Source: https://senecalearning.com/en-gb/revision-notes/a-level/history/aqa/1-3-1-trade-and-commerce-in-the-empire

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# Trade & Commerce in the Empire

History: AQA A Level The British Empire, topic 1.3.1

## Interpretations about the British Empire's Economy

Historians have presented different interpretations about the importance of economic factors in driving the British Empire's expansion.

### Marxist interpretation

![Marxist interpretation](https://image-v2.cdn.app.senecalearning.com/2018-08/68f5f03b-0161-4b93-9af9-16979895adf3/karl-marx-.jpg)

- The Marxist interpretation of the British Empire focuses heavily on trade, seeing expansion as being driven by the ‘haves’ against the ‘have-nots’.

### J.A Hobson

![J.A Hobson](https://image-v2.cdn.app.senecalearning.com/2018-12/49888fb6-5339-45e1-a0bb-be6c3dd14795/capitalism-marxism-communism-communist-.jpg)

- A contemporary critic of the empire, J.A. Hobson, saw imperialism as an economic, political, and cultural practice common to nations with a capitalist economic system.
- Hobson _Imperialism_ (1902):
 - "They [British capitalists] need Imperialism because they desire to use the public resources of their country to find profitable employment for the capital which otherwise would be superfluous".

### Jan Morris (1968)

![Jan Morris (1968)](https://image-v2.cdn.app.senecalearning.com/courseImages/chemistry/6.1.1%20Calculating%20rates%20of%20reactions/6.1.1_profit-min.jpg)

- Exploring Britain’s trade and commerce seems to confirm Jan Morris’ belief that ‘the deepest impulse of empire was the impulse to be rich’.

### Martin Kitchen (1996)

![Martin Kitchen (1996)](https://image-v2.cdn.app.senecalearning.com/2018-08/e5cb6f05-55c9-40ae-98ee-01f8401045d2/kitchen-sink.jpg)

- Before 1800, Kitchen says ‘the Empire has largely been left to exploitation by individual adventurers and commercial companies’.
- Kitchen says ‘by the mid 19th Century, the driving force behind this type of imperialism was a curious mixture of nationalism, Christian missionary zeal, the search for profit and the career objectives of Britain’s civil and military officials’. 
- Unlike today, private companies rather than governments enforced rule.

### Cecil Rhodes & Indian sepoys

![Cecil Rhodes & Indian sepoys](https://image-v2.cdn.app.senecalearning.com/2020-06/4a4bac68-ff78-47ac-b42d-19d5ec602b6e/cecil-rhodes-.jpg)

- In 1889, Cecil Rhodes (pictured) led soldiers employed by the British South Africa Company to the Limpopo river to create the colony of Rhodesia.  
- In India, sepoys were local Indian soldiers, employed by the East India Company. The East India Company was often able to pay soldiers on time and more reliably than local political or military leaders.

### Parliamentary and noble interests

![Parliamentary and noble interests](https://image-v2.cdn.app.senecalearning.com/2018-09/83ac812a-366a-4e63-819d-317cf6d964aa/stock-exchange-738671_1280.jpg)

- Between 1719 and 1721, the Duke of Buckingham, a former member of the royal Privy Council, was one of the most active traders in East India Company shares. In the late 1600s, the East India Company paid a 22% dividend each year.

## Adam Smith and the Free Trade Concept

Expanding trade and commerce was a defining feature of the British Empire.

### Adam Smith and Free Trade

![Adam Smith and Free Trade](https://image-v2.cdn.app.senecalearning.com/2018-08/a51a666d-555a-4475-a9c7-e29b88629378/adam-smith-.jpg)

- The 18th-century focus on mercantilism and protectionism was dismantled in the first half of the 19th century by Adam Smith’s _Wealth of Nations_ concept of ‘free trade’. 
- Mercantilism is the economic policy of a state that seeks to maximise the exports of the state while minimising the reliance on imports.
- Protectionism is the restriction of foreign imports through measures like taxation.

