Review | The Great Degeneration: How Institutions Decay and Economies Die by Niall Ferguson

One of the most interesting books I’ve read in recent years was Niall Ferguson‘s Civilization: The West and the Rest, an examination of the extraordinary rise of Western Civilization relative to the rest of the world and the causes that seem to be at the root of its apparent decline. Ferguson’s newest book–The Great Degeneration: How Institutions Decay and Economies Die–continues that examination, looking at why rich countries, as he puts it, “lose their way.”

With a page count a bit lower than Civilization, The Great Degeneration is based on his 2012 “Reith Lectures” on the BBC and walks through four institutions that Ferguson sees as crucial to the prosperity of the modern state. Faced with growing symptoms of decline, such as slowing growth, crushing debts, increasing inequality, aging populations, antisocial behavior, Ferguson believes that our institutional degeneration may be the major cause.

Ferguson opens by first addressing other arguments about why wealthy countries have declined. China and India’s impressive economic growth, in contrast to relative stagnation in western democracies, is not a matter of the rest of the world catching up to the West, but is also a result of actual decline in real terms in western countries of certain institutions, especially in the decline of political, economic, legal and social institutions.

The west’s success, relative to “the rest,” over the last few centuries has been in large part due to four institutions: democracy, capitalism, the rule of law, and civil society.

Democracy has deteriorated not so much due to access, but rather due to the breakdown of the social contract between generations, says Ferguson. For this, he cites the expensive benefits that older generations have voted themselves to be left to the next generation to pay for, noting that Edmund Burke, in his Reflections on the Revolution in France saw the generations as an important part of the social contract. By taking on astronomical amounts of debt, we have put future generations on the hook for our expensive lifestyles.

When it comes to capitalism, Ferguson is not so much anti-regulation as he is anti-bad regulation. There is not such thing as a market without some kind of regulation, he says, but the regulation must makes sense and malefactors must be made to pay. On the contrary, in the recent recession, Wall Street came out ahead, despite risky behavior and dangerous bets, while average Americans bailed them out with giant debt producing stimulus packages.

Where once the rule of law protected contracts and property rights, tort law has slowed down the legal system, raised the costs of doing business, increased the costs of products, and failed to produce a corresponding benefit, stifling innovation and creativity.

It is when Ferguson reaches civil society that I am most intrigued. He quotes from both Bowling Alone: The Collapse and Revival of American Community by Robert Putnam and Coming Apart: The State of White America, 1960-2010 by Charles Murray, both landmark works on the dramatic decrease in voluntary associations over the last century. Where as at one point both wealthy and poor attended the same churches, participated in the same organizations (think Lions Club or Rotary or even the Boy Scouts), and lived in the same neighborhoods, recent decades have seen lower and lower membership and participation in these voluntary associations that have brought people together for a common purpose. Instead, government has replaced these voluntary associations in many cases as the source of resort and not often with improved results. We may have more “Friends” on Facebook, but the relationships and capacity for civic engagement there are no more substantial than the effort to click “Like.”

And no, showing up to vote does not reflect civic participation. Voter turnout is merely a symptom of increased, or decreased, civic engagement.

Since I listened to the book over the course of several days commute and while doing a bit of home improvement, I found the shorter analysis and references to other works useful and was unsurprised to hear, as Ferguson closed up the book, that it was based on a series of lectures. While The Great Degeneration is a fascinating, if bite-sized, look at the problems assailing western civilization, it proceeds along lines that are more prescriptive than proscriptive. As a gateway, however, it is a starting point, and on that score, I recommend it as a place to begin your examination of the future of our democracy.

Related articles

• Much Bigger Than The Shutdown: Niall Ferguson’s Public Flogging Of Paul Krugman (forbes.com)
• Western Civilisation: Decline – or Fall? (ritholtz.com)
• Will The Rest Of The World Catch Up To The West? (wnyc.org)
• Government Spending Is The Problem and The Interest on The National Debt Will Stop It As Will Stopping The Spending — Videos (raymondpronk.wordpress.com)
• Niall Ferguson on “Krugtron the Invincible” (politics.ie)
• Niall Ferguson Roasts ‘Krugtron the Invincible’ (freebeacon.com)