How much is entrepreneurship predetermined by family background? According to a new study,
Parent Role-Modelling
recent papers have collectively suggested that entrepreneurship might be more predetermined than previously thought – entrepreneurship education has been proven to be effective in primary school (Huber et al 2014) and, to a lesser extent, in secondary school (Elert et al 2015), but not at all when individuals are older, that is, students (Oosterbeek et al 2010) or adults (Fairlie et al 2015). Moreover, strong intergenerational associations in entrepreneurship have attracted considerable attention. While part of this relationship has been shown to be genetic (Nicolaou et al 2008), parental role-modelling appears to be the main driver of the intergenerational association in entrepreneurship (Lindquist et al. 2015). Additionally, exposure to a dense entrepreneurial environment during formative years also increases the likelihood of entry into entrepreneurship (Guiso et al. 2015).
So the policy-relevant questions arise: To what extent is entrepreneurship predetermined? Have we spent (public) funds wisely by implementing policy measures and education aimed at changing the behaviour of adult people?
In a recent paper, we assess the predetermination of entrepreneurship outcomes by calculating and analysing sibling correlations (Lindquist et al 2016). We argue that sibling correlations are more complete and precise measures of predetermination, including the importance of genes, family background, and neighbourhood effects as determinants of entrepreneurship. Sibling correlations have been used before to study outcomes other than entrepreneurship and provide much broader measures of the importance of family background and neighbourhood effects than intergenerational associations (Solon 1999). Their interpretation is also straightforward – the higher the sibling correlation, the larger the importance of family background.
Their results?:
25% of the variance in individuals’ decisions to become self-employed is explained by family background and community influences;
For incorporation, this is close to 35%;
These percentages are slightly higher when we consider measures of successful entrepreneurship such as above median years of self-employment and incorporation;
Brother correlations are always larger than sister correlations;
The largest correlation is for males with above median years of incorporation, which is close to 50%;
Mixed sibling correlations are consistently smaller than same-sex correlations.
Parental entrepreneurship status is quite important;
Parental education and income matter much less; and,
Family structure and immigrant status do not matter.
Parental self-employment is a prime explanatory force in individual self-employment, but not incorporation; and
Parental incorporation explains individual incorporation best, but not self-employment.
Between 56–78% of the sibling correlations in self-employment; and
Between 38–46% of the sibling correlations in incorporation.
The researchers conclude “that parental entrepreneurship and genes are the two most important factors generating sibling similarities in entrepreneurship.” Policy wise, the authors explain that “children appear to be able to learn about entrepreneurship through their family and community environment, which implies that it may be possible to teach entrepreneurship to young people.”
He recently sat down with economist Tyler Cowen for a segment of Conversations with Tyler at GMU’s Mercatus Center. The interview is fascinating as they discuss Henrich’s work on cultural evolution and its implications for both today and the future. What perhaps excited me the most was Henrich’s discussion of his work-in-progress on marriage norms and the development of Western individualism:
In my latest project I’m really looking at the kind of spread of the Western church into Europe and how it transformed the social structure in ways that I think led to individualism, it led to a different kind of cultural psychology that would eventually pave the way for secular institutions and economic growth. The church is the first mover in that account…When the church first began to spread its marriage-and-family program where it would dissolve all these complex kinship groups, it altered marriage. So it ended polygyny, it ended cousin marriage, which…forced people to marry further away, which would build contacts between larger groups. That actually starts in 600 in Kent, Anglo-Saxon Kent. Missionaries then spread out into Holland and northern France and places like that. At least in terms of timing, the marriage-and-family program gets its start in southern England.
This project is in its early stages (according to the email Henrich sent me), but it’s something I’m greatly anticipating. The entire interview is worth watching/listening to. Cowen provides both insightful feedback and even pushback, making the discussion a productive one. Check it out.
Does geography contribute to unemployment? “In a paper published in 1965,” reports The Economist,
John Kain, an economist at Harvard University, proposed what came to be known as the “spatial-mismatch hypothesis”. Kain had noticed that while the unemployment rate in America as a whole was below 5%, it was 40% in many black, inner-city communities. He suggested that high and persistent urban joblessness was due to a movement of jobs away from the inner city, coupled with the inability of those living there to move closer to the places where jobs had gone, due to racial discrimination in housing. Employers might also discriminate against those that came from “bad” neighbourhoods. As a result, finding work was tough for many inner-city types, especially if public transport was poor and they did not own a car.
