Economic Theory

Imperial Measurement: a rejoinder to Will Hutton and the Guardian/Observer


Observer columnist Will Hutton is not a fan of my latest publication Imperial Measurement: A Cost-Benefit Analysis of Western Colonialism. As he puts it in last Sunday’s edition:

““Imperial Measurement” […] is a risible recasting of history that should have been ignored as self-serving ideological tosh. […]

Recent historical research, blithely dismissed by […] Niemietz, […] has increasingly uncovered a mountain of evidence that places ever more importance on empire […] as important drivers of the Industrial Revolution and evolution of our economy. […]

[T]o minimise and abstract, as Niemietz attempts, the economic impact of first the sugar and then cotton slave plantations, and also the industries that radiated from them, as not part of the story is plainly inadmissible.”

Hutton’s main objection to Imperial Measurement seems to be that there is a book  which comes to a different conclusion. Well, yes. Of course there is. There always is. That’s how this works. Different books come to different conclusions.

The book in question is Slavery, Capitalism and the Industrial Revolution by Maxine Berg and Pat Hudson, which Hutton appears to be basing his arguments on. I am not quite sure what he means by “blithely dismissed”, though. I’m not dismissing anything, neither blithely nor otherwise. I discuss Slavery, Capitalism and the Industrial Revolution in Imperial Measurement (and more extensively on the IEA blog), and explain why I’m not convinced by its main thesis. Again: that’s how this works. Authors read other authors’ work, and then explain why they agree or disagree.

Slavery, Capitalism and the Industrial Revolution is an attempt to rehabilitate the “Williams Thesis”, the idea that slavery (the slave trade itself, and the Caribbean sugar, coffee and tobacco plantations derived from it) made a large contribution to Britain’s Industrial Revolution. They do not do this by claiming that slavery accounted for a large percentage of Britain’s GDP, or its rate of investment and capital formation, or any other macroeconomic variable. Presumably, this is because other authors have tried this before, and they have not come up with much. What they do instead is to hunt for indirect, second-order and third-order effects. They do this, for example, by pointing out that there were spillover benefits for other sectors of the economy.

Hutton does this too:

“The ships and their cargoes […] needed insuring, generating a large marine insurance industry. Sugar refineries were prone to burning down easily […] causing the need for specialist fire insurance companies. No account of the boom in the textile industry either side of the Pennines or the City of London is complete without empire and the slave trade”

This may all be true, but my problem with it is that you could make a similar argument about virtually any industry. No industry exists in isolation. Every industry has some knock-on effects on other industries.

By that logic, you could also claim that the free-market think tanks based on and around Tufton Street are a “strategic industry”. Here’s why. Imagine we all disappeared. (Every Guardian/Observer reader’s dream, I know.) Plenty of people in Westminster would feel the knock-on effects. There are the street food stalls on Strutton Ground, where many of us get our lunch from. There are the publishing companies who proofread, typeset, design and print our publications. There are the event hire venues, and the catering teams who serve the wine and the canapes. Above all, there are the pubs of Westminster, who would undoubtedly notice the disappearance of some of their most reliable customers. So all hail Tufton Street, pillars of Westminster’s economy?

I am 100% sure that Will Hutton would reject that logic – and he would be right. “Rubbish!”, he would say. “If you lot did the decent thing and disappeared, all the Dark Money that you currently use to poison the national discourse would become available for other things. It would be spent by someone else. Perhaps not in Westminster, and perhaps not for those exact purposes, but somewhere, and on something.”

And this would be correct. But it is equally true that if the slave trade had not existed, something else would have existed instead. I don’t know what that “something else” would have been. But given how dependent the slave trade was on indirect state support, it is not implausible to assume that it might have been something more productive and beneficial even in purely economic terms, never mind the obvious immorality of the slave trade.

