[owlmirror]

You must ask yourself what is the reason that people in London have more money. Purchasing power is not something that manifests itself out of thin air, as well as exchange rates of money.

An economy in which the people have multiple times the purchasing power must do something right. And moving people in that economy around is more valuable than moving people elsewhere.

[smokey_circles]

>You must ask yourself what is the reason that people in London have more money

As an African that's an easy answer. They stole it.

Before you all go clutching your pearls: it's beyond impractical to even suggest paying it back nor would I even want to think about that. Not an option. not suggesting it.

But don't pretend it's because you're special. You stole it. Just own it.

[simonh]

My wife is Chinese and she was taught in the 80s that the reason the UK is richer than China was that 100 earlier before we stole their best stuff.

Yes these thefts did happen, our big trading companies were basically organised piracy and extortion. There is an argument that we're still benefiting from investments in infrastructure and social development back then.

That's not why anyone in London today earns more for similar work than people in China or Africa though. You can't apply that argument to say Japan, South Korea or Taiwan for example, or to China today. 20 years ago the Chinese taxi driver would have earned 1/10th of the London taxi driver. Now it's 1/4. Britain burning down the Summer Palace in the 1860s is just not a factor in the reasons for why it used to be 1/10th in 2000 or is now 1/4.

[selfhoster11]

It definitely is the reason why. Part of what sets compensation in London is the cost of real estate, and those prices have their origins in the stolen wealth.

[simonh]

Property values have risen 30x in the last century in PPP terms. Colonialism might have had an impact on the starting value back then, but the other 97% of the current value was accumulated since then and came from somewhere else.

If you think the UK has an advanced economy due to 19th century colonialism you then need to explain the development of countries like Taiwan, Japan and South Korea. Japan went from feudal backwater to major global power in 80 years, and it completed that transformation 80 years ago. If you don't believe the UK did anything worthwhile in the last century to earn it's way and is free riding on the profits from stolen Zimbabwean tobacco from 1910, ok fine, now explain Japan.

[rocknor]

Sure, the UK has certainly not been free riding from its profits. But the UK wouldn't be nearly as rich as it is now without the initial investment that came from plundering colonies. Innovation doesn't come for free, wealth is needed to finance it. People say the physical resources that were stolen don't matter, but that's absolutely not true, they matter a lot, even to this day (see how the media is talking about the Taliban sitting on trillions of dollars of minerals in Afghanistan).

For example, if not for India, Britain would be absolutely destroyed after WW2 and would be far from their current position in the 21st century (assuming allies still somehow win, big if). India was Britain's cash cow and is the reason why it survived the war.

[simonh]

We did very well out of plundering colonies, yes, to our shame. I don't think it has any relevance to our economy now though. Compare us to Germany, Austria and Sweden. They never had significant empires. Do you think we would be massively poorer now compared to those countries if we hadn't had the Empire? Is the only reason we can compete with them now the fact that until the 1950s we had India?

Germany put the lie to imperial supremacy in 1940 when they comprehensively but-kicked France and Britain. They proved that industrialisation is what mattered and by then imperial mercantilism was a distraction. We were only saved by the English channel, and yes thanks to India. The fact we had India undoubtedly saved us, but in a last ditch final card up our sleeve that kept us in the game kind of way. Not in a trump card that meant Germany never had a chance from the start kind of way.

[ativzzz]

> Japan went from feudal backwater to major global power in 80 years, and it completed that transformation 80 years ago

Japan achieved this by looking to countries like England as an example and becoming an imperialist and colonizing parts of Southeast Asia - kicking out some of the European countries who held those colonies in the process.

So yea they did the same thing to get wealthy - stealing resources.

[simonh]

Japanese expansionism was enabled by their industrialisation, not a cause of it. Yes they wanted access to resources, but it would have been dramatically cheaper to just buy them than incur the massive costs of conquest. They expanded because they thought that's what you do to succeed, but as the post war period has shown that's just not the case and never was. Anyway the war wiped them out, there's no way any benefits of their territorial expansionism before the war carried over into the post-war period.

