It's not that plunder let Western Europe get better technology, but that technology let Western Europe seize more plunder.
Premodern nations everywhere imposed tribute or took slaves from or just conquered weaker states. Europeans were no different. But modern guns, ships, and financing let Europe do to the whole world what people like the Aztecs or Manchus had only been able to do to their neighbors.
It's not like Spain needed American colonies to develop guns and ships and bankers. It's the other way around: by the 1500s, Spain already had superior enough tech to conquer Mexico and Peru with tiny bands of well-timed conquistadors. The technology came first, and made the great plundering possible.
We forget, now, how much technology had already advanced in Europe by 1800, or even by 1500. It wasn't important for everyday standards of living yet, so it doesn't show in per capita income charts. But if you lived in London or Amsterdam of 1700, or even Florence of 1500, you were in a city decked with engineers and manufacturers who could sell you things that nobody could buy in India or China or the Americas. That technology wasn't making ordinary peasants better off yet, but it was already reshaping long-distance travel, and business – and war.
Ironically, the same technology that enabled so much plundering was making it unimportant. A rich ancient Roman was rich because he had many slaves working for him; conquest, and the extreme inequality that followed it, really was essential for wealth. But today we're rich because we own machines, not because we subjugate our neighbors. In fact free neighbors are worth more to us than slaves, because free neighbors are much more productive.
Capitalist growth, that leftists want to credit to plunder, is just what's made plunder no longer an important part of our world.
the distinction needs to be made between plunder and colonialism. Because colonialism wasn't just a 1-way street of extracting resources.
1. Turbo-charged global trade where colonies were importing goods made from the Europe, and most colonies were not allowed to process their own resources. So Europe created their own captive consumer market
2. Germany didn't have colonies, but it was indirectly trading with the colonies via Britain / Netherlands as well as FDI from overseas (especially Britain). As the industrialised countries became richer, they would import more and fuel nearby European economies (e.g Denmark's agricultural sector exported a significant amount to Britain. Foods such as bacon, butter and eggs)
Germany/Sweden also had the fortune of having natural resources like iron ore and wood that were essential to industrialisation.
3. The reason Spain and Portugal didn't get as wealthy is because they overly-relied on the resources they extracted and didn't industrialise or develop industry (a.k.a resource curse). They were also up to their eyes in debt and most of the wealth went directly to British/Dutch creditors
So if we are in agreement that industrialisation is the key to wealth, and that the resources and demand from the colonies are what drove globalisation, then it only follows that colonisation was in-fact what led to European wealth and everything else is downstream of that.
It wasn't technology that made the European conquest of the Americas possible so much as the genetic inferiority of the Native Americans, that resulted in their near-extermination by European diseases.
This vulnerability was the result of their ancestors passing through a genetic bottleneck, as they crossed the Ice Age-era Bering land bridge from Siberia to Alaska.
1) We need to be more honest that after Britain industrialized, most other countries got richer through utilizing IP from richer countries, reverse engineering, and then improving it. In the 18th century, Treasury Secretary Alexander Hamilton, endorsed stealing British inventions, reverse engineering them, and then make American versions. In 1791, the American government paid $48 ($1561 in 2023 money) to English industrialists to replicate inventions for the American market. That's how the North in the U.S. became industrialized before American became on the frontier of innovation itself. While the South was just exporting cash crops like cotton. Germany, Japan, and South Korea got rich the same way. Now China is getting rich that in the same way.
2) We now have a few (but not many) examples of former Vassals/colonies that surpass the metropole. Those former colonies/vassals got richer or became as rich either through winning the natural resource lottery with a small population (UAE or Qatar beating UK with having a lot of oil & gas), ingenuity and finding advantages, hardwork and etc. (Taiwan and South Korea are now equal or higher on a per capita ppp basis to Japan the former colonial master, Singapore > UK, Macau, through becoming a gambling state > Portugal), and of course US and Canada > UK or Poland & Baltic states > Russia.
3)I think it's obvious that the industrial revolution came from the continuation of manufacturing advances that Persian, Turkish, Mughal, Omani, Ming & Ching, and even perhaps even the Moroccan and more advanced African empires (Kongo, Songhay, etc.) made. The Europeans managed to trade with ALL of them, so the Europeans just continued their ideas and advance them with by developing an economic system that rewards risking capital (Dutch invented stock market) and values strong property rights protection British. Even in the 18th century, most of the world was basically feudalistic society with a King that abused property rights. Since that feudalism was dead in Western Europe since the bubonic plague, they were the first to end that type of society and make a new one. Meanwhile in Africa, Ethiopia, the only nation that avoided colonialization, was a feudalistic society where the Monarch controlled most of industry and the nobles discouraged some innovation to protect their wealth. Ethiopians were poorer than Congolese (which had a horrific colonial history with King Leopold and Belgians) until 2008.
If the industrial revolution was a group project, England was the kid that did almost all of the work the night before deadline. The development of new ideas in Europe in the early modern era Far Surpasses anything that had existed before, and it's not even close.
1) Ethiopians will call Mussolini's rule in the 1930s an "occupation" but not colonialism. They tbink of that period like Russia occupuing Ukraine. Italy tried taking Ethiopia in the 1880s, just like how every other African country was colonized and Ethiopia resisted colonialism.
2) Part of the reason why Ethiopia suffered communism is that Ethiopia never changed its nearly millenia old feudal land laws. The monarch and the nobles basically owned everything, the farming productivity was terrible, leading to a constant famine including the mid 70s one. It was so bad, Selassie tried hiding the famine. The youth, farmers and military couldn't take it anymore and the military took over and tried communism. The brief Italian occupation didn't really "colonize" Ethiopia since they literally went right back to the centuries old empire laws after.
I agree, but I don’t think that comes close to explaining the declines of the Spanish and Portuguese empires. The Iberian empires attempted to strip the New World of gold and silver (and spread Christianity). The gold was used to build beautiful churches, palaces, and fund wars. While the coffers of the Kingdom of Castile were temporary filled, the world view of the Spanish and Portuguese was rather medieval. Very religious, they looked down on commerce, cared about status and lineage. This was the dominant view across Christendom. It was in a handful of places in Europe, which were relatively tolerant of innovation or protective of property rights, where this view changed.
Just a minor quibble. This: "Their clothes were shabby and fell apart quickly." Is probably wrong. The average poorer person's clothes in past centuries might've been shabby, but it also would've been designed to last, even if it meant doing the occasional patch. This is part of the recent "modern sweaters are bad" discourse. ( https://www.theatlantic.com/technology/archive/2023/10/sweater-clothing-quality-natural-fibers-fast-fashion/675600/ ) The older style of knitwear was designed so you could darn over any holes that developed, and _one_ could easily last you a lifetime -- and you'd darn well better _make_ it last. The shirt on your back probably represented a non-trivial percentage of your total wealth, as a poor person in the pre-industrial world.
I don't think it even would be true that they "needed more frequent repair" -- they would've been designed to be quite durable, but then when they inevitably did eventually get damaged, they would be repaired, because repair was cheaper than making a new one. When modern clothes get damaged, we generally _don't_ repair them, we toss them and get something new. They're not designed to be repairable for less than the cost of a new one -- which is a function of the fact that repair would require attention to the details of the damage, and the time of a skilled tailor or seamstress is vastly more valuable now _relative_ to the cost of producing a new garment through a highly mechanized / standardized process.
I was in Uniqlo in London the other day and noticed there was a very busy section dedicated to the Japanese art of aesthetically repairing clothes (which I've never heard of before so it's possible they just made it up). This may say something about the UK's developed economy status. I'll have to check if Uniqlo Japan is doing it too.
Certainly aesthetic repair is a thing in Japan. Kintsugi (reconstruction of ceramics) is probably the most famous. https://en.wikipedia.org/wiki/Kintsugi
I'd expect there are _some_ people in Japan still practicing kintsugi, both hobbyists and professionals selling it as art. It's part of their cultural heritage.
In any case this is kind of irrelevant to my original point, which is that in the 17th century, repairing an existing garment was, relatively speaking, a lot cheaper than getting an entire new garment. In a society where the source fibers are incredibly cheap because of mechanized agriculture and fertilizers (not to mention production of fibers from inorganic inputs), and then you can use mechanized systems to convert the fiber to cloth and then cut pieces, and machine-assisted sewing to turn the pieces into a garment... a new garment requires relatively little human attention. Whereas a good repair still requires just as much human attention to detail as ever, and if anything, that skilled attention is MORE valuable today, because many fewer people learn how to do it. Your average 17th century peasant knew how to take some thread and patch material, and patch up their breeches, or at minimum knew somebody in their family who could. The only kind of garment you'd do custom repairs on now is something like a bespoke suit, or a high end gown, and you'd have to find a specialist tailor who probably charges like $100/hr for their time. Maybe more.
