Title: The Tyranny of Experts: Economists, Dictators and the Forgotten Rights of the Poor
Author: William Easterly
Scope: 3.5 stars
Readability: 4 stars
My personal rating: 5 stars
See more on my book rating system.
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Topic of Book
Easterly assess the results of Non-Governmental Organizations (NGOs) and Government Aid to assist development in poor countries.
If you would like to learn more about how rich societies became rich, read my book From Poverty to Progress: How Humans Invented Progress, and How We Can Keep It Going.
While I disagree with Easterly’s assessment that economic development automatically stems from political and economic rights, he makes a strong case that foreign aid does little to help poor countries. While there are some examples of success from highly-targeted foreign aid programs, the main result has been allowing corrupt, authoritarian regimes to avoid making positive reforms.
- Development is “bottom-up, not top-down.”
- Economic development in poor countries will not come from technocratic solution, government policy, or international aid.
- The people in these countries are poor because their governments are corrupt, undemocratic and uninterested in promoting progress for their countrymen.
- Governments in those countries use international aid to channel resources to their political supporters.
- External aid only strengthens corrupt and undemocratic governments. It is far more humanitarian to cut off aid, than continue it.
- The East Asian nations who have developed rapidly over the last few generations received very little foreign aid.
- Economic progress in poor countries will occur when their political leadership finally gives the people economic freedom and voting rights. Then economic development will happen naturally.
Important Quotes from Book
“The conventional approach to economic development, to making poor countries rich, is based on a technocratic illusion: the belief that poverty is a purely technical problem amenable to such technical solutions as fertilizers, antibiotics, or nutritional supplements. We see this in the Bank’s actions in Mubende; we will see the same belief prevalent amongst others who combat global poverty, such as the Gates Foundation, the United Nations, and US and UK aid agencies.
The technocratic approach ignores what this book will establish as the real cause of poverty—the unchecked power of the state against poor people without rights.”
“By this technocratic illusion, the technical experts unintentionally confer new powers and legitimacy on the state as the entity that will implement the technical solutions. The economists who advocate the technocratic approach have a terrible naïveté about power—that as restraints on power are loosened or even removed, that same power will remain benevolent of its own accord.
What used to be the divine right of kings has in our time become the development right of dictators. The implicit vision in development today is that of well-intentioned autocrats advised by technical experts, what this book will call authoritarian development. The word technocracy (a synonym for authoritarian development) itself is an early twentieth-century coinage that means “rule by experts.”
The sleight of hand that focuses attention on technical solutions while covering up violations of the rights of real people is the moral tragedy of development today. The rights of the poor—such as the right of Ugandan farmers not to have their homes burnt down—are moral ends in themselves. Morally neutral approaches to poverty do not exist.”
“One cannot avoid this moral choice by appealing to “nonideological evidence-based policies” (a popular phrase in development today).
Authoritarian development is also a pragmatic tragedy. History and modern experience suggest that free individuals with political and economic rights—call it free development—make up a remarkably successful problem-solving system. Free development gives us the right to choose amongst a myriad of spontaneous problem-solvers, rewarding those that solve our problems. These public and private problem-solvers accomplish far more than dictators who implement solutions provided by experts.”
“The technocratic illusion is that poverty results from a shortage of expertise, whereas poverty is really about a shortage of rights.”
“The dictator whom the experts expect will accomplish the technical fixes to technical problems is not the solution; he is the problem.”
“Three dimensions of the new research challenge the authoritarian consensus—three dimensions that already appeared in the proto-debate that got squelched. One is an emphasis on history. Technocratic solutions view history as not really mattering, a view that we can call the Blank Slate. ”
“Another dimension of the new research is an emphasis on nonnational factors—for example, the technology, values, and network contacts that migrants take with them from one nation to another. ”
“Finally, the new research shows the importance of spontaneous solutions in politics, markets, and technology. It turns out that when the rights of local people are respected, new trades happen, new technologies happen, new public services happen. This challenges conventional wisdom about the “benevolent autocrats” behind many success stories. ”
“We present them each here as a dichotomy in which few would be at either extreme (and the extremes will be less extreme today than in the 1950s):
1.The Blank Slate versus learning from history.
