out.
What i think is you can't have perfect corruptionless institutions because of the human factor. Also you can see how corrupted a institution because they are not that much corrupted.
I would rather go for Rwanda honestly, particularly in comparison to Burundi, as those countries are basically identical except for the policy of their governments.
I read the book and it mostly deals with 'natural" historical experiments. For instance, the diverging economies of north and south korea; north and south America; the rapid industriliaztion and de-industrialization of Russia among other historical analysis. Does the actual research delve into more hard economics? To me, this years winner is a lot more polemical in its approach than previous winners.
Well, while Why Nations Fail rightly emphasizes the role of institutions in shaping national prosperity, it presents a heavily pro-U.S. perspective that overlooks key factors. The book suggests that wealth is a natural result of democratic institutions, but it glosses over how the U.S. has frequently undermined democracies that didn't align with its interests, such as in Chile and Iran. It also ignores how the U.S. imposes crippling sanctions on countries like Cuba and Venezuela, which keeps them economically stifled, only to then blame their poverty on 'corrupt leadership.' By downplaying this imperialist history and global power imbalances, the book risks misleading readers about why some nations truly succeed while others remain poor.
@@maksim_rin US president Carter in its time said Venezuela was one of the most solid democracies in the world, and before the actual bolivarian government was indeed highly regarded internationally as that, yet the population's poverty were over 50% when Chavez took mandate.
@@Phtom-b ok, I didn't know this about Venezuela. I still think institutions make a huge difference to economic growth, but: it needs time for people to got used to (30 years is not enough, we've seen that so many times) and a little period of peace (american foreign policy before the fell of USSR was nuts, due to dreadfull fear of commies). Of course institutions are only one of the needed keys, but going without them won't do you any favour.
finally, took scrolling this far to see someone pointing this out. If trust was the deciding factor, then what causes the governments of 'poor' nations to act in untrustworthy ways? It's of course the forces of imperialism and class conflict driven by capitalism. It is to maintain the global capitalist hegemony that the US puts down populist uprisings and movements in third world countries and plants in handpicked governments that are convenient to them as well as place crippling sanctions. When a nation is pushed to the corner this way, it is inevitable that it will develop untrustworthy and authoritarian characteristics.
The US system is interesting, for me it was not like before. Each year, the US institutions are losing power which is going to richer and richer people. We can see this on how the criminality in the US has risen drastically unless of course you have enough money to live in one of the wealthiest neighbourhoods around Los Angeles or San Francisco, mega rich cities (with the most richest people in the World) but with neighbours that you easily can find in the slums of Mumbai.
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so basically....its a skill issue
Leave it to EE to make mistakes in the first minute of the video... There is no Nobel prize in economics because it is a pseudo-scientific field. It was back when Nobel established the prizes, and it is still today.
Time to do video on Wartime economy
How can I buy the book, Why Nations Fail since I am in Oz and they won't ship it me?
@@AL-lh2ht so basically...colonialism destroyed local institutions and thereby ruined both past and present lives. And unlike with your hot take, that's actually what's said in the video.
I keep seeing comments like, "This seems obvious" or "seems like commonsense" when the video itself explained why this was ground breaking. Correlation does not imply causation, not to mention that many other people claim other things. I.e. geography, racial supremacy and stuff like that. These guys won the Nobel Prize because they gathered data to demonstrate causation and definitively show that trust in institutions is what leads to good economics.
it is obvious, proving it is nice but thats not like they found a solution to enforce it and save the third world country from themselves. they just confirmed what those poor folks knew before, they are fucked by their corrupt rulers.
Yeah, I've noticed that too.
I feel like asking them if it was so obvious, why they didn't publish an award winning paper, which can substantiate their "obvious" conclusions.
and funnily enough, it's still wrong
@@dampaul13Since these findings where made by Adam Smith then critiqued by Karl Marx hundreds of years ago.
That’s the dumbest thing I’ve ever heard. It’s not just that it seems obvious, the weird thing is that it hasn’t been done sooner. People knew economic and political systems directly influence economic success since the Cold War.
I guess the book explains well why Argentina is still poor. We have almost no trust in our instututions, or our own people. Recently I left an umbrella unattened on the street. I realized a few minutes later, but by the time I returned, it was already gone. My japanese teacher told me then than, in Japan, the umbrella would still be there. People in Argentina see something they can take, and just take it. This applies to not only people on the street but also politicians who can't see beyond their noses.
There are places in Europe where, when you drop a wallet, it will be stolen before it hit's the floor. Please don't be too caught up by stereotypes. Argentina is a tragedy now, but if the people can get together to refund the nation, maybe sometime in the future they can get things right.
That's a good example of a wider phenomenon.
Because so much potential wealth has been created by technology, and historical investment in infrastructure - a country can become wealthy by simply not breaking stuff.
@@jmbpinto73 Most stereotypes are accurate.
It's poverty and desperation that brings out criminality which is in a neverending loop
Shaking out the bad habits and getting along well, with great promise for even better. Then Peron. The only country in the Economic Top 10 in 1890 that was no longer on the list in 1990. I think replaced by Japan in the 1960s, the Japan that was nowhere near the list twenty years earlier.
So basically game theory where both sides play fair produce the richest economies.
Yes
Interesting way to put it and it seems accurate. The final couple
Minutes mention how this is difficult
And "both sides are more likely to play fair" in high-trust cultures, so a ruling-class that undermines trust is likely to also undermine the amount of wealth they can siphon off.
@@Homer-OJ-Simpson Well the game is between the institutions and the people. When the institutions continually operate fairly without corruption and offering opportunity growth it gives the green light for the people to react the same way thus creating productivity.
@@AlecMuller And higher IQ individuals more easily approach the optimal strategy for any given game.
