Introducing and Reviewing “The Rise and Decline of Nations” with Jafar Kheirkhahan and Ali Hossein Samadi

Mancur Olson was born in 1933 in Grand Forks, North Dakota. His parents were immigrant farmers from Norway. During this era, public investments by the government in educational institutions such as the University of North Dakota in Grand Forks and the North Dakota Agricultural College (where Olson completed his undergraduate studies) provided opportunities for social mobility for all. Olson's brilliant academic achievements and his effervescent excitement for new ideas lifted him out of the obscurity of North Dakota. Olson won the prestigious Rhodes Scholarship to study at the University of Oxford, earned his Ph.D. in economics from Harvard in 1963, and became an assistant professor at Princeton University. Four years later, he became the Deputy Assistant Secretary of the U.S. Department of Health, Education, and Welfare. In 1967, he published his first masterpiece, the book "The Logic of Collective Action." In the eighteen years between the publication of "The Logic of Collective Action" and "The Rise and Decline of Nations," Olson moved to the University of Maryland and became a major figure among economists. Finally, in February 1998, Olson passed away after founding a new approach in political economy.

Now, 40 years after the writing of "The Rise and Decline of Nations," this important work by Mancur Olson has been translated into Persian. Mohammad Fazeli and Jafar Kheirkhahan are the translators of this book, and Rowzaneh Publications has released it. In mid-March 2024, the seventy-fourth session of the Goftar va Andisheh (Discourse and Thought) meetings in Shiraz, organized by the Islamic Iran Nation Union Party (Fars branch), was dedicated to introducing and reviewing this book with the presence of Dr. Jafar Kheirkhahan (the book's translator) and Dr. Ali Hossein Samadi (a faculty member at Shiraz University).

Jafar KheirkhahanMancur Olson should be called a social scientist rather than merely an economist; someone who, by integrating economics, political science, and sociology, and making extensive use of historical knowledge, endeavored to make our knowledge and understanding of the roots and causes of the main problems of human societies better and more realistic. Olson's most important intellectual legacy and work in this field is the book "The Rise and Decline of Nations: Economic Growth, Stagflation, and Social Rigidities," which points the finger of blame and the root cause of the problems of human societies at the formation and role-playing of "special interest groups" and clearly demonstrates their negative effects and consequences on economic growth and societal inequality. According to the comparative historical studies Olson conducted within certain countries and at various points in time, when a country experiences economic prosperity and flourishing for a period and achieves greater stability and longevity, the so-called Olson cycle begins, such that the number of special interest groups inevitably increases. These groups increasingly lean towards narrow, self-serving guild, clique, and factional interests, causing a decline in economic dynamism, innovation, and productivity. Ultimately, these groups pave the way for the decline and fall of nations. In other words, the proliferation and multiplication of such groups, which engage in collusion and conspiracy against the public interest, and create cartels and form monopolies through lobbying, interference, and exerting influence in policymaking bodies and regulatory centers to serve their petty group and guild interests, cause disruption and deviation in public goals and the collective good, leading to the institutional paralysis of governmental organs and state organizations, social rigidities, and political schism and division. Since these groups possess relatively greater power, the successes they gradually achieve in collective action prevent any reform movement, and they take on the role of parasites and leeches that suck the lifeblood of the economy. In fact, at the highest levels of governance, they change the rules of the governance game from a just and fair state, i.e., a win-win game, towards a zero-sum and then negative-sum game. Of course, in every society, encompassing and broad-based interest groups also exist and can form, but according to Olson's analysis, alas, the majority of these groups, even if they exist, usually remain in a latent and dormant state, and it is very rare for them to move from potentiality to actuality. In relation to Iranian society, it can be claimed that a large part of the country's declining economic growth over the past decade and in the coming years has been and will be the result and handiwork of the proliferation and empowerment of such special interest groups, which prevent the fair distribution of political posts and positions, and economic opportunities and blessings, and like a nightmare, they squeeze the throat of Iran's economy, politics, society, and culture, depriving growth-enhancing actors and groups serving the public welfare of breath and mobility.

