Intellectual Property – Ethiopia’s Experience (continued)

Professor Justin Hughes recently completed a State Department trip to Ethiopia to conduct talks on intellectual property. The U.S. embassy in Addis Ababa's official blog is publishing a series of his posts on the topic. The first was published on June 1, 2017.

In my last blog post, I focused on Ethiopia’s coffee industry; now let’s talk more broadly about Ethiopian’s intellectual property (IP) laws and how those laws potentially impacts the country’s growth.

Ethiopia is almost unique among African countries for its lack of participation in the multilateral treaties that govern the international IP system. There are two main multilateral conventions for IP: the Paris Convention (for patents and trademarks) and the Berne Convention (for copyright law). Today, those treaties have 195 and 183 members, respectively. Ethiopia is the largest economy not participating in the Paris Convention and perhaps the second largest economy not participating in the Berne Convention (after Iran).

Read the complete blog post

Intellectual Property – Ethiopia’s Experience

Professor Justin Hughes recently completed a State Department trip to Ethiopia to conduct talks on intellectual property. The U.S. embassy in Addis Ababa's official blog is publishing a series of his posts on the topic. The first was published on May 19. 

It’s been a pleasure to come to Ethiopia as part of the U.S. State Department’s public speaker series; the State Department invited me here to talk about intellectual property (IP) laws as well as international trade, the two subjects I teach at Loyola Law School at Loyola Marymount University in Los Angeles. During my trip, I’ve spoken before audiences from Addis Ababa and Hawassa universities; conducted a 1.5 day workshop for the Ethiopian Intellectual Property Office (EIPO), and had many smaller meetings and site visits, including the Ethiopian Agricultural Research Institute in Addis, the Oromia Coffee Farmers’ Cooperative Union in Oromia, and rural health centers and health posts in Amhara.

Read the complete blog post>>

Dear Brits: Don't listen to the U.S. on 'Brexit'

By Professor Justin Hughes

This op-ed originally appeared in the June 15, 2016 edition of the Los Angeles Times.

Dear British friends, I’m writing to say I’m sorry my president has been meddling so much in the debate about “Brexit,” your June 23 vote on whether to remain part of the European Union. The speeches, the BBC interview, the op-ed in the Daily Telegraph — it’s all been a bit much.

Still, good friends cannot help but offer advice. I’ve watched the polls swing back and forth — a recent Guardian/ICM poll suggested leaving is up 53% to 47%, while poll aggregators see a dead heat with about 10% of you undecided. As an American who’s worked in international affairs, lived in the EU, and loves both Burgundy wines and Devon clotted cream, let me offer you this bit of advice: In this existential decision, don’t let experts and politicians — yours or ours — scare you. Take everything with a dose of salt.

Read the entire op-ed on LATimes.com.

International Human Rights Clinic Conducts Fact-Finding Mission in Trinidad and Tobago

By Mary Hansel, Deputy Director, International Human Rights Clinic

This spring break, the students of the International Human Rights Clinic, supervised by myself and Professor Veronica Aragon, carried out human rights fact-finding in Trinidad and Tobago. Our students honed their attorney skill sets by preparing for and conducting in-depth interviews regarding the country’s treatment of irregular migrants. Interviewees included government officials, a representative of the United Nations High Commissioner for Refugees, case advocates from local migrants’ rights organizations and an attorney with the Nigerian consulate, as well as several migrants with an array of demographic backgrounds.

We will use the information gathered from these interviews to draft a report analyzing the country’s development and implementation of alternatives to detention (ATDs) for migrants. Currently, many migrants arriving in Trinidad and Tobago are held in a highly controversial detention center. Refugees and asylum-seekers, however, are generally allowed to live in the community, albeit subject to orders of governmental supervision and without work permits. Our report will evaluate this ATD scheme under applicable international human rights standards and set forth recommendations for modification and possible expansion. The hope is that Trinidad and Tobago may eventually serve as a model for the Caribbean region with respect to its migration policies and practices.

