At 17:45 pm Beijing time yesterday (October 14), the last prize of this year's Nobel Prize: the Nobel Prize in Economics, was finally announced.
Three United States economists, MIT professor Daron Acemoglu · MIT professor Simon ·Johnson, MIT professor Simon Johnson, and University of Chicago professor James · James A. Robinson co-· the award for his "research into how institutions are formed and how they affect prosperity."
I know you're interested in the world's most important economic awards, but you may struggle to understand the results of these disciplines.
According to international practice, what we hope to do is to "lower the threshold of business cognition". Therefore, today, I want to use the most concise language to help you quickly understand what the results are, and help these three scholars win the Nobel Prize, the crown jewel of economics.
I believe that you will definitely gain something after reading it.
If you go to the official website of the Nobel Prize, you can see that the Nobel Prize committee has given this summary of their research topic:
They helped us understand the differences in prosperity between countries.
I think this summary is very concise and accurate. But I would like to translate it again. The three winners answered the eternal question:
Why are some countries poor and others rich?
True, this is an eternal question, not a new one.
Whether it is Plato and Aristotle in the West, or Mencius and Shang Yang in China. The essence of these wise men is to find an answer to this eternal question.
They agreed that if they found that answer, they could lead their country on the road to prosperity.
As for the specific answers, there are many different ones. Some appeal to certain virtues, such as charity and mutual aid; Some resort to a certain great man, such as Emperor Qin and Emperor Caesar; Some even resort to religious enlightenment, such as the glory of God and the teachings of Buddha.
In the history of political thought for thousands of years, there are three types of answers, which have been widely recognized by some scholars.
The first type of answer is called the "geographical hypothesis".
The representative figure is Jared · Diamond, who has a famous book "Guns, Germs and Steel" that is very popular in China.
This hypothesis holds that the poverty and wealth of a country are essentially determined by geographical conditions and resource conditions.
Or, we translate it into the vernacular: where is a country located, whether it is mountains or seas, whether it is cold or warm, what vegetation it is, and what minerals. These factors have decisively contributed to the poverty and wealth of the country.
For example, Diamond said, why did the main achievements of civilization take place in Eurasia, while the American continent is relatively backward? If you open the world map, you can see it at a glance.
You see, the Eurasian continent as a whole runs east-west, while the American continent as a whole runs north-south.
What is the difference between the different directions? Diamond said that the separation was too big.
One of the advantages of the east-west direction is that there is not much difference in climate between the same latitudes, so all kinds of crops and livestock can move horizontally, and crops in one place can be planted in another place, which allows civilization to spread on a larger scale and promote technological progress.
The difference in climate between the north and south is so great that the crops that thrive in this place cannot take root at all if you go a hundred kilometers to the south. As a result, civilization can only develop on a small scale.
In other words, according to Diamond's theory, even if aliens bring a time travel machine to bring us back to the moment when civilization was budding 10,000 years ago, and let the entire human civilization start all over again, the result will be very different, with Eurasia continuing to develop and the American continent continuing to lag behind.
This theory is called "geographical determinism".
The second type of answer is called the "cultural hypothesis".
The representative figure is the famous sociologist, Max Weber, author of "The Protestant Ethic and the Spirit of Capitalism·".
What is the cultural hypothesis? The answer can be seen from the title of this famous book. What is it that creates the "capitalist spirit" that makes economic development? Weber's answer is: the Protestant ethic.
Weber believed that under the Protestant ethic, believers were generally freed from the shame of "making money" and regarded doing their work as a great cause to glorify God. It is this ethic that promotes the germination and development of the spirit of capitalism.
Of course, Weber's theory is only one type of cultural hypothesis. But in short, proponents of the cultural hypothesis generally believe that it is the different cultures and customs of each region that contribute to the poverty and wealth of the country.
The third type of answer is called the "ignorance hypothesis".
Put simply, this type of hypothesis holds that the root cause of a nation's poverty or wealth is none other than the ruler himself.
Those national leaders, those policy makers, either because they don't understand the laws of the economy, do bad things with good intentions. Either because they are short-sighted and only interested in their immediate interests, in short, they frequently make wrong economic decisions, which leads to the long-term failure of the country to develop.
