What Makes A Nation Rich
What makes a nation rich? MIT economist Daron Acemoglu considered why some nations thrive economically while others do not in an article in Esquire magazine. Asking what makes a nation rich he pondered on why some nations as in the United States are well developed and have better standards of living than many countries in Africa, South Asia, South America, and around the world. He argues that inequality is not predetermined, nations are not created poor or rich but that their governments make them the way they are. He covers some of the theories behind why some nations are poor as in their relative geography and weather. People have concluded that in the poorer parts of the world nutrient starved soil makes agriculture a challenge and that tropical climates foment disease. He discusses another theory that poor nations lack the technology to be successful. Although these theories work for some cases, Acemoglu argues against them all believing the reason a nation becomes and stays poor is that they ignore incentives. He states that people need incentives to invest and prosper, basically people need to know that if they work hard they can make money and be able to keep what is rightfully theirs. The economic principle that relates to this would be that people respond to incentives. As the point was clearly made in this article, people’s behaviors change when costs or benefits change. Acemoglu basically states this principle saying that if you fix incentives you will fix poverty, and to fix incentives you have to fix governments. The cause of the issue in this article lies in the basic human flaw that people are greedy and are more worried about their own personal gain than doing what is right or helping others. As a new Nation is formed or an old one is reborn someone new takes control of the government. If the new people in charge are out to make a great nation and they create laws and organizations that do so as what happened when America was founded you