Is there any data to back up this theory?
A new paper,[ref]This is a 2014 article.[/ref] published by the National Bureau of Economic Research…looks at the job searches of nearly 250,000 poor Americans living in nine cities in the Midwest. These places contain pockets of penury: unemployment in inner Chicago, for instance, is twice the average for the remainder of the city. Even more impressive than the size of the sample is the richness of the data. They are longitudinal, not cross-sectional: the authors have repeated observations over a number of years (in this case, six). That helps them to separate cause and effect. Most importantly, the paper looks only at workers who lost their jobs during “mass lay-offs”, in which at least 30% of a company’s workforce was let go. That means the sample is less likely to include people who may live in a certain area, and be looking for work, for reasons other than plain bad luck.
For each worker the authors build an index of accessibility, which measures how far a jobseeker is from the available jobs, adjusted for how many other people are likely to be competing for them. The authors use rush-hour travel times to estimate how long a jobseeker would need to get to a particular job.
If a spatial mismatch exists, then accessibility should influence how long it takes to find a job. That is indeed what the authors find: jobs are often located where poorer people cannot afford to live. Those at the 25th percentile of the authors’ index take 7% longer to find a job that replaces at least 90% of their previous earnings than those at the 75th percentile. Those who commuted a long way to their old job find a new one faster, possibly because they are used to a long trek.
Governments could seek to “help workers either to move to areas with lots of jobs, or at least to commute to them. That would involve scrapping zoning laws that discourage cheaper housing, and improving public transport. The typical American city dweller can reach just 30% of jobs in their city within 90 minutes on public transport. That is a recipe for unemployment.”[ref]AEI’s James Pethokoukis has a good piece expanding on this.[/ref]
indicates that the gains from trade and migration are tremendous and that the world stands to benefit greatly from their further liberalisation (Desmet et al. 2016). The problem with virtually all quantitative and empirical evaluations of trade and migration is their static nature. They completely ignore the dynamic gains from globalisation. As we will later discuss, these dynamic gains quantitatively dwarf any short-run costs.
After providing the theory of growth behind trade and migration, the researchers present their jaw-dropping conclusions:
Completely lifting all migration restrictions would increase real world output by 126% in present discounted value terms. Since such a policy may be unrealistic, consider instead a reform that liberalises migration so that 10% of the world population moves at impact. This would yield a present discounted value increase in real world output of 14%. Such a reform would cause some extra congestion in Europe and the US, implying that average welfare would increase by 9%, a smaller but still impressive figure. It is hard to think about any other policy that could readily be applied at the world level for which estimated benefits are as large. Migration is uniquely powerful in generating positive effects. In economic terms, having an open-door policy is a no brainer, not because of some abstract theoretical arguments, but because the measurement of the relevant forces tells us so.
Turning back the clock on trade would have equally dire consequences. Increasing trade costs by 40% would lower real world output by 30% in present discounted value terms. Although globalisation might create losers in the short run, allowing the free flow of goods and people across regions and countries is still one of the best ways we know to ensure our long-run wealth and well-being.
These numbers are astronomical. The potential good that can come from liberalized trade and migration makes the rising nationalism all the more disheartening.
I’ve mentioned Swedish statistician Hans Rosling in a couplepostshere at Difficult Run. A recent article in Nature[ref]Thanks to Robert Couch for the article.[/ref] takes a look at the influence Rosling is having throughout the world as a public intellectual. His graphics-based presentations[ref]See his site Gapminder.[/ref] of world poverty and health have helped audiences visualize the major changes that have taken place over the last couple centuries. Cognitive scientist “[Steven] Pinker admires the animations that Rosling uses. One, which depicts countries as bubbles that migrate over time according to wealth, life span or family size, allows viewers to grasp multiple variables simultaneously. “It’s a stroke of genius,” Pinker says. “He gets our puny human brain to appreciate five dimensions.”” Rosling’s approach was undoubtedly influenced by his feeling that
neither his students nor his colleagues grasped extreme poverty. They pictured the poor as almost everyone in the ‘developing world’: an arbitrarily defined territory that includes nations as economically diverse as Sierra Leone, Argentina, China and Afghanistan. They thought it was all large family sizes and low life expectancies: only the poorest and most conflict-ridden countries served as their reference point. “They just make it about us and them; the West and the rest,” Rosling says. How could anyone hope to solve problems if they didn’t understand the different challenges faced, for example, by Congolese subsistence farmers far from paved roads and Brazilian street vendors in urban favelas? “Scientists want to do good, but the problem is that they don’t understand the world,” Rosling says.
