The Mises Community
An online community for fans of Austrian economics and libertarianism, featuring forums, user blogs, and more.

Why did so called "western" nations develop faster than what are now 2nd and 3rd world nations?

rated by 0 users
Answered (Not Verified) This post has 0 verified answers | 126 Replies | 12 Followers

Top 150 Contributor
Male
245 Posts
Points 4,900
Ansury posted on Sat, Aug 22 2009 1:39 PM

I'm asking in the context of the last say, 400 years or so, since that's when Europe (and the US eventually) really started to take off.

In part I'm also asking, did imperialism give western nations a head start, or was it other factors such as economic freedom, trade, culture, etc.?

  • | Post Points: 275

All Replies

Top 10 Contributor
Male
7,643 Posts
Points 132,750
MVP
SystemAdministrator

Esuric:

liberty student:
access to resources, access to land, military superiority etc.

The problem with this is that it doesn't explain post WW2 Japanese economic expansion, nor does it explain the growth seen in Singapore and Hong Kong.

Good points.  I probably shouldn't have answered, I haven't given this topic a lot of thought.

 

If you find something evil that wobbles, push it. - Gary North

  • | Post Points: 5
Top 50 Contributor
Male
604 Posts
Points 10,795

@ the OP

 

I don't think that Western imperialism can be considered a causal factor.

The reason why should become clear once you ask yourself the question why was it that the West came to conquer the rest of the world rather than the other way around? A state's military power depends on the level of wealth it can draw from its domestic population. The fact that the West came to dominate the rest of the world is a consequence of the West becoming rich before the rest of the world.

There is a pretty good audio lecture on the subject by Ralph Raico here. Here are a few point form notes I made after while listening to it. I haven't checked out any of the authors he referenced.

<notes>

The European Miracle

 

Authors on the subject

  • Douglas North (Nobel prize winner of economics)
  • Jean Baechler (University of Paris)
  • Nathan Rosenberg (Stanford)
  • Neil Jones (La Trobe, The European Miracle)

 

  • Davis Lambdas
  • William McNeill

 

It was in Europe alone that human beings achieved sustained per capita economic growth over time and escaped the Malthusian trap.

Why Europe?

The small size of states made it easy for subjects to escape their rulers which imposed restrictions on the tax and regulation burden they could place on their subjects i.e. decentralization.

Representative assemblies of taxpayers (non-democratic, Lambdas) had to agree to new taxes.

European nobles had contract status with rulers.

Laws that bound kings (magna carta for instance).

West had an independent international church. (Deepak Lal)

 

Middle ages

  • Rebirth of Aristotleanism
  • New rationalism and scholasticism
  • Modern universities

 

The taboo of envy. God being on your side. Christian prejudice against envy (Thou shalt not covet thy neighbours possessions).

 

Against the "spurious consensus." (Peter Bouer)

Spurious Consensus = Agents of the state are Plutonic guardians which are only interested in the welfare and good of society. The role of the public economist is to develop policy for the Plutonic guardians. The state is not predatory in nature.

</notes>

 

 

Also, the post by stranger was particularly good. Hoppe provides a simple explanation of why territorially smaller states tend to be less exploitive than larger ones, allowing for greater capital accumulation and higher standards of living. Any of his economics of political centralization lectures are pretty good, and go through in detail the effects of smaller territorial political units with respect to larger ones.

 

There is also a biological component to it as well.

There is a 0.7 correlation between IQ and per capita GDP. Also Hoppe gives some arguments to this effect at the beginning of his mises audio lecture, The Production of Law and Order. He also provides some more of this line of argument in his video lecture, From the Malthusian Trap to the Industrial Revolution.

So it is the combination of factors: political decentralization, genetic component of intelligence, cultural attitudes and tradition, legal structure, ect.

 

  • | Post Points: 45
Top 150 Contributor
Male
245 Posts
Points 4,900
Ansury replied on Sat, Aug 22 2009 8:31 PM

Just to clarify, I never had the opinion that imperialism and the pillaging of defenseless 3rd world nations were the (major) factor.  I think it's probably a combination of factors, with (classical) liberalism at the front.

Obviously this is an extremely complex subject, but I find the opinions and discussions here interesting.