### Adam Smith: _Wealth of Nations_ (1776)

![Adam Smith: _Wealth of Nations_ (1776)](https://image-v2.cdn.app.senecalearning.com/2018-09/8f89064b-e2f3-4bd8-a43e-571049d493ee/Adam-Smith.png)

- Smith argued that wealth could be infinite and that governments should not intervene in markets. Smith argued that individuals pursuing their selfish goals would lead to the optimal outcome because of the 'invisible hand' of the market. 
- This free-market doctrine became a dogma in the UK.

### Handling of the Irish Potato Famine

![Handling of the Irish Potato Famine](https://image-v2.cdn.app.senecalearning.com/courseImages/biology/4.1.1%20Photosynthesis/potatoes-1388512_640-min.jpg)

- During the Irish Potato Famine, Parliament was reluctant to intervene because of its belief in free markets. It thought that if it helped Ireland, it would create a 'moral hazard' and make them reliant on UK money. Sir Robert Peel managed to send the Irish £100,000 worth of Maize, but his government collapsed and support stopped. The Economist condemned this failure in 1845.

## The British Empire and Trade and Commerce

Expanding trade and commerce was a defining feature of the British Empire.

### Britain and free trade in India

![Britain and free trade in India](https://image-v2.cdn.app.senecalearning.com/2018-08/b09b0dc5-75a9-4e27-9517-a9f9d01f22b4/stock-trading-wall-st.jpg)

- The British Empire's growth was supported by free trade.
- Free trade is based on the idea that competition between businesses leads to the best outcomes for consumers. 
- However, in India, the East India Company tried to create a monopoly and raise taxes as high as they could to maximise their profits. The East India Company had a monopoly granted by the Queen and tried to seize all control from local politicians, like the Mughal Emperor.

### Britain and free trade in China

![Britain and free trade in China](https://image-v2.cdn.app.senecalearning.com/memory-location-images/Hong%20Kong,%20Hong%20Kong-min.jpeg)

- The East India Company had been selling opium made in India (used to make heroin) to China. The Qing Dynasty decided to ban opium in China. During the Opium Wars with China between 1839 and 1860, the British navy fought against the Qing Dynasty (Chinese government) in order to allow Britain to keep selling the now-illegal opium in China.
- Britain gained Hong Kong as a colony from China in 1842 as part of the Treaty of Nanjing.
- In China, the East India Company's commercial interests were supported by the British military and British navy.

### Britain trading with colonies

![Britain trading with colonies](https://image-v2.cdn.app.senecalearning.com/2019-02/504aac8e-f73c-4be4-b25a-567e23aaf5db/british-empire.png)

- It was easy for colonies to trade with Britain because of the power of the Pound Sterling as a currency, the use of English law, the use of English as a language, and the capital provided by the City of London's financial markets. 
- Between 1875 and 1900, 20% of Britain's imports were from colonies and 33% of Britain's exports went to colonies.
- There was also a system of 'imperial preference' that the USA would dismantle after World War 2. Imperial preference meant that tariffs (taxes) on goods between two nations were lower if they were both parts of the British Empire.

## Test yourself on Trade & Commerce in the Empire

- What did Adam Smith argue in *Wealth of Nations*?
- Why was it easy for colonies to trade with Britain?
- Which of these are true of the British Empire's dealings with opium?

[Practise this topic for free](https://app.senecalearning.com/classroom/course/4dd48474-7381-4a8b-8d47-f52ec6b25dfd/section/1b9095ee-6797-4d1b-abfe-1853e043463f/session)

- Previous topic: [1.2.5 The Informal Empire](https://senecalearning.com/en-gb/revision-notes/a-level/history/aqa/1-2-5-the-informal-empire.md)
- Next topic: [1.3.2 Infrastructure of Trade & Commerce](https://senecalearning.com/en-gb/revision-notes/a-level/history/aqa/1-3-2-infrastructure-of-trade-and-commerce.md)

