It's very accessible, no economics background required. Along with Krugman and Kahneman, one of the few economics scholars that take the time to write a book for layman.
The rule of law is a key part of a nations success as argued by AJR. A very good exposition for the layman on the rule of law provided by Tom Bingham in the eponymous 'The Rule of Law):https://www.goodreads.com/book/show/7734691-the-rule-of-law
While the above is informed by the UK's constitutional arrangement, the 8 principles are near universal when considering nations that have or aim for The Rule of Law.
The principles are:
(1) The law must be accessible and so far as possible intelligible, clear and predictable.
(2) Questions of legal right and liability should ordinarily be resolved by application of the law and not the exercise of discretion.
(3) The laws of the land should apply equally to all, save to the extent that objective differences justify differentiation.
(4) Ministers and public officers at all levels must exercise the powers conferred on them in good faith, fairly, for the purpose for which the powers were conferred, without exceeding the limits of such powers and not unreasonably.
(5) The law must afford adequate protection of fundamental human rights.
(6) Means must be provided for resolving, without prohibitive cost or inordinate delay, bona fide civil disputes which the parties themselves are unable to resolve.
(7) The adjudicative procedures provided by the state should be fair.
(8) The rule of law requires compliance by the state with its obligations in international law as in national law.
After reading "Why Nations Fail", which I really enjoyed, I wondered whether we could develop an LLM with a wide enough context window where I could input the lessons from such books along with data and metrics about a specific country. Then, the AI could prescribe tangible solutions and policy recommendations tailored to that nation's unique situation. I'm curious what an AI system like that might look like. I also wonder if it's possible to experiment with a smaller-scale version of this concept using today's technology.
I thought the Chicago School had already proved blindly applying "policy recommendations" from on high was a receipt for disaster and misery, but sure, let's do the same with AI, this time it will surely work.
What's the point? We generally know what economic policies work. But they aren't put into effect due to ideology or special interests. This isn't a problem with a technical solution.
Not sure I'd spend time on a Krugman book. He predicted in 1998 that the internet would cease having an economic impact by 2005 and that it would be no greater than fax machines. He's like the Neil deGrasse Tyson of economics.
Krugman is controversial at times, but he is a serious economist. The quote is also taken out of two important contexts. 1. It was not a serious academic prediction but rather part of a fluff piece by the Times about future precitions. 2. The quote also exists in the context of a debate that was raging during the advent of the internet whether or not the internet would hyper charge productivity and economic growth. In hindsight, especially after the late 1990s, the truth is far closer to the fax machine rather than a new era of prosperity. The lack of visible productivity growth from a technology that has so visibly transformed our society is one of the bigger questions in economics today.
The lack of visible productivity growth. In particular, it's not as visible as you expect in the GDP statistics.
Take TV Guide, for instance. Now, if anybody watches broadcast television, they can use the internet to find out what's on when. Is that better or worse for users than having a paper TV guide? In many ways it's better. But it shows up in the GDP as a negative, because nobody's buying TV Guide any more.
Or take Google. I can search for any information I want, for free. That creates immense value - immense in every sense except the GDP, where it doesn't show up at all, because it's free.
Wikipedia. Linux. gcc. The Wayback Machine. Even HN. All this is available to us, whenever we want it, for whatever purpose we want, for free. There's great value to us. Just nothing that shows up on the GDP statistics, because it's all free. (Yeah, I know, RedHat sells Linux, and Wikipedia asks for donations. They aren't Microsoft selling Windows and The World Book, though. You can still use them for free, and not get sued or jailed.)
These free things (Wikipedia, Linux, etc.) are sustained by a high GDP that translates to high incomes and, in turn, people willing to donate time and money for them to remain free.
Let's try living in a country with a measly GDP per capita of $1,000 (Rwanda for example) and see how many free things we can get..
People give more consistently in more pro-social societies. But those societies are poorer, with lower percentage of computer ownership and programming skills. So they give things like care and food.
Trying to spin the west as the place where altruism is most prevalent seems incorrect. More data needed.
I think we're in agreement here. I never said the West inherently has more altruism. However, the West's high GDP is what enables Westerners to give more to free computing/internet-related projects offering excellent value.
Without a high GDP, there won't be much to give in the first place.
Sure, there's a lot of value. There's also a lot of slops and negative value. These days I don't even use wikipedia that much even though I googled things constantly.
GDP is a very gross measure of things to be sure, but also difficult to fake.
Kind of like saying Lysenko was controversial at times.
He's not "controversial," he's just a bloviator. His credentials as a serious economist expired long ago when he signed up with the leftist team and agreed to never challenge them again, on anything.
When you have to spend many words on explaining the "context" in which someone's quotes should be viewed, you are losing.
Krugman triggered some self reflection on my part when I read a column by him that was really stupid. Not just politically biased, but got economics wrong.
This is a Nobel winner in economics, I warned myself. Are you really putting your judgement ahead of theirs in their own field of study? I wanted to make sure I wasn't just doing the HN thing of arrogantly assuming I'm an expert in a field because I read a book once.
The eventual conclusion I came to was that I should always make sure to hold some allowance that the export may be correct and myself wrong, except when it's really obviously dumb, and that Krugman's writing fell into that camp.
> His credentials as a serious economist expired long ago when he signed up with the leftist team
You might be (unpleasantly) surprised by the emphasis of the current year's nobel economics prize winners on the importance of societal institutions and the need for inclusivity to advance the wealth of nations :-)
> Kind of like saying Lysenko was controversial at times.
This is BS. Krugman has very specific theories that made predictions validated by practice.
Remember 2008? He made a prediction that an increase in the monetary base wouldn't cause inflation. This prediction was spectacularly confirmed. He also made a case for fiscal intervention: it wouldn't cause inflation, and it would speed up the recovery. And his prediction again was confirmed.
More recently: he predicted that the inflation spike was transient, due to supply chain issues rather than fundamental changes. And he's again been vindicated.
Saying that Krugman was vindicated is quite a stretch. As the economist Noah Smith wrote:
>...In 2021, Krugman tweeted: "I like it and plan to steal it. This report does look like what you'd expect if recent inflation was about transitory disruptions, not stagflation redux".
As Smith pointed out:
>...But in late 2021, inflation spread to become very broad-based. Services inflation was always significant, and took over from goods inflation as the main contributor in 2022.
>The notion that this was just some transient supply-chain disruptions that was only affecting specific products was absolutely central to Team Transitory’s claims in the summer of 2021. And that was incorrect.
>...Team Transitory also called the end of the inflation at least a year and a half too soon.
On October 13, 2021 Krugman tweeted "Three month core inflation. Why isn't everyone calling this a victory for team transitory"
>...So they didn’t entirely whiff here. They just greatly overstated their case. And their complacency in 2021 probably fed into the Fed’s decision to delay the start of rate hikes until 2022, which in retrospect looks like a serious mistake.
What did get vindicated was mainstream economics as taught in our textbooks. As Smith wrote:
>...Mainstream macro’s first victory was in predicting that the inflation would happen in the first place. In February 2021, Olivier Blanchard used a very simple “output gap” model to predict that Biden’s Covid relief bill would raise demand by enough to show up in the inflation numbers. His prediction came true. He didn’t get everything right — he thought wages would rise more than consumer prices, and he neglected the lagged effects of Trump’s Covid relief packages and Fed lending programs. But his standard simple mainstream model got the basic prediction right when most people made the opposite prediction, and this deserves recognition.
>More importantly, mainstream macro appears to have gotten policy right.
I read the summary from the review and I am not convinced that neoliberal US and EU have a less extractive governance structure than China has, as the authors seem to claim. It's been a decade since the book was published and China is still going strong. We will see.
China has become more and more authoritarian under Xi, its GDP growth stats may be dodgy, and recently its housing bubble has popped big-style. It could go the way of Japan. I agree with your last sentence, all the same.
