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Dundee, jute and empire
Dundee, jute and empire

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2.1 Industry and empire

That there should be a link between Britain’s early industrialisation and the British empire is something that we take for granted, unexamined. In the late eighteenth and early nineteenth centuries, Britain was the first country to industrialise, giving it a dominant position in the world economy that was to last for more than a century. During the same period, it acquired the largest empire ever. Surely there must be some relationship between these two developments?

In a textbook entitled Industry and Empire, first published in 1968, Eric Hobsbawm discussed this relationship. He starts by highlighting the importance of the Industrial Revolution and the power it briefly gave Britain:

There was a moment in the world’s history when Britain can be described, if we are not too pedantic, as its only workshop, its only massive importer and exporter, its only carrier, its only imperialist, almost its only foreign investor … Much of this monopoly was simply due to the loneliness of the pioneer … When other countries industrialized, it ended automatically.

(Hobsbawm, 1968, pp. 13–14)

He then considers the unique role in the world economy that this situation created. Britain became:

the agency of economic interchange between the advanced and the backward, the industrial and the primary-producing, the metropolitan and the colonial or quasi-colonial regions of the world … [T]he world economy of nineteenth-century capitalism developed as a single system of free flows, in which the international transfers of capital or commodities passed largely through British hands and institutions, in British ships between the continents, and were calculated in terms of the pound sterling.

(Hobsbawm, 1968, pp. 13–14)

Hobsbawm goes on to point out that Britain was quite prepared to force poorer regions of the world to participate in this economic system. Yet his emphasis in this passage is not on coercion, but on Britain’s central role in the world trading system: it is this role, rather than Britain’s overseas dominions, that is presented as central to empire. Britain long remained the world’s most important international trader, exchanging, broadly speaking, manufactured goods for raw materials and foodstuffs. Yet, throughout the nineteenth century, most British exports did not go to the empire and most British imports did not come from it. For some foreign countries – Argentina is an oft-cited example – trade with Britain and, later, investment by Britain dominated the economy. As a result, such countries were very sensitive to British wishes and historians have used the term ‘informal empire’ to describe this British sphere of influence beyond the boundaries of the formal empire. Yet, on the whole, Britain did not use this influence to enforce exclusive trading agreements. From the 1820s on, British policy at home was to lower tariffs, and abroad too it encouraged free trade. Britain’s early industrialisation gave it such an advantage that free trade made British goods competitive in most markets.

This way of looking at empire therefore captures an important dimension of Britain’s imperial history. Where it is less helpful is in explaining territorial expansion. The last decades of the nineteenth century saw Britain acquire many new colonies, but it is quite difficult to show, even in the case of so valuable a colony as South Africa, that this had economic causes. Many of the new colonies were of very limited economic value. Moreover, the late nineteenth century was precisely the period when Britain’s industrial leadership was coming under challenge. Was territorial expansion perhaps defensive, because informal empire was no longer enough? Did Britain acquire colonies precisely because its manufacturers were no longer so dominant?