Seventeenth century England, for example, benefitted from the arrival of tens of thousands of Huguenots fleeing persecution in France. Huguenots created the watch industry in London, as other refugees created other enterprises and industries in Britain. Similarly, Spain’s mass expulsions of Jews in 1492—forcing them to leave most of their wealth behind—led many to settle in Holland, where the human capital that they retained helped make themselves prosperous again, and helped make Amsterdam one of the world’s great commercial ports.{908} #101 | | |
Over the centuries, tens of millions of people fled from various parts of Europe to the United States, whether to escape persecution or just to seek wider economic opportunities than were available to ordinary people in Europe. Many American industries were created, or greatly advanced, by immigrants who had been people of no real wealth or distinction in Europe, but who became economic titans in America, while transforming the United States from a predominantly agricultural country into the leading industrial nation of the world. #102 | | |
Cultural isolation takes many forms, creating economic and other handicaps that differ from group to group and from one society, nation or civilization to another. Differing levels of cultural isolation within and between societies add to geographic and other factors making economic equality unlikely among groups, societies, nations or civilizations. #103 | | |
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Because not all cultures developed written versions of their languages at the same time, there has been vastly larger and more varied written knowledge available in one language than in another language, at a particular period of history. Thus, in the nineteenth century, Czechs, Estonians or Latvians who wanted to become doctors or scientists, or to work in other professions that required advanced education, could more readily find the appropriate books and courses available in the German language than in their own languages. #105 | | |
Although there was a written version of the indigenous language in Estonia before the nineteenth century, most of the publications in the Estonian language “remained religiously oriented” before 1850, and “the working language of all educated persons was German.”{909} Educated people in adjoining Latvia, and in the Habsburg Empire’s province of Bohemia —among other places in Eastern Europe and the Baltic—were likewise educated in German. #106 | | |
German was the language of the educated classes in Prague, whether those educated individuals were ethnically German, Czech or Jewish.{910} Similarly in the Baltic port city of Riga in the Russian Empire, most of the education in that city in the nineteenth century was conducted in German, even though Germans were no more than one-fourth of the city’s population.{911} When the czarist government opened a university in Estonia in 1802, most of its faculty and students were German, and this remained so for most of the nineteenth century.{912} It was not just in formal education, but also in many different craft skills, that Germans were more advanced than many of the peoples of Eastern Europe. German farm settlements along the Volga and in the Black Sea region of the Russian Empire were more productive and more prosperous than the farms of the indigenous population.{913} #107 | | |
There was a history behind such patterns. As already noted, Western European languages developed written versions centuries before Eastern European languages, as a result of Western Europe’s having been conquered by the Romans and having acquired Latin letters. During the Middle Ages, it was not uncommon for Western Europeans to be a majority of the population in various Eastern European cities. These urban Western Europeans were often Germans, though there were some Jews and other Western Europeans as well. Even when the Germans were not a majority of the urban inhabitants, they were often a majority of the economic elites, as in Prague in the Habsburg Empire or in Riga, Tallinn and other Baltic cities in the Russian Empire.{914} #108 | | |
While Slavs were usually an overwhelming majority of the people in the Eastern European countrysides, there were also enclaves of German farming communities in Eastern Europe, often deliberately recruited by Eastern European rulers, who were anxious to bring people with more advanced skills into their domains, so as to increase the wealth and power of the lands they ruled. Not only did this transplant more advanced knowledge, technology and experience into Eastern Europe, it also opened the possibility of indigenous individuals in Eastern Europe acquiring some of the cultural advances from Western Europe. #109 | | |
From a purely economic standpoint, these infusions of human capital into Eastern Europe contributed to greater opportunities for members of the indigenous population to advance economically by rising, as many did, through the acquisition of the German language and culture. However, from a social and political standpoint, a situation in which the German minority dominated the business and professional elites—when German families in Prague often had Czech servants but few, if any, Germans were servants{915}—was a situation provoking ethnic resentments and eventually ethnic identity movements expressing those resentments politically. Similar tensions and polarizations have been common in other countries, where an immigrant group brought more human capital than that of the indigenous population, and was conspicuously more prosperous as a result—the Chinese in Southeast Asia, Lebanese in West Africa, Japanese in Peru and Indians in Fiji, among many others. #110 | | |
