In May 2000 the world’s leading financial weekly announced that there was little hope for the future of Africa. Under the headline ‘The hopeless continent’, The Economist’s cover showed a young man, presumably a rebel, carrying an anti-tank rocket launcher, over a cut-out of the region. The dark background spelled doom.

The Economist was not alone in its Afro-pessimism. In a seminal 1999 paper, development economists Paul Collier and Jan Willem Gunning attributed most of the malaise to Africa’s poor integration in the global economy, a result of import-substitution and exchange controls. They concluded that African countries were left with challenges that ‘are much more difficult to correct than exchange rate and trade policies, and so the policy reform effort needs to be intensified. However, even widespread policy reforms in this area might not be sufficient to induce a recovery in private investment, since recent economic reforms are never fully credible.’

Africa is a massive continent. One could fit all of Western and Eastern Europe (including the UK), India, Japan and China, and the United States into the continent, and still have space left. Africa, of course, has far fewer people. In 2021 an estimated 1.4 billion people lived on the African continent. The combined number for those other countries was a startling 3.7 billion people.

This makes Africa a land-abundant continent. In other words, Africa has a low labour-to-land ratio – there are about 46 people for every square kilometre in Africa as compared to 150 people, on average, in those other regions. The numbers for China (153), Western Europe (174) and India (464) are much higher.

This high land–labour ratio is not a new phenomenon. Africa has historically also had an abundance of land relative to the number of people who can work it. As we will see in this chapter, it has shaped the types of production systems and institutions that developed on the continent.

Argentina was one of the richest countries in the world in 1900. Its GDP per capita, according to the Maddison Project database, was $4,583. At the same time, Germany’s GDP per capita was $4,758, Sweden’s was $3,320, and Japan’s $2,123, the same as South Africa one year earlier, while Indonesia ($1,151) and India ($955) were comparatively poorer.1

More than a century later, in 2018, the situation was very different. While Argentina was four times as rich in 2018 as in 1900 ($18,556 vs. $4,583, adjusted for price increases), Germany was ten times richer in 2018 than in 1900 – a country, one must remember, that had suffered defeat in two world wars. Sweden was fourteen times richer. Indonesia was ten and India seven times richer.

Kindleberger’s intellectual formation was in American institutionalism. At Columbia University, the two biggest influences on him were H. Parker Willis and James W. Angell. He learned banking from the former and international economics from the latter, even as he turned away from the policy conservatism of the former and the doomed multilateralism of the latter.

There was nothing special about James Hargreaves. Born in 1721 near Blackburn in Lancashire, he never learned to read. As he grew to adulthood his only job prospect was that open to other Blackburn men of his standing: he became a hand-loom weaver who turned yarn into fabric to make a living. From his meagre salary he supported his wife and thirteen children.

Eighteenth-century England was an important textile producer. To produce fabric from wool or cotton requires three steps: carding, spinning and then weaving. At the time, it usually took three carders to provide the roving for one spinner, and three spinners to provide the yarn for one weaver. To increase the amount of fabric, one needed to speed up the process early in the chain of production. And so, in 1764, the story goes, Hargreaves was working with a one-thread spinning wheel when it accidentally fell over.

War service completed Kindleberger’s intellectual formation, establishing him as fundamentally an intelligence analyst. First in London as Chief of the Enemy Objectives Unit, then on the Continent as advisor to General Bradley, and then after the war at the State Department working first under William Clayton on the reconstruction of Germany and then under George Marshall on the reconstruction of Europe, Kindleberger’s government service career provides a staffer’s eye view of the dramatic events of war and reconstruction.

Around 1300 CE, so the legend goes, the king of the Malian empire in West Africa hatched a plan. He believed that the earth was round and wanted to prove it, so he equipped 200 boats full of men and another 200 full of gold, water and victuals, and sent them west. After a long time only one boat returned, reporting that ‘we have navigated for a long time, until we saw in the midst of the ocean as if a big river was flowing violently’.1 Not happy with the answer of the only boat to escape the danger, the king doubled down, and equipped 2,000 boats for a second voyage. This time he travelled with them. Just before he left he put his deputy in charge. The king and his fleet never returned. In 1312 this deputy became the tenth ruler of the Mali empire. His name was Mansa Musa.

A Financial History of Western Europe is Kindleberger’s self-identified masterwork, an attempt to derive robust theories from centuries of accumulated fact, and then to use those theories as a framework for making sense of the momentous events of Kindleberger’s own life. It is a story of financial development in support of economic development at a global scale, both development processes advancing together in Darwinian evolutionary fashion by means of boom and bust.

Walk into the Warsaw Uprising Museum in Poland’s capital, and it won’t be long before you’ll begin to feel the eeriness that comes with being surrounded by death.1 One exhibit allows visitors to cower inside a replica of the sewers where members of the Polish underground resistance used to hide while fighting the Nazis. Another exhibit shows original film footage of the destruction of Warsaw; by January 1945, after the Polish forces surrendered, 85 per cent of the city’s buildings had been flattened. A third is dedicated to the child soldiers and nurses who died fighting for freedom. Around 16,000 members of the resistance were killed fighting in the streets. But the actual death toll was much larger. During and after the uprising, an estimated 150,000 civilian men, women and children died, mostly in mass executions.

From 1948 to mandatory retirement in 1976, Kindleberger taught international economics at MIT, which over that same time grew to become the leading economics department in the world. His original plan was to keep one foot in the world of policy, the better to push for Hansen’s postwar vision of economic development in the Global South. Security clearance trouble, however, put that plan on hold, and forced him instead to embrace a more purely scholarly career. Over time, the increasingly technical character of modern economics pushed him to the fringes of academia, where he reinvented himself as an economic historian.

In December 1932, in the throes of a deep recession, South Africa left the gold standard. Britain had abandoned it the previous year – and a political battle within South Africa’s government had ensured a delay that severely hurt the economy. The decision to leave had an immediate effect; instead of having the currency backed by gold, the South African pound depreciated, making South African exports more attractive to foreign buyers. It proved a huge boon to gold-mining companies. Gold prices rose rapidly and mining output expanded, increasing the demand for inputs and workers, and as a consequence government revenues increased significantly. In 1936, only three years later, the Johannesburg municipality could begin construction of the South-Western Townships, or Soweto, on the back of windfalls from the mining industry.

These mining windfalls – profits for shareholders and taxes for government – depended on one important factor: paying cheap wages.

Long-haul tourists visiting South Africa are always fascinated by the clicks of isiXhosa. Foreign to their ears, the eighteen click consonants can be grouped into three types: the ‘c’ is a dental click made by the tongue at the back of the mouth, the lateral ‘x’ is made by the tongue at the sides of the mouth, and the alveolar ‘q’ is made by the tip of the tongue on the roof of the mouth.

IsiXhosa is part of the Nguni language group, which also includes Zulu and southern and northern Ndebele. Yet few of these or the other South African vernacular languages have clicks, and those that do have them use them far less. How is it that isiXhosa came to use clicks so commonly?

One clue comes from the other languages of southern Africa that also make use of clicks – and there are lots of them.

By November 1932 the United States economy was in a deep depression. The unemployment rate was above 20 per cent, the highest it had ever been, and the production of goods and services had fallen by 28 per cent since its peak in 1929. America needed fresh ideas.

It found them in a new president. During the first hundred days of his presidency Franklin D. Roosevelt, together with a largely Democratic Congress, instituted a broad range of spending and lending programmes and various new regulations that would collectively become known as the New Deal. The range of programmes included things such as state and local public works initiatives, temporary relief for the unemployed and the payment of farm subsidies.