It’s time to found a new republic – Daron Acemoglu & Simon Johnson

MIT Sloan Professor Simon Johnson

MIT Professor Daron Acemoglu

From Foreign Policy

Most Americans tend to believe that they’ve lived under the same form of government, more or less, since the country was founded in late 1700s. They’re mistaken.

It’s true that there have been important continuities. The American conception of what government should and should not do is deeply rooted in clear thinking at the start of the republic; the country has long preferred limited government and effective constraints on capricious executive action. But this persistence of core ideas (and the consistent use of the same buildings in Washington, D.C.) obscures the dramatic changes that have taken place within the governing institutions themselves.

In fact, formidable challenges at the end of the 19th century were met by fashioning a transformation so thorough it could effectively be deemed a “Second Republic.” This new republic came with significantly different economic and political rules — and, as a result, enabled the American system to survive and even thrive for another century. Today, faced with serious economic and political dysfunction, we are in need of another round of deep institutional renewal: a Third Republic.

The conditions that brought about the first transformation of American society are strikingly similar to those we see today. At the root of the problems confronting the United States by 1900 was a wave of innovation that sped up growth. The direct benefits of these new technologies accrued to a few, while many others became more uncertain about their economic future.

Early in the 21st century, we have reached a similar phase; the latest technology enables the offshoring of many of the manufacturing jobs that had previously been the mainstay of the middle class, or automates them out of existence. And we witness newly extreme concentrations of economic power, which are again making our politics less genuinely democratic.

There are differences too, of course. The modification of the American republic early in the 20th century would not have been feasible, for instance, without the Civil War, which tore down slavery. Still, there are lessons to be learned.

The prime driver of reform at the end of the 19th century was the progressive movement, itself a reaction to the accelerating technological change and the rise of oligarchs. If America as we know it — or, even better, a renewed, reinvigorated version of it — is to survive for yet another century, it will have to replicate the progressives’ achievements. The first task will be to understand the degree of improvisation which accounted for those successes.

The American Revolution took place in a largely agrarian economy, with a few pockets of commercial activity on the East Coast. Through the 1850s, population growth continued and economic change was undeniable — but the opportunities provided by existing technology would, for the most part, be quite recognizable to the Americans who had fought the British. This would soon change.

Read the full post at Foreign Policy.

Daron Acemoglu is the Elizabeth and James Killian Professor of Economics at MIT.

Simon Johnson is the Ronald A. Kurtz (1954) Professor of Entrepreneurship at the MIT Sloan School of Management, where he is also head of the Global Economics and Management group and chair of the Sloan Fellows MBA Program Committee. 

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