Dr. Ali Hossein Samadi, Department of Economics, Shiraz University

Mancur Olson studied economics at the University of North Dakota (BA), Oxford (MA), and Harvard (PhD), and his doctoral dissertation was published in 1965 as a book titled "The Logic of Collective Action: Public Goods and the Theory of Groups." In this book, he answers two fundamental questions: What are the factors influencing collective action? And what is the relationship between group size and the effectiveness of collective action? The answer to these questions leads to his first theory: "The smaller the dimensions of a group, the greater the likelihood of consensus for the provision of a collective good." The discussions raised in this book provided the idea for writing "The Rise and Decline of Nations: Stagflation, Economic Growth, and Social Rigidities [Inertia]" and, in fact, led to Olson's second theory: "The longer the temporal dimensions of a group, the more opportunity social groups have to accumulate capital, change technical methods, and invent new modes of production." Olson, in The Rise and Decline of Nations, seeks to discover the secret of the economic miracles of countries like Germany and Japan after World War II. This secret is discovered based on the expansion of the logic presented in The Logic of Collective Action. The common thread between both books is that they show how, in most cases, there is a difference between the preferences of individuals and groups, and how the actions of pressure groups hinder economic progress. In this regard, he introduces the concept of distributional coalitions (and other concepts such as encompassing interests, the market-augmenting state, and sclerosis, i.e., economic and social inertia) and makes them the basis of his analyses. Although Olson has other books, Power and Prosperity (2000) is another important book published after his death. The clear thought of this book is the integration of the fundamental subjects of political science and economics: power and prosperity. Looking at the commonalities of these three books, it is clear that Olson's main achievement in economics was introducing politics into economics and turning it into an inseparable part of economic thought and the formulation of economic policies. Although in the last days of his life, he worked on the origin of states providing public goods, the fiscal policies of democratic and monarchical governments, and, most prominently, the role of property rights and contracts in economic development, which is the main theme of Power and Prosperity.

The main theme of The Rise and Decline of Nations is explaining how the increase of pressure groups and cartels in democratic societies leads to a decrease in the dynamism of those societies. Olson sought to explain the "British disease"—the slowing down of the British economy and redundancy—and the astonishing growth of Japan and Germany after the war. In this book, he systematically explains how nations are affected by the internal dynamics of society. How can countries rise and decline as economic giants due to competition among various actors? He expresses the view of other economists on how countries grow, experience stagflation, and decline as follows: "They trace the water in the river along its course to the streams and lakes from which it comes, but they do not explain the rain. These do not explain the silt in the channels of economic progress (in Olson's terms: growth retardants)." (p. 46). The fundamental and essential achievement of this book is that it discusses the anatomy of 'economic sclerosis'. It also seeks to explain how this economic disease grows and why it is likely to attack any democratic society with lasting prosperity. Olson organizes this book into two parts: theory and applications. In the theoretical part (comprising the first three chapters of the book), the first two chapters examine the basic argument of his previous book (The Logic of Collective Action), but he makes the third chapter a theoretical continuation of The Logic of Collective Action. One of Olson's important arguments is that since most competition over redistribution occurs in the political sector, the government plays a larger role in the economy. As groups grow and the political sector expands, the decision-making process becomes more difficult, and the economy reacts more slowly to changing conditions. The economy develops a kind of institutional sclerosis. The result is stagnation and decline.

Moreover, the number of coalitions accumulates over time, and with them grows an intricate web of institutional arrangements (designed for redistribution rather than increasing income). In Chapter 9, he examines and presents the implications of his theory. In the seventh implication we read: Distributional coalitions slow down a society's capacity to adopt new technologies and reallocate resources in response to changing conditions, thereby reducing the rate of economic growth. (p. 123) But in the second part of the book, he points to applications in the following areas. - The growth of developed democracies in the postwar period, - Integrated markets and barriers to trade, - Inequality and discrimination, and - Macroeconomics.

This book, although a very valuable work, has overlooked certain issues. Three are mentioned below: 1- In the analyses presented in this book, Olson does not pay attention to the role of government and the role of time. In fact, Olson offers no theory of state behavior and does not explain when or why the state helps form these groups or dismantles them. He also gives no serious attention to the question of the equilibrium number of groups or the extent of redistribution. 2- There is much about how societies decide to respond to challenges and opportunities and allocate their resources that Olson's propositions do not take into account. 3- The general idea put forward in this book does not differ much from Ibn Khaldun's theory of decline (asabiyyah and the seeds of decay).

.

Speech and Thought Sessions | Session 74 Introducing and Reviewing “The Rise and Decline of Nations” Author: Mancur Olson | Rowzaneh Publications

With the presence of: Dr. Jafar Kheirkhahan (translator of the book) Dr. Ali Hossein Samadi (Full Professor, Shiraz University)

March 2024 Islamic Iran Solidarity Party | Fars Branch

.

Watch this session on YouTube

Watch this session on Aparat

Download the audio of this session

Listen to the audio of this session on Anchor | Spotify | Castbox