Why Nations Fail

Trump's America and the extractive institutions that destroy societies from within. Where the extraction goes first and what happens when the laboratory comes home.

I am studying for the bar exam in Trump’s America, which means I am memorizing the rules of a legal system being disassembled in real time by the people running it, color-coding flashcards about constitutional protections while the administration they are supposed to constrain deports people to foreign prisons without due process, while ICE raids churches and schools, while the Supreme Court finds new and creative ways to call all of this acceptable. On my desk next to the study materials is Acemoglu and Robinson’s Why Nations Fail, because i needed something “fun” to read to distract me from my boring prep materials. The book is primarily about why the institutions that are supposed to prevent the concentration of power keep producing it instead. All the while, I am watching a video of a father in Rafah carrying the burned and broken body of his child through rubble that used to be a neighborhood, and Tyre is under evacuation orders again, and I am thinking that the book, for all its rigor, was written about the wrong place.

Acemoglu and Robinson argue that nations fail because of extractive institutions, systems designed to concentrate wealth and power in a narrow elite at the expense of everyone else, producing a vicious circle where economic capture enables political capture and political capture protects economic capture until the whole thing collapses under the weight of its own predation. The counter is inclusive institutions, which distribute power broadly enough to create accountability, broadly enough that the people being governed have some stake in the system governing them. The book traces this across centuries and continents, from the Congo to Colombia to the American South, asking why some societies industrialize and others collapse, why some break out of poverty and others remain trapped. What the book never quite manages to ask is where the extraction goes when it leaves home, and what happens to the society that perfects it abroad before turning it inward.

Gaza is the answer to that question that the book never wrote. What Israel has built in Palestine across eighty years is the extractive institution in its most complete form: Military Order No. 158 classifying Palestinian rainwater as Israeli state property, a permit system making Palestinian farming on Palestinian land conditional on Israeli approval, an administrative detention regime holding people for years without charge inside a court system with a ninety-nine percent conviction rate, settlers destroying fifty-two thousand olive trees many of them older than the state that protects the settlers who burned them, Doctors Without Borders documenting that the deliberate starvation of two million people manufactured a famine in under two years in a territory where malnutrition before October 2023 was almost nonexistent, ninety percent of babies born to malnourished mothers now premature, neonatal mortality doubled, the UN Commission of Inquiry concluding that genocidal intent was the only reasonable inference from the totality of evidence and that the intent extended to the period before October 7, 2023. Less than ten percent of historic Palestine remains under complete Palestinian control. The extraction was total, funded and armed and diplomatically shielded by the United States without interruption across eight decades and eleven presidencies, and the tools built to administer it did not stay in Palestine.

The surveillance technology that Peter Thiel’s Palantir sold to ICE, now tracking, detaining, and deporting people across the United States, was developed on contracts with Israeli defense and intelligence agencies that spent decades perfecting population control in the West Bank and Gaza. The administrative detention holding immigrants in ICE facilities for months without charge is the West Bank military court system translated into American English, the same logic that produces a ninety-nine percent conviction rate because the system was never designed to acquit, because acquittal would mean acknowledging that the detained person has rights the state is obligated to respect rather than a problem to be processed. The dehumanizing rhetoric that makes these systems politically viable, the language of invasion and infestation and animals and vermin that Trump deploys against immigrants and Muslims, is the same rhetoric Israeli officials have used about Palestinians for decades, and American politicians learned it was usable here because they watched it deployed against Palestinians for decades without consequence, because Gaza was the place where the question of what you could do to people and call it policy was answered, and the answer traveled.

Peter Thiel has moved his family to Argentina. The man who built the surveillance state, who funded the politicians who constructed the legal conditions for what is now happening to immigrants and dissidents and activists across this country, does not trust the state he built enough to raise his children inside it. This is what Why Nations Fail describes at the end of the vicious circle, the moment when the people running the extractive institution understand that extraction does not honor the boundaries of class or contribution or political loyalty, that the machine they built will eventually process them too, and so they leave, and they take their money, and they go somewhere the machine has not yet reached, which is to say somewhere whose own history of what happens when the machine arrives they have apparently not read.

The Supreme Court has spent two years completing the circle from the other direction. The institution whose counter-majoritarian function was supposed to make the vicious circle impossible has upheld the administrative frameworks enabling mass deportation, declined to check executive overreach at the moments when checking it was the only thing that mattered, watched the Justice Department converted into an instrument of political reward and punishment, and responded with a proceduralism so careful it amounts to permission. The institution designed to break the feedback loop of extraction is instead closing it.

Meanwhile Trump attacked Iran on a feeling, according to his own press secretary, opening Operation Epic Fury with strikes that killed Khamenei, killed 168 schoolchildren and their teachers, and achieved what the New Yorker described as near complete control of Iranian airspace, allowing the United States and Israel to rain death and destruction from the sky all day long, Pete Hegseth crowing about punching them while they’re down in the specific register of a man who did not anticipate the most obvious retaliatory move in the history of warfare. Iran closed the Strait of Hormuz, through which roughly a quarter of the world’s seaborne oil and twenty percent of its liquified natural gas pass, and began charging tolls in Chinese yuan, which is not merely a military defeat but a strike at the petrodollar system that has underwritten American financial dominance since Bretton Woods, each toll paid in yuan another brick removed from the financial architecture that made American sanctions the most powerful non-military weapon in the world. Trump threatened to blow up Oman for jointly charging tolls with Iran. Oman is still there. The tolls are still being collected.

The ceasefire terms include Iranian control of the strait, an end to all primary and secondary sanctions, war reparations, and the withdrawal of American forces from the region, every condition worse for American interests than what existed before Trump started the war, the United States having lost its sixth war in the Middle East in twenty-five years in six weeks, faster than Afghanistan, faster than Vietnam, the gap between imperial self-image and imperial reality finally too wide to paper over with speeches about self-defense at every podium the international order has made available.

Viet Thanh Nguyen wrote this week that what the United States is doing in Iran shows, once again, that it has learned the wrong lessons from Vietnam, that the wrong lessons include believing overwhelming military force will lead to victory and that supporting an anti-democratic authoritarian ally is sustainable, South Vietnam disappearing after 1975 without American support just as Israel's policies of occupation and apartheid are only possible with it.

The war on Iran is Washington's Suez moment, the point at which the gap between imperial self-image and imperial reality becomes impossible to manage, except that this is dumber than Suez by an order of magnitude, because at Suez there were actual superpowers to force Britain and France to stop, and here there is no replacement hegemon, only the vacuum Trump created by removing the constraints that hegemonic ambition, for all its violence, paradoxically imposed. Others around the world are watching. Others are eyeing nearby strategic waterways. The cutlasses are being sharpened.

Why Nations Fail was written with cautious optimism about inclusive institutions reasserting themselves, about the accumulated pressure of extraction producing enough resistance to change the path. I am sitting with that argument in Trump’s America, with a Gazan father carrying his child in one tab and bar prep in another, with Tyre under evacuation orders and Thiel in Argentina and the Supreme Court completing the vicious circle and the Strait of Hormuz charging tolls in yuan, and what I keep returning to is that Acemoglu and Robinson built their theory of institutional failure on every place except the one that has been living it in its purest form for eighty years, the one that has been telling the world exactly what extraction looks like when it is total and unaccountable and backed by the most powerful military in human history. They wrote a book about why nations fail and never quite named the place where the failure was perfected before it came home.