I don’t want to single this out but tangible proof of a net increase in ‘authoritarian’ decision making, compared to say a decade ago, has never been posted on HN, as far as I know.
Most of the in depth analysis I’ve seen suggests that although enforcement actions have become stricter over the past decade, the actual number of new laws and regulations has gone down.
And more importantly, the number of contradictory laws and regulations (between central authorities, and between the centre and provinces) has gone way way down.
So there’s much less leeway to punish
on a whim or trap someone in a double bind, compared to a decade ago. Which suggests a net decrease, if anything.
It depends on if you’re talking about authoritarianism as it relates to the average person or the political and ruling class. There have been a lot of reports of Xi getting rid of a lot of potential adversaries when he announced himself ruler for life and the imprisonment of Jack Ma and stripping him of his wealth for making challenging statements against Xi seems pretty authoritarian.
Does it makes sense to discuss it relative to the ‘political and ruling class’?
Since they pretty much all have party cards already. And the moment they give it up means they’re kicked out from any decision making, from what I understand.
Yes internal factions within the party can arbitrarily punish each other for made up reasons all day long, every day of the year.
So in a sense it was already authoritarian without limit.
But that’s not new, nor different from any other big political party.
The kind of punishment authoritarian regimes dish out is much more severe in ways that you couldn’t do in the US (imprisonment, seizure of assets, death). In fact I’d argue it’s the only kind that matters. Authoritarian regimes rarely go after normal people unless they speak out actively against the government (which China does) and instead focus on controlling and censoring anyone in a position of power and let the implicit censoring of the entire population flow downstream from that.
The Guantanamo Bay detention camp is a United States military prison...As of August 2024, at least 780 persons from 48 countries have been detained at the camp since its creation, of whom 740 had been transferred elsewhere, 9 died in custody, and 30 remain; only 16 detainees have ever been charged by the U.S. with criminal offenses.
In the United States, civil forfeiture (also called civil asset forfeiture or civil judicial forfeiture)[1] is a process in which law enforcement officers take assets from people who are suspected of involvement with crime or illegal activity without necessarily charging the owners with wrongdoing...To get back the seized property, owners must prove it was not involved in criminal activity.
There should be a word for when someone picks the most extreme situation to prove their point.
Yes, the U.S., Europe, and all well-governed democracies aren't perfect, but they're much better than China in that regard.
A litmus test: U.S. and European citizens are free to challenge their leaders, e.g., the recent glut of anti-establishment parties garnering more votes in the EU. Some of these guys are loons, yet they're free to challenge the status quo because that's part of democracy.
Remind me where Xi Jinping and Putin's political opponents end up again? In jail or dead.
Revoking party membership doesn’t mean much necessarily if you still wield influence and power. Imagine if Barack Obama or Bill Clinton were kicked out by Joe Biden trying to consolidate power. They’d still have a voice and be influential outside of their party membership. That’s why Xi needs to imprison his rivals and root them out beyond just revoking their membership. And again I’ll point you to the example made of Jack Ma who wasn’t in the political party except maybe nominally but had wealth. I think you’ve never lived under an authoritarian regime and never talked with people who lived under it to understand what life is like.
This is getting too into the weeds, of course individual situations can be analyzed, but this doesn’t apply to ‘the political and ruling class’ as a whole.
To be more precise in wording, the net increase, or decrease, in net negative authoritarian decision making is what matters for me and probably most HN readers.
Since this increase, or decrease, may be positive and negative to varying degrees for various people and factions, it’s practically impossible to tell if it’s net negative for the class as a whole.
The difference between oligarchy that deliberately maintains balance of power and interests between, say, dozens or hundreds of prominent players, and a one-man rule where the "courtiers" are just richer than an average citizen, but equally subjugated to the Dear Leader, is enormous.
Both Russia and China developed since 2000 from one to the other, and I wonder what the end game will be. In Russian case, the development led to re-establishment of the imperial idea and an attempt to conquer formerly held lands by force; that is something that the oligarchs wouldn't start, but a neo-Tsar absolutely did.
Communist China used to be way less externally aggressive than Russia / USSR, but I don't like the current military gestures by Xi. Not at all.
So the degree of authoritarian decision making felt by ‘courtiers’ within the party can vary from year to year?
I guess that is possible, but if that’s the case, wouldn’t that naturally be their goal? To concentrate power and authority in one place, or person, that they can more readily manipulate.
You don't read my mind well if you think that I am against China defending itself. Most nations have an army for that purpose.
I am against China performing threatening exercises near Taiwan and against China claiming the majority of the South China Sea for themselves when hundreds of millions of other people live on its shores.
Clearly Taiwan does not want to be "defended" by China, but is rather desperately asking for defence against China. Also, the international court ruled against China's claim to control everything behind the 9-dash line. It's not true that China needs that line to defend itself - it has done so perfectly well since 1947 without it.
Does India need to control the Indian Ocean in order to defend itself?
What about Mexico, should it control the Gulf of Mexico? Ireland, the Irish Sea? Etc.
And, by the way, as of 2024, you don't really need to control the entire sea (or even half of it) to prevent the enemy from landing on your shores. Any military worth its cost has a large assortment of missiles for that purpose.
Case in point: Ukraine has unambigously denied the Russians (the Russians!) control of the Black Sea while literally having no navy to speak of. By shooting at them from land. That is how it goes.
Taiwan also doesn't rely on its control of the seas to defend itself. Even the Israeli Navy is comparatively weak. Etc.
Taiwan is literally an independent country, although they promote a policy of strategic vagueness about this in hopes that it will discourage China from launching an invasion. The arguments China makes for its ownership of Taiwan are no more defensible, and arguably less, than Portugal's justifications for maintaining ownership of Goa.
It's not a country according to the UN because China is a permanent member of the UN Security Council.
Does Taiwan have its own military? Yes.
Does it issue its own passports? Yes.
Do you have to have their visa to land there? Yes.
That's a country.
And you, sir, on this thread, sound more like a propagandist than someone trying to have an actual conversation. You're not here to converse, to listen, but only to trumpet your talking points. That's not what HN is for, and you've been here long enough to know it.
The problem is not the army, but military posturing. It can too easily transition into an actual war.
Case in point: Russia. Putin's ratings were falling, and he decided to commit "a small victorious war", based on faulty assumptions. And his assumptions were faulty because all the secret agencies were filled with yes-men who were just telling Putin what he wanted to hear.
That's the problem with the authoritarian regimes: they don't have people who can stop the Dear Leader if the Dear Leader starts seriously believing in conspiracy theories and/or just goes mad with power.
The US starts a new war for posturing every few years. They have the faulty assumption that they can control the world, even as they keep losing wars. So, not a problem unique to Russia.
> The US is not in a real danger of becoming an authoritarian state
So you're saying democrats are lying? They say that may happen by the next election, so at least 50% of the population believes this is possible.
Moreover, from the point of view of foreign policy the US is already an authoritarian state. People have no say on weather to start or stop a war, anymore than the Russians have.
They are not lying. Trump is literally saying that he's going to use the military to suppress his opponents, after all. I just happen to think that the US has far more resilience built into its political system than it seems.
E.g. Project 2025 is terrible and if it's implemented, it'll result in pure hell for the regular people. But a hypothetical Trump administration won't be able to implement even a fraction of it. It'll need many dozens of new laws passed, and probably even new Amendments.
And then there are also individual states that hold a lot of power to sabotage the laws that they don't like. For an example, look at the "sanctuary city" laws in California or Washington.
Mind you, it doesn't mean that a hypothetical Trump administration won't hurt a lot of people. I'm just saying that it won't be able to totally monopolize the political power.
> I just happen to think that the US has far more resilience
Well, if this is true then democrats are lying. They pretend the US can be transformed into a dictatorship if Trump is elected.
