September 2024

For centuries, Europe extracted wealth, resources, and human capital from the rest of the world, fueling its industrial revolution and empire-building. Yet, when we look at Europe today, a striking paradox emerges: the very nations that once pillaged the globe now struggle to maintain relevance in an increasingly multipolar world.

Take Britain, for instance. A nation that colonized and drained vast territories, most notably India, now finds itself in economic decline. Economist Utsa Patnaik estimated that Britain owes India $45 trillion in reparations for its colonial loot. To put that in perspective, Britain’s entire GDP today is barely $3.3 trillion. If it were to repay what it stole, it would cease to exist as an economic entity.

This reveals an uncomfortable truth—Britain (and much of Europe) was never truly “rich.” It was merely propped up by theft, and without its empire, its actual productive capacity was weak. The empire was its lifeline. When the empire crumbled, so did Britain’s status.

The Myth of European Innovation

There’s a persistent myth that Europe’s wealth came from its own ingenuity. But history tells us otherwise. The industrial revolution was fueled by stolen cotton from India, enslaved labor in the Americas, and free-flowing capital extracted from colonies. London and Paris thrived because the world paid the price. When that supply chain of exploitation was cut off, these economies began to stagnate.

Compare this to Asia. China and India were once among the world’s richest economies before colonization. Now, freed from European plunder, they are rising again, not through conquest but through productivity. Meanwhile, Europe, which had centuries of stolen advantage, now clings to relevance with outdated institutions like the EU, internal economic crises, and declining global influence.

The True Cost of Colonization

Colonization wasn’t just about looting wealth—it also destroyed economic structures in the colonized nations, making them dependent and delaying their natural growth. India, for example, had a 25% share of global GDP before British rule. By the time the British left, it was reduced to less than 3%.

But what did Britain do with this stolen wealth? It squandered it. Instead of building a sustainable economy, it created a rentier system—living off past gains without producing new ones. Today, its industries are weak, its politics is fractured, and its economy is floundering.

Europe’s Future: A Declining Power

As Asia, Africa, and Latin America reclaim their agency, Europe faces a harsh reality—it is no longer the center of the world. It doesn’t have the colonies to sustain its illusion of wealth anymore. It lacks the productive power to compete with rising economies.

The European model—built on extraction rather than creation—has run its course. Without the ability to loot, Europe has little left to offer. The debt it owes the world is greater than the wealth it possesses. And that is why, in a truly global accounting, Europe is a net loss.