## History: AQA A Level The British Empire contents

### 1 High Water Mark of the British Empire, 1857-1914
- 1.1 Development of Imperialism, 1857-1890
  - [1.1.1 Empires over Time](https://senecalearning.com/en-gb/revision-notes/a-level/history/aqa/1-1-1-empires-over-time.md)
  - [1.1.2 Key Questions About Empires](https://senecalearning.com/en-gb/revision-notes/a-level/history/aqa/1-1-2-key-questions-about-empires.md)
  - [1.1.3 Expansion into Africa](https://senecalearning.com/en-gb/revision-notes/a-level/history/aqa/1-1-3-expansion-into-africa.md)
  - [1.1.4 History of Egypt](https://senecalearning.com/en-gb/revision-notes/a-level/history/aqa/1-1-4-history-of-egypt.md)
  - [1.1.5 Control of Egypt](https://senecalearning.com/en-gb/revision-notes/a-level/history/aqa/1-1-5-control-of-egypt.md)
  - [1.1.6 Control of Sudan](https://senecalearning.com/en-gb/revision-notes/a-level/history/aqa/1-1-6-control-of-sudan.md)
- 1.2 Imperial & Colonial Policy, 1857-1890
  - [1.2.1 The British Empire & India](https://senecalearning.com/en-gb/revision-notes/a-level/history/aqa/1-2-1-the-british-empire-and-india.md)
  - [1.2.2 The British Raj](https://senecalearning.com/en-gb/revision-notes/a-level/history/aqa/1-2-2-the-british-raj.md)
  - [1.2.3 International Relations with other Powers](https://senecalearning.com/en-gb/revision-notes/a-level/history/aqa/1-2-3-international-relations-with-other-powers.md)
  - [1.2.4 Scramble for Africa](https://senecalearning.com/en-gb/revision-notes/a-level/history/aqa/1-2-4-scramble-for-africa.md)
  - [1.2.5 The Informal Empire](https://senecalearning.com/en-gb/revision-notes/a-level/history/aqa/1-2-5-the-informal-empire.md)
- 1.3 Trade & Commerce, 1857-1890
  - [1.3.1 Trade & Commerce in the Empire](https://senecalearning.com/en-gb/revision-notes/a-level/history/aqa/1-3-1-trade-and-commerce-in-the-empire.md)
  - [1.3.2 Infrastructure of Trade & Commerce](https://senecalearning.com/en-gb/revision-notes/a-level/history/aqa/1-3-2-infrastructure-of-trade-and-commerce.md)
  - [1.3.3 Products of Trade & Commerce](https://senecalearning.com/en-gb/revision-notes/a-level/history/aqa/1-3-3-products-of-trade-and-commerce.md)
- 1.4 Attitudes Towards the Empire, 1857-1890
  - [1.4.1 Explorers](https://senecalearning.com/en-gb/revision-notes/a-level/history/aqa/1-4-1-explorers.md)
  - [1.4.2 Missionaries](https://senecalearning.com/en-gb/revision-notes/a-level/history/aqa/1-4-2-missionaries.md)
  - [1.4.3 Traders & Colonial Administrators](https://senecalearning.com/en-gb/revision-notes/a-level/history/aqa/1-4-3-traders-and-colonial-administrators.md)
  - [1.4.4 Government Attitudes Towards Imperialism](https://senecalearning.com/en-gb/revision-notes/a-level/history/aqa/1-4-4-government-attitudes-towards-imperialism.md)
- 1.5 Relations with Indigenous Peoples, 1857-1890
  - [1.5.1 Relations with India](https://senecalearning.com/en-gb/revision-notes/a-level/history/aqa/1-5-1-relations-with-india.md)
  - [1.5.2 Relations with South Africa](https://senecalearning.com/en-gb/revision-notes/a-level/history/aqa/1-5-2-relations-with-south-africa.md)
  - [1.5.3 British-Boer Relations](https://senecalearning.com/en-gb/revision-notes/a-level/history/aqa/1-5-3-british-boer-relations.md)