Baumol's Cost Disease is probably the single most important factor in understanding the modern economy.
> the old Marxist labor theory of value, with natural resources tacked on in addition. The problems with that theory are well-known.
When I first read Marx, as a young socialist, I realised he didn’t understand how machines contributed to capital at all. He claimed that all wealth was the product of work - he said human work but there’s no need to differentiate.
In Marx’s view 100 hired hands harvesting a field contributed their work and energy to transform something (what was being harvested) into capital. It’s an energy to capital equivalence not too dissimilar to the E = mC^2 equation of Einstein. W = kC.
If you replace the 100 workers with a combine harvester then it’s the machine creating the value - the driver is just sitting and directing. (A bit like a foreman in the past).
Machines create more wealth than Marx could have imagined as he saw the total amount of capital replenishment in any year as only ever equal to human production alone. All that Marxism was going to do for the worker was reduce the profits of the capitalists making the worker 10-20% richer. But that would be it.
Isn't all wealth still the product of human work though, with capital just adding additional stages of indirection? If manual farm labourers are replaced by a combine harvester then isn't the value created by the workers who designed and built the combine harvester?
The real input Marx misses here is technology. The value is created not just by the labor input, but by the pattern that determines where the input goes. That pattern is technology. "Work smarter, not harder" is the refutation of the labor theory of value.
Absolutely. Design is critical. The stick versus the mold board plow. The sledge versus the wheel barrow. Paddle wheels versus propellers. Flapping wings versus aerodynamic lift of Wright Bros. wing profile. These are design innovations that amplify labor by orders of magnitude. This is what Noah means by 'pattern'. This is intellectual input, or innovation. What makes it powerful is that design ideas can be copied and improved upon without degrading the original. If I build a lifting wing, it does not diminish the effectiveness your lifting wing. I do not need to colonize your tech to build my tech. The only control is legalistic: Patent. But: It is hard to control Ideas. And liberal science, with open publication, peer review, repeatability, and falsifiability tends to spread ideas.
Labor and capital are the inputs to production, and it is production that has value. Technology increases productivity - the amount a lump of labor produces with a given investment in capital.
"Did I rip you off? No! Sure, the thing I traded you (the bookshelf) contained less wood and required less labor than the thing you traded me (the raw wood). But you’re happy with the trade, because now you have a bookshelf that you couldn’t have easily produced yourself."
What if I hoarded the knowledge of techniques needed to build a bookshelf, and used the wealth I gained from these kinds of exchanges to make it harder for the people in your country to learn the techniques? (say, via political influence on the intellectual property regime, or tempting budding carpenters in your country to immigrate to my country creating a sort of brain drain) And even if the knowledge was available, my established bookshelf-making company might have various advantages (economies of scale, deals with suppliers of other needed parts in value chain, etc.) that would make it cheaper in the short term for people in your country to just buy from me than to try to start making them yourselves, although it would be in your long-term interest to develop the ability (allowing you to keep more native wood).
I think these issues would show up in a steelmanned version of "unequal exchange", one which would not claim that unequal exchange is the whole reason for differences in wealth between countries, but just that richer countries press their advantages in ways that make it harder for poorer countries to develop than it would be otherwise. For example https://scholarworks.umass.edu/cgi/viewcontent.cgi?article=1312&context=econ_workingpaper talks on p. 8-9 about the role of "intangible assets" due in part to intellectual property rights, and other forms of market power that existing large firms have.
Interesting and correct. IP law, as it stands, is an illegitimate exercise of state-created monopoly power, as the entire economics profession pointed out in the amicus brief on Ashcroft vs Aldred. That's true between states as well as within them.
And isn't dependency theory especially true in a field like Big Tech where network effects encourage monopoly?
This is why Big Tech is overwhelmingly dominated by the US, because the European market is too fragmented by linguistic diversity while the individual national markets were too small. As a result, French Dailymotion couldn't compete with YouTube, German XING couldn't compete with LinkedIn, and Spanish tuenti couldn't compete with Facebook.
The only part of the world that has escaped US domination is China, and only because the US Big Tech products are outright banned there. Would Tencent still be viable if the Chinese were able to use Facebook?
Also, another aspect of steelmanning unequal exchange might be the imperialism caused colonized countries to develop worse institutions that impeded their ability to grow wealth later on, with a stronger effect for countries that were wealthier when initially colonized because the colonizing countries took a stronger hand with them, see the paper by Acemoglu et al. providing evidence for this hypothesis at https://economics.mit.edu/sites/default/files/publications/reversal-of-fortune.pdf
Knowlage is not a commodity that can be hoarded. Read your own sentence and realize how odd it sounds.
You should rethink your understanding of trade. Trade is not automatically adversarial and is not a zero sum game. A lot of modern rhetoric these days assumes an every trade has a winner and a loser. That’s just not the case
My instinct was always that colonial powers got rich first and colonised later. After all, colonisation requires military strength, and military strength requires money.
This is surely more to do with Portugal being a dictatorship until the 1970s, than anything to do with GDP figures. Once it democratised, it decolonised pretty quickly.
My point is that Portugal didn't get rich from its continuing colonialism (which as you point out was continued in part because it was the very raison d'être of the country's then fascist regime), and in fact the cost of its colonial wars may have ruined the economy to the point that it led to the regime's downfall.
The cost (in money and lives) of trying to police their colonies absolutely led to the fall of Estado Novo. The Carnation Revolution was about as bloodless as it gets.
I agree that the “neocolonial” and “decolonize” narratives will continue to outlive their usefulness as ways to understand and think about the world.
That being said, I feel like this piece might be missing the spirit of what others are trying to communicate when they bring talk about imperialism, and bring it into the conversation.
My baseline is that what drives wealth, based on the available evidence is some mix of institutions, technology and power. Those allow you to accumulate human and physical capital and proceed in the way Noah describes above.
Maybe we can’t explain institutional and technological development from resource extraction / plunder, etc. but we can certainly say that the power that plunder allows countries to accumulate, is a big enabler for the conquerors and disenabler for the conquered. And that allows “imperial countries” to deliberately or not, slow down and control the institutional / technological development of other places.
Slavery might not have caused development, but it definitely impacted negatively the development of Africa and African Americans. It definitely created hysteresis and path dependency within their own institutions.
Imperialism maybe didn’t drive technology in Asia, Latam, etc. but the power that comes from imperialism certainly gave other places the power to influence and shape the development of Latam and Asia.
To be clear, every country was in the same game - African, Asian, Latam countries would have done the same if they were in the position to, and it’s a little silly to me to believe that institutional / technological development would not have occurred in those places collaboratively or in a different way or shape absent imperialism. Europe / the West were not the only places where this could have happened.
The best example is Haiti - the power of the countries around it shaped its politics and institutions in a way that contributed to its current sad state. That and a terrible mix of bad luck and terrible leadership on its own part. And, again they tried to play the same game in DR and failed so it’s not a racial thing, but it feels crazy to say the system of extraction and power had nothing to do with where they are, and they are “lucky” to benefit from what exists or was developed elsewhere.
It could have developed there! It was not allowed to, and that’s what folks mean, and that’s the argument imo that we should be engaging in. Especially when those same power dynamics shape what is possible for a lot of places that were formerly colonized can do.
The other point I'd make is that the 2021 paper cited which suggests that unfair resource extraction benefitted the global North by 7% of GDP in a single year--if that continues year after year it is extremely significant. After 30 years an economy would be 7.6x what it otherwise would have been and an economy losing 7% of its GDP each year would only be 11% of the size it would otherwise have been. If the methodology in the paper is bad then perhaps it should be doubted. But the example of Haiti shows how crippling unfair "resource" extraction can be, in that case financial resources, when carried out over decades.
Well that's fair enough. But I think we're now in a position where we see several formerly-colonized countries doing rather well in the catch-up growth race and a few that have joined the rich nations, and by all appearances these trends will continue or accelerate.
So I wonder what is making the key difference in those cases. I suspect it is domestic factors more than any external ones. But of course then it gets complicated by how much the domestic situation was affected by previous external interactions in the ages of western imperialism and colonialism.
