Wealth, Poverty and Politics

Thomas Sowell has just published a revised and enlarged edition of his classic “Wealth, Poverty and Politics.” At the very beginning, he quotes Alexander Hamilton, who said, “The wealth of nations depends upon an infinite variety of causes.” The book’s 16 chapters apply Hamilton’s notion to domestic, as well as international, differences in wealth. In both academic and popular literature, it is implicitly assumed that economic equality is natural, automatic and common. Thus, people see wealth inequality as a mystery that must be explained. The fact of the matter is precisely the opposite.

The ancient Greeks had geometry, philosophy, architecture and literature at a time when Britain was a land of illiterate tribal people living at a primitive level. Of course, by the end of the 19th century, Britain was far ahead of the Greeks and ultimately controlled one-quarter of the planet’s land. Such historic reversals have occurred elsewhere. The ancient Chinese were far ahead of Europeans, but by the 19th century, the relative positions of the Chinese and Europeans were reversed. Just these two examples prove that the same people are not always on top.

Sowell argues there are many factors that explain wealth differences among nations, as well as people within those nations. One of the more obvious explanations is that some people have greater productive capacity than others. Or they seized more of what others produced or had what they produced taken from them. For example, Spain conquered indigenous people in the Western Hemisphere. Spaniards looted 200 tons of gold and 18,000 tons of silver. But despite that wealth transfer, Spain is one…