Tuesday, May 25, 2021

Mises Wire

Mises Wire

The Real Estate Boom in Vegas Is More Frenzied Than Ever

Posted: 24 May 2021 12:00 PM PDT

In Las Vegas, asset price inflation is combining with rising prices on building materials to create a real estate bubble of remarkable proportions. 

Original Article: "The Real Estate Boom in Vegas Is More Frenzied Than Ever​​"

This Audio Mises Wire is generously sponsored by Christopher Condon. Narrated by Michael Stack.

 

The Six Stages of the Creation of the State

Posted: 24 May 2021 12:00 PM PDT

[Excerpted from chapter 1 of The State: Its History and Development Viewed Sociologically]

In the genesis of the state, from the subjection of a peasant folk by a tribe of herdsmen or by sea nomads, six stages may be distinguished.

In the following discussion it should not be assumed that the actual historical development must, in each particular case, climb the entire scale step by step. Although, even here, the argument does not depend upon bare theoretical construction, since every particular stage is found in numerous examples, both in the world's history and in ethnology, and there are states which have apparently progressed through them all. But there are many more that have skipped one or more of these stages.

Stage 1: Looting

The first stage comprises robbery and killing in border fights, endless combats broken neither by peace nor by armistice. It is marked by killing of men, carrying away of children and women, looting of herds, and burning of dwellings. Even if the offenders are defeated at first, they return in stronger and stronger bodies, impelled by the duty of blood feud. Sometimes the peasant group may assemble, may organize its militia, and perhaps temporarily defeat the nimble enemy; but mobilization is too slow and supplies to be brought into the desert too costly for the peasants. The peasants' militia does not, as does the enemy, carry its stock of food — its herds — with it into the field.

In Southwest Africa the Germans recently experienced the difficulties that a well-disciplined and superior force, equipped with a supply train, with a railway reaching back to its base of supply, and with millions of the German Empire behind it, may have with a handful of herdsmen warriors, who were able to give the Germans a decided setback. In the case of primitive levies, this difficulty is increased by the narrow spirit of the peasant, who considers only his own neighborhood, and by the fact that while the war is going on the lands are uncultivated. Therefore, in such cases, in the long run, the small but compact and easily mobilized body constantly defeats the greater disjointed mass, as the panther triumphs over the buffalo.

This is the first stage in the formation of states. The state may remain stationary at this point for centuries, for a thousand years. The following is a thoroughly characteristic example:

Every range of a Turkoman tribe formerly bordered upon a wide belt which might be designated as its "looting district." Everything north and east of Chorassan, though nominally under Persian dominion, has for decades belonged more to the Turkomans, Jomudes, Goklenes, and other tribes of the bordering plains, than to the Persians. The Tekinzes, in a similar manner, looted all the stretches from Kiwa to Bokhara, until other Turkoman tribes were successfully rounded up either by force or by corruption to act as a buffer. Numberless further instances can be found in the history of the chain of oases which extends between Eastern and Western Asia directly through the steppes of its central part, where since ancient times the Chinese have exercised a predominant influence through their possession of all important strategic centers, such as the Oasis of Chami. The nomads, breaking through from north and south, constantly tried to land on these islands of fertile ground, which to them must have appeared like Islands of the Blessed. And every horde, whether laden down with booty or fleeing after defeat, was protected by the plains. Although the most immediate threats were averted by the continued weakening of the Mongols, and the actual dominion of Thibet, yet the last insurrection of the Dunganes showed how easily the waves of a mobile tribe break over these islands of civilization. Only after the destruction of the nomads, impossible as long as there are open plains in Central Asia, can their existence be definitely secured.

The entire history of the old world is replete with well-known instances of mass expeditions, which must be assigned to the first stage of state development, inasmuch as they were intent, not upon conquest, but directly on looting. Western Europe suffered through these expeditions at the hands of the Celts, Germans, Huns, Avars, Arabs, Magyars, Tartars, Mongolians and Turks by land; while the Vikings and the Saracens harassed it on the waterways.

