I’ve been reading the book “How Nations Fail,” which is about the importance of well constituted republican institutions in maintaining society. It talks about extractive versus inclusive institutions and how they either improve society or destroy it. Extractive institutions concentrate and waste resources and the capital produced when resources are turned into wealth that can be used as capital.

“Institutions are “inclusive” when many people have a say in political decision-making, as opposed to cases where a small group of people control political institutions and are unwilling to change. They argue that a functioning democratic and pluralistic state guarantees the rule of law. The authors also argue that inclusive institutions promote economic prosperity because they provide an incentive structure that allows talents and creative ideas to be rewarded.”

This essentially is part of the argument for why Democratic and Republican institutions are needed in our country. And an argument why dictatorships, Libertarianism, and oppressive systems like “managed democracy”, fail.

Written in 2012/06/26, updated 12/16/2018

https://projects.iq.harvard.edu/files/pegroup/files/clark_golder.pdf
https://www.amazon.com/Why-Nations-Fail-Prosperity-2012-03-20/dp/B01MT30NR6/ref=pd_lpo_sbs_14_t_1?_encoding=UTF8&psc=1&refRID=X05Y3Q1HPQTQ48521RD3