Daron Acemoglu wins the quasi-Nobel for Economics
He's not my favorite Theory of Everything economist...
From my 2012 Taki’s column about Acemoglu and his fellow Nobelists:
Steve Sailer
May 30, 2012
MIT’s Daron Acemoglu is a rock star among economists, one of the ten most cited in his profession. This is largely because of the paper the Istanbul-born Armenian cowrote in 2001: The Colonial Origins of Comparative Development. Other economists have found that it provides a suave way to finally answer the embarrassing question of why, in the 21st century, some countries are rich and some are poor.
Acemoglu has a big new book out with James A. Robinson, Why Nations Fail: The Origins of Power, Prosperity, and Poverty, that makes his case at great length.
To understand Acemoglu’s professional popularity, you have to grasp how awkward the major features of global economic reality are to careerist economists. If you look naively around the world, you might get the impression that, say, Chinese territories such as Taiwan, Singapore, and Hong Kong have been economically dynamic because they have a lot of Chinese people in them. Moreover, the Overseas Chinese control much of business in Southeastern Asia, so we might assume that the Chinese tend to have a lot on the ball wherever they go.
The epochal conclusion that Deng Xiaoping, urged on by Singapore’s Lee Kuan Yew, drew from this in the late 1970s was that if all the Chinese folks in the world were getting rich except the Maoist Chinese, the problem must lie more in the “Maoist” than in the “Chinese” part. And, indeed, once liberated from Mao’s dogmas and whims, the Mainland Chinese responded with one of history’s greatest economic surges.
To an economist looking for invitations to conferences, however, the danger of adopting the Lee-Deng perspective is its flip side: Some other peoples, such as black Africans, New World Indians, and Pacific Islanders, have tended to lag notably behind Northeast Asians and Europeans, whether at home or abroad, and under all sorts of ideologies and institutions.
Acemoglu’s contribution was to come up with a regression analysis that, he claimed, showed that Third World poverty was the fault of those all-purpose bad guys, European imperialists. In colonies where early Europeans settlers faced low risks of dying from tropical diseases (such as Massachusetts), they set up good “inclusive” institutions. But in colonies where white men died like flies (such as Nigeria), they set up bad “extractive” institutions.
Institutions are (practically) everything, you see. If, say, the Central African Republic is poor, it’s not because it’s a republic in Central Africa (or because poverty is the default condition of humanity), but because it has extractive institutions. And that’s because Europeans didn’t set up inclusive institutions for the Central Africanese.
If Australia or New Zealand or Canada are richer than the Central African Republic, it’s not because Australia or New Zealand or Canada are full of Europeans, it’s because the Europeans hogged the inclusive institutions for the places they colonized. Or something. Acemoglu wrote:
These results suggest that Africa is poorer than the rest of the world not because of pure geographic or cultural factors, but because of worse institutions.
According to Acemoglu, that’s pretty much all you need to know. From the abstract of his 2001 paper:
Our estimates imply that differences in institutions explain approximately three-quarters of the income per capita differences across former colonies. Once we control for the effect of institutions, we find that countries in Africa or those farther away from the equator do not have lower incomes.
Now, you might think that Acemoglu’s model for predicting national wealth in ex-colonies, such as the United States or New Guinea, is:
1. More white people means more wealth.
How dare you think such a thing! Instead, it’s a two-step process:
1. More white people hundreds of years ago means better institutions today.
2. Better institutions then means more wealth today.
Two steps are better than one, according to Occam’s Butter Knife.
In Why Nations Fail, Acemoglu and Robinson have extended their Inclusive Good/Extractive Bad dichotomy. If anything good ever happened anywhere in world history, it was due to “inclusive institutions” and vice-versa. Sir Karl Popper, the philosopher of science, would have torn his hair out trying to read Why Nations Fail. He would have found Acemogluism as unfalsifiable (and thus as unscientific) as Freudianism and Marxism.
Now, I’m a big fan of inclusive institutions and don’t like exploitative ones. But Acemoglu’s dogma strikes me as a tad superficial. For instance, he focuses on the border cities of Nogales, Arizona, and Sonora. Why is the American side richer? It must be because America has better institutions.
OK…but what makes for better institutions north of the border? After all, Mexico has had plenty of opportunity to study American institutions. Could the enduring differences have something to do with America having a lot of Americans?
What’s the real story behind good and bad institutions? Two brave economists from Africa, Isaac Kalonda-Kanyama of the University of Johannesburg and Oasis Kodila-Tedika of the University of Kinshasa, have tackled this question head-on in a new study entitled Quality of Institutions: Does Intelligence Matter? Their conclusion:
We analyze the effect of the average level of intelligence on different measures of the quality of institutions, using a 2006 cross-sectional sample of 113 countries. The results show that average IQ positively affects all the measures of institutional quality considered in our study, namely government efficiency, regulatory quality, rule of law, political stability and voice and accountability. The positive effect of intelligence is robust to controlling for other determinants of institutional quality.
Don’t expect Kalonda-Kanyama and Kodila-Tedika to get big career boosts from their finding.
Extractive, eh? Like slavery? In the Middle Ages Europe was an island of non-slavery, surrounded by slavers. Without Whites the entire world would still practice slavery, like it always did for all of history until Whites forced the non-Whites to stop. Whites are the only people who have come up with moral arguments against slavery.
