The New Horizon

A new world explored with a rational view

Colonialism and Economy

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In my earlier post I argued that colonialism has probably no long lasting economic effect on either of the colonizer or the colony. I got a couple of more points to display it. The first is that of Caribbean Island states. They got their independence in different times in the history but that has no effect on their economy. The first one to get independence was Haiti (1804) but they lag behind the all of other neighboring islands by much. The top-of-the-list Bahamas got their independence in 1973 and the second-in-list Puerto Rico is still a US Colony.

Caribbean Economic Performance and Year of Independence

The second set of data is of Turkey and Balkans. Turkey had a lot of area (in Europe) under their occupation for a long time in the history. However, in the long term, there is nothing to suggest that Turkey has economically a better performer than the rest. Rather it is more evident that the other East European colonies are doing far better than Turkey. In fact, until recently (till 1980s), Turkish people were far worse of the entire East Europe they ruled for centuries.

Ottoman Turk Colonies in Europe and Turkey

Ottoman Turk Colonies and Turkey

Both of these also shows that colonialism has limited effect on a economy of a country in the long term. Of course there are some effects in the short-term, such as draining resources or dependency, but in the long economic history drainage of resources has similar effects to that of a war. A war has seldom made a country poorer – especially if we take recent examples of Germany or Japan.

Colonialism, or as of that the whole thing called imperialism has a different root. If I can see through the eyes of Adam Smith, the famous economist and father of modern Economics -

No nation ever voluntarily gave up the dominion of any province, how troublesome soever it might be to govern it, and how small soever the revenue which it afforded might be in proportion to the expense which it occasioned. Such sacrifices, though they might frequently be agreeable to the interest, are always mortifying to the pride of every nation, and what is perhaps of still greater consequence, they are always contrary to the private interest of the governing part of it….”

Well, all that imperialism boils down to the pride of nation. The notion of a colony is a positive pride for the mother country and negative shame for the colony itself. It may be beneficial to the mother country in the economic sense. It may not be as well.

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Written by Diganta

November 29, 2012 at 12:50 am

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