Wednesday, December 26, 2012

OUR NEXT FOUR YEARS! Be Afraid,,,Very Afraid

I began warning about Barack Obama’s ambitions right after he won the 2008 presidential election. Now, finally, more people are beginning to take this possibility as a serious threat.

Rather than lashing out with absurd statements like this, the Marxmeister does much better when he follows the far-left playbook and innocently feigns indignation over anything that isn’t to his liking. Or when he vilifies his natural enemies – primarily Republicans, the “rich” and tea partiers and Israel.

Targeting the 1% showed a lack of business savvy in adhering to his well-planned stealth-Marxism strategy. His angry, careless remark must have given chest pains to cheerleading, brainless Obamaviks everywhere.
                    WAS ROD SERLING A PROPHET?.

I will say yet again what I have been saying for more than three years: But since Obama has won the 2012 election, My message fell upon death ears. After January 20, 2013, he’ll move swiftly to unleash a dictatorial full monty – consisting of more regulations, higher taxes and less freedom – that will make even his staunchest Marxist allies say "DAMN Barack!, that's mean".

Nothing will be off limits; just think of it: a national police force, instant citizenship for all Third World people who want to come to America, forced equalization of income (except for Obama’s wealthy supporters, who'll be getting kickbacks), widespread use of tax audits to carry out vendettas against enemies of his administration, a virtual end to oil drilling, coal mining and gas exploration, suspension of habeas corpus, a new sedition act that will make it a crime to speak out against the government, the police, or the military … and much, much more.

During a speech in Las Vegas, Obama, railing on about the woefull economy he inherited, said that “we can’t wait for an increasingly dysfunctional Congress to do its job. Where they won’t act, I will.” It was a clear message about his dictatorial intentions in his second term.

Hitler did not have to destroy democracy; he merely took advantage of the decay of democracy and at the critical moment obtained the support of many to whom, though they detested Hitler, he yet seemed the only man strong enough to get things done.

Likewise, notwithstanding his cunning and cleverness, "Ceasar" Obama didn’t walk into a finely tuned republic and reduce it to a redistribution-of-wealth democracy overnight. The reason he and his left-wing cronies have been able to violate the Constitution as though it didn’t exist is that they are merely taking advantage of the decay of our republic into a democracy – and the subsequent decay of our democracy – that was already present when they came to power.

The Founding Fathers realized that a democracy is but a pretense for tyranny of the majority. Like all democracies before it, our democracy has destroyed itself through an excess of democracy. Majority rule has evolved into a free-for-all stampede of citizens appealing to politicians to give them more and more of the plunder. And there is never a shortage of vile human beings who are willing to resort to meaningless slogans like “hope and change” to win over the mindless masses, or in other words,, that 47% so famously spoken about here-of-late.

Lt. Col. Terry Lakin
Dictatorship and total collapse is in the air. Can't you feel it to? That’s why it was encouraging when Lt. Col. Terry Lakin, a decorated Army doctor, refused to go to Afghanistan unless Barack Obama would make his birth certificate public, which resulted in his serving six months in prison and being dishonorably discharged. But it’s far more discouraging that no other high-ranking officer has had the courage to join him.

This is an important issue, because I continue to believe that if a dictatorship starts to emerge (many would argue that it already has), it may ultimately get down to a question of whether, at the moment of truth, the military will take orders from Barack Obama or, instead, side with American citizens.

Civilian Drone
Those who chuckle at all this would do well to bone up on their history. But in the event you have no idea where to begin, then I'll suggest we start looking at "Drone" flights over US cities.

So not only can Obama now imprison us with no charges, he can spy on us and if need be fire a missile at us from one of the predator drones that will now be roaming the skies above America. Why the fuck would predator drones be needed in America? The weight of evidence grows by the day. Our government is preparing for an epic collapse and will do everything in their power to retain control over the ignorant masses. Will the ignorant masses ever wake up? 

The rise of a Totalitarian Dictatorship in America and the world has been in the making for many years. The bills and legislation that have been passed that are taking away our freedoms and giving more power to President. The signing of the NDAA gives the power to the military the power to detain Americans or anyone of suspected ties to terrorism without charges or jury trial. This establishes Martial Law in America.

