The relationship between advanced economies and their developing counterparts is complex. Human rights and working conditions in emerging nations, where many products consumed in developed countries are made, have been debated for many years. The contours of the Rana Plaza accident that killed 1,100 people, which I discussed yesterday*, the first anniversary of the tragedy, captured the key issues of that debate. But none of it is new. Its origins lie in the colonial past.
Using superior military power and technology, European powers, such as England, Spain, Portugal, Netherlands, Italy, France and Germany, established and maintained colonies in Asia, Africa and the Americas. The basic drivers were cheap resources, labour (often in the form of slavery) and new markets for the colonising nation's products.
Colonialism fuelled the growth and prosperity of the old world. Portuguese explorer Vasco da Gama was exultant at being able to buy pepper in the East Indies for 3 ducats a hundredweight from indigenous traders, knowing it would fetch 80 ducats in Venice.
Karl Marx approved: "The question is not whether the English had a right to conquer India, but whether we are to prefer India conquered by the Turk, by the Persian, by the Russian, to India conquered by the Briton." Even as he recognised the exploitation of Indian markets and labour by the East India Company for commercial gain, Marx argued that capitalism would transform the subcontinent. India would benefit from the fruits of the Industrial Revolution, such as improved communications and a free press. It was a sentiment worthy of George Macdonald Fraser's Flashman, who regarded the Victorian empire as "the greatest thing that ever happened to an undeserving world".
Underlying colonialism was what Edward Said in 1978 termed Orientalism. This was a reference to the patronising attitude of Westerners towards Asian, Middle Eastern and African societies. They were seen as static and underdeveloped, which a superior West could shape in accordance with its own image. This dehumanising and Europe-centric view was recognised by George Orwell, who wrote in 1939 about Marrakech: "When you walk through a town like this - two hundred thousand inhabitants, of whom at least twenty thousand own literally nothing except the rags they stand up in - when you see how the people live, and still more, how easily they die, it is always difficult to believe that you are walking among human beings. All colonial empires are in reality founded upon the fact. The people have brown faces - besides they have so many of them. Are they really the same flesh as yourself? Do they even have names? Or are they merely a kind of undifferentiated brown stuff, about as individual as bees or coral insects? They arise out of the earth, they sweat and starve for a few years, and then they sink back into the nameless mounds of the graveyard and nobody notices that they are gone. And the graves themselves soon fade back into the soil."
Driven in part by the 1941 Atlantic Charter, many colonies gained independence after World War II. In his landmark speech on August 14, 1947, Prime Minister Jawaharlal Nehru identified the transcendent hopes of an independent India as well as all former colonies: "Long years ago we made a tryst with destiny, and now the time comes when we shall redeem our pledge, not wholly or in full measure, but very substantially. At the stroke of the midnight hour, when the world sleeps, India will awake to life and freedom. A moment comes, which comes but rarely in history, when we step out from the old to the new, when an age ends, and when the soul of a nation, long suppressed, finds utterance."
The reality proved different.
A combination of casual indifference and malicious design created nation states whose borders ignored important historical, ethnic, tribal, religious and economic differences. It set the stage for frequently violent sectarian conflicts in a number of states in Asia, Africa and West Asia, which continue to this day. This impeded development, since political and economic resources were diverted to resolving differences.
Many lacked essential infrastructure, political and social institutions as well as skilled workers to administer the new states, often reflecting a lack of "nation building" by the colonisers.
New-found statehood changed, but did not eliminate, reliance on metropolitan countries, which did not, of course, offer recompense for sometimes centuries of looting or exploitation. Most remained dependent on the colonial power for capital, technology, skills and markets for their products. Developed nations carefully controlled innovation and intellectual property to capture a substantial share of any commerce.
The newly de-colonised world went through several semantic mutations - less developed countries (LDCs); newly industrialised countries (NICs); emerging markets (EMs); and frontier markets (FMs). As the world economy globalised, these nations progressively were forced to join the capitalist caravan train and travel a familiar road.
Initially, foreign investment drove growth, as developed countries relocated production facilities utilising low-cost local labour or set up facilities to exploit local resources. To foster development, international aid agencies and non-governmental organisations advised deregulation and sale of government-owned businesses, local assets and business opportunities. Foreigners and favoured locals, sometimes in partnership, bought assets frequently at bargain prices and advantageous terms.
Living standards improved, especially for the fortunate and connected. Inequality increased, since for the bulk of people there were only minimal improvements through the trickle-down of wealth. A small middle class developed. Property and share prices generally rose quickly as capital flowed in attracted by tales of success. To varying degrees, cronyism and corruption increased.
Finally, local constraints, rising costs and demands for a greater share of development from the disadvantaged altered the dynamics. Costs rose to levels that made the economies uncompetitive. The capitalist caravan became restless, seeking newer cheaper locations. Even as they talked up the nation's prospects - especially to foreigners - smart locals shifted money to Switzerland, Luxembourg, Hong Kong or Singapore.
Emerging nations, so the economic development argument goes, can develop and rise out of their impoverishment through trade and foreign investment. But most of the trade involves supplying cheap resources and low-cost labour. It relies on poor environmental and workplace safeguards. For emerging nations, producing, for example, cheap, low-value products for international markets to escape poverty always entails a risky, uncertain and tragic future.
The history of many emerging nations follows this familiar trajectory. The majority of people living under the yoke of this neocolonialism are already familiar with what Oscar Wilde identified in "The Soul of Man Under Socialism": that capitalism lays upon men "the sordid necessity of living for others".
The writer is a former banker and author of Extreme Money and Traders, Guns & Money