Saturday, January 8, 2022

The West Didn’t Steal Its Way to Wealth By DEIRDRE NANSEN MCCLOSKEY

 Let’s be clear ethically. Imperi­alism, as in South Asia, was very bad. Enslaving people, as in West Africa, was too. So was shooting striking workers, as in Ken­tucky. There are no excuses for the Opium Wars or King Leopold II in the Congo or the U.S. seizure of the Philip­pines or Ford’s goons beating up workers at the Battle of the Overpass. Stealing, coercion, murder are evil.

To know the actual economic history of enrichment and civilization, you have to know the numbers. Most people don’t. The surpassingly wise Swedish professor of public health Hans Rosling reported that even well-informed people score worse than a chimp would throwing darts at the numbers. People think that the rich are getting richer and the poor poorer. They think that economic growth is perpetually threatened by new headwinds requiring urgent tacking by the ship of state. They think that things are worse than ever. They think that The End Is Near. And in reaction to such horror movies, they think that perhaps a bit of tyranny from left or right would be a Good Thing.

No. Nearly forever, from the caves until about two centuries ago, the average human, except for a few lords and priests, dragged along in today’s prices on less than $2 a day. Try living on $2 a day. Some people still do: South Sudan. Then, from 1800 (or 1900 or 1960) to the present, a Great Enrichment, dwarfing the mere doubling in the so-called Industrial Revolution of 1750 to 1850, made the average human 25 times richer. The number nowadays in the same prices is about $50 a day. Think China, Brazil, and Botswana. And Finland, Ireland, and Iceland, once miserable and colonized, stand well above $100 a day. At $50 or $100 a day, people get food instead of famine, long lives in­stead of parasites, Ph.D.s instead of illiteracy, high-rises instead of hovels.

Every nasty jerk in history has stolen, and usually gotten away with it. As Gibbon said in 1776, “history is little more than the register of the crimes, follies, and misfortunes of mankind.” So stealing by imperialism and enslavement caused the Great Enrichment, yes?

No. Do the numbers. If you seized your neighbor’s house and her stuff and enslaved her husband, you might get 20 percent richer. Maybe 50. Call it 100. Great for you. “Foreigners shall rebuild your walls,” said the Lord to Jerusalem through His prophet Isaiah, “and their kings shall be your servants. . . . Your gates shall be open continuously . . . that through them may be brought the wealth of nations and their kings under escort.” Good for Jerusalem. In the zero-sum world before 1800, stealing and enslaving got the jerks 10, 50, even 100 percent richer. Hallelujah.

But the Great Enrichment has been two-and-a-half thousand percent. By fourth-grade arithmetic, the present $50 minus the miserable base in 1800 of $2 is $48, which divided by the base is about a factor of 25, or about that 2,500 percent. Blimey. Stealing can’t come remotely close to accounting for it. Stealing from the wretched of the earth doesn’t even sound like a good criminal plan. And anyway, stealing from Peter to pay Paul can’t enrich both, and certainly not by 2,500 percent.

Consider, for example, British imperialism. Half of the Royal Navy, which was paid for by Britons at home, was assigned to protect the sea routes to India. Glorious. Yet India itself yielded no stolen benefit to the average Briton. Not a shilling. India traded with Britain, sure. But trade is not stealing, and the trade would have happened regardless of whether the Raj was Britain or France or the domestic rajas.

Straightforward stealing from India happened only once. A window opened after the Battle of Plassey in 1757 through which some bold thieves en­tered. Robert Clive of India and Warren Hastings and some other nabobs made fortunes by stealing. Clive remarked that in view of his opportunities, “by God, . . . I stand astonished at my own moderation.” Then the stealing stopped and the paying for the glory began, as did a little peaceful trade of Sri Lankan tea and Indian jute for Lancashire dhotis and Yorkshire railway locomotives. And as rich as Clive and his fellow nabobs briefly became, their enrichment was trivial in national terms. Clive’s wealth at his death was half of one-tenth of 1 percent of Britain’s. Nice to have, you say, roughly $200 million nowadays. But it’s not average-enrichment-making, then or now. It’s a fly on the scale.

Something therefore is deeply screwy about blaming the West’s undoubted stealing and enslaving and other mal­feasance for the poverty that remains. While the malfeasance was taking place, humans for the first time went from misery to sufficiency, and they can now look forward in a few more generations to universal enrichment. As late as 1960, 4 billion out of the 5 billion souls on the planet earned the old $2 a day. Now it’s 1 billion out of nearly 8 billion, and truly rich places that were once shockingly poor, such as the Italian South or South Korea or South Tyrol, multiply.

Stealing does not a Great Enrichment make. Our friends on the left claim that rich people stealing from the English working class around 1800 resulted in . . . uh . . . everyone getting richer by a factor of 25. Huh? You break into your neighbor’s house and, like the assassin in the 2002 Tom Hanks gangster movie Road to Perdition, you brutally murder Hanks’s wife and one of his sons. Then you make off with his stuff. Out of this, says the Left, the real incomes of everyone — you, Hanks, his other son, the gangster boss, everyone — rise by 2,500 percent.

