Economics, Academic Philosophy

Is Global Wealth Inequality Unjust?

[Editor’s Note: The following is a guest post by Jonathan Anomaly, assistant professor of political science at Duke University.]

When we look around the world and observe the massive wealth disparities between citizens in rich and poor countries, many of us are apt to conclude that the differences must have arisen because of colonialism, imperial warfare, or theft of raw materials like gold or oil. Of course, all of these things have happened at various points in time, and they can arguably explain some variation in the standard of living. Colonialism can be especially destructive of institutions that support peace and commerce. But a recent article by the philosopher Dan Moller casts doubt on the view that injustices like these can explain much of the observable differences.

Instead, Moller musters economic data to suggest that blatant injustices barely show up in the overall trajectory of economic growth in most countries over long periods of time. Specifically, Moller appeals to “the Great Divergence,” illustrated by graphs like this. The basic idea is that rich countries got rich by pulling away from poor countries, not by making other countries poor.

Not surprisingly for economists, the main explanation for the Great Divergence is trade, fostered in part by favorable cultural and political institutions. This may seem obvious to those who understand that trade is a positive sum game, and that there are exponential gains from trade as markets expand and the division of labor becomes more fine-grained. The problem is that most philosophers who write about global poverty are convinced otherwise. They think that people in wealthy countries are in some sense responsible for poverty in less developed countries, and that we therefore have an obligation to do something about it.

So, who’s right? Moller thinks that if citizens in wealthy countries did not cause poverty among citizens in other countries, we are not violating any obvious moral duties by failing to offer aid.

Moller’s main argument is that if we get rich because of good political institutions, or because we live in a culture that encourages social and scientific experimentation, we are not doing wrong to others – even if none of us can take credit for the contributions or our ancestors. When people in one country create the conditions for endogenous economic growth they do not thereby cause people in other countries to fail to do so. If anything, over the long run, one country’s success makes it more likely that other countries will follow suit.

By analogy, suppose a family in a nearby community is not doing as well as we are, and that we know exactly what resources they need to improve their prospects – cash, a new car, or extra math tutoring. It is not obvious that by failing to provide these things for them, we are morally responsible for their relative poverty. To extend the analogy, if people in our neighborhood are wealthy mainly because we have a well-functioning Neighborhood Association and a robust trading network, our relative success is not causing people in nearby neighborhoods to fare worse than we are.

This is not to say we shouldn’t help people in need, especially when we have a reasonably good idea of how to do so, or when we have committed an injustice against them in the past. It’s just to say that massive wealth disparities are not always caused by injustice.

  • Whatever happened to the “BH” in “BHL”? Of course, the cold-hearted idea that there are only duties not to harm others, and none to positively help them, is precisely what’s refuted by Singer’s pond case. (You don’t have to be causally responsible for the drowning child’s plight in order to have a moral responsibility to aid them.)

    I do think it’s unfortunate that political philosophers are so focused on “justice”. Beneficence is a much more important moral value (or so says this bleeding heart) — and one that moral (as opposed to political) philosophers writing on global poverty appropriately focus more on.

    I agree it isn’t especially plausible to think that we’ve caused others’ poverty (by and large). Pogge’s work basically strikes me as a “noble lie” meant to get the cold-hearted on board with improving the world.

    • Libertymike

      “Whatever happened to the ‘BH’ in ‘BHL'”? For the sake of love, peace, and prosperity, hopefully lost forever.

    • Anomaly

      Thanks for the comment, Richard. I’m inclined to think we have reasons to help people in need when we know how to do that (though I’m not always sure we know how). My main point, and Moller’s, is to separate the general reasons we have to help the needy from the question of whether most of the observed wealth disparities between countries is the result of unjust behavior on the part of people in wealthy countries. I’m inclined to think it is not, given the evidence. But that’s perfectly consistent with the view that we should care about poverty, and that we should do our best to encourage institutions that help people around the world rise above it.

