Economics Nobel Endorsing settler-colonial Eurocentrism. Creating mental traps for ideas

The Economics Nobel is yet another example of an endorsement of a narrative that aims to affirm the supremacy of Western thought, policies, and systems over the rest of the world. It is as if world ideas exist only in Europe and America.

By K Yatish Rajawat and Dev Chandrasekhar

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The Nobel Prize in Economics was awarded to Daron Acemoglu, Simon Johnson, and James A Robinson for their work on the institutional frameworks that drive long-term economic development. This includes the influential book, "Why Nations Fail,” and the relatively lesser-known, "The Colonial Origins of Comparative Development”.

The trio categorize institutions as "inclusive" or "extractive." According to them, inclusive institutions that support property rights, democracy, and low corruption drive economic development and are typical in Western high-income countries. In contrast, extractive institutions, characterized by concentrated power and limited political freedom, aim to enrich a small elite, hindering development.

Their thesis revolves around the idea that some forms of colonialism (particularly settler colonialism) established beneficial institutions, such as strong property rights and transparent political systems, that promoted long-term economic growth. They contend that these regions developed more resilient economies than areas where European presence was primarily extractive.

This narrative assumes that institutions are exclusive to the West and the rest of the world has to be educated, trained, and converted to this way of thinking. By awarding such thinking, the Nobel Prize committee perpetuates a colonial mindset, a Eurocentric view of the world that sees the Russian-Ukraine war as a global war. Even property rights are not exclusive to the West. For example, cattle ownership rights existed in Bronze Era Harappa, when almost all of the present-day Global North were hunter-gatherer settlements.

The Economics Nobel is another example of the long-standing endorsement of a narrative that aims to affirm the supremacy of Western thought, ideas, policies, and systems. These are built upon a well-oiled framework of academic institutions and their funding and awarding of grants for research. Strengthening that framework are global, North-based institutions for global commerce and governance, such as the UN Security Council, the WEF, the World Bank/IMF, and the rating agencies.?

This narrative has been countered by prominent scholars such as Immanuel Wallerstein, Andre Gunder Frank, and Aníbal Quijano. They have rigorously pointed out that such a perspective ignores colonialism's exploitative nature and its lasting negative impacts on colonised societies. Their works collectively challenge Eurocentric narratives of development and progress, and offer critical perspectives on global inequality and colonialism's legacy.

Aníbal Quijano's concept of the "coloniality of power" argues that colonial structures and hierarchies continue to shape global relations long after colonialism's formal end. It posits that the modern world system is still fundamentally organised around a racial and cultural hierarchy established during colonial times.

The coloniality of power manifests in various forms — economic domination through global capitalism; political control through international institutions such as the UN Security Council the World Bank/IMF, and, indeed, the Nobel Prizes; cultural hegemony through the imposition of Western knowledge systems; and racial classifications that privilege whiteness. These structures perpetuate inequalities between former colonisers and the colonised, influencing everything from labour relations to knowledge production.

Predating Quijano, Immanuel Wallerstein's world-systems theory, and Andre Gunder Frank's dependency theory are counter-perspectives in understanding global economic inequalities and the structure of the international capitalist system. Both theories emerged in the 1960s and 1970s as critiques of modernization theory, according to which all countries would eventually develop along a similar path to Western industrialized nations.

Wallerstein's world-systems theory divides the global economy into core, semi-periphery, and periphery regions, with wealth flowing from periphery to core and creating a complex, interconnected world economy with unequal power dynamics. Core regions are the affluent, industrialised countries with solid geopolitical influence. Semi-periphery regions have mixed characteristics, acting as a buffer between the core and the periphery. Periphery regions are poor and often exploited for resources and labour. According to Wallerstein, wealth flows from the periphery to the core through unequal trade relationships and exploitation of resources. This system is dynamic, with countries potentially moving between categories over time, but the overall structure remains stable. For instance, the imposition of cash crop economies disrupted local food production, leading to death by famines and financial instability in many colonized regions.

While sharing some similarities with world-systems theory, Frank's dependency theory focuses more explicitly on the relationship between developed and underdeveloped countries. He argues that underdevelopment in the Global South is not a natural state or a stage of growth but rather a direct consequence of the historical development of capitalism in the Global North: Economic surplus is extracted from "satellites" (underdeveloped countries) and transferred to "metropoles" (developed countries), creating structural dependencies. This process creates "the development of underdevelopment," making satellite economies structurally dependent on metropoles and hindering their autonomous growth. Underdevelopment, thus, is not a result of traditional economies but rather their incorporation into the system of the Global North.

These thinkers comprehensively falsify the idea that free trade and capitalism naturally lead to development for all countries. They have detailed the historical and structural factors that perpetuate global inequalities, arguing that the wealth of developed nations is intrinsically linked to the poverty of underdeveloped ones.

Theorising apart, the lived experiences and narratives of colonised and indigenous populations necessitate a more nuanced examination. The majority of the world's intricate and often painful economic histories reveal a more complex narrative. Settler colonialism frequently led to land dispossession, decimation of local economies, enforced labour systems, and cultural upheaval. In many parts of the world, European settlers displaced and even annihilated indigenous populations, leaving enduring scars on societies.

Exploitation of resources continues to exacerbate these inequalities. Historical extraction of resources, such as coffee in Kenya, rubber in the Congo, and oil in Nigeria, has led to severe environmental degradation and displacement, wreaking havoc on local ecosystems and communities. That the legacy of resource extraction by colonial regimes still adversely impacts local communities, contributing to poverty and social unrest, has been documented extensively.

The experiences of the colonised should be more forcefully incorporated into the global economic discourse. This entails pointing out and challenging the dominant narratives that obscure our histories. Shashi Tharoor’s An Era of Darkness, for example, chronicles the debilitating impact of colonialism on the economy, culture, and mindset of Indians over centuries. His Inglorious Empire details Britain’s extractive pillaging that systematically de-industrialised India, making it extraordinarily difficult for postcolonial leaders to lay the foundations for inclusive growth.

We can honour the resilience and contributions of the world's dispossessed by aiming for a more comprehensive economic understanding. Confronting these historical truths is vital to build a more equitable and just future.