Congratulations to Daron Acemoglu, Simon Johnson and James Robinson (AJR) for winning the Economics Nobel! This powerhouse has made a tremendous contribution, demonstrating that inclusive institutions are fundamental for long-run economic prosperity.
…“The Narrow Corridor” suggests that for liberty and prosperity to thrive and flourish, countries must have strong states and strong societies. A strong state provides the rule of law and public goods, while a strong society exerts pressure for reform, holding the Leviathan in check.
Why do countries differ so much in economic performance? AJR are known for a focus on institutions. So is Douglass North, another Nobel Laureate.1
One objection to the focus on institutions is that culture also matters. It seems that AJR have decided to incorporate culture in their analysis. Evans points to Culture, Institutions, and Social Equilibria: A Framework, a working paper by Acemoglu and Robinson. They write,
Following Geertz, we thus define culture as patterns of beliefs, relationships, rituals, attitudes and obligations that furnish meaning to human interactions and provide a framework for interpreting the world, coordinating expectations and enabling or constraining behaviors. Critically, a culture does not typically determine a specific type of behavior. Rather, it provides a set of justifications and associated choices.
…We view culture as inseparable from a broader social equilibrium and closely interacting with political and economic power. By providing justifications to various social arrangements, culture influences economic and political institutions, but is fundamentally impacted by politics as well. Deepening our understanding of the two-way interaction between culture and institutions is one of the main objectives of our framework.
They are interested in cases of rapid, broad cultural change. For example they say that in the 16th and 17th century in England, the political culture changed from “divine right of kings” to “popular sovereignty.”
They argue that it is neither the case that culture is downstream from institutions nor that institutions are downstream from culture. Instead, the two are intertwined.
Evans writes,
Culture isn’t a fossil, it’s a fist-fight. Contending coalitions are constantly vying for ideological and institutional dominance. In the past, they primarily sought conquest. But now it’s a battle for persuasion - in which prestige reigns supreme.
And she points out,
If we recognise that charismatic and prestigious media are major drivers of ideological persuasion, we must also recognise the power of institutional censorship!
…While A&R’s “The Narrow Corridor” claims that ‘strong societies’ invariably push for liberty, I am actually sceptical. Through my globally comparative research, I recognise many bottom-up coalitions for censorship. Deeply-devoted religious believers have mobilised to entrench piety - in Malaysia, Saudia Arabia and Egypt. Competing for credibility, political leaders may then institutionalise censorship in order to prove their piety and garner wider legitimacy.
Acemoglu is probably the most-admired economist of his generation, and many economists have AJR’s books on their shelves. But Evans may be one of the few who is actively pursuing research related to their work.
This Nobel award is unusual. Typically, the award goes for a striking insight found using math or statistics, appearing in a journal article. The originality of the idea can be expressed concisely. In the case of AJR, I do not believe that one can concisely say what is original. I see their work as a synthesis, not a theorem.
I do not mean that as a criticism. (Noah Smith offers a more serious and informed critique.) Just as a warning to be wary of journalistic attempts to summarize their contribution.
substacks referenced above: @
@
Frankly, I have found North more readable than AJR. My knowledge of AJR is second hand.
The bit about how in the “16th and 17th century in England, the political culture changed from ‘divine right of kings’ to ‘popular sovereignty’” got me to thinking about how if I had to do it over again, I would reverse a lot of the order of the books I read concerning English and European history generally. This may be because before I got into reading history a lot, I remember being impressed with Why Nations Fail. When I first read it what seems like so long ago, I was impressed with its breadth and insight. Reopening it now, maybe not so much anymore.
With that in mind, I am going to suggest to younger readers with limited budgets that before going out and dropping money on anything out of the AJR oeuvre, that they might consider undertaking some free reading that I at least wish that I had had at a much earlier age.
As a starting point to understanding the English civil wars, the birth of liberalism, and the historiography of English economics, I wish I had first read Town life in the fifteenth century, by Mrs. J. R Green (https://www.gutenberg.org/ebooks/50392 ). This provides a highly readable account of the “fist fight” between institutions involving the king, church, and townspeople in England over taxes, property rights, and the duties of social order. I think it provides a useful context for considering the English civil wars, whose historical importance are difficult to understate, as well as providing me a with a real example of how in reading history it is easy to overlook the importance of isolated and local struggles and events.
