New Imperialism

New Imperialism is the expansionist foreign economic policy seen amongst the more powerful of the European nation-states, between the Franco-Prussian War and World War I, during the late-Victorian Era, also known as, "The Era of Empire for Empire's Sake". During this period, Europe added almost 23,000,000 km² (20% of Earth's land area) to its collection of overseas colonial possessions, with the focus of this period being the colonization of Africa.

Scholars debate the causes and ramifications of this period of colonialism, most notably, the relationship this period might have to the First World War.

Readers should also become familiar with the earlier eras of European imperialism. (See: mercantilism, free trade colonialism)

Pax Britannica

In those years, betwixt the Congress of Vienna and the Franco-Prussian War, Britain became known as, "the workshop of the world", being the world's most advanced industrial nation. Following the defeat of Napoleon, British goods were produced so cheaply that they could often undersell, locally manufactured, goods in almost any other market. At this time, Britian was supplying half the manufactured goods of such nations as Germany, France, Belgium, and the United States.

The decline of Pax Britannica, was made possible by changes economics and the balance of power, such as the breakdown of the Concert of Europe and the establishment of nation-states in Germany and Italy. As France, Germany, and the United States, increasingly became industrial powers, Britain's comparative advantages began to decline.

See also: Pax Britannica

Loss of Britain's Comparative Advantage

German textiles and metal industries had, by the beginning of the Franco-Prussian War, surpassed those of Britain and usurped British manufactures within their own domestic market. Meanwhile, Britain was growing incapable of dominating its more traditionally assured markets, such as India, and was witnessing market depletion in the industrializing regions of central Europe, Latin America, and China. Britain had lost, and would continue to lose, much of its comparative advantage. Britain’s share of world trade fell from 25%, in 1880, to 16% in 1913, to 12% by 1948.

The Long Depression

These problems coincided with the ‘Long Depression’ of 1873-1896, which had followed fifteen years of economic instability. Business, after 1873, suffered from lengthy periods of falling profits. During this period, production often exceeded domestic demand. The capitalists, being powerful political forces, urged the nation towards securing new markets in Africa.

Technology and Innovation

New techonologies also played an important role during this era. The development of steam ships greatly decreased transportation costs and made previously unviable markets, in Africa, of great economic interest. New techniques, especially that of mass production, reduced production costs, further increasing the potentials for profit.

The African Power Vacuum

The continent of Africa was also largely unclaimed by nation-states of significant military power. Most of this region consisted of territories claimed by the ‘dying nations’ (i), (Spain, Portugal, the Netherlands, and the Ottoman Empire), none of which were significant powers by the begining of the twentieth century. As a result, the major European powers felt that the entire continent was open to colonization. This led to what is known as, "the scramble for Africa".

Increasing Competition

Germany, Italy, and France were no longer as embroiled in continental concerns and domestic disputes, as they were prior to the Franco-Prussian War.

Continental political developments of the late 19th century, rendered imperial competition feasible, in spite of Britain’s centuries of naval superiority. As unification of Germany, by the Prussian "Garrison State", proceeded, the Germans began to compete against the British, for control of foreign markets, notably in southern Africa. The rise of Napoleon III and the Third Republic also rendered France more capable of challenging Britain’s global preeminence. Likewise, Italy became interested in securing African markets.

British Strategic Expansions

For Britain, the 1869 completion of the Suez Canal, prompted the strengthening of control over Egypt. Battles over the Nile headwaters caused Britain to expand in Sudan, and the close proximity of Russia's expanding empire, to India, triggered wars in Afghanistan. Rhodes and Milner advocated a “Cape to Cairo” empire, which would link, by rail, the Suez Canal to the mineral rich regions of southern Africa. Though hampered by the German conquest of Tanganyika, Rhodes continued to lobby on behalf of a vast British empire, in East Africa.

Social Darwinism

Racism and Social Darwinism were terms sometimes used to describe the so-called "mission of civilization", that is, the practice of spreading republican government and capitalist economics. Human rights issues were much the same during this era as they had been during the conquest of the Americas.