Fun fact: Professor Robinson has a particular fondness for my Home country of Colombia and he is a regular guess professor at my university, University of Los Andes in Bogotá. I had the privilege to assist a couple of classes with him and got so invested in his theory. So much that, I went and buy his book and loved every page of it and because of that I got really interested in economics and that way I found your channel!.
He is fluent in Spanish?
Yeah I can back this up. We attended my university in Dominican Republic back in 2017 as a speaker. It was a great time to be an econ student hahahaha
Really good _coffee,_ over there. That's likely why?
y aun así los políticos colombianos no han aprendido nada de él.
Ay hola uniandino
I read the book a few months ago. Nice summary but everyone should read the book to be honest. One important aspect you didn’t mention is creative destruction. The fact that innovation often comes at the expense of encumbents. So countries ruled by small minorities stifle innovation or adoption of new technology (which leads to wealth creation) in order to stay in power.
What I find interesting is you can apply this to your own life as well. Generally humans are resistant to change or adoption of new ideas or ways of thinking. Once we ‘know what we know’ we avoid learning new skills or adopting new ideas that would creatively destroy our existing paradigm but would otherwise lead to greater success. I guess generally it’s just good to maintain curiosity and keep an open mind
I was just thinking about how interpersonal relationships (families, couples etc) also thrive when there exists this same culture of collaboration and trust. There is no power struggle, no scarcity mindset, no zero-sum game to be played. That greater success in our relationships comes from letting go of old paradigms, roles, or expectations that freeze people in time and leave no room for change or growth or becoming.
@@gracekimchi
what? 😂😂 You got all that from this? 😂😂
Tbh it's just sign of maturity to understand that people will say things they don't mean or that even if they did it doesn't change fundamental facts.
@@datuputi777 lol k. That's why I said it. I saw a meaningful parallel to what I was learning outside of this topic bc social relationships work the same whether in the specifics or in the general.
Glad you said that. Schumpeter is a hero for me. Saved my doctorate
Yep, read the book recently. The example of how the Queen of England banned a stocking frame knitting machine to protect knitting jobs still sticks with me. It shows how political interests can hinder creative destruction.
I swear every Economics student remembers these guys! Amazing contribution, and so very well deserved
.....why THEY DIDNT GET A PRIZE OF LITERATURE FOR THEIR *FAIRYTALE* ,THO
....WHERE IS GEOPOLITICS INVOLVED?
@@robotnikkkk001even with geopolitics the underlying rules still apply.
@@robotnikkkk001 - Let me guess, you expect to blame certain nations for the failure of other nations. This video shows that isn’t the major reason they are poor, but some people are dedicated to blaming their problems on others
@@ElectronFieldPulseit is a fact that some nations ARE the reasons behind why some are poor. This research doesn’t deny that. If you are stupid enough to believe that this explains causation of poverty and ignore colonialism, which this video clearly points out how India and China were left poor after colonialism when they were richest before colonialism, then that is sad. Don’t look for justification for crimes against st humanity here.
Why nations fail was a favorite reading of mine in my freshman year!
It all boils down to honesty and trust. If you have an honest society that treats each other right then the nation will succeed.
And for that you need to build certain priniciples into your organisations, namely the tendency to dissolve themselves once they've done their job. Otherwise you get a power structure that only exists to maintain its power, which is as good a definition of corruption as any.
No it's not when the institution are only made tk control this happens
Exactly. And that is dependent on a homogenous population with the same beliefs.
In other words, it’s a reallyyy large scale relationship and should be treated as such
How can you change that in a society aside from education (i dont believe education can do that)
"Why nations fail"
The answer is corruption, simple as that. If very scare resource countries like Singapore and South Korea are able to be hundreds to times wealthier than very rich resource rich countries like Nigeria and Venezuela, corruption is the answer as to why nations fail. El Salvador cleaning up their decades long crime issues is another sign that honest politicians can lead a country to greatness
The answer is simpler: IQ. Dumb people can't make anything.
But why are nations corrupt?
If you read the book you'd know it's more than that, but corruption is a big part.
It's not just corruption.
It's stability, trust, integrity.
A good point is the rise in theft and violent crime in London. If you can't trust your community not to steal your private property, say a bike, if you leave it locked up outside your work, then you may wish to work somewhere with less crime. If you know that the police won't catch you and the courts won't punish you for committing theft and other similar crimes then a life of crime becomes more productive and attractive than a life of legitimate work. If crime pays then young people will see crime as an alternative to work and so won't put the investment into getting education etc meaning the nation loses the skills it needs. With the workers fleeing for safer countries, and the people left having no skills needed, the country begins to collapse.
This is why if you want to maintain a strong economy with strong institutions it's not just about dealing with corruption. You need to deal with anyone and everyone that undermines the rule of law and the institutions that work on our behalf.
The answer is not corruption. Corruption is bad, and it effects negatively that’s for sure. But China was extremely corrupt and managed to develop significantly. On the other hand, Britain which is low on corruption (relatively) is also doing pretty bad economically. (They went from global power to starving children in just 60 years) The current Taliban regime has a very low level on corruption (no jokes, they are killing anybody who steals anything) yet they reject core structures such as interests so they won’t have a good economy.
This is why India is still behind. The people do not trust any government institutions with anything, as these are always slow, ineffective or incompetent.
True. And the reason is that people don’t trust each other- as a community and a nation, there is low to no trust. Simple things like being on time can’t be relied upon.
Yeah, and South America has the same problem.
@@write2pras84 People trust each other within their circles in India , they don't trust government related institutions as there is a culture of corruption and bribery involved.
Indeed. Brits saddled us with worthless systems that are only good for resisting change.
In India we don't trust anyone....everyone is opportunistic,exploits and selfish....being nice/law abide is a foolish thing in India....because every day everyone fighting for their survival....eg: there is no point of keeping a queue to get into bus. Because1 bus have 60 seat and 100 people waiting for it...anyway 40 people will not get seat...so fight for a seat is more pragmatic thing....overpopulation and corruption
I really appreciate the background footage for these videos, just simple enough to not distract from the script, and way better than a PowerPoint or any other text on the screen.
