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164 of 170 people found the following review helpful
*A full summary of this book is available here: An Executive Summary of Niall Ferguson's 'The Great Degeneration: How Institutions Decay and Economies Die'

The main argument: Over the past half-millennium the West has built up a substantial lead over other parts of the world when it comes to both economic power and material standard of living. Now, though, this lead is slipping away. Indeed, developing nations led by such powers as China and India are quickly closing the gap, as they experience impressive economic growth, while the West is stagnating. Many argue that this is the natural result of globalization (and the fact that major corporations are taking advantage of cheaper labor in developing nations). For Harvard historian and writer Niall Ferguson, however, there is something deeper going on here. For Ferguson, the closing of the gap between the West and the Rest has less to do with the rise of the Rest, as the decline of the West.

Specifically, Ferguson argues that it is the West's political, economic, legal and social institutions that have allowed it to gain the upper hand over the past 500 years or so, and that now these institutions are beginning to deteriorate (just as other nations increasingly copy what made the West successful in the first place). The result: Western stagnation, and the catching up of everyone else.

Ferguson identifies 4 primary institutions that account for the West's success over the past half-millennium: 1. Democracy; 2. Capitalism; 3. The Rule of Law; and 4. Civil Society. Each of these, the author argues, has eroded in the recent past.

Beginning with democracy, Ferguson argues that the deterioration of democracy in our time has not so much to do with the break-down of the social contract between the individual and the state, as the break-down in the contract between the present generation and future generations. Specifically, by taking on the astronomical amount of public debt that many Western governments have taken on over the past half-century, we have undermined our own growth and unjustly put future generations in hock. We have lived well at the expense of our progeny, and have set them up for failure.

With respect to capitalism, where once Western institutions led the world in making it easy for businesses to start-up and operate efficiently, now heavy and overly-complex laws and regulations stifle new businesses and send domestic corporations overseas. Western banks and financial institutions, the author argues, are not under-regulated, but poorly regulated. And what's more, they are not made to pay for their transgressions when they do breach the law (as witnessed, most recently, in the financial crash of 2008), thus they are invited to behave irresponsibly.

When it comes to the rule of law, where once the West did well to protect contracts and property rights, now tort law has allowed civil suits to run amok and choke the legal system. Meanwhile, copyright law now deeply favors the established over the up-and-coming, which has stifled innovation and progress. The Rule of Law has become the Rule of Lawyers.

When it comes to civil society, where once most Western citizens freely donated their time and money to worthy causes and charities, and flocked to join associations, clubs and organizations that promoted both civic-feeling and the public good, now citizens largely hide behind their televisions and computer screens and wait for the government to take care of the less fortunate and any and all public goods.

For Ferguson, unless we reverse the current deterioration of our institutions, we can expect our stagnation to continue (and we also run the risk of having our societies crash outright).

The book is well-written and, for the most part, well argued. However, at 150 pages (before notes), it is quite lean. Several of the points could have used additional defending, with additional evidence. Also, the author largely eschews any talk of where he believes the reforms in each of the institutions could and should begin. This is a significant oversight, in my mind. All in all, some good ideas, but more fleshing out of the material would have been helpful. A full summary of the book is available here: An Executive Summary of Niall Ferguson's 'The Great Degeneration: How Institutions Decay and Economies Die'
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158 of 172 people found the following review helpful
This is a review of "The Great Degeneration: How Institutions Decay and Economies Die" which is the kindle title of this work, and is no longer available on kindle.

The author is concerned about the "Degeneration of the West" into a "Stationary State" similar to that of China during the previous centuries. This he believes is due to the weakening of traditional civil institutions, crony capitalism, inefficient bureaucracy, and the decay of our legal system. Needless to say, this has drastic political and economic consequences for our society, with the widening gap of economic inequality being a symptom of the problem. Other symptoms are the rise of a welfare state that exploits those who work for those that have become "entitled". The abandonment of what Edmund burke called "The partnership between the generations", is also the abandonment of what is our true social contract. The excessive public and private debt is a symptom of a deeper problem; the breakdown of the generational social order.

For the rise of Europe Ferguson rejects the theories of Diamond (geographic factors), North and Wallace (transition to open access society), Max Weber (Protestant Capitalism) and Pomerants ("ghost acres"). The author argues that it is not so much as geographic and cultural factors (citing the two Koreas and the city of Nogales on the US-Mexican border), but rather the role of an inclusive elite vs. an exclusive elite with extractive institutions. He agrees with the argument of De Soto that dysfunctional institutions force the poor to live outside the law without title to the property they often "own". This is "dead capital" that cannot be used to increase wealth.

Ferguson argues that the cause of the economic meltdown of the banks was not lack of regulation but rather the inefficiency of the current laws and regulatory system that failed to give jail time to the miscreants that violated the laws. He also believes that greater expertise is needed by the regulators rather than strict rules; we need an experienced pilot with good judgment, not a mandatory auto-pilot that follows pre-programed rules and cannot adjust to changing conditions in an unknowable future.

