“The colonists came with a model of how you colonize the new world, which is actually completely based on the Spanish conquest of Latin America. It's just that ... there were no indigenous people to exploit in Virginia. ... They didn't bother planting any crops, and two-thirds of them starved to death because their model was: we don't work, we exploit the indigenous people.”
Odd Lots · Money & Markets · October 2026
The Why Nations Fail co-author was asked why English colonists in North America didn't reproduce Latin America's extractive model. He said that once Jamestown's model collapsed, the colony had to attract settlers, which pushed it toward far more inclusive political institutions, including a legislative assembly.
Transcript
…poorer than the rest of the country. It was less urbanized. There was less industry. But, you know, the key thing is that when the U.S. institutional framework got kind of definitively set up with the Constitution, it's really the North that somehow really created that. So there were compromises.
Actually, can you explain? This is a little bit of history because when they landed in the US, they were hoping to replicate the extraction of South America. It didn't work the same way. Why? Yeah,
I mean, that's a fascinating story that with the Jamestown colony, the origins of the Jamestown colony, the colonists came with a model of how you colonize the new world, which is actually completely based on the Spanish conquest of Latin America. It's just that you couldn't, there were no indigenous people to exploit in Virginia. And, you know, there's a whole sort of farcical early history where the English settlers try to set up a model exploiting indigenous people. And in the meantime, they didn't bother planting any crops, and two-thirds of them starved to death because their model was: we don't work, we exploit the indigenous people. And when that…
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