EconTalk Can a Nation Plunder Its Way to Wealth (with Noah Smith)
42 snips
Jan 15, 2024 
Noah Smith, an economist and blogger known for his insightful Substack, delves into the complex relationship between imperialism and wealth. He argues that true prosperity stems from innovation and industrialization, not plunder. The conversation challenges the belief that militaristic conquests lead to economic gains, advocating instead for peaceful development. Smith also highlights the impacts of globalization and examines the economic transformations in China and India, emphasizing how liberalization has enhanced living standards and reduced poverty.
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Sources of Wealth
- Real wealth creation arises from ongoing innovation and increased productivity, not one-time plunder.
- Modern advancements like technology and industrialization drive true wealth, as seen in the last 150 years.
Colonialism and Wealth
- Spain and Portugal, despite colonial plunder, remained relatively poor due to lack of industrial investment.
- Germany, with minimal colonial involvement, industrialized successfully, demonstrating plunder wasn't essential for growth.
Stocks vs. Flows
- Sustainable wealth requires continuous growth, not just one-time gains from cheap resources or labor.
- True economic progress depends on transforming production processes, not simply acquiring more inputs.