1. Not every country was in the same game. The chinese famously turned inwards after sending fleets around the world from 1405-1433. They were in the same position as later imperialist powers and decided not to colonise. The Japanese also focused inwards rather than colonising until imperialism forced them to open. So its wrong to argue that every country would be imperialist if it had the opportunity.
2. Haiti is a terrific example of how imperialism and what was developed elsewhere restricted their development. That is the billions of dollars they paid in reparations to France and US banks well into the 20 century for the right to ban slavery- which was then fed into French and US development at the expense of Haitian development. It would interesting to understand how Haiti, with its immense wealth, would have developed if it hadn’t;t been forced to pay hundreds of millions of dollars a year to France.
You assume technological progress as a matter of fact, which is a wrong assumption. Imagine a world where there was just Africa and no other land. What do you think would’ve happened? The people, their race or whatever else people like to point at is completely irrelevant here, whatever human you put there, you’d get the same results: little progress. Because there’s no inland rivers for transportation, no safe location (geographically speaking) to have a hub for the exchange of goods and ideas.
A lot of developed areas today are the way they are due to simple coincidence of having some kind of an advantage. Stable climates meant more stable supply food, having rivers to make transportation of material easier, and much more. Think of storefront on a busy street, it just happens to be in a place where there’s a lot of activity. That’s it. That’s what made some places develop so well. Sure they developed and plundered, but that has nothing to do with why other places didn’t develop.
It’s a weird logical fallacy vast majority of people around the world believe in: that today’s technological development is inevitable. It’s not. Humans would’ve stayed hunters and gatherers for a very long time if there was only the single continent of Africa, given how difficult farming, exchange of goods and ideas, and spread out it is. I want to emphasize this has nothing to do with the people of Africa, but rather the unfortunate geography. No race of human would ever develop if only continent of Africa existed. On the other hand, humans would’ve developed to what we are today if only the continent of Europe and Asia existed
Nile, Congo, Niger. Great Lakes system. Strong evidence for independent development of iron smelting in SubSaharan Africa. Regional trade networks. Migrations and (gradually) increasing population before modern influences. Just a few observations undermining the premises of your counterfactual scenario. I assume this is a Gun, Germs and Steel inspired counterfactual. Fundamental geographical and climate conditions are certainly worth interrogating, but I don't think you've made a case here. I'd dump the counterfactual. It's fun, we all do it, but it doesn't lend itself to the kind of certainty and explanatory power you're claiming.
I didn’t say any of those were nonexistent, but they pale in comparison to accessibility of Europe and Asia. Even for the British, it’s was extremely difficult for them to go further deep in Africa due to the geography. The geographies are not even remotely comparable. If you can’t look at a map and see how obviously more accessible all developed regions are, and have a good climate, I don’t know what to tell you. There’s no other variable that so consistently predicts development of a region
Isn't disease also a huge problem in Africa? We evolved there, and thus so did many of our diseases. It wasn't until the discovery of quinine that European colonialists were really able to penetrate the interior of tropical Africa.
And not just human diseases either: much of pre-colonial tropical Africa was restricted to hoe-based cultivation because the tsetse fly killed draft animals, and the Boers also discovered this issue the hard way when they attempted to venture north of the Limpopo.
Yet the Bantu migration spread through the central forests to east and south coasts. Numerous migrations in northern Africa. And those rivers and lakes I mentioned. Africans don't appear to have had any problems moving around Africa.
Africa has a wide range of climates. Some comparable to those you would call 'good', some good by other criteria.
There are also numerous examples of favorable geographies and/or climates (and which of those are you claiming are determinative, they're not the same thing) that didn't yield technologies that Europe and/or Asia did (which technologies or technological levels are we talking about btw?). North American Great Lakes, Mississipoi valley with tributaries, Atlantic coast, Northwest. Caribbean. South American coasts and Rio Plata. Southeast Asia. Indonesia. All favorable, none with the specific technological developments you seem to have in mind.
So I'd dump the simplistic deterministic explanations along with the counterfactual-as-demonstration style, I don't think they say anything like what you're attempting to say.
You don’t seem to be able understand that unfavorable conditions doesn’t mean absolutely zero movement. I’m not saying there was no movement or trade, just that the scale of it was much, much smaller due to higher risks and difficulty. Are you going to argue Antarctica is not inhospitable because humans have gone there and have moved resources there?
One caveat on the resources side is the role of nimbyism in developed countries; in the US it is increasingly difficult to build a mine largely due to nimbyism and the ability for groups to challenge federal and state permits in court. The natural result of this is we keep building copper, lithium, cobalt, nickel mines in other countries, as opposed to domestically, and those countries tend to have weaker environmental and labour laws / standards, so in a way we are doing some regulatory arbitrage where externalities for resource extraction are not priced / enforced. Much more visible when the company operating the asset is Chinese and not US/UK/Canada/Australia based, as things like corruption laws and international E&S standards will apply to the latter group.
That's fair enough, but there are good reasons those countries allow those mines to be built, they're not just allowing themselves to be exploited because they don't know better.
A country with a GDP per capita of 1000$ is going to see much greater marginal benefits to QoL from resource extraction revenues than a country with 50000$ GDP per capita. Often, the negative impacts of pollution etc are enough to outweigh the benefits in the latter, but be relatively negligible to the former.
The first industrialized countries went through the same period, and we will see nimbyism rear it's head in the currently developing countries as soon as they get rich enough.
I think the regulatory arbitrage is downstream of development in the same way as the nimbyism is - strict environmental and labour protections are things that only relatively rich peoples can afford to care about.
The DRC is pretty corrupt, as is Indonesia. If you build a mine in a place like Nunavut, Canada, the Free Prior and Informed Consent of the people living there is built into the permitting process, so you can't build it without having community buy in. The same is not true in many permitting & regulatory regimes elsewhere around the world; especially where politicians and their families benefit financially from the development, so saying "these countries want them to be built" misses a lot of the nuance on whether its citizens human rights are being violated by them being built.
I think that dedicating the accomplishments of today to the atrocities of yesterday is deeply misguided. Yes, imperialism has shaped the globe to the extent that it is hard to imagine a world without its effects, but that does not make all progress during and since irreplaceable without it, or rather a different chain of events in its stead. Like you said, it’s at best an unknown.
Eventually, slavery weakened the Confederacy. They lost incentive because they exploited cheap labor. The first thing Lee asked Grant after surrendering was if Grant could give him food for the starving Confederate army. You can’t eat cotton. The economy of the South was one-dimensional and lacked the complexity and nimbleness of the North’s economy provided by invention and industrialization.
Is Dixie's downfall arguably also an argument against free trade dogma, given that most places that industrialized (including the US North) did so behind protectionist barriers, and a country wedded to free trade can easily get stuck at a local maximum, where its economy becomes overwhelmingly dominated by a few products where it has the greatest comparative advantage (such as cotton for the American South, or beef for Argentina)?
This was a very great article, and matches what I've been thinking a lot of lately. I think it's really important to note that thinkers *at the time* realized that slavery and imperialism were both morally wrong and economically foolish, like Adam Smith's case against colonialism: https://www.adamsmithworks.org/documents/adam-smith-s-economic-case-against-imperialism
The word "neocolonialism" was invented, wrongly or rightly, by my country's first president Kwame Nkrumah who was an African Socialist. Once you read about it, Neocolonialism just means rich countries have economic advantages over poor countries and he bought into the plunder theory. The issue is of course richer countries will have advantages... If a poor country doesn't manufacturer cars, rather than reinvent the wheel they will ask for technicians from richer societies...
But the issue with the idea that "Africa is poor because of European colonialism" is that Africa had to already be poorer for Europe to colonialize them. The goal of screaming neocolonialism is to try to change the global system to benefit poorer countries. But an entire global system will not change just because poorer countries want it to. Poorer countries, rightly or wrongly, need to work in the system to get richer.
BUT, I will say that there are global institutions which are used to give the West an advantage. For example, President Joko in Indonesia utilizes a process called "resource downstreaming" to industrialize. Indonesia has 21% of the world's supply of nickel and Indonesia banned nickel exports. As a result, companies had to process nickel in Indonesia. However, this strategy is banned by the World Trade Organization (WTO). The European Union took Indonesia to court on the WTO, and the EU won. However, Indonesia is continuing the strategy because they know this process is helping their economy, and now Joko doesn't care what the EU says.
Nkrumah was dealing with the political imperatives of a new nation that had to unite to survive and prosper.