### 2 Imperial Consolidation & Liberal Rule, 1890-1914
- 2.1 Consolidation & Expansion in Africa, 1890-1914
  - [2.1.1 Consolidation & Expansion into Africa](https://senecalearning.com/en-gb/revision-notes/a-level/history/aqa/2-1-1-consolidation-and-expansion-into-africa.md)
  - [2.1.2 Consolidation & Expansion in South Africa](https://senecalearning.com/en-gb/revision-notes/a-level/history/aqa/2-1-2-consolidation-and-expansion-in-south-africa.md)
  - [2.1.3 Historical Interpretations: Expansion into Africa](https://senecalearning.com/en-gb/revision-notes/a-level/history/aqa/2-1-3-historical-interpretations-expansion-into-africa.md)
- 2.2 Imperial & Colonial Policy, 1890-1914
  - [2.2.1 Policy in India](https://senecalearning.com/en-gb/revision-notes/a-level/history/aqa/2-2-1-policy-in-india.md)
  - [2.2.2 Policy in Egypt](https://senecalearning.com/en-gb/revision-notes/a-level/history/aqa/2-2-2-policy-in-egypt.md)
  - [2.2.3 Native Policy in Colonies](https://senecalearning.com/en-gb/revision-notes/a-level/history/aqa/2-2-3-native-policy-in-colonies.md)
  - [2.2.4 International Relations with Other Powers](https://senecalearning.com/en-gb/revision-notes/a-level/history/aqa/2-2-4-international-relations-with-other-powers.md)
- 2.3 Trade & Commerce, 1890-1914
  - [2.3.1 The Benefits of Trade](https://senecalearning.com/en-gb/revision-notes/a-level/history/aqa/2-3-1-the-benefits-of-trade.md)
  - [2.3.2 Costs of the Empire](https://senecalearning.com/en-gb/revision-notes/a-level/history/aqa/2-3-2-costs-of-the-empire.md)
  - [2.3.3 Debates Over Trade](https://senecalearning.com/en-gb/revision-notes/a-level/history/aqa/2-3-3-debates-over-trade.md)
- 2.4 Attitudes Towards the Empire, 1890-1914
  - [2.4.1 Key Administrators - Chamberlain & Rhodes](https://senecalearning.com/en-gb/revision-notes/a-level/history/aqa/2-4-1-key-administrators-chamberlain-and-rhodes.md)
  - [2.4.2 Key Administrators - Baring & Milner](https://senecalearning.com/en-gb/revision-notes/a-level/history/aqa/2-4-2-key-administrators-baring-and-milner.md)
  - [2.4.3 Key Administrators - Curzon](https://senecalearning.com/en-gb/revision-notes/a-level/history/aqa/2-4-3-key-administrators-curzon.md)
  - [2.4.4 Government Attitudes to the Empire](https://senecalearning.com/en-gb/revision-notes/a-level/history/aqa/2-4-4-government-attitudes-to-the-empire.md)
  - [2.4.5 National Efficiency & the Boer War](https://senecalearning.com/en-gb/revision-notes/a-level/history/aqa/2-4-5-national-efficiency-and-the-boer-war.md)
  - [2.4.6 Popular Attitudes Towards Imperialism](https://senecalearning.com/en-gb/revision-notes/a-level/history/aqa/2-4-6-popular-attitudes-towards-imperialism.md)
- 2.5 Relations with Indigenous Peoples, 1890-1914
  - [2.5.1 Challenges in India](https://senecalearning.com/en-gb/revision-notes/a-level/history/aqa/2-5-1-challenges-in-india.md)
  - [2.5.2 Challenges in Africa](https://senecalearning.com/en-gb/revision-notes/a-level/history/aqa/2-5-2-challenges-in-africa.md)
  - [2.5.3 Challenges in South Africa](https://senecalearning.com/en-gb/revision-notes/a-level/history/aqa/2-5-3-challenges-in-south-africa.md)
  - [2.5.4 Historical Interpretations of the Boer War](https://senecalearning.com/en-gb/revision-notes/a-level/history/aqa/2-5-4-historical-interpretations-of-the-boer-war.md)
  - [2.5.5 Relations & Business with Iran](https://senecalearning.com/en-gb/revision-notes/a-level/history/aqa/2-5-5-relations-and-business-with-iran.md)

