I got to meet Daron Acemoglu when I was a PhD student.
I did my PhD in Game Theory. My advisor was buddies with Daron and also his wife, who was an EECS professor, also at MIT. There were a few multi-university grants that one or both of them, and we, were a part of. There were periodic meetings that Daron would attend with us, although I never worked with him directly.
Daron, unlike many other economists, was open to working with people in other, less "glamorous" fields. Possibly, he felt more comfortable than others in doing that because he was already so famous. Around fifteen years ago when I first met him, it was already common knowledge in econ circles that his Nobel was inevitable. He just needed to wait for his turn.
It was definitely not lost on any of us researchers that Daron's work was somewhat arm-chair and grandiose. Not bad or wrong, but quite different to what was expected from the average researcher. It was pretty clear that a lowly PhD student could not get the same acclaim for the same type of work. I remember asking about this and being told by some faculty that Daron himself acknowledged privately the tremendous role of what he called "charm and persuasion" in his own personal success. This was simply how econ worked, it was explained to me.
I didn't take any of this to imply Daron was some kind of charlatan. Rather, just that the culture that elevates Daron predates and is bigger than Daron himself. Don't hate the player, hate the game, if you will.
Pretending that this kind of essayism is scientific because you include a few models / graphs / formulas is eroding trust in actual science. I agree that this kind of enquiry can be important for the general discourse (and I definitely find it entertaining) – so they should write essays and label them correctly.
That paper doesn't do a good job, certainly not a Nobel-worthy job, of establishing its claims. It's a good thing to criticize.
But I do want to disagree with your broader point that "essayism" and science are strictly different, the difference is immediately obvious, and they should be kept strictly separate.
1) Things turn out to be testable that you wouldn't have expected: Models of planetary formation were n = 1 pie-in-the-sky when it seemed like we'd never be able to observe planets beyond our solar system. An expanding universe was similarly a ridiculous, untestable, frankly religious idea that eventually became properly "scientific" via standard candles and the cosmic microwave background radiation.
2) Theoretical big-think can and does stimulate later empirical research. To give one example, Marvin Minsky wrote a whole book about the "society of mind", cognition as interacting sets of agents, that's inspired a bunch of AI research and I think also some neuroscience. It wasn't empirical and doesn't engage with any data.
The thing I think deserves criticism is their overclaiming about their shoddy empirical work, not daring to consider certain questions at all. Science in practice is messy!
"Systematic study of testable hypotheses to produce and organize knowledge"? I don't want to get hung up on any definition and I don't want to put "actual science" on a pedestal either. Making their point in an essay can generate useful beliefs.
But on a epistemological level, the objections to those theories are obvious. Sure, it would be *amazing* to be able to study such things empirically in the way they are trying to do. But we really can't, so we shouldn't pretend we could.
Publishing something like the graph Noah showed as an example with a straight face *in a scientific journal* is naive at best and disingenuous at worst. I don't think they are naive, and I think they should be criticized for that.
Then, I think the problem is trying to answer a question using the wrong method. To me, 'actual' science includes knowing which method is best fit to the question at hand, and being able to interpret the results.
I apologize for referencing a standard analogy that involves a term that is naturally heard as insulting. (https://en.wikipedia.org/wiki/Streetlight_effect - interestingly, it appears to go back to a 13th century Islamic philosopher!)
Does michihuber use "she" pronouns?
I interpreted michihuber as saying that since these kinds of graphs can't get great support, we should rule them out of science. My claim was that this is analogous to only looking at the places where the light is good - even when there's good reason to think that the truth might be in the place where the light is really bad.
No, I was speaking about this graph specifically, where the correlation is spurious. If there is a clear correlation, of course that's a valid argument in support of a hypothesis.
(I use 'he' pronouns, but I can see the confusion re: my shortname "Michi" sounding female in some cultures.)
To be fair, I'm talking about micro and much of the quasi-sociological / poli-sci stuff like Acemoglu. Macro is a hard science, because in extremely large groups, humans can (for economic purposes) be treated as atoms.
I don't think macro is like science. It seems more like engineering. This is in the sense that in physics, there are a finite set of rules you are trying to fully elucidate whereas in engineering, you are just looking for a finite set of rules that adequately model a far more complex system which frequently includes unknown and possibly unknowable behaviors. The art of intelligent approximation.
I remember reading “Why Nations Fail” as a teenager and being initially quite impressed. The thesis definitely “feels” right and, living in a Western democracy, one probably wants it to be right.
For me, it fell apart when they described the institutions of the Roman Republic as inclusive and those of the Roman Empire as extractive, thus supposedly (in their words) leading to Rome’s downfall. Only that this transition happened in 27 BC and the Roman Empire in the West continued to exist (and thrive) for another 500 years or so, in the East even for another 1,500 years!
This just stretches the credibility of this argument beyond breaking point. Of course, this might not have been in their paper, but it’s an indication that they play fast and loose with the evidence for their grand theories.
Still, having said that, I think it’s worthwhile to also think about these big questions and put out theories. I just wish they (and other big thinkers) would be a bit more rigorous with what we actually have as evidence and actually know – and what is (more than) a stretch.
PS: For all intents and purposes – and from a modern point of view – both the Roman Republic and the Roman Empire were deeply extractive anyway, of course. The vast majority of men had no direct say in political matters, let alone women or all those not deemed citizens, and they had millions of slaves.
But coming from a history background, it just bugged me a lot that economists would play fast and loose with historical evidence in that way. It just doesn’t make much sense.
If anything the Roman Republic (at least outside the Italian peninsula) was even more extractive than the Roman Empire.
The real weakness of the Roman Empire concerned legitimacy: it was an autocratic regime in a culture that (due to its beginnings as a puppet kingdom of the Etruscans) had a negative view of hereditary monarchy.
This was an invitation to coups and civil wars that sapped the Empire's strength, with the 3rd-century Military Anarchy being the clearest example.
Another key problem is exaggerating the importance of the Glorious Revolution of 1688 as a cause of the industrial revolution. And also political changes in Venice undermining the inclusivity of their institutions. Both examples are at best exaggerated.
I think that there are better competing theories, including my own:
> And none of them have anything to do with whether it’s a “real Nobel”. Whether a 19th-century arms manufacturer said in his will that your academic subject ought to have a prize named after him is a poor guide to how prestigious that prize should be.
True. But it's a pretty good guide as to whether the prize should be named after said 19th-century arms manufacturer, no?
No one says the econ nobel isnt an econ nobel because they care greatly about alfreds opinions just the prestige and acclaim that the name brought with it
This is a great post, in that I find it super entertaining and it makes very novel points clearly.
But the facts of it also make me think that economics in general, even this “top economist in the field” and the specific ideas that win Nobels, is just not that *profound*.
All this ink spilled to say that … countries with institutions are richer than those without? And even that has a huge caveat, that says it might not be the institutions, it might be human capital (aka migration of those with the famous Protestant work ethic*)?