The whole article is worth reading. While some of Rosling’s academic colleagues may not appreciate his work, I certainly do. Combating ignorance about the state of the world is a worthwhile endeavor.
You can test your knowledge of the world with this quiz.
The relaxation of emigration restrictions in the Soviet Union and the State’s subsequent collapse led to a large exogenous shock to Israel’s immigrant flows because Israel allows unrestricted immigration for world-wide Jews. Israel’s population increased by 20 percent in the 1990s due to immigration from the former Soviet Union. These immigrants did not bring social capital that eroded the quality of Israel’s institutional environment. We find that high quality political institutions were maintained while economic institutions improved substantially over the decade. Our case study finds that the immigrants played an active role in this institutional evolution and we also employ a synthetic control to verify that it is likely that the institutions improvement would not have occurred to the same degree without the mass migration.
The authors conclude,
This finding in no way proves that in every case unrestricted migration would not harm destination country institutions. However, as a complement to Clark et. al. (2015) that found in a-cross country empirical analysis that existing stocks and flows immigrants were associated with improvements in economic institutions, it should increase our skepticism of claims that 26 unrestricted migration would necessarily lead to institutional deterioration that would destroy the estimated “trillion dollar bills” that the global economy could gain through much greater migration flows (pgs. 25-26).
Chiwetel Ejiofor as Solomon Northup in 2013’s ’12 Years a Slave’
A new article over at The Chronicle of Higher Education provides an excellent review of a controversy that has been brewing over the last couple years that should be of interest to those who care about history and economics. The controversy surrounds the new history of slavery and capitalism, marked by books like Johnson’s River of Dark Dreams, Beckert’s Empire of Cotton, and especially Baptist’s The Half Has Never Been Told. The main claim among these historians is that slavery was essential to American capitalism and the emergence of the Industrial Revolution. Economists and other social scientists are not convinced. “Most economic historians,” the article states,
have argued that “cotton textiles were not essential to the Industrial Revolution,” and that cotton production did not necessarily depend on slavery, according to [Dartmouth economist] Douglas A. Irwin…Summarizing economists’ thinking…Irwin points out that cotton was grown elsewhere in the world without slaves. Cotton production continued to rise in the United States even after slavery was abolished. “In this view, the economic rise of the West was not dependent on slavery,” Irwin says, “but came about as a result of an economic process described by Adam Smith in his book The Wealth of Nations — a process that depended on free enterprise, exchange, and the division of labor.”
Economists see the problem with the new histories on slavery as
stem[ming] in part from how the discipline of history has developed. In the ’60s and ’70s, historians and economists battled over economic history. But as historians turned toward culture, and economists became more quantitative, economic history increasingly became just a subfield of economics. For a variety of reasons, including the 2008 crisis, historians are turning their attention back to financial matters. But they “did not build up their tools in order to understand the material world,” says Rhode. “And they carry along certain ideological positions which they hold fervently and are not willing to test.” Historians, he says, “can’t be making stuff up.”
Historians, however, see economic history as too reductive:
“The problem is the economists left history for statistical model building,” says Eric Foner, a historian of 19th-century America at Columbia University. “History for them is just a source of numbers, a source of data to throw into their equations.” Foner considers counterfactuals absurd. A historian’s job is not to speculate about alternative universes, he says. It’s to figure out what happened and why. And, in the history that actually took place, cotton was extremely important in the Industrial Revolution.
Some economists who attack the new slavery studies are “champion nitpickers,” adds Foner…”They’re barking up the wrong tree. They’re so obsessed with detail that they don’t really confront the broader dynamics of the interpretations. Yes, I’m sure there are good, legitimate criticisms of the handling of economic data. But in some ways I think it’s almost irrelevant to the fundamental thrust of these works.”
