Answer in about 150 words: Extractive capitalism. (2026, 10 Marks)
Extractive capitalism is accumulation that draws value out of existing wealth (minerals, land, cheap labour, rents and now data) rather than creating new value. The surplus flows to a narrow set of owners, while the costs fall on workers, local communities and ecosystems. The idea has three lineages, and together they make it a sharp lens on globalisation.
Lineages of the concept
- Institutionalist: Daron Acemoglu and James A. Robinson (Why Nations Fail, 2012) contrast extractive institutions, which let an elite capture rents, with inclusive ones that reward broad investment. Colonies built for plunder left extractive institutions behind; the work fed into their 2024 economics Nobel, shared with Simon Johnson.
- Latin American and Marxist: Eduardo Gudynas popularised the term neo-extractivism for Pink Tide governments that spent hydrocarbon rents on welfare while deepening commodity dependence; Maristella Svampa (2015) called it the “commodities consensus”. David Harvey’s accumulation by dispossession supplies the general mechanism, and Laleh Khalili’s Extractive Capitalism (2025) traces it through oil, sand, shipping and consultancies.
- Indian: Dadabhai Naoroji’s drain theory (Poverty and Un-British Rule in India, 1901) was an early diagnosis of surplus pumped out of a colony.
Contemporary forms
- Resource frontier: the energy transition has set off a scramble for critical minerals, mined largely in the South but refined in a few places. The top refining country’s average share rose to 72% in 2025 from 70% in 2023, and Chinese export controls now cover three times as many mineral codes as in 2023 (IEA, 2026).
- Financial extraction: Brett Christophers (Rentier Capitalism, 2020) shows profit shifting to ownership of assets, debt and intellectual property. Developing countries paid about $921 billion in net interest in 2024 (UNCTAD).
- Data extraction: Shoshana Zuboff’s surveillance capitalism and the data colonialism of Nick Couldry and Ulises A. Mejias extend the logic to human behaviour.
Indian anchor
In the Niyamgiri case (2013), the Supreme Court left Vedanta’s bauxite mine to the gram sabhas, which rejected it. The National Critical Mineral Mission (January 2025) and the Quad’s Critical Minerals Framework (May 2026) must secure supply without repeating Fifth Schedule dispossession.
Conclusion
The concept persuades where states are captured or weak, as in the resource curse. It overreaches where capable states, such as Botswana with diamonds, have turned rents into development. Extraction is not destiny: what decides outcomes is who governs the rent and on what terms communities consent.