← The Foreign Affairs Interview
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- [00:00]
A
Dan I'm Dan Kurtz Phelan and this is the Foreign affairs interview. Once you start thinking of new technology, just like a gale or a storm that is out of our control, then the best thing we can do is we can try to adapt to it. We build better skills, we build better protection mechanisms, et cetera. But if we are choosing the direction of AI, then an obvious question is why not meet halfway? Why not? Rather than just like push AI in some crazy direction and have humans adjust to it when it's not really that easy, why don't we try to steer AI in a direction that's actually quite useful for humans?
- [00:41]
B
I'm Deputy Editor Kanish Tharoor. Dan is away this week. The world has reached various inflection points, or so we're often told. Advanced technology such as artificial intelligence promises to transform our way of life. In geopolitics, the growing competition between China and the United States heralds an uncertain new era. And within many democracies, the old assumptions that undergirded politics are in doubt. Liberalism appears to be in disarray and illiberal forces on the rise. Few scholars are grappling with the many dimensions of the current moment. Quite like Darren Acemoglu is. The world is in the throes of a pervasive crisis, he wrote in foreign affairs in 2023, a crisis characterized by widening economic inequalities and and a breakdown in public trust. Acemoglu is a Nobel Prize winning economist, but his research and writing has long strayed beyond the conventional bounds of his discipline. He has written famously in the bestselling book why Nations Fail, about how institutions determine the success of countries. He has explored how technological advances have transformed or indeed failed to transform societies. And more recently, he has turned his attention to the crisis facing liberal democracy, one accentuated by economic alienation and the threat of technological change. I spoke with Acemoglu about a stormy world of overlapping crises and about how the ship of liberal democracy might be steered back on. Daron, thank you so much for joining us today.
- [02:26]
A
My pleasure, Kanishka. Thank you for having me.
- [02:29]
B
We have a lot of ground to cover, but let's zoom in before we zoom out. You know, you've received a lot of attention recently for your thinking around artificial intelligence. I think a lot of this was springing from a paper you published earlier this year in 2025. You know, it's very common now to hear big claims about how AI will transform the world, or indeed AI will destroy the but you have a more deflationary take. In that paper you wrote that AI will contribute only 1% to US GDP growth over the coming decade. That's 0.1% a year. Why do you think the impact will be so limited? And indeed, why do you think the impact of AI has been so overstated?
- [03:13]
A
What I wanted to do with that paper was draw out the implications that very basic economic theory has about what the productivity gains from automation based AI would be and just introduce a note of caution because these automation based technologies, you know, are pretty impressive in some ways, but they generally don't lead to huge improvements in productivity because you know, what you're doing is you're replacing workers with machines and getting some 20, 30% improvements in costs. But that's not like revolutionary. And many of these automation technologies need to be integrated into organizations, which is not easy. So those were the two pieces that I put together and the numbers came out to be quite modest. Now do I have much confidence that it's 1% and not 2%? No. Do I have any confidence that it's 1%, not 50%? Yeah.
- [04:12]
B
With that in mind then, what do you make of the extraordinary amount of investment, attention, focus that the biggest companies, governments, areas of civil society, you know, the brightest minds are now directing toward AI?
- [04:28]
A
Well, I mean, I think it's a very promising technology and even if the spread is slow, there are reasons for paying a lot of attention. So I tell all of my students and everybody that, you know, you should learn AI. And I have also no doubt that for better or worse, AI is going to have fundamental impacts on our society, on our economy, if not in three or four years, but in definitely 10 to 15, 20 years. But I think a lot of the investment right now is driven by a combination of hype and a racing dynamic, by which I mean that many companies are locked into a race that they think is going to be determining in that whoever takes the lead now will have a huge advantageous position in a couple of years time. It is impossible, in my opinion, to understand the investments that OpenAI or Google or Anthropic are making in AI without recognizing this winner take all perception that they have. In particular, it's not possible to rationalize those with the profit opportunities that AI currently presents. You know, OpenAI is generating some decent income because they are able to make some money from consumers using ChatGPT, but it's a very small amount relative to their huge investments. The only way you can justify that sort of investment is either if you think that almost overnight you're going to have super high productivity enhancing improvements so that they can start selling, you know, AI or AI based software and services to the majority of the companies in the United States or because they think that they're going to win the race and then once they win the race, they're going to dominate the next 20 years. I think it's a combination of the former, but there I'm not really optimistic because no company has produced very profitable production facing production targeted applications yet. So it's really the latter that there are in this winner takes all race.
- [06:54]
B
In the thinking and the conversation around AI and technological innovation, we often sort of invariably run into this metaphor that sort of treats technological change like a disembodied force of nature. You know, it's like, it's like a, it's a storm or it's a tidal wave and you know, it's up to us to build sturdier boats or to raise our houses on stilts. But in, you know, I think your last book, Power and Progress, which you co wrote with Simon Johnson, you remind us that of course, you know, technology is not force of nature. It's something that's mediated by states and societies and human beings and that they shape how technology is adopted.