Aye Acemoglu, Johnson, and Robinson finally got a Nobel prize. They are legendary in my economic history class. I have their book and it's great.
It's not Nobel Peace Prize, it's Nobel Memorial Prize
They have a few books now. I highly recommend the Narrow Corridor, which more focused on democracy.
@@teh5678 my bad
can a lay person with no economics background understand the book? asking for a friend
@@afs208 absolutely! I’d recommend it
The whole reason a couple of hundred employees of the East India Company were able to administer vast swathes of the subcontinent is that the British merchants could be trusted to repay the Indian banks unlike the local population or the Moguls. They employed local armies, paid with local currency borrowed from local banks. Trust is the only thing that matters.
Oh, shite! You're saying the Caucs did something right? I guess if you are English, you are already in prison.
....YOU WANNA SAY *_POWER OF GUNPOWDER_* ,RIGHT?
.....YOU JUST DONT UNDERSTAND HOW WRONG YOU ARE
@Chewyg8kThe Moguls tried to play the French off against the English - and discovered the French were inferior to the British when push came to shove (a history that has repeated for most of the last millennium).
As an Indian I have to agree here. But, that's the thing. Societies are built on this.
@ The French and the Portuguese had their own establishments (the Portuguese for longer than the British…).
For me it is quite obvious that good institutions can give rise to rich economies. But what is not so obvious to me is the question: What gives rise to good institutions?
People of average IQ.
Culture of integrity and trust gives rise to reliable institutions, it comes from the culture of the people and nothing else.
Mixture of competency (educated, resilient, etc.), adaptable, access from divergent groups, and internal controls.
Pulling from Peter Principle Revisited, after a minimum baseline is set, you are statistically better off choosing people at random than any supposed meritocracy (which also prioritizes the well-being of the group over individual interests).
It's mostly an IQ question which is a big part of why they develop where they develop as well. The western world is heading down a dark path as it rapidly lowers average IQ through mass migration from the lowest IQ areas in the world.
There's an element of luck.
And hardly anyone likes to admit it, but we are reliant on a very few, outstanding, strong, well-meaning and smart people for our wealth, and the things they do can generate national wealth for decades.
Singapore would be nothing without LKY.
China has gone from poor, to lifting 900m people out of poverty in just a few decades, but nobody will ever thank Jinping for it, because it is an unpopular thing to say.
I can’t believe this and I’m kind of emotional right now! The name Acemoglu sounded very familiar so I just realised that last year I had an assignment based on a paper that was written by Acemoglu, Hassan and Tahoun (The power of the street: Evidence from Egypts Arab Spring) and I really liked that working on that assignment and now he just won a Nobel Prize! It’s amazing! Congratulations🎉❤
Can we also mention the USA's involvement in destabilization of Latin American countries for more than half a century. Supporting coups, blocades etc. Doesn't really allow a nation's people to form trust of governmental institutions nor take advantage of their resources in a fair and democratic way.
Very fair point, and something they don't address in the book at all (modern interventionist states)
I think this has been vastly overlooked. Rich countries rely on poor countries for their natural resources. It’s in their interest to keep those counties poor to keep the costs down.
Thank you. Seems like much of the criticism raised towards the book point toward this. It apparently failed to address the widespread genocide of locals when colonial settlers landed in those areas too. Gotta read the book for myself to find out why though
People talk about it like it was a solo affair and ignore the Soviet unions role.
This is the biggest point
5:07 the stability and reliability of the institutions has been said to be HUGE factors for many years but it seems it can be difficult to prove something that is obvious for a while. I’m sure people and scientists were highly certain that good parenting leads to more likely success of the child but it must have taken a long time to scientifically prove it
Now if they go ahead and prove the obvious cause for the stability and reliability of these institutions, we can call it a day.
@ yup. It’s two parts. What leads to prosperity they have proven but what leads to the favors that lead to prosperity is what they discussed and theorized. That will be equally important as it lays the groundwork for the change.
It’s like trying to figure out what leads to winning in a sport, for example tennis. Perhaps they prove that agility and backhand are the biggest factors. The next step is to then determine how to get a player to their best agility and back hand.
@@Homer-OJ-Simpson The study would never be funded, much less recognized. Anything to preserve the sacred cow of Human equality.
@@loneIyboy15 Mostly likely proxy wars. Bigger Nations meddle in poorer nations and their rivals do as well. Many countries fighting insurgencies are kept under decades of arms sanctions leading to a stalement where neither side has a decisive victory. imagine the CCP and the Chinese Nationalists could not have a decisive war the nation would still be in turmoil or recovering from it. if a nations is peaceful no matter how corrupt over time it will self correct and strong institutions will rise as kids not born in a destablised nation will make a far better society. In time empires fall and new ones rise as humanity adapts. who would have thought the barbarians the romans fought would be prosperous certainly not the romans. Many third world nations who had no power history are experiencing far better conditions than their regional superpowers. Kenya compared to its neighbours around the horn.
This is great to see! Read “Why Nations Fail” years ago. It was referred to me by a retired Economics Professor here in Australia. Loved it. So clear and logical.
Another wonderful source is Prof Paul Collier, who established the Blavatnik School of Government in Oxford. Collier wrote “The Bottom Billion” and many other wonderful books. Reaches broadly similar conclusions - but came out before “Why Nations Fail”.
In the book why nations fail, authors also question effectiveness of IMF contributions to struggling countries, without changing the political landscape. Gives the example of Zimbabwe which went from worse to worst despite IMF support
also happen to Indonesia during 1998. IMF give loan but asking the country to make some policies which later proven worsened the condition. Many argue that IMF has been intercepted by advance country intelligent services to slow down developing country progress. There are some prove that their commision have relation to CIA
The grandfather of research on the contribution of institutions to economic growth was a University of Maryland professor named Mancur Olson, and his book The Rise and Decline of Nations, published in 1982.
