Adaner Usmani

Why Some Are So Rich: What's Imperialism Got To Do With It?

Introduction
Over the course of the past few centuries, the global economy has been characterized by a marked rise
in inequality between the so-called First and Third worlds. uibbles in the literature notwithstanding,
the broad trend is unmistakable! according to "aul #airoch$s summary of the estimates, the differential
between %future developed countries and the future Third &orld' circa ()*+ was on the order of ( to
(.(-(.,.
(
Today, the same gap is estimated at ( to (+, possibly greater.
-
.s /iovanni .rrighi observes,
%over the past two centuries, the increasing independence of the &estern and non-&estern worlds has
been associated not with the convergence hypothesized in the Communist Manifesto but with a huge
divergence.'
,
0aturally, this has invited a series of e1planations, aiming to e1plain both the initial $take-off$ in the
now-developed world, as well as the fact of consistently growing international inequality. There are
those, for e1ample, who would invoke the propitious values of &estern civilization. 2n this vein, 3avid
4andes$ recent work argues that the more tolerant disposition of &estern cultures contrasted favorably
with the intrusive and bureaucratic mores stifling innovation in the 5ast.
6
The implication, of course, is
straightforward! to the e1tent that the 5ast can cast aside the shackles of this cultural hangover, it will
be well-placed to catch up.
7eparately, a series of theorists have understood persistent underdevelopment as a product of 7tate
failure8very roughly, the shared argument, here, is that the virtues of self-sustaining capitalist growth
can accrue to the Third &orld, provided its institutions be appropriately enabling. Of course, depending
on what one thinks crucial to a propitious conte1t, one$s in9unctions will be more or less demanding.

.t
its least e1acting, the position guides the prescriptions of mainstream economists, for whom tweaks to
the institutional order :i.e., a thin, $nightwatchman$ 7tate presiding over a climate conducive to private
investment; are sufficient. .t the other end lies a different tradition of development economists, for
whom the obstacles are altogether more formidable. <ere, the broad consensus is that the 7tate has to
meaningfully confront two challenges! first, the overhaul of pre-capitalist social relations in agriculture,
which inhibit the formation of a workforce and a domestic market= and second, the construction of
7tate capacity with a view to building a internationally-competitive industrial base. .s >ivek ?hibber
has argued, though, even in those cases that a 7tate recognizes these as its goals, success is far from
guaranteed.
*

Otherwise, there are a series of e1planations that have more public affinities to @ar1ism and the 4eft.
@ost famous among these are the world-systems and dependency schools. Aoughly, the orienting
claims, here, are that &estern take-off was rooted in 5urope$s unique success in maneuvering for
control of surpluses in a early, globalizing economy, and that the consequently unequal structure of the
world economy has tended to $lock in$ international inequality. Bnderstandably, the implications of
these arguments are typically severe. 7hort of some form of overhaul of the global economic order :or,
perhaps, $autarky$;, sustained economic development across the periphery is considered more-or-less
impossible.
( #airoch (CC*, p. (+D.
- OE#rien and 3e 4a 5scosura (CCF, p. ,-.
, .rrighi, -++), p. -(.
6 4andes (CCC.
* ?hibber -++D.
2t goes without saying that this broad typology omits much that is distinctive about important,
individual accounts of development and underdevelopment, many of which sit between, if not outside,
the positions enumerated above. 0onetheless, it is sufficient to motivate this paper$s aims, which are
decidedly more narrow in scope. The purpose, here, is to assess the importance of 5uropean
imperialism as a factor in that region$s economic development.
D
&estern geopolitical hegemony is
consistently adduced, most frequently on the 4eft, as a leading e1planation of 5urope$s distinctive
economic success. 2 will argue, however, that a cursory review of the facts shows this position to be
basically unsupportable.
To this end, this paper puts forward two theses. First, 2 argue that imperialism is unimportant to
e1plaining the initial take-off in 5uropean growth, which was a consequence, instead, of propitious but
entirely endogenous transformations of its social structure. 7econd, it is clear that even through the
modern heyday of 5uropean empire :ca. (F,+ to (C(6;, none of the arguments highlighting the
e1ceptional benefits of colonial possessions :the import of raw materials and the e1port of
manufactured goods, the e1port of surplus labour, and the possibility of super-profits on capital
e1ports; are empirically sustainable.
Of course, even if imperialism can$t e1plain take-off, and did not bring e1ceptional benefits to
5uropean populations at-large, this does not mean that it was without economic consequences. 5mpire
did benefit certain segments of the metropolitan population, which helps e1plain its persistence as
policy. @oreover, the impact of imperialism on the periphery was certainly severe. 2n this sense,
because 5uropean imperialism mattered to the underdevelopment of the Third &orld, it bears
emphasizing that the phenomenon is relevant to any thorough appraisal of global inequality.
I. European Tae!"##: Did Imperialism $roduce %apitalism?
The Long 16
th
Century
.s mentioned, for several theorists with close affinities to the dependencyGworld-systems school, the
e1planation for 5uropean $take-off$ lies in the region$s ability to take e1ceptional advantage of the
growing commercial network that emerged in the interstices of a moribund feudalism8roughly during
what 2mmanuel &allerstein calls $the long (D
th
century$ :(6*+-(D6+;. Though the arguments vary in
their empirical details, they share this claim that the rise of 5urope was a consequence of facts
e1ogenous to its own social structure.
For &allerstein, for e1ample, who advances arguably the most well-developed of all the accounts of
this development, the collapse of an earlier world removed fetters on the e1pansion of international
commerce. .s a trade-induced international division of labour subsequently evolved, regions of the
congealing world-system came to constitute its core, semi-peripheral, and peripheral zones. &hile
&allerstein adduces a series of mechanisms that both e1plain and $lock in$ the transfers of surplus
across regions :the nature of the commodities each zone produces, the system of labour control
employed in their respective production, and the varying strength of the 7tates in service of regional
interests;, these aren$t our concern, here. Aather, the relevant point for this essay is that &allerstein
D For the most part, this paper is concerned with formal imperialism8that is, that aspect of 5uropean hegemony that was
e1pressed in effective control over foreign territories. 7uch are the arguments advanced in favour of empire$s
significance, however, that 2 will occasionally consider the importance of more informal forms of empire :especially, in
the second section of the paper, the dividends of 5uropean trade with an underdeveloped periphery;.
believes &estern 5urope$s success in positioning itself at the head :or, core; of this evolving world-
system to be, at least partly, a consequence of its concomitant colonization and plunder of the 0ew
&orld. 2n &allerstein$s list of four $striking things$ about 5urope$s (D
th
century ascent, the first is
5urope$s e1pansion into the .mericas.
)

7imilar claims are advanced more strongly by #laut, in The Colonizer's Model of the World. For #laut,
colonial enterprise around the time of 5urope$s ascent :which he dates to (6C-;
F
was foundational to
5urope$s subsequent and unique emergence from a proto-capitalist phase :which, for #laut, was
common to societies across .sia and .frica at this time;. These overseas $investments$ were the work of
a privileged class in 5urope, who %took its profit from .merican enterprise and invested part of it in
5urope, buying land and developing commercial agriculture, developing industries.'
C
#laut adduces as
many as si1 sources of surplus, which were the result, e1clusively, of 5urope$s adventures! gold and
silver mining in the .mericas, plantation agriculture :principally in #razil;, the trade in spices, cloth,
and the like with .sia, the profits made by 5uropean investors on general enterprise in .merica, the
profits from slaving, and the rewards of piracy.
(+
2t is, to reiterate, the flow of this surplus capital into
5urope that is supposed to have unleashed a whole series of secondary effects, %including agricultural
e1pansion and transformation, primitive manufacturing, urbanization, and e1pansion of rural
settlements and the commercial economy,'
((
all of which culminate in what #laut understands as
5urope$s decisive ascent.
For both &allerstein and #laut, then :as well as for others in this school;, 5uropean hegemony in this
mercantilist world was instrumental to its subsequent economic success. .t its strongest, the argument
is that absent these various sources of plunder overseas, 5urope$s $take-off$ into capitalist development
would have been unthinkable.
(-

