Daron Acemoglu — 2024 Nobel laureate, among the world’s most-cited economists — has a new book, What Happened to Liberal Democracy?, arguing that liberal democracy lost the working class and can get it back. Most of the left would rather not engage. Gerard Di Trolio argues in Jacobin that this is a mistake, and then does the engaging.

The book’s spine is the framework Acemoglu is known for:

  • Inclusive institutions constrain power, protect rights and broaden opportunity
  • Extractive institutions concentrate wealth and authority, and undermine long-run prosperity even when they deliver short-term growth
  • Technological innovation does not automatically produce shared prosperity — who benefits depends on who controls the technology and how institutions distribute its gains
  • “Pro-worker AI” would help workers do existing tasks better and take on new ones, rather than automating them out; Acemoglu thinks AI firms have no incentive to build it
  • On speech: regulate the algorithms, not the speech — feeds should show accounts you follow instead of shepherding users toward outrage

None of that troubles a Jacobin reader much. Di Trolio points out the left was theorizing institutions long before Acemoglu — Poulantzas on the state as the “material condensation” of class forces, the Analytical Marxists, Maher and Aquanno’s Institutional Marxism, Chibber on industrial policy design.

The disagreements are sharper:

  • Acemoglu blames the de-linking of wages from productivity more on technology than on the decline of organized labor
  • His “working-class liberalism” wants local communities and deliberation over cultural change imposed from above — local deliberation cannot set trade, finance or AI policy
  • He treats American liberalism and European social democracy as interchangeable, when in the New Deal organized labor was a coalition special interest, not a foundational force — which is exactly why the US welfare state is leaner
  • Foreign policy is the book’s largest omission: Iraq, Afghanistan and the war on terror corroded faith in government, and today’s suppression of speech about Gaza will do more of the same
  • He calls for “a new kind of business unionism” and blames communist unions for labor’s damage — the review answers with Stepan-Norris and Zeitlin’s Left Out on what communist-led unions actually did for racial and gender equality, and with Penny Lewis on working-class opposition to the Vietnam War

The China problem is the most serious structural one. Inclusive-versus-extractive explains colonial underdevelopment in Africa and Latin America; it explains authoritarian states pushing the technological frontier much less well.

The takeaway Di Trolio lands on is unfashionable but hard to argue with: growth still matters in the medium term, control of technology is genuinely up for grabs, and a lot of working people feel deeply alienated. Institutions are the terrain either way — which is a reason to argue with Acemoglu rather than ignore him.