Stop Crying About the Size of Government. Start Caring About Who Controls It.
An interview with economist Daron Acemoglu by David Sloan Wilson
Economists tend to be better at thinking about abstractions than about messy empirical realities, which is fine. The problem comes when economists make some assertion about history that would not impress historians, but gets a free pass from their fellow economists because what do economists know about history.
For example, economist Steven Levitt’s abortion-cut-crime theory was wildly popular with his fellow economists since few of them remember the Crack Wars. David Card’s study of the failure of wages in Miami to fall after the Mariel Boatlift of 1980 is a lot more impressive to other economists than it is to people who remember the Great Miami Cocaine Boom of the early 1980s. And Daron Acemoglu’s idee fixe that all of history can be explained by dividing governments up into “extractive” and “inclusive” appeals to people who know even less about history than Professor Acemoglu.
In this interview with David Sloan Wilson, Acemoglu rhapsodizes about his latest discovery
The context of the paper is the US in the 19th century, which is often viewed as a society with a weak state. This is not entirely untrue. But the weakness of the US federal state is often exaggerated. What’s worse is that from this observation of state weakness, it is easy to jump to the conclusion that it was the weakness of the US state that laid the foundations of economic growth. We wanted to critically investigate this issue. This little paper starts by noting that the U.S. Postal Service, which was the largest federal agency and employer at the time, was playing a pivotal role not only in connecting the country, but bringing a range of services to distant corners of the United States. It’s also a symbol of the presence of the federal state. All of this made us wonder whether counties that got the post office became more likely to innovate and patent. The empirical evidence we present strongly supports this hypothesis: the opening of a new post office is associated with a significant increase in patenting in the county. We cannot categorically rule out other factors leading both to the introduction of new post offices and a simultaneous pickup in patenting in some counties, but our evidence suggests that this is unlikely to be driven by any obvious omitted factors or reverse causality. So what we are finding is a suggestive piece of evidence that even in the US society with its quintessentially weak federal state, state presence may have played a defining role and innovations.
Oh boy … The United States in the 19th Century, like the United Kingdom, didn’t have a “weak” state, it had a relatively well-organized one, but one that that was limited for self-imposed ideological reasons. Both ideologically limited states tended to be quite strong at what they cared about doing, and improving communications was very high on their list of priorities.
As all stamp collectors have read, the UK, for example, invented the postage stamp in 1840. Mail delivery in Victorian London was phenomenally fast, with the famous poets Robert Browning and Elizabeth Barrett often exchanging several love letters per day.
America tended to employ talented men to run its post office, such as Benjamin Franklin during the first 15 months of the Continental Congress. During the Republic, the Postmaster General was often the ruling party’s chief political fixer, such as James Farley under FDR and Larry O’Brien under LBJ. In early 20th Century Britain, two Postmaster Generals were future Prime Ministers. Abraham Lincoln notoriously spent the crucial opening weeks of his presidency not trying to head off secession and civil war, but instead interviewing candidates for local postmaster jobs.
It would be reasonable to point out to libertarians that even when their ideology was most widely accepted, in the mid-19th Century, the governments of the USA and the UK made famous exceptions for government postal services. But Acemoglu gets even that snarled up.
Of course, his knowledge of the present is little better than his knowledge of the past. Professor Acemoglu goes on to say:
“As a result, you have wanton police brutality against our African-American citizens, which the most powerful president on earth can do nothing about.”
For example, in Baltimore last year, you had black riots over a black career criminal dying at the hands of black cops in a city with a black police chief, black DA, and a black mayor, in a country with a black attorney general and a black president promoting #BlackLivesMatter, a campaign of anti-white agitation which appears to have led to a large increase — especially in Baltimore but also nationally — of blacks murdering blacks (the homicide rate in 2015 in the 50 biggest cities was up 16% over 2014, with the worst spikes concentrated in heavily black cities.)
It sounds, actually, as if in 21st century America, black political power correlates with a higher rate of blacks shooting each other, which certainly raises difficult questions for Professor Acemoglu’s Inclusiveness theory.
A close student of evolution, on the other hand, might come up with some interesting hypotheses for why that is.