ESMT - Why Nations Fail: The Origins of Power, Prosperity, and Poverty

ladies and gentlemen it's my great pleasure to welcome you here to e SMT today's open lecture with James Robinson as you know I may know the S&T of lecture focuses on questions of current intellectual concern we showcase speakers who are internationally recognized leaders thought leaders in their field and we've pushed the frontiers of public discussion the lecture as always is followed by discussion so the chance for you to ask questions and and to receive answers and also after the discussion I'd like to invite you to join us to stay at the SMT for a brief reception now nothing could be more thought-provoking than the title of the book that transformants in will present tonight the lecture being called why nations fail the origins of power prosperity and poverty and I should add probably there's no better building than this one to actually think about the questions of why nations fail so this book that mr. Robinson brought with economics Daron Acemoglu things very deeply about the topic of what makes nations success and things in the very broad terms about the success factors and the determinants for this it is in our keynote speaker can will of course talk much more about this it builds on a long stream of research and of course has high practical relevance even as of today thinking about questions of where countries are heading and where countries which the Germans are they have four for success in the future as you as you also see and also as of course from the the vast interest this lecture has received this book has received numerous extremely positive awards and recognitions such as from the Businessweek The Guardian was also long listed for the Financial Times in Goldman Sachs business book of the Year what 2012 of course we are looking very much forward to hearing firsthand from Professor Robinson who is a political scientists and economists the David Florence professor of government at Harvard University and a faculty associate at the Institute for quantitative social science in the weather had Center for International Affairs he just mentioned it the other his other positions he studied economics at the London School of Economics university of warwick yale university he previously taught in the Department of Economics at the University of Melbourne the University of Southern California and before moving to Harvard was a professor at the University of California at Berkeley his main research interests in comparative economic and political development with the focus on the long run and he takes special interest in Latin America and sub-saharan Africa professor Robinson is a great pleasure for us to have you here welcome to the open lecture I'd also like to introduce our moderator for tonight welcome back Quentin Thiel Financial Times chief correspondent in Germany we are delighted to have you back for the the questions and answers tonight I'd like to stress that the old lecture is another milestone for our long-standing and very successful cooperation with the American Academy in Berlin represented tonight by Gary Smith it's a great pleasure to have this off lecture this tradition of working with you I would also like to thank the s Fisher lager especially Nina Salaam who is here with us tonight and would also like to give special thanks to the Daimler fund for making this event possible last but not least I would also like to thank the Turkish speaker for the support is our media partner in the open lecture but now to our guest of honor welcome mr. Robinson the floor is yours oh wow okay good so thanks very much for inviting me it's a real pleasure to be here very grateful to the the American Academy in Berlin for facilitating this and for the ESM T for hosting me here I don't think I need to be near these things I have this microphone doesn't this work okay well I can I can try to stay here so thank you very much for inviting me at hosting this event and and it's it's really a privilege to be here it's the first time I've been in Berlin so it's been very exciting to come here and and and talk to you today so what I'm going to try to do in half an hour's to give an overview of the book the book is 500 pages long or something but you can't write a short book on such a large potential topic so we had to you know it had to be long but we'll see what I can do in half an hour just to get some of the basic ideas across so what's the book about the book is about comparative economic development it's trying to boil down in a simple way research that Darrell Nash model and I have been doing for 15 years so we've been talking about this topic actually I realized we met each other 21 years ago and we've been talking about this topic more or less all the time for 21 years I've been writing papers on it since about 1996 and this is an attempt to try to take a lot of the academic research we've done and distill it into a simple framework to talk about why some countries are economically successful in other countries are not economically successful both today and also historically so we're very interested in looking around the world today at the difference between poor countries and rich countries and sort of proposing a way to think about what creates those differences but we're also very interested in the book in a sort of historical approach in trying to explain why we think the world ended up looking the way it did and could the world have ended up looking different in some way could prosperity be distributed differently in the world I think the historical approach is very powerful for discriminating between different hypotheses of why the world is so unequal today and hopefully a little bit of that will come out in the talk so I'm going to explain our framework not by jumping into some sort of arcane definitions but by actually telling you a story about the economic and political history of the Americas and using that story which we do in Chapter one of the book to sort of extract some some lessons some generalizations which form the core of the book but let me before I start on the economic and political hit political history of the Americas let me just say something kind of fundamental which is that thinking about differences in economic prosperity across the world today or historically about why it was over the last 250 300 years some parts of the world became much more prosperous than other parts what economists have understood since the work of Robert Solow in the 1950s a Nobel Prize winner at MIT is that what drives long-run economic growth is innovation its innovation technical change new ways of doing things new goods new products if you go back to the British Industrial Revolution which sort of started this enormous expansion of inequality in the modern world what was the Industrial Revolution it was innovation it was mechanization of production it was the invention of the factory system it was the steam engine new methods of power transportation the railway that cumulated into all sorts of things it came through the 20th century the the diesel engine the airplane the computer chip whatever it is it's fundamentally what creates prosperity is new ways of doing things new good new production techniques that just make human beings much more productive now here's the thing about the Industrial Revolution where did all these ideas and innovation come from was that you know George the third who had all these ideas was that the King of England was it some British aristocrat who came up with the steam engine no what's really interesting about the British Industrial Revolution as if you look at who these innovators were who these first people they came from all over the social spectrum they were elite non-elites poor people artisans craftsmen farmers professional people there's an in very important lesson at the heart of our book from that experience and many other experiences like it which is that talent ideas skill energy creativity entrepreneurship are very broadly distributed in society and if you want to have a prosperous society you need to have a what we call a set of institutions a set of rules in the society that can harness all of that talent ok so keep that thought in mind when I come back to abstracting some concepts from the comparative economic and political history of the Americas ok so let me have a go at that 1492 Columbus discovers the Americas the Americas very interesting if you think about it in 1492 you've never been able to predict that the United States and Canada were the most prosperous part of the Americas or would have income levels multiples 20 times what poor countries in Central America have in fact the most developed parts of the Americas were the best technology the most advanced political societies were in the Central Valley of Mexico or an Andean South America the Incas you know they had built public goods they built 25,000 miles of roads they had famine relief they recorded vast amounts of information on knotted strings called cuckoos they didn't have writing but they had they didn't have money even but they had amazing organization you know they even had a kind of postal system almost they had runners that went all around the Empire so this was something on a completely different scale and level of sophistication than anything you see in the Southern Cone of Latin America at the time or in North America and yet in between now and then there was an enormous reversal in this pattern of relative prosperity instead of being the richest parts of South America and E and instead of being the richest parts of the America and the in