- [07:34]
A
Right.
- [07:35]
B
When you look back at past innovations, whether it's the plow, the steam engine, the telephone and so forth, what can we learn about the way those technologies were adopted when we're thinking about AI today?
- [07:46]
A
Well, there are many important issues that you're raising. Thank you. I think the first one is that sort of this imagery of AI as an unstoppable gale of course contributes to the hype. So we should really note that. The second is the view that you hear all the time that AI is so different from the rest of technologies that humanity has grappled with, that we have little to learn from the past. Then there's a third rhetoric that you hear sometimes, which is that in the past we've done very well and everybody has benefited from new technologies. So therefore we can learn something very high level from the past that technological change is going to be ultimately beneficial to everybody, unless this time is different. So you see the tensions between these two narratives, but they're often made by similar people or the same people. But in fact, I disagree with both of them because first of all, there is a lot to learn from history. Nothing is identical to AI, but we can learn about the mistakes we've made. We can learn how new technologies spread about who wins and who loses and the political economy of it. But secondly, History actually shows that the adoption of new technologies has been a much more painful process, both because it's been very slow and second, it has created huge winners and losers, especially when it has happened within a non democratic setting in which a few companies or a few people could impose it on the rest of society by hook or crook. There were many downsides to that and workers often failed to derive any benefits. The Industrial Revolution in Britain is often given as an example of, look. Oh, we are so lucky. Yes, indeed, today we are very lucky. But it's like 300 years after the first 80 or so years of the British Industrial Revolution. Real wages fell, working hours lengthened, working conditions became horrible. So it wasn't like a pretty picture.
- [10:02]
B
The satanic mills.
- [10:04]
A
The satanic mills, exactly. You know, life expectancy in Manchester was 29 years old at birth. Amazing. I mean, can you imagine that today in the poorest country in Africa, it's like 62 or 63. So history has a lot of lessons for us. We just have to apply them the right way because AI is obviously much more pervasive. It's going to affect many more sectors. Things are going somewhat faster, quite a bit faster than the factory technology ever advanced. But we can learn first of all that the birth pains of any technology are going to be more than what you might first expect. So weaving machines were amazing. They were really revolutionary. But it took them 30 years to spread sufficiently in the UK. And in that process, and once they spread, they also reduced the wages of weavers by two thirds in real terms. So it was a really big shock. So we shouldn't expect AI. If we're going to draw an analogy to weaving machines to spread that fast, same thing from electricity, same thing from computers, there will be exceptions. I think AI is spreading very fast as a consumer technology because it's entertaining and it's well marketed and all the hype helps. But many more people are using it just for asking advice about where to go for a restaurant than in the production process. And second, again, unless there is democratic oversight and the right sort of institutional adjustments and the right steering of AI technology, it might create big winners and losers. And that's really important because the promise that many people in the industry make is that this is going to be a really transformative technology from which we will all benefit. And again, history puts a lot of caution onto that. And the gale metaphor that you started with has one more implication, which I also like to take issue with. Once you start thinking of new technology, just like a gale or a storm that is out of our control, then the best thing we can do is we can try to adapt to it. We build better skills, we build better protection mechanisms, et cetera. But if we are choosing the direction of AI, then an obvious question is, why not meet halfway? Why not, rather than just like push AI in some crazy direction and have humans adjust to it when it's not really that easy, why don't we try to steer AI in a direction that's actually quite useful for humans? Exactly as the skills that exist today would indicate. Of course we have to build new skills. Of course we have to upskill our population. Of course we have to make sure that people understand AI and understand how to communicate with AI tools. But that doesn't mean that we should just think of AI as an autonomous force which will go where it will go. And then humans just have to adjust to it, either by putting up regulations or changing their complete psychology so that they are happy by staying at home. And we're living on ubi. So it seems like a really strange way of thinking how society should adjust.
- [13:16]
B
I get a little skeptical, I suppose, of the sort of breathless presentism that often seems to accompany AI and the notions of its major transformations.
- [13:26]
A
I'm glad you do well, and I.
- [13:28]
B
Often, you know, I think this is where your historical view, I find it helpful. And I often wonder, you know, what would it have been like, you know, to be around in another period in the 19th century, you know, as all sorts of these new and frankly miraculous innovations were spreading electricity, the light bulb and so forth, the telephone, do you think? I mean, this is a slightly whimsical question, but do you think people then, when they were looking to the future, were probably even more disoriented than we are now?