  • DST

    Even if richer countries did have a duty to help poorer ones, those richer countries would probably be complying with that duty. Rich countries generally argue that other, poorer countries adopt free trade, rule of law, democracy, and liberal social policies. Since those are the cultural and political norms that helped rich countries get rich, then this type of peaceful evangelism of freedom is all that needs to be done. There’s no secret to becoming a moderately wealthy country; most people/governments just refuse to do what’s necessary.

  • urstoff

    Has deontology completely swallowed political philosophy or is it just in the process of doing so? Nothing has less persuasive power than an appeal (or non-appeal) to vaguely delineated moral duties.

    • urstoff

      And I will add that there seems to be a much simpler argument to get to the same conclusion:

      We literally have no clue how to help poor countries become wealthy, except maybe trade (getting a country from Congo poor to Denmark rich is a bit more complex than saving a drowning kid in a pond). Thus, while research is ongoing, the rest of us not qualified to undertake such research are morally okay in not trying to solve the problem.

      • If you’re not interested in any improvements short of turning the Congo into Denmark, then you’re letting the perfect be the enemy of the good. For more modest (but still hugely significant for cheaply improving many, many individual lives), there’s http://www.givewell.org

        • urstoff

          I’m all for buying Malaria nets and whatnot, but we really don’t know much about what to do after that. Buy people Malaria nets, give them bleach tablets for clean drinking water…then we’re out of proven ways to improve a country’s development in the long run.

          • Help fund more research by donating to J-PAL (Poverty Action Lab that conducts randomized trials of promising interventions), GiveWell’s Open Philanthropy Project (evaluating less conventional projects such as political lobbying, catastrophic risks, scientific reform, etc.), etc.

            Money is a powerful tool — there are always ways you could use it to significantly help others, including by funding efforts to find out how to more significantly help others. The idea that there’s nothing we can do to help is just an excuse, not a serious contribution to the debate. (That’s what really annoyed me about Jason’s blog post on the topic, too.)

  • Sam Watkins

    Some might argue that colonialism included the active suppression of the development of functioning civil institutions that would allow for widespread economic growth and that this suppression was undertaken by foreign governments and corporate interests in collusion. Regardless, isn’t our responsibility to help them build those institutions now?

    • TracyW

      Regardless, isn’t our responsibility to help them build those institutions now?

      Doesn’t this raise the question of are we capable of helping them build those institutions?

      There’s a couple of problems in assuming we do have that capability:

      1. We might well lack local knowledge and local political credibility. Even in someone’s native country, building an effective political coalition is tough. It’s pretty common in the West for a government to not get re-elected, even though the leaders speak the same language and come from the same cultural background as the voters. Why should, say, Africans listen to people from far-away continents?

      The British attempts at finding a peace in Northern Ireland in the 1970s, in the form of the Sunningdale Agreement, were rejected by the Northern Irish Unionists. If the guys who actually wanted to be part of a country would disagree with that country’s government of the day, the odds that people in ex-Colonial countries would listen are even lower.

      2. The agents who would have the job of building those institutions would have their own interests. A lot of the British empire happened against the wishes of the government of the day, driven by local agents seeking to expand their own fortunes.

      • Sam Watkins

        I would start with first, do no harm. I think we have a moral obligation to ensure that our society as a whole (individual, governmental and corporate entities) is not impeding the development of healthy institutions elsewhere in the world. I believe the US has done exactly that for short-term political gain & other, more opaque reasons. I’m not sure it is productive to consider positive interventions until we can first break the habit of making things worse. What would Iran and the surrounding area look like if the CIA hadn’t engineered the removal of Mosaddegh, for example? Maybe not much better, but hard to imagine much worse.

        • TracyW

          “Do no harm” has many merits as a starting point. But I don’t see how you can reconcile it with the claim that we have a responsibility to help them build those institutions that create wealth.

