Daron Acemoglu's Top Book Recommendations

Daron Acemoglu

In terms of understanding this top inequality, I mentioned the possibility that it might be about politics. How should we think about politics? What are the levers of politics? For that we need a conceptual framework and that’s what this book tries to provide. It’s co-authored with my long-term collaborator and friend Jim Robinson – and it’s not about US or UK or Canadian inequality. It runs through several thousand years of history, and tries to explain how societies work and why, often, they fail to generate prosperity for their citizens. It’s a very political story. [source]

Bill Gates

CEO/Microsoft

"I read two books that raise big, interesting questions about social change and technological progress. I’m planning to write longer reviews of each of these books, but let me flag them for you now. One is Why Nations Fail: The Origins of Power, Prosperity, and Poverty by Daron Acemoglu and James A. Robinson.The topic of this book is why some countries have prospered and created great living conditions for their citizens while others have not. This is an important topic, which I care a lot about. The book makes an appealing argument that economic development depends on political institutions that protect individual rights. It is well written and very easy to read with lots of interesting historical stories about different countries. But it is a major disappointment. Its analysis is vague and simplistic. I’ll explain more in a longer review." [source]

Mark Zuckerberg

Founder/Facebook

My next book for A Year of Books is Why Nations Fail by Daron Acemoğlu and James A. Robinson. This book explores the different kinds of social institutions and incentives that nations have applied to encourage prosperity, economic development and elimination of poverty. This is a good complement to our last book, Portfolios of the Poor, which focused on how people live in poverty. This one discusses why poverty exists and how to reduce it. [source]

Daron Acemoglu

This is a really wonderful book. It gives a masterful outline of the standard economic model, where earnings are proportional to contribution, or to productivity. It highlights in a very clear manner what determines the productivities of different individuals and different groups. It takes its cue from a phrase that the famous Dutch economist, Jan Tinbergen coined. The key idea is that technological changes often increase the demand for more skilled workers, so in order to keep inequality in check you need to have a steady increase in the supply of skilled workers in the economy. He called this “the race between education and technology”. If the race is won by technology, inequality tends to increase, if the race is won by education, inequality tends to decrease. [source]

Timothy Noah

What I think is really ingenious about this book is that it squares the circle. In the 1990s Bill Clinton told us that computers had revolutionised what was required from the workforce and that all of a sudden you needed to get a college education to perform in this knowledge-based economy. Goldin and Katz actually point out that the technological changes at the beginning of the 20th century were probably a lot more dramatic. At the beginning of the 20th century you had the spread of electricity, then the advent of radio, the spread of air travel and the growth of television. And as technological change imposed greater and greater skill demands on workers, the skill level of American workers rose and rose. Why? Simultaneously the United States was experiencing the high-school movement. At the start of the 20th century very few people went to high school. Within a few decades most people were going to high school as part of a conscious policy change. Europeans snickered at Americans for the sentimental notion that there should be universal secondary education. They thought that secondary education should be for preparing the small segment of the population that was going to college. Consequently, American workers were able to meet rising technological demands in a way that European workers were not, just when high-school education became more necessary for all sorts of blue-collar work. Factory workers needed to have a fundamental understanding of how electricity worked and farmers needed to be familiar with new agricultural and marketing processes. In the United States the high-school graduation rate rose and rose, as did technological demands, until the graduation rate levelled off in the 1970s. But with the advent of the computer technological demands continued to rise – that bid up the price of skilled labour. That’s Goldin and Katz’s central insight: It wasn’t computers that caused inequality, it was the fact that for this technological revolution, as opposed to the technological revolutions that preceded it, the American K-12 primary and secondary education system was no longer keeping up with marketplace demands. Europeans had realised their mistake and started spreading secondary education. Secondary school attendance rates in many Western European countries now exceed those in the United States. College completion rates in many Western European countries exceed those in the United States. [source]