### 3 Imperialism Challenged, 1914-1967
- 3.1 Expansion & Contraction of Empire, 1914-1947
  - [3.1.1 Impact of WW1](https://senecalearning.com/en-gb/revision-notes/a-level/history/aqa/3-1-1-impact-of-ww1.md)
  - [3.1.2 Palestine](https://senecalearning.com/en-gb/revision-notes/a-level/history/aqa/3-1-2-palestine.md)
  - [3.1.3 Ireland & WW1](https://senecalearning.com/en-gb/revision-notes/a-level/history/aqa/3-1-3-ireland-and-ww1.md)
  - [3.1.4 Impact of WW2 on the British Empire](https://senecalearning.com/en-gb/revision-notes/a-level/history/aqa/3-1-4-impact-of-ww2-on-the-british-empire.md)
- 3.2 Colonial Policy & Administration, 1914-1947
  - [3.2.1 Administration in India & Palestine](https://senecalearning.com/en-gb/revision-notes/a-level/history/aqa/3-2-1-administration-in-india-and-palestine.md)
  - [3.2.2 Administration in Iraq & the Dominions](https://senecalearning.com/en-gb/revision-notes/a-level/history/aqa/3-2-2-administration-in-iraq-and-the-dominions.md)
  - [3.2.3 Imperial Defence](https://senecalearning.com/en-gb/revision-notes/a-level/history/aqa/3-2-3-imperial-defence.md)
- 3.3 Trade, Commerce & Economic Impact of War
  - [3.3.1 Economic Impact of WW1](https://senecalearning.com/en-gb/revision-notes/a-level/history/aqa/3-3-1-economic-impact-of-ww1.md)
  - [3.3.2 Inter-War Trade & Commerce](https://senecalearning.com/en-gb/revision-notes/a-level/history/aqa/3-3-2-inter-war-trade-and-commerce.md)
  - [3.3.3 Economic Impact of WW2](https://senecalearning.com/en-gb/revision-notes/a-level/history/aqa/3-3-3-economic-impact-of-ww2.md)
- 3.4 Attitudes Towards the Empire, 1890-1914
  - [3.4.1 Colonial Administrators](https://senecalearning.com/en-gb/revision-notes/a-level/history/aqa/3-4-1-colonial-administrators.md)
  - [3.4.2 Trusteeship](https://senecalearning.com/en-gb/revision-notes/a-level/history/aqa/3-4-2-trusteeship.md)
  - [3.4.3 Gandhi](https://senecalearning.com/en-gb/revision-notes/a-level/history/aqa/3-4-3-gandhi.md)
  - [3.4.4 Montagu, Haig & Linlithgow](https://senecalearning.com/en-gb/revision-notes/a-level/history/aqa/3-4-4-montagu-haig-and-linlithgow.md)
  - [3.4.5 Cameron, Mitchell, Cohen & Furse - African Admins](https://senecalearning.com/en-gb/revision-notes/a-level/history/aqa/3-4-5-cameron-mitchell-cohen-and-furse-african-admins.md)
  - [3.4.6 Imperialist Ideals](https://senecalearning.com/en-gb/revision-notes/a-level/history/aqa/3-4-6-imperialist-ideals.md)
- 3.5 Relations with Indigenous Peoples, 1914-1947
  - [3.5.1 Ireland & India 1914-1947](https://senecalearning.com/en-gb/revision-notes/a-level/history/aqa/3-5-1-ireland-and-india-1914-1947.md)
  - [3.5.2 The Middle East and Africa](https://senecalearning.com/en-gb/revision-notes/a-level/history/aqa/3-5-2-the-middle-east-and-africa.md)