  • Swami Cat

    This topic has been explored by dozens or hundreds of economic historians. In my opinion the argument is overwhelmingly convincing that prosperity is a positive sum process, and that the divergence is best explained as some states discovering how to foster positive sum growth, others followed their lead (often with their own spin), and still others either refused to or were unable to.

    In brief, prosperity comes from establishing massive networks of reciprocity and cooperation which are peculiarly effective at creating solutions to human problems, spreading and multiplying these solutions, and then systematically building upon them. We are prosperous, knowledgeable and healthy now because we have learned how to specialize in problem solving and then integrate and share the solutions via institutions and norms.

    Just as importantly, we have learned how to avoid/counteract the negative feedback processes of predation, privilege, change resistance and Malthus.

    Those arguing a strictly zero sum version of history have neither facts nor logic on their side. Frankly, their arguments are kind of embarrassing. What they do have is a great dependency and victimology story, and victimology sells.

    The most important thing we can do to help those who have as yet been unable to help themselves is as follows:
    1). Continue to explain and demonstrate the logic of positive sum growth inherent in science, markets and “open access” government. Continue to lead by example. Let time, trial and experience prove itself over stimulating rhetoric and catchy folk songs.
    2). Open our markets and institutions to those in developing nations. The fact we still have trade prohibitions against agricultural imports from some of these nations is criminal.
    3). Open borders
    4). Continue to progress ourselves, allowing the spillovers of our science and technology and institutional effectiveness to continue to improve the lives of others due to massive spillover effects and advantages of copying and borrowing from leaders. Make no mistake though, the same folks spinning tales of victimology are also trying to undermine our growth in the name of equality and empathy.
    5). Continue to explore new ideas such as Romer’s charter cities where we allow new pro growth institutions to come to other nations.
    6). Stop providing any aid or assistance which causes harm by bolstering the institutions, bandits and Mindsets which propagate poverty. If we aren’t absolutely sure our aid or actions are helping, we should probably discontinue them.

    Overall, worldwide GDP trends show that prosperity continues to advance. The last generation has seen more economic progress for more people than ever before in history, and per capita GDP worldwide continues to advance at about two percent per year. We are on the right track and the most important thing is not to get off track.

    Per capita prosperity trends:
    http://www.worldeconomics.com/papers/Global%20Growth%20Monitor_7c66ffca-ff86-4e4c-979d-7c5d7a22ef21.paper

    Larger trends:
    http://thinkprogress.org/security/2013/12/11/3036671/2013-certainly-year-human-history/

  • Koen Swinkels

    Even if a situation was not caused by unjust actions, that does not mean that said situation cannot be unjust. Or rather, it does not mean that allowing the situation to continue (inaction) cannot be unjust.

    So if some people in region A live in deep poverty and the poverty was not caused by the (collective or individual) actions of people outside of that region, then that does not mean that it cannot be unjust for people outside of that region to not try to help the people in region A (especially if they have good reason to think that they could do so successfully and without much of a burden on themselves).

    The failure to make this distinction between unjust actions and unjust situations / unjust inaction is what underpins Hayek’s criticism of the concept of social justice.

    • Swami Cat

      You can call it unjust, or unthoughful or whatever you would like. Until you convince people that your opinion on the matter is right and theirs wrong, what is your point?

      I think forcing kids in Detroit and Baltimore to go to dysfunctional public schools is unjust too. I am not sure what effect if any my stressing this has on those disagreeing with me, though. Instead I argue that if we care about these kids that we should offer better.

      • Koen Swinkels

        I was only making the narrow point that just because a situation may not have been caused by unjust actions doesnt mean that that situation – or allowing it to continue – cannot be unjust.

        What situations may be unjust or what the proper response to injustice is or who the agents of justice should be are all distinct issues.