These hordes inundated entire continents far beyond the limits of their accustomed looting ground. They disappeared, returned, were absorbed, and left behind them only wasted lands. In many cases, however, they advanced in some part of the inundated district directly to the sixth and last stage of state formation, in cases namely, where they established a permanent dominion over the peasant population. Ratzel describes these mass migrations excellently in the following:

The expeditions of the great hordes of nomads contrast with this movement, drop by drop and step by step, since they overflow with tremendous power, especially Central Asia and all neighboring countries. The nomads of this district, as of Arabia and Northern Africa, unite mobility in their way of life with an organization holding together their entire mass for one single object. It seems to be a characteristic of the nomads that they easily develop despotic power and far-reaching might from the patriarchal cohesion of the tribe. Mass governments thereby come into being, which compare with other movements among men in the same way that swollen streams compare with the steady but diffused flow of a tributary. The history of China, India, and Persia, no less than that of Europe, shows their historical importance. Just as they moved about on their ranges with their wives and children, slaves and carts, herds and all their paraphernalia, so they inundated the borderlands. While this ballast may have deprived them of speed it increased their momentum. The frightened inhabitants were driven before them, and like a wave they rolled over the conquered countries, absorbing their wealth. Since they carried everything with them, their new abodes were equipped with all their possessions, and thus their final settlements were of an ethnographic importance. After this manner, the Magyars flooded Hungary, the Manchus invaded China, the Turks, the countries from Persia to the Adriatic.

What has been said here of Hamites, Semites, and Mongolians may be said also, at least in part, of the Aryan tribes of herdsmen. It applies also to the true negroes, at least to those who live entirely from their herds:

The mobile, warlike tribes of the Kafirs possess a power of expansion which needs only an enticing object in order to attain violent effects and to overturn the ethnologic relations of vast districts. Eastern Africa offers such an object. Here the climate did not forbid stock raising, as in the countries of the interior, and did not paralyze from the start, the power of impact of the nomads, while nevertheless numerous peaceable agricultural peoples found room for their development. Wandering tribes of Kafirs poured like devastating streams into the fruitful lands of the Zambesi, and up to the highlands between the Tanganyika and the coast. Here they met the advance guard of the Watusi, a wave of Hamite eruption, coming from the north. The former inhabitants of these districts were either exterminated, or as serfs cultivated the lands which they formerly owned; or they still continued to fight; or again, they remained undisturbed in settlements left on one side by the stream of conquest.

All this has taken place before our eyes. Some of it is still going on. During many thousands of years it has "jarred all Eastern Africa from the Zambesi to the Mediterranean." The incursion of the Hyksos, whereby for over 500 years Egypt was subject to the shepherd tribes of the eastern and northern deserts — "kinsmen of the peoples who up to the present day herd their stock between the Nile and the Red Sea" — is the first authenticated foundation of a state. These states were followed by many others both in the country of the Nile itself, and farther southward, as far as the Empire of Muata Jamvo on the southern rim of the central Congo district, which Portuguese traders in Angola reported as early as the end of the 16th century, and down to the Empire of Uganda, which only in our own day has finally succumbed to the superior military organization of Europe. "Desert land and civilization never lie peaceably alongside one another; but their battles are alike and full of repetitions."

"Alike and full of repetitions"! That may be said of universal history on its basic lines. The human ego in its fundamental aspect is much the same all the world over. It acts uniformly, in obedience to the same influences of its environment, with races of all colors, in all parts of the earth, in the tropics as in the temperate zones. One must step back far enough and choose a point of view so high that the variegated aspect of the details does not hide the great movements of the mass. In such a case, our eye misses the "mode" of fighting, wandering, laboring humanity, while its "substance," ever similar, ever new, ever enduring through change, reveals itself under uniform laws.

Stage 2: Truce

Gradually, from this first stage, there develops the second, in which the peasant, through thousands of unsuccessful attempts at revolt, has accepted his fate and has ceased every resistance. About this time, it begins to dawn on the consciousness of the wild herdsman that a murdered peasant can no longer plow, and that a fruit tree hacked down will no longer bear. In his own interest, then, wherever it is possible, he lets the peasant live and the tree stand. The expedition of the herdsmen comes just as before, every member bristling with arms, but no longer intending nor expecting war and violent appropriation.

The raiders burn and kill only so far as is necessary to enforce a wholesome respect, or to break an isolated resistance. But in general, principally in accordance with a developing customary right — the first germ of the development of all public law — the herdsman now appropriates only the surplus of the peasant. That is to say, he leaves the peasant his house, his gear, and his provisions up to the next crop.

The herdsman in the first stage is like the bear, who for the purpose of robbing the beehive, destroys it. In the second stage he is like the beekeeper, who leaves the bees enough honey to carry them through the winter.