It’s Monty Python loony. In 1930 the spoof of English history 1066 and All That put it this way: “Many remarkable discoveries and inventions were made [about the year 1800]. Most re­markable among these was the discovery (made by all the rich men in England at once) that women and children could work for 25 hours a day . . . without many of them dying or becoming excessively deformed. This was known as the Industrial Revelation.”

After all, the historical problem with the hypothesis of stealing for enrichment is that stealing is historically commonplace, yet it never resulted in a Great Enrichment. Until it did. Whoops. What kind of a historical explanation is that?

And the economic problem is that the Enrichment after 1800 was so very Great that it can’t possibly be explained by routine projects, whether financed by evil stealing or by virtuous abstention from consumption. Canals, for example. Projects such as the Swedish state’s stealing of the conscripted labor of 58,000 soldiers to dig the Göta Canal from Söderköping to Gothenburg be­tween 1810 and 1832 face sharply diminishing returns. Normal capital accumulation does. That’s besides being economically idiotic in this case, and in the case of most of the canals that were financed as nice-sounding “internal improvements” in the United States during the 1830s. Compare stealing tax money to build a high-speed railway between L.A. and San Francisco. Just sayin’.

Or consider the historical facts and the economic logic of stealing labor from black Africans. Obviously, traditional chiefs were pretty nasty, too, and enslaving, long before Europeans arrived on the coast. And afterwards. In the moving anti-apartheid novel Cry, the Beloved Country, John Kumalo, from a village in Natal, and a big man in Johannesburg, says, “I do not say we are free here.” (A black man under apartheid in South Africa in 1948 could hardly say so.) “But at least I am free of the chief. At least I am free of an old and ignorant man.” And outright slavery was the practice of African kingdoms long before the British or even the Portuguese knew anything about them. True, the Atlantic slave trade gave the African kings a profitable market in which to sell their fellow Africans, especially to Brazil and the Caribbean, and gave them an additional incentive to wage war on Africans. It was like slavery in the Greek and Roman world. In the 16th year of the Pelo­ponnesian War the Athenians, fresh from some stimulating discussions with Socrates about justice, conquered Melos, then executed all its men and sold all its women and children into slavery. A big king in Benin could simply grab another black man or woman or child. It was great business for him, though apparently not so great as to cause an enrichment of Africa itself.

The East African slave trade, note, was as large as and lasted longer than the West African one. Yet it did not cause an enriching “capitalism” to flourish in the Middle East. The Barbary pirates and their North African allies and competitors enslaved European sailors or the victims of coastal raids in large numbers for hundreds of years, yet no Great Enrichments ensued there. The very word “slave,” of course, comes from “Slav,” those enslaved on the east side of the Holy Roman Empire and seized by Mongols in the Golden Horde north of the Black Sea and sold into the markets of Constantinople/Istanbul. No Enrichment by a factor of 25 per person there either.

The Europeans to whom the king of Benin sold slaves had to compete with other Europeans for the privilege of taking later steps in the supply chain to the New World. It was not cheap to evade the British naval squadron patrolling the west coast of Africa to stop the trade. Nor, contrary to what people often say, was a slave at work in Recife or Kingston or Charleston at any time “cheap labor.” To think so is to get the accounting and the economics wrong. Slaves required food, as a tractor requires fuel. A slave in Charleston in 1860 sold for three times the average workingman’s annual in­come. If there was any super profit in buying him, the competition of other eager owners would drive up his price. Buying a John Deere tractor does not give an Iowa farmer super profit. The return for the European slave traders and U.S. slave owners therefore ended up back to normal. Normal returns are not a Great Enrichment.

So, as economic historians pointed out long ago, the profits from the West African trade stayed in Africa. Yes, I know. The economic logic of thinking of slaves as tractors and of their profits as staying in Africa makes us uncomfortable. It sounds like being unfeeling and blaming the victim. Credit to your feelings. But the enslaving chiefs and kings and Mongols were not the victims. Their slaves, acquired by the initial act of people-stealing, were.

In his second inaugural, Lincoln de­clared that “if God wills that [the Civil War] continue until all the wealth piled by the bondsman’s 250 years of unrequited toil shall be sunk, . . . as was said 3,000 years ago, so still it must be said, ‘the judgments of the Lord are true and righteous altogether.’” It is a creditable sentiment, nobly expressed. Yet the economics implied, revived, and ex­tended now in the 1619 movement, that exploitation of slaves is what made the U.S. rich, is mistaken. Slavery made a few southerners a little rich, and a few northerners, too, and especially a lot of African kings. But to get up to the 2,500 percent it was liberty and innovation that enriched Americans, including at last the descendants of the very slaves.

