A History of Wealth and Poverty: Why a Few Nations are Rich and Many Poor, by John P. Powelson.


Africa: Trade, Entrepreneurship, Pluralism, and Leverage

North Africa, the Middle East, India, and China all have led the world at separate times in economic development and science. By the fourteenth century, all these areas — and sub-Saharan Africa as well — were trading vigorously both at home and with the rest of the world. They all exhibited resourceful entrepreneurship, innovative systems of money and corporate enterprise, and capital formation. All therefore possessed the basic requisites for economic development found in conventional theories. Yet by the eighteenth century these same areas had become the most underdeveloped, while northwestern Europe led the world. The next six chapters address the reasons for the turnaround. We start with Africa.

The Early Promise


Herodotus reported that in 500 BCE horse-drawn chariots were crossing the Sahara from the Fezzan and from southern Morocco. [1] In the eighth century CE the king of Ghana derived a major portion of his revenue from taxes on trade, mainly in gold but also salt. [2] Before the eleventh century, Soninke traders in West Africa were more at home on trade routes than in their agricultural way of life. [3] In the fourteenth century, "Zimbabwe was the political and religious centre of a mighty trading state with connections as far distant as China." [4]

African trading networks prospered on into the period of European influence. "The growth of trade in the seventeenth and eighteenth centuries along the routes leading from the interior [of the Sahel] to the [Atlantic] coast caused the migration of Muslims, traders, and ulama (Islamic religious authorities) westward, and the establishment of new Muslim settlements." [5] These routes also converged with a trading network that the Dyula, African forest traders, had developed since the fifteenth century, to connect the Sahara with the southern savanna and seacoast. [6]

In southern Africa in the eighteenth century, "the Tsonga were developing sophisticated entrepreneurial skills and were reaching out to exploit the trading opportunities of an immense arc, from Uteve in the north to the Venda in the Zoutpansberg and the Pedi on the high veld, and southward, through the length of Natal, as far away as the Xhosa." [7] In the early nineteenth century, the Chokwe "established their own long-distance caravan system, with their own routes, carriers and leaders. Once they had launched into the business of carrying, the Chokwe began to rival the old entrepreneurs." [8]

"Hundreds of ad hoc arrangements and adjustments during the eighteenth and nineteenth centuries [in the central Zaire basin] resulted in the complex and diverse commercial institutions observed by the Europeans in the late nineteenth century. [T]rade crossed the boundaries between the inland populations and the river people by two methods: formal markets, and informal ties between individual traders." [9]


Schumpeter (1936), McClelland (1961), Hagen (1962), Gillis et al. (1987:26-28) and many other authors cite entrepreneurship as essential to economic development. [10] All the great movements across African soil were entrepreneurial: the Berbers migrating westward during prehistory, the southward jihads dating from the Almoravid conquests of the eleventh century to the eastward movements of the Fulani and the Sultanate of Sokoto in the nineteenth. So also were the establishment of trade routes spanning the Sahara in two directions and forming an intricate cobweb across central and southern Africa, concentrating on the Zaire and Zambezi Rivers.

Entrepreneurship was vital to the great empires of Ghana, Mali, Songhai, Kongo, Loango, Luba, Lunda, Mwene Matapa, Rozvi, Mozambique, Bunyoro, and Buganda. As they were formed, trade routes were reshaped, tributary states founded, new production initiated, and imperial business houses established. Alliances were made with the Portuguese on both sides of the continent and with the Arabs to the east, leading to trade as far as the Americas and China.

Agricultural innovation also dates to ancient times. Experimentation and innovation occurred in the Ptolemaic period (332-30 BCE) in Egypt, with a tripling of agricultural output in the Fayyum and the introduction of new viticulture. [11] Extension services today might contemplate how quickly the Africans introduced new crops, such as maize and cassava, from the Americas in the seventeenth century, with no outside agency to teach them other than the traders who sold them the seed. [12]

Crops spread rapidly up and down the west coast in the seventeenth century. "The trade in agricultural products [in Zaire] was given impetus by the introduction of cassava, which replaced millet, yams, and plantains as the staple crop in most areas. . . . By 1698 it was the staple food at the Pool [in the Zaire River], and from there it spread upward and inland." [13]

