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1.3
Labour can only really be split up, if there is a certain density of jobs. People living in the vast countryside cannot specialize in one specific thing, as they will not be able to trade.
Rivers and navigable seas massively support the cheap supply of trade, making it easier for people to specialize.

1.2
Men only act for their own wellbeing. Everyone, like in nature, has to care for themselves, so one only takes up a job, if they can be assured, that trading their product or service brings themselves more what they need for life, than actually getting these things themselves.

1.1: A society is more productive when Labour is split. Everybody should only be employed in 1 very specific task. That way they get better, faster and cheaper. That differs prosperous nations from not so prosperous ones.
That’s not really possible (due to seasons) in agriculture. Therefore their products remain of the same price for equal quality.

15.4 there is few things that can really help changing systems. One being a broad society and and non party institutions like worker unions. These helped Brazil reform and become successful. Another is the free media, which helps inform people and organize.

15.3 Nations fail, because of their extractive institutions. Foreign aid, simply pouring money on them, is not the solution, as it will be abused by the existing ruling elites to enrich themselves. Making it conditional does not help either, as we have seen, it has the same impact. It would mean, that leaders would have to undermine themselves.
What would help would be supporting ‘new’ groups, to challenge elite

14. Whether it Botswana, China or the U.S south, it is possible to break the mold. It needs a broad coalition, like the male adults with wealth in Botswana and often a critical juncture, like the death of Mao. Ultimately it is to note, that luck is key too, like the chiefs in Botswana got lucky, that their appeal for royal safety before Rhodes and the low interest of the UK in their country helped them stay on track.

14.3 China was in a bad economic situation under Map, having between 20 - 40 million people starve in a certain period. Maos policies were very extractive. Then came change, when Mao died Deng was able to open up markets. One of the first things implemented were incentives, so productivity rose. Then they opened cities for international investments. This accounted for a huge economic rise.

14.1 Botswana was, like many African nations before colonialism split into smaller parts, ruled by chiefs. These chiefs would inherit their positions, unless there was a more talented male adult there. So these chiefs could be challenged. They also held meetings with all male adults to discuss important matters and could be outvoted. These inclusive institutions led to a democracy and wealth after independence.

13. There is a lot of different examples of modern failing nations. The general reason are extractive economic institutions. Whether it be like in Zimbabwe or Colombia, with a lack of state centralization, North Korea with communism or Uzbekistan and Egypt with extractive elite controlled capitalisms or Argentina.
Generally leaders often make use of persisting extractive institutions, enriching themselves.

13.5
In Uzbekistan president Karimov has split up the cotton farms between the elites. Every school kid has to pick cotton in autumn and gets paid around 0.03 $ per day. The tea industry is also owned by the first and so far only president of Uzbekistan. This country is very poor and its situation derives from the extractive nature of its economy and subsequently politics.

13.4 a lot of nations today fail, because they implement communist theory. They abolish the possibility to own something and therefore cut out all possible innovation. On top such economies virtually always have a small elite. The systems are designed to extract any wealth created by the economy, to live a good life. North Koreas leader had an annual cognac-budget of around $ 800.000.

13.3 Columbia, a state that basically works and does not fail to provide certain services (health, education, security) to their citizens in urban areas, massively lacks state centralization, resulting in paramilitary rules in rural areas. Columbia fails today, because it is not able to provide the same level of services in all its regions.

13.1 In Zimbabwe, like in many sub Saharan post independence countries, former extractive institutions were after gaining independence not instantly challenged and even became more extractive after some years (vicious circle). The mechanisms for extraction created by the (mostly) the west were just used by former liberal movements and their new absolutist, corrupt emperors.

12.
Societies with very extractive political and economic systems tend to fall into a vicious circle, where even the new leaders after revolutions or post critical juncture leaders strengthen the extractiveness of the institutions. This is often due to the fact, that there is now broader parts of civilization like merchants or businessmen pushing for liberalization, and even if there would be no change. Africa, SA

10.4 strong inclusive political institutions like the ones in the us keep people from undermining them and maintain political inclusion. Roosevelt tried to get rid of certain supreme judges to pass his bills but was opposed by his own supporters.

At the same time a Argentinian president was able to get rid of a few supreme judges. Later in 1990 a president there enlarged the court w/t same arguments as Roosevelt.