- [14:03]
A
That's what I would imagine. Because, you know, before the modern factory system, which really mechanized quite a lot of what humans did by hand, before that came on the scene, few people would have really forecasted that there will be those machines that act semi autonomously in just a decade. Whereas if you think of current AI models, there's still no match to what, you know, science fiction writers wrote in the 1950s and 1960s. So this is not as unexpected. Okay, fine. Not many people were expecting this to come out of deep learning and next word predictions. So there are some details of it that are very surprising. But the overall ambition and the overall shape that the world may look like with powerful AI isn't as much of a shock as probably the dark satanic mills coming up everywhere or machines work being just operated by the labor of children were to Victorian, English or British.
- [15:10]
B
I wanted to return to the idea of a race that you brought up before. It's very common now to see in our pages and elsewhere a kind of panic that the United States may not innovate as fast as its competitors. It may not achieve AGI first, and that would be really bad for the country and so forth. But others make the case. And here I'm thinking about a recent book by the political scientist Jeffrey Ding called Technology and the Rise of Great Powers, that what matters is not so much who innovates first but who distributes technology best, that we should be focusing on the diffusion of technology as much as, if not maybe more than questions of innovation. What do you make of that case?
- [15:55]
A
Well, there is some validity to that, but I think there is more to be said. First of all, I sometimes joke that if China did not exist, the tech industry in the US would have had to invent is their trump card against any regulation. And that case is made on a very flimsy argument, which is that we are locked into this existential race to AGI, which will get realized within the next few years. And as soon as AGI is achieved, then we will move to the ASI artificial super intelligence stage. Whoever gets to AGI will have a huge advantage to get to the asi, and then whoever gets to the ASI will dominate the world. So that argument has so many assumptions, none of which is empirically bolstered or validated, and it has many pernicious implications. We have so many global problems, from climate change to AI regulation to taxation and regulation of powerful multinational companies. Pandemics, nuclear, non proliferation, all of these require global cooperation, especially between China and the United States, to some extent between developing countries and United States and China, but also Europe. And none of that seems likely when we emphasize this racing aspect because we think, or lawmakers and tech leaders think, that this is a zero sum game and we should do our best to destroy China rather than cooperate with China because of this race to AGI, race to artificial super intelligence. So it really narrows the space for any kind of international collaboration. And it is very dangerous. I mean, in the United States right now, we are in this very polarized environment. The only bipartisan topic is China bashing. And you know, don't get me wrong, I've been a long time critic of the Chinese regime. I think it's very repressive. It is not going to be able to achieve the developmental milestones that people think it will. And it has also used AI in a very pernicious way with surveillance, monitoring and data scooping. But still, we have to work with China. That's the other major global power. And we cannot confront pandemics or climate change or other global problems without some sort of collaboration with China. So the racing mentality is really dangerous.
- [18:33]
B
We published a piece recently by Dan Wang and Arthur Kroeber arguing for the merits of China's current model, its industrial policy, the building of deep infrastructure, its very robust tech ecosystem, and taking a rather dim view in that light of the current trajectory of things here in the United States with spending cuts and sort of fixation on immigration and restricting immigration and focus on export controls and tariffs and the like. What's your perception at the moment of the relative trajectories of both countries?
- [19:07]
A
Well, look, I would be lying if I said I am optimistic about where the US Is going. And we can talk more about that if you want in a second, but let's focus on China first. I think there are certain things that China gets right and there are many things that China gets wrong and there are some things that China is lucky in which are helping it. In this current conjecture, what it gets right is that infrastructure spending is very important, especially digital infrastructure. And of course education is very important. And of course preparing a large number of engineers that are well trained, that's going to be critical. So just the differences in, you know, supporting industry and innovation with infrastructure in China and not doing so in the US would be a very important point and could create some advantage for China. On the other hand, industrial policy is a double edged sword. It works sometimes, it doesn't work other times. The evidence is not completely dispositive here, but there are several papers that suggest that Chinese industrial policy comes with a lot of costs. It may have played an important role in kickstarting certain things, but it's not an unalloyed good for the Chinese private sector. Third, more generally in industrial policy, there's a lot of evidence showing that both in research in academia, in other things, the top down Chinese approach is very costly. It does not allow a competition of ideas. It gives a lot of implicit power to politically influential actors. So for example, in a research paper I have with David Yang and Jia Zhu, we find that in Chinese academia, people distort their choice of topics very strongly in order to carry favor with whoever becomes dean or party commissar or other influential position holders in the academia. So those kinds of things are very, very costly. There is evidence showing that when there are public Private partnerships, the public part brings down productivity. So again, that's the reason why I'm saying that industrial policy in China has been a mixed blessing. On the other hand, Chinese digital industry, and especially AI industry has benefited tremendously from access to huge amounts of data and from a cadre of very well trained engineers. So US and this is where the immigration debate comes in, US has a real shortage of engineers even today when we are giving a lot of H1Bs to engineers. And if you cut those H1Bs, it would have even more of a shortage of engineers for a very simple reason that we've let our education system fail. China does not have a democratic education system. It's got a lot of indoctrination in it, but it has poured in money and it has supported both middle school and university degrees. And there are millions of engineers in China and that's a big advantage. So if you look at, for example, Deep Seek, which shocked the world because it reached parity with the models that OpenAI had spent hundreds of millions of dollars developing, supposedly for much less cost, much, very quickly, and starting from essentially a zero background, if you look at the details, what you see is that Deep SEQ did not innovate in terms of methods or new approaches to AI. They were using age old methods that were invented by statisticians 20 years ago, or approaches that Google and OpenAI had pioneered. But what they achieved was an engineering marvel. They were able to put these pieces together in a much more efficient form than American companies were able to do. And how did they do that? That's where they used their engineering prowess and that's probably where they benefited from the fact that they were on a shoestring budget. So when OpenAI wants to solve a problem, they throw another $300 million of compute power to it, whereas they had to use limited compute power and find more efficient ways of processing models and data. So that is an advantage for China and the future of China. US competition will be shaped not just by issues like Taiwan, but how these advantage disadvantage pair will play out. So the disadvantage being China's top down, less free environment for research, and the advantage being the supply of engineers and better infrastructure.
