Image credit: Futuristic landscape of Wakanda from Marvel Studios’ Black Panther movie
Earning over $1.3 billion at the box office, an Oscar nomination for best picture, and a sterling 97 percent rating from review aggregator Rotten Tomatoes— the movie Black Panther has proven to be a hit among critics and moviegoers alike. It’s fortunate that the film is so entertaining, as it allows free traders to forgive a rather sizeable plot hole.
Largely set in the mythical African kingdom of Wakanda, Black Panther portrays this small land-locked country as home to vast riches, the planet’s most advanced technology, and—as a result of largely avoiding contact with the outside world—an autarkic trade policy. This ability to pair stupendous prosperity with a refusal to engage in international trade is explained away by the presence of vast deposits of vibranium, a mineral which has the ability to absorb and then release kinetic energy. While perhaps sufficient for a superhero movie’s flexible bounds of believability, let’s hope that audience members do not mistake this comic book-inspired universe for economic reality.
As bitter experience has shown, policies of isolation have invariably correlated with poverty and backwardness. By cutting themselves off from international commerce, governments inflict considerable harm on their people through the denial of access to foreign products and technology and diminished opportunities for specialization. Furthermore, contra Black Panther, natural resource endowments by themselves are unlikely to compensate for a lack of trade. Absent foreign know-how to develop and harness these resources, or overseas markets in which to exchange for needed products, the benefits realized from domestic resource endowments are sure to be greatly limited.
In contrast, it is no accident that trade has long been synonymous with wealth and prosperity. Indeed, since ancient times the world’s great cities has sprung up next to navigable rivers or great bodies of water which allowed for greatly expanded commercial ties. Even relatively small, resource-poor states such as The Netherlands and Venice in years past were able to become fabulously rich in large part due to their trading prowess, while in more modern times global commerce has transformed Hong Kong and Singapore from economic backwaters into bastions of great wealth.
Unfortunately, for too long Africa has been a comparative bit player in this story of trade and prosperity. Suffering from a range of trade barriers including tariffs, poor infrastructure, corruption, onerous customs procedures, and high regulatory hurdles, the continent has struggled to realize the potential of both its resources and human capital. The situation for land-locked African countries such as the mythical Wakanda is often even more difficult. As Paul Collier notes in his book The Bottom Billion, it is one thing to be Switzerland and surrounded by rich, open neighbors with excellent infrastructure, and quite another to be the Central African Republic whose most important navigable river, the Ubangi, flows into the poverty-stricken and poorly governed Democratic Republic of Congo.
There is, however, reason for hope. Just as—spoiler alert!—Black Panther shows Wakanda ultimately opting for an embrace of international integration at the movie’s conclusion, there has been a growing realization by African countries that their future lies in expanded trade. Of note, from 1988-2010 the continent’s average applied tariff fell from 26.6 percent to 11 percent and a number of trade initiatives, including the 26-member Tripartite Free Trade Area and the pan-African Continental Free-Trade Area, continue to make progress. Africa may have not yet reached its Hollywood ending, but there are encouraging signs its trade policy is on the right path.
This article originally appeared in the March 2018 edition of the Cato Trade Chronicle.