Causes of New Imperialism, the Breakdown of Bax Britannica

Breakdown of the Concert of Europe

Some argue that Britain's push for free trade was merely because of her economic position during the early 19th century, and was unconnected with any true philosophic dedication to free trade. Because Britain was the first nation to undergo the industrial revolution, it was thought by many that Britain had a competitive advantage which made free trade highly profitable.

In the later 19th century new industrial powers, such as France, Germany, and the United States, rose to industrial maturity. Britain's comparative advantage in trade of finished goods began diminishing, and it began to face far stiffer competition in overseas markets. Britain’s share of world trade fell from one-fourth in 1880 to one-sixth in 1913, diminishing to one-eighth in 1948. Britain was no longer supplying half the needs in manufactured goods of such nations as Germany, France, Belgium, and the United States. Britain was even growing incapable of dominating markets such as India, which under mercantilism would have been seen as "captive markets" of the colonial power. The nation had lost much of its comparative advantage in the manufacturing sector.

As a result of these developments, British industries that rose to prominence in the the Industrial Revolution were beginning to experience real competition within Britain itself. The German textiles and metals industries, for example, had by the beginning of the Franco-Prussian War surpassed those of Britain in organization and technical efficiency and displaced British manufactures in the domestic market. This trend continued right through the turn of the century. In midst of Britain’s relative industrial decline, the fact that invisible financial exports actually kept Britain “out of the red” is somewhat indicative of both Britain’s pressure to secure overseas markets in both nominally independent states and colonies and its newly precarious hegemony over overseas markets.

The Long Depression

Amalgamation of industrial cartels in the era of finance capitalism, in the forms of larger corporations and mergers and alliances of separate firms, and technological advancement during the Second Industrial Revolution, particularly the increased utilization of electric power and internal combustion engines fueled by coal and petroleum, were mixed blessings for British business during the late Victorian era. The ensuing development of more intricate and efficient machines along with monopolistic mass-production greatly expanded output and lowered production costs. As a result, production often exceeded domestic demand.

Among the new conditions, more markedly evident in Britain, the forerunner of Europe’s industrial states, were the long-term effects of the severe ‘Long Depression’ of 1873-96, which had followed fifteen years of great economic instability. Business after 1873 in practically every industry suffered from lengthy periods of low—and falling—profit rates and price deflation. Among the new conditions were the short-term effects of the severe economic depression of 1873, which had followed fifteen years of great economic instability. Business after 1873 in practically every industry suffered from lengthy periods of low profit rates and deflation; profits were falling because too much capital were chasing too few markets.

Some powerful industrial lobbies and government leaders in Britain, such as Joseph Chamberlain, concluded that that profits were falling because too many manufactures and too much capital were chasing too few markets. In such overseas markets, whether in colonial areas or in nominally sovereign, pre-industrial states outside Western Europe, with their cheep labor, limited competition, and abundant raw materials, a greater premium was often possible for investments of such surplus capital.

These problems coincided with the long-term effects of the severe ‘Long Depression’ of 1873-1896, which had followed fifteen years of great economic instability. Business after 1873 in practically every industry suffered from lengthy periods of low—and falling—profit rates and price deflation. This greatest problem during this period was that production often exceeded domestic demand. This forced an adoption of new policies. The manufacturers had become very powerful forces in the more democratic Britain, controlling the purse strings of the major parties. The manufacturers were eager for new destinations for exports and pushed for the government to secure captive markets in Africa.

At a time when the contiental powers' abandonment of free trade limited the European market, some business and government leaders, such as King Leopold II of Belgium and Jules Ferry, concluded that sheltered overseas markets would solve the problems of low prices and over-accumulation of surplus capital caused by shrinking continental markets.

Not only did British industrialists have to deal with depression, but increased competition abroad, especially after the rise of newly industrializing states, trading with its traditional markets in continental Europe, China, and Latin America.

Britain's Increased Competition

As mentioned, by the end of the Franco-Prussian War, Britain was no longer the world's sole modern, industrialized nation.

