Hey there.
Today I want to dismantle a mistaken idea that a lot of people used to hold about African
countries.
After 20 years of rampaging growth, it may not even be a factor for most of this channel's
audience, but a lot of people my age and older believed that African countries had some unique
problem with economic development in the decades after independence.
Well today I am here to tell you that there is nothing unique or surprising about what
happened to Africa in those first decades of freedom.
It was the oil crisis, pure and simple.
The post world war II era can be divided pretty neatly in two.
For just under thirty years, the price of energy was predictable, everywhere, and it
got predictably cheaper year by year.
This was great, for everybody.
Japan and Europe experienced 30 years of rampaging economic growth.
The United States did too, even though we didn't have any war damage to bounce back
from.
This rich world expansion led to slow but steady gains across the developing world as
well.
The growth wasn't as rapid as the China driven expansion of the past few decades, but it
was significant.
Everybody has commodities to sell.
This reliable world of ever cheaper energy came to a crashing halt in the early 1970s.
The arab oil embargo of 1973 was the inciting event, but the fundamentals had been shifting
for years.
The easiest oil had been accessed, and demand kept growing.
For almost 50 years now the oil market has been incredibly volatile.
Sure, there was a period in the 1980s and a shorter one in the 1990s when prices were
low again, and have been low again since 2014, but that's nothing to rely upon.
The volatility in price makes it harder to plan anything and makes economic growth more
difficult, everywhere.
In most areas of the world, we acknowledge how important this is.
In Europe, most historians think the oil crisis ended the post-war economic expansion.
In the United States, I think the best term to describe what 1973 eventually brought is
regime change.
The economic stagflation of the 1970s killed the era of FDR and ushered in the era of Reagan.
If you're interested, one of my best videos of 2020 was on this American regime change.
I will link to it at the end of this video.
The complete revamping of the US's economic model under Reagan did push the country forward,
but there is a dirty secret nobody likes to acknowledge.
Even when it was working at its best, in the 1980s and 1990s, the Reagan Model could never
match the US economic growth rates of the 1950s and 1960s.
So even the richest countries in the world had a hard time in the new era of energy uncertainty
that launched after 1973.
A few countries in North-east Asia were a bit of a special case, that I would like to
get to in the coming months, but on the whole the developing world got its ass kicked.
Historians generally acknowledge the effect that the oil crisis had in Latin America.
A fairly hopeful 1950s and 1960s in the region gave way to a nightmarish 1970s and 1980s,
with multiple civil wars and a continent wide debt default crisis.
The role of energy prices in this chaos is always recognized.
Maybe it's just me, But when it comes to Africa, I feel like nobody talks about the oil crisis.
This past week, as I was reading this ambitious history of Africa's post independence era,
the oil crisis explanation hit me like a ton of bricks.
It is now shocking to me that any analysis of African under-development could leave the
oil crisis out.
This book really brings home how staggeringly diverse this continent's 50+ countries are.
In the decades after independence everything was tried.
Many leaders were committed socialists.
Some went whole hog for capitalism.
Some leaders were dedicated and conscientious.
Most were greedy.
Some were insane.
Some countries started out with many advantages, and some seemed doomed from the start.
But no matter what the system was like, every story is the same.
The hopes for development were all dashed by the same problem, oil prices that skyrocketed
in the 1970s, and an inability to pay for the energy necessary for growth.
The economic development of African countries faces many obstacles.
Many of the standard explanations are true to some extent.
Nonsensical borders, bad leaders, lack of a common identity in many countries, Imperialism,
that's all important.
But I really get the sense that people would rather scold Africans than admit they were
blind sided by the same thing that blindsided everybody else.
I think this eagerness to blame Africa for post-independence failure might have its roots
in a really fundamental misunderstanding.
I think a lot of people assume that African countries became independent directly after
World War II.
This is true for most of Asia, and there were a handful of North African countries that
did become independent in the 1950s.
But most African countries didn't become independent until the 1960s and 1970s.
The median African country gained its independence in like 1961, just 12 years before the 1973
oil crisis.
So during those healthy economic decades after World War II, European imperialists were sucking
up all the benefits that African countries should have been banking.
Most of Southern Africa didn't achieve independence until after the oil crisis era had already
started.
Very few African countries had more than a decade to build themselves up before 1973.
Cheap energy is vital to every economy, and the poorer a country is, the harder it's going
to get hit by unstable prices.
There are other important explanations for the under development of African countries.
But I think the oil crisis is the most important explanation by far.
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