Magazine | January 25, 2016, Issue

The Causes of Wealth

Wealth, Poverty and Politics: An International Perspective, by Thomas Sowell (Basic, 336 pp., $29.99)

One of the more striking public-health developments of the post-war era has been the rise in the number of Americans suffering from cardiovascular disease, particularly in the states of the old Confederacy. Recently, two economists, Richard H. Steckel and Garrett Senney, have offered a clever hypothesis as to why cardiovascular disease has grown so prevalent in the South. They begin by observing that when a child is in the womb, her body builds its organs in accordance with the best available information about the nutrition that will be available once she is born, information that is transmitted via her mother’s placenta. When there is a mismatch between the expectations set during the course of fetal development and the reality of life as a child, the result can be serious physiological stress that raises the risk of all kinds of diseases, including cardiovascular disease.

Which brings us to the post-war American South. Steckel and Senney find that the risk of cardiovascular disease increased most dramatically in the U.S. states that experienced the most rapid income growth from 1950 to 1980. That is, the post-war boom that saw the southern U.S. catch up with the rest of the country seems to have contributed to unbalanced physical growth in southern children. Essentially, babies who developed in the expectation that their childhoods would be deprived had a hard time adjusting to the conditions of abundance that materialized instead. There are many other factors at work, to be sure, and Steckel and Senney’s findings are not yet the received wisdom among public-health scholars. Yet there is something more than a little poignant about their hypothesis: Just as every cloud has a silver lining, even the best economic news can exact a human toll. More broadly, Steckel and Senney’s work reminds us that many of the most powerful forces shaping our lives are entirely out of our control. Yes, you might be able to reduce your risk of cardiovascular disease by maintaining a more active lifestyle, and by eating more leafy greens. But there is very little one can do about the circumstances of one’s fetal development.

I thought of Steckel and Senney’s work while reading Thomas Sowell’s latest book. Never one to shrink from an ambitious undertaking, Sowell offers a brief survey of global economic history to explain why some societies, and some subcultures, are so rich while others are so poor. Drawing on evidence from a wide range of sources, Sowell demonstrates that the lives we lead today bear the consequences of decisions made by our ancestors long ago, and of accidents of geography in which we’ve played no role. These differences contribute to inequalities of wealth and power across individuals and groups. Yet Sowell insists that these differences aren’t etched in stone. The central argument of Wealth, Poverty and Politics is that the members of one group can learn from the members of another, provided they don’t allow envy and resentment to poison their worldview.

To get to this point, Sowell first seeks to demystify the sources of group differences. Does the fact that the Chinese are so much wealthier than the peoples of the landlocked Central African Republic reflect some intrinsic superiority on the part of the former, or might there be other factors at work? Sowell suggests the latter. Consider the role of geography. The coastlines of East Asia are dotted with superb natural harbors, which greatly facilitated the emergence of seafaring cultures and the spread of valuable knowledge and goods. The same cannot be said of the coastlines of sub-Saharan Africa, where natural harbors are few and far between. While Chinese civilization arose alongside a vast network of navigable rivers, tropical Africa is not so blessed. One result is that Chinese culture spread across a vast geographical zone while sub-Saharan Africa is far more culturally fragmented, a fragmentation that has long posed a barrier to political and economic coordination. While China, a country of over 1.3 billion, is remarkably cohesive given its size, the Central African Republic, a country of 4.6 million, is plagued by ethnic conflict, and much the same can be said of sub-Saharan Africa writ large.

Waterways aren’t everything, to be sure. Sowell observes that though the Amazon is unmatched in its navigability and its length, it can’t hold a candle to lesser rivers such as the Mississippi or the Rhine as an artery of commerce. The value of a given natural resource depends heavily on the availability of the knowledge needed to exploit it. Iron-ore and oil deposits are worthless if you can’t make use of them, which is a big part of why rising European states were able to vanquish the decaying states of the Americas, Asia, and Africa during the age of imperialism. Human progress is driven by complex interactions between the obstacles we encounter in our daily lives, the ingenious solutions we devise to overcome these obstacles, and the systems we employ to spread these solutions and to constantly replace them with better ones. Just as the capacity to devise these new solutions and to make use of them is distributed unevenly across individuals, it is distributed unevenly across cultures. The question is how societies react to this uneven distribution of cultural know-how, which in our world often manifests itself in an uneven distribution of income and wealth.

Sowell cites many examples of societies in which the resentment of productive minorities has led to destructive economic policies, and in some cases even violence. In Malaysia, the ruling party has long backed policies designed to close the economic gap between the country’s Malay majority and its prosperous Chinese-origin minority. Rather than celebrate the achievements of the Chinese community, and the wealth it has created, Malay politicians have imposed rigid racial preferences that disadvantage students, professionals, and entrepreneurs of Chinese descent. Not surprisingly, these policies have driven large numbers of ambitious Chinese Malaysians to emigrate. This brain drain may well have mitigated inequality, as at least some capable Chinese Malaysians are making their fortunes in Singapore or Canada rather than at home. But of course this also means that Malay politicians are no longer able to tax these Chinese-origin émigrés to finance their various pet projects. 

If these policies are so irrational, why do societies so often pursue them? Sowell argues that while hostility to productive minorities might be foolish from the perspective of the society as a whole, it makes a great deal of sense from the perspective of those who lead the groups that have fallen behind. If productive minorities were held in high esteem, the members of other groups might seek to emulate them by adopting their cultural practices. By encouraging the members of lagging groups to resent the members of more advanced groups, the leaders of lagging groups reduce the risk that members of lagging groups will embrace the culture of more advanced groups, and in the process abandon their leaders. Though it is hard to imagine Malays abandoning their culture en masse to mimic that of their Chinese neighbors, a subtler diffusion of norms and values is much easier to envision. Throughout history, diaspora minorities have been the conduits through which new ideas, from political ideologies to managerial techniques, have spread from one part of the world to another. Nevertheless, the minorities that serve this vanguard role often find themselves despised.

As Wealth, Poverty and Politics comes to a close, Sowell focuses his attention on controversies closer to home. He has much to say about the persistence of black poverty in the United States, and the role that the welfare state has played in perpetuating it. African Americans are, according to Sowell, a lagging group that has been ill served by its leadership, not entirely unlike the Malays in Malaysia.

I can’t say I agree with every aspect of Sowell’s take on the contemporary American scene. For Sowell, the chief obstacles facing poor native-born blacks looking to better their lot are ghetto culture and a welfare-state ideology that rewards idleness. My own view is that many of the pathologies Sowell identifies can be explained at least in part by the failure of governments to protect African Americans from violence. For much of U.S. history, officialdom turned a blind eye to “black-on-black” violence, which in effect meant that predators routinely got away with murder and innocent victims knew they could not trust the state to protect them. People who live in fear are often less productive than those who live in peace.

Nevertheless, Sowell has done us a great service by placing our current controversies in international context. We may be thankful that the U.S. is not yet a society in which productive minorities are despised. One wonders whether this will still be the case a generation or two hence, when there is a very good chance that racial disparities in wealth and income will have grown even more pronounced than they are today.

Reihan Salam is president of the Manhattan Institute and a contributing editor of National Review.

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