Skip to main content

The Next 100 Years

Daron Acemoglu has an interesting working paper entitled “The World our Grandchildren Will Inherit: The Rights Revolution and Beyond”.  In it he surveys the 10 most important economic and social trends of the past century and asks what the future holds for these trends.  The 10 trends are:

1. The rights revolution – the increase in civil and political rights of citizens.  According to Acemoglu, this is the most fundamental right as it underpins the other trends.
2. The sweep of technology
3. Unrelenting economic growth
4. Uneven economic growth
5. The transformation of work and wages
6. The health revolution
7. Technology without borders
8. War and peace
9. Counter-Enlightenment in politics
10. Population explosion, resources and the environment

At the centre of Acemoglu’s paper is the idea that technological change is at the root of economic growth, and that technological change is shaped by political institutions.  Societies which are pluralistic and have a broad-based distribution of political power, and where the government has a monopoly of coercive power have higher economic growth and are more prosperous.  For this reason, Acemoglu is not optimistic about China’s future prosperity unless they move towards a more inclusive and broad-based polity.

Acemoglu’s paper can be criticised on at least three counts.  First, he has a very Whiggish view of history.  Second, there is the danger that the distribution of political power becomes too wide and ultimately begins to undermine democracy.  Third, the rights revolution has created a huge rent-seeking culture and industry.  The question ultimately is whether this industry is a parasite or a parasitoid.

There is also a review of Acemoglu's paper over at the NEP-HIS Blog.      

Popular posts from this blog

Bitcoin Bubble?

According to Robert Shiller , speaking at Davos, Bitcoin is a perfect example of a bubble - story here . Shiller sees Bitcoin as a backwards step in the evolution of money.   George Selgin , a free banker, takes an opposing view - click here .  Although he doesn't believe that Bitcoin is money, he sees its development as a fascinating turn in the evolution of money. In particular, he lauds the fact that Bitcoin production is constrained and cannot be infinite. There is a short video below where Bitcoin explain how it works.

How Valuable Are Connections?

Daron Acemoglu, Simon Johnson, Amir Kermani, James Kwak and Todd Mitton have written a paper on whether firms connected to Timothy Geithner benefited from these connections. They do so by looking at how stocks of these firms reacted to the announcement that he was a nominee for Treasury Secretary in November 2008. They find that there were large abnormal returns for connected firms. Below is the paper's abstract and the full paper is available here . The announcement of Timothy Geithner as nominee for Treasury Secretary in November 2008 produced a cumulative abnormal return for financial firms with which he had a connection. This return was about 6% after the first full day of trading and about 12% after ten trading days. There were subsequently abnormal negative returns for connected firms when news broke that Geithner's confirmation might be derailed by tax issues. Excess returns for connected firms may reflect the perceived impact of relying on the advice of a small ne

Boom and Bust: A Global History of Financial Bubbles

Boom and Bust: A Global History of Financial Bubbles, co-authored with my colleague Will Quinn , is forthcoming in August. It is published by Cambridge University Press and is available for pre-order at Amazon , Barnes and Noble , Waterstones and Cambridge University Press .