and twentieth centuries some nations were able to take advantage of the Industrial Revolution and the technologies and methods of organization that it brought while others were unable to do so. Technological change is only one of the engines of prosperity, but it is perhaps the most critical one. The countries that did not take advantage of new technologies did not benefit from the other engines of prosperity, either. As we have shown in this and the previous chapter, this failure was due to their extractive institutions, either a consequence of the persistence of their absolutist regimes or because they lacked centralized states. But this chapter has also shown that in several instances the extractive institutions that underpinned the poverty of these nations were imposed, or at the very least further strengthened, by the very same process that fueled European growth: European commercial and colonial expansion. In fact, the profitability of European colonial empires was often built on the destruction of independent polities and indigenous economies around the world, or on the creation of extractive institutions essentially from the ground up, as in the Caribbean islands, where, following the almost total collapse of the native populations, Europeans imported African slaves and set up plantation systems.
We will never know what the trajectories of independent city-states such as those in the Banda Islands, in Aceh, or in Burma( Myanmar) would have been without the European intervention. They may have had their own indigenous Glorious Revolution or slowly moved toward more inclusive political and economic institutions based on growing trade in spices and other valuable commodities. But this possibility was removed by the expansion of the Dutch East India Company. The company stamped out any hope of indigenous development in the Banda Islands by carrying out its genocide. Its threat also made the citystates in many other parts of Southeast Asia pull back from commerce.
The story of one of the oldest civilizations in Asia, India, is similar, though the reversing of development was done not by the Dutch but by the British. India was the largest producer and exporter of textiles in the world in the eighteenth century. Indian calicoes and muslins flooded the