Thomas Sowell on Wealth Creation, Human Capital & Colonialism

another source of conflict in the world sometimes as we've mentioned drawn along racial or ethnic lines is poverty what what are the true causes of poverty as you have been able to to discern them in your study of the world in a comparative way I'm afraid that I haven't even looked for the causes of poverty I regard poverty is just some of the absence of wealth so why do I look for all the things that cause wealth to occur I don't believe that there's any particular reason why everyone in the world would in fact have the same wealth there was a certain peculiar circumstances that have arisen in a few countries on the face of the earth and only relatively recently in human history that has made the kind of affluence that exists the United States or Western Europe or Japan commonplace in these countries so what I'm interested in is what peculiar set of circumstances have caused that to come about I don't have an answer to that but I think that people ought to be asking that question and not the question of poverty everyone is born poor and ignorant to the extent that people become different we have to find out what other things that enable them to become different and how can those opportunities be more widely generalized but you have written that in order to be a partisan of the poor you must at first be a partisan of the truth what then do you think gets close to being at the truth of the sources of wealth generation what what creates well Oh skills traits of human beings and one sort of another discipline organization entrepreneurship again there's not the slightest reason to expect these various factors in there are many many others obviously ever going to be randomly distributed every single group has its own history it has its own geographic setting in which it develop and so on it would be an absolute miracle if all these factors were the same across groups and nowhere in the world we find them even approximately the same the difference in income between blacks and whites in the United States for example it's very commonplace around the world it's about the same as the difference between Sephardic and Ashkenazi Jews in Israel it's smaller than the difference between Chinese and Malay it's much smaller than there was between East Indians in Africa in East Africa and you could go on and on down through history and around around the world no where I do I find this even distribution of income or the even distribution of people in occupations or institutions that people talk about as sort of a norm that would exist if there were no institutional discrimination well you you seem to trace wealth generation or the absence of it namely poverty to a kind of human capital that groups carry around with them is this human capital inherited or is it is it is it acquired Oh quiet because at different periods of history you'll find one racial group centuries ahead of another and then a thousand years later it will be the other way around the Jews and the Egyptians would be a classic example but the Jews were held as slaves at the time of the Pharaohs clearly today is real as far more advanced than in Egypt you could find many other kinds of are reversals of that sort if you look in history just within the European community Britain was very easily conquered by a relatively small force of Romans the days of the Roman Empire clearly England has been ahead of Italy now for us for centuries by a vast amount what seems to be critical in the in the equation in the human capital equation and in the acquisition of human capital not education sometimes education can make a contribution I think that's greatly overrated in most cases and particularly as it relates to underdeveloped countries and to some extent to groups that are just emerging from poverty in a given country that is if you have really formal education what you may create is an expectation of an enormous economic advantage of an enormous entitlement to power and privilege and so on which can be negative in its impact in the sense that there are people in places like India Indonesia Malaysia who have acquired a certain low level of education but because that education is so rare in their country they will no longer accept many kinds of jobs that require them to work with their hands and that would include even engineers you see who want to sit behind the desk and look at the blueprints but don't want to stay out there and hip boots in the muck supervising the construction of the building so that we have those kinds of attitudes and you're simply creating a sense of entitlement without a corresponding set of skills to generate the wealth to pay it off then that may be a negative factor in the country's growth well you link wealth creation to the acquisition of skills and the employment of skills in a disciplined way and also in a in a frugal way in terms of lifestyles but others would would attribute the generation of poverty the obverse of wealth to colonialism imperialism exploitation economic exploitation how do you handle handle those arguments well in so boys'll organism it seriously you can simply look at evidence insofar as they're purely political arguments they're saying what people wanted here obviously there are people who would much rather hear that and to hear the other because if you think that's the problem then there's no there's only a quicker solution but there's more more emotionally and morally satisfying solution unable you fight against the exploiters and so on if you look at the third world for example those parts of the third world where the imperialist powers have come in has typically been the more advanced parts of it they've been the most most prosperous ones even if they weren't processes where they got there they became the more prosperous parts that was parts of the third world of the imperialists have never touched almost without exception the very poorest places on this earth so you don't find any exploit any explanation for poverty and colonialism the reverse perhaps oh absolutely that when the Romans for example invaded the British Isles they conquered the southern part of Britain but they never conquered Scotland and for centuries thereafter perhaps for a thousand years thereafter Scotland was far behind England in economic and cultural development across England I had the advantage of tying in to their whole Roman civilization and everything that it created to some extent percolated down through the British that doesn't mean that British were happy with the Romans being there you know a thousand years later Rachel could say we all London's our own but that's a thousand years later and Churchill didn't have to go through what those people went through so I'm not saying this is good for the people who were there but in but in the longer run of course England became what it was because the Romans came and Scotland finally developed only after England's conquered Scotland and then the culture there developed in England MCAS spreads and into Scotland as well well does this suggest them that in addressing poverty in today's world there ought to be a latter-day reincarnation of imperialism or colonialism in some form no because I think politically it's impossible that their men die I hear from the perverse parts of some independent nations they say that they lay they were better off under colonialism and so on that is that isn't in the cause the people who are in the imperialist nations don't want to take on that but someone say that there is the functional equivalent of that in the operation of the multinational corporation today do you see that the operation of the multinational corporation as help or hindrance to the generation of wealth in developing countries well in those countries the multinational corporations very often duck don't only pay more money than the local industry pays but it brings in skills that don't exist and creates industries that never were there before to that extent I think they are a source of a transmission of international human capital to that extent yes