All this ink to merely SUGGEST that countries outside Europe are richer today if they got some rule of law? How is that a profound statement? Who thought otherwise? It all just seems so banal. And yet there’s apparently famous papers arguing and going to battle over whether its institutions or migration that help a country get rich, with neither proven. The discipline, which I usually respect, surely wants better than that??
I'm sure you know this, but they are trying to identify what the causal pathway to growth is, which feels to me to be one of the most profound and central questions to economics.
We know that Europe + colonies + East Asia are richer, but everything is endogenous - good things generally generate more good things. And bad things generate other bad things - this is why nations fail, and why most countries never started growing. If you install rule of law in a poor country, it will get corrupted; if you transfer people with good human capital into a poor country, they get much less productive.
This makes it difficult to identify a central driver of growth (human capital, geography, technology, genetics, institutions, or just random luck) that triggered this divergence, and, for a development economist, to answer the trillion-dollar question of how you might push a poor country out of poverty.
If it's true that institutions, in a narrow sense of the word, could break poor nations out of the trap of bad governance, corruption, underinvestment in human capital etc., then we should be able to use this to install new institutions, and the human capital of the population being held to account by these institutions doesn't matter so much. If it's all about human capital, then moving, educating people, or investing in early childhood education may work effectively, regardless of institutional quality.
Both factors impact each other strongly, and they overlap (when does a cultural habit stop being human capital, and start becoming an institution?), hence all the debates on this topic.
I agree with Noah that they haven't fully answered this question, and that AJR's empirical data and use of instrumental variables to tease out causality is interesting, but not fully convincing. I also lean towards human capital being the current limiting factor - successful minorities around the world, such as whites in South Africa and Chinese in Southeast Asia, point to softer cultural institutions and human capital playing a greater role than their argument gives credit to.
But I don't get this idea of respecting economics less for trying to answer this question. In any social science we'd expect lots of experiments and quasi-experiments to tease out the causality of a massively important question, even if it were difficult because of limited sample sizes or lots of confounding variables. We'd also expect disagreement from both an empirical and a theoretical perspective to get closer to the truth.
Crémieux Recueil argued that a similar process over a millennium earlier helped make the Jews into a global intellectual elite: after the Romans crushed the Bar Kochba revolt the Jews made literacy (in Hebrew) a religious obligation, even though it was even less economically relevant in Roman Palestine than (vernacular) literacy was in early modern Europe.
The result is that the richer and smarter Judeans kept their religion and culture and became the ancestors of today's Jews, while the poorer and dumber Judeans lost theirs and became the ancestors of today's Palestinians.
And Ashkenazi Jews were even more intelligent as they went through a _second_ selection process: while Jews in the Muslim world would only need to be successful enough to afford the jizya (the tax on non-Muslims), Jews in Europe faced a whole swathe of discriminatory laws that only the best of the best could surmount.
I actually do not think that ACR are correct. First of all their definition is very fishy: rule of law is not an institution. It may be an outcome of a set of institutions, but it is not an institution itself. Same for property rights and corruption. This definitional squishiness undermines the entire Institutional theory.
And the alternative theory of human capital is still a very vague concept.
I am happy for ACR winning the Nobel prize because they have done good work on a very important and very challenging topic: the causes and origins of material progress. Economics as a field is very good at understanding how an economy works and how to properly manage it, but the field cannot answer the most important question: what caused the economy in the first place!
A new emerging field of Progress Studies, in which I am a contributor, is focused on exactly that question. And, yes, it is a very challenging issue, but since it is so important we should try.
I believe that I have the most comprehensive theory explaining the causes and origins of material progress. Institutions play a role, but there are other more important factors.
I call it the Five Keys to Progress, and you can read more here:
The fact is that (macro-)Economics is a science WAY AHEAD of its time. There are other posts where Noah talks about this, but certain general equilibria models need a thousand years of data to be good.
But lots of good stuff, particularly in the micro-economics side. See the work of Esther Duflo and her colleagues. And we have been arguably richer since the General Theory was published. (Macro-)Economists are some of the best scientists over there, but their field is very hostile to science.
I just want to say I love this paragraph. You can build an entire high school semester around the ideas here and do a lot to help prepare our youth for advancing America.
“Also, intuitively speaking, I sort of think this theory is right. I look at countries like Russia that devalue their own people and view them as cannon fodder, and I see them doing worse in terms of technology and the economy. I see Xi Jinping cracking down on private entrepreneurship, and I can’t imagine it’ll be good for China’s growth. I look at any number of repressive regimes and see militaries and party-states and mafias that reach their tentacles deep into society, preventing regular people from getting ahead, and producing a feeling of hopelessness. I see how companies that rely heavily on cheap labor often fail to innovate.”
Over the years, I have seen MANY single-cause explanations for development, all of which were blatantly wrong and primarily used for propaganda purposes by libertarians/neoliberals/racists/etc.
Perhaps this "grand unified theory of development" is deserving because (a) it might make the case for many needed requirements, (b) it makes the case for requirements that most of the simpler explanations ignored, and (c) it is just obviously so much better than preceding theories? I'm unfamiliar enough with the field that I would love some discussion of these ideas.
Yes, I agree. I have done some fairly comprehensive research in the field, and all single-cause explanations are just not enough to explain all or even most of the variation. But you can also go to the opposite extreme and create a laundry list of causes.
A new emerging field of Progress Studies, in which I am a contributor, is focused on the origins and causes of material progress. I believe that I have the most comprehensive theory explaining the causes and origins of material progress. I try to hit a compromise between one cause and many causes,
I call my theory the Five Keys to Progress, and you can read more here:
A minor question/quibble: Why isn't education the sixth? There is a strong temporal coincidence. Or is it one of your enabling technologies?
I very much like that you chose commercial rather than capitalist. Too much propaganda for the latter.
The best part of your causes IMHO (that is often neglected in most theories) is the decentralization of power. I live in Ecuador, and the contrast is stark because so much is federalized. However, I presume you have to make excuses for China, the Soviet Union, and even Protestant Britain: perhaps you say that you don't need decentralization of power in all domains.
I try to focus on the irreducible minimum number of causes. I am confident that any society that has all five keys will be able to figure out how to build an education system.
I am interested in your article on the Nobel Prizes for the simple reason that it always seems to be another choice of the already noted and publicised person(s) that are the recipients. In other words, this prize often seems to be awarded to those individuals who are already well known in whatever field of study or innovation or production that they are involved in. In a way that is a shame for over time some of our most important advances in many fields have come from people who are unknown until their innovations or rock solid conclusions are in the public realm. They are often overlooked because of the lack of publicity for their work and not because of a lack of utility or interest. Nonetheless it is always interesting to see who has been enNobled and the comments that their recognition brings forth.
I’m glad that people are being recognized for giving the best possible answers the big questions, rather than precisely answering trivial questions (waste of time!).
George Akerlof has a 2010 paper in which he argues that ‘economics, as a discipline, gives rewards that favor the “hard” and disfavor the “soft.” Such bias leads economic research to ignore important topics and problems that are difficult to approach in a “hard” way thereby resulting in “sins of omission.”’
