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.