South America now a very poor and the southern cone of Latin America or North America is much richer where did that come from what created this enormous change in this pattern of prosperity well that's fundamentally the way that the colonial societies in the Ameri got formed so let me tell you a little bit about why colonial society got fooled very differently in the United States than it did in Bolivia or Colombia or Guatemala okay I'll try to do that through the Spanish colonization of Argentina okay so today we think of Argentina Buenos Aires as being you know one of the most sophisticated interesting fun parts of Latin America that's not how the Spanish sort the Spanish got there they called it the Rio de la Plata because they found some silver they thought hey silver great this is why we're in the Americas I turned out the silver came from far far to the west in the Inca Empire it had come through trade routes it wasn't from Argentina so they built a settlement in Buenos Aires and they tried to negotiate or would they they tried to enter into contact with the local indigenous people the local indigenous people that shuras and the carrandi were basically hunter-gatherer societies that they fired arrows at the Spanish they wouldn't cooperate they clubbed a few to death things weren't working out well for the Spanish they sent out expeditions trying to find where the silver came from and they discovered up the Parana River in what is now Paraguay the Guarani so the Guarani were a large densely populated sedentary agricultural society with hierarchy and chiefs and tribute the Spanish abandoned Buenos Aires on mass moves up the river and took over the Guarani and founded what's now Asuncion the capital of Paraguay so what the Spanish were looking for in the Americas was indigenous people to exploit minerals to mine okay that created a very hierarchical unequal society with particular structures designed to extract tribute resources what economists would call rents from indigenous people so if we look on at say how the labor market was structured the labor market was structured to coerce indigenous people into working for the Spaniards what happened in North America you're thinking let me tell you about the history of the United States was colonized by British people right British people brought a common law they brought Liberty they brought crickets they brought cucumber sandwiches this is not like the Spanish okay completely wrong the British had a model for how you colonize the Americas and that model said number one capture the local Indian chief okay that's how the Spanish have got control over indigenous society that's what called tears have done in Mexico that's what Pizarro did in Peru it's what him in as the casada did in what's now Colombia captain the local Indian chief what you capture local Indian chief you get this huge leverage over indigenous society the indigenous people work they bring tax as they bring food this is how things work in the Americas that was a model the British had when they got to Jamestown 1607 so there was a local Indian chief he was a gentleman called Juan suna but well sooner was someone very different from at a well Peru Montezuma or king pocket ah he was he was in charge of this sort of Restless group of tribes the Powhatan confederation this was not a hierarchy you know it was it was something very different the British said come to Jamestown you know contact he was like no no no no no you you I'm not coming to Jamestown you you he was a very suspicious Chatwin soon the call come you come to might you come to me so the first year the British were you know trying to trade they were trying to figure out how they could get control over what hunt soon the the second winter two-thirds of them starved to death in Jamestown why did they starve to death they didn't bother planting any crops what's that that's not what you did in the Americas you didn't plant crops you exploited the indigenous people okay that was their model two-thirds of them starved to death now James Doohan was founded by the Virginia Company the Virginia Company was a business they were in it to make money there wasn't a charity to spread you know the common law so they thought okay this plan of exploiting the indigenous people isn't working we need a new plan let's exploit the English people so they sent over a new governor called Sir Thomas Dale and Sir Thomas Dale passed a new set of laws and the first law said a colonist running off to live with the Indians is punishable by death now that's very significant that was the first Clause because the first reaction of English people to being exploited was to run off into the forest and live with Rahul Sunna and the local tribes so so the attempt said that after the attempt to exploit indigenous people there was an attempt to exploit the English people that failed for various reasons one is people ran away another was of course that once they realize the only way to have a viable colony was to get English people to go it was very difficult to get more English people to come if you were exploiting the ones that were already there so in 1618 the Virginia Company did something remarkable and this is the origin of why the United States ended up different from South America they decided look this exploiting business is not working let's try something else let's try giving these people incentives so they free people from their labor contracts they give everybody fifty acres of land and the next year to make this whole thing believable they introduced a legislative assembly and gave adult males political rights not females this was not the transportation of some wonderful British institutions adult males didn't get you didn't get suffrage in Britain until after the first world war does this was 300 years before that so so they moved from a society based on coercion to a society based on opportunity and incentives so you're asked you're thinking of yourself the US there's that Constitution isn't that important yeah the Constitution was important but the Constitution was an outcome of a process of institution building which had already taken place in the 17th century in Virginia okay you're also thinking hold on a second that's an awful long time ago he just mentioned 300 years how can that possibly be relevant for anything it's relevant as we show in the first chapter because the early way that colonial societies got organized in North America and South America was very very persistent over time so we show in the first chapter we give a whole lot of examples of how this created what we call a a dependent process of institutions political and economic institutions I'm gonna be more precise about that in a second which goes all the way up to today think about how Bill Gates and Carlos Slim made their money probably the two richest people in the world Bill Gates made his money through innovation okay he wanted to be a monopolist of course he did everybody wants to be a monopolist it's an Adam Smith Reid the Welshman that would read The Wealth of Nations Adam Smith says you can't get you get a few businessman in a room and they come up with some plan to defraud the public okay that's just a natural human impulse the thing in the United States is as thing called antitrust that got Bill Gates under control so one he made his fortune by innovating too when he tried to become a knotless he ran in front of antitrust in Mexico how did Carlos Slim make his money through negotiation and networks with politicians through insider privatization and monopolies Carlos Slim is a clever brilliant businessman but he's operating in a different environment and in Mexico the reward is not to innovating it's to creating monopolies and forming cliental istic networks with politician that's very very telling about the different nature of those societies and that has deep roots in history okay so let me try to abstract some principles or some basic concepts from this discussion you know there's I'm sort of developing this dichotomy here there's some historical development path of the United States and there's some historical development path of Latin America and I'm going to put terminology onto this dichotomy the dichotomy is sort of overly simplified but I think it's useful for developing the argument okay so and I want to come back to this first discussion of the Industrial Revolution and and how ideas and very wide and energy and pound has very broadly distributed in society what the United States did in that early days in Virginia not by design but as a sort of outcome of the equilibrium that arose in this early colonial society was it created a situation where there was very widespread Economic Opportunity and incentives that was the model that the Virginia Company in the end tried to set up something very different happened in Latin America with coerced labor enormous restrictions on Economic Opportunity and lack of incentives for the vast mass of population monopolies all sorts of things so we want to say what's crucial for prosperity as I emphasized at the start with is this ability to harness this talent and we're going to say whether or not a society can do that depends on its institutions the rules that govern the economy that create economic incentives or opportunities so I'm going to call the type of economic institutions or rules that harness this potential inclusive economic institutions you see where this word inclusive comes from inclusive economic institutions and I'm going to call the other sort the type of economic institutions they had in colonial Guatemala or colonial Colombia extractive okay so