Widodo's idea is interesting, and the U.S. should support it for strategic reasons (to friendshore production out of China), but ultimately its usefulness for spurring development may be small.
If other countries find it cheaper to ship raw materials and process it themselves, rather than ship already processed materials and thus incur less shipping costs, that means Indonesia is much less efficient at processing the materials and are probably bottlenecking global supply of processed nickel. It’s in their interest to sell raw materials without restrictions since they’ll sell much more of it. The nickel processing industry would suffer sure, but the whole economy would benefit. This is the same song and dance of all protectionist policies, they protect an industry and a few thousand people, at the expense of the economy and millions of people. Politically this is a hard sell because people can see individuals in the nickel industry losing their business, but they can’t see the damage to the broader economy that affects everyone.
Another thing: wasn't sub-Saharan Africa so underdeveloped that almost all European colonies there turned out to be money pits for the colonizers?
The main exception was the Congo Free State, and that was only because it was ruled with utter genocidal barbarity that appalled even the thoroughly colonialist and white-supremacist Europeans of the early 20th century.
Compared to Japan, South Africa or Brazil, yes African countries were horrifically poor. But they were on par with most of East, South East or East Asia at the time which were also colonized.
Keep in mind Europe only had a few colonies in Africa until the 1885 Berlin Conference (like Britain had Sierra Leone, Portugal had Angola & Mozambique, Spain had Equatorial Guinea prior to the berlin Conference).
Britain had India since 1857. But Britain conquered my people, the Ashanti empire (in Ghana) in 1900.
Here are GDP per capitas in 1955 before most African countries were independent:
Ghana: $1200 (Where I'm from, my family used to brag that "We were richer than many of these countries! But CIA funded a coup, and then the next leaders were idiots and stole)
Taiwan: $1189
South Korea: $1169
Indonesia: $964
Thailand: $945 (a country that avoided colonialism)
Nigeria: $835
Vietnam: $750
Zambia: $736
Democratic Republic of Congo: $734
Kenya: $718
India: $676
Pakistan & Sierra Leone: $635
Burkina Faso: $539
China: $537
Ethiopia: $422 (Ethiopia was the only country that escaped the 1885 European Imperialism of Africa, it was only occupied for 5 years from 1936-1941 under Fascist Italy. Unfortunately Ethiopia was a feudalistic state where the monarch and nobles had most of the power and money until the communist revolution by the military Derg)
Africa didn't go downhill and got into the "we can't catch up!" until the 1980s due the commodity bust and the African debt Crisis, which lasted until the late 90s/early 2000s.
All of the gains were erased. Africa in 2000s was basically the same as it was in the 1950s inflation adjusted.
If you are curious about the African debt crisis, I wrote about it here:
I don't see the contradiction: I was arguing that European colonialism in Africa (unlike in Asia) wasn't profitable for the Europeans because Africa was so underdeveloped, while your reply was more about the economic history of Africa _after_ decolonization.
To me it seems like the main difference between Asian vs African economies in the post-WWII era is that the African economies were far more dependent on raw commodity exports: could this be because the West was more willing to tolerate (non-communist) East Asian protectionism for reasons of Cold War geostrategy?
Ah, I may have misinterpreted you. I thought you were saying that Black Africans were poorer than South and Southeast Asians (which they weren't pre-independence), but you are saying that Africa colonies were unprofitable, which is true for the most part.
If you read the book "How Asia Works" - you'll know that Taiwan and SK first developed their agriculture by doing land reform to give people household farms. Turns out household farms are more productive than plantations because people like farming for themselves and their families more than a plantation owner and the government provided rural credit which pushed up yields so high that they eliminated subsistence farming. By 1960s, Taiwan and SK's cereal yields were over 3 tonnes per hectare. Rice and other farming products became sources of foreign exchange initially.
African economies TO THIS Day have terrible farming yields and can't hit 3 tonnes per hectare except South Africa & Egypt. So most African countries leaned more on mining ores which have volatile prices and basically collapsed 1980-2000s. But African economies import more in food, medicine, manufactured goods(Cars,Computers,phones), and refined petrol than they sell in raw materials, making them constantly go bankrupt.
You can play with this graph to see agricultural productivity within each country.
The biggest difference is that the green revolution has still escaped Africa which churns out their foreign currency reserves. South Korea had many failures trying to industrialize (failed video games, failed aerospace industry, etc.) but the government could eat those failures more because more foreign exchange gave them more room to fail. African countries because they drain so much FX with especially food, kills their ability to fail as much as SK had.
2. Most African economies were highly protectionist too. Right up until the neoliberal reopenings of the 1980s.
I know Pakistan's backwardness (relative to India) is also often blamed on lack of land reform and continuing feudalism.
On the other hand, land reform in Ireland in the late-19th and early-20th century is often blamed for _retarding_ that country's economic development, by creating a class of contented and conservative peasants unwilling to move to cities.
Maybe whether land reform is a good or a bad idea depends on the population density?
My point of the land reform was just that it ended the feudalistic regime of the land structures in SK and Taiwan which boosted yields and as a result it didn't drain their foreign currency. The point isn't about land reform but food security. SK and Taiwan had it by the 1960s, most African countries are still working on it. As for your question about what makes land reform good or bad is an interesting question. But I don't have the answer.
Back to my point on food security ->
SK and Taiwan were at the same level as some African countries but they fixed that issue. African countries by and large don't need land reform (maybe South Africa, but that's a different story). The problem with African food security & food productivity are the land law regime, the marketing boards, lack of irrigation, and the ability to get enough fertilizer & storage systems for farmers. For the land law regime, many parts of Africa have different land laws: Government owned land, if the country has a large % of Muslims then they will have Sharia land laws, and then customary land laws, where the chiefs are the custodians of the land. It's not very productive on the whole. Nigeria has all 3 (where Sharia is in the North), Ghana has customary and government land. Sometimes people go to court over which type of land it is...
For many African countries, because they can't grow their own food they have to import it. Not only that, many African countries, including my country Ghana, purposely has a central bank regime to purposely raise interest rates, so investors will buy your currency, to then buy your bonds which are offering higher rates to artificially strengthen the value of their currency to the dollar to make imports of food cheaper. Another strategy is to sell FX reserves to strengthen your currency.
These strategies are done in some African countries because they lack food or fuel security. What Taiwan, SK, Japan, and even China did was purposely WEAKEN their foreign exchange to the dollar to make their exports cheap so they can dominate Western markets. The Japanese Toyotas and Hondas flooded American markets and hurt GM and Ford's market share.
Overall, large wealth divergences between countries are caused by the innovation, development, and scaling of NEW technologies/markets. It turns out freedoms of various forms (thought, invention, fail) is very important to enable the launch of these new technology-based markets. "Free" market democratic societies have a natural advantage in absorbing these powerful new markets.
It's not that plunder let Western Europe get better technology, but that technology let Western Europe seize more plunder.
Premodern nations everywhere imposed tribute or took slaves from or just conquered weaker states. Europeans were no different. But modern guns, ships, and financing let Europe do to the whole world what people like the Aztecs or Manchus had only been able to do to their neighbors.
It's not like Spain needed American colonies to develop guns and ships and bankers. It's the other way around: by the 1500s, Spain already had superior enough tech to conquer Mexico and Peru with tiny bands of well-timed conquistadors. The technology came first, and made the great plundering possible.
We forget, now, how much technology had already advanced in Europe by 1800, or even by 1500. It wasn't important for everyday standards of living yet, so it doesn't show in per capita income charts. But if you lived in London or Amsterdam of 1700, or even Florence of 1500, you were in a city decked with engineers and manufacturers who could sell you things that nobody could buy in India or China or the Americas. That technology wasn't making ordinary peasants better off yet, but it was already reshaping long-distance travel, and business – and war.
Ironically, the same technology that enabled so much plundering was making it unimportant. A rich ancient Roman was rich because he had many slaves working for him; conquest, and the extreme inequality that followed it, really was essential for wealth. But today we're rich because we own machines, not because we subjugate our neighbors. In fact free neighbors are worth more to us than slaves, because free neighbors are much more productive.
Capitalist growth, that leftists want to credit to plunder, is just what's made plunder no longer an important part of our world.
Yep
the distinction needs to be made between plunder and colonialism. Because colonialism wasn't just a 1-way street of extracting resources.
