Even handed free-trade or exploitation Britain 1840-1870
...free trade’ went as far as to suggest, that ‘free trade’ was “the only means of effecting universal and permanent peace” a statement that could sound pompous and pretentious, but does however give an excellent insight into the kind of passionate feelings that ‘free trade’ was steering amongst British society. The Manchester industrial lobby for example, was so excited with the idea that they decided to dedicate a building to it, the Free Trade Hall, completed in 1856 on the site of the Peterloo ‘massacre’. However, some historians over the years have viewed the establishment of ‘free trade’ legislation as a very negative movement for Britain. Moreover, they argued that by ending Imperial protection, Britain actively pursued politics that were forcing the old colonial possessions towards independency and consequently exploitation. Those historians whose beliefs went towards the idea of a redundant empire once ’free trade’ took over as the legitimate governmental doctrine, were mainly neo-Marxist like Hobson and Lenin at the beginning of the 20th century. Thus Lenin (1916) wrote “When free competition in Great Britain was at its height, i.e. between 1840 and 1860, the leading British bourgeois politicians were. . . of the opinion that the liberation of the colonies and their complete separation from Great Britain was inevitable and desirable.” However one must always be cautious with neo-Marxist assumptions such as this as they always bear hidden agendas, which made them undeniably biased towards their own political interests. More contemporary historians for example Gallagher and Robinson (1953) suggested that this neo-Marxist vision was a distortion from the truth when they stated that “The common assumption that British governments in the free-trade era considered empire superfluous arises from over-estimating the significance of changes in legalistic forms.” They argued that even in this period of ‘free trade’ 1840-1870 different political and legislative approaches for formal and informal empire were common practise by the British government: “Thus mercantilist techniques of formal empires were being employed to develop India in the mid-Victorian age at the same time as informal techniques of free trade were being used in Latin America for the same purpose.” Nevertheless for Hopkins (1989 pg. 8), the view championed by Gallagher and Robinson that the invisible ‘empire’ (profit from investment abroad) that had signified most of Britain’s gain over this period of ‘free trade’ and practically ceased to exist after 1870 was also an erroneous balance. He argued that “…the British invisible ‘empire’ was more limited in the mid-nineteenth century than they supposed, and it grew rapidly after the 1870s”. Investment did exist in this period and started to have some impact on the British economy, however it was still in its infancy and it could not have represented the economic preponderance alleged to it by Gallagher and Robinson’s argument. Moreover, the argument defended by Hopkins suited the historic development of industrialism. It is after the 1870s that better financial institutions and economic resources were in place and long time experience made the elite choose wiser ventures. Thus it is at this time when ‘the invisible empire’ began to mature and therefore to provide constant profit growth and not the other way around. Even Handed ‘Free Trade’ or Exploitation Britain was by then ruling the waves and possessed at the time a manufacturing power second to none. The possibility of rule by trade could have been practically achieved by default. These were the years when Britain could afford to be arrogant as Lord Palmerston, (foreign minister 1832-52 and prime minister 1855-64) cited by Hyam (1976, pg.89) stated in 1848 that “I may say without any vainglorious boast, or without great offence to anyone, that we stand at the head of moral, social and political civilization. Our task is to lead the way and direct the march of other nations”. This was the age of ‘equipoise’ the ‘workshop of the world’, ‘Rule Britannia’ etc. However did this ultra-Nationalistic feeling, this marching on of British ego lead Britain away from its humanistic liberalism towards informal economic relations, pursuing not an even handed trade but a violent more cunning form of world exploitation? Britain’s formal and informal empire during this époque as well as during the periods immediately before and after, constantly expanded. Exporting revolutionary technology, manufactured goods, capital, ideas and people to all the corners of the world, Britain’s energy at the time seemed endless. With an accrued deficit on population in relation to other bigger countries such as USA, Russia, France or Germany, it was remarkable how Britain managed to keep speeding ahead of the pack, due mainly to the impact that the industrial revolution was having. Moreover during the period that this study is concerned with and despite the idea that neo-Marxist historians seem to suggest i.e. that ‘free trade’ changed the perception towards the empire, new lands were still being acquired by the old formal mercantilist style, for example New Zealand, the Gold Coast, Labuan and Natal etc. Old colonies were maintained by old mercantilist methods (as was the case of India which had been sufficiently exposed before) or by new ‘mixed designer’ methods, like Canada where despite its formal protests for the repeal of the Corn Laws, it never tried a constitutional break from Great Britain. Why would they when Canada’s balance of payments was definitely favoured as a consequence of the opportunities opened by the new British legislation especially on its trade with USA. However where ‘free trade’ was exceptionally tested was against the Spanish and Portuguese ex-colonies of Central and South America. There, Britain’s ‘free trade’ ideology was the foundation on which these international relations were to be based. Soon after their independence was recognised by Britain, these ex-European colonies were signing economic treaties with the powerful British lobby. They started off as the quintessential of ‘free trade’; large new markets in independent nations in desperate need for manufactured and capital goods that only Britain could at the time regularly provide, practically a monopoly heaven and an opportunity for exploitation. However things did not turn out this way. Firstly the small local industries resisted the British industrial intromission. Instead of disappearing they continued to produce and compete with their new foreign adversaries. They held the upper hand as they were playing at home and were already established in their fields knowing perfectly well the specific requirements of the markets. Secondly the low level of population and the low purchasing power of those nations together with the lack of transport and infrastructure saw disappointing levels of export towards these countries for the whole of the period. Thirdly, even though Britain’s investments in South America did indeed grow over the period, they were unsecured and unstable as loans were often defaulted from as was the case with Peru in 1853 or Argentina in 1824. Ultimately the corrupt politicians on the local governments made sure that they benefited also from the bargained concessions secured by British entrepreneurs by ensuring that they were not one-sided. Porter (1999, pg.114) said that “Free trade reflected far more the persistent over-optimism of early Victorian society rather than the developing realities of world politics”. Britain in its ever profound pragmatism firmly believed that by freeing the market in a world dominated widely by their admirals and more advanced industries, she would have nothing to worry and everything to gain. However, the figures for exports during these years were disappointing and they did not reflect the high hopes that ‘free trade’ brought about. Jude (1996, pg.64) said to this respect that “for nearly every year of Queen Victoria’s reign the British economy was actually in deficit in terms of the commodity balance of trade”. It was not until the 1880s when the ‘invisible’ exports such as investment, banking and insurance carried the British economy at last into surplus, which corroborates Hopkins argument rather than that of Gallagher and Robinson. If economically, socially and politically the adventure of ‘free trade’ during this period fell short on profits and expectations, the influence that an experiment like this left behind not only for Britain but for the whole of the world, will never be sufficiently praised. Ferguson (2004, pg. 4) observed that “Without the influence of British imperial rule, it is hard to believe that the institutions of parliamentary democracy would have been adopted by the majority of the states in the world” Conclusion ‘Free trade’ was brought about by the social convulsion of the 1830s and 40s. It was a brave attempt by Britain to liberate the economy from the ever-imposing and retarding state intervention. Was ‘free trade’ the right and perhaps the only policy available during those years of food scarcity and high risk of popular revolt? ‘Free trad...