"Places like Venezuela, which is sitting on top of enough oil to make their residents generationally wealthy, are poor." This small bit of the video hurts me and stings me like no other as someone who was born and raised in Venezuela who was forced to legally migrate to the US in search of a better life and more opportunities. The economic and humanitarian crisis was already starting to sink in by the time I was born, but growing up there and just witnessing the rapid decline of the local institutions, the economy and the morals of the people was just something so incredible horrible that I would not wish that upon anybody. Billions upon billions of dollars were drained from our economy year after year at such a fast pace that no ordinary people really knew the extent of the damage until it was too late. And if we read about the history of our country, tracing those problems back to Colonialism is not very hard to do. I can only wish that one day countries like mine also receive their fair chance to succeed.
🙏🙏
Glad you made it out and I hope you and yours are in a better place.
The tragedy of places like Venezuela, Russia, and soon the USA, is that all this wealth could have gone to the country and the people to build hospitals, to provide free child care, to build roads and bridges, to expand high-speed internet, to expand electrical production, all of this would have boosted Venezuela to the heights where they are the envy of the world.
Instead, a handful of already rich, thoroughly corrupt and evil people who only care about amassing wealth and power have ratfucked the economy and they don't care because they're happy to be the King of the Pile of Ash. They live in wealth and luxury so why should they care that the rest of the country is degrading?
Good and honest wish that you have for Venezuela 🙌
But uncle Sam don't want to 👉
and people didn't seem to mention that Venezula is always being sanctioned and bullied by US?
@@tornamacpilib5029 they did things to make immeasurable loss to the country and get petty gain for themself
Regarding the final part of the video I think a great example is Singapore which is relatively speaking quite strict and authoritarian but run super well and became economically wealthy while keeping the one-party system willingly BECAUSE they did a great job. How it's done doesn't matter, just make sure institutions are strong and reliable and benefitting the people and the pieces will fall into place.
Singapore is a unicorn. One party authoritarian rule is always corrupt. Don't cherry pick unicorn
@@larryc1616 you need to do some research on the Singapore Constitution, Institutions, and their single party's guiding principal "continuous improvement of the country's living standards". Which fundamentally occur when people trust institutions to provide services in exchange for their capitol/efforts. Also Singapore is consistently ranked one of the least corrupt countries in the world it's current ranking is 5th place and it is significantly less corrupt than the US.
@@jordanpohl6856all he said was that Singapore is a unicorn when it comes to authoritarianism. At its worst, it manifests in caning and death penalty for accidentally bringing in a doobie in your luggage.
There was a joke in the Singapore satirical film I Not Stupid in that the government just bribes troublemakers instead of just oppressing them.
The only way to be sure is to ask the authors, but I think you’ve managed to take exactly the opposite point from the book/video/research from what’s intended
@@larryc1616You can just simply compare Singapore with neighbouring Malaysia to observe the effect. A lot of the institutions in Singapore were initially combined together with Malaysia before the split. You can google each and every one of them to see how well they are run now (e.g. Malaysian Airlines vs Singapore Airlines, University of Malaya vs National University of Singapore, LHDN vs IRAS, EPF vs CPF, PPR vs HDB, etc.)
as a backyard thinker, like this is rather intuitive if you think about it, sociey's most improtant part is the people, if the people is being organized in a good/fair way, the society benefits from it, but like the video said, great job doing the hard work to acturally prove it, and congratulations on getting reconized for that
as an economics student, i really admire your content.
Free the Uyghurs
Free Palestine
Free the Rohingya
Free the Kurds
Free Tibet
Stop every genocide!!!
Really? He gives such a poor surface level understanding of economics. Would you not admire the likes of unlearning economics or someone who makes deeper videos
I can only confirm this I had final state exam, to Eco whole subject and I swear to god, I watched one video (it was new one atm) and next day It was part of my question and I pass by few point for it, so he really is a hero we deserve. (^o^)7
@@darragho6358you seem like a salty hater. try providing some evidence next time buddy
me too, but I am a political science student
When I heard Acemoglu got the prize, I was like: 'woah, that's the guy I used in half my poli-sci papers'.
Thanks!
A lot of comments says it's IQ issue, but history shows how circumstances shape the evolution of nations. Take the Vikings, for instance: known for their fierce, war-oriented culture, they were once feared as 'barbarians' across Europe. Now, their descendants in Scandinavian countries are among the wealthiest and most stable populations on Earth, with high standards of living and strong social welfare systems. In contrast, Ancient Egypt was one of the most advanced and prosperous civilizations of its time, but modern Egypt faces economic struggles and significant social challenges. This contrast highlights how historical factors, natural resources, governance, and geopolitical changes over centuries can influence the rise and fall of nations
It's not the same people though. The modern Scandinavian people have very little to do with the Viking people, and the Egyptians were similarly replaced over the centuries.
@@LordVarkson Your argument lacks scientific evidence and relies more on myths than facts. Genetic studies indicate that today’s Egyptians are indeed the descendants of the ancient Egyptians, just as modern Scandinavians share a significant genetic lineage with the Vikings. The idea that ancient Egyptians were Europeans with blond hair and blue eyes is unsubstantiated; historical and genetic evidence shows their appearance aligns more with indigenous North African populations.
Moreover, the notion that creating an advanced civilization equates to being inherently superior is flawed. Achieving a complex society doesn’t imply that one group of people is better than another; it’s a shared human endeavor, influenced by geography, resources, and culture, rather than racial or regional superiority. I’m not arguing that Middle Eastern people are superior to Europeans, just pointing out that such distinctions don’t define the value or significance of a civilization.
@@LordVarkson what about when Rome overtook Greece in the ancient days? Dumb v Smart is a common dialectic that's likely played itself out in ALL wars?
