We know that history, law and politics interact to shape modern economic institutions. The question is not whether history "matters", or whether it is "relevant" in understanding economic development, but how precisely it shapes the present and future.
The colonial history of the British Empire is of course relevant to understanding economic development in former colonies, but how that history should be understood is an open question. Understanding history is interesting in and of itself, for its own sake. It also helps us to understand how we arrived where we are now, how to avoid the mistakes of the past, and how to forge different paths in the future.
A key issue is understanding the links between capitalism and colonialism. Capitalism may be defined as "an economic system characterised by comprehensive private property, free-market pricing, and the absence of coercion" (Sternberg). By this definition the coercive element of colonialism was a feature of colonialism, not a feature of capitalism. African socialism rightly rejected colonialism, but mistakenly rejected capitalism under the erroneous presumption that colonialism and capitalism are indistinguishable.
The British Empire was not simply a system of coercive control in its intention or design. It was also a system of trade and commerce.
The perception that colonialism, with all its legal institutions including commerce and the rule of law, were purely about coercion goes a long way in explaining the fear of capitalism and free market exchange.
Fear of being exploited, fear of missing out, fear of being left behind as the world marches on, fear of losing everything.
The ethos of fear largely explains the preference for a strong protective state and strong protective legislation.
"When Thomas Jefferson wrote that "all men are created equal," he did not mean that all men were equal in all respects...Yet, many today quote Jefferson as though he intended to state that all men ought to be made as equal as possible. This is to speak of equality of condition, a position rejected by Jefferson and all political thinkers in the Age of the American Revolution. It was rejected because even a cursory examination of human nature reveals ineradicable differences among men."
- The Idea of Equality in America
Equality means equal in virtue of our humanity, equal rights to life, liberty and property, and equal in our relationship to law and the state. Equality does not mean the equalisation of life experiences. It does not mean the equalisation of life opportunities. Despite what liberals say, everybody in life cannot have "equal opportunities". Opportunities are influenced by family, income, culture, geography, language, skills, intelligence, history, fortune or misfortune - too many variables for any government to ensure that the opportunities of all human beings are equal.
Nor does equality mean the equalisation of wealth. The socialist dream in which all wealth must be equalised, even at the cost of impoverishing society, has nothing to do with the classical ideal of equality.
Egalitarians who are keen to equalise everything devote substantial effort to measuring inequality. There are several things that could be measured to ascertain the degree of inequality:
As we know, socialists focus only on the first: income and wealth. This may partly be because income and wealth are easier to identify and measure, tend to be more envy-inducing and are treated by governments as easy to fix through tax policies or the simple expedient of printing more cash.
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