But the real point is that in terms of foreign policy the US is already a nondemocratic state, because both parties support non-ending wars and are financed by the MIC. The voters don't matter anymore.
People were saying when the PRC was founded 75 years ago it would collapse any day now. They were saying this during the cultural revolution. They were saying it earlier this year, as China sent a robot to the far side of the moon to collect moon rocks and bring them back to earth. And they're still saying it. I'm not holding my breath.
Just because PRC didn't collapse doesn't mean PRC perform well. On the contrary, the current strength of PRC is probably a reversion to mean, what China would be like if it wasn't so mismanaged, and yet decades late from where they could be.
States can endure a lot of mismanagement. Look at North Korea for instance. What we won't know is when we hit the breaking point.
What is happening in Russia may lead to an eventual collapse, though unlikely. There are some signs of a loss of monopoly on violence as the system is pushed to its breaking point. Hopefully that won't happen, but it's a scary possibility nonetheless.
There are HN posters with the ability to see hard data inside America's largest tech and manufacturing businesses, but don't investigate the question, "How much of what you buy every day was made in China?"
You have a short-term perspective. All kinds of governance structures can work for a single human lifetime, if they manage to get the right people to the right places. But those people will eventually retire and die. Good institutions make it more likely that their replacements will also be competent and have the right motivations and incentives.
PRC has enjoyed ~45 years of stability and economic growth under four leaders. Until now, the leaders have retired voluntarily, and there has been an ordered transition of power to the successor. But Xi Jinping is clinging to power in a way his predecessors didn't. If he stays beyond 2027, it will be interesting to see if China can survive his death.
Do you actually think China has fairer courts, more open financial markets, and better business environment than the EU or US? For the longest time Hong Kong had to fill those gaps for China in order for the country to attract capital.
Regardless, even if China does today the explanation still holds considering China only transformed a few decades before the book was written.
I think China is a worse country to live that the US or EU, but a better business environment. China's State Capitalism is simply more efficient than the neoliberalism hellscape that came up from the Soviet Union's collapse.
I see the rest of the world becoming more similar to China than the other way around, unfortunately. The US is already a pseudo-Soviet state economically, and is on the brink of becoming a dictatorship on top of that.
Extremely inequality that keeps increasing, political movements that try to change this are killed in the crib, a dying empire.
Just because the Central Comittee is called Blackrock, doesn't mean the American economy is not being more and more centrally planned. Free Enterprise is dying.
I mean economically, the political system is still "free" (less and less), it's not a dictatorship (yet).
Very cool to see public econ and history of economics represented! On top of the popular release, there's usually some advanced background info (https://www.nobelprize.org/uploads/2024/10/advanced-economic...) which is admittedly pretty massive but gives a lot of background about the Prize.
Absolutely chuffed to hear that Daren Acemoglu (one of my fav econ writers), Simon Johnson and Robinson won the Nobel memorial prize.
Acemoglu has been a brilliant and prolific econ writer, and I enjoy his exposition. Many have commented on his "Why Nations Fail", and rightly so. More recently, he also wrote "Power and Progress: Our Thousand-Year Struggle Over Technology and Prosperity".
I'm more interested in his thoughts on tech and development (than on instituions and democracy), and he doesn't disappoint.
More topically for HN folks, he wrote on "The Simple Macroeconomics of AI" [1]. Unlike many contemporary researchers / writers (incl. Ethan Mollick) who are completely ga-ga over prospects of AI-driven economy over the next decade, Acemoglu is more reserved.
His top findings:
Modest Productivity Gains: Estimates suggest TFP growth from AI will be less than 0.55% to 0.71% over 10 years, limited by the complexity of tasks.
Hard vs. Easy Tasks: AI's impact on "hard-to-learn" tasks, which lack clear metrics and are context-sensitive, will likely produce smaller gains than on simpler tasks.
Wage Effects: AI's productivity benefits may not substantially raise wages, particularly for low-skill workers.
Inequality Impact: AI is unlikely to reduce labor income inequality significantly and may widen the gap between capital and labor incomes.
Task Complementarity: AI could enhance productivity by complementing human workers, though benefits may be limited if task prices fall.
Role of New Tasks: New AI-enabled tasks could boost productivity, but some may also create negative social value, such as manipulative content.
Automation Limitations: Extensive-margin automation may not lead to substantial wage increases if displacement effects outweigh productivity benefits.
Consumer Welfare: Increases in GDP may overstate consumer welfare improvements due to investment's impact on consumption.
Capital-Labor Dynamics: AI's use may increase the capital share of income, further shifting income away from labor.
Investment Response: AI-related productivity gains will likely trigger only modest capital stock increases.
[Caveat: above summary generated by ChatGPT, sorry!]
I'm cautious -- neither too optimistic (although the engineer in me wants to believe in the AI-driven future) nor too pessimistic (but I'm also very, very realistic in broad adoption and benefits dissemination of AI).
His recent chat with FT [2] is also illuminating (Sep 2024).
The "Nobel Prize in Economics" was not one of the original ones endowed by Alfred Nobel. As the name implies, it was created by a bank.
Is there any reason Jeff Bezos, Bill Gates, Mark Zuckerberg, and Elon Musk can't endow a Prize in Computer Science? That would end the controversy about whether AI is "Physics."
Not being the original does not make it any less meaningful. Repeating the same "Not real Nobel" spiel every time Nobel price in Economics is discussed as it is some kind of refutation is silly.
>Is there any reason
Yes there is. Nobel committee has accepted Nobel in economics as one of the Nobel prices. Its in their website, in their documents and its given out in the same ceremony in Stockholm. Laureates are selected by the Royal Swedish Academy of Sciences.
"created by a bank "
Sveriges Riksbank is the central bank of Sweden. It's not a just some random private bank.
> The Breakthrough Prize, renowned as the “Oscars of Science”, recognizes the world’s top scientists working in the fundamental sciences – the disciplines that ask the biggest questions and find the deepest explanations.
> Each prize is $3 million and presented in the fields of Life Sciences, Fundamental Physics and Mathematics.
> The Breakthrough Prizes were founded by Sergey Brin, Priscilla Chan and Mark Zuckerberg, Yuri and Julia Milner, and Anne Wojcicki. The Prizes have been sponsored by the personal foundations established by Sergey Brin, Priscilla Chan and Mark Zuckerberg, Ma Huateng, Jack Ma, Yuri and Julia Milner, and Anne Wojcicki.
It's not even a non-original Nobel. It's simply "Not a Nobel Prize".
The headline should read "Daron Acemoglu, Simon Johnson, and James A. Robinson won Not a Nobel Prize in Economics."
We shouldn't validate the idea that one can earn a Nobel in economics. It's simply not possible because such a prize does not exist. Shame on economists for attempting to legitimize economics using the memory of Alfred Nobel. It is low, even for them.
> Is there any reason Jeff Bezos, Bill Gates, Mark Zuckerberg, and Elon Musk can't endow a Prize in Computer Science?
Even without searching, I'm sure they back a number of organizations that do endow various awards, scholarships, and so on. I doubt they could come up with a "flagship" one that would be as prestigious as the Nobel Prize, though. Our attitudes toward modern-day "industrialists" and their pet projects are quite different today. Whatever controversies surround the Nobel Prize, they would be many times worse for the Bezos-Gates-Zuck-Musk Medal of Merit.
This seems kinda confused. The Nobel is now controversial because after all, Nobel invented dynamite and he wanted to expunge his guilt. Yet you said it was "prestigious" -- but you want to cancel that, regardless?
But somehow the Nobel Prize in Computer Science would be too controversial even given all that.
OK, I get that you don't like Bezos-Gates-Zuck-Musk. Maybe you're just jealous.