Which leads us to one of my main problems with Slavery, Capitalism and the Industrial Revolution. The authors make it very clear that the slave trade was propped up by the state, at a high fiscal cost. But they then count this fiscal cost as a disguised benefit, on the grounds that it stimulated those industries that supplied the army with arms, ships, uniforms etc. Hutton does this too:

“The trade needed protecting and policing. A strong navy was an imperative […] The navy was also a richly profitable and important market for British farmers and gun makers.”

This could be almost literally out of Frédéric Bastiat’s classic What Is Seen And What Is Not Seen. Bastiat describes a fictitious (?) policy under which the French army employs 100,000 people more than it needs, at the expense of 1m franc. He cites a fictitious (?) member of the public who argues that this is, in fact, a good thing:

“[I]s it not fortunate that the State is providing bread to these hundred thousand people? What is more, consider that the army consumes wine, clothing, and weapons, and thus provides activity for factories and in garrison towns, and that in fact it is the very salvation of its countless numbers of suppliers. Do you not tremble at the thought of abolishing this huge engine of industrial activity?”

Bastiat then explains why this reasoning is wrong:

“One hundred thousand men who cost the taxpayer one hundred million, live and provide a living for their suppliers to the extent that one hundred million can be spread: that is what is seen. But one hundred million, extracted from the pockets of taxpayers, interfere with the economic lives of these taxpayers and their suppliers to the tune of that one hundred million: that is what is not seen. […]

[D]ischarging one hundred thousand soldiers is not to annihilate one hundred million, it is to return this sum to the taxpayers. […]

[C]asting one hundred thousand workers onto the market is at the same time to cast the one hundred million intended to pay for their work onto the same market. As a result, the same measure that increases the supply of labor also increases the demand […]

[W]hen a taxpayer hands over his money, either to a soldier in return for nothing or to a worker in return for something, all the subsequent consequences of the circulation of this money are the same in both cases, with the sole difference that in the second case, the taxpayer receives something while in the first he receives nothing. The result: a net loss for the nation.” 

You won’t be surprised that Bastiat’s keen awareness of opportunity costs also led him to be sceptical of the (then still relatively recent) colonial project of French Algeria. He quotes a fictitious (?) French politician who promises:

“Vote in favor of fifty million […] to build ports and roads in Algeria, in order to take settlers there, build them houses, and clear fields for them. In doing this you will bring relief to French workers, stimulate work in Africa, and expand trade in Marseilles. It is pure profit.”

Bastiat then explains the flaw in this reasoning:

“Yes, that is true, if you consider the said fifty million only from the time that the state spends it; if you look at where this money is going, not where it came from; if you take account only of the good it will do on leaving the coffers of the tax collectors and not of the harm that has been done nor of the good that has been prevented when it entered these coffers. […]

Jacques Bonhomme […] would have rebuilt the fence around his garden and can no longer do so, that is what is not seen. He would have had his field marled and can no longer do so, that is what is not seen. He would have added a floor to his cottage and can no longer do so, that is what is not seen. He would have bought more tools and can no longer do so, that is what is not seen. […] [T]he work by the laborer, carpenter, blacksmith, tailor, or his village schoolmaster that he might have encouraged and that is now wiped out: all this too is what is not seen.”

Quite so. Bastiat and other liberal anti-imperialists already knew all this in the 1840s. Maybe one day, the Guardian/Observer will get there too.

 

Head of Political Economy

Dr Kristian Niemietz is the IEA's Editorial Director, and Head of Political Economy. Kristian studied Economics at the Humboldt Universität zu Berlin and the Universidad de Salamanca, graduating in 2007 as Diplom-Volkswirt (≈MSc in Economics). During his studies, he interned at the Central Bank of Bolivia (2004), the National Statistics Office of Paraguay (2005), and at the IEA (2006). He also studied Political Economy at King's College London, graduating in 2013 with a PhD. Kristian previously worked as a Research Fellow at the Berlin-based Institute for Free Enterprise (IUF), and taught Economics at King's College London. He is the author of the books "Socialism: The Failed Idea That Never Dies" (2019), "Universal Healthcare Without The NHS" (2016), "Redefining The Poverty Debate" (2012) and "A New Understanding of Poverty" (2011).