?ertainly, there$s no doubting the fact that much was plundered from the periphery. #ut, as "atrick
O$#rien has noted, &allerstein and others make no attempt to quantify e1actly how much. Their
method, instead, has been to %e1pand micro evidence into macro generalizations,' without calculating
how much %this commerce between continents really addHedI up to over long cycles between (6*+-
()*+.'
(,
The work of doing this reveals, quite decisively, that fortunes from various forms of
commerce with the periphery represent, at best, only a fraction of what the world-systemsGdependency
position implies. .nd it could scarcely have been otherwise= as he writes elsewhere, %the commerce of
that era seems to have more in common with its medieval past than with the kind of international
economy that stepped into prominence after the coming of the railways.'
(6
.ll indications are that a significant uptick in international commerce occurred only around (D*+. #ut
) &allerstein (C)6, p. (-F.
F %#efore (6C- there was slow growth in 5urope, perhaps even a downturn. ?ertainly8and this is accepted by the
ma9ority of 5uropean historians8no truly revolutionary transformation was underway in (6C-. &ithin a few decades
after (6C- the rate of growth and change speeded up dramatically, and 5urope clearly entered a period of rapid
metamorphosis. There is no dispute about this fact, which is seen in the known statistics relating to prices, urban growth,
and much more beside...' :#laut (CC,, p. (F);.
C #laut (CC,, p. (FF.
(+ #laut (CC,, p. (FF.
(( #laut (CC,, p. (CD.
(- There is a weaker version of this argument, which this paper can$t address directly. .cemoglu, Johnson, and Aobinson,
while acknowledging O$#rien$s argument that profits on trade were economically insignificant, argue that it induced
institutional changes that stood 5urope on the track of economic development :.cemoglu, Johnson, and Aobinson
-++-;.
(, O$#rien (CF-, p. (D.
(6 O$#rien -++*, p. )).
even in the late ()++s :in other words, a gross overestimate of the e1tent of trade at the time of the
world-system$s apparent emergence during &allerstein$s $long (D
th
century$, (6*+-(D6+;, available data
indicates that 5uropean e1ports and imports to the periphery amounted to no more than (K and --6K
of total economic output, respectively.
(*
5ven for those countries especially engaged in trade with the
periphery :such as "ortugal, <olland, and #ritain;, estimates are in the single digits= and as late as
(F6D, for these the same three countries the ratio for both imports and e1ports to income never
e1ceeded (*K.
(D

Bnderstandably, then, profits from this trade could never have represented a very significant part of
total capital formation8O$#rien$s estimates for #ritain, which was the most involved in trade with the
periphery in the late ()++s, suggest that a ma1imum of about (*K of gross investment e1penditures
undertaken during the 2ndustrial Aevolution had their source in commerce with the periphery.
()
Aeliable estimates for the earlier period :i.e., the period of $take-off$; are not possible, but the figure
would almost certainly be much, much smaller.
O$#rien also re9ects the specific claim that the e1traction of bullion from the .mericas was crucial to
the development of capitalism in 5urope. &hile the world-systemsGdependency school divines several
mechanisms for its importance :relieving a monetary constraint, facilitating the e1pansion of
international trade with .sia and the #altic,
(F
e1ercising an upward pressure on price levels which
encouraged investment by redistributing income upwards
(C
;, again not enough effort is e1erted to
establish the scope of these effects :or, in the case of the last, its theoretical coherence;.
-+
&hen one
does this, the implications are underwhelming.
First, the actual volume of bullion imported from the 0ew &orld is not as significant as often
suggested, adding no more than -*K to the e1isting stock of silver and gold by (D*+.
-(
O$#rien further
notes that 5urope$s $silver famine$ had already been addressed by the late fifteenth century, through the
e1pansion of production in 5urope$s own mines.
--
@oreover, bullion, imported or not, was not the only
solution to monetary constraint! the velocity of circulation was increased, and debasement frequently
resorted to.
-,
Finally, it is true that gold and silver :again, imported or not; mattered for trade with .sia
and the #altic. #ut, as previously mentioned, trade with the former region was tiny, as a proportion of
economic output= and, though #altic imports were more important, they weren$t much more so
:supplying not more than (-- K of total 5uropean consumption of grain, for e1ample;.
-6
2n any case,
(* (K is the figure O$#rien calculates for the percentage of 5urope$s gross national output e1ported to .frica, .sia, 4atin
.merica, the ?aribbean and the southern plantations of the B7, in ()F+-()C+. --6K is a figure 2$ve calculated, on the
basis of O$#rien$s estimates that roughly -*K of imports came from the periphery, and imports represented a ma1imum
of (+-(*K of /0" :O$#rien (CF-, pp. 6-*;.
(D O$#rien -++*, p. )).
() O$ #rien (CF-, p. ).
(F &allerstein, for what it$s worth, agrees that the e1change of lu1uries with .sia was not large enough to %sustain so
colossal an enterprise as the e1pansion of the .tlantic world, much less Hcould it have accountedI for the creation of a
5uropean world economy' :&allerstein (C)6, p. 6-;.
(C %The inflation created a redistribution of incomes... 2t was... a method of ta1ing the politically weakest sectors to provide
a capital accumulation fund which could then be invested by someone... The argument, remember, is not only that there
was a profit windfall, but that inflation encouraged investment' :&allerstein (C)6, pp. F,-F6;.
-+ &allerstein does discuss much of this with a critical eye :even citing @iskimin, who O$#rien uses in his re9oinder;, but
the overall conclusion is still incompatible with the evidence O$#rien presents :see &allerstein (C)6, pp. )(-)) and p.
(-F-(-C;.
-( O$#rien (CF-, p. (,.
-- O$#rien (CF-, p. (,.
-, O$#rien (CF-, p. (,.
-6 O$#rien (CF-, p. (6.
O$#rien points out that only one-third of #altic imports were paid for with bullion= the other )+K were
covered by commodity e1ports, or the sale of 3utch and 5nglish shippingGmercantile services.
-*

2t$s worth emphasizing, here, that the &allerstinian position has to contend with one other fact about the
age of mercantilism! namely that, with the e1ception of #ritain and arguably <olland, the principal
powers of this period remained undeveloped despite formidable imperial acquisitions. "ortugual, for
e1ample, whose conquest of ?euta in (6(* opened the first phase of 5urope$s imperial age, saw no
meaningful multiplier effects from the revenues it would accumulate over the subsequent centuries. .s
O$#rien writes, %at no time during the country$s long involvement with empire and e1pansion overseas,
(6(*-(F(*, had the inflow of revenues accruing from plunder, conquest, trade and from servicing the
international economy, been allocated towards the creation of an alternative, less vulnerable and
productive base for agriculture andGor industry within the borders of "ortugal.'
-D
4ikewise, 7pain, who
presided over one of the largest 5mpires in world history until the loss of its .merican possessions at
the beginning of the (C
th
century, remained mired in long-term %economic retardation,' only
%converging towards northern 5uropean levels of productivity after the 7econd &orld &ar.'
-)
&hile
5mpire is hardly responsible for this8as noted earlier, all indications are that linkages with the
periphery were too small to be of serious significance, positive or negative
-F
8it is the case that
colonization probably helped stabilize the power of the traditional order.
-C
.s 5llen @eiksins &ood
writes, %7pain, the dominant early colonial power and the leader in $primitive accumulation$ of the
classical kind... e1pended its massive colonial wealth in essentially feudal pursuits.'
,+
Brenner
O$#rien$s work on the empirical foundations of the world-systemGdependency position is complemented
well by Aobert #renner$s famous essay on the position$s $0eo-7mithian$ assumptions.
,(
Though the
argument is quite involved, in its details, the cru1 of #renner$s re9oinder to what he calls $the
commercialization model$ is fairly straightforward. Aecall that in 7mith, the prime mover behind
productivity increases in the 5uropean economy is the e1pansion of opportunities to produce for a
growing market8often, for the proto-industrial towns that had grown fat on the dividends of 5urope$s
mercantilist hegemony.
,-
Aoughly, the claim is that the commercialization of agriculture :which, as 2
mention below, was critical to 5urope$s $take-off$;
,,
proceeded in this way. . new mode of production
-* O$#rien (CF-, p. (6.
-D O$#rien and 3e 4a 5scoscura (CCF, p. 6(.
-) O$#rien and 3e 4a 5scoscura (CCF, p. 6*. @addison$s figures on per capita /3" levels from (*++ to (F++ bear this out.
&hile "ortugal and 7pain$s per capita /3" grew --K and -CK between (*++ and (D++, over the ne1t two centuries
their growth rates were -*K and (FK, respectively. The BL$s per capita /3" level, on the other hand, grew ,DK
between (*++ and (D++, and )*K between (D++ and (F++ :see @addison -++,;.
-F %The albeit imperfect data... suggests that most of the relevant ratios :including trade to gross domestic product,
emigration to total population and imports of bullion to domestic product; are simply too small to e1plain more than a
fraction of 7pain$s overall record of economic growth between (6C- and the loss of its .merican colonies, (F+F-(F-6'
:O$#rien and 3e 4a 5scoscura (CCF, p. 6*;.
-C %/uaranteed flows of bullion also formed the basis upon which 7panish kings could borrow money from 5uropean
bankers and merchants. 2t substituted for ta1es and provided the security for the rapid accumulation of an enormous
royal debt. #ullion not only underpinned regal power but augmented the incomes of the aristocracy and thereby reduce
their rapacious tendencies to prey upon the crown estate or to use their territorial powers and property rights to e1tort
retns from merchants, businessmen and towns. 2n short, colonisation helped to consolidate and stabilise traditional
institutions and structures of power, status, and property rights within 7pain.' :O$#rien and 3e 4a 5scoscura (CCF, p.
6,;.
,+ &ood -++-, p. (6F.
,( #renner (C)).
,- 7ee #renner$s summary of the $7mithian$ thesis :#renner -++), p. *+;
,, &allerstein, correctly, observes the same. &hile the world-systemsGdependency position does identify the beginnings of
emerged as producers responded to the possibility of production for profit.
,6