To connect the 15th century to today, the second free book I would recommend is Leonard Hobhouse’s Liberalism (https://www.gutenberg.org/ebooks/28278 ). It traces the intellectual currents at play in the rise and fall of the free cities through the civil wars through the classical liberal thinkers and beyond all the way up through Gladstone and the new liberals, which in a way provides a liberal pedigree for the social democracy which Acemoglu seems to see as a pinnacle of human achievement if perhaps not the end of history. Classical liberalism is maybe better understood in the context of the numerous schisms with which liberalism was beset historically.
To understand institutional limits and failures, and how out of control fist fights can get despite all the rationalism in the world, as well as to provide a broader historical context for the historical origins of modern institutions, Tocqueville’s The Old Regime and the Revolution (https://oll.libertyfund.org/titles/tocqueville-the-old-regime-and-the-revolution-1856 ) is a good, short and engrossing book with which to consider that epochal event.
And to tie it all up from a political context that fully explores the aforementioned switch from divine right of kings to popular sovereignty, Guizot’s The History of the Origins of Representative Government in Europe (https://oll.libertyfund.org/titles/guizot-the-history-of-the-origins-of-representative-government-in-europe ) is a worthy read.
If you really want to drop some coin reading about the history of institutions, though, I’m guessing your money would be just as well spent on Harold Berman’s Law and Revolution: The Formation of the Western Legal Tradition or Larry Siedentop’s Inventing the Individual: The Origins of Western Liberalism. However, I haven’t read any of the recent AJR books and they may be really wonderful as well, but at least from my experience, I would have been a much more critical reader of theirs if I had originally had the free books above under my belt.
Evan’s delightful and apt description of culture as a “fist fight” might suggest that even economists need to embrace the cautious and contextualized approach of historicism and reject universal and fundamental laws of explanation. Maybe focused historical, anthropological, and sociological approaches and case studies are not so bad after all? Perhaps many of us might benefit from paying as much attention to the Royal Historical Society, Wolfson, and Pollard prizes as we do the econ Nobel?
And perhaps because Mommsen’s History of Rome is one of my favorite of such histories, and because it is institutionally focused as well, maybe noting that the Nobel prizes have tended to recognize history writing with the literature prize, we might consider that much of what AJR are getting at has been addressed by literature Nobelists. AJR are big on colonialism as the big explanation for everything and the literature prize in 2021 went to Abdulrazak Gurnah for his “uncompromising and compassionate penetration of the effects of colonialism,” so one is tempted to think that current anti-colonial fervor has much to do with these prize awards. But there is a longer history and some very interesting and worthwhile older Nobel-recognized work to consider.
Winston Churchill’s History of the English Speaking People starts out with the Roman conquest of the British isles. But in opposition to his imperialism, we also have Nobelist Rabindranath Tagore’s interesting take on institutions, culture, and change:
“Civilisation must be judged and prized, not by the amount of power it has developed, but by how much it has evolved and given expression to, by its laws and institutions, the love of humanity. The first question and the last which it has to answer is, Whether and how far it recognises man more as a spirit than a machine? Whenever some ancient civilisation fell into decay and died, it was owing to causes which produced callousness of heart and led to the cheapening of man's worth; when either the state or some powerful group of men began to look upon the people as a mere instrument of their power; when, by compelling weaker races to slavery and trying to keep them down by every means, man struck at the foundation of his greatness, his own love of freedom and fair-play. Civilization can never sustain itself upon cannibalism of any form. For that by which alone man is true can only be nourished by love and justice.”
Tagore thus seems imminently linkable to the AJR vision.
But the literature Nobels also provide us with interesting competing explanations. My favorite in this department Nobelist Henryk in whose work themes of the Polish positivists were developed and communicated. Polish positivists sought to gain independence for partioned Poland through a rational course of development by mass education and building physical infrastructure to allow their societ to function as an integrated "social organism." Such notions of indigenous cultural agency seem incompatible with AJR’s colonialism-centric approach.
Other great works of Nobel-recognized historical literature that might be profitably examined in relation to AJR include Mario Vargas Llosa (I’d recommend The War of the End of the World and Conversation in the Cathedral as starters), Ivo Andric (“There are no buildings that have been built by chance…”), Johannes Jensen’s The Fall of the King, and Waladyslaw Remont’s The Peasants.
Perhaps there is ambiguity at the heart of all great literature and that is why the Nobel literature prizes would seem to a offer a different sort of value that is not possible through the type of historical literature recognized by the economics Nobel prize?