@@محمدالجعلي-م2ت hey Hakeem hawkTuah al sausagi, the Scandinavians are rich because of those gold teeth from your arch-rivals.
@@LordVarksonEgyptians were definitely not replaced, they are still very similar to ancient Egyptian in terms of their DNA
Colonial history never ceases to depress me
Most of modern Africa is better explained by the more recent Cold War than colonialism. Robert Mugabe Communist.Africa is where the Cold War went hot.
Human history is that of colonization. The depressing thing is people thinking only western nations did it. Every single country is the result of colonies. Even the economists here fell prey to this, blinded to their own observations that the colonial powers brought stable institutions to countries lacking them. This was true of the romans, persians, greeks, and so on.
I read the book. It is extremely insightful and well written. Would highly recommend
When an idea so impactful and easy to understand receives a Nobel prize, it’s sure that that a colossal amount of work went into it. Thank you for explaining it so clearly.
It’s cooperation (either trust or force) and culture. Japan, Scandinavia are high trust societies and cooperate well. Most early farming civilizations are high trust. There is also force to get cooperation. The Aztec were an advanced civilization but also a military state that ran on force. Every tribe around them hated them. Many early kingdoms forced peasants to do work. Force is still used today (taxes, military draft). Trust or forced cooperation is the main factor. Then culture norms like religion reinforce cooperation and traits like hard work.
mostly, but you and most other people are still neglecting the racial component
@@johnsmith-fk7fwwhat???? This channel is for economist and anti racist
@johnsmith-fk7fw What exactly is the racial component? Race is never as important as culture. What we think of now as “race factors” are often just cultural factors, pure and simple.
@@johnsmith-fk7fw And you're ignoring the continuity of the exploitative colonial institutions in most non-white countries as was mentioned in the video.
@@CBlackEagle and youre ignoring that throughout history, every area & people have been exploited and enslaved/colonized. you think it was just an invention in the last few hundred years? lol. also many of those places were better under colonial rule, and got much worse after it ended, and most things that still exist there now are from colonial times with little new development. i know because im from one of those places...
7:38 - 7:43 - good point. Its a feedback loop that can be virtuous or vicious & both sides of the argument are equally important
Video starts at 4:18
Thank you. Saw it late tho
This video provides a very good summary of the key takeaway of Why Nations Fail. The book is definitely highly recommended, it is richly detailed and contains a lot of case studies to substantiate the hypothesis of the authors
The amount of footage of Sweden you show when you're talking about successful nations make me smile.
I just read Acemoglu's narrow corridor that was very good.
Just a warning if you ever sit and read Why Nations Fail: if you're not already, it will radicalize you in SOME way. It is that kind of book that even though most of it comes across as Hindsight-Common Sense-Duh Becky...it will remind you of how stifling unfair the social structure is set up for many, for a LONG time in human history and the hidden millstones on the necks of many nations.
If nothing in that book moves you, makes you think differently or raise your guard to daily decisions to serve your family, society, neighbors differently - I don't know what to tell you.
Absolutely loved the breakdown and explanation. Agree with almost all of it.
I would just add one small angle, as someone who has lived in India and the US, there is a big difference in terms of level of trust within these societies. So in countries like India where institutions for centuries were used to have control over people and oppress them, people were trained to not trust institutions. This meant that even after the countries got independence, people did not trust institutions and that somewhere influenced those controlling the institutions to start acting in a way that was befitting of the public perception of institutions and it became a self fulfilling loop leading to the whole society becoming a low trust society.
A well deserved Nobel Prize for the trio! It is not apparent especially to people in the developing world how important institutions are to the development, prosperity and well-being of countries.
I loved the last comparison. It really gives a perspective on how same place have different economies based on the government.
This is great. I’d love to understand one level deeper: how did good institutions come to exist in the first place? I think it comes down to culture: culture where people respect and trust each other in their community. Many of the colonies used to have an egalitarian way of life which led to good governance and systems.
yes until particular groups of people learned to deceive and sow seeds of doubt to destabilize said stable egalitarian civilizations
sure it's a skill issue but the willingness to forego morals and to keep going as if the drop is towards a bottomless pit is just so lame and pathetic. just so they can have buffet breakfast and vacations that cost 10x more but isn't that much better? it's hard to say that it isn't this disgusting mentality of them having even just enough could feel like ecstasy so long as others have barely any
it's almost a miracle how accessible the internet is nowadays. i'd like to think we'd all be living in total abundance and extravagance if everyone would be in on it, and so long as everyone agrees we should all have our turn in the mines and in the fields
Dude this is so sad, basically those who suffered the most in the past are the ones who will continue to suffer in the present and the future. As someone who lives in a developing economy, just sad.
These videos need to be taught and debated in schools from the age of 14 on.
I read this book in 2014 after it was published in german. Great to read, easy to follow and some mindblowing stuff they come up with. Well deserved
It would be great if you could create a series on notable or sequential novel prize winners in Economics. It's super informative and interesting stuff that ordinary people like myself would otherwise know nothing about
Props for an actual decent pronunciation of Sveriges riksbank, that can't have been easy.
I nearly cried when they gave the award to them for their theory, its something I've told people for 20 years now and was told I didn't know what I was talking about by a number of my economics professors over the years. I felt validated, then last week I saw my country went the opposite way.
I assume your country is the US since we just had an election. I assume by “went the other way” means you thought VP Harris was trustworthy and President-elect Trump is not. I voted for Trump because I believed President Biden promised to “bring us together”, but followed a hard agenda on only one side. My guess is that most voters also concluded that they trusted Trump more.
@rumbaughsteven5577 what agenda did Biden follow that was hardline? The CHIPS Act, Infrastructure Act, Bipartisan Border Bill?
Why do you support guaranteed recessions under Republicans exactly?