9 thoughts on “Imperial Measurement: a rejoinder to Will Hutton and the Guardian/Observer”

  1. Posted 07/05/2024 at 12:36 | Permalink

    On 5th May 1838, the first batch of Indians from the states of Bihar, Uttar Pradesh, Punjab and a minority from South India arrived in British Guiana as indentured labourers. The 186th anniversary of this arrival was commemorated on the 5th May 2024. Their recruitment on contracts followed the abolition of slavery. They were escaping the poverty and famines orchestrated by the British Raj. Indian indentureship, swept up diverse nodal points, such as Fiji, Natal and Durban in South Africa, British Guiana, East Africa, Mauritius, Malaysia, Suriname, Trinidad and Tobago, Guadeloupe, Jamaica, Martinique, Grenada and many others. The British also recruited Africans as indentured labourers from Liberia, Gambia and Sierra Leone during the 1840s and this was due to massive shortage of labour following the abolition of slavery. The British also played Indians against Africans and vice versa. Ethnic tensions have blighted Guyana since. My question is quite simple: If chattel slavery and the the colonial enterprise were so ‘unprofitable’ then why sustain them for hundreds of years? The British held Guyana for 135 years, from 1831-1966 and before that, the Dutch held Guyana from 1667- 1815, a whopping 148 years. It just doesn’t make sense! But we all know that the aggressive exploitation, oppression and horrendous, ghoulish, sadistic and brutal violence that continued during indentureship was because Europeans were hell bent on protecting and consolidating their huge profits. They were super-profitable enterprises. British Guiana was one of the largest cotton, sugar and coffee producers on earth during the 18th and 19th centuries. Hugh Tinker in his brilliant work, “A New System of Slavery: The Export of Indian Labour Overseas 1830-1920” surveys a system that used similar modalities of coercion and brutality as was used on the slave plantations. Like they had done to African women, British administrators brutally raped thousands of Indian women and the colonial police shot and killed hundreds of Indian men who were participating in protests against low wages and poor working and living conditions. Like the Africans before them, the Indians experienced state orchestrated linguistic and cultural genocide. Languages such as Hindi, Urdu and Bhojpuri were eliminated and there was aggressive British orchestrated proselytization against Indian Muslims and Hindus. Unlike Suriname, the majority of Indian Guyanese don’t speak an Indian language. In British Guiana, one of the requirements for entry into the civil service was the use of an anglicized name. Hence today in Guyana, many Indians have names such as David Singh, Richard Persaud, Judy Kallicharran etc. As an African Guyanese, i can assert with great confidence that the colonial enterprise was sexist, racist, patriarchal, barbaric, exploitative, oppressive, violent to its core, a destroyer of cultures and religions, misogynistic and genocidal in its aggressive pursuit of superprofits. Why did the Dutch and British used such extreme violence to put down slave rebellions in their “unprofitable” colonies in Berbice and Essequibo in Guyana? Why did the Dutch use the indigenous people of Guyana to track down and apprehend and if this wasn’t possible, to kill enslaved Africans who had escaped their sadistic brutality?
    In a world where it’s possible to access an abundance of information by tapping on a few keys on a computer there is thus no excuse for the cavalier show of woeful ineptitude and wretched mediocrity that has become so prevalent in the narratives on slavery and colonialism.
    Some who want to depict colonialism and slavery as benevolent and benign enterprises should visit the archives of Guyana, UK, and the Hague in the Netherlands and read of the extreme measures that the Dutch and the British had taken to protect their ‘unprofitable’ slave and colonial enterprises in Guyana that were teeming with gold, diamonds, bauxite, manganese, oil, sugar, rice, cotton and coffee cultivation.

  2. Posted 07/05/2024 at 19:06 | Permalink

    “My question is quite simple: If chattel slavery and the the colonial enterprise were so ‘unprofitable’ then why sustain them for hundreds of years?”

