If you want a simple way to understand why “institutions” matter, consider a thought experiment from economist Daron Acemoglu.

Ask yourself: Where would you feel comfortable taking a real risk with your life’s work?

We often romanticize the talent inside the garage. But Acemoglu’s point is that the most important part of the story is actually the garage door.

In many places throughout history, the garage was a hiding place. If you invented something valuable, you kept it secret. You knew that the moment you opened that door and showed the world you had something worth owning, you became a target for whoever held the most personal power.

The Invisible Shield

The difference between a stagnant society and a thriving one isn't a lack of talent. Talent is everywhere. What’s rare is what institutions provide: an Invisible Shield.

When institutions are stable, they act as a protective layer over the marketplace. You can’t see this shield, but you feel it every time you make a bet on your future. It provides the quiet confidence that:

• The rules won’t change mid-game: You won’t wake up to find your work "nationalized" because it became too profitable.

• The state has limits: The government’s role is to be the referee, not a player who can seize the trophy whenever they like.

• Success is yours to keep: You can trust that a patent, a contract, or a legal title will actually hold up in court—even against the powerful.

The Reality Check

Many people already feel that this “shield” is cracking. The sense that the well-connected play by different rules isn’t a hypothetical future fear; it’s a lived reality for many—and the concern is not only how far it has eroded, but how much further it could go if institutions weaken further.

If the powerful can bend the rules, people lose trust in the system—and that trust is extremely difficult to restore.

The Bottom Line

"Institutions" aren't an abstract governance concept. They are the psychological floorboards that allow us to stand up and build.

Innovation doesn't happen just because people are ambitious; it happens because they live in a system where it is finally safe to be successful. When that invisible shield cracks, the garage stops being a launchpad and starts being a bunker.

Institutions are our greatest asset against the erosion of law into personal rule.