Monday, March 26, 2007

No Profits in Colonies

Not often you find an entire and plausible hypothesis summarised in a single paragraph, covering a history period from the mid-18th century through to the mid-20th century. It is also an instructive counter to those who think that society is a one-dimensional exhibit of the workings of Homo economicus.

Rafe Champion achieves the one-paragraph test in his post on ‘The betrayal of liberalism’ in the “Catallaxy” Blog:

Keith Windschuttle has contributed a really excellent historical study of the waxing and waning fortunes of British liberalism, especially in relation to imperialism and the Empire. Adam Smith and David Hume saw no future for overseas dominions other than as friendly trading partners and similar views were held by the 19th century Manchester radicals such as Cobden and Bright. However one evil led to another because the threat of Napoleon prompted Britain to establish a worldwide system of naval bases to protect their sea trade and later these became the entry points for colonization of the pink ‘coloured empire that extended’ around the globe.”

Smith commented that it was an error to think that society required ‘Perfect Liberty’ before it progressed from barbarism to opulence. Desirable as general Perfect Liberty would be for such development, it was neither a necessary nor a sufficient condition for opulence over a long enough period. On this basis he did not indulge in predictions about the future. He concentrated on elaborating on the deficiencies of mercantile political economy and their impact on contemporary 18th-century Britain (Book IV, Wealth of Nations).

His thoughts on the role of colonies were fairly negative and this showed in his assessments of the rebellion in the British colonies in North America. I imagine that he would have been critical of the British colonial empire in India (he was a trenchant critic of the East India Company’s role in India during the 16th-18th centuries) and more so of the 19th century’s British colonies in Africa.

Those who saw imperialism as the ‘highest stage of capitalism’ (early 20th century) linked it to economics, missing the point that the strongest economic ties and destination of capital exports were to North America and Australasia and not the ‘colonies’, which cost more to garrison and defend than they provided repatriated profits for London. These colonies were the follies of governments, not the projects of capitalists. Any profits made by individuals were small compared with the costs of the military establishments believed necessary to keep the ‘Frenchies’ and ‘Huns’ at bay.

The colonies, as the bastard children of national rivalries, also contributed a mixture of good and bad for the inhabitants; the good being the institutions of the rule of law, education and medicine they brought along; the bad being the racial treatment, plunder and bad examples meted out by vile individuals.

[Read more of Rafe Champion’s article – it’s a good read at:]


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