I wouldn't consider the precise answers to relatively trivial questions as a waste of time but I agree that some balance between that and approximations to extremely complex and important questions is necessary
Thanks for the post. As a student I found Acemoglu's work enlightening to the extent that it sheds light on the previously blackboxed factors (which were simply referred to as endogenous and exogenous to the model) that should account for inequality across countries, among other things. To me the value of the AJR paper is exploiting existing administrative data for a good approximation of the effect of some institutions and norms. I don't doubt, though, that the methods has faults and, more importantly, that their dataset alone is just not enough to account for the whole picture. This leads me to my next point, which is that academic economics seems to be confused: it wants to explain human behaviour without a genuine engagement with other fields that also want to explain human behaviour. I totally get why many economists in academia want to essentially do policy analysis and stick to well-defined and focused questions--for this goal one can do without a deeper understanding of why humans are the way are. What I see in many other academic economists, though, is trying to reinvent the wheel with a dismissive attitude toward other disciplines.
On the definition of institutions: legal systems are just the formalised, highest form of institutions. Institutions exist at lower levels as well. This is why a better definition of institutions is norms or rules that people are incentivised to follow. Incentives can take the form of financial rewards, of course, but also social benefits and costs too. See e.g. Guala's 2006 book called Understanding Institutions. It is also important to remember that institutions are not purely exogenous, they are shaped by culture and norms, which shapes behaviour, which then shapes culture and norms again.
That's something I did like about Why Nations Fail. It avoids the two most common problems in economics: "assume a can opener" and "exogenous to the model". These are the two dominant reasons that homo economicus diverges so greatly from homo sapiens.
I didn't like his laziness with facts and desire to squash history into his theory. But I still think it's a pretty good book.
I think the definition of Institutions that they and other researchers use is very squishy, but I do not think that your proposed definition is better. "norms or rules that people are incentivised to follow"
Biology, family, geography, and culture can establish norms and rules and then people are incentivized to follow (to give just a few examples that immediately come to mind).
I would argue that if an institution does not have a headquarters in a building, it is not an institution. I admit that this definition breaks down in the digital world, but it works for the rest of human history.
Norms and rules include the norms and rules of biology, family, geography and culture. It can be *any* kind of norm or rule as long as it helps coordinate in a given context and is common knowledge. This is of course a rough outline to the model. Understanding Institutions by Francesco Guala expands on and enriches the theoretical groundwork laid down by Douglass North in the 1990s, which AJR arguably relied on heavily. And my ongoing PhD deepens these accounts even further by introducing cognition to the picture.
You should also check out my online library of 300 book summaries on Technology, History, Economic Growth & Progress. It probably includes a number of books that are relevant to your studies that you have not read:
Oh, I'm not researching what causes economic growth--should've clarified that. Institutions, however one may define them, exist independently of economic growth. North, AJR and others just pointed to their relevance to economic growth. Thanks for the links! I'm familiar with most of those readings, most deeply the bits on cultural evolution.
I am conflicted here. I am a historian, not an economist, but I think this is an area where economists can greatly aid in the study of history. Noah's argument makes sense and the critiques he highlights stand on their own. However, one of the main reasons I have a PhD in history and not political science despite working in between the fields is because I believe the latter has become too bogged down in cold quantitative analysis. The inability to reduce something to a mathematical equation does not mean it is not valid and even groundbreaking work that can dramatically increase our understanding of humanity. Economics is not a hard science and it will do itself no favors pretending to be one. It is fine for more mathematical works to win the Nobel Prize but it should be fine for qualitative works to win it as well. Such is the diversity of the social sciences.
I’m sorry if this sounds very obvious or is essentially what human capital means but, isn’t it the belief in the institutions that’s just as important as the institutions themselves? And when you have the settlement of the people who created said institutions, it’s not entirely surprising that they’re more likely to uphold said institutions as opposed to those whom they’ve been forced upon. I find it odd to consider institutions existing as some disembodied phenomenon outside of the people who believe in them.
You mean culture matters? Economists really don't like hearing that.
There was an old joke that supposedly originated among State Dept FSOs during the Iraq war: "Iraq is just 4 men away from having a functional, liberal, multicultural, Western-friendly, democracy. Unfortunately their names are Washington, Jefferson, Adams, and Madison."
<You mean culture matters? Economists really don't like hearing that.xYou mean culture matters? Economists really don't like hearing that.>
Economists don’t like anything that can’t be quantified. It’s why many of them are obsessed with transfer payments like the EITC and not with less-quantifiable-but-equally-important institutions such as inclusive labor laws and a firm leash on the financial sector.
<"Iraq is just 4 men away from having a functional, liberal, multicultural, Western-friendly, democracy. Unfortunately their names are Washington, Jefferson, Adams, and Madison.”>
I think this gets the causality backwards. While I don’t wanna diminish the personal contributions of the Founding generation (especially Washington and his decision to retire after two terms), Washington and company (and by extension, us) were geopolitically blessed in ways that most revolutionaries were not. High wages and comparative economic equality, the absence of any major sedentary indigenous civilizations (think Aztecs and Incas), the Atlantic Ocean as a defensive buffer against the Old World, and other endowments are extremely important because it gave American statesmen the freedom to cultivate more “inclusive” institutions for their society. Iraq had virtually none of those blessings: they were smack dab in the conflict-prone Middle East, surrounded by potential enemies (Turkey, Iran, Israel, etc.) and ridden with ethnic/sectarian divisions. Invading Iraq eliminated the previous order and replaced it with nothing but the mere appearance of democracy, and Robespierre was on to something when he said “no one loves armed missionaries.”
People forget that the decision to build extractive institutions is not really much of a choice and more of a necessity: even a primitive functional society needs law and order to prosper (let alone progress), and extractive institutions (tax farming, strongman rule, large professional militaries) are usually the only tools available for these societies; they’re also necessary to a certain degree, especially at certain lower stages of social/political development. Historically the challenge has been to cultivate inclusive institutions over time, which is particularly difficult because (A) extractive institutions have interest groups that can defend them (slaveowners, ambitious army officers, feudal aristocrats, etc.) and (B) inclusive institutions make societies vulnerable to subversion and conquest in the dog-eat-dog world of international relations.
Isn't the biggest problem with the greater Middle East the prevalence of father-brother-daughter marriages?
This isn't just biologically harmful but also has the effect of splintering society into tribes and clans at odds with one another (above and beyond the effects of ethnic/sectarian divisions). And since most women wouldn't choose to marry their own cousin, crap like gender apartheid and honor killings also naturally follows from this.
Cousin marriage is very uncommon in western cultures largely because it was outlawed by the medieval Catholic Church.
As someone who is from the "greater Middle East", I'd advise you against making blanket statements about incest. The problems with the Middle East are structural and relate to bad institutions and the cultural incentives those institutions produce, not bad genes.
Also, "cousin marriage" was not as uncommon in Western cultures as you make it out to be. There are numerous high-profile examples of cousin marriage in Western history, from the quasi-incestuous web of marriages engineered by Queen Victoria to old-style WASPs like FDR and Eleanor, who were fifth cousins when they got married. The Catholic Church was indeed powerful in the Middle Ages, but it had nothing on the state-capacity of modern nation-states.
