The Empire Project: The Rise and Fall of the British World-System, 1830–1970 (25 page)

To the official classes in Britain, Latin America was the dark side of the moon. ‘South America…is quite out of the currents of the world’, wrote Dawkins wistfully, hankering after official preferment in Egypt or India.
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The continent was a diplomat's graveyard. But, by 1913, it was the brightest jewel in the City's crown, the richest province of its business empire and the great white hope of the investing classes. It was the perfect illustration of the third dimension of British power, springing not from conquest or settlement but from collaboration in the pursuit of wealth. By 1913, Latin America was providing around a quarter of Britain's overseas property income. It employed nearly a quarter of Britain's long-distance shipping fleet
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and contributed heavily to her invisible earnings. Its expanding railways were the perfect vehicle for British financial, technical and managerial expertise, as well as being large consumers of British coal – whose bulk export was the key to the profitability of British shipping: 85 per cent of outward cargoes to Brazil were coal.
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The British commercial and professional communities in Latin America were small in numbers, but wealthy, well-educated and influential.
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In a continent (increasingly) of European immigrants, and in cities like Buenos Aires where foreigners made up three-quarters of the adult population by 1914,
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their cosmopolitan origins and outlook were no handicap. In Buenos Aires in 1909, there were 7,113 British among 7,444 Germans, 27,000 French, 277,000 Italians and 174,000 Spanish.
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In a wider perspective, the remarkable florescence of British commerce in Latin America around 1900 can be seen as part of a ‘swing to the West’ – a subtle rebalancing of Britain's global interests and commitments between Europe, the Americas and the Eastern world. The huge flow of capital towards Argentina had its counterpart in the great migration of men and money to Canada in the decade before 1914 and the dramatic growth of Anglo-Canadian trade. British investment in the United States also surged upwards from £500 million in 1899 to £800 million by 1914.
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The Anglo-American rapprochement and the careful accommodation of British interests in Central America to American regional predominance
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was part of this new Atlantic pattern. By 1913, the Americas accounted for one-fifth of Britain's exports, one-third of her imports, more than half of her overseas investment and almost three-quarters of her oceanic shipping. Here, far away from the cockpits of imperial rivalry, was a vast zone of safety, stability and wealth: some compensation for the strain of defending British interests in Asia or, after 1910, for the strategic burden in Europe.

Of course, in Latin America at least, this happy conjuncture could not be taken for granted. The growing size and scale of British enterprise bred resentment.
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The nativist reaction of the early 1900s in Argentina and elsewhere revealed the strains of nation-building under conditions of hectic growth and foreign influence.
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Ultimately, the ‘order and progress’ in which the British had invested so heavily rested upon the primacy of the local agro-commercial elites. In turn, their fate and their readiness to comply with external financial discipline depended on the booming demand for their commodity exports and London's ability to supply the capital on which growth and stability relied. In 1914, with appalling suddenness, this great experiment in business empire came to a grinding halt.

Commerce or empire?

The union of commercial and imperial muscle was the foundation of the British world-system. The vast scale of British trade, the fleets of merchant shipping, the treasure chest of overseas investment and the resources it commanded were widely seen as the real embodiment of British world power. They supplied the economic energy to sustain the show of empire and pay for its defence. They formed the invisible chains that bound the visible empire of dependencies and settler states to their far-off metropole. They provided the means to expand the sphere of British influence and turn the ‘undeveloped estates’ of empire into imperial assets. In a world in which a handful of imperial ‘superstates’ was expected to hold sway, they were the guarantee of premier status, and of independence.