- [23:59]
B
And then what would it take now for the US to, to get back ahead in that race in that competition?
- [24:05]
A
Well, I think right now we are in the midst of, to put it bluntly, destroying every valuable part of the US economic engine. So if I were to say what are the things that make the US economically special? I would count four things among the top list. One, is the US higher education system, which was the best in the world. It's being destroyed right now. Grants are being cut. Some of the most experimental areas, including MRNA vaccines, are being completely shut down everywhere. Universities have been declared to be the enemy of the administration. It's a, it's a bloodbath. Did universities not make mistakes? Of course they did. Were some of those mistakes infuriating? Sure. But the way to deal with that is not to destroy that huge advantage. Second, because of the aforementioned shortage of talented personnel, which is partly to blame on our crumbling education system, especially in K12 education, the US relies on foreign engineering talent. And if you look at the innovators in the United States, those people who get patents or found new companies or spearhead the most radical innovation, immigrants, often coming with technical backgrounds, are very strongly overrepresented. So politicizing the entire immigration debate is also damaging that. So again, were there mistakes in the Biden administration on immigration? 100%, huge mistakes. But none of that was really about whether you would block engineers and new talents coming in and create a disadvantage in the industry. Third, big advantage, innovation. The US has been at the forefront of economic growth for the last 35 years because it's been the most innovative economy that has come with some costs. Silicon Valley has made mistakes, created inequality, has created a beginning of a two tier society. But let's not make any mistake that the US economy wouldn't be where it is if it wasn't so innovative. But what is innovation? Innovation is a very forward looking activity. People of all walks of life start things in their garage and sacrifice time and resources because they think that they have the talent to create something new. And once they create that new thing, at some point other people are going to see it, they're going to raise funding. With that funding, they're going to be able to scale up. With that scale up, they're going to be able to get workers and with that they're going to be able to compete against established companies, some of them with hundreds of thousands of employees. When they run into conflict, the courts are going to side with whoever is right rather than crush them. And they're going to be able to reach global markets. All of this has horizons of 20, 30 years sometimes. Why do people have that sort of confidence? Well, the answer is very clear. They don't have that confidence in, you know, Turkey or in Mexico or in Brazil. Because US traditionally has had legal institutions, court systems, procurement systems, broad property right protections that made it sensible for people to believe that their investments would bear Fruit and they would enjoy those fruits, that the courts would defend their rights and they would not be crushed by rivals. And you know, what is the Trump administration doing? It's completely destroying those institutions. Now all institutions are much more biased. Courts are not impartial. Companies that are allied with the Trump administration get special treatment. So you should have rationally much more doubt when you're thinking of devoting your time and money in your garage. The other big secret source of the US Economy is that we have had tremendous advantage because we can borrow very cheaply from foreigners. This is why the financial crisis was spearheaded by US Banks and all the other countries did worse than the US because investors turned around and put more money in the U.S. corporate bonds and Treasuries and stock market because they thought US is the safest place. Same thing during COVID we were able to borrow and invest much more than many other countries. That's why Covid is much softer for the US As a negative shock than other industrialized nations. Why are people willing to put their money in the United States? Again, because of institutions. Would you want to put $5 million into the Chinese companies and then end up in Chinese courts, then not be able to turn that money back into whatever you want to do, whenever you want to do it? No. I think again, that's an institutional problem. And the US institutions being under attack, and especially courts being now much less effective and much less able to play that role, I think people are going to start rebalancing their portfolios with very important negative effects on the future of the US economy. So on all of these grounds, I'm very worried about what's going on. And I'm also worried that some of these things are going to be very hard to reverse even if there is a different government in three years time. So this is a very important thing. I'm not going to say China is going to win the race with the US because there's so many factors and I'm hoping that, you know, us doesn't become stuck in this new equilibrium. But the costs are not to be belittled.
