Nobel Prize shows America’s prosperity depends on protecting institutions

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This year’s Nobel Prize in Economic Sciences exposes a truth that many politicians would rather ignore: Economic prosperity doesn’t depend on geography, culture, or luck—it rests on the strength of a nation’s institutions. At a time when the very institutions that underpin our democracy are under pressure, this research is a crucial reminder for the United States.

Daron Acemoglu, Simon Johnson, and James Robinson were awarded the prize for their groundbreaking work, showing that countries thrive when they build inclusive, transparent institutions that empower citizens. They collapse when power and wealth are concentrated in the hands of the few. This isn’t just academic theory; it’s a reality we need to consider as our nation faces challenges that put the strength of our institutions to the test.

The great American experiment, and the true foundation of conservatism, has never been about cultural divisions or blind loyalty to a leader. It has always been about preserving the institutions that protect our freedoms and allow the nation to prosper. Yet, in recent years, this principle has been under threat from political forces that question the legitimacy of key democratic institutions, including the courts and the press.

Acemoglu and Robinson, co-authors of Why Nations Fail: The Origins of Power, Prosperity, and Poverty, reshaped our understanding of why some nations prosper while others falter. Johnson, a former chief economist at the IMF, played a critical role in shaping global economic policy during the 2008 financial crisis. Together, their work provides irrefutable evidence that institutions matter.

It’s not natural resources or the hard work of citizens that determine a nation’s success, but the inclusivity of its institutions. Inclusive institutions, those that encourage democratic participation and protect individual rights, foster innovation and shared prosperity. Extractive institutions, on the other hand, enrich only the elite and leave societies impoverished and unstable.

This message hits especially hard today, when the United States is at a crossroads. We are seeing how undermining democratic norms and weakening the rule of law have a long-term impact not just on our politics but on our economic success. These attacks don’t just erode our political system—they threaten our economic future. A democracy that values civil liberties, the free exchange of ideas, and accountability isn’t just morally right—it’s essential for long-term prosperity.

The evidence is clear. Acemoglu and his colleagues have shown that nations with inclusive institutions are wealthier, healthier, and more stable than those with extractive ones. Take Nogales, Arizona, and Nogales, Sonora—two towns on opposite sides of the U.S.-Mexico border. One is significantly wealthier, not because of geography or culture, but because American institutions have historically been more inclusive, providing opportunities for broader prosperity.

Advertisement. Scroll to continue reading. This isn’t just history—it’s a lesson for today. Authoritarian regimes may see short-term economic boosts by exploiting resources or labor, but without innovation and shared prosperity, they will ultimately collapse under the weight of corruption and inequality. Acemoglu’s research is a stark reminder that countries with extractive institutions are doomed to fail.

The stakes couldn’t be higher for the United States. As wealth disparities grow and wages stagnate, the solution isn’t to weaken our democratic institutions or give in to extreme political solutions that prioritize short-term gains over long-term stability. The real answer lies in strengthening these institutions to ensure they serve all Americans, not just the powerful.

The Nobel committee’s decision to honor this research sends a powerful message: The future of our prosperity depends on the health of our democracy. Undermining our institutions isn’t just a political game—it’s a direct threat to our economic future. Acemoglu, Johnson, and Robinson have shown us the path forward, but it’s up to us to follow it.

Here lies the glaring contradiction. Across Alabama and the nation, many who claim to champion American values seem willing to undermine the very institutions that have protected those values for generations. From the courts that protect our rights, to the free press that ensures government accountability, to peaceful transitions of power—these institutions are the lifeblood of our democracy. Without them, the fabric that holds this country together unravels, and the promises of prosperity, opportunity, and liberty could collapse.

This isn’t just about abstract ideas. When elections are questioned, the free press is discredited, and trust in our courts is eroded, it’s not just a political opponent under attack—it’s the very foundation of our country. Political movements may be wrapped in patriotic slogans, but when their leaders undermine the institutions that have made America strong, the country’s future is at risk.

It’s easy to support a leader or movement, and it’s much harder to recognize when their actions are damaging. The path forward requires a commitment to the institutions that have upheld American greatness for over two centuries. Once our institutions fall apart, so, too, does the prosperity, opportunity, and freedom that Americans have long cherished.

Conservative principles have always placed the defense of institutions at the heart of American greatness. The Nobel-winning research of Acemoglu, Johnson, and Robinson is a wake-up call: Our future depends on the strength of our institutions. Will we defend them, or let them crumble in pursuit of fleeting political victories?

Advertisement. Scroll to continue reading. The choice is ours.

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