39 thoughts on “Thomas Sowell on Wealth Creation, Human Capital & Colonialism

  • I would guess that the reversal in Egypt was partly due to the Muslim conquest among other things. But perhaps a lot of other factors were involved. The way the bible was written suggests a different type of thinking than went into the pyramids.

  • I felt that Sowell's comments on economics are more intelligent than the ones of Chomsky. Sowell is an economist, Chomsky is a linguist. He is out of his depth. (This is a comment on another video that does not allow comments). As far as I can see Chomsky is a non-entity in the area of political economy.

  • I didn't know the term institutional discrimination existed in 1983, I thought it was a term 10 or 15 years old at most.


  • I love Dr. Sowell, but he is full of shit on this one. Lets look at the evidence. How can a country using free labor not increase profitability exponentially? Colonial Corporations were planting, tilling, gathering , separating, weighing and packaging the raw materials that were being sold to the mother country, with free labor. Cost of Revenue is dramatically decreased. If Coca Cola could erase Salary and Wage expenses, I'm sure that profits would be great! Then you have to look at those effected by Coca Cola not paying them wages. They would not be able to purchase basic needs for survival. They would have no other option but poverty.

  • I like that he speaks in Universal Terms, Not like Yvette Carnell who believes in two different types of Gravity. One for White People and another for Black People.

  • I love these old vids of Dr. Sowell, this man was born a genius. Or was it just the facts and statistics, or just looking for the truth. Show me the evedince. I'm proud of myself that I know who Dr. Sowell is. I feel like I'm just a little smarter than your average bear.

  • How does this make sense I don't understand… to imply poverty is simply to "not be wealthy" whereas it means to be deprived of a need with wealth being only one element to it. He then states he believes everyone is born poor and to get out of that one needs to obtain skills, discipline, etc (human capital) which is obvious but what about those that are deprived of the rights to obtain those necessary skills as evident through slave trades, class and gender discrimination. He states he's unsure what made America so wealthy but the US was left relatively unscathed after WWII and had held 50% of the world's wealth distributed over 6% of the global population (albeit unequally which is why poverty exists today with a shrinking middle class). His answers are very binary and somewhat detached, as it has been proven time and time again that socioeconomic conditions of an individual will determine their future more so than moving out of poverty through "sheer hard work and determination". Everyone loves a good rags to riches story but they are outliers and don't happen often because it is in fact very difficult. Currently underemployment is increasing around the world with relatively "unskilled" labour force being replaced by technology or globalisation yet the education standards haven't aligned to account for this replacement of human capital, and this is happening on a large scale not on the scale he states. His claim on imperialism resulting in betterment in other countries is untrue as his understanding of bettering a country is based on a western economic philosophy but at the cost of definite exploitation and extraction of that nation's wealth through war, threat of war and one sided free trade agreements. I didn't like this at all sorry.

  • John Kennedy wasnt
    born poor.
    Jackie wasnt born poor
    George bush wasnt
    born poor
    Onassis wasnt born
    No Rothschild is born
    No Ford is born poor
    This fool just said
    everybody is born poor.
    Tell it to the House of
    Question: What is the
    cause of poverty?
    He answers: Eyzzz dun no dat. But ,Eyzz
    sho nuff kin tell youse
    whose got dee munee.
    And howzit be lack dat.

  • @6:50 why can't black people understand this man. what he is saying; the black experience is woven into the fabric of the flag. the experience for blk americans in 1,000 years should be part of the development of this nation and our culture.
    Until we are proud to be Americans we will always be outsiders within our country. the black community needs to come in from our of the cold.
    please let's use our strength and power to assist fellow Americans.

  • There are interests behind the decisions of those who inherit the positions of leadership through their ascribed birth and familial social position! So, institutional racism, sexism and ageism is not simple a question of a lack of skills! They are due to the "nondecisions" of those with political and institutional power.

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