While the Catholic Church's ban on cousin marriage was obviously no longer being enforced in places that turned Protestant, its de-tribalizing effects endured. And an occasional cousin marriage (especially between _distant_ cousins) is pretty harmless: it's when it becomes a cultural norm that it is really, really bad.
And father-brother-daughter marriage results in a greater degree of inbreeding than other types of cousin marriage, and perhaps for this reason it is almost unique to Arab-influenced cultures: the only other culture that once practiced it were the Tswana in southern Africa, although they have now abandoned it.
Another alternative, institutional hypothesis, courtesy of Emmanuel Todd, runs as follows: various different family structures pre-date industrialization and give rise to group values and ideals that endure beyond the point where the patterns of co-residence typical of a family structure break down due to industrial-era transformations such as urbanization. And there's good evidence that most key political and economic measures correlate strongly with dimensions of family structure. So yes, certain political institutions associated with liberal democracy do accompany higher levels of economic development, but this is due to the fact that they both share a more fundamental, pre-industrial cause with enduring influence: family structures. When large groups of people move to a new country in large, geographically-concentrated numbers, they form an implantation of their original, anthropological base (i.e. family structure-based) culture within the host culture. One problem for this hypothesis, and I think the reason that it doesn't get much of an airing, is that it claims that the institution that is really important for development is 'sticky' in that it sticks to groups of people. This means that on a superficial reading (and what other kind is there nowadays?) it is, at best, rather pessimistic and small 'c' conservative and, at worst, the sort of thing that could be weaponized by the far right and used as a substitute for biological racism to justify extremist policies. The advantage of AJR's institutional hypothesis, whether or not it's correct, is that it gives hope, leaves room for change and can't be easily co-opted by extremists at either end of the political spectrum.
You're absolutely right, but one can't win a Nobel in economics by talking about family structures. In fact, economics is the wrong tool for family structure analysis, since so much of what the family provides can't be found in GDP and thus doesn't register as "economic activity". Zimmerman's Family and Civilization laid out the case you do here in great detail almost 80 years ago, but from the nascent field of sociology not economics.
Yes, economics is probably the wrong tool for analyzing family structures but family structures may be the right tool for explaining economic measures. To make policies from it would require a discipline that can identify levers that are intermediate between the anthropological description of the family-based culture and the political or economic measures - a causal layer that's accessible to policy interventions that can support and strengthen development, if such a thing exists.
You certainly can win a Nobel in economics by talking about family structure. It's an important part of the work of Nobelists including Gary Becker, Simon Kuznets, Claudia Goldin and Amartya Sen.
I'd forgotten about Goldin, whose work I find extremely persuasive even if I don't like the outcome it leads to (sub-replacement birthrates in any modern economy that embraces sexual egalitarianism.)
I'll be honest, I've never found Becker particularly convincing. In fact, I think he's one of the best cases of an economist being a hammer looking for nails and banging away on screws hoping to make them move.
The others I'm not particularly familiar with (it has been 30 years since my econ grad work, some things get lost in the brain.) However, I stand corrected, both of those two did get econ Nobels for family structure research.
The broad scope of this thinking may have appealed to the Nobel committee also because, in the context of today's international political environment, it presents an argument for the importance of well-functioning institutions, democracy, entrepreneurship and the rule of law. As many have said, this is not to take away the significance of AJR's research, but to suggest that the work of prize committees may also reflective of the current moment in history.
I've been fortunate, and old (70) to have met a couple dozen Nobel winners. In Physics, you pretty much are done at age 27. Newton was 23, Einstein 27 in their annus mirabili year. Bohr was 27. Heisenberg 26. A rare exception was Max Planck - 42 when published the ground breaking work on Quanta.
And most of these built on others prior work but radically so. Einstein's only Nobel was for quanta effect - the Photoelectric effect, based on Planck. Planck and Heisenberg's ideas came soley from their minds. Bohr built on Planck. Einstein's relativity built on Lorenz. Still, E=mc^2, mass-energy equivalence was all Einstein's brain. Einstein never won a Nobel prize for this, Special Relativity, or General Relativity.
Of note, the 1927 Solvay conference, was, arguably, the greatest gathering of world changing intellect in man's history.
Scientist Birth Year Nobel Prize Year
Albert Einstein 1879 1921
Niels Bohr 1885 1922
Werner Heisenberg 1901 1932
Erwin Schrödinger 1887 1933
Paul Dirac 1902 1933
Louis de Broglie 1892 1929
Max Born 1882 1954
Max Planck 1858 1918
Marie Curie 1867 1911, 1923
Hendrik Lorentz 1853 1902
Hendrik Anthony Kramers 1894 (not awarded)
Peter Debye 1884 1936
William Lawrence Bragg 1890 1915
Ralph Howard Fowler 1889 (not awarded)
Arthur Compton 1892 1927
Owen Willans Richardson 1879 1928
Paul Langevin 1872 (not awarded)
Charles-Eugène Guye 1866 (not awarded)
Charles Thomson Rees Wilson 1869 1927
As to macroeconomics, Economic philosophy, and big think -- Economics is just still waiting for its own "Annus Mirabili" -- its own ----- Harry Seldon !!
I am happy for ACR winning the Nobel prize because they have done good work on a very important and very challenging topic: the causes and origins of material progress. Economics as a field is very good at understanding how an economy works and how to properly manage it, but the field cannot answer the most important question: what caused the economy in the first place!
A new emerging field of Progress Studies, in which I am a contributor, is focused on exactly that question. And, yes, it is a very challenging issue, but since it is so important we should try.
I believe that I have the most comprehensive theory explaining the causes and origins of material progress. Institutions play a role, but there are other more important factors.
I call it the Five Keys to Progress, and you and your readers can read more here:
I got to meet Daron Acemoglu when I was a PhD student.
I did my PhD in Game Theory. My advisor was buddies with Daron and also his wife, who was an EECS professor, also at MIT. There were a few multi-university grants that one or both of them, and we, were a part of. There were periodic meetings that Daron would attend with us, although I never worked with him directly.
Daron, unlike many other economists, was open to working with people in other, less "glamorous" fields. Possibly, he felt more comfortable than others in doing that because he was already so famous. Around fifteen years ago when I first met him, it was already common knowledge in econ circles that his Nobel was inevitable. He just needed to wait for his turn.
It was definitely not lost on any of us researchers that Daron's work was somewhat arm-chair and grandiose. Not bad or wrong, but quite different to what was expected from the average researcher. It was pretty clear that a lowly PhD student could not get the same acclaim for the same type of work. I remember asking about this and being told by some faculty that Daron himself acknowledged privately the tremendous role of what he called "charm and persuasion" in his own personal success. This was simply how econ worked, it was explained to me.
I didn't take any of this to imply Daron was some kind of charlatan. Rather, just that the culture that elevates Daron predates and is bigger than Daron himself. Don't hate the player, hate the game, if you will.
I think they should be criticized.
