What makes some nations great, people there living in dignity and prosperity whereas other states fail, again and again, trapped in poverty and misery?
I have often wondered about this question.
Common explanations focus on differences in geography, resource endowment, the amount of capital, culture or religion but these answers have never really satisfied me as they didn't seem to go to the core of the problem.
Then, very recently I stumbled on a new explanation, as simple as convincing: Institutions.
In their brilliant book “Why nations fail” Daron Acemoğlu and James Robinson propose to differentiate between inclusive (serving all the people, democratic) and extractive (serving a small elite exploiting the mass) institutions and give numerous historic examples of countries striving whenever inclusive institutions emerged and countries failing under extractive elites. Further, there is a vicious circle as extractive political institutions usually create extractive economic institutions through corruption and cronyism and vice versa.
Following this explanation, the problem with extractive dictators such as Kim Jong Un or Robert Mugabe is not a lack of talent but that their interests don't extend to general economic prosperity. Because the creative destruction that comes with growth brings change, change brings new power relations and new power relations threaten the power of those in charge they simply don't want growth for their countries.
It seems that with these simple insights, you can explain a lot of human history, such as why Great Britain started the Industrial revolution or how the differences between North and South America emerged (the geography of the South enabled huge slave plantations and therefore led to massive inequality and extractive institutions but as this was not feasible in the North, a much more equal and inclusive settler society emerged there).
After reading the book I came to think about the standing of developed Western societies of today. Where should we place developed countries such as Germany or the USA on a scale from 1 to 10, with 1 as completely extractive (North Korea might be a good candidate) and 10 as a perfectly inclusive society?
As everyone has the right to vote and as an Afro-American US-president and a female German chancellor seem to prove the possibility for everyone to make it to the top - how about a 9? Or if you think about the generally poor voter turnout, the high inequality and the power of multinationals is a 5 maybe more adequate?
Certainly, we have achieved historically unmatched degrees of freedom, justice and prosperity. Politicians and institutions are generally supposed to serve the majority of people and I am convinced that real change is possible if the great mass calls for it.
Nevertheless, I worry that we are currently headed in a dangerous direction.
While formal power lies with the people, practical power is not distributed evenly. Massive lobbying and interest groups by multinational corporations undermine our governments capacities of act. Moreover, I am convinced that todays financial markets are not working for societys general prosperity but for a tiny elite enriching themselves - they are extractive in that sense. Also, financial inequality has reached dramatic scopes concentrating too much power in the hands of few. Warren Buffett, one of the richest man on earth even stated:
How did we get here and who is to blame?
As always it is easy to point the finger on greedy bankers or big multinationals.
But maybe some of the responsibility is not to be found with others but with ourselves.
Dulled from the economic success and general prosperity of recent decades, too many people have abandoned the stage of democratic dispute. As the struggle for democracy seemed to be won and over, most preferred to focus on their own success and materialistic well-being so that the public sphere had to take a back seat.
Politics has become infected by pop culture and a politicians looks or scandals receive more media attention than factual party programs or discussions. Political debates are considered boring compared with celebrities eating cockroaches in trash tv.
It seems, the underlying views on politics are that:
- the state and government is some detached institution that one is not part of
- one doesn't have any influence because "those at the top" do whatever they want anyway
- participation in politics is something for those people that have too much time and a need for feeling important
- democracy means voting every few years
- why politics if you can watch silly cat videos on youtube?
But democracy is not a spectator sport.
I'm sure you agree that there are many issues of great importance that deserve urgent attention. There is inequality & injustice, poverty, corruption, climate change (including overfishing, deforestation, species extinction...) and recently the financial crisis.
What has to change? What makes you angry? How would you redesign our society?
Already, there is no lack of people being enraged about these issues.
In Europe there is a high share of so called frustration- or protest-voters that tend to vote for extremist positions to express their anger about politics. Worse are only the non-voters, completely leaving the field to those they criticise.
My theory is that a part of the problem here lies with the natural reaction that people show to these issues which is shaped by our evolutionary functioning in groups: The natural rationale to sanction antisocial behavior through angry slander and non-cooperation. "Little Jimmy peed in the swimming pool!" - "Bah, we should break the contact and never talk to him ever again!"
While this behavior is highly effective in small social circles to make people comply with the interest of the group, unfortunately it seems rather useless in the political sphere.
Instead, to have an impact on politicians and how our society is functioning, it requires active political participation.
With this though, I don't simply refer to voting.
In my opinion, even if done regularly and responsibly, voting once every couple of years is not sufficient. Elections only let you choose between a small variety of paths that our society ought to take. But these paths were designed by others and therefore choosing a party usually feels like a decision of least-bad. Active participation on the other hand means to be part of the construction of that path.
To bring topics of importance to the political agenda, to inform those in charge about the needs of "normal" citizens and to give a counterweight to the massive lobbying of corporate interest groups it requires active participation from many citizens.
I've tried to depict different types of participants according to their political participation on the one hand and their political interest and emotional engagement regarding politics on the other hand. In terms of political participation, I propose the following stages:
Stage 0: No voting
Stage 1: Regular voting
Stage 2: Regular voting plus (passive) membership in parties or initiatives, occasionally joining demonstrations or other campaigns
Stage 3: Regular voting plus active membership in parties or initiatives, participation through multiple channels
Where would you find yourself in the following graph?
Usually, when I get to see the German parliament building, an imposing structure with its trasparent dome, the imposing flags of EU and Germany and the giant letters "Dem Deutschen Volke" (to the German people) I get goosebumps.
Not from of a feeling of national pride or patriotism, but because of the fundamental and historic significance that this edifice represents as the beating heart of Germanys democracy.
I become conscious of all those terrible years under Nazi occupation, all those years of people struggling for justice and representation, all those lives lost in that fight.
To our great fortune, now times have changed and finally the government is supposed to serve ALL the people.
This development can and must not be taken for granted.
We have a duty to invest time and devotion to preserve this achievement.
About two years ago this insight struck me. Since, I have joined a political party and started to actively support different citizens initiatives. And what surprised me, was how much easier it was to actively participate than I had expected. Of course this has to be taken with the humility that you are just one of mankind on a planet of billions and that democracy means that the power of individual people is supposed to be limited. But with this in mind it is definitely possible to be heard and to make an impact, if you only try!
This job will require much time and energy but I think that one will rarely regret the time spend this way. It feels empowering to work on improving our society and can bring much fulfillment and meaning to a life.
So if you are unsatisfied with politicians, join and influence a political party. If you want to reform the financial system, join one of the many initiatives. If you are enraged by corruption, support Transparency International. And if you are angry and not giving a fuck, drive randomly around the city on your bicycle with a banner around your chest and a megaphone to address social issues (as one guy in Berlin really does!)
There are countless groups working for change that are happy about every support they can get. In my experience the smaller the organization the easier to participate and the bigger your impact. And if you really don't have the time, at least donate to some cause so that someone else can do the job for you.
In most developed countries we do have the inclusive institutions to empower the masses. But only our collective participation can bring meaning to this historic achievement.
I think there is still a great potential in our societies and if many people get engaged in improving it, we can achieve sustainable prosperity and justice for everyone.
We can create our utopia here on earth.
Why Nations Fail - TED video presentation by one of the authors mentioned above presenting the key points of the book