Economic Foundations of British Overseas Expansion 1815–1914

THIS pamphlet differs from previous ones in two ways. First, it examines a rather broader theme than previous works in this series. Secondly, it provides a link between previous pamphlets on various aspects of the development of the traditional leading industrial nations and new pamphlets in this series dealing with other parts of the world. Two of these pamphlets on the new theme — by Dr N. Charlesworth on India and by Dr I. McPherson on Japan — are already in preparation. I should also emphasise that although the pamphlet is based on the assumption that economic forces played an important role in imperial expansion throughout the century, this is not meant to imply that political, religious or other non-economic motives were of no importance. In this survey they are, if only for reasons of space, simply omitted from consideration.

IN 1815, British economic foreign policy was still largely dominated by ideas which had been inherited from the nation’s pre-industrial past and which, following Adam Smith, historians and economists have labelled `mercantilist’. Given the relatively slow growth of agriculture in the early modern period, the mercantilists looked to trade as one of the few means of increasing wealth and power rapidly. Agricultural produce was difficult to export and emphasis was placed on the need for the export of manufactures, the control of luxury trades and dominance of the carrying trade. International commerce was slow to expand and this explains the interest of nations in trade diversion and in colonial possessions with their obvious implications for international conflict.

ONE very pertinent criticism of Gallagher and Robinson is that they assume too readily the existence of a free trade policy in Britain as early as 1815. In fact, free trade won a very slow victory in Britain and was not generally accepted before the 184os. In 1815, then, there is much to be said for Platt’s picture of a self-sufficient Britain meeting her trading needs mainly through contacts with her existing empire and traditional trading partners in the USA and Europe. Platt, however, does not appreciate the extent to which this traditional system began to break down in the aftermath of the Napoleonic Wars.

IN 1815, the white settled colonies were still very much a part of an economic and political system ruled firmly from Britain and it was a commonplace as late as the 183os to associate them with commercial and navigational success [171: 82–95]. The relationship between economic subservience and political control could be seen most obviously when, in 1835 and again in 1842, the white colonies were reminded that legislation passed by their own parliaments would not be approved in Britain if they ceased to give preferential treatment to British goods [195: 453].

WE must now examine the relationships between Britain and areas outside the bounds of formal empire. A great deal of the controversy on this issue has centred on Britain’s relationships with the Latin American countries so they must be dealt with first. Did the British try to gain economic hegemony through free trade [57: 9–10] or did they simply bargain with others for entry into their market on a basis of equality, scrupulously refusing to use their power to influence their smaller and weaker partners as Platt has argued [146; 148: 308f.]?

IN the sixty years after the Congress of Vienna the area of the globe under British sovereign control expanded considerably. Gallagher and Robinson imply that these extensions of formal control were always undertaken, deliberately and for economic motives, when informal means of influence proved inappropriate. For his part, Platt denies that the movement of the imperial frontier was inspired by metropolitan ambition, preferring to argue that expansion was primarily undertaken for local reasons which might have an economic component. As might be expected, the picture which emerges from a close study of frontier expansion is rather more complicated than either party allows.

THE picture which emerges from this survey of the evidence of British economic imperialist activities in the period is more complex and fragmentary than any of those suggested in chapter 1. After 1815 a protectionist policy which included a deliberate strategy of colonialism was steadily modified until free trade became the order of the day. Free trade was frequently associated with a distaste for imperialism, and it can be argued that the political emancipation of the white colonies and the liberal nature of economic policy towards Latin American states exhibit this growing inclination to anti-imperialism. At the same time, it must be remembered that British control over and economic penetration of India was enlarged after 1815; and the evolving ideas of liberality of commerce in Britain did contain a strongly imperialist element, though economic hegemony rather than political control became the centre of discussion. The long-running conflict between those who associate free trade with the decline of the forces making for imperialism in Britain and those who see it merely as a device which allowed for a more subtle form of domination is particularly marked in the debate over British policy in Latin America, and it is evident also in the discussions about the growth of responsible government in the white colonies.

