If you’ve been reading these posts, then you’ll be unsurprised to hear that 1870 was the turning point in human history, 1910 was the high-water mark for the white man’s domination of the world, and 1953 was the year it all fell apart.
In 1910, the North Atlantic was unashamedly imperialist. The justification through Adam Smith and Rudyard Kipling was that imperialism was undoubtedly a force for good – putting native people under European domination made them better through the spread of civilization, science, religion, weapons, markets, etc. The North Atlantic could point to that turning point in 1870 and the fact that the gulf between haves and have-nots had never been greater, on the back of industrial progress and technology.
By 1953, the North Atlantic was very ashamed to be imperialist. Two world wars and an economic depression costing the lives of 100 million people meant that it was a laughable argument to claim that the white man had any natural stake in spreading his culture. Imperialism came to be associated with words like greed, war, misery, and tyranny, illustrated all too vividly by photographs of bombed out cities in Europe and Japan; imperialism’s face was now Hiroshima.
But what’s interesting is that in 1953, the industrial and technological gap between the First and the Third World was bigger than ever. Even Germany, cut in half and bombed to shit, could still outproduce any Third World country. It wasn’t that the Third World had failed to progress in education, industrialization, technology, or capital accumulation, it was that they had singularly failed to close the gap.
The question is why and there’s a story behind it.
-Before 1870, steam power was only profitable where coal was very very cheap, which consisted almost solely of England. Everywhere else in the world, muscles were cheaper than engines, so they had no reason to switch or let market forces create research.
-Between 1870 and 1910, machines were sophisticated enough to spread throughout the North Atlantic and be profitable. The technology could be spread around the world, but utilizing industrial machines requires a complex system where a lot of things have to go right – you need institutions, labor, capital, technology, and a way to finance it all. In the absence of this, white people organized local people enough for bigger projects like plantations, mines, railroads, etc, but couldn’t get enough to go right for industrialization. But without industrialization and harsh imperialist versions of capitalism, natives never got above a subsistence wage and had little incentive for things like education. With some white guy in a tuxedo and monocle lecturing about how hard labor for pennies is fair and just how the market works, small wonder native people didn’t really want progress.
-1910-1953 should have seen progress as machines became ever more sophisticated and countries advanced, but it didn’t. The problem was political turmoil in Europe, the depression causing a severe trade contraction, and awful leadership generally replacing the white man’s rule. This can be illustrated with a few examples.
1) Argentina
Argentina in 1910 was one of the rising powers in the world, on par with Australia or even the US. But after World War I, they began a slow-down that they haven’t recovered from to this day. Despite never fighting in World War II, their growth slipped to negative in the 1950s, sliding below France and Germany in a descent to the Third World. What went wrong was the gold standard – they lost everything when the gold standard went belly-up in World War I and ended up overvalued after Versailles. This caused a gold drain in the country and when they cut themselves free, Britain responded with an embargo. Since the British Empire accounted for 80% of Argentina’s trade, this ruined their economy forever.
From there, it’s a series well-deserving a place in the historical hall of tragedies. They ended up backwards from the world from then on – Peron embraced capitalism and free trade when the rest of the world shut it down in the Great Depression, then shut Argentina from the world when everyone asked for help in the 1940s. Argentina got stuck in the worst trap possible – they had too many agricultural goods, the government redistributed industrial wages (crippling industries), and nobody could get money to finance the economy. Combined with a brand of socialism that somehow got both Washington and Moscow to hate it, Argentina really messed up everything they could.
2) China
We left China as the greatest failure of the 19th century. They didn’t do very well in the 20th either, mostly because of turmoil. Until the Communists won in 1949, China didn’t have a stable government that lasted more than a decade. The Qing’s dynasty’s worst fears were realized as disputing groups within China tore the country apart from the inside out. By the time Chiang Kai-Shek had established some measure of stability, the Japanese pounced. They were ruined by silver and FDR, a story I think I’ve told before. But the Japanese couldn’t put China back together either, they only made things worse by destroying nascent industrialization on the coasts.
The long miserable story ends with Mao Zedong painfully conquering China piece by piece. To let you know how stupid and godawful the Chinese civil war was, Mao lost 95% of his peasant soldiers in the Long March and STILL managed to drive Chiang Kai-Shek’s Nationalists off to Taiwan. You can only imagine how incompetent and foolish the Nationalists must have been to lose to an army like that, or how goddamn fucking tough those survivors were. But we know the story of Mao, who would employ his Long March, survival only of the absolutely unkillable strategy to the rest of China. Industrialization wouldn’t start until the 1980s.
3) India
India’s story is perhaps the most miserable, because they had the resources of the British for over a century and still couldn’t make anything of themselves. The partition between India and Pakistan will go down as one of the dumbest and most horrific decisions in human history; you can say it was preferable to civil war, but with 3 million dead in the partitioning, it’s a tough sell.
India is a total enigma. It defied the laws of Adam Smith and Karl Marx. It had peace, low taxes, and sensible government, but still raged with barbaric disputes. However, India also resisted both the industrial progress hoisted upon it by the British (i.e. stages of capitalism) and the peasant revolutions that occurred around the Third World. It was too good to be an Asian country and too proud to become a white one. What’s difficult to understand is with all of this, with the resources of the British, wooing from Washington and Moscow, an outstanding reputation and widespread respect, and some of the greatest leaders, mathematicians, and engineers in the world, how they ended the 20th century looking up at a China who had none of those things.