    If you had read Dr Niemietz’s book, you would not have had to ask this question. The profits of colonialism and slavery went to a small number of politically influential merchants and plantation owners, whose political clout ensured that tax revenues were used to support their activities through military and naval power. These tax revenues were a cost imposed on the bulk of the British population, who were worse off as a result.

  3. Posted 08/05/2024 at 10:19 | Permalink

    In light of the publication of the book in question, the Caribbean Reparations Commission must intensify its campaign for reparatory justice for the 90 million Africans who were removed from the African continent during the brutal European Slave Trade and those who were brutally victimized during the notorious New World Plantation Chattel Slavery for the benefit of the capitalist and imperialist project. The 90 million figure takes into consideration the millions of Africans who died during the slave raids in West and Central Africa; the millions who died during the middle passage and the millions who died as soon as they arrived in the Americas to toil under the lash for Europe and the USA to become the mega rich places they are today. The immense wealth from chattel slavery created the USA and Europe, especially Belgium, France, Germany, Sweden, Denmark, Norway, Portugal, Spain, the UK and the Netherlands. Without the unfree labour of Africans, there would be no Europe and there would be no USA. Both would be back waters today.

    Concerning Kemi Badenoch, Kemi shares an alternate interpretation of African history and that should be respected and Kemi should not be ridiculed for that. What Kemi has achieved in the face of aggressive patriarchal hegemony needs to be applauded. Though i disagree with everything she has propounded in this debate on Britain’s colonial legacy, i will always celebrate her brilliance and inspiration as a fighter. God bless her.

    The people who should be viciously ridiculed are the so-called historians of Africa who present as knowing more about Africa than Africans themselves. Some years ago, a person by the name of Zareer Masani gave a rambling address at the Oxford Union. A great counterpoint to what he had said was made by Shasti Karoor, whose book the “Inglorious Empire” a brilliant survey of 200 years of British tyranny in India must be read by all of those interested in gaining an accurate understanding of the Indian dimension of the British Empire in all its nakedness.

    Then there is Rachel Feinstein’s book “When Rape was legal” it’s the untold history of sexual violence during chattel slavery in the USA. Then African women were routinely raped in the hundreds of thousands by white plantation owners. Capitalism, imperialism, colonialism and neo-colonialism are the most evil systems known to man.

  4. Posted 08/05/2024 at 12:29 | Permalink

    Mr Collins may be correct, but completely misses the point. Slavery was indeed brutal, and colonialism quite possibly exploitative and oppressive, but this debate is about their significance to the UK economy. Kristian makes a strong case that they did not make a major contribution to Britain’s economic growth, and may even have been a net cost to the country. Most British people, many of whom had harsh and brutal working lives themselves, did not personally gain significantly from imperialism. And as the book shows, there was much strong and principled domestic opposition to slavery and colonialism.

