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Today on Esquire’s website, Daron Acemoglu, a professor at MIT, tackles an age-old question: Why are some nations wealthy while others are poor?

There have been plenty of sweeping theories to choose from, as Acemoglu notes.  In the 18th century, the French political philosopher Montesquieu was proposing that people in hotter places are just lazier. Today, in a similar way, Jeffrey Sachs of Columbia University’s Earth Institute says a lot of it boils down to geography and the weather.

But according to Acemoglu, while these theories may help explain aspects of poverty, they ignore the incentives that truly drive prosperity. In Acemoglu’s view, if countries create sound institutions and improve their governments, then their citizens can expect that their hard work will be protected by the rule of law and poverty can be fixed.  While rich nations may not be able to totally force their institutions onto other countries, according to Acemoglu, they can push for government reforms and even help the citizens of poorer nations by providing them with educational opportunities and technology.

Acemoglu’s connection between economic incentives and the rule of law is appealing but it ultimately fails to answer the initial question.  Certainly there is a correlation between good government and economic prosperity.  But why do some nations develop sound, transparent institutions while others settle for warlords or corrupt puppet governments?

And it can’t all come down to education.  Russia, for example, has excellent universities and a literacy rate close to 100 percent. Yet the International Finance Corporation ranks Nigeria and Pakistan as better places to do business.

Social scientists will keep on trying to isolate that single causal factor that explains wealth and poverty.  But what if there simply isn’t one to be found? After all, even Iraq was once home to the center of civilization.

If you’ve been following the healthcare debate, then you’ve probably heard of this WHO finding, which forms the basis of so many arguments for reform: “The U.S. health system spends a higher portion of its gross domestic product than any other country but ranks 37 out of 191 countries according to its performance.”

But scholars at the CATO Institute counter that those stats do not provide an accurate diagnosis of the health of America’s healthcare system.  When one factors in innovation (basic science, diagnostics and therapeutics), they argue, then the American system does not look so bad.  America has fewer people than the EU but we’ve recently won more Nobel Prizes in medicine and physiology and produced more pharmaceutical wonder drugs over the last few decades.

If an ambitious doctor is looking for fertile ground to find a better cure, America looks like it’s the best place to set up shop.  It follows then, that attempts to exert government control over the healthcare system could thwart innovation and also weaken one of the American economy’s strongest sectors.

However, the report’s authors mention an odd side effect of our system which I think weakens, rather than helps, their case:

Consider, for example, the frequent claim that European health systems achieve similar health outcomes to those of the United States at a much lower cost. That claim fails to consider that higher U.S. spending levels could be generating innovations that improve health outcomes in Europe and around the world.

As the CATO scholars go on to point out, the rest of the world is essentially getting a free ride off of our investments in medical innovations.  When these innovations can be controlled and patented, as is often the case with new drugs, then American companies and our broader economy both benefit overall.  But many investments in innovation, such as long-term health studies, end up as global public goods.  We pay the price to figure out a new procedure and everyone else gets to adopt it, free of charge.

Perhaps there is a better way for the world to share the costs of all these healthcare advances since the benefits don’t necessarily trickle down to Americans who can’t afford insurance.

According to a new report by the US Department of Agriculture, more than one in seven American families suffered from “food insecurity” sometime in 2008 and we should all be concerned that that figure is rising.  Many media outlets have eaten this report up at face value, blasting similar headlines about how more Americans are “going hungry.”

This hunger awareness drive is not new, though.  Feeding America, a nonprofit funded in large part by the food industry, and its partner, the Ad Council, have been running an Ogilvy-powered ad campaign for a year now which claims one in eight Americans “live with hunger.”  Feeding America even connected with Matt Damon to pitch its hunger talking points on the season finale of HBO’s Entourage.

Obviously, everyone is against hunger.  And whenever someone in a country as rich as America can’t afford food, it’s a disgrace. We clearly have the resources to keep everyone well-fed.

So here’s my problem: these hunger numbers just don’t seem to add up when you realize how many people in America are over-fed.

Just look at Feeding America’s own website.  Do their “faces of hunger” from across America look like they’re starving to you?

We don’t have a serious hunger problem in the land of the absurdly cheap one dollar double cheeseburger. We have an obesity epidemic.

Let’s check the government’s own data.  In 2008, only one state (Colorado) had an obesity rate that was less than 20 percent.  According to the latest CDC stats, 32.7 percent of American adults are now overweight, 34.3 percent are obese and 5.9 percent are are extremely obese.  I’m supposed to believe that roughly 14 percent of American families are “food insecure” when only 27 percent of American adults are not overweight or obese?