Crops spread even farther, into Luba-Lunda territory in the center. "A leader called Ntatatkwa ascended the fertile Fipa plateau after migrating from Buluba. In a typical charter myth, he and his people are said to have introduced the cultivation of millet, with its need for cooperative labour, and iron working." [14] From middle Africa, American crops spread into the east. The Kalenjins of present-day Kenya adopted "new ideas in agriculture from the peoples to the west. Both maize and tobacco were introduced into the Kalenjin-speaking parts of the western highlands from the Bantu and Luo to the west . . ." [15]

The swell of trading caravans led to the need for foodstuffs along the way. Lacking manpower — for the bulk of their males were off trading — the Nyamwezi introduced slaves to grow crops along their routes from Central Africa in present-day Tanzania to the coast. "The coastmen introduced new foods such as rice, cassava, pawpaw and citrus. Tutsi with large herds of cattle also came in great numbers and settled in various parts of Unyamwezi." [16]

Similar events in what is now southwestern Uganda led to increased specialization in the eighteenth century, with commercial agriculture supplementing subsistence and the appearance of traders and craftspeople. Cloves in Zanzibar and cocoa in Ghana are other examples of entrepreneurial burst. In 1840, Omani imam Sayyid Sa'id moved his capital from Oman to Zanzibar. He experimented with several commercial crops and settled on cloves. Setting up forty plantations himself, he persuaded his fellow Arabs to establish even more. [17] Cocoa plantations in Ghana were founded, at the end of the nineteenth century, by two migratory groups, the Adangbe-speaking Shai and Krobo, and the Twi-speaking Akwapim. Hill has documented the migrations, [18] and Hunter has written about their cooperation in determining land-ownership patterns. [19]

Agricultural entrepreneurship continues into our own time. In 1981, Nichodamas Manomano, a Zimbabwean farmer, "with careful cultivation practices that he learned in a course for so-called master farmers . . . raised more than 100 bushels of corn an acre . . . where yields as low as 35 and even 15 bushels an acre are commonplace . . . [H]is output was little short of miraculous." [20]

Nor has entrepreneurship been confined to agriculture. "Increasingly [in the seventeenth and eighteenth centuries] one can discern the impact of individual personalities, technological advances, and intellectual or ideological innovations. [I]ndividuals are known through their exploits and achievements recorded in tradition, or through second-hand reports of foreigners." [21]

A network of trading villages in the Congo from 1500 to 1891 also exemplifies nonagricultural entrepreneurship. Harms [22] shows how the family and labor system adapted to new circumstances such as the slave trade; how younger people formed satellite villages; how financing was obtained; and how long-distance ventures were undertaken by cooperating families. "In response to the expanding regional and international trade, many of the people living along the upper Zaire abandoned fishing as their primary occupation and took up commerce. Many fishing villages became trading centers." [23] Although using canoes instead of sailing ships, shells and copper instead of bank notes, and oral instead of written contracts, nevertheless these joint ventures are reminiscent of Italian city states of the fifteenth century.

Still another example of entrepreneurship is the growth of city-states and Canoe Houses in the Bight of Biafra (modern Nigeria) in the eighteenth and nineteenth centuries. Descent-based families formed themselves into trading societies, radically changing their character by obtaining workers through marriage and slave purchase. Although initially expanded to supply slaves to European traders, these houses traded widely in other commodities as well. Houses combined to form villages, composed of chiefs, elders, age sets, and other political organizations. [24] "The remarkable expansion of the slave trade in the eighteenth century provides a horrific illustration of the rapid response of producers in an underdeveloped economy to price incentives." [25]

Among the Loango in central Africa in the seventeenth century, "the level of locally inspired economic exchanges went far beyond the bounds of a 'subsistence-oriented' trading system. . . . Many of the goods produced required a high degree of entrepreneurial specialization. . . . By the 1660s the Loangans had a well-organized copper-producing enterprise." [26]

In the eighteenth century the Chokwe of eastern Angola created a new trading empire by moving northward into the less sparsely settled Congo basin. There they took up wax production, responding to a thirtyfold increase in demand from Benguela and Luanda. When the Portuguese abolished the royal monopoly of ivory in 1834, the Chokwe produced less wax and hunted more elephants. Investing the proceeds in women slaves, they expanded their agricultural output. Then they diversified into rubber tapping. Once again responding to price signals, they established long-distance caravans for ivory. "In the short space of fifty years the Chokwe had risen from being a small, remote, forest people to being one of the most dynamic economic forces in central Africa." [27]

The Yao of the interior behind Mozambique equaled the Chokwe in a stunning advance during the eighteenth century "by responding immediately and intelligently to the rapidly changing market conditions of the coast, which were at once the source of raw materials of the continent and the provider of exotic goods that were desired by the Yao and other Africans of the interior." [28]

All these examples attest to the entrepreneurial genius of the Africans, indicating that the explanation for African underdevelopment lies elsewhere than in any presumed lack of entrepreneurship. Further historical references to Africa as a trading continent are listed in Appendix 7.1.