  5. Posted 09/05/2024 at 15:28 | Permalink

    Mr Shackleton, Permit me to address your blog in this way: When ExxonMobil discovered oil in Guyana in 2015, they and the then Guyana Government crafted a Production Sharing Agreement which was and is still most favourable to ExxonMobil. Guyana gets 2% royalty, when the standard index for royalty globally is between 12.5% and 25% . There is a 50% profit sharing after cost recovery, amounting to tens of billions of US dollars, taken by ExxonMobil to its US headquarters in Houston in Texas. There is much more to the ‘sweet deal’ that the then Guyana Government quite naively had given ExxonMobil. The current Guyana Government has been insisting on its compliance with the principle of Pacta Sunt Servanda, while 40% of Guyanese are living below the poverty level; there are daily electricity outages; food prices are among the highest in the world and Guyana has one of the highest rates of emigration on planet earth. Weren’t it for mass legal migration the USA, thousands of Guyanese would starve. The winners in Guyana’s oil bonanza of 11 billion equivalent barrels with a population of just 800,000 are ExxonMobil and other predatory capitalists in the gold, bauxite, diamond and timber industries. All of them are foreigners from the USA, Canada, UK, Australia and elsewhere. ExxonMobil has tens of thousands of shareholders dispersed throughout the USA. They invest heavily in the USA from the huge profits made abroad and all Americans benefit from this, whether directly or indirectly. Where do you think the managers of the hedge funds got their billions? And who mostly benefit from such money? It’s surely not the people from the so-called “Third World” When the Slave Compensation Act of 1837 was ratified, ex- plantation owners were paid a whopping 20 million pounds, today’s equivalent of 2.4 billion today, but nothing was paid to the enslaved Africans who created the wealth. Within which political economy did the former plantation owners spend their money? Why were the enslaved Africans treated so differently? I will leave this question for G Bannas and other sympathisers of the monstrous and barbarous systems of capitalism, slavery, imperialism, colonialism and neo-colonialism to answer.
    When the British dimension of the European Slave Trade and New World Plantation Chattel Slavery were at the height of their odious brutality, the implements of sadomasochistic torture, such as the iron used to brand enslaved Africans, the shackles, manacles etc were made in Birmingham, Manchester and Leeds and these cities grew extremely wealthy as a consequence. Those former cotton mills in the Northern Quarter in Ancoats, Manchester, and others throughout Lancashire, couldn’t function unless they were provided with cotton grown by enslaved Africans in the USA and the Caribbean. I often smile wryly whenever i read the street names of Ancoats. Paul Mantoux puts it this way: The growth of Lancashire, of all the English counties, the one most deserving to be called the cradle of the factory system, depended first of all on the development of Liverpool and her trade”

    “Most British people, many of whom had harsh and brutal working lives themselves, did not personally gain significantly from imperialism” This may be partially true, especially for some people from Northern England, but they still gained significant benefits as a by product of the benefits essentially tailored for the middle and upper classes of Southern England. The class system persisted in the most vicious manner during slavery and colonialism. Then, as is now, many from the landed gentry and upper classes excluded members of the working class from their Magic Circle. Even then, they had quite ingenuous ways of hiding their wealth. Today, their descendants hide theirs in offshore accounts in the Caribbean.

    “Kristian makes a strong case that they did not make a major contribution to Britain’s economic growth, and may even have been a net cost to the country”

    Capitalists are among the most wily, deceitful, shifty, tricky and manipulative individuals in the world. Recently it has been alleged that a Canadian gold company in Guyana signed a one million US dollars deal with the Guyana Government and within a mere three days of signing the deal, the Chief Executive of the company sold a tiny part of his stake in the company for an astonishing US$600 MILLION. Wow!

    Huge profits from New World Plantation Slavery built the UK and other European countries. If there are people who feel that slavery wasn’t impactful in terms of economic growth of the UK, they should study how capitalists operate. Many venture capitalists don’t want to pay taxes because they don’t want their taxes to fund welfare services for the working class hence they have devised nefarious schemes to avoid paying taxes. The concern of the Caribbean Reparation Commission is about the damage done to peoples of African descent and to parts of the world impacted by slavery and colonialism. Kristian can launch an investigation into where the slave traders, plantation owners and colonists took their dirty money. He may find hundreds of trillions worth of slavery assets hidden right here in this country