@rumbaughsteven5577 what "hard agenda to one side" in particular?
And why would I believe a man who has 34 felony convictions for fraud this year, owes $450 million for fraud from a lawsuit earlier this year against his business, owes another $90+ million to E Jean Carroll for more defamation/lies, has 34 felony fraud convictions against his business in 2022, and has settled fraud lawsuits against him for decades?
Why in particular do you support reliable republican recessions, Trump had a worse 2019 before covid than Biden did 2024, but I guess $860 billion in bailouts for Wall Street in September just convinced you Trump was that good in 2019 huh?
@rumbaughsteven5577 why can't I reply to you? You MAGA types seem to just block and flag anything you don't like and it's pretty sad you're creating such a safe space from facts.
Trumps economy was falling apart in 2019 without bailouts and QE lite giving his bad economy enough life to limp into covid.
@@Pickn4Gold seems like he or the channel are hiding your comments huh? They don't like when you point out you can prove their worldview doesn't work in reality.
This book disproves your video about hot and cold climates' effects on wealth creation.
Does it? Societies in cold climates still require more organization, coordination and structure.
Not necessarily. And it doesn't disprove Jared Diamond's theory about the importance of geography either. The claim of the book is that institutions matter a lot, but it leaves open the question of how and why institutions become what they are.
Other factors can influence this. For example cold climate forces society and technology to advance faster, so institutions evolve faster too, which leads to prosperity. Scandinavian countries have the strongest and most stable institutions, because they had the more time to refine them, because they were forced to cooperate by the harsh environment.
It tries but fails in my opinion, how come Africa had no previous institutions was colonized by adavanced countries with reliable institutions but is still poor? That theory fails to explain thay
@@mariusvanc In the Americas, the south was more developed, then there is Egypt, then there are people around the Mediterranean were more developed than north Europe. Did you read why nations fail?
@@Daniel-ef7nk It was explained after 8.20. Africa had population and institutions in place before colonialism, and were replaced by the colonial powers. Then, those colonial administration was gone and left nothing but chaos behind. This was like 60 years ago or less, and since then the continent overall has been struggling with several wars and plagued by brain drain.
I read this book during covid times, it was such an eye opening thing. And was pleasantly surprised when i heard acmeglu, robinson won nobel for it.
Biggest problem with the book is they basically take you right to the foot of the conclusion that a more equal wealth distribution is pretty essential for long run growth but can't quite bring themselves to say it. If you read Joe Studwell on asian economies, he comes to similar conclusions on wealth distribution.
As a Nigerian, it’s painful seeing my country being used as the “bad” example all throughout this video 😢 a lot of the videos on the bad side were from Lagos or Abuja.
I understand though, we still have a long way to go, I just hope things improve quickly
I live in Illinois, in the United States. I know what you mean. Our whole state gets a bad reputation based on Chicago, and east St Louis.
Don't feel bad, it's our fault. It's as if you'd feel ashamed about your apartment being a mess after thieves broke in and stole and destroyed all cabinets and appliances. It's not your fault. I know it's fantasy hoping that us Western countries would work with you to repair the damage, but I at least hope you'll find a way to make it work
I think that while Nigeria is improving due to some positive institutional choices, it has not changed as quickly as it could. The reasons for this are many. You can see the same issue in India where its institutions are facing similar issues but on a larger scale.
You might be interested to know that Nigerian-Americans have a higher median household income than the average American household: That is not true of other Americans of African descent that have immigrated to the country in the last century. The leading theory is that Nigerian culture places a lot of emphasis on education, as do Americans of Korean and Indian decent. Those two groups are also are wealthier than the average American.
@@jeffb1880 that is deceptive statistics. And your "leading theory" is wrong, since the real reason is well known in Nigeria.
A Nigerian immigrant to the US is more likely to have got that immigration status due to being educated. An uneducated Nigerian is less likely to immigrate to the US (for many reasons). But if you then take the average US born citizen, they are from a range of educational backgrounds by default.
This is actually a well known problem in Nigeria, as many university graduates in Nigeria end up leaving Nigeria for better jobs in wealthier countries... leaving the less educated behind.
Basically what you are doing is comparing a bunch of university graduates (Nigerian immigrants) to a group of random people on the street (US citizens).
The same issue applies to immigrants from other countries like India. For the South Korean issue you are seeing more of an immigration from educated women, who are oppressed culturally and seeking less oppression.
It’s not rocket science.
Where you have justice you have prosperity. Where injustice goes, poverty follows.
That is a very feel-good talking point. "Justice" is highly subjective. A pro-capitalist and a pro-communist will have entirely different concepts of justice with two entirely different economic outcomes based on their interpretation of what justice looks like.
Those two guys are absolute clowns
@@roymarshall_
Justice is not that tough.
@@roymarshall_ Calling it predictability and hope would be more accurate. Or you know, Maslow's hierarchy of needs plotted against time. We look forward to see if we can get enough food; and when we trust we will have that, then we look forward to see if we can get enough safety, and so forth up the hierarchy of needs. the higher we think our future selves will get on the hierarchy, the better we function in the here and now.
@@loneIyboy15 if you read the book that the two Nobel Prize winners wrote, they have a whole dedicated chapters into disproving the racial development theory. Read it, Why Nations Fail.
I read that book, and if I recall, the main point was inclusive economy leads to inclusive governance, which further leads to better governance, and then it invests heavily in the people.
This was brilliant, thank you
Brilliant Video!!
And this also shows why over a half century of pumping trillions of dollars into failing 3rd world economies without addressing the roots of the problem (corruption) has been a waste.
Wait, it wasn't for the lulz???
well more like "pumping trillions into resource-rich regions to destabilize them so american companies can swoop in and make money doesnt do anything to promote long-term stability?" cause america refuses to allow any remotely leftist economy exist undisturbed, and if they cant get their way through propaganda the cia just does/backs a coup, i think theyve admitted to over 40 in south america
South Africa's is a great example of this - on the Corruption Index 25 years ago its peer economies were Japan & Austria. Today, its almost as bad as Brazil & Argentina. and the decline in infrastructure & brain drain of skilled workers mirrors this.