Other chapters deal with the importance of a good legal system and the need to maintain a civil society. We seem to have done our best to kill a civil society by replacing it with a cradle to grave government welfare system, the danger of which was pointed out by the prescient De Tocqueville almost 200 years ago.

The author's conclusions are troubling, with a final reference to President Obama, as the "stationary mandarin" (the famous "you didn't build that" speech) who feels that government institutions and bureaucracies are the key to growth and not individual initiative supported by a good legal system, civil institutions, and competition. Other problematic issues raised is the enormous debt-burden in the West.

A major strength of this work is the extensive documentation cited in the notes.
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58 of 62 people found the following review helpful
on February 15, 2013
In this book Professor Ferguson maintains that economic prospect in the western world will continue to be gloomy if politicians fail to take radical reform of the four institutional pillars that have led the western world to maintain its economic hegemony since the sixteenth century. He dispels the widely-held proposition advocated by Max Weber and David Landes (P.27) that culture is a key independent variable to determine economic growth which differentiates economic trajectory of rich countries from the poor ones. Nor does he accept other plausible perspectives and interpretations (natural resources and forces, climate, and technoptimism) to account for the rise and fall of the western economy. To him, a holistic institutional transformation from extractive (limited access) to inclusive (open access) ones (P.30) is a panacea for the current stationary economy in the western world.

In terms of the four institutional pillars, Professor Ferguson maintains that key maladies with western institutions encompass meager regulatory enforcement in the financial sector, rotten rule of law, government encroachment in the civil society, and breakdown of social contract between the generations (Edmund Burke's concept of contract in which the current fiscal policies cannot inexorably create huge debts at the expense of the young and the unborn). Professor Ferguson disagrees with Keynesian economists who are advocates of low interest rate and issuance of public debt to stimulate economic growth.

In this book Professor Ferguson is quite pessimistic towards institutional degeneration in the western world because economic and political processes are dominated by rent-seeking elites (P.151) whereas non-western countries such as China have painstakingly achieved astonishing economic growth by downloading killer applications (best practices) of the western world.

This book traces the causes of economic stagnation of the western world from the institutional perspective. Professor Ferguson is an eminent historian and this book contains abundant and useful information about historical development of laws and institutions in the Anglo-American world.

This book is relevant to readers who are interested in understanding how institutions can influence political and economic development in the western world.
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82 of 94 people found the following review helpful
on June 18, 2013
Freedom, Choice and Institutions

In his latest book, "The Great Degeneration", Niall Ferguson brings up elements of his former books (The Ascent of Money, Civilization,) and updates them with mention of Nassim Taleb's "Anti-Fragile", Acemoglu and Robinson's "Why Nations Fail", Reinhart and Rogoff's" Growth in a Time of Debt", as well as earlier works by Hernando de Soto, Mark Buchanan , Charles Murray, and the classics "Lombard Street" by Walter Bagehot and "Democracy in America" by de Tocqueville.

What is missing, in my view, is the depth and degree of explanation present in his other works.

He has a consistent and refreshingly negative view of the evils of government over- regulation and policies that obstruct business formation. Our current dangerous path as a society based on dependency rather than competition driven growth also comes in for criticism.

He prefers choice and competition. This includes privatization of schools, less consumer protection, increased ease of business formation, and protection for investors and creditors.

In this book Ferguson discusses the elements that contributed to the growth and historical outperformance of the West and seem to be currently out of fashion. Regard for individual initiative and an open adaptable but limited and general rather than specific framework of law created efficiencies.

Civil structures and a sense of community effort were widespread before cradle to grave dependencies existed. Ferguson cites the decline of membership in clubs and voluntary service societies as a negative societal factor.

He seems to agree with those who support increased urbanization for productivity gains and the opportunities that specialization and differentiation offer, but there are no examples of the community or social efforts he says we need emerging in the urban environment.

These are all important topics and seriously considered. I just think they deserve a bigger book.
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26 of 30 people found the following review helpful
on June 20, 2013
Upon reviewing book reviews, the books which get all five stars and one stars, or mostly so, usually
seem to have struck some nail squarely on the head, with applause from some and howls of anguish from others.
After hearing Niall Ferguson speak (on the BBC's Reith lectures), I formed the opinion that he is intelligent and articulate, with a particular viewpoint. For those reasons alone, he is worth reading, even if his point of view does not aways agree with yours (or mine). The personal attacks by some reviewers merely illustrate the acuity of his insights.
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20 of 24 people found the following review helpful
Yesterday I finished this book. I think Ferguson makes it very clear that heavy debt (more than 100 trillion) for the United States, and proportionately the same or worse for most western European nations, Japan, and Australia make economic collapse of these countries a certainty since no one is willing to make the entitlement sacrifices necessary to fix the problem (The increase taxes necessary to rectify this would crush these economies). So my question to those who dislike Ferguson, do you not believe our debt crisis is likely to cause economic calamity, and do you think it can be fixed without us giving up a lot of government programs and benefits?
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22 of 27 people found the following review helpful
on June 11, 2013
A very valuable contribution to the study of institutions and how they can degenerate over time. Not very strong when it comes to proposing solutions.
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9 of 10 people found the following review helpful
on August 5, 2013
A powerful, perceptive, readable analysis of the underlying economic and political challenges faced by the U.S. and the global community. The book is also a clear warning of the dangers of weak leadership, political apathy and the failure of education. Ferguson should be required reading for Congress, the White House, regulatory agencies and every responsible American. Great work. Timely. Pertinent. Invaluable.
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10 of 12 people found the following review helpful
on October 24, 2013
The current book nothing more than (an edited?) transcript of a series of talks. With a normal font size you might get 80 pages of text in the book. There is nothing wrong with a thin book as long as it is clearly positioned by the publisher. In this case I think the publisher is seriously misleading potential readers. Charging $20 for a thin book that must have taken something like three weeks to complete just shows that the author and the publisher is out to make a quick buck.

