Analyse the various interpretations about British imperialism.

"The profound hypocrisy and inherent barbarism of bourgeois civilization lies

unveiled before our eyes, turning from its home, where it assumes respectable
forms, to the colonies, where it goes naked."1

Marxists have, for the past century, attempted to produce a cogent theory of imperialism as an
inevitable outcome of capitalist economic development; one which has both the power to explain
past imperialisms, and the capacity to make some kind of predictions for the future. As such, the
problem has taken a central position in Marxist political economy. Economic historians have
followed a similar, if determinedly demarcated path, since the decline of the British Empire after
the Second World War, with the purpose of identifying or disputing the existence of an economic
drive to imperial policy. The intention of this essay is to assess these rival theories of
imperialism, and to make a brief evaluation of how they can be applied to British colonialism
around the turn of the 19th century. To do so I will present a chronological history of theories of
imperialism, explaining what they can each add to a wider body of knowledge and what their
limitations or flaws are. This essay will largely focus on the appraisal of theory, which inevitably
requires some level of empiricism in order to support it, but can largely operate within its own
abstract laws. Only in applying these abstract scientific laws to history can we be certain of their
merit, but to fully pursue both ends is beyond the remit of this essay. Therefore, historical
sections will be shorter than I would have wished. I ultimately intend to propose a critical
Marxist reading of British imperialism which draws on the classical legacy of Hilferding,
Bukharin and Lenin in particular, newer revisions of these ideas, alongside some arguments
provided by mainstream historians. Doing so will demonstrate the economic driving force of
British imperialism, without discounting social, political, and cultural factors which assisted it. I
also aim to discount the notion that either finance or industry alone can bear responsibility for
imperialism, and identify the precise mechanism by which capital as a whole pressured the state
into pursuing imperial aims.
Marx’s method in Capital is an attempt at an exposition of the entirety of the laws which govern
capitalist accumulation. In his work, he moves progressively from deeply abstracted analysis of a
commodity and value theory, towards introducing increasingly empirical notions such as the
state. Never reaching this point, he left instead two tools which were vital for the development of
a theory of imperialism: the scientific method he developed in Capital, and his writings on India.
His method provides a model for this essay: that of the progressive introduction of non-deductive
arguments into a theoretical analysis of capitalism as a whole, including its drive to war, moving
towards empirical historical investigation. 2
Marx’s writings on India were considerably less theoretical. What they emphasize is the
revolutionary nature of British capitalism on Indian society, and the centrality of the new social
relations it would establish in this process of change. Marx provides little in the way of defining
the mechanism by which imperialism was caused, he does however try to link industrialisation to
imperialism. He differentiates between the ‘pre-industrial’ imperialism of the East India
Company in the hands of a “moneyocracy”, content with exploiting India by importing its cheap
goods, and the new industrial interest in “creating fresh productive powers in India” capable of

1
Marx, Karl, ‘The East India Company’ in Karl Marx and Frederick Engels Works: Volume 12, March 1853-February 1854
(London, 1979) p.150
2
Alex Callinicos, Imperialism and Global Political Economy (London, 2009) pp.10-12
absorbing its output.3 For Marx, British imperialism is the outcome of industrialisation – but it is
not clear why, or whether this is inevitable.
J.A. Hobson’s Imperialism marked the first major attempt at a scientific analysis of imperialism,
and provided the influence for the theories of the classical Marxists to come (though a liberal
himself). Published in 1902, following the ‘scramble for Africa’ period of British, French, and
German imperialist expansionism, the cornerstone of Imperialism is the problematic theory of
underconsumption: the notion that economic crisis is a result of workers’ wages being too low.
According to him, the development of monopoly in industry provides superprofits and cuts
further into workers’ consumption, so effective demand is greatly reduced. The extra savings that
capitalists are left with must therefore be invested overseas to avoid crisis, as monopoly has also
reduced domestic investment opportunities; as such the state becomes a vehicle for securing
financiers’ foreign investments. Hobson’s preferred alternative is a redistribution of wealth by
the state.4
Hobson developed a fully-fledged theory of imperialism and identified what he saw as the
mechanism by which it worked. It is, however, not viable. Its main weakness is a reliance on an
underconsumptionist analysis, decisively rejected since his time. The proof is ultimately that
capitalists can and do purchase goods from each other, meaning that high levels of savings do not
necessarily limit investment. Workers underconsumption is a constant feature of capitalism and
does not explain the drive to invest abroad. High savings and monopoly capitalism are almost
incidental to Hobson’s theory, however. His most important claim is that foreign investment is
causally linked to imperialism, a mistake5 Lenin would later repeat. Again, this cannot be true –
over 80% of British investments at the turn of the century were in Europe and the USA, where no
attempt at asserting hegemony was made.6 Hobson provides the first economic analysis of
imperialism, and though it is riddled with errors its insistence that there is an economic drive
towards war provided a useful starting point for Marxists to pick up the mantle.
In her The Accumulation of Capital and Anti-Critique, Rosa Luxembourg develops Hobson’s
argument by arguing that capital accumulation (the driving force of capitalist society, according
to Marx) necessarily relied upon an ‘outside’ to which it could export capital. Vitally, presenting
imperialism as an inevitable outcome of capitalism was a pathbreaking contribution, but like
Hobson’s, it was fatally flawed by underconsumption theory. Her insistence on a teleological
notion of capitalist accumulation, derived from her claim that expansion is inevitable to provide
effective demand, provided Bukharin’s fruitful rejoinder that capitalism is indeed an illogical
system which pursues ‘production for production’s sake’, and as such can reproduce itself within
a purely capitalist global economy.7
Hilferding, by contrast, did not seek to analyse ‘imperialism’ as a phenomenon. His goal instead
was to outline the features of what he saw as a new stage in capitalism: that of finance-capital.
He drew upon Marx to distinguish three kinds of capital – industrial capital, merchant capital,
and financial capital. Under the new stage of monopolist, financial capital, all three were
subsumed under the control of finance, due to the process of the concentration and the
centralization of capital in fewer hands. This explains the undue influence the kings of finance
had on foreign policy – their monopolies needed protective tariffs to expand their influence and
aid their process of accumulation.8

3
Marx, 'The East India Company’ (London, 1979) p.144
4
Anthony Brewer, Marxist Theories of Imperialism (1990) pp.74-75
5
Brewer, Marxist Theories of Imperialism (1990) pp.75-85
6
Eric Hobsbawm, The Age of Empire: 1875-1