I'm now going through a book by the man who won the Nobel Prize in Economics last year. The book is called Why Nations Fail and it was written about 10 years ago. It's very accessible but also very repetitive. But it's been reassuring.

His thesis is that political institutions are either "inclusive" or "absolute" while economic institutions are either "pluralistic" or "extractive". "Pluralistic" or "inclusive" is when lots of people have a little bit of power or wealth. Property rights are respected, and random people with good ideas have a shot at getting to the highest level, because there is room at the top, no one has a monopoly on anything. "Absolute" is when the same people stay in charge no matter what and "extractive" is when ordinary people don't have real choice about how to earn their living and the only people who can get rich are the people who are already rich or at least politically connected.

His thesis is that you will rarely find mismatches - if a political system is inclusive, the economic system will be pluralistic. And if a political system is absolute, its economics will be extractive. Further, and this is the reassuring part, he says that when they are matched, if you try to change one, the other will resist. An inclusive political system will resist rich people's efforts to make the economic system extractive, and a pluralistic economic system will resist a President's effort to make the political system more absolute.

I hope he's right!

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