Alex Douglas

December 5, 2009

Mining and Economic Development

Filed under: Research — afdoug @ 6:23 pm  Tagged , ,

Is extracting natural resources inherently harmful for a country’s economic development? Bolivia, home of the once-largest-in-the-world silver mine of Potosi, is now the second poorest country in the Western Hemisphere (after Haiti). Nonetheless, when we take a careful look at the dynamics of colonial silver mining, particularly mining’s labor institutions, there are a lot of parallels between 17th-century Bolivia and England during the industrial revolution. Tens of thousands of laborers migrated to proto-industrial jobs in cities where they worked freely for wages. Government policies subsidized capital investment at the expense of agriculture, although agricultural production was maintained by gathering land holdings into large estates managed for profit. Don’t believe me? Take a look for yourself:

Mining and Development in 17th Century Bolivia

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