Week 5- British Empire & Exploitation Flashcards
What is Maddison’s argument about Britain’s rise?
Their mercantilist approach
What is Burke’s views on the colonies?
Colonies were vital to secure preferential trade
Colonial policy was harsh and allowed Britain to extract high rents
Supernormal profits were reinvested into capital back in Britain- explaining long run success
What was Smith’s views on colonies?
They were a drain on resources (defence, loans)
Capital was diverted from non-colonial opportunities
Profits were available due to British taxpayer subsidies.
Interest group that captured profits didn’t spread throughout the whole British economy.
What were the Navigation Acts of 1651?
Acts that governed colonial trade and commerce
What are some acts that the British implemented?
Sugar tax
Quartering Act- requiring colonists to feed British military
Declaratory Act- Declared colonies are subordinate to Britain
Tea Act- Monopoly of EIC to import tea to America
What are features of the Navigation Acts?
-All trade had to be conducted through England
-Some colonial commodities (sugar/cotton) could only be exported to England
-Select manafactures could only be purchases in England
What were direct costs of the Navigation Acts to the 13 colonies?
76% of exports were subject to enumeration.
Enumeration increased prices in Europe and lowered quantities sold by redirecting trade through England.
75% of imports were purchased from England
What were indirect costs of the Navigation Acts?
-Colonies faced lower tariffs
-Benefits on goods England would have purchased anyway
-Large costs to defend colonies
-Colonies recieved bounties to produce inefficient goods vital to England
What was the burden per capita for the empire?
Ransom- 1.4-2% of income
McClelland- 3% of income
How was America exploited?
-Constrained manufacturing
-Shortages in money supply
-Rebalance of tax burden met with extreme responses
When did the second industrial revolution occur in the US?
After 1870
How was the American economy in the late 1800s?
-High saving rate (10%)
-$3 billion FDI
-1897 Exports exceeded $1 billion
What does LaFeber argue about the US economy in the late 1800s?
“From the 1890s, the US was the most competitive player in the global market place”
How did market organisation change?
Emergence on MNCs
High availability of labour from European migration
Protectionism
How did the Sherman Anti-Trust Act aid MNCs?
-Limited anti-competitive behaviours
-Gold Standard eliminated currency risk
How did the 2nd IR occur in the US
-Big corporations in the North
-Capital grew South
-New textile export markets in Latin America
-Automated tobacco industry
What are some statistics about the Mid Victorian Success?
-Made 1/3 of all manufactured articles
-Control 40% of global manufactured trade
-Global finance centre
-GDP per capita twice that of the continent
What are some statistics of Late-Victorian Failure?
-GDP Growth from 2.2% to 1.8%
-Higher German industrial power
-World trade in manufacturing fell to 1/4
What were some causes of British slowdown?
-Too much capital abroad
-Banking failure
-Labour market failure
-Overcommitment
What is the overcommitment hypothesis?
-Committed too much during the first IR
-Stuck in ‘traditional’ industries
-Interest group constraint
-Requirement of tariff protection
Why did high capital outflow affect Britain?
-Lack of domestic capital accumulation
-High social returns but higher private returns abroad
How much capital went out of the UK?
1/3 of British Investment
What was the banking failure in Britain?
-Centralisation resulted in less flexibility and lending to industry
-New industry bias
-Inefficient stock market
What are the 2 argument for labour/business market institutions failing in Britain?
(1) Industrial structure
(2) Labour market
