Britain ran an empire for centuries that at its peak 100 years ago occupied just under a quarter of the world’s land area. Yet if you believe “Imperial Measurement”, a report released last week from the rightwing Institute of Economic Affairs (IEA), the net economic impact of this vast empire on Britain was negligible, even negative.
If you thought the empire profoundly shaped our industry, trade and financial institutions, with slavery an inherent part of the equation, helped turbocharge the Industrial Revolution and underwrote what was the world’s greatest navy for 150 years, think again. The contribution of the transatlantic trade in enslaved people to our economy was trumped by domestic brewing and sheep farming, opines the IEA. The tax “burden” of defending this barely profitable empire was not worth the candle. Instead, it was free-market economics that unleashed British economic growth – a truth that must be restated before Marxists and reparation-seeking ex-colonies start controlling the narrative.
It is a risible recasting of history that should have been ignored as self-serving ideological tosh. But enter the business and trade secretary and aspiring Tory leader, Kemi Badenoch, who took it upon herself to endorse this IEA “research”. She told an audience of financial services bosses at a conference in London: “It worries me when I hear people talk about wealth and success in the UK as being down to colonialism or imperialism or white privilege or whatever.” If you believe any of this story about oppression and exploitation as the cause of British wealth, then the solutions to “our growth and productivity problem” will be even worse. It was “free markets and liberal institutions” that drove the Industrial Revolution and economic growth thereafter.
Except that, while they were certainly part of a cocktail of reasons for Britain’s rise to economic pre-eminence, they were only part. Recent historical research, blithely dismissed by author Kristian Niemietz, the IEA’s head of political economy, has increasingly uncovered a mountain of evidence that places ever more importance on empire, and slavery in particular, as important drivers of the Industrial Revolution and evolution of our economy.
Take innovation, and the correctly celebrated inventions – James Hargreaves’ spinning jenny of 1764/5, Richard Arkwright’s water frame, patented in 1769, and Samuel Crompton’s mule, introduced in 1778/9 – that together made it possible to harness the delicate but tough Barbadense cotton and manufacture it at scale. By the turn of the 18th century, Lancashire had emerged as Europe’s pre-eminent manufacturing centre of high-quality cotton, usable with other weaves and whose dyes and prints would hold. It was a position of global dominance that Lancashire cotton manufacture, soon joined by West Yorkshire, would reinforce over the century ahead.
But as Maxine Berg and Pat Hudson write in their brilliant Slavery, Capitalism and the Industrial Revolution, it was no accident that this all began a few miles from Europe’s largest slave port, Liverpool. Or that fine Barbadense cotton flourished in Britain’s slave plantations in Barbados and elsewhere in the West Indies. Or that much of the finance for investing in these expensive, but highly profitable, innovative machines came from Liverpool merchants whose own fortunes originated in transatlantic trade.
In painstaking research, they place slavery at the heart, not only of early industrialisation, but the growth of services such as banking and insurance. By the last decades of the 18th century, they demonstrate that the West Indies was co-equal with Europe as Britain’s biggest trading partner. Cotton’s importance was preceded by slave-grown sugar, which became a national staple. All this spawned a vast boom in British shipping, from 1m tons and 50,000 seamen in the 1780s to 2.5m tons and 130,000 seamen in the 1830s, with the growth propelled by the Atlantic plantation trade.
The ships and their cargoes, whether of enslaved people, sugar or cotton, needed insuring, generating a large marine insurance industry. Sugar refineries were prone to burning down easily – there were over 100 in London alone in the 1780s – causing the need for specialist fire insurance companies. No account of the boom in the textile industry either side of the Pennines or the City of London is complete without empire and the slave trade, which even after abolition in 1833 would continue as trade in indentured labour.
The trade needed protecting and policing. A strong navy was an imperative – the West Indies became the second most important theatre for the navy outside British home waters, and where the custom of giving sailors a daily tot of West Indian rum originated. A 74-gun ship of the line from 1805 might cost the equivalent of 16 cotton mills, but the money was easily found from burgeoning tariffs. The navy was also a richly profitable and important market for British farmers and gun makers.
No one argues that slavery caused the Industrial Revolution, least of all Berg and Hudson. But to minimise and abstract, as Niemietz attempts, the economic impact of first the sugar and then cotton slave plantations, and also the industries that radiated from them, as not part of the story is plainly inadmissible. It is also true that liberal institutions, such as judicial independence and rule of law, helped early capitalism and was additionally fostered by the creation of a unified internal market.
Britain’s liberal approach to immigration, in welcoming inventors, scientists and engineers from all over Europe, fanned the fires of invention and manufacture, as economic historian Joel Mokyr argues in The Enlightened Economy. Badenoch would be more persuasive if, while exalting such liberal factors, she conceded the critical role of slavery, but also that her own government is hardly a friend of judicial independence, celebrates leaving the largest single market on earth and could scarcely be more hostile to immigration – very different illiberal principles to those she thinks drove the Industrial Revolution.
Empire, without doubt, profoundly affected the British economy. Not least, it was a source of lush, easy profits and rents which have become a benchmark that most British companies target even now, so limiting the projects in which they invest. British industry was still sheltering behind preferential imperial tariffs in 1970.
Empire absolved us of thinking how to develop our national economy; the market seemed to achieve that magically by itself. This magical thinking is now integral to our headlong decline, and the IEA is one of its leading advocates, betraying a wilful ignorance that goes beyond history. Its advice wrecked Liz Truss’s career. Badenoch should beware it does not do the same for her.
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