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Most critics of President Donald Trump view him as the ultimate threat to American democracy. But to Nobel prize-winning economist Daron Acemoglu, Trump’s merely a fever, the result of an infection that’s been brewing for years before he rode down the golden escalator to announce his presidency.
The MIT economist has spent decades studying the origins of economic and political decay, specializing in how institutions foster inclusive growth—or succumb to extractive systems. In the 2012 book Why Nations Fail: The Origins of Power, Prosperity, and Poverty, Acemoglu and co-writer James A. Robinson argue that nations proper because of their political institutions. In 2024, Acemoglu won the Nobel Prize in economics, alongside Robinson and Simon Johnson, for demonstrating how political and economic institutions shape prosperity.
Acemoglu argued that while Trump’s authoritarian tendencies are weakening the country’s institutions, the president is not the root cause of the broader structural problems. He warned the country is headed down a grim path and outlined two shifts relative to AI development he sees as critical to avoiding deeper decline: cracking down on economic inequality and tempering job destruction. “If we go down this path of destroying jobs [and] creating more inequality, U.S. democracy is not going to survive,” he told Fortune.
One: The proliferation of economic inequality
According to Acemoglu, AI-driven job displacement could be catastrophic and further entrench inequality. He notes the U.S. is currently seeing unprecedented levels of wealth inequality, and traditional policy has failed to close the gap. “We may need wealth taxes because anything else we do today is still going to lead to this huge wealth gap that exists in this country.”
The economist pointed to California’s proposed “billionaire tax,” a ballot initiative which would impose a one-time 5% wealth tax on all individuals in the state with a net worth of $1 billion or more. But even that doesn’t go far enough, according to the economist. “It’s not enough to tax the rich,” he said. “You really need ways in which workers of all sorts of skills can take part in the growth process.”
https://www.yahoo.com/finance/news/nobel-laureate-co-wrote-why-123200600.html
The MIT economist has spent decades studying the origins of economic and political decay, specializing in how institutions foster inclusive growth—or succumb to extractive systems. In the 2012 book Why Nations Fail: The Origins of Power, Prosperity, and Poverty, Acemoglu and co-writer James A. Robinson argue that nations proper because of their political institutions. In 2024, Acemoglu won the Nobel Prize in economics, alongside Robinson and Simon Johnson, for demonstrating how political and economic institutions shape prosperity.
Acemoglu argued that while Trump’s authoritarian tendencies are weakening the country’s institutions, the president is not the root cause of the broader structural problems. He warned the country is headed down a grim path and outlined two shifts relative to AI development he sees as critical to avoiding deeper decline: cracking down on economic inequality and tempering job destruction. “If we go down this path of destroying jobs [and] creating more inequality, U.S. democracy is not going to survive,” he told Fortune.
One: The proliferation of economic inequality
According to Acemoglu, AI-driven job displacement could be catastrophic and further entrench inequality. He notes the U.S. is currently seeing unprecedented levels of wealth inequality, and traditional policy has failed to close the gap. “We may need wealth taxes because anything else we do today is still going to lead to this huge wealth gap that exists in this country.”
The economist pointed to California’s proposed “billionaire tax,” a ballot initiative which would impose a one-time 5% wealth tax on all individuals in the state with a net worth of $1 billion or more. But even that doesn’t go far enough, according to the economist. “It’s not enough to tax the rich,” he said. “You really need ways in which workers of all sorts of skills can take part in the growth process.”
https://www.yahoo.com/finance/news/nobel-laureate-co-wrote-why-123200600.html