Yet the project of a free-standing commercial republic, no longer reliant on political, diplomatic or military support, had made little headway outside the favoured zones of South and Central America. Even there, it depended to a degree upon British political and cultural prestige. ‘The educated Englishman who arrives in Latin America’, remarked a traveller in 1913, ‘must generally assume the prestige as well as the burden of his empire.’
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Elsewhere, beyond the developed world of the United States and the ‘white dominions’, commerce needed empire more than ever. This was especially true in the Eastern world south and east of Suez where a large proportion of British trade and investment was still to be found. Eighteen per cent of British investment was in India and East Asia: the total for Asia, Africa and Australasia was 41 per cent. In India, the largest market for Britain's largest export, cotton textiles, colonial rule pegged open a market that would otherwise have been snapped shut by tariffs and homemade competition. It was decisive in the early and rapid construction of railways, underwritten by colonial revenues and pressed forward at London's command. The contrast with China, whose disorganised network was barely one-sixth the length of India's by 1913, was telling. Indeed, there, the security of British investment, the organisation of foreign trade and the prospects for commercial development seemed to require the enforcement of the ‘unequal treaties’ and the defence of the colonial and semi-colonial enclaves scattered the length of the China coast. To its British residents, treaty-port Shanghai was as much a part of the Empire as Sydney or Cape Town and entitled to the same protection
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– a claim which the policy-makers acknowledged down to the 1930s. To the champions of tariff reform after 1903, it was precisely this reliance on force to open new markets in Asia and save old ones that condemned free trade. ‘Not feeling quite strong enough to keep the door open in Europe by threat of force’, Leo Amery told Milner, ‘[England] tries to do so elsewhere by forcibly retarding the expansion of other powers. The policy has increased our armaments and our territory enormously in the last twenty years.’
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Experience of India, China, the Middle East and Africa also kept alive, in the heyday of
laissez-faire
, a variant of political or imperial capitalism that had little in common with the rational entrepreneurship imagined by Joseph Schumpeter in his
Imperialism and Social Classes
(1919). To businessmen like Goldie, Mackinnon, the Liverpool traders on the Niger, the
taipans
of the China coast and railway promoters like Bland, it was self-evident that political power should be used if necessary against the threat of monopolistic rivals and to clear the path of local ‘obstructions’. To them, commercial development, local progress and the imperial interest were bound up inseparably, and the cavils of diplomats and administrators either myopic or self-serving. It was a short step from this to the harder face of political capitalism in those parts of Afro-Asia where resources were scantier, the resistance tougher and the environment harsher. In sub-Saharan Africa, especially, coercion became the fastest means of accumulating wealth. Force was used to uphold a commercial monopoly against local competition (on the Niger); and to appropriate land and cattle (in East and Central Africa). Coercion ensured the supply of labour from African societies whose manpower was scarce and valuable. The threat of collective vengeance became the shield behind which traders, settlers and miners could practise a quasi-coercive production system with remarkable security and at negligible cost.
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With the rise of a vulgar ‘ethnic Darwinism’ in the later nineteenth century, these cruder forms of political capitalism could also be dignified as instruments of ‘moral and material progress’.

In all these ways the commercial republic was heavily dependent upon the well-being of the British world-system as a whole. To its fiercer critics it seemed ever more reliant on profits extracted by coercive methods and regions exploited by political power. This was too pessimistic. What was beyond doubt was the extent to which the vast commercial system pivoted on London needed the support of its British host: to guard its long lines of communication and the vulnerable installations of trade; to preserve free trade, the magnet of commerce and finance; and to maintain the advanced industrial base whose products it traded. In return, it supplied much of the influence and wealth that late-Victorian opinion had come to see as its birthright.

4 THE BRITANNIC EXPERIMENT

Perhaps the most striking feature of Britain's global expansion was the limited influence exerted over its course by the imperial government in London. Most of the energy behind British expansion was private, not public. Of course, it was true that it usually needed a mixture of private and public resources: capital, manpower, but also protection against external and sometimes internal opponents. Governments could withhold that protection and refuse to annex when the political risks they entailed seemed out of proportion. They could also strike bargains with rival imperialists that frustrated the plans of British settlers, merchants or missionaries. But only up to a point. The promoters of British expansion could usually mobilise both public and private ‘investment’ at home (both material and emotional), and use it to leverage additional resources on the local or colonial ‘spot’. It was this combination that made them so versatile; and that versatility was what made the British presence so ubiquitous.

