The Role of Institutions in Prosperity

Fundamental institutions originating in Western Europe have been defined as essential to modern prosperity, dubbed 'Killer Apps' by Neil Ferguson. These include competition, which decentralizes political and economic power; modern scientific methods that enhance our understanding of the natural world; the rule of law that protects private property and enforces contracts; modern medical advancements; the establishment of a consumer society that supports industrialization; and a strong work ethic that provides moral motivation. Ferguson asserts that these institutions catalyzed modernity and can be adopted by any society to enhance prosperity, as evidenced by the rapid development of countries like China that have embraced them. Unfortunately, many students in higher education graduate without encountering these foundational concepts, resulting in significant political and economic liabilities for society.