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Maritime Enterprise and Empire: Sir William Mackinnon and His Business Network, 1823-1893

Author(s):Munro, J. Forbes
Reviewer(s):White, Nicholas J.

Published by EH.NET (October 2003)

J. Forbes Munro, Maritime Enterprise and Empire: Sir William Mackinnon and His Business Network, 1823-1893 . Woodbridge, Suffolk: Boydell & Brewer, 2003. ix + 525 pp. $130 or ?75 (hardback), ISBN: 0-85115-935-4.

Reviewed for EH.NET by Nicholas J. White, Economic and Social History, Liverpool John Moores University, UK.

Despite the occasional typographical error, this book is a joy to read and represents economic history at its best. J. Forbes Munro — emeritus professor of international economic history at the University of Glasgow, UK — provides a detailed, meticulously researched account of the growth and development of the Mackinnon group of inter-connected companies, but that analysis is also placed in its proper political and socio-cultural context. As Munro tells us in the introduction, his study bridges three distinct sub-fields of history — business history, shipping/maritime history and imperial history.

William Mackinnon is most famous for his failures, notably the collapse of the Imperial British East Africa Company (IBEA Co.) in the 1890s. But, Munro’s study demonstrates the global spread of interests which Mackinnon and his associates had built up at the time of William’s death in 1893. Hence, the final demise of the IBEA Co. in 1895 had little impact on the diversified conglomerate as a whole, which as Inchcape survives to this day (albeit in substantially modified form). Indeed, Mackinnon’s “family-based enterprise network” had probably become the largest British overseas “investment group” by the 1880s. Distinguishing Mackinnon from other trading companies, this tremendous growth had been based on diversification out of the Indian import-export trade via the Clyde and the Mersey into Asian coastal shipping from the 1850s onwards. The real big break for William came in 1862 when an agreement was concluded permitting the Mackinnon firms to run a series of inter-connecting steamship services around India and its satellites (from Singapore to the Persian Gulf). Hence was born the British India Steam Navigation Co., heavily reliant on state subsidies and patronage for the carrying of mail and troops. The British India system was subsequently extended to the Netherlands East Indies after 1866 in the Nederlandsch Indische Stoomvart Maatschappij. This latter move was intended as a stepping-stone to opening up an India-Australia route, finally realized in 1881 through a mail and emigration contract with the government of Queensland and a take-over of coastal steamship services five-years later to form the Australian Steam Navigation Co. In the meantime, the group had also developed long-haul services from London to Calcutta, and from the imperial metropole to the Gulf and Zanzibar as well, while affiliated firms had also made direct investments in Indian jute spinning and tea gardens. Moreover, the longer-term view of the Mackinnon network presented by Munro allows the IBEA Co. fiasco after 1888 to appear slightly less madcap and jingoistic than is usually assumed. Here was an opportunity “to put into practice ideas about the development of trade along the Arab-Swahili coast which [Mackinnon] had harboured since the mid-to-late 1870s” (p. 410), and with the ultimate aim of linking up the group’s interests in the Middle East with economically expanding South Africa.

But, by the era of the “new imperialism,” the author demonstrates how the Mackinnon interests were facing threats on a global scale: despite assiduously courting King Leopold, Belgian neo-mercantilism came to prevail in the Congo, and similar nationalistic considerations led to the termination of contracts with the Dutch in Indonesia. In the 1890s, worldwide economic downturn and competition — both foreign and British — affected business in Australia and India. There was also a change of attitude on the part of the state regarding the merits of utilizing private enterprises as “agents of empire.” At the Raj’s “high-noon” an “arms-length relationship between government and business . . . became the accepted norm” (p. 315). The scramble for Africa might have been expected to help Mackinnon, but Anglo-German geo-political considerations awarded the most prosperous “sphere of influence” along the Arab-Swahili coast to Berlin. In London, meanwhile, the Treasury increasingly balked at the costs of subsidies for transport development in the empire, while Lord Rosebery — Foreign Secretary from 1892 to 1894 — viewed East Africa in strategic terms vis-?-vis Egypt and the Suez Canal. Rosebery also developed a deep disdain for Mackinnon’s profiteering. Uganda was now considered too important to be left to a buccaneering entrepreneur alone.

Indeed, this last example points to the limits of Cain and Hopkins’s notion of “gentlemanly capitalism” in explaining the Mackinnon experience. As Munro emphasizes, the Rosebery-Mackinnon entanglement illustrates that the “gentlemen” certainly were “in command” of the late-nineteenth century empire, but “their relationship to ‘capitalism’ was much less uncertain” (p. 510). Mackinnon relied on close links to Sir Bartle Frere in his Indian expansion in the 1850s and 1860s, as well as his early dabbles in East Africa in the 1870s, and he became concerned also to ingratiate himself with “aristocratic capitalists” such as the Duke of Sutherland. But this Scot of humble origins ran his businesses on a clan basis, and agencies and partnerships were actively sought out with expatriate Scots in India, the Gulf, Indonesia and Australia. Hence, the world’s largest and most diversified cluster of steamship companies was built up “without recourse to the London Stock Exchange or to equity investment by City financial institutions” (p. 490). Once William was a wealthy man, moreover, he purchased a country estate in 1869 in his native Kintyre and spent as little time in London as possible. Another hardy perennial of imperial economic history, which must be significantly modified by this work, is the concept of “informal empire.” In contrast to India, the poor showing of Mackinnon’s interests in Iran and Iraq derived from a lack of internal communications to stimulate the export trade from the Gulf ports, while Persian and Ottoman regimes strongly resisted further European encroachment. Poor inland transport networks proved another factor which disrupted the IBEA Co.’s plans in pre-colonial Kenya and Uganda. The Mackinnon experience illustrates therefore that coastal shipping was a key ingredient in the building of colonial economies, and the luring of the Afro-Asian periphery into the global economic order. But that particular form of economic imperialism followed the flag rather than the other way round, while the links between the colonial state and expatriate business were often fragile and fleeting.

As well as the author, the publishers are also to be commended in allowing a liberal selection of maps and illustrations as well as footnotes at the bottom of each page. Unfortunately, however, the cover price will restrict the circulation of this excellent book to a small number of academic libraries.

Nicholas J. White is Senior Lecturer in Economic and Social History, Liverpool John Moores University, UK. He is the author of Business, Government, and the End of Empire: Malaya, 1942-57 (Oxford University Press, 1996) and British Business in Post-Colonial Malaysia, 1957-70 (RoutledgeCurzon, forthcoming). He is currently engaged in a research project entitled “Imperial City: Liverpool and the British Empire, c. 1700-1970.”

Subject(s):Transport and Distribution, Energy, and Other Services
Geographic Area(s):Middle East
Time Period(s):19th Century