  • | Post Points: 35
Top 200 Contributor
148 Posts
Points 3,020

Mises blames liberty.

I do remember in the Myth of National Defense a quote from Nicolas Gomez Davila that without Christianity and antiquity as their background, Europeans would be nothing but palefaced barbarians.

  • | Post Points: 20
Top 10 Contributor
Male
2,809 Posts
Points 49,985
Moderator

Stranger:

The Paradox of Imperialism by Hans Hermann Hoppe

To answer your question, "Europe" did not conquer the world. Instead Europe produced capitalist enterprise, and states that leveraged the benefits of capitalism were able to wipe out the others, in Europe and, eventually, the rest of the world. It was because of limited freedom and capitalism that the Italians could become sea-explorers. It was because the Spanish kings could buy ocean-going ships that they could send their Italian agents to conquer America. Had this capital not been available, they would have remained trapped in Spain.

Later it was the Spanish fiefdom of the Netherlands that decided to become more liberal by getting rid of feudalism, and the Dutch spread this sea-faring, capitalistic technology to even farther ends of the Earth. The Dutch became wealthy and powerful enough to conquer Britain, which then took on the task of developing global capitalism. And of course the United States came out of the British Empire to conquer the entire world.

What this has to do with "Europeans" is tenuous. European tribes, with their capitalistic technology, could easily wipe out inferior tribes and settle primitive countries, enslaving the locals. This is what happened in South Africa with the Boers, but as "Europeans" they did not enjoy any special rights, eventually the British came to enslave and destroy them as well.

This isn't capitalism...this is mercantilism.

'It is difficult to imagine any normal person wishing to meet Marx for a third time.' - Alexander Gray, The Socialist Tradition

  • | Post Points: 20
Top 10 Contributor
Male
2,809 Posts
Points 49,985
Moderator
Suggested by liberty student

Esuric:
The problem with this is that it doesn't explain post WW2 Japanese economic expansion, nor does it explain the growth seen in Singapore and Hong Kong.

Post WWII Japan can be explained by the fact that the US destroyed nearly all of Japan's industry and when invaded the main island of Japan, established whole new industrial bases which were the high of technological advancement of the time. Basically everything Japan got was brand new while the rest of Europe was dealing with aged/destroyed machinary.

'It is difficult to imagine any normal person wishing to meet Marx for a third time.' - Alexander Gray, The Socialist Tradition

  • | Post Points: 5
Top 50 Contributor
Male
604 Posts
Points 10,795

Ansury:
Just to clarify, I never had the opinion that imperialism and the pillaging of defenseless 3rd world nations were the (major) factor.  I think it's probably a combination of factors, with (classical) liberalism at the front.

Imperialism is a major drag on economic development. War is very expensive and the burden is born through taxes. A higher burden in taxes means that producers will tend to substituted present consumption and leisure for savings and future investment all other things being equal. Also expropriation, mercantilism, and slavery are never as productive as free trade and voluntary exchange since these are just forms of exploitation of foreigners and have the same effects on production for foreigners as is does for a domestic population. The hampering of the international division of labour reduces the reduces productivity of international trade to a greater extent than the benefits of exploitation in the long run.

So, if anything, Western imperialism has made the West even less wealthy than it would have been if it had never forcibly colonized the rest of the world.

  • | Post Points: 20
Top 25 Contributor
Male
1,174 Posts
Points 24,320
Moderator

Natalie:
The end of slavery in the Europe proper must be one of the factors.

It is most likely that the Western nations were able to abolish slavery was because of their economic, esspecially industrial, prosperity -  they could afford the costly process while less developed nations that did not have the industry of the Western ones simply could not. Hence, I believe that you are reversing the causation: prosperity lead to the abolition of slavery. 

 

In addition, focusing on Great Britain, the historical ties between the state, and property rights are of interest with respect to the enclosure movement, and the Poor Laws of the time - in The Great Transformation, the author's, Karl Polyani, thesis, among other things, is that  the industrial revolution in England, and Scotland was only possible due to the government's seizing of commons, and the role that the Poor Laws had in easing the social repercussions of the enclosure movement. 

I am becoming a Burkean Whig.