Many will counter that it must be poor people and the nation’s children who are “going hungry.”  But again, according to the government’s own data, around 17 percent of children are now obese. And paradoxically, many studies have confirmed a correlation between poverty and obesity. While the USDA claims that one in seven American families are “food insecure,” the CDC’s data shows that one of seven low-income, preschool-aged children is obese.

So why is Big Food trying to convince us that there is a huge hunger problem?  My theory is that Feeding America and its backers, which include Kraft, the Campbell Soup Company, Wal-Mart and ConAgra Foods, want to hype hunger so that no new regulations try to tackle obesity.  What politician would dare propose a new tax on fatty or empty calorie foods when the public thinks one in seven families can’t put enough food on the table?  And who is now going to try and stop the redistribution of tens of billions of our tax dollars to King Corn and his Frankenfood court each year?

One thing is certain.  President Obama’s controversial pick to lead the USDA, Iowa’s former Governor Tom Vilsack, and his friends at Monsanto, won’t be going hungry any time soon.

Two Seattle-based organizations illustrate how the distinction is blurring between charities and businesses.  Grist is a popular news blog and Groundwire is a consulting shop that helps organizations build up their online capabilities. Grist competes with every other new media site for eyeballs and advertising dollars while Groundwire has to battle with every other ad agency for new website contracts.

But both have an inherent advantage over other service providers in the field.*  Because they have an environmental component to their missions, they are both classified as nonprofits.  That means they avoid paying many federal income taxes and can supplement their operating budgets with tax-exempt donations.

First off, it is worth noting that there are disadvantages with establishing an organization as a nonprofit.  The group’s founders cannot sell or cash out, for example.  And it’s not necessarily easier to rely on donors rather than just customers.

And finally, I am not accusing either of these groups of doing anything illegal or unethical.  Both have to make their cases to the IRS that they should qualify as tax-exempt charities working solely in the public’s interest and they’ve both been approved.

However, I’m not convinced that nonprofits with this level of commercial activity deserve the exact same tax breaks as pure charities.  Perhaps it’s time for Congress to clarify the rules.

*Disclosures: I’ve helped an environmental group with a media buy on Grist before.  I also own a for-profit online news site as well as a consulting practice that helps environmental groups, among others, develop websites.

20 years ago today, the Berlin Wall came crashing down, taking with it the communist regimes that haunted Eastern Europe during the 20th century. World leaders are gathering in Germany’s capital to commemorate the reunification of Germany and the end of the Cold War.

Of course, the fall of the Wall has come to symbolize more than a political and military win for the West.  It also represents the idea that free markets work better than planned socialist economies.

However, a new global poll has found that today’s recession has many doubting pure capitalism.

According to pollster Doug Miller, “It appears that the fall of the Berlin Wall in 1989 may not have been the crushing victory for free-market capitalism that it seemed at the time — particularly after the events of the last 12 months.”

Here are the poll’s key findings:

Only 11 percent of people surveyed across 27 countries thought free market capitalism is working well, while 51 percent believed its problems can be solved with more regulation and reform, the poll said.

In only the United States (25 percent) and Pakistan (21 percent), did more than one in five people agree that capitalism works well in its current form, the poll conducted for the BBC World Service said.

A majority now believe free-market capitalism doesn’t really work.  Were the eulogies over socialism’s demise premature?  Share your predictions below.

Al Gore has made quite the comeback since losing to George W. Bush.  Back in 2000, the former Vice President couldn’t even pull off a proper kiss with his wife.  But now he’s a rockstar among environmentalists and other policy elites for his crusade against climate change.

It’s been three years since an “Inconvenient Truth” changed the debate.  But Gore is still all over the news.  This week, he’s on the cover of Newsweek. He’s also got a new book out called “Our Choice: A Plan to Solve the Climate Crisis.”

And there’s going to be even more Gore stories in the media as we approach next month’s UN summit in Copenhagen on climate change.  Gore recently sat down with CBS’ Katie Couric to make the case that America needs to act quickly to solve what he calls the “climate crisis.”

But many are growing skeptical over Gore’s fast push for laws that could fundementally alter our economy.  Perhaps that’s because Gore stands to profit off of legislation that regulates carbon emissions.  Gore’s green-tech investments could make him the planet’s first “carbon billionaire,” according to an estimate in the UK’s Daily Telegraph.

Last April, Republican Representative Marsha Blackburn gave Gore the chance “to clear the air about [his] motives, to which Gore replied, “Congresswoman, if you believe that the reason I have been working on this issue for 30 years is because of greed, you don’t know me.”

Do you take him for his word? Is it ok for Gore to make money from climate change legislation?  Please discuss below.

Over half of academic life science researchers maintained financial ties with industry, according to survey results published in Health Affairs.

Here are the key details about the relationship between universities and corporate America, according to the Wall Street Journal:

About a third of the respondents said they had served as consultants, nearly a quarter said they had been paid speakers and 20% said they had received research funding from industry. That last figure is down from 28% of researchers who said they received research funding from industry in a similar survey conducted in 1995.

