the costs and benefits of British imperialism 1846-1914, patrick o'brien

(163-164): here not concerned with industrial take-off (that was the earlier article); instead, concerned with costs/benefits to British people, between 1846 and 1914

(164): in the spirit of the classical critics of Empire (Smith, Hobson, etc.)

(165): four topics of central concern, in the debate in the 19th and early 20th centuries

1. emigration of labour overseas
2. investing money overseas; did it help capital formation at home?
3. political infrastructure helped trade and commerce?
4. kingdom's security?

(166-170): TRADE

• (166): this period was one in which economy was increasingly internationalized; Britain produced only half of foodstuffs domestically; 90% of non-coal raw materials came from abroad
• (167): BUT--only 1/4 of imports came from Empire (more food than raw materials, and more from dominions than from India and other countries; moreover, plausibly obtainable from other countries [hmm]); only 1/4 to 1/3 of exports went to Empire--significant, but not overwhelming.
• (167-168): if political ties severed, calculated costs from trade losses are in the range of 3-5 % of GDP [i.e., if dominions and dependent countries were allowed to pursue independent policy, etc.]
• (169): applies c-factual logic to India; Kennedy dissents, of course
• (170): Hobsbawm arg that imperial mkts allowed Britain to postpone adjustments

(170-175): MIGRATION OF CAPITAL AND LABOUR

• (170-173): lots of problem w/ data used
• (173): BUT--only 1/4 of investible funds flowed into Empire (about 20% private, 30% government). of those that did, most into the 'white dominions' (about 65%) (see tables 1 and 2)
• (174): concludes that 'little capital exported' [not exactly little, but OK]
• (174-175): 2/3 of people leaving UK went outside empire [doesn't really draw out questions of this fact's implications; but this does, also, take us beyond the question as rightly narrowly posed]

(175-186): RETURNS ON INVESTMENT IN EMPIRE

• (175-177): Marxist arg. was that they were staving off diminishing returns (export of capital, etc.), but no clear support for this in data available (1.58% gap, but not widening, not too significant)
• (177-179): big data problems, re: random/representative profit data
• (180): from different data set, also no support for hypothesis that investments in empire were consistently more profitable than domestic investments.
• (180-181): suggestion that there was a dynamic whereby rational investors were 'gulled' into investing abroad, b/c of sense of security, etc.
• (183-185): hinting at argument that this investment was dysfunctional--a kind of 'drain' that depressed domestic levels of investment (i.e., part of the radical critique of the times: (1) depressed savings; (2) forestalled dev of mass consumer mkt; (3) small firms crowded out)
• (185): legacy of 'institutional sclerosis', hampering innovation and ability to compete during 'second industrial revolution'

(186-): IMPERIAL BUDGETS AND STRATEGIC NECESSITIES

• (186): for contemporaries, question was more difficult to establish than it is for us
• (187-188): serious tax burden borne by British taxpayers (37% of gov't revenue), and subsidy to dominions (not India, though)
• (189): dominions were able to spend more lavishly on public development, etc.
• (189): c-factual, british taxes might have been lowered by 40%[!]
• (191-193): imp. of British naval hegemony to commerce? suggestion that no, commerce could have flourished w/ restricted role [Kennedy challenges him, here]
• (194): Brits bearing 2-3 times the costs faced by other citizens
• (195, 200): of course, even as tax system was becoming more progressive, the burden was born by the non-elite; the elite benefited from much of the Empire [points at the larger argument, of course]

(196): sum of the historical critique

1. costly to taxpayers
2. didn't ensure higher rates of return on investments abroad
   
3. not productive destination for capital (same as 2) or labour
4. not fundamental to ensuring access to markets/supplies of food/rawmaterials

(198): 80% of casualties and 88% of expenses in WWI incurred by UK and domestic taxpayers

(199): only King Leopold offered supernormal profits!

DEBATE

Kennedy Reply

(187): disputing the 'leaving India' counterfactual--the non-existence of the Raj would have meant an end to exports/imports

(187-188): disputing the 'end to the imperial Navy' counterfactual

(188-189): O'Brien's claim that they could have focused on German militarism misunderstands how burdensome this kind of a policy might have been

(189-191): disputing O'Brien's calculations that British taxpayers bore unequal burdens: b/c of higher standard of living, not true

(192): concluding that Cobdenite criticism becomes more compelling by the 1950s if not the 30s, but less in Empire's heyday

O'Brien Reply

(192-193): Kennedy's position that India would cease to export/import is mistaken; is an apology for British rule [hmm]

(196): re-asserting the case for greater fiscal burdens, in GB [O'Brien does seem to win on this point]