1. Turbo-charged global trade where colonies were importing goods made from the Europe, and most colonies were not allowed to process their own resources. So Europe created their own captive consumer market
2. Germany didn't have colonies, but it was indirectly trading with the colonies via Britain / Netherlands as well as FDI from overseas (especially Britain). As the industrialised countries became richer, they would import more and fuel nearby European economies (e.g Denmark's agricultural sector exported a significant amount to Britain. Foods such as bacon, butter and eggs)
Germany/Sweden also had the fortune of having natural resources like iron ore and wood that were essential to industrialisation.
3. The reason Spain and Portugal didn't get as wealthy is because they overly-relied on the resources they extracted and didn't industrialise or develop industry (a.k.a resource curse). They were also up to their eyes in debt and most of the wealth went directly to British/Dutch creditors
So if we are in agreement that industrialisation is the key to wealth, and that the resources and demand from the colonies are what drove globalisation, then it only follows that colonisation was in-fact what led to European wealth and everything else is downstream of that.
It wasn't technology that made the European conquest of the Americas possible so much as the genetic inferiority of the Native Americans, that resulted in their near-extermination by European diseases.
This vulnerability was the result of their ancestors passing through a genetic bottleneck, as they crossed the Ice Age-era Bering land bridge from Siberia to Alaska.
1) We need to be more honest that after Britain industrialized, most other countries got richer through utilizing IP from richer countries, reverse engineering, and then improving it. In the 18th century, Treasury Secretary Alexander Hamilton, endorsed stealing British inventions, reverse engineering them, and then make American versions. In 1791, the American government paid $48 ($1561 in 2023 money) to English industrialists to replicate inventions for the American market. That's how the North in the U.S. became industrialized before American became on the frontier of innovation itself. While the South was just exporting cash crops like cotton. Germany, Japan, and South Korea got rich the same way. Now China is getting rich that in the same way.
https://yawboadu.substack.com/p/5-answers-to-questions-you-may-have
2) We now have a few (but not many) examples of former Vassals/colonies that surpass the metropole. Those former colonies/vassals got richer or became as rich either through winning the natural resource lottery with a small population (UAE or Qatar beating UK with having a lot of oil & gas), ingenuity and finding advantages, hardwork and etc. (Taiwan and South Korea are now equal or higher on a per capita ppp basis to Japan the former colonial master, Singapore > UK, Macau, through becoming a gambling state > Portugal), and of course US and Canada > UK or Poland & Baltic states > Russia.
3)I think it's obvious that the industrial revolution came from the continuation of manufacturing advances that Persian, Turkish, Mughal, Omani, Ming & Ching, and even perhaps even the Moroccan and more advanced African empires (Kongo, Songhay, etc.) made. The Europeans managed to trade with ALL of them, so the Europeans just continued their ideas and advance them with by developing an economic system that rewards risking capital (Dutch invented stock market) and values strong property rights protection British. Even in the 18th century, most of the world was basically feudalistic society with a King that abused property rights. Since that feudalism was dead in Western Europe since the bubonic plague, they were the first to end that type of society and make a new one. Meanwhile in Africa, Ethiopia, the only nation that avoided colonialization, was a feudalistic society where the Monarch controlled most of industry and the nobles discouraged some innovation to protect their wealth. Ethiopians were poorer than Congolese (which had a horrific colonial history with King Leopold and Belgians) until 2008.
https://data.worldbank.org/indicator/NY.GNP.PCAP.CD?locations=ET-CD
Yep!!
If the industrial revolution was a group project, England was the kid that did almost all of the work the night before deadline. The development of new ideas in Europe in the early modern era Far Surpasses anything that had existed before, and it's not even close.
Wasn't Ethiopia briefly under Italian colonial rule, as well as being under a horrible Communist dictatorship during the 1980s?
1) Ethiopians will call Mussolini's rule in the 1930s an "occupation" but not colonialism. They tbink of that period like Russia occupuing Ukraine. Italy tried taking Ethiopia in the 1880s, just like how every other African country was colonized and Ethiopia resisted colonialism.
2) Part of the reason why Ethiopia suffered communism is that Ethiopia never changed its nearly millenia old feudal land laws. The monarch and the nobles basically owned everything, the farming productivity was terrible, leading to a constant famine including the mid 70s one. It was so bad, Selassie tried hiding the famine. The youth, farmers and military couldn't take it anymore and the military took over and tried communism. The brief Italian occupation didn't really "colonize" Ethiopia since they literally went right back to the centuries old empire laws after.
3) I made a whole series on Ethiopia on this:
https://open.substack.com/pub/yawboadu/p/ethiopia-part-2-monarchy-to-communism?r=garki&utm_campaign=post&utm_medium=web
Isn't plundering just basically resource-curse-by-proxy?
I think so, yeah. That's why Spain did so poorly in the 1500s and 1600s...
I agree, but I don’t think that comes close to explaining the declines of the Spanish and Portuguese empires. The Iberian empires attempted to strip the New World of gold and silver (and spread Christianity). The gold was used to build beautiful churches, palaces, and fund wars. While the coffers of the Kingdom of Castile were temporary filled, the world view of the Spanish and Portuguese was rather medieval. Very religious, they looked down on commerce, cared about status and lineage. This was the dominant view across Christendom. It was in a handful of places in Europe, which were relatively tolerant of innovation or protective of property rights, where this view changed.
Just a minor quibble. This: "Their clothes were shabby and fell apart quickly." Is probably wrong. The average poorer person's clothes in past centuries might've been shabby, but it also would've been designed to last, even if it meant doing the occasional patch. This is part of the recent "modern sweaters are bad" discourse. ( https://www.theatlantic.com/technology/archive/2023/10/sweater-clothing-quality-natural-fibers-fast-fashion/675600/ ) The older style of knitwear was designed so you could darn over any holes that developed, and _one_ could easily last you a lifetime -- and you'd darn well better _make_ it last. The shirt on your back probably represented a non-trivial percentage of your total wealth, as a poor person in the pre-industrial world.
True; I should have been more specific, and said that they needed more frequent repair.
I don't think it even would be true that they "needed more frequent repair" -- they would've been designed to be quite durable, but then when they inevitably did eventually get damaged, they would be repaired, because repair was cheaper than making a new one. When modern clothes get damaged, we generally _don't_ repair them, we toss them and get something new. They're not designed to be repairable for less than the cost of a new one -- which is a function of the fact that repair would require attention to the details of the damage, and the time of a skilled tailor or seamstress is vastly more valuable now _relative_ to the cost of producing a new garment through a highly mechanized / standardized process.
I was in Uniqlo in London the other day and noticed there was a very busy section dedicated to the Japanese art of aesthetically repairing clothes (which I've never heard of before so it's possible they just made it up). This may say something about the UK's developed economy status. I'll have to check if Uniqlo Japan is doing it too.
Certainly aesthetic repair is a thing in Japan. Kintsugi (reconstruction of ceramics) is probably the most famous. https://en.wikipedia.org/wiki/Kintsugi
Nobody in Japan actually goes around kintsugi'ing things or wearing clothes with patches on them.
Tokyo is like NYC, everyone wears new black and white clothes from Uniqlo or expensive brands like BEAMS that look like Uniqlo.
I'd expect there are _some_ people in Japan still practicing kintsugi, both hobbyists and professionals selling it as art. It's part of their cultural heritage.
In any case this is kind of irrelevant to my original point, which is that in the 17th century, repairing an existing garment was, relatively speaking, a lot cheaper than getting an entire new garment. In a society where the source fibers are incredibly cheap because of mechanized agriculture and fertilizers (not to mention production of fibers from inorganic inputs), and then you can use mechanized systems to convert the fiber to cloth and then cut pieces, and machine-assisted sewing to turn the pieces into a garment... a new garment requires relatively little human attention. Whereas a good repair still requires just as much human attention to detail as ever, and if anything, that skilled attention is MORE valuable today, because many fewer people learn how to do it. Your average 17th century peasant knew how to take some thread and patch material, and patch up their breeches, or at minimum knew somebody in their family who could. The only kind of garment you'd do custom repairs on now is something like a bespoke suit, or a high end gown, and you'd have to find a specialist tailor who probably charges like $100/hr for their time. Maybe more.
Baumol's Cost Disease is probably the single most important factor in understanding the modern economy.
> the old Marxist labor theory of value, with natural resources tacked on in addition. The problems with that theory are well-known.
When I first read Marx, as a young socialist, I realised he didn’t understand how machines contributed to capital at all. He claimed that all wealth was the product of work - he said human work but there’s no need to differentiate.