Great is the progress between the first stage and the second. Long is the forward step, both economically and politically. In the beginning, as we have seen, the acquisition by the tribe of herdsmen was purely an occupying one. Regardless of consequences, they destroyed the source of future wealth for the enjoyment of the moment.

Henceforth the acquisition becomes economical, because all economy is based on wise housekeeping, or in other words, on restraining the enjoyment of the moment in view of the needs of the future. The herdsman has learned to "capitalize."

It is a vast step forward in politics when an utterly strange human being, prey heretofore like the wild animals, obtains a value and is recognized as a source of wealth. Although this is the beginning of all slavery, subjugation, and exploitation, it is at the same time the genesis of a higher form of society, that reaches out beyond the family based upon blood relationship.

We saw how, between the robbers and the robbed, the first threads of a jural relation were spun across the cleft which separated those who had heretofore been only "mortal enemies." The peasant thus obtains a semblance of right to the bare necessaries of life; so that it comes to be regarded as wrong to kill an unresisting man or to strip him of everything.

And better than this, gradually more delicate and softer threads are woven into a net very thin as yet, but which, nevertheless, brings about more human relations than the customary arrangement of the division of spoils. Since the herdsmen no longer meet the peasants in combat only, they are likely now to grant a respectful request, or to remedy a well-grounded grievance. "The categorical imperative" of equity, "Do to others as you would have them do unto you," had heretofore ruled the herdsmen only in their dealings with their own tribesmen and kind. Now for the first time it begins to speak, shyly whispering in behalf of those who are alien to blood relationship. In this, we find the germ of that magnificent process of external amalgamation that, out of small hordes, has formed nations and unions of nations — and that, in the future, is to give life to the concept of "humanity." We find also the germ of the internal unification of tribes once separated, from which, in place of the hatred of "barbarians," will come the all-comprising love of humanity, of Christianity and Buddhism.

The moment when first the conqueror spared his victim in order permanently to exploit him in productive work, was of incomparable historical importance. It gave birth to nation and state, to right and the higher economics, with all the developments and ramifications that have grown and that will hereafter grow out of them. The root of everything human reaches down into the dark soil of the animal love and art, no less than state, justice, and economics.

Still another tendency knots yet more closely these psychic relations. To return to the comparison of the herdsman and the bear, there are in the desert, beside the bear who guards the bees, other bears who also lust after honey. But our tribe of herdsmen blocks their way, and protects its beehives by force of arms. The peasants become accustomed, when danger threatens, to call on the herdsmen, whom they no longer regard as robbers and murderers, but as protectors and saviors. Imagine the joy of the peasants when the returning band of avengers brings back to the village the looted women and children, with the enemies' heads or scalps. These ties are no longer threads, but strong and knotted bands.

Here is one of the principal forces of that "integration," whereby in the further development, those originally not of the same blood, and often enough of different groups speaking different languages, will in the end be welded together into one people, with one speech, one custom, and one feeling of nationality. This unity grows by degrees from common suffering and need, common victory and defeat, common rejoicing and common sorrow. A new and vast domain is open when master and slave serve the same interests; then arises a stream of sympathy, a sense of common service. Both sides apprehend, and gradually recognize, each other's common humanity. Gradually the points of similarity are sensed, in place of the differences in build and apparel, of language and religion, which had heretofore brought about only antipathy and hatred. Gradually they learn to understand one another, first through a common speech, and then through a common mental habit. The net of the psychical interrelations becomes stronger.

In this second stage of the formation of states, the ground work, in its essentials, has been mapped out. No further step can be compared in importance to the transition whereby the bear becomes a beekeeper. For this reason, short references must suffice.

Stage 3: Tribute

The third stage arrives when the "surplus" obtained by the peasantry is brought by them regularly to the tents of the herdsmen as "tribute," a regulation that affords to both parties self-evident and considerable advantages. By this means, the peasantry is relieved entirely from the little irregularities connected with the former method of taxation, such as a few men knocked on the head, women violated, or farmhouses burned down. The herdsmen on the other hand, need no longer apply to this "business" any "expense" and labor, to use a mercantile expression, and they devote the time and energy thus set free toward an "extension of the works," in other words, to subjugating other peasants.

This form of tribute is found in many well-known instances in history: Huns, Magyars, Tartars, Turks, have derived their largest income from their European tributes. Sometimes the character of the tribute paid by the subjects to their master is more or less blurred, and the act assumes the guise of payment for protection, or indeed, of a subvention. The tale is well known whereby Attila was pictured by the weakling emperor at Constantinople as a vassal prince; while the tribute he paid to the Hun appeared as a fee.