More has been siphoned out than has been pumped in.
@@lm_b5080but in South Africa the institutions stayed mostly the same structurally. What changed were the people running them.
Trust in institutions has been falling in the US every year. The corruption keeps getting worse. I wonder how long before it all crumbles.
1:47 Economic Explains video editing team love Chicago. They use downtown Chicago a lot in their stock footage and often from different angles of different parts of downtown. It is one of the most beautiful downtowns you will see. Certainly outside of older historic centers
It could be in reference to the Chicago school of economics or the University of Chicago.
@@edwardcoit9748interesting. Univ of Chicago isn’t downtown but it could be why they are more aware of Chicago. And then add in the beauty of downtown, it’s probably why almost every video here when referencing global rich cities / countries include shots of downtown Chicago and almost never (for example) Los Angeles
en.wikipedia.org/wiki/Chicago_school_of_economics
Chicago definitely has the most beautiful downtown area in the US, at least in terms of the urban landscape (other cities have more natural beauty).
Have you been to Europe? Chicago wouldn't be in the top 300 most beautiful downtowns.
I kept agreeing from 5:12, I kept agreeing until I can’t agree anymore. The “stability and reliability of the institutions”!
Amazing. Thanks for
sharing this.
0:41 - Thats Loblaws in Collingwood Ontario Canada. First time Ive ever recognized stock footage. I shop there sometimes.
I’m from Chicago and they use Chicago in almost any video that discusses rich / developed countries. It’s a beautiful downtown and someone else mentioned this group might be familiar with Chicago through Univ of Chicago
I knew it was Loblaws as soon as I saw the aisle sign. Here in NS, folks call it Superstore 😉
What are the odds lol
Met Acemoglu before, seemed like a nice guy.
@@thettoprak So what? There is no need to be racist.
@@thettoprak He is from Turkey, but of Armenian descent. And, he is a known critic of Erdogans policies.
@@gleitsonSalles most of turkey against erdogan's policies
Thank you for recommending Sarah Jennine Davis on one of your videos. I reached out to her and :nvesting with her has been amazing.
Wow, congratulations on your impressive investment success! Your discipline and focus on delayed gratification is truly inspiring. I'm curious, what are some of the key factors that you consider when making investment decisions? Do you have any tips for those of us who are just starting to dip our toes into the world of investing? Thanks for sharing your story!
Do you mind sharing info on the adviser who
assisted you? I'm 39 now and would love to
grow my portfolio and plan my retirement
@@วิทยาคงกะพันธ์ Sarah Jennine Davis is highly recommended
You most likely should get her basic info when you search her on your browser.
@@mayor-o1wHow do I access her ? I really need this
+156
I have acemoglu book. Very good but not really news. Piketty and paul kennedy and many others have covered this for last 100 years but acemoglu did good job here. Thanks.
This makes sooo much sense!!!!!
0:28 How much dynamite was used in bombs? I figured it was mainly used for demolition and mining due to its sensitivity.
It basically revolutionized the technology of explosives from a ball of gunpowder to what they are today
@brendonmann3179 That's more nitrocellulose but they did combine nitroglycerine with nitrocellulose later on.
I like how you say that seems like a lot of research to prove a causal link, because to me it felt like it should take even more in something as messy as human societies
The exact wording used in their book was "inclusive political institutions" vs "extractive political institutions". They cited China as an example of extractive political system, and the Soviet union too. 🙄
Why do you believe that's wrong?
Very well explained. Democracy matters!
This was my second year political science textbook way back in 2020. Living in a developing country, we see the theory play out firsthand
Video starts at 4:20 …..
This....
Nah, I enjoyed the historical context bit. It's interesting to know more about the Nobel prize, the winners, and why they earned it in the first place.
If you double tap to move ahead through the ad, youtube shows a button to skip through the entire ad. Good feature
That "if" you mention in your opening is a very big IF
Lets be honest, most politicians will ignore advice from economists if it disagrees with what they want to do politically
Wow! I know this video is too concise, and one would need a lot more research into this before making any conclusive comments, but in all my years growing up in India, this is a really good explanation for the major wealth gap we are seeing in India today!
I was reading the book and surprised about the deepness of the research, hoping they would win the nobel, happy they did, amazing!
9:08 you make assumptions that places like India didn't have institutions before. as the British specifically were light rulers they didn't come to disrupt the way of live of the locals they followed the path of low cost imperialism ruled through local princes with very minimal presence of their own you have to realize that places like India was many little kingdoms and empires who themselves were exploitative. also cause the British followed low cost of imperialism module as soon as the cost rose cause of rebellion or separatism the time was to leave.
"Alright, I’ve been hoarding $155k in my emergency fund like a dragon guarding gold, and I’m finally ready to dive into investing. Watching this video got me thinking-if these Nobel brains can decode economics, maybe I can at least figure out ETFs without nuking my savings. Where’s the ‘Investing for Dummies: Don’t Lose Your Shirt’ section? 😂 Any headstart ideas?"
Haha, love the vibe, but seriously, with $155k, you might want to pump the brakes on the DIY approach. A financial advisor saved me from turning my money into Monopoly cash. They’re worth the fee if you get a good one. Think of it as investing in your investing.
Okay, both of you are speaking my language. I’ve got a chunk saved too, and I know I need an advisor, but how do you even find one? It’s like online dating-how do you know who’s not gonna ghost your portfolio?
"There are a handful of CFAs. I’ve experimented with a few over the past years, but I’ve stuck with Linda Aretha Reeves for some years now, and her performance has been consistently impressive. She’s known in her field, look her up."
