Sunday, October 26, 2008

Robert Sowell and history

Robert Sowell makes an absurd claim during the online discussion of his book "Economic Facts and Fallacies".

He maintains that colonialism never touched the poorest places on earth.

What about Congo?

Surely he must have read 'Heart of Darkness'? He will claim that it was post-colonial rule that failed the country; even if that can be proven (and it hasn't been proven), it doesn't alter the fact that colonialism did touch one of the poorest places on earth today. The only country to have benefited from colonialism in Africa was – Belgium.

Throughout his discussion, there is an unhistorical - indeed, anti-historical – bias. It shows when he maintains that markets (say, for credit) don't discriminate against black people because, in that case, they also discriminate in favour of Asians.

Asians are high net-worth people; more so than white people on the average. Asian values are world-famous; so is the "Protestant ethic". And Asian-Americans are immigrants to boot – a group that often out-achieves the natives.

Black Americans did not come to America voluntarily; they were not immigrants; they were not free; they were systematically denied their rights; the net worth of a black person in the bottom quintile is – hold your breath! - $57; while that of a white person runs into five digit figures.

Markets always discriminate – that is their function ("effective demand", remember?). Markets allocate goodies according to purchasing power. To "allocate" is necessarily to discriminate. And why should credit, for instance, be allocated to somebody who's worth $57? Markets don't care about history. They care about returns.

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