Stage 4: Occupation

The fourth stage, once more, is of very great importance, since it adds the decisive factor in the development of the state, as we are accustomed to see it, namely, the union on one strip of land of both ethnic groups. (It is well known that no jural definition of a state can be arrived at without the concept of state territory.) From now on, the relation of the two groups, which was originally international, gradually becomes more and more intranational.

This territorial union may be caused by foreign influences. It may be that stronger hordes have crowded the herdsmen forward, or that their increase in population has reached the limit set by the nutritive capacity of the steppes or prairies; it may be that a great cattle plague has forced the herdsmen to exchange the unlimited scope of the prairies for the narrows of some river valley. In general, however, internal causes alone suffice to bring it about that the herdsmen stay in the neighborhood of their peasants.

The duty of protecting their tributaries against other "bears" forces them to keep a levy of young warriors in the neighborhood of their subjects; and this is at the same time an excellent measure of defense since it prevents the peasants from giving way to a desire to break their bonds, or to let some other herdsmen become their overlords. This latter occurrence is by no means rare, since, if tradition is correct, it is the means whereby the sons of Rurik came to Russia.

As yet the local juxtaposition does not mean a state community in its narrowest sense; that is to say, a unital organization.

In case the herdsmen are dealing with utterly unwarlike subjects, they carry on their nomad life, peaceably wandering up and down and herding their cattle among the perioike and helots. This is the case with the light-colored Wahuma, "the handsomest men of the world" (Kandt), in central Africa, or the Tuareg clan of the Hadanara of the Asgars, "who have taken up their seats among the Imrad and have become wandering freebooters. These Imrad are the serving class of the Asgars, who live on them, although the Imrad could put into the field ten times as many warriors; the situation is analogous to that of the Spartans in relation to their Helots."

The same may be said of the Teda among the neighboring Borku:

Just as the land is divided into a semi-desert supporting the nomads, and gardens with date groves, so the population is divided between nomads and settled folk. Although about equal in number, ten to twelve thousand altogether, it goes without saying that these latter are subject to the others.

And the same applies to the entire group of herdsmen known as the Galla Masi and Wahuma.

Although differences in possessions are considerable, they have few slaves, as a serving class. These are represented by peoples of a lower caste, who live separate and apart from them. It is herdsmanship which is the basis of the family, of the state, and along with these of the principle of political evolution. In this wide territory, between Scehoa and its southernmost boundaries, on the one hand, and Zanzibar on the other, there is found no strong political power, in spite of the highly developed social articulation.

In case the country is not adapted to herding cattle on a large scale — as was universally the case in Western Europe — or where a less unwarlike population might make attempts at insurrection, the crowd of lords becomes more or less permanently settled, taking either steep places or strategically important points for their camps, castles, or towns. From these centers, they control their "subjects," mainly for the purpose of gathering their tribute, paying no attention to them in other respects. They let them administer their affairs, carry on their religious worship, settle their disputes, and adjust their methods of internal economy. Their autochthonous constitution, their local officials, are, in fact, not interfered with.

If Frants Buhl reports correctly, that was the beginning of the rule of the Israelites in Canaan. Abyssinia, that great military force, though at the first glance it may appear to be a fully developed state, does not, however, seem to have advanced beyond the fourth stage.

At least Ratzel states,

The principal care of the Abyssinians consists in the tribute, in which they follow the method of oriental monarchs in olden and modern times, which is not to interfere with the internal management and administration of justice of their subject peoples.

The best example of the fourth stage is found in the situation in ancient Mexico before the Spanish conquest:

The confederation under the leadership of the Mexicans had somewhat more progressive ideas of conquest. Only those tribes were wiped out that offered resistance. In other cases, the vanquished were merely plundered, and then required to pay tribute. The defeated tribe governed itself just as before, through its own officials. It was different in Peru, where the formation of a compact empire followed the first attack. In Mexico, intimidation and exploitation were the only aims of the conquest. And so it came about that the so-called Empire of Mexico at the time of the conquest represented merely a group of intimidated Indian tribes, whose federation with one another was prevented by their fear of plundering expeditions from some unassailable fort in their midst.

