Review: Daron Acemoglu & James A Robinson, Why Nations Fail

I am not convinced. This book comes with 14 pre-publication product endorsements, five of them from Nobel laureates, so the weight of world opinion is against me. But let me try to make my case.

In a 529 page book, Acemoglu and Robinson (A&R) survey world history - Neolithic to the present - through a score or more of small or medium-sized case studies. They leverage these cases into examples of the thesis they wish to maintain, using just a handful of not very abstruse concepts.

Some of the case studies are thumbnails and, occasionally I had reservations: for example, I think Russia was more industrialised and wealthy before 1914 than they allow, collapsing between 1917 and 1921. It then grew from a much lower base than it had achieved prior to 1914. Some of the more extended cases are well-structured and carefully argued: those of South Africa and Botswana, for instance.

The general idea is that nations can sustain economic development over the long term only if they are open both economically and politically - "inclusive" is the concept A&R use: a useful concept because more inclusive than "free market" or "democratic".

For short periods, nations which are inclusive only at one level - economic or political - can make progress but then they will hit the buffers unless the non-inclusive level opens up. A&R reckon that this will happen to China where the control of the Communist Party will sooner or later come into conflict with the relatively inclusive economy it has unleashed. This thesis is not unfamiliar - I think I read it first in Will Hutton.

A&R use "extractive" as the opposite of "inclusive" and, in effect, write about extractive elites. At the economic level, these operate through guilds and monopolies and general hostility to outsiders and innovation. At the political level, they take the form of absolute monarchies, one party states and common-or-garden dictatorships which extract whatever they can from whatever is going. The two levels inter-connect, as in cases of "resource curse" where a single political elite monopolises the revenues from production and export of a nation's only valuable resource - diamonds, coffee, oil.

Extractive elites get even richer when they find ways of (further)depressing labour costs, whether through slavery, serfdom, land apportionment or other more subtle methods of confining a labour supply to just one kind of employment possibility.

Extractive economies and polities have serious problems accepting technological innovation and the "creative destruction" that implies or accepting independent entrepreneurship. With remarkable consistency, they end up banning them and killing people involved with them. A&R give many telling examples.

Extractive states also have serious problems of control, since the rewards from being the elite are so great that others may try to take over the act. From this, civil war. And the resources being extracted may run out or go out of fashion. Whatever, extractive societies - like the DR Congo for all of its history - generally end up producing mass poverty and political instability.

Whereas inclusive societies manage to get into a virtuous circle where things can only get better, extractive societies generally end up in a vicious circle and things only get worse. Thus Spain over many centuries in the past or North Korea today.

Exactly what happens to a given society depends a lot on contingent events which produce what A&R call "critical junctures". They use the Black Death in Europe as a paradigm example. The thesis they advance here denies historical inevitability and stresses historical contingency - things could have turned out otherwise.

So far so good. Now to what I think is the big problem. A&R paint some rosy pictures of inclusive societies, old and new: England after 1688, the USA, Australia, Botswana. And they paint some terrible pictures of failed extractive nations in Africa, Asia and Latin America.

They write about colonialism, emphasising the way in which in Latin America and Africa local extractive elites simply took over at Independence the role of colonial elites, doing nothing to enhance the lives of their citizens. But they do not write about the continuing role of former Imperial powers - or the United States - in sustaining these elites.

Yet a large part of world history of the 20th century is the story of cuddly-friendly inclusive Western societies doing their utmost to sustain extractive elites in power in Latin America, Africa and Asia. They did it - and continue to do it - either by direct military intervention against forces seeking more inclusive economic and political institutions, or by selling armaments on an extraordinary scale to the world's worst regimes so that they can keep themselves in power and their people poor. In this, France has played an appalling role in Africa; the USA in Latin America and Asia; and the United Kingdom wherever there is half a chance - Saudi Arabia, for instance.

This kind of vicious interdependency is not discussed by A&R.Developed and followed through, it would greatly alter the outlines of the world history they offer us. It does not mean that their concepts are not helpful, nor does it invalidate their often valuable analyses of the dynamics of development. But societies are not closed. And the Goodies from one perspective often turn out to be Baddies when looked at in a wider perspective.

Review: Bernard Wasserstein, On The Eve

Some years ago, I visited the Museé d'art et d'histoire du Judaisme in Paris for an exhibition of the photographs of Roman Vishniac under the title "Un Monde Disparu". I used a postcard from the exhibition as a bookmark while reading On The Eve.

Wasserstein does not mention Vishniac anywhere in his 552 pages and, though he uses some photographs as illustrations, he does not use one of Vishniac's. I don't know why, though I now read on Wikipedia that there is controversy over the way Vishniac put together and wrote up his work, for example, combining images from different sources as if they belonged to a single scene. But that doesn't seem enough to me to ignore the work totally.

