Has Mitt Been Reading “Why Nations Fail”?

Mitt Romney’s latest overseas outrage is asserting that Palestinians are so much poorer than Israelis because of their culture.

“As you come here and you see the GDP per capita, for instance, in Israel which is about $21,000 dollars, and compare that with the GDP per capita just across the areas managed by the Palestinian Authority, which is more like $10,000 per capita, you notice such a dramatically stark difference in economic vitality,” the Republican presidential candidate told about 40 wealthy donors who breakfasted around a U-shaped table at the luxurious King David Hotel.


Romney, seated next to billionaire casino owner Sheldon Adelson at the head of the table, told donors at his fundraiser that he had read books and relied on his own business experience to understand why the difference is so great.

“And as I come here and I look out over this city and consider the accomplishments of the people of this nation, I recognize the power of at least culture and a few other things,” Romney said, citing an innovative business climate, the Jewish history of thriving in difficult circumstances and the “hand of providence.”

While some outraged responses have focused on Mitt’s ignorance of the true extent of Palestinian poverty and others have decried Mitt’s racism, all I could think is that Mitt is voicing a misreading (but not an extreme one) of the latest fad book among policy elites of both parties: Daren Acemoglu and James Robinson’s Why Nations Fail.

Why Nations Fail purports to explain why some areas are rich and some poor (it adopts economic success as its measure of success and failure with no questioning of whether that’s the correct measure) by pointing to what it deems the relative extractive characteristic of a particular state. In states where the elite share the wealth via relatively open political systems, wealth grows. In states where the elites keep the wealth to themselves with the help of political repression, wealth stagnates.

The reason I think Mitt’s comment comes from having read or been briefed on Why Nations Fail (aside from his comment attributing the opinion, in part, to books he has read) is because his comment basically repeats the book’s key gimmick: the authors compare Nogales, Mexico with Nogales, AZ, North and South Korea, and South and North America and with each claim the wealthier of the geographically contiguous pair is wealthy because of its relative freedom. Mitt is making the same comparison–explaining why people in contiguous geographic areas have dramatically different outcomes.

In both the book’s gimmick and what I suspect is Mitt’s appropriation of it, there’s something missing. Why Nations Fail claims that everyone in Nogales, AZ enjoys great political rights; it doesn’t consider the important economic role played in the Southwest by undocumented workers who enjoy no political rights. Nor does it consider the way the drug war strips money and viable economic growth out of the rest of Latin America. Similarly, while the book admits that the US has provided a lot of aid to South Korea since the Korean war–not to mention paid for its defense–it doesn’t consider how important that outside relationship has been in determining South Korea’s path since the war. And somewhere in the discussion of how the US evolved in a less extractive fashion than Latin America–which includes a discussion of genocide in Latin American–the authors state something to the effect of “the Native Americans [in the US] were sidelined” (I listened to the book, so I can’t give you the exact quote). “Sidelined” (if that’s the word the authors used) is the politically correct–and almost unremarked term–for extraction that democrats later go on to whitewash.

And all that’s before you get to the inter-state power dynamics that lie behind the success or failure of a lot of smaller client states, which itself tends to tolerate a lot of extraction the authors barely mentioned.

Now, if Mitt got his little theory from Why Nations Fail, it is a misreading of the book, though not a big one. Mitt attributed the difference to culture, not politics. But in a policy world where people uncritically say Israel is the only democracy in the Middle East (ignoring Iran and Turkey, but also ignoring that Arabs in Israel–to say nothing of the occupied territories–don’t enjoy the same rights as other Israelis), Mitt really is just replicating Why Nations Fail‘s gimmick, pointing to democracy and innovation as a way to ignore the oppression that democratic regimes exert over others and instead celebrate that difference.

In which case, if I’m right, the whole flap should focus not just on the comment itself, but on what it says about Mitt’s cognitive ability (his slight misreading of the book), but also the policy elites’ fetishization of a book that engages in the same kind of whitewashing, to serve virtually the same end, a sort of blind self-congratulation.

Update: NYT’s Michael Barbaro, who has read Romney’s No Apology, says he cites David Landes’ The Wealth and Poverty of Nations in the book. IIRC, Why Nations Fail bills itself as a critique of Landes (though perhaps more his earlier technological determinism).

22 replies
  1. Jeff Fecke says:

    Meanwhile, Mitt advances policies that would concentrate wealth in the hands of an ever-shrinking elite. I’m sure he doesn’t see the irony in that.

  2. Bob Schacht says:

    There’s another element missing here, and that is the strangle-hold Israel has over the Palestinian territories, in the name of “security.” Freedom? Ha! Tell that to someone waiting at an omnipresent Israeli “check point” in the West Bank or Gaza. There is no freedom of movement for labor, no freedom of movement for Palestinian businesses, and if you think you own the land you work on, fugedaboutit unless you have all the proper documents in order in the *Israeli* bureaucracy (Palestinian records don’t count.) We’re comparing apples and skunk cabbage here. Jimmy Carter was right: This is apartheid, under some other more palatable name.

    Bob in AZ

  3. emptywheel says:

    @Bob Schacht: Right. That’s what most reports have rightly pointed out. My point is that Mitt’s blind spot about repression of Palestinians is very similar to blind spots that all manner of elites have uncritically embraced in the latest fad book.