It will be observed that one can not speak of this as a state in any proper sense. Ratzel shows this in the note following the above:

It is certain that the various points held in subjection by the warriors of Montezuma were separated from one another by stretches of territory not yet conquered. A condition very like the rule of the Hova in Madagascar. One would not say that scattering a few garrisons, or better still, military colonies, over the land, is a mark of absolute dominion, since these colonies, with great trouble, maintain a strip of a few miles in subjection.

Stage 5: Monopoly

The logic of events presses quickly from the fourth to the fifth stage, and fashions almost completely the full state. Quarrels arise between neighboring villages or clans that the lords no longer permit to be fought out, since by this the capacity of the peasants for service would be impaired. The lords assume the right to arbitrate, and in case of need, to enforce their judgment. In the end, it happens that at each "court" of the village king or chief of the clan there is an official deputy who exercises the power, while the chiefs are permitted to retain the appearance of authority. The state of the Incas shows, in a primitive condition, a typical example of this arrangement.

Here we find the Incas united at Cuzco where they had their patrimonial lands and dwellings. A representative of the Incas, the Tucricuc, however, resided in every district at the court of the native chieftain. He

had supervision over all affairs of his district; he raised the troops, superintended the delivery of the tribute, ordered the forced labor on roads and bridges, superintended the administration of justice, and in short supervised everything in his district.

The same institutions that have been developed by American huntsmen and Semite shepherds are found also among African herdsmen. In Ashanti, the system of the Tucricuc has been developed in a typical fashion; and the Dualla have established for their subjects living in segregated villages "an institution based on conquest midway between a feudal system and slavery."

The same author reports that the Barotse have a constitution corresponding to the earliest stage of the mediaeval feudal organization:

Their villages are … as a rule surrounded by a circle of hamlets where their serfs live. These till the fields of their lords in the immediate neighborhood, grow grain, or herd the cattle.

The only thing that is not typical here consists in this, that the lords do not live in isolated castles or halls, but are settled in villages among their subjects.

Stage 6: State

It is only a very small step from the Incas to the Dorians in Lacedaemon, Messenia, or Crete; and no greater distance separates the Fulbe, Dualla, and Barotse from the comparatively rigidly organized feudal states of the African Negro Empires of Uganda, Unyoro, etc.; and the corresponding feudal empires of Eastern and Western Europe and of all Asia.

In all places, the same results are brought about by force of the same sociopsychological causes. The necessity of keeping the subjects in order and at the same time of maintaining them at their full capacity for labor leads step by step from the fifth to the sixth stage, in which the state, by acquiring full intranationality and by the evolution of "Nationality," is developed in every sense.

The need becomes more and more frequent to interfere, to allay difficulties, to punish, or to coerce obedience; and thus develop the habit of rule and the usages of government. The two groups, separated, to begin with, and then united on one territory, are at first merely laid alongside one another, then are scattered through one another like a mechanical mixture, as the term is used in chemistry, until gradually they become more and more of a "chemical combination." They intermingle, unite, amalgamate to unity, in customs and habits, in speech and worship.

Soon the bonds of relationship unite the upper and the lower strata. In nearly all cases the master class picks the handsomest virgins from the subject races for its concubines. A race of bastards thus develops, sometimes taken into the ruling class, sometimes rejected, and then because of the blood of the masters in their veins, becoming the born leaders of the subject race. In form and in content the primitive state is completed.

Public Debt Got a Lot Worse from The Great Recession to The Great Lockdown

Posted: 24 May 2021 09:00 AM PDT

The 2020 recession, which many countries are still going through, now has an "official" name: the Great Lockdown. In economic terms, the public sector's response in practically all countries has been very swift and bold (which is not necessarily a good thing).1 This has caused the global public debt to skyrocket as never before. As a result, now more than ever, it is necessary to emphasize the dangers of public debt.

In this article, we will highlight the contrasts between this recession and the previous one (the Great Recession of 2007) to analyze the public-debt problem the world is facing. In a second article, we will analyze the economic dangers of excessive public debt.

The Public Sector Entered This Recession in a Much Weaker Position Than in 2007

During the economic expansion that ended in 2020, the public sector in most countries was almost totally complacent about deficit spending. Levels of public debt shot up practically everywhere. So public debt in the Great Lockdown was considerably greater than in the Great Recession in all of the major regions of the world.

Chart 1: Public Debt by Region

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Source: Prepared by the author with data from the International Monetary Fund. Created with Datawrapper.

Of the seven major world economies (G7), only Germany bore less public debt at the beginning of 2020 than it did at the beginning of 2007.

