With the recent launch of The Lianeon Project, I felt the need to succinctly explain precisely what the motivation behind the project is. The basic premise, as outlined on the Mission page, is that technological advancement, economic growth, and the improvement of the human condition is not merely functions of time but is “unlocked” by government policy and optimal societal organization.
A few years ago, I read a book entitled Why Nations Fail, written by Daron Acemoglu and James A. Robinson. The researchers posit that the reason some nations flourish while others do not, depends largely upon whether or not the government structures of those nations are “inclusive” or “extractive.” An extractive regime extracts (exploits) its subjects, while an inclusive regime shares wealth and power with its subjects.
Based on historical examples, they illustrate that inclusive regimes are better at delivering innovation and therefore the productivity growth that underpins economic growth. An extractive regime can deliver growth and innovation, but only for a short time, but will inevitably fall behind. They also discovered that nations can shift from being inclusive to extractive over time. The Roman Empire, for example, is known for its incredible technological achievements, but less known is that most of its innovation and technical achievements came not from the Roman Empire, but from the Roman Republic (the more inclusive government) that preceded it. The Empire survived on borrowed time, drawing from the wealth and technology of the prior order. Eventually too, the extractive regime of the Roman Empire fizzled out and collapsed.
Extractive regimes are incentivized to preserve existing power structures. Technological advancement and economic growth inevitably threaten incumbent power/wealth structures and vested interests, so extractive governments struggle to deliver progress. The preservation of power in the extractive system requires that ruling elites place arbitrary barriers intended for the sole purpose of maintaining the status quo. The quintessential example of this occurred in 1589 when William Lee, the inventor of the “stocking frame” knitting machine, demonstrated the machine to Britain’s Queen Elizabeth in hopes of securing a patent for the technology. The machine promised to greatly reduce the costs of textiles and increase textile output per worker. The Queen refused to grant him a patent, fearing that the machine would put her subjects out of work and threaten the stability of her regime. Extractive regimes will inhibit the adoption of new technology lest it upset the incumbent order. New technology threatens the socio-economic and political foundations upon which the regime stands.
It’s no surprise then that the industrial revolution began in Britain only after the Glorious Revolution stripped power from the king; spreading power among the many members of Parliament. Parliament, comprised of more varied political and economic interests, was able to guide economic policy more effectively than a single individual could, as the dialectical battle of competing interests in Parliament ensured better political inclusivity.
In another seminal work, The J Curve, by Iam Bremmer, it is explained that the stability of a nation correlates strongly with its “openness” both internally and externally. Save for the trough in the “j curve” the nation that opens up to the world and to its own people, has a more stable social-politico environment. It stands to reason that greater stability also benefits economic and technological advancement. One has to wonder if the “openness” described by Bremmer is analogous to the “inclusiveness” described by Acemoglu and Robinson. After all, to be “open” requires a certain degree of inclusivity.
Something about the openness and inclusivity of a nation/government seems to be a determining factor in its ability to innovate and grow. The reason may lie in another work, The Wisdom of Crowds by James Surowiecki. Surowiecki illustrates that while individuals can be poor decision-makers, “crowds” that draw upon the knowledge and wisdom of many individuals can be incredibly wise. In a jelly bean guessing contest, for example, if you ask any individual to guess the number of jelly beans in a jar, their individual answers will likely be very inaccurate. But if you ask a large number of people and average their guesses, the average will be startlingly accurate. In other words, the proper aggregation of a large number of diverse viewpoints is remarkably good at making predictions and finding truth.
Perhaps these researchers are all all touching upon the same phenomena. The advancement of technology and the economy hinges upon a nation’s ability to design good public policy, which itself hinges upon the extent to which a government is open and inclusive, and effectively aggregates and draws upon the knowledge and wisdom of its citizens. With this in mind, it seems only natural that the more open a society is, the more inclusive it is, the better the political system is going to be able to deliver good policy that facilitates innovation and growth.
But if we look around today, in many nations, including the United States, there are signs of significant backsliding. The freedom of human movement, freedom of press, freedom of communication and other indicators of “openness” are in decline. The yawning wealth gap and the growing of political influence of the wealthy is leading toward an extractive “democracy.” Greater social unrest, disenfranchisement, and the rise of “populist” movements around the world serve as clear evidence that we are not moving in the direction we need to be.
History has shown us where this leads. The collapse of the Roman Empire saw centuries of technological progress wiped out. It saw the collapse of trade and infrastructure, and once vibrant cites reduced to empty shells as people fled to the countryside to live as subsistence farmers. People of those ages looked back, seeing the aqueducts, roads, and building of a prior civilization that was more advanced than their own.
This can happen again, and it will, unless we take immediate action reversing the backsliding and re-imaging democracy so as to foster a new kind of inclusiveness, a new kind of openness, to better aggregate the wealth of human knowledge and experience, so that we can unlock a new and bright era of growth and human advancement.