This explains why dictators often reject improvements in national growth because the changes would result in a net negative for that dictator’s personal growth (often by threatening the balance of power).ģ. Some market “incentives” are good for a nation, but bad for a dictator (and are thus disincentives). Political actors respond to market incentives.Ģ. This is what I’m hearing: (correct me if I’m wrong)ġ. Put them all together and there’s much more good sense about the big story than there was in the past.Ĭapitalism, Institutions, and Economic Development Still, there’s been a spate of books since 2009 that basically get things right – my own, NWW (North), McCloskey, Fukuyama, and now Acemoglu & Robinson. In my book I try to explain why the market and law sequence did not work in Russia but why it remains the best message of hope and realistic discontinous change in developing as well as advanced countries. And I disagree with Acemoglu’s despondency about what can be done to improve institutions. By the way, Weber, as I show, is the origin of the ‘open and closed’ ‘inclusive exclusive’ distinction (his theory of closure is fundamental for understanding politics). Weber practically disowned The Protestant Ethic in the introduction when he said that it treats only one side of the causal chain. He was quite scathing about culturalist analysis. Weber regarded cultural explanations of development as unscientific. Soviets were thus classic case of asset grabing economy with the predictable endingĪcemoglu is a good scholar and he gets a lot of things right about development. Since Germany was not yet into IT technology soviets suffered major disadvantage in arms race. The Car moskvitch later Lada were clones of 1930 opel, camera zorka was german laica list goes on. Most of “wonders” of soviet technology were inept copies of german invention. As german slave labor aged so did advantage of soviet union in space. NKVD(predecessor of KGB) had orders to locate and arest all eningineers and technician involved in “hightech luft waffe indudtries” It gave rise to so called winning of the space race. The technological advance happened only after 1945 when large scale enslavement of german technicians captured by Red army. Moreover actual wage in Russia if measured in number basic products as meat milk etc per hour dropped after revolution and regained level 1911 in 1987 Gulags at one point employed on 1/5 of labor force and produced 40% of output or more. So call progres by Soviet Union was made with horrendous sacrifices and extensive use of slave labor in period of 1930 – 1940.
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