Even the Chinese Buddhist monks had slaves working their rice fields.
https://www.amren.com/videos/2021/07/slavery-is-our-original-sin/
The Arabs took slaves in Iberia, and slaves in Africa. They raided Europe for centuries to take slaves. The women were raped, the men were killed through the practice of galley slaves, who were chained to the oars until they died. The Arabs took special pleasure in enslaving Christians, with adults and children lining up to throw rocks at the captives. Ottomans enslaves Whites in the Balkans for centuries. Tartars in Crimea took Russian, Ukrainian, Polish and Baltic women as slaves and sold them to the Ottomans and Arabs. The Arabs raided throughout the Caucasus. They also bought Black slaves from the Somalis and other African slavers. The slaves were shipped to Arab lands and to India, and even China.
All of this went on until Whites forced the Arabs and Ottomans to stop.
Africans, from west to east, were also forced to stop and free their African slaves. Likewise the Indian tribes in North and South America and in between were forced to stop using slaves - they enslaved Whites, bought Black slaves, and enslaved other Indians. The Comanches and Apaches raided each other and sold the captives as slaves to other tribes, until Whites forced them to stop. The "trail of tears" included thousands of Black slaves owned by the Indians.
Haven't we been taught that to wage aggressive war is justified if it frees slaves in the end? Thanks to Whites there is no slavery left. Or almost none: Some Africans and Indians still keep slaves, where they can get away with it without Whites interfering.
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Speaking of Central Africa, how does Daron Acemoglu explain the fact that in that state and its neighbors, people tend to set up shop in a neighboring country? Because if they do it at home, all of the large extended family, and all their friends, come to loiter in the store, talk crap for hours, and take whatever they want. Because of a complete disrespect for a person's private property. You should "share with your family." So they go to another country. It seems the "extractive institutions" are simply African families.
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Liberia was set up with a constitution nearly identical to the one in the U.S., and the country was populated by Christian Blacks from the U.S., with plenty of help in seeing how governance and private business should be run. They proceeded to oppress the native Blacks, and the country had one of the bloodiest civil wars in Africa, where they cut off the hands of villagers en masse to terrorize a region.
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Eritrea was colonized by Italy - and the Eritreans still like the Italians today! They got everything from Italy. The Italians hired them as soldiers when they invaded Ethiopia, with French and British blessing, and Mussolini abolished the Black Ethiopia's slavery. Everyone agreed that the Eritreans made good soldiers. (Meanwhile the Germans had been arming the Ethiopians, to slow down Italy's advance, because Mussolini opposed Austria's joining with Germany, which almost all Austrians had favored. Austria was Italy's neighbor, and he contacted Britain and France for "a solution to the German Question." Ethiopia kept him busy elsewhere.)
What about Eritrea today? It is run by Blacks, thanks to Britain taking it from Italy and then leaving it. (The Eritreans generally say that they liked the Italians but not the British.) Eritrea is one of the world's most hideous states. The "police" walk into a store and demand money whenever they want. They act exactly like gangsters. It is a country that truly deserves being called a gangster state.
How is Eritrea's condition the fault of EUROPEANS? Looking at history, it is Eritrea's lack of the European benefactors that is the problem. Eritrean organizations in Europe write signs with "Some day Eritrea will be free" in Italian.
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Meanwhile in Ethiopia, which was never colonized, the government has recently waged a vicious war against the Tigray, 2020-2022. As usual in Africa, government is the way to take the wealth for yourself, and the rulers then dish it out as they please. They withheld money for the Tigray region, which then rebelled. Hundreds of thousands were killed and hundreds of thousands of women were raped. The government soldiers even forced fathers to rape their daughters and forced boys to rape their mothers. Tigray who fled to Saudi Arabia through Yemen were machine gunned to death in the hundreds by the Saudi border.
Where in this did Whites do the exploitation and the killing?
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More about Africa without White rule:
https://www.aljazeera.com/news/2023/8/30/mapping-africas-coups-detat-across-the-years
Africa has had 214 military coups since 1950, with at least 106 of them being successful. This in at least 45 of the 54 African nations.
As Ann Coulter writes, by the end of the 1980s not a single African head of state in three decades had allowed himself to be voted out of office. Of some 150 heads of state, only six had voluntarily relinquished power. In Congo alone, in 1964, over a million people, virtually all civilians, died in sectarian strife.
Mobutu Sese Seko took power in Congo and became one of the richest men in the world. He had 17 wives, lots of mistresses, 55 children - and he was a cannibal.
Uganda's Idi Amin killed thousands of people, including the Chief Justice, the country's university's Vice Chancellor, and an Anglican Archbishop. Westerners would like Anglican archbishops to be killed, right? Surely it's Westerners' fault? One of Amin's former wives was found dismembered in the trunk of a car. Amin was believed to perform blood rituals over his victims, and he boasted numerous times about eating human flesh.
The researcher Robert Klintberg reported on oil-rich Equatorial Guinea as being "a land of fear and devastation no better than a concentration camp - the 'cottage industry Dachau of Africa.'" Under Macias Nguema, more than half of the population was either killed or fled into exile.
In Nigeria, between 1988 and 1993, an official report estimated $12.2 billion was “diverted” from the fiscus. In 1990, the United Nations concluded that Nigeria had one of the worst records for human deprivation of any country in the developing world.
The real problem with the economics "Nobel" prize is that there are not nearly enough economists making major new discoveries of lasting value to justify the award on an annual basis. Indeed, when you look at lists of publications in the CV's of leading academic economists you have to feel sorry for them. So much effort expended writing technically abstruse papers of such little significance.
Unlike physics, say, it is useful to think of economics as more like checkers than chess. The subject is so easy on the face of it that the number of true experts is vanishingly small.
There are exceptions however: https://shorturl.at/4aacQ