A Patriot's History of the Modern World

by Larry Schweikart

  For most Europeans, the colonies were a net drain, and had been since the 1700s, at least insofar as the spotty data reveals. One study of British investment in their empire concluded that colonial finance played only a minor role in capital markets, returns on investment were low relative to domestic investment, and imperialism was a net cost to the taxpayers.123 With few exceptions, African and Asian territories were money losers. Rubber, tin, and diamonds paid off, but capital poured into independent states in Latin America seldom produced a return, and in any event, merely getting products to market demanded expensive and permanent construction and maintenance of railroads, port and harbor facilities, communications, hospitals, and schools. In India, from 1891 to 1938 the British laid forty thousand miles of railroad track, doubled the number of irrigation facilities, and created a postal and telegraph system. France built the Congo-Ocean Railway from Point-Noire to Brazzaville, but at horrific cost. One estimate put the number of native workers who died on the project at sixteen thousand, and the construction led to the revolt of the Gbaya people near French Cameroon in 1928 and the subsequent Kongo-Wara War. European railroads in Africa reduced transport costs by 90 percent, but still profits were elusive. Not surprisingly, then, foreign investment abroad shrank for every leading colonial power between 1914 and 1930.124

  Whatever gains that were realized came from work gangs and forced labor, supplied in part through imperial justice meted out to noncitizens. Under such a system, there was no motivation for natives to invest in their colonized homeland themselves. South of the Sahara, for example, the opportunity for French citizenship was even more remote than in Algeria. By 1936, only two thousand nonwhites held French citizenship in lower Africa, leading to the steady flight of blacks to neighboring British provinces where infrastructure was better and there was greater opportunity for employment.

  Colonial economic structures thus produced uneven growth at best, leading critics to maintain that “forced development” did not work, regardless of benevolent intentions. Statistics tended to indicate that top-down development failed. Excluding the years of the Great War, from 1870 to 1946, India’s GNP grew at only .5 percent per year or less. Ghana grew at 1.3 percent from 1870 to 1913. Overall, African growth during the imperial years was .6 percent from 1870 to 1913 and .9 percent from 1913 to 1950. But these numbers failed to tell the whole story, and the dark fact may well be that Africa’s growth rate only managed to achieve such pathetically weak rates because of European investment and interference. At any rate, it seemed to matter little what policy was overlaid on top of the territories. Free trade models, instituted by the British and Dutch, seemed no better than protectionist frameworks erected by France, Spain, Italy, and, for some time, the United States.

  Whatever the purpose of the initial investment, colonial powers usually discovered it was no inexpensive matter (a lesson the Americans had learned in the Canal Zone). Once built, factories and plantations could rely on native labor, but seldom did they profit from the “networking” benefits of highly skilled employees who made incremental improvements in the production process. High-skill jobs were therefore imported from the colonial power and retained at home. To a large degree, advanced economies tended to invest in one another—Isaac Singer built his grand sewing machine factory in Scotland, where it employed fourteen thousand—rather than in the undeveloped backwaters of Africa and Asia. Natives who lacked skills made poor wage workers, and attempts to bring vast numbers of them into the wage economy proved fruitless. According to economist E. J. Berg, less than 5 percent of sub-Saharan Africans worked for wages at any time during the year as late as 1950, producing demands to import Pakistani and Indian laborers, who added yet another ethnic tension to the mix.125 In the Boer republics during the late nineteenth century more than ninety thousand workers were recruited from England to provide skilled and semiskilled labor—a move that ultimately cost the Boers their nations. English workers claimed they were discriminated against by not being allowed to vote; England took the side of their countrymen, and after two costly wars, England brought the Boers to heel and combined the Cape Colony, Natal, Transvaal, and Orange Free State into the Union of South Africa, a British dominion. There was a lesson here, but one missed by Western politicians.

