Can a Nation Plunder Its Way to Wealth (with Noah Smith)
Jan 15, 2024
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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.
Wealth creation arises from industrialization and technological advancements, not just plunder and colonial exploitation.
Globalization and trade bring long-term benefits that outweigh short-term challenges, promoting economic development and well-being.
Historical claims that torture and cruelty increased cotton production during slavery are unfounded; better types of cotton and technological advancements were the main drivers.
Deep dives
Plunder and the Wealth of Nations
The podcast episode explores the concept of wealth acquisition through plundering other nations. It discusses the historical examples of colonial plunder, such as the Spanish and British empires, and examines the argument that colonial exploitation led to the wealth of nations like the United States and Western Europe. The guest economist Noah Smith provides evidence to debunk this theory, highlighting that these countries achieved their wealth through industrialization and technological advancements, not just the extraction of resources. He emphasizes the importance of looking at the timing of nations' economic growth and the necessity of scientific discoveries and accumulated knowledge for industrialization. Additionally, the episode touches on the belief that slavery contributed to the Industrial Revolution and counters it by pointing out the flawed research supporting this claim. Overall, the podcast emphasizes that economic development and wealth creation arise from peaceful and sustainable means, focusing on improving living standards, investments in machinery, and innovation.
The Misconceptions of Plunder and Globalization
The discussion delves into misconceptions surrounding plunder and globalization. It examines the argument that nations exploit each other through globalization and trade, resulting in winners and losers. While acknowledging that certain individuals or groups may face short-term challenges due to globalization, the podcast asserts that the long-term benefits of increased trade outweigh these concerns. It highlights the importance of understanding the transformation in how goods are produced and the ongoing process of improving productivity. The topic of economic nationalism is also explored, which is seen as a destructive force that overlooks the positive impact of trade on global well-being. The podcast cautions about the risks to trade resulting from the breakdown of freedom of the seas, threats to sea and landborne trade, and the rise of nationalism as a barrier to economic integration.
Lessons from China, India, and Asia's Growth
The episode concludes by examining the extraordinary economic growth in China, India, and Southeast Asia and drawing lessons from their experiences. These regions have achieved significant improvements in living standards. It emphasizes that their growth was not entirely dependent on plunder or exploitation, but rather on industrialization, technological advancements, and trade. The podcast highlights the importance of learning from their success and implementing policies that promote peaceful economic development, innovation, and investments in machinery and infrastructure. It suggests that sustainable growth can be achieved by focusing on improving the well-being of citizens, embracing globalization, and ensuring the stability of trade and freedom of movement across borders.
The role of torture and slavery in cotton production
The podcast episode challenges the belief that torture and cruelty were significant factors in increasing cotton production during the era of slavery. The speaker argues that the idea of a torture system leading to higher cotton output is unfounded and that the actual increase in production was driven by the introduction of better types of cotton. The episode highlights the importance of accurate historical scholarship and questions the assertion that slavery made cotton cheaper.
The impact of machines and liberalization on economic growth
The podcast episode explores the role of machines and liberalization in driving economic growth. It emphasizes the advantages of using machines over human labor in terms of productivity and innovation. The speaker argues that the substitution of machinery for human labor, along with the liberalization of economies, has not only enriched machine owners but also improved the material well-being of workers. The episode highlights the importance of technological advancements, such as renewable energy and biotechnology, as well as the potential for further globalization and its positive impacts on economic development.
Did nations get rich on the backs of other nations? Did the West get rich from imperialism? Noah Smith says no. But why not? If you can steal stuff, isn't that better than having to make it yourself? Listen as Noah Smith and EconTalk's Russ Roberts discuss the impact of imperialism and industrialization on growth and wealth. Smith argues that understanding plunder and where wealth comes from is more than an exercise in economic history--it matters for today's world, too.
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