Within nations, as well, particular groups have migrated from one part of their country to another, bringing economic benefits while provoking social and political backlashes because of others’ resentments of their higher economic achievements. However these conflicts turned out—and some have turned out tragically—from a purely economic standpoint these are among the many complicating factors which prevent regions, races and nations from having either equal outcomes or even the same pattern of inequalities over time. #111 | | |
Leaders and spokesmen for lagging groups have often tended to blame others for their lags, sometimes depicting qualifications standards for admissions to educational institutions or for employment as arbitrary barriers. This view was epitomized by an ethnic spokesman in India who asked, “Are we not entitled to jobs just because we are not as qualified?”{916} and by an ethnic spokesman in Nigeria who decried “the tyranny of skills.” {917}Very similar political responses to achievement differences have been common in other countries, with the German minority being blamed for the lags of Czechs in nineteenth century Bohemia or Latvians in Latvia, just as Fijians in Fiji blamed the Indian minority there and the peoples of various countries in Southeast Asia tended to blame the Chinese minority there. {xxxiii} #112 | | |
In other words, ethnic leaders have often turned their people against the cultures that could help advance them, and dissipated their energies in opposing both such cultures and the people who had the advantages of those cultures. These were not necessarily irrational actions on the part of ethnic leaders, whose promotion of an “us against them” attitude advanced the ethnic leaders’ careers, even when it was detrimental to the economic interests of the people they led. This pattern has been common at various times and places on every inhabited continent.{918} #113 | | |
It was the exception, rather than the rule, when the great philosopher David Hume urged his fellow eighteenth century Scots to learn the English language for the sake of their own advancement—which they did, and rose rapidly in many fields. Ultimately the Scots surpassed the English in engineering and medicine. That too was the exception, rather than the rule. The nineteenth century Japanese were another exception. Once their isolation was ended, the Japanese openly acknowledged their long lag behind Western nations, and proceeded to bring in experts from Europe and America to introduce Western technology into Japan. #114 | | |
In the twentieth century, Japan caught up to the West in many areas and surpassed the West in others. But, as of the time when Commodore Perry’s American naval forces pressured the Japanese government to open their country to the outside world in 1853, the backwardness of the Japanese was demonstrated in their reaction to a train that Perry presented as a gift: #115 | | |
At first the Japanese watched the train fearfully from a safe distance, and when the engine began to move they uttered cries of astonishment and drew in their breath. #116 | | |
Before long they were inspecting it closely, stroking it, and riding on it, and they kept this up throughout the day.{919} #117 | | |
Yet from such levels of technological backwardness, Japan began a massive importation of European and American technology and engineers, and a widespread learning of the English language to directly acquaint themselves with the science and technology of the West. Slowly at first, but more rapidly as they acquired more experience, the Japanese rose in the following century to the forefront of world technology in many fields, producing trains that surpassed any produced in the United States. #118 | | |
As a country with a population almost entirely of one race and with no history of being a conquered people before 1945, there was little basis on which nineteenth century Japan could blame others for their lags. Nor did they or their leaders attempt to do so. But, again, Scotland and Japan were rare exceptions, and so was their spectacular rise to economic success. Both countries had meager natural resources and were in previous centuries poor and backward. Neither had the same geographic prerequisites for originating an industrial revolution as some other countries did. But the fact that both acquired knowledge of the advances already made by other people, who lived in more fortunate environments, enabled them to transcend the geographic handicaps of their own environment and move to the forefront of human achievement. #119 | | |
Because nations that are culturally and economically more advanced are not necessarily more advanced militarily as well, their prosperity and the culture that created it can be destroyed by militarily more powerful peoples who may not be as advanced otherwise. When invading barbarians destroyed the Roman Empire, they destroyed most of the institutions that had perpetuated Roman culture, leaving the peoples of the former Roman Empire both economically and technologically living below the level their forebears had achieved under Roman rule. #120 | | |