2n his critique, #renner points out that this argument is compelled to rely on a transhistorical :and
7mithian; assumption of how producers respond to e1panding market opportunities8the wager is that,
universally, they will specialize in search of gains on the market, which by developing the division of
labour and fostering competition, advances productivity.
,*
#ut a thoughtful inspection of the social
structure of feudalism, #renner argues, reveals that neither of feudalism$s two constitutive classes8
peasants and lords8actually e1hibited economic strategies that aligned with these e1pectations.
On the one hand, peasants, #renner suggests, valued their access to the means of subsistence, above all
else8a strategy that he labels $safety-first.$ They weren$t compelled to innovate or specialize because
their economic reproduction was guaranteed outside the market. .s long as they weren$t required to
out-compete other producers in pursuit of their daily bread, they wouldn$t. This didn$t mean that
peasants never pursued production for the market= but it does mean that, even if surrounding markets
were relatively well-developed, their priorities always lay elsewhere. The overwhelming imperative of
ensuring a stable supply of food foreclosed a strategy that would require surrendering to the vagaries of
market competition.
,D

On the other hand, for lords, the task of imposing systematic productivity increases on peasants was,
#renner argues, a step too far. #oth because peasants possessed their own plots, surrendering labour
andGor produce only under compulsion, and because lords had no regular recourse to the threat of
e1pulsion, %lords found the supervisory costs of securing satisfactory work too high to 9ustify much
agricultural investment or innovation.'
,)
0ote that this is not to say that lords had no interest in
procuring ever greater quantities of produce, from peasant producers. On the contrary, the pressures of
inter-lordly competition did demand larger surpluses. #ut it is to suggest that, because of the
prohibitive costs of organizing and forcing technical change on peasants, they invariably sought
recourse to alternative strategies :namely, e1tending the area of cultivation and accumulating political
capacity;.
,F

&hat #renner$s argument suggests, of course, is that the mechanism driving the transition, in early
modern 5urope, could not have been the e1pansion of market opportunities owing to growing
capitalism in the urban centers of the late medieval and early modern periods, there is a recognition, at least in
&allerstein, that self-sustaining growth, leading to industrialization, presupposed the commercialization of agriculture.
%The emergence of an industrial sector was important, but what made this possible was the transformation of agricultural
activity from feudal to capitalist forms' :&allerstein (C)6, p. (-D= see also pp. ((D-(();. O$#rien quotes Fernand
#raudel e1pressing an observation on which this insight is based, namely that much of the obsession with merchants and
towns obscures the fact that the vast ma9ority of humanity lived elsewhere! %$H2tI was overwhelmingly a world of
peasants and of the tenant farmers and landowners= crops and harvests were the vital matters of this world and anything
else was superstructure, the result of accumulation and of unnatural diversion towards the towns. "easants and crops, in
other words food supplies, and the size of the population silently determined the destiny of the age.$' :O$#rien (CF-, p.
(F;.
,6 .s &allerstein writes, %&e must persist a little longer on this question of the development of western 5uropean
agriculture and why it could not take the route of eastern 5urope! large estates with coerced cash-crop labor. 2t was, in
the end, because a capitalist word-economy was coming into e1istence.' &allerstein proceeds to suggest that it was the
different options open to landlords all searching for profits on an e1panding world-market that e1plains the famous
divergence between &estern and 5astern 5urope :&allerstein (C)6. pp. ((+-(((;. The %overall picture' for him, is that
%wage labour and money rents' were emerging in 0orthwest 5urope as a response to a widening market, and the
consequent agricultural specialization of the core :&allerstein (C)6, p. (D;.
,* #renner -++), p. *D-*).
,D #renner -++), p. DD-)+.
,) #renner -++), p. )+.
,F #renner -++), pp. )+-)(.C
international trade. The argument #renner does advance, for feudalism$s demise, is not particularly
important in its details, here= famously he argues that capitalist social-property relations emerged, only
in certain parts of 5urope, as the unintended consequence of the struggle between lords and peasants in
the conte1t of the crisis of the (6
th
century. &hat matters, for our purposes, is that capitalist take-off in
5urope is decidedly the product of facts endogenous to its social structure.
One issue does, perhaps, need clarification. #renner$s disagreement with &allerstein doesn$t only
concern the factors driving the transition to capitalism, but is also, in no small part, a clash over what,
e1actly, capitalism denotes. For &allerstein :like 7mith, again;, the signal feature of capitalism is
production for profit on the market8while &allerstein acknowledges that this pre-e1ists the modern
world-system, he identifies capitalism as a system in which production for the market predominates
:the implications for social structure, as we$ve seen, vary regionally;. .s #renner notes in his critique,
&allerstein$s corollary conception of economic development is thus quantitative8capitalism emerges
as the accretion of decisions taken by producers to respond to the call of growing markets.
#renner$s conception of the distinction between feudalism and capitalism, on the other hand, is sharply
qualitative. The economic strategies of peasants and lords generate distinctly feudal developmental
patterns, and it is only with the clean break from the social-property relations that undergird those $rules
of reproduction$, in the form of the transitions of the early modern period, that one begins to observe
identifiably capitalist laws of motion. "ut differently, it is only once producers are divested from
independent access to the means of subsistence, and appropriators sub9ect to the pressures of market
competition, that one observes the systematic tendencies towards increasing labour productivity that
marks capitalist take-off. 0ote that, as #renner argues, the development of meaningful capitalist
industry presupposes this initial transition! the development of labour productivity in agriculture and
:tragically; the e1pulsion of the direct producers are prerequisites for the creation of a home market and
a workforce for industry, respectively.
,C

