Re: On Social Imperialism (Reply to dms)

[Paul Cockshott <paul@xxxxxxxxxxxxx>]

Rakesh there seems to be some sort of accounting error in this

Rakesh Bhandari wrote:

> Huato quotes Bairoch:
>
>    In  Late Victorian Holocausts Mike Davis presents an argument as to
> why colonialism was an important factor in the industrialization of
> even apparently non imperial countries :
>
> "Britain earned huge annual surpluses in her transactions with India and China
> that allowed her to sustain equally large deficits with the US, Germany and 
> the
> white Dominions. True, Britain also enjoyed invisible earnings from shipping,
> insurance, banking and foreign investment but without Asia, which generated 73
> percent of British trade credit in 1910, Anthony Latham argues, Britain
> 'presumably would have been forced to abandon free trade' while her trading
> partners would have been forced to slow down their own rates of
> industrialization. The liberal world economy might otherwise have fragmented
> into autarkic trading blocs, as it did during the 1930s
>
> "'The US and industrial Europe, in particular Germany, were able to continue
> their policy of tariff protection only because of Britain's surplus with Asia.
> Without the Asian surplus, Britain would no longer have been able to subsidise
> their growth. So what emerges is that Asia in general, but India and China in
> particular, far from being peripheral to the evolution of the international
> economy at this time, were in fact crucial Without the surpluses which Britain
> was able to earn there, the whole pattern of international economic 
> development
> would been been severely constrained.'

If the UK was running a trade surplus with India, this means that
there was a net export of value from the UK to India, thus embodied
labour was being transfered to India and Britain would have been
subsidising India. If the UK ran a deficit with US, Germany and the
Dominions, that means that there was a net flow of value from these
countries to the UK which was thus being subsidised by them.

What is missed out from this is the trade balance between India and
the block of the Dominiouns , US and Germany.

If there were balancing flows here, nobody was subsidising any one.

A strong case can be made out that the UK was subsidised by the rest
of the world by looking at the UK visible trade balance. Except for
the 1980s when oil earnings were high this has been consistently in
the red for every decade since the 1870s. This deficit on visible
trade was a net inflow of value paid for out of invisibles :
repatriated profits, interest on loans, insurance and inward
investment. This is the evidence that you need that there was a net
subsidy of the UK by the rest of the world. The current US trade
deficit is evidence of a similar situation.




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