The Past is Present !

Meetu Singh

This year’s Nobel Prize highlights a critical issue within economics: its ongoing struggle to address the legacies of colonialism. It also invites us to reflect more deeply on the connection between poverty and the historical impact of colonization.

Daron Acemoglu, Simon Johnson and James Robinson have been awarded the 2024 Nobel memorial prize in economics for their influential work on how institutions shape economic development. These works have inspired a rich debate on the relationship between societal institutions and economic development.

Acemoglu, Johnson and Robinson’s work divides institutions into two categories: “inclusive” and “extractive”:
Inclusive institutions – such as those that enforce property rights, protect democracy and limit corruption – foster economic development, according to the laureates. In contrast, extractive institutions, which give rise to a high concentration of power and limited political freedom, seek to concentrate resources in the hands of a small elite and thus stifle economic development.
The laureates claim the introduction of inclusive institutions has had a positive long-term effect on economic prosperity. Indeed, these institutions are today found primarily in high-income countries in the west.

Colonization on world map

The map suggests that nearly the entire world was once colonized. This raises the question: are we all in the same boat as a result? Perhaps yes, perhaps no.

Lets see the main colonizers
British Empire
French Empire
Portuguese Empire
Spanish Empire
Dutch Empire
Belgian Empire
If you’re reading this article and you’re not from one of the countries listed above, it likely means you’re from a nation that was once colonized. Each of these colonial powers shaped the economic, social, and political systems of these regions in lasting ways, with many of these countries experiencing ongoing impacts from the legacy of colonization.

How Colonization Impacted the Colonies

Colonization has left a significant, lasting impact on the world economy. Colonizing countries extracted valuable resources like precious metals, cash crops, and minerals from colonies,  accumulated vast wealth, as a result many colonized regions remained underdeveloped. Their economies were often restructured to focus on a few exportable commodities like sugar, cotton, or rubber, which made these territories dependent on volatile global markets.

Colonizers established trade routes, ports, and railroads to transport goods efficiently to their countries. Colonies were used as sources of raw materials, that were exported from colonial region and then sold back as finished goods limited the industrial development of colonies. Hence this imbalance in trade, limited local industrial development and reinforced dependency, preventing colonies from building self-sustaining economies.

Colonization often involved forced labor and slavery, especially in the Americas and Africa. It forced people to migrate or move due to slavery, indentured servitude, or resource extraction needs. This migration disrupted traditional communities, undermined family structures, and created dependency on low-wage jobs that limited the economic growth of entire regions.

Education in many colonies was limited or focused on producing administrators for colonial governance rather than fostering local skills or innovation. They retained advanced technology for themselves, creating technological divides that persist today.

Colonial economies often reinforced racial and gender divides, creating systems of privilege and exclusion. Many former colonies are still grappling with economic systems that favor certain groups over others, limiting social mobility. They often created local elites who were aligned with colonial interests, exacerbating social inequalities and creating class divisions. After independence, these elites often continued to control economic resources, leaving the majority of the population with limited access to economic opportunities.

Colonial policies often degraded indigenous cultures and promoted European values as superior. This has led to cultural dislocation and alienation, affecting social cohesion and self-confidence. Psychological impacts, such as internalized inferiority, have limited entrepreneurship, innovation, and self-sufficiency.
Colonial powers set up international institutions, like the International Monetary Fund (IMF) and the World Bank, that often reflect the interests of wealthier, formerly colonizing nations. This can result in economic policies that may not always align with the needs of developing countries.

The colonial legacy has created structural inequalities that continue to shape the global economy, with significant disparities in wealth, industrial capacity, and infrastructure development across the world. Overcoming these effects requires reforming global economic policies and investing in sustainable development, inclusive education, and infrastructure in formerly colonized regions. Overcoming these impacts requires substantial investment in education, healthcare, governance, and economic diversification, as well as international policies that address structural inequalities inherited from the colonial era

Despite the fact that colonization had created a long lasting negative effect on colonies, A few countries emerged stronger economically, socially, or politically after their periods of colonization, largely due to a combination of unique historical, cultural, and geographical factors. Their growth can be attributed to specific ways they adapted, leveraged opportunities, and built resilience, often with a mixture of  leadership, and external circumstances.

United States
The U.S. had vast natural resources, including fertile land, minerals, and waterways, which supported a strong agricultural and industrial base. The American colonies gained independence relatively early in 1776, before the Industrial Revolution took off, allowing the U.S. to industrialize and develop its economy without further colonial restrictions. It attracted immigrants from around the world, fostering a diverse and innovative society that accelerated economic growth. The U.S. expanded westward, creating infrastructure, railways, and industries that connected and grew the economy.