2n short, in light of these ob9ections, the position that 5uropean imperialism was a decisive factor in its
$take-off$ to self-sustaining capitalist growth seems both empirically and theoretically untenable. .s
O$#rien observes, though commerce with the periphery e1isted, its significance pales in comparison to
intra-5uropean economic activity. .nd even if commerce with the periphery had been orders of
magnitude larger, and urban markets consequently more well-developed, #renner$s argument strongly
suggests that the social structure of feudalism would have been impervious to their influence.
II. &ene#its to Europe: Does Empire 'ae (ou Rich?
The fact that 5uropean imperialism does not e1plain 5uropean take-off, though, is hardly the end of the
controversy. . weaker, much more frequent claim is that 5uropean imperialism, even if it can$t e1plain
the origins of capitalism in 5urope, certainly played an important role in making 5urope as wealthy as
it became.
Two caveats, first.
The concern, in what follows, is mostly with what can be thought of as the second wave of 5uropean
imperialism8that phase of 5uropean e1pansion that can be dated, roughly, to the French conquest of
.lgeria in (F,+, but that had its most clear-cut e1pression in the $7cramble for .frica$ towards the end
of that century. 2t is in the years of the $new imperialism$ :the last two decades of the (C
th
century;,
,C .s 2 noted earlier, &allerstein seems to agree :see F0 ,,;.
within this period, that 5urope and its possessions went from covering D)K of the world$s surface, to an
e1traordinary F6K.
6+ %
#y (C(,, 5uropean colonies included eleven times more land and eighteen times
more people than the areas and populations directly ruled by 5uropean imperial governments.'
6(
There$s little reason to assess the argument for the economic benefits of 5mpire in the conte1t of the
first, $mercantilist$ wave,
6-
given that the central fact about international trade in this later period
:namely, that links to the peripheryGcolonies were economically relatively marginal;, applies only more
strongly to that first period, which, as 2 argued, predates the meaningful e1pansion of international
trade.
)i*ure +
,-
@oreover, much of the following focuses on the #ritish 5mpire, for good reason. .s O$#rien writes,
%...the macro-economic significance of empire for the rise, growth and decline of the #ritish economy
remained far greater and persisted for longer than it did for any other nation in 5urope with the possible
e1ception of "ortugal.'
66
One indication of this is the share of commodity e1ports that 5uropean
powers sent to their empires! from the late ()++s to the (C,+s, the figure is highest for #ritain. France
consistently e1ports at roughly half of #ritain$s level :in percentage terms;, while 7pain and "ortugal
begin at a similar level :6+-*+K;, but drop off drastically as the nineteenth century proceeds. For
6+ O$#rien and 3e 4a 5scoscura (CCF, p. D+.
6( O$#rien -++*, p. FD.
6- To be fair, as regards the BL specifically, O$#rien does advance a $middling$ position on the importance of #ritish
investment in its fiscal and military 7tate between the /lorious Aevolution and the Treaty of >ienna. <is position
:which, interestingly, is not unlike Offer$s later critique of O$#rien$s argument that the 5mpire wasn$t important, after
(F6D; is that #ritain$s empire mattered to its ability to take advantage of foreign trade, which was important for the
larger tra9ectory of the #ritish economy in this period. For O$#rien, histories of the 2ndustrial Aevolution which stress
only $endogenous$ dynamics overstate the case. &hile this paper can$t address O$#rien$s argument in detail, his position
seems odd. /iven that the economic weight of foreign trade as a percentage of /3" was weak :O$#rien notes this, but
thinks that this isn$t the appropriate measure;, one can acknowledge spin-off effects but still maintain their relative
insignificance. Aegardless, O$#rien remains e1plicit in distancing himself from the $world-systems school$, seeking only
to correct a trend in the historiography that, in his opinion, unduly discounts the importance of changes in the 5nglish
state. 2nsofar as he stresses his unwillingness to make $commerce and imperialism$ into the $engine$ of the industrial
revolution, 2 understand his position here to be broadly compatible with the larger arguments of this paper :O$#rien
(CCC, pp. **-D-;. 7ee also @okyr (CCC, pp. DF-)F, where @okyr offers an overview of the debates on the importance of
foreign trade to the 2ndustrial Aevolution8including a critical review, via 7tanley 5ngerman$s famous critique
:5ngerman (C)-; of 5ric &illiams$ thesis that ?aribbean slavery was crucial.
6, #airoch (CC*, p. F,.
66 O$#rien and 3e 4a 5scoscura (CCF, p. D,.
1 7 00 1 7 5 0 1 800 1 82 6 1 87 6 1 9 00 1 9 1 3 1 9 4 5 1 9 5 0 1 9 6 0 1 9 6 3
0
1
2
3
4
5
6
7
8
9
1 0
1 1
1 2
European Colony-to-Metropole Ratios, 1700-1963
Ar ea Ra t io
Popu l at ion Ra t io
countries like <olland, /ermany, 2taly, and #elgium, the figures are all negligible.
6*

)i*ure .
,/
2n short, wherever it can be demonstrated that, even for #ritain, connections to the colonies were too
small to be economically significant, this can be understood as proof of the larger claim that 5urope$s
wealth was not dependent on its colonial possessions.
6)

.s 2 understand it, $dependency$ arguments come, roughly, in three forms! first, 5urope$s imperial
possessions, it is claimed, allowed it to e1port and import commodities to the benefit of the metropole
:either because e1ports relieved pressures in the domestic economy, or because imports offered
abundant andGor important inputs;= second, the e1port of surplus labour to the colonies is said to have
alleviated the threat of domestic unrest= and third, imperialism helped resolve the problem of declining
rates of profit in home markets, by offering high rates of return on capital e1ported to the colonies.
A. Trade 0ith the $eriphery
uro!e
Though no one seems to have compiled comprehensive data on metropole-colony trade for each of the
5uropean empires, the general point can be illustrated by means of an appro1imation :trade between
the First &orld and the Third &orld;, first, and then by assessing the specific figures for the #ritish
5mpire, second. 0ote that this first measure has the added benefit of assessing the $unequal e1change$
hypothesis, which is part of the family of arguments advanced by the world-systemGdependency
schools.
6F
Transfers of value from Third &orld to First &orld can only have been significant if they are
derived from a trade that is relatively meaningful, in volume terms.
Bnfortunately, all indications are that this is not the case. "aul #airoch, in the opening salvo of a (C)6
e1change with .ndre /under Frank in the "ournal of uro!ean conomic #istory, presents data on
international trade for the (C
th
and first half of the -+
th
centuries, grouped by region and also by the
development level of the destination or source. Overwhelmingly, his figures show that $core-periphery$
trade was not considerable, as a proportion of 5uropean economic activity.
6* 7ee O$#rien and 3e 4a 5scoscura (CCF, p. D,.
6D O$#rien and 3e 4a 5scoscura (CCF, p. D,.
6) 7ee #airoch (C)6, p. *)*, where #airoch presents figures for commodity e1ports for individual 5uropeans by the
regions to which they were destined, illustrating that #ritain was far more entangled in trade with non-5uropean
countries than any other power.
6F 5mmanuel (C)-= .min (C)). For a critique, see 7haikh (C)C and 7haikh (CF+.
Commodity Exports Delivered to Empire (as % of total exports)
Late 1700s Mid 1800s Early 1900s 1929-19!
"ritai# 53 26 35 42
$ra#%e 22 10 13 24
&pai# 38 21 6
'ort()al 46 2 15
*olla#d 9 6
+erma#y 1
,taly 2 3
"el)i(m 1
)i*ure -
,1
For one, the ma9ority of e1ports that left 5uropean countries were destined for other markets inside
5urope. From (F++ to (C)-, the figure is as high as )*K of total e1ports :in (C)-;, and never lower
than D+.)K :in (C*,;. 3uring the $second wave$ of imperialism :roughly, (F,+ to (C,+;, the figure
averages DF.*K.
*+
.lmost half of the remainder, as #airoch shows, went to other relatively developed
countries, outside of 5urope :0orth .merica, Oceania, Japan, and 7outh .frica;. The average level of
e1ports that were sent to Third &orld countries, between (F++ and (C)-, amounts to only (F.DDK of
the total.
*(
5lsewhere, for the period (F++ to (C,F, #airoch$s estimate of this figure is ()K. On this
basis he notes that %e1ports to the Third &orld represented only (.,-(.)K of the total volume of the
production of those developed countries.' :2ncidentally, #airoch supplies estimates for 5urope$s trade
with its colonies, as well! CK of e1ports, and +.D-+.CK of production. #ut because levels of
involvement with the 5mpire varied considerably amongst 5uropean powers, this fact is not a
substitute for the BL-specific analysis of the ne1t section;.
*-
0one of his core findings, it scarcely
needs to be said, offer much in the way of support for the hypothesis that Third &orld markets, by
providing an important outlet for 5urope$s e1ports, were foundational to 5uropean wealth.
*,
6C #airoch (C)6, p. *DD.
*+ #airoch (C)6, p. *D-.
*( #airoch (C)6, p. *DD.
*- #airoch (CC*, pp. )--),.
*, 2ncidentally, because trade as a share of /0" was even lower in the B7, these figures are even less impressive when
applied to e1plain .merican imperialism :#airoch (C)6, p. ()+;.
1 800
1 83 0
1 84 0
1 85 0
1 86 0
1 87 0
1 880
1 89 0
1 9 00
1 9 1 0
1 9 2 8
1 9 3 8
1 9 5 3
1 9 6 0
1 9 7 0
1 9 7 2
0
1 0
2 0
3 0
4 0
5 0
6 0
7 0
80
9 0
1 00
European E!ports, 1800-1972
"#ir $ %or l $
&e' el ope$
)i*ure ,
2,
Bnderstandably, a similar story holds, as regards 5urope$s imports. .gain, the ma9ority of 5uropean
countries$ imports arrived from producers in other 5uropean countries. For the (F,+ to (CD+ period,
this figure averages about D-K of total imports. .lmost half of the remainder comes from other
developed countries, meaning that, on average, roughly a fifth of total imports to 5urope in this period
arrived from Third &orld countries :-+.F(K;.
**
Once again, as a proportion of total economic output,
this figure is relatively negligible.
*D

