The economics of empire

And why it matters today

On 24 March, the IEA’s Kristian Niemietz spoke on a panel at the Free Market Road Show, held at the University of Ljubljana. The article below is based on his introductory remarks.

I am going to say a few words about the economics of empire: about the idea that the wealth of the Western world was originally built on colonial exploitation. That is an idea which has become very fashionable over the past five years. It played a large role in the Black Lives Matter protests of 2020 and 2021, and while BLM now seem to be largely defunct, the idea has since taken on a life of its own.

Photo by Karl Callwood on Unsplash

Some of you may wonder: what does any of this have to do with the topic of this panel, or indeed of this conference? Isn’t this a topic that is only of interest to a few specialist economic historians? Shouldn’t we be talking about the economic challenges of today, rather than about things that happened 150, 200 or 250 years ago?

But the woke, progressive activists who have given the topic its renewed prominence certainly do not see it as only a topic of the distant past, which has no relevance for the world of today. Their focus is very much on the present and the future, and they approach the subject through that lens. And they have a point. Even if you are not interested in the specifics of what happened in the 18^th or the 19^th centuries, the issue touches on much more fundamental questions:

Where does wealth come from?

Why are some parts of the world rich, while others are not?

Why did the Western world industrialise before anyone else did?

How you answer those questions has a profound impact on how you see the world today.