Seems like one conclusion that can be drawn is that the indigenous people who get colonized should just shut up and enjoy their new reservations. The political, societal, and economic benefits of colonization were not intended to help them. Those changes were only to help those who did the colonizing build a new society that was free from the institutions that prevented them having a voice in how they were able to conduct their lives back in the old (European monarchy) country. Shit rolled downhill in the new country and the oppressed became the oppressor.
It worked out in the end though for those who survived since they now have representative government with members elected who are beholden to the people and who remember the main lesson of the past - grassroots organization against oppression is the only tool that works to preserve freedom for the majority of the people in a country.
i don’t fully understand your post, but I don’t think
“grassroots organization against oppression is the only tool that works to preserve freedom for the majority of the people in a country”
is a good takeaway for native americans and i struggle to imagine a counterfactual where native americans having this knowledge at the start of colonization would make any significant difference to the course of events
In most settler-colonial situations during history, unless strict separation between races and nations was maintained, the conquerors intermingled with the conquered so thoroughly that you cannot tell them apart nowadays (Who is a Norman and who is an Anglo-Saxon? Who is a Roman and who is a Celt?). That included a lot of Amerindians in the US.
This is pretty much the norm across the ages. You could probably say that it is wise from the vanquished to adapt at least partially the culture of the conquerors; after all, it might be better suited for victories in wars, and that was a major factor in survival until recently. (In some places, still is.)
Their seminal book literally opens with explaining how most colonial institutions were created to extract the wealth of natives and slaves, institutions that live on today through the authoritarian regimes that inherited them.
Academic talking points. Talk about the indigenous Irish who got "colonized" by the Celts, or the Britons who got "colonized" by the Saxons, Danes, and Normans, or the native American tribes who got "colonized" by other tribes, or the Gauls who got "colonized" by migrant tribes.
The fact is, everyone is on "stolen land" including the "indigenous." The Spaniards were more exploitive than the English and other northern Europeans (look up "Potosi"), but that doesn't make the latter perfect.
The New World was going to be integrated with the Old World sooner or later, no matter who did it.
Terrible decision. Very bad and sloppy economics, a simplified version of what sociology and political science have been doing much better for over 40 years, as if before these crucial contributions we had no idea that institutions, forms of power and social conflict affect economic outcomes.
Acemoglu's strand of institutional social science is known to be painfully racist and clueless about realities on the ground https://africasacountry.com/2016/09/africa-why-western-econo... The narrative that you can get economic growth with "good institutions" is a fable, and cases like China are also completely outside their narrative. Not only is their narrative historically inaccurate, if not ideological, it can't explain why Western economies like the US have prospered despite being as corrupt as China is today.
> Good decision. They deserve it. Obviously, there is a lot to disagree with in their work, but AJR initial papers were excellent, and broadened economic work to include politics and economic history. Congratulations!
There’s nothing racist about stating that strong institutions and rule of law lead to economic success.
It’s an obvious truth, which many Africans reject for some reason. I’m Nigerian, and my country is a clear example of how excessive corruption and dependence on a natural resource (oil) makes a country mediocre.
It sounds like you are parroting arguments without explaining those arguments.
"Wikipedia entries with regressions" is a facile argument that can be applied to Picketty and Milanovic as well.
Plus, Milanovic congratulated AJR and agreed to a number of their initial works in the space (which are the ones that won them the Nobel)
> The narrative that you can get economic growth with "good institutions" is a fable
Bullshit. We don't invest in Uganda or Kenya because we know we won't be able to get a contract enforced.
A major reason FDI to PRC skyrocketed in the 2000s was because individual provinces worked on building SEZs with ease of contract enforcement, as well as a number of harmonizing business regulation reforms (eg. the Guiding Cases Project).
And that same FDI outflow from China that we are now seeing is due to the opaqueness that now permeates the judicial and regulatory environemnt in China after a number of backwards reforms in 2018-22.
> it can't explain why Western economies like the US have prospered despite being as corrupt as China is today.
Over a century of major reforms and regulations.
This was a major reason why the PRC began the Guiding Cases project.
Which is why the pro-Trump tech folks are playing with fire. Exchanging potentially faster approvals/lower regulation for favored projects, for an environment where rule of law and institutions are weakened.
you've misread the comment, weakened rule of law and lesser regulations are two different things that (according to the comment) are being exchanged. For example firing Comey had nothing to do with regulations.
More law, better regulation comes from the same school as more code, better product. It’s obviously bullshit but novice practitioners and non-practitioners support the idea because they think all problems are solvable with more something.
The slow and messy process of reaching consensus (or close) via a complex web of institutions help “western” (in the sense that Kotkin uses) societies avoid really bad policy and adapt to mistakes.
Some people are frustrated by this and think it would be much better to substitute their judgment for this process. They don’t necessarily hold this view selfishly or maliciously, they are just short sighted.
I guess I agree. I tend to try to view others actions in best reasonable light, so I default to the idea that they are simply blind to their own limits, but mean well.
The pro-Trump tech folks are 90% about crypto. It's single-issue politics, like abortion or gun rights.
Scratch the surface on a SV Trump supporter like Marc Andreessen, and you'll find a big bag of crypto that they want to keep dumping on retail investors.
I strongly recommend Acemoglu, Robinson classic book "Why Nations Fail"
https://www.amazon.com/Why-Nations-Fail-Origins-Prosperity/d...
It's very accessible, no economics background required. Along with Krugman and Kahneman, one of the few economics scholars that take the time to write a book for layman.
The rule of law is a key part of a nations success as argued by AJR. A very good exposition for the layman on the rule of law provided by Tom Bingham in the eponymous 'The Rule of Law):https://www.goodreads.com/book/show/7734691-the-rule-of-law
While the above is informed by the UK's constitutional arrangement, the 8 principles are near universal when considering nations that have or aim for The Rule of Law.
The principles are:
(1) The law must be accessible and so far as possible intelligible, clear and predictable.
(2) Questions of legal right and liability should ordinarily be resolved by application of the law and not the exercise of discretion.
(3) The laws of the land should apply equally to all, save to the extent that objective differences justify differentiation.
(4) Ministers and public officers at all levels must exercise the powers conferred on them in good faith, fairly, for the purpose for which the powers were conferred, without exceeding the limits of such powers and not unreasonably.
(5) The law must afford adequate protection of fundamental human rights.
(6) Means must be provided for resolving, without prohibitive cost or inordinate delay, bona fide civil disputes which the parties themselves are unable to resolve.
(7) The adjudicative procedures provided by the state should be fair.
(8) The rule of law requires compliance by the state with its obligations in international law as in national law.
I also recommend Acemolgu's recent book "Power and Progress" on the relationship between labor and technology [0].
If you don't like reading, Acemoglu gave a talk about it at HKS recently [1]
[0] - https://ig.ft.com/sites/business-book-award/books/2023/longl...
[1] - https://www.youtube.com/watch?v=WT0NzlATjf0
After reading "Why Nations Fail", which I really enjoyed, I wondered whether we could develop an LLM with a wide enough context window where I could input the lessons from such books along with data and metrics about a specific country. Then, the AI could prescribe tangible solutions and policy recommendations tailored to that nation's unique situation. I'm curious what an AI system like that might look like. I also wonder if it's possible to experiment with a smaller-scale version of this concept using today's technology.
I thought the Chicago School had already proved blindly applying "policy recommendations" from on high was a receipt for disaster and misery, but sure, let's do the same with AI, this time it will surely work.
What's the point? We generally know what economic policies work. But they aren't put into effect due to ideology or special interests. This isn't a problem with a technical solution.
> Krugman
Not sure I'd spend time on a Krugman book. He predicted in 1998 that the internet would cease having an economic impact by 2005 and that it would be no greater than fax machines. He's like the Neil deGrasse Tyson of economics.