AFTER 1875 the British economy, although growing in absolute terms, was in relative decline compared with other great powers, notably the USA and Germany. Not only had these countries become larger producers of manufactures by 1 goo, but in many important sectors of industry they had taken a significant technological lead over the first industrial nation. Britain’s relative decline was reflected in a more sluggish rate of growth of exports than hitherto and a sharp fall in Britain’s share of world trade. Competition became fiercer not only overseas but even in Britain’s domestic market; at the same time, although Britain retained free trade, the trend towards commercial liberalism in the rest of the world, apparent before the 187os, was arrested. Imports rose faster than exports and the deficit on balance of commodity trade grew considerably. This deficit would have been much greater but for the buoyancy of trade with the empire. While total exports at current prices increased by only 6 per cent between 1871–5 and 1896–1900, exports to the empire rose by 29 per cent and the increase in sales to the white settled areas within the empire was 45 per cent.* These figures must be kept in mind when assessing, first, the significance of the reviving interest in closer economic unity with the empire, especially the white-settled parts, after 1875 and the clamour to abandon free trade; and, secondly, the business agitation for the incorporation of large areas of Africa and Asia into the formal empire in this period.

THE years after 1875 saw a growing interest in the idea of reestablishing some special economic relationship with the white colonies. Industrial difficulties were the base from which grew more comprehensive fears, gaining in strength as 1914 approached, that Britain, if she maintained free trade, was in danger of losing her industrial supremacy and her world-power status. Many academics, journalists and politicians, as well as businessmen, were impressed by the large, rapidly growing populations and resources of countries such as Germany and the USA; and it was not lost on them that these great powers had been consolidated and sustained behind protectionist barriers which gave them control of their own markets. Such speculations led on, naturally enough, to the idea that Britain should join with her white colonies — whose growth potential was reckoned to be enormous and who had a large appetite for British goods [151: 105–15] — to create an economic and political unit of similar size and power, whose self-sufficiency would add to Britain’s security and take her into the twentieth century assured of great-power status. For those with grand conceptions such as this, free trade seemed to offer only the prospect of increasing exclusion from overseas markets; the export of capital and manpower to our industrial rivals; and the fragmentation of the empire itself which would eventually be pulled into the economic orbit of larger, more rapidly growing industrial nations [35: ch. 5; 9:pts. ii and iii; 161.

ROBINSON and Gallagher’s explanation of Britain’s part in the Scramble for Africa after 1880, which is still the dominating influence in the discussion, is an attempt to discredit the view that changing economic conditions in Europe had any important part to play in the drama. They claim that the proximate cause of the Scramble was the breakdown of informal influence in Egypt which made it necessary for the British to assume control there in order to safeguard the Suez waterway and the routes to the East. France’s exclusion from what hitherto had been a joint financial control of Egypt led her to react violently against Britain in other parts of Africa. Other powers were drawn in and the stock market in African properties was under way. In the process, it is claimed, the British were reluctantly forced to acquire the whole of the Nile Valley as a means of securing their position at Suez. Similarly, they felt it necessary to consolidate their hold on the other area of strategic significance in Africa, the Cape, by going to war with the Boer republics, which the British believed were intent on removing South Africa from imperial control. In West Africa, an area which had economic but not strategic significance, the British asserted themselves on the Lower Niger, but elsewhere conceded large areas of territory, especially to the French, as useful pieces of bait in the diplomatic battle for strategic safety elsewhere in Africa.

ATTENTION must now be directed to those areas with which Britain retained some kind of informal relationship up to 1914. To what extent did changing economic conditions in Britain and the world lead to changes in these relationships, if at all

THERE is evidently something to be said for Gallagher and Robinson’s interpretation of imperial expansion after 1875. Strategic motives — the defence of our existing empire in the East — did have a powerful influence on the decision to expand in East Africa, South Africa and the Middle East; and there is no doubt that many extensions of formal control were undertaken as a last resort when every informal expedient had been exhausted.