“Columbus was searching for hardware — precious metals, silk, and spices — the sources of wealth in his day. I was searching for software, brainpower, complex algorithms, knowledge workers, call centers, transmission protocols, breakthroughs in optical engineering — the sources of wealth in our day.”
–Thomas Friedman, The World Is Flat
Choosing the right topic to start a blog is difficult. As a previous owner and contributor of blogs (Homo Homini Lupus RIP, Libro Libertate and Capitalismo) I’ve found that my interests were always linked to one idea: Wealth. Indeed, Wealth has played a role in every single decision I’ve made. From choosing which book to read, starting a business or planning for my career development I’ve always been interested in a difficult topic: Wealth creation.
As such, I have decided to start my last blog in the celebration of Columbus Day. A day like today on October 12th, 1492 the three ships leaded by the Italian sailor Christopher Columbus “discovered” America. It is important to note that America was not discovered by Columbus, the Continent was already inhabited by millions of humans that had developed some of the richest and most educated civilizations on Earth. However, the impact of his discovery amounted less than 50 years later to one of the major transfers of technology, institutions, crops, diseases and commerce than the world had ever seen.
The effects of Columbus discovery are still now evident and engineered one of the largest path-dependencies on history. American soil (it started to be recognized as America until 15 years later) and its biological life was to transform forever. Millions of humans were conquered and ruled by the Spanish, English, Dutch and French Crowns and millions of them died because of diseases transferred from Europe, Africa and Asia. Hundreds of different plants and animals were introduced and exported to and from the continent modifying forever the ecosystems of a large part of the planet.
Today, Columbus Day should represent for us that singular moment of globalization in which an infinite amount of transfers occurred. These transfers reshaped the globe into a realm of interconnectedness never seen before. Finally, in 1492 the six continents of the world were connected for the first time. Today, we have benefited and suffered many changes that resulted from that historical moment.
It shall be the aim of this blog to study, discuss and identify those events that modified the course of history and emphasize which were those principles, decisions and achievements that enabled for more men to pursue happiness. Lets us learn from the past!
Globalization & Capitalism 
Food for thought: “Wealth in the contemporary, post-industrial world is not simply to be found in resources, but rather in ideas, entrepreneurial instincts and skills. The wealth of nations is no longer stuff in the ground; the wealth of nations resides in the human mind, in human creativity.”
(George Weigel, cited by Andreas Windmer in his new book, The Pope and the CEO)
Congratulations on your new blog, Guillermo!
Thank you very much! I’ll aim to discover as many entrepreneurial ideas and skills in History as possible!
This reminds me a lot to the book we read in the Public Choice course you teach at UFM: “the underlying source of the West’s ability to attract the lightning of economic revolutions was a unique use of experiment in technology and organization to harness resources to the satisfaction of human wants. The key elements of the system where the wide diffusion of the authority and resources necessary to experiment; an absence of more than rudimentary political and religious restrictions on experiment; and incentives which combined ample rewards for success, defined as the widespread economic use of the results of experiment, with a risk of severe penalties for failing to experiment…. The thematic terms are thus autonomy, experiment, and diversity.” How The West Grew Rich by Rosenberg and Birdzell
The key elements of the system were then, not just the wide diffusion of the authority and resources necessary to experiment as Rosenberg and Birdzell mention; but the entrepreneurial minds that risked their lives and property to experiment and satisfy human wants.
Happy Columbus Day! 🙂
Guille!
Good Luck with your new blog, I wish you the best, and hopefully you can write about the new things you learn while abroad studying your master’s.
I completely agree with you that the “discovery” of America marked a major break point in history due mostly to the institutional transfer you mention.
As such this is a “natural experiment” which Acemoglu, et al. have used to try to estimate the effect of the colonial institutions adopted over wealth creation in a historical perspective.
Their thesis called “the reversal of fortune” states that regions with higher population density adopted extractive institutions vs. “frontier” regions which had lower population density and where colonized by settlers who adopted institutions more respectful of property rights; the kind of institutions adopted generated a path dependent institutional setting which can explain much of the actual differences in income across countries.
This is a thesis which many historians have proposed, but the value of their contribution is to find empirical evidence for it.
I don’t know if you have already read it, but I highly recommend two of the papers they wrote:
Click to access reversal-of-fortune.pdf
http://www.jstor.org/pss/2677930
Thanks a lot, I’ll check the papers and go back with you. State-building in America was indeed the result of different interests. I wonder if those settlers that adopted institutions more respectful of property rights did it because they had a different understanding of themselves and the regions they had just conquered, or if it was the result of a power-based psycho-epistemology in which they had no chance to enslave (dominate) indians and as such work for themselves. I’ll go back with you and thanks for sharing those pdfs!
PS: I am taking a class on “International Statebuilding: From Colonialism to the Post-9/11 World” with Professor Markus Michael Müller and its been wonderful so far!
Congratulation!! Powerful writings!!
Thank you very!