2.The well-being of nations versus that of individuals.
3.Conscious design versus spontaneous solutions. ”
“The Blank Slate mind-set tends to ignore history and to see each poor society as infinitely malleable for the development expert to apply his technical solutions. The alternative would be to learn from history why each poor society is poor, to learn from history why other societies became rich, and to draw lessons accordingly for how to escape poverty. Since the Blank Slate ignores the particulars of history in each country, and technical experts start from scratch in every country, all poor countries seem equivalent. The best example of the pervasive Blank Slate mentality in development is the idea of “underdevelopment” itself.”
“A big problem with conscious direction from the center, said Hayek, is the lack of sufficient knowledge at the center.”
“Even more inaccessible to conscious designers is tacit knowledge, which cannot be communicated as a list of instructions from one individual to another. Tacit knowledge is the kind of trained and mostly unconscious knowledge needed, for example, to ride a bicycle—it does not work to follow a recipe on how to balance and turn the pedals… Tacit knowledge can only be gained through what Kenneth Arrow later called “learning by doing.” Tacit knowledge can certainly not be accessed by centralized problem-solvers.
For Hayek, the advantages of a spontaneous order of free individuals is that it creates the incentives for individuals to utilize their own localized or tacit knowledge, without any need for anyone else to access it. ”
“We cannot rely on centralized expertise to run society “because every individual knows so little” relative to the vast knowledge needed to give us what we want. We don’t even know enough to know who should be the expert, because “we rarely know which of us knows best.”
“The triumph of the technocratic idea of development was written into the charter of the new United Nations.”
“First, Western semi-colonial interests in China agreed with the interests of an autocrat in China on the suppression of Chinese individual rights. Second, British colonial interests in Africa agreed with postcolonial African rulers on the suppression of African individual rights. Third and finally, US Cold War interests in Colombia agreed with a Colombian autocrat on the suppression of Colombian individual rights”
“But the future belonged to the free cities. Population growth of free cities throughout Western Europe systematically outpaced that of cities under absolute rule. Freedom in a particular region led to the emergence of more new cities, as individuals accustomed to freedom in their original cities came together to form new cities. The statistical results indicate that, on average, a region developed two new cities (of population greater than 30,000) for every century that it had been free of absolute rule”
“One study finds that even within the Italian North, those cities that were free at the time of Barbarossa’s defeat in 1176—and kept their freedom because of that defeat—are richer today than those cities that were not free”
“in the seventeenth and eighteenth centuries, there are now two dimensions—Atlantic access and freedom—that splits the European countries into four groups. Spain and Portugal had Atlantic trade access but they had absolutist institutions and values. Northern Italian cities had relatively free institutions and values but they did not have Atlantic access. Eastern Europe and Russia had neither Atlantic access nor free values. The winners were the United Kingdom and the Netherlands, which had Atlantic access and already had relatively free institutions and values by sometime in the 1600s.”
“Autocracies perpetuate collectivist values; free cities and states perpetuate individualist values.”
“The family is a major vehicle by which values persist from one generation to the next. Parents learn in their own experience the costs and consequences of conformist versus individualist values. They then decide which values to pass on to their children.”
“The regions with collectivist values and autocratic history are still poorer today than those with individualist values and a more democratic history. The most notable examples are Portugal and Spain (except for Catalonia), and of course southern Italy once again. The most positive examples of individualist values, democratic history, and prosperity are the United Kingdom, the Netherlands, and northern Italy. ”
“Another Tabellini study of the values of third-generation US immigrants offers further confirmation of the persistent role of autocratic history.Those immigrants today whose country of origin was autocratic more than a century ago (taking 1850, 1875, and 1900 as base dates of comparison) have lower levels of trust and respect for others than immigrants from historically democratic countries. ”
“Once we realize that autocracy versus democracy affects values, and that values in turn determine whether a society will have autocracy or democracy, then the stage is set for a virtuous feedback loop between democracy and individualist values.”