Look at Germany, they never had any significant empire, but they still brought rest of Europe including the imperial powers to their knees in 1940. That conflict showed that the imperial mercantilism of the previous centuries just wasn't relevant anymore.

If imperialism was so great, there's no way Germany should have conceivably been able to roll over the imperial superpowers of France and Britain. The only thing that saved the UK was the English Channel. What mattered was industrialisation, along with economic and financial liberalisation. Every country that has done well in the last 100 years, except a few resource states like those in OPEC, has done so this way.

[sangnoir]

> but the other 97% of the current value came from somewhere else.

It the value literally came from somewhere else (geographically), funneled through the financial district and spread to the local economy. London is the bay area, but for bankers.

The City of London has been laundering money for centuries. Lately, there's a lot of Russian/former soviet oligarch money sloshing about, and the Square Mile doesn't ask too many questions about source of funds. Not too long ago, HSBC was slapped on the wrist for laundering cartel money.

[simonh]

"Lately, there's a lot of Russian/former soviet oligarch money sloshing about".

This keeps getting brought up but it's inconsequential at the scale of the total economy. As I pointed out elsewhere already on this thread, total Russian inward flows to this country accounts for about 1% of foreign investment. Now yes absolutely, foreign investment is a significant factor in the UK economy, about 20%. That makes a big difference, but Russian oligarch funds are not a significant part of that, they're just a politically and socially highly visible one that gets talked about a lot.

The reason London is a centre for laundering money is that it's a massive mainstream finance centre. So yes, you're on the right track, but you're obsessing over a small forest footpath and missing the mainstream economic motorway right next to it.

US FDI into the UK is more than 30x that from Russia. That from the EU is even bigger. This is the stuff that moves the needle.

[sterni]

Japan has a colonial history, for example it colonised Taiwan and Korea, ruled the Philippines at some point, etc...

[pjc50]

To be fair, quite a lot of the London wealth more recently has been stolen by Russians, or is the rightful property of murderous feudal monarchs in the middle east. We're an equal opportunity laundry.

[sudosysgen]

Yeah, no.

Being essentially a colonial slave does not help at all increase labour productivity, nor valorizing labour. Having no ownership of the capital your labour is used into doesn't help.

From that on you can very easily get a 100 year setback economically. Then you have to play catch-up economically. That's where the social dysfunction, literal assasinations, and ethnic regimentation kick in :)

Sure it's not 100% about colonialism, but that's the deciding factor.

[7sidedmarble]

All the countries doing well today either were historically imperial, ie., most of Europe, America, Japan, China, Russia, or were or are now connected to imperial countries as 'allies' like South Korea. Any remaining difference is explained by these imperial powers continuing to project power gained through violence by soft means: dominating culture and international trade. The calculus really is that simple.

The case of Britain vs China isn't a particularly interesting one in this dynamic: it's just the dynamic great powers have always had within their group. The older state has more momentum but is sunsetting. Their wealth still comes from the exact same place, they just haven't quite equalized yet.

[simonh]

Japan did have an empire for a few decades in the early 1900s but there's no way any benefits from that persisted into the post-war period. Anyway their industrialisation was a cause of their imperial success, knocking over their neighbours that had failed to develop, not a result of it.

I see you avoided mention of South Korea or Taiwan. Israel is another example. I'm actually pretty bullish on Iran if they could kick out the clerics, that country has massive potential.

I think it's fair to characterise China as an imperial power, but how much of their current economic power actually comes from controlling say Tibet or Xinjiang? Those are marginal backwaters. They get a bit of forced labour and cheap vegetables. Maybe some minerals, but nothing they couldn't have bought fairly cheaply from Australia.

Do you actually, genuinely think not having their peripheral controlled territories would have prevented China developing? Seriously?

