Basic economics / Основи на икономиката: Chapter 23 INTERNATIONAL DISPARITIES IN WEALTH

Английски оригинал Перевод на български

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}

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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.

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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.

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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.

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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.

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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?

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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.

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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}

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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}

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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.

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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}

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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}

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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.

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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.

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By and large, imperialism cannot be said unequivocally to have been a net economic benefit or a net economic loss to those who were conquered. In some cases, it was clearly one rather than the other. But even where there were long-run benefits to the descendants of the conquered peoples, as in Western European nations conquered by the Romans, the generations that were conquered and lived under Roman oppression were by no means necessarily better off. However, even such a British patriot as Winston Churchill said, “We owe London to Rome,” {940}because the ancient Britons created nothing comparable themselves. Yet the sufferings and humiliations inflicted on the ancient Britons provoked a mass uprising that was put down by the Romans with a merciless slaughter of thousands.

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What can be said from an economic standpoint is that there is little compelling evidence that current economic disparities between nations in income and wealth can be explained by a history of imperial exploitation. There were usually large economic or other disparities before these conquests, and these pre-existing disparities facilitated worldwide conquests by relatively modest-sized nations like Spain and Britain, each of which conquered vastly larger lands and populations than their own.

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Trying to assign relative weights to the various factors behind economic differences would be an ambitious and hazardous undertaking. Even a sketch of just some of the individual factors involved in economic advancement suggests that equal economic outcomes for different regions, races, nations or civilizations have been unlikely in principle and rare empirically. When the various interactions of these factors are considered, the chances of equal outcomes become even more remote, as the number of combinations and permutations increase exponentially. For example, regions with similar rivers are unlikely to have similar economic outcomes if the lands through which the rivers flow are different, or the cultures of the people living on those lands are different, or the waterways into which the rivers empty are different in proximity to markets or in other ways.

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Interactions are crucial. Despite the importance of geographic settings in limiting or extending opportunities for economic development, there can be no geographic determinism, since it is the interactions of the physical world with changing human knowledge and varied human cultures which help determine economic outcomes. Most of the substances found in nature that are natural resources for us today were not natural resources for the caveman, because human knowledge had not yet reached the level required to use those substances for human purposes. Only as the frontiers of knowledge advanced did more and more substances become natural resources, in unpredictable times and places, changing the relative geographic advantages and disadvantages of different regions. Even when geography is unchanging, its economic consequences are not.

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Nevertheless the effect of geographic influences can be considerable in a sequence of events involving many other factors. Peoples isolated geographically for centuries—whether in the Balkan mountains or in the rift valleys of Africa—tend to be culturally fragmented as well. They may also tend to have highly localized loyalties (“tribalism” or “Balkanization”) that make it more difficult for them to combine with others to form larger political units like nation-states. In turn their individually small societies may for centuries be vulnerable to marauding enslavers or imperial conquerors.

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Nor do cultures which originated in places that were geographically isolated for centuries quickly vanish when modern transportation and communications penetrate that isolation. Some people define environment as the physical, geographic or socioeconomic surroundings as of a given time and place. But this leaves out the cultural patterns inherited from the past, which can differ greatly among groups who are all currently living in the same setting, with the same opportunities, but leading to very different economic outcomes among these groups. Although the children of Italian and Jewish immigrants to the United States in the early twentieth century lived in very similar surroundings, and often attended the same neighborhood schools, they came from cultures that put very different emphasis on education, and these children performed very differently in school,{941} leading to different economic patterns as adults.{942}

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Even the relatively few individual factors sketched here show many complications when examined in greater detail {xxxiv}—which is to say that the variables at work increase exponentially for each of these factors, making equal outcomes ever more unlikely. Other factors not explored here—such as demographic differences among regions, races, nations and civilizations—simply add to the complications and the inequalities. When the difference in median age between nations, or between racial or ethnic groups within a given nation, can be ten or twenty years, the likelihood that different peoples would have even approximately equal economic outcomes, despite their many years’ differences in adult economic experience, is reduced to the vanishing point.

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While there are discernible geographic, cultural and other patterns behind many economic inequalities among peoples and nations, there are also sheer happenstances that can play major roles. Wise decisions or foolish mistakes made by those who happened to be political or military leaders of particular peoples at crucial junctures in history can determine the fate of nations, empires and generations yet unborn. The decision of China’s leaders, when that was the most advanced nation in the world, to seal off their country from the rest of the world, forfeited China’s preeminence in the centuries that followed.

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The role of chance when closely matched armies clash on chaotic battlefields can make the difference between victory and defeat “a near run thing,” as the Duke of Wellington said of the battle of Waterloo, which he won against Napoleon—and which determined the fate of Europe for generations to come. Had the battle of Tours in 732 or the siege of Vienna in 1529 gone the other way, this could be culturally a very different world today, with very different economic patterns.

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Other happenstances include the great biological vulnerability of the indigenous peoples of the Western Hemisphere to the diseases brought by Europeans, which diseases often decimated the native populations more than the European weapons did. Because the Europeans were far less vulnerable to the diseases of the Western Hemisphere, the outcomes of many of the struggles between the two races were essentially predetermined by microorganisms that neither of these races knew existed at the time. {xxxv} It was said of a kindly Spanish priest who went among the native peoples in friendship, as a missionary, that he was probably responsible for more deaths among them than even the most brutal Conquistador.{943}

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Taking into account both discernible geographic, cultural and other patterns that present either wide or narrow opportunities for different peoples in different places and times, and unpredictable happenstances that can disrupt existing patterns of life or even change the course of history, suggests that neither equality of economic outcomes nor the indefinite persistence of a particular pattern of inequalities can be assumed.

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What the centuries ahead will be like, no one can know. But much may depend on how well the many peoples and their leaders around the world understand what factors promote economic growth and what factors impede it.

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