On reflection, this is hardly surprising. 2n large part, the lure of peripheral markets could only be as
strong as the periphery was developed. /iven that consumers were poor andGor had secure access to
their means of subsistence, infrastructure was underdeveloped, and markets were correspondingly
$thin,$ trade could hardly have prospered.
2t could plausibly be argued that while Third &orld e1ports may not have been quantitatively
important, producers in the Third &orld might still have provided 5uropean countries with reasonably
large quantities of certain, indispensable raw materials. <ere, though, #airoch$s figures are quite
striking. The claim that 5urope was energy or mineral dependent on the periphery, for e1ample, can$t
withstand scrutiny. .s regards the former, for e1ample, on the eve of &orld &ar 2, 5urope actually
en9oyed an e1cess of -.6K of energy production over consumption. This is both a product of the fact
that it was well-endowed with coal, which hadn$t yet been supplanted by oil :this process only began
after &&22;, and of the prohibitive costs of transporting energy for much of this era.
*)
7imilarly,
*6 #airoch (C)6, p. *)C.
** #airoch (C)6, p. *)C.
*D /iven that 5uropean trade-to-/3" ratios in the (F*+ to (C(, period averaged around ,+K :see #roadberry and
O$Aourke -+(+, pp. *6-**;, my very rough estimate of imports from the Third &orld as a proportion of gross economic
output is ,K :note that this is almost certainly an overestimate, biased in favour of the significance of the periphery,
given that trade in the pre-(F*+ period was smaller;. ?ombining this with #airoch$s undoubtedly more accurate :and
lower; figure for Third &orld e1portsG5uropean /3", cited earlier, a high estimate of the Third &orld trade as a
proportion 5uropean /3" is *K. Bsing O$#rien$s method of calculating upper-bound estimates for profits on core-
periphery trade in (F++ :see O$#rien (CF-, p. D;, an overgenerous figure for the contribution of this trade to investment
would be around (.-*K of gross product, in the late (F++s. 7ince investment ratios in this period hovered around ((K of
/3", this would mean that profits from trade with the Third &orld represented, at most, F.FK of gross investment. This
is comparable to O$#rien$s estimate for the BL in (F++ :which was (+K;, which he deemed insignificant, in light of the
claims often made in relation to peripheral trade.
*) #airoch (CC*, pp. D+-D-.
1 83 0
1 85 0
1 86 0
1 87 0
1 880
1 89 0
1 9 00
1 9 1 0
1 9 2 8
1 9 3 8
1 9 5 3
1 9 6 0
0
1 0
2 0
3 0
4 0
5 0
6 0
7 0
80
9 0
1 00
European ()ports, 1830 to 1960
"#ir $ %or l $
&e' el ope$
significant trade deficits in key minerals evolved only after the inter-war period, again because %price
considerations in relation to transport costs are of primary importance.'
*F
2ncluding other commodites
:te1tile fibres, dyes, rubber, hides, and skin;, #airoch calculates a 5uropean $self-sufficency$ ratio in
raw materials of about C6-CDK, around (C(,.
*C
.ll told, #airoch$s summary e1presses the evidence well!
The most significant conclusion to be drawn from an analysis of the geographical structure of
5uropean foreign trade would be the preponderance of inter-5uropean trade and trade between
developed regions... This has meant that trade with what is today called the Third &orld was
relatively marginal, i.e. about -+K of 5urope$s foreign trade in the (C
th
century.
D+
The $%
/iven the fact that #ritain$s foreign trade was far more skewed towards the Third &orld than other
5uropean powers, it$s necessary to review the specific evidence for the #ritish 5mpire. 2t$s certainly
plausible, after all, that intercontinental data could mask significant variation within 5urope8for some
countries, links to the periphery might well be significant. Of course, since #ritain was most involved,
D(
if there$s any truth to the argument that the periphery andGor colonies mattered crucially for individual
powers, it should be borne out by the #ritish e1perience.
)i*ure /
/.
.s regards the periphery, #ritain$s involvement is, at first glance, relatively striking. .ccording to
*F #airoch (CC*, p. D-.
*C %Therefore, on the even of &orld &ar 2 when the developed world already had a volume of per capita manufacturing
production some seven to nine times higher than that of the world in ()*+, CFK of metal ores used by the developed
countries came from the developed world= F+K of its te1tile fibres= and, as we have seen, over (++K of its energy. 2n
terms of the volume of the rest of raw materials :such as those used in glass, cement, paper, and clay industries;, the
degree of local autonomy was over CCK' :#airoch (CC*, p. DF;.
D+ #airoch (C)6, p. *C-.
D( ?rouzet, citing <abakkuk, further notes that %from the economic point of view #ritain possessed the best of all possible
empires in the middle of the nineteenth century! a group of pioneer or backward countries tied to a highly industrialised
country, buying its manufactured goods in return for their primary products' :?rouzet, p. -((;.
D- ?rouzet (CF-, p. ,*6.
1 81 6 *1 81 8
1 84 8*1 85 1
1 889 *1 89 1
1 9 1 1 *1 9 1 3
0
1 0
2 0
3 0
4 0
5 0
6 0
7 0
80
9 0
1 00
+, E!ports, 1816-1913
1 84 8*1 85 1
1 86 9 *1 87 1
1 889 *1 89 1
1 89 9 *1 9 01
1 9 1 1 *1 9 1 3
0
2 0
4 0
6 0
80
1 00
+, ()ports, 1848-1913
"#ir $ %or l$
&e' el ope$
#airoch, in the mid-(C
th
century, commodities sent to the Third &orld accounted for 6+K of #ritain$s
total e1ports, while e1ports to 5urope only ,*K.
D,
?rouzet offers more complete data for the (F++s,
which only slightly tempers the apparent importance of the Third &orld in this period :his figure is
,6.DK;.
D6
. full -*K of #ritish e1ports in this period, according to his figures, were sent to 0orth
.merica. 2mports from the Third &orld were, for the most part, less significant than e1ports, though
obviously more significant than was the case for the rest of 5urope. .ccording to ?rouzet, between
(F6F to (C(,, imports from the periphery represented, on average, -CK of total goods coming in to the
BL.
&hile all this establishes that trade with the periphery mattered more to the BL than it did for the rest
of continental 5urope, it hardly establishes that it was of foundational importance to #ritain$s
development. For one, on the basis of ?rouzet$s estimates of trade-to-/3" ratios for the #ritish
economy in this time period, peripheral imports and e1ports could not have represented any more than
(+K of the country$s /3".
D*
&hile this is twice the 5urope-wide figure, it is, of course, only half the
analogous estimate for the portion of the BL$s /3" comprising trade with developed countries. The
logic underlying this fact is no different than what was argued earlier. 2nsofar as, in these regions,
%populations were small, impoverished and politically unstable, transport was difficult, there was a lack
of return-cargoes and means of payment,'
DD
markets were correspondingly smaller than their
counterparts in developed regions.
D)

@oreover, a more detailed assessment of these changes in the geographic composition of #ritish trade
lends itself to some similar conclusions. @uch of the increase in e1ports to peripheral countries can be
e1plained by a surge in te1tile e1ports to peripheral areas. <obsbawm cites data to demonstrate %a
steady flight from the modern, resistant and competitive markets into the undeveloped.'
DF
&hile in the
year (F-+, only ,(.FK of total cotton piece goods were e1ported to the underdeveloped world, by (F6+
they captured DD.)K and in (C++ a startling FD.,K. 4atin .merica alone consumed ,*K of #ritain$s
cotton e1ports in (F6+= towards the end of the century, %as the new industrial powers started to break
into Hthe regionI,' 2ndia came to absorb even more, in the region of 6+-6*K.
DC
For <obsbawm, all this
is evidence that these regions %saved' 4ancashire.
&hile this is true, it isn$t necessarily evidence that these were crucial in the way the dependency
argument envisions. .s ?rouzet writes, much of the appeal of these territories was the fact that, therein,
%little or no competition' e1isted.
)+
Aather than serving as impetus for industrial dynamism, it is
probably more accurate to consider these markets a refuge for a te1tile industry facing perennial
D, 2n contrast, for continental 5urope, commodities sent to the Third &orld represented only (+K of total e1ports, and to
other destinations in 5urope F+K :#airoch (C)6, p. *C,;.
D6 ?rouzet presents data on the geographical distribution of BL trade. #y grouping the data for $developed$ and
$underdeveloped$ continents, it becomes appro1imately comparable to #airoch$s figures.
D* These are overgenerous estimates based on my own calculations, which are in turn based on ?rouzet$s figures. For the
BL economy, the ratio of trade to national product peaks at ,+K, in the (F)+s :?rouzet (CF-, p. ,6,;. /enerously
estimating peripheral trade as ,+K of total trade means that the ratio of peripheral trade to /3" would be CK.
Furthermore, following O$#rien$s methodology, a very generous estimate of the portion of total investment attributable
to gains from this trade would be in the region of (*--+K.
DD ?rouzet (CF-, p. ,*6.
D) /iven that, in (C(,, 2ndia$s population alone was twenty-three times the white population of the dominions, the fact that
the latter$s share of trade neared *+K can only be e1plained by this fact. .s Offer notes, %these countries en9oyed very
high incomes, which came to about 6+ per cent of BL national income for ?anada and .ustralia alone in (C+F.' :Offer
(CC,;.
DF <obsbawm, p. (-6.
DC <obsbawm, pp. (-6-(-*.
)+ ?rouzet (CF-, p. -+F
problems of absorption in domestic and developed markets, and which was8after a brief mid-century
boom8nearing its last legs.
)(
O$#rien offers a similar assessment of #ritain$s use of its dependencies,
more generally, arguing that #ritain$s access to sheltered markets allowed its economy to sidestep the
pressures of competing with /erman and .merican industry, in turn damaging long-term prospects.
3iscussing the banking sector at the end of the nineteenth century, for e1ample, he writes that %the
legacy of mercantile, imperial, and cosmopolitan practices, routines, and cultures embedded in #ritish
financial institutions encouraged a truly massive e1port of capital that a minority of contemporary
critics with foresight8and historians with hindsight8represent as malign for the long-term vitality of
the domestic economy.'
)-

