2.3.2

Costs of the Empire

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Costs of Sustaining the British Empire

By the late 19th century, the British public began to question the costs of the British Empire.

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Resenting taxes

  • There was increasing resentment amongst British upper middle classes about paying for imperial defence through taxes.
  • Some thought that Britain's navy was too expensive.
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Failure to modernise

  • Britain’s reliance on the British Empire meant that the country failed to modernise at a time when Germany & the United States were industrialising fast.
  • Britain's share of global manufacturing production fell from 23% in 1880 to 13.6% in 1913.
  • Landes (1969) says that "the cities of the early 19th Century were not built to accommodate the factories of the 20th Century". Germany and the USA did not have these issues.
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The negative impact of cheap imports

  • Some groups in the British public argued that colonial food imports undermined domestic food production.
  • There was also concern that cheap foreign labour in colonies depressed wages in Britain.
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British loans and investment

  • British loans to countries in the British Empire yielded higher interest rates for investors, so they often invested in the Empire instead of Britain.
  • This helped to generate competition against British industries.
  • Lancashire's cotton mills faced increased competition from Indian cotton mills.
  • Harley (2004) says that although this investment policy was optimal for private investors, it wasn't optimal for Britain's domestic economy. Landes (1969) argues that capital markets and investors unfairly favoured overseas investments relative to Britain.

Jump to other topics

1High Water Mark of the British Empire, 1857-1914

2Imperial Consolidation & Liberal Rule, 1890-1914

3Imperialism Challenged, 1914-1967

4The Wind of Change, 1947-1967

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