inclusive economic institutions extractive economic institutions let me give you my favorite example of extractive economic institutions apartheid South Africa so until 1994 when Nelson Mandela became president in South Africa there wasn't this apartheid system and the apartheid system was many things but one thing it was was a massive system of exploitation of black people in 1913 the government passed what's called the native land act the native land act said 93% of the economy is the white economy and 7% is per Africans Africans were probably about 85 percent of the population in 1913 they get 7 percent the whites get 93 percent this is the white economy in the white economy black people couldn't own assets or property they couldn't run a business or start a business they couldn't undertake any skilled profession in fact there was something called a collar bar the color bar was a huge list of things that only white people could do bricklayer Boilermaker cooper lawyer doctor accountant so black people had what could they do they could work as unskilled laborers in mines or farms they had very few opportunities or economic incentives okay this created the world's most unequal society but it was very similar to colonial societies in other parts of the world in Latin America for example and South Africa and Zimbabwe by the way were created by English people you know which is an interesting fact also so this was a huge system of economic regulation extractive economic institutions rules which enormous lis restricted what black people could do achieve or aspire to okay so that simultaneously undermined the prosperity of the society okay so this is the basic idea that's the extractive institutions similar in many ways different in details to what went on in colonial South America but but but but in important in very similar ways which are critical for prosperity okay so the basic story of the book or the first part of the story is why is it that some countries are poor today and others are rich it's because countries that are rich tend to have inclusive economic institutions which have this property that I described while poor countries have extractive economic institutions where why did this enormous inequality emerge in them in the last 300 years in the modern world because most countries historically had extractive economic institutions and some made a transition to inclusive economic institutions and that generated prosperity while others didn't fine so why is it that some countries have extractive economic institutions and others have inclusive and how come some made a transition to inclusive economic institutions in the modern world and others didn't and that's the most interesting part of the book and that's about politics go back to the South African example how come you know the native land that got passed how come the color bar came in which says all these occupations are for white people are not black people that was fundamentally about politics that wasn't some Harvard economist came to South Africa and said you know I've just written this really cool paper about what makes a country develop and what you need is something like the color bar that's really going to have a big impact in this country no this has nothing to do with ideas and it was about power it was about the power of white people in many colonial societies to create a system of economic and political rules which favored them at the expense of the vast mass of the population that's how the Spanish a colonial empire ran that's how the British colonial empire ran that was the model the British had in North America it just didn't work that's the similar model in Australia by the way and it broke down for not dissimilar reasons so so so this is about power it's about politics so lying behind different sets of economic institutions are fundamentally structures of political power so we talk about we make a similar dichotomy that lying behind inclusive economic institutions our inclusive political institutions and line behind extractive economic institutions our extractive political institutions and we emphasize two things about inclusive political institutions one is you know you could think about the South African case is a sufficiently broad distribution of political rights in society of political power in society the other is a centralized state we call this political centralization so to have inclusive political institutions you need these two dimensions and the book emphasizes that this is what leads to inclusive economic institutions so and let me give you some motivation for that where does this state centralization idea come from well in the book we motivate it by talking about the Somali society so Somalia was a part of the world in the Horn of Africa where we really had no centralized political authority the most famous ethnography of the Somali clans by a Welsh social anthropologist called Yan Lewis is called a pastoral democracy the title is very significant because what lewis shows is that actually Somali clans that Somalia was sort of separated into six large clan territories all of whom traced their ancestry back to a mythical founder called all clans made male members of clans made very democratic decisions about what to do okay there but no politicians no bureaucrats no police no lawyers no judges but since the clans collectively made decisions the male members of the clans collectively made decisions about what to do but what Louis shows in most of the book is that what they made decisions about what to do was feuding blood feuds who to attack who to retaliate against so so this society this stateless society thus democratic stateless society didn't lead to inclusive anything it just led perpetual state of warfare and conflict so having a central and what we call a political centralization is critical for providing basic public goods like alder for example which you'll never without which we're never going to have any kind of economic development and you need an entity which can enforce inclusive institutions which can enforce inclusive rules it's not enough to have them they need to be enforced and the state is critical for that so that's part that's a key part of this and you know the broad distribution of political power that's also you know that's also critical how is it that you have you know think about South Africa in 1994 South Africa moved from a narrow distribution of political rights to a much broader distribution of political rights the types of economic institutions under apartheid like the color bar couldn't possibly be sustained after political power had been broadened because people will use their political rights to challenge these institutions that favoured some narrow subset of the society okay so inclusive and extractive economic institutions lying behind them inclusive and extractive political institutions a lot of the book emphasizes how persistent these combinations of institutions are think about my description of the Americas I started by telling a story five hundred years ago how in the colonial period there was this divergence between these different types of institutions in North America and South America and once they got set up they were very persistent so we emphasize a lot that these combinations tend to be very persistent once society gets set up in a particular way whether it be extractive or inclusive there's lots of feedback loops that tend to lead those particular organizations to persist nevertheless you can make a transition from extractive to inclusive and vice-versa and you can also have societies with this odd combination of extractive inclusive political and economic what some examples of that China is an example of that okay what do we say about China well China I'm sort of emphasizing inclusive political institutions inclusive economic institutions what about China how does China fit into that hmm Communist Party that doesn't sound very inclusive so that must be extractive political institutions even this far we kind of must have figured that out so extractive institutions but hold on China's doing well so his theory must be all wrong you know well I'm not going to give in that quickly how do we think about China many other cases like that there's many experiences in world economic history of countries experiencing economic growth with this sort of mismatch between economic and political institutions and what we emphasize in the book is that this is quite possible for transitory periods of time but it's fundamentally unstable ok so what's happened in China to spur economic growth in the 1970s in the 1970s China was an incredibly poor a technologically backward economy ok they started moving economic institutions under Deng Xiaoping in a more inclusive direction what jump-started Chinese economic growth was the introduction of inclusive economic institutions in the rural economy in the 1980s that spread to the industrial sector this was all about creating incentives and opportunities before there this wasn't the genius of the Communist Party this was the Communist Party retreating from tried to control every aspect of people's lives so moving towards a more inclusive economy spurred very rapid economic growth they captured the other kind of what column is called catch-up growth so adopting technology and rapidly accumulating capital reallocating people from the countryside who are being very unproductive sticking them in a factory raising productivity same way that Stalin did a bit kind of more user-friendly than the way Stalin did it but same sort of principle ok so what we are getting is that there's many