Wednesday, March 09, 2011

How history shapes people

We know that our history shapes our lives to some extent. What a new field of economics is finding is to just how large an extent that is.

Tim Harford
author of the excellent Undercover Economist wrote earlier on this year about the phenomenon:

The largest silver mines in the Spanish empire were the Potosí mines, discovered in 1545 in what is now Bolivia. Exploiting the mines was dangerous, and in the late 16th century, the Spanish introduced the mita system of forced labour. Villages near Potosí were obliged to provide one-seventh of their adult male population to work the mines, and the mita system continued until its abolition in 1812.

That is history. This is not: the former mita districts are 25 per cent poorer than apparently identical districts on the other side of a boundary that ceased to mean anything 198 years ago. A long-abolished colonial system has somehow shaped the modern world.

While the field is a relatively new one, it has profound implications for public policy. Circumstances determine much of people's lives, even where those circumstances linger in the mists of collective memory. Policies such as those being implemented in Brazil to create conditional cash transfers are perhaps one way of addressing these inherited inequalities, but more ways must be found. It is considered a classic example of injustice that a child ought not inherit the sins of their parent (or their parent's owner); we ought do more to make that a reality.

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