Best Books of 2019: The Narrow Corridor

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Review of The Narrow Corridor: States, Societies, and the Fate of Liberty by Daron Acemoglu and James A. Robinson.

Acemoglu and Robinson’s previous book, 2014’s Why Nations Fail, contrasts “extractive” and “inclusive” political institutions. Predatory governments with high corruption, that don’t respect political and economic freedoms, are extractive. Countries with these sorts of institutions tend to be both poor and repressive. Countries with inclusive institutions, such as strong property rights, democratic accountability, and the rule of law, tend to be both wealthy and free. Think of the difference between extractive North Korea and inclusive South Korea, which have a shared language and cultural heritage, but different political institutions.

Acemoglu and Robinson, 2019 follow-up, The Narrow Corridor, uses a more complicated framework with more nuance, and ultimately reaches a similar conclusion. It also does it in an accessible style—which is important in a time of rising populism that needs to be countered. The more ears that hear about the connection between liberalism—in the correct sense of the word—and prosperity, the better. Instead of a dichotomy of extractive and inclusive, here Acemoglu and Robinson use a trichotomy between absent Leviathan, despotic Leviathan, and shackled Leviathan. They are the same awful creature, just put into three different situations.

Absent Leviathan is a government that doesn’t do the things governments are supposed to do. When a government does not protect property rights, provide an accessible and fair legal system, a reasonably stable currency, and on down the line—the list varies with one’s political views—that country tends to be poor and stagnant.

Despotic Leviathan is a government that is too present. Like fire, if not kept in check, government destroys everything it touches. The twin terrors of fascism and communism are recent history’s starkest examples. But other types of despotic Leviathan have appeared throughout history on every inhabited continent, from European colonial governments, and often their independent successors, to dynastic monarchies in China and Egypt, to empires in Central Asia, Russia, South and Central America, and Europe.

Acemoglu’s ultimate goal is to implement some kind of shackled Leviathan, which they describe on p. 27: “[R]epression and dominance are as much in its [Shackled Leviathan’s] DNA as they are in the DNA of the Despotic Leviathan. But the shackles prevent it from rearing its fearsome face. How those shackles emerge, and why only some societies have managed to develop them, is the major theme of our book.”

The “cage of norms” is their name for a key concept in keeping Leviathan in that narrow corridor where it is both present and shackled—their metaphors do get a little tangled. The cage of norms is Acemoglu and Robinson’s catch-all term for highly restrictive cultures. It also represents a bit of a turn for Acemoglu and Robinson. Why Nations Fail was mostly about institutions, where the cage of norms emphasizes culture. Many economists downplay or ignore cultural factors in their work because it is often difficult or impossible to measure or formally model. Deirdre McCloskey is the most prominent exception. Her name does not appear in the bibliographies, but her fellow traveler Joel Mokyr’s does, along with Douglass North, Barry Weingast, and a few other similarly minded scholars.

There are many types of cages.  Some cages confine women from public and economic life. Others place taboos against commerce. Nationalist cages enforce hostile attitudes to outsiders. Traditionalist cages can lock out progress and change. India’s caste system is one example. Honor cultures are another. Religious fundamentalism is nearly always a cage of norms. Nationalism, which is currently returning to a vogue not seen in decades, is a very risky cage at the moment in several countries, including Hungary, Italy, the UK, Mexico, and the United States.

The point is that countries that have strong cages of norms have a hard time keeping their Leviathans shackled in the narrow corridor, and are generally bad places to live.

The Red Queen effect is Acemoglu and Robinson’s main metaphor for how Leviathan can stay in its proper corridor. It’s essentially competition. When church and state compete with each other, they work ever harder and more furiously, only to stay in place relative to their competition, similar to Lewis Carroll’s Red Queen in Through the Looking Glass.

And as Harold Berman pointed out in Law and Revolution, they were also competing for customers. This meant church and state had to keep their behaviors inside the narrow corridor. Federalism, or competing levels of government, is another area for Red Queen-style competition. So is separation of powers, with competing branches running as fast as they can to stay in the same place relative to the other branches. A vigorous civil society, unconfined by a cage of norms, is ultimately the most effective Red Queen racer.

In another intellectual turn, Acemoglu and Robinson rely more on history than on economic analysis to make their argument. They offer plenty of numbers and data, but little of the regression analysis or formal model-building that one associates with MIT or University of Chicago economists.

The wide-ranging first chapter alone travels from Wyoming to Ghana in the 19th and 20th centuries, among several other places. To illustrate absent, despotic, and shackled Leviathans, they tell  stories about free-wheeling Siena in Italy, regimented and militaristic Prussia to its north, and Switzerland caught in between them. China and India get their own in-depth chapters, and the comparison of Costa Rica and Guatemala, and how coffee affected their different trajectories, is especially instructive.

Acemoglu and Robinson find their framework also applies in the present day. Ferguson, Missouri’s police department is simultaneously an absent Leviathan and a despotic Leviathan. It doesn’t do things it’s supposed to do, such as providing safety and security. And it does plenty of things it shouldn’t do, some of which became national news. To a greater degree than in wealthier communities, Ferguson’s majority-black residents are subjected to arbitrary and unpredictable fines for everything from jaywalking to the length of the grass in their yard. Residents are then fined further when they are unable to pay, trapping them in a vicious circle. A Ferguson police officer’s 2014 murder of Michael Brown was a flashpoint incident that brought stark attention to how far outside the narrow corridor Ferguson’s government—and governments in many other communities like it—had strayed.

Their tangle of metaphors is a bit much, but Acemoglu and Robinson’s underlying message is sound. The best government is limited government. They are not doctrinaire libertarians, and as Deirdre McCoskey argues in her new book Why Liberalism Works, they rely too much on the traditional, and mistaken, Marxian conception of capitalism as dependent on capital. It depends far more on new ideas, and people’s openness to them. But their message of the need to limit political power is important, especially in the current political moment. Leviathan is an awful creature who can kill by the millions when it escapes the narrow corridor. If government is a necessary evil, then one must remember that both of those words are important.