Plato, for example, had the ideal political system in mind called the "philosopher-king", which either made a philosopher a ruler or a ruler a philosopher. In short, under this hypothesis, the country is poor simply because of the ignorance of the rulers.
Okay, let's first summarize the eternal question of "why some countries are poor and some countries are rich". Over the millennia, countless thinkers have expressed their opinions and provided countless frameworks of interpretation.
Of course, eternal questions mean that there are no definite answers. The three winners of this time have used their own research for more than ten years to propose a new set of explanatory frameworks for this problem.
What is the interpretive framework? Let's take a look at how these scholars evaluate the various theories mentioned above.
There is an influential book, Why Nations Fail, written by two of this year's three winners: Acemoglu and Robinson. If there is only one book to represent the research results of this year's Nobel Prize, it must be this one.
In the second chapter of the book, the two authors criticize each of the three explanatory theories, even calling them "theories that don't work."
Their logic is roughly like this, the earth is always the earth, the mountains, rivers, lakes and seas are always the mountains, rivers and lakes and seas, if the "geographical hypothesis" is correct, then how do you explain the rise and fall of countries in the whole historical process?
For example, the Middle East, where human civilization first originated, seems to be nothing but poverty and war, except for a few oil countries.
For example, Egypt and Iran have created the most powerful great empires. But today's Egypt and Iran seem to be completely out of step with wealth, how do you explain this situation?
Another example is China, after experiencing the stagnation of modern development, but in the last 40 years it has completed a great development that has attracted worldwide attention, how do you explain it? Could it be that China's geographical location has changed?
As for the "cultural hypothesis", there are countries in the world that are culturally similar, but whose economic development is vastly different.
For example, Korea and North Korea are two countries created by political factors, with the same language and the same culture. How do you explain the stark difference between the two countries' economic levels today?
For example, for a long time, Western academics believed that Confucian values, or Chinese culture, were harmful to economic growth. However, among the "Asian Tigers" that began to take off economically in the 60s of the last century, three countries and regions are from the Chinese cultural circle: Singapore, Hong Kong, China, and Taiwan. Immediately after the 80s, China's economy also began to take off.
At this time, some people began to argue in turn that the Chinese's "labor ethics" played a role in promoting economic growth, is this not a contradiction?
Finally, there is the "ignorance hypothesis", in which the authors argue that economic development would be too easy if it were really only because of the ignorance of the leaders. As long as the leaders correct these mistakes, or replace them with a group of more insightful leaders, it will be fine.
But what we see in reality is that some third world countries have repeatedly couped d'état, civil wars, and revolutions, but they have never been able to get out of the quagmire of poverty.
Since they believe that none of these hypotheses are true, what exactly is the theory of these three scholars?
Their answers can be summed up in two words: system.
In the book, they divide all economic systems into two broad categories: "inclusive economic systems" and "extractive economic systems."
Extremely wealthy countries with inclusive economic systems generally have the following characteristics:
1. Allow and encourage the majority of people to participate in economic activities, and do their best to give full play to their talents and skills, so that individuals can make free choices.
2. Protect private property, create a just legal system, and provide public services.
3. Break the monopoly of the industry, allow new businesses to enter, and allow people to choose their careers freely.
The gap between the rich and the poor stems from the difference in systems; The difference in systems has created a disparity between the rich and the poor.
The extractive economic system, on the other hand, does not have fair market competition and does not have a normal legal environment, which cannot prevent a few people from profiting through improper means. For example, in some third-world countries, the people have almost no way out, and the only money they can earn is money from the collusion of officials and businessmen.
Of course, the above is just a minimalist explanation framework, a more detailed analysis, and it is highly recommended that you read the book "Why Nations Fail", which is a very light-hearted and easy-to-read book, full of a lot of interesting stories and cases, without the twist of an academic paper at all.
And the work of these scholars, like all other research theories, has received both praise and criticism.
I would like to pick out a representative one from the positive and negative points of view to introduce to you, to help you listen to both the clear and broaden your horizons.
The most representative argument is that this theory can explain China's economic miracle over the past 40 years.
Many traditional economic theories fail to explain China's development achievements. Today, no one will deny that the achievements of reform and opening up are the achievements of economic structural reform. Liberate the productive forces, develop the private economy, protect property rights, and build a legal environment.