Similarly many countries like Singapore, South Korea, Hongkong, India, Malaysia, Israel, Botswana are also succeeded to a greater extent.

Still the  growth of economy remains unstable. Mounting loans, bankrupt companies, unemployment, financial inequality, capital concentration, and corruption are some of the issues plaguing countries, even in former colonies deemed successful. Gradually, these issues have also affected the former colonizing countries, putting them all on a similar level in terms of financial challenges.

Awakening

It has taken over 70 years in India, and more than 100 years in many other countries, to finally acknowledge on the international stage that colonization is one of the primary root causes of poverty. Unfortunately, no economic expert has stepped forward to address true freedom—economic freedom. Perhaps they were unaware of it, or perhaps they were fearful, as the powerful capitalist system was operating under the guise of democracy. Economists understood that speaking out against capitalism was akin to speaking out against an elected government.

After gaining independence, people did not experience the true “freedom” they had dreamed of. Instead of genuine liberation, it was merely a transfer of power from colonizers to the newly independent states. The system itself remained unchanged; only the leaders were replaced. The affluent class took over, ruling over the poor and quickly realized that the European methods of administration were also beneficial for their own interests.

Prout – The Only solution

The 2024 Nobel Prize-winning economists have highlighted the root cause of poverty, perhaps encouraging us to seek a solution—without realizing that a solution was already articulated in 1955 under the Progressive Utilization Theory, or PROUT. Before discussing this solution, it would be incomplete without acknowledging the hardships and sacrifices that Shri P.R. Sarkar and the proponents of PROUT endured.

P.R. Sarkar, the founder of PROUT, was imprisoned on false charges by the Indian government in the 1970s—charges that the government ultimately failed to prove in court. Initially, he was offered enticing deals to abandon the PROUT movement, but when he refused, the Congress government imposed a ban on the entire mission. Its members were jailed and brutally beaten, with some even losing their lives. During this period, the country was under emergency rule, leaving no freedom of speech. On February 12, Sarkar was poisoned in prison. Despite being under Congress rule, where his voice was largely ignored, he respected the judicial process, filing numerous cases against the government, including one for the poisoning attempt. These cases only progressed after Congress lost power and a neutral judiciary could act. Sarkar also undertook a hunger strike lasting over five years.

The Indian government’s actions faced strong international opposition, and over 12 monks and senior members from around the world performed acts of self-immolation to protest these policies. This was perhaps the first time the world’s moralists united, coming together for a common cause. I offer my deepest respects to all the PROUTists who fought and sacrificed to keep humanity free from the chains of economic slavery.

Economic Democracy – A ray of Light

The days of political democracy are numbered. PROUT demands economic democracy, not political democracy. To make democracy successful, economic power must be vested in the hands of the common people and the minimum requirements of life must be guaranteed to all. This is the only way to ensure the economic liberation of the people. PROUTʼS slogan is: “To end exploitation we demand economic democracy, not political democracy.”

Requirements for Economic Democracy

1. Guarantee of Basic Needs: Ensure that all members of society have access to five fundamental necessities—food, clothing, shelter, education, and healthcare.

2. Increasing Purchasing Power: Every individual should have a growing purchasing power, avoiding subsidies unless absolutely necessary.

3. Full Employment with a Local Focus: Achieve 100% employment with an emphasis on local job creation to reduce labor migration. Local bodies will plan at the block level for the generation and use of funds. Instead of exporting raw materials, industries will be developed locally to boost employment.

4. Cooperative Banking: Banks will operate as cooperatives, with only the Central Bank (RBI) remaining under government control.

5. Local Control of Economic Decisions: Economic decision-making authority should rest with the local community, or samaja, ensuring that outsiders are prevented from interfering in the local economy.

6. Three layered Industrialization – Cottage industry (small scale), Co-operatives (mid scale), Key Industries (large scale)

To achieve these goals, the economy must be decentralized.

In today’s centralized economy, the richest 10 percent capture 52 percent of the world’s total income, while the poorest half receive only 8.5 percent.

By establishing a decentralized economy, we can eliminate economic and psycho-economic exploitation, reduce the gap between rich and poor, and significantly enhance both individual and collective well-being.

Here are additional key points that I encourage readers to explore. These serve as essential pillars supporting economic democracy:

• Sam Samaja Tattva & World Government
• Neo-Humanistic Education
• The Varna Cycle of society
• Sadavipra – Staunch moral leaders placed at the Centre of the system
• Master Units
  and more.

This is the only path to achieve the economic liberation of the people and eradicating poverty, which is often seen as the result of colonization, communism, or capitalism. By fostering a progressive present—both physically and economically, we can pave the way for the spiritual advancement of individuals.

Meetu Singh