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Colonialism is the direct economic exploitation of one nation by another.

Nearly every country has done it at one point or another.

But by Victorian times all but a handful of the countries in Africa, North America, South America, East Asia, South Asia, Southeast Asia, Middle East and Australia were brutally exploited under colonial rule, mostly by European powers but also by the United States and Japan.

In the Americas, most of these nations gained de jure independence in the 1800s and 1900s. Though many Latin American countries remained under foreign economic and political control. British capital ruled much of the southern cone of Latin America and the United States imposed its will throughout MesoAmerica and the Caribbean until the Mexican Revolution.

All of Asia except China and Thailand were European and/or Japanese colonies while all of Africa except Ethiopia were European colonies. Most of the Asian and African countries gained their independence after World War II, with the largest number gaining independence in the 1960s.

Generally speaking, liberal and progressive scholars have viewed the impact of the experience as largely negative for the colonized nations, with European nations exploiting the rest of the world through military force and the threat of military force. Imperialism which is the name for a policy of establishing foreign colonies, is a synonym for Colonialism. In many cases an exploitive relationship was justified based upon a philosophy of racism or upon the theory that the lives of colonial residents was improved because they were made Christians in the process and hence assured of salvation in the next life. In part for this reason, many anti-colonial movements, in Latin America, at least, were also anti-clerical in orientation.

Most modern international boundaries were drawn by colonial powers. As a result, there is often little congruence between ancient boundaries between groups who share ethnicities and cultures ("nations") and the governments that govern particular geographic areas ("states"). This reality has placed a desire to support self-determination at odds with a desire to maintain stability and thereby avoid bloody civil wars if international boundaries are no longer deemed legitimate in much of the world. One synthesis which progressives have used to address this program is to support Cosmopolitan or, for example, Pan-African identities.

The legacy of colonialism likewise profoundly influences the modern reality in many former colonies, providing a common language of elites for peoples in a state that was artificially created by colonial powers, continuing to structure economic and social links to former colonial power, and often influencing the structure and political culture that governs the Westernized part of a former colonies legal and political system.

It is common to view the modern structure of business and culture ties shared by former colonies and the former colonial powers as a form of "economic imperialism".

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