Krugman is controversial at times, but he is a serious economist. The quote is also taken out of two important contexts. 1. It was not a serious academic prediction but rather part of a fluff piece by the Times about future precitions. 2. The quote also exists in the context of a debate that was raging during the advent of the internet whether or not the internet would hyper charge productivity and economic growth. In hindsight, especially after the late 1990s, the truth is far closer to the fax machine rather than a new era of prosperity. The lack of visible productivity growth from a technology that has so visibly transformed our society is one of the bigger questions in economics today.
The lack of visible productivity growth. In particular, it's not as visible as you expect in the GDP statistics.
Take TV Guide, for instance. Now, if anybody watches broadcast television, they can use the internet to find out what's on when. Is that better or worse for users than having a paper TV guide? In many ways it's better. But it shows up in the GDP as a negative, because nobody's buying TV Guide any more.
Or take Google. I can search for any information I want, for free. That creates immense value - immense in every sense except the GDP, where it doesn't show up at all, because it's free.
Wikipedia. Linux. gcc. The Wayback Machine. Even HN. All this is available to us, whenever we want it, for whatever purpose we want, for free. There's great value to us. Just nothing that shows up on the GDP statistics, because it's all free. (Yeah, I know, RedHat sells Linux, and Wikipedia asks for donations. They aren't Microsoft selling Windows and The World Book, though. You can still use them for free, and not get sued or jailed.)
These free things (Wikipedia, Linux, etc.) are sustained by a high GDP that translates to high incomes and, in turn, people willing to donate time and money for them to remain free.
Let's try living in a country with a measly GDP per capita of $1,000 (Rwanda for example) and see how many free things we can get..
Alternative conjecture.
People give more consistently in more pro-social societies. But those societies are poorer, with lower percentage of computer ownership and programming skills. So they give things like care and food.
Trying to spin the west as the place where altruism is most prevalent seems incorrect. More data needed.
I think we're in agreement here. I never said the West inherently has more altruism. However, the West's high GDP is what enables Westerners to give more to free computing/internet-related projects offering excellent value.
Without a high GDP, there won't be much to give in the first place.
Yes, I suspect I've made a distinction without a difference. You're right.
Sure, there's a lot of value. There's also a lot of slops and negative value. These days I don't even use wikipedia that much even though I googled things constantly.
GDP is a very gross measure of things to be sure, but also difficult to fake.
> Krugman is controversial at times
Kind of like saying Lysenko was controversial at times.
He's not "controversial," he's just a bloviator. His credentials as a serious economist expired long ago when he signed up with the leftist team and agreed to never challenge them again, on anything.
When you have to spend many words on explaining the "context" in which someone's quotes should be viewed, you are losing.
Krugman triggered some self reflection on my part when I read a column by him that was really stupid. Not just politically biased, but got economics wrong.
This is a Nobel winner in economics, I warned myself. Are you really putting your judgement ahead of theirs in their own field of study? I wanted to make sure I wasn't just doing the HN thing of arrogantly assuming I'm an expert in a field because I read a book once.
The eventual conclusion I came to was that I should always make sure to hold some allowance that the export may be correct and myself wrong, except when it's really obviously dumb, and that Krugman's writing fell into that camp.
> His credentials as a serious economist expired long ago when he signed up with the leftist team
You might be (unpleasantly) surprised by the emphasis of the current year's nobel economics prize winners on the importance of societal institutions and the need for inclusivity to advance the wealth of nations :-)
I'd be more surprised if you linked to any of Krugman's recent columns and I actually thought they were worthwhile.
Indeed. He is more politico and less economist these days: https://www.nytimes.com/column/paul-krugman
> Kind of like saying Lysenko was controversial at times.
This is BS. Krugman has very specific theories that made predictions validated by practice.
Remember 2008? He made a prediction that an increase in the monetary base wouldn't cause inflation. This prediction was spectacularly confirmed. He also made a case for fiscal intervention: it wouldn't cause inflation, and it would speed up the recovery. And his prediction again was confirmed.
More recently: he predicted that the inflation spike was transient, due to supply chain issues rather than fundamental changes. And he's again been vindicated.
>...And he's again been vindicated.
Saying that Krugman was vindicated is quite a stretch. As the economist Noah Smith wrote:
>...In 2021, Krugman tweeted: "I like it and plan to steal it. This report does look like what you'd expect if recent inflation was about transitory disruptions, not stagflation redux".
As Smith pointed out:
>...But in late 2021, inflation spread to become very broad-based. Services inflation was always significant, and took over from goods inflation as the main contributor in 2022.
>The notion that this was just some transient supply-chain disruptions that was only affecting specific products was absolutely central to Team Transitory’s claims in the summer of 2021. And that was incorrect.
>...Team Transitory also called the end of the inflation at least a year and a half too soon.
On October 13, 2021 Krugman tweeted "Three month core inflation. Why isn't everyone calling this a victory for team transitory"
>...So they didn’t entirely whiff here. They just greatly overstated their case. And their complacency in 2021 probably fed into the Fed’s decision to delay the start of rate hikes until 2022, which in retrospect looks like a serious mistake.
What did get vindicated was mainstream economics as taught in our textbooks. As Smith wrote:
>...Mainstream macro’s first victory was in predicting that the inflation would happen in the first place. In February 2021, Olivier Blanchard used a very simple “output gap” model to predict that Biden’s Covid relief bill would raise demand by enough to show up in the inflation numbers. His prediction came true. He didn’t get everything right — he thought wages would rise more than consumer prices, and he neglected the lagged effects of Trump’s Covid relief packages and Fed lending programs. But his standard simple mainstream model got the basic prediction right when most people made the opposite prediction, and this deserves recognition.
>More importantly, mainstream macro appears to have gotten policy right.
https://www.noahpinion.blog/p/grading-the-economic-schools-o...
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> He predicted in 1998 that the internet would cease having an economic impact by 2005 and that it would be no greater than fax machines
The future is hard to predict. Using that as a reason to discount a Nobel-prize economist's economics-related work sounds like a gap in logic.
If economists can't predict the future then what good are they?
If developers can’t produce code without bugs, what good are they? /s
I read the summary from the review and I am not convinced that neoliberal US and EU have a less extractive governance structure than China has, as the authors seem to claim. It's been a decade since the book was published and China is still going strong. We will see.
China has become more and more authoritarian under Xi, its GDP growth stats may be dodgy, and recently its housing bubble has popped big-style. It could go the way of Japan. I agree with your last sentence, all the same.
China is the #1 trading partner of nearly every country in the world. That's all you need to know about how bad they are doing.
How do you know this?
I don’t want to single this out but tangible proof of a net increase in ‘authoritarian’ decision making, compared to say a decade ago, has never been posted on HN, as far as I know.
Most of the in depth analysis I’ve seen suggests that although enforcement actions have become stricter over the past decade, the actual number of new laws and regulations has gone down.
And more importantly, the number of contradictory laws and regulations (between central authorities, and between the centre and provinces) has gone way way down.
So there’s much less leeway to punish on a whim or trap someone in a double bind, compared to a decade ago. Which suggests a net decrease, if anything.
It depends on if you’re talking about authoritarianism as it relates to the average person or the political and ruling class. There have been a lot of reports of Xi getting rid of a lot of potential adversaries when he announced himself ruler for life and the imprisonment of Jack Ma and stripping him of his wealth for making challenging statements against Xi seems pretty authoritarian.
Does it makes sense to discuss it relative to the ‘political and ruling class’?
Since they pretty much all have party cards already. And the moment they give it up means they’re kicked out from any decision making, from what I understand.
Yes internal factions within the party can arbitrarily punish each other for made up reasons all day long, every day of the year.
So in a sense it was already authoritarian without limit.
But that’s not new, nor different from any other big political party.