experiences like this in world economic history we call this extractive economic growth but it's unsustainable under this type of combination of institutions it's same the other way around you know you can have apartheid had extractive economic institutions and extractive political institutions once you move to inclusive political institutions that combination of extractive economic and inclusive political was just unstaple that inclusive political institutions forced economic institutions to become more inclusive the other off-diagonal is also unstable ok so what do I mean by unstable well there's lots of different scenarios you can tell about this instability there's lots of different ways it could pan out ok so one way it could pan out is that you know as Lord Acton said power corrupts and absolute power corrupts absolutely what we do know is Chinese political elites are enormous Lee enriching themselves and their family by predating on the economy you know as we speak and that's something that could exacerbate and you know drive economic progress you know down okay so one scenario of which there's many examples in world history economic history is just you can't control this power and it will lead to enormous predation on the economy and slowdown in economic growth just as likely is the fact that this is very destabilizing politically destabilizing so in the book we emphasize this what we call creative destruction that technological change and economic dynamism redistributes income wealth political power and this is a very destabilizing process you know why is it that you know in North Korea they don't try to go down the same road because they just don't feel they're going to be able to control it okay so that's another trade-off that the Chinese regime will face so I don't want to go I just described the theory about that okay so so we try to talk about these dynamics historical dynamics and about contemporary societies have made a transition from extractive to inclusive you can see that that's very difficult to do but it can't be done so let me end by talking about a little bit about the Arab Spring which introduces one more the last element of this dynamics which is important okay so we emphasize a lot in the book conflict over institutional structures and institutional change it's pretty obvious in South Africa you know just because it wasn't an economist who came along and said you know gosh this color bar is a really good idea for developing the economy it wasn't some Harvard professor who came along and said you know I have a dear colleague of mine Michael son tell him some of you may know who's a very into like justice so it wasn't Michael who came along to this apartheid regime in South Africa and said you know it's really not fair the way you're treating all these black people it was the fact just like in the u.s. South in the 1950s with the civil rights movement it was the collective organization and mobilization of black people starting in the 1970s with the Soweto uprising that was the death knell for apartheid in South Africa in the same way as the civil rights movement was the death knell for apartheid in the u.s. south it was politics it was a shift in political power that forced this to change and that's true in the Arab Spring okay it was collective mobilization for the people who suffered under the extractive institutions of President Mubarak with his crony capitalists that forced presently back from power okay so conflict is important but what's also clear obviously clear from historical examples is that conflict over institutions doesn't necessarily lead from an extractive to an inclusive society after all Latin America is the continent of revolution I told a story about the continuity in Latin America and I even talked about Mexico but Mexico had a rebel lucien of course mexico had civil wars in the 19th century it has a revolution around about the time of the first world war so shouldn't that revolution have led to inclusive institutions of course it didn't what the revolution led to was a coalition of warlords in the 1920s who got themselves together and called themselves the PRI the perc were actually they didn't call themselves a PRI to the 1940s but they caught they made a part they created a one-party state these warlords who had come out of the Mexican Revolution alive and victorious okay so this was not a inclusive society that emerged it was the circulation of it what Pareto called the circulation of elites or what we call in the book the iron law of oligarchy actually sir it's the Turk coined phrase by a famous German sociologist called robert michels i've never been quite sure how you pronounce that but I'm going to definitively learn that today so robert michels coined this term actually he was a and he was very outraged at how the Socialists had supported Germany's entry into the First World War and so he was trying to explain how they'd been captured by the powers that be and how new elites were captured by the traditional elites but also he describes this process of elite circulation so this is crucial to understand think about Egypt and how people are talking about Egypt everybody's worried that now Mubarak has disappeared he'll be replaced by the Muslim Brotherhood so this won't be an inclusive or different type of society it will be mubarak 2.0 it'll be a different group on top different face may be different instruments but it won't be a fundamentally inclusive society it'd be an extractive Society in a different guise okay and there's many many examples of that we talked a lot about that in the book so what is it that makes the difference between a conflict that leads to the reproduction of an extractive Society in a different guise or a conflict that leads to a new inclusive society and the concept we use in the book is what we call a broad coalition okay so let me motivate that and then I'll shut up so what's a broad coalition well well this is a very empirical thing what determines whether or not a conflict seems to lead from extractor to inclusive is the nature of the people in the conflict if you look at the Glorious Revolution in 1688 in Britain that we point to as being fundamental in leading to a more inclusive set of political institutions in Britain which then subsequently laid the foundations for the Industrial Revolution what you see is that the gorse revolution was fundamentally a kind of the derailment of the sort of absolutist political project that was being that was sort of underway at that time so King James ii was kicked out of power and there was a civil war in which a very broad heterogeneous group of people were organized against him people from across the political spectrum from the nascent political parties the Whigs and the Tories at the time landowners mercantile groups all sorts of people were organized against him why is that important well I'll give you a very specific example one thing James ii was doing was really irritating people was intervening in legal cases so some judge ruled in some way he didn't like he intervene and fire them ok this was this was annoying people so this was a big sense of grievance now imagine we're trying to start a revolution ok so um I'm in charge and you're what you're you're the potential revolutionaries now I need to get you mobilized and out and out on the street what could I do well one thing I could do is I could say you know when we're in power we're going to get the legal decisions we want you know he's getting the legal decisions he likes now but where we are in power we'll get what we want ok now that's a viable thing if that's just a small what you know what Lenin might have called a Vanguard's party you know so we're in the right place to me to talk about the Vanguard parties so I'll talk about Vanguard parties you know the Bolshevik Revolution what was that that was a kind of coup d'etat in some sense by a very narrow group of people so so but the more and more people I have to appeal to I can't offer selective favors to everybody ok if I have to appeal to a broad coalition of people in society I can't I can't behave in this way favorable to everybody so what can I do instead that I can say well well we're very aggrieved at this intervention in the legal system by James a second so what we're going to do is we'll have everybody will have equality before the law will have a level playing field nobody's going to get discriminated against maybe that's not quite so powerful for mobilizing some people but that's what you're going to have to do to mobilize a lot of people because you can't use this very selective way of mobilizing people and that's exactly what we show in the book which is that after the Glorious Revolution this notion of basically the rule of law or equality before the law emerged as a consequence of the strategies that people had developed in order to contest power with James a second so I hope that's a sort of very tangible example of what we mean by this broad coalition you know when does a broad coalition form and will it form in Egypt and we don't really have a theory about that but but but that's that's that's where we are so I hope I probably said too much so I think I've given some idea of what the basic ideas are and how we use them and so let me shut up I must introduce myself very briefly again professor Rocco said I'm the correspondent for the Financial Times here in Berlin and you've given me a very challenging job to do because your your your canvas is so huge I mean an extraordinary book the sort of book one would die to have the opportunity to write but actually you're it's a very brave and maybe