Quotes from Daron AcemoÄŸlu

As we will see many times in this book, economies based on the repression of labor and systems such as slavery and serfdom are notoriously noninnovative. This is true from the ancient world to the modern era.

Both feared that the mechanization of stocking production would be politically destabilizing. It would throw people out of work, create unemployment and political instability, and threaten royal power. The stocking frame was an innovation that promised huge productivity increases, but it also promised creative destruction. T

El propio Mao respondió así a las quejas por el alcance de aquella violencia: «Ese hombre, Hitler, era todavía más atroz. Cuanto más atroz, mejor, ¿no crees? Cuanta más gente matas, más revolucionario eres».

Inclusive economic institutions, such as those in South Korea or in the United States, are those that allow and encourage participation by the great mass of people in economic activities that make best use of their talents and skills and that enable individuals to make the choices they wish.

Most economists and policymakers have focused on "getting it right," while what is really needed is an explanation for why poor nations "get it wrong.

Until 1726 they had to wear specific markers, two concentric yellow rings for men and a striped veil for women. All Jews had to pay a special poll tax.

once pluralism and the rule of law were established, there would be demand for even greater pluralism and greater participation in the political process.

También mostraremos que la desigualdad del mundo no se puede explicar por las diferencias en la productividad agrícola. La gran desigualdad del mundo moderno que apareció en el siglo XIX fue debida a la desigual distribución de las tecnologías industriales y la producción manufacturera, no a la divergencia en los resultados agrícolas.

Those controlling political power will eventually find it more beneficial to use their power to limit competition, to increase their share of the pie, or even to steal and loot from others rather than support economic progress. The distribution and ability to exercise power will ultimately undermine the very foundations of economic prosperity

We saw in the previous chapter how the process of political centralization under the Tudor monarchy in England increased demands for voice and representation by different local elites in national political institutions as a way of staving off this loss of political power. A stronger Parliament was created, ultimately enabling the emergence of inclusive political institutions. But

For example, a merchant in a colony such as New Spain, roughly modern Mexico, could not trade directly with anyone in New Granada, modern Colombia. These restrictions on trade within the Spanish Empire reduced its economic prosperity and also, indirectly, the potential benefits that Spain could have gained by trading with another, more prosperous empire.

Rich nations are rich largely because they managed to develop inclusive institutions at some point during the past three hundred years.

1791 the French National Assembly emancipated French Jewry. The

Because elites dominating extractive institutions fear creative destruction, they will resist it, and any growth that germinates under extractive institutions will be ultimately short lived.

But in many other cases, just the opposite takes place, and the process of political centralization also ushers in an era of greater absolutism.

revolution that overthrew Mubarak will lead to a new set of institutions capable of bringing prosperity

The process of political centralization can actually lead to a form of absolutism, as the king and his associates can crush other powerful groups in society. This is indeed one of the reasons why there will be opposition against state centralization

In fact, Egypt is poor precisely because it has been ruled by a narrow elite that have organized society for their own benefit at the expense of the vast mass of people.

T]he presence of markets is not by itself a guarantee of inclusive institutions. . . . Markets, left to their own devices, can cease to be inclusive, becoming increasingly dominated by the economically and politically powerful. Inclusive economic institutions require not just markets, but inclusive markets that create a level playing field and economic opportunities for the majority of the people.

Inclusive economic institutions require secure property rights and economic opportunities not just for the elite but for a broad cross-section of society. Secure

The vicious circle is based on extractive political institutions creating extractive economic institutions, which in turn support the extractive political institutions, because economic wealth and power buy political power.

Finally, we will also discuss how the failure of nations today is heavily influenced by their institutional histories, how much policy advice is informed by incorrect hypotheses and is potentially misleading, and how nations are still able to seize critical junctures and break the mold to reform their institutions and embark upon a path to greater prosperity.

during the critical juncture created by the Industrial Revolution, many nations missed the boat and failed to take advantage of the spread of industry. Either they had absolutist political and extractive economic institutions, as in the Ottoman Empire, or they lacked political centralization, as in Somalia. A

These monopolies, and many more, gave individuals or groups the sole right to control the production of many goods. They impeded the type of allocation of talent, which is so crucial to economic prosperity. Both