- [29:58]
B
Speaking of institutions, probably the book of yours that is still the most well known is why Nations Fail, in which you and your co authors make a long argument or long historical argument for why countries succeed and why countries don't on the basis of their institutions. And you focus on how institutions help distribute power within a society and prevent its consolidation. And you contrast those societies that are inclusive institutions with those that have extractive ones. The extractive ones being ones that invariably lead to failure, inclusive ones being the ones that have a higher chance of leading to success and stability. Now, the example of China, especially after 1980, is often raised as an example of a potential sort of outlier in your thesis. Now, you have suggested just now that you think that China will face certain headwinds in the future, born out of its own system and its inefficiencies and so forth. But suppose the Chinese model proves to be somewhat durable or more durable than you anticipate. Would that present some kind of challenge to the thesis about institutions and their role?
- [31:10]
A
Yes, absolutely, 100%. So just a second ago, in my somewhat long answer to your previous question about, you know, U.S. economy, I essentially articulated an institutional view of the U.S. success and the current failures to the U.S. now, if the United States were to fix its institutions and go back, you know, to where it was, say in the 1970s or 1980s, which were not perfect, US institutions always had imperfections, poverty, racial discrimination, much greater inequality because safety net type arrangements are weaker. But if we went to where we were and despite that, China surged ahead and became a more innovative economy than the United States, that would be a challenge to the institutional thesis. Because what we say in why Nations Fail is that authoritarian regimes can grow for short periods of time, for decades sometimes, but ultimately for sustained growth driven by innovation, it is inclusive institutions that have an advantage. And I've also articulated why I think the AI age is a little different, because it's elevating this data and engineering so much that's creating some additional tailwinds for China. But I think the headwinds are still very major. And the institutional structure, the hierarchical nature of how entrepreneurship and science is done, and the authoritarian way in which all institutional questions are resolved are going to be big bottlenecks for China.
- [32:49]
B
On why Nations Fail, there have been many attempts to understand why the west ascended in the last 500 years or so and why others did not do nearly as well. There are cultural arguments that focus on ideas, political theories and values. There are material ones. I'm thinking of Ken Pomeranz's the Great Divergence, which suggests that the reason that Europe grew more powerful than China in particular was geographical, the location of an accessibility of key natural resources and the like. What do these approaches miss to this central question that your approach to institutions manages more successfully?
- [33:31]
A
Well, I would say we have to go in layers. First of all, at the high level, there are four groups of approaches you can think about, as you said, geographic, cultural, institutional, and perhaps luck. Perhaps it was all just lucky break for one country versus another. So I think geographic explanations don't stand a chance for the very simple reason that the countries that were the richest 500 years ago, especially among the former colonies, are today among the poorest. Central America, Peru, North Africa, parts of Indian subcontinent. So their geography hasn't changed. It's their institutional arrangements that have changed, especially during the colonial era and in its aftermath. Math cultural explanations I think have some legs. But culture by itself, just as views and values that differ, also doesn't seem to explain things because those values seem to change a lot during the time as their interactions with institutional arrangements, organizations that matter. Now explanations like Pomeran, I think are a combination of luck and institutions. So he says, you know, Europe turned out to be lucky because they colonized the right places. And then it's the colonial institutions or colonial exploitation. So that's an institutional story. But once you dig deeper into the institutions, I think it's not colonialism or the resource extraction, which is what Pomerant emphasizes, but it's other side effects or more far reaching effects of institutions. The United States did not pull ahead of Peru and Mexico because Peru and Mexico had their gold extracted. That happened, but it did not set them that far back and did not put us onto a very growth oriented path in the 17th century. The divergence between the US and the rest, or between Britain and Southern Europe, between parts of India that industrialized in parts didn't. It's all related to industrializations, new ideas, new technologies. So you have to think of the institution's role in fostering this technological dynamism. And that's where I think a lot of the explanation lies. And you see that very clearly. It's the northeast of the United States, it wasn't the antebellum South. That's where you see the patents, that's where you see the new entrepreneur, that's where you see the new machines. US quickly takes over Britain as the industrial leader because it's introducing better technolog. So it's that kind of thing which is at the heart of the explanation that Jim Robinson and I propose in why Nations Fail. And my research proposes, and that's the one that I think is the right corner of the institutional argument that has the best possibility of explaining the data. Then you can also talk about the scientific revolution. Of course, that was an input and talk about the Industrial Revolution or the French Revolution. There are many institutional and other changes that fed into the ensemble of inclusive institutions and technological progress that really propelled the US And Then before then the UK forward.
- [36:47]
B
There's a critique of your thesis that goes something like this, that you and your co author are sort of too schematic in separating inclusive and exclusive societies. So that you know that it's odd to, for example, consider the rise of inclusive institutions in Britain or in colonial Virginia, separate from the extraction that's happening in the Caribbean, for example, that failing to see it as part of an integrated system makes that schema a little more wobbly.