  • Ryan Muldoon

    I’m very sympathetic to the argument that institutions, both formal and informal, are deeply important for prosperity. Likewise, I tend to think that trade is a good thing that has been a powerful tool for lifting people out of poverty. However, it puzzles me how the Great Divergence argument ignores the role that colonial powers played in decimating institutions in other countries. The trans-Atlantic slave trade was not only directly harmful to the people captured and sold into slavery, but it also completely destroyed social trust across large swaths of Africa. To this day, countries that were sources of slaves have terrible rates of generalized trust, and have pretty aggressive don’t-trust-strangers norms. This set of norms, which are generally understood in the literature to be Nash equilbria, makes trade more difficult, it make good governance more difficult, it makes engaging in the formal banking system more difficult, and it makes tribalism and corruption a lot more likely. Similarly, while the British seem to have ‘provided’ reasonably good institutions to their colonists, the French, the Belgians, and the Spanish gave everyone pretty horrible institutions. This is on top of colonial institutions structured around wealth extraction that can be difficult to shake off later.

    The global wealthy now lucked into being born in (or being allowed to immigrate to) very functional institutions. The global poor had the bad luck being born into some pretty crummy institutions. Part of the enabling conditions for the Great Divergence was creating better, more politically equal institutions at home on the backs of theft abroad (or at home with a subjugated population). That wasn’t ‘trade’ – it was pure conquest and extraction. The leftovers of these institutions (which I think are horrible both on liberal and libertarian grounds) have made it a lot harder for countries to lift themselves out of poverty. There are so many informal and formal institutions that prop up particular harmful (and anti-growth) practices that it is hard to make progress on changing one of them without having to address all of the others as well. Not all of these can be laid at the feet of the West, but the number is a whole lot bigger than zero.

    • Swami Cat

      Ryan,

      Though I am strongly on the other side of the debate, I think you are making some excellent points here.

      If I was to rephrase it, the West didn’t prosper BECAUSE it exploited the others, it prospered even as it exploited others. The exploitation did leave lasting scars and has affected culture and norms and institutions of the colonies and victims.

      I will add that the effects of the west were not only negative. After all, standards of living, freedom, lifespan, and general health have increased overwhelmingly just about everywhere compared to the pre IR baseline. The spillover effects of the west have been astronomically more positive than negative.

      But your point is solid. The west did undermine some effective institutions and norms, and this should play into our understanding and our sense of obligation.

      • Ryan Muldoon

        Thanks for the thoughtful reply. I think we are going to disagree about how much the West gained from colonialism, conquest, and exploitation. I certainly don’t think that these are the sole reasons for the Great Divergence, but I don’t think they didn’t matter. A big part of the industrial revolution was making clothing. That cotton came from somewhere. Most of the people picking the cotton weren’t doing it for a market wage. It is absolutely true that the IR and an embrace of markets made an enormous difference. But there were a lot of capital endowments that enabled this prosperity that were pretty much stolen.

        Of course, the rich countries have created all kinds of stuff that have had positive spillovers as well. That is obviously true. But we have certainly done a great deal to others that inhibits their ability to lift themselves out of poverty. I tend to think that creates some obligations on our part to assist, particularly by trying to help foster better norms and institutions that are ‘locally owned’ rather than imposed.

        • Swami Cat

          Yes… Well said.

        • TracyW

          A big part of the industrial revolution was making clothing. That cotton came from somewhere. Most of the people picking the cotton weren’t doing it for a market wage.

          The people picking the cotton weren’t doing it for a market wage. If they were doing it for a market wage, they would have had more money. People with more money can buy more things. So if they had been paid a market wage, then there would have been more consumers.

          But slavery was not just a transfer of wealth from enslaved people to slave owners. It actively wasted resources. Slaves didn’t work as hard, slave owners hired people to beat slaves, to chase down escaped slaves, etc. Those resources could have been spent doing something that would make people better off, not worse off.

          Noticeably, the ending of slavery in the USA didn’t come along with a collapse in economic growth in the West.