Chart 2: Public Debt of G7 Countries

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Source: Prepared by the author with data from the International Monetary Fund. Created with Datawrapper.

The Debt Resulting from This Recession Is Unparalleled

The public sector has responded to the Great Lockdown recession with a fiscal expansion unparalleled in history. In 2009, the year with the largest fiscal deficit during the previous recession, global public debt increased by 10.5 percent of GDP. In 2020, global public debt increased by 18.7 percent of GDP.2 Across all regions we can see a huge contrast between the current recession and the Great Recession. Even countries in Latin America, which ran only moderate deficits in the previous recession, have significantly increased their debt as a response to the Great Lockdown of 2020.

Chart 3: Increase in Public Debt during the Great Recession versus the Great Lockdown (2009 versus 2020)

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Source: Prepared by the author with data from the International Monetary Fund. Created with Datawrapper.

Advanced economies accumulated 50 percent more debt in 2020 than in the ten previous years combined, an unprecedented figure in peacetime.

The Twenty-First Century Is the Century of Public Debt (and Potential Default)

The amount of public debt accumulated since the beginning of the twenty-first century would have left the most insightful commentators of a century ago at a loss for words. However, the wealth and income attained this century would have also left even the most optimistic of our great-great-grandparents speechless. Accordingly, while it might seem that public debt is growing uncontrollably, since wealth is also growing exponentially one could conclude that the debt does not pose a problem because we are generating the resources with which to pay down the debt. However, in most parts of the world, public debt has grown faster than the economy. Only in emerging markets is the economy growing more rapidly than public debt is.

Chart 4: GDP Growth and Increase in Debt (2001–20)

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Source: Prepared by the author with data from the International Monetary Fund. Debt and GDP in 2001 dollars were used to calculate the indices (as it is the most appropriate way to compare ability to pay).

In the most advanced economies, the public debt was 4.5 times larger in 2020 than 2001. It is expected to multiply sixfold through 2025.3 Meanwhile, GDP was only 1.9 times larger in 2020 than 2001, and it is expected to be 2.4 times larger in 2025 than 2001. The advanced economies are on a trajectory of public-debt accumulation that is unsustainable in the medium term.

The good news is that emerging economies, as well as sub-Saharan Africa, the Middle East, and ASEAN-5,4 are increasing their debt at rates significantly lower than their economic growth rates. Unfortunately, advanced economies' enormous accumulation of debt has not been offset by the reduction in debt (relative to the size of the economy) in emerging markets.5

Debt accumulation was already unsustainable prior to 2020, but the Great Lockdown has triggered an explosive increase. It may soon be reaching a point of no return for the world's major economies.

Originally published by by Market Trends at Universidad Francisco Marroquín.

  • 1. A swift and decisive response to stop the spread of the virus while avoiding monetary and fiscal expansions would have been preferable.
  • 2. See the IMF (2020).
  • 3. International Monetary Fund estimates.
  • 4. The last two regions are not included in chart 4.
  • 5. In 2001, advanced economies made up 79 percent of global GDP, but in 2020, this figure fell to 59 percent.

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What Igbo Culture Teaches Us about Capitalism

Posted: 24 May 2021 04:00 AM PDT

The Igbos are one of many ethnic groups within Africa. They consist of about 43 million people, 40 million of whom live within Nigeria.  They are widely successful in Nigeria and are considered by many to be the "Jews of West Africa," partly because they tend to be more economically successful than their neighbors.  For example, according to some estimates, Igbo investments are a driving factor within Nigeria's economy. By observing the culture of the Igbos, their phenomenal success in entrepreneurship appears unsurprising. The Igbos illuminate what economist Deirdre McCloskey refers to as "bourgeois dignity." In Igbo culture, attaining wealth is perceived as a blessing to be cultivated and not an object of scorn. Unlike other cultures in Africa, the merchant occupies a sacred position among the Igbos. Commerce is central to understanding the world view of Igbos.

In an article for the Journal of Philosophy, Culture, and Religion, Gregory Chinweuba and Everistus Ezeugwu submit that appreciation for commerce is embedded in the language of Igbos. They have a created an intriguing panoply of words to reflect their love for trade, such as imu ahia (learning a trade), oru (starting an enterprise), and igba oso ahia (indulging in trick of marketing of another's good with his consent at a price that raises capital). Aside from valuing work, the last description reveals a sophisticated understanding of the middleman's role in increasing capital. Scholars also contend that for the Igbo people entrepreneurship is understood as a quest for profit motivated by innovation, efficient utilization of assets, and acquisition of deliverables. The Igbos are not only entrepreneurial but quite Schumpeterian in outlook.