In Marx’s view 100 hired hands harvesting a field contributed their work and energy to transform something (what was being harvested) into capital. It’s an energy to capital equivalence not too dissimilar to the E = mC^2 equation of Einstein. W = kC.
If you replace the 100 workers with a combine harvester then it’s the machine creating the value - the driver is just sitting and directing. (A bit like a foreman in the past).
Machines create more wealth than Marx could have imagined as he saw the total amount of capital replenishment in any year as only ever equal to human production alone. All that Marxism was going to do for the worker was reduce the profits of the capitalists making the worker 10-20% richer. But that would be it.
Isn't all wealth still the product of human work though, with capital just adding additional stages of indirection? If manual farm labourers are replaced by a combine harvester then isn't the value created by the workers who designed and built the combine harvester?
The real input Marx misses here is technology. The value is created not just by the labor input, but by the pattern that determines where the input goes. That pattern is technology. "Work smarter, not harder" is the refutation of the labor theory of value.
Absolutely. Design is critical. The stick versus the mold board plow. The sledge versus the wheel barrow. Paddle wheels versus propellers. Flapping wings versus aerodynamic lift of Wright Bros. wing profile. These are design innovations that amplify labor by orders of magnitude. This is what Noah means by 'pattern'. This is intellectual input, or innovation. What makes it powerful is that design ideas can be copied and improved upon without degrading the original. If I build a lifting wing, it does not diminish the effectiveness your lifting wing. I do not need to colonize your tech to build my tech. The only control is legalistic: Patent. But: It is hard to control Ideas. And liberal science, with open publication, peer review, repeatability, and falsifiability tends to spread ideas.
Labor and capital are the inputs to production, and it is production that has value. Technology increases productivity - the amount a lump of labor produces with a given investment in capital.
Unless a machine built the combine, which is probably what happened. Anyway that philosophy could lead to objectivism and John Galt.
Isn't the point that all the money that's paid for the resulting grain must end up going either to workers, or to landowners or other rentiers?
"Did I rip you off? No! Sure, the thing I traded you (the bookshelf) contained less wood and required less labor than the thing you traded me (the raw wood). But you’re happy with the trade, because now you have a bookshelf that you couldn’t have easily produced yourself."
What if I hoarded the knowledge of techniques needed to build a bookshelf, and used the wealth I gained from these kinds of exchanges to make it harder for the people in your country to learn the techniques? (say, via political influence on the intellectual property regime, or tempting budding carpenters in your country to immigrate to my country creating a sort of brain drain) And even if the knowledge was available, my established bookshelf-making company might have various advantages (economies of scale, deals with suppliers of other needed parts in value chain, etc.) that would make it cheaper in the short term for people in your country to just buy from me than to try to start making them yourselves, although it would be in your long-term interest to develop the ability (allowing you to keep more native wood).
I think these issues would show up in a steelmanned version of "unequal exchange", one which would not claim that unequal exchange is the whole reason for differences in wealth between countries, but just that richer countries press their advantages in ways that make it harder for poorer countries to develop than it would be otherwise. For example https://scholarworks.umass.edu/cgi/viewcontent.cgi?article=1312&context=econ_workingpaper talks on p. 8-9 about the role of "intangible assets" due in part to intellectual property rights, and other forms of market power that existing large firms have.
IP law as neocolonialism? Interesting thought!
Interesting and correct. IP law, as it stands, is an illegitimate exercise of state-created monopoly power, as the entire economics profession pointed out in the amicus brief on Ashcroft vs Aldred. That's true between states as well as within them.
And isn't dependency theory especially true in a field like Big Tech where network effects encourage monopoly?
This is why Big Tech is overwhelmingly dominated by the US, because the European market is too fragmented by linguistic diversity while the individual national markets were too small. As a result, French Dailymotion couldn't compete with YouTube, German XING couldn't compete with LinkedIn, and Spanish tuenti couldn't compete with Facebook.
The only part of the world that has escaped US domination is China, and only because the US Big Tech products are outright banned there. Would Tencent still be viable if the Chinese were able to use Facebook?
Also, another aspect of steelmanning unequal exchange might be the imperialism caused colonized countries to develop worse institutions that impeded their ability to grow wealth later on, with a stronger effect for countries that were wealthier when initially colonized because the colonizing countries took a stronger hand with them, see the paper by Acemoglu et al. providing evidence for this hypothesis at https://economics.mit.edu/sites/default/files/publications/reversal-of-fortune.pdf
Knowlage is not a commodity that can be hoarded. Read your own sentence and realize how odd it sounds.
You should rethink your understanding of trade. Trade is not automatically adversarial and is not a zero sum game. A lot of modern rhetoric these days assumes an every trade has a winner and a loser. That’s just not the case
Most of the the wealth in the West is due to technological advancements and subsequent increase in productivity.
My instinct was always that colonial powers got rich first and colonised later. After all, colonisation requires military strength, and military strength requires money.
Although the last European power to abandon its African colonies was relatively poor Portugal.
This is surely more to do with Portugal being a dictatorship until the 1970s, than anything to do with GDP figures. Once it democratised, it decolonised pretty quickly.
My point is that Portugal didn't get rich from its continuing colonialism (which as you point out was continued in part because it was the very raison d'être of the country's then fascist regime), and in fact the cost of its colonial wars may have ruined the economy to the point that it led to the regime's downfall.
The cost (in money and lives) of trying to police their colonies absolutely led to the fall of Estado Novo. The Carnation Revolution was about as bloodless as it gets.
I agree that the “neocolonial” and “decolonize” narratives will continue to outlive their usefulness as ways to understand and think about the world.
That being said, I feel like this piece might be missing the spirit of what others are trying to communicate when they bring talk about imperialism, and bring it into the conversation.
My baseline is that what drives wealth, based on the available evidence is some mix of institutions, technology and power. Those allow you to accumulate human and physical capital and proceed in the way Noah describes above.
Maybe we can’t explain institutional and technological development from resource extraction / plunder, etc. but we can certainly say that the power that plunder allows countries to accumulate, is a big enabler for the conquerors and disenabler for the conquered. And that allows “imperial countries” to deliberately or not, slow down and control the institutional / technological development of other places.
Slavery might not have caused development, but it definitely impacted negatively the development of Africa and African Americans. It definitely created hysteresis and path dependency within their own institutions.
Imperialism maybe didn’t drive technology in Asia, Latam, etc. but the power that comes from imperialism certainly gave other places the power to influence and shape the development of Latam and Asia.
To be clear, every country was in the same game - African, Asian, Latam countries would have done the same if they were in the position to, and it’s a little silly to me to believe that institutional / technological development would not have occurred in those places collaboratively or in a different way or shape absent imperialism. Europe / the West were not the only places where this could have happened.
The best example is Haiti - the power of the countries around it shaped its politics and institutions in a way that contributed to its current sad state. That and a terrible mix of bad luck and terrible leadership on its own part. And, again they tried to play the same game in DR and failed so it’s not a racial thing, but it feels crazy to say the system of extraction and power had nothing to do with where they are, and they are “lucky” to benefit from what exists or was developed elsewhere.
It could have developed there! It was not allowed to, and that’s what folks mean, and that’s the argument imo that we should be engaging in. Especially when those same power dynamics shape what is possible for a lot of places that were formerly colonized can do.
I also thought of Haiti when reading this piece and the reparations they had to pay France for more than 100 years costing their economy tens of billions of dollars (https://www.nytimes.com/2022/05/20/world/americas/haiti-history-colonized-france.html).
The other point I'd make is that the 2021 paper cited which suggests that unfair resource extraction benefitted the global North by 7% of GDP in a single year--if that continues year after year it is extremely significant. After 30 years an economy would be 7.6x what it otherwise would have been and an economy losing 7% of its GDP each year would only be 11% of the size it would otherwise have been. If the methodology in the paper is bad then perhaps it should be doubted. But the example of Haiti shows how crippling unfair "resource" extraction can be, in that case financial resources, when carried out over decades.
Well that's fair enough. But I think we're now in a position where we see several formerly-colonized countries doing rather well in the catch-up growth race and a few that have joined the rich nations, and by all appearances these trends will continue or accelerate.
So I wonder what is making the key difference in those cases. I suspect it is domestic factors more than any external ones. But of course then it gets complicated by how much the domestic situation was affected by previous external interactions in the ages of western imperialism and colonialism.
Interesting argument however, a few quibbles.
