Daron Acemoglu won the Nobel Prize in economics in 2024 and is the third most cited economist of all time. Thus, the paradox of his new book, What Happened to Liberal Democracy?, is that its most serious analytic failures are economic. He provides a sincere and serious consideration of modern liberalism’s estrangement from the working class. But when he moves from description to solutions, the basic building blocks of economic analysis disappear. Imperfect markets are compared with an idealized government. Expansive agencies are proposed while the risk of their capture—well known in public-choice theory—is ignored. And while Acemoglu is known for integrating institutions into economics, he sometimes celebrates democratic consensus without attention to the elite institutions that formed it.

Acemoglu “pitches his tent” on the left side of liberalism, arguing that it “has historically been an engine of material and social progress.” Today he believes tradition should give birth to “working-class liberalism,” which means, for him, creating a more level economic playing field and technological change that complements rather than displaces labor. The book is well-intentioned. He recognizes that elites cannot be trusted to direct culture. But he never explains why they can be trusted to direct technology, redistribution, and the administrative state.

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