The remnants of colonialism continue to produce winners and losers economically, with the winners stuck in local maxima where they extract value from the people, but the people themselves see only marginal benefit, and development is stuck at a snail's pace.
As with seemingly everything in life, the incentives for the different players really don't line up. Consumers lose, producers lose, and only a select few middlemen win anything at all.
The reason New York City is the biggest city in the US is because when the Erie Canal was built, the agricultural riches of the Midwest had a route to world markets. Where you have a major seaport, you also need major banks and major insurance companies to smooth out the financial needs of traders and shippers, providing the funds right away back to the farmers, instead of them waiting till the voyages were complete. (without the Erie Canal, New Orleans would have become the largest city in the US)
Yes, there is a lot of money in trading, banking, etc. At every step of the transaction pyramid, a %age is added to the price, and the %age fees charged on that go up accordingly. But that measures the true value of the product at each stage; if you have a cheaper way of getting the same product to the same stage cheaper, the (supposed) riches will be yours.
The socialist instinct ("anybody getting rich must be cheating") unfortunately obscures the real problem ("monopolists and cartels controlling supply and setting prices are the true enemies of the people") which hinders solving it; by putting capitalism in your gunsights, you make enemies out of natural allies.
It is not pleasant to think about it in these terms; but it does seem like some of the greatest improvements in general human welfare have their roots in relatively ungenerous undertakings by methodical, reasonable, self-interested actors. The Romans roads and the Pax Romana, and the profound legacy of Roman law, were not the result of a benevolent desire to help everyone in the world and save them from evil.
Can you provide some examples and resources to back up this hard truth?
https://www.nobelprize.org/prizes/economic-sciences/2024/sum...
https://someunpleasant.substack.com/p/a-nobel-prize-for-an-i...
> So, if the paper has so many problems, why did it prove so influential? First, because it utilized cutting-edge techniques at the time (instrumental variables was a new thing back in the 2000s), and because it used novel datasets and clever inference to answer a big-picture question. While “the conditions of colonization determined the institutional quality of colonies” is not a new idea (in fact, Marxist Karl Kautsky came up with a similar idea in 1907), treating it in a formal and empiric manner like this was fairly novel in the 2000s.
So it seems like the answer is not resoundingly clear at all, but the novel methods and analysis was worth the prize, not the perceived veracity of the claims.
Anyways, the topic is about how colonial powers set up institutions in colonized countries, and different types of institutions lead to different types of economic outcomes (inclusive vs extractive). But consider China and India. The former has no colonial institutions, having never been colonized. But both are growing at similar places with similar GDP growth rates (China being slightly ahead). So the idea that only a colonial power could build such institutions, thus all the negatives are outweighed. I don't buy that at this moment. I'm open to learning more though.