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If you get involved in online debates about economic history, it won’t be long before someone tells you that the West is rich because it stole the resources of the regions it colonized. This stolen-wealth theory is cited as the reason the U.K. and France are rich today, while Ethiopia and Burundi are poor. It also is sometimes used to argue that global capitalism is inherently unjust and that wealth must be radically redistributed between nations as compensation.
The problem is, the stolen-wealth theory is wrong.
Oh, it’s absolutely true that colonial powers stole natural resources from the lands they conquered. No one disputes that. And at the time, this definitely made the colonized regions a lot poorer. The U.K., for example, caused repeated famines (https://www.quora.com/What-is-the-general-extent-to-which-the-famines-India-suffered-during-the-times-of-British-rule-impoverished-India) in India by raising taxes on farmers and by encouraging the cultivation of cash crops instead of subsistence crops. That is a pretty stark example of destructive resource extraction.
It’s also probably true that this stolen wealth helped much of the West get rich. Of course, Western countries didn’t simply consume the resources they plundered -- the global economy isn't just a lump of wealth that gets divvied up, but rather relies on the productive efforts of individuals, companies and governments. The U.K., for example, was able to industrialize not by consuming spices confiscated from India, but because its citizens invented power looms and steam engines and other technologies, and because its people worked very hard at factories and plants that used those technologies.
But steam engines and power looms and other industrial machinery required raw materials like coal and rubber as inputs. When those materials became less expensive, it became cheaper to substitute machines for human labor. That means that some of the resources stolen from colonies probably did give Britain and France part of the boost they needed to jump-start the industrialization that eventually made them wealthy.
So if the West did steal resources from colonized nations, and if this theft did help them get rich, why do I say that the stolen-wealth theory is wrong? I say that because the theory doesn’t explain the global distribution of income today. It is no longer a significant reason why rich countries are rich and poor countries are poor.
The easiest way to see this is to observe all the rich countries that never had the chance to plunder colonies. Germany, Italy, Sweden, Denmark and Japan had colonial empires for only the very briefest of moments, and their greatest eras of development came before and after those colonial episodes. Switzerland, Finland, and Austria never had colonies. And South Korea, Taiwan, Singapore and Hong Kong were themselves colonies of other powers. Yet today they are very rich. They did it not by theft, but by working hard, being creative, and having good institutions.
Meanwhile, poor countries have long since taken control of their natural resources. State-controlled oil companies in countries such as Saudi Arabia, Venezuela, Iran and Russia own far more (https://www.e-education.psu.edu/egee120/node/397) of the world’s oil than do giant Western corporations like Exxon or BP. African countries control their own mines, and Latin American countries their own crop land. The era of resource theft by rich countries is over and done.
Yet still, somehow, these countries are not very rich. Only a small handful of tiny nations whose economies are based on natural resources -- Brunei, Kuwait and Qatar among others -- are actually rich. Most are poor, despite controlling all of their own wealth. This sad fact is known as the resource curse (http://www.investopedia.com/terms/r/resource-curse.asp).
So it’s unlikely that resource-rich countries would have become industrialized but for the depredations of colonialism. And it seems quite possible that colonial nations such as France and the U.K. would have gotten rich without their resource plunder, as did Germany, South Korea, Switzerland and Taiwan.
Does that mean colonialism was a benign institution? Definitely not. At a bare minimum, the tens of millions killed by colonial conquests and famines leave an indelible stain on the West. And while colonialism had benefits in some places (http://www.nber.org/papers/w16551), in many others it left a nasty legacy that is felt to this day. Many economic studies (http://economics.mit.edu/files/4123) show that regions where colonizers focused on extracting resources were later cursed (http://ftp.iza.org/dp4276.pdf) with pernicious political institutions (http://www.nber.org/papers/w12613). Those regions, even today, exhibit poor economic performance.
So colonializing nations did steal resources, and it did hurt colonies by doing it. But the real tragedy is how unnecessary that all was. The U.K. and France would have gotten rich without plundering Africa, India and Southeast Asia. All of that violence and conquest was probably for nothing.
http://www.bloombergview.com/articles/2015-12-31/former-colonies-aren-t-poor-because-of-western-plunder?utm_campaign=trueAnthem:+Trending+Content&utm_content=56861cea04d301423aff21ae&utm_medium=trueAnthem&utm_source=twitter
Not historian enough to offer a comprehensive evaluation, but I would like to point out that the countries that ultimately benefited from resources did so more by winning wars and dominating politically than by exploiting what they acquired, resource wise. Spain was at one point the wealthiest country, but squandered what they acquired on wars they lost. England won against both France and Spain, and today is still a world power.
Let the historians on here debate it, but the picture is far more complicated and involves a lot more than capitalism vs national interests.
Quote from: stromboli on January 01, 2016, 10:09:14 AM
Not historian enough to offer a comprehensive evaluation, but I would like to point out that the countries that ultimately benefited from resources did so more by winning wars and dominating politically than by exploiting what they acquired, resource wise. Spain was at one point the wealthiest country, but squandered what they acquired on wars they lost. England won against both France and Spain, and today is still a world power.