quite foolhardy book to to really go for such a break so what I want to do and I want to involve the audience here as much as possible in a debate I assume we've got till 8 o'clock yeah and is really bring your thinking into the world that we're living in very much and say ok well using that theory what's going to happen which is what you've just bulked on the Arab Spring so I won't start with the Arab Spring yeah I'll start with the BRICS let's look at Brazil Russia India China here we have four countries that are really a pretty disparate group but at all between them in a way representing the explosion of the emerging markets and what have we got fundamentally too overwhelmingly extractive countries and to that a far more inclusive Russia and China still essentially extractive India and Brazil inclusive your theory would predict that the great successes are going to be India and Brazil looking at them today I would think it's going to be China yeah so that's exactly right I mean I think that Russia Russia is an example of a failed transition to an inclusive society in the 1990s yeah this is a the collapse of the Soviet regime and the transition to a democratic society was not a broad-based political movement at all it was something going on in Moscow and the and and the the attempt the some you know the somewhat serious to create a more inclusive model collapsed in the face of political you know chicanery I would say you know so so so this was a this was a failed attempt to make a transition to an inclusive society and I would say it's very extractive you know that what works in Russia is natural resource extraction you know it's it's the wealth and the economic growth is based on oil and natural resources and and and you know and the Chinese case you know I would say this is you know I talked a lot about that you know that this is not a stable situation India is a sort of gray you know great area in the sense that one of the arguments the Indians use is we are the Democrats therefore in the long run we're going to work it's a very imperfect type of democracy so so in the book we kind of avoid that we talk about inclusive political political institutions no we talked about you know inclusive economic and extractive because we want to try to use different terminology you know if I want to talk about difference between South Korea and North Korea I think the important distinction is not capitalism and socialism it's this inclusive and extractive and I think that's the thing about democracy as well that some sorts of democracies can be very non inclusive you know in India is enormous ly corrupt there's very there's a huge amount of vote-buying and cantle ISM there's enormous sort of populist tendencies as well so I would say it's very imperfect the indian democracy and economic inclusion is also very imperfect think about the caste system you know the caste system must counter sort of the world's most institutionalized extractive institution that blocks opportunity and incentives but nevertheless I would say you know who asked me you know which of the two countries China or Brazil had a kind of institutional set up which was most likely to be persistent successful in the long run I'd say by far India you know in what India has done something really amazing which people never talk about which is how surprising it is that such a thing exists India is this enormous lis heterogeneous linguistically ethnically historically subcontinent you know China hasn't even you know Salta I don't think with a workable political system so so you know the Indians managed to create this workable thing and create a social contract and identity and it's lots of imperfections but that's quite an astonishing achievement Brazil we talked about at the end of the book as being a case of a very interesting transition to more inclusive economic institutions as a consequence of the democratization in the 1980s and we speculate as to whether you know what is the broad coalition in Brazil and as you know we talk about the application of this idea and it fits your model to the extent that in taking this transition to democracy in a way from military rule it really has opened up the economy dramatically right but that it's a particular sort of transition you know the trend that the transitions of democracy you know in Venezuela didn't have the same didn't have the same impact so it's it's not just the transition to democracy it's what type of democracy you get it's you know it's that that's absolutely crucial and that in our view is to do with the type of movement that fought for democracy in Brazil that's very different from many of these other Latin American cases ok but now I mean take your book is it the sort of book that should be making a European audience feel good at night deafness we're inclusive we're all right don't worry the world out there and yeah if you're sitting in Europe you feel we are getting worse and worse at making decisions we are moving very slowly demography is all wrong all the other things that you're rather dismissive of are going wrong well I wouldn't say I mean I think that you know there's never room for complacency right yeah what is it that makes institutions work and persist and that's human beings you know human beings have to work to defend institutions to make them work better to make them flourished you know so so human you know it's human beings that make the system work you know of course in any particular set of institutions human beings operate with the particular set of expectations about how other people are going to behave about how the rules are going to be enforced and you know so so people's energies are channeled in particular direction in the same way Bill Gates's energies were chatted in a different way from Carlos Slim but I don't think there's any rule for complacency you know we give examples in the book historically from the in case of the United States in particular about how institutions historically are being challenged many times in the US you know but their idea with inclusive institutions is that they're sort of feedback there's feedback that tends to lead to inclusive institutions persisting over time so you know if I'm going to take all the countries in the world and I'm going to put them in one of two bins extractive or inclusive obviously European countries are going to be in the inclusive bin and I you know I think that you know inclusiveness or something that's deepened enormously you know Minh Europe in the after the Second World War that the European Union has paid an incredibly positive role in promoting inclusive institutions you know not just in southern Europe in iberia but also in Eastern Europe and in the Baltic States you know it's just seems to me that yeah I I don't know where all this European pests were euro pessimism comes from I say that you know any type of economy is a private enterprise economy is prone to instability you know innovation goes along with instability you know a lot of the financial crisis is caused by the fact that people come up with new financial ideas you know innovations new securities assets derivatives you know a securitization it's a clever idea they can make money it allows you to do things you couldn't do before but it also has all sorts of unintended consequences you know so you know this is this is a problem it creates instability the regulators don't understand it either their government is trying to catch up that can create speculative bubbles it can create crises it creates huge amounts of pain and welfare losses unemployment but I guess you I would say you have to look at the big picture you know to me the you know the European project has been enormous ly successful okay you know : admit Iran thought well we can't get everything we want but we can do this monetary union thing so let's go for it and that created this strange combination of monetary union without fiscal union and that created a lot of McCracken dis equilibria but I'd say you know and maybe that's part of the crisis - well what's happening now well people are trying to figure out a way of solving that problem I mean and I think you know that's going to be quite a consensual thing in the end you know think about Greece you know Greece is not benefiting from this incoherence the Greeks are suffering enormously from the fallout from this particular model of how the EU worked and so why wouldn't they want to find an institutional architecture which will stop this happening again you know so so I greased is still essentially an extract - I you know I'm not going to deny that there's differences between Northern Europe and southern Europe but think about the story you know we have in the book you know about the emergence of inclusive institutions and I didn't get into this very much in you know in Europe and well this is happening in the early modern period the Atlantic economy opens up trade developed and mercantile institutions what's happening in Greece it's part of the Ottoman Empire the Ottoman Empire is something like colonial Latin America it's this very patrimonial and a very patrimonial political system you know greet you know Greece's trapped in a kind of a speck in a very different world than the rest of Europe in that period so I would say you know these problems with Greek politics can't ilysm patrimonial States you could say okay the EU should have sorted that out and it didn't but the EU didn't create that that's something much much much deeper in the history of the society it seems to me all right you're getting you know I'm starting to get a little bit persuaded I want to bring