[rosmax_1337]

There are western countries that are wealthy despite little to no involvement in slave trade. For example Finland. Historical injustices happened between all peoples, and Africans were not a special case, but have been made into a special case because of race relations being very poor primarily in the US.

Your bottom line might still be correct however, wealth is a measure of resources and resources are more or less distributed in a zero-sum game. Whenever someone won something, someone else lost something. The importance of the English Empire and their naval dominance isn't something to downplay, and something they indeed should "own", rather than dismiss.

[TremendousJudge]

>There are western countries that are wealthy despite little to no involvement in slave trade.

You're actually the first to mention the slave trade in the chain -- the discussion was just about wealth. Latin America is still also poor when compared to the "developed countries" at the top of the economic food chain, and their people weren't exported as slaves.

But the economic and political structures left by colonialism (both internal and international) meant that the people from these countries could never get out of that hole. Ultimately, people in Finland live much better than in Bolivia because there's a lot more money going around to build nice infrastructure, pay for teachers, quality goods, food, and so on, and where this money comes from can be traced all the way to colonialism.

Nokia couldn't have existed in Bolivia, even though the raw materials to make phones can be found there. It lacks absolutely everything else that is required to maintain a company like that: infrastructure, education, political stability. And the reason why this country lacks all of these things, is this "historical injustice". It's not only that the wealth was stolen, but also the capacity to create more wealth was stolen, not just the cobalt, but also the hypothetical industry that could have generated wealth for the people of the country.

[disgruntledphd2]

How do you explain the existence of the Republic of Ireland then?

It was definitely colonised, lost all it's forests for the navies of the Empire, and yet is actually pretty rich today (although we still have a lot of post-colonial syndrome, to be fair).

[rocknor]

It's in the EU? It has proximity to other rich countries? It wasn't left in nearly as bad state as ME/Africa/South Asia after decolonization? Want more? Just read a book or two.

[MandieD]

Existence: local population determined enough to throw off centuries of oppression by far more powerful neighbor that said neighbor gave it up as a bad job (except for a few northern counties…)

Current wealth: English-speaking, ridiculously tax-incentivized corporate portal to Germany’s economic area

[throwaway210222]

> As an African that's an easy answer. They stole it.

As another African, your logic and morality are a disgrace.

[notpachet]

Why? I think there's a definite argument to be made that a large part of the West's foundation of economic power is rooted in a history of colonialism and global oppression.

[throwaway210222]

> a large part

Yip, they sure stole a lot of stuff - as of course did the Mongols and the Aztecs who are now dirt poor. In addition, the Ventians and Swiss never colonised anyone and are/were dripping cash.

But your comment is already a lot more nuanced than the OP's lazy clichéd statements.

A hell of a lot of their wealth also came from, amongst other things:

- individual rights - e,g, Magna caerta - no theft involved

- invention of limited liability corporations

- cadastas and private property rights (no theft involved)

- common law based on precedent (no theft involved)

- investment in mechanised warfare (to keep what they made and stole, see Mongols above)

- etc. etc.

Once only has to compare Singapore (colonised by British and Japanese) with Ghana since independence in the 1960s. Singapore has no water, no resources, no power, is surrounded by hostile neighbours, but is absolutely loaded. Ghana is resource rich and dirt poor.

You can decide for yourself who implemented the list above and who did not. You can also guess who is going to keep digging the hole they are in.

But I guess in certain progressive circles, "they stole it" passes for a rigourous analysis. [ And they get the bonus of claiming the moral high ground of being the perpetual victim ].

The OP should read Hernando de Soto instead.

[7sidedmarble]

It has been noticed that resource rich countries in Africa actually do worse on average than those without. There's a lot of theories as to why: a common one is that it leads to brittle economies with all their eggs in one basket. If your country is rich in emeralds let's say, it doesn't take the entire countries population to mine enough to sell, so what does everyone else do when the whole economy is built around emerald mining? This leads to higher unemployment that's been seen in the mineral rich African states. It also means the economy is very sensitive to the market of the few goods they are rich in.