It’s hard to dispel the idea embedded in Lincoln’s poetry. assumes “that northern finance made the Cotton Kingdom possible” because “northern factories required that cotton.” The cotton idea underlies recent books such as Walter Johnson’s River of Dark Dreams, Sven Beckert’s Empire of Cotton: A Global History, and Edward Baptist’s The Half Has Never Been Told: Slavery and the Making of American Capitalism. It’s the Left’s two-century-old quest to find some original sin in their coinage, “capitalism.” Marx thought it was piracy. The recent Left has turned to environmental sin. What­ever. Anyway, malfeasance worthy of a satisfying indignation.

The facts and logic of the King Cotton historians are wrong. The enrichment of the modern world did not depend on cotton textiles. Cotton mills, true, were pioneers of some industrial techniques, techniques applied also to wool and linen. Yet wool and linen break the link to cotton itself. And numerous other techniques, in mining and farming and engineering and iron-making, not to speak of biological and organizational innovations, had nothing to do with cotton. The U.K. in 1830 and the U.S. in 1860 were not cotton mills.

Nor is it true that if a supply chain is interrupted, there are no possible substitutes. Such was the theory behind strategic bombing, as on German in­dustry and on the Ho Chi Minh Trail. Neither worked as promised. Yes, Covid-19 and the fevered governmental reaction to it did drop bombs on a good many supply chains. Yet only in the short run is it “necessary” for something to come from a particular region by a particular route. The “chain” metaphor is not apt. A missing piece of the chain can be replaced, as in fact it was during the blockading of raw cotton from the South after 1861. British and other European manufacturers began to turn to Egypt to provide some of what the South could not.

Growing cotton, unlike sugar or rice, never required slavery. Many whites in the South grew cotton, before the war and after. By 1870 freedmen and whites produced as much cotton as the South had in the slave time of 1860. Cotton was not a slave crop in India or in southwest China, where it had been grown in bulk anciently. That slaves in the South produced cotton does not imply that they were essential or causal in the production.

Economic historians have been think­ing this way about U.S. slavery for half a century, but you wouldn’t know it from the King Cotton school. That school has been devastated recently in detail by two economic historians, Alan Olmstead of UC Davis and Paul Rhode of the University of Michigan. They point out, for example, that the influential and leftish economist Thomas Piketty grossly exaggerated the share of slaves in U.S. wealth. Piketty’s estimates were then used by Baptist to put slavery at the center of U.S. economic history. Slavery was evil, and central to U.S. social and political history, sure enough. But the evil was not a cause of economic enrichment.

Olmstead and Rhode note, too, that the price of slaves increased from 1820 to 1860 because of an astonishing rise in the productivity of the cotton plant, achieved by selective breeding. Innova­tion, not capital accumulation or ex­ploitation, made cotton a king, though a little one.

The big king, that is, was a liberalism invented in the 18th century and implemented slowly after 1800 that let people have a go. And go they did. The right word for what we’ve seen since then is not the economically misleading word “capitalism” but rather “innovism.” What made us rich was not capital accumulation, whether by evil thieves or by virtuous savers, but a new birth of freedom to try out new ideas. The Great Enrichment is a story of the political idea of liberty leading to massive innovation, from the steam engine and the modern university to containerization and the Internet.

If stealing from colonies explained the Great Enrichment, then Sweden, which had a trivial overseas empire, would be poorer than Britain, which had the largest one in history. If slave-stealing did, then Canada, which had no slaves, would be radically poorer than the U.S. If stealing dignity and autonomy did, then South African whites, said to be benefited by apartheid over the large majority of blacks and “coloureds,” would be much richer than Australian whites, who merely crushed a small minority of Aboriginals. If Jim Crow had been good for the U.S. South, it too would be richer. The countless conquering and enslaving societies following on the Sumerians, the Olmecs, and the Shang Dynasty would have produced a Great Enrichment be­fore the Great Enrichment.

For a few years in the 1980s, in each spring term, I taught a class of 430 under­graduates at the University of Iowa (go Hawks!) what we still called “Western Civilization.” I taught the kids that history is a story we tell, disciplined by ascertainable facts. You can tell European history from 1648 to 1948 or 1988 as a tragedy or as a comedy. In the Department of English we call Hamlet a tragedy because everyone gets killed in the last scene, and The Winter’s Tale a comedy because everyone gets married. You can tell European or world history as a tragedy leading, say, to the Holo­caust. It’s a worthwhile way of telling it. You can tell American history as a tragedy of racism. Worthwhile, too. The kids need to know that such evil of populist tyranny actually happened, at scale. But you can also tell it as a comedy leading to liberty and the Great Enrichment, also at scale, in Europe and the U.S. and now the world. They also need to know that.

The problem is not telling both stories, and then proceeding to burn the books of the other side in the flames of indignation, left or right. No challenging facts or logics get through. It results in ignorant yet self-satisfied kids who become conspiratorial adults easily enchanted by demagogues, left or right.

Let’s not.

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