The Case For Decolonizing Economics

Quick Overview

Surbhi Kesar argues that mainstream economic theories, particularly those concerning the Industrial Revolution and subsequent growth, are flawed because they fail to properly account for colonialism and extractive institutions, leading to an incomplete, Eurocentric view of global development that needs to be decolonized by incorporating historical context and structural inequalities.

Key Points: Global GDP per capita remained stagnant at the equivalent of $1,000 USD until the Industrial Revolution around 1800, after which it rose vertically, showing the revolution as the most significant event in human history regarding economic growth (00:00). Child mortality rates, historically around 50% before puberty, plummeted dramatically after 1800, dropping to 4.3% globally by 2020, demonstrating massive improvements in living standards post-Industrial Revolution (00:41). Kesar critiques mainstream economic explanations for the Industrial Revolution, like those by Mokyr, which focus on an 'enlightened economy' valuing practical innovation and science, arguing they ignore colonialism (01:03, 01:46). The decolonizing economics perspective, as presented in the book "Decolonizing Economics," emphasizes that the Western trajectory of growth was fundamentally linked to extractive institutions and colonialism (01:46, 02:50). Kesar points out that the World Bank and IMF poverty reduction figures, while showing success in India (lifting 171 million people out of poverty between 2011 and 2022), often overlook the underlying structural issues like high informality (80%) and inequality (02:51, 03:00, 07:50). The core thesis of decolonizing economics is that the path taken by the West (inclusive institutions enabling growth) and the path taken by the colonized world (extractive institutions leading to underdevelopment) are fundamentally different historical processes (05:01, 07:12).

Context: The discussion features an interview between Michael Walker and economist Surbhi Kesar regarding the necessity of decolonizing economic theory. Kesar challenges the traditional Western-centric narrative of economic progress, exemplified by the massive GDP growth post-Industrial Revolution, arguing that this growth narrative ignores the role of colonialism and extractive institutions that actively suppressed development elsewhere, creating structural inequalities that persist today.