Good Reads: Why nations fail, and how we overlook some successes

This week's reading list includes a close look at why nations fail, how Africa is booming, why Greece's default won't be such a tragedy after all, and how Facebook's IPO is a warning bell. 

Why Nations Fail

We do it as individuals, and we do it as nations: We compare.

Some people and nations succeed, while others fail, and the writer who discovers the formula for why some peoples fail can write a successful book to prevent the rest of us from making those same mistakes.

The latest such book, “Why Nations Fail,” by Daron Acemoglu and James Robinson, offers a number of case studies, comparing Nogales, Ariz., and its sister city of Nogales, Mexico, and finds that societies that have developed good institutions of governance generally prosper more than those run by patronage systems.

Who better to assess this book’s worth than Jared Diamond, author of the best-selling books “Guns, Germs, and Steel,” and “Collapse.” In this week’s New York Review of Books, Mr. Diamond dusts off a few of his theories on how geography and climate have a lot to do with why certain temperate societies of northern Europe and east Asia succeed, while many of those in tropical regions such as central America and sub-Saharan Africa lag behind. In “Why Nations Fail,” he finds a lot of theories to like.  

“The various durations of government around the world are linked to the various durations and productivities of farming that was the prerequisite for the rise of governments. For example, Europe began to acquire highly productive agriculture 9,000 years ago and state government by at least 4,000 years ago, but subequatorial Africa acquired less productive agriculture only between 2,000 and 1,800 years ago and state government even more recently. Those historical differences prove to have huge effects on the modern distribution of wealth.”

Why we fail to recognize success

Here’s the thing about comparison: It is so subjective.

A successful economy in Europe looks impressive in the glossy pages of Vanity Fair, but a successful economy in Africa, say, can look a little shabby. It’s all relative.

Yet, as Howard French writes in this week’s issue of The Atlantic, while stereotypes of African poverty may be blinding ordinary Americans to one of the world’s biggest success stories, the sustained economic boom of Africa. Corporate America has moved to Africa in a big way. Out of the 10 fastest growing economies in the world, seven are African. This economic boom is creating the beginnings of a massive continental middle class, which is already larger than the middle class of India, and by 2030, African consumers spending will grow from $680 billion in 2008 to $2.2 trillion.

"American media have largely failed to pick up on these trends, hewing instead to their long-running traditional narratives of African violence and suffering to the exclusion of most other news,” writes Mr. French, a former New York Times Africa bureau chief who is now an associate professor at the Columbia University Graduate School of Journalism. “Corporate America, though, is proving itself increasingly attentive to Africa as a big new growth story. Big companies, from retail to technology, are approaching Africa as a promising new growth frontier. Many are already investing heavily there.”

Why Greece should fail

Newspapers these days are full of free advice about how the European Union should handle the crisis of a number of poorer European countries that have spent themselves deeply into debt. For the most part, the advice has been that Europe needs to put on a stern-Mommy face and then punish Greece (and Spain, and Italy) by, well, by giving them lots of money to help them pay off their debts. If Europe doesn’t do this, stock market confidence will plummet.

Here is an alternative viewpoint, written by Thomas Oatley and Kindred Winecoff in this week's Foreign Policy.

…Greece is not Lehman Brothers. Lehman's failure triggered a global crisis because Lehman was at the center of the global financial network. Greece, in contrast, is at the periphery of this network. Global crises don't start in the periphery. While a Greek collapse would certainly be devastating for Greece and some of its neighbors, the rest of the world is likely to escape with minor disruptions to their economies.

Why Steve Coll is leaving Facebook

You probably saw the headlines this week about Facebook launching an initial public offering of its stock, and clicked on your own internal “Like” button when the price of that stock fell, and fell.

Steve Coll, the former Washington Post writer and now president of the New America Foundation in Washington, looked at that same phenomenon and saw warning signs. In this week’s New Yorker, Mr. Coll writes that the arrival of Facebook investors is likely to put pressure on Facebook to be even more intrusive into the personal information that Facebook users voluntarily post online. And BTW, Coll is so “un-friending” Facebook.

Facebook’s huge valuation now puts pressure on the company’s strategists to increase its revenue-per-user. That means more ads, more data mining, and more creative thinking about new ways to commercialize the personal, cultural, political, and even revolutionary activity of users.

There is something vaguely dystopian about oppressed peoples in Syria or Iran seeking dignity and liberation inside a corporate sovereign that is, for its part, creating great wealth for its founders and asserting control over its users.