Economic Update: The Economics of Colonialism Part 1 - The British Empire

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This week's show focuses on an analysis of capitalist colonialism that begins with the passing of Queen Elizabeth as a monument to the passing of the British Empire itself. Wolff discusses the differences between pre-capitalist and capitalist colonialism, the goals of capitalist colonialism, the development of a world economy, examples of India, US, and Kenya, the centrality of independence for ex-colonies, and neo-colonialism.

Transcript has been edited for clarity

Welcome friends to another edition of Economic Update, a weekly program devoted to the economic dimensions of our lives and those of our children. I'm your host Richard Wolff. Today's program is a little bit different. On the one hand, yes, it responds to something that we've been thinking about and looking at for weeks now. And that's namely the passing of the United Kingdom's Queen Elizabeth on the 8th of September of this year and the enormous media attention that event, the funeral and so on have garnered, as well as the coming to power of her son Charles III, the new King of that country. But it's different in the sense that I'm going to be looking at it, as you might imagine, from a different perspective, as an event that marks in many, many ways the end of the British Empire.

As the longest reigning monarch in British history Elizabeth had the time up there on the throne to preside over momentous closing chapters of that Empire. I want to talk about that, partly because it's real history that we ought to think about. And like all history it's right here with us right now, not because of Britain but because the empire role that Britain once played passed then to the United States - formerly part of that empire - and that the United States is now facing the decline of it's empire and therefore has a great deal to learn from thinking about the passing of that other one, marked by Queen Elizabeth's death.

So let's talk a little bit about the economics of empire and of colonialism in particular. It used to be said in the history books that the British were proud of saying in the time of their Empire that "the sun never sets on the British Empire." Meaning that as the Earth turned and the sun went down in one place and up in another there was always, in wherever the sun went up, a portion of the British Empire. And that's really one of the great, remarkable things, historically speaking, about that Empire. It was global in a way that nothing had been global before. Had there been Empires before? Yes, of course, quite a few. Had they spread from an initial location to encompass a much larger territory? Yes, often very large territories. But the whole world? No. That was really Britain's achievement. All the more remarkable because the country is, after all, a small offshore island off the mammoth continent of Europe. What do we mean when we talk about empire? Well, in the British sense the word empire is synonymous with colonialism. That is the idea that in a country located in one place - Athens, Greece, Rome, Italy (although the notions of Greece and Italy didn't exist in those days) you had a local power, a local community, a local economic system spread out and take over other areas, often violently clashing with people who lived in those other areas. And whose idea of a future did not include being part of somebody else's economic system. And especially not a subordinate part of somebody else's system. And so setting up a colony often meant violently overthrowing what was there before as a society, as a community, substituting your own people or finding local people to act as your agents. Or literally settling your own people there. That's called 'settler colonialism' when you do that. So for example when the British Empire settled the North American area we now call the United States that was settler colonialism. Whereas in other parts of the world they didn't settle very many people, perhaps beyond a few administrators. They relied on the local community's subordination, usually with some military persuasion involved to run the show.

Well, the important economic question is why? Why do societies expand like that? Especially when the people they take power over don't like it, don't want it, resist it, fight about it. Well, before capitalism, that is before the 17th/18th century, when capitalism takes over in Europe the empires we see were usually created to get something that the society, expanding, needed. Could be food, could be slaves - that was often, in ancient society, the case, - it could be wealth, in a kind of general way, it could be labor for the military that they needed to expand even further. But it had to do with gold, silver, slaves, things that you could grab and take. It was a 'grab and take' kind of expansion. What's different about capitalism is that it's much more organized, it's much more invasive. It does way more than steal and snatch wealth and people. It does that but it wants to integrate the area it takes over into it's own economy as a subordinate provider. It really is an expansion that absorbs, one way or another, what it's expanding over. And so, for example, the British Empire came to the Western Hemisphere. By the way, not the only one. The Dutch were here, the French were here and many other countries have been colonialists; Arab people were colonialists in their ways, even earlier, as were others: Greeks, Romans, Mongols and so on. But I want to focus on the modern experience.

Because what's notable about Britain is it's Empire was the first modern capitalist empire. And what do I want to say about it? Well, here's what it went after. As capitalism expands and, as I think most of you understand, it is an expansive system. Every capitalist corporation is proud and thinks of itself as successful if it's expanding, if it's market share is growing, if the size of its business is getting larger. That's what you want to see, that's what's successful, that makes an executive at the CEO level shine, that's what makes your stocks look good etc. etc. So in capitalist colonialism what you want is to expand, and you want to expand everything. For example, if you're going to expand and hire more people you may need more food to be produced in the agricultural part of your country in order to sustain those workers who are in the industries, in the factories, in the cities. And you may not have enough agricultural land to produce the food that you need. So you expand to get it. The British, meaning an empire on a little island, really wanted to get food. Which eventually they took from the prairies of the United States in huge amounts to feed their people with grain. You also needed raw materials. For example, the British Empire developed on the backs of one particular commodity more than everything else: cotton. The British took over the world by producing cotton cloth in ways and at a price nobody could compete with - nobody. But in order to be able to produce cotton cloth and cotton textiles the British had to get cotton which will not grow on a cold wet island off the continent of Europe. And they tried to plant cotton anywhere. And they took over parts of the world, like that of the United States, with great interest once they discovered cotton could and would grow here. And, in fact, cotton was the great mechanism, if you like, of the British Empire.

