11 - The British Empire

How did British imperialism emerge?

From 1700 to 1820 Britain went from a fairly minor player to a global hegemon

This transition resulted from colonial and trade expansion and a series of major wars with different european powers

Significant gains were made in the treaties of 1713 (Utrecht) and 1763 (Paris)

• 1763 - spain ceded Gibralter, Minorca and a slave Monopoly (Asiento)

• France ceded Newfoundland, Ruperts land, Acadia, Saint Kitts and the fur trade

• France ceded Canada, Dominica, Saint Vincent, Tobago and Louisiana

• France ceded Florida

Period of Napoleonic Wars (1803 - 1815) was devastating for the former European powers

• Dutch lost asian and frican terrirtories except Indonesia to Britain

• French lost Saint dominique (Haiti) and most of their Asian trading posts to Britain

• Brazil established its independence from Portugal

• Spain lost the rest of its colonial empire except Cuba, Puerto Rico and the Philippines

• Britain gained much of India and Australi

What was the Colonial Debate?

The rise of Empire (not just trade) coincides with British growth

• as usual there is the question of causation

Maddison argues that this rise was partly due to Britain’s beggar-thy-neighbour mercantilist approach in the 18C → empire was zero-sum game where spanish, Dutch and the French lost

If empire mattered we assume Britain extracted rents from colonies

• profits that could not have been acquired through normal trade alone

Did colonies generate supernormal profits that explain European growth?

• Historians have not been able to agree on this

• So we need to look at the opposing views

What are the 2 views on colonies

Edmund Burke (1775)

• colonies were vital to empire trade and commerce → only way to secure preferntial trade

• Colonial policy was harsh and allowed Britain to extract large rents → evidenced by American War of Independence

• Dependency theory views colonies in a core/periphery relationship → provide resources to and demand manufactures from Britain

• Investment opportunities were highly profitable and unmatched elsewhere → gains to Britain welath holders

• These supernormal profits were reinvested in capital at home → explains British long -run success

Adam Smith (1776)

• colonies were a drain on resources not a benefit → defence, loans, preferential trade

• TRade and capital were diverted from non-colonial opportunities → crowded out

• Profits were available because british taxpayer subsidies to the colonies

• These profits were captured by interest groups (merchants, planters)

• These interest groups did not spread profits throughout the British economy

Whats the Colonial Debate by Region?

Empire and its role is complex and varied

• british literature has focussed on four key regional debates

we will consider the colonial debate in one sphere ( early colonialism

• 13 colonies and the navigation acts

• British West Indies and sugar

• India and the East India TRading Company (EIC)

• China and opium)

What was the 13 colonies and the navigation acts?

American Independence was the result of perceived exploitation by the British Empire

• Made famous in the slogan “Taxation without representation is tyranny”

Navigation Acts (1651) - governed colonial trade and commerce

Currency Act (1751) - limited the issuing of colonial bills

Sugar Act (1764) - tariffs on several goods and extension of Navigation Acts

Stamp Act (1765) - explicit revenue tax on colonists

Quartering Act (1765) - required colonists to house and feed British troops

Declaratory Act (1766) - political act declaring colonies subordinate to Britain

Townshend Act (1767) - import duties on 72 items including the tea

TEa act (1773) - granted monopoly to EIC to import and distribute tea to America

Coercive or Intolerable Act (1774) - retaliatory acts against the Boston tea party

How were the Navigation acts - economic regulation of the colonies?

• goods could only be carried on empire ships with empire crews

• All foreign trade throughout the empire had to be conducted throughout England

• Selected colonial commodities (enumerated goods) could only be exported to England - tobacco, sugar, cotton, dyewoods, indigo, rice, molasses, naval stores, lumber

• Selected manufactures could only be purchased in BRitain and not produced in the colonies

• Preferences were given to colonial exporters for selected goods

• Bounties were paid to colonial producers to produce selected goods

what was the Debate over Navigation Acts

Nettels - british policy after 1763 was restrictive, injurous, negative

Dickerson - no case that they were economically oppressive

Historians have traditionally remained undecide whether the Navigation Acts were explotative

• some believed preferential trade and commerce was a net benefit

Economic historians have attempted to quantitiavely assess whether the Navigaton acts were explotative e.g. Harper (1942)

All of these attempts involve measuring the burden of navigation acts using cost-benefit analysis and a counter-factual of American independence

What were the direct costs of Navigation Acts according to Thomas?

Thomas (1965) began by calculating the main trade costs:

Cost of “enumerated goods” exported to england

• 76% of exports were subject to enumeration and 85% were then re-exported to Europe

• Enumeration increased prices in Europe and lowered quantities sold by redirecting trade through England (entrepot tax) - demand curve slows down

• Estimations were done from tobacco and rice - residual enumerated exports treated as an average of these

• Utilized estimates of the prices for goods from the colonies and Europe under empire (1763-72) and in colonies and Europe after empire (1785-89) to calculate the hypothetical price for goods in the colonies without empire (1763-72)

Cost of “enumerated goods” imported from England

• 75% of imports purchased from England and 20% were manufactured in Europe

• European manufactures were more costly due to re-export via england

• English manufactures puchased due to foreign shipping costs

• Same method employed to calculate import burden as export burden

• This approach provided estimates of the direct trade burden

what were the indirect costs of the Navigation Acts to the 13 Colonies?

Thomas (1965) also calculated production, shipping and defence effects:

Benefits of preferntial duties

• colonies faced lower tarriffs (preferential duties) on select goods

• GEnerated benefits on goods England would have purchased regardless

• Generated benefits from goods sold to england that would not have been

Cost/benefit of restrictions on shipping services (lack of information on shipping rates

• shipping had to be carried out in colonial or empire ships

• Net benefits estimated as the monopoly carrying trade but with lower trade

• Difficult to measure empirically so assumed equal on balance

Benefits of defence

• massive cost to protect and police colonies

• army cost estimated as standing army required after independence

• Navy costs using change in marine insurance after independence against cargo shipped

Benefits of bounties

• Colonies received bounties to produce inefficient goods vital to England

• Key bounties were for Indigo, Naval Stores and Lumber

• Net benefits are estimated as value of bounty less cost of resources wasted

What was the Burden to the 13 colonies?

These estimates imply a very small cost per capita for empire

• 26p on £100 income → equibalen to £70 on average income of 26,500

• This amounts to less than 1% of per capita national income

Revisionists questioned data and methods but failed to overturn the findings

• Ransom (1968) argued that income was lower (£55-85) making the burden slightly higher (1.4%-2% of income)

• McClelland (1969) forecefully argued that the method was flawed but even when corrected they still found a burden of 3% of income

• Even original estimates by Harper (1942) were close - not much of a burden

How was there exploitation during the American War of independence?

Taxes were justified but untenable in the colonies

• Taxes were extremely low in the 13 colonies (lower than the entire ROW except Poland) and highest in England due to 18C war debts

• Acts were to balance the contributions and not exploit the colonies

• After 1763 colonial subjects felt safe from France and Spain

• Attempts to rebalance the tax burden met with extreme responses

Other Acts mattered (e.g. Currency Act)

• Colonial money supply was an issue since settlement

• Attempts to solve shortages and issue colonial notes were blocked

• Colonists felt Britain was unfairly restrictive and out of touch

Individuals and interest groups lost out (pushed for war)

• manufacturing was constrained by British policy (iron, furs etc)

• Southern tobacco farmers and rice planters suffered the most

• Western settlers repressed to placate Natives and French Canadians ( e.g. Quebec Act) - limited trade