“Cities in China were held back by the lack of cooperation between clans. Clans were responsible for tax collection and educating their members for civil-service exams. Immigrants to the cities remained loyal to their rural-based clans; they did not transfer loyalty to the city. As one scholar says of China in the seventeenth century: “the majority of a city’s population consisted of so-called sojourners,”
“There was no such thing as city self-government in China as there was in the free cities in Europe. The percent of the population living in cities in China remained at only about 3 to 4 percent long after Europe had passed 10 percent early in the Industrial Revolution.”
“Trusting and respecting other groups leads to widespread support of rights for all groups,”
“Oppression has broad consequences that hold back development. It promotes a lack of trust that inhibits trade and facilitates more oppression. It entrenches a hereditary political and economic elite that blocks the creative destruction necessary for development. Oppressive rulers under-invest in public goods for the majority. ”
“Oppression is a crime of opportunity. If you can do it, and you can get away with it, you will do it. This was true of Colombians who oppressed a majority. It was true of Africans who profited from the slave trade in Africa. It was true of the American South that oppressed a slave minority. ”
“When controlling the government is a way for the elite to enrich itself, rival elite factions will fight each other for that control. Colombia has been famous since its independence for its nearly constant civil wars between Conservatives and Liberals, two rival European-led parties.”
“Individual freedom does not automatically mean asocial individuals who do not care about any group larger than themselves; it means freedom for the individual to choose the groups that he or she values and works with in economic as well as social activities. Many success stories involve individuals working with their extended families and self-defined ethnic group together to achieve success.
The big difference is that dealing with (or even belonging to) your own ethnic group is voluntary in individualist societies, as opposed to mandatory in collectivist societies. There is also more mutual tolerance between groups in individualist societies compared to collectivist ones, as we saw in Chapter Six. Members of ethnic groups in individualist societies can then get the best of both worlds. They benefit from high trust and social networks within the ethnic group to find and make some beneficial deals. But impersonal contract enforcement in individualist societies means they also have the opportunity to make interethnic deals that offer a much wider range of opportunties.”
“What would you think of a single antipoverty program within one poor country that was responsible for 82 percent of all the escapes from poverty that had ever happened in that country? The development community’s actual reaction seemed to be: that’s terrible!
The country was Haiti, and the program was called—migration to the United States. ”
“Remittances, the money sent home by migrants, are three times the size of official development assistance and they provide an important lifeline for millions of poor households. Remittances to developing countries are estimated to reach $372 billion in 2011.”
“Zambia, in contrast, did get poorer because people could not migrate when there was a huge negative shock like the collapse of the copper industry. Pritchett contrasted the phenomenon of “ghost towns”—where people leave when the mine shuts down—to what he suggested we should call “ghost countries”—countries that get a lot poorer when the mine shuts down because people cannot leave. Such a nation becomes a prison for poor people.”
“national growth success is usually temporary and quickly reversed. This finding has been replicated many times since as new data have come along.
In other words, the fastest-growing countries in one period are not the same countries as those of the next period, or of the previous period”
“Policy differences between countries persist a long time, but growth differences between countries do not. So it is hard to give much importance to national policies (or any other national characteristic that is long lasting—and most national characteristics are long lasting). What actually produces a lot of growth variations are temporary factors: booms and busts in commodity prices, the boom-and-bust cycles of international lending, natural disasters and recovery, or (embarrassingly) measurement error in growth rates. ”
“To say it another way, there is a strong tendency for both extreme success and extreme failure to revert toward average. ”
“Between successive decades, for example, about 70 percent of the above-average growth in a country disappears in the next period.”
“Growth accelerations do not happen when economists expect they will: “most instances of economic reform do not produce growth accelerations.” And growth accelerations do happen when economists have no reason to expect them: “most growth accelerations are not preceded or accompanied by major changes in economic policies, institutional arrangements, political circumstances, or external conditions.”
“The vote of the evidence is a landslide for temporary factors over permanent national differences. Of the total variation of annual growth rates, around 95 percent is temporary; only about 5 percent of the variation of annual growth reflects permanent differences between nations. To put it another way, the year-to-year variability of growth within each country is about 20 times larger than the permanent growth differences between countries. Those nation-states getting credit for growth success in the short run account for surprisingly little of the development action in the long run.
