Nobel economist blames Spain for Latin American poverty

Nobel economist blames Spain for Latin American poverty

A commemorative Economics prize argues that the gap between North and South America stems from colonial institutions. The diagnosis, formulated by a British economist, has peine the debate on the Black Legend and who truly plundered the continent. The thesis is simple: where there was Spanish colonization, extractive structures remained; where there was British colonization, inclusive institutions emerged. The problem is that the version circulating on social media simplifies a book that also assigns blame to London and Washington.

The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel—which is not a Nobel in the strict sense, though few remember this—went to an author who has long argued that the key to development lies not in geography or culture, but in the rules of the game left behind by the colonizer. His most cited work, Why Nations Fail, points to Creole elites who replaced the Crown and maintained the extraction system.

What the book actually says about Spain and America

The central thesis is not that Spaniards were worse people, but that they encountered densely populated and hierarchical societies, which allowed them to set up a system of forced labor and fiscal extraction. In the north, British settlers came across sparsely populated territories and ended up creating settlement colonies with distributed property rights. That institutional contrast, the author argues, carries consequences centuries later.

Some read there an exclusive condemnation of Spain. That is not what the text says. The British tried to replicate the extractive model in their own colonies and failed; the book records this. And when Creole elites expelled Spanish administrators, they did not dismantle the inherited institutions: they captured them. This is the point that usually disappears in the controversy.

The gold that stays and the gold that goes

The discussion on plunder has a contemporary leg that the noise obscures. Current mining concessions, many with Canadian and US capital, extract more minerals today than left during centuries of colonial rule. Millions of ounces of gold leave Peru annually, exploited by foreign companies. The uncomfortable question is not what Spain did in the 16th century, but what Anglo-Saxon capital is doing in the 21st.

That detail disorients those who reduce the problem to a single flag. Extraction did not end with independence: it changed hands. And there the Nobel narrative falls short, because its analytical framework barely dedicates space to dictatorships funded from Washington or to the oligarchies that divided the continent after the break with Madrid.

The Black Legend as a battlefield

The jury's decision has served to reignite a cultural battle that has been open for centuries. One part of the analysis argues that the prize validates and amplifies the Black Legend, arriving at its peak health. Another current responds that the Black Legend is precisely the framework that prevents discussing the substance: mestizaje, the early prohibition of indigenous slavery, and the founding of universities do not fit into the narrative of pure plunder.

The clash has an inevitable comparative component. If colonialism explains poverty, why are Jamaica, Haiti, or the Guianas, with British and French traditions, not Switzerland? And why have Australia, Canada, or New Zealand, with Anglo-Saxon colonization, converged with Europe? The book's answer is institutional; the economic nationalist answer is simpler and less useful.

Japan, India, and the inconvenient argument

The most repeated counterargument does not come from Spain, but from Asia. Japan was a volcanic rock without resources, lost a world war, and received two nuclear bombs. Today it is the third economy on the planet. India went from concentrating 23% of global GDP in the 18th century to just 4% in the 20th, and now moves in the opposite direction. Colonization existed; determinism did not.

That data dismantles single-cause explanations. It also bothers those who attribute Latin American backwardness to the ethnic composition of its population, a thesis that the material itself discards: the Viceroyalty of New Spain was one of the most prosperous regions of the empire at the time of independence, and today it is led by Creole elites of European origin.

Who profits from the narrative and who pays

The prize has an immediate effect: it turns an academic hypothesis into an argument from authority. Those who use it to close debates have not read the book; those who discredit it for coming from a Briton haven't either. Between both extremes lies the interesting part: a framework that explains why some colonies generated states capable of limiting power and others did not.

The prediction, with all reservations, is that this episode will change nothing materially. Minerals will continue to be extracted, elites will continue to profit, and guilt will continue to circulate across the Atlantic in both directions. The only thing that changes is who holds the microphone when the prize is awarded.