Outsourcing Unrest

The 300-Year Colonial Adventure is Over at Last, Which is Why Britain is in Political Crisis

Why now? It’s not as if this is the first time our representatives have been caught out. The history of governments in all countries is the history of scandal, as those who rise to the top are generally the most ambitious, ruthless and unscrupulous people politics can produce. Pushing their own interests to the limit, they teeter perennially on the brink of disgrace, except when they fly clean over the edge. So why does the current ballyhoo threaten to destroy not only the government but also our antediluvian political system?

The past 15 years have produced the cash-for-questions racket, the Hinduja and Ecclestone affairs, the lies and fabrications which led to the invasion of Iraq, the forced abandonment of the BAE corruption probe, the cash-for-honors caper and the cash-for-amendments scandal. By comparison to the outright subversion of the functions of government in some of these cases, the expenses scandal is small beer. Any one of them should have prompted the sweeping political reforms we are now debating. But they didn’t.

The expenses scandal, by contrast, could kill the Labour party. It might also force politicians of all parties to address our unjust voting system, the unelected House of Lords, the excessive power of the executive, the legalized blackmail used by the whips and a score of further anachronisms and injustices. Why is it different?

I believe that the current political crisis has little to do with the expenses scandal, still less to do with Gordon Brown’s leadership. It arises because our economic system can no longer extract wealth from other nations. For the past 300 years, the revolutions and reforms experienced by almost all other developed countries have been averted in Britain by foreign remittances.

The social unrest which might have transformed our politics was instead outsourced to our colonies and unwilling trading partners. The rebellions in Ireland, India, China, the Caribbean, Egypt, South Africa, Malaya, Kenya, Iran and other places we subjugated were the price of political peace in Britain. Following decolonization, our plunder of other nations was sustained by the banks. Now, for the first time in three centuries, they can no longer deliver, and we must at last confront our problems.

There will probably never be a full account of the robbery this country organized, but there are a few snapshots. In his book Capitalism and Colonial Production, Hamza Alavi estimates that the resource flow from India to Britain between 1793 and 1803 was in the order of £2m a year, the equivalent of many billions today. The economic drain from India, he notes, “has not only been a major factor in India’s impoverishment . . . it has also been a very significant factor in the Industrial Revolution in Britain.”(1) As Ralph Davis observes in The Industrial Revolution and British Overseas Trade, from the 1760s onwards India’s wealth “bought the national debt back from the Dutch and others . . . leaving Britain nearly free from overseas indebtedness when it came to face the great French wars from 1793.”

In France, by contrast, as Eric Hobsbawn notes in The Age of Revolution, “the financial troubles of the monarchy brought matters to a head.” In 1788, half of France’s national expenditure was used to service its debt: “the American War and its debt broke the back of the monarchy.”

Even as the French were overthrowing the ancien regime, Britain’s landed classes were able to strengthen their economic power, seizing common property from the country’s poor by means of enclosure. Partly as a result of remittances from India and the Caribbean, the economy was booming and the state had the funds to ride out political crises. Later, after smashing India’s own industrial capacity, Britain forced that country to become a major export market for our manufactured goods, sustaining industrial employment here (and avoiding social unrest) long after our products and processes became uncompetitive.

Colonial plunder permitted the British state to balance its resource deficits as well. For some 200 years a river of food flowed into this country from places like Ireland, India and the Caribbean. In The Blood Never Dried, John Newsinger reveals that in 1748 Jamaica alone sent 17,400 tons of sugar to Britain; by 1815 this had risen to 73,800 tons. It was all produced by stolen labour.

Just as grain was sucked out of Ireland at the height of its great famine, so Britain continued to drain India of food during its catastrophic hungers. In Late Victorian Holocausts, Mike Davis shows that Indian wheat exports to the UK doubled between 1876 and 1877 as subsistence there collapsed. Several million Indians died of starvation. In the North Western provinces the famine was wholly engineered by British policy, as their surplus production was exported to offset poor English harvests in 1876 and 1877.

Britain, in other words, outsourced famine as well as social unrest. There was terrible poverty in this country in the second half of the 19th Century, but not mass starvation. The bad harvest of 1788 helped precipitate the French Revolution, but the British state avoided such hazards. Others died on our behalf.

