068: Daron Acemoglu on Why Nations Fail and Why Inequality Exists Between Countries

Daron Acemoglu is the Elizabeth and James Killian Professor of Economics at Massachusetts Institute of Technology in Boston.

Daron’s principal interests are political economy, development economics, economic growth, technology, income and wage inequality, human capital and training, and labour economics.

Daron was the winner of the 2005 John Bates Clark Medal awarded to economists under forty judged to have made the most significant contribution to economic thought and knowledge.

His most recent works concentrate on the role of institutions in economic development and political economy.

Daron received his M.Sc. in Econometrics and Mathematical Economics and his Ph.D. from the London School of Economics.

Daron is co-author of ‘Why Nations Fail: The Origins of Power, Prosperity, and Poverty’ which can be found at whynationsfail.com

Markets are the foundation of long run economic growth but only if they are under guard by inclusive institutions – Daron Acemoglu

Economics: 

In this interview, Daron mentions: capitalism, marxism, inequality, inclusive institutions, extractive institutions, property, public finance,  rights, risks, cliometrics, econometrics, labor, technology, human capital, inequality, creative destruction and comparative advantage.

Economists: 

In this interview, Daron mentions: James Robinson, George Akerlof, Thomas Picketty, Douglass North and Joseph Schumpeter.

In this episode you will learn:

• why nations fail and others prosper.

• why Daron despises the term capitalism refereeing it as ‘and ugly term’.

• why macro variables are second order to the type of institution when explaining the prosperity of a country.

• why we should study political systems in an economics course.

• how economic decisions get made.

• if democracy is good for economic growth.

• how Daron first became interested in institutions while growing up under a political dictatorship in Turkey.

• if the political economy or the type of institution of a country explain inequality.

• what explains inequality within a nation.

• about Daron’s mixed views on philanthropy.

• why empires, such as the Roman, Ottoman and British, collapse and whether we could witness the collapse of other institutions.

• why China will ultimately fail in its present institutional form.

• what China must do to maintain its economic growth.

• about the Ireland and how its economy transitioned over the last 100 years.

I think, on the contrary, extractive institutions have great staying power – Daron Acemoglu

Books:

• ‘Why Nations Fail: The Origins of Power, Prosperity, and Poverty’ by Daron Acemoglu.
• Why the West Rules–for Now: The Patterns of History, and What They Reveal About the Future by Ian Morris.
• War! What is It Good For? Conflict and the Progress of Civilization from Primates to Robots by Ian Morris
• The Dynamics of Ancient Empires: State Power from Assyria to Byzantium by Ian Morris
• The Secret of Our Success: How Culture Is Driving Human Evolution, Domesticating Our Species, and Making Us Smarter by Joseph Henrich

Where to Find Daron:

• http://whynationsfail.com/
• MIT academic page

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