  4. Philip Munger says:

    @emptywheel: Additionally, it is hard to develop or even sustain an economy that has traditionally been based largely upon agrarian products under these circumstances:

    RAMALLAH (Ma’an) — Israel allocates 70 times more water to each settler than to the average Palestinian in the West Bank, the head of the Palestinian Water Authority said Sunday.

    At a press conference in Ramallah, Shaddad Attili said Palestinians received 105 million cubic meters of water, less than the amount allocated in the 1995 Oslo Accords and around a quarter of the 400 million cubic meters needed according to international standards.

    Israel controls most of the water resources in the West Bank and refuses to increase the amount of water it allocates to Palestinians, Attili said, forcing Palestinians to buy water from Israel.

    Water is a final status issue in negotiations with Israel and postponing the issue to final talks has created a water crisis in Gaza and the West Bank, the official said.

    The Palestinian Water Authority has had to buy water and is billions of shekels in debt, Attili said. The Palestinian Authority, in the midst of its own fiscal crisis, has not helped with the debt, he added.

    Meanwhile in Gaza, 95 percent of the water is not fit for human consumption, and sea water — contaminated with sewage — is leaking into the over-extracted coastal basin, threatening long-term problems of kidney disease. Within two years there may be no drinking water left in Gaza, Attili said.


  5. MadDog says:

    “…GDP per capita, for instance, in Israel which is about $21,000 dollars, and compare that with the GDP per capita just across the areas managed by the Palestinian Authority, which is more like $10,000 per capita…”

    Hmmm…the US has given the Israelis $60 billion dollars (since Jonathan Pollard’s arrest in 1985), and with an estimated 2012 population of 7,890,600 – 75.3% Jewish, 20.5% Arab and 4.2% Other, that works out to $10,098 for every Jewish member of Israel.

    Let’s see then. Per capita income of $21,000 minus the $10,098 we gave each of them equals $10,902.

    So that would be $10,902 per capita for Israelis versus $10,000 per capita for those managed by the Palestinian Authority.

    $10,902 versus $10,000.

    Yup Mittster, those Israelis have out-earned those Palestinians by $900 bucks.

    That’ll teach those Palestinians!

    Capitalistic stooges unite!

  6. BSbafflesbrains says:

    In Mitt’s world the only indicator of success is how much money you make relative to others. Invidious comparison is the hobgoblin of the wealthy class. And in our Country it hasn’t mattered how you made the money since the time of Jay Gould and all the subsequent Robber Barons.

  7. Bob Schacht says:

    I think this news also highlights the way Romney has operated and will operate: On any given issue, he consults a few 1%-ers, doesn’t seek any opposing perspectives, and without thinking further, endorses the 1% perspective. This is how Romney would operate as President.

    Bob in AZ

  8. Scott Lazarowitz says:

    It would help if the settlers wouldn’t steal land and homes away from Palestinians who have owned them for generations. It would have helped to not have a blockade of Gaza that has prevented the Palestinians from rebuilding the damaged businesses, schools and homes that the Israeli military destroyed during the 2008-09 war. It would also help if socialist governmental bureaucratic restrictions on commerce, trade, property and contracts were lifted there. (Come to think of it, it would help us here in the U.S., too, if we could possibly have that freedom once again.)

    The article today on Zionism by Uri Avnery on Antiwar.com is very informative.

    Regarding Willard Romney, he is as phony a politician as one could be, with no real genuine views or convictions, just a craving for power and a desire to be at the top just like plenty other State murderers of foreigners, counterfeiters of official State money, and violators of the rights of their very own fellow countrymen.

  9. Mart says:

    Mitt has been exceptional at one thing in his life, whether at Baine, the Olympics or politicking: getting other peoples money. That has been his only job his whole career. That is all he knows.

  10. BSbafflesbrains says:

    @Mart: It certainly hasn’t been reading. He is the prototypical boobus americanus seen throughout the Hamptons and like environs.

  11. bell says:

    this is an interesting article to read juxtaposing it next to the most recent article immediately above on the young girl swimmer who isn’t swimming for money.. something about integrity and doing things based solely on money that doesn’t jive and the young girl is bright enough to know that.. too bad mitt has his head up his ass brown-nosing his way to november..ain’t nothin’ 100 million won’t do, lol..

  12. tjallen says:

    Why do US states with equal freedoms have unequal incomes? How will Mitt explain Mississippi vs Texas, which have the same amount of freedom but different incomes?

  13. Bill Michtom says:

    “Regarding Willard Romney, he is as phony a politician as one could be, with no real genuine views or convictions, just a craving for power and a desire to be at the top just like plenty other State murderers of foreigners, counterfeiters of official State money, and violators of the rights of their very own fellow countrymen.”

    Aside from his ability to speak the language and, eventually, be pulled into some areas of the 21st century, I’m hard pressed to see a significant difference between Mitt and Obama.

  14. readerOfTeaLeaves says:

    Oh, and re: Korean prosperity. The Koreans actually have some interesting writing systems. Hangul is distinctive and phonetic.

    Alphabets are faster to learn and more ‘efficient’ than syllabaries or pictographic systems like those used in Japan and China. Certainly US military and economic support has been critical to Korean success, but having an alphabet probably provided a competitive advantage.

    Not that the Mittster would find any of this interesting; after all, you can’t take out leverage against an alphabet. Yet.

  15. shekissesfrogs says:

    The Israeli culture is all about keeping a boot on palestinians necks; it’s been a tremendous success, therefore god approves.

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