The report will be co-authored by law students from the University of the West Indies (UWI), alongside whom the Clinic students conceptualized this project and conducted their interviews. Indeed, the Clinic’s collaboration with UWI has been one of the most rewarding aspects of this project, fostering cross-cultural exchange and new friendships that promise to endure well past the end of the semester.

Students meet with the former Inter-American Commission on Human Rights President

Does Domestic Violence Constitute Valid Ground to Claim Refugee Status?

By Professor Cesare Romano, Director, and Adjunct Professor Veronica Aragon, Deputy Director, International Human Rights Clinic, Loyola Law School, Los Angeles 

Does domestic violence constitute valid ground to claim refugee status? Encouragingly, the answer is increasingly yes, and Loyola’s own International Human Rights Clinic (IHRC) is trying help moving international law in that direction.

In concert with human rights organization Asylum Access Ecuador (AAE), Loyola’s International Human Rights Clinic filed a case today before the United Nations Committee on the Elimination of Discrimination Against Women (CEDAW) seeking to recognize domestic violence as grounds for refugee status. It is one of the first cases of its kind to be brought before a United Nations body.

The case, regarding a Colombian woman who had been subjected to severe domestic violence and subsequently denied refugee status in Ecuador, argues that domestic violence should be grounds for refugee status under the 1951 Refugee Convention. It also aims to ensure that refugee status determination proceedings at the national level are non-discriminatory and gender-sensitive.

Al Bahlul, Conspiracy, and the Misuse of History

By Professor David Glazier

This piece originally appeared on Lawfare.

The oral arguments in Monday's D.C. Circuit en banc review of Ali Hamza al Bahlul's military commission conspiracy conviction essentially came down to competing views of history. The government concedes that conspiracy is not a recognized war crime under international law. But rather than accepting chief prosecutor Brigadier General Mark Martins' plan to move forward using more credible charges, the Justice Department argued that the Guantánamo commissions can try conspiracy based on historical U.S. practices. Relying largely on research by prosecution team member Haridimos Thravalos (discussed on Lawfare here and here), the government asserts the existence of a "domestic" U.S. law of war which includes conspiracy to overcome concerns that its initial codification in the Military Commissions Acts of 2006 cannot be applied retroactively. Al Bahlul naturally disagrees.

After reviewing each authority cited by Thravalos' article and the government's briefs, I believe that al Bahlul has the best of this argument for reasons I expressed to the court in an amicus briefand have more fully developed in a draft law review article available here. As I see it, there are two basic flaws in the domestic law arguments:

(1) Virtually every credible reference to the law of war, including the sources the government relies on, describes the law of war as being part of international law. 

(2) None of the cases cited as domestic "law of war" conspiracy prosecutions really stand up to exacting scrutiny. On closer examination, each one seems to (a) represent the prosecution of completed, rather than inchoate, conduct; (b) ground the conspiracy charges in domestic legal jurisdiction under martial law or military government rather than the law of war per se; or, (c) use conspiracy as a mode of liability rather than charging conspiracy as a substantive offense.

How Asia Works: Success and Failure in the World's Most Dynamic Region by Joe Studwell

By Professor Jeffery Atik

This post originally appeared on Attravero: Jeff Atik's Commentary on International Banking and Finance.

Pity Joe Studwell. He has written a very intelligent, very thoughtful book. You might not agree with much of it; I have my doubts about his recipe. But there is little doubt what the book is: an exercise in economic history, with a focus on a peculiar developmental pathway followed by a few highly successful (generally northern) east Asian countries and not followed by certain (largely southern) east Asian countries. And geography has nothing to do with these diverging outcomes.

So poor Studwell delivers this intelligent book to his editor - one imagines - who decides it needs a snazzy title. Regardless of whether the title describes Studwell's book. Studwell writes about 'How Certain Asian Countries Developed' - not about 'How Asia Works'. He has very little to say in How Asia Worksabout how any of Asia works today - again, he is an economic historian. And he makes no claim within the book's pages that Asia is 'the World's most dynamic region.' Poor Studwell.