Pretending that this kind of essayism is scientific because you include a few models / graphs / formulas is eroding trust in actual science. I agree that this kind of enquiry can be important for the general discourse (and I definitely find it entertaining) – so they should write essays and label them correctly.
That paper doesn't do a good job, certainly not a Nobel-worthy job, of establishing its claims. It's a good thing to criticize.
But I do want to disagree with your broader point that "essayism" and science are strictly different, the difference is immediately obvious, and they should be kept strictly separate.
1) Things turn out to be testable that you wouldn't have expected: Models of planetary formation were n = 1 pie-in-the-sky when it seemed like we'd never be able to observe planets beyond our solar system. An expanding universe was similarly a ridiculous, untestable, frankly religious idea that eventually became properly "scientific" via standard candles and the cosmic microwave background radiation.
2) Theoretical big-think can and does stimulate later empirical research. To give one example, Marvin Minsky wrote a whole book about the "society of mind", cognition as interacting sets of agents, that's inspired a bunch of AI research and I think also some neuroscience. It wasn't empirical and doesn't engage with any data.
The thing I think deserves criticism is their overclaiming about their shoddy empirical work, not daring to consider certain questions at all. Science in practice is messy!
What is actual science?
"Systematic study of testable hypotheses to produce and organize knowledge"? I don't want to get hung up on any definition and I don't want to put "actual science" on a pedestal either. Making their point in an essay can generate useful beliefs.
But on a epistemological level, the objections to those theories are obvious. Sure, it would be *amazing* to be able to study such things empirically in the way they are trying to do. But we really can't, so we shouldn't pretend we could.
Publishing something like the graph Noah showed as an example with a straight face *in a scientific journal* is naive at best and disingenuous at worst. I don't think they are naive, and I think they should be criticized for that.
Then, I think the problem is trying to answer a question using the wrong method. To me, 'actual' science includes knowing which method is best fit to the question at hand, and being able to interpret the results.
You sound like the drunk who only wants to look for the keys under the light, rather than in the place they were lost.
No, she's saying the opposite. The question is where are the keys. Doing science includes thinking about which kind of light will give the best clues.
Also, there's no need to throw random insults around.
I apologize for referencing a standard analogy that involves a term that is naturally heard as insulting. (https://en.wikipedia.org/wiki/Streetlight_effect - interestingly, it appears to go back to a 13th century Islamic philosopher!)
Does michihuber use "she" pronouns?
I interpreted michihuber as saying that since these kinds of graphs can't get great support, we should rule them out of science. My claim was that this is analogous to only looking at the places where the light is good - even when there's good reason to think that the truth might be in the place where the light is really bad.
No, I was speaking about this graph specifically, where the correlation is spurious. If there is a clear correlation, of course that's a valid argument in support of a hypothesis.
(I use 'he' pronouns, but I can see the confusion re: my shortname "Michi" sounding female in some cultures.)
Economics is not a science.
Is math a science ? :)
No, but is it quasi-science or pseudo-science? And more importantly, how do you turn it into science?
You don't. Because human beings aren't atoms.
To be fair, I'm talking about micro and much of the quasi-sociological / poli-sci stuff like Acemoglu. Macro is a hard science, because in extremely large groups, humans can (for economic purposes) be treated as atoms.
I don't think macro is like science. It seems more like engineering. This is in the sense that in physics, there are a finite set of rules you are trying to fully elucidate whereas in engineering, you are just looking for a finite set of rules that adequately model a far more complex system which frequently includes unknown and possibly unknowable behaviors. The art of intelligent approximation.
I can live with that. Probably a better metaphor.
I think it's the reverse. Micro is definitely more like the real science. You can design and perform actual experiments.
Macro you can never really test.
Actual science is dis-covery and explication of mechanisms.
Good post, very much on the point!
I remember reading “Why Nations Fail” as a teenager and being initially quite impressed. The thesis definitely “feels” right and, living in a Western democracy, one probably wants it to be right.
For me, it fell apart when they described the institutions of the Roman Republic as inclusive and those of the Roman Empire as extractive, thus supposedly (in their words) leading to Rome’s downfall. Only that this transition happened in 27 BC and the Roman Empire in the West continued to exist (and thrive) for another 500 years or so, in the East even for another 1,500 years!
This just stretches the credibility of this argument beyond breaking point. Of course, this might not have been in their paper, but it’s an indication that they play fast and loose with the evidence for their grand theories.
Still, having said that, I think it’s worthwhile to also think about these big questions and put out theories. I just wish they (and other big thinkers) would be a bit more rigorous with what we actually have as evidence and actually know – and what is (more than) a stretch.
PS: For all intents and purposes – and from a modern point of view – both the Roman Republic and the Roman Empire were deeply extractive anyway, of course. The vast majority of men had no direct say in political matters, let alone women or all those not deemed citizens, and they had millions of slaves.
But coming from a history background, it just bugged me a lot that economists would play fast and loose with historical evidence in that way. It just doesn’t make much sense.
If anything the Roman Republic (at least outside the Italian peninsula) was even more extractive than the Roman Empire.
The real weakness of the Roman Empire concerned legitimacy: it was an autocratic regime in a culture that (due to its beginnings as a puppet kingdom of the Etruscans) had a negative view of hereditary monarchy.
This was an invitation to coups and civil wars that sapped the Empire's strength, with the 3rd-century Military Anarchy being the clearest example.
Another key problem is exaggerating the importance of the Glorious Revolution of 1688 as a cause of the industrial revolution. And also political changes in Venice undermining the inclusivity of their institutions. Both examples are at best exaggerated.
I think that there are better competing theories, including my own:
https://frompovertytoprogress.substack.com/p/the-five-keys-to-progress
> And none of them have anything to do with whether it’s a “real Nobel”. Whether a 19th-century arms manufacturer said in his will that your academic subject ought to have a prize named after him is a poor guide to how prestigious that prize should be.
True. But it's a pretty good guide as to whether the prize should be named after said 19th-century arms manufacturer, no?
No one says the econ nobel isnt an econ nobel because they care greatly about alfreds opinions just the prestige and acclaim that the name brought with it
This is a great post, in that I find it super entertaining and it makes very novel points clearly.
But the facts of it also make me think that economics in general, even this “top economist in the field” and the specific ideas that win Nobels, is just not that *profound*.
All this ink spilled to say that … countries with institutions are richer than those without? And even that has a huge caveat, that says it might not be the institutions, it might be human capital (aka migration of those with the famous Protestant work ethic*)?
All this ink to merely SUGGEST that countries outside Europe are richer today if they got some rule of law? How is that a profound statement? Who thought otherwise? It all just seems so banal. And yet there’s apparently famous papers arguing and going to battle over whether its institutions or migration that help a country get rich, with neither proven. The discipline, which I usually respect, surely wants better than that??
*putting this here because the Protestant work ethic itself is problematic, but the most persuasive form of it is in the tendency to inspire reading which ended up by sheer luck to be useful hundreds of years later - as Matt Yglesias put so well here: https://www.slowboring.com/p/the-protestant-reformation-was-a?utm_campaign=posts-open-in-app&triedRedirect=true
I'm sure you know this, but they are trying to identify what the causal pathway to growth is, which feels to me to be one of the most profound and central questions to economics.
