The Lessons of Medieval Venice: Will the Elite Strangle America’s Prosperity?

The Christian Science Monitor talks with Why Nations Fail co-author Daron Acemoglu, who says that medieval Venice could offer some helpful parallels in understanding threats that could undermine America’s future:

Americans on the left worry about the self-serving political clout of Wall Street and big banks, while Americans on the right worry about the self-serving clout of big public employee unions like Wisconsin’s teachers.

“Those are well-placed fears. But both historically and in the United States, the bigger threat has come not from the unions but from specific groups of employers. Only in a few societies – for example, in England in the 1970s – have unions become so strong and so well organized and presented a uniform enough interest to really block technological change.”

The prime example is the political power of the financial industry, illustrated by the skill in which it came through the last financial crash without the significant rule changes that usually follow big crashes.

Perhaps even more relevant:

After centuries of growth, wealthy families eventually found ways to close political power off from newcomers and used it to close off newcomers from the economy as well. That, according to “Why Nations Fail,” is “how Venice became a museum.”

“In Venice,” explains Acemoglu, “things started unraveling not when economic inequality increased but when political inequality increased – when a particular group of merchant families worked to seal the system to start monopolizing political power.”

Continue reading at The Christian Science Monitor.



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9 Comments on "The Lessons of Medieval Venice: Will the Elite Strangle America’s Prosperity?"

  1. Seems like Daron Acemoglu tries to escape from sinking ship of neoclassical cult. But anyway, one thing is good that in this book he avoided using empirical BS by which he usually substitute logic and reasoning, as in his purely statistical paper about institutions.  

  2. Anarchy Pony | Aug 7, 2012 at 2:11 pm |

    Where are the Assassins when you need them?

  3. Nunzio X | Aug 7, 2012 at 3:41 pm |

    The elite already have the non-elite in a naked choke hold, and won’t recognize a tap-out.

    Instead, they want us not only unconscious but also left with piss and shit in our pants and the very blood supply to our brains cut off.

    After all, once they’ve drained us of every last penny, what good are we anymore?

  4. I think the collapse of 15th century Spain is a more apropos example

    Spain was the most powerful country on Earth
    it had vast stores financial riches and extreme debt

    it spent most of its money on weapons, wars and military occupation
    it helped destroy the biosphere of the Americas
    climate change was killing large numbers of people around the world

    Spain eventually collapsed financially and militarily by 1700
    it had a 200 year run before it petered out
    sounds sorta familiar

  5. There is one reaason and one reason only why nations ‘fail.’ It is because they forsake God.

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