Could any real country have an economy like Panem, the post-apocalyptic setting for The Hunger Games? Actually, yes, writes Matthew Yglesias. Economic theory says that over the long term, prosperity is driven by capital accumulation and the “Solow residual” of technology. In Panem, the government controls the populations of 12 districts with extractive economies. District 12, for example, is oriented around a coal mine manned by unskilled labor and devoid of mechanized equipment despite being a technologically advanced society. In a free market, competition would drive wages up, but the government is the only purchaser of mine labor and pays low wages. This has a trickle-down effect that keeps the rest of the district in poverty. We’ve seen this happen repeatedly in our own history. For example, European colonialists created extractive institutions in what are now Africa’s modern states. African mass resistance helped overthrow the colonialists, but in almost every case, the new elite continued the same extractive institutions for their own benefit.
Don’t forget you can visit MyAlerts to manage your alerts at any time.