We know that Europe + colonies + East Asia are richer, but everything is endogenous - good things generally generate more good things. And bad things generate other bad things - this is why nations fail, and why most countries never started growing. If you install rule of law in a poor country, it will get corrupted; if you transfer people with good human capital into a poor country, they get much less productive.
This makes it difficult to identify a central driver of growth (human capital, geography, technology, genetics, institutions, or just random luck) that triggered this divergence, and, for a development economist, to answer the trillion-dollar question of how you might push a poor country out of poverty.
If it's true that institutions, in a narrow sense of the word, could break poor nations out of the trap of bad governance, corruption, underinvestment in human capital etc., then we should be able to use this to install new institutions, and the human capital of the population being held to account by these institutions doesn't matter so much. If it's all about human capital, then moving, educating people, or investing in early childhood education may work effectively, regardless of institutional quality.
Both factors impact each other strongly, and they overlap (when does a cultural habit stop being human capital, and start becoming an institution?), hence all the debates on this topic.
I agree with Noah that they haven't fully answered this question, and that AJR's empirical data and use of instrumental variables to tease out causality is interesting, but not fully convincing. I also lean towards human capital being the current limiting factor - successful minorities around the world, such as whites in South Africa and Chinese in Southeast Asia, point to softer cultural institutions and human capital playing a greater role than their argument gives credit to.
But I don't get this idea of respecting economics less for trying to answer this question. In any social science we'd expect lots of experiments and quasi-experiments to tease out the causality of a massively important question, even if it were difficult because of limited sample sizes or lots of confounding variables. We'd also expect disagreement from both an empirical and a theoretical perspective to get closer to the truth.
Crémieux Recueil argued that a similar process over a millennium earlier helped make the Jews into a global intellectual elite: after the Romans crushed the Bar Kochba revolt the Jews made literacy (in Hebrew) a religious obligation, even though it was even less economically relevant in Roman Palestine than (vernacular) literacy was in early modern Europe.
https://www.aporiamagazine.com/p/how-do-elite-groups-form
The result is that the richer and smarter Judeans kept their religion and culture and became the ancestors of today's Jews, while the poorer and dumber Judeans lost theirs and became the ancestors of today's Palestinians.
And Ashkenazi Jews were even more intelligent as they went through a _second_ selection process: while Jews in the Muslim world would only need to be successful enough to afford the jizya (the tax on non-Muslims), Jews in Europe faced a whole swathe of discriminatory laws that only the best of the best could surmount.
I actually do not think that ACR are correct. First of all their definition is very fishy: rule of law is not an institution. It may be an outcome of a set of institutions, but it is not an institution itself. Same for property rights and corruption. This definitional squishiness undermines the entire Institutional theory.
And the alternative theory of human capital is still a very vague concept.
I am happy for ACR winning the Nobel prize because they have done good work on a very important and very challenging topic: the causes and origins of material progress. Economics as a field is very good at understanding how an economy works and how to properly manage it, but the field cannot answer the most important question: what caused the economy in the first place!
A new emerging field of Progress Studies, in which I am a contributor, is focused on exactly that question. And, yes, it is a very challenging issue, but since it is so important we should try.
I believe that I have the most comprehensive theory explaining the causes and origins of material progress. Institutions play a role, but there are other more important factors.
I call it the Five Keys to Progress, and you can read more here:
https://frompovertytoprogress.substack.com/p/the-five-keys-to-progress
I also have dozens of articles that go into more detail and provide evidence for my theory.
The fact is that (macro-)Economics is a science WAY AHEAD of its time. There are other posts where Noah talks about this, but certain general equilibria models need a thousand years of data to be good.
But lots of good stuff, particularly in the micro-economics side. See the work of Esther Duflo and her colleagues. And we have been arguably richer since the General Theory was published. (Macro-)Economists are some of the best scientists over there, but their field is very hostile to science.
I just want to say I love this paragraph. You can build an entire high school semester around the ideas here and do a lot to help prepare our youth for advancing America.
“Also, intuitively speaking, I sort of think this theory is right. I look at countries like Russia that devalue their own people and view them as cannon fodder, and I see them doing worse in terms of technology and the economy. I see Xi Jinping cracking down on private entrepreneurship, and I can’t imagine it’ll be good for China’s growth. I look at any number of repressive regimes and see militaries and party-states and mafias that reach their tentacles deep into society, preventing regular people from getting ahead, and producing a feeling of hopelessness. I see how companies that rely heavily on cheap labor often fail to innovate.”
Over the years, I have seen MANY single-cause explanations for development, all of which were blatantly wrong and primarily used for propaganda purposes by libertarians/neoliberals/racists/etc.
Perhaps this "grand unified theory of development" is deserving because (a) it might make the case for many needed requirements, (b) it makes the case for requirements that most of the simpler explanations ignored, and (c) it is just obviously so much better than preceding theories? I'm unfamiliar enough with the field that I would love some discussion of these ideas.
Yes, I agree. I have done some fairly comprehensive research in the field, and all single-cause explanations are just not enough to explain all or even most of the variation. But you can also go to the opposite extreme and create a laundry list of causes.
A new emerging field of Progress Studies, in which I am a contributor, is focused on the origins and causes of material progress. I believe that I have the most comprehensive theory explaining the causes and origins of material progress. I try to hit a compromise between one cause and many causes,
I call my theory the Five Keys to Progress, and you can read more here:
https://frompovertytoprogress.substack.com/p/the-five-keys-to-progress
Thanks: that's very cool!
A minor question/quibble: Why isn't education the sixth? There is a strong temporal coincidence. Or is it one of your enabling technologies?
I very much like that you chose commercial rather than capitalist. Too much propaganda for the latter.
The best part of your causes IMHO (that is often neglected in most theories) is the decentralization of power. I live in Ecuador, and the contrast is stark because so much is federalized. However, I presume you have to make excuses for China, the Soviet Union, and even Protestant Britain: perhaps you say that you don't need decentralization of power in all domains.
I try to focus on the irreducible minimum number of causes. I am confident that any society that has all five keys will be able to figure out how to build an education system.
I am interested in your article on the Nobel Prizes for the simple reason that it always seems to be another choice of the already noted and publicised person(s) that are the recipients. In other words, this prize often seems to be awarded to those individuals who are already well known in whatever field of study or innovation or production that they are involved in. In a way that is a shame for over time some of our most important advances in many fields have come from people who are unknown until their innovations or rock solid conclusions are in the public realm. They are often overlooked because of the lack of publicity for their work and not because of a lack of utility or interest. Nonetheless it is always interesting to see who has been enNobled and the comments that their recognition brings forth.
Interesting, I had the opposite reaction.
I’m glad that people are being recognized for giving the best possible answers the big questions, rather than precisely answering trivial questions (waste of time!).
