Smithian Critiques of Non-Western Economic Stagnation: Institutions, Demography, and Culture

Smithian explanations for the economic lag of the non-Western world fundamentally argue that critical impediments to growth were never removed. While geographic and contingent factors are occasionally cited, the primary emphasis lies on governance. Rulers and systems outside the West are consistently portrayed as predatory. The great Eastern empires, such as China, are often described as ‘plunder machines’ or ‘revenue pumps’, led by inefficient, luxury-consuming elites whose rule fostered exploitation and insecure property rights. This environment allegedly encouraged hoarding rather than productive investment. Even when research revealed that some 18th-century Chinese emperors ruled lightly, it was reinterpreted as a problem of ‘under-government’ and ‘lethargic’ administration, still framed as a failure to provide the necessary framework for markets.

Beyond Asia, the narrative persists. The rulers of Mesoamerican and Andean civilizations like the Maya, Aztecs, and Incas are depicted as brute exploiters. Pre-colonial Africa is frequently characterized as lacking formal states altogether. The colonial introduction of Western state models is seen as a fraught experiment, with often disastrous post-independence results, cementing the continent’s reputation for poor ‘good governance’. The divergent development of the Americas is presented as the quintessential institutional case study: North America prospered from British-derived institutions, while South and Central America inherited the ‘wrong institutions’ from Spain and Portugal. The universal critique is that non-Western rule was inherently arbitrary and unaccountable, creating an environment hostile to development.

Critiques extend beyond politics to demographic and social structures. Overpopulation is a recurrent theme in descriptions of societies like China, often accused of prioritizing reproduction over production. These accounts emphasize contrasts with the West, such as early marriage and high fertility. Discussions of Africa reveal contradictory claims of being both under- and over-populated. Furthermore, the social fabric of ‘the Rest’ is faulted for stifling initiative. The prevalence of extended families, clans, and tribes is seen as suppressing the individualism and personal ambition necessary for a market economy. The critical separation of household and firm remained underdeveloped, particularly in agrarian societies where the ‘household mode of production’ perpetuated a cycle of self-exploitation and acted as a major obstacle to modern growth.

Cultural explanations within the Smithian framework are equally varied. A perceived defective work ethic is a common charge, alongside critiques of major religions. Confucianism was long viewed as promoting fatalistic adaptation rather than transformative drive, until its re-evaluation during the late-20th century ‘Asian Miracle’. Hinduism and Buddhism were dismissed as too ‘other-worldly’, while Islam was characterized as a historically conservative force. Non-Western societies are further described as less ‘open’, both physically and intellectually. Historical isolationism in China, Korea, and Japan, and the land-bound nature of the Mughal, Safavid, and Ottoman empires, are contrasted with Western expansionism. These societies are portrayed as closing not just their borders but also their minds to new ideas. Notably, these views were not merely ‘Western prejudices’ but were broadly endorsed by non-Western modernizers across the ideological spectrum, from liberals to socialists and nationalists.