22/10/2024
Unreported in New Zealand
Last week, the Nobel Prize in economics was awarded to three economists, Acemoglu, Johnson, and Robinson “for studies of how institutions are formed and affect prosperity.”
You won’t have read about this in the New Zealand press, besides syndicated cut and paste jobs, even though it is about colonisation, institutions, and prosperity.
The official Nobel Citation says:
The richest 20 per cent of the world’s countries are now around 30 times richer than the poorest 20 per cent.
Moreover, the income gap between the richest and poorest countries is persistent; although the poorest countries have become richer, they are not catching up with the most prosperous. Why?
This year’s laureates have found new and convincing evidence for one explanation for this persistent gap – differences in a society’s institutions.
The economists studied many countries' histories over the last 400 years, focusing on the influence of European countries that colonised most of the world. They conclude that what kind of set-up, or institutions, those colonising countries left has a strong bearing on the colonised countries’ prosperity today.
They divide countries into two types. There are inclusive countries, that give people equal rights, to vote, own property, and operate under the rule of law. There are extractive countries, set up to extract natural resources and benefit a small number of people.
The extractive countries tend to be the ones that weren’t very welcoming to colonisers, for example if there was a lot of malaria. In these cases, e.g. African ones, a small number of settlers arranged to get the wealth out of the ground, and that was about it.
The alternative is inclusive countries, with free markets, the rule of law and democracy. The United States is the obvious example, along with Australia, New Zealand, and Canada. These countries attracted settlers in large numbers and there were too many of them to simply exploit natural resources. Instead they created inclusive institutions.
There is a twist, an historic reversal of fortunes. The countries that were relatively poorer before colonisation, and ended up adopting more colonial institutions, are now relatively wealthier.
Another important observation is that history is not static. Over time, countries liberalise. Colonial institutions were not set down in a state of perfection, far from it. But they were capable of improvement, widening voting rights, compensating for past wrongs, and enhancing civil liberties.
You are probably starting to get a sense of why this work has not been discussed in the NZ Press. It finds that institutions matter if you want people to be prosperous. It doesn’t matter where you start, it’s where you finish that counts, and that depends on adopting the best institutions, democracy, the rule of law, property rights, free speech, and all of those values that allow people to flourish.
No doubt New Zealand universities will be holding book burnings in case these Nobel Prize winners’ ideas make students ‘feel unsafe.’ The same institutions trained the journalists, which may be why there’s been so little discussion about this.
Nonetheless, somewhere in our future is a country where free and open debate is not only allowed but cherished. It would be a country where we can discuss what works to create prosperity.
The central lesson of these economists’ work is really that wealth is not given or taken, it is not ‘owned’ rightfully by any historic group. It can be created, to the point that everyone is richer than 200 years ago, but some people are 30 times richer. The trick is to adopt the right institutions, the policies that work, as quickly as possible, and those institutions are democracy, free markets, the rule of law, and equal rights for all."
These are all Christian Values and values of a Christian society or Country. In a Christian country every one is equal,has free soeech, free, even to pursue a life of sinful free choice. In a Secular/Athiest, Communist or Muslim ruled country only those in power, in The party or Muslim leaders are free - Everyone else subdegated lives in poverty, extreme poverty and no one is FREE.
