Daron Acemoglu

Kamer Daron Acemoğlu[2][3][lower-alpha 1] was born in Istanbul, Turkey to Armenian parents[6][7] on September 3, 1967.[8] He is the only child of Kevork Acemoglu (1938−1988), a commercial lawyer and lecturer at Istanbul University, and Irma (d. 1991), principal of Aramyan Uncuyan, an Armenian school in Kadıköy district.[9][10][11] He attended the Aramyan Uncuyan Armenian elementary school[12][13] and graduated from Galatasaray High School in 1986.[14] He became interested in politics and economics as a teenager.[11] He was educated at the University of York, receiving a BA in economics in 1989, and at the London School of Economics (LSE), receiving an MSc in econometrics and mathematical economics in 1990, and a PhD in economics from in 1992.[15] His doctoral thesis was titled "Essays in Microfoundations of Macroeconomics: Contracts and Economic Performance."[8][3] His doctoral advisor was Kevin W. S. Roberts.[16] James Malcomson, one of his doctoral examiners at the LSE, said that even the weakest three of the seven chapters of his thesis were "more than sufficient for the award of a PhD."[17] Arnold Kling called him a wunderkind due to his age of receiving a PhD; he became a doctoral at 25.[18]

Acemoglu is a naturalized U.S. citizen.[19] He is fluent in English and Turkish,[20] and speaks some Armenian.[21] He is married to Asuman "Asu" Ozdağlar, a professor of electrical engineering and computer science at MIT,[11][22] who is the daughter of İsmail Özdağlar, a former Turkish government minister. Together they have authored several articles.[23][24] As of 2015, they live in Newton, Massachusetts with their two sons, Arda and Aras.[25]

Acemoglu in 2009

Acemoglu in his office, January 2020

Acemoglu was a lecturer in economics at the LSE from 1992 to 1993. He began lecturing at MIT in 1993, when he was appointed an assistant professor. He was granted tenure at MIT in 1998,[26] and promoted to full professor in 2000.[27] In 2004 he became the Charles P. Kindleberger Professor of Applied Economics. Since 2010 Acemoglu has been the Elizabeth and James Killian Professor of Economics at MIT.[8] In July 2019 he was named Institute Professor, the highest faculty honor at MIT.[28]

As of mid-2019, he has mentored over 60 PhD students.[28] Among his doctoral students are Robert Shimer, Mark Aguiar, Pol Antràs, and Gabriel Carroll.[16] In 2014, he made $841,380, making him one of the top earners at MIT.[29]

Acemoglu is a fellow of the United States National Academy of Sciences, American Academy of Arts and Sciences, Econometric Society, European Economic Association, and other learned societies.[15] He is a research associate at the National Bureau of Economic Research,[30] and a Senior Fellow at the Canadian Institute for Advanced Research.[31] He was the editor of Econometrica, an academic journal published by the Econometric Society, from 2011 to 2015.[32]

Acemoglu has authored hundreds of academic papers.[33] He noted that most of his research has been "motivated by trying to understand the sources of poverty."[19] His research includes a wide range of topics, including political economy, human capital theory, growth theory, economic development, innovation, labor economics,[15][34] income and wage inequality, and network economics, among others.[35] He noted in 2011 that most his research of the past 15 years concerned with what can be broadly called political economy.[36] He has made contribution to the labor economics field.[19]

Acemoglu has extensively collaborated with James A. Robinson, a British political scientist, since 1993.[26] Acemoglu has described it as a "very productive relationship." They have worked together on a number of articles and several books, most of which on the subject of growth and economic development.[19] The two have also extensively collaborated with economist Simon Johnson.[37]

Acemoglu is a follower of new institutional economics.[38][39][40] Among economists and sociologists who have influenced him are Joel Mokyr and Kenneth Sokoloff,[41] Douglass North,[42] Seymour Martin Lipset,[43] and Barrington Moore.[43]

Why Nations Fail

Why Nations Fail was included in the Shortlist of the 2012 Financial Times Business Book of the Year Award.

In their 2012 book, Why Nations Fail, Acemoglu and Robinson argue that economic growth at the forefront of technology requires political stability, which the Mayan civilization (to name only one) did not have,[47] and creative destruction. The latter cannot occur without institutional restraints on the granting of monopoly and oligopoly rights. They say that the industrial revolution began in Great Britain, because the English Bill of Rights 1689 created such restraints.

