Shuffle - Nicholas Eberstadt Nicholas Eberstadt is a Henry Wendt Scholar in Political Economy at AEI.

I THANK Andrew Maxwell for his kind words. It is always a pleasure to read William Easterly--no less so in the gracious and thought-provoking challenges he poses to my essay. Let us go through his points one by one.

1) With respect to the pace and contours of material advance and economic development in our modern era, Bill's disagreement with my essay is not so much empirical as it is normative and definitional. He implicitly uses the criterion of "convergence" as his standard for measuring the success of the modern project of augmenting global prosperity: by that definition, global development only succeeds when former low-income countries catch up to or surpass former high-income countries. This relativistic criterion is perfectly defensible, as far as it goes and for what it can indicate--but it perforce ignores the consequential absolute improvements in prosperity and living standards that populations the world over have enjoyed in the postwar era, and indeed over the course of the 20th century.

Take Mexico, one of Bill's examples of a contemporary society "muddling along at stubbornly high or medium poverty rates." By the estimates of the late economic historian Angus Maddison, Mexico's real level of PPP-adjusted per capita GDP in 2008 was 3.7 times as high as in 1950. By Maddison's reckonings, moreover, Mexico by 2008 had reached the same level of per capita income that Finland achieved in the late 1960s (1967). According to the UN Population Division, Mexico's overall life expectancy at birth these days (2005/2010) is a little over 76 years--a level fully two decades higher than half a century earlier: a level, furthermore that Sweden and the Netherlands, leaders in global health progress, did not themselves reach until the 1980s. Does this really count as "muddling along at stubbornly high or medium poverty rates"? Poverty may always, perhaps, be in the eye of the beholder. But such changes speak empirically to a tremendous and indisputable long-term improvement in material well-being for ordinary people in Mexico--improvements that may well be highly meaningful to the populations in question. (The same general points, incidentally, could be made about other countries Bill mentions.)

2) Bill takes me to task for being altogether too optimistic about the potentialities of "state-building" in the poorest and most chaotic reaches of the planet. I am mystified by such a reading of my essay. He chides me for "excus[ing] particular state-building failures as the result of 'bungling,'" which would work if only "done right." But in point of fact, I describe the U. S. intervention in Iraq (in part an effort at state-building) as "in many ways bungled"--no excuses proffered--and never once talk about how internationally promoted state-building initiatives might be "done right."

The reason I did not offer any such suggestions is because I, like Bill, regard the task of externally abetted state-building as an extraordinarily difficult and demanding proposition--especially under currently accepted international norms for such engagement, and in the contemporary settings (Afghanistan and Democratic Republic of the Congo, among many others) where a functioning and legitimate state will be a precondition for any hope of sustained long-term economic development.

As the experience of early modern Western Europe attests, state-building can be a prolonged historical affair, replete with setbacks--and it is not always pretty to watch, frequently entailing mass bloodshed as the emerging state establishes its monopoly on violence. Like Bill, I take great stock in Hayek's spontaneously emerging market institutions--but the performance of those institutions, even in Hayek's and von Mises's recounting, depend upon the existence of at least a "night-watchman state." Such capacities are very largely absent today in most of the regions of the world that have suffered from long-term economic stagnation or retrogression--and for now, alas, there seems to be little evidence that a successful wave of state-building for these distressed societies is generally in the offing.

3) On the subtle and highly complex question of the interplay between culture and economic performance, Bill suggests that I slight the importance of "individual rights and freedoms" while overemphasizing such factors as "hard work and thrift." Bill asks, "After all, why save and work hard when your rights against theft or expropriation are not respected?"

I urge Bill to take another look at my essay--because I address and attempt to answer that very question. In discussing the interplay between politics and culture, I specifically underscore "the crucial role of governance--which is shaped by, and in turn independently shapes, local attitudes, expectations, and motivations. Throughout the reaches of the world characterized by long-term economic failure . . . violent political instability and predatory, arbitrary, or plainly destructive state practices have shaken, or sometimes altogether destroyed, the institutions and legal rules upon which purposeful individual and collective efforts for individual betterment depend." It looks to me as if we are in violent agreement here.

Beyond these particulars, I thank Bill for his generous comments about the substance of my essay and look forward to comparing notes with him again in the future.

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Nicholas Eberstadt is a Henry Wendt Scholar in Political Economy at AEI.