.s regards trade with the colonies, the preceding is obviously only appro1imate evidence of its relative
unimportance. #ut a specific assessment of the significance of the colonies and dominions as suppliers
of primary produce and as consumers of metropolitan goodsGservices reveals similarly underwhelming
figures. .ccording to O$#rien$s numbers for the period (F6D to (C(6, commodities from the colonies
and dominions peaked at roughly -*K of total imports :in (C(,;.

&hile many of the individual
commodities supplied were $statistically significant,$ as a proportion of total quantity consumed, %no
commodities delivered from the empire were... unobtainable elsewhere in the economy and #ritish
consumers paid competitive prices for imported primary produce regardless of its origins.'
),
51ports
represented a larger proportion of total goods sent abroad8for most of this period the proportion
hovers between a quarter and a third, though it peaks at ,CK in (C+-. Aoughly half of all e1ports went
to the dominions, and8particularly after %the rapid growth of imports of $temperate$ foodstuffs from
the empire'8a similar number of imports came from these territories.
)6

)i*ure 3
32
@oreover, for the claim that 5mpire mattered crucially to the BL$s wealth to be watertight, it should
pass a more stringent counterfactual. 7trictly-speaking, the question is not whether #ritain$s wealth
could have survived without any imports from or e1ports to its 5mpire :to which the answer is surely
no;, but rather whether these imports and e1ports required political control over the territories
)( 7ee ?rouzet (CF-, pp. -+D--(-.
)- O$#rien (CCC, p. ),.
), O$#rien (CF-, p. (D).
)6 ?rouzet in Aatcliffe (C)*, p. -(D.
)* ?rouzet in Aatcliffe (C)*, pp. -(C---(.
1 85 4 -1 85 7
1 87 7 -1 87 9
1 89 8-1 9 01
1 9 09 -1 9 1 3
0
2 0
4 0
6 0
80
1 00
+, ()ports -ro) t#e E)pire, 1854-1913
1 85 4 -1 85 7
1 87 7 -1 87 9
1 89 8-1 9 01
1 9 09 -1 9 1 3
0
2 0
4 0
6 0
80
1 00
+, E!ports to t#e E)pire, 1854-1913
Col onies
.i' e &o)inions
concerned.
)D
O$#rien e1plores this eventuality, based on the e1pectation that the colonies would have
immediately imposed tariff levels roughly equivalent to those already levied by the self-governing
dominions. <e cites calculations by @ichael 5delstein to suggest that the upper-bound estimate for
losses to the #ritish economy is (.( percent :of /3"; in (F)+, and ,.,K in (C(,.
))
3eleterious,
certainly, but far from catastrophic.
)F

&. E4port o# 5a6our
7eparately, it$s often argued that the 5mpire served the role of $safety valve$ for the 5uropean homeland,
facilitating the transfer of a surplus, potentially troublesome population overseas. 2n &m!erialism' The
#ighest (tage of Ca!italism, 4enin famously quotes ?ecil Ahodes in this vein!
2 was in the 5ast 5nd of 4ondon yesterday and attended a meeting of the unemployed. 2 listened
to the wild speeches, which were 9ust a cry for Mbread,$ bread,E $bread,$ and on my way home 2
pondered over the scene and 2 became more than ever convinced of the importance of
imperialism... @y cherished idea is a solution for the social problem, i.e., in order to save the
6+,+++,+++ inhabitants of the Bnited Lingdom from a bloody civil war, we colonial statesmen
must acquire new lands for settling the surplus population, to provide new markets for the goods
produced in the factories and mines. The 5mpire, as 2 have always said, is a bread and butter
question. 2f you want to avoid civil war, you must become imperialists.
)C
The truth of the matter, though, is that this claim is difficult to sustain. For much of 5uropean history,
the vast ma9ority of people %passed their working lives not simply in their countries of origin, but close
to their places of birth.'
F+
?ertainly, the numbers migrating overseas became more significant during
the $.ge of 5mpire,$ towards the end of the (C
th
century8in the first decade of the -+
th
century, for
e1ample, roughly a million people left 5urope every year. Throughout the rough period under
)D One could obviously pose a similar counterfactual, in relation to the $informal$ 5mpire. For e1ample, would #ritain have
been able to e1port to 4atin .merica in large quantities, without deploying its clout to $open$ the region to its
commoditiesN /allagher and Aobinson, famously, don$t think so, arguing that $free trade$ with this region presupposed
the 5mpire8without it, conceivably, these regions could have raised tariffs and encouraged domestic producers
:/allagher and Aobinson (C*,;. "latt, on the other hand, thinks that #ritain e1erted remarkably little of its coercive
capacity in 4atin .merica, suggesting that trade with the region proceeded amicably, and to mutual benefit :"latt (C)),
"latt (CF,;. There were no $missed$ opportunities, and %the impact of imported manufactures on newly independent 4atin
.merica is much overdone' :"latt, (CF+;. .ddressing this question in detail would take this paper far afield from its
original argument, for which the main findings are sufficient. #ut for a 9udicious overview of this debate, see ?ain (CF+.
)) .s O$#rien notes, too, 5delstein$s %analysis proceeds on the basis of two assumptions :both biased heavily in favour of
the economic significance of empire;! first, that the resources embodied in the production of #ritish e1ports sold to
colonies and the dominions possessed no potential for employment elsewhere in the domestic economy= and secondly,
that the infant industries located behind tariff walls in territories granted independence would not have boosted demand
for #ritish capital goods and industrial inputs' :O$ #rien (CF- p. (DF;.
)F 2n a critique of 3avis and <uttenback8and a critique of O$#rien, as well8.vner Offer argues in favour of the
economic significance :and $the rationality$; of 5mpire. &hile he raises some interesting empirical questions regarding
their measurement of military e1penditure and their methodology for calculating profit rates, much of his re9oinder
misses the mark. .t its most defensible, the general claim is that #ritain$s economic development required defense of its
arteries of trade by the Aoyal 0avy. Thus, elevated military e1penditure was $rational.$ Lennedy, in his re9oinder to
O$#rien, raised a similar concern :Lennedy (CFC;. <owever, as O$#rien argues in his reply to Lennedy, it$s not clear that
e1penditure on naval power in distant corners of the world was $functional$ for #ritish wealth, given that #ritish trade
with these possessions :especially the dominions; could have survived an end to naval supremacy. For obvious reasons,
much of this dovetails with assessments of "latt$s debate with Aobinson and /allagher8the question there, as here, is
how much of #ritain$s imperial infrastructure was necessary to ensuring that its $trading arteries$ remained open :see F0
)D;.
)C 4enin in ?hristman (CF), p. --C.
F+ O$#rien -++*, p. )F.
consideration here :roughly (F-(-(C(*;, the total added up to about 6D million.
F(
#ut the ma9ority of
these migrants were bound for the Bnited 7tates. 2ncreasingly, they originated from the poorer regions
of 5urope8not, it bears emphasizing, from the imperial heartlands.
F-
5ven when they did come from
these regions, the implications aren$t distinct= official BL emigration statistics suggest that roughly
two-thirds of people leaving the BL between (F*, and (C(+ traveled to destinations outside of the
5mpire :again, mainly the B7;.
F,

