Historians seldom consider the metanarratives within which academic articles, monographs, models and analyses must eventually become embedded, if they are to inform public debate in modern societies.footnote Yet, however micro the problems they tackle, their findings can always be situated within some ‘greater story’.footnote1 Since the Second World War, the central preoccupation of our national politics has been with the search for a post-imperial identity. After prolonged discussion, and at the very end of the twentieth century, the British seem to be on their way to recovering a cultural consciousness and reconstructing an economic system reconnected to active participation in intra-European trade, capital movements and labour markets.footnote2 To address the large problem concerned with the benefits and the costs that flowed from the realms, a move away from Europe into more than three centuries of engagement with Empire, seems opportune. Furthermore, the theme resonates beyond European into global history because a majority of intellectuals from Asia, Africa and Southern America continue to claim that the relative backwardness of their economies compared to the West can—to some degree—be imputed to the malign effects of imperialism. They suggest that economic relations with Britain—and with other European powers—operated to retard the development of their countries but, at the same time, promoted the progress of Europe’s imperial and neo-imperial economies.footnote3

Alas, my article will be ‘repressively occidental’, and ‘Anglocentric’ since it proposes to deal only with the long-term rise and relative decline of the British economy. In any case, for Europeans, it is not obvious that macro-economic ‘losses’ suffered by the colonized from conquest and incorporation into empires led to commensurate material gains for the colonizers.footnote4 My aim is to construct a coherent, and convincing, metanarrative about the connections between imperialism and the long-term growth of the British economy. Historians do not write fiction, but they deploy methods and devices that provide them with advantages that are comparable to those enjoyed by novelists. For example, they ‘impose order’ on a plethora of otherwise disconnected sources, data and libraries of secondary literature. They exercise control over periodization by determining the beginning, the middle and end—as well as the outcomes—of their narratives in order to avoid the complexity and endless variation in detail across space and over time.footnote5 Thus, statistical averages and index numbers will appear as rhetorically persuasive evidence at various places in this text. I also opt to periodize my argument explicitly in two sections and implicitly in a narrative covering four stages of British imperialism. The first, from 1688 to 1846, will be associated with the First Industrial Revolution. The second, from 1846 to 1914, is that short period when Britain, as the world’s hegemonic naval power, operated as guardian of the liberal international economic order and when the national economy achieved marked superiority over its European rivals. This ‘golden age’ was succeeded, from 1918 to 1948, by decades of neo-mercantilism, of armed struggle to maintain the balance of power in Europe, and intensified competition on world markets for shares of international trade that hardly changed in volume between 1913 and 1945. In our own times, the reluctant rediscovery of Europe occurred when Britain decolonized, submitted to American hegemony and suffered from relative economic decline upon almost all international indicators of income, wealth, productivity and comparative welfare.

Any serious analysis of discernible decline is inseparable from an appreciation of the major forces which promoted the rise of the national economy, simply because legacies of past success usually constrain possibilities for adjustment to changes in technology and opportunities for profit emerging in a rapidly evolving world economy. Where to begin the narrative is, however, a problem. British imperialism did not commence with the Glorious Revolution. Its origins can be traced to thrusts across the sea to Ireland as long ago as the High Middle Ages. Its antecedents included more than two centuries of ‘piracy’ against the Portuguese and Spanish empires followed by three wars in the seventeenth century fought to ‘degrade’ Dutch primacy in the international economy.footnote6

Yet 1688 represents a discontinuity in British geopolitical history, and not merely the date of the replacement of the Stuart dynasty by Dutch and Hanoverian monarchies. Britain’s Glorious Revolution led the state into playing a more aggressive role in great-power politics, which began with a very costly and successful effort to contain the ambitions of Louis xiv in Europe from 1689 to 1713.footnote7 That conflict led to a permanent commitment to maintain a balance of power on the Continent, basically through the use of sea power but also by placing troops on the mainland—as and when that became necessary—for example, in the 1690s, the early 1700s and, again, during the conflict with Napoleon 1808–14. The Glorious Revolution also presaged the outbreak of a second ‘Hundred Years’ War’ with France and her allies—particularly Spain—for the spoils of empire and the profits of global commerce. Engagement in six major and three minor wars occurred between 1689 and 1815 when the armed forces of the crown fought the navies and armies of the kingdom’s enemies on every continent—Europe, of course, but also in the Americas (North and South) as well as in Asia and Africa.footnote8

Eventually, the systematic deployment of power transformed a small realm off the mainland of Europe into the world’s hegemonic commercial and imperial nation, but that required a sustained rise in the income and expenditure of the state. Taxes and loans (which, in real terms, had risen at an almost imperceptible rate since the beginning of the Tudor dynasty in 1485) went up by a series of jumps from plateau to plateau in wartime—to reach a peak at the time of Waterloo. For example, in real terms, taxes multiplied some fifteen times between 1688 and 1815—when their share of national income amounted to 18 per cent, compared to around 3 per cent during the reign of James ii. At the same time, the royal or national debt rose from a tiny fraction to nearly three times the gross national product (gnp) for 1819. Servicing the debt absorbed only 12 per cent of the state’s revenues in the 1680s. Immediately after the defeat of Napoleon, the government transferred nearly 60 per cent of taxes as interest and amortization payments to its creditors.footnote9