  6. Posted 10/05/2024 at 10:23 | Permalink

    I view capitalism as the most grotesque, evil, monstrous, demonic and ghoulish social pathology there has ever been in human history. Capitalism, given its notorious history of brutality and barbarism, can be never be redeemed. Walter Rodney argues that capitalism is the mother of modern racism: ” The capitalist system in a particular phase of its accumulation, in which it was required to subordinate non white people in a particular way, was responsible for both aspects of modern racism, namely, the involvement of race as a category in determining how people had access to the means of production; the involvement of race in the actual production relations and secondly, inevitably, the dissemination of racist ideas as a necessary part of the ideological superstructure to maintain that type of exploitation. (Walter Rodney)
    It was not until i started writing these blogs that i realized how much anguish i had been suppressing over many years of contemplation about the sheer barbarity of New World Plantation Chattel Slavery and the European Slave Trade from Africa to the Americas. Writing these blogs is a catharsis. I am deeply appreciative of the IEA for publishing them.
    Walter Rodney, the African Guyanese Marxist historian, takes a view on abolition that unsurprisingly, is not shared by mainstream European historians of Africa: “It is often stated or implied that the abolitionists mobilized humanitarian feelings to triumph over more mundane considerations such as profits to be made from the slave trade. The ‘economic interpretation’ of the same phenomenon suggests that changes in productivity, technology and patterns of exchange in Europe and the Americas made it necessary for the British to end their participation in the trade in 1807. It is not enough to conclude lamely that the truth lies somewhere between these two approaches. One has to identify priorities, and profit had top priority within the capitalist commerce which linked the three continents. A decline in the profitability of the triangular trades made it possible for certain basis human sentiments to be asserted at the decision-making level in a number of European countries- Britain being the most crucial because it was the greatest carrier of African captives across the Atlantic”
    “The humanitarian concern of some individuals was rebuffed by economic considerations, until England found that the pattern of its own Atlantic trade was altering in the second half of the eighteenth century in such a way as to make it dispensable” Walter Rodney, “Africa in Europe and the Americas” Cambridge History of Africa, Volume 4, Cambridge University Press. 1975.

    There has been a massive pushback in the UK against the reparation campaign and this includes Richard Madeley’s demonstration of exasperation when he interviewed Irfaan Ali, President of Guyana. Regular critics of the campaign appear on GB News to minimize and trivialize the deleterious consequences of New World Planation Slavery. “Many have posited the following: “It happened a long time ago and you guys should move on” But are we really allowed to move on in the world where the scourge of anti-black racism, which has its origins in chattel slavery, lurks in every weft and waft of quotidian life? Modern anti-black racism has its ontogenesis in the Barbadian Slave Code of 1661. Edward Long in his notorious book, “History of Jamaica”, presents Africans as “physiologically and genetically inferior” Every time a person of African descent experiences racism, the perpetrator takes them on a psychic journey of 400 years to the slave plantations of the Americas . It means that racists don’t forget, but of course, descendants of enslaved Africans ‘must always forget and move on’

  7. Posted 12/05/2024 at 20:17 | Permalink

    @JosephBCollins : I think that what you are trying to establish is that being a slave,or wage-slave, or serf, or indentured serf was a pretty schit experience. You’ve gone off-piste in other words.
    I think that what Dr Niemietz has established is that there were reasons why the UK was the world’s number one big economy on income/head until the 1890s or thereabouts, when overtaken by the USA in Quincy Watts ’93 mode. Those reasons were not majorly due to slavery or colonialism itself, but to peace, easy taxes, and a relaxed policy on investment, planning, and taking advantage of new technologies.

  8. Posted 12/05/2024 at 23:01 | Permalink

    It’s worth recalling that the Conservative Party has not always been so ignorant about the importance of West Indian slavery for the development of British capitalism. On 20 July 1937, at a banquet at the Dorchester Hotel, Winston Churchill recalled that “Our possession of the West Indies gave us the strength, the support, but especially the capital, the wealth, at a time when no other European nation possessed such a reserve.” This “lay the foundations of that commercial and financial leadership which enabled us to make our great position in the world”. Churchill was very precise: he called it “that unexpected margin of capital”.

  9. Posted 15/05/2024 at 11:12 | Permalink

    TO D’VARIOUS SCHLONG,

    I recommend the following books by Walter Rodney so that you can gain a great understanding of how Europe became so developed and Africa underdeveloped:

    1. How Europe Underdeveloped Africa

    2. A History of the Guyanese Working People, 1881-1905

    3. A History of the Upper Guinea Coast, 1545-1800

    The resurgence of aggressive, racist, one-dimensional and reconstructivist literature, minimising the positive impact of the ultra iniquitous and barbaric systems of slavery and colonialism in making the UK and Europe fabulously rich, is a concerted vicious attack on the Caribbean Reparations Commission. Nevertheless, we will prevail.

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