Obama passed other legislation that gives him the power to shut down the internet. There is a bill called the sopa act that can give the government power to censor the internet. That bill hasn’t passed yet but they are in the works. New laws are being passed that takes away more freedoms and gives more power to the President. These warning are foretold in Prophecy.
If it wasn't before, the ultimate purpose of Dictator Barack Hussein Obama should now be clear to even his most die-hard fans.

With Obama's planned and now-revised "Cyber-security Act of 2009, his inordinately broad and sweeping powers to take control of the Internet AND private networks is making its way through the Senate.

The bill gives Obama's Executive Branch the power to shut down the Internet for any reason he considers to be a "Cyber-security emergency." That, of course, is anything Obama decides to declare an emergency.

Those who have been living in a cave for the last several years might ask "What's the reason for this suspension if not dissolution of liberty?"

The answers are:

1. because Obama can.

2. To shut down ALL opposition to his totalitarian programs and regime.

3. To stop any and all warnings going out en masse when Obama's initial troops begin arriving in our towns and cities. Don't think so? Nothing else makes any sense either folks.


The only good news is that many former Obama supporters are now - finally - beginning to see and feel the dictator's relentlessly encroaching darkness. Even they don't like it and are beginning to feel the fear move up their reinserted spines. Obama is also now actively working to demoralize - if not completely shut down - the CIA. Does anyone else think it was even mildly coincidental that Obama already has his personal 'replacement' interrogation team in place? Will Obama's new and personal "security team" soon replace the entire CIA or will there still be a skeleton crew left for show purposes? Placing the now former USA in jeopardy of another major attack doesn't bother Obama in the least. Does anyone else wonder whose side Obama is on? Bye-bye CIA.

The tyrant is already going against the will of the American people with both his ObamaCare and Cap and Trade. Both of these bills are designed to further gut the country of its wealth and liberties and its ability to survive. And in order to partially fund the ObamaCare multi-Trillion-dollar package (per the Congressional Budget Office), Obama plans to further raze Medicare. Bye-bye seniors.


In his column "The Ugly Truth of Obamacare" budget becomes strained, as it must - and, as Obama admits, already is under Medicare - the government will have to cut back on what it lets people have." But, after admitting that he will cut back on Medicare benefits(called 'rationing"), Obama continues to say he won't ration health care to Seniors.

Suffice it to say, Obama has become a Master of speaking out of both sides of his mouth - and remarkably at the same time! Obama is a classic example of the "double-minded man; Bye-bye common or any other kind of sense.

Since his usurping of the US presidency (have you heard the latest Obama birth certificate rumor that it was burned up in a fire?), Obama has instituted one assault after another against the American people.

Note: No one in his or her sane mind would be doing these things except out of hatred for the victims. Even before his "election" he spoke about his disdain for the US Constitution. Yet, more and more people are asking "With everything going to Hell in a hand basket, why is Obama still smiling broadly?"

There are actually at least two answers:

1. Because he's setting up a White House Emporium - with all necessary private police and enhanced voter fraud units - so that he will never be forced, let alone voted, out of office.

2. Because the destruction of the USA and its "transformation" into ObamaLand was his plan all along.

Despite his promises to end the war, President Obama has continued to expand his presidential powers in the War on Terror, which are legal executive privileges that began in the Bush administration. The key difference is that Obama's authority seems to be more ambiguous, more powerful, and less defined than in the previous administrations. When Obama was accused of violating the Constitution with the passage of his Affordable Care Act, at least the Supreme Court could justify the legitimacy of the legislation by invoking the Constitution's Taxing and Spending Clause. However, with the passage of the National Defense Authorization Act for Fiscal Year 2012, he is vested with extrajudicial powers that at times contradict the very principles codified by the Founding Fathers.

One such power is granted under the NDAA's section 1021 and 1022, which contain the provisions that allow the president to indefinitely detain a terrorist suspect without a trial. In an interview with John Cusack on, the George Washington University law professor Jonathan Turley observes that this effectively undermines the due process guaranteed by the Fifth Amendment of the Constitution that could be detrimental to our civil liberties if the power is used irresponsibly.