Aborted Institutions

African progress toward economic development was similar to that of northwestern Europe and Japan in many ways, even before these two areas had come into extensive contact. Trading organizations, corporations and guilds, monetary systems, and law were all forming. Yet none of these institutions reached the complexity of its European or Japanese counterparts.

Money and Credit

In the earliest known times, money and credit instruments were more advanced in Egypt and the Maghrib than in Europe or Japan. In the Ptolemaic period (from 332 until 30 BCE), both private and royal banks in Egypt received money on deposit and paid it out on order; they also traded foreign exchange. Although banks did not lend at interest, much lending occurred outside banks. [29]

Nor did the banking tradition die with the Roman Empire. By the eleventh century, North African banks were issuing credit instruments similar to bills of exchange in Europe, and promissory notes circulated, their value depending on the reputation of the issuer. [30] Mamluk times in Egypt (1250-1517) saw a stable dinar and ample silver coinage. [31] In sub-Saharan Africa, on the other hand, money consisted mainly of cowrie shells, beads, and other natural objects right up until colonial times. In the eighteenth century tribute and debts in some areas were settled in slaves. [32]

The inconvenience of different currencies in different territories was resolved both by exchange houses, operated privately, and by adoption of copper or brass rods as international currencies, like gold in European trade. Birmingham associates the advanced economy of Loango in the eighteenth century with its copper currency, [33] as does Harms with the Upper Zaire region in the nineteenth century. [34]

Africans also used credit. But before the twentieth century and in some places even today, it was usually limited to one's own ethnic group or to people the creditor knew personally. [35] The Fulani would borrow only from others in their lineage, [36] while the Yoruba had a credit union (esusu) for deposits and loans. [37] One of the principal functions of secret societies among the Ibo peoples "was to regulate credit and provide sanctions for the recovery of debts. This was very effectively carried out." [38] Muslims also would make loans, for God's wrath would fall upon those who did not repay them. [39] Credit might be extended by Europeans on the Atlantic coast [40] or by Asians on the Indian Ocean coast. Europeans would give "trusts" (credits) to Niger delta kings with which to buy slaves and provisions in the interior. [41] In West Africa, "the large farmers, though sometimes temporarily in debt themselves, stood as creditors at the head of an extensive network of financial relations, and frequently advanced money (usually on a seasonal basis) to the smaller farmers in the locality." [42] Sayyid Sa'id borrowed from Indian financiers to plant his cloves in Zanzibar. [43] Sometimes strong African states would borrow from weaker ones on terms set by the former. For example, Asante leaders borrowed in the Upper Niger in the seventeenth century. [44]

Sub-Saharan African states did not develop promissory notes, paper currency, modern banks, or investment houses, nor did they create money markets and accounting systems to facilitate large-scale capital formation. Furthermore, some societies assigned different currencies to consumption and investment, impeding a flow of resources from one to the other. [45] Why did the history of financial instruments pause before these institutions were created?


Guilds — or something similar — arose in both northern and sub-Saharan Africa. They were even known in Ptolemaic Egypt. [46] The idea of a corporate body making decisions and holding assets and liabilities also was understood. "[A] guild could be held corporately liable for default in tax-payments by one of its members." [47] Mabogunje found evidence of a guild system well developed among the Nupe of northern Nigeria around the eighteenth century or earlier that was "in many respects comparable to that of medieval Europe." [48]

The Canoe Houses of the Ibo functioned in some ways like European and Japanese guilds. The head of a house could tax the members. "In political terms he became a member of the King's council — the successor of the village assembly — which decided on internal and external relations. . . . All members belonged directly to the head's trading organization or depended on him for recommendation to European merchants." [49] Old houses spawned new ones. The head of a new house depended on the old house for political status but traded independently. [50]