Let the historians on here debate it, but the picture is far more complicated and involves a lot more than capitalism vs national interests.
The main point of the OP is that there are many countries which didn't colonize and there are countries which were themselves colonized, yet they are rich today. So those countries which are still poor today can't really blame the Western powers for colonizing them. IOW, stop the blame game. If you're a poor country, maybe a little introspection is needed as to why you're still poor. And it ain't "the West did it to us". Maybe that was true 50 years ago, not any more.
Quote from: josephpalazzo on January 01, 2016, 10:27:40 AM
The main point of the OP is that there are many countries which didn't colonize and there are countries which were themselves colonized, yet they are rich today. So those countries which are still poor today can't really blame the Western powers for colonizing them. IOW, stop the blame game. If you're a poor country, maybe a little introspection is needed as to why you're still poor. And it ain't "the West did it to us". Maybe that was true 50 years ago, not any more.
A good example might be the Netherlands, which as an early sea power got to the Americas and was to some extent a global player, but now not by any stretch a world power. I can generally agree with the OP, but it is much more complicated than just capitalism and exploiting 3rd world countries. There is a very complicated history just between England and India and England and the Middle East, all the way up to and including two world wars.
There are rich blacks who came from the ghetto, therefore where they came from isn't a factor of their socio economics.
While I agree that wrapping oneself in victimization, even if it happened to you personally, isn't productive. But that doesn't excuse the perp who rolled you and took your purse.
Of course the history of colonized places is complicated, and it is a lot of apples and oranges. The Congo and Kansas have very little in common. The lack of development of the native peoples .. is their problem, not the imperialist's problem. The subsequent corruption of post-colonial globalism (local elites ripping off their own people) is only partly the fault of the former colonizers ... but the former colonizers, as part of neocolonialism, participate in the corruption of the local elites. One also has to see this in the light of Cold War competition ... particularly since we have entered a new Cold War. The impact of fiat currency and the dominance of the gold dollar followed by the petrodollar can't be ignored either ... it helps maintain a favorable balance of wealth ... at least for the international elites, if not for the Five Eye elites.
But avoiding moralizing would be a good idea ... it is non-productive. People are born into better or worser circumstances. More by luck, a few disadvantaged manage to improve themselves, and by sloth and lack of character, the scions of the elite often are worse off. Personal character factors in, but maniac individualism ascribes all you have ... to one's Horatio Alger fantasy ... thus also conveniently reinforcing the notion that one can keep what one has "earned" and practice one's work "unregulated". Just as much class warfare fantasy as any other.
Quote from: stromboli on January 01, 2016, 11:56:59 AM
A good example might be the Netherlands, which as an early sea power got to the Americas and was to some extent a global player, but now not by any stretch a world power. I can generally agree with the OP, but it is much more complicated than just capitalism and exploiting 3rd world countries. There is a very complicated history just between England and India and England and the Middle East, all the way up to and including two world wars.
You probably can get a 500-page+ analysis on the net, but very few people read that. Nevertheless, there is always a place for a brief explanation of a complicated situation. The OP, as brief as it is, stresses one particular point, which I think is very valid.
Quote from: josephpalazzo on January 01, 2016, 01:07:51 PM
You probably can get a 500-page+ analysis on the net, but very few people read that. Nevertheless, there is always a place for a brief explanation of a complicated situation. The OP, as brief as it is, stresses one particular point, which I think is very valid.
From my perspective, development by colonizers .... even if involuntary ... as positive aspects that wouldn't have happened otherwise. Native cultures already had their own problems before the Europeans showed up. I just don't think it is possible to take a complicated historical situation and do a Utilitarianism calculus on it saying it was net positive or net negative ... that judgement comes from ideology, not reason. Not to say that I have callous feelings toward Native Americans ... maybe there are parallel universes, and in one of them the Native Americans get to go their own way ... like that time Kirk was amnesiac and stranded with Indians on an alien world. It was the happiest he had ever been.
So in a non-Black-vs-White world, where actions taken or not taken can be both positive and negative at the same time ... poverty (whatever causes it) ... is not simply because of the Europeans. I think the Europeans were involved however. Technically the Native Americans could have given them all the gold and silver as a bribe ... to simply go away. The Native Americans weren't using precious metals for much anyway. The damage doesn't come from robbery, it comes from instituting a whole new culture that is part Native American part European as in Latin America. The situation in N America was much worse for the Native Americans, they were simply marginalized. In the Caribbean the Native Americans were replaced by Africans ... as they were in the US South.
On poverty however ... back to my "What is Money" ... basically development occurs because of symbiosis and parasitism between the rural and urban populations ... and that happens on a larger scale between colonizer and colonized. Voluntary symbiosis would be ideal, except for those most nostalgic for foot binding and eunuchs in China for example. But power differentials typically devolve into some kind of tyranny.