in the audience as much as possible so why don't you start sort of raising your hands or shouting at me and I will keep going also a little bit just before I come to you then over there Beth I'm going to say ask you one more thing haven't you got the wrong title for the book isn't the real question not Wiese nations fail yeah but why that much rarer thing do they succeed yeah I know that the title yum you may be right the norm is they extract but the title comes from the fact you know this is a lot of the theoretical work that Daren and I have done in economics and political science which is that you know we've always thought some economists think that success is sort of deeply puzzling you know they think that oh gosh it's such a mystery you know how do we solve the problems of Sierra Leone whereas we've always seen this as being easy you know like what do you need to make Sierra Leone more prosperous well it'd be nice if there was some electricity some roads you know it would be nice if there was any kind of infrastructure if the schools had teachers and if the schools had books or maybe roofs on them you know just like basic things education infrastructure you know functioning government rule of law uncorrupt legal system you know this is easy you know this is you know I don't know how to turn Sierra Leone into a kind of manufacturing miracle but I know how to take it from GDP per capita of $500 to $10,000 so we've always thought this bits easy you know the difficult bit as understanding why is it that this society can't exploit this very easy things it everyone knows how to do look at the electricity you know there's no electricity in Sierra Leone you know or North Korea well in the if you look at North Korea at night you'll see there's some power in the presidential compound in Pyongyang but apart from that we've known how to electricity is a very easy to use technology it's been around for a hundred and third this is not rocket science to use electricity and why is it not used you know so so we've always thought failure was the puzzling thing we've done a lot of theoretical work trying to understand the politics and the institutional structures that create failure and I guess that's that's really if I come again yeah right best part over there the microphone just behind you I'd like to ask how many times you have been invited to China and what was your reception never I mean I've been several conferences in China academic conferences but never I hadn't know why not do they no idea what do you think your reception would be like if you I don't know III the last time I gave I gave a talk at the Peking University about five years ago and it's very very open you know I found that I was very worried ice I saw I talked to them that I was invited by Justin Lin who was just the world bank chief economist who's a professor there and I said yeah I was very anxious about what can I say you know do I have to censor myself and I don't have caused controversy said no you can say anything you like it's a university and it was very fun I mean I found the interaction very fun and interesting but like no but I didn't talk about China I got a question just on the out of here stand up so exist so my my puzzle is about your persistence did you just say who you are I'm Jay Bernstein from the Academy Fred puzzled about the persistence thesis so my puzzle is it's not clear to me why when people become powerful they don't change the rules in order to favor themselves in order to make the economy more extractives indeed that seems to be just what's happened in the United States and in Europe over the last 15 or 20 years you claim there's a positive feedback loop but the evidence of the last 20 years is exactly not that the feedback is from an opportunity from an inclusive to an extractive given the opportunity to do so so I don't understand where the thesis of the persistence of a good feedback comes from and why you don't think that there is a natural tendency to go from inclusive to extractive yeah I don't agree with this characterization of economic institutions in Europe and United States I yeah I think you know in the United States there's a severe concern that increasing inequality is leading to a sort of oligarch ization of politics and making the political system much less accountable and much less inclusive and you know I think we can we can we can debate that you know I don't see any evidence in the United States you know you could make an argument about the financial sector but I don't see any evidence in the private sector that industry is becoming oligarch eyes or riven by monopolies or entry barriers i see the private sector in the US as being still very dynamic and competitive you know so and I I mean I'm not an expert on Europe but but Britain which is a country I'm a citizen of and I know something about I don't see that that's any different in Britain then it's always been there's always been a sort of banking cartel in Britain going back you know for as long as back probably to the 17th century but you know I don't see the private side if anything the private sector to become much more dynamic you know now Britain is an exporter of cars for the first time for 30 years Britain now export cars that's because they're Japanese car Britain exports Japanese and German they've imported human capital in it expertise the Tatars that Tatars have come that's fine you know that's that's that's that's that's gains from trade and comparative advantage you know so that's the break you know why did that happen because that's extractive institutions in some parts of the British economy made it impossible to innovate so they had to go bankrupt and new people had to come with different ways of doing things and different ideas and business strategies and that's that's creative destruction in action so so I don't you know if you ask me you know you're what you're what you're describing is what happened in Tunisia you know when President Ben Ali took over in 1987 in Tunisia he took over a project you know which was quite an inclusive project under President Bourguiba you know president Bourguiba expanded education he wanted to create the Tunisian identity he had a project you know like Lee Kuan Yew had a project or you know like president Maha Thea had a project even President Marcos and the Philippines had a project some people claimed but what happened in the in in Tunisia is very interesting because that was again this combination of inclusivity in the economy in many dimensions with extractive political institutions what happened when President Bourguiba was pushed aside and President Ben Ali came in his thought his family started looting the economy so so so so yeah this is what happens when you have unconstrained power and you know that's another instant case of instability so you know there's a gap question in the middle here well we've got more than one question yeah that gentleman there hi I'm Michael Levitan American journalist I'd like you to talk a little more about your idea of the broad coalition that you started on and in speaking to the fracturing essentially the fracture that is occurring now with southern Europe essentially every country in southern Europe now taking on you might not want to call it a revolutionary aspect but certainly the majority's vast majorities of the population not agreeing with the policies in the direction of the governments from Portugal to Spain right across even Slovenia Bulgaria Greece and now Italy with a new party it's evident so can you talk about what you see when populations do as you as you cited the the Glorious Revolution built a broad coalition in our era the elites and those in power seemed not to be listening to the people regardless of a majority voicing opposition to policies that are being pushed on populations so how do you see that broad coalition manifesting in something that actually brings about more livable existence for the many people yeah I mean I don't want to you know by being optimistic about the sort of European project I don't want I don't want to de-emphasize the short-run costs of you know economic crisis but I think if you think about the Spanish case you know what is it that creates what if that you know fundamentally that created this crisis you know it's it's a sort of speculative bubble in real estate you know now you could say that's an enormous failure of regulation you know what happens when respective bubble occurs so so house price there's a huge boom in house prices financial industry starts lending lots of money to buy house prices that bids up house prices construction starts construction drives up wages it sucks resources from workers capital from the rest of the economy then the whole thing crashes you know you can't those people are unemployed you know people's houses are taken back you know there's enormous discontent in society you know you could that's a massive failure of regulation of the financial sector of but you know I don't have some Machiavellian theory of that I just think that that's a crate grater so that correct grated perhaps by some extent perverse incentives you know within the financial sector in the sense that the financial sector is too big to fail and they know that so they can engage in you know to speculatively or to risky activities from a social point of view you know so okay so this is a this is that you know to me that that's that that's a that says nothing that doesn't reflect on the viability or kind of sense of the project of the EU or European integration it just means you have to find a way of learning from that experience of trying