Surveying history it becomes clear that pursuing economic extraction does not lead to long-term prosperity. Typically, countries with a history of exploiting others are poorer than their peers. In Africa, Benin is an economic dwarf despite its rapacious history, but less aggressive peers like Mauritius and Botswana are economic stars. Similarly, the Ivory Coast experienced some of its best years when the country invested in promarket policies.
https://mises.org/wire/rich-country-poor-country-why-differences
The scourge of poverty wounding citizens in the developing world has provoked much discussion in affluent countries. Quite unreasonably, rich countries have been indicted for inciting poverty in poor countries. Unfortunately, the assumption that prosperity stems from exploitation is still widely popular in academia and politics. However, the historical record casts serious doubt on this argument.
Imperialism was the standard in the ancient world, but no imperialist power achieved Schumpeterian growth. For example, bouts of economic progress in ancient Rome and Greece fizzled out despite imperial pursuits. Indeed, the national treasury is expanded when empires extract tributes from conquered states, but this does not redound to superior living standards for ordinary people. The wealth of the state is not a proxy for individual prosperity.
Surveying history it becomes clear that pursuing economic extraction does not lead to long-term prosperity. Typically, countries with a history of exploiting others are poorer than their peers. In Africa, Benin is an economic dwarf despite its rapacious history, but less aggressive peers like Mauritius and Botswana are economic stars. Similarly, the Ivory Coast experienced some of its best years when the country invested in promarket policies.
On the European side, empire proved to be quite costly for Sweden. Sweden became the envy of the world after the collapse of its empire. Further, the economic success that coincided with Swedish imperialism was the result of governance and economic reforms rather than empire-building. Japan experienced the glory of empire late in its history and like other examples, the evidence shows that it was a burden.
Using political clout to exploit other countries is not a strategy for success. Indeed, history reveals that many poor countries transitioned into affluence by facilitating commerce rather than chasing colonies. Finland was a poor European country in the early twentieth century and had no colonies like Switzerland. Yet both are two of the most successful countries in the world.
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