### 4 The Wind of Change, 1947-1967
- 4.1 Decolonisation in Africa & Asia, 1947-1967
  - [4.1.1 Reasons for Decolonisation](https://senecalearning.com/en-gb/revision-notes/a-level/history/aqa/4-1-1-reasons-for-decolonisation.md)
  - [4.1.2 Decolonisation in East & West Africa](https://senecalearning.com/en-gb/revision-notes/a-level/history/aqa/4-1-2-decolonisation-in-east-and-west-africa.md)
  - [4.1.3 Decolonisation in Central & South Africa](https://senecalearning.com/en-gb/revision-notes/a-level/history/aqa/4-1-3-decolonisation-in-central-and-south-africa.md)
  - [4.1.4 Decolonisation in Asia](https://senecalearning.com/en-gb/revision-notes/a-level/history/aqa/4-1-4-decolonisation-in-asia.md)
- 4.2 Colonial Policy & Administration, 1947-1967
  - [4.2.1 Relations & Business with Iran after WW2](https://senecalearning.com/en-gb/revision-notes/a-level/history/aqa/4-2-1-relations-and-business-with-iran-after-ww2.md)
  - [4.2.2 The 'Winds of Change'](https://senecalearning.com/en-gb/revision-notes/a-level/history/aqa/4-2-2-the-winds-of-change.md)
  - [4.2.3 The Suez Canal Crisis - 1956](https://senecalearning.com/en-gb/revision-notes/a-level/history/aqa/4-2-3-the-suez-canal-crisis-1956.md)
  - [4.2.4 International Relations 1947-1967](https://senecalearning.com/en-gb/revision-notes/a-level/history/aqa/4-2-4-international-relations-1947-1967.md)
- 4.3 Trade & Commerce, 1947-1967
  - [4.3.1 The Economic Impact of WW2](https://senecalearning.com/en-gb/revision-notes/a-level/history/aqa/4-3-1-the-economic-impact-of-ww2.md)
- 4.4 Attitudes Towards the Empire, 1947-1967
  - [4.4.1 Colonial Administrators: Cohen & Arden-Clarke](https://senecalearning.com/en-gb/revision-notes/a-level/history/aqa/4-4-1-colonial-administrators-cohen-and-arden-clarke.md)
  - [4.4.2 Local Leaders in the Independence Movement](https://senecalearning.com/en-gb/revision-notes/a-level/history/aqa/4-4-2-local-leaders-in-the-independence-movement.md)
  - [4.4.3 Pan-Africanism in Nationalism](https://senecalearning.com/en-gb/revision-notes/a-level/history/aqa/4-4-3-pan-africanism-in-nationalism.md)
- 4.5 Post-Colonial Ties, 1947-1967
  - [4.5.1 Windrush & Immigration](https://senecalearning.com/en-gb/revision-notes/a-level/history/aqa/4-5-1-windrush-and-immigration.md)
  - [4.5.2 Commonwealth Immigrants Act](https://senecalearning.com/en-gb/revision-notes/a-level/history/aqa/4-5-2-commonwealth-immigrants-act.md)
  - [4.5.3 Residual Impact of the Empire](https://senecalearning.com/en-gb/revision-notes/a-level/history/aqa/4-5-3-residual-impact-of-the-empire.md)
- 4.6 Relations with Indigenous Peoples, 1947-1967
  - [4.6.1 Challenges to Colonial Rule Post 1947](https://senecalearning.com/en-gb/revision-notes/a-level/history/aqa/4-6-1-challenges-to-colonial-rule-post-1947.md)
  - [4.6.2 Kenya & the Mau Mau Uprising](https://senecalearning.com/en-gb/revision-notes/a-level/history/aqa/4-6-2-kenya-and-the-mau-mau-uprising.md)
  - [4.6.3 Nigeria & Rhodesia](https://senecalearning.com/en-gb/revision-notes/a-level/history/aqa/4-6-3-nigeria-and-rhodesia.md)