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Yesterday, the Nobel Prize in Economics was awarded to a trio of economists: Daron Acemoglu, Simon Johnson, and James Robinson.

Today, I want to talk about their work, why it’s important, and how it’s shaping my thinking on the upcoming Presidential election.

Who are AJR?

Acemoglu, Johnson, and Robinson (more frequently referred to as AJR) are some heavy hitters in economic research.

• A professor at MIT, Acemoglu is one of the most productive economics researchers in modern history

• Also a professor at MIT, Johnson is a leader in researching political economy and development economics

• A professor at the University of Chicago, Robinson is an accomplished researcher in comparative development, and co-authored the book Why Nations Fail with Acemoglu

These three have significantly impacted the economics field in recent years due to the theory popularized in Why Nations Fail.

What do they claim?

The main focus of AJR’s research has to do with inequality between countries. Why are some countries swimming in wealth, while others are dirt poor?

While some researchers have posited that the difference comes down to geography, natural resources, etc, AJR posit that the difference comes down to institutions. It’s not natural resources that makes the difference; Venezuela and Norway both have access to massive oil reserves, but only one of them is wealthy. Many countries in Africa are drowning in diamonds but can’t afford clean water.

According to AJR, the institutions which control these resources are what matter the most.

Imagine two countries:

• In country A, everyone plays by the same rules, contracts are enforced, and property rights are protected. This country has what AJR call inclusive institutions, meaning that anyone and everyone is included to compete in the same game.

• In country B, a small and powerful elite rig the system to make it hard for anyone else to compete with them, allowing them to engage in rent seeking behavior. This country has what AJR call extractive institutions, meaning that the focus is on extracting wealth and power for a select few rather than empowering all players.

In Colonial Origins of Comparative Development, AJR offer a theory:

1. During the colonial period, some states were set up by colonial empires to be extractive, while others were set up to be inclusive.

2. In the extractive states, the purpose of the colony was to send as many resources back to the colonizer as possible. In the inclusive states, the purpose of the colony was to develop and grow into a sustainable settlement.

3. In regions where the colonizers had high mortality rates, they were more likely to set up extractive states than inclusive states.

4. Extractive states often failed, while inclusive states often thrived and developed into larger societies.

5. The institutions that the colonizers introduced, whether extractive or inclusive, persisted for generations, even after the colonizers left.

This last part is the most important: institutions persist long after their creators develop them. And these institutions have a massive impact on whether a society thrives or decays.

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Why does this matter?

Institutions matter.

AJR’s (now Nobel-winning) work shows that strong, inclusive institutions are beneficial for long-term economic prosperity. Therefore, the destruction of these institutions is a threat to the long-term prosperity of a given country.

A country like ours.

Of Trump’s actions on January 6, 2021, Robinson said:

In interviews, the authors state that the attacks waged by Trump and his campaign on our country’s inclusive economies could pave the way for the rise of more extractive alternatives.

We’re also beginning to see examples:

Trump has made a number of baseless accusations against FEMA in the wake of Hurricane Helene. These lies were denounced and debunked by the agency, and by some of the most conservative members of congress. Still, threats from militias against FEMA workers caused the agency to temporarily stop providing aid to regions of North Carolina devastated by the hurricane.

This is a clear example of an inclusive institution—FEMA, which ensures that those affected by natural disasters are given what they need to rebuild and continue contributing to society—being toppled and replaced by the far more extractive alternative of roving militias hunting perceived enemies.

In this example, you have the choice of an inclusive taxpayer-funded institution dedicated to supporting victims, or of a band of armed strangers listening to debunked lies and threatening violence against those who stand in their way.

It’s more than FEMA

There are plenty more examples. From Project 2025, to the efforts of individual/groups of Trump supporters, it is clear that the aim of a second Trump term is retribution:

A second Trump term would prioritize the destruction of the inclusive institutions which ensure that all Americans have equal protection under the law, reducing the state capacity that allows the government to enforce contracts and ensure we play by the same rules, and extracting maximum power for himself and his friends at the expense of the average American.

We know that this cannot be good for America. The Nobel literally just went to a group of researchers who compellingly demonstrated this fact.

Our institutions are important, and our institutions are at risk.

You don’t have to support Kamala Harris (I probably still won’t vote for her). But if this prize-winning research means anything to you, if you understand the value of our institutions, then there is no justification for electing those that would see them reduced to rubble.