This violation of the due process of law is viewed by Turley as a dangerous concession by U.S. citizens that could lead to greater encroachment on our liberties in the future. According to Turley, it is "meaningless" that Obama has pledged to not use his powers against U.S. citizens because he still possesses the legal authority to do so. It is uncertain whether future administrations will be so "disciplined" in its refrain from indefinitely detaining or killing U.S. citizens (on home soil) who speak out against the government, tasks that can be legally accomplished by labeling them terrorists and subsequently circumventing the mechanisms of the judicial process guaranteed by the Constitution.

In response to such concerns, President Obama issued a policy directive in February that narrows the coverage of indefinite detention to non-U.S. citizens and does not allow those under his administration to detain citizens or legal permanent residents captured on U.S. soil.

However, legal columnist Joanne Mariner still finds the issue unresolved because the directive could just as easily be rescinded by future presidents. She suggests that American citizens on U.S. soil have not ensured that their constitutional liberties are protected as long as section 1021 and section 1022 of the NDAA remain as they are now because we are subjected to the executive branch's "discretion" unless there are changes to the statute itself. Currently, a bill called the Due Process Guarantee Act that would make it illegal to detain a citizen or lawful permanent resident has been in review by the Senate Judiciary Committee since last year.

Another controversial position taken by President Obama is the expansion of federal authority beyond Afghanistan in the war against terrorism. In a secret interagency memorandum issued by the administration's legal counsel in 2010, wherever someone who is a threat to the security of the United States is located, even outside of war zones such as Afghanistan, it is lawful to kill him "if it is not feasible to take him alive." This expanded geographic jurisdiction was demonstrated in the case of Anwar al-Awlaki, an alleged leader of al Qaeda who was killed in 2011 by an American drone in Yemen with secret consent from the Yemeni president. Thus the war is not simply restricted to terrorist activities in Afghanistan anymore; it can be anywhere. The case was also unprecedented in that it marked the federal government's targeted killing of a U.S. citizen without a trial.

It would be difficult to find a more insightful source into the Obama administration concerning these legal issues than Attorney General Eric Holder. In a speech to students at Northwestern University School of Law this past March, he reveals the administration's position as one whose actions "must always be grounded on the bedrock of the Constitution – and must always be consistent with statutes, court precedent, the rule of law and our founding ideals."

 After praising the Executive Branch's fairness in allowing terrorists to be prosecuted in civilian courts, he goes on to explain the necessity of occasionally bypassing those courts in favor of military tribunals:

"Military commissions are also appropriate in proper circumstances, and we can use them as well to convict terrorists and disrupt their plots. […] Reformed commissions allow for the protection of sensitive sources and methods of intelligence gathering, and for the safety and security of participants. […] A key difference is that, in military commissions, evidentiary rules reflect the realities of the battlefield and of conducting investigations in a war zone. For example, statements may be admissible even in the absence of Miranda warnings, because we cannot expect military personnel to administer warnings to an enemy captured in battle. But instead, a military judge must make other findings – for instance, that the statement is reliable and that it was made voluntarily."

The Military Commissions Act of 2009 redefined who would be eligible for trial before military commissions, stating that an "unprivileged enemy belligerent" is compared to the previous "unlawful enemy combatant."

Critics of the statute contend that the definition of a "belligerent" is too broad because it expands the class of persons who will be tried by a military commission as opposed to a civilian court, and that it limits the judicial review for non-U.S. citizens who are accused of even providing "support" to hostilities, putting them on the same ground as those who "engage" in hostilities.

According to Joanne Mariner, except for these few cosmetic changes to the language of the MCA of 2006, which the then-Senator Obama voted against, the key provisions remain essentially the same. She notes that this discrimination on the basis of U.S. citizenship is a violation of international human rights obligations and the Equal Protection Clause of the Constitution.

Holder's response to the criticism is, "There is, quite simply, no inherent contradiction between using military commissions in appropriate cases while still prosecuting other terrorists in civilian courts. Without question, there are differences between these systems that must be – and will continue to be – weighed carefully. Such decisions about how to prosecute suspected terrorists are core Executive Branch functions."

Essentially, Holder is saying that the power to determine suspects who will be tried in a normal civilian court or a military tribunal still lies with the president and those under his authority, not Congress or the Supreme Court.

Even with the Obama administration's claim of goodwill in not exercising the power to indefinitely detain or potentially kill a citizen within the United States without a trial, legislation such as the NDAA sets up the mechanisms that allow the president to largely bypass the checks and balances of the other branches of government, a system so vital to the foundation of our civil liberties that potential transgressions by the executive authority should not be ignored.

