"Poverty from the Wealth of Nations" provides concrete evidence to support the argument that European imperialism devastated, rather than enhanced, the economic development of much of the rest of the world. The author, M. Shahid Alam, brings in the factors of sovereignty and racism to show that market mechanisms alone were not the only factors determining success or failure. Alam shows that the initial disparities between now advanced and now lagging countries were not as great as once supposed, and that the subsequent divergence was due more to exploitation and racist policies rather than to the innate qualities of particular peoples. In doing so, he challenges the prevailing, if unconscious, tenets of Eurocentric ideology.
The more sovereignty a state had, the more it was able to shape its economic policy to its own advantage. Sovereign countries usually did this by instituting protectionist measures to enable their nascent industries to establish themselves domestically and then get a foothold in the global market. Dependencies, quasi-colonies, and colonies were proportionally less and less able to do this, and were thrown into a vicious downward spiral.
Alam meticulously demonstrates the sovereignty differentials among these categories in terms of the countries' export orientation, industrialization, human capital, and growth rates. Non-sovereign countries' markets were forced open, providing a cheap source of raw materials to the imperial power, while cheaper manufactured imports prevented any domestic manufacturing sector from developing. Meanwhile, the colonial powers used their technological gains to create their own "import substitution" at home, improving their agricultural techniques and creating synthetic replacements for other primary goods (e.g., dyes), while denying these advances to the colonies, so that the colonies' range of potential exports progressively narrowed.
Infrastructure in colonies was designed with export in mind, causing markets for domestically produced goods to wither. Also, social policies were influenced to keep education, job advancement opportunities, and wages at a minimum, as this kept the prices of primary goods low as well, maximizing profits and savings for the colonial power. Over time, the cumulative effects of these phenomena brought about the extreme disparities in wealth between nations that we see today.
Alam's findings should be carefully examined by economists and other scholars who are willing to consider the possibility that our prevailing economic worldview is fundamentally flawed.