Sustainable Wealth Creation and Economic Advantage

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A colony's economic advantage through plundering is not sustainable wealth creation. Taking without paying may provide material benefits in the short term, but it doesn't lead to persistent material well-being. True wealth comes from growth and persistent material well-being that is widespread across the population. The confusion often arises from a misunderstanding of the difference between stocks (things at a point in time) and flows (things that persist over time) in the economy.

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.