Holder ends his speech by saying, "Our most sacred principles and values – of security, justice and liberty for all citizens – must continue to unite us, to guide us forward, and to help us build a future that honors our founding documents and advances our ongoing – uniquely American – pursuit of a safer, more just, and more perfect union."

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Friday, December 7, 2012

The Idea of America

                                    THE IDEA OF AMERICA

Pierre Lemieux

Click On This Picture To Order

Visionaries Pierre Lemieux and William Bonner invite readers to re-examine long accepted notions of what America is and what it means to be an American. Lemieux and Bonner carefully chose each of the written works included in the striking anthology to spark imagination, thought, and debate.

Each of the selections some well-known classics and others the thoughts of less conventional thinkers--builds on the next, engaging readers in an exploration of the concepts that are fundamental to our view of who we are. No stone is left unturned as subjects ranging from individual liberty to religion and self reliance are covered through the words of some of the most creative thinkers ever to put pen to paper.

This arresting collection contains one of the most unique mixes of works ever to be compiled. From the documents that gave birth to America--the Declaration of Independence and the Bill of Rights--to the insightful reflections from the always delightful H.L. Mencken on the American character and Ralph Waldo Emerson's classic words on individual and religious self reliance. The Idea of America is a true celebration of the spirit that is America.

Wednesday, December 5, 2012

The Road To Serfdom; By F. A. Hayek


                                   The Road to Serfdom
Margaret Thatcher

Margaret Thatcher, the Conservative prime minister who dismantled Britain's socialist economy in the 1980s, once noted that "there can be no liberty without economic liberty."

In Thatcher's opinion, the freedom to employ one's resources as one sees fit is the hallmark of all other political rights. While Thatcher's observation is quite correct, it no doubt benefited from hindsight. By the 1980s, Thatcher had experienced the very real difficulties presented to freedom and prosperity in her efforts to dismantle Britain's cumbersome welfare state. Moreover, she had begun to see the crumbling of the socialist system in neighboring countries such as France and the Soviet Union.

F.A. Hayek
Some forty years earlier, however, before the United Kingdom implemented its vast system of planning, another Briton named F.A. Hayek made a similar point in his acclaimed treatise, "The Road to Serfdom." In the book, Hayek connects the concept of a planned economy with the Nazi rise to power in Germany in the 1930s. "The rise of fascism and Nazism," writes Hayek, "was not a reaction against the socialist trends of the proceeding period but a necessary outcome of those tendencies."

Writing in 1944, at a time when many Americas and Britons feared Hitler's totalitarianism and simultaneously supported a continuation of the wartime planning of the economy, Hayek invariably tied the two concepts together. According to Hayek, a state that assumes control over what is produced "would control what we consume almost as effectively as if it directly told us how to spend our income."
For Hayek, once economic freedom is lost, all other freedoms are soon to follow. In fact, "The Road to Serfdom" paints a clear picture of how even tentative steps towards socialism inevitably lead to totalitarianism.

    Socialism, says Hayek, exchanges society's supreme ideal of freedom for the vague concept of "fairness." But by focusing on fairness, society slowly abandons its respect for the rule of law. What is "fair" is determined by judges and the state and may very well conflict with an individual's right to property, prosperity, or political freedom. In other words, once a state can control competition, redistribute wealth, or plan aspects of the economy, it becomes the ultimate arbiter of right and wrong.