Anyway, I found it all a bit disconcerting since Vishniac, working without the benefit of hindsight, saw the Jews of Europe through much the same lens as now does Wasserstein, "The demographic trajectory was grim and, with declining fertility, large scale emigration, increasing outmarriage, and widespread apostasy, foreshadowed extinction" (p 434).

Wasserstein's book is, at best, encyclopaedic and, at worst, miscellaneous: "In Hungary, where name-changing was particularly common, Joseph Löwinger, a banker, changed his name upon ennoblment, to Lukács de Szeged. His son, György, born in 1885, was therefore known as von Lukács. In 1919, when he served briefly as deputy commissar for education in the short-lived Communist régime of Béla Kun, he dropped the von. Writing mainly in German, it was as Georg Lukács that he became the best-known Marxist literary critic of the age" (p 197)

A lot of the prose is as plodding and inconsequential as this and, at many points, I just wanted to give up. One cannot read a very long book for snippets of information alone.

There is a sustained engagement with Yiddish, as language and as literature. Wasserstein transliterates and thus makes the language more accessible to an outsider, but at the price perhaps of making it seem more accessible than it really is. More importantly, I felt that here a general historian was trying to do work which needs the co-operation of some pretty heavyweight historical linguists or sociolinguists if one is to hope to understand the dynamics of a minority language whose spoken form is partly inter-intelligible with one surrounding and often dominant language (German) but whose written form is not, since it uses a different alphabet. (The same is true of Judeo-Espagnol, which Wasserstein also discusses).

Structurally, there were times when I would have welcomed some comparison with the situation of Europe's other minorities of the inter-war period, in particular, the Roma. I thought that would help one understand more clearly what is specific to the Jewish experience between the two world wars (essentially, the time frame of this book). And, perhaps for no very good reason, I would have liked just a little about the Kairates especially as the book includes extensive discussion of Jews in Lithuania and Crimea - both Kairate strongholds (well, as Kairate things go). They did, after all, practice a Jewish faith. It is only with hindsight that they become radically other because the Nazis classified them as racially not Jewish.

Wasserstein most of the time avoids the pitfalls of hindsight and most of the time he calls a spade a spade and a rascal a rogue. The Munkácser rebbe appears repeatedly through the book as a warning against religious fundamentalism of all kinds. (I hope I don't misread Wasserstein here). More generally, I found it impossible to read Wasserstein's descriptions of religiously-controlled Jewish primary schooling in inter-war eastern Europe without thinking about what I read in my newspapers today about Islamic primary schooling in,say, Pakistan.

Maybe this book just attempts too much - the apparatus runs to 116 pages - and therefore becomes encyclopaedic and not very readable. Maybe there is just not enough analytical or theoretical zest to focus the remarkable amount of information assembled here.

Review: Matthew Lynn, Greece, The €uro, and the Sovereign Debt Crisis

I nearly stopped reading this book on page 3. It felt like it was being addressed to American readers and therefore taking into account their woeful ignorance of history and current affairs (witness the repeated gaffes of Republican presidential hopefuls). And the prose was pretty wooden. But I knew it was a book which would challenge some of my assumptions and beliefs, so I kept going. It gets a lot better as it goes on and I finished the whole book.

Lynn writes from a generally monetarist and fiscal conservative position: they're bust, we're bust, we're all bust. Except for Germany, the real and only home of Prudence.

He reckons the €uro was doomed from the moment the EU agreed to bail out Greece, creating more debt as if it would solve the problem of old debt. If Greece had not abided by the terms of the Growth and Stability pact, simply continuing its profligate path, how would throwing money at it alter that? I felt at the time(2010) that Greece should have been allowed to go bust and this book does nothing to challenge that as a sensible view.

Indeed, a year on in 2011, everywhere I read (including The Economist) is talking about the good sense of an "orderly default". There is no possible future in which Greece will be able to pay its debts, so why not recognise that now instead of throwing good money at the riot police?

Interestingly, whereas most fiscal conservatives are unconcerned by a bit of deflation, Lynn's best arguments are designed to show that the €urozone has now trapped itself within deflationary policies. Because no individual country can devalue, every country in even a bit of trouble is pushed towards exaggerated austerity and that deflationary pressure works it way round the whole monetary area.

Quite persuasively, he argues the case for Greece's exit from the €urozone. It would allow Greece's currency to devalue, just as the UK has been able to devalue against the €uro. When the €uro was introduced, I decided to dual-price my stock. I still have stickers which say "£10 or 16€". Then I realised it wouldn't work, so I started pricing just in €uros - a decision which has worked in my favour. Today, £10 is under 13 €. If you want 16€ worth of stuff now, and want to pay in sterling, it will cost you £14.16. In other words, the pound has devalued 40% against the €uro in under a decade. No wonder Booze Cruises are a thing of the past.