  Another lesson that Progressive politicians refused to learn was that colonies needed first to develop at least some of the underpinnings to American exceptionalism in order to avoid tyrannies and establish democratic republics. Since Europeans themselves did not have checks and balances in their political systems, they were not inserted into colonial governments. Private property became something maintained by force rather than law, and combines of government and private corporations established crony capitalism in which influence in government was vastly more important than ideas, hard work, and business efficiency. Common law was missing altogether; indeed, all laws were promulgated by high officials, often located outside the colony; religion was normally autocratically administered; and a form of serfdom throughout the native population was institutionalized. Given these deficiencies in colonial social and political structures, democracy did and would remain a pipe dream, understood only in propaganda slogans, for many long years to come.

  “Democratizing” Asia

  If Americans had a higher opinion of their “yellow brothers” in Asia than they did of their “brown brothers” in Latin America, they never made it known. Modernization in Asian political systems and economic structures proceeded at almost as slow a pace as it did in South America. During their periods of industrialization, neither Japan nor China elicited much interest or direct investment from the Americans or Europeans, save for the establishment of some trading posts and the carving out of “spheres of influence.” European military presence in both nations was minimal and the commercial presence scarcely larger, but the stark contrast of such advanced foreigners motivated both Japan and China to modernize.

  Earlier reforms in Japan had led to the Meiji Constitution of 1868, wherein the shogunates were ended and an oligarchy of four western clans operating under the Emperor Meiji (Mutsuhito) moved to rapidly industrialize Japan. By 1905, following the slogan “Enrich the country, strengthen the military,” Meiji leaders imposed conscription, enacted land reforms, and privatized shipbuilding, ironworks, and textile mills. Japan urbanized rapidly, and silk and coal production soared.126

  Emperor Taisho (Prince Yoshihito prior to becoming emperor in 1912), an unbalanced semirecluse who was not a part of the governing process and whose edicts required ministers’ signatures, had little actual power. Nor did the Diet (parliament), which could pass budgets and little else. Power resided in the zaibatsu, huge financial and industrial conglomerates that controlled Japan’s economy and much of its daily life. Initially the “Big Four” of Mitsubishi, Mitsui, Sumitomo, and Yasuda formed the main power base in the Meiji period, but these were later joined by Fujita, Furukawa, Nissan, Nakajima, and Kawasaki, among others. These vertical monopolies could and did form alliances with the Japanese military for imperial expansion, and their very structures fostered autocratic governance.

  Taisho demonstrated all the oddball characteristics of a grown child. When inspecting his troops on parade—that is, when he didn’t fall off his horse—he alternated between slapping the soldiers or embracing them. Once, addressing the Diet, he rolled up his written speech and made it into a telescope, peering through it at the dumbfounded members. At the same time, however, he was the “Divine Emperor,” the living god on earth, which meant he was the final source of law. His dynasty survived a wave of Christian missionaries who failed to convert—or even significantly alter—the Japanese. Under Taisho, Japan borrowed heavily, almost obsessively, from China and the West, including Confucian literature, Sung art, poetic verse, Taoist sayings, technology, railroads, dress, and even business and administrative models from the American managerial revolution.

  If the Meiji leaders could have frozen the frame in 1911, they would have, embracing Wester
n technology and select concepts, while rejecting the deep conversion to Western values—including freedom of speech, constitutional limitations, a growing respect for women, and above all the de-deification of the emperor. It was no surprise that after World War II General Douglas MacArthur insisted on giving women the vote as a means to introduce a greater feminine influence into Japanese politics. But as much as the Japanese in the Meiji and Taisho periods flirted with Western concepts, none of those ideas truly penetrated the moral fiber of the nation. Instead, aware that some internal faith and religious adherence undergirded Western success, between 1912 and 1930, Japan melded Shintoism, an animistic religion of study that incorporated ancestor worship with natural deities from the earth, waves, skies, and other forces (Shinto means “Way of the Gods”), with a new state-encouraged warrior ethos called Bushido or “Way of the Warrior-Knight.” Bushido called for supreme loyalty to the emperor combined with Japanese-style chivalry that blended martial arts, frugality, and honor—if necessary, to death. Shinto had been established as a state religion in the late 1800s, then entrenched as a social code as early as the 1920s. Fortified and reinforced by military victories, it was then finally elevated in 1941 into a full political religion replete with national religious ceremonies. In both Nazi Germany and Imperial Japan, therefore, the state co-opted or perverted the mitigating hand of religion in such a way as to make it a servant of its policies.

