SEVERAL CENTURIES ago, there was a nation that rose to become a world power on the strength of its innovation and its dedication to capitalist enterprise. It became a major center of trade, a financial powerhouse whose name was well known across the planet. It was blessed with an unusual society that rewarded talent and hard work, not social position - one of the few places where a person who had nothing could realistically dream of a far better life. And then this vibrant place, the envy of the world, suddenly collapsed. Its economy shrank; its people left.
The place was Venice, and if it is hard to imagine the charming tourist destination was once one of the richest places on the Earth, then that is precisely what MIT economist Daron Acemoglu wants me to understand. I had come to the Sloan School of Management cafeteria, its tall windows framing the Charles River, for coffee and a discussion of his favorite topic - why nations fail.