Hayek also points out that a democratic government cannot salvage freedom in a socialist system, despite the passionate arguments to the contrary on the left. Instead, notes Hayek, democracy must ultimately succumb to absolute planners because the legislative branch of democracy is simply unable to plan -- or decide what is fair for all of society -- on a massive scale. Even defenders of socialism, notes Hayek, acknowledge that an economic plan needs a unitary concept to be effective. "Planning leads to dictatorship because dictatorship is the most effective instrument of coercion and the enforcement of ideals and, as such, essential if central planning on a large scale is to be possible."
Even if a socialist government were able to maintain democracy, however, Hayek points out that the system would not necessarily preserve freedom. Unlike liberty, says Hayek, democracy is not the highest political end. In Hayek's words democracy merely is a "utilitarian device for safeguarding internal peace and individual freedom. As such it is by no means infallible or certain."
Such observations are worth remembering as the United States eagerly promotes democracy around the world. The Soviet Union, it is worth remembering, claimed to be the most democratic nation on earth. While democracy is certainly a useful political system it does not, by itself, create or protect liberty. As Hayek notes, economic freedom, not democracy alone, is the ultimate protector of human freedom.
Despite Hayek's passionate defense of liberty, he does not advocate an extreme laissez-faire approach to economic affairs. Hayek recognizes that some aspects of the economy and human interaction cannot be effectively resolved through competition. In these situations, Hayek advocates government intervention to address market failures. In a notable departure from classical liberalism or today's libertarianism, Hayek defends regulating poisonous substances or working hours as long as the measures are consistently and generally applied.
While this position of limited government intervention provides some insight into Hayek's personal views of the appropriate place for government, "The Road to Serfdom" is largely a reactionary work. Hayek vigorously attacks planning and totalitarianism, but he generally avoids stating his own position of government's place in the economy.
In some respects, of course, the absence of Hayek's own views highlights the importance and urgency of what he did say -- namely, that the continuation of wartime planning in America and Britain would lead to totalitarianism. In this light it is conceivable that Hayek did not want to distract the reader from his warning by introducing his own views into the argument. Still, Hayek's consistent focus on one topic and the negative tone of his writing makes the book somewhat repetitive.
In fact, for today's post-Reagan era readers, the more subtle remarks of Hayek's work may have the most impact. Hayek warns, for instance, against the leftist practice of vilifying capitalism by pointing to the negative aspects of the system such as unemployment or inequality. "It is essential," he writes, "that we should re-learn frankly to face the fact that freedom can be had only at a price and that as individuals we must be prepared to make severe material sacrifices to preserve our liberty."
Freedom, not government, has allowed Americans to achieve unmatched prosperity. By limiting government and relying on individual initiative, the United States has created a better society for all. Hayek's "Road to Serfdom," however, reminds us that freedom is a privilege that must always be safeguarded, not only from external forces, but also from ourselves. Freedom is too precious to be taken for granted.

Friday, November 30, 2012

Why Nations Fail: A Must Read From Amazon Books


What makes countries end up in persistent and permanent poverty? Why is Mexico much poorer than the United States? Why is Latin America so fundamentally different to North America? How is it possible that an average American is 40 times richer than an average Sierra Leonean? Is it climate, geography, culture, or could it be the ignorance of domestic leaders? 

Acemoglu and Robinson suggest it’s none of these – rather, the real reason behind the poverty trap and significant between-nation differences lies in the role of political and economic institutions. Politics and the formation of political institutions take centre stage in their book, which formulates the thesis that only within an inclusive political system is it possible for nations to achieve prosperity. The opposite scenario will occur under extractive political institutions where wealth will be accumulated within a narrow ruling elite which will aim to preserve its power thus sentencing a nation to persistent poverty.

In the very beginning of the book the authors hint to the reader how it will be organized – through a series of historical case studies upon which they illustrate their theory of institutional change and the consequential success or failure of nations. It starts with the example of Nogales, a city on the US-Mexican border, which is split in half by a fence. One city, in the same geographical position, characterized by the same cultural upbringings, same population, same diseases, but one part three times richer, much healthier, safer, and with higher living standards. The crucial difference is the very border separating the two parts of the city depicting the different institutional settings within them.

North and South Korea; Can you see the Difference?
The authors make a strong claim that this great divergence on a localized level had its roots in the very start of colonization of North and South America. As the Spaniards came to the Aztec, Mayan and Inca empires they had a single aim of conquering the indigenous population and extracting their wealth. By founding their settlements the colonizers designed a system that would coerce the indigenous people to work for them and extract resources while enriching only the small ruling Spanish elite. This made the Spanish Crown quite rich at the time, as massive amounts of gold and other resources flooded into the country.

The colonization strategy of the English was the same as of the Spaniards – extract the resources and force the indigenous population to work for the colonial elite, which would, along with the Crown, obtain maximum benefits from it. This strategy worked well in India and Africa, but it failed in North America. First of all, they were late. North America was less attractive and much scarcer in gold than South America. In addition, the Native Americans put up far greater resistance and more importantly didn’t allow themselves to become enslaved and forced into manual labour for the newcomers. 