He can take comfort from having written a provocative book, which challenges much of the prevailing orthodoxy in developmental economics. And he's obviously willing to horrify both left and right - praising Robin Hood-esque land reform (but not agricultural collectivization), autocratic leaders who impose export discipline on their cronies, and the elegant effectiveness of capital controls.

Studwell examines the East Asian development successes (Japan, Korea, Taiwan, and China) and the laggards (Malaysia, Indonesia, Thailand, and the Philippines). The winning path, according to Studwell, involves three distinct phases ("one, two, three," he calls these in his concluding chapter). These three phases are a recipe for developmental success, they form the "same stretch of the river" that poor countries must navigate.

The first stage requires equitable land distribution to absorb labor and capture the productivity gains associated with moving to garden-style agriculture by small family landowners. The magic here is that everyone works - and most start at the same base. Garden intensity agriculture yields very low returns on labor but enhanced returns on land - it permits the accumulation of small surpluses that can be used to fund imports of necessary technology.

The End of Power: From Boardrooms to Battlefields and Churches to States, Why Being in Charge Isn't What it Used to Be by Moisés Naím

By Professor Jeffery Atik

Moisés Naím sees the decline of power across many institutions. He is at times wistful, at times celebratory in his reaction to power's decay. But he isn't entirely clear why we should care about the passing of power. The powerful do care; Naím has many powerful friends who lament power's loss of magic. Popes, pols and pundits just don't get the respect their predecessors received; their authority is more circumscribed, more readily challenged (the same decline is noted by law professors). But for the greater number of us, who are in more settings objects of the power of others than detainers of power, the end of power is not a self-evident cause for concern.

A decline in social organization is a cause for concern - and to the degree the phenomena described in The End of Power signal a loss of capacity for coordination, Naím's book is more than an indulgence of ambivalent nostalgia. Naím is careful with his definition of power: power is the ability of some few - the powerful - to direct the actions of others. And, he asserts, there are four means by which power is exerted: muscle (force), code (tradition), pitch (persuasion), and reward (incentive).

Naím is a superachiever who has spent his life at or close to the top. He was a prominent politician in Venezuela - and since has become a heralded writer in the United States. As such, his personal prescription, given toward the end of The End of Power, is quite surprising. Get off the elevator, Naím urges. And by this he calls for an abandonment of mindless ambition and more; elevator thinking is the focus on rank and hierarchy, which promotes power as an end in itself.

Prof. Jeff Atik Launches New Blog Dedicated to International Finance Commentary, Book Reviews

Professor Jeffery Atik, a Sayre Macneil Fellow at Loyola Law School, launched the new blog Attraverso as an online discussion about hotly contested issues in the world of international finance, as well as a depository of his reviews of important books on related topics. From Attraverso's introductory post:

Attraverso means "through" or "across" in Italian; it has both a spatial sense (as crossing a mountain range, or a border) and a temporal sense (as across the centuries). It seemed fitting for a new online journal designed to scratch beneath the surface of global financial issues. More than ever, public debate centers around international economic topics: the financial crisis and the great recession, bank reform, pressure on the Euro, austerity and the future of hope.

Attraverso covers the roots of these issues -- and the ongoing institutional innovations proposed to address them. Attraverso is a journal devoted to commentary and reviews of books on international finance and economics. Formerly published as a series within Loyola's Summary Judgments faculty blog, Attraverso's content proved vast and rich enough to fill its own space.

International finance is an arena for ideas; it is a cultural practice. Attraverso will be the first online resource dedicated to covering books in this space. The blog is designed to be a dialogue; comments are encouraged.

The blog is edited by Jeffery Atik, a widely published lawyer and economist with deep experience in Europe and North America. He teaches International Banking & Finance and related courses at Loyola Law School, Los Angeles.

Attraverso: ECB's new role as eurozone bank regulator

By Professor Jeffery Atik

Early Thursday morning (December 13) eurozone finance ministers agreed to take a first step toward establishment of a banking union. The agreement will grant supervisory powers to the European Central Bank (ECB) - at least with regard to the 200 or so largest banks headquartered in the eurozone. Large European banks located outside the eurozone (chiefly UK banks) will continue to answer to national authorities. With the accretion of these new powers and responsibilities, the ECB will come to resemble the Federal Reserve which functions as both as a monetary authority and as the chief regulator of large banks operating in the United States.