          • Ryan Muldoon

            No, the ending of slavery resulted in the largest loss of life in any American war, along with unprecedented loss of capital goods, an assassination of a President, a (likely too-brief) military occupation of the South, and then a long-term insurgency effort aimed at denying a significant portion of the population their freedom. In doing so, it created institutions that we are still trying to unwind that have led to the systematic denial of access to property and the rule of law for one segment of the population. So that went well.

            Think of the argument this way. Imagine a bank robber who, say, robbed a bunch of banks for a dozen years, stealing millions of dollars. Now let’s say that the bank robber stopped robbing banks, and invested that stolen money in some factories which were very profitable. Just because the bank robber didn’t suddenly become poor after he stopped robbing banks doesn’t demonstrate that his current wealth is independent of his theft of property. In this case it’s pretty clear that the capital acquired by theft ended up being pretty essential for establishing his later sources of wealth. Hell, had he stolen enough money, he probably could have continued to live a very nice life just on the interest from the stolen principal. Compound interest on stolen capital by itself, without any adjustments to the production frontier, can account for some (but by no means all) of the Great Divergence.

          • TracyW

            Your robber analogy falls apart because you’re only talking about the robber, not about the robber and his victims.

            Yes, the robber might have more money, but the robber’s victims are out an equal amount. Every dollar that the robber has means that someone else has a dollar less.
            And, what’s more, resources have been wasted by the robber on carrying out the bank robbery and the bank owners on trying to stop bank robberies. Shop owners’ benefits from selling stuff to the robber are offset by their losses from no longer being able to sell stuff to the people whose money was robbed.

            As for the loss of resources in the ending of slavery, yes, that was huge, but it was offset by increasing the ability of ex-slaves to make more use of their own human capital. For example, freed slaves could move North, where there still was terrible racism, but not the lynchings and so forth of the south. That’s a gain for the economy, as well as the individuals.

          • Ryan Muldoon

            I think we’re talking at cross-purposes. The original point is fairly simple. The post argued that the Great Divergence is really a story about better institutions leading to more wealth, and this suggests that the wealthy West doesn’t have an obligation to help the poor. My response is simply to agree that institutions are incredibly important, and for exactly that reason, a lot of the West bears some responsibility for the dismantling of institutions in the developing world, and (very often) putting in place horrendous institutions that many countries struggle to get free of. Secondarily, I argued that a fair amount of the wealth coming out of the industrial revolution period came on the backs of serious exploitation and theft, most obviously in the form of slavery.

            I’m delighted to agree that there are better forms of economic production than slavery. I’m also delighted to agree that ending the practice was an obviously good thing. I vehemently disagree that as soon as slavery ended, former slaves and their descendants were all of the sudden offered equal rights, or that the North was all that welcoming to African Americans. Simply not lynching people isn’t quite the standard I think we should aim for. There was systematic theft of property, and denial of access to the legal system for black victims.

            So, no one here is disputing that markets are great tools for wealth generation, or that individual liberties are great, or that culture and institutions can be better or worse for growth. My contention is simply that we can’t look at different growth rates, or economic outcomes between groups, and then claim that each country or group started from the same conditions unmolested by others. There was a massive amount of interference, and the institutional legacies that followed have sharply inhibited growth. Furthermore these institutions are difficult (though not impossible) to change. I don’t think this is a terribly contentious viewpoint. If you think institutions matter, then surely imposing terrible institutions on others also matters.

            I don’t quite follow your complaint about the robber example. In my robber story, the robber is, say, the US or the UK or whatever colonial power you want. They took lots of stuff from their colonies and other group, whether it was in the form of material resources or human labor. Those victims lost those resources. This is just true of colonial history. I agree that it’s not as economically efficient as a system of voluntary global trade, but that doesn’t mean it didn’t happen. If anything, my robber analogy fails to capture the fact that historically, it wasn’t just that the robber stole money, but then also in the process of stealing it damaged the victims’ ability to earn more later.