The long-run growth differences do allow for a few really exceptional countries. The most famous are the aforementioned Gang of Four—Singapore, Hong Kong, South Korea, and Taiwan—who maintained a 6 percent per capita growth rate for several decades. China has joined the 6 percent club more recently with its remarkable growth surge. Yet even for these superstars, their long-run growth is very likely less than 6 percent. ”
“So maintaining 6 percent growth for several decades really is a miracle. Yet virtually all countries have had at least one year of 6 percent growth (only 4 out of 101 nations with the most complete data failed to attain 6 percent growth in at least one year).”
“The statistical pattern of all countries speaks loudly that most miracle growth rates are one-hit wonders. The evidence is saying that annual growth is mostly noise rather than signal. This is not a welcome finding in development agencies that claim to know how national actions can raise long-run growth within a reasonable horizon for policy makers.
The root cause of these findings is simply that annual growth rates are extraordinarily volatile. The average change in GDP per capita growth rates (in either direction) from one year to the next is over 4 percentage points, usually reflecting the appearance and disappearance of temporary factors like a commodity-price boom.”
“One among many factors that helps explain the volatility of annual growth rates is a particular embarrassment: growth is subject to large measurement errors.”
“Yet they [Indexes] have a surprising tendency to disagree on what growth is for a given country and year. On average, the difference for all countries between their estimates (in either direction) for any given year in any given country is 2.2 percentage points of growth.”
“The national characteristic that does robustly matter is what region your nation belongs to.”
“The term overseas Chinese, referring to the Chinese minorities spread throughout East Asia, is an overly broad generalization. A disproportionate share of the migrants came from just one Chinese province: Fujian.”
“The Fujianese network was one factor in East Asia becoming the biggest and most lasting beneficiary of that boom. East Asia’s share of global exports went from 12 percent in 1960 to 31 percent by 2011. ”
“Income, infant mortality, and life expectancy are characteristics much more of regions than they are of nations… Factors like cultural values and technology do not show sharp divides at national boundaries. They are products of entire civilizations, not the arbitrary boundaries of today’s nations.”
“Whether trade self-destructs or thrives depends not on one nation alone but on a nation and all of its would-be trading partners. Even if a country frees up its own exports and imports, its trading partners must also free up their corresponding imports and exports.”
“A bridge made out of papier mâché may look exactly like a real bridge, but the difference will become clear if you drive a truck across it. Lant Pritchett has used this metaphor to describe many of the organizations set up by newly independent states after colonialism ended. Each country had all the trappings of a nation—a president, a department of education, and borders—but the “nation” had little ability to do any of the things that nations are supposed to do. ”
“Chung knew that the worst way to solve your own problem is to try to solve your own problem. A better way is to join an “association of problem-solvers” in which you dedicate yourself to solving other people’s problems, and in which you trust other people to solve your own problems. ”
“A successful problem-solving association has to have two features that this book has mentioned before. First, it must have adequate knowledge for others to solve your problem. Second, the problem-solvers must have adequate incentives to solve your problem.
An agricultural expert in Asan may indeed have had some knowledge that the villagers lacked on, say, fertilizer. However, the expert might find it difficult to find out from local men in the village how unsuccessful a long experience of trial and error with fertilizer had already been. It might be thought he could simply ask, but the history of development is full of failed communications between experts and locals.”
“Another way to state the knowledge problem is that success is often a surprise. It is often hard to predict what will be the solution. It is even harder to predict who will have the solution, and when and where. And it is even harder when the success of who, what, when, and where keeps changing. ”
“Smith’s faith in the individual as a problem-solver was so revolutionary, then and now, that it creates lots of misunderstandings. Anyone who says “Adam Smith” is assumed to favor pure laissez-faire.”
“Smith’s idea of a free market in this context (still a relevant context today) was not to enrich the existing merchants but to make them less rich through the loss of their monopoly rights and privileges. For the same reason, Smith’s agenda would not make a “few lordly masters” richer. His free-trade agenda would actually lead to cheap food imports for the poor that would undercut these large landowners.”
“Smith articulated three important ideas that made the Invisible Hand so effective: the division of labor, gains from specialization, and gains from trade”
“The division of labor is about how much a worker performs all the necessary tasks to produce something versus how much the work is divided up into more specialized tasks among workers.”