to stop that happening again of regulating the financial industry or whatever it is or finding a different monetary policy or you know so as I said you know I think that stability instability is a part of innovation be it in the financial sector or when the other sectors of the economy you know I as I'd say the same back Greece you know I don't see what is the you know in this case I'm not sure it is a battery of a broad coalition because I think that Spain has fundamentally inclusive institutions it has fundamentally inclusive economic and political institutions it's a matter of sort of the society identifying what's in its collective interest I understand that in the short run this is enormous ly painful you know having to bear all of this wage cutting cuts in public expenditure people losing their houses this is verily very you know it's very socially destructive and it's very bad for people's lives but it seems to me that the current that the correct reaction to that you know all the socially desirable reaction is to recognize that the fundamentals of society are good and it's just a matter of adjusting to this you know which is painful that's about well you know who pays for that as well as an important issue so it's a there's also a distributional issue as well as a kind of welfare issue so you know I understand that in situations like that you could get very dysfunctional type of politics can arise populist politics or whatever but I I mean I'm my impression if you take the Greek case you know perhaps I'm not understanding what's going on well enough but my sense in degree kay says is that the voters recognized that they were going to have to adjust to this situation what else do you do take get out of the EU you know Greek people would be much worse off if they got out of the EU devalue their currency becomes worthless they lose all of this connections I mean this is not a sensible future for any of these countries it seems to me but you've put your finger on I think a very interesting difference between Greece and Spain yeah we're in in Greece the real problem is that the institutions do not exist to actually provide a sustainable solution that they are still locked in this sort of post uh termined aha stasis whereas Spain had moved much further to have a viable institution yeah so the real challenge in Greece is actually to build those institutions not just an economic challenge it's an institutional right which i think is very interesting I've got a question on the edge that I want to put something to firstly I want to come back to the grand coalition idea and where does the bourgeoisie fit into this because I was in Russia in the perestroika years and I remember feeling very much that once there was a real bourgeoisie who had an interest in in property rights and so on you would get much more of an unstoppable force towards it hasn't really happened even the oligarchs didn't become a great force for saying now let's now we've stolen all our property let's preserve it with good property laws they just took their money out to Cyprus or wherever it may be so where does the bourgeoisie the social change fit in with the institutional change well I know I think that's part of that that's an important part of the story you know people say there is a middle class emerging now in Russia but it seems to me that it's it's it's very dependent on the state it's dependent on access this is a very strangely defined middle class I think you know one motor car and a couple of television yeah but you know having a middle class which is you know what's crucial about the British case for example is that a middle class you know or a mercantile bourgeoisie emerged which was autonomous completely autonomous from the state in fact it fought tooth and nail against the state to make itself autonomous in the early in the first half of the 17th century and to stop the state trying to predict on it and it was not it was not a middle class or a mercantile class that was that was you know reliant on state favors or state monopolies or state patronage it was a it was an autonomous man and that was a very big political battle in England the statute of monopolies from the Elizabethan England right the way through to the Civil War I mean I we don't emphasize so much the middle class per se in the book I think you know that that you know if you look at the take the take the brazillian transition you know one of the things that was crucial in the Brazilian transition is not the middle class but the working-class but the Workers Party now of course the Workers Party is a very heterogeneous party but the Workers Party started with a strike wave by unionists against the military dictatorship and that was a sort of something that precipitated this creation of a much broader interest of intellectuals of you know middle class people and sub-sub pouts how Paulo or Rio de Janeiro and so so I think I think that's an important part of it but it's not emphasized that much in the book okay I've got one question on the edge up here at the front and then I got to at the back there's a man right behind you tell us who you are I'm Dee turbo master a retired civil servant of Berlin and a friend of Lesley Khalid today I read in a paper that in Europe bound run 1 million cars at the end of the decade to 1920 2020 now I ask you you you agree with me that Germany is relatively successful nation within Europe but I asked you whether Germany is not may be a country which belongs to your extractive extractive in societies because Germany exploits maybe its capacity to build big stars to export and inclusive society would after your ideas find ideas how to make tasks for the future so maybe a successful nation can also be a extractive Society you're worried about the consequences of this for the environment is that the question is that is that why you're worried about the environmental consequences at all are you saying that in order to get environmental progress you need to have a more autocratic government but actually maybe we're not gonna do it III think there would be necessary to have new ideas you started your lecture very well with saying it's good to have innovating ideas and and I agree with you but in Europe maybe the innovating ideas are not too too big we dwell on the things we have we have achieved a lot and that makes lazy maybe and so right so I mean I think that you know some you know a lot of people could legitimately criticize the book as being too focused on economic development and what about you know that that that many people believe that this model of economic development we've had over the last 200 years is something which is completely kind of unsustainable in the face of you know deterioration of the climate or finite resources or so you know I think those are enormous ly important issues particularly you know global warming and the enormous externalities from economic activity for the climate but I would say you know is that what what type of society is most likely to solve those problems or be able to negotiate with each other and you know devise a sort of collectively durational solution I would think that was societies with inclusive institutions I wouldn't have much faith that you know the dictatorship in North Korea or as Becca Stan or wherever it is it's going to be able to make any kind of socially desirable choice for the society they they govern you know so you know III I would say that yes these are big political problems that the world faces you know but I would say that if any type of society was likely to be able to solve those problems in a rational way and get together to do something about it it would be it'll be inclusive those with inclusive political institutions we've got to the microphones with somebody there at the back yep yep you've got my good evening I am a student from the fire University Italian and I'm working on something that that is very closely related to the topic of your book it's a link between political pluralism and innovation and empirically speaking I think they're very highly correlated now the area that interests me is Eastern Europe after 1990s in Russia for example at the beginning of the transition period there was a multi-party political system that had more than 100 political parties enlisted for voting for number of votes do you think that the higher the political party system the more innovations will come and the higher growth will be generated do you think it is a question of time and do you think that there is an ideal number of political parties thank you very much somebody else close by at the back but I get a second question right if you could just keep you up yeah well thank you my name is Mick oh man I'm a student at the school of governance here in Berlin and as Russia was already touched upon and you mentioned early and you said one of the reasons that they failed to actually establish inclusive institutions was it because of the extraction of natural resources and talking about the so-called resource curse I was wondering whether in your research you you were actually able to establish a link between the existence of Natural Resources and the establishment of extractive institutions thank you can you handle this yeah absolutely yes so I don't think there's any desirable number of political parties you know I think that the number of political parties tends to reflect incentives in the electoral system for example the British system that you have in the United this majoritarian system you have in the United States tends to naturally generate two-party political competition whereas the type of