Artifacts from medieval Europe reveal that the quality of their workmanship had declined significantly since the days of the Roman Empire. {920}Central heating, which was introduced into Britain in Roman times, became rare or non-existent, even among the nobility, in the centuries after the Romans withdrew. Medieval cities in Europe, including Rome itself, had much smaller populations and fewer amenities than in Roman times.{921} As late as the early nineteenth century, no European city had as dependable a water supply as many Roman cities once had, more than a thousand years earlier.{922} History does not always move in an upward line of progress. Sometimes the retrogressions can be deep and long lasting. #121 | | |
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Populations can affect economic outcomes by their size, their demographic characteristics or their mobility, among other factors. The concentration or dispersion of a population can also greatly affect economic progress, which often varies with the degree of urbanization. Either the physical or the social separation of different segments of a country’s population can also affect the extent of their cooperation and coordination in economic activities. #123 | | |
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The danger of “overpopulation” has long been a recurrent concern, even before Malthus raised his historic alarm at the end of the eighteenth century that the number of human beings threatened to exceed the number for which there was an adequate food supply. At various places and times throughout history, famines have been monumental tragedies that some have regarded as confirmation of Malthus’ theory. #125 | | |
As late as the twentieth century, a famine in the Soviet Union under Stalin took millions of lives and, in China under Mao, tens of millions. But even catastrophes of this almost unimaginable magnitude do not prove that the world’s food supply is inadequate to feed the world’s population. Famines in particular countries or regions are often due to factors at work in those particular countries and regions at the time, such as a local crop failure or the disruption of transportation due to war, weather or other causes. In the case of the Soviet Union, the famine was concentrated in a region—the Ukraine—that was before, and is again today, a major producer and exporter of wheat. #126 | | |
Crop failures are not sufficient, by themselves, to bring on famine, unless food from other parts of the world cannot reach the stricken areas in time, and on a scale sufficient to head off mass starvation or the diseases to which undernourished people become vulnerable. Poor countries lacking transportation networks capable of moving vast amounts of food in a short time have been especially susceptible to famines. The modern transportation revolution has reduced such conditions over most of the world. But a country or region isolated for political reasons can remain susceptible to famine, as in the Soviet Union under Stalin and China under Mao. After radical changes in China’s economic system in the decades following the death of Mao, an estimated one-fourth of China’s adults were overweight by the early twenty-first century.{923} #127 | | |
Contrary to Malthusian theory, few—if any—countries have had a higher standard of living when their population was half of what it is today. Studies based on empirical evidence show results very different from those projected by advocates of “overpopulation” theories. For example: #128 | | |
Between the 1890s and 1930s the sparsely populated area of Malaysia, with hamlets and fishing villages, was transformed into a country with large cities, extensive agricultural and mining operations and extensive commerce. The population rose from about one and a half to about six million. . . The much larger population had much higher material standards and lived longer than the small population of the 1890s. Since the 1950s rapid population increase in densely-populated Hong Kong and Singapore has been accompanied by large increases in real income and wages. The population of the Western world has more than quadrupled since the middle of the eighteenth century. Real income per head is estimated to have increased by a factor of five or more.{924} #129 | | |
Nevertheless, “overpopulation” theories of poverty have endured and have had sporadic resurgences in the media and in politics, much like theories that we are running out of various natural resources. Moreover, the arguments are similar in both cases. The indisputable fact that there are finite limits to the amount of each natural resource has led to the non sequitur that we are nearing those limits. Similarly, the indisputable fact that there are finite limits to the number of people that the planet can feed has led to the non sequitur that we are nearing those limits. #130 | | |
Poverty and famine in various parts of the world have been taken as evidence of “overpopulation.” But poverty and famine have been far more common in such thinly populated regions as sub-Saharan Africa than in densely populated Western Europe or Japan, which each have several times as many people per square mile as in sub-Saharan Africa. Travelers in Eastern Europe during the Middle Ages often commented on the large amount of land that was unused in this poorer part of Europe.{925} While today there are densely populated poor countries like Bangladesh, there are also sparsely populated poor countries like Guyana, whose population density is the same as that of Canada, which has several times as large an output per capita{926} and one of the highest standards of living in the world. #131 | | |