Acemoglu and Robinson insist that "development differences across countries are exclusively due to differences in political and economic institutions, and reject other theories that attribute some of the differences to culture, weather, geography or lack of knowledge about the best policies and practices."[48] For example, "Soviet Russia generated rapid growth as it caught up rapidly with some of the advanced technologies in the world [but] was running out of steam by the 1970s" because of a lack of creative destruction.[49]

The book was written for the general audience.[48] It was widely discussed by political analysts and commentators.[50][51][52][53] Warren Bass wrote of it in The Washington Post: "bracing, garrulous, wildly ambitious and ultimately hopeful. It may, in fact, be a bit of a masterpiece."[54]

Clive Crook wrote in Bloomberg News that the book deserves most of the "lavish praise" it received.[55] In his review in Foreign Affairs Jeffrey Sachs criticized Acemoglu and Robinson for systematically ignoring factors such as domestic politics, geopolitics, technological discoveries, and natural resources. He also argued that the book's appeal was based on readers' desire to hear that "Western democracy pays off not only politically but also economically."[56] Bill Gates called the book a "major disappointment" and characterized the authors' analysis as "vague and simplistic."[57] Ryan Avent, an editor at The Economist, responded that "Acemoglu and Robinson might not be entirely right about why nations succeed or fail. But at least they're engaged with the right problem."[58]

Journalists and economists have described Acemoglu as a centrist.[lower-alpha 2] Why Nations Fail was well received by liberal and conservative economists.[79] Acemoglu's and Robinson's long-time collaborator Simon Johnson suggests that their "point is not just about how things may become awful when the government goes off track (a right-wing point). They are also more deeply concerned about how powerful people fight to grab control of the state and otherwise compete to exert influence over the rest of society (a left-wing perspective)."[37]

Acemoglu has praised the successes of the Progressive Era, and argued in favor of its replication.[80] Acemoglu argues that the market economy is the only system that creates prosperity. He believes in finding an appropriate balance between "incentivizing creativity, hard work and risk-taking and creating the essential public services, social safety nets and equality of opportunity."[81] For Acemoglu, markets work only with regulations and predictable laws and that all markets are regulated to some extent; it is only a matter of degree.[26] He suggests that free markets are not unregulated markets.[82]

Wall Street

In September 2008, Acemoglu signed a petition condemning the Bush administration's bailout plan of the U.S. financial system.[83] As the main cause of the financial crisis of 2007–2008, he stated that policy makers were "lured by ideological notions derived from Ayn Rand’s novels rather than economic theory" and opined: "In hindsight, we should not be surprised that unregulated profit-seeking individuals have taken risks from which they benefit and others lose."[82] In an early analysis of the Great Recession, Acemoglu wrote: "When channeled into profit-maximizing, competitive, and innovative behavior under the auspices of sound laws and regulations, greed can act as the engine of innovation and economic growth. But when unchecked by the appropriate institutions and regulations, it will degenerate into rent-seeking, corruption, and crime."[26] He argues that the heavy overrepresentation from the financial sector in the top 1% "has been an outcome of the political processes that have removed all of the regulations in finance, and so created the platform for 40 percent of U.S. corporate profits to be in the financial sector."[36] He argues that a platform, particularly in Wall Street, has been created "where the ambition and greed of people, often men, has been channeled in a very anti-social, selfish and socially destructive direction."[84]

Inequality

Acemoglu has voiced concerns regarding the increasing inequality in the US, which in his view turns into political inequality, in turn undermining the inclusiveness of US institutions.[51] In 2012 he identified societal polarization, caused by economic inequality, as the biggest problem for the US.[85] He argues that "democracy ceases to function because some people have so much money they command greater power."[78] He states that he is comfortable with economic inequality which comes through different social contributions as it is a "price that we pay for providing incentives for people to contribute to prosperity." However, high levels of inequality create problems as the rich who control significant portions of the societal resources use them to create an "unequal distribution of political power."[84] He sees the solution in increasing social mobility by "providing an opportunity for the bottom to become rich, not forcing the rich to become poor."[78]

Acemoglu has praised the American tradition of vibrant protest movements dating back to the Populists and the Progressives.[86] He has also praised Occupy Wall Street for "putting the question of inequality on the agenda, but also for actually standing up for political equality."[87] He notes that Occupy Wall Street brought the 1% to the attention of the wider public, academic attention was brought by Tony Atkinson, Thomas Piketty, and Emmanuel Saez.[84]

Specific policies

Acemoglu is in favor of raising and indexing the minimum wage.[88]

Acemoglu believes that universal basic income is "expensive and not generous enough" and that a "more efficient and generous social safety net is needed."[89] He further called it a "flawed idea" and a "poorly designed policy." He instead advocates for a "guaranteed-income program would offer transfers only to individuals whose monthly income is below $1,000, thereby coming in at a mere fraction of a UBI's cost." He calls for "universal health care, more generous unemployment benefits, better-designed retraining programs, and an expanded earned income tax credit (EITC)."[90]