In essence: it is the effect of the entire European world coming in, taking whatever they want, and then absolutely ensuring that independence would be doomed to fail. These economies fail because they're not modern. If Europe wanted Africa to succeed post-colonialisn: it could have helped train people, build infrastructure, etc. Instead they secured rights for foreign companies to continue the work of imperialism even today.

[randomopining]

Your great and nuanced answer is being downvoted. Shows how insane some of these bubbles are.

They can't face the facts and want to hide their ego behind simple cliche statements that don't capture even 1% of the reality of history.

[alienthrowaway]

As yet another African, the logic is pretty solid to me: the literal Crown Jewels of the United Kingdom have gems plundered from the colonies, most notable is the biggest gem of the entire collection: the diamond known as "The Star of Africa".

[randomopining]

And how do the Crown Jewels give any level of wealth to the common person of the UK?

Do the Crown Jewels produce billions of dollars daily that gets handed out to each citizen?

Or was it actually the British creating ships, goods, establishing trading posts, furthering science and creating the newest machinery etc... that created their wealth? (And still creates it to this day)

[throwaway210222]

Indeed.

And since we are on the topic of the South African 'Star of Africa', the astute investor should note that those muppets in South Africa are busy changing their constitution to allow the expropriation of private property from their own citizens (never mind evil foreigners) a) without compensation, and b) just for kicks - without recourse to the courts.

So I ask you: would you be happy if your pension administrator sold up in Switzerland and USA invested your retirement in South African farms and factories?

It will impoverish them further, and yet it will be someone else's fault.

This is how we in Africa roll.

[alienthrowaway]

Extreme inequality and polarization has consequences. The "rainbow nation" never came to be because wealthy South Africans do not see themselves as having the same destiny as their fellow citizens, and the poor have cottoned on.

> It will impoverish them further, and yet it will be someone else's fault.

I've noticed certain parallels between segments of South African and American society: people who feel they have been left behind by a wealthy elite that doesn't care about them, and are willing to burn everything to the ground and start anew. Cue a charismatic politician who radically panders to them (despite being part of the elite), the only differences are that South Africa has objectively worse inequality, and has a longer political cycle.

[alienthrowaway]

You did not dispute the point I was making: that wealth was plundered. If the crown jewels do not (directly) benefit UK citizens, that doesn't mean other plundered wealth doesn't benefit the average citizen. For that, you can dig into the infrastructure, bequests, scholarships, to mention a few examples that were funded by plundering and exploiting colonies.

[randomopining]

Ok, so can you show that directly plundered/stolen wealth actually helped much?

Setting up trading posts and controlling the beginnings of truly international trade over 200-300 years ago... I would think that would set a country up well moving forward, and somebody eventually had to do it. British were one of the first.

[quotz]

If Europeans were to argue about theft and slavery between themselves we would have endless wars and constant World War scenarios. Europe, since Ancient Greek time, was at war with itself literally all the time. I believe not a single day has passed in the history of Europe were there wasnt war waged up until modern times. Slavery and war treasures were omnipresent. its just the name of the game.

[rocknor]

Bad argument, not even comparable. Colonization of Africa, Asia and Americas was orders of magnitude worse, and more importantly, incredibly recent. Which is why the lingering effects are still there.

[simonh]

Well of course there are lingering effects. Sure. They're just not having macroscopic economic impact today.

If Europe was able to develop off the back of exploiting African resources, how come in the several generations since, Africa hasn't been able to develop off the back of African resources? What about all the developed countries that never had any significant empire? There are plenty of them.

[rocknor]

> They're just not having macroscopic economic impact today.

Nope. Sorry, you can't whitewash the facts so easily, us from the former colonies won't let you!

https://voxeu.org/article/economic-impact-colonialism

> If this is right, then a third of income inequality in the world today can be explained by the varying impact of European colonialism on different societies. A big deal.