  Westerners mistook universal male suffrage and the trappings of democracy in Japan for genuine processes and indicators of liberty, but in reality power was concentrated in a few hands. Over a period of thirty-three years of cabinet governance, eighteen cabinets held office with only nine different premiers, only two of whom were not of the Choshu or Satsuma clans, and five of whom were military men.127 Meanwhile, the emperor’s favorites controlled the bureaucracy, thus neutering the Diet, and bribes, force, and tricks were used to obtain favorable votes.

  World War I opened new doors to Japan. Deprived of European suppliers, and operating outside the Europeans’ restraints, the Japanese dramatically increased exports, foreign trade, and manufacturing, acquiring new Asian markets, all enhanced by the presence of a rich stratum of skilled tradesmen who could apply iron-making and shipbuilding technology. Industrial development, however, can carry one only so far, and in a Japan lacking common law—indeed, lacking any fixed legal code, save that of the Divine Emperor—business could grow only so much.

  Beginning about 1840, China sought to modernize to save itself from Western invasion and interference in internal matters that were epitomized by the Opium Wars and Britain’s involvement in the Taiping Rebellion. Under the Qing Dynasty, Western-style factories were built under the principle of Yang Wu, or “self-strengthening.” This modernization only went so far, and China remained behind Japan, seeing her navy crushed by the Japanese in 1894–94 in the Chinese North Sea. In fact, these setbacks only reemphasized one of the tenets of the “Western Way of War,” which is all things being equal, the freer nation tends to win military conflicts due to its superior productivity and motivated forces. China reacted with the Xinhai Revolution under Sun Yat-sen in 1911, resulting in the nation’s first elected parliament. For the next twenty years, the “Golden Age” unfolded until Japan ended the era with its invasion in 1937.128 However, this era was hardly golden and was punctuated by civil war, incessant strife, and continual economic disruption.

  Sun Yat-sen, the respected “Father of Modern China,” stood the best chance of pointing China on the road to Western-style progress and republicanism. Born to a poor Cantonese family, he had emigrated with a brother to Hawaii, where he received an education. After the failed 1895 revolt, Sun hopped from the United States to England, then to Japan, attempting to raise funds for a revolutionary effort. He returned to China in 1911 to develop the Kuomintang, a political party dedicated to republicanism and land reform. That year, delegates from sixteen provisional assemblies established the Republic of China and elected Sun the “provisional president.” But his self-imposed exile had left him with a meager power base, and as soon as he assumed office, Sun sent a telegram to General Yuan Shikai, whose Beiyang army was one of the most formidable. Acknowledging his own lack of any military forces, Sun announced to Yuan that the presidency “is actually waiting for you, and my offer will eventually be made clear to the world. I hope that you will soon decide to accept this offer.”129 In truth, Sun was a missionary, not a militarist; and Yuan proved a tyrant, not a democrat. He assumed power with Sun’s endorsement in January 1912 and during the subsequent elections, the leader of the majority party was assassinated, then Yuan outlawed the party itself.130 Disbanding the newly created parliament, Yuan established himself as president for life and intended to name himself emperor before he died in 1916. Rival groups battled for leadership in China, with Sun operating out of Canton, but his lack of military training and his discomfort with military leadership soon forced him to flee from his own generals.131