The authors suggest a number of possible causes of the drop in researchers who said they got industry funding for research, including a big increase in NIH research funding since 1995 and more scrutiny of academic-industry ties.

Interestingly, it was also found that faculty with industry support “were more productive than faculty without such support on virtually every measure.” However, we cannot conclude that corporate support caused the productivity surge, since it’s possible that the most productive researchers tend to attract the most money.

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If you demand identity privacy or insist on paying with cash when patronizing a local business, then you could be a suspected terrorist.  That’s according to FBI flyers which have been sent to tattoo shops as part of its “Communities Against Terrorism” drive.

The government now wants local businesses to keep an eye on their customers and report any suspicious activity. Apparently, getting a group tattoo or radically changing your hairstyle is a cause for concern.

Correct me if I’m wrong, but aren’t most potential terrorists religious fanatics from the Islamic world who sneak into America hellbent on wreaking havoc?  Kind of like those 9/11 highjackers?  So why target tattoo shops, then, FBI?  Muslims can’t get tattoos per their religious traditions.  And who would bother getting a tattoo if they were about to blow themselves up?

I have to doubt whether this initiative is really about the terrorist bogeyman.  What’s more likely: Selling a million dollar lottery ticket or selling to a terrorist?  It seems just as, if not more, plausible that this is about quashing political dissent.

Getting neighbors to rat on their neighbors is a page straight out of the Soviet Union playbook.  When there is that kind of distrust at the local level, it’s a lot more difficult to rally around a petition against the government.

If business owners care more about the principles for which this government stands than for whatever officials happen to have the power that day, then they have a responsibility to reject these types of FBI-community “partnerships.”

We all know a coworker that slips inappropriate jokes into the conversation here and there. So now that President Obama has signed an updated hate crime bill (ironically stuffed into a defense measure) into law, does that mean the “thought police” are going to send everyone who gets a cheap laugh from that fellow to jail?

First of all, keep in mind that the bill expands federal hate crime legislation that’s been on the books since 1968. Along with race, religion and national origin, it now covers “actual or perceived” sexual orientation and gender identity as well. If local authorities don’t have the will or resources to investigate violent crimes motivated by this type of hate (yes, critics, all crimes are indeed motivated by hate), then the Attorney General has the right to swoop in and finish off the case.

In other words, your crass coworker still has the legal right to spew his opinions on race, religion and sexual orientation. But if that coworker is notorious for making jokes about gays all day at work and then one night he goes out and commits a violent crime against someone, the federal government could investigate the entire office, turning the “criminal prosecution into a political correctness prosecution.”

Therefore, if the joke wouldn’t get cracked in front of the cameras, it shouldn’t be said in the office either. Simply put, unless those soundbites are relevant to your job, keep your mouth shut.

And one last thing: I’m not a lawyer and obviously cannot offer legal advice. But I have read the whole bill and gather that this the extent of what could happen. If you have a different interpretation of this new law, feel free to share it below.

Newsweek recently decided to deal with threat of the web by cutting circulation and doubling down on editorial.  I’ve been skeptical that they could pull it off, however, I have to admit that the weekly has produced quite a few thought-provoking pieces over the last few months.

This week, Senator Lamar Alexander, who has served as both US education secretary for George H.W. Bush and president of the University of Tennessee, argues in Newsweek’s cover story that universities should consider a three year graduation option to keep costs down for students. Think about how much that proposal makes sense, considering that the information revolution is enabling students to reach proficiency levels faster than ever. If you graduate in three years, rather than four, you instantly cut your tuition costs by 25 percent.  That seems a lot simpler than adding another federal loan scheme to the mix.

Alexander bases his argument by drawing an intriguing parallel between America’s universities of today and the Big Three automakers of yesteryear.  Alexander suggests that Detroit’s domination in the 20th century contributed to its ultimate downfall because the industry became too complacent under its near-monopoly.  Once consumer tastes shifted toward leaner cars produced by the Japanese and the Europeans, Detroit was done.

Right now, as Alexander points out, America produces the best universities in the world by nearly every measure.  And their customers seem willing to take out loans and pay whatever it takes to attend the institutions with the most celebrity professors and the biggest labs and football stadiums.  In other words, America’s universities are churning out SUVs of education.

But what happens when students decide they’d rather not buy into these tuition guzzlers?  What happens when students opt for three year schools or take more classes from entrepreneurial (and cheaper) online players? What happens when those flashy new stadiums and high-tech lecture halls are filled with empty seats?  It’s not a stretch to think most universities operate under the assumption that the taxpayers will ultimately pick up the tab during any tough times.

Are our universities too big to fail now?  Please share your opinion below.