Historical Perspectives: HISTORICAL PERSPECTIVES: WHY ARE SOME COUNTRIES WEALTHY?

In 1776, Adam Smith published the first modern, in-depth look at why some countries are wealthier than others, The Wealth of Nations. Smith recognized a need for government, but emphasized the benefits of trade.

Modernization After World War II, Western Europe and the United States grew wealthier rapidly. Scholars in these regions, such as American political scientist David Apter, developed modernization theory. The problems of poor, newly emerging countries were seen as the natural by-products of the transition from a traditional, agrarian society to a modern, developed society. Developed countries could provide economic and technological assistance to help in this transition.

Self-Reliance In the 1970s, a new generation of scholars saw developed countries as the problem, not the solution. They rejected modernization theory, arguing that it placed the blame for poverty on poor countries, not on the former colonial powers. According to dependency theory, former colonies were victims of the international marketplace. In this theory, the way out of poverty was self-reliance.

Globalization Recent writers, such as

journalist Thomas Friedman, focused not on self-reliance but on globalization. Friedman saw the increasing interconnectedness of economies around the world as an opportunity for countries to prosper. His “flat world” referred to relatively inexpensive technologies that allowed developing nations to compete with developed ones for jobs and the creation of innovative products. In response, Canadian journalist Linda McQuaig attacked Friedman as an “apologist of globalization.” Friedman’s critics charged that he looked at the benefits of increased trade and investments without seeing the costs incurred in poor countries through these actions.

Trade Ha-Joon Chang, a British economist who was born and raised in South Korea, took a historical view. In Kicking Away the Ladder: Development Strategies in Historical Perspective (2002), he evaluated the path to prosperity for today’s wealthy countries in Western Europe and the United States. All once had high tariffs and other trade barriers to protect their growing industries from foreign competition. Only after they became wealthy did they advocate for free trade. However, today wealthy countries press poor ones to open their borders economically. The lesson of history, he argued, was to let poor countries use the same protectionist methods that led to prosperity for other countries.

Develop an Argument: Evaluate the extent to which historical evidence supports one of the perspectives on nations’ wealth after 1900.