12 min read or listen on SoundCloud.
We Brits – and all of us in the so-called “West” – should understand our privileged position in the world, and switch our focus from charity towards justice too.
I can’t tell you how many times, with shock, anger and shame, I had to put down Jason Hickel’s The Divide, as I learned what my ancestors and their fellow countrymen did to colonise, enslave and exploit the world. Along with increasing feelings of guilt and determination as I realised how this exploitation has been continued and strengthened to this day.
And anger about the failings of our education and media in this respect too.
But I can’t hide behind that. I’ve known.
Perhaps we’ve all known, in some way or other?
Jason Hickel was brought up in his father’s medical centre in Botswana. He’s seen how that part of Africa is. Since then, he’s worked in various development roles around the world. He came to realise that, in this global financially driven world we’ve evolved, the structure and operations of that world actively drive the very same recipients of overseas aid into further desperation. And this in a world where the wealthiest 16% – that’s mainly us in Western Europe and the USA – uses 80% of the natural resources.
This is not the story we’ve been told. Why?
The Development Delusion
In his first chapter “The Development Delusion” Hickel tells how President Truman created the idea of Development, for so-called Third World countries, in his inaugural address of January 1949. This picture of America helping those ‘living in conditions approaching misery’ through its ’industrial and scientific knowledge’ airbrushed out the history of exploitation, by both USA and the other ‘Western’ nations over the previous 400 years.
And it also omitted to mention that this exploitation contributed to our countries’ wealth and power.
Since 1949 more layers of exploitation have been added from which all our nations continue to benefit. It is our investors and traders which benefit most – although many of us have pensions invested in exploitative funds. Those of us who went to Oxford, Cambridge or the ‘red-brick’ universities have benefited from massive endowments from slave traders and colonialists. And all of us are better of from this exploitation too: through the Welfare State, lower prices and greater availability of food and other commodities.
How the Divide was Created
The investors and merchants of western nations took gold and silver from Latin American mines which they used to fund industrial development; and employed people in their own countries who’d been driven into poverty in the cities by forcible land enclosures. They then sold these industrial goods (cotton and wool fabrics, and processed sugar) in countries around the world – often destroying local livelihoods.
They also used the stolen gold and silver to buy land, and land intensive goods (mainly food) from other countries to sell at lower prices. In this way more Europeans who’d been moved off the land, could be paid lower wages in the factories.
And of course slavery contributed to greater profits. We, in the UK, often congratulate ourselves that we were the first to abolish slavery. Yes that’s true, but there are two very big ‘buts’: The UK benefited from slavery for 320 years. And every British slave owner was compensated at market value by the government – by printing money. Much of this windfall was then invested in national infrastructure such as trains and the underground network so super-charging the industrial revolution.
All of these trends secured the industrial, financial and military dominance of the Western nations. And while the Western nations prospered; this led, in the rest of the world, to huge loss of productive workers through slavery, to massive numbers of deaths through colonial violence, starvation and disease; to destruction of the sustainable ecologies and economies of peasant and indigenous societies; and to falling living standards across the whole of the Global South. And of course, this was achieved by much violence and the threat of it too.
The model of Enclosures
In the course of his analysis Hickel reveals a recurring pattern in much of this exploitation – that of the Enclosures. This – you’ll probably recall – was what wealthy landowners and perhaps wealthy peasants did in the UK during the Tudor period. They realised that – using a combination of force and new laws – turning others off the land in favour of sheep farming would bring greater returns.
This behaviour seems to have been copied by the colonists who repeated the same pattern all down the east coast of North America and later into the interior too. The underpinning value system appears to have been ‘If I can use this land more productively ie to generate more personal wealth, I’m entitled to displace others currently living on it and ignore their future wellbeing.’ This pattern continues today – there are particularly gross and well documented instances of this in both Argentina and India, no doubt, in many other places too.
How the Divide is Strengthened to This Day
Quite a bit later after many countries had become independent, Western countries with their now overwhelming global muscle, used the World Bank and IMF to impose unfair conditions on states needing to borrow money. These included requiring them to open up their businesses to takeover and to allow essential services to be privatised – so diverting more of the financial returns out of the country. They demanded removal of subsidies on basic goods such as food – so allowing outside multinationals to supply low cost food – and as a consequence destroyed local agriculture. And they often required prioritising debt repayment over everything else.
And Western traders, through institutions such as the WTO, imposed unfair trading conditions on weaker nations, such as imposing higher tariffs on goods imported by the West. So for example there are higher tariffs on roasted coffee beans coming to the West than on raw ones – so protecting our own domestic coffee processing industries.
Just listen to some of Davison Budhoo’s resignation letter as he resigned from being an economist at the World Bank:
- “To me resignation is a priceless liberation, for with it I have taken the first big step to that place where I may hope to wash my hands of what in my mind’s eye is the blood of millions of poor and starving peoples.” and
- “We manipulated, blatantly and systematically, certain key statistical indices so as to put ourselves in a position where we could make very false pronouncements” and how about this:
- “We are asking the Government of Trinidad and Tobago to … self-destruct itself and unleash unstoppable economic and social chaos”
This is the story of the IMF and the World Bank ever since.
Why Justice instead of charity
Hickel devotes a whole chapter to this. He starts by arguing that prevention is better than cure – something most of us intuitively believe. He also argues that giving charitably often leads us to assume that the recipients have been either unfortunate or feckless. It also often obscures the fact that the system we have created not only provides us with material comforts, while at the same time, creating the poverty and misery of those we are helping with our charity. And of course, charity also makes us feel good about ourselves.
When it comes to the numbers – they are truly revealing – a 2016 study by the group Global Financial Integrity found that developing countries received about $2 income – for every $5 taken out of the country. In that year in total these countries received $2 trillion in 2016. This includes income from commodity exports, incoming investment, aid and charity, and money sent home by those working overseas. The $5 trillion that flowed out in the same year had a variety of components: debt interest and repayments, the profits of multinational corporations and other income that multinationals took by fiddling the books – economists call two of these tricks ‘trade mis-invoicing’ & ‘abusive transfer pricing‘; and the last outflow is known as capital flight. This happens when overseas investors withdraw their investments because they can find better opportunities elsewhere or when the future looks risky. Capital flight also has the effect of driving down the exchange rate so pushing up the price of necessary imports such as food, fuel and medicines.
So perhaps we can begin to see why many are arguing that charity is just a ‘band aid’; and something more radical is called for. But that’s not to say that charity should be stopped – we should just do more.
Conclusion
Hickel goes on to put forward a series of possible remedies. I’ll let you read the book to go through his ideas.
And I’ll finish by reading you one of Hickel’s conclusions:
“It is tempting to see this just as a list of crimes, but it is much more than that. These snippets of history hint at the contours of a world economic system that was designed over hundreds of years to enrich a small portion of humanity at the expense of the vast majority. By the early part of the 20th century, this new order was complete, designed so that the core of the system – Europe and the United States – could siphon cheap raw materials from the periphery and then sell manufactured products back to them while protecting themselves from competition by erecting disproportionately high tariffs.”
Jason Hickel
I urge you to buy and read the whole of the book The Divide: A Brief Guide to Global Inequality and its Solutions.
Can you really miss reading this book? Or watching some of Hickel’s videos?
So what should our individual and collective responses be?