The article is an excellent introduction to an important controversy in historical scholarship. Check it out.
Take a hard look at the graph above. I’ve discussed marriage and family structure a lot here at Difficult Run. The social science is pretty clear: marriage matters for children’s well-being. Concerns over immigration often revolve around culture: do immigrants assimilate well? What kind of foreign cultural elements are they bringing with them? I’ve addressed cultural diversitybefore. And according to the data above, intact families are yet another positive contribution made by immigrants. According to researcher Nicholas Zill,
Indeed, the latest data from the Census Bureau on the family living arrangements of U.S. children show that 75 percent of immigrant children live in married-couple families, compared to 61 percent of children of U.S.-born parents. The figure is the same for immigrant children who were born in this country as for those who were foreign-born.4 Children of immigrants are less likely than native children to be living with divorced, separated, or never-married mothers: 14 percent lived with their mothers only, compared to 26 percent of children of U.S.-born parents.
Furthermore, immigrant parents stay together despite the fact that many are living below or close to the poverty line. Half of U.S.-born children of recent immigrants are in families that are poor or near poor, with nearly a quarter living in families below the poverty line. The circumstances of foreign-born immigrant children are worse: 57 percent are in families that are poor or near poor, with 29 percent living in families below poverty. The comparable figures for native children are 38 percent in poor or near-poor families, with 18 percent below the poverty line.
Zill concludes that “we should…recognize the strong work ethic and robust family values that many immigrant families exemplify. Far from undermining our traditions, they may be showing us the way to “make America great again.””[ref]Especially since family structure matters more in rich countries.[/ref]
I guess it’s a work of political theory, but for the most part it reads as history with a dash of evolutionary psychology. In exploring the origins of political order, Fukuyama starts by going way, way back before pre-history to make his first essential point: biology matters. In this regard, he’s echoing Steven Pinker’s The Blank Slate: The Modern Denial of Human Nature, but the relationship here is fairly specific. According to Fukuyama, the primary problem with thinkers like Rousseau or Hobbes isn’t that they got the particulars of pre-social humanity right, it’s that the concept of “pre-social humanity” is an oxymoron. Humans, as the expression goes, are social animals. And that means we’re political animals. Politics didn’t come later–after the invention of writing or agriculture –but have been there from the beginning, inextricably intertwined with our development of speech. So, from this “biological foundation of politics”, Fukuuama draws the following propositions:
human beings never existed in a presocial state
natural human sociability is built around two principles, kin selection and reciprocal altruism
human beings have an innate propensity for creating and following norms or rules
human beings have a natural propensity for violence
human beings by nature desire not just material resources but also recognition
After laying this groundwork, Fukuyama than goes on to describe in broad strokes the evolution of human societies from bands to tribes to states. He invokes principles from biological evolution explicitly here, arguing that societies compete against each other in ways that are sometimes (but not always) analogous to competition between animals. This analogy shouldn’t be taken too far: there are treacherous debates about whether organisms or genes compete, for example, and about the viability of group selection, but Fukuyama’s primary concern is actually with the differences between biological and political evolution, and so those nuances are forgiveably overlooked.
As for the bands -> tribes -> states progression, the basic notion is that bands (groups of no more than 100 or so at the most) are held together by actual blood relation. Tribalism is a social innovation that allows bands to come together by claiming (real or fictitious) common descent. Two bands might have the same patriarch or matriarch, and so in the face of a common enemy they can rapidly coalesce into a single unit. This capacity means that it’s fairly easy for tribal societies to defeat band societies, because every time a solitary band and a band that’s part of a tribal society come into conflict, the latter can call upon as many tribal allies as needed to win the fight. As a result almost no band societies are left in existence.[ref]Those that do remain are in remote locations where the benefits of tribalism do not apply.[/ref]
But tribal segments are intrinsically unstable. Fukuyama cites an Arab expression: “Me against my brother, me and my brother against my cousin, me and my cousin against the stranger.” When there is no stranger to confront, the cousins go to war. When there is no cousin on the horizon, the siblings feud. And so states are yet another progression–as superior to tribes as tribes are to bands–because of their ability to support not only temporary, contingent cooperation but permanent, universal cooperation.[ref]Not that states are Utopias, of course, but simply that in a functioning state predation–murder, theft, and rape–are dangers the state opposes instead of relying on individuals to provide their own deterrence and defense.[/ref]
Another argument he makes–and this one seemed just a little tangential but it’s interesting enough to go into–can be summarized as: ideas matter. Fukuyama says, for example, that “It is impossible to develop any meaningful theory of political development without treating ideas as fundamental causes of why societies differ and follow distinct development paths” and that ideas are “independent variables.” He’s reacting to the idea–exemplified in Marx–that to understand history in general and political development in particular, all you need are the physical factors: how much stuff do people have and what do they need to do to get more of it? He’s right to reject this idea. It’s wrong. But I think that–along with lot of other folks these days–he drastically overstates the extent to which anybody actually believes this.
