Another NOBEL win:
Daron Acemoglu was criticized in Digitalism vs. Capitalism, and he won the Nobel Prize with a funny and empirically unsupported theory. Along the lines of Batmaz's criticism, the definite meaning of Daron’s win of the Swedish Central Bank's price in the memory of Alfred Nobel is that capitalism is definitely dying.

 

The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 2024

14 October 2024

The Royal Swedish Academy of Sciences has decided to award the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 2024 to

Daron Acemoglu
Massachusetts Institute of Technology, Cambridge, USA

Simon Johnson
Massachusetts Institute of Technology, Cambridge, USA

James A. Robinson
University of Chicago, IL, USA

“for studies of how institutions are formed and affect prosperity”

They have helped us understand differences in prosperity between nations

This year’s laureates in the economic sciences – Daron Acemoglu, Simon Johnson and James Robinson – have demonstrated the importance of societal institutions for a country’s prosperity. Societies with a poor rule of law and institutions that exploit the population do not generate growth or change for the better. The laureates’ research helps us understand why.

When Europeans colonized large parts of the globe, the institutions in those societies changed. This was sometimes dramatic, but did not occur in the same way everywhere. In some places the aim was to exploit the indigenous population and extract resources for the colonizers’ benefit. In others, the colonizers formed inclusive political and economic systems for the long-term benefit of European migrants.

The laureates have shown that one explanation for differences in countries’ prosperity is the societal institutions that were introduced during colonization. Inclusive institutions were often introduced in countries that were poor when they were colonized, over time resulting in a generally prosperous population. This is an important reason for why former colonies that were once rich are now poor, and vice versa.

Some countries become trapped in a situation with extractive institutions and low economic growth. The introduction of inclusive institutions would create long-term benefits for everyone, but extractive institutions provide short-term gains for the people in power. As long as the political system guarantees they will remain in control, no one will trust their promises of future economic reforms. According to the laureates, this is why no improvement occurs.