Daron Acemoglu
It was up to the settlers to work themselves. At first they were coerced into working by the colony’s rulers but this strategy failed due to a range of possibilities for the coerced to escape to the Indians. As a result, the colony needed to create different institutions to create incentives for the settlers. With more personal freedom came demands for more political freedom. In fact, the authors claim that the historical prelude to the monumental 1774 US Constitution and the colonists’ fight for liberty was the formation of the General Assembly in colonial Jamestown in 1619.

These initial institutional differences manifested through the limitation of political power, democratic principles, and economic incentives that paved the different development paths of US and Mexico, generating the crucial difference between the two parts of the city of Nogales.

An intriguing case study approach analyzed through the lens of institutional formation is the framework used throughout the book. The emphasis is on how inclusive political institutions can lead to inclusive economic institutions which will lay the foundations of wealth creation and sustainable growth. The combination of inclusive political and economic institutions shapes the incentives needed for a society to prosper. If people have their wealth expropriated, they will lack the incentives to create or sustain it. They will fail to innovate and fail to achieve progress. People need an initial set of institutions to reduce uncertainty and maintain stability.

The two examples exists side-by-side
This initial set of inclusive economic institutions includes secure property rights, rule of law, public services and freedom to contract. The state is relied upon to provide all of these. It is the role of the state to impose law and order, enforce contracts and prevent theft and fraud. When the state fails to provide such a set of institutions it becomes extractive, where its main objective is to satisfy a small powerful elite (whether the ruler of the country, a set of rulers or prevalent interest groups).

Acemoglu and Robinson formulate their central hypothesis around the fact that a strong set of economic institutions which will guide incentives towards creating wealth can only be achieved through more political freedom. Political inclusiveness and the distribution of political power within a society are the key elements that will determine the success or the failure of nations.

The outcome of this insightful thesis originating from the works of Adam Smith can often depend on random historical events. They refer to these as the critical junctures of history that exploited the initial small institutional differences and led to diverging development paths of nations. One interesting example of a critical juncture that probably contributed to the divergence between Western and Eastern Europe was the bubonic plague, better known as the Black Death, in the 14th century. Another example is the aforementioned different colonization pattern in many countries, the most notable one being between North and South America.


In their pursuit of an explanation for the role of politics in development, the authors touch upon other dominant theories that have tried to explain poor growth and under-development. They stress three approaches: (1) the geographical position of the country (countries in the sub-tropical area), which blames exposure to rough climate, barren land and tropical diseases; (2) the cultural attribute, where the population is to be blamed for not being hard-working (less productive) due to their ethical, religious or cultural boundaries (a famous example here is Max Weber’s Protestant ethic argument); and (3) the ignorance of the country’s ruling elites, implying that if they had better economic advice, they would be able to emerge from poverty. They also touch upon the dual economy paradigm that blamed African underdevelopment on the co-existence of two sectors within an economy between which social mobility was almost impossible.

Each of these arguments is found faulty by the authors. The rule of a narrow elite that organizes the society for its own rent-extracting interest is a common trajectory every nation followed on its road to poverty. The differences between the two parts of Nogales, two Koreas, or East and West Germany cannot be explained by geography, culture, diseases or ignorance – it could only be explained by a different set of political institutions that resulted in different economic outcomes. As for the African dual economy paradigm, the dual economy was artificially created by the ruling (white) elite that maintained extractive political institutions.

The problem isn’t that poor nations remain poor because of outside (or inside) exploitation, economic ignorance or laziness of the population. It lies in the role of politics, and how the ruling elite will organize the country’s political and economic institutions. If political institutions are organized as extractive and concentrated in the hands of a narrow elite, then economic institutions will only serve the purpose of the ruling elites extracting the maximum wealth for themselves. If they are organized as inclusive, power being dispersed among the many rather than concentrated among the few, then this institutional environment will create incentives of inclusive economic institutions, where innovation and creative destruction will ensure the creation of sustainable economic growth and development. Becoming a rich nation necessitates the overthrow of the ruling elites and the distribution of power and political rights evenly within a society. The government has to become accountable and responsive to its people, who can then use this security and stability to advance on the economic opportunities available to them.