George Akerlof has a 2010 paper in which he argues that ‘economics, as a discipline, gives rewards that favor the “hard” and disfavor the “soft.” Such bias leads economic research to ignore important topics and problems that are difficult to approach in a “hard” way thereby resulting in “sins of omission.”’
I’m with Akerlof on this one.
I wouldn't consider the precise answers to relatively trivial questions as a waste of time but I agree that some balance between that and approximations to extremely complex and important questions is necessary
I agree. Economics as merely an exhibition of neat causal data science isn’t doing its job
Thanks for the post. As a student I found Acemoglu's work enlightening to the extent that it sheds light on the previously blackboxed factors (which were simply referred to as endogenous and exogenous to the model) that should account for inequality across countries, among other things. To me the value of the AJR paper is exploiting existing administrative data for a good approximation of the effect of some institutions and norms. I don't doubt, though, that the methods has faults and, more importantly, that their dataset alone is just not enough to account for the whole picture. This leads me to my next point, which is that academic economics seems to be confused: it wants to explain human behaviour without a genuine engagement with other fields that also want to explain human behaviour. I totally get why many economists in academia want to essentially do policy analysis and stick to well-defined and focused questions--for this goal one can do without a deeper understanding of why humans are the way are. What I see in many other academic economists, though, is trying to reinvent the wheel with a dismissive attitude toward other disciplines.
On the definition of institutions: legal systems are just the formalised, highest form of institutions. Institutions exist at lower levels as well. This is why a better definition of institutions is norms or rules that people are incentivised to follow. Incentives can take the form of financial rewards, of course, but also social benefits and costs too. See e.g. Guala's 2006 book called Understanding Institutions. It is also important to remember that institutions are not purely exogenous, they are shaped by culture and norms, which shapes behaviour, which then shapes culture and norms again.
That's something I did like about Why Nations Fail. It avoids the two most common problems in economics: "assume a can opener" and "exogenous to the model". These are the two dominant reasons that homo economicus diverges so greatly from homo sapiens.
I didn't like his laziness with facts and desire to squash history into his theory. But I still think it's a pretty good book.
I think the definition of Institutions that they and other researchers use is very squishy, but I do not think that your proposed definition is better. "norms or rules that people are incentivised to follow"
Biology, family, geography, and culture can establish norms and rules and then people are incentivized to follow (to give just a few examples that immediately come to mind).
I would argue that if an institution does not have a headquarters in a building, it is not an institution. I admit that this definition breaks down in the digital world, but it works for the rest of human history.
Norms and rules include the norms and rules of biology, family, geography and culture. It can be *any* kind of norm or rule as long as it helps coordinate in a given context and is common knowledge. This is of course a rough outline to the model. Understanding Institutions by Francesco Guala expands on and enriches the theoretical groundwork laid down by Douglass North in the 1990s, which AJR arguably relied on heavily. And my ongoing PhD deepens these accounts even further by introducing cognition to the picture.
You should also check out my online library of 300 book summaries on Technology, History, Economic Growth & Progress. It probably includes a number of books that are relevant to your studies that you have not read:
https://techratchet.com/2021/04/11/where-do-i-start/
https://techratchet.com/institutions-learning-path/
If you focus largely on the Institutionalist perspective, you are missing many very useful perspectives.
Then the theory is useless.
If the definition of "Institutions" includes biology, cognition, family, geography and culture, then it pretty much includes everything.
So the conclusion of the theory is that Everything causes economic growth. Not useful.
That is exactly why the current definition used in Institutionalism warps the entire theory. It needs a much tighter definition.
If you are serious about researching the field, then I suggest that you read my competing theory:
https://frompovertytoprogress.substack.com/p/understanding-the-causes-of-modern
https://frompovertytoprogress.substack.com/p/understanding-how-humans-create-progress
And since it likely matters to you, I have a PhD from Brown University.
Oh, I'm not researching what causes economic growth--should've clarified that. Institutions, however one may define them, exist independently of economic growth. North, AJR and others just pointed to their relevance to economic growth. Thanks for the links! I'm familiar with most of those readings, most deeply the bits on cultural evolution.
I am conflicted here. I am a historian, not an economist, but I think this is an area where economists can greatly aid in the study of history. Noah's argument makes sense and the critiques he highlights stand on their own. However, one of the main reasons I have a PhD in history and not political science despite working in between the fields is because I believe the latter has become too bogged down in cold quantitative analysis. The inability to reduce something to a mathematical equation does not mean it is not valid and even groundbreaking work that can dramatically increase our understanding of humanity. Economics is not a hard science and it will do itself no favors pretending to be one. It is fine for more mathematical works to win the Nobel Prize but it should be fine for qualitative works to win it as well. Such is the diversity of the social sciences.
I’m sorry if this sounds very obvious or is essentially what human capital means but, isn’t it the belief in the institutions that’s just as important as the institutions themselves? And when you have the settlement of the people who created said institutions, it’s not entirely surprising that they’re more likely to uphold said institutions as opposed to those whom they’ve been forced upon. I find it odd to consider institutions existing as some disembodied phenomenon outside of the people who believe in them.
You mean culture matters? Economists really don't like hearing that.
There was an old joke that supposedly originated among State Dept FSOs during the Iraq war: "Iraq is just 4 men away from having a functional, liberal, multicultural, Western-friendly, democracy. Unfortunately their names are Washington, Jefferson, Adams, and Madison."
<You mean culture matters? Economists really don't like hearing that.xYou mean culture matters? Economists really don't like hearing that.>
Economists don’t like anything that can’t be quantified. It’s why many of them are obsessed with transfer payments like the EITC and not with less-quantifiable-but-equally-important institutions such as inclusive labor laws and a firm leash on the financial sector.
<"Iraq is just 4 men away from having a functional, liberal, multicultural, Western-friendly, democracy. Unfortunately their names are Washington, Jefferson, Adams, and Madison.”>
I think this gets the causality backwards. While I don’t wanna diminish the personal contributions of the Founding generation (especially Washington and his decision to retire after two terms), Washington and company (and by extension, us) were geopolitically blessed in ways that most revolutionaries were not. High wages and comparative economic equality, the absence of any major sedentary indigenous civilizations (think Aztecs and Incas), the Atlantic Ocean as a defensive buffer against the Old World, and other endowments are extremely important because it gave American statesmen the freedom to cultivate more “inclusive” institutions for their society. Iraq had virtually none of those blessings: they were smack dab in the conflict-prone Middle East, surrounded by potential enemies (Turkey, Iran, Israel, etc.) and ridden with ethnic/sectarian divisions. Invading Iraq eliminated the previous order and replaced it with nothing but the mere appearance of democracy, and Robespierre was on to something when he said “no one loves armed missionaries.”
People forget that the decision to build extractive institutions is not really much of a choice and more of a necessity: even a primitive functional society needs law and order to prosper (let alone progress), and extractive institutions (tax farming, strongman rule, large professional militaries) are usually the only tools available for these societies; they’re also necessary to a certain degree, especially at certain lower stages of social/political development. Historically the challenge has been to cultivate inclusive institutions over time, which is particularly difficult because (A) extractive institutions have interest groups that can defend them (slaveowners, ambitious army officers, feudal aristocrats, etc.) and (B) inclusive institutions make societies vulnerable to subversion and conquest in the dog-eat-dog world of international relations.
