Source: https://senecalearning.com/en-gb/revision-notes/a-level/history/aqa/2-3-1-the-benefits-of-trade

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# The Benefits of Trade

History: AQA A Level The British Empire, topic 2.3.1

## Arguments that Suggest the Empire Made Britain Wealthier

The economic impact of the British Empire has been hotly contested for years amongst historians.

### The scale of trade in the Empire

![The scale of trade in the Empire](https://image-v2.cdn.app.senecalearning.com/2018-10/6ad7153d-54cc-4109-88fa-fbf573d68c9c/barrel-wood-crate-trade-.jpg)

- Britain traded more with the Empire than any other part of the world. 
- 10% of all of Britain's beef imports and 15% of all of Britain's wheat imports came from Canada. 
- Britain dominated exports in manufactured goods. In 1913, 32% of all manufactured goods bought in the world came from Britain. 
- Britain's main exports in 1913 were insurance, shipping, steel, cotton, machinery, and coal. 
- Jaffe (1988) highlights that selling products into a large market can give economies of scale and allow innovation to happen. Britain was a small nation, so selling British products in the Empire was advantageous.

### Trade with India

![Trade with India](https://image-v2.cdn.app.senecalearning.com/2018-10/7eb972d4-550f-43dd-9772-0822b3843874/india-colonisation-.jpg)

- India exported huge amounts of commodities like cotton and tea to Britain.
- These benefitted British consumers by giving them low prices, but Britain also re-exported these goods to other countries. 
- In 1913, India had a zero percent tariff on goods produced in the UK vs a 40% tariff on goods produced in the USA in 1913. This made British goods relatively cheaper to Indian consumers and businesses than American goods.

### Trade with Australia and New Zealand

![Trade with Australia and New Zealand](https://image-v2.cdn.app.senecalearning.com/2018-04/aed73f16-3ed1-4dec-ae15-194dbaf03596/shutterstock_127120301.jpg)

- Australia exported wool and sugar to Britain.
- Refrigerated rail wagons and improvements in international transport allowed frozen lamb to be transported to Britain from Australia, New Zealand, and Argentina.

### Historical views of the benefits of Britain's Empire

![Historical views of the benefits of Britain's Empire](https://image-v2.cdn.app.senecalearning.com/2018-07/ced8a5a4-0374-43d4-a2b1-9a72d0870332/Travel-Emigration-Moving-Train-Man-Bags.jpg)

- Edelstein (2004) argues that "the empire meant much more for economic wellbeing in 1913 than in 1870 due to increased proportion of British commodities & services marketed in the Empire". 
- But Edelstein quantifies the gain at only 1% of GDP. 
- A lot of the benefit came from having additional troops and a larger tax base during World War 1. 225,000 troops from the Empire died relative to 744,000 British troops. 
- But using this tax base led to anti-British sentiment after the war. In countries like Egypt, people faced deprivation and hardship because of the war.

## Arguments Against the Importance of Trade with the Empire

The economic impact of the British Empire has been hotly contested for years amongst historians. Many argue that the importance of trade has been exaggerated.

### Waning interest in the Empire

![Waning interest in the Empire](https://image-v2.cdn.app.senecalearning.com/2018-11/c8f52e48-15ee-478e-a476-fcb437b310eb/thumb-down-.jpg)

- The Imperial Federation League was set up in 1884 to promote closer colonial ties, but this organisation was disbanded forever in 1893. 
- Edelstein (2004) argues the benefit of the Empire was only 1% of GDP. 
- Harley (2004) highlights that in 1913, 30% of all British goods and services were exported to other countries. After World War One, this had fallen to 15%. World War One harmed European producers and led to the rise of American and Japanese producers. 
- After World War One, protectionism and tariffs became more common, undermining the importance of the British Empire to Britain economically.

### Limits of the Empire's exports

![Limits of the Empire's exports](https://image-v2.cdn.app.senecalearning.com/courseImages/biology/6.2.1%20-%20Variation%20and%20evolution/wheat-field-640960_640-min.jpg)

- The Empire was only Britain’s main food supplier in cheese, apples, potatoes, and fresh mutton.
 - The Empire provided less than 10% of other foodstuffs to Britain. 
- The British turned to alternative exporters.
- Edelstein (2004) argues that the formal gains from Empire in tax revenue and trade were limited. More important, Edelstein argues, were the indirect subsidies and manipulation of trade, encouraging the purchase of British goods.

### Trade with the non-imperial world

![Trade with the non-imperial world](https://image-v2.cdn.app.senecalearning.com/2018-09/10ec8975-e80b-4701-a176-ea7cb386523b/usa-uk-flag-.png)

- Britain’s trade with the states outside of its empire (especially the USA) was growing in the late 19th century.
- In 1896, the Empire’s total trade was £745 million.

### Benefits to the Empire

![Benefits to the Empire](https://image-v2.cdn.app.senecalearning.com/2018-10/6ad7153d-54cc-4109-88fa-fbf573d68c9c/barrel-wood-crate-trade-.jpg)

- Arguably, Britain helped to develop very poor nations. 
- Iran's oil industry benefitted from British expertise in the city of Abadan. However, lots of Iranian workers lived in poverty and most profits went to Britain. 
- In 1913, 43% of foreign British investment went to the Empire. So the Empire led to increased capital to allow economic development to happen. 40% of this capital was spent on railways.

### Borrowing from the City of London

![Borrowing from the City of London](https://image-v2.cdn.app.senecalearning.com/courseImages/chemistry/2.3.4%20Nanotechnology/money-2180330_640-min.jpg)

- Countries in the British Empire could also borrow money in the City of London at lower interest rates than nations that were not in the British Empire. 
- However, the cost to the local population from increased taxes, loss of civil liberties, and lack of self-determination may well outweigh some of the developmental benefits.

### Benefits to private companies and individuals

![Benefits to private companies and individuals](https://image-v2.cdn.app.senecalearning.com/2019-04/5393c559-0fef-4e0a-9d43-a67596df6a84/map-vintage-compass-east-west-south-1418873-pxhere.com.jpg)

- It is possible that the chartered companies made huge profits for their owners and shareholders, but that little value accrued to Britain as a niche outside military strategic importance.
- This could explain the transition from privately-owned companies, to British protectorates, and then to independence over time.

## Test yourself on The Benefits of Trade

- What developments allowed frozen lamb to be transported to Britain from Australia, New Zealand and Argentina?

[Practise this topic for free](https://app.senecalearning.com/classroom/course/4dd48474-7381-4a8b-8d47-f52ec6b25dfd/section/3035a3cb-93d9-4d81-9824-5ed5018b7263/session)

- Previous topic: [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)
- Next topic: [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)

## 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)