Age sets, secret societies, and clans have been among the bodies organizing African economic activities. All these have been traditional to peoples spanning the sub-Saharan continent. Like the guilds of Europe and Japan, they were socially integrative, with trading only one of their functions. Age sets of the Mande people and secret societies in eighteenth-century Nigeria "constituted forums for resolving conflicts which arose within the ruling class or at least within the ruling class of a broad ethnic community; they set values for all citizens through educational programmes; and they regulated economic activities." [51]

By the nineteenth century, many trade organizations existed in West Africa, but their influence over prices and competition was slight. Rather, their greater success lay "in representing the interests of their members in negotiating with state authorities, and in helping to enforce regulations regarding weights and measures, and laws governing debt, contract and agency." [52]

Despite these vertical negotiations, these groupings did not grow into trading communities like the East India Company or into modern corporations with limited liability, diversified debt instruments, and shareholdings, nor did they expand into investment banks and stock exchanges.

Why Were These Institutions Aborted?

Before examining why these institutions were aborted, some commonly presumed explanations of economic development or its lack must be set aside: population growth, the nature of trade, and literacy. Others are slavery and colonialism, which will be considered in the next chapter.


According to the demographic theory, population growth spurred Europe's development in the eleventh to thirteenth centuries. Africa's population increased little before the twentieth century. Colin Clark's figures show European population increasing by 23 percent per century during the critical period, 1000 to 1340 CE, while that of Africa went up by only 10 percent per century. [53]

The demographic theory proposes that population growth induced new towns, specialization, and trade in Europe, and that these in turn led to economic development. In Africa, however, new towns, specialization, and trade grew in the absence of strong population growth and without leading to substantial economic development. Since the middle portion exists without either the presumed prerequisite or the presumed effect, the demographic theory is incomplete.

External versus Internal Trade

Other observers point to Europe's external orientation — its explorers and overseas traders — whereas Africa either turned inward or relied on other countries' ships. But Japan did much the same as Africa, at least during the Tokugawa period (1603-1868). Furthermore, no good theory explains why outward trade should be superior to inward. If greater opportunities directed Africans toward trade within Africa, economic development would require them to turn that way.


Still other observers have suggested Africa's illiteracy as an impediment to economic development. This proposition requires more insight than is at present possessed on why any society becomes literate, such as the ancient Egyptians, Arabs, Romans, Greeks, or Chinese.

Illiteracy might have held sub-Saharan Africans back in their quest for monetary and corporate systems, but their innovativeness in other ways makes it hard to believe that they could not have invented literacy, numeracy, and accounting had they needed them. Nothing in the African systems of trade and finance would suggest any necessity for these inventions. Therefore, they probably did just as well without them, at least until late in the nineteenth century.

Slavery and Colonialism

Many see slavery and colonialism as the reasons for the aborted development of the institutions of economic growth. Surely these disastrous events played their part, as will be discussed in the next chapter. But even before the swell of European slavery and much before colonial conquest, Africans were showing signs of falling behind the powerful economic growth occurring in northwestern Europe.

Failure of the Power-Diffusion Process

The institutions of economic growth — law, money, corporations, wage labor, and the like — may have been aborted because they were handed down as rules or organizations by the centralized state and were not formed primarily through the interaction of many groups at a grass-roots level. For the most part, the state was governor, producer, trader, executive officer, and judge, with no separation of powers. Although local goods were sold on free markets, labor and capital often were stolen or kidnapped when family resources proved insufficient. This occurred whether the state/producer/trader was a small city-state as among the Hausa, or a Canoe House as among the Ibo, or in tribes or clans acting like states, or in great empires with conquered people. The simplicity or complexity of states, the amount of their power, and the size of their bureaucracies correlated mainly with trade. In many cases, the state rose or fell with trade.

"State" in the African context can be much different from the Western concept. Writing about West Africa of the seventeenth to nineteenth centuries, Obayemi distinguishes between mini-states and mega-states. The former are lineages "united to form the community. [They are] characterized by a number of settlements at varying distances from one another distributed all over its territory." [54] The latter are empires established by some groups or clans conquering others.

According to Obayemi, long-distance trade was the principal reason for forming megastates in western Africa, for trade and kingship were "closely linked." Probably "the power of the kings derived in some way or other from their involvement in the development of local and probably also long-distance trade in the area." [55] Usually there was no stipulation against long-distance trading apart from the state, and private trade organizations existed by the nineteenth century. On balance, however, the synthesis of economic organization and the political state has been overwhelming and remains so today.