          • TracyW

            I vehemently disagree that as soon as slavery ended, former slaves and their descendants were all of the sudden offered equal rights, or that the North was all that welcoming to African Americans.

            You’re attacking a strawman. I note that you don’t actually quote anything where I said anything like that.

            Secondarily, I argued that a fair amount of the wealth coming out of the industrial revolution period came on the backs of serious exploitation and theft, most obviously in the form of slavery.

            And this is the bit I’m disagreeing with. I’m saying that the serious exploitation and theft destroyed wealth, that Britain and the United Kingdom and the other slave-owning countries would have been even wealthier overall if they had not engaged in slavery, and had not built an empire – in other words that the wealth that some individuals earned from the slave trade and other exploitations was more than off-set by the losses occurred by other Brits/white Americans caused by said slave trade and exploitation.

            My contention is simply that we can’t look at different growth rates, or economic outcomes between groups, and then claim that each country or group started from the same conditions unmolested by others.

            Another strawman.

            There was a massive amount of interference, and the institutional legacies that followed have sharply inhibited growth. … I don’t think this is a terribly contentious viewpoint.

            And yet, some of the countries who went through terrible interference have even so taken off, economically. South Korea, Singapore, Poland are all examples.

            That you don’t think this is a terribly contentious viewpoint doesn’t mean that it is true. I’ve noticed that I’m the one citing historical examples here, not you.

            In my robber story, the robber is, say, the US or the UK or whatever colonial power you want. . They took lots of stuff from their colonies and other group, whether it was in the form of material resources or human labor. Those victims lost those resources.

            That’s why I criticised it. You’re modeling the US or the UK as a single person, which is the wrong level of analysis.

            Okay, let us imagine a small town (with some attached farms) that’s totally isolated from the rest of the world. The town is occupied by orange, teal, and purple people. To simplify language, I’m going to talk like everyone always spends all the money they have, but basically the same logic applies if people do some investing as well.

            So Scenario 1:I’m an orange person, you’re a purple person. I steal $1000 from you. There’s one shop, where everyone shops, owned by an orange person, let’s call him Fred.

            Now, since I stole $1000 from you, I’m now $1000 richer, and you’re $1000 poorer. I presume we agree. But that doesn’t mean that Fred is going to be $1000 richer. Because while I have an extra $1000 to spend, you have $1000 less. What Fred wins on the swings he loses on the roundabouts.

            Scenario 2: I’m an orange person, you’re a purple person. I steal $1000 from you. But there’s segregation in this town: Fred only sells to orange people and there’s another shopkeeper Alice, who only sells to purple people, and a third one, Sally, who only sells to teal people.

            So, I steal $1000 from you, now Fred is $1000 better off, and Alice and you are both $1000 poorer. But, now Alice is $1000 poorer. When Alice goes to restock her shop, she has $1000 less to spend. Let’s say she therefore buys $1000 less of food from an orange farmer. The orange farmer therefore has $1000 less to spend in Fred’s store. What Fred wins on the swings, he loses on the roundabouts.

            Scenario 3: I’m an orange person, you’re a purple person. I steal $1000 from you. But we’ll insert some intermediate steps.

            Alice buys her food from a teal farmer, the teal farmer then spends $1000 less at teal Sally’s shop, so Sally then spends $1000 less on clothes made by an orange tailor, who then spends $1000 less at orange Fred’s shop.

            Scenario 4: Rather than directly stealing $1000, I kidnap you and force you to work on my sugar cane plantation. Before my brutal intervention, you were earning $26.25 an hour for yourself, or $1050 a week. Now, I spend $50 a week on keeping you alive, which is the bare minimum, and pocket the $1000 extra. You’re $1000 poorer, I’m $1000 richer, again, what Fred gains from my increased spending power he loses from your shortage of spending power.

            Scenario 5: I persuade the town council to pass laws restricting purple’s employment options so your only option is to work at my textile factory, and I can pay you only $50 a week. Same problem for Fred as before.

