|Author(s):||Magee, Gary B.|
Thompson, Andrew S.
Published by EH.NET (August 2010)
Gary B. Magee and Andrew S. Thompson, Empire and Globalization: Networks of People, Goods and Capital in the British World, c. 1850?1914. Cambridge: Cambridge University Press, 2010. xx + 291 pp. $32 (paperback), ISBN: 978-0-521-72758-7.
Reviewed for EH.NET by Ranald Michie, Department of History, University of Durham.
There is a recent fashion developing in the writing of economic history. That is to refer to the Global Financial Crisis of 2007/8 and the need to re-examine the operation of impersonal markets. This has created opportunities for those who have long been skeptical of the idea that markets were the product of forces beyond the influence of mankind. Instead, markets are seen as human constructs prone to irrationality and abuse. Applied to the 50+ years before 1914, the first age of globalization, this leads to the recognition that empires were a key feature of that time, with much of the world belonging to one European power or another. These varied between the land masses of Russia and Austria/Hungary to the maritime possessions of Britain, France, Germany, the Netherlands, Portugal and Spain. The existence of these imperial domains meant that the mass movement of people, goods and capital that took place at that time was not simply the random product of global economic integration but a process influenced by culture, politics and individual behavior. In this book the focus is on the creation of the British World, by which is meant that sub-set of the British Empire largely settled by British migrants, namely Australia, Canada, New Zealand and South Africa. Such an approach does create problems as this was not a self-contained unit while the position of an ex-member, the United States of America, is never fully clarified. Nevertheless, this approach does provide the authors, respectively an economic historian and an imperial historian, with a mechanism through which the process of globalization can be examined. Though there are a number of original contributions within this study, reflecting the research conducted by the authors, the material used for this is largely derived from an extensive reading of the work of others, including that of this reviewer.
From this approach the British world emerges as a complex interconnected one involving multiple points of contact and circuits of exchange. Though Britain occupied a place at the center of this world there was no official direction and many of the currents bypassed it. Instead, this was a world unified through a shared identity, a common language, and the security provided by Britain?s military power.? Those who peopled it saw themselves as British even if they were no longer resident in that country or had been born there.? For this reason not all the inhabitants of those countries possessed this shared identity, especially the native races. In many ways this was an unstable world reliant on constant migration to and from Britain in order to reinforce this common identity. Between 1850 and 1914 an estimated 13.4 million emigrated from the British Isles with around 40 percent returning either permanently or temporarily. Though the greatest single stream went to the United States their presence there was swamped by both those long settled and those from a diversity of other countries. In contrast, these British migrants in the settler countries of the Empire were a major presence, while their letters, remittances and visits helped maintain strong links with family remaining in the UK. It is the study of this migration that lies at the heart of this book for its consequences are then traced in terms of consumption habits and the funding of investment.
As so many of those who lived in the settler countries of the Empire were British or of British origin their consumer tastes were easily satisfied by goods imported from Britain. However, this did not make these countries captive markets for British manufacturers. Other manufacturing nations soon seized the opportunity to sell goods in these markets, especially when they were better placed than British producers, as was the case with U.S. and Canada. Of even more importance was the growth of local manufacturing as it was better attuned to the changing needs of the population, as the example of beer shows. The conclusion drawn from this is that British industry did possess initial advantages in selling to these markets because of cultural affinity but only held onto them by remaining competitive in terms of price, product, distribution and marketing.? The rising proportion of British goods sold to these countries represented not a retreat into soft imperial markets by British industry but the ability of these countries to purchase more goods because of rising per capita income.? This section of the book contributes further to the rehabilitation of the once-maligned British manufacturing sector, especially as it reveals the great variety of products that it was supplying to distant markets.
The other consequence of this migration was to generate investment flows from Britain to these countries.? This was not just because of the flow of funds from a country where the returns to savers and investors were low to ones where they were high, because of conditions of supply and demand. What is examined in great detail is the role played by information flows in creating a climate in which British investors were favorably inclined to place their money in these countries. Evidence of a home bias among investors has been long known and the way the settler economies were perceived brought them within that. In addition, the degree of ongoing personal contact between Britain and these settler economies created openings for profitable investment by lowering the risks involved. This is something I explored in an article written thirty years ago and it is flattering to find it developed so expertly today!? The authors also extend this aspect of their study by looking at institutional links. British life insurance companies extended their operations to these countries as they followed their customers abroad and that also made them familiar with locally available investment opportunities.? Though there was a division between British domestic and overseas banking this did not extend to personnel, thus providing important contacts at that level.? What all this provides is a rational explanation for the imperial bias among British investors while being aware that other destinations were also of great importance, such as Argentina and, especially, the U.S.
What empires delivered before 1914 was a force for economic integration that placed flows of people, goods and money into particular channels. This is well argued though it must always be recognized that it did not preclude other flows as, for example, both the U.S. and the independent countries of Latin America were major participants in all these. However, this study goes beyond the economic by stressing the cultural dimensions of the British World. This is significant as Britain fought two world wars in the twentieth century based on this shared cultural identity and, arguably, owed its eventual victory to it as much as to the support of the U.S.? As the migration flows that bound these countries together faded after the 1950s so did this British World. By then, though, this British World was already in decline as the constituent countries forged their own identities, greatly influenced by the policies followed by their own governments.
Ranald Michie, University of Durham, is a specialist on modern financial history. His most recent publications are The Global Securities Market: A History (Oxford University Press, 2006) and Guilty Money: The City of London in Victorian and Edwardian Culture (Pickering and Chatto, 2009)
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|Subject(s):||Economywide Country Studies and Comparative History|
Financial Markets, Financial Institutions, and Monetary History
Historical Demography, including Migration
International and Domestic Trade and Relations
Markets and Institutions
|Geographic Area(s):||General, International, or Comparative|
|Time Period(s):||19th Century|
20th Century: Pre WWII