However, the authors do admit that growth can be achieved within a set of extractive political institutions. The elites can simply reallocate resources into temporary highly productive activities under their control (e.g. from agriculture to industry). But the problem is that this growth is unsustainable in the long run. When the economy runs out of steam, so will rapid growth and the country will first be exposed to an economic and ultimately to a political crisis. The example of the rapid growth of Soviet Russia illustrates this point. It wasn’t driven by innovation, but state control and when the foundations for growth were exhausted, nothing came to replace it. The authors predict the same thing happening to China. Even though China is different than Soviet Russia, as it deploys some inclusive economic institutions, the political elites still constrain creative destruction. They mention the example of a Chinese entrepreneur who wanted to compete with big, inefficient state-owned steel companies and ended up in prison as a result. 

The Chinese anti-entrepreneurship climate, censorship of the media, and technological growth based on adoption of technologies rather than innovation are all signals of an extractive political system in which growth is not sustainable. China can overcome this and reach sustainable growth if it manages to undergo a political reform that will introduce more individual and political freedom. Until then, they are destined to repeat the Soviet scenario.

The book develops as a fascinating storyline comprising of a multitude of vivid historical examples that support the central thesis of the authors. After identifying the main framework of the analysis in the first four chapters, it takes the reader on a journey through history featuring a number of famous historical and more recent stories of success and failure. This gives the reader an opportunity to see how politics can indeed play an important part in the development of a society.

We see the same historical pattern reoccurring in Venice and Ancient Rome, in Ethiopia and Mayan city-states, in Soviet Russia and Congo, in 18th century Spain, absolutist Austro-Hungary or tsarist Russia. The common characteristic that led them to failure was the extractiveness of their political institutions. Even if they did briefly experience rapid growth (such as the absolutist monarchies or Soviet Russia), this growth was temporary and unsustainable, unless a path towards inclusiveness followed. When Ancient Rome, Venice and the Mayan city-states had even partially inclusive institutions that offered the proper incentives for growth, they managed to experience it. However, when they switched to authoritarianism and usurpation of power by the elites, conflicts emerged and the downfall of their societies began. Inclusiveness was replaced by extractiveness and consequently development was reversed.
In England, something different happened. Whilst in other countries repression was the dominant type of social order, in England the demand for more property rights and a greater political voice set the stage for sustained growth and prosperity.

Creative destruction and technological innovation made people richer, led to a new distribution of wealth, and more importantly new distribution of power in the society. The elites, afraid of losing their privileges, opposed this process. They felt threatened and formed barriers to innovation. But in England, through political conflict, the rising wealth of merchants and manufactures was able to overcome this opposition and constrain the power of the sovereign, initiating the beginning of a new historical era.

This is precisely why the Industrial Revolution started in England, not anywhere else in the World. The Industrial Revolution developed on the trails of the Glorious Revolution. It was the importance of a broad coalition representing the people that succeeded. If there had not been such a broad coalition, one elite would have simply overtaken the other and continued with extractive institutions (as happened briefly during the dictatorship of Oliver Cromwell). Irreversible political change and the switch to inclusiveness transformed the economic incentives in the society and created enormous wealth and prosperity.

But not all countries followed this rapid development and not all countries embraced the benefits of the Industrial Revolution, some even for a long time. It is due to these defining moments of history (critical junctures) where the authors explain why all those countries that developed on the ruins of the Ottoman Empire tend to be relatively impoverished (provided that they are not oil exporters). The Ottoman Empire, instead of embracing change, felt threatened by it and sentenced its minions to another 200 years of extraction and poverty. The opposition to the elites in the Ottoman Empire never grew as strong as it did in England, which is why inclusive institutions never developed there. The same is true for a multitude of countries at the time, including Spain, Austro/Hungary, Russia or China.

Wherever those with political power felt threatened by technology and innovation, they prevented it, and by doing so they effectively prevented wealth creation and prosperity.

The summing-up of their analysis is through explaining the vicious and the virtuous cycles of prosperity. Whenever inclusive institutions are present, the virtuous cycle will create positive feedback loops that will prevent the elites overcoming them. It will make sure that inclusive institutions expand and become persistent. Similarly, in the case of extractive institutions vicious cycles will generate negative feedback loops that will prevent progress.