And now you can begin to see how colonialism develops. Because the United States had the soil, had the sun, had the moisture, had the climate, had everything but one thing to be the great cotton producer for the British Empire - it didn't have the labor. The indigenous people would not or could not do that kind of work. Plus the Empire as it came in found that they were resisting. They didn't want to be workers for the Europeans. They fought and they were destroyed. It was ethnic cleansing before we had the phrase to name it. So the Indians were exterminated. For two centuries they were exterminated, particularly by the British, although not only by them. And that meant that the only way the British could think to provide the labor to do the work of cotton was to bring the labor to the United States. And there goes the great British slave trade, the ransacking of Africa to steal and/or buy the slaves; shipped by the British to the United States - then called a British colony, which it was - to produce the cotton. Which the British Empire used to ship all over the world. And all over the world the British went to say you can't buy anybody else's cotton. Cotton used to be produced in Calcutta (the old name of that important urban area in India.) That cotton was everywhere that was produced there, very good quality. The name got a little mangled here in the United States, where it came to be called Calico, but it was Indian. But all the Indian production was destroyed by the insistence of the British, who controlled the colony of India - they had to buy British cotton. That's what you can do in an empire, you can make it very valuable for you.

So things you might not associate with the British Empire: slavery, cotton, India, that was all part of integrating a world economy by having European countries, mostly, take over more and more parts of the world and integrate them into their economies as subordinate places. Wealth was created but wasn't left there. It was shipped to the mother country, which became very rich.

Well, we've come to the end of the first part of today's show. Before we move on I want to remind everyone that Economic Update is produced by Democracy at Work, a small donor-funded non-profit media organization now celebrating 10 years of producing critical system analyses through a variety of media. For example my book Understanding Marxism, which offers an accessible overview of Marxism, as well as an argument for the power and usefulness of Marx's criticism of the capitalist economic system. It's available in several formats on our website And please remember to follow us on social media, sign up for our mailing list to stay up to date with all we do and especially how you can support our work in a variety of ways. Stay with us, we'll be right back with the second part of this analysis of the economics of colonialism.

Welcome back friends to the second half of today's Economic Update, devoted to the conversation we're having about colonialism and imperialism and all of those kinds of things having to do with empires, in which mostly European countries in the modern period expanded out from the island of Britain or the little country of Belgium to take over vast amounts of the rest of the world, eventually in the process creating - although that's not what they set out to do - a world economy of the sort we live in now.

You might think of colonialism as the birth of the modern economy. And, like usual, the conditions of birth have a long lasting effect on what kind of societies you produce. And being born in colonialism is a violent and dangerous way to come into being. And the British Empire exemplifies this. As does the reign of Elizabeth. Because when she comes to power (1952) the British Empire is already in decline and literally falling apart. It has lost its biggest part - India - a few years before she becomes Queen. That's in an enormous, basically a hundred years struggle, from the mid of the 19th to the middle of the 20th century, for India to free itself from Britain, culminating in the passive resistance of Mahatma Gandhi that many of you know about and have admired. It was a violent struggle in which millions of people died, some in direct military repression which the British tried over and over again to impose on India until they could not anymore succeed. But it wasn't for lack of trying. Their parting gift was to divide the colony into two: India and Pakistan, Pakistan later dividing into Pakistan and Bangladesh, the division called the partition there, again, fraught with enormous conflict of Muslim and Hindu, of east and west, a legacy that the Indian subcontinent - those countries - are still struggling with in the modern time.

Speaking of deaths, let me remind you that it is estimated that 70,000 Americans were killed by the British in The War of Independence, another fifteen thousand were killed by the British in The War of 1812. It was the determined notion of Americans at that time that their only way forward, and certainly their best way, was to get rid of the British Empire, to be independent, to quit and to fight two wars to achieve that. And the British Empire tried twice, it even toyed with the idea in the Civil War in the United States of siding with the South to fight the North, bitter about having lost the colony that it depended on.

And that takes me to another point, which I don't like going to. But in the interests of using an argument that I don't think much of, but to make a different point, many people opposed to socialism, communism and so on like to use what I call 'count the deaths' arguments. They count deaths and I say something like this: Stalin killed millions or 10 million. Many of them do the same exercise with Mao. There's no question that the tumultuous transformations in Russia after 1917 and in China after 1949 - those are the days when they change their society to try to construct some sort of socialism, at least that's what they called it - that these were traumatic transformations. A lot of people died, no question. And if you want to blame that on socialism I don't understand quite what you're doing there. Social transformations, as I'm about to show you, incur deaths of large numbers. And they always have. But, okay, let's do it for a moment. And this time I'm going to ask the question: what about capitalism? If we're going to charge socialism and communism as responsible for the deaths under Stalin and Mao, well, then we have to look at capitalism and ask what? Well, over the last two or three centuries how many people died as a result of them in that sense? And the answer is (not that it gives me any satisfaction to tell you this) that the number of dead is much, much larger than we can attribute to Stalin and Mao. To be crude, maybe it's because Stalin and Mao didn't sit for two or three or four centuries. They're much, much younger systems. They haven't had the time yet to perhaps do comparable damage.