            Basically, Fred only gets richer from my exploitation of you if we assume that otherwise there is no trade between orange and purple, not even indirectly via teal. This is implausible in the case of Europe in the 19th century given its consumption of gold, gemstones, tea, cofffee, cotton, etc.

            (To get more complicated, if we assume that I invest more of that money in useful things than you would, then my stealing from you could make Fred better off, but if you’re going to argue *that* you need some evidence on that point – there are some pretty impressive pre-19th century ruined cities in Africa. And of course if I invest less of that money in useful things than you would have then I’ve made Fred worse off.)

            Now, so far I’ve only argued that Fred is no better off as a result of me stealing $1000 from you, not that Fred is worse off. But, next step: in this situation, it’s pretty likely that you would react to my theft and kidnapping and other exploitative activities by taking steps to try to stop me. So, rather than spending money on something that makes you happier or more productive, like gourmet meals, or better farming tools, you spend money on police to try to hunt me down. So, the town council might divert money from upgrading the roads to hiring more police officers. Fred has the same amount of money as before (the police officers spend their income), but he is worse off because he walks on worse roads.

            Or, in the slave-situation, you wait until I’m asleep then bash my head in. So I have to spend money on someone to guard me while I’m sleeping, rather than spending money on something I enjoy. And the guard is busy hanging around me, rather than growing more food, or mending the roads. Again, Fred gets less real resources.

            And if I persuade the town council to pass laws restricting you so you have to work at my textile factory, that’s taking the town council members’ time away from doing something wealth improving. What’s more, if someone wants to employ people for their new lab investigating the potential of light bulbs, thanks to my efforts they can’t hire any purple people, even if someone purple is the best person for the job, so light bulb development is retarded and Fred is worse off again.

            (Note: these are issues about quality of life and real resources, not $ figures.)

            . If anything, my robber analogy fails to capture the fact that historically, it wasn’t just that the robber stole money, but then also in the process of stealing it damaged the victims’ ability to earn more later.

            Good point, that is indeed another way that slavery and other imperial exploitation made Britain and the USA worse off overall than if they had not done it.

            TL;DR: stealing resources doesn’t make everyone richer for the same reason that pyramid schemes don’t make everyone richer.

    • TracyW

      Part of the enabling conditions for the Great Divergence was creating better, more politically equal institutions at home on the backs of theft abroad (or at home with a subjugated population).

      Counter examples are Sweden and Switzerland.

      • Ryan Muldoon

        Both countries were slow to industrialize compared to their European peers. Sweden was a pretty militarily aggressive and expansionistic empire for quite some time up into the 18th Century, but just didn’t establish far-off colonies. Switzerland has been known to make a bit of money off of providing banking services to people who haven’t acquired their money in terribly honest ways. Both benefitted from not being colonized and/or enslaved. And then there is normal spillover growth and such.

        My point is not to say that all the money from all the rich countries comes from them being terrible in the past. My point is simply to say that it’s a lot easier to get rich when you haven’t had your institutions destroyed, and you aren’t dealing with a colonial history built around kleptocracy. It’s also a bit easier to get rich when you get the benefits of compound interest off of stolen capital.

        • TracyW

          Wealth is the thing we want, not industrialisation per se.

          Yes, Sweden didn’t get rich when it was a militaristic aggressive and expansionist empire, it got rich after it gave up. Like Japan, which got rich after it gave up doing that (post WWII). These aren’t good support for your claims.
          (As for Switzerland getting rich of providing banking services, yes, and Switzerland also got rich from providing banking services to people who wanted to keep their hard-earned money away from not terribly-honest governments).

          My point is simply to say that it’s a lot easier to get rich when you haven’t had your institutions destroyed, and you aren’t dealing with a colonial history built around kleptocracy.

          I note that you don’t cite any examples in support of this. And there are counter-examples: Singapore, South Korea, Japan.

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