Economics of Amnesia: Reflections from South Africa

By Cooper Cross, Y20 Freya Phillips National Scholar

In August of this year, I had the privilege of being Australia’s delegate on the Inclusive Economic Growth and Employment track at the Y20 in South Africa. Over the five months of negotiations, what struck me was the entrenched nature of orthodox and liberal economics. As someone representing Australia, it was deeply confusing. Let me tell you why.

Australia’s prosperity was built on protectionist measures, not the orthodox liberal economics of the modern era. Forged off the expropriation of convict labour as well as Indigenous dispossession and genocide, “Australia” was anything but a free-market state. In our formative capitalist expansion and establishment in the 19th and 20th centuries, Australia constructed some of the highest trade barriers in the world (Anderson, 2020, pp. 1044–1045). We relied on state-owned colonial enterprises and heavy government intervention in key sectors, such as the state ownership of rail, ports, water and telegraphs (Ergas & Pincus, 2014). It wasn’t just markets that were protectionist. The White Australia Policy ensured that labour was shielded from external racialised competitors. Australia was never a liberal economy, in the modern sense, until well after industrialisation, with most liberalising reforms occurring in the 1980s (Anderson, 2020, p. 1045). The economic truth that opening markets will lead to growth when development is occurring is as false as it is dangerous.

This economic history is not exclusively or uniquely Australian. The two largest shapers of the modern global economic order, the United Kingdom and the United States of America, also built their wealth through protectionist means (Chang, 2003, p. 25). As a matter of fact, most, if not all, of the world’s wealthiest nations were protectionist during the process of accumulating their wealth (Chang, 2003). In doing so, it allowed them to develop a domestic industry whilst pillaging their colonies and other nation-states. Those who dissented from this new capitalist economic order were treated with impunity. China, one of the many examples, refused this new ultimatum and was punished by the United Kingdom by flooding the Chinese market with opium, sold by British merchants, eventually leading to war and the liberalisation of Chinese markets (Trocki, 1999).

The labour that created these nations’ wealth was, as the Australian example shows, off the backs of slaves and other cheap alternatives. The United Kingdom, now heralded as the country that banned slavery, was also one of the countries that started it (Eltis & Engerman, 2012). It was only once slave markets became too expensive that ‘morality’ became a factor (Hall, 2013). Similarly, the United States only ratified the 13th Amendment after the northern states justified slavery as an outdated form of economic production that was doing the American economy more harm than good in terms of productivity and efficiency (Hornbeck & Logan, 2023).

Some proponents of the liberal economic world order point to countries like South Korea as a leading example of investment and liberalisation. Again, this is another fallacy. Under the dictatorship of Park Chung-Hee, South Korea took on an extremely protectionist industrial policy (Lane, 2025, p. 1687). In association with US-backed ideological funding (economic and militaristic), they protected infant industries, built well-known brands through targeted state investment (Samsung, Hyundai, LG) and directed credit through state-owned banks (Westphal, 1990). In pursuing this development, South Korean officials smashed workers’ rights, forcing people into employment where wages were extremely low, workplaces were hazardous, and representative union activities were state controlled to the point of extinction (Choi, 1983). South Korea’s success came from US funding, protectionism, state planning and labour repression, not the fairy tale of free-market liberalisation.

When our attention turns to modern markets and financial systems, it is easy to remark that times have significantly changed since the eras of pre-20th-century capitalism. This, again, is a false characterisation. As Samir Amin (1974) and, more recently, Thomas Piketty (2025) have demonstrated, countries situated in the semi-periphery, periphery, and to a certain extent the core, continue to operate through their colonial economies. Take Kenya for example. Colonised by the British in 1895 as the East Africa Protectorate, Kenya became an agricultural experiment site for the British Empire (Wolff, 1970, p. 276). This experiment saw Kenya’s main commodities become that of coffee, tea, rubber and cotton (Wolff, 1970, p. 276). Today, Kenya’s main exports mirror that of the colonial era, with the addition of cut flowers and refined petroleum (Observatory of Economic Complexity, 2025). Cut flowers, first mobilised by Danish capital in the 1970s, have become the second-largest export of Kenya (Gemählich, 2023, p. 91). Nowadays, Lake Naivasha, where most of the flowers are grown, is dominated by foreign-owned farms on its perimeter where Kenyans are exploited for a sliver of the profits made in the core economies (Hunjan & Higgins, 2024). For refined petroleum, you guessed it, the market is dominated by the British firm Shell (Kwama, 2025). Under that pretence, we must ask ourselves a simple question: is there any possibility that Kenya could become as rich as Italy, a country with a similar population size and a smaller geographical space? No. So long as Kenya exists in the orthodox global economy, its markets will continue to be dominated by core economies’ desires, capital and ownership. The modern economic system is built to exploit poorer nations and keep them poor, so long as it sustains the core economies.

If we are to advocate and work towards a global economy that is truly inclusive and sustainable, we must recognise that today’s economic orthodoxy is imperialism’s fist covered in a velvet glove. Moving beyond colonial dynamics and relationships of unequal exchange is essential. While we may discuss at length what such a future economic system looks like, the first steps must be tangible: rejecting the false lessons of liberalisation and instead building economic systems rooted in equality and sustainability.

Bibliography

Amin, S. 1974, Accumulation on a World Scale, 2nd edn, Monthly Review Press, New York City.

Anderson, K. 2020, ‘Trade protectionism in Australia: Its growth and dismantling’, Journal of Economic Surveys, vol. 34, no. 5, pp. 1044–1067.

Chang, H-J. 2003, ‘Kicking away the ladder: Infant industry promotion in historical perspective’, Oxford Development Studies, vol. 31, no. 1, pp. 21–32.

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Hunjan, R. & Higgins, I. 2024, ‘The real cost of a rose’, ABC News, viewed 20 September 2025, https://www.abc.net.au/news/2024-08-22/the-true-cost-of-rose-foreign-correspondent/104236124.

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Lane, N. 2025, ‘Manufacturing revolutions: Industrial policy and industrialisation in South Korea’, The Quarterly Journal of Economics, vol. 140, no. 3, pp. 1683–1741.

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