Acemoglu believes that nation-building by the West is no longer possible around the world because the West now lacks the resources and commitment that were present in post-World War II Germany and Japan, and because countries, such as in the Muslim- and Arab-majority countries, where such work is required today do not trust the West.[91] He views the US war on drugs as a "total and very costly failure",[92] and supported the 2013 ballot referendum Colorado Amendment 64, a successful popular initiative that legalized the sale of recreational marijuana.[93]

In a 2016 interview with NPR, he opined that the US infrastructure is in a "pitiful state, with negative consequences for US economic growth."[94]

Socialism, communism, and Marxism

Acemoglu argues that socialist states have not been successful in creating prosperity.[81] He wrote that socialist regimes "from Cuba to the eastern bloc have been disastrous both for economic prosperity and individual freedom."[95]

In a review written with James A. Robinson, he argues that Thomas Piketty and Karl Marx are "led astray" due to their disregard for "the key forces shaping how an economy functions: the endogenous evolution of technology and of the institutions and the political equilibrium that influence not only technology but also how markets function and how the gains from various different economic arrangements are distributed."[96]

Social democracy and unions

In 2019, Acemoglu argued in favor of social democracy. He stated: "[Social democracy, when practiced by competent governments] is a phenomenal success. Everywhere in the west is to some degree social democratic, but the extent of this varies. We owe our prosperity and freedom to social democracy. ... [Social democracy] did not achieve these things by taxing and redistributing a lot. It achieved them by having labor institutions protecting workers, encouraging job creation and encouraging high wages."[95] Acemoglu also noted that the economists of US presidential candidate Bernie Sanders, who is an advocate of democratic socialism along the lines of the Nordic model, "don't understand basic economics. They are not just dangerous, they are clueless."[95]

Acemoglu argued that a "tradition of strong labor movement or social democratic party, by constraining the actions of the social planner, can act as a commitment device to egalitarianism, inducing an equilibrium in which the country in question becomes the beneficiary from the asymmetric world equilibrium."[68]

Donald Trump

In an op-ed in Foreign Policy, Acemoglu claimed that President Donald Trump shared political goals and strategies of Hugo Chávez, Vladimir Putin, and Recep Tayyip Erdoğan, such as "little respect for the rule of law or the independence of state institutions, ... a blurred vision of national and personal interests, ... little patience with criticism and a long-established strategy of rewarding loyalty, which can be seen in his high-level appointments to date. This is all topped by an unwavering belief in his abilities."[86] In a 2019 interview with Der Spiegel, Acemoglu stated that he sees similarities between Trump and the Republican Party and the Nazis: "Surely, Trump and the Republicans are no Nazis. But they are exploiting the same political sentiment." He argues that Trump "poses a great risk to U.S. democracy" because he is "looking for a new order with elements of anti-liberalism, misinformation and a lax attitude to corruption. If he is re-elected next year, it will be the beginning of the end of American democracy."[97]

Authoritarian countries

According to Acemoglu, the three obstacles for economic growth under authoritarian regimes are the tendency of authoritarian regimes to become more authoritarian, their tendency to use power to halt "Schumpeterian creative destruction, which is key to sustaining growth" and the instability and uncertainty caused by internal conflicts.[26] He believes that Saudi Arabia would be like a poor African country without the oil, while the "only thing that is keeping [Russia] going is a big boom in natural resources and a clever handling of the media."[98]

He believes that China has managed to achieve significant economic growth because it "sort of picked up the low hanging fruit from the world technology frontier, but that sort of growth is not going to last until China goes to the next step, which is harnessing innovation," which he argues will be impossible "unless economic institutions become even more open and the extractive political institutions in China will be a barrier to that."[85] He and Robinson wrote for the HuffPost that the "limited rights [China] affords its citizens places major restrictions on the country’s longer-term possibilities for prosperity."[99]

Turkey

Acemoglu opined that the Republic of Turkey, formed in 1923 by Atatürk, "is very continuous with the Ottoman Empire." Although the shift from empire to republic brought some positive changes, he argues, the model was largely maintained by the reformers who took power, citing a persistent concentration of power and economic activity.[100] He suggests that the Republican period has been characterized by an unwillingness to accept ethnic minorities.[101] In 2014, Acemoglu condemned the widespread anti-Armenian rhetoric in Turkish textbooks, and demanded that the books be pulled from circulation.[10]