“Division of labor then makes possible two particular gains from specialization. First, all of us are much better at some things than others, and specialization allows us to do what we do best.”
“Second, workers get even better at their best area with experience. As workers perform smaller tasks more often, they get more proficient at doing it through repeated practice. Nearly two centuries after Smith, Nobel Prize winner Kenneth Arrow would call this “learning by doing.”
“If you could not trade, you would have to make everything for yourself. There would be no division of labor, no specialization, no learning by doing. Trade opens up a large market that makes radical division of labor and specialization possible. The gains from trade for you do not imply losses for anyone else, the gains from trade are mutual: everyone wins, even if not necessarily by the same amount.”
“To put it another way, trade is the final piece of the problem-solving system.”
“To find your automotive problem-solver, you just need to look on the Internet for the lowest-price car of your own desirable quality for sale in your area… This vast search and matching process is summarized in only one piece of information: the price of cars.”
“Equally, the potential personal-transport problem-solvers do not need exhaustive knowledge of everyone in the world who wants that problem solved and how much they are willing to pay. Everything they need to know is contained in that same small piece of data: the price of cars.”
“The Invisible Hand solution to the incentive problem is a self-reinforcing system of rewards.”
“We could also describe the Invisible Hand in reverse: it is the process of driving out of business the incompetent in favor of the mediocre, the mediocre in favor of the good, and the good in favor of the excellent.”
“But the Invisible Hand does not thereby become irrelevant. It is critical to keep avoiding the perception of a slippery slope toward one extreme (problems can be solved perfectly by the market) or the other (problems can be solved perfectly by the government).”
“The Invisible Hand principle would also make the supply of public goods work much better.”
“The debate about market versus government is thus once again the wrong debate. One side pretends market failures do not exist, and the other pretends government failures do not exist.
The right debate is once again about individual rights versus state power.”
“The technocratic approach—solutions by experts—arguably gives us the worst of all worlds. Having experts in charge of solving society’s problems turns things over to agents who face neither a market test nor a democratic test. If they get the knowledge (including localized feedback) wrong, they suffer neither economic nor political penalties. If their solutions should happen to work, they get neither economic nor political rewards. So there is nothing to spur them on to scaling up successes any more than there is anything to motivate them to kill off failures.
The Invisible Hand spurs development through the virtuous circle of specialization, learning by doing, and gains from trade. The Invisible Hand guides nonexperts to something they are good at doing. They start selling it, and they get even better at it thanks to learning by doing. Trade allows them to keep increasing the scale of the virtuous circle, selling more and more, learning to do it better and better, till they take the world market by storm.”
“There are three things to note about the remarkable volatility and unpredictability of success in markets. First, it is not markets that are volatile, it is life. Markets adjust rapidly to changing circumstances and, compared to not adjusting, this is a virtue rather than a vice.
Second, this volatility should alleviate some of the anxiety about corporate power. “Powerful corporations” are only temporarily powerful.
Third, the volatility does have upsides and downsides. On the upside, it is constantly creating a lot of new opportunities… On the downside, success does not last forever.”
“If we do not understand technology’s role in development better, it is partly the fault of the whole field of economics… For most of the history of economics, the field spent most of its energies on explaining a static economy in which existing goods could be allocated with ever-increasing efficiency. The field never had quite enough to say about the most important two things going on over those two centuries: the invention of new goods and perpetual economic growth.”
“One simple innovation model suggested by the new growth theorists was the ultimate in spontaneous solutions emerging from the bottom. Innovation just means coming up with new ideas. In this simple model, the number of new ideas is proportional to the number of people. ”
“The only evidence we can find for this bottom-up story of innovation is—all of human history. The story first predicts that the higher the initial population, the higher population growth will be. ”
“The story next predicts that the higher the initial population, the more innovation there will be. The world as a whole confirms this prediction, as the rate of technological progress kept accelerating as the world population rose. The most surprising explanation for the industrial revolution was that it was not a revolution at all; it was a gradually accelerating process over centuries that just finally reached a critical mass of people for producing ideas.”