> how come in the several generations since, Africa hasn't been able to develop off the back of African resources

Who says it hasn't? I invite you to look at graphs at https://gapminder.org/tools. You must avoid the natural binary thinking tendency, there is a whole spectrum between "developing" and "developed". Don't forget that factors like geographical/religious/linguistic etc affect speed of development. Why are black people in the US still not doing well, despite living in the richest country in the world? It is hard to get out of the vicious cycle of poverty.

> What about all the developed countries that never had any significant empire

Hmm, sneaky attempt at changing goal posts - I never said colonization was necessary for development!

[akomtu]

You mean they stole gold and cadmium? There are three uses of raw minerals: as jewelry, as something to exchange for goods, and as a component of high tech. For most of the Africa, minerals are jewelry at most and to get goods, you need an advanced nation to produce these goods for you. The phone you're using to post these comments has trace amounts of gold and cobalt, probably sourced in Africa, but the rest - the Internet in particular - wasnt created in Africa. And by using goods produced in Europe/America/China, you become complicit in this arrangement.

[randomopining]

How did they "steal" it? Like they came and stole your gold 200 years ago and now they're rich forever? lol.

How did your African country get all this modern tech that you didn't work towards to invent? How are you using the internet? You must've stolen it.

Maybe some countries simply have a good flow of education --> production --> exchange high quality goods for currency.

[stayfrosty420]

>How did they "steal" it? Like they came and stole your gold 200 years ago and now they're rich forever? lol.

Explains how a small island in north Europe with a weak military and flagging economy is on the UN security council.

[t0ughcritic]

200-300 years of bankrupting countries like India. But they say all is fair in war. So it is what it is.

[nepeckman]

> How did they "steal" it? Like they came and stole your gold 200 years ago and now they're rich forever? lol.

Unironically, yes this is how capitalism works. If you have resources, you leverage those resources to produce goods and services that increase your total wealth. If I were to walk into a bank and steal a couple million dollars, maybe I could leverage that money into a successful business. Maybe so successful that it produces inner-generational wealth, so that my great-great-grandchildren are on average more wealthy than they would have been otherwise. I may have "earned" this money with my hypothetical business skills, but it doesn't change the fact that I only had the opportunity because I stole the money.

So yeah, many enterprising individuals took land and resources (and plenty of slave labor) from the Americas/Africa/Asia for hundreds of years, and were able to leverage those resources into even more wealth, thus people in London have more money, thus taxi drivers make more money.

[simonh]

The problem with this is that WW2 wiped us out financially, and then post-war nationalisation wiped us out economically. ww1 had done a pretty good job on us as well, as did the depression between the wars.

The value of the UK economy, since around 1930, has increased in PPP terms by about 90%. So there's a reasonable argument the value in 1930 was partly down to imperialism, although I think industrialisation was a much bigger factor. Still, the 90% of our economic value we accrued since then certainly didn't come from colonialism, so where did it come from?

Look at Japan, yes it had an empire for a few decades before WW2, but that was mainly a result of industrialisation that had already happened, not a cause of it. Look at what's happened in China since it opened up and liberalised it's economy. At least they finally, finally figured this out.

[z2]

For instance, having a century headstart in industrialization and fast economic growth? It actually returns to a longer scale version of having accumulated wealth through working a long time...

Also taxi driving isn't exactly the most efficient of markets to compare value. London taxi drivers for example have a unique barrier to entry to become a taxi driver via an onerous road memorization test ("The Knowledge"), and that has nothing to do with the general British economy "doing something right."

[akomtu]

What headstart? Africa existed when vikings were roaming the European waters.

[kansface]

The industrial revolution started in Britain.

[akomtu]

Why didn't Africa start it a century before? Otherwise it sounds like "industrial revolution" was like a deity that chose to descend onto Brits.

[lozenge]

It might be something to do with the centuries of colonialism where the natural resources, labour and human lives of entire countries was stolen for the economic benefit of the United Kingdom.