- [37:20]
A
I do not disagree with that criticism. So we are being schematic in that way, but that is for the sake of clarity and partly also because we do not believe that there is one law like integration of extractive and inclusive elements. They are much more contingent. So you could have some amount of exploitation of the indigenous population in some countries together with inclusive institutions. You had inclusive institutions and slavery in the United States, but was the Northeast's industry really fueled by slavery in the South? Not so much. Perhaps a few inputs. British textile industry was the main beneficiary of the cotton that was cheaply grown with slave labor in the South. In Switzerland, you had amazing participatory institutions. But at first it was associated with mercenary war making. For a long time it was associated with gender inequality. Was that really important for the Swiss inclusivity? I don't think so. It was a bad side effect that persisted. So that's the sense in which I think right when we separate the inclusive and the extractive, we're simplifying things. But I don't think there is like a world system like unity between extraction and inclusivity. There were some interesting thesis like by Marxist social scientists like Emmanuel Wallerstein, Andre Gunder, Frank. I don't think any of them hit the spot. They are interesting things to discuss and contemplate, but I don't think the evidence supports anything that's so integrated, like a world system.
- [39:14]
B
We'll be back after a short break.
- [39:18]
A
What if you could explore places in the news like a reporter does? I'm Nicholas Wood, a former journalist with the New York Times and BBC. Fifteen years ago, I created the travel company Political Tours. Our small group trips led by top correspondents around the globe. Taiwan, Turkey, NATO's front line with Russia are just some of the issues we're exploring. Next year we'd like you to come and join us. To find out more, go to politicaltours.com that's politicaltours.com.
- [39:53]
B
Georgetown University Press presents Russian Military Thought by the renowned scholar Gudrun Persson. This new book offers novel insights into Russian military thought on doctrine and strategy from the Crimean War to Russia's full scale invasion of Ukraine. Persson dismantles the simplistic notion that Russian military thought is backward. Through archival research based on Russian language sources, she draws on theoretical insights from history and political science. Her nuanced qualitative analysis will provide readers with a better understanding of the current Russian leadership's mindset and the constraints that shape Russia's future possibilities. Russian Military Thought is available for purchase at Press, Georgetown. Edu and other selected bookstores. And now back to my conversation with Daron Acemoglu. We've talked a lot about technology already, but one technology that we haven't discussed is the nation state. And it spread in the 19th century and through the 20th century till it sort of took over the entire world. And you know, you see in the horrific war in Sudan, for example today and many other conflicts, the legacy of the sort of troubled adoption of the nation state. You know, when you're thinking about why countries fail, what role does the nation state and the difficulties of its adoption play?
- [41:19]
A
Well, look, I mean I think humans are tribal. They identify with an in group often it's not cast in stone. It changes over time. And I think education, debate, perspectives can change. A nation state has been a very important part of the equation for the last 200 years. But it's not like before the nation states, humans didn't kill each other. I think the evidence from archeologists is very clear that especially if you take the world wars out, humans used to kill each other at much greater rates than in the late 19th or 20th centuries. So I don't think we can blame humans proclivity for killing each other on the nation state alone. And I think the nation state has also got some achievements. I think state institutions that provide services and protect laws and introduce protections for people, I think that would have been quite a bit harder with village institutions. But of course the world wars cannot be understood without the nationalist fervor. So hopefully we'll be able to smooth out the edges of the nation state moving forward. And I think the best way of doing that is more global cooperation. I am not advocating or I'm not an optimist for a world government and universalism and everybody forgets that they are, you know, ethnicity, religion, history and becomes part of a world government. I don't think that's going to happen anytime soon. But the challenges that the world faces are largely global. AI pandemics, climate change, demographic change, nuclear non proliferation, multinationals. So we have to have global governance at some level, but we can only get there via the nation state. By the way, we can only have good nation state institutions if we start at the local level. So I think the way that I see good politics developing in the future, and one that limits polarization, which has become a real scourge of our time, is start from local communities, often intersecting communities, self government at the local community that percolates up to the nation state. And the nation states especially, once this polarization problem is contained, start building more global institutions consistent with their population's wishes and interests.
- [43:49]
B
We're going to get to the future very soon. But first the present. Just quickly. You know, we worked together on your last essay for Foreign affairs on the crisis of democratic capitalism. And as you wrote then, you see the current moment as one of pervasive crisis, marked by repression, turbulence and the disintegration of democratic institutions. What do you see as the sources of this disturbance?
