Doruk Degerli’s Reviews > Why Nations Fail: The Origins of Power, Prosperity, and Poverty > Status Update

Culture Hypothesis

Culture is merely a consequence of institutions and institutional history rather than the driving factor for prosperity and poverty, as we see in many counter examples cannot explain practically anything.

Chapter 2 Starts

Establishing a pattern of prosperity and poverty segments in the world since the industrial revolution, will be used to dispute the theories that don’t work.

Amparo is the loophole that provides elite with the “exemptions” in Mexico - Carlos Slim. Political insts pave the path for economic insts of a country, and thus opportunities and set ground rules for an individual, which greatly determines the incentive and life aspirations. For the most part these political insts are set and built through history so very hard to challenge them for prosperity of a country.

Mexico’s political instability&authoritarian leaders led to banking monopoly, so no competition and obv inaccessible financial institutions for many. The US being able to keep their politicians in check with elections killed the monopolistic state banking system attempt.

Napoleon’s activity over Spain led to Cortes laws, which caused an opposition/freedom movement from Latin American local elites, wow. A lot of political instability was caused by efforts to keep the colonial structure and institutions alive, making Mexico poorer. The US, though as imperfect as they were, somewhat had the distribution of that power through the seats, which paid off in the long run.

Very interesting to see the stark contrast of Spanish and English conquest to Americas, never really thought about how tables have indeed turned over time. It’s funny how failure of taking over indians and punishment based ruling led to a free play to win kind of situation, which inherently rejects that rigid societal hierarchy.

This section sets up the scene to compare Prosperity and Poverty through Nogales cities, with as much controlled vars as possible. Starts from North/Latin American history.

Encomienda: Primary institution that ran Spaniard settled land for indigenous labor.

Mita: Incan labor plantations that provided food for everyone in return of famine relief and security.

*Potosi is that one silver mountain town in Bolivia.

Preface
The main argument that will be constructed seems to be the distribution of political power greatly determines prosperity, and poverty comes from the power being held by a narrow group of people. Prosperous countries went through “revolutions” that broke the cycle to expand the opportunities to more people.