Hello Reader,
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As sledgehammers crashed into the Berlin Wall in 1989, the world witnessed the collapse of history's greatest controlled experiment on human flourishing. For 28 years, identical people—same culture, same language, same work ethic—had lived under radically different institutions. East Germans endured communist central planning while West Germans embraced a free market democracy with multipolarity and independent institutions.
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The verdict was clear: freedom had tripled Western prosperity.

Does Western Wealth Impoverish Other Nations?

Yet today, a stubborn narrative persists that economic prosperity is a zero-sum game: that Western prosperity causes Global South poverty. From academic “dependency theory” to progressive politicians lamenting historical American imperialism as a chief cause of poverty, this worldview paints poorer nations as helpless victims of rigged development and Western oppression.
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Cuba's leaders constantly blame their economic failures on the U.S. embargo, despite being free to trade with every other nation on earth. India remains deeply suspicious that America aims to suppress its growth—suspicions that Trump's punitive 50% tariffs on Indian goods only reinforce.
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China frames U.S. opposition as economic suppression. Yet our quarrel is with Communist Party tyranny, not Chinese economic growth.
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This zero-sum thinking isn't just wrong—it's tragically counterproductive. As the groundbreaking research behind the 2012 book "Why Nations Fail," reveals:
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"Countries such as Great Britain and the United States became rich because their citizens overthrew the elites who controlled power and created a society where political rights were much more broadly distributed."
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Here’s the liberating truth: This model is available to any nation that embraces it.

Botswana's Inspirational Example

When Seretse Khama became Botswana's first president in 1966, his nation epitomized the dependency theorists' nightmare. The former British protectorate had no paved roads, virtually no industry, and a per capita income lower than Bangladesh. Colonial extraction had left the country desperately poor. Khama would have been justified to blame the West, but he never did.
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When massive diamond deposits were discovered, he didn't nationalize them in anti-imperialist fervor. Instead, he negotiated partnerships with De Beers that gave Botswana a 50% stake while maintaining crucial expertise. Most critically, he built transparent institutions to manage wealth, established a fund to invest diamond revenues, and created democratic governance structures that distributed prosperity broadly.
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The results demolished every assumption about resource curses and colonial legacies. Botswana transformed from one of Africa's poorest nations into one of its most stable and prosperous. It maintains the continent's longest continuous democracy, boasts the highest per capita income in sub-Saharan Africa, and achieved sustained economic growth averaging over 7% annually for three decades. Khama proved that nations aren't condemned by their colonial past—they're empowered by their institutional choices.

Why Nations Fail

Nobel laureates Daron Acemoğlu and James Robinson's revolutionary research in "Why Nations Fail" explains why. Their evidence is overwhelming: North and South Korea share identical geography, culture, and history until 1945, yet North Koreans are among the world's poorest while South Koreans are among the richest.
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The Mexican and American sides of the city of Nogales share the same desert and ethnic makeup, yet the American side enjoys dramatically higher incomes and opportunity. The difference isn't resources, colonial history, or Western exploitation—it's institutions.
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"Poor countries are poor because those who have power make choices that create poverty," the authors reveal. Prosperity flows from inclusive institutions that empower broad populations and encourage innovation. Poverty persists under extractive institutions that enrich narrow elites while stifling economic dynamism.

The Destruction of Dependency Theory

The book destroys dependency theory by documenting a stunning "reversal of fortune": among European colonies, those that were more prosperous before colonization became relatively poorer afterward, while previously poor regions became wealthy. This pattern can't be explained by resources, geography, or ongoing Western policies—only by the institutional choices colonies made after independence.
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Zimbabwe and Botswana offer the perfect comparison. Both are landlocked African nations rich in minerals, both endured European colonization, both gained independence around the same era. Yet Botswana built inclusive democracy while Zimbabwe constructed extractive autocracy under Robert Mugabe. Botswana prospered; Zimbabwe collapsed into hyperinflation and mass emigration.

Trump's "Extractive" Foreign Policy

Unfortunately, Trump's transactional foreign policy validates zero-sum suspicions. His "America First" approach treats other nations as extraction opportunities rather than potential prosperity partners. The recent Congo deal—trading military support for mineral rights while ignoring the Democratic Republic of Congo's illiberal institutions—epitomizes extractive thinking. His escalating tariffs on India play directly into narratives about America preventing others' rise, when India's growth would benefit American consumers and workers.
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But Trump's failures don't vindicate dependency theory. When Cuban leaders blame American embargoes for their economic dysfunction, they ignore Cuba’s corrupt and un-democratic institutions while failing to look inward. When academic progressives frame global economics as inherently exploitative, they miss that prosperity isn't finite—it's created through human ingenuity unleashed by inclusive institutions.

The Path Forward

Acemoğlu and Robinson bring us glorious news: any country can prosper by building democratic institutions that protect property rights, encourage entrepreneurship, and distribute political power. Any country that rejects “extractive” policies that favor elites can flourish.
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The Berlin Wall's collapse proved freedom works. Botswana's transformation proves it's available to all. Their examples shine as beacons to the world.
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This newsletter exists to amplify that light.

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