1. Not every country was in the same game. The chinese famously turned inwards after sending fleets around the world from 1405-1433. They were in the same position as later imperialist powers and decided not to colonise. The Japanese also focused inwards rather than colonising until imperialism forced them to open. So its wrong to argue that every country would be imperialist if it had the opportunity.
2. Haiti is a terrific example of how imperialism and what was developed elsewhere restricted their development. That is the billions of dollars they paid in reparations to France and US banks well into the 20 century for the right to ban slavery- which was then fed into French and US development at the expense of Haitian development. It would interesting to understand how Haiti, with its immense wealth, would have developed if it hadn’t;t been forced to pay hundreds of millions of dollars a year to France.
https://www.npr.org/sections/money/2021/10/05/1042518732/-the-greatest-heist-in-history-how-haiti-was-forced-to-pay-reparations-for-freed
You assume technological progress as a matter of fact, which is a wrong assumption. Imagine a world where there was just Africa and no other land. What do you think would’ve happened? The people, their race or whatever else people like to point at is completely irrelevant here, whatever human you put there, you’d get the same results: little progress. Because there’s no inland rivers for transportation, no safe location (geographically speaking) to have a hub for the exchange of goods and ideas.
A lot of developed areas today are the way they are due to simple coincidence of having some kind of an advantage. Stable climates meant more stable supply food, having rivers to make transportation of material easier, and much more. Think of storefront on a busy street, it just happens to be in a place where there’s a lot of activity. That’s it. That’s what made some places develop so well. Sure they developed and plundered, but that has nothing to do with why other places didn’t develop.
It’s a weird logical fallacy vast majority of people around the world believe in: that today’s technological development is inevitable. It’s not. Humans would’ve stayed hunters and gatherers for a very long time if there was only the single continent of Africa, given how difficult farming, exchange of goods and ideas, and spread out it is. I want to emphasize this has nothing to do with the people of Africa, but rather the unfortunate geography. No race of human would ever develop if only continent of Africa existed. On the other hand, humans would’ve developed to what we are today if only the continent of Europe and Asia existed
Nile, Congo, Niger. Great Lakes system. Strong evidence for independent development of iron smelting in SubSaharan Africa. Regional trade networks. Migrations and (gradually) increasing population before modern influences. Just a few observations undermining the premises of your counterfactual scenario. I assume this is a Gun, Germs and Steel inspired counterfactual. Fundamental geographical and climate conditions are certainly worth interrogating, but I don't think you've made a case here. I'd dump the counterfactual. It's fun, we all do it, but it doesn't lend itself to the kind of certainty and explanatory power you're claiming.
I didn’t say any of those were nonexistent, but they pale in comparison to accessibility of Europe and Asia. Even for the British, it’s was extremely difficult for them to go further deep in Africa due to the geography. The geographies are not even remotely comparable. If you can’t look at a map and see how obviously more accessible all developed regions are, and have a good climate, I don’t know what to tell you. There’s no other variable that so consistently predicts development of a region
Isn't disease also a huge problem in Africa? We evolved there, and thus so did many of our diseases. It wasn't until the discovery of quinine that European colonialists were really able to penetrate the interior of tropical Africa.
And not just human diseases either: much of pre-colonial tropical Africa was restricted to hoe-based cultivation because the tsetse fly killed draft animals, and the Boers also discovered this issue the hard way when they attempted to venture north of the Limpopo.
Yet the Bantu migration spread through the central forests to east and south coasts. Numerous migrations in northern Africa. And those rivers and lakes I mentioned. Africans don't appear to have had any problems moving around Africa.
Africa has a wide range of climates. Some comparable to those you would call 'good', some good by other criteria.
There are also numerous examples of favorable geographies and/or climates (and which of those are you claiming are determinative, they're not the same thing) that didn't yield technologies that Europe and/or Asia did (which technologies or technological levels are we talking about btw?). North American Great Lakes, Mississipoi valley with tributaries, Atlantic coast, Northwest. Caribbean. South American coasts and Rio Plata. Southeast Asia. Indonesia. All favorable, none with the specific technological developments you seem to have in mind.
So I'd dump the simplistic deterministic explanations along with the counterfactual-as-demonstration style, I don't think they say anything like what you're attempting to say.
You don’t seem to be able understand that unfavorable conditions doesn’t mean absolutely zero movement. I’m not saying there was no movement or trade, just that the scale of it was much, much smaller due to higher risks and difficulty. Are you going to argue Antarctica is not inhospitable because humans have gone there and have moved resources there?
Hat-tip to economist Paul Romer and Endogenous Growth Theory!
One caveat on the resources side is the role of nimbyism in developed countries; in the US it is increasingly difficult to build a mine largely due to nimbyism and the ability for groups to challenge federal and state permits in court. The natural result of this is we keep building copper, lithium, cobalt, nickel mines in other countries, as opposed to domestically, and those countries tend to have weaker environmental and labour laws / standards, so in a way we are doing some regulatory arbitrage where externalities for resource extraction are not priced / enforced. Much more visible when the company operating the asset is Chinese and not US/UK/Canada/Australia based, as things like corruption laws and international E&S standards will apply to the latter group.
Well that's true, but those countries, generally speaking, really really want us to build those mines! Should we refuse them?
That's fair enough, but there are good reasons those countries allow those mines to be built, they're not just allowing themselves to be exploited because they don't know better.
A country with a GDP per capita of 1000$ is going to see much greater marginal benefits to QoL from resource extraction revenues than a country with 50000$ GDP per capita. Often, the negative impacts of pollution etc are enough to outweigh the benefits in the latter, but be relatively negligible to the former.
The first industrialized countries went through the same period, and we will see nimbyism rear it's head in the currently developing countries as soon as they get rich enough.
I think the regulatory arbitrage is downstream of development in the same way as the nimbyism is - strict environmental and labour protections are things that only relatively rich peoples can afford to care about.
The DRC is pretty corrupt, as is Indonesia. If you build a mine in a place like Nunavut, Canada, the Free Prior and Informed Consent of the people living there is built into the permitting process, so you can't build it without having community buy in. The same is not true in many permitting & regulatory regimes elsewhere around the world; especially where politicians and their families benefit financially from the development, so saying "these countries want them to be built" misses a lot of the nuance on whether its citizens human rights are being violated by them being built.
I think that dedicating the accomplishments of today to the atrocities of yesterday is deeply misguided. Yes, imperialism has shaped the globe to the extent that it is hard to imagine a world without its effects, but that does not make all progress during and since irreplaceable without it, or rather a different chain of events in its stead. Like you said, it’s at best an unknown.
Eventually, slavery weakened the Confederacy. They lost incentive because they exploited cheap labor. The first thing Lee asked Grant after surrendering was if Grant could give him food for the starving Confederate army. You can’t eat cotton. The economy of the South was one-dimensional and lacked the complexity and nimbleness of the North’s economy provided by invention and industrialization.
Yep.
Is Dixie's downfall arguably also an argument against free trade dogma, given that most places that industrialized (including the US North) did so behind protectionist barriers, and a country wedded to free trade can easily get stuck at a local maximum, where its economy becomes overwhelmingly dominated by a few products where it has the greatest comparative advantage (such as cotton for the American South, or beef for Argentina)?
This was a very great article, and matches what I've been thinking a lot of lately. I think it's really important to note that thinkers *at the time* realized that slavery and imperialism were both morally wrong and economically foolish, like Adam Smith's case against colonialism: https://www.adamsmithworks.org/documents/adam-smith-s-economic-case-against-imperialism
Yep!!
The word "neocolonialism" was invented, wrongly or rightly, by my country's first president Kwame Nkrumah who was an African Socialist. Once you read about it, Neocolonialism just means rich countries have economic advantages over poor countries and he bought into the plunder theory. The issue is of course richer countries will have advantages... If a poor country doesn't manufacturer cars, rather than reinvent the wheel they will ask for technicians from richer societies...
But the issue with the idea that "Africa is poor because of European colonialism" is that Africa had to already be poorer for Europe to colonialize them. The goal of screaming neocolonialism is to try to change the global system to benefit poorer countries. But an entire global system will not change just because poorer countries want it to. Poorer countries, rightly or wrongly, need to work in the system to get richer.