Almost always the power of the chief of state was primordial; economic advantage was secondary. Security was a principal factor. Unless one carried the magic of the Muslim, it was simply not safe to transport goods long distances without the protection of the state. It is sometimes suggested that chiefs were constrained by tribal custom. While this may be so to some extent and in some places, more frequently their power was overwhelming, their cruelty great, and they themselves defined custom.

The cruelty of the chiefs is a byword among the Mambwe; they emphasize the power and authority that the chief held over their lives and property in the past . . . [H]is power to take a man's life was his most significant characteristic. [56]

Illustrations of the dominant role of the state in trading are plentiful. Ancient Egypt serves as a prototype:

The Ptolemaic government [was] one of the most efficiently run and most rigidly hierarchical bureaucracies ever devised; an administrative regime whose raison d'être was the enrichment of the monarchy through a highly organized and tightly controlled economy. . . . The administration was staffed by a host of officials and bureaucrats, recording and regulating the activities and obligations of the king's subjects, down to the last detail of the enforced labour which every able-bodied male was forced to perform . . . [57]

When Gray argues that innovative leaders rather than historical determinism influenced the history of seventeenth-century Africa, he lists rulers rather than private citizens as those contributing to economic and technological advance. "Increasingly one can discern the impact of individual personalities, technological advances, and intellectual or ideological innovations. . . . Iyasu I of Ethiopia, Mai Aloma of Bornu, Garcia II of Kongo and Queen Nzinga of Matamba, or Herry from the Cape, are all clearly recognizable." [58]

"States in the Yoruba/Aja group [in the seventeenth and eighteenth centuries] exercised wide powers over money and trade. Having developed a monetary system based on cowries, the state treasury controlled the inflow and circulation of currency. Foreign trade was exclusively under the administration of the central government. . . . Local production and distribution also came to some extent under central control." [59]

"In some parts of Africa the development of long-distance commerce was accompanied by the growth of states to control and regulate trade. In the Zaire basin, however, the micropolities that dotted the area remained largely independent of one another. . . . Each market was under the control of a market chief, usually the inland chief who controlled the land on which the market was held." [60]

In the Mossi states of West Africa, 1500-1800, agricultural "surpluses passed, by various forms of taxation, to the local chiefs, who were able to maintain courts, often small-scale replicas of that of the king, and to equip and train a number of their kin as cavalrymen who could be mobilized in time of war." [61] "In 1600 the maloango was a powerful king whose influence extended not only over his own kingdom of Loango, but also over the whole [Atlantic] coast from St. Catherine in the north to the smaller kingdoms of Kakongo and Ngoyo in the south. . . . Internal trade was conducted through the king, whose government collected taxes and used the unconsumed surplus for commercial exchanges." [62]

"Much trade in eighteenth-century southern Africa took place as tribute, conducted by royal embassies:" [63] Trade in the Luba Empire in central Africa in the early nineteenth century was "a vertical exchange, with producers paying a part of their produce in kind to the chief and receiving in return material rewards derived from tributes of others. Such a system did not encourage horizontal trade between producers, and did not lead to the emergence of full time traders. . . . On the other hand, when outside traders established links with Luba leaders, these rulers were immediately in a position to go into business as monopolist entrepreneurs. . . ." [64]

Other illustrations of state dominance in trading abound:

  • Mabogunje writes that lands seized by the Fulani in the twelfth and thirteenth centuries became property of the state. "When the Yoruba/Aja peoples decided that family enterprise was not strong enough to meet the European challenge," he goes on, "they decided on a strong central monarchy." [65]
  • Horton describes how stateless societies evolved into states by rulers co-opting economic resources and enterprise. [66]
  • Wilks and Hopkins both write of ownership of mining by chiefs. [67]
  • Marks and Gray tell how, once the royal court's needs were satisfied in Butua, no one was allowed to industrialize further, possibly to reduce any threat to the ruler. In addition, Rozvi trading expeditions were considered official embassies; only influential persons could participate. Birmingham explains how Lozi and Kongo kings controlled their empires' economic resources. [68]
  • Alpers tells of the concentration of wealth in the ruling Tutsi of Rwanda, with the Hutu becoming little more than serfs. He also explains how Buganda gained its superiority over Bunyoro in the eighteenth century by making trade a royal monopoly. [69]
  • Chanock writes that in Malawi and Zambia in the nineteenth century, "chiefs claimed a control over the right of movement and settlement of persons." [70]
  • According to Marks and Gray, the northern Nguni chiefs monopolized the cattle and ivory trade in the nineteenth century, and the Xhosa chiefs dominated it in their region. [71]
  • Wilks explains that the Asante managed state enterprises. [72]
  • According to Birmingham, in the Lunda Empire in the eighteenth century "control of the country's external economy became a central function of royal authority." [73]
  • Among the Ngonde, according to Alpers, the ruler of the Kyungu dynasty represented all his people in the initial dealings with traders, and from this he increased his economic power by controlling the ivory export trade. [74]
  • Hopkins tells of official traders transacting business for the state in the kingdoms and city states that are now Nigeria. [75]
  • Richmond tells how Mohammed Ali, Ottoman viceroy of Egypt in the early nineteenth century, required that all crops be delivered to the state at prices fixed by it. [76]
  • Unomah and Webster tell how interior rulers in eastern Africa controlled trading movements by protecting them militarily. [77]
  • Marks and Gray explain how slave ownership by Loango chiefs in the nineteenth century led to their control over land and trade. They also describe how the Tswana chief "held supreme religious, judicial, legislative and executive power over his people, and controlled trade." [78]

These examples support the generalization that African states have dominated production and trade from early centuries, often to the exclusion of other groups or private enterprise.

Political and military power determined economic strength as much as the other way around. Thus northern African states — Egypt and the Maghrib — were both more powerful and more prosperous than those south of the Sahara. The empires of Ghana, Mali, and Songhai rose and declined with the great trade routes of the Sahara. Ethiopia identifies with the Red Sea trade, while Arab states along the east coast and on Zanzibar depended for their nationhood on trade with India and China. This trade helped form empires in the interior, such as Lunda, Bunyoro, and Buganda, to link with the Indian Ocean as well as with the Atlantic.

The central African forests — Cameroon and its interior, where land was abundant and geographic facilities for trade scant — were the home of stateless peoples, who did not engage much in economic enterprise. Farther south, where the Congo River system linked central Africa with the Atlantic coast, other great trading empires arose: Kongo, Loango, Bobangi, Luba, and Lunda, to mention only some. As the land base narrowed into a cone and the Zambezi and Limpopo rivers offered more transportation, new trading states were formed, such as Zimbabwe, Mwene Matapa, Butua, Rozvi, and Mozambique.

The link between trade and state must not be overstated. Sometimes trade tended to break states apart rather than glue them together. For example, the Kanuri Empire, "ruled by kings of international fame . . . rested on an unstable balance between centralizing and disintegrating forces." [79] It broke down in civil war.

Laroui even argues that "throughout the history of the Maghrib, maritime trade, though often regarded as a mark of prosperity, has gone hand in hand with a weakening of political authority" [80] (italics mine). This undocumented statement — even if true for the Maghrib — does not represent the generality for nonmaritime trade in the rest of Africa.

While statehood in England, France, the German princedoms, and Japan also depended on trade, the very identities of these countries, their nationalities, and their geographies, were not as intimately tied to international trade as were those of the African states. Independent traders in Europe and Japan arose as a counterpoise to the state.

Reasons for the Failure of Power Diffusion

The state's central role in trade, along with its primordial concern for power and security, stifled diffusion of power in Africa and retarded economic development for the following reasons.

First, no effective way existed to transfer land and other physical property from less efficient to more efficient uses. Sovereignty was not distinct from land ownership. Alienation of land to individuals within the tribe usually required the chief's permission. Outside the polity it would have been an unthinkable cession of sovereignty.

Second, no independent labor market developed. Since the productive power of people was oriented toward the state, no need existed for a free labor market. Slavery and marriage were employed to move labor from areas of its abundance to those where it would be more productive. Neither is an efficient means of allocating labor.

Third, no easy way existed to tell when consumer preferences changed. Goods to be consumed were supplied mostly by domestic agriculture and what the chief decided to import. Therefore, changing utilities, including propensity to invest, could be stifled.

Fourth, not enough independent groups formed to challenge the authorities and to compete with them. Without such challenge and negotiation, the cultural capability to negotiate and compromise on economic matters did not mature enough to lead to complex economic ventures. While Africans were very good at compromise within their clan and other small circles, they did not extend this facility to wider economic circles.