The political accord reflects a compromise between the competing visions of France and Germany. France had desired a complete transfer of bank supervision to the ECB, effectively extinguishing national regulation. Under this approach all banks located within the eurozone would become 'European' in character. Germany resisted; Germany has been desirous of sheltering its politically powerful regional banks from European control. A reported late-night compromise between France and Germany has resulted in a mixed system - with the eurozone's 200 largest banks falling under the authority of the ECB and the remaining 5,800 or so smaller banks (including virtually all of Germany's regional banks) continuing under the oversight of national regulators.

Attraverso Review: Wired for Culture: Origins of the Human Social Mind by Mark Pagel

By Professor Jeffery Atik

Mark Pagel addresses the conundrum posed by variegated cultures. Culture -- what we have that monkey's don't (according to a witty formula quoted by Pagel) -- both unites us and divides us. In Wired for Culture, Pagel attempts an evolutionary account for the existence of cultures. His inquiries commence with the mad multiplicity of languages. Language is the prime instrument of cultural transmission and the strongest marker of cultural identity. Yet the intra-group facilitation of communication provided by distinct languages are foreclosed to outsiders. Our languages seal us off from one another.

Human adaptability to the widest range of niches offers only a partial explanation for the multitude of cultures. New Guinea sports more than 800 different languages within a very small territory -- here mutual unintelligibility seems to be the point. Language operates both to permit and prevent understanding; both these characteristics are necessary. The value of a closed system of communication has long been recognized. Tradesmen, criminals and academics use argot to separate themselves and to keep secrets.

Pagel makes an evolutionary case for the multiplicity of languages; language serves as an identifier of group membership. This is culture's darker role: defining group boundaries. Pagel sees language and other cultural institutions functioning to set limits for altruism. Humans are social -- but only to a degree. We are a species that engages in magnificent cooperation -- yet are capable of inflicting harm on a scale not found in any other species.

Attraverso Review: Collateral Knowledge: Legal Reasoning in the Global Financial Markets by Annelise Riles

By Professor Jeffery Atik

And yes, Riles pulls it off. She promises an "ant's-eye view" of these stories, consistent with traditional ethnographic method. While the original intended targets of her observation were Japanese bank regulators, she later realizes the 'back-office' personnel (including the lawyers overseeing the documentation of the transactions) were as central in the process of the law-making.

Riles examines two crucial points of tension in the swap practices of Japanese banks. The first is the utilization (under Japanese law) of the institution of collateral: the posting of property to secure repayment of a debt. The book's title, *Collateral Knowledge*, plays on this and other meanings of "collateral." All commercial lawyers understand how collateral should work: it should freely pass the pledged assets into the hands of the favored creditor in the event of a debtor's default. And so the mission of a bank lawyer (in this case, one dealing with a Japanese bank) is to assure his principals that these functional expectations are met. This is hardly a simple matter where (in an example given by Riles) the swap is between a Japanese bank and a UK bank, posted to their respective Cayman Island subsidiaries and involving Chinese and Singaporean currencies.

The swap raises peculiar difficulties, as neither party knows ex ante whether it will be a net creditor or net debtor of the other -- and so both may need to post, maintain and adjust collateral supporting the transaction. The standard industry forms, drafted by British and American lawyers and routinely used by the Japanese banks, are "literally nonsensical" to the Japanese, according to Riles.
But the forms "work" -- in that they satisfy the lawyers, the banks and their regulators. The art of a back-office lawyer is completing the forms -- the invariable boilerplate, the prompted elections (such as which country's law should govern) and any special terms. Standardization is at work here -- but so too is the exercise of a lawyer's "aesthetic" sensibilities, knowing when the paper looks right. In fact legal certainty may not be a dominant consideration -- at least not in ordinary times. But Riles' fieldwork followed an earlier Japanese financial crisis that set off external anxieties about aspects of Japanese law.