One can agree, of course, that these migrations probably alleviated pressures on the home economy.
#ut it$s difficult to see what, if anything, imperialism has to do with this. On the reasonable assumption
that 5uropeans would never have made their way to dependent territories, absent formal anne1ation
and control of those regions, all indications seem to be that the bulk of these migrations would have
continued uninterrupted.
%. E4port o# %apital
One of the more prominent arguments advanced in favour of the economic significance of 5mpire, of
course, is that 5urope$s imperial e1pansion mattered critically because it staved off diminishing returns
on investments at home. The strong version of this argument is 4enin$s8namely, that these
$superprofits$ from colonial e1ploitation further served to safeguard the domestic social order, by
effectively $buying off$ a segment of the homeland$s population.
F6

For all of this to be true, at least two facts should be borne out by the available data. First, the amount
of capital e1ported to the colonies ought to have been significant= second, returns on these investments
ought to have been demonstrably higher than returns available on the home market.
.s regards the former claim, the evidence is unmistakable. .gain one can focus on the #ritish 5mpire,
for aforementioned reasons.
F*
.t first glance, the e1tent to which #ritish investors ventured abroad does
seem e1traordinary! citing 5delstein, O$#rien notes that some 6DK of #ritish savings left the BL
between (C+* and (C(, :in (F,+, this figure was (-K, and in the (F)+s, ,+K;.
FD
3avis and
<uttenback$s data for the (FD* to (C(6 period is even more remarkable8measuring total financial
flows :two-thirds of which were private funds;
F)
over the course of this fifty-year period, they note that
%somewhat less than a third Hof total flowsI remained at home.'
FF

F( O$#rien -++*, p. F,
F- O$#rien -++*, p. F,
F, O$#rien (CFF, pp. ()6-()*.
F6 %&e thus see clearly the causes and effects. The causes are! :(; 51ploitation of the whole world by this country. :-; 2ts
monopolistic position in the world market. :,; 2ts colonial monopoly. The effects are! :(; . section of the #ritish
proletariat becomes bourgeois. :-; . section of the proletariat permits itself to be led by people who are bought by the
bourgeoisie, or, at least, who are in their pay.' :4enin in ?hristman, p. -F-;.
F* #airoch and Lozul-&right cite figures suggesting that, in (C(,, #ritish lenders were responsible for 6(K of total foreign
investment, more than France :-+K;, /ermany :(,K;, and the B7 :FK; :#airoch and Lozul-&right, (CCD;.
FD O$#rien (CCC, p. D).
F) 3avis and <uttenback include an e1tended discussion of the data they use, which isn$t strictly comparable to the data
used by 5delstein. For various reasons, they suggest that $the new-issue series$ they employ %provide an imperfect but
superior inde1 of imperial economic activity and probably a better measure of the connection between #ritain and the
5mpire' :3avis and <uttenback (CFD, p. ,6= see pp. ,,-,);.
FF 3avis and <uttenback (CFD, p. ,F.
)i*ure 7
71
<owever, for our purposes what$s most notable is that almost two-thirds :D,K; of the flows that went
overseas went to destinations outside the 5mpire
C+
8particularly, O$#rien notes, to the Bnited 7tates. Of
the remaining ,DK that did go to the 5mpire, a full )+K went to the white, self-governing dominions.
C(
This means that over the course of the (FD* to (C(6 period, investments in the dependent colonies
represented a marginal amount8at most, something in the region of (+K of total financial flows. For
the classic view, which fi1ates on the marriage of finance with the violent sub9ugation of these
territories, this is sobering indeed. .s 3avis and <uttenback summarize it,
2f #ritain absorbed ,+ percent, if the nations over which the #ritish e1ercised no political control
drew an additional 6*, and if the colonies over which its control was, at best, limited took an
additional (D, less than O( in (+ remained for all of 2ndia and colonies... that had few
representative institutions. ?ertainly, the amount of finance that was directed to the dependent
5mpire was substantial enough :it averaged more than OF million per year; to ensure that some
5nglishmen could have become rich, but it appears doubtful... that the total was sufficient... to
make the average #ritish sub9ect better off.
C-
These facts alone strongly suggests that profits on imperial possessions, however great, could hardly
have been significant enough to summon a labour aristocracy into e1istence.
C,
Further evidence
regarding the relative rates of return on these investments only confirms this suspicion. On the basis of
a sample of *DD securities, 5delstein did conclude that between (F)+ and (C(, foreign investments
yielded higher rates of return, by a risk-ad9usted margin of (.*FK.
C6
#ut after disaggregating the
specifically imperial component, %his figures indicate that, while colonial firms were more profitable
than domestic, they were substantially less profitable than foreign.'
C*