Acemoglu has criticized Recep Tayyip Erdoğan and his government for its authoritarian rule.[102] In a 2013 op-ed in The New York Times, following the crackdown of Gezi Park protests, Acemoglu wrote that "Even before the brutal suppression of the demonstrations, the belief that Turkey was on its way to becoming a mature democracy — a role model for the rest of the Middle East — had already become untenable."[103] In a May 2014 op-ed in Foreign Affairs, Acemoglu wrote that the drift from democracy by Erdogan is lamentable, but an "almost predictable, stage of Turkey’s democratic transition."[104] In the late 2010s, Acemoglu often criticized Turkey's economic policies and consequently became popular with the opposition.[105]

Armenia

Acemoglu, an ethnic Armenian, stated in a 2015 interview with the Armenian service of Voice of America, that he has always been interested in economic, political, and social developments in Armenia.[13] Talking via video, Acemoglu partook in the Armenian Economic Association's annual conference in October 2013 held at the Yerevan State University, during which he argued that Armenia's problem is political, and not geographic, cultural, or geopolitical. He called for the Armenian government to be "more responsive to the wishes of its citizens so that through that political process Armenia ceases to be an oligarchy."[106] In a September 2016 conference in Toronto Acemoglu criticized the Armenian diaspora for legitimizing the successive governments in Armenia, especially when the rights of its citizens are violated and a wrong economic and political line is being followed for the country.[107] In an April 2017 conference held by the USC Institute of Armenian Studies, Acemoglu stated that while "Armenia could have looked much more like the Czech Republic or Estonia and what we got instead is a country that looks much more like Azerbaijan or Uzbekistan, which is a real shame." He suggested that in the immediate post-Soviet years Armenia was "stronger and it's been getting worse and worse." He criticized the level of corruption of the government, which has systematically closed the political system.[108]

Other countries

In an op-ed for The Globe and Mail following the 2014 Ukrainian revolution, Acemoglu advocated Ukraine "to break with its past as quickly as possible. It needs to move away from Russia, politically and economically, even if that means an end to the natural-gas subsidies Russia has used to keep it in the position of a client state. Even more important is for Ukraine’s leaders to spread political power and economic benefits to the maximum number of its people, including Russian speakers."[109]

Acemoglu argued that the Greek government-debt crisis was caused by the "terrible state of Greek institutions, and the clientelistic nature of its politics", and stated that the country's problems are "political not just macroeconomic." He identified lack of political integration within the EU as Greece's problem and that "the only way forward for Europe is to have greater fiscal and banking integration or to abandon monetary integration."[110][111]

According to data collected by Research Papers in Economics (RePEc), Acemoglu was the most cited economist of the decade leading to 2015.[127][7][10] According to Google Scholar, his works (including co-authored works) have been cited more than 200,000 times as of January 2023.[33] He was listed 88th in Foreign Policy's 2010 list of Top 100 Global Thinkers "for showing that freedom is about more than markets."[128] In a 2011 survey of 299 economics professors in the U.S. Acemoglu ranked third, behind Paul Krugman and Greg Mankiw, in the list of "Favorite Living Economists Under Age 60".[129]

Francis Fukuyama has described Acemoglu and his long-time collaborator James A. Robinson as "two of the world's leading experts on development."[130] Clement Douglas wrote in the Federal Reserve Bank of Minneapolis publication that the "scope, depth and sheer volume of [his] scholarship are nothing short of breathtaking, verging on implausible."[36] Angus Deaton called him a "young superstar" and noted that Acemoglu is "a very good example of the way things ought to be going, which is you do history but you know enough mathematics to be able to model it too."[131]

Acemoglu is widely considered a prospective Nobel laureate in Economics.[132][133][134][135][136]

• Acemoglu, Daron; Robinson, James A. (2006). Economic Origins of Dictatorship and Democracy. Cambridge University Press. ISBN 9780521855266.
• Acemoglu, Daron (2008). Introduction to Modern Economic Growth. Princeton University Press. ISBN 9781400835775.
• Acemoglu, Daron; Robinson, James A. (2012). Why Nations Fail. Crown Business. ISBN 978-0307719218.
• Acemoglu, Daron; Laibson, David and List, John (2014). Principles of Economics, Pearson, New York.
• Acemoglu, Daron; Robinson, James A. (2019). The Narrow Corridor: States, Societies, and the Fate of Liberty. Penguin Press. ISBN 978-0735224384. Description, arrow-searchable preview, & reviewers' comments (at bottom).
• Acemoglu, Daron, and Simon Johnson (2023). Power and Progress: Our Thousand-Year Struggle Over Technology and Prosperity. New York: PublicAffairs.