Attraverso: Supreme Court to hear major gray-market case

By Professor Jeffery Atik

On Monday, Oct. 29, the U.S. Supreme Court will hear arguments in *Kirtsaeng v. John Wiley & Sons, Inc.*, a case that promises to resolve (finally) whether the first-sale doctrine applies to copyrighted works produced and sold abroad and then imported into the United States. It is no small surprise that this is an open question, as the current U.S. copyright act has been in place since 1976. And the copyright first-sale doctrine is older than that.

Compare the situation in Europe, where the European Court of Justice has long ago established that exhaustion (corresponding to the first-sale doctrine) occurs with full effect throughout the European territory, notwithstanding the national character of most European IP rights. A copyright holder which sells a book in France may not use its German copyright to block the importation or resale of that book in Germany.

But not so with respect to IP protected goods first sold outside of Europe: these goods may be blocked by the IP right holder when introduced to the European market. Thus, it is said that the Europeans practice regional exhaustion (first-sales within European cut off IP rights), but not international exhaustion (IP right holder retain rights with respect to goods first sold outside Europe).

Book Review: Private Empire: Exxon-Mobil and American Power by Steve Coll

By Professor Jeffery Atik

Steve Coll's Private Empire provides oil spill-to-oil spill coverage of the recent history of Exxon-Mobil, and in that course brings us Bush/Cheney adventures, climate change deniers, armed conflicts in lost and forgotten places, and the rise (and fall) of Russian oligarchs. In this complex work, Exxon-Mobil appears misunderstood and misunderstanding.

Coll begins his story with the 1989 crash of the Exxon Valdez, the moment that seared Exxon in the public consciousness as an environmentally reckless brute, pandering to America's oil addiction at the cost of America's soul. Exxon reacts from this crisis in both positive and negative ways. It becomes obsessed with safety -- though the company's pursuit of safety is not to assure accident avoidance as much as it is a premise for increasing demands for precision and attention from its workforce. The safety culture Exxon creates becomes, in a menacing way, grounds for enforcing discipline, regimentation and uniformity-of-voice throughout the enterprise.

The second formative moment Coll relates is the 1993 removal of Exxon's headquarters from New York City (Exxon was the former Standard Oil of New Jersey) to Irving, Texas. Neither bi-coastals nor Texans would be surprised by the resultant shift in company worldview.

Exxon CEO Lee Raymond dominates the first half of this book. It is he who responds to the Exxon Valdez affair, he who engineers the merger that forms Exxon Mobil, he who denies the science behind climate change. And he's one tough cookie. His message to an Exxon Mobil executive recovering in a hospital after a bicycle accident: "[T]his is your last injury as an employee of Exxon."

Raymond is depicted as a credible scientist who takes pride in Exxon-Mobil as a science-based organization. Yet he refused to abandon his skepticism about climate change despite the accumulation of scientific evidence. Raymond and Exxon-Mobil's public affairs department are in no small part responsible for the emergence of the contemporary denier culture in American politics -- the often successful strategy for blocking unwelcomed regulation by attacking the soundness of its underlying scientific premises.

Attraverso - Digital Copyright Crimes and the Trans-Pacific Partnership

By Professor Jeffery Atik

The IP provisions of the Trans-Pacific Partnership (TPP), a regional trade agreement involving the United States and 10 other Pacific Rim nations, are not merely 'TRIPS Plus;' they are also 'WIPO Plus.'

Two major multilateral copyright treaties came into force following the establishment of TRIPS: the 1996 WIPO Copyright Treaty and the 1996 WIPO Performances and Phonograms Treaty. Together, these treaties expand protection to authors and performers in the digital environment. As WIPO products, these two treaties, known together as the WIPO Internet Treaties, reflect fairly broad international consensus, in contrast to the more contentious 'TRIPS Plus' norms promoted by the United States and Europe in various bilateral and regional settings. The now abandoned Anti-Counterfeiting Trade Agreement (ACTA) was an attempt to construct TRIPS Plus broadly, outside of the WTO.