The kind of punishment authoritarian regimes dish out is much more severe in ways that you couldn’t do in the US (imprisonment, seizure of assets, death). In fact I’d argue it’s the only kind that matters. Authoritarian regimes rarely go after normal people unless they speak out actively against the government (which China does) and instead focus on controlling and censoring anyone in a position of power and let the implicit censoring of the entire population flow downstream from that.
US does all the nasty crap China does. Less brazenly, but it's certainly there.
> imprisonment
https://en.m.wikipedia.org/wiki/Guantanamo_Bay_detention_cam...
The Guantanamo Bay detention camp is a United States military prison...As of August 2024, at least 780 persons from 48 countries have been detained at the camp since its creation, of whom 740 had been transferred elsewhere, 9 died in custody, and 30 remain; only 16 detainees have ever been charged by the U.S. with criminal offenses.
> seizure of assets
https://en.m.wikipedia.org/wiki/Civil_forfeiture_in_the_Unit...
In the United States, civil forfeiture (also called civil asset forfeiture or civil judicial forfeiture)[1] is a process in which law enforcement officers take assets from people who are suspected of involvement with crime or illegal activity without necessarily charging the owners with wrongdoing...To get back the seized property, owners must prove it was not involved in criminal activity.
> death
https://en.m.wikipedia.org/wiki/Capital_punishment_in_the_Un...
> go after normal people unless they speak out actively against the government
https://en.m.wikipedia.org/wiki/Julian_Assange
There should be a word for when someone picks the most extreme situation to prove their point.
Yes, the U.S., Europe, and all well-governed democracies aren't perfect, but they're much better than China in that regard.
A litmus test: U.S. and European citizens are free to challenge their leaders, e.g., the recent glut of anti-establishment parties garnering more votes in the EU. Some of these guys are loons, yet they're free to challenge the status quo because that's part of democracy.
Remind me where Xi Jinping and Putin's political opponents end up again? In jail or dead.
If the party membership is revoked first, then the person wouldn’t be part of the ‘political and ruling class’ any longer.
Then they would just be a citizen who might formerly have been some bigshot, i.e. the second case.
It still doesn’t seem to make sense to discuss any increases relative to the first case, since in 2012 it was already unlimitedly authoritarian.
Revoking party membership doesn’t mean much necessarily if you still wield influence and power. Imagine if Barack Obama or Bill Clinton were kicked out by Joe Biden trying to consolidate power. They’d still have a voice and be influential outside of their party membership. That’s why Xi needs to imprison his rivals and root them out beyond just revoking their membership. And again I’ll point you to the example made of Jack Ma who wasn’t in the political party except maybe nominally but had wealth. I think you’ve never lived under an authoritarian regime and never talked with people who lived under it to understand what life is like.
This is getting too into the weeds, of course individual situations can be analyzed, but this doesn’t apply to ‘the political and ruling class’ as a whole.
To be more precise in wording, the net increase, or decrease, in net negative authoritarian decision making is what matters for me and probably most HN readers.
Since this increase, or decrease, may be positive and negative to varying degrees for various people and factions, it’s practically impossible to tell if it’s net negative for the class as a whole.
The difference between oligarchy that deliberately maintains balance of power and interests between, say, dozens or hundreds of prominent players, and a one-man rule where the "courtiers" are just richer than an average citizen, but equally subjugated to the Dear Leader, is enormous.
Both Russia and China developed since 2000 from one to the other, and I wonder what the end game will be. In Russian case, the development led to re-establishment of the imperial idea and an attempt to conquer formerly held lands by force; that is something that the oligarchs wouldn't start, but a neo-Tsar absolutely did.
Communist China used to be way less externally aggressive than Russia / USSR, but I don't like the current military gestures by Xi. Not at all.
So the degree of authoritarian decision making felt by ‘courtiers’ within the party can vary from year to year?
I guess that is possible, but if that’s the case, wouldn’t that naturally be their goal? To concentrate power and authority in one place, or person, that they can more readily manipulate.
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You don't read my mind well if you think that I am against China defending itself. Most nations have an army for that purpose.
I am against China performing threatening exercises near Taiwan and against China claiming the majority of the South China Sea for themselves when hundreds of millions of other people live on its shores.
Ever heard of "the Nine Dashes"?
https://en.wikipedia.org/wiki/Nine-dash_line
That has zilch to do with defense. That is expansionism, every bit as bad as its Western equivalents.
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Clearly Taiwan does not want to be "defended" by China, but is rather desperately asking for defence against China. Also, the international court ruled against China's claim to control everything behind the 9-dash line. It's not true that China needs that line to defend itself - it has done so perfectly well since 1947 without it.
> Do you understand that it is called "South China Sea" for a reason right?
So by this yardstick you're acknowledging that India has the right to control the entirety of the "Indian Ocean", correct?
And the same with the Sea of Japan, and that Inner Mongolia is really a part of Mongolia, not China?
:-)
Does India need to control the Indian Ocean in order to defend itself?
What about Mexico, should it control the Gulf of Mexico? Ireland, the Irish Sea? Etc.
And, by the way, as of 2024, you don't really need to control the entire sea (or even half of it) to prevent the enemy from landing on your shores. Any military worth its cost has a large assortment of missiles for that purpose.
Case in point: Ukraine has unambigously denied the Russians (the Russians!) control of the Black Sea while literally having no navy to speak of. By shooting at them from land. That is how it goes.
Taiwan also doesn't rely on its control of the seas to defend itself. Even the Israeli Navy is comparatively weak. Etc.
Taiwan is literally an independent country, although they promote a policy of strategic vagueness about this in hopes that it will discourage China from launching an invasion. The arguments China makes for its ownership of Taiwan are no more defensible, and arguably less, than Portugal's justifications for maintaining ownership of Goa.
Well, by the OP's naming standards, it's Taiwan (Republic of China) that is the primary entity, and they have the rights to all of China :-)
It is not a country, just ask the united nations, for example. The US likes to pretend it is, but it won't happen.
It's not a country according to the UN because China is a permanent member of the UN Security Council.
Does Taiwan have its own military? Yes.
Does it issue its own passports? Yes.
Do you have to have their visa to land there? Yes.
That's a country.
And you, sir, on this thread, sound more like a propagandist than someone trying to have an actual conversation. You're not here to converse, to listen, but only to trumpet your talking points. That's not what HN is for, and you've been here long enough to know it.
Has it declared independency? Has it been accepted by other countries? No, we all know this. It is not a country, then.
The problem is not the army, but military posturing. It can too easily transition into an actual war.
Case in point: Russia. Putin's ratings were falling, and he decided to commit "a small victorious war", based on faulty assumptions. And his assumptions were faulty because all the secret agencies were filled with yes-men who were just telling Putin what he wanted to hear.
That's the problem with the authoritarian regimes: they don't have people who can stop the Dear Leader if the Dear Leader starts seriously believing in conspiracy theories and/or just goes mad with power.
The US starts a new war for posturing every few years. They have the faulty assumption that they can control the world, even as they keep losing wars. So, not a problem unique to Russia.
The US is not in a real danger of becoming an authoritarian state. So any top-level war-mongering is somewhat self-limiting.
And while the US presidents can and do ignore intelligence data, they at least _have_ it.
> The US is not in a real danger of becoming an authoritarian state
So you're saying democrats are lying? They say that may happen by the next election, so at least 50% of the population believes this is possible.
Moreover, from the point of view of foreign policy the US is already an authoritarian state. People have no say on weather to start or stop a war, anymore than the Russians have.
> So you're saying democrats are lying?
They are not lying. Trump is literally saying that he's going to use the military to suppress his opponents, after all. I just happen to think that the US has far more resilience built into its political system than it seems.
E.g. Project 2025 is terrible and if it's implemented, it'll result in pure hell for the regular people. But a hypothetical Trump administration won't be able to implement even a fraction of it. It'll need many dozens of new laws passed, and probably even new Amendments.