          - F.A. Hayek

  • | Post Points: 35
Top 50 Contributor
Male
604 Posts
Points 10,795

laminustacitus:
It is most likely that the Western nations were able to abolish slavery was because of their economic, esspecially industrial, prosperity

I don't think so. Slavery can only be sustained through political privilege in any economy. A poorer country can just as easily abolish slavery as a rich one.

  • | Post Points: 20
Top 25 Contributor
Male
1,174 Posts
Points 24,320
Moderator

Stephen Forde:

laminustacitus:
It is most likely that the Western nations were able to abolish slavery was because of their economic, esspecially industrial, prosperity

I don't think so. Slavery can only be sustained through political privilege in any economy. A poorer country can just as easily abolish slavery as a rich one.

You completely ignore the fact that slavery can often be an economic institution without which an economy cannot sustain itself. In a historical perspective, absolishing slavery is not as easy as just freeing the slaves; rather, a nation must have a way of sustaining itself without the use of slavery before it considers abolishing slavery, and this is seen in nations that have peacefully abolished slavery.

I am becoming a Burkean Whig.

          - F.A. Hayek

  • | Post Points: 20
Top 10 Contributor
2,610 Posts
Points 46,205
Stranger replied on Sat, Aug 22 2009 10:17 PM

Laughing Man:

 

This isn't capitalism...this is mercantilism.

The capital required to equip a fleet of ships and operate them over the entire world points otherwise. This was the reason European companies could colonize any place in the world, while Zulus, for example, could only migrate around their homeland in Africa.

  • | Post Points: 35
Top 10 Contributor
Male
5,196 Posts
Points 88,450
Juan replied on Sat, Aug 22 2009 11:10 PM
You completely ignore the fact that slavery can often be an economic institution without which an economy cannot sustain itself. In a historical perspective, absolishing slavery is not as easy as just freeing the slaves;
As of late, it seems that Lam's hobby is to analyze politics from a materialistic point of view, and somehow justify slavery...cute.

February 17 - 1600 - Giordano Bruno is burnt alive by the catholic church.
Aquinas : "much more reason is there for heretics, as soon as they are convicted of heresy, to be not only excommunicated but even put to death."

  • | Post Points: 20
Top 10 Contributor
Male
5,196 Posts
Points 88,450
Juan replied on Sat, Aug 22 2009 11:13 PM
Stranger:
Laughing Man:
This isn't capitalism...this is mercantilism.
The capital required to equip a fleet of ships and operate them over the entire world points otherwise.
As usual, Stranger is attempting to get free-enterprise and mercantilism confused.

February 17 - 1600 - Giordano Bruno is burnt alive by the catholic church.
Aquinas : "much more reason is there for heretics, as soon as they are convicted of heresy, to be not only excommunicated but even put to death."

  • | Post Points: 5
Top 50 Contributor
574 Posts
Points 9,290
Moderator
Natalie replied on Sat, Aug 22 2009 11:25 PM

laminustacitus:
It is most likely that the Western nations were able to abolish slavery was because of their economic, esspecially industrial, prosperity -  they could afford the costly process while less developed nations that did not have the industry of the Western ones simply could not.

But how do you explain the fact that slavery disappeared long before European countries started becoming prosperous?

If I hear not allowed much oftener; said Sam, I'm going to get angry.

J.R.R.Tolkien, The Lord of the Rings

  • | Post Points: 20
Top 10 Contributor
Male
7,643 Posts
Points 132,750
MVP
SystemAdministrator

Juan:
As of late, it seems that Lam's hobby is to analyze politics from a materialistic point of view, and somehow justify slavery...cute.

I don't think he is justifying slavery, but accurately portraying the evolution of a society, and slavery is a typical economic system that nearly every race and region has gone through at one point or another.

If you find something evil that wobbles, push it. - Gary North

  • | Post Points: 35
Page 2 of 9 (127 items) < Previous 1 2 3 4 5 Next > ... Last » | RSS

Ludwig von Mises Institute | 518 West Magnolia Avenue | Auburn, Alabama 36832-4528

Phone: 334.321.2100 · Fax: 334.321.2119

contact@Mises.org | webmaster | AOL-IM MainMises

Mises.org sitemap