Isn't the biggest problem with the greater Middle East the prevalence of father-brother-daughter marriages?
This isn't just biologically harmful but also has the effect of splintering society into tribes and clans at odds with one another (above and beyond the effects of ethnic/sectarian divisions). And since most women wouldn't choose to marry their own cousin, crap like gender apartheid and honor killings also naturally follows from this.
Cousin marriage is very uncommon in western cultures largely because it was outlawed by the medieval Catholic Church.
As someone who is from the "greater Middle East", I'd advise you against making blanket statements about incest. The problems with the Middle East are structural and relate to bad institutions and the cultural incentives those institutions produce, not bad genes.
Also, "cousin marriage" was not as uncommon in Western cultures as you make it out to be. There are numerous high-profile examples of cousin marriage in Western history, from the quasi-incestuous web of marriages engineered by Queen Victoria to old-style WASPs like FDR and Eleanor, who were fifth cousins when they got married. The Catholic Church was indeed powerful in the Middle Ages, but it had nothing on the state-capacity of modern nation-states.
While the Catholic Church's ban on cousin marriage was obviously no longer being enforced in places that turned Protestant, its de-tribalizing effects endured. And an occasional cousin marriage (especially between _distant_ cousins) is pretty harmless: it's when it becomes a cultural norm that it is really, really bad.
And father-brother-daughter marriage results in a greater degree of inbreeding than other types of cousin marriage, and perhaps for this reason it is almost unique to Arab-influenced cultures: the only other culture that once practiced it were the Tswana in southern Africa, although they have now abandoned it.
Another alternative, institutional hypothesis, courtesy of Emmanuel Todd, runs as follows: various different family structures pre-date industrialization and give rise to group values and ideals that endure beyond the point where the patterns of co-residence typical of a family structure break down due to industrial-era transformations such as urbanization. And there's good evidence that most key political and economic measures correlate strongly with dimensions of family structure. So yes, certain political institutions associated with liberal democracy do accompany higher levels of economic development, but this is due to the fact that they both share a more fundamental, pre-industrial cause with enduring influence: family structures. When large groups of people move to a new country in large, geographically-concentrated numbers, they form an implantation of their original, anthropological base (i.e. family structure-based) culture within the host culture. One problem for this hypothesis, and I think the reason that it doesn't get much of an airing, is that it claims that the institution that is really important for development is 'sticky' in that it sticks to groups of people. This means that on a superficial reading (and what other kind is there nowadays?) it is, at best, rather pessimistic and small 'c' conservative and, at worst, the sort of thing that could be weaponized by the far right and used as a substitute for biological racism to justify extremist policies. The advantage of AJR's institutional hypothesis, whether or not it's correct, is that it gives hope, leaves room for change and can't be easily co-opted by extremists at either end of the political spectrum.
You're absolutely right, but one can't win a Nobel in economics by talking about family structures. In fact, economics is the wrong tool for family structure analysis, since so much of what the family provides can't be found in GDP and thus doesn't register as "economic activity". Zimmerman's Family and Civilization laid out the case you do here in great detail almost 80 years ago, but from the nascent field of sociology not economics.
Yes, economics is probably the wrong tool for analyzing family structures but family structures may be the right tool for explaining economic measures. To make policies from it would require a discipline that can identify levers that are intermediate between the anthropological description of the family-based culture and the political or economic measures - a causal layer that's accessible to policy interventions that can support and strengthen development, if such a thing exists.
You certainly can win a Nobel in economics by talking about family structure. It's an important part of the work of Nobelists including Gary Becker, Simon Kuznets, Claudia Goldin and Amartya Sen.
I'd forgotten about Goldin, whose work I find extremely persuasive even if I don't like the outcome it leads to (sub-replacement birthrates in any modern economy that embraces sexual egalitarianism.)
I'll be honest, I've never found Becker particularly convincing. In fact, I think he's one of the best cases of an economist being a hammer looking for nails and banging away on screws hoping to make them move.
The others I'm not particularly familiar with (it has been 30 years since my econ grad work, some things get lost in the brain.) However, I stand corrected, both of those two did get econ Nobels for family structure research.
The broad scope of this thinking may have appealed to the Nobel committee also because, in the context of today's international political environment, it presents an argument for the importance of well-functioning institutions, democracy, entrepreneurship and the rule of law. As many have said, this is not to take away the significance of AJR's research, but to suggest that the work of prize committees may also reflective of the current moment in history.
I've been fortunate, and old (70) to have met a couple dozen Nobel winners. In Physics, you pretty much are done at age 27. Newton was 23, Einstein 27 in their annus mirabili year. Bohr was 27. Heisenberg 26. A rare exception was Max Planck - 42 when published the ground breaking work on Quanta.
And most of these built on others prior work but radically so. Einstein's only Nobel was for quanta effect - the Photoelectric effect, based on Planck. Planck and Heisenberg's ideas came soley from their minds. Bohr built on Planck. Einstein's relativity built on Lorenz. Still, E=mc^2, mass-energy equivalence was all Einstein's brain. Einstein never won a Nobel prize for this, Special Relativity, or General Relativity.
Of note, the 1927 Solvay conference, was, arguably, the greatest gathering of world changing intellect in man's history.
Scientist Birth Year Nobel Prize Year
Albert Einstein 1879 1921
Niels Bohr 1885 1922
Werner Heisenberg 1901 1932
Erwin Schrödinger 1887 1933
Paul Dirac 1902 1933
Louis de Broglie 1892 1929
Max Born 1882 1954
Max Planck 1858 1918
Marie Curie 1867 1911, 1923
Hendrik Lorentz 1853 1902
Hendrik Anthony Kramers 1894 (not awarded)
Peter Debye 1884 1936
William Lawrence Bragg 1890 1915
Ralph Howard Fowler 1889 (not awarded)
Arthur Compton 1892 1927
Owen Willans Richardson 1879 1928
Paul Langevin 1872 (not awarded)
Charles-Eugène Guye 1866 (not awarded)
Charles Thomson Rees Wilson 1869 1927
As to macroeconomics, Economic philosophy, and big think -- Economics is just still waiting for its own "Annus Mirabili" -- its own ----- Harry Seldon !!
I am happy for ACR winning the Nobel prize because they have done good work on a very important and very challenging topic: the causes and origins of material progress. Economics as a field is very good at understanding how an economy works and how to properly manage it, but the field cannot answer the most important question: what caused the economy in the first place!
A new emerging field of Progress Studies, in which I am a contributor, is focused on exactly that question. And, yes, it is a very challenging issue, but since it is so important we should try.
I believe that I have the most comprehensive theory explaining the causes and origins of material progress. Institutions play a role, but there are other more important factors.
I call it the Five Keys to Progress, and you and your readers can read more here:
https://frompovertytoprogress.substack.com/p/the-five-keys-to-progress
I also have dozens of articles that go into more detail and provide evidence for my theory.