It is precisely this kind of institutional reform that has made China what it is today. Every Chinese has benefited from this.
The most representative opposing viewpoint is that this set of theories is somewhat suspicious of "shooting arrows first, and then drawing targets".
If institutions are the decisive factor in development, shouldn't the transfer of the institutions of rich countries to poor countries take effect immediately?
But what about the facts? Not at all.
For example, there is a country in Africa called Liberia that has a flag that looks like this.
How do you feel? Doesn't it sound familiar? Seems to resemble the flag of a big country?
That's right, congratulations on your answer: United States. Only the number of stars and stripes is different, and the layout is simply identical.
What's even more amazing is that Liberia's constitution is almost a copy of the United States Constitution, except that the name of the country is different from the 50 states, and the other parts are almost unchanged.
Because the country of Liberia was originally formed by some black United States who were free to return to Africa after the rise of the abolitionist movement in United States in the 19th century.
I also heard Teacher Shi say that there is even a strange kind of racial discrimination in Liberia: these blacks who return from the United States will discriminate against the local indigenous blacks.
But in short, you can see that this is a country that is in the same vein as the United States system.
Excuse me, what is the economy of Liberia? Is it a world power like the United States?
Of course not, it has a GDP per capita of less than $1,000 and is one of the least developed countries in the world.
For example, in the same country, the system is always roughly the same. But why is it that United States economic conditions are still very different between states and provinces in China?
If you ask a few Nobel laureates this question, you may get this answer: The system is the system, but the people who implement the system are different, the conditions for implementing the system are different, and the results are naturally different.
But if this is the case, can the answer to "system" still be regarded as an answer to the question "why are some countries poor and some countries rich?"
Some people even think that rather than summarizing the causes of the country's wealth and poverty, it is better to say that they are counting the results of the country's wealth and poverty, and then defining the system of those rich countries as an "inclusive economic system" and the system of those poor countries as an "extractive economic system".
Who's right and who's wrong is left to you to judge.
Finally, I would like to ask you a brief biographies of the winners, I was really fascinated by their experiences.
Simon · Johnson is a British-born United States who earned bachelor's and master's degrees in United Kingdom and doctorates in United States, and has spent his entire research career on both sides of the Atlantic.
Acemoglu is of Turk descent and was born and raised in Turkey, received his PhD in London, United Kingdom, and tenured faculty at MIT in United States.
Even more amazing is James · Robinson, who earned degrees in United Kingdom and United States, taught in Australia, traveled to the Andean University in Bogotá, the capital of Colombia, every summer, and even traveled to Botswana, Congo, Sierra Leone and other sub-Saharan African countries to conduct academic research.
You see, these 3 winners all have transnational and even transcontinental visions, and they have traveled all over the 6 continents of the world, leaving only Antarctica without their footprints.
In their books, various cases from various countries are at their fingertips, and perhaps only such a global perspective can support such a broad research.
Well, this year's Nobel Prize in Economics will be dismantled for you, I believe it is enough for you to look at the general situation and understand the core ideas of several scholars.
If you must ask me, how does knowing this help us personally? I think there are at least two points to share:
1. Business, economics, and politics are all "super complex systems", and you can never come to a conclusion that "if you do it, what will happen".
All research, theories, and hypotheses are trying to find a clue in an incomparably complex world. As long as you lift the veil of complex systems even a little bit, it is a great progress in human knowledge, and even recognized by the Nobel Prize.
2. The topic of the country may be too big. But similar ideas and similar problems are actually faced every day.
For example, why are some people poor and others rich? You will find that the essence of the education we receive from childhood is to try to answer this question.
Why are some companies poor and some rich? You will find that all the business theories we learn, including the business analysis you see every day on this official account, are essentially answering this question.
The stones of other mountains can be used to attack jade. If you are concerned about these issues, then the study of these national theories may be able to enlighten you from a higher dimension.
Good luck, progress.
*Personal opinion, for reference only.
Resources:
1. Where does the unique spiritual temperament of United States come from? 50 lectures on · Chinese History
Writer / Ge Ping Editor / Erman Layout / Huang Jing
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