The west also gain through trade through colonization as the colonial markets provided very important outlets for the west, especially for British manufactured goods during the early 90s as British companies based its 19th century’s developments the most heavily on overseas and especially colonial outlets. As it could be seen, that British companies became one of the industrialized country, with a large amount of exports of manufactured goods to their colonial outlets.
However, there are costs to the west from colonization and to keep control of their colonies countries. Resources from first world has to be transfer to their colonies countries i.e. a large amount of diversion of entrepreneur skills, a process of setting up administration and organizations in their colonies countries and possibly, the army based to keep their colonial empires. These transfers of resources do involve the high cost of transporting which is one of the reasons that led to a slow economic growth of the west.
Another reason that could be a high cost to the west is the developing process in the third world that the west played an important role on the administration and planning of the process i.e. an improvement of the infrastructure in the third world, (notably railway system which had been introduced to many of the third world countries through colonization.), a change of educational system or even political constraints. In order to achieve these processes, the west had to lose its own skilled labours and transferred to the third world.
An opportunity cost had occurred to the west. If the west did not have their colony countries, these valuable resources, which were transferred to the colonies countries would be located in its own country, which would then being used efficiently in terms of development and eventually, will lead to a higher economic growth. It has been shown that the rate of growth during 19th century, which was the period of expansion of colonialism, showed that the non-colonial countries have greater economic growth than those countries that have their colonial empires.
According to P. Bairoch’s investigation and historical facts showed that colonial countries e.g. Britain, France, The Netherlands has slower economic development than, say, Belgium, Germany, etc. which are non-colonial countries. In the early 20th century, Belgium joined colonial club and became the group of slow growth whilst the lost of The Netherlands colonial power leads to acceleration in its economic development. Thus, this could suggest that colonization has not been a powerful factor for development and somehow that the west did not gain much through colonization.
On the other hand, most of the colonies countries are in the 3rd world which can be defined as “developing or under-developed countries” Colonization does benefit the 3rd world in several ways e.g. better infrastructure for example, railways, system of law has been changed, education system, foreign investment which eventually led the third world country to be able to use their resources more efficiently.
The resources which was being left unused or the spare resources had been allocated by the introduction of new system from the west. Therefore, led to an improvement of the use of factors of production i.e. land, labour, capital which play important role on total products produced in the country and furthermore, an economic growth.
For example, in the case of Hong Kong or Singapore, both countries have been colonized by the west. There were many spare resources being left in the countries, especially Hong Kong which had plenty of land resources being left unused. During the colonization, the west had introduced the use of spare resources by building up companies and factories, which made both countries more attracted to foreign direct investment due to their improvement of infrastructure. Better infrastructures also lead to a low cost of transportation of goods, which is one of an important factor for the low cost of production. There were an increase in investment and gross national products (GNP) in both countries and now, Hong Kong and Singapore have become one of the most-industrialized countries in Asia.
However, the third world had been destroyed from the west through colonization, most obvious and importantly, its culture were destroyed. Once the country became colonized by the west. The systems, which were operated in the country, have influenced or had been changed by the colonial country in every ways including political power. The loss of national independence became a major disadvantage to the third world countries. Alteration of numerous forms of civilizations and cultures and the consequences of negative form including slavery. This sounds cruel but it is the reality of the loss of the third world.
The colonies countries were also became de-industrialization through colonization. The historical fact showed that industrialization of the third world was higher than those developed countries during pre-19th century, as it has been known that colonization expanded to third world after 19th century. This suggests that colonization led to de-industrialization of the third world.
An example would be in India. Post-19th century, India was one of the biggest textile exporters, their exports accounted around 60 - 70% of the total export. At the time, textile has been known to be luxury goods and was highly priced in Europe. Britain has no power to import textile to India.
Since 1813, the Indian company monopoly disappeared, thus, led to the influx of British textiles into India. At the time, Europe and US imposed tariff for import of textiles, whilst, Britain’s textiles goods enter India with no tariff. This influx of textile goods to India and the lose of power to export their textile goods to Europe could lead Indian workers unemployed or led the country became de-industrialized as well as the lost of its culture products.
Colonization also brings in multi-nationalization to the third world country. The growing of multi-nationalization of manufacturing industry in the third world means that the profit gained by the industry will eventually be sent back to the main industry which owned by the first world. Therefore, the third world had to use its factors of production, raw materials and not being able to keep the profit in their own countries which will then lead to an imbalance of the country’s balance sheet which will represents more outflows than inflows to the country.
In fact, the third world did lose much through colonization but the west did not gain much. The west lost and was less benefit through colonization due to the high costs of transportation or the high cost to keep their colonial empires. However, they did gain from colonization. In contrast, the third world, I believed, did lose much more than the west as it practically lose its own country, its culture and the dependence of their own. The whole system of colonization does not seem to lead us to any good both in the point of the west, nor the third world.
Bibliography
∙ Paul Bairoch, Economics and World History: Myths and Paradoxes (University of Chicago Press 1993)
∙ David Landes, “The Great Drain and Industrialization; Commodity Flows from Periphery to Centre in Historical Perspective” in R. Mathews ,(Editor), Economic Growth and Resources (Macmillan, 1979)
∙ James M. Cypher and James L. Dietz, The Process of Economic Development (Routledge 1997)
∙ David S. Landes, The Wealth and Poverty of Nations: Why Some are so Rich and Some are so Poor (Norton, 1998)
∙ Edward W. Said ; Orientalism (Penguin Classics) ,
Paul Bairoch, Economics and World History: Myths and Paradoxes (University of Chicago Press 1993) Chapter 6 Page 76
Economics and World History P. 77 Chapter 6 ,P Bairoch