Unfortunately for Britain, as the Long Depression had bred longstanding fears regarding economic decline and the emergent strength of trade unionism and socialism, Europe descended into an era of aggressive national rivalry with newly industrializing nation-states that were merely securing colonies before they strictly professed to needing them. German imperialists, for instance, argued that Britain’s world power position gave the British unfair advantages on international markets, thus limiting Germany’s economic growth and threatening its security.

Many European statesmen and industrialists wanted to accelerate the rise of formal colonialism, securing colonies before they strictly needed them. Their reasoning was that markets might soon become glutted, and a nation’s economic survival depend on its being able to offload its surplus products elsewhere. British reactionaries, such as Joseph Chamberlain, hence concluded that formal that formal imperialism was necessary for Britain because of the relative decline of the British share of the world’s export trade and the rise of German, American, and French economic competition. Continental political developments in the late nineteenth century also rendered such an imperial competition feasible.

The Amalgamation of industry

Pro-imperialist industrialists, however, like the ex-liberal Joseph Chamberlain, never represented a majority in Britain’s Parliament, not even in Commons. Joseph Chamberlain, thus, to no avail, in staunchly free-trade Great Britain argued on behalf of a grand imperial Zollverein, or customs union. This campaign failed in the 1890s and for another forty years afterwards until the premiership of his infamous son, Neville. But the fact that imperial jingoism and formal empire caught on given the limited political influence of bourgeois industrialists like Chamberlain indicates the role of surplus capital accumulated by finance in encouraging New Imperialism in a highly industrialized country like Britain.

Long-term economic trends led Britain, and to a lesser extent other industrializing nations following a similar course of development, such as the United States and Germany, to be more receptive to the desires of prospective overseas investment. This is the case even in Britain with an industrial sector arguably declining due to the rise of finance.

Amalgamation of industry and banks, through their connection with industry, enabled finance to exert a great deal of control over the British economy and politics. During the period of “cut-throat” competition of the mid-Victorian era, produces became aware of the advantages of consolidation, in the forms of larger corporations, but also of mergers and alliances of separate firms, such as mass-production, lobbying power, and efficient union busting. To create and operate such industrial cartels required larger sums than the manufacturer could ordinarily provide, resulting in a new capitalist stage of development.

Just as industrial capitalism had replaced mercantilism and commercial capitalism in the eighteenth century, finance capitalism supplanted industrial capitalism in the late nineteenth century.

By the 1870s, London financial houses thus achieved an unprecedented control of industry, contributing to an increasing concerns among elite policymakers regarding British ‘protection’ of overseas investments—particularly those in the securities of foreign governments and in foreign-government-backed development activities such as railroads. Although it had been official British policy for years to support such investments, with the large expansion of these investments after about 1860 and with the economic and political instability of many areas of high investment (such as Egypt), calls upon the government for methodical protection became increasingly pronounced in the years leading up to the Crystal Palace Speech. After the more gentlemanly service sector of the economy (banking, insurance, shipping) became more prominent—possibly at the expense of manufacturing—the influence of London’s financial interest began rising precipitously. The ‘cleaner’ financial sector probably had an effect the decisions taken by Britain’s disproportionately aristocratic bureaucrats and parliamentarians . Late-Victorian political leaders, most of whom were stockholders , “shared a common culture with the financial class.”

This prompted imperial critic J.A. Hobson to conclude that finance was manipulating events to its own profit. Contemporary historians, such as Bernard Porter, P.J. Cain, A.G Hopkins do not downplay the influence of ‘the City’s’ financial interests either, but contest Hobson’s conspiratorial overtones and ‘reductionisms’. Nevertheless, they often acted as repositories of the surplus capital accumulated by a monopolistic system and they were therefore the prime movers in the drive for imperial expansion, their problem being to find fields for the investment of capital.

Social Views

New social views of colonialism also arrised. Rationalized by Rudyard Kipling-style racism and Social Darwinism in predominately Protestant empires and the paternalistic (but republican and progressive) French-style “mission of civilization”, was attractive to many European statesmen. Riding the sentiments of the late nineteenth century Romantic Age, imperialism inculcated the masses with ‘glorious’ neo-aristocratic virtues and helped instill broad, nationalist sentiments.