FC 3avis and <uttebnack (CFD, pp. D6-D). #ased on intermediate estimates.
C+ 7ee 3avis and <uttenback (CFD, p. ,F. There they also note that 4enin had estimated a *+-*+ split between foreign and
imperial investments.
C( O$#rien gives a figure of D*K :O$#rien (CCC, p. D);, but he$s citing 3avis and <uttenback, who actually provide a figure
of )+K :3avis and <uttenback (CFD, p. 6-;.
C- 3avis and <uttenback (CFD, p. ,+F.
C, 7ee "ost -+(+.
C6 O$#rien (CFF, p. ()D.
C* 3avis and <uttenback (CFD, p. F+.
1865-1869
1870-1874
1875-1879
1880-1884
1885-1889
1890-1894
1895-1899
1900-1904
1905-1909
1910-1914
"otal
0
1 0
2 0
3 0
4 0
5 0
6 0
7 0
80
9 0
1 00
&estination o- /ritis# 0a'in1s, 1865-1914
&epen$ent Col onies a n$
(n$ia
Responsi2l e 3o' er n)ent
.or ei1n
&o)est i4
Otherwise, in the most e1haustive attempt to address the plausibility of $superprofits,$ 3avis and
<uttenback report results from a sample of 6F- firms, between (FD+ and (C(- :some chosen on the
basis of a random sample of the 4ondon 7tock 51change, and some on the basis of availability of
records;. Their evidence suggests that, during the first two decades of this period, 5mpire did $pay$8
possibly because many of these were firms operating in $newly opened regions,$ returns on business in
the 5mpire e1ceeded returns on both foreign and domestic investment. #ut between the (FF+s and
(C(- :given the 4eninist argument, interestingly around the period that returns at home start to fall;, the
finding flips. For much of this period, 5mpire firms %were substantially less profitable than domestic,
and somewhat less profitable than foreign.'
CD
&hile their conclusions aren$t decisive, given the
limitations of the data, their evidence is the best available. .t the very least, it$s very safe to conclude
that the core intuitions of the 4eninist theory of imperialism are in need of reworking.
III. Economic %onse8uences o# Empire
/iven this fact that, at no stage in 5uropean history does imperialism seem of compelling importance
to the economies of the countries that practiced it, the question of its persistence, as policy, is
unavoidable. &hy, if domestic populations failed to benefit from empire, would policymakers pursue
itN Two things can be said, tentatively, with the caveat that both are based on observations of the #ritish
5mpire.
First, it might be unwise to overstate empire$s appeal. .s 3avis and <uttenback stress, policymakers in
#ritain were painfully aware that the infrastructure of the empire was being sustained at great cost to
the national e1chequer. %Few of the nineteenth-century proponents and critics of empire though that the
enterprise was without e1pense.'
C)
Their own figures show that, around the turn of the twentieth
century, #ritish citizens bore a defense burden some two and a half times greater than their counterparts
in other developed countries.
CF
&hile a disproportionate share fell on the backs of an income-ta1 paying
middle-class,
CC
the universal difficulty of compelling imperial possessions to bear the costs of their own
defense certainly sensitized policymakers to the costs of empire.
This reluctant spirit often found e1pression in the recorded opinions of #ritish politicians. 7tatesmen
often felt $dragged in$ to stronger commitments overseas, either on account the pressure of foreign
competition or the requirements of e1panding trade.
(++
.s 3avis and <uttenback note, there was
certainly a significant, even if inconsistent, anti-imperial voice in "arliament, in the shape of the
4iberal party.
(+(
@oreover, the spirit of the 7mithian, $free trade$ critique of empire famously lived on in
the figures of <obson, ?obden, /ladstone, and others.
?ertainly it$s tempting, given the considerable resources and formidable violence that the #ritish
consistently invested in their formal e1pansion, to regard these equivocations as no more than public
theater put on by otherwise thoroughgoing imperialists. Pet all things considered the more circumspect
interpretation advanced by Aobinson and /allagher seems right. 2n their famous essay %The
2mperialism of Free Trade,' they sought to revise the notion that #ritish policy could be disaggregated
into $reluctant$ and $e1pansionist$ phases :the mid->ictorian and late->ictorian periods, respectively,
CD 3avis and <uttenback (CFD, p. (+C.
C) 3avis and <uttenback (CFD, p. ,+,.
CF 3avis and <uttenback (CFD, p. ,+6.
CC 3avis and <uttenback (CFD, p. -*+.
(++/allagher and Aobinson (C*,, p. (-.
(+(3avis and <uttenback (CFD, p. -)-.
pivoting on an alleged %revolution in policy' around (FF+;.
(+-
Their synthesis seems a reasonable
verdict on #ritish thinking on 5mpire!
#ritish policy followed the principle of e1tending control informally if possible and formally if
necessary... The usual summing up of the policy of the free trade empire as $trade not rule$
should read $trade with informal control if possible= trade with rule when necessary.
(+,
7econd, and perhaps more importantly, a first resolution to the $puzzle$ that 5mpire didn$t benefit the
#ritish nation is the certainty that it benefited particular social groups. Obviously, 7tates don$t typically
make policy in the interests of their citizenry at-large! why should imperialism be any differentN
3avis and <uttenback agree, writing that while %the #ritish as a whole certainly did not benefit
economically from the 5mpire.., individual investors did.'
(+6
For their part, they conduct an accounting
of the social origins of the shareholders involved in imperial investments, concluding that the policy of
committing substantial resources to protect #ritish investments in imperial territories effectively
transferred resources from the middle to the upper classes.
(+*
Their argument further implies that the
working-classes, insofar as they bore the burden of indirect ta1es but only negligibly benefited from
imperial investments, were equally victims of the imperial obsession.
2deally, then, an e1planation of the motives behind imperial policy would record the influence of these
beneficiaries on policymakers. 3avis and <uttenback$s attempts to do 9ust this, however, suggest that
companies, chambers of commerce, trade associations and other coalitions actually wielded quite
limited influence over "arliament. The e1ception that proves the rule, in their analysis, is 4ancashire$s
influence on cotton tariffs in 2ndia. 2f this general conclusion is correct, it naturally invites a more
$political$ theory of 5mpire. 2n their pursuit of what was in the national interest, statesmen might well
have had more autonomy than a crude $economism$ might commonly assume. The spirit of ?hibber$s
review of $theories$ of imperialism suggests a move in this direction
(+D
8a retreat from attempts to
capture some underlying economic logic of imperial e1pansion, towards an approach that, while still
respecting the structural constraints on politicians, takes the tumult of the political sphere seriously.
%onclusion
To be clear! if imperialism, specifically, and the sub9ugation of the periphery, more generally, were only
marginal factors in the processes that generated the wealth of the developed countries, it does not
follow that the enterprise was ever a benign one. For one, the formal anne1ation of territories :or even
more informal forms of domination; by the imperial nations was often accompanied by unconscionable
levels of violence, and the consistent trampling of its inhabitants$ property and livelihood rights. 2n the
words of Fanon, the record of 5uropean imperialism reveals %an avalanche of murders' carried out by
those who %never stopped talking of man.' This was always reason enough to re9ect it and its
ideologues.
Furthermore, while there$s little evidence to suggest that imperialism was meaningfully responsible for
enriching the First &orld, it is easy enough to demonstrate that it had a great deal to do with the
(+-"latt (CDF, p. ,+D.
(+,/allagher and Aobinson (C*,, p. (,.
(+63avis and <uttenback (CFD, p. ,+D.
(+*3avis and <uttenback (CFD, pp. -*+--*-. .ccording to their definition, the middle-class represents C)K of the non-
working class population :or a little more than -FK of the total population;, and upper-classes the remainder :roughly
+.FK of the total population; :see 3avis and <uttenback, pp. -6F--6C;.
(+D?hibber -++6.
persistent poverty of the periphery. .s #airoch writes, even %if the &est did not gain much from
colonialism, it does not mean that the Third &orld did not lose much.'
(+)
.t its most damaging, as in
2ndia, formal colonization devastated indigenous industry, while entrusting a reactionary sliver of the
rural aristocracy with the task of e1acting elevated and infle1ible levels of ta1ation from a half-starving
peasantry.
(+F
@ike 3avis$ unforgiving chronicle of the official response to the famines these
interventions engendered is as good an indictment of imperialism$s civilizing virtues as any.
(+C
)i*ure 1
++9
.cross the Third &orld, both the formal colonies and the nominally independent countries :4atin
.merica, Turkey, ?hina, etc.; were sub9ect to an $enforced liberalism$ that precluded development
strategies routinely practiced by $late developing$ 5uropean nations.
(((
.s a result, producers in the
Third &orld were prematurely compelled to compete with their much more productive rivals in the
advanced countries
((-
8an economic strategy which is guaranteed to $lock in$ the backwardness of the
less competitive.
((,
7ignificantly, the self-governing, $white$ dominions of recent settlement were spared
the ravages of this policy package. .nd to the e1tent that the formally independent territories succeeded
in beating back pressures to remain open,
((6
they found relative success. .s #airoch writes, %the
(+)#airoch (CC*, p. FC.
(+F %To facilitate collection of revenue, and to guarantee proprietary rights... the colonial government introduced tenurial
systems which conferred legally guaranteed proprietary right in land on about four per cent of the population directly
dependent on agriculture... H2In the pre-colonial traditional order, the hereditary usufructory right of the other classes8
e.g. those in the position of $hereditary$ tenants paying customarily fi1ed amounts was inviolable. 0ow, the right to use
land had to be purchased with the market controlled by some four per cent of the population earning their livelihood
from land and very little guarantee for any rights below that level... 2n the early stages of #ritish 2ndian revenue history,
the situation was further complicated by e1cessively heavy revenue demand which meant either abandonment of
cultivation... or the burden being passed on as far as practicable to the rent-payer' :Aayachaudhri (CF*;.
(+C3avis -++-.
((+#airoch
(((#airoch (CC*, p. FF-C-.
((- #airoch$s estimate of the productivity differentials between 5nglish and 2ndian te1tile producers, for e1ample, is
startling. %#y (F,+... the productivity of an 5nglish worker using modern equipment was for the best :fine; qualities of
yarn some two to three hundred times higher= and for the most commonly used yarn in traditional societies some ten to
fourteen times higher than that of an 2ndian artisan' :#airoch (CC*, p. FC;.
((, 7ee 7haikh in 7haikh -++).
((6%...H.Is a result of the influ1 of 5uropean products in the (F-+-(F)+ period and also under the influence of 0orth
.merica trade policy, most 4atin .merican countries altered their trade policies in the (F)+-(FC+ period, introducing
protectionist tariffs to promote industrialization' :#airoch (CC*, p. C+;.
1 7 5 0 1 800 1 83 0 1 86 0 1 9 00 1 9 1 3 1 9 2 8 1 9 3 8 1 9 5 3 1 9 7 3 1 9 80 1 9 9 0
0
5 0
1 00
1 5 0
2 00
2 5 0
3 00
3 5 0
4 00
4 5 0
5e'el o- (n$ustriali6ation, 1750 to 1990
"#ir $ %or l $
&e' el ope$ Cou nt r ies
political independence of 4atin .merica also contributes to the fact that in (C(,, with only )K of the
Third &orld$s population, the region had -(K of the Third &orld$s cotton spindles.'
((*

.ll this said, this paper has not been concerned with appraising the devastating effects of imperialism
on the Third &orld. 2nstead, the focus here has been on the much-touted role of imperialism in
e1plaining the wealth of the developed world. 2n this regard, the evidence is clear! 5uropean geo-
political hegemony played little part in the origins of capitalism on the 5uropean continent, nor did it
bring e1traordinary economic benefits to the 5uropean economy.
For the 4eft, the conclusion is no doubt a tad disorienting. #ut here, of course, we can only be true to
the evidence as it e1ists. The fact that this is not the tempting interpretation of the past few hundred
years of &estern political and economic domination is hardly grounds to re9ect it. Our political pro9ect,
after all, can only be compelling to the e1tent that it complements what we know, not denies it.
((*#airoch (CC*, p. C+.
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