10.3
In the later 19th century so called Robber Barons (Rockefeller, Vanderbilt, J.P. Morgan, etc.) formed monopolies in the US, centralizing wealth. Through media originally farmers and later on others organized to oppose this development. As a result of this, the Sherman act was imposed, regulating monopolies. These movements ultimately ended monopolies, which would have led to less inclusive institutions.

10.2
Britains wealth builds upon a virtuous circle. Small steps towards more political inclusion led to more economic prosperity for the broad society, which led to more inclusive political institutions.

France’s wealth builds upon a few very hard cuts (revolutions).
Britains growth to inclusion was more sustainable.

10.4
In Japan there was absolutist rule by the shogun. S revolution overthrew their regime and abolished a ‘class-system’ and clergious dominance. They implemented inclusive systems and were the first Asian country with a constitution. Due to that, they were able to take advantage of the Industrial Revolution

10.3
The French Revolution and later Napoleons armies carried out radical changes in the countries they conquered. The French Revolution resulted in equality in front of the law, less power for the elites and the ability for ‘everybody’ to be elected. These changes were implemented in the conquered countries too (Benelux, Italy, Switzerland, Germany) resulting in a rapid adaption of the Industrial Revolution.

9.2 Africa did not turn to serfdom, as Europe did, but kept working with slaves. The biggest slave trade happened across the Sahara. When in the Caribbean the plantations exploded, a lot of slaves were sold to this region, followed by the US and Europe. After slavery was forbidden in England and then in the US, it did not disappear. Trade with Africa surged and slaves were used within Africa massively.

9.1 When the Portuguese first reached Southeast Asia via the cape of good hope they instantly tried to monopolize clove, mace and nutmeg trade (these regions were rich because of these spices). They failed. The Dutch then did this, killing locals and monopolizing trade. Locals destroyed their own crops (all of them) to keep the Dutch away. These regions had no chance to adopt the Industrial Revolution and remain bad

8. There is a variety of reasons economic growth does not happen. In Austria and Russia (trains), China (sailing) and the Ottoman Empire (printing press) rulers actively forbid innovation, to stay in power. Other countries are simply too extractively ruled and some countries, especially African and Asian ones, may be inclusive but lack state centralization and therefore property rights and law and order.

7. There is no singular reason as to why the industrial revolution happened in England. There have been a bunch of junctures that lead to it.
From the Black Death ending serfdom, to a variety of civil wars several things lead to ultimately more inclusive institutions in England resulting in a parliament and elections from 1688 onwards. Petitions enabled more people to participate in policy making

6. States like Rome and Venice had economic success due to their inclusive institutions. They turned back to extractive institutions, when their remaining elite realized, that creative destruction would crush their families influence. This led to lower population numbers and less successful economies and no more innovation, in Romes case leading to the end of the empire and the creation of serfdom.

5. Extractive Institutions and Economic Growth
It is possible for extractive institutions to create economic growth, it is even necessary, so that they have something to extract. They cannot let creative destruction happen, so there is no innovation in subsequently no long term sustained economic growth. The basis for that is a centralized state. Such states make infighting very likely.

5.1
Extractive institutions can generate economic growth. It’s just not sustained.
The Soviet Union was able to achieve this, by reallocating resources towards factories. Though not being efficient, it was more efficient than just farming. Their economy grew, just without innovation. They simply lacked incentives. They started paying ‘bonuses’, to create these, though they didn’t lead to more innovation.

4.3
The English parliament had no monopoly on cross-Atlantic trade, which resulted in some tradesman gaining power and influence ultimately lowering the power of the crown. This was not the case in France or Spain, resulting in less inclusive institutions and less economic success.

4.2
The glorious revolution in England ended with the founding of the constitutional monarchy, making king and queen rule under a parliament. This more inclusive political system resulted in a more inclusive economy ultimately founding the basis for the first industrial revolution.
Incentives like financial wealth and security through patents were created

4.1 the Black Death was a changing point in European economy. While the eastern peasants were less organized and lordships were bigger than in the west, the lack of Labour lead the less rights for peasants. In the west, peasants threatened to stop working and by that gained more freedoms and right. This lead to a more inclusive economy leading to more wealth.

1. So close and yet so different
The difference in wealth between the US and South America can be explained by the way they were colonized. While SA was exploited (gold and labor), that was not possible in the US. Trade started and democracies formed.
For economic success, a state must provide reliable institutions and certain incentives for people to build pursue certain careers. Politicians must be controlled.