Like the Calvinists, who fashioned success as evidence of God's favor, in traditional Igbo society financial success is inextricably linked to gaining favor from ancestral gods. According to Igbo philosophy, leading a worthwhile life should entail the accumulation of earthly riches. As such, no one who dies poor (i.e., enwe nta, enwe imo, the wretched poor) is entitled to a seat among the ancestors. One cannot divorce success from the identity of being Igbo. Therefore, to remind people of their purpose, children are often conferred with names predicting prosperity. Hence names like Ifeadigo (wealth is available), Ubaka (wealth is greater), and Ubanozie (wealth has taken its proper place) attest to the industry-oriented ethos of the Igbo.

Yet despite the passion for seeking wealth, Igbo culture is undergirded by ethical principles. Wealth obtained by fraudulent means is seen as unworthy of emulation by Igbos. Indeed, the Igbo proverb Aku luo uno okwuo ebe o si (when wealth gets home, it declares its source) illustrates the importance of ensuring that the community remains untainted by illegitimate sources of wealth. Similarly, the ethical world view of the Igbo people affirms acceptance of egalitarian individualism. Although the Igbos value community, there is a clear recognition in their tradition that strangers are not entitled to the fruits of others' productive labor.

This arrangement can be described as the autonomous individualism of communal societies. Invariably, one is expected to invest in the well-being of his neighbor, but an obligation is imposed on beneficiaries to graduate from welfare by achieving individual goals. Notwithstanding their connection to the community, people are still seen as individuals with various desires and a capacity to succeed. To be a true citizen in Igbo society, one must exercise one's duties by making society more productive. Without hard work, a man ceases to be Igbo. This is explained in a 2016 paper in the International Journal of Social Sciences and Humanities Review by Oliver Onah, Hyginus Ezebuilo, and Theodora Ojiakor. The authors assert:

The traditional Igbo community had the pattern of an egalitarian society. This does not mean that there were no established ranks. There were ranks and positions or titles of honour. But everybody related freely with every other person without bureaucratic procedures. Every member of the community was accorded due respect and treated as a blood brother or sister. The implication is that the rights of each person were respected. Every individual also has responsibilities to the community. Positions or titles were mainly attained through hard work.

Moreover, because Igbo institutions were already compatible with the individualistic and achievement-oriented culture of capitalism, the emergence of market economies during the colonial and postcolonial eras gave Igbos an advantage over other ethnic groups like the Hausas and Yorubas, whose social structures privileged hereditary status at the expense of elevating individual ambition. Furthermore, like many entrepreneurial groups, the prosperity of the Igbo people can be explained by harsh environmental conditions. Stemming from the low availability of land resources, they were forced to specialize in professions outside of agriculture and would migrate to foreign lands, so their survival depended on being resourceful. Kenneth Dike writes in agreement:

Igbo pressing against limited land resources had, of necessity, to seek other avenues of livelihood outside the tribal boundaries. In the 19th century and earlier, the growth of a large non-agricultural population in areas where the land was too small or too poor to sustain the people gave rise to some measure of specialization among sections of the tribe: the Aros became the middlemen of the hinterland; the Ada and the Abam constituted the mercenaries; Awka men were the smiths and doctors, while Nkwerre people, in addition to their work in iron, played the role of professional spies and diplomatists. If we may judge from the 19th century records, in spite of this specialization over-population was the rule in all sections of the tribe.

Yet we cannot explore the success of Igbos without mentioning apprenticeship. For generations, the innovative training system known as the "Igba-Odibo" has equipped young men with the managerial expertise, business acumen, and social capital required to succeed in business. After serving his mentor for a period, usually seven years, the mentee is given the capital to launch his own business. This scheme has created several successful businessmen, including Innocent Chukwuma and Cosmas Maduka. For example, in a study of Igbo entrepreneurship, economists conclude that entrepreneurs who participate in the native apprenticeship program have higher rates of business survival, strong business growth rates, access to informal credit, greater customer acquisition and management skills.

The Igbo people of Nigeria can enrich our understanding of how certain cultural attributes can enhance economic growth and success in any setting, including outside European legal and cultural institutions.  

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