It’s true that Economists talk about Homo economicus (the model of human beings as perfectly rational, self-interested agents), but never without an ironic edge. They know[ref]Maybe I should say, we know, but I’m never sure if an MA in economics makes one an economist or not.[/ref] that this model is broken and doesn’t explain everything. That’s why the leading edge of critiquing human rationality intersects with economics: behavioral economics. Give economists some credit, they’ve already come up with bounded rationality as a fall-back, and you don’t do that unless you know that (unbounded) rationality is broken. Not that they’re satisfied with bounded rationality either, but economists are in the business of making models of human behavior and “all models are wrong.” Most of the folks who seem confused about this fact aren’t the economists, but the folks outside the discipline who don’t seem to be aware of the fact that economists are aware that their models are flawed.
Now, to Fukuyama’s main point: are ideas “independent variables”? I don’t think so. If Newton hadn’t figured out gravity, would some other clever chap have come along and figured it out by now? Probably so. I think that in most cases if you take out one particular genius, some other genius sooner or later comes to the same–or a very similar–realization. There’s no way to test it, but that’s my hunch. In fact, the whole business of a singular genius inventing this or that is often a delusion to begin with. Most of the really big breakthroughs–evolution and calculus come to mind first, but there plenty of others–were invented more or less simultaneously by different people at similar times.[ref]It turns out there’s a name of this: multiple discovery theory. I love Wikipedia so much.[/ref] This is strong evidence to me that something about the historical context of (for example) Darwin and Wallace or Newton and Leibniz strongly directed people towards those discoveries. Which, if true, means that scientific discoveries are emphatically not independent. I have a hunch that’s what’s true of science is probably true to some degree of non-scientific ideas as well. If Marx had never been born, would we have Marxism? Probably not, but we’d probably have something pretty darn similar. (After all, we’d still have Engels, wouldn’t we?) It’s not like collective ownership is a new idea, after all. We’ve had the Peasant’s Revolt and the Red Turban Rebellion and many, many more. Take that basic idea, throw in a little Hegel (Marx just retrofitted Hegelianism) and presto: Marxism. If Marx hadn’t done it, and Engels hadn’t either, someone else would probably have done something similar. Maybe even using Hegel.
I don’t want to overstate my rebuttal to Fukuyama’s overstatement, so let’s pull back just a bit. I’m saying it’s probable that–in a world without Marx–someone else invents an ideology pretty close to Marxism. But does it take off? Does it inspire Lenin and Stalin? Does it lead to Mao and Castro? Do we still have the Cold War? I have no idea. And, while we’re at it, I’m not saying that if you didn’t have Shakespeare, someone else would have written Romeo and Juliet. I think that’s pretty absurd. My argument has two points: first, there’s interaction between ideas and physical contexts. Neither one is independent of the other. Second, human society is a complex system and that means it’s going to have some characteristics that are robust and hard to change (stable equilibria) and others where the tiniest variation could give rise to a totally different course of events (unstable equilibria). Maybe there was something inevitable about the general contours of socialism such that if you subtract Marx, and then subract Engels too, you still end up with a Cold War around a basically capitalist / socialist axis. Or maybe if even a fairly trivial detail in Marx’s life had changed, then Stalin would have been a die-hard free market capitalist and the whole trajectory of the post World War II 20th century would have been unrecognizable. I don’t know. I just do know that–just as ideas aren’t merely the consequences of physical circumstances–they also aren’t uncaused lightning bolts from the void, either. Ideas and the physical world exist in a state of mutual feedback.