But my mistake was to think of the €uro simply as a medium of exchange, in which case, one currency rather than 500 is a no-brainer. Lynn does show how the €uro was not thought through beyond this level, when in fact a common currency will only work if there are fairly standardised (and healthy) fiscal policies throughout the currency area. Greece should never have been admitted to the €urozone in the first place; it was a basket case and the €uro of itself could do nothing to change that. Except indirectly: it was the money markets which downgraded Greek public debt just because they could see that Greek governments did not give a toss about the terms of the Growth and Stability pact. Unable to devalue, Greece could not escape the judgment of the markets.

Something I did not know: in the build-up discussions on the common currency, the UK suggested a system of dual or parallel currencies: each country keeps its own money (and central bank) but alongside these there is a common currency. You take your pick (just as you do when offered dual priced goods). If the common currency works well, then its advantages as a medium of exchange will progressively reduce the role of national currencies. It will grow organically towards being the people's choice. This is an interesting idea and one which could be revived.

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Orignally published on my Blog, The Best I Can Do

Review: Ben Macintyre, Operation Mincemeat

Ben Macintyre is another journalist who knows how to do research and how to write. The result is a fascinating book, both thorough and highly readable, which has provided my relaxation this Easter weekend. Thank you!

The story (The Man Who Never Was) has been well known for over fifty years: Churchill's spooks mounted a deception exercise involving a dead body carrying fake papers washed ashore in Spain. By this means they succeeded in significantly misleading Hitler (possibly with some unexpected help from an anti-Hitler German aristocrat high up in German intelligence). As a result, Hitler had his forces in the wrong places when the Allies invaded Sicily in 1943. Thousands of Allied military lives were probably saved for a very modest outlay in pounds, shillings and pence.

Because it's in the News, I have been thinking about social mobility and internships. Put the spooks and other players in Operation Mincemeat through the grinder of those issues.

In many respects, the desperate struggle of World War Two forced the UK to open careers to talents. At the same time, as this book indicates, networks of privilege and sponsorship continued to operate - sometimes with disastrous results (think of the Cambridge circle of Soviet spies).

But I cannot at the moment convince myself that one would have got a better result than the clubland aristocrats and upper-class / upper middle-class eccentrics achieved in their Whitehall intelligence basements had one insisted on open recruitment and no sponsorship. It seems to me that these people were often the glitzy showmen or the nerds and anoraks of their day who would never had the chance to show their real abilities had they been put through some politically-correct recruitment procedure. Horses for courses, and not all courses are alike.

I will try to find something to read on this subject, specifically in relation to World War Two. Any suggestions?

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Originally published on my Blog, The Best I Can Do

Review: Oliver Bullough, Let Our Fame Be Great

When journalists are good they are very, very good. Oliver Bullough is terrific. His combination of historical research and contemporary reportage is an extraordinary introduction to the history and continuing conflicts of the North Caucasus - that barrier of mountains and Muslims which once lay between Russia proper and its imperial ambitions in Transcaucasia and is now a mess of unhappy partlets of the Russian Federation: Kabardino - Balkaria, North Ossetia, Ingushetia, Dagestan and Chechnya. Since the 2008 conflict with Georgia, add Abkhazia and South Ossetia.

Russia comes out very badly from Bullough's stories.

Imperial Russia in the 1860s drove the Circassians of what is now Abkhazia into the sea - by the hundreds of thousand - and, if they were lucky, exile in Ottoman Turkey.

Stalin, encouraged by his fellow-psychopath Beria, deported whole Caucasian populations en masse in the 1940s in the kind of closed rail wagons which were as good at killing mountain herders as elsewhere city Jews.

Post-Soviet Russia bludgeoned the Chechens into a kind of submission in wars of appalling brutality - though Bullough acknowledges, on both sides.

I read this 500 page book with unflagging interest. It is beautifully crafted and puts to shame the kind of dull prose which academics still deploy. But I would want to enter one corrective of perspective, which does not exonerate Russia but places it as just another Imperialist power.

Uniquely, Russia - both Imperial and Soviet - built its Empire by expanding overland North, East, South and West. At no point did it have to cross an ocean. All the colonial brutality it perpetrated occurred on the Eurasian landmass. This is one reason perhaps why Bullough thinks particularly reprehensible Russians' ignorance of their own terrible history.

But I do not think Russia is unique in the horrors it inflicted or in ignorance of them.

The atrocities of a squalid Imperial bit player like Belgium occurred thousands of miles away in the Congo. It is probably still possible for Belgians to think that it is not part of "their" history.

France has a poor record in Africa up to the present day under Emperor Sarkozy. The civil war in Algeria is the one "we" know about. How different would it feel if Algeria had been attached to the south of France rather than separated from it by the Mediterranean? I think we might expect the French to be more apologetic than they are, which is in any case not very apologetic.