- [44:16]
A
Well, look, I think even if we did not have Trump, this would be a uniquely turbulent time. Inequality has reached alarming levels. AI is going to disrupt everything one way or another. The world is aging as it has never done before. Most continents will have their populations declining within 10 years. Climate change will require huge adaptations in our urban design, in the way we produce energy, in the way that we produce food. And there are huge macroeconomic risks. Add to that China, US rivalry, Russia as a declining power lashing around to its neighbors, plus Trump destroying U.S. institutions and global cooperation, especially between Europe and the U.S. well, you know, I don't think you can imagine an even more tumultuous time than this. So this is ripe for crisis. I think we're going to have many crises. It's not just one crisis. The question is how do we navigate these very turbulent waters. And I think two elements we have to strengthen our institutions, starting from again local communities to the nation state and then some global cooperation. And we have to use technology. The if we use steer technology to be helpful when we are undergoing demographic change or make the energy sector less fossil fuel intensive and our urban designs much more sustainable, if we can use technology to provide new goods and services for an aging population, for a changing consumption pattern of the global community, if we can use AI in a more pro worker way so that it doesn't destroy jobs, but it actually makes workers more productive, that's a very big part of the solution. So this technology institutions nexus is critical for the next several decades during the.
- [46:20]
B
Pandemic, one of the indicators of how well a country could fare in weathering the pandemic was levels of trust in governments and institutions. You wrote in that essay for us about the sort of disastrous collapse in trust. Why has that trust ebbed and are there ways to rebuild it?
- [46:39]
A
This is actually. Perhaps you'll have me back again because this is the topic of my new forthcoming book in August entitled what Happened to Liberal Democracy? And I'll just parrot the message of that book in a very shortened form. Liberal democracy promised shared prosperity, high quality public services and voice to people on all sorts of things, starting again from local communities and all the way up to the nation state. It delivered on those for many decades and it flourished when it delivered and it created aspirations. And over the last four decades or so, it has failed. Inequality has skyrocketed. The quality of public service, from education to infrastructure to health, have been crumbling across the industrialized world, especially in the United States. And people are feeling increasingly that they don't have voice. It is imperative in this complex world that we use expertise from experts on questions like vaccines, central banking, rockets, whatever. But that doesn't justify in a democratic country, democratic society, that some sort of technocracy emerges and suppresses people's views. And that's exactly what we created also over the last four decades. So this three bedrock promises of liberal democracy have all been faltering. And I think that is why liberal democracy is in crisis. That is why trust in institutions, trust in journalism, trust in academia, all of them are lower. And trust in Congress, presidency and courts has collapsed. So the future, I think, unless we want something highly anti liberal and highly undemocratic, is to revive that promise of liberal democracy.
- [48:27]
B
You're calling for working class liberalism. What is that?
- [48:31]
A
So working class liberalism to me is the only way out. By that I mean a liberalism that still remains faithful to individual liberty, but in a way that's consistent with working class values, which means that people's views, whatever they are, are not suppressed. So we stay away from social engineering and too much top down imposition of cultural values. It prioritizes jobs and shares prosperity and it works with communities because liberal democracy, when it elevated local self government, worked with communities. And it's very important because that's where politics starts, that's where trust starts, that's where social networks are key for the spread of new ideas and new practices. So a working class liberalism is a template for a more community based and economically more egalitarian form of liberalism.
- [49:28]
B
Do you see in the recent successes of say, left populists like Zoran Mamdani in New York, any plausible iteration of your working class liberalism?
- [49:39]
A
Yes and no. So if I were to give a grade to Mamdani on three items that matter for me and for working class liberalism, he did well on one of them and he fails on two. He did very well. Well, okay. He did very well in terms of campaigning, which I'm leaving out. He's very charismatic, so he gets full grades on that. Kudos. But leaving the charisma aside, he did very well in focusing on bread and butter issues. And I think that's very, very important. But he made promises that are not realistic, that can only lead to further disappointment. So he cannot deliver on the things that he talked about. He cannot as a New York mayor. He cannot raise billions of dollars of tax revenue and redistribute it. He cannot make life affordable that's not under his control. And he cannot change some of the dynamics. Rent control is not going to be a solution to rents and house prices being expensive in New York. So there are a lot of things that are promise there that are not going to be realistic. The third bucket is that I think the failure of liberal democracy also coincides with a reordering in political alignments in the industrialized world. Across the industrialized world, not just in the United States, where center left, which used to be the party of the working class, became the party of the educated elite. You see that about who are the center left politicians and activists? They used to be trade unionists and blue collar workers. Now you don't see any of them. Who votes for whom? The working classes, Blue collar workers. Less educated workers used to vote for the central left. They don't anymore. They vote for the center right or the populist right. The educated, especially urban educated, vote for the center left. And that's not consistent with left liberalism prioritizing working classes. And Mamdani, for all of his flair, is a product of that milieu. So he's speaking to the educated elites of New York. His sensibilities are about that. And I think that's not going to have an appeal to workers in communities around the world. And it's also not going to kickstart a working class liberalism that is really concerned with shared prosperity and community in this broad sense. But it's a good start. Let's see whether the Democratic Party can build on it.
