This year, almost 22 million college students will be indoctrinated in the incontestable virtues of inclusion and diversity. Problem is, most educational institutions aren’t inclusive. In fact, they’re just the opposite.
If you peruse any number of college brochures these days, the salient selling points seem to be inclusion, diversity, rock walls, food courts, and football. Pretty heady stuff. But not so healthy when you read Why Nations Fail: The Origins of Power, Prosperity, and Poverty. The authors, Daron Acemoglu and James A. Robinson, believe most educational institutions not very inclusive. They may preach it – but they don’t practice it.
Acemoglu, an MIT professor of economics, and Robinson, a professor of government at Harvard, start their story at Nogales, Arizona (USA) and Nogales, Sonora (Mexico) – two towns straddling the Rio Grande but inhabiting two very different worlds. Arizona residents are prosperous. Those in Sonora are not so lucky. The authors pick Nogales to pick apart various theories of culture-change, including geography and worldviews. Neither adequately explains Nogales. The key is two different kinds of institutions.
The Arizona and Sonora residents “live in a different world shaped by different institutions,” they write. Dissimilar institutions are the result of different histories. Spain extracted as much wealth as possible from Mexico for the benefit of Spain. Britain initially tried this, but soon established inclusive institutions that gave outsiders, colonists, a say. They served as dissenting voices often prompting what economist Joseph Schumpeter called creative destruction. Acemoglu and Robinson say this paves the way for the engines of prosperity. Inclusive institutions are disruptive in order to be innovative.
Mexico on the other hand established extractive institutions. They insulate themselves from dissenting voices, curtailing creative destruction. In the case of Mexico and Latin America, political institutions enable the elites controlling political power to choose economic institutions with few constraints or opposing forces. This enables elites to structure future political institutions, further enriching them (think: Putin). They consolidate their political dominance, resisting creative destruction and innovation.
This distinction between institutions is important as the authors say the U.S. is becoming a nation of extractive institutions. “Most educational institutions are extractive, as is most of Washington, DC.” They extract income from one subset of society to benefit a different subset. It’s a recipe for failure. Start with education.
Until recently, university academic officers have been free to extract exorbitant tuition fees from parents even though the ROI for students is meager. For instance, according to a recent Gallup survey, 96 percent of today’s professors are “extremely or somewhat confident” that they prepare students for the work force. A second survey indicates that just 11 percent of business leaders “strongly agree” with this. Too many educators insulate themselves from this damning evidence. It’s a recipe for failure in educational institutions, as predicted by the recent report, “The Coming Avalanche.”
A second example: Not too long ago, religion was considered the “queen science,” tying together the academic disciplines. That’s hardly the case today. Genuine inclusion would have educators asking whether excluding religion – not taking it seriously – is healthy.
The exception to the rule is the University of Southern California, at least during Steven B. Sample’s tenure as President from 1991 to 2008. Sample included a contrarian voice on the board. Becoming an inclusive institution is one reason why USC climbed from 51st (1991) to 26th (2008) in the U.S. News & World Report rankings.
We further see the advance of extractive institutions in the political world. In political institutions, leaders too often insulate themselves from creative destruction (think: gerrymandering). They extract taxes to redistribute to favored constituencies (think: earmarks). They rail against the 1% but join the club after leaving office (think: book deals and exorbitant speaking fees). Our political institutions resist dissenting voices.
Why Nations Fail is must-read for those serious about changing the world. It’s helpful for several reasons: 1) Few Americans think institutionally. Most believe that an aggregate of impassioned individuals can change the world. Why Nations Fail lays waste to this fallacy. 2) Institutions are not identical. A few are inclusive. Most are extractive. 3) The trend is toward institutions becoming extractive. Elites protect mutually beneficial networks. 4) Nations fail when their leading institutions become extractive. Student silliness is but one example.
Today’s students jibber jabber about inclusion but don’t know the genuine article. Inclusion relies on contrarians and invites creative destruction. That’s not happening on most college campuses. They preach inclusion but don’t practice it, a recipe for how nations fail.
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