The contemporary global landscape - rooted in capitalist ideals and impulses - is governed by the proliferation of wealth and power networks that stem purely out of economic relations. Eighteenth-century political economist Adam Smith laid the groundwork for understanding this phenomenon, positing that a nation’s future income depends upon its ability to accumulate capital, and the more one invests in better productive relations, the more wealth will be generated in the future (1). In Smith's view, the accumulation of affluence is not merely a matter of national vanity but serves as the backbone for societal advancement, enabling improved living standards, robust defence capabilities, and greater international influence. Through this essay, I would like to explore that it is through relations of production, distribution, and exchange - across borders and boundaries - and the policies and practices related to the same, that nations obtain wealth and gain power (1).
Initially, agrarian economies, centered around land and agricultural practices, were the bedrock of feudal societies. Yet, the class struggles and an inherent quest for wealth accumulation and profitable trade led to feudalism's decline and mercantilism's rise. Eventually, the Industrial Revolution and its new technologies gave rise to capitalism. During this shift, European colonial ventures began aiming at territorial and economic expansion (2, 3). Within the capitalist framework, trade, profits, and industry are primarily orchestrated by private entities;(3, 4) a system that forms the linchpin of today's global economic networks. Thus, nations with elevated levels of human and financial capital, amplified by technological innovation, occupied a vantage point of economic preeminence. Today, nations with these advantages are categorised as 'developed,' fueling their financial prosperity relative to emerging economies (5). This incongruent rise in economic well-being testifies to the enduring impact of historical endowments and resources in shaping today's fiscal terrain.
Contrary to prevailing thought, a nation's prosperity is predominantly engineered, not bestowed. It is not natural endowments or the labour pool that spearhead a country’s rise; rather, national prosperity hinges on competition. Thus, industries must adapt and upgrade in alignment with evolving global requirements, intricately bound to nations’ calculated projects for the accumulation of wealth and power (6) within international markets. However, the gains of such quests manifest less as a universal harmoniser and more as catalysts for discord. In a landscape saturated with colossal national wealth, disharmony reigns, turning international relations into a cauldron of stress and competition (7), and creating an untenable situation for socio-economically vulnerable nations. The ascent of developed countries in the global hierarchy is often predicated upon the exploitation of those struggling to meet basic needs. This leaves impoverished nations perpetually hungry, unable to escape the cyclic dynamics of transnational free markets (8, 9).
The quest for national affluence and influence is a Byzantine weave of historical lineage, industrial agility, and structural disparities. Echoing the tenets of Smith, the foundation of a country's fiscal future is its proficiency in asset accrual and advantageous interactions. This endeavour, however, exacerbates global divisions, creating a lopsided order where the prosperous thrive at the cost of the marginalised. As we ponder this landscape, we must consider whether our current mechanisms for wealth and power distribution are just, or if we should seek alternative frameworks for a more balanced global coexistence.
Submitted to 'Immerse Education Essay Competition 2023'; 'International Relations' Category. Jaiveer was awarded a scholarship of 50% to study the field of his choice through the Immerse Education Program.
1. Smith, A. (no date) The Wealth of Nations, Adam Smith Institute. Available at: https://www.adamsmith.org/the-wealth-of-nations
2. Wood, E.M. (2020) The transition from feudalism to capitalism, Verso. Available at: https://www.versobooks.com/en-gb/blogs/news/4809-the-transition-from-feudalism-to-ca pitalism
3. Smith, A. (no date) Why did economic systems begin to shift during the Industrial Revolution?. Available at:
https://cdnsm5-ss1.sharpschool.com/UserFiles/Servers/Server_1087968/File/Ricci/Adam %20Smith%20-%20Wealth%20of%20Nations%20Capitalism%202019.pdf
4. Kelly, K. (2020) Everything you need to know about capitalism, Teen Vogue. Available at: https://www.teenvogue.com/story/what-capitalism-is
5. Batabyal, A. (2022) Why some nations are wealthier than others – and what it means for future prosperity, World Economic Forum. Available at:
https://www.weforum.org/agenda/2022/07/wealth-nations-some-richer-than-others/
6. Porter, M. (2023) The competitive advantage of Nations, Harvard Business Review. Available at: https://hbr.org/1990/03/the-competitive-advantage-of-nations.
7. Jacks, L.P. (2019) Greed caused the war, The Atlantic. Available at: https://www.theatlantic.com/magazine/archive/2014/08/greed-caused-the-war/373402/
8. Hickel, J. (2017) Aid in reverse: How poor countries develop Rich Countries | Jason Hickel, The Guardian. Available at:
https://www.theguardian.com/global-development-professionals-network/2017/jan/14/aid -in-reverse-how-poor-countries-develop-rich-countries
9. Simon, A. (1988) Greed keeps third world hungry : East-west lust for power, possessions diverts resources, Los Angeles Times. Available at:
https://www.latimes.com/archives/la-xpm-1988-03-02-me-54-story.html
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