But the primary concern of the book is this question: how do political order arise? For Fukuyama, political order has three components:
State building
Rule of law
Accountable government
His account is contrarian basically from start to finish, but never (to my mind) gratuitously so. He argues, for example, that instead of starting with the rise of liberal democracy in the West, the key starting position is ancient China, the first society to develop a state in the modern sense. On the other hand, China never developed a robust rule of law. It was rather rule by law, a situation in which the emperor was not constrained by the idea of transcendent laws (either religious or, later, constitutional) and therefore China’s precocious, early state became as much a curse as a blessing:
[P]recocious state building in the absence of rule of law and accountability simply means that states can tyrannize their populations more effectively. Every advance in material well-being and technology implies, in the hands of an unchecked state, a greater ability to control society and to use it for the state’s own purposes.
Fukuyama’s historical analysis is far-reaching. He spends quite a lot of time on India and the Middle East as well. At last he turns his analysis on Europe where–quite apart from the conventional East / West dichotomy–he goes country-by-country to show how the basic problems confronted by states in China, India, and the Middle East also sabotaged the development of most European states. France and Spain became weak absolutist governments with state building and rule of law, but no accountability. Russia became a strongly absolutist government. The difference? The central rules of Spain and France managed to subvert their political rivals (the aristocracy), but only just barely. In Russia, the czars completely dominated their political rivals, ruling with more or less unchecked power.
Fukuyama spends a lot of this time on England, specifically, which he holds up as a kind of lottery winner where all sorts of factors that went awry everywhere else managed to line up correctly. And the story he tells is a fascinating one, because he inverts basically everything you’ve been taught in school. Here’s a characteristic passage where he summarizes a few arguments that he makes at length in the book:
[T]he exit out of kinship-based social organization had started already during the Dark Ages with the conversion of Germanic barbarians to Christianity. The right of individuals including women to freely buy and sell property was already well established in England in the 13th century. The modern legal order had its roots in the fight waged by the Catholic church against the emperor in the late 11th century, and the first European bureaucratic organizations were created by the church to manage its own internal affairs. The Catholic church, long vilified as an obstacle to modernization, was in this longer-term perspective at least as important as the Reformation as the driving force behind key aspects of modernity. Thus the European path to modernization was not a spasmodic burst of change across all dimensions of development, but rather a series of piecemeal shifts over a period of nearly 1,500 years. In this peculiar sequence, individualism on the social level could precede capitalism. Rule of law could precede the formation of a modern state. And feudalism, in the form of strong pockets of local resistance to central authority, could be the foundation of modern democracy.
It’s a fascinating argument–just because it’s original and well-argued–but I also found it convincing. I think Fukuyama is basically correct.
So a couple more notes. First, there are basically two problems that Fukuyama sees consistently eroding political order, and both of them go back to the biological foundations of politics. The first is what he calls repatrimonialization. To keep things simple, let’s just say “nepotism” instead. The idea is that the band-level origins of human nature never go away, and the temptation to use the state’s authority to enrich one’s own kin is omnipresent. His discussion of the Catholic church’s invention of the doctrine of celibacy to successfully stave off this threat (bishops kept trying to pass on their callings to their children before that doctrine was created) and the unsuccessful attempts of the Mamluk Sultanate to use slave soldiers to stave off this threat (eventually the slave soldiers grew so politically powerful that they “reformed” the prohibitions against passing on property) are some of the most historically illuminating in the book.
The second problem is human conservatism. Fukuyama doesn’t mean in the partisan sense. He’s referring to our tendency–a universal aspect of human nature–to invent and then follow norms and laws. The problem here is that once we invent our laws, we stick to them. And when circumstances change, the norms/laws (and institutions) should change too, but humans don’t like to do that. So one of the #1 causes of the downfall of political order is a historically successful state proving incapable of reforming institutions to meet a changing environment due to sheer inertia. The classic example is pre-revolution France, and here Fukuyama finds a convention with which he has no quarrel:
We have seen numerous examples of rent-seeking coalitions that have prevented necessary institutional change and therefore provoked political decay. The classic one from which the very term rent derives was ancient regime France, where the monarchy had grown strong over two centuries by co-opting much of the French elite. This co-option took the form of the actual pruchase of small pieces of the state, which could then be handed down to descendants. When reformist ministers like Maupeou and Turgot sought to change the system by abolishing venal office altogether, the existing stakeholders were strong enough to block any action. The problem of venal officeholding was solved only through violence in the course of the revolution.
