Transitive action verb requiring an object e.g., nation A doing something to nation B . To draw or pull out forcibly; to obtain despite resistance.

“Extract”

Transitive action verb requiring an object e.g., nation A doing something to nation B . To draw or pull out forcibly; to obtain despite resistance.

North American Imperialism

We are fortunate that Columbus was financed by King Ferdinand of Spain and rumors of gold in Central and South America directed exploration there. By the time Great Britain began exploring and colonizing, they got the leftovers i.e., North America. While looting the Caribbean Islands rumors of gold sent the Spanish farther south. King Ferdinand understood that the acquisition of that gold was the only way in which he could fund his scheme of exploring and spreading the word of God.

He became desperate for gold and on July 25, 1511, he unequivocally instructed his New World colonists to “get gold humanely, if you can, but at all hazards, to get gold”, an objective that was adopted by subsequent Spanish monarchs for centuries. Thus, the Spanish conquistadors embarked on a policy of brutal colonization and began the drawn-out process of pilfering America’s gold and silver treasures.”[Wikipedia]

Natives were enslaved, forced to be miners and human beasts of burden, their land confiscated and distributed to the conquistadors who accompanied the famous explorers. An entire mountain near Potosi, Bolivia was 40-60% pure silver! Even today sunken ships lof the Spanish treasure fleet laden with tons of gold and silver are being brought up from the seas between Latin America and Spain. It is estimated Spain extracted $2 trillion [2018 USD] of precious metals from the Americas. The magnificent palaces and cathedrals in Spain tourists target today were built by robbing the ancestors of the refugees from Latin America heading north from Mexico. Their miserable, failed governments, poverty, and crime were the result of the conflation of church and state and ‘extractive’ governments and economies fueled by theft.

“These institutions turned Latin America into the most unequal continent in the world and sapped much of it s economic potential. European colonization set the stage for institutional divergence in the Americas where, in contrast to ‘inclusive’ institutions developed in the U.S. and Canada, extractive ones emerged in Latin America. This explains the patterns of inequality we see in the Americas. The extractive political and economic institutions of the Spanish conquistadors in Latin America have endured, condemning much of the region to poverty.

Critical Junctures

Growth under extractive institutions is unsustainable because sustained economic growth requires innovation which causes creative destruction by displacing existing economic powers [think Amazon killing small retailers] thereby establishing new economic and political elites. Hence, extractive institutions once in place tend to persist. [aka “iron law of oligarchy’]

Major institutional change, the requisite for major economic change takes place as a result of ‘critical junctures’ such as printing press and Protestant Reformation,. These eventually led to separation of church and state and democratic governments in the West that underlay the Industrial Revolution and the disproportionate wealth of the West. That’s why people southeast of Europe are fleeing northwest and people south of the Rio Grande are fleeing north.

The Industrial Revolution was a critical juncture transforming the economies first in Great Britain. Water and then steam power along with innovations in machines for converting cotton into cloth in the 18th and 19th centuries ended home and rural manufacturing depopulating rural areas sending youth into factory jobs in urban centers.

National wealth was jump started but the creative destruction Schumpeter explained was in part illiterate rural youth pouring into urban factories and ghettoes. Just as agriculture ended the hunter-gatherer stage of economic growth the industrial age superseded agriculture.

Each new economic era involves productivity improvement meaning fewer but higher-skilled individuals produce more than was previously produced by lesser-trained individuals. Increases in national wealth creates economic victims and pockets of poverty whose inhabitants have little hope of achieving the American Dream. Farm youth displaced by mechanization in the twenties could handle factory jobs in Detroit paying enough to support their families.

Literacy

The West benefitted from each cycle of creative destruction because economic changes were in lock step with expansion of public education—the prerequisite of technological innovation. The very definition of ‘literacy’ now includes computer-related skills and cognitive skills in Science, Technology, Engineering , and Math i.e., S.T.E.M. Math and digital literacy is cumulative meaning each advance requires success at the previous stage. Casualties ow of moving from the Service Economy to the Information Economy that began in the 1950’s lost their ability to adapt now as adults back in grade school.

Income Inequality

The combined wealth of only three billionaires [Gates, Buffett, Bezos] is as much combined wealth [$264 B] as 160 million Americans. The increase in wealth of the top 1% increased an eye-popping 192% between 1979 and 2013 compared 42% for the bottom 80%.The top earners are now passing on their advantages to their children while children of the ones below inherit their parents’ disadvantages tending to change society from class to caste. [1]

When we experienced a similar critical juncture with the Industrial Revolution, the main agencies of socialization--home, school, church-- worked together increasing children’s literacy. Now, with both parents working, schools prohibited from teaching moral literacy, and most evangelical Christian churches having rejected the social gospel, youth are being socialized 7.2 hours a day by electronic media to the near exclusion of modern literacy. Rescue now, however, might come by the means used then i.e.,by school on Sunday in churches.

[1] The Economist, July 1, 2017, p73,.