BUT, I will say that there are global institutions which are used to give the West an advantage. For example, President Joko in Indonesia utilizes a process called "resource downstreaming" to industrialize. Indonesia has 21% of the world's supply of nickel and Indonesia banned nickel exports. As a result, companies had to process nickel in Indonesia. However, this strategy is banned by the World Trade Organization (WTO). The European Union took Indonesia to court on the WTO, and the EU won. However, Indonesia is continuing the strategy because they know this process is helping their economy, and now Joko doesn't care what the EU says.
https://go.kompas.com/read/2022/11/29/211707874/indonesia-continues-downstreaming-of-nickel-despite-defeat-in-wto#google_vignette
https://open.substack.com/pub/yawboadu/p/world-bank-data-2022-update?r=garki&utm_campaign=post&utm_medium=web
Nkrumah was dealing with the political imperatives of a new nation that had to unite to survive and prosper.
Widodo's idea is interesting, and the U.S. should support it for strategic reasons (to friendshore production out of China), but ultimately its usefulness for spurring development may be small.
Yeh. Indonesia is right. The US also became rich behind a wall of tariffs. It won’t work for poorer countries, or resource free countries, though.
If other countries find it cheaper to ship raw materials and process it themselves, rather than ship already processed materials and thus incur less shipping costs, that means Indonesia is much less efficient at processing the materials and are probably bottlenecking global supply of processed nickel. It’s in their interest to sell raw materials without restrictions since they’ll sell much more of it. The nickel processing industry would suffer sure, but the whole economy would benefit. This is the same song and dance of all protectionist policies, they protect an industry and a few thousand people, at the expense of the economy and millions of people. Politically this is a hard sell because people can see individuals in the nickel industry losing their business, but they can’t see the damage to the broader economy that affects everyone.
Another thing: wasn't sub-Saharan Africa so underdeveloped that almost all European colonies there turned out to be money pits for the colonizers?
The main exception was the Congo Free State, and that was only because it was ruled with utter genocidal barbarity that appalled even the thoroughly colonialist and white-supremacist Europeans of the early 20th century.
A common misconception but not entirely true.
Compared to Japan, South Africa or Brazil, yes African countries were horrifically poor. But they were on par with most of East, South East or East Asia at the time which were also colonized.
Keep in mind Europe only had a few colonies in Africa until the 1885 Berlin Conference (like Britain had Sierra Leone, Portugal had Angola & Mozambique, Spain had Equatorial Guinea prior to the berlin Conference).
Britain had India since 1857. But Britain conquered my people, the Ashanti empire (in Ghana) in 1900.
Here are GDP per capitas in 1955 before most African countries were independent:
Source: https://ourworldindata.org/grapher/gdp-per-capita-prados-de-la-escosura?tab=chart&time=1955&country=NGA~LBR~THA~ETH~CHN~IND~LKA~JPN~KOR~ZAF~PAK~VNM~IDN~SEN~GHA~COD~BFA~SLE~SGP~MYS~ZMB~BRA~TWN~KEN~MAR~MEX~SAU~QAT~ARE~TUR
Apartheid South Africa: $2830
Japan: $2771
Mexico: $2633
Liberia: $2167
Turkey: $2093
Singapore: $1838
Brazil: $1834
Morocco: $1483
Malaysia: $1460
Senegal: $1367
Sri Lanka: $1337
Ghana: $1200 (Where I'm from, my family used to brag that "We were richer than many of these countries! But CIA funded a coup, and then the next leaders were idiots and stole)
Taiwan: $1189
South Korea: $1169
Indonesia: $964
Thailand: $945 (a country that avoided colonialism)
Nigeria: $835
Vietnam: $750
Zambia: $736
Democratic Republic of Congo: $734
Kenya: $718
India: $676
Pakistan & Sierra Leone: $635
Burkina Faso: $539
China: $537
Ethiopia: $422 (Ethiopia was the only country that escaped the 1885 European Imperialism of Africa, it was only occupied for 5 years from 1936-1941 under Fascist Italy. Unfortunately Ethiopia was a feudalistic state where the monarch and nobles had most of the power and money until the communist revolution by the military Derg)
Africa didn't go downhill and got into the "we can't catch up!" until the 1980s due the commodity bust and the African debt Crisis, which lasted until the late 90s/early 2000s.
All of the gains were erased. Africa in 2000s was basically the same as it was in the 1950s inflation adjusted.
If you are curious about the African debt crisis, I wrote about it here:
https://yawboadu.substack.com/p/the-1980s-and-1990s-african-debt
I don't see the contradiction: I was arguing that European colonialism in Africa (unlike in Asia) wasn't profitable for the Europeans because Africa was so underdeveloped, while your reply was more about the economic history of Africa _after_ decolonization.
To me it seems like the main difference between Asian vs African economies in the post-WWII era is that the African economies were far more dependent on raw commodity exports: could this be because the West was more willing to tolerate (non-communist) East Asian protectionism for reasons of Cold War geostrategy?
Ah, I may have misinterpreted you. I thought you were saying that Black Africans were poorer than South and Southeast Asians (which they weren't pre-independence), but you are saying that Africa colonies were unprofitable, which is true for the most part.
If you read the book "How Asia Works" - you'll know that Taiwan and SK first developed their agriculture by doing land reform to give people household farms. Turns out household farms are more productive than plantations because people like farming for themselves and their families more than a plantation owner and the government provided rural credit which pushed up yields so high that they eliminated subsistence farming. By 1960s, Taiwan and SK's cereal yields were over 3 tonnes per hectare. Rice and other farming products became sources of foreign exchange initially.
African economies TO THIS Day have terrible farming yields and can't hit 3 tonnes per hectare except South Africa & Egypt. So most African countries leaned more on mining ores which have volatile prices and basically collapsed 1980-2000s. But African economies import more in food, medicine, manufactured goods(Cars,Computers,phones), and refined petrol than they sell in raw materials, making them constantly go bankrupt.
You can play with this graph to see agricultural productivity within each country.
https://ourworldindata.org/grapher/cereal-yield?tab=chart&country=TWN~OWID_AFR
The biggest difference is that the green revolution has still escaped Africa which churns out their foreign currency reserves. South Korea had many failures trying to industrialize (failed video games, failed aerospace industry, etc.) but the government could eat those failures more because more foreign exchange gave them more room to fail. African countries because they drain so much FX with especially food, kills their ability to fail as much as SK had.
2. Most African economies were highly protectionist too. Right up until the neoliberal reopenings of the 1980s.
I know Pakistan's backwardness (relative to India) is also often blamed on lack of land reform and continuing feudalism.
On the other hand, land reform in Ireland in the late-19th and early-20th century is often blamed for _retarding_ that country's economic development, by creating a class of contented and conservative peasants unwilling to move to cities.
Maybe whether land reform is a good or a bad idea depends on the population density?
My point of the land reform was just that it ended the feudalistic regime of the land structures in SK and Taiwan which boosted yields and as a result it didn't drain their foreign currency. The point isn't about land reform but food security. SK and Taiwan had it by the 1960s, most African countries are still working on it. As for your question about what makes land reform good or bad is an interesting question. But I don't have the answer.
Back to my point on food security ->
SK and Taiwan were at the same level as some African countries but they fixed that issue. African countries by and large don't need land reform (maybe South Africa, but that's a different story). The problem with African food security & food productivity are the land law regime, the marketing boards, lack of irrigation, and the ability to get enough fertilizer & storage systems for farmers. For the land law regime, many parts of Africa have different land laws: Government owned land, if the country has a large % of Muslims then they will have Sharia land laws, and then customary land laws, where the chiefs are the custodians of the land. It's not very productive on the whole. Nigeria has all 3 (where Sharia is in the North), Ghana has customary and government land. Sometimes people go to court over which type of land it is...
For many African countries, because they can't grow their own food they have to import it. Not only that, many African countries, including my country Ghana, purposely has a central bank regime to purposely raise interest rates, so investors will buy your currency, to then buy your bonds which are offering higher rates to artificially strengthen the value of their currency to the dollar to make imports of food cheaper. Another strategy is to sell FX reserves to strengthen your currency.
These strategies are done in some African countries because they lack food or fuel security. What Taiwan, SK, Japan, and even China did was purposely WEAKEN their foreign exchange to the dollar to make their exports cheap so they can dominate Western markets. The Japanese Toyotas and Hondas flooded American markets and hurt GM and Ford's market share.
Great article....
Overall, large wealth divergences between countries are caused by the innovation, development, and scaling of NEW technologies/markets. It turns out freedoms of various forms (thought, invention, fail) is very important to enable the launch of these new technology-based markets. "Free" market democratic societies have a natural advantage in absorbing these powerful new markets.