The Hidden Enemy Destroying Nations

Officials in the Egyptian government realized that Pharaoh’s policy toward the Israelites was a disaster for their nation.

Pharaoh’s officials said to him, “How long shall this fellow be a snare to us? Send the people away, so that they may serve the Lord their God. Do you not yet understand that Egypt is ruined?” (Exodus 10.7).

This verse reminded me of a book I read a few years ago. “Why Nations Fail,” written by Daron Acemoglu and James A. Robinson, focuses on the relationship between political and economic institutions and their impact on the prosperity or decline of nations.

Here are five key factors discussed in the book that can contribute to the decline of nations. As you read the outline below consider how this happened in Egypt and around the world today.

(1) Extractive Institutions: Extractive institutions concentrate power and wealth in the hands of a small elite, allowing them to exploit and extract resources from the broader population.

According to a Google search, half of the world’s net wealth belongs to the top 1%, the top 10% of adults hold 85%, while the bottom 90% hold the remaining 15% of the world’s total wealth, and the top 30% of adults hold 97% of the total wealth.

History shows that over time, this situation will lead to economic stagnation and societal decline.

(2) Lack of Property Rights: Secure property rights are essential for economic growth and development.

In nations where property rights are weak or non-existent, people have limited incentives to invest, innovate, or engage in productive activities.

(3) Corruption: Corruption erodes trust in institutions, undermines the rule of law, and diverts resources away from productive sectors.

(4) Lack of Inclusive Institutions: Inclusive institutions provide equal opportunities for individuals to participate in economic and political processes.

They promote competition, protect property rights, and provide public goods such as education, healthcare, and infrastructure.

You may have heard someone called a “Luddite.” During the Industrial Revolution in 19th Century England, the Luddites opposed the adoption of labor-saving machinery such as automated looms.

They feared that these innovations would lead to job losses and reduced wages for workers. The movement resorted to acts of sabotage and violence against the new machinery, as they saw it as a threat to their livelihoods.

We do well to consider Luddite-like legislation that is aimed at slowing current technology to prop up entrenched but fading industries.

(5) Failure to Adapt to Change: Nations that fail to adapt to changing circumstances, whether technological advancements or shifting global economic trends, can struggle to remain competitive.

Failure to innovate, invest in education and infrastructure, and adjust to new economic realities can lead to a decline and a loss of competitiveness on the global stage.

North and South Korea

The contrast between North and South Korea is a striking example of how different institutions can shape the fate of nations.

North Korea hits all five of the markers of an extractive economy. Its authoritarian regime, lack of property rights, and centralized control of the economy have resulted in economic stagnation, poverty, and isolation from the global community.

While North Korea invests heavily in military objectives, it can barely feed its own people. One-third of North Korean children are stunted, due to malnutrition, according to the World Food Program.

Inflation in North Korea may be as high as 100 percent, due to mismanagement of the currency.

Most homes and apartments are heated by open fireplaces burning wood or briquettes. Many lack flush toilets. Electric power is sporadic and unreliable, with homes that have electricity often receiving just a few hours per day.

In contrast, South Korea’s inclusive institutions, protection of property rights, and focus on education and innovation have contributed to its remarkable economic growth and prosperity.

According to the World Bank, “The Republic of Korea has achieved remarkable success in recent decades in combining rapid economic growth with significant poverty reduction, with the real gross domestic product (GDP) growing on average by 4.9% annually between 1988 and 2022.

“This robust performance was fueled by annual export growth averaging 8.9% in the same period.”

A Christian Response

What sort of response can average Christians like the people who read my blog give to the issues I have hinted at in my article?

(1) We can get informed and reflect on the issue of wealth inequality and the concentration of power in the hands of a few.

(2) We can consider our own stewardship of God’s resources. Our contributions may be small, but our actions toward those in need will benefit each recipient.

(3) We can condemn corruption and work toward fostering integrity in both public and private spheres.

(4) We can advocate for inclusive institutions that provide equal opportunities for all individuals to participate in economic and political processes.

This may involve supporting initiatives that protect property rights, promote fair competition, and ensure access to education, healthcare, and infrastructure for all members of society.

We are blessed to live in a country where our vote counts. If we believe companies or policymakers are corrupt or exclusive, we can express our beliefs at the ballot box.

We also can choose which companies deserve our business. We have options and can exercise discretion in spending.

(5) We can pray. God’s response to hurting persons is one of the reasons given for the exodus.

God told Moses, “I have observed the misery of my people who are in Egypt; I have heard their cry on account of their taskmasters. Indeed, I know their sufferings, and I have come down to deliver them” (Exodus 3.7-8).

One of the ways we can pray is to review the summary I have provided from Acemoglu and Robinson’s book. We can take their points to God and ask for his help for those who suffer from extractive institutions.

YouTube Video

Rudy Ross and I discuss this passage on YouTube today. It is on the Bob Spradling channel.