In the late 19th Century, Davis shows, Britain’s vast deficits with the United States, Germany and its white Dominions were balanced by huge annual surpluses with India and (as a result of the opium trade) China. For a generation “the starving Indian and Chinese peasantries . . . braced the entire system of international settlements, allowing England’s continued financial supremacy to temporarily co-exist with its relative industrial decline.”Britain’s trade surpluses with India allowed the City to become the world’s financial capital.

Its role in British colonization was not a passive one. The bankruptcy and subsequent British takeover of Egypt in 1882 was hastened by a loan from Rothschild’s bank whose execution, Newsinger records, amounted to “fraud on a massive scale.” Jardine Matheson, once the biggest narco-trafficking outfit in world history (it dominated the Chinese opium trade), later formed a major investment bank, Jardine Fleming. It was taken over by JP Morgan Chase in 2000.

We lost our colonies, but the plunder has continued by other means. As Joseph Stiglitz shows in Globalization and its Discontents, the capital liberalization forced on Asian economies by the IMF permitted northern traders to loot hundreds of billions of dollars, precipitating the Asian financial crisis of 1997-98. Poorer nations have also been strong-armed into a series of amazingly one-sided treaties and commitments, such as Trade Related Investment Measures, bilateral investment agreements and the EU’s Economic Partnership Agreements. If you have ever wondered how a small, densely-populated country which produces very little supports itself, I would urge you to study these asymmetric arrangements.

But now, as John Lanchester demonstrates in his fascinating essay in the London Review of Books, the City could be fatally wounded. The nation which relied on financial services may take generations to recover from their collapse. The great British adventure — three centuries spent pillaging the labor, wealth and resources of other countries — is over. We cannot accept this, and seek gleeful revenge on a government which can no longer insulate us from reality.

George Monbiot is the author of the best selling books, The Age of Consent: A Manifesto for a New World Order and Captive State: the Corporate Takeover of Britain; as well as the investigative travel books Poisoned Arrows, Amazon Watershed and No Man’s Land. He writes a weekly column for the Guardian newspaper (UK). Read other articles by George, or visit George's website.

6 comments on this article so far ...

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  1. Michael Kenny said on June 27th, 2009 at 12:16pm #

    Why now? Essentially, because the US, to which the British have hitched their post-colonial wagon since the mid 1960s, is collapsing! The European empires destroyed themselves in WWI, although nobody noticed it at the time. For Britain, the first big crack in the empire was India in 1947 But Ghana in 1957 was the big shock. Black Africans were perceived as primitive and uncivilised and the idea that they could govern themselves boggled everybody’s mind. From then on, highlighted by the generalisation of TV, the British saw s long string of ceremonies at which various royals stood to attention as the Union Flag was hauled down, funny-looking flags were hauled up in its place and funny-looking black, brown and yellow men stepped forward to salute them. By the mid-60s, the British new that they were no longer the world bully, so they made themselves the best boys of the new world bully, the “special relationship”. With the US on the skids, the Brits are starting to realise that they are just Europeans like the rest of us and made the same long list of stupid (and deadly!) mistakes in the 20th century that we all did. What we’re seeing is another step in the “re-Europeanisation” of Britain.

  2. KL5 said on June 27th, 2009 at 1:50pm #

    Michael Kenny, “the Brits are starting to realise that they are just Europeans like the rest of us and made the same long list of stupid (and deadly!) mistakes in the 20th century that we all did.”
    many demarcation lines on the world map are british achievements. do you think that the brits would ever apologize to the primitive and uncivilsed for their royal demarcations?

  3. KL5 said on June 29th, 2009 at 2:24pm #

    Michael Kenny, you brag and grumble here freely, but when you ‘re asked or challenged, you don ‘t brag at all. i suggest, you shut up and disappear from dv. have a nice whisky!

  4. Melissa said on June 29th, 2009 at 2:31pm #

    How lofty and unifying. Not.

  5. Sudhir Srinivasan said on June 30th, 2009 at 3:07am #

    Brilliant facts. Every Indian needs to know the reality. Every Indian
    as to make sure that it is never repeated again. Indians have to
    realise life is a cycle as said in Gita and it is our time to rule.

  6. Accurateafrica said on July 8th, 2009 at 6:16am #

    Great post! Outsourcing wouldn’t hurt a country. On the contrary it would help create more better paying jobs. That is what policy makers have failed to understand.