In short, neither high population density nor low population density automatically makes a country rich or poor. What seems to matter more is not the number of people but the productivity of those people, which is dependent on many factors, including their own habits, skills, and experience. To the extent that population density, as in urban communities, can facilitate the development of human capital, people in small isolated societies have tended to lag behind the general progress of others. #132 | | |
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While peoples in different regions of the world might live, and their cultures and societies evolve, in their own respective regions for millennia, at various times they have also moved to other regions of the world, whether as conquerors, immigrants or slaves. Some have migrated singly or in families, and others have migrated en masse, whether settling among existing inhabitants or driving the existing inhabitants out and displacing them, as invaders from Asia in centuries past set off chain reactions of population displacements in Eastern Europe and the Balkans, or as invaders from Europe would later displace indigenous populations in North America. #134 | | |
In the early years of the industrial revolution, when technology advanced through the direct practical work of people in factories, mines and other productive facilities, rather than through the application of science as in later times, the movement of migrants was the principal means of diffusion of technology from its sources to other nations and regions. Thus British technological advances could spread more readily to an English-speaking country like the United States than to nearer countries on the continent of Europe. The government of Britain, where the industrial revolution began, tried to restrict the movement of British workers to other countries, in order to protect Britain’s technological advantages.{927} However, as technological advances became more and more a matter of applying science, knowledge could more readily be spread on paper, rather than requiring the actual movement of people. #135 | | |
Improvements in transportation and communications during the nineteenth century also sped up the diffusion of technological advances. By 1914 British advances in technology had spread not only to nearby countries but across the continent of Europe.{928} #136 | | |
In countries around the world, the movement of peoples is also a movement of their cultures. This can result in a displacement of existing cultures at their destination, a planting of a new culture in the midst of one already in place, or an assimilation to the destination culture by the migrants. These varied prospects add more combinations and permutations to the possibilities affecting economic and social development—making equal development among regions, races and nations even less likely than with geographic or cultural differences alone. #137 | | |
Sometimes the newcomers end up adopting the culture of the surrounding society, beginning with the language, as most of the millions of immigrants to the United States did in the nineteenth and early twentieth centuries. In other cases, however, such as the settlement of Western Europeans in Eastern Europe during the Middle Ages, the migrants retained their own language and culture for centuries and, to some extent, assimilated members of the indigenous population to the transplanted cultures. This was especially so when the transplanted peoples were more prosperous, more highly skilled and better educated. #138 | | |
Peoples who may be very poor in their native lands can sometimes prosper in some other lands which have more promising geographic or other advantages that the migrants have the human capital to benefit from, often more so than indigenous inhabitants. For generations, it was a paradox that the Chinese and the Indians prospered almost everywhere around the world, except in China and India. As late as 1994, 57 million overseas Chinese produced as much wealth as the one billion Chinese in China.{929} However, major economic reforms in China and India, beginning in the late twentieth century, brought much higher economic growth rates in both countries, suggesting that their domestic populations, as well as their overseas offshoots, had potentialities that required only a better setting in which to reach fruition. #139 | | |
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Conquests have transferred wealth, as well as cultures, among nations and peoples. During the height of the Spanish empire, more than 200 tons of gold were shipped from the Western Hemisphere to Spain, and more than 18,000 tons of silver.{930} King Leopold of Belgium likewise took vast riches from the Belgian Congo. In both cases—and others—imperial powers extracted huge amounts of wealth from some conquered peoples, often through the forced labor of those peoples. As John Stuart Mill put it, conquerors have often treated the conquered peoples as “mere dirt under their feet.”{931} This was true not only of European conquests in the Western Hemisphere, Africa and Asia, it was equally true of indigenous conquerors of other indigenous peoples in all those places—and of Asian, Middle Eastern and North African conquerors who invaded Europe in the centuries preceding Europeans’ invasions of other lands. #141 | | |