British subjects have until the past few weeks been shielded from much of the truth about the late colonial wars we waged in such countries as Kenya.

Probably the Germans have done most to acknowledge and deal with their own past.

What is notable about Vladimir Putin's attitudes, which figure significantly in Bullough's account of the Chechen Wars, is that he is determined that there shall be no accounting for the past or the present in his own backyard. What is perhaps most frustrating is that such an attitude is unnecessary to any sound project of ensuring Russia its rightful place in the world.

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Originally published on my Blog, The Best I Can Do

Review: Fred Halliday, Political Journeys

Since his death, Fred Halliday (1946 - 2010) has figured in the newspapers as the retired Professor of International Relations who warned his old university, the London School of Economics, against entanglement with the Gadaffi regime.

I spotted his posthumous book, Political Journeys (Saqi 2011)on my last visit to the London Review of Books shop, bought it and read it - cover to cover as I normally do.

It's impressive. It's confident, decisive, principled and - though it derives from essays written at frequent intervals for online publication in openDemocracy - marshalls an extraordinary range and depth of reference. To single out just one from nearly fifty essays, there is a brisk but erudite demolition of (my) misconceptions about Sharia law, done and dusted in just four pages (pp 213 - 17).

The focus of the book is the Middle East where all through the historical and political analyses, the red thread of principle is oppositon to viciousness, whether by their side or your own.

But Halliday is also enlightening when he writes about other areas: there is a good essay on Georgia (pp 243 - 48) and a running theme of the weaknesses of small states or would-be states: not just Palestine but Northern Ireland, the Basque country and Tibet.

Halliday despairs of the stupidity and nastiness of the Bush regime, in power when most of these essays were written, but Tony Blair's journey is so far beneath his contempt as to be barely mentioned - his name occurs just three times in 277 pages.

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Originally published on my Blog, The Best I Can Do

Review: Hubert Wolf - Pope and Devil

The future is like the past. And the past is like the future.

This is a fascinating book by an academic church historian, using the Vatican archives to show how it responded to the rise of Nazism and the reality of the Third Reich. It provides - perhaps unwittingly - insight into how the central bureaucracy of a totalitarian organisation functioned in the 1920s and 1930s and - no doubt - still functions today. There are obvious parallels between the way in which the Vatican has handled its recent sex abuse scandals and the way in which it handled its relations with Nazi Germany, in both cases always deciding in favour of institutional self-interest.

At first, I thought the author must be writing tongue in cheek, ironically, in taking us through the handling of matters about which priests in rather expensive black gowns get excited - female gymnastics in the case of the future Pope Pius XII. But by the end, I suspect not.

The Vatican as we know it was Mussolini's creation. He acceded to the Church's demand to remove itself from the jurisdiction of national civil and criminal law by granting it recognition as a state, able to send ambassadors all over the world, issue passports and postage stamps, but above all, able to claim immunity when threatened with action for the crimes of its leaders.

But its bogus claim to statehood is only one of the sources which nurtures the Vatican's irresponsibiliy. The other source is its unaccountability for the use to which it puts the funds furnished by the faithful. Hubert Wolf describes in detail what Vatican bureaucrats do with their time. So many bureaucrats, so much time on their hands. If God hadn't invented committees for them, they would have surely done so themselves.

It is in this area that I locate Wolf's lack of wider vision. As a church historian, he is above discussing the Vatican as an organisation where money, power and influence operate as in any organisation, only - because of its totalitarian character - more so.

Nor is it his job to moralise. I am free to do that. For me, the central question is this: Is the Vatican, as an organisation, a force for Good or Evil? (I am not a relativist and I am happy to use those terms).

I answer that it is a force for Evil, always ready to persecute, even excommunicate , those of its members who show too much humanity - as long as they have no worldly power. Always ready to accommodate to the powerful, to bow down to worldly power. Hitler was never excommunicated - a topic Wolf throws away lightly in his closing pages.

Nowadays, no one stands up to the Vatican. Only this year, all our politicians grovelled to Pope Benedict on a state visit got up by Tony Blair and Gordon Brown.

Standing up to the Vatican begins with withdrawing diplomatic recognition. No more Papal Nuncios scurrying around organising the bishops to fight the British version of Modernism. Wolf gives a detailed and fascinating account of what Nuncios - among whom the future Pius XII - got up to in the 1920s. I don't believe anything will have much changed. Read this book, and you won't want a Nuncio in your own back yard.

Postscript: "Nowadays, no one stands up to the Vatican". I forgot the recent action of the Belgain authorities who raided the Catholic bishops and archbishops, laptops and all, daring to treat them as subject to Belgian law. The indignation in the Vatican was intense: that our priests sexually abuse children is no business of the police!

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Originally published on my Blog, The Best I Can Do, 8 November 2010