Who is the author of The Great Degeneration?

The author of The Great Degeneration is Niall Ferguson.

Economics

The Great Degeneration Book Summary - The Great Degeneration Book explained in key points

The Great Degeneration summary

Name: The Great Degeneration
Rating: 3.8 (47 reviews)
Author: Niall Ferguson

Niall Ferguson

How Institutions Decay and Economies Die

3.8 (47 ratings)

15 mins

Brief summary

The Great Degeneration by Niall Ferguson is a thought-provoking book that explores the decline of Western civilization and the underlying factors responsible for it.

Topics

Socialism & Capitalist Critique Democracy International Economics

Table of Contents

The Great Degeneration
Summary of 9 key ideas

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Key idea 1 of 9

The key to a society’s power and prosperity lies in the strength of its institutions.

What makes a society successful? For a long time, intellectuals have debated this point, wondering why some nations prosper and succeed while others dwindle and suffer. Is it down to some kind of superior racial biology of the more prosperous society? Or perhaps sheer luck? In fact, the true answer is more subtle: A society is made great by its institutions.

Why? Because humans tend to be selfish, so without some kind of rules to force them to think about the common good – the good of their society as a whole – they tend to simply look after their own interests. Institutions provide such rules and boundaries.

For example, consider the institutions of the law, like the judiciary and the police. They provide certain rules and boundaries that the rest of society abides by.

The importance of institutions means that the nations with better institutions are more likely to prosper. And what makes institutions good or bad?

Quite simply, the things they incentivize people to do with the rules and boundaries they set. Good institutions will encourage the population of the nation to strive harder for worthwhile goals, like economic growth or a fair legal system. Bad institutions do the opposite; for example, they may encourage crime.

A good example of the importance of institutions can be seen when comparing the economies of former East and West Germany. Both countries were essentially populated with the same people, but the difference in their institutions was immense: In West Germany, the political and economic institutions encouraged people to work hard, innovate and take risks (for example, by starting their own businesses). In East Germany, this kind of entrepreneurship was discouraged.

The result? West Germany became a vibrant economic state while East Germany stagnated.

Over the last 500 years, Western nations have dominated because they had the best institutions.

About 500 years ago, a powerful geopolitical shift began to take place on Earth. Prior to this, Western nations had not been particularly powerful or influential in global affairs. But then began what is known as the great divergence. Western nations started to outstrip the rest of the world in terms of economic growth, military power and technological development.

Why did this divergence happen?

The relative decline of the Western nations is due to decline in the quality of their institutions.

The West may have been the dominant economic and geopolitical force for the past 500 years, but this time seems to be coming to an end.

This can be seen in the way the rest of the world is catching up to the West in terms of economic power. To see this trend, it is enough to glance at recent economic growth figures: In 2012, the US economy grew by a measly 2 percent, while the European economy actually contracted. Meanwhile, the Chinese economy grew by a whopping 8 percent.

The current generation in the West is prospering at the expense of future generations.

In the eighteenth century, the political philosopher Edmund Burke put forth the idea that civilized society was in fact a kind of contract between generations: those dead, those now living and those yet to be born. In a civilized society, no one generation should act without considering what the others would think, meaning that the values of dead generations cannot be trampled on and the well-being of future generations must be considered. This philosophy was thought to bring about a stable, prosperous society.

However, in the West today, this cross-generational contract has been broken: older and middle-aged people are living selfishly at the expense of those not yet born. They do this by enjoying generous government benefits, in terms of wages, health care plans and pensions. But these benefits are not free, and the government is running up a huge public debt by spending on these things. The public debt of Japan, a Westernized nation, has reached the dizzying level of almost 2.5 times their gross domestic product.

The financial system evolves in an unpredictable and inconsistent way, which makes it very hard to regulate well.

You may recall that after the 2007 financial crisis, there were ever louder calls for stronger regulation of the financial system.

This approach is misguided and dangerous, because financial crises are caused not by lack of regulation, but rather by bad regulation.

Western legislation has become so costly and complex that it no longer supports economic growth but stifles it.

The legal systems of both the United Kingdom and the United States are developed through the process of common law, meaning the law is not determined solely by a strict legal code but can be interpreted and developed by judges. This common law system was one of the main drivers behind these two countries’ evolution into global economic powerhouses.

This is because, first of all, common law protected hard-working citizens from having their property seized by the state. This made populations under common law more entrepreneurial, driving growth.

Where once the West had a flourishing and diverse civil society, it now has the inefficient and monopolistic welfare state.

Until the early twentieth century, many people in the West were active in various societies and clubs – for example, in political parties and private clubs.

This phenomenon is known as civil society, where such organizations form an important part of how a community deals with those less fortunate. Clubs and societies encouraged people to pull together for the common good and to help each other.

Future societies are likely to become increasingly urbanized, making good institutions vital.

It’s no secret that the population of world is growing. In fact, it is slated to reach nine billion souls, with most of them living in the developing world.

Even more precisely, the growth will be primarily in cities and megacities (a city with a population over ten million) in the developing world. It has been predicted that over half of all global population growth between 2012 and 2025 is estimated to come from less than 500 cities, all non-Western.

The declining power of the West could make the world more uncertain and violent in the future.

The decline of Western power and influence is likely to continue into the future. This is because Western nations are currently crippled by huge debts, so instead of expanding their influence in the world they will have to deleverage – which means they will have cut back their global economic, military and political presence in order to save money and reduce their debts.

For example, Western powers used to play a vital role in maintaining security in the Middle East, but they may soon need to withdraw from such areas.

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What is The Great Degeneration about?

The Western world seems to be in crisis. It is faced with huge levels of public and private debt, and the economies of the rest of the world are fast catching up. After 500 years of total global dominance, the era of Western powers could be coming to an end.

The Great Degeneration (2014) aims to tackle why this is the case. It suggests that a decline in Western institutions is partly to blame. Only by arresting this decline through radical reform can the West recover.

The Great Degeneration Review

The Great Degeneration (2012) explores the factors contributing to the decline of Western societies and offers thought-provoking insights on how to reverse the trend. Here's why this book is worth reading:

It provides a comprehensive analysis of the social, political, and economic forces leading to the degeneration of Western civilization.
Through careful examination of historical examples and current events, Niall Ferguson presents a compelling case for the urgent need to address these challenges.
The book's clear and concise arguments make complex concepts accessible, ensuring readers are engaged throughout and not overwhelmed by information.

Best quote from The Great Degeneration

...institutions are to humans what hives are to bees. They are the structures within which we organize ourselves as groups.

—Niall Ferguson

Who should read The Great Degeneration?

Students of political and economic history
Anyone who wants to know why Western nations are in so much debt
Anyone who is interested in the future of democracy

About the Author

Niall Ferguson is one of the United Kingdom’s most famous and distinguished historians. He is the Laurence A. Tisch Professor of History at Harvard University.

Ferguson has written numerous bestsellers including The Ascent of Money, The War of the World and Civilization. He is also well known for his many television series based on his books, and is a regular commentator for publications and networks in the United Kingdom and the United States.

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