From a purely economic standpoint, putting aside the painful implications of such behavior for human nature in general, the question is: How much do these conquests and enslavements of the past explain economic disparities among nations and peoples in the present? #142 | | |
There is no question that, during the centuries when Spain was the leading conqueror in the world, it destroyed whole civilizations—such as those of the Incas and the Mayans—and impoverished whole peoples, in the process of enriching itself. Spain’s empire in the Western Hemisphere extended continuously from the southern tip of South America all the way up to the San Francisco Bay, and also included Florida, among other places, while there were also parts of Europe ruled by Spain and, in Asia, the Philippines. But there is also no question that Spain is today one of the poorer countries in Western Europe. Meanwhile, European countries that have never had empires, such as Switzerland and Norway, have higher standards of living than Spain. #143 | | |
While the vast wealth that poured into Spain from its colonies could have been invested in building up the commerce and industry of the country, and building up the literacy and occupational skills of its people, this wealth was in fact largely dissipated in the consumption of imported luxuries and military adventures during the “golden age” of Spain in the sixteenth century.{932} Both luxuries and war were primarily for the benefit of the ruling elite, rather than for the advancement of the Spanish people at large. As late as 1900, more than half the population of Spain remained illiterate.{933} By contrast, in the United States that same year a majority of the black population could read and write, despite having been free for less than 50 years.{934} A century later, the real per capita income in Spain was slightly lower than the real per capita income of black Americans.{935} #144 | | |
Like many conquering peoples, the Spaniards in their “golden age” disdained commerce, industry and labor—and their elites reveled in leisurely and luxurious living. This led to a large and continuous drain of precious metals from Spain to other countries, to pay for imports. Silver could thus become in short supply within Spain just weeks after the arrival of ships laden with silver from its Western Hemisphere colonies. The Spaniards themselves spoke of gold as pouring down on Spain like rain on a roof, flowing on away immediately.{936} #145 | | |
Nor were Spaniards unique among great conquering peoples in having little to show economically in later centuries for their earlier historic conquests and exploitations of other peoples. The descendants of Genghis Khan’s vast conquering hordes in Central Asia are today among the poorer peoples of the world. So are the many peoples in the Middle East who were once part of a triumphant Ottoman Empire that ruled conquered lands in Europe, North Africa and the Middle East. Nor have the descendants of the peoples of the Mogul Empire or the Russian empire been particularly prosperous. #146 | | |
Britain might seem to be an exception, in that it once had the largest empire of all—encompassing one-fourth of the land area of the Earth and one-fourth of the human race—and today has a high standard of living. However, it is questionable whether the British Empire had a net profit over the relatively brief span of history in which it was at its ascendancy. Individual Britons such as Cecil Rhodes grew rich in the empire, but the British taxpayers bore the heavy costs of conquering and maintaining the empire, including the world’s largest burden of military expenditures per capita.{937} #147 | | |
Britain also had at one time the world’s largest slave trade in its empire. But, even if all the profits from slavery had been invested in British industry, this would have amounted to less than 2 percent of Britain’s domestic investments during that era.{938} #148 | | |
The economic record of slavery, in general, as a source of lasting economic development is unimpressive. Slavery was concentrated in the southern part of the United States and in the northern part of Brazil—and, in both cases, these remained the less prosperous and less technologically advanced regions of these countries. Similarly in Europe, where slavery persisted in Eastern Europe long after it had died out in Western Europe, the latter being for centuries the faster growing and more prosperous part of the continent, right up to the present day. Slavery continued to exist in the Middle East and in parts of sub-Saharan Africa long after it was banished from the rest of the world, but the Middle East and sub-Saharan Africa are today places noted more for poverty than for economic achievements. #149 | | |
In short, forcible transfers of wealth from some nations or peoples to other nations or peoples, whether through conquest or enslavement, can be large without producing lasting economic development. A vast amount of human suffering may produce little more than the transient enrichment of contemporary elites, who live in luxury and invest little or nothing for the benefit of future generations. What was said of serfdom in Russia, that it simply put “much wealth in the hands of a spendthrift nobility,”{939} would apply to other systems of oppression elsewhere that contributed little or nothing to economic development. #150 | | |
