What all the developed countries have in common - Page 7 - Politics Forum.org | PoFo

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#15105908
Pants-of-dog wrote:@wat0n

Yes, the issue is always more complicated.

That does not change the fact that the transfer of wealth from (what are now) developing countries helped spur economic and industrial development in Europe, and enriched the business classes or the monarchies in Europe.

Not does it change the fact that colonialism either enriched foreign countries (like extraction colonies) or the settler colonizing country (like Canada and the USA) at the expense of indigenous communities.


OK, but that alone did not save former empires like Turkey (which had a quite extractive relationship with its subjects outside the borders of present-day Turkey) from eventually failing to develop and neither does it explain why other countries have been able to develop themselves after.
#15106002
Pants-of-dog wrote:@wat0n

So you agree with my argument and making the (completely uncontested) additional claim that other factors also happened.


If you read the very source you posted, Acemoglu and Robinson say that even the colonial powers would not necessarily benefit from their colonies, and that it depended on their institutions.
#15106012
Pants-of-dog wrote:https://voxeu.org/article/economic-impact-colonialism


To clarify, I meant the delusion that the developed countries are developed because of colonialism. The impact of Atlantic trade on economic growth in Western Europe was small. (in this paper they make the argument that Atlantic trade had an indirect effect through the impact on institutions in Western Europe, by enriching a merchant class, but that effect is ambiguous, e.g. for Spain, where it enriched the monarchy, it was negative).

That colonialism hat an impact on economic development in different parts of the world I do not doubt. However, even in this case the paper you cited compares different regimes of colonialism. It doesn't ask the question whether colonialism was bad or not. In fact, they make the argument that the quality of institutions determined economic growth, and the most important control variable in their regressions with a positive impact on the quality of institutions is the share of the population of European descent in 1900. So basically, the more European settlers the better.
#15106035

Economics of slavery

In France in the 18th century, returns for investors in plantations averaged around 6%; as compared to 5% for most domestic alternatives, this represented a 20% profit advantage. Risks—maritime and commercial—were important for individual voyages. Investors mitigated it by buying small shares of many ships at the same time. In that way, they were able to diversify a large part of the risk away. Between voyages, ship shares could be freely sold and bought.[112]

By far the most financially profitable West Indian colonies in 1800 belonged to the United Kingdom. After entering the sugar colony business late, British naval supremacy and control over key islands such as Jamaica, Trinidad, the Leeward Islands and Barbados and the territory of British Guiana gave it an important edge over all competitors; while many British did not make gains, a handful of individuals made small fortunes. This advantage was reinforced when France lost its most important colony, St. Domingue (western Hispaniola, now Haiti), to a slave revolt in 1791[113] and supported revolts against its rival Britain, in the name of liberty after the 1793 French revolution. Before 1791, British sugar had to be protected to compete against cheaper French sugar.

After 1791, the British islands produced the most sugar, and the British people quickly became the largest consumers. West Indian sugar became ubiquitous as an additive to Indian tea. It has been estimated that the profits of the slave trade and of West Indian plantations created up to one-in-twenty of every pound circulating in the British economy at the time of the Industrial Revolution in the latter half of the 18th century.[114]



https://en.wikipedia.org/wiki/Atlantic_ ... of_slavery
#15106077
Rugoz wrote:To clarify, I meant the delusion that the developed countries are developed because of colonialism. The impact of Atlantic trade on economic growth in Western Europe was small. (in this paper they make the argument that Atlantic trade had an indirect effect through the impact on institutions in Western Europe, by enriching a merchant class, but that effect is ambiguous, e.g. for Spain, where it enriched the monarchy, it was negative).


In Spain, it was negative for the business class and other institutions that were (at the time) creating the foundations for capitalism, but it still brought wealth into Spain through the monarchy. Spanish nobles and their estates profited immensely, and this helped Spain in the long run, even if places like London and Amsterdam were ready to profit from much more because they had things like private banks.

And the Atlantic trade was more than simply slaves, and ignores the huge boost in wealth associated with land.

That colonialism hat an impact on economic development in different parts of the world I do not doubt. However, even in this case the paper you cited compares different regimes of colonialism. It doesn't ask the question whether colonialism was bad or not. In fact, they make the argument that the quality of institutions determined economic growth, and the most important control variable in their regressions with a positive impact on the quality of institutions is the share of the population of European descent in 1900. So basically, the more European settlers the better.


Yes, the more settlers, the better for the colonisers. And the worse off for the colonised. This is why the US is wealthy but indigenous communities in the US are living in conditions like the developing world.
#15106337
Pants-of-dog wrote:In Spain, it was negative for the business class and other institutions that were (at the time) creating the foundations for capitalism, but it still brought wealth into Spain through the monarchy. Spanish nobles and their estates profited immensely, and this helped Spain in the long run, even if places like London and Amsterdam were ready to profit from much more because they had things like private banks.

And the Atlantic trade was more than simply slaves, and ignores the huge boost in wealth associated with land.


And yet since that wealth was eventually dilapidated by the Monarchy, Spain did not benefit from it at large. It only became a developed economy in the 1990s. @Rugoz did that quoting for me.

Pants-of-dog wrote:Yes, the more settlers, the better for the colonisers. And the worse off for the colonised. This is why the US is wealthy but indigenous communities in the US are living in conditions like the developing world.