[Swenrekcah]

It is more profitable, not more valuable in any usual sense of the word.

By the same token you could say that moving money for the mafia is more valuable than preventing violence and disease in poorer societies.

[simonh]

Profits are customers saying thank you for the value they are getting. So, London is a criminal enterprise that provides no real value, or is parasitic, or at least it's reasonable to compare it to one?

I suspect the root issue here is what we consider to be value, or what activities are valuable and how value is generated. The common critique of capitalism is based (often unknowingly) on the Marxist theory of value which sees the vast majority of economic activities as parasitic of value, particularly financial activities, and if that's the issue here sure I'm quite willing to debate on that.

[Swenrekcah]

Moving money for ruthless violent people is profitable if done right, but value destroying for society.

Value, whether measured in safety, shelter, nourishment, entertainment, ownership, infrastructure, sense of belonging or whatever you wish, is best built when you can trust the people around you and thus focus your efforts on what is valuable rather than trying to prevent being hurt or robbed.

Note that above I didn’t count money as valuable, since it isn’t intrinsically.

[selfhoster11]

> So, London is a criminal enterprise that provides no real value, or is parasitic, or at least it's reasonable to compare it to one?

As a former Londoner, absolutely yes. London as a city is extremely parasitic, especially when it comes to time and standard of living. It does provide value when you're either so poor or find it so hard to get a job that working there provides you enough value, or you earn such "screw you" money that you can afford to live a comfortable life there. But for anyone outside of those groups, it's best avoided unless you're just visiting for the sights.

[burnished]

Uh, rampant theft? Colonialism? Why are so many other countries historical artifacts located in London, again?

[bserge]

They had a ~200 year headstart and furthermore, they helped establish the current systems worldwide.

[hippari]

I believe the comparison isn't adequate here since the British got massive advantages after WW2.

[simonh]

Britain came out of WW2 deeply fcuk'd. We'd lost the Empire, owed the US a crapton in loans, and then were economically smothered under a nationalisation programme that wiped out UK manufacturing competitiveness. At least we got the NHS (no small thing) and a passable social security system out of it. The economy we have today is the one Maggie re-engineered in the 1980s. Even the Blair government had the good sense to not dare touch it.

[patrickk]

Britain subsequently benefited from transforming itself from an imperial power to a financial power. Good documentary on it:

https://www.youtube.com/watch?v=5uM2cdhfAGA

This is the reason that there's so many rich Russians knocking about e.g. https://old.reddit.com/r/soccer/comments/p83ljc/offshore_adv...

[bserge]

They were a financial power long before. It kinda came with the territory, being a global empire.

They did well to hold on to it, though.

[7sidedmarble]

How can you look at the history of the British trade companies and not see how intertwined imperialism and what we today call 'finance' are?

[refurb]

People underestimate just how bad Britain was financially after WW2. The one thing that hit home for me was Britain still had a good ration system in place until the early 1950’s (obviously fewer and few items as time went by).

[hippari]

Sorry, I was comparing that to the like China, India, and also many SEA countries. If you are comparing to the USA, everyone is deeply fooked.

[pjc50]

> Britain came out of WW2 deeply fcuk'd. We'd lost the Empire, owed the US a crapton in loans, and then were economically smothered under a nationalisation programme that wiped out UK manufacturing competitiveness.

.. and on all those metrics China came out much worse (the civil war, no marshall plan, proxy war with the US, communism), as well as not having the massive advantage of having been an industrial power long before the war.

This article dates the takeoff to 1978 (Deng), which seems reasonable: https://www.stlouisfed.org/publications/regional-economist/a...

Perhaps the question should be "at what date in the future do we expect the cost of a taxi in London and one in Beijing to equalize"?

[sokoloff]

Beijing? Maybe 2050, maybe sooner. 200 km away in countryside outside Beijing vs 200 km away countryside outside London? Probably much longer.