Looked her up, and wow, Linda Aretha Reeves seems like exactly what I needed! Time to finally get my financial house in order.
"Watched Linda Aretha on a Bloomberg Finance Summit a few years back, and her presentation was top-notch! Totally see why people recommend her."
A country like South Africa is an interesting case study granted all the above applies (good and bad). It’s essentially two parallel economies.
Very true. I studied Economics in South Africa. Its both fascinating & depressing. The SA economy has some fundamental structural issues that need to be solved in order to create a bridge between the two economies. Unfortunately, this processes is hindered by extreme government corruption & anti-democratic conduct. I pray SA finds better leadership before the economy effectively collapses.
Alternatively, this theory doesn’t seem to fit Ireland at all.
@@jamessloven2204 Please elaborate. If you have the time. I want to learn. Thank you in advance.
Ireland extremely benefitted from the spillover effect of the European institutions. So did Spain and Italy.
South Africa, unlike other middle-income countries, was widely classified as a developed country by international agencies such as the UN back in the 1960s and 1970s. At that time, even as millions of non-whites were languishing in poverty, it had world-class infrastructure and financial stability not seen in, say, the many Latin American countries that are also middle-income.
Well done this video!
Perhaps the best RUclips-channel there is
Can you provide the list of economist which you shown in the video?
Thank you for this consideration
2:38 they offer solutions, instead of certain recent winner(s), in particular one who was chairman of a certain federal reserve before, during and after the worst global economic crisis in a century and arguably is the author, or at least very enthusiastic participant, of many of our current economics problems…
I'm disappointed that you didn't put Acemoglu on the leaderboard
Read this book 10 yrs ago. Since than I have been looking and assessing situations using the approach of those authors. One of the best and most inspiring books ever read.
Interesting book✨🌟
The poor countries needs to make a lot of repairs on legal, technical, religious, social, economic and infrastructural grounds in order to cope up with the rich and powerful countries.More than horrible financial position the poor mindset of people and politicians that are keeping 3rd world countries poor.
It's societal trust. Trusting for example, that your deliveries won't be stolen from your porch, or certain demographics won't be raiding your trick or treat buckets with backpacks.
15 minute high level break down of decades of studys and all the comments are basically "duh, obviously"
I bet people around Isaac Newton also went "duh, of course an apple falls down"
Why Nations Fail is such a good book! It has so many interesting examples all throughout history…
Very intresting. A typical game theory situation, where the Nash Equilibrium does not equal the Socialy Optimum Solution.
But as no side can improve their situation by changing the strategy, noone changes the strategy and all stays the same, even though it is worse for everyone.
I forget when I had this notion but I did remember getting the notion where it was the political system that made the good economy, not the other way around. I'm glad it's scientifically found out.
Economics feels like an abstract study.
American Institutions??? they are not corrupt, really?? and it's the richest country in the world.
What i think is you can't have perfect corruptionless institutions because of the human factor. Also you can see how corrupted a institution because they are not that much corrupted.
Am currently reading that book. What a coincidence 🎉
this video was amazing. thank you
Exemplum gratia: Botswana. Compared to its neighbors who have more or everything going for them.
I would rather go for Rwanda honestly, particularly in comparison to Burundi, as those countries are basically identical except for the policy of their governments.
@@russmitchellmovement Prima Luce: that chron-chron.
I read the book and it mostly deals with 'natural" historical experiments. For instance, the diverging economies of north and south korea; north and south America; the rapid industriliaztion and de-industrialization of Russia among other historical analysis. Does the actual research delve into more hard economics? To me, this years winner is a lot more polemical in its approach than previous winners.
You can’t really run RCT on macroeconomics.
Ibn Khaldun called it "assabiya" (social cohesion) back in 1377.
Thank you. Explains a lot 🎉
Awasome explanation!!
Well, while Why Nations Fail rightly emphasizes the role of institutions in shaping national prosperity, it presents a heavily pro-U.S. perspective that overlooks key factors. The book suggests that wealth is a natural result of democratic institutions, but it glosses over how the U.S. has frequently undermined democracies that didn't align with its interests, such as in Chile and Iran. It also ignores how the U.S. imposes crippling sanctions on countries like Cuba and Venezuela, which keeps them economically stifled, only to then blame their poverty on 'corrupt leadership.' By downplaying this imperialist history and global power imbalances, the book risks misleading readers about why some nations truly succeed while others remain poor.
My guy, do you really assume Iran, Cuba and Venezuela even were democracies?
@@maksim_rin US president Carter in its time said Venezuela was one of the most solid democracies in the world, and before the actual bolivarian government was indeed highly regarded internationally as that, yet the population's poverty were over 50% when Chavez took mandate.
@@Phtom-b ok, I didn't know this about Venezuela. I still think institutions make a huge difference to economic growth, but: it needs time for people to got used to (30 years is not enough, we've seen that so many times) and a little period of peace (american foreign policy before the fell of USSR was nuts, due to dreadfull fear of commies).
Of course institutions are only one of the needed keys, but going without them won't do you any favour.
finally, took scrolling this far to see someone pointing this out. If trust was the deciding factor, then what causes the governments of 'poor' nations to act in untrustworthy ways? It's of course the forces of imperialism and class conflict driven by capitalism. It is to maintain the global capitalist hegemony that the US puts down populist uprisings and movements in third world countries and plants in handpicked governments that are convenient to them as well as place crippling sanctions. When a nation is pushed to the corner this way, it is inevitable that it will develop untrustworthy and authoritarian characteristics.
The US system is interesting, for me it was not like before. Each year, the US institutions are losing power which is going to richer and richer people. We can see this on how the criminality in the US has risen drastically unless of course you have enough money to live in one of the wealthiest neighbourhoods around Los Angeles or San Francisco, mega rich cities (with the most richest people in the World) but with neighbours that you easily can find in the slums of Mumbai.