I have recommended "Why Nations Fail", before; this book is as important as "The Wealth of Nations" by Adam Smith. I will apply, in this note, what I learned, to the State of the World.
Today, here in Chicago, Obama is talking to NATO leaders, and Afghanistan rulers. He sided with this country vis a vis, Pakistan. The Khyber Pass is controlled by Afghanis, not by Pakistanis. The POTUS has decided to stop the war in Afghanistan, and it seems his best option is to leave in 2014.
Why Karzai won and Zardari lost?
The Afghanis had more bargaining chips, than the Pakistanis. The relations between countries is not decided on the basis of moral rectitude, but on the basis of sustainable agreements. Acemoglu et al., are not telling us that the US and England, are made up of only angels inside their borders, but rather, that historical accidents in their respective regions, allowed more rights for workers, than anywhere else in the World. Today we can read that German workers got a big salary increase. The reason is not, that German Unions know how to fight, and that all other unions in the world do not. The reasons have to do with agreements all over Europe, and very likely the world, which gave German workers this benefit now.
Sustainable agreements, not supermen; that is what is needed.
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