In the middle of chapter five (pp.136–149) of Why Nations Fail, Acemoglu and Robinson review the Neolithic Revolution. They explain the curious fact that social organization and urbanization occurred, sometimes, even before the invention of agriculture. Their major example is the Natufian culture, located in the Levant. On pages 138–139, they try to provide some rationale for the decision to become sendentary, although they tend to reject the usual explanations. Instead, they offer their own theory (pp. 139–140), that basically argues that it was the development of political institutions that caused Natufian society to become sedentary. They cite Jared Diamond’s belief that it was agriculture that made possible government, arguing that the evidence suggests the relationship is the other way around. They might be right (that political institutions precede agriculture), but one passage in the book suggests to me that the theory is incomplete.

Early political institutions do not necessitate a sedentary lifestyle. Nomadic societies also have political structures; all they need is some wealth to extract. Regarding the rise of villages, one passage in particular (p. 140) draws my attention, “Shells and other obsidian were traded, and control of this trade was quite likely a source of power accumulation and inequality.” This entire page describes evidence from cemetery organization, where there are some who are seen to be obviously well off (buried with scarce, aesthetic items) and others who are not. This suggests some volume of mercantile activity, where some of these goods were imported. A more likely explanation for the beginnings of sedentary cultures seems to me the growing division of labor and the growth of regional trade activity that came as a result. That is, the Neolithic Revolution was driven by merchants. These people needed areas to stock their goods and areas to sell them, and it makes sense that towns were built around this wealth.

Another excellent historical example is the great Maya cities on the Yucatán Peninsula, of what is now southern Mexico. I have to the fortune of knowing just enough to be skeptical of Acemoglu’s and Robinson’s incredibly superficial interpretation of the brief historical evidence they bring up. On page 146, they posit that it was the beginnings of extractive Maya institutions during the Maya Classical Era that ushered in a period of wealth (soon to be curtailed by these extractive institutions). I cannot speak of this classical era, but the history of the city of Chichén-Itzá (~800–1200 C.E.) offers a counter-example. Chichén-Itzá became great because of trade; trade did not become great because of Chichén-Itzá (see Enrique Florescano, “Chichén Itzá, Teotihuacán, and the Origins of Popol Vuh,” Colonial Latin America Review 15, 2 [2006]). Complex extractive institutions came as a result, once there was great wealth to be extracted. Otherwise — as Acemoglu’s and Robinson’s own theory of extractive institutions shows —, there would have been no great accumulation of wealth in these cities.

This is a great tension in Why Nations Fail, and a major reason why the book’s great overarching thesis is bogged down by bad detail. Acemoglu and Robinson show how extractive institutions handicap economic growth, but they hold a quasi-contradictory belief that some political institutions are necessary. It is actually worse than this, because more specifically they believe that some level of political centralization is needed,* even though that they note (although not enthusiastically) that historically centralization leads to absolutism. They never fully embrace the virtuosity of the entrepreneur, the true harbinger of wealth and social progress. Without wealth, there can be no wealth extraction, so it is difficult to see how advanced states were possible without the previous accumulation of the wealth in question.

Their one great example showing that stateless societies do not foster inclusive economic institutions is Somalia (pp. 238–243). The evidence, as they present it, seems convincing enough to be skeptical of the possibility of advanced stateless divisions of labor. Essentially, they present pre-colonial Somalia as a geographic area dominated by six clans. These clans feuded between themselves and Somalian society never developed past basic agriculture and activities like sheep-herding. Compared to Europe and even other African kingdoms, in other words, Somalia remained backwards. Acemoglu and Robinson write (p. 241), “The complex politics of Somalia had even more subtle implications for economic progress.” Yet, these “complex politics” are never explained in their complexity. The authors are suited with a two page review of the six clans and the political relationship between each other.

There is nothing on the various central governments that ruled, or at least attempted to rule, parts of Somalia prior to Italian and British colonization. Neither is there anything on mercantile trade in Somalia prior to the 16th century. To further illustrate their case, the authors include a photograph of a Somali warrior, probably of the civil war or post-civil war era. That is, the civil war of the 1990s, not a civil war of the 18th or 19th centuries. That is, a civil war that followed twenty or so years of repressive dictatorship (Somali Democratic Republic). Neither do they discuss whatever social progress Somalia has enjoyed since the end of the civil war.

Finally, there is a counter-example provided in their book, but the authors fail to recognize the relationship and implications. This is provided in their discussion on South Africa (pp. 258–271). The original Dutch colonizers, and the later British, soon discovered an indigenous culture: the Xhosa. This was a tribal culture of relative poverty. But, the arrival of Dutch and British settlers soon created a wider market, and Xhosa agriculture started to bloom. The power of the chiefs started to crumble, and we see a society grow into one with property rights and a growing division of labor. There was no centralization of power, just a diffusion. In fact, in order to protect Dutch and British farmers, these two invaders decide to centralize their power over the region and introduce legislative reforms that deny blacks property rights and the ability to use entrepreneurial abilities. In other words, centralization — spurred by rent-seeking — led to racial absolutism. But, of course, Acemoglu and Robinson do not showcase the Xhosa as a counter-example to their thesis about institutional centralization and economic development.

I am not trying to provide a detailed criticism of the book’s political theory. I am relatively ignorant about the history of the cultures we are talking about. But, I can see some of the inconsistencies, contradictions, and over-simplifications that mar Why Nations Fail. The authors protect their thesis of inclusive versus extractive political institutions without realizing that all political institutions are extractive: they all require the extraction of wealth to survive. True, we might concede that the State needs to provide some infrastructure for an industrial revolution to occur (even though even this is suspect, since the industrial revolution occurred before the English State really began to embrace and subsidize it). But, we are talking about something more basic than that: the creation of a mercantile, sedentary society. It does not make a priori sense to assume that states breed societies, and not vice versa (a possibility, sure, but not one that can be upheld by superficial evidence and poor theoretical interpretations).

Believe it or not, my main intention is to create some kind of discussion, since there are undoubtedly people who read this blog that understand political theory and know history very well. What does the evidence show?

* Contradictory, because the virtuous element in inclusive institutions is pluralism, which really refers to the diffusion of power from the few to the many.