The second note I wanted to make was about partisanship. First, it’s important to note that although Fukuyama celebrates the rise of modern liberalism in England, he’s not promoting English exceptionalism. He spends a lot of time talking about what he calls “getting to Denmark.” His point there is that Denmark is also a widely-respected stable, modern, prosperous democracy and it didn’t follow the trajectory of England. The point is that he’s not saying: everyone, copy the English. Although he traces the origins of liberalism the farthest back in time in England, he specifically notes that if Denmark could find its own way into liberalism without retracing that path: so can other nations.
This is an important point, because Fukuyama is dealing in comparative politics, and he has no problem drawing rather sweeping (albeit justified, in my mind) generalizations when contrasting, for example, India and China. This is the kind of thing that anyone in my generation or younger (young Gen-X / Millennials) has been trained to reflexively reject. If you compare societies, it’s because you’re a racist. Given that Fukuyama is comparing societies–and that he arguably has the most praise for the English in terms of the philosophical origins of modern liberalism–there is no doubt in my mind that he’s going to be (has been) attacked as a kind of apologist for white supremacy, etc.
And that’s not true. First, because as I said he’s adamant about the fact that other nations can (and have) found their way to liberalism without imitating all aspects of English (let alone European) culture, society, or politics. Second, because he has plenty of non-European success stories. (Unfortunately, those are mostly from his second volume, since this one only goes up to the French Revolution and so doesn’t cover the explosion of democracy world-wide since that time.) Third, and finally, because he’s more than willing to look at pros and cons of differing systems. For example, going back to China and their problem with despotism, here’s a comment he makes towards the end of the book:
An authoritarian system can periodically run rings around a liberal democratic one under good leadership, since it is able to make quick decisions unencumbered by legal challenges or legislative secondguessing. On the other hand, such a system depends on a constant supply of good leaders. Under a bad emperor, the unchecked powers vested in the government can lead to disaster. This problem remains key in contemporary China, where accountability flows only upward and not downward.
This is the kind of clear-eyed, open-minded analysis that I think we need more of, not less of. It’s hard to argue, for example, with the success of S. Korea in leap-frogging from despotism to liberal democracy. There’s no reason–in principle–that China could not do something similar. (Other than problems of scale, that is.)
So here are my final thoughts. First: this is a fascinating book and it’s a lot of fun to read. It’s full of interesting history along with interesting theorizing. Second: I am convinced by Fukuyama’s arguments. And lastly, I have a lot of respect for his approach. He’s a centrist, and so he’s going to tick some people off for praising the kinds of things that radicals like to attack. If you think liberal democracy is the devil, Fukuyama is an apologist for Satan. On the other hand, it would be entirely wrong to dismiss him as a partisan hack. He interacts with Hayek a lot, for example, but this includes a mixture of praise on some points and also staunch criticism on others. He’s willing to laud capitalism (as the evidence warrants, I might add) but also to tip some of the rights sacred cows. “Free markets are necessary to promote long-term growth,” he says, but finishes the sentence with, “but they are not self-regulating.” He also savages the small-government obsession of the right, arguing that if you like small government, maybe you should move to Somalia. He’s not just ridiculing the right in that case, however, but pointing out that:
Political institutions are necessary and cannot be taken for granted. A market economy and high levels of wealth don’t magically appear when you “get government out of the way”; they rest on a hidden institutional foundation of property rights, rule of law, and basic political order. A free market, a vigorous civil society, the spontaneous “wisdom of crowds” are all important components of a working democracy, but none can ultimately replace the functions of a strong, hierarchical government. There has been a broad recognition among economist in recent years that “institutions matter”: poor countries are poor not because they lack resources but because they lack effective political institutions. We need therefore to better understand where those institutions come from.
In other words–and he returns to this point in the second volume–Fukuyama is dismissive of arguments about the quantity of government in favor of arguments about the quality of government.
His ideas are interesting, they are relevant, and they are compelling. I highly, highly recommend this book.