In order for the virtuous cycle to work the first precondition is to have pluralism, which will constitute the rule of law and lead to more inclusive economic institutions. Inclusive economic institutions will remove the need for extraction since those in power will gain little but lose a lot if engaged in a repression and constraining democracy. Finally, they also recognize the importance of free media to provide information on threats against inclusive institutions.

The virtuous cycle explains how the reforms of the political system in England or the US became irreversible, since those in power understood that any possible deviation would endanger their own position. The examples of British consolidation and its slow, contingent path to democracy in which the people gradually demanded and gradually received more rights; or the trust-busting in the US in the beginning of the 20th century; or the failed attempts of President Roosevelt to limit the power of the US Supreme Court illustrate this point.
Pluralism and the rule of law were critical conditions leading to the limits of political power that made the virtuous cycle possible in the US and Britain. And this was precisely why Fujimori’s Peru, Chavez’s Venezuela or Peron’s Argentina failed. They failed to create institutions to limit political power. 

These systems developed extractive institutions and generated a vicious cycle in which the ruling elite had no constraints on power and had great incentives for expropriation and wealth extraction. Even if this elite were to be overthrown by a revolution, the “iron law of oligarchy” implied that a new elite would simple replace the old one and continue in its extraction, sometimes even worse than under the old elite. This is why the authors are somewhat sceptical of the ability of the Arab Spring to produce the necessary shift towards inclusiveness.

Once again the authors convince the reader in the mechanism of the negative feedback loop and the iron law of oligarchy through a multitude of cases ranging from Sierra Leone, Guatemala, Ethiopia, Zimbabwe, Uzbekistan, Columbia, Argentina, Egypt and even slavery in the US South. However, the vicious cycle in the US South was easier to break due to the existence of inclusive institutions on the federal level. The Civil Rights Movement generated equality in the South and paved the way for economic growth.
Another good example of “breaking the mould” is Botswana, where the natural resource course didn’t lead to extraction from colonists or usurpation of power over who gets to control resource extraction and enrich upon it. They have managed to seize their critical juncture – postcolonial independence – and used it to develop inclusive institutions.

The authors refrain from trying to write a recipe for development since there is no such thing. Their theory based on critical junctures and specific historical paths loses predictive power since it is hard to tell which countries could break the mould anytime soon. The theory can say which countries are likely to stay poor for a long time but it cannot really answer the question on what will follow after events like the Arab Spring. A range of factors will decide whether the Arab countries undergo a gradual path towards inclusiveness or whether the iron rule of oligarchy prevails.

Finally, prosperity cannot be engineered by international institutions with a recipe for reform or foreign aid; it has to come from empowerment to the people and their inclusiveness in the political process. Once a broad coalition is formed this will enable the inclusive institutions to persist and the political reforms to become irreversible. One can conclude that based on this approach, inclusive economic and political institutions develop spontaneously, while extractive institutions are imposed by outside coercion. The road to prosperity is thus always achieved through more political, individual and economic freedom.

The only part the authors did not cover in more detail is what happens after political and economic inclusiveness are attained, when certain elites or organized interest groups try to obtain political support to serve their own self-interest. An answer from the book would probably be that this scenario falls out of the general definition of inclusive political institutions, where the media is (partially) captured and where narrow self-interests can curtail the system in order to extract certain benefit. It is here that their framework could be extended, but the already large scope and size of the book prevent the authors from engaging so deeply into the subject.

The framework used in the book is based on a rigorous fifteen-year research process conducted by the authors and examined previously in some of their earlier, more analytical work. Regular readers of their work will recognize many of the ideas on the consolidation of democracies and political transitions coming from their 2006 book, Origins of Dictatorships and Democracy, along with many academic articles. Why Nations Fail builds on these findings thus providing the crowning achievement in their political economy theory. It is a recommended read to all professions and anyone interested in finding out why some nations are rich while others are poor.

Even though the book lacks academic rigour in supporting the theory and proving the causality of certain events and their further manifestation, such virtues were probably not the authors’ objectives.

For anyone interested in the academic proofs behind certain historical events, I recommend their earlier work in which the analytical framework can be thoroughly analyzed. 

This book has different goals. Its emphasis on historical case studies to make it more interesting to the general reader succeeds in transferring the idea to all those outside the economic and political science profession. They have managed to summarize their theory and make the case for institutional change, while presenting it in an understandable, yet brilliant way for all those who are not economists. That alone marks the book as a success.