Last week, Daron Acemoglu, Simon Johnson, and James Robinson won the 2024 Nobel Prize in Economics “for studies of how institutions are formed and affect prosperity,” according to the Nobel committee.
The prizewinners’ work is laudable and important because economics is downstream of political and moral philosophy. That is where economics originated in Adam Smith’s day. Smith’s first major work, before The Wealth of Nations, was The Theory of Moral Sentiments. Acemoglu, Johnson, and Robinson (henceforth AJR) tie these fundamental themes together by studying how institutions that embed various political and moral philosophies influence economic growth and, thereby, the fact that some countries are so rich and others so poor. If their insights are largely correct (a matter up for debate) and applied wisely, they will help the poor become rich and the rich stay that way.
But AJR’s body of work has attracted criticism, to which I’ll turn shortly. Some of the criticisms are well founded
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