proportional representation system you have in Germany allows multiple parties to flourish I would see that as pretty unimportant relative to other things I mean I think you know that I wouldn't say that that type of electoral system that type of difference generates different sorts of incentives and parties I wouldn't see that as being a big issue I think you know in the Russian case yes you had this proliferation of political parties but that was a sort of epiphenomena in some sense you know that it was soon snuffed out and I would say you know the Russian case you know as in many cases in Eastern Europe there's a lot of continuity you know I mean in Russia the content the unfortunate continuity was there were still elements of the Soviet state and security apparatus that were still enormous ly powerful after the collapse of communism which prevent which which President Putin was able to utilize in a very interesting way you know the fact that the state got these oligarchs under control is something absolutely fascinating you know that would never happen in Mexico or Columbia no no way so I don't think there's an optimal number of political parties and I just think the whole slew the whole nature of this particular competition here if you look at these if you look at countries like Poland or Hungary which actually had a sort of history of democracy and sort of free elections and free politics well somewhat free between the First World War and the Second World War there's actually a lot of continuities between what went on before the second world war before the sort of iron curtain fell and what's happened since so there's all sorts of continuities in terms of the politics and you know in terms of the resource curse I I don't think and this is what the book argues that there really is a resource curse except at particular historical instances you know so think about the Americas I think at the time of the colonization of the Americas the availability or otherwise of particular resources may be important for determining what type of society you get but I think that's generally not relevant you know look at Venezuela you know vent to me Venezuela looks like an absolutely normal Latin American country you know Venezuela has oil you know Colombia doesn't have oil it sort of does now but it hasn't had much in the past you know I just see all the similarities between Venezuela and Colombia not the differences you know and that's because the structure of those society the politics that's all deeply rooted in some much more slower moving historical process when oil came on stream in Venezuela in the nineteen twenties it really did not much to change that and I you know I think that's generally the case in the book we give the examples of gold in Australia and diamonds in Sierra Leone so I taught in Australia for two years actually at the University of Melbourne so in Victoria in Australia where Melbourne is there was a gold rush in the 1850s and this was this was gold was spread out all over the place and it's not like something deepmind there were thousands of people went off diggers went off you know and started prospecting for gold with a shovel and a pan okay now in Australia this is like democratic gold you know this is creates this Democratic impulse it creates the first part of the world which had an effective secret ballot that's called the Australian ballot that was introduced about five years after this gold rush started in Victoria so what happened in Sierra Leone you have same resources very similar you know diamonds people go shovel pan mining what do you have in Sierra Leone blood diamonds you have no Democratic impulse why is that well the intrinsic resource was very similar but the way it was exploited was completely different in Australia you had this very open access thousands of people went out they started digging they got a claim what happened in Sierra Leone in the early 1930s when they discovered diamonds the British put a huge fence around the whole thing and gave the monopolies to the one company to exploit that had very very different social implications from the dock the way that gold was exploited in Australia so so I what the way we talked about it in the book is the consequences of resources tend to be very conditional on the different types of institutions you have and it's only at particular moments when resources can be can be important I feel we're running out of time now all the answers that we must bring up we let me let me just take there was one question here is there a microphone and gentlemen right yeah stand up and bring him a mic and then I'll take two questions together and then I fear we're gonna have to wind up so nice short question please my name is toast baranski I'm from the Humboldt University of Berlin my question is so far you've talked about foreign policy as an initial shock in economies like the Spaniards in South America or the English people and in America North America but you haven't talked about hegemony or influence in in in in current politics or in politics of the past so what about it yeah regional like for example Nicaragua with the United States influencing like the economic you can there's only one hegemon basically it's America yeah I I mean I would you know I would have thought the recent experience in Iraq and Afghanistan has underlined how it completely ineffectual the United States foreign policy is in in determining you know what the world looks like you know both cases that's been a complete failure of the plan to create some sort of you know western friendly little puppy dog lap dog type of society it's been a complete and utter failure they just haven't recognized that yet in Afghanistan I think you can find instances such as in Nicaragua or maybe Chile in the 1970s or Guatemala in the 1950s where the CIA came in and you know they did this or did that or they tried to encourage this side or that side but I you know we don't emphasize in the book that in the book because because I just you know we just feel that that's not really first order you know if you look at the Chilean Chilean dictatorship okay so this is one of the most famous examples I mean that the you know that the same would be true of in Nicaragua but okay fine so the Chilean military mounted a coup you know in September the 11th 1973 they sort of the CIA you know Henry Kissinger Henry Kissinger sort of back in fashion now but back in the day you know he was waving on the Chilean military to mount a coup and shoot a few communists and trade unionists now were the Americans cheering sure but what was the real impact of that you know George W Bush was cheering when the Venezuelans got rid of Chavez for 48 hours and then Chavez bounced back and you know then he'd just look stupid you know my guess is that what real you know the real thing in Chile is this enormous conflict in society over the way the society was going to function there was a socialist project of the government of Ind there was enormous opposition to that in society from landowners other type of interests and that was what the conflict was about the Americans came in kind of one side cheering and egging it on but I know if you'd taken the CIA out of that and and and pensioned Kissinger off more sent him back to Harvard he used to be a professor at the Weatherhead Center before used to be called the Center for International Affairs before has renamed the Weatherhead Center for International Affairs you know anyway Kissinger used to hang out there in 1960s so so you know they could have paged them off essentially back to Harvard the coup would have still happened that's my guess maybe not but I don't think that effect is big so that's why we don't emphasize that sort of thing I think we bleed too much so we no no no we have to wind up I'm very sorry because there lots of people would like to come in now but maybe afterwards you can get a few people running up I like to end with up rather than conspiracy after of life long life as a journalist I am convinced that up is far more common than conspiracy I want to finish with wonderful story of my own because you write a lovely piece in the book about one of my all-time favorite countries and that is Botswana I was correspondent in South Africa for five years and I used to travel up to Botswana and it was the moment of liberation when got there and that wonderful gentleman who you write about in the book quit Masseria was president and I went to interview him once and he invited me and my colleague in and he said gentlemen six o'clock would you like a drink and we were very good and we said yeah we'll have a Coke or Diet Coke or something equally so he sent out a flunky to go and get us a coke and after about 10 minutes this rather embarrassed flunky came back and said excuse me mr. president you've got the key to the cool drink cabinet definition of a civilized so but so there is my all time civilized country professor Robinson thank you very much for your talk for answering all those questions thanks to the audience and thanks to those who arranged the meeting

Channel: ESMT Berlin

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Keywords: robinson, Acemoglu, berlin, Harvard, american academy, political scientist, ESMT European School Of Management And Technology (College/University), ESMT, Business School (Organization), Bschool, MBA, EMBA, Executive Education, Germany (Country), Europe (Continent), Harvard University (College/University), power, prosperity, poverty, Why Nations Fail, University (Building Function)

Id: bs0vKyz35AQ

Length: 83min 31sec (5011 seconds)

Published: Tue Apr 09 2013