But let me give you an example of the first time I encountered this. The first book I ever wrote is called Economics of Colonialism. It's about a small country in East Africa known as Kenya. And it touches all of this. The period of my book and my doctoral dissertation covers 1895 when the British take over that area in something called the East Africa Protectorate and it runs till 1930. The British were in charge that whole time. It was a British colony. When the British arrived the census they took indicated roughly 4 million African people. In 1930, another time of a census, it was two and a half million. A million and a half people vanished, died as a result, it's easy to show, of the British colonial regime. It literally moved the mass of the African population around the country, throwing them out of areas they had lived in for many centuries, because it was useful to grow coffee there. Arabica coffee grew on the highlands in the middle of Kenya. The British settled their own people - settler colonialism - in those Highlands to produce coffee to be sent to England where there was a big merchant coffee business that took it and distributed it in England, Europe, all over the world. It made a lot of money. But to use that good land to have the coffee you had to get rid of the Africans? And where did you put them? In reserved areas. That's what they were called. Reserves, you know, like what we did with Indians, the people we called Indians, the indigenous people here. Reservations, they did that there too. And they made the reservations too small to sustain the African population. So the only way they could live would be to go out and work on the coffee estates of the British who had settled the land from which they had thrown out the Africans. It cost them millions of lives. It subordinated their economy to the British. They were coffee producing and then a little few other products. They never developed any industries, they never developed hardly anything. When I arrived there as a young person, which I did, teaching math, which I did as a college student in Kenya, a population by then of three or four million had four high schools in the whole country. That's what the British had prepared for them. You are subordinate people, you're going to get paid nothing, you have no education you have very little medical care, your job: live short, work, produce coffee, ship it to England.

You may not like this story and it may upset you in terms of Queen Elizabeth. But she was the Monarch presiding over all of this. So it should come as no surprise that in 1953, a year after she becomes Queen, Kenya erupts with a revolution of the black people who dominate there, who are the people there. It was called The Mau Mau revolt. And if you're interested there's a professor of history at Harvard University, who became famous in recent years. Her name is Caroline Elkins. Look her up. She wrote books based on secret documents in London in the British government's possession that she stumbled upon when she was doing her dissertation as a Harvard Professor that showed the vast amounts of torture and extinction of the African population. If we can talk about millions in that little corner of the Empire, imagine if we had a census. No more would you hear death count be the way of comparing capitalism and socialism and communism. Socialism and communism may catch up. And they will be criticized if they do. But they have a long way to go to catch up to the murder that is part the mass murder that is part of the evolution of colonialism as the extension of capitalism.

I'm gonna have to devote another program to analyzing colonialism now. In the end almost every colony fought for and got independence. In a sense that's history's judgment on how good it is to be a colony of somebody else. It's no good at all. When I was young I remember my professors telling me "well, you know, the British built railroads." When I would explain, for example, my story about Kenya they said "they built a harbor and they built the railroads." And, you know, that's true they did build something, they built some of those four schools. But four is not enough for four million people. And the railroads, you know where they went? Did they go around to help develop the economy in different ways? Oh no, they went from where the coffee was to where the harbor would wait to pick up the coffee. In other words, whatever was done by the colonial power was done to integrate as a hewer of wood and a drawer of water, as it says in the Bible, the subordinate people of the colony to serve the economy in the metropolitan Europe.

That's one of the reasons there's the gap in the wealth between Europe, North America, Japan on the one hand - major colonial powers - and what we call the global South, what we called the third world in the past, the periphery relative to the center of world capitalism. Capitalism has concentrated it's wealth in the places where it began. Only in recent decades has it begun to be spread out a bit further. You know why? Because the colonial territories who had to fight over the last three centuries to get their independence from being a colony could only after that begin to develop their economic systems to stop being the poor backward countries that they were made by modern capitalism.

It's a harsh reality, but that Empire that the British helped to create they no longer control. They are quickly going back to being a small offshore island off Europe. The United States, which, as I'll explain the next time we revisit this topic of colonialism, came later. It took over in many ways the colonial system. But it was smart. The United States, having had its own history of Independence, wanted everybody to stay independent. It didn't want to exercise it's empire over owned properties the way the British had. They developed neo-colonialism, a new way of controlling without making the other country non-independent. And that's what we'll talk about when we look at colonialism: part two, as an economic phenomena.

I hope you found this a useful addition to what else the mainstream media have been telling us about Queen Elizabeth, her passing, Charles III and so on. History has to be balanced, otherwise it becomes distorted. Thank you for your attention. I look forward to speaking with you again next week.

Transcript by Brendan Tait

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