The author is a historian, but this book is a very personal attempt to provide some reasons for the relative decline of the West. His focus is on the US, but some of his reasons are also applicable for western Europe. The reasons provided feels a bit ad hoc and one is left wondering why these reasons and not others. Still I have respect for the author and it is an interesting reading.

The book is also full with references to important books about political economy (broadly conceived). These are not really academic references, but are meant for the serious reader that want to learn more. Most of these references lead to interesting books well worth reading.

There are several reviews here on amazon that trashes the book because the author is a conservative. Those partisan reviewers are not worth listening too. One of the factors that the author deals with is the escalating costs of the legal system, that is not clearly a right-wing issue. In any case, whether you are right-wing or left-wing, you should read books in the other camp. Trashing the book only because it belongs to the other camp is silly.

Had this book been subtitled "A historian's view on what is wrong with the USA" and had it been priced at $10-12 dollars, my rating would have been four stars. Right now I would rather recommend the author's Civilization: The West and the Rest. That book is a product of research and summarises years of work and knowledge.
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4 of 4 people found the following review helpful
This book references ideas that I have already found in other books that I have read. (Maybe I should stop buying books based on Amazon's recommendations, because this is happening a bit too much.)

1. Antifragile: Things That Gain from Disorder (Incerto) Nassim Nicholas Taleb.
2. Bowling Alone: The Collapse and Revival of American Community Robert Putnam.
3. The Collapse of Complex Societies (New Studies in Archaeology) Joseph Tainter.
4. Adapt: Why Success Always Starts with Failure Tim Harford.

The third of the books that I have mentioned (Tainter) did not deal with the collapse of civilizations in real time, and that is what this book *appears* to make an attempt at doing.

There are two novel things that I found in this book:

1. It does deal with something like that (he spends a lot of time on the United States)-- and that is basically what this book brings to the table (i.e., that is different to all the other books that I have read on Topics Like This).

2. It does get into the details of the long, complex, obscurantist piece of legislation known as the Dodd-Frank Act.

When I got to the end of this brief book, I came up with two questions.

1. (With a nod to the Empiricists.) If some society somewhere forgets what it learned at its founding, will that be the first time that it has happened? And so what? Is there anything that really needs explanation, or is this just an empirical fact? Does it do any good to invest so much time in explaining something that happens as a matter of course?

2. (With a nod to Tainter.) Ok, so some civilizations/ societies come up with questions that they cannot solve. Was that news? Was the fact that financial regulation is too complex for countries to handle unpredicted/ unpredictable?

What is this author's point? He breezes by so many topics, that it easy to get lost. Is it voluntary organizations? Is it school vouchers? Is it the results of charter schools versus state schools? Is it democracy vs. authoritarian government? Is it the precipitation and creation of financial crises? I just can't decide. And neither can this author.

There is a lot of discussion of the declining position of the United States governance. But there are some problems with his analysis in that sense:

1. The author chooses surveys. Those are notoriously unreliable tools, because the people who participate in them are self selected.
2. Among the surveys that he chooses, he presents them in a misleading way. One example is where he demonstrates that some number of African countries have improved governance while the US is falling behind its peers in the same categories. But that is like saying that you have four women, ages 18, 19, 75, and 76. Yes. strictly speaking the 19 year old is older than the 18 year old and the 75 year old is younger than the 76 year old. But most men would choose the first two women and not the last two-- even if the older of the youngest is technically a bit older than the youngest of the youngest. Hong Kong and Singapore are ahead of the United States in terms of governance, but this is by some number of parts out of one hundred as compared to the African cases-- which would take many centuries to catch up, even at the current rates of change.

Verdict: I recommend this book at about the price of $1 plus shipping. It is not worth the price that I paid for it new. It's just a bit too unfocused and tries to deal with too many things. The aforementioned books deal with issues that are covered in this book-- but at book length.
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Customers who viewed this also viewed
The Ascent of Money: A Financial History of the World
The Ascent of Money: A Financial History of the World by Niall Ferguson (Paperback - October 27, 2009)

Civilization: The West and the Rest
Civilization: The West and the Rest by Niall Ferguson (Paperback - October 30, 2012)


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