The USSR, Congolese Tribes, Trayvon Martin and Patent Reform all in one post

I’ve been reading Why Nations Fail, the blog and book. I’ve reached the section on the Soviet Union and the Lele and the Bushong – the discussions linked to above are from Paul Krugman and James Robinson, but are on very similar lines.

The Soviet Union achieved economic growth in the 1920s-1970s by moving resources, very, very violently, out of low productivity agriculture into high productivity industry. From 1930 to 1960 the Soviet Union saw growth rates of 6% a year, probably the fastest sustained rate ever seen at that time.

The Bushong and Lele are tribes that live on opposite banks of the Kasai river. The Bushong are far wealthier, more peaceful and more technologically advanced than the Lele. This was because in the early seventeenth century, on just one side of the Kasai, Shyaam formed the Kuba Kingdom. This was an absolutist and centralised collection of the local warring villages.

What links both is that in the Soviet Union, and on the Bushong side of the Kasai, elites came to power who had the incentive to move resources to high productivity sectors in order to extract more wealth for themselves. Both societies eventually stagnated – the Soviet Union at the level of a poor industrial society, the Bushong at the level of a rich agricultural one – because both lacked institutions that gave citizens incentives to innovate and invent.

Acemoglu and Robinson argue, at length and convincingly, that wealthy capitalist countries are successful because institutions in these countries are politically inclusive, giving everyone a stake in their functioning, and economically inclusive, giving everyone a chance to take whatever employment suits them and experiment to see what innovations they can make work. Only this combination creates sustained economic growth. There are echoes of Eric Jones’ Growth Recurring, which I have discussed before.

I’ve also just read Richard Seymour‘s history of lynching and its importance in understanding the murder of Trayvon Martin. Richard underlines the long tradition of American citizens being deputised into violently upholding America’s  racial hegemony. Lynching was just one part of the system of exploitation and repression blacks faced in the US.

The murder of Trayvon Martin should be seen as part of the continuation of this tradition of separating white and black space by violence in the United States. Florida’s law allowing racists to kill black people and avoid arrest if they can convince local law enforcement they were under some sort of threat. These are exclusionary political institutions in action.

The manifestly exclusionary political institutions the US still has – see also the incarceration of blacks in the US – took an even worse form in the past. These exclusionary institutions and extractive economic institutions did not however seem to significantly retard growth or innovation – although even in the US, evidence for Acemoglu and Robinson’s thesis is available, the more repressive south is poorer than the less repressive north.

The 1930s were a tragic decade macroeconomically but were the most technologically progressive decade in history, never had productivity grown so quickly. So, despite manifestly extractive institutions and exclusionary political institutions existing in the US in this period (for women as well as blacks remember) there was an explosion of innovation.

There seems to be a disconnect between incentives being important for innovation at the societal level and incentives being important for promoting innovation at the individual level. I don’t take this as evidence against the importance of institutions which promote innovation, some people had the incentive to innovate, and they pursued it with enthusiasm. The question all this seems to pose is: to what extent were these innovations individual endeavours?

What this makes me think is that many inventors do not deserve to capture the full results of their innovations. Ideas seem to be more “in the air” than the product of individual efforts. Even if inventors don’t deserve their ideas protecting, and even if it doesn’t make much sense to label something someone’s idea because they perfected it, or submitted a patent a few months or years before someone else, it may still make sense to offer them patent protection and so on to achieve the maximum possible economic growth. What policy implications this notion of desert has then is unclear.

However, synthesising Marxist analyses of race and space and the life’s work of Daron Acemoglu, James Robinson and Alexander Field isn’t something you get to do everyday. So although policy prescriptions are lacking, I hope you find the above thought-provoking.

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4 thoughts on “The USSR, Congolese Tribes, Trayvon Martin and Patent Reform all in one post

  1. How did you get this book so quickly. I pre-ordered bu no sign yet. Good post. Will respond when I’ve read it too.

  2. I got it early! About mid-March. Guess you’ve just been caught out.

    It is a very well written and very well sourced piece of work.

    Given your interest on Charles Tilly, you’ll like its emphasis of the synergies between growth and state creation. The extra emphasis on the institutions of the state and the role of social groups putting pressure on elites is good too.

    But really, its got discussion from the neolithic revolution through rome, through china, through the glorious revolution and all that, and Latin America and slavery…it really is one of “those” books that touches on everything in the stream of “Guns, Germs and Steel” or Graeber’s “Debt.”

  3. Really enjoyed “Why Nations Fail” ‘s exploration of the seminal role of power in wealth and poverty. A worthy extension to “Guns Germs and Steel” ‘s treatment of geography’s influence on the ancient dissemination of agriculture.

    Interesting comment on 1930’s innovation. You rightly mention extractive institutions. F.D.R. made enough changes that some reactionary rich people turned “Roosevelt” into a swear word as in “It’s blowing a Roosevelt!”. Roosevelt empowered groups who didn’t have a voice, making political institutions less extractive, and built up national infrastructure, .

    Automobiles was one area which saw significant innovation in the 1930’s. In retrospect one could explain as follows:
    The big three (Ford, Chrysler, General Motors) had equal power. None could monopolize the market
    The market was small(few could afford a car) and competition fierce, innovate or die. Teddy Roosevelt killed the Trusts a generation back, probably why the Big Three didn’t collude too much. Innovation makes sense in that corporate micro-environment. Compare that power relationship to the power relationship with the tiny, independent “Tucker” and his technologically superior car in the 1940’s.

    One could argue that Teddy Roosevelt’s trust-busting, and F.D.R.’s empowerment of out-groups, laid the ground-work for subsequent prosperity. The massive investments in national infrastructure become a side-effect of a government taking the less well off seriously.

    “Why Nations Fail” lays out an extensively documented and well presented argument that wealth and poverty comes down to power. So long as we have multiple, independent, competing power centers, we get innovation and change (creative-destruction). Once power gets entrenched and complacent, we get at best stagnation, and at worst decay and anarchy.

  4. Shame George Zimmerman was Peruvian. Otherwise we could really have made whites feel guilty about it.

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