His summary of Why Nations Fail: the Origins of Power, Prosperity and Poverty, by Acemoglu and Robinson. The sub-text of the story is the difference between Argentina and Australia although he did not explore that topic as he was urged to do when he was wondering what to do after his PhD.
So here is my summary. Some nations succeed, and for a long time. Then slowly, or quickly, something goes wrong. Why? The authors offer three candidate explanations which anyone who is interested in history will have come across. The most popular is the geographic explanation… The authors do a neat job of demolishing that one, though it has a lot going for it.
Culture is the second. Some ‘nations’ just don’t develop a culture that encourages agriculture. They never invent the wheel, for example; they don’t protect and domesticate animals; they get set in hunter-gatherer cultures that work for them… Pre-1788 Australia provides a good example. But other groups in similar situations did learn about domestication, food production and settlements. Why not the indigenous Australians?
Ignorance is the third. Some populations simply don’t ever get it, and continue not to get it. Here there is a mixture of culture and ignorance. The authors point out that similar groups in similar situations do in fact sort it out, and get past ignorance. In those cases what happens then is a growth in wealth for the community.
He pursued the idea of extractive and inclusive political systems. In extractive systems elites gain control and tax the others or enslave them. The inclusive system offers everyone the opportunity to do their own thing, and to prosper.
Most political systems are extractive, but the vibrant, prosperous ones are inclusive. Australia is one, the USA another. So are the ‘Western democracies’. But they were not always like this.
What prevents the return of the extractive elites? Democratic elections, a strong central government, the rule of law, and so on. These are more or less embedded in our system. They are not immovable, however, and they need protection.
We need to be careful what we mean by democracy and a strong central government. That does not mean unchecked majority rule and it does not mean big government. The government needs to be limited (minimal) and also strong enough to resist the incursion of extractive elites. A nice idea but we are a million miles away from that kind of government.
In case you are looking for the book.