  It was inevitable that Japan and China—Asia’s two rising powerhouses—would clash. Japan’s Twenty-one Demands, which were imposed on China in 1915 ostensibly to protect Japan’s sphere of influence (but suspected in China of being a conspiratorial agreement between then-president Yuan and the Japanese for Japan’s support of the Yuan government), led to a change in world opinion about Japan as a quaint, amusing sideshow of a nation. Following the Sino-Japanese War of 1895 and the Russo-Japanese War, which ended in 1905, Japan stood astride large regions in northern China and Manchuria. Sun Yat-sen maintained that the Twenty-one Demands existed only because of General Yuan’s maneuvering to gain the emperorship. After joining World War I on the Allied side, Japan increased her demands to include German territories in China. Among the most obnoxious of these additional demands were those known as “Group 5,” which included putting Japanese advisers in the Chinese central government and police forces. Japan withdrew those forces in short order, but the entire process alienated the United States (which still stood behind the Open Door policy negotiated in 1898–99 by John Hay) and irritated the British. In no mood for confrontations in Asia, the United States sought a compromise, and the Lansing-Ishii Agreement (1917) resulted, in which Japan promised to uphold the Open Door. Everything was finalized by the Versailles conference two years later.

  Neither Britain nor America could fully trust Japan after that point—although oddly, Winston Churchill, who astutely saw the dangers of an expansionist Nazi Germany, never discerned that Japan posed a similar threat on the other side of the world. At the same time, neither Britain nor the United States could actually do much on the mainland in Asia due to their lack of an army presence. Spared regular interaction with European powers, Japanese nationalism increased, as did antipathy for the “white nations.”

  What one witnessed in Africa and Asia was the dysfunctional “land feedback loop” present in much of Europe and often repeated in less advanced countries. Scarce land meant low wages, as there was no agricultural alternative available to workers to substitute for low-wage jobs, and low wages led capitalists to substitute labor for machinery, a trait displayed by China during much of its Mao and early post-Mao period. The substitution of labor for machines, in turn, required little in the way of skills, and without skills, workers could not successfully demand higher wages. This was the opposite of what had traditionally taken place in America, where available frontier land always allowed workers to quit their job and start a farm, which forced industrialists to substitute capital for labor, then to hire highly skilled employees to work the machines and pay them well.

  Policies for Colonial Success…and Failure

  Colonial powers, whether in Asia or Africa, had no intention of introducing private land ownership for their subjects. With land in private hands, imperialism was doomed for two reasons. In economic terms, a colony would eventually have no use for the imperial power if it had its own thriving industrial base—America was the key case in point. But unlike Asia and Africa, in America th
e British had extended land ownership to immigrants due to the need for labor. Instead of providing more laborers, however, English policies created more landowners—and more wealth. English Americans by 1770 already had incomes rising as fast as their colonial masters “across the pond,” and already had higher per capita incomes than the Turks, Russians, or Mexicans of the 1990s.132 Even more astounding, compared with India or parts of Africa, the British made few investments in the American colonies: analysis by numerous economic historians found that the system of bounties and duties enacted by the British left the Americans with a net loss of about $1 million in 1770, or $.40 per person per year (about 1 percent of income).133 Put another way, Americans had caught up to the British despite carrying the dead weight of the Navigation Acts and managed to exceed modern (supposedly advanced) nations, all because British America had, more or less, a free market in land.

  Of course, it wasn’t just the availability of land that made this possible. Access to property required that open land not merely exist, but be on the market. England, with its enclosure laws, possessed vacant land, yet it was unavailable for use. Moreover, a free process demanded a system of assigning reliable title deeds quickly and fairly. By the late twentieth century, it was nearly impossible to impose a system of titles and deeds on native populations. One of the first economists to discern the need to create a market in land that operated within a functioning and just framework of legal titles and deeds was the Peruvian Hernando de Soto. His phenomenally influential book, The Mystery of Capital, published in 2000, revealed that wealth without an institutional framework to guarantee legal title would fail just as surely in a free market as it would in a collectivist economy.134 Others, however, found that tribal customs occasionally made it difficult or even impossible to determine who owned the land to begin with.135 More recent analysis has shown that legal title alone is not sufficient, but it was at least a central component, and one sadly lacking in European-controlled Africa and Asia.136 By contrast to what had taken place in the American colonies, in 1931, the 1.8 million colonial Europeans owned more than ten times as much land as the native population, which was six times larger; in Rhodesia, the imbalance was over two-to-one in favor of whites; and in Kenya, virtually the entire country was either in private white ownership or government “reserves,” which the Africans had no hope of obtaining.