The Informal Empire
History: AQA A Level The British Empire, topic 1.2.5
The Informal Empire
In 1953, Gallagher and Robinson wrote an article called "The Imperialism of Free Trade". It outlined a theory that the British Empire was split into the 'formal' and 'informal' empire.
The informal empire
- Britain had no legal claim over many areas in which it wielded influence, namely through economic agreements.
- These areas became known as Britain's ‘informal empire’.
Iran
- Countries like Iran were part of Britain's informal empire.
- In 1891, a British business bought the rights for the entire Iranian tobacco industry.
- In 1901, a British business, the Anglo-Iranian Oil Company, bought all the rights to Iran's oil for a period of 60 years.
Latin America
- Some of the informal Empire was controlled through commercial agreements.
- For example, public capital in Latin America reached £80 million in 1865.
- The economists Bordo & Rockoff have found that there is an association between being part of the formal empire instead of the informal empire. Obstfeld (2003) finds that "more money was invested in de jure colonies like India, than de facto colonies like Argentina".
Upholding agreements
- Often, military power was needed to secure ‘free trade’ agreements and the Royal Navy was brought into Peru and Chile to uphold treaties.
Historical assessment
- Historians Gallagher and Robinson (1953) argue that "Mid-Victorian 'indifference' and late-Victorian 'enthusiasm' for empire were directly related to the rise and decline in free-trade beliefs".
- Gallagher and Robinson (1953) also argue that "the dependence of the commercial thrust upon the political arm resulted in a general tendency for British trade to follow the invisible flag of informal empire."