- [52:21]
B
When we're thinking about the current breakdowns and turmoil, we often look to the decades after World War II in the west in particular, as where you saw the rise of fairly stable democracies, welfare states, and the like as some kind of vanished idle. And I think there's something similar underlying the way in which sort of small northern European countries are often invoked as exemplars today of relative equality and good functioning. Do you see that period, those golden decades after World War II and indeed even sort of modern Scandinavian states as outliers or as potential models?
- [53:01]
A
Well, I do see them as potential models, but with idiosyncrasies that you have to take into account. First of all, indeed, these were the golden decades. There was shared prosperity, huge improvements in public services. People really participated in politics, especially local politics during those eras. But it wasn't just confined to Scandinavia. I mean, Scandinavian social Democratic or workers parties were great exemplar of this. But the kind of left liberalism that I'm describing as laying the institutional foundation for that period is also the same as New Deal liberalism. And the United States was as far from Scandinavian countries as you can imagine in the 1930s. And FDR formed a coalition very different in some ways than what you see in Norway or whatever. But it worked. I mean, it changed the face of politics. It's changed the economy, it's transformed the labor movement. It laid the foundation of much more shared prosperity. So New Deal liberalism was in the United States. It brought together the unions, the labor movement, the Dixiecrats, the southern conservative democrats, left leaning intellectuals, all of them together. So I don't see that as impossible. But obviously some things were easier in Scandinavia, by the way. They weren't that easy. Sweden was hugely unequal. It was non democratic. It had much worse labor relations than us ever did, many more frequent and militant strikes. Those things changed. Today we identify Sweden with this homogeneous cooperative society. Well, that's something that emerged after the 1930s. So in that sense, I don't think, you know, we can say social democracy or left leaning liberalism similar to the working class liberalism that I'm describing in some ways is only possible in homogeneous, you know, happy, shiny societies. Sweden only became that in that process. And by the way, today Sweden has the most radical neo Nazi party in power in Europe. No other, you know, AfD. We hear a lot about AfD or the reform Party. Well, the Swedish Democrats are the ones that have neo Nazi roots that are very clear. Why? Well, because Sweden, from 0% immigrant went to 15% immigrant in the course of about 10 years and it did not deal with those problems. So again, it shows how difficult the cultural changes that communities have to go through are when there is huge globalization or huge immigration changes. So we have to take those into account as well. So neither is it the case that Sweden is well placed to be the nexus of working class liberalism and the United States will remain polarized and can never create it. I think possibilities exist everywhere and mistakes are going to happen everywhere.
- [55:57]
B
Let's close with this. The critique you often hear now from those that consider themselves post liberal, and even indeed people who consider themselves liberal of liberalism, is that it failed by forsaking its focus on the common good for the sake of what people have called radical individualism, so to speak. As a liberal, which I sense you are, how would you suggest that societies can find that right balance between a sort of collective sense of the common good while still respecting the desires ambitions of individuals?
- [56:35]
A
So the way that I describe what I'm proposing, both as a justification for liberalism and liberal democracy and the way forward in the book is to say it is in the liberal tent, but it stretches it a little bit. And precisely because I think that radical individualism wasn't always part of liberalism and doesn't need to be part of liberalism. Individual rights are always key and they have to be protected. But that can be combined with an understanding of the value of community, both as something that defines people's norms and identities, and a value of community as a trusted group of other people with whom we share information, with whom you can reach compromise more easily. And that's the pathway to respecting the common good. Again, I think it's much harder to tell people you have your family and you have the universal common good for 8 billion people, but it's much easier to start from the community's common good and then from there on build to a broader society, to perhaps the nation state, and from the nation state to the global community. So I think that is the pathway that's feasible for the common good. And I think criticizing radical individualism and the imposition of radical individualism shouldn't be the confine of anti liberals. So there are anti liberals that have that sort of emphasis. Perhaps they fall into your post liberal category as well, or they fall into the reactionary category. But to them, every aspect of the liberal agenda and the protection of individual freedoms was wrong from the get go. To me, that was the most inspiring part of liberalism. But that doesn't mean that we should erase the common good or the community. And especially it doesn't mean that we should abandon inspiring goals such as shared prosperity.
- [58:27]
B
Thanks so much, Darren. We will look forward to exploring many of these ideas in future pieces and indeed to your forthcoming book. But thanks so much for your time.
- [58:35]
A
This was fantastic. Thanks for giving me the platform and for these fantastic questions. Thank you for listening. You can find the articles that we discussed on today's show@foreign affairs.com this episode of the Foreign Affairs Interview was produced by Mary Kate Godfrey, Rose Kohler and Kanish Tharoor. Our audio engineer is Todd Yeager. Original music is by Robin Hilton. Special thanks as well to Arina Hogan. Make sure you subscribe to the show wherever you listen to podcasts, and if you like what you heard, please take a minute to rate and review it. We release a new show every Thursday. Thanks again for tuning.