The WIPO Internet Treaties establish new categories of unlawful activity, but they do not require the imposition of criminal penalties on infringers. For example, Article 11 of the WIPO Copyright Treaty requires signatories to "provide adequate legal protection and effective legal remedies" against persons who circumvent technological measures for the protection of copyrighted works. While the WIPO Copyright Treaty does not prevent a signatory from imposing criminal liability in these cases, neither does it mandate it.

The 1998 Digital Millenium Copyright Act (DMCA) purports to be the United States implementation of the WIPO Internet Treaties. Yet the DMCA arguably goes beyond the WIPO Internet Treaties by imposing criminal liability on persons who "willfully violate" DMCA's central provisions "for purposes of commercial advantage or private financial gain."

Book Review: What Chinese Want: Culture, Communism and the Modern Chinese Consumer by Tom Doctoroff

By Professor Jeffery Atik

In this unabashedly pop business book, Tom Doctoroff, head of the J. Walter Thompson advertising firm in China, tells us What Chinese Want. Yet the implicit question is complex: what do the Chinese want for themselves? For their children? For China? And to answer the question coherently involves considerable psychological framework. Doctoroff is an ad guy -- so the question that lies squarely within his expertise might be: what does the Chinese consumer want to consume? And this question he begins to answer. He is less certain -- and less convincing -- when applying the insights he draws from Chinese consumption habits to the more mysterious nature of Chinese culture, politics and foreign policy.

I suppose we can learn something meaningful about the Chinese from studying their patterns of material consumption -- even using the tools of an advertising executive. In some sense, Doctoroff's inquiry is an exercise in applied cultural anthropology -- though his ends are more instrumental than scientific. So which firms are doing well in China -- and what do their successful adaptations suggest?

Starbucks, Doctoroff tells us, has configured larger stores in China which serve as group meeting places. The Chinese consumer would not pay the equivalent for $4.00 for a cup of coffee for private consumption (this may reveal the inherent cross-elasticity of Starbucks coffee and ubiquitous hot tea). The consumer will do so, however, when observed by others; the Starbucks customer's extravagant expenditure for a latte is justified by a gain in social standing. And so by facilitating the prospect of mutual observation -- by providing large, welcoming meeting spaces -- Starbucks sells coffee in China.

The Trans-Pacific Partnership and IP Crimes

By Professor Jeffery Atik

True, we know little about the current form of the draft Trans-Pacific Partnership -- a regional trade agreement to involve the United States and ten other countries (Australia, Brunei Darussalam, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam) -- but we can be certain that TPP will include an Intellectual Property chapter with a battery of TRIPS Plus features. We can get a hint at the IP content of an eventual TPP -- or at least at the negotiation goals of the United States -- by examining the IP provisions of recent U.S. Free Trade Agreements such as those concluded with Peru, Panama and South Korea. Or we could look back at the recently concluded ACTA, now abandoned by the European Union, one of ACTA's principal sponsors. Or we can look at the text of a leaked draft that may or may not be accurate. So let's apply all three approaches to create an amalgam for conversational purposes -- and explore the criminalization mandates found in the leaked TPP draft.

TRIPS introduced criminalization obligations to the international IP system. With the passage of years, these provisions are regarded as inadequate by crucial U.S. IP constituencies (along with TRIPS' enforcement more generally). The United States has included expanded criminalization mandates as part of its TRIPS Plus program. Additional activities are subject to criminal liability under the terms of recent FTAs and ACTA and in the leaked TPP draft.

Article 15.1 of the leaked TPP draft echoes TRIPS Article 61: "Each Party shall provide for criminal procedures and penalties to be applied at least in cases of willful counterfeiting or copyright or related rights piracy on a commercial scale." Ignore for a moment the insertion of the phrase "or related rights." The TPP leaked draft tracks the first sentence of TRIPS Article 61 word-for-word, including the problematic "on a commercial scale" limitation. It also replicates the language found in the recent FTA entered into with South Korea.

