Sunday, December 16, 2012

Imperial Rents

Arun has me thinking about Capitalism and and Colonialism. Many, perhaps most, of colonial ventures started with trade, or ambitions of establishing trade. That is a very capitalistic enterprise. It's when the capitalist sees an opportunity to establish a exclusive license, as in the British East India Company that he becomes transformed into a rent seeker. Many of the worst evils of colonialism are associated with the consequences of this rent seeking.

As usual, the successful rentier makes a great fortune, but as Adam Smith pointed out in The Wealth of Nations comes at the expense of both the colony and the colonizing nation. It's a matter of economic efficiency.

My attempts to find a good, reasonably brief, reasonably ideologically uncontaminated book on colonialism have so far failed.