Fifth, for all the aforementioned reasons, traders did not ordinarily write modern contracts, did not have the markets in which to fulfill them or the law courts to enforce them, and did not trust each other sufficiently to want to engage in these activities.

Sixth, confrontation and war became the principal means of "resolving" disputes; the term is in quotation marks because — as Bozeman suggests [81] — disputes were not expected to be resolved in a Western sense. They might only be contained, indefinitely.

The foregoing assertions raise more questions, even more controversy, than they solve, because they are all relative. Central authority did have its offsets, such as a titled nobility or tributary groups far enough removed to act independently, or the inability of the government to control all behavior. Nevertheless, these propositions reflect the overwhelming generality about most of Africa for most of known history before colonialism. Further historical references to African state domination over trade, land, and other resources are listed in Appendix 7.2.

Power and Leverage

Two reasons for the state's strong power over production and trade may be advanced. Both are speculative. First, in the wide open spaces of Africa, until the twentieth century peoples enjoyed both long-term migrations and short-term escapes from each other. Second, following the Goodell thesis mentioned in Chapter 5, through widespread trade which they controlled, chiefs became so wealthy that they did not have to negotiate with their subjects.

Not until the late nineteenth or the twentieth century did most Africans encounter the land shortage that elsewhere had forced cooperation across cultures or groups whose survival was otherwise threatened. Although some African societies developed a sort of vassalage, no contract feudalism like that of Japan and Europe emerged, and few vertical alliances were formed. Institutions of trust, such as financial, monetary, and legal systems, were aborted, partly because no further advances were needed for the types of commerce in which Africans were engaged and partly because the essential culture of negotiation had not been sufficiently developed.

While evidence of some incipient pluralism with the possibility of leverage has been found, such instances do not slide off the pages of African histories as voluminously as they do from those of northwestern Europe and Japan. Nevertheless, the scant evidence must be examined to see why a crucial threshold was not reached, to put the power-diffusion process into motion.

In Egypt of the first century CE, "counteractive institutions and practices developed — alternative authorities strong enough to force the government to encourage co-operation rather than to coerce. Such strength, of course, needed an economic base; . . . the church had such a base, both in totality and in its constituent parts, particularly the monasteries which are excellent examples of such institutions offering protection to their inmates." [82] This leverage might have improved the balance of power between church and monarchy, in the direction of pluralism, had not Egyptian institutions later been compromised by anarchy throughout the Roman Empire, including Egypt.

Wolfe writes that "the maintenance of power [in North Africa in the fourteenth century] depended on keeping control of the region through its elite, and on effective alliances with pastoral groups able to defend the caravan routes and oases in the hinterland. Contesting control meant forming alliances with disaffected tribal segments and enlisting the cooperation of disgruntled urban merchants and artisans." [83] Instead of gradually enhancing their status through such vertical alliances, however, the "disgruntled" sectors bided their time until they could seize power for themselves. With insufficient stability in the central government, the power-diffusion process was not at work.

In the sixteenth century, Portuguese traders settling in the Kongo formed vertical alliances to play off the interests of Kongo and Portugal, alternatively. But they seem merely to have retained their status rather than enhancing it through leverage. [84]

In Dahomey, Oyo, and Benin in the eighteenth century, power was diversified with checks and balances upon each authority. "The olu of Warri boasted of his independence from the oba of Benin, but his own power was limited by that of three nobles. . . . [T]here was competition for place and power among the various dignitaries, . . . the power of the oba was whittled down relative to that of the collective nobility, the titled elite interposed between the oba and the rest of his subjects. [85] Since this kind of pluralism is reminiscent of northwestern Europe and Japan, why did subject groups, such as slaves and common freemen, not offer their support to the nobility or the oba or the olu in their conflicts with each other, in exchange for greater privilege? In the absence of any evidence that this occurred, one can only speculate either that the elite groups in competition were sufficiently united in their subjection of lower classes or that the lower classes sensed too low a probability of success, especially if they should ally themselves with the losing group.

Birmingham writes how "the economic and political growth of Luba began to weaken" about 1870, with "constant feuding between royal factions." [86] One may question why lower classes did not take advantage of these divisions to make vertical alliances. Possibly successful leverage requires alliances with relatively stable stronger groups; otherwise, the risk of losing is too great. By this time, Luba was not a stable society.