And then there are also individual states that hold a lot of power to sabotage the laws that they don't like. For an example, look at the "sanctuary city" laws in California or Washington.
Mind you, it doesn't mean that a hypothetical Trump administration won't hurt a lot of people. I'm just saying that it won't be able to totally monopolize the political power.
> I just happen to think that the US has far more resilience
Well, if this is true then democrats are lying. They pretend the US can be transformed into a dictatorship if Trump is elected.
But the real point is that in terms of foreign policy the US is already a nondemocratic state, because both parties support non-ending wars and are financed by the MIC. The voters don't matter anymore.
> Well, if this is true then democrats are lying. They pretend the US can be transformed into a dictatorship if Trump is elected.
I think you are lying.
I think you don't have anything constructive to say.
People were saying when the PRC was founded 75 years ago it would collapse any day now. They were saying this during the cultural revolution. They were saying it earlier this year, as China sent a robot to the far side of the moon to collect moon rocks and bring them back to earth. And they're still saying it. I'm not holding my breath.
Just because PRC didn't collapse doesn't mean PRC perform well. On the contrary, the current strength of PRC is probably a reversion to mean, what China would be like if it wasn't so mismanaged, and yet decades late from where they could be.
States can endure a lot of mismanagement. Look at North Korea for instance. What we won't know is when we hit the breaking point.
What is happening in Russia may lead to an eventual collapse, though unlikely. There are some signs of a loss of monopoly on violence as the system is pushed to its breaking point. Hopefully that won't happen, but it's a scary possibility nonetheless.
There are HN posters with the ability to see hard data inside America's largest tech and manufacturing businesses, but don't investigate the question, "How much of what you buy every day was made in China?"
You have a short-term perspective. All kinds of governance structures can work for a single human lifetime, if they manage to get the right people to the right places. But those people will eventually retire and die. Good institutions make it more likely that their replacements will also be competent and have the right motivations and incentives.
PRC has enjoyed ~45 years of stability and economic growth under four leaders. Until now, the leaders have retired voluntarily, and there has been an ordered transition of power to the successor. But Xi Jinping is clinging to power in a way his predecessors didn't. If he stays beyond 2027, it will be interesting to see if China can survive his death.
Do you actually think China has fairer courts, more open financial markets, and better business environment than the EU or US? For the longest time Hong Kong had to fill those gaps for China in order for the country to attract capital.
Regardless, even if China does today the explanation still holds considering China only transformed a few decades before the book was written.
I think China is a worse country to live that the US or EU, but a better business environment. China's State Capitalism is simply more efficient than the neoliberalism hellscape that came up from the Soviet Union's collapse.
I see the rest of the world becoming more similar to China than the other way around, unfortunately. The US is already a pseudo-Soviet state economically, and is on the brink of becoming a dictatorship on top of that.
> I see the rest of the world becoming more similar to China than the other way around, unfortunately.
I hope they enjoy the mediocrity that comes with state-dominated economies.
> The US is already a pseudo-Soviet state economically.
Maybe I'm blind, but I have no idea how someone looks at the USA and concludes this.
Extremely inequality that keeps increasing, political movements that try to change this are killed in the crib, a dying empire.
Just because the Central Comittee is called Blackrock, doesn't mean the American economy is not being more and more centrally planned. Free Enterprise is dying.
I mean economically, the political system is still "free" (less and less), it's not a dictatorship (yet).
> Just because the Central Comittee is called Blackrock, doesn't mean the American economy is not being more and more centrally planned.
Of course, you'll mention BlackRock, the never-ending boogeyman for people with little economic knowledge.
Not really:
https://data.worldbank.org/share/widget?contextual=aggregate...
Very cool to see public econ and history of economics represented! On top of the popular release, there's usually some advanced background info (https://www.nobelprize.org/uploads/2024/10/advanced-economic...) which is admittedly pretty massive but gives a lot of background about the Prize.
Well deserved. Acemoglu is the economist everyone respects.
Very technical, but not for the sake of mathiness. His models have a meaning. They clarify thought and ideas. https://scholar.google.com/citations?user=l9Or8EMAAAAJ&hl=en
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If interested, this page has context: https://www.nobelprize.org/prizes/economic-sciences/2024/pop...
Absolutely chuffed to hear that Daren Acemoglu (one of my fav econ writers), Simon Johnson and Robinson won the Nobel memorial prize.
Acemoglu has been a brilliant and prolific econ writer, and I enjoy his exposition. Many have commented on his "Why Nations Fail", and rightly so. More recently, he also wrote "Power and Progress: Our Thousand-Year Struggle Over Technology and Prosperity".
I'm more interested in his thoughts on tech and development (than on instituions and democracy), and he doesn't disappoint.
More topically for HN folks, he wrote on "The Simple Macroeconomics of AI" [1]. Unlike many contemporary researchers / writers (incl. Ethan Mollick) who are completely ga-ga over prospects of AI-driven economy over the next decade, Acemoglu is more reserved.
His top findings:
[Caveat: above summary generated by ChatGPT, sorry!]I'm cautious -- neither too optimistic (although the engineer in me wants to believe in the AI-driven future) nor too pessimistic (but I'm also very, very realistic in broad adoption and benefits dissemination of AI).
His recent chat with FT [2] is also illuminating (Sep 2024).
---
[1] https://economics.mit.edu/sites/default/files/2024-04/The%20... (Apr 2024)
[2] FT audio interview - https://www.ft.com/content/e865a777-501a-4417-839e-dffd4b520... (Sep 2024)
> Wage Effects: AI's productivity benefits may not substantially raise wages, particularly for low-skill workers.
Yeah no shit. It’s going to spike them down hard.
The "Nobel Prize in Economics" was not one of the original ones endowed by Alfred Nobel. As the name implies, it was created by a bank.
Is there any reason Jeff Bezos, Bill Gates, Mark Zuckerberg, and Elon Musk can't endow a Prize in Computer Science? That would end the controversy about whether AI is "Physics."
Not being the original does not make it any less meaningful. Repeating the same "Not real Nobel" spiel every time Nobel price in Economics is discussed as it is some kind of refutation is silly.
>Is there any reason
Yes there is. Nobel committee has accepted Nobel in economics as one of the Nobel prices. Its in their website, in their documents and its given out in the same ceremony in Stockholm. Laureates are selected by the Royal Swedish Academy of Sciences.
"created by a bank "
Sveriges Riksbank is the central bank of Sweden. It's not a just some random private bank.
Exactly, it is a central bank.
> The Breakthrough Prize, renowned as the “Oscars of Science”, recognizes the world’s top scientists working in the fundamental sciences – the disciplines that ask the biggest questions and find the deepest explanations.
> Each prize is $3 million and presented in the fields of Life Sciences, Fundamental Physics and Mathematics.
> The Breakthrough Prizes were founded by Sergey Brin, Priscilla Chan and Mark Zuckerberg, Yuri and Julia Milner, and Anne Wojcicki. The Prizes have been sponsored by the personal foundations established by Sergey Brin, Priscilla Chan and Mark Zuckerberg, Ma Huateng, Jack Ma, Yuri and Julia Milner, and Anne Wojcicki.
https://breakthroughprize.org/About
We already have the Turing Award, and a prize sponsored by Google.
It's not even a non-original Nobel. It's simply "Not a Nobel Prize".
The headline should read "Daron Acemoglu, Simon Johnson, and James A. Robinson won Not a Nobel Prize in Economics."
We shouldn't validate the idea that one can earn a Nobel in economics. It's simply not possible because such a prize does not exist. Shame on economists for attempting to legitimize economics using the memory of Alfred Nobel. It is low, even for them.
> Is there any reason Jeff Bezos, Bill Gates, Mark Zuckerberg, and Elon Musk can't endow a Prize in Computer Science?
