Why Nations Fail

To the one who is interested in history and want a have a glance on it, must read the book "Why Nations Fail". After reading this book, one will find himself in a position to have a minimum structure of geographical lays of the land in his mind. From the American continent to the Australian one, this book elaborated their history in a brief account. Though the book is not about the history or geographical patterns of the present world, it gives you a sound understanding of these approaches as well. 

The Book is aimed to elaborate a theory for a sound understanding of poverty and prosperity of the current nation-states. Why is it so, that Great Britan and United States of America are prosperous enough to give a standard living to those who are not well off? Here, it is pertinent to keep in mind that the theory followed the comparative developmental approach. So, those who are poor in Britan and USA are relatively richer to those in Sub-Saharan Africa poor masses. The theory also strengthen the argument that Political development leads to  economic development.

The terminologies that are mentioned in this book are as follow: extractive economic and political institutions, inclusive economic and political institutions, critical Junctures, Small differences, vicious circle, virtuous circle and iron law of oligarchy. By Extractive institutions they mean the institutions that extract the wealth and power from the majority and concentrate it in the hands of the few-elite. The inclusive institutions are the one that promote the values of pluralism and encourage the participation of the majority, both in economic and political field. The defining movements in the history of a nation are described in words "critical junctures", for example the Glories Revolution. The small differences are the one that were not important at that time but has a great impact upon the history of the nation; Like, Bostwana Chieftains movement against the Mighty Rhode's of South African Company. The Vicious and Virtuous circles are the feedback mechanism in different sets of institutions. Iron law of oligarchy implies that when colonizers left, the new class of elite worsen the lives of their fellow countrymen.   

The theory states that the prosperity and poverty of a nation depends upon the institutions of that nation. If their institutions-political and economic-are inclusive in nature, there will be prosperity. On the other hand, if their institutions are extractive in nature, the majority will live under poverty. If the political institution is extractive in nature and economic institution is inclusive then it will leads to the creative destruction. As more people will be well off economically, they will challenge the absolutism of political system. Hence, conflict will arose and it can leads to both the possibilities, either, inclusive institutions will prevail or the extractive one. Those countries that are developed today had faced the conflict and in their cases inclusivity prevailed-for example Great Britan.
          

Throughout reading this book, one will find the writers biased toward capitalism, liberalism and democracy. In spirit, I am not against any one of them. Still, I can't accept their approach which mean only these values guarantee prosperity. As the book concluded that China will end up as a disaster, if, it not changed the extractive political institution.   

The book, somehow, cleared my misconception regarding the Unions. As I was of the view that these Unions were the tools in the hands of few aiming to hinder the efficiency of an institutions. I believed so, because in majority of the cases of student unions were influenced by political parties. The political parties provided them funds, in return they became their subordinates. Though, if one can assure that they will be financially independent, nothing better can safeguard the interests of the community.