“We can also test the story by comparing different parts of the world with each other. The prediction of this simple story is that the more-populous parts of the world will at any moment have better technology than less-populous parts. The more-populous parts will also have more technological innovation than less-populous parts.”
“The archaeological evidence keeps accumulating to confirm that virtually all of Eurasia had wheeled vehicles pulled by draft animals in the first centuries after Christ. The rest of the world did not even have the wheel. It would not appear in sub-Saharan Africa, Australia, New Zealand, or North and South America until after Columbus.”
“The virtuous circle of technological innovation is even stronger than the population–technology story alone would predict because technology also feeds on itself. The more technology one already has, the faster is the rate of technological innovation. This is another piece of theory and evidence in favor of innovation as a bottom-up process.
I will just give one reason: many new inventions are just combinations of previous inventions. ”
“We confirmed that technology in 1500 predicts technology (and thus per capita income) today. In fact, 78 percent of the income difference today between Europe and sub-Saharan Africa can be explained by technology that was already in place by 1500.
There is a strong correlation between technology in 1000 BC and that in AD 1, and between technology in AD 1 and technology in AD 1500. We can also jump right to a strong correlation between 1000 BC and technology in AD 1500.
So we find that a very simple theory of bottom-up innovation can explain many of the big facts about technology around the world today.”
“Why did the West invent the steam engine and railroad, and not the East? We need something else.
That something else is already on the table: the Western idea of the individual that emerged from the Enlightenment.”
“The economic historian Joel Mokyr in his superb book The Enlightened Economy attributes the British industrial revolution to these new Enlightenment ideas about the individual’s right to dissent:”
“The other Enlightenment idea that boosted Western innovation was that the inventor could keep the rewards of his own invention.”
“Romer’s 1994 theory was that new technology became embodied in new products and moved as those products were exported to other areas. If you want to imitate a new technology invented in some other part of the globe, Romer suggested in 1994, all you need to do is import that new product.”
“To move a technology, all you need to do is move a person.”
“The prediction contest is no contest: the people-based measure of technological heritage from 1500 drastically outperforms the place-based measure in predicting today’s technology and income. This result has been replicated many times in the new development research that stresses the importance of historical roots: it is the history of people rather than of places that matter.”
“Societies that allow individuals to sapere aude (dare to know! question authority!) are going to be more permissive for individuals to adopt foreign technologies that challenge the social status quo. Conformist societies that obey the elders in sticking to the old ways will not be fertile for imitating foreign technology any more than they were for inventing technology.
Incentives will also matter. If the individual gets to keep the rewards for adopting a productive technology from abroad, adoption is more likely to happen.”
“We have discussed above how innovation is complementary to previous technology. The same is true with imitation: the richer your own technology history, the easier it is to adopt new technologies from abroad.”
“Technological imitation explains some patterns in postwar economic growth. Let’s divide countries into two groups. Some countries have already adopted most or all of the most advanced technologies in each sector, usually known as the technological frontier. Let’s call them the frontier countries. The rest of the world has not adopted most of the advanced technologies. We will just call them the non-frontier countries. Since technology is a principal determinant of income per capita, these two groups are equivalent to the rich countries and the poor countries.”
“The frontier keeps gradually moving outward as new technologies are invented like, say, the successive versions of the iPad. Since we identified technological progress as the long-run driver of growth, this suggests that the frontier countries will all grow at roughly the same rate.
Those far from the frontier potentially have much more variable outcomes, based on whether the environment is favorable for imitating frontier technology. At one extreme, some countries continue to suppress individual rights so much that there is little or no incentive for either imitation or innovation. They will have worse growth than the frontier countries.
At the other extreme are countries with a rights regime favorable for technology adoption. They can benefit both from the fact that imitation is cheaper than innovation, and from the large technological leaps toward the frontier that imitation makes possible.”