Revisiting China's IP Conviction Thresholds

By Professor Jeffery Atik

Among the many changes to the international IP landscape wrought by the WTO's TRIPS Agreement was the unprecedented mandate to impose criminal liability for the most egregious acts of trademark and copyright infringement. Criminal sanctions add to civil and administrative remedies to create a climate of observation of IP rights throughout the WTO space. In anticipation of its joining the WTO -- and in response to pressure from the United States -- China amended its domestic criminal law to provide for the possibility of imprisonment or fines in certain instances of IP infringement as a complement to civil and administrative remedies. Nonetheless, there remains continuing concern held by IP holders about the effectiveness of China's IP enforcement. Much of the current 'TRIPS-plus' program (including the discarded ACTA and the emerging Trans-Pacific Partnership [TPP]) is intended to indirectly influence China with regard to IP enforcement.

In 2007, the U.S. brought a three-prong challenge to China's IP system within the WTO dispute settlement system. The central part of the dispute involved a U.S. assertion that China failed to give full effect to the TRIPS criminalization mandate. Article 61 of TRIPS obligates WTO members to provide "for criminal procedures and penalties to be applied at least in cases of wilful trademark counterfeiting or copyright piracy on a commercial scale."

Book Review: Why Nations Fail - The Origins of Power, Prosperity, and Poverty by Daron Acemoglu and James Robinson

By Professor Jeffery Atik

Acemoglu and Robinson's Why Nations Fail is a thrilling read. It proposes answers to grand questions: Why are some nations rich? Why are others poor? Why are there such great disparities? Their theory is seductive -- yet it ultimately fails to give much guidance as to what can be done.

The key to prosperity, in the authors' view, can be found in a nation's political and economic institutions. The operative distinction is whether these institutions are extractive or inclusive. The most successful countries will have inclusive political and economic institutions; the most desperate will be afflicted with extractive institutions. Prescriptions seem tantalizingly accessible at first: simply replace extractive institutions with inclusive ones. But this is not so easy, Acemoglu and Robinson caution.

Labeling the 'bad' institutions extractive (as opposed to the more symmetrical 'exclusive') is a nice turn of phrase. Economists use the term extractive to describe economies that exploit endowments of valued natural resources, such as oil, gold or Mr. Kurtz's ivory, that are literally extracted. But the authors intend to characterize the relationship between the elites and the masses; elites 'extract' power and wealth from human resources through oppressive political and economic institutions.

In proposing an institutional account of prosperity, Acemoglu and Robinson reject cultural and geographic explanations. There is nothing peculiar about Northern European Protestantism (despite Weber's assertion) that suits it to the accumulation of wealth -- and folks living in temperate climes are not more industrious (or if they are -- they are not more likely to be successful). Technology is also non-determinative -- as opportunities for technological progress are frequently rejected by extractive states. Inclusive states -- the authors argue -- tend to be more receptive to new technologies, and hence enjoy the welfare gains innovation throws off.

Book review: Paper Promises: Debt, Money and the New World Order< by Philip Coggan

By Professor Jeffery Atik

As its subtitle suggests, Philip Coggan's book examines the relationship between debt and money and its implications for the 21st century economy. Coggan takes us through familiar territory (the nature of money) and familiar debates (Keynesianism vs. monetaristm), yet offers a novel framing that make this book a valuable read.

Coggan has an unusual view of the fundamental divide in political economy. Rather than seeing class struggle everywhere, Coggan treats the conflict between creditors and debtors as the central fracture motivating politics, though he notes that -- all things being equal -- creditors tend to be wealthier (and fewer in number) than debtors.

In speaking of debt, Coggan slides (perhaps too easily) between private and public debt. The debt that interests Coggan is the burgeoning debt that tends toward default (as opposed to the under-remarked debt that is extinguished by repayment in the ordinary course). This is the persisting debt that in usual times is rolled over upon each maturation. He writes of unsustainable debt -- again, both private and public -- that will of necessity lead to some degree of default. In the case of public debt, the default scenarios include -- importantly -- devaluation, a course open to most states to reset the exchange value of the money in which a debt is expressed and thus unilaterally reduce the value of the debt (as expressed in some other value, such as gold or a harder currency).