Because they do not adopt the institutions of the broader country you mean?
#15106351
@wat0n

1. Again, just because the bourgeoisie did not get most of the money does not mean that the money magically vanished. It simply enriched the nobles, the church, and the people who worked for them. These were mostly in Spain.

2. No. Colonialism takes wealth away from the colonised. They lost land, the resources on them, and have been oppressed for centuries. To blame their poverty on them because they did not “adopt the institutions of the broader country” is not only wrong, but also victim blaming.
#15106353
Pants-of-dog wrote:@wat0n

1. Again, just because the bourgeoisie did not get most of the money does not mean that the money magically vanished. It simply enriched the nobles, the church, and the people who worked for them. These were mostly in Spain.


But it means it was not invested in generating growth in Spain.

Pants-of-dog wrote:2. No. Colonialism takes wealth away from the colonised. They lost land, the resources on them, and have been oppressed for centuries. To blame their poverty on them because they did not “adopt the institutions of the broader country” is not only wrong, but also victim blaming.


They are not mutually-inconsistent. They don't even need to care about generating economic growth either.
#15106362
@wat0n

1. Every time you buy a product at a store, you invest in that store. So when the monarchy and nonles “squandered” their wealth by spending it, they invested in Spanish industries. They just did so in a way that was notably less effective than the capitalist investment processes that were being invented in London and Amsterdam at the time.

You are splitting hairs here, arguing that Spain did not profit because they did not invest thwir money as wisely. The wealth transfer still happened, even if the money was not used as effectively as possible.

2. I an going to assume that you are not aware of the history where indigenous people were simply not allowed to “adopt the institutions of the broader country”. Do you think the slaves in Potosi were impoverished because they chose not to adopt slavery of indigenous Bolivians?
#15106364
Pants-of-dog wrote:1. Again, just because the bourgeoisie did not get most of the money does not mean that the money magically vanished. It simply enriched the nobles, the church, and the people who worked for them. These were mostly in Spain.


The whole point of that paper is that the direct effect was small, but the indirect effect, through empowering certain groups in society relative to others that led to better institutions (i.e. more friendly towards capitalism), was more important.

Here's the part about effect on investment in the UK:

For example, O’Brien (1982) calculates that total profits from British trade with less developed regions of the
world during the late eighteenth century were approximately £5.6 million, while total gross investment during the
same period stood at £10.3 million. Inikori (2002, Table
4.2) suggests that imports from the periphery around 1800
were about double O’Brien’s estimate. During this period,
the aggregate savings rate was between 12 and 14 percent,
so if we assume that this savings rate also applies to profits
from trade, the contribution of these profits to aggregate
capital accumulation would be less than 15 percent, even
using Inikori’s estimates. Even assuming considerably
higher savings rates, the contribution would remain relatively small.


The above numbers are from two other papers than use actual historical figures. Their argument about the indirect effect I don't find very convincing anyway.

The problem is that people like you think importing luxury goods and gold contributes to economic growth, while in reality it's investment and technology transfer that does. Trade with the colonies had a minor positive effect on the former, but no effect on the latter, because Europe was already technologically ahead of all the regions it conquered. That's why it was able to conquer them in the first place.
#15106368
Pants-of-dog wrote:@wat0n

1. Every time you buy a product at a store, you invest in that store. So when the monarchy and nonles “squandered” their wealth by spending it, they invested in Spanish industries. They just did so in a way that was notably less effective than the capitalist investment processes that were being invented in London and Amsterdam at the time.

You are splitting hairs here, arguing that Spain did not profit because they did not invest thwir money as wisely. The wealth transfer still happened, even if the money was not used as effectively as possible.


They did profit, but they did not become developed. It's not any different from the case of developing countries that waste natural resource windfall profits - say Chile during the Parliamentarian Republic. Even then, there was a substantial investment in infrastructure at the time, but no one would say it was a pro-development policy.

Pants-of-dog wrote:2. I an going to assume that you are not aware of the history where indigenous people were simply not allowed to “adopt the institutions of the broader country”. Do you think the slaves in Potosi were impoverished because they chose not to adopt slavery of indigenous Bolivians?


Are they still enslaved?

And also, why do you measure their affairs using a materialistic Western perspective that they may not care about? Maybe they don't care so much about being poor and don't regard themselves in that way. Maybe they prefer to live a poorer, yet more traditional life. I won't judge if they do, but of course it has some material costs.
#15106372
@Rugoz

Yes, that is what I said.

Please note that we all agree that there were massive wealth transfers. Whether or not the wealth was then invested in proto-capitalist only affects the relative amount of growth between developed nations.

@wat0n

Please clarify what your argument is at this point.
#15106387
@wat0n

It would depend on how you define investment and economic development.

Even if colonising countries did not invest their newfound wealth in ways that would promote economic development, there was still a wealth transfer that impoverished the colonised nation. And the colonising nation would, at worst, keep the same amount of wealth. And if they invested wisely, they would develop more depending on how wisely they invested.

So we would have a group that was significantly impoverished by colonialism. We have another group that benefited from colonialism. Within that latter group, different nations invested in different ways which then created a spectrum of development within this latter group.
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