The result by the later nineteenth century was the creation of a British world-system. Its system-like character can be seen in two ways. First, private and public activity had combined (most visibly in the strategic and technological achievement of long-distance sea-lanes) to encourage the growth of a single vast network centred on Britain, to distribute credit, capital, goods, information, manpower and protection on a global basis, and not into a set of closed ‘mercantilist’ zones each with its own rules. The result was to lower the cost of defence and reduce the transaction costs of a global pattern of trade. Secondly, by a series of incremental adjustments, the main spheres of British enterprise came to play different but complementary roles in the larger process of British expansion. The shipping and property empire, much of it active in non-British territory, provided an income that sustained high levels of imports, the domestic balance of payments, and new exports of capital. The ‘sub-empire’ of India assumed after c.1870 a primarily (but not exclusively) military function, meeting the ordinary costs of almost two-thirds of the Empire's regular land forces: its British garrison and its own Indian army. By contrast, the settlement colonies were not expected to pay for their
strategic
defence and were allowed (unlike India) to protect local industry. Their contribution instead was to borrow and trade on a scale (proportionately) far greater than India. And, increasingly, by the end of the century, they began to take up the part of Britain's most reliable allies, bound to her ‘system’ by deep ties of self-interest and self-identification.

The Britannic idea

This ‘Britannic’ solidarity was a crucial dimension of the British world-system, and one of the keys to its tenacious survival in the twentieth century. It would have greatly surprised the early Victorians. Indeed, it is easy to see why opinion in Britain in the earlier part of the century had shown little enthusiasm for the settlement colonies. They seemed liabilities scattered broadcast across the world. With the exception of the two ‘Canadas’ (modern Ontario and Quebec) and New South Wales, their populations were tiny and their prospects uncertain. Far from forming solid territorial blocs, British North America, British South Africa and the British South Pacific were fragmented and fissiparous. The Canadas had been forced into uneasy union in 1840, but the ‘Lower’ or Maritime provinces remained stubbornly separate: indeed, overland travel between them and the Canadas was dauntingly difficult.
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In the 1850s, six separate governments ruled over the one million or so settlers in Australia, while geographical separation (on a much smaller scale) encouraged a similar trend in New Zealand. Although London had recognised that local self-government (‘responsible government’) could not be resisted in most settlement colonies (but not in Cape Colony), their financial fragility and proneness to faction – rather than party-based politics – cast doubt on how far self-reliance could be carried.
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Worse still, in too many cases, the risk of foreign invasion or local ‘native’ wars had made them a drain on Britain's limited military manpower. In the 1840s, frontier conflicts in South Africa and New Zealand, as well as the tension provoked by the Oregon crisis with the United States, dispersed British forces from one end of the world to the other.

Nevertheless, by around 1850, a more positive estimate of the settlement colonies had begun to take root. The ‘Colonial Reformers’ attributed the colonists’ failings to interference from London, not the inherent defectiveness of colonial societies. Edward Gibbon Wakefield's idea that the British were especially adapted to colonise became more influential. The irresistible flow of Gladstonian rhetoric was deployed in support of British colonisation. ‘The object [of colonization]’, he began to tell audiences, ‘was to reproduce the likeness of England, as they were doing in Australia, New Zealand, North America and the Cape, thereby contributing to the general happiness of mankind.’
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Far from being seen as tiresome dependants, they were increasingly thought of, in some circles at least, as little Americas, from whom separation was certain at some foreseeable point. In the world of free trade, the balance of colonial costs and benefits could only be negative. But there was also gradual acceptance that the settler communities could be a valuable adjunct to British wealth and power, and a ‘healthy’ extension of British society.