Sunday, August 05, 2007

But For The Empire, Britain Would Have Done So Much Better

US Economic Vulnerability” by Craig Murray (5 August) former UK diplomat, writes in Atlantic Free Press: ‘Hard Truths for Hard Times’

How the system works was outlined 100 years ago by the Liberal economist J.A.Hobson in his great book Imperialism - A Study. Written at the greatest extent of the greatest formal Empire the World has yet seen, Hobson proved, counter to the prevailing wisdom of both supporters and opponents of Empire, that the Empire had cost Britain money, not been a gain at the expense of the colonies. But while the net effect had been to make Britain poorer, the redistributive effect had made the ruling class, military and arms manufacturers much richer, at the expense of everyone else.

Hobson is now almost completely forgotten. In part this is because Lenin, a much lesser thinker, ruthlessly plagiarised Hobson's work some years later and plastered it over with Communist claptrap. But for me Hobson's Imperialism is in the same rank as J.S. Mill's On Liberty, Adam Smith's The Wealth of Nations and Tom Paine's The Rights of Man, as essential reading on the foundations of modern political thought

None on the relative merits of the four books mentioned. I read J. A. Hobson’s Imperialism when studying a class on the British Empire as an undergraduate (off the reading list) and I kept my copy. It’s in France I believe with the rest of my academic library. From memory it was a good read and with its general theme I agree: the Empire was the Great British diversion, not worth the blood and treasure expended on it, keeping it, and nursing it.

Contrary to Lenin’s ‘Imperialism’, which found in the British Empire a net profit for Britain, the flow of capital to the former colonies of North America (Canada and the US), Australia, New Zealand and South Africa, the 19th-20th-century Empire was a high net loss. If it had been abandoned, better still never initiated, Britain would have been richer, its economy better developed and its ventures in to wars, big and small, would have been curtailed.

Smith pointed all this out in Wealth Of Nations in his critique of the colonial policy of England, before 1707, and then Britain from 1707. Our own efforts to found a Scotch colony at Darien thankfully ended in a financial disaster from which Scotland barely recovered until the laet 18th century.

The finance behind it incidentally never went to Dairen, on the Isthmus of Panama; most of it was spent in Holland on building new ships at inordinate expense (they could have been chartered for a quarter of the price). Part of the deal on joining into a parliamentary union with England (there was already a 100-years-old common monarchy) was that the shareholders of the ill-fated Darien company received compensation for their losses.

Smith linked his critique of colonial ventures to his general critique of mercantile political economy (Books IV and V). The only colony that did well was that of Hong Kong, which ended British rule infinitesimally better off than when the British founded it. It practiced free trade too.

Malaysia and Singapore also come close to the better-off category, but they did it largely by themselves after independence. Australia, New Zealand and Canada, which were self-ruling ‘Dominions’, also did fairly well and have done so since. They are secular democracies. South Africa went off into a racialist cul-de-sac; Zimbabwe is governed by a tribal sect, and like much of Africa, is slowly sliding, if not backwards, certainly to a stand still. India, adopting freer market measures is at last moving forwards, with Pakistan lagging behind.

So I would endorse you reading Hobson’s ‘Imperialism’, with the caveat that his analysis of the distortional effects of colonial capital flows on the domestic economy is not as sound as Smith’s.


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