Following the results of November’s presidential election, I decided to read up on the social science on voter rationality. The first was Ilya Somin’s Democracy and Political Ignorance. The second was economist Bryan Caplan’s Princeton-published The Myth of the Rational Voter: Why Democracies Choose Bad Policies. Caplan argues that voters are not merely ignorant about economic policy; they are systematically biased in a way that puts them at complete odds with the economic profession. These biases include:
Anti-market bias: the public drastically underestimates the benefits of markets.
Anti-foreign bias: the public drastically underestimates the benefits of interactions with foreigners.
Make-work bias: the public equates prosperity with employment rather than production.
Pessimistic bias: the public is overly prone to think economic conditions are worse than they are.
For me, the evidence from surveys regarding the opinions of the public vs. economists was the most illuminating. People overwhelmingly support protectionism. Not only that, “solid majorities of noneconomists think it should be government’s responsibility to “keep prices under control”” (pg. 51). Other examples include:
Far fewer economists are concerned about “excessive taxation” than the public.[ref]Most academic economists are moderate Democrats: “Controlling for individuals’ party identification and ideology makes the lay-expert belief gap a little larger. Ideologically moderate, politically independent economists are totally at odds with ideologically moderate, politically independent noneconomists. How can this be? Economics only looks conservative compared to other social sciences, like sociology, where leftism reigns supreme. Compared to the general public, the typical economist is left of center. Furthermore, contrary to critics of the economics profession, economists do not reliably hold right-wing positions. They accept a mix of “far right” and “far left” views. Economists are more optimistic than very conservative Republicans about downsizing or excessive profits—and more optimistic about immigration and welfare than very liberal Democrats” (pg. 82).[/ref]
Far fewer economists are concerned about the deficit being “too high” than the public.
Few economists think foreign aid spending is “too high”, while a large number of the public does (foreign aid actually takes up about 1% of the federal budget).
Few economists think their are “too many immigrants”, while this is a concern for the public.
The list goes on. You can see a lecture by Caplan on his book below.
So write three scholars drawing on their 
I’m writing this review 6 months after finishing the book for a pretty simple reason: I had precisely 100 notes to transcribe into Evernote before I was ready to write my review. That should tell you how much I got out of the book, by the way. There are a only a few books–
As for the bands -> tribes -> states progression, the basic notion is that bands (groups of no more than 100 or so at the most) are held together by actual blood relation. Tribalism is a social innovation that allows bands to come together by claiming (real or fictitious) common descent. Two bands might have the same patriarch or matriarch, and so in the face of a common enemy they can rapidly coalesce into a single unit. This capacity means that it’s fairly easy for tribal societies to defeat band societies, because every time a solitary band and a band that’s part of a tribal society come into conflict, the latter can call upon as many tribal allies as needed to win the fight. As a result almost no band societies are left in existence.[ref]Those that do remain are in remote locations where the benefits of tribalism do not apply.[/ref]
Now, to Fukuyama’s main point: are ideas “independent variables”? I don’t think so. If Newton hadn’t figured out gravity, would some other clever chap have come along and figured it out by now? Probably so. I think that in most cases if you take out one particular genius, some other genius sooner or later comes to the same–or a very similar–realization. There’s no way to test it, but that’s my hunch. In fact, the whole business of a singular genius inventing this or that is often a delusion to begin with. Most of the really big breakthroughs–evolution and calculus come to mind first, but there plenty of others–were invented more or less simultaneously by different people at similar times.[ref]It turns out there’s a name of this: 
Fukuyama’s historical analysis is far-reaching. He spends quite a lot of time on India and the Middle East as well. At last he turns his analysis on Europe where–quite apart from the conventional East / West dichotomy–he goes country-by-country to show how the basic problems confronted by states in China, India, and the Middle East also sabotaged the development of most European states. France and Spain became weak absolutist governments with state building and rule of law, but no accountability. Russia became a strongly absolutist government. The difference? The central rules of Spain and France managed to subvert their political rivals (the aristocracy), but only just barely. In Russia, the czars completely dominated their political rivals, ruling with more or less unchecked power.
That was the first note (what are the threats that political order must overcome), and we get into those in a lot more detail in his second volume: 
Following the results of November’s presidential election, I decided to read up on the social science on voter rationality. The first was Ilya Somin’s