Even without searching, I'm sure they back a number of organizations that do endow various awards, scholarships, and so on. I doubt they could come up with a "flagship" one that would be as prestigious as the Nobel Prize, though. Our attitudes toward modern-day "industrialists" and their pet projects are quite different today. Whatever controversies surround the Nobel Prize, they would be many times worse for the Bezos-Gates-Zuck-Musk Medal of Merit.
This seems kinda confused. The Nobel is now controversial because after all, Nobel invented dynamite and he wanted to expunge his guilt. Yet you said it was "prestigious" -- but you want to cancel that, regardless?
But somehow the Nobel Prize in Computer Science would be too controversial even given all that.
OK, I get that you don't like Bezos-Gates-Zuck-Musk. Maybe you're just jealous.
> The Nobel is now controversial because after all, Nobel invented dynamite and he wanted to expunge his guilt.
It's not controversial for that reason. It's actually a fantastic origin story for the prize, especially since he arranged for it on his deathbed.
> OK, I get that you don't like Bezos-Gates-Zuck-Musk.
Huh?
Is CS even a real discipline when a physicist (or two) can win the Turing Award? /s
Seems like one conclusion that can be drawn is that the indigenous people who get colonized should just shut up and enjoy their new reservations. The political, societal, and economic benefits of colonization were not intended to help them. Those changes were only to help those who did the colonizing build a new society that was free from the institutions that prevented them having a voice in how they were able to conduct their lives back in the old (European monarchy) country. Shit rolled downhill in the new country and the oppressed became the oppressor.
It worked out in the end though for those who survived since they now have representative government with members elected who are beholden to the people and who remember the main lesson of the past - grassroots organization against oppression is the only tool that works to preserve freedom for the majority of the people in a country.
i don’t fully understand your post, but I don’t think
“grassroots organization against oppression is the only tool that works to preserve freedom for the majority of the people in a country”
is a good takeaway for native americans and i struggle to imagine a counterfactual where native americans having this knowledge at the start of colonization would make any significant difference to the course of events
In most settler-colonial situations during history, unless strict separation between races and nations was maintained, the conquerors intermingled with the conquered so thoroughly that you cannot tell them apart nowadays (Who is a Norman and who is an Anglo-Saxon? Who is a Roman and who is a Celt?). That included a lot of Amerindians in the US.
This is pretty much the norm across the ages. You could probably say that it is wise from the vanquished to adapt at least partially the culture of the conquerors; after all, it might be better suited for victories in wars, and that was a major factor in survival until recently. (In some places, still is.)
Well it’s kind of a moot point if we only care about “those who survive”.
> Seems like one conclusion that can be drawn is that the indigenous people who get colonized should just shut up and enjoy their new reservations
Colonial institutions ARE extractive.
This is a fairly prominent point in Acemoglu, Simon, and Robinson's works.
Their seminal book literally opens with explaining how most colonial institutions were created to extract the wealth of natives and slaves, institutions that live on today through the authoritarian regimes that inherited them.
> indigenous people who get colonized
Academic talking points. Talk about the indigenous Irish who got "colonized" by the Celts, or the Britons who got "colonized" by the Saxons, Danes, and Normans, or the native American tribes who got "colonized" by other tribes, or the Gauls who got "colonized" by migrant tribes.
The fact is, everyone is on "stolen land" including the "indigenous." The Spaniards were more exploitive than the English and other northern Europeans (look up "Potosi"), but that doesn't make the latter perfect.
The New World was going to be integrated with the Old World sooner or later, no matter who did it.
Terrible decision. Very bad and sloppy economics, a simplified version of what sociology and political science have been doing much better for over 40 years, as if before these crucial contributions we had no idea that institutions, forms of power and social conflict affect economic outcomes.
Branko Milanovic has aptly and rather amusingly defined Acemoglu's naive theorizing as "Wikipedia entries with regressions" https://glineq.blogspot.com/2014/08/my-take-on-acemoglu-robi... and he is right.
Acemoglu's strand of institutional social science is known to be painfully racist and clueless about realities on the ground https://africasacountry.com/2016/09/africa-why-western-econo... The narrative that you can get economic growth with "good institutions" is a fable, and cases like China are also completely outside their narrative. Not only is their narrative historically inaccurate, if not ideological, it can't explain why Western economies like the US have prospered despite being as corrupt as China is today.
Here is what your boy Branko Milanovic says: https://x.com/BrankoMilan/status/1845850368221032590
> Good decision. They deserve it. Obviously, there is a lot to disagree with in their work, but AJR initial papers were excellent, and broadened economic work to include politics and economic history. Congratulations!
There’s nothing racist about stating that strong institutions and rule of law lead to economic success.
It’s an obvious truth, which many Africans reject for some reason. I’m Nigerian, and my country is a clear example of how excessive corruption and dependence on a natural resource (oil) makes a country mediocre.
Dan Rogger published an interesting paper 13 years ago digging into this from a Civil Service standpoint [0]
Some of the recommendations were implemented, but it's still very much a work in progress.
[0] - https://www.danrogger.com/files/survey%20reports/Nigeria%20C...
> defined Acemoglu's naive theorizing
It sounds like you are parroting arguments without explaining those arguments.
"Wikipedia entries with regressions" is a facile argument that can be applied to Picketty and Milanovic as well.
Plus, Milanovic congratulated AJR and agreed to a number of their initial works in the space (which are the ones that won them the Nobel)
> The narrative that you can get economic growth with "good institutions" is a fable
Bullshit. We don't invest in Uganda or Kenya because we know we won't be able to get a contract enforced.
A major reason FDI to PRC skyrocketed in the 2000s was because individual provinces worked on building SEZs with ease of contract enforcement, as well as a number of harmonizing business regulation reforms (eg. the Guiding Cases Project).
And that same FDI outflow from China that we are now seeing is due to the opaqueness that now permeates the judicial and regulatory environemnt in China after a number of backwards reforms in 2018-22.
> it can't explain why Western economies like the US have prospered despite being as corrupt as China is today.
Over a century of major reforms and regulations.
This was a major reason why the PRC began the Guiding Cases project.
I, for one, am waiting for the field of economics to be colonized by AI folks
Which is why the pro-Trump tech folks are playing with fire. Exchanging potentially faster approvals/lower regulation for favored projects, for an environment where rule of law and institutions are weakened.
More rules doesn’t mean stronger rule of law.
Having lots of weakly enforced or discretionary laws is net worse for rule of law and a stable non-corrupt society.
you've misread the comment, weakened rule of law and lesser regulations are two different things that (according to the comment) are being exchanged. For example firing Comey had nothing to do with regulations.
More law, better regulation comes from the same school as more code, better product. It’s obviously bullshit but novice practitioners and non-practitioners support the idea because they think all problems are solvable with more something.
The slow and messy process of reaching consensus (or close) via a complex web of institutions help “western” (in the sense that Kotkin uses) societies avoid really bad policy and adapt to mistakes.
Some people are frustrated by this and think it would be much better to substitute their judgment for this process. They don’t necessarily hold this view selfishly or maliciously, they are just short sighted.
Yes. Their judgment. Everyone else gets to shut up and take it. It's a very selfish view, whether or not they are consciously selfish about it.
I guess I agree. I tend to try to view others actions in best reasonable light, so I default to the idea that they are simply blind to their own limits, but mean well.
I guess I'd better assume the best about such people, given how easy it is for me to have the same attitude...
The pro-Trump tech folks are 90% about crypto. It's single-issue politics, like abortion or gun rights.
Scratch the surface on a SV Trump supporter like Marc Andreessen, and you'll find a big bag of crypto that they want to keep dumping on retail investors.
It’s not really about crypto. It just self interest.
Which crypto Bill Ackman is trying to dump on retail?
Ackman is not a tech folk.