The failure of economic development may ultimately lie in geography, especially the greater availability of land in Africa. The high fluidity of interest groups, and indeed of whole societies in Africa, was not conducive to vertical alliances with leverage. Migrations, state formation and dissolution, capture and enslavement, the quick rise and fall of states, new empires and their breakup, all impeded the essential stability, in contrast to northwestern Europe and Japan. Thus, circumstances did not force Africans to negotiate and compromise beyond the clan or tribe. As a result, the power-diffusion process did not occur, and the requisite institutions for durable economic development did not take root.


  1. EBMa 1974:19:762.
  2. EBMa 1974:19:761.
  3. Levtzion 1976:146.
  4. Barraclough 1984:166.
  5. Levtzion 1975:218.
  6. Levtzion 1975:182.
  7. Marks and Gray 1975:408.
  8. Birmingham 1976:237.
  9. Harms 1981:71-72.
  10. Schumpeter 1936; McClelland 1961; Hagen 1962; Gillis et al 1987:26-28, and many more.
  11. Bowman 1986:101.
  12. Gray 1975:8.
  13. Harms 1981:52.
  14. Alpers 1975:500.
  15. Alpers 1975:494.
  16. Unomah and Webster 1976:297.
  17. Unomah and Webster 1976:273-76.
  18. Hill 1959:14-28.
  19. Hunter 1972:85-109.
  20. Lelyveld, in New York Times, 10/10/1981.
  21. Gray 1975:8.
  22. Harms 1981. Harms is an anthropologist who lived among the Bobangi, collecting his evidence from whatever written or archaeological records existed, but largely by oral history, not only among the Bobangi but also among fishermen from other tribes.
  23. Harms 1981:5.
  24. Rodney 1975:261.
  25. Hopkins 1973:105.
  26. Birmingham 1975:345-46.
  27. Birmingham 1976:238.
  28. Alpers 1975:525.
  29. Bowman 1986:113.
  30. Udovitch 1979:268-70.
  31. Lewis 1988:188.
  32. Fisher 1975:101.
  33. Birmingham 1975:345.
  34. Harms 1981:85.
  35. Hopkins 1973:64.
  36. Horton 1976:99.
  37. EBMi 1974:10:829.
  38. Rodney 1975:264.
  39. Hopkins 1973:64.
  40. Hopkins 1973:109.
  41. Alagoa 1976:359.
  42. Hopkins 1973:239.
  43. Unomah and Webster 1976:285-7.
  44. Rodney 1975:324.
  45. Harms 1981:165.
  46. Bowman 1986:110-11.
  47. Bowman 1986:112.
  48. Mabogunje 1976:24.
  49. Alagoa 1976:343.
  50. Rodney 1975:261.
  51. Rodney 1975:280.
  52. Hopkins 1973:57.
  53. Clark 1968:64.
  54. Obayemi 1976:205.
  55. Obayemi 1976:258.
  56. Watson 1958:161, cited in Chanock 1985:33.
  57. Bowman 1986:56.
  58. Gray 1975:8.
  59. Rodney 1975:239.
  60. Harms 1981:71-73.
  61. Wilks 1976:421.
  62. Birmingham 1975:348.
  63. Marks and Gray 1975:403.
  64. Birmingham 1976:250.
  65. Mabogunje 1976:27.
  66. Horton 1976.
  67. Wilks 1976:427; Hopkins 1973:47.
  68. Birmingham 1975:381, who cites Mainga 1973.
  69. Alpers 1975:478-81.
  70. Chanock 1985:168.
  71. Marks and Gray 1975:438.
  72. Wilks 1976:449.
  73. Birmingham 1975:372.
  74. Alpers 1975:514.
  75. Hopkins 1973:62.
  76. Richmond 1977:63.
  77. Unomah and Webster 1976:303.
  78. Marks and Gray 1975:417.
  79. Abdullahi Smith 1976:171.
  80. Laroui 1977:187.
  81. Bozeman 1976.
  82. Bowman 1986:86.
  83. Wolf 1982:38.
  84. Birmingham 1975:331.
  85. Rodney 1975:240.
  86. Birmingham 1976:251-52.

Copyright © 1994 by the University of Michigan. First published in the USA by the University of Michigan Press, 1994.

Published on the World Wide Web by The Quaker Economist with permission from the University of Michigan Press, 2005.

Creative Commons License This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 2.5 License.