“In some of the exercises (using the different growth datasets), we find no evidence for any long-run growth differences between rich countries. ”
“The most favorable conditions for rapid growth due to catch-up are to have adequate incentives today for imitation and an advanced technical heritage but a low current income for some other reason. ”
“The world’s largest imbalance between extensive technological history and low current income in 1950 was China. The systemic changes in China that improved individual incentives after 1978 are a major change toward greater freedom. So China after 1978 had practically ideal conditions for rapid catch-up growth: strong technology history and a positive change in freedom. It is strange that we evaluate rapid Chinese growth (which is the percentage of change in technology and income levels) relative to the level of freedom today in China. It makes more sense to relate changes in income and technology adoption to changes in freedom in China.
Since technological history travels with people, the imbalance between this history and initial income in 1950 could also be relevant to places with a Chinese diaspora. Such places include three of the four members of the Gang of Four: Taiwan, Singapore, and Hong Kong. And these places were notable for large increases in, at least, economic freedom. So we now have a story that covers most of the growth superstars.”
“Innovation has the greatest of all knowledge problems. The essential point is as ignored as it is obvious: you cannot plan or predict innovation. If innovation could be predicted in advance, it would not be innovation. If the invention is already known, it does not need to be invented. What this means is that the path of innovation is always a surprise. Who will be the innovator is equally a surprise.”
“There are two variants of the benevolent-autocrat idea. The first and stronger variant is simply that autocrats are better than democrats for development (by development in this context we usually mean “rapid economic growth”). The second, weaker variant is that the best autocratic leaders are better for growth than the best democratic leaders, while conceding that the worst autocrats are worse for growth than the worst democrats.
Even with the stellar autocratic success list, it does not take long to dispose of the first variant, that autocrats are good for growth. You only have to know one additional thing: autocrats also presided over most of the world’s recent growth disasters. ”
“In the postwar period, the average growth is the same or lower under autocrats compared to democrats. In the longer run, including the historical growth of today’s now rich democracies, as we saw in Chapters Six, Seven, and Eight, the growth advantage is with democrats.”
“Economic growth is about a percentage change in development, not about the level of development. So a leading candidate to explain growth would be the change in freedom. It makes sense to explain the change in development with a change in freedom. Why should the discussion be on whether the level of freedom explains the change in development?
So another possible explanation for growth miracles is a positive change in freedom. To take everyone’s favorite example, China has actually had a strong positive change in both political and economic freedom since the death of Mao and the loss of power by his cronies.”
“The moral of this section is that autocrats get too much credit for episodes of increased economic freedom. While there surely are cases in which autocrats intentionally liberalize policies to increase economic freedom, there is no reason to assume this is the norm without more detailed examination. There are two alternative plausible stories: particular state leaders choose on their own to reduce the economic controls imposed by the state, or resistance from below triggers the reduced economic controls of the state.”
“The debate on benevolent autocrats goes back much further than Lee Kuan Yew, or Myrdal versus Hayek, or Moses versus Jacobs. It actually goes all the way back over 250 years to a book on Despotism in China, published in 1767 by the French economist François Quesnay. The book did not criticize despotism, it celebrated it. Quesnay was the French counterpart to Adam Smith, and Smith used and cited many of his ideas. Yet there was a fundamental division between them that was a division in the Enlightenment itself: Smith’s branch wanted to free people to act in their own interests; Quesnay’s branch wanted the educated and talented minority of intellectuals to act on behalf of the majority. ”
“There is one thing the history in this book has shown us that we must not do: we must not let caring about material suffering of the poor change the subject from caring about the rights of the poor. It doesn’t mean that we care less about the material suffering; it means that we understand that the autocrats have offered a false bargain to meet material needs while we overlook their suppression of rights.”
“This book does not say that nothing good will happen until some utopian ideals on rights are attained. No, this book argues the opposite: an incremental positive change in freedom will yield a positive change in well-being for the world’s poor. These incremental changes are already happening.”
“One interpretation of trends today is that the Rise of the Rest challenges the free values of the West. Focusing on the last few decades, the high growth in autocratic China seems like a particular assault on the Western model. But this book has offered another interpretation from a longer-run perspective: free values are gradually spreading from the West to the Rest, including to China, and the Rise of the Rest reflects precisely that spread of free values. The idea that individual rights are “Western values” may be an anachronism that is becoming clearer.”
If you would like to learn more about how rich societies became rich, read my book From Poverty to Progress: How Humans Invented Progress, and How We Can Keep It Going.