Nobel in Economics Awards Proof that the Whiter, the Wealthier
This year’s Nobel Prize in economics rewarded a research effort to address world-wide poverty. According to the Chair of the Prize’s committee, the men awarded contributed to an understanding that strong and functional European institutions make colonized nations wealthier. As such, the absence or weakness of these institutions, caused by a lapse in the population’s willingness to uphold the European values which raise these institutions, is what leads to poverty. In conclusion, in order for a poor country to become rich, European colonization must not only continue, but deepen, and wipe out once and for all any reminisce of Pre-Columbian systems and epistemologies.
“The Colonial Origins of Comparative Development: An Empirical Investigation”, by Daron Acemoglu, Simon Johnson, and James A. Robinson, was published in the American Economic Review in 2001. Its premise is that high mortality among European colonizers resulted in weaker, “extractive” institutions, which persist “to the present”. Today’s extraction of resources for short-term gain is a colonial legacy caused by higher death rates among settlers. And the fact that the region was hostile to Europeans during colonization kept these nations in a cycle of “low economic growth”.
Being less hostile, or deadly, to Europeans meant that more of them survived, therefore, democratic institutions were allowed to be built and sustained. Economic growth was stimulated, and so these countries are less poor now. “According to the laureates, (…) no improvement occurs” in nations where the institutions are authoritarian, as opposed to “inclusive”. There is an interesting, or baffling, distinction made between “inclusive” and “extractive” approaches to colonization:
“In some colonies, the purpose was to exploit the indigenous population and extract natural resources to benefit the colonisers. In other cases, the colonisers built inclusive political and economic systems for the long-term benefit of European settlers.” (They provided an explanation for why some countries are rich and others poor)
It’s perplexing that both of these approaches are described as crucially distinctive, when, in reality, they are equally and solely concerned with the well-being of settlers. “To benefit the colonisers” is literally the same thing as to the “benefit of European settlers.” Now, how is “inclusive political and economic systems” different from ‘the exploitation of native peoples and extraction of natural resources’?
These “political and economic systems”, which they call “inclusive”, legitimized exploitation and extraction, since they have been run by settlers and only had their own well-being in mind.
The distinction lies not where those responsible for awarding this research claim – it is not about how one is more democratic and humane than the other, and how democracy leads to high GDP per capita. The distinction, for those of us who live in these so-called ‘poor colonized countries’, is what constitutes legitimized exploitation and extraction.
The line between legitimate and illegitimate institutions is drawn by Europeans, in this particular case by Caucasian-American men with a Nobel Prize. According to them, colonized countries where “settlers tried to replicate European institutions” are extreme opposites from the ones where settlers only extracted resources without establishing western institutions.
One is Congo or Mexico, while the other is the United States or Australia. One is wealthy, the other is not. One has a system of free elections, where private property is protected and kids get high school diplomas, while the other is plagued by organized crime, politicians are corrupt, and entrepreneurism isn’t viable.
The researchers attribute these extreme differences to the fact that some geographical regions and landscapes just weren’t convenient for European settlement. They called these regions “the disease environment”. The annihilation of local populations by settlers in the countries where they did impose their own “inclusive” institutions was not addressed.
Nevertheless, the racial profile of the categories of nations they use as examples is quite evident. The USA, Australia, Canada, Hong Kong are rich supposedly because they are democratic. While Brazil, Mexico, Guatemala, Congo are poor because their governments have been corrupt or authoritarian. It’s argued that if Nigeria’s institutions could “improve” like Chile’s institutions have been able to, “Nigeria’s income” would see a “7-fold increase”.
Could it be, however, that malaria and yellow fever actually protected certain countries from further domination, displacement and genocide at the hands of Europeans?
Could it be that the both institutional models, “extractive” and “inclusive”, are European concoctions designed to subjugate non-Europeans?
Could it even be that the concept of wealth and the systems for measuring it are European inventions that were not designed with the best interest of colonized countries in mind?
From where I am standing, as an ethnic Brazilian in Brazil, this country’s democratic and “inclusive” institutions have done next to nothing to protect our forests from exploitation, and even less to protect native populations from displacement, poverty, abuse and death.
To the researchers, Brazil is an example of one of those countries that were exploited through extraction because slavery was only institutionally abolished 20 years after the United States. While, on one hand, Brazil had its resources extracted, on the other, the United States had its territory deliberately populated by Europeans, and effort was put into making this mass migration attractive by instituting western political structures.
This narrative fails to account for the fact that Brazil did all of those things, and more – there was extraction, encouragement of European settlement, encouragement of miscegenation, establishment of “inclusive” institutions, and slavery, and a dictatorship, and the free market. We even have our own Monarchy. And we are still “poor”.
The researchers are not concerned with how to make European institutions more effective at protecting people and nature. They are concerned with making the predictable argument that communists are authoritarian and poor, while capitalists are democratic and rich. The first examples they use in the ‘complimentary’ document from the American Economic Review to illustrate the importance of institutions are, in their own words, the “obvious” ones of North and South Korea, and East and West Germany.
Three Caucasian-American men were awarded a million dollars for a research project which concludes that wealth is where Europeans are.
Without discussing the fact that the concept of wealth as we know it today was created by and for Europeans, they make a case for Democracy and attribute the lack of it to the lack of European presence in a space. Right-wing people who advocate for little government and big Capital are not convinced by this research either, for completely different reasons. They see an endorsement of government regulations as a threat to the economy. In the end, it is the same old debate between Republicans and Democrats, not on how to end poverty, but on how to continue to ensure the global dominance of the Free Market. Research like this Nobel Prize winner evidences how economics is not an evolutionary science, it’s just a profitable story.
Mirna Wabi-Sabi
Mirna is a Brazilian writer, site editor at Gods and Radicals and founder of Plataforma9. She is the author of the book Anarcho-transcreation and producer of several other titles under the P9 press.