Capitalism in Smith and Taiwo- George
In his discussion of wages and the labor market, Smith mentions a phenomenon that Taiwo also discusses, and that economic historians have increasingly looked to as an explanation for continued global wealth disparities: the colonial exportation of tyranny. He points to mass famine of "Bengal, and of some other of the English settlements in the East Indies" as an example of what happens when wages drop too low, and as an aside posits that "the difference between the genius of the British constitution which protects and governs North America, and that of the mercantile company which oppresses and domineers in the East Indies, cannot perhaps be better illustrated than by the different state of those countries," (Smith 75). The economists Acemoglu and Robinson in particular have made a similar point, taking in a much broader array of examples. Colonies like America where Europeans settled in large numbers benefited from the market-enhancing aspects of British common law. Those where they did not were subject to oppressive colonial regimes that stifled endogenous growth. The various institutional cultures carried on after the end of colonialism, resulting in massive wealth disparities.
Taiwo describes some of the features of these oppressive colonial regimes. They "cut across the distinctions between the judicial, legislative, and executive functions of government that the colonial powers considered so essential for their own home governments," they maintained the authority to "censor media and jail political dissidents without serious charges," etc. (Taiwo 55). After the colonizers left, "many of the newly independent states inherited an already autocratic political structure, as well as generations of autocratic political culture and institutional knowledge," (Taiwo 55).
I think that the relevance of exported illiberalism reveals an interesting paradox within the views of both Taiwo and Smith. On the one hand Taiwo points out that the development of free markets and the liberal governance norms that supported them in England and other European countries was greatly aided by cheap natural resources extracted from the colonies. On the other hand, part of the harm that England and other colonizers did to their colonies was by setting them on a path away from liberal government and free markets. The liberal capitalism that Smith extols in The Wealth of Nations therefore has a complicated role in the story of global racial empire. It is both a product of colonialism and a remedy for its harms.
Because the constructive view of reparations is focused on the distribution of capabilities, on remedying the material effects of racial empire on the global south, I think it requires to focus more on the latter. Taiwo's view essentially leads to an empirical question of how to best correct global wealth disparities. Smith gets a lot right about how capitalism creates broad-based growth in wealth and living standards, i.e. capabilities, despite the fact that England's role as one of the principal perpetrators of global racial empire underlies his whole discussion of the Wealth of Nations. The focus of a constructive reparations movement, therefore, would be primarily about improving and promoting capitalism in countries that have been denied access to it by global racial empire, not dismantling it.
George,
ReplyDeleteThis is a very insightful blog post and I am glad you connected Smith and Taiwo and touched on imperialism. This discussion reminds me of British imperialism in India. The British took many natural resources from India, but also used their skilled merchants and superior materials and brought them back to England. The British then put tariffs on countries like India to stop the importation of India's goods. However, the British banned the Indians from implementing tariffs for the sake of open market capitalism, which hindered Indian producers. It is interesting to see capitalism used in such a weaponized way and how it was a tool to expand imperialism.
It is important to think about how capitalism, for developing countries, could be used to exploit these markets and how world powers could dominate these countries since we are already very developed. I think it is essential to consider how material disparities in global wealth could make it more difficult to implement capitalism and whether some of the material disparities need to be diminished before capitalism can be successfully built in these countries. I also agree that it was very helpful to read some of The Theory of Moral Sentiments before reading The Wealth of Nations because it gives you a foundation for how Smith views people relating to each other. It was especially important to read about how Smith viewed the accumulation of wealth and greed and how it corrupts humanity.
Great blog posts, George and Walsh!
ReplyDeleteGeorge, I think you make an interesting point that the reconstructive movement requires us to build up liberal capitalism in countries that have previously been denied it, rather than dismantling the entire system. I think there is a lot to be fleshed out in terms of how to correct global wealth disparities, but I wanted to go off in a bit of a different direction here and touch on the point Walsh brought up about The Theory of Moral Sentiments.
Colonialism and global tyranny seem to contradict the natural sympathy and sense of justice that Smith suggests we all possess in A Theory of Moral Sentiments. Enslavement, abuse, tyranny, famine, etc., all occurred under colonial regimes: if Smith's assessment of our natural feelings of sympathy towards one another is correct, how did some feelings of guilt or drive for justice fail to mitigate some of the harm done by the colonizers?
I would argue that part of the reason these injustices could occur, despite our "natural senses of justice," is due partially to the distance between many colonizers and those colonized. The degrees of separation, especially historically, were so great that individuals in colonizer nations felt little to no sense of sympathy for those colonized. Furthermore, even among individuals who were on the ground in colonized countries, many colonizers looked at people of other cultures as sub-human. Thus, they lacked sympathy for those in colonized countries because they simply failed to see them as fellow human beings, and thus could not relate to them with feelings of sympathy or apply to them their senses of justice. For these reasons, I would argue that global communication and connection is of primary importance in the reconstruction movement: people need to be familiar with and feel connected to individuals of other countries/races/cultures in order to feel sympathy for them, and subsequently feel compelled to deliver them justice. In an interconnected global community, sympathetic feelings for one another need to exist to prevent large-scale injustices before such growth in wealth and living standards can occur.