The Self-Destruction of the 1 PercentQuicklink submitted by Kyle McDermott Permalink
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|The story of Venice's rise and fall is told by the scholars Daron Acemoglu and James A. Robinson, in their book 'Why Nations Fail: The Origins of Power, Prosperity, and Poverty,' as an illustration of their thesis that what separates successful states from failed ones is whether their governing institutions are inclusive or extractive. Extractive states are controlled by ruling elites whose objective is to extract as much wealth as they can from the rest of society. Inclusive states give everyone access to economic opportunity; often, greater inclusiveness creates more prosperity, which creates an incentive for ever greater inclusiveness. The history of the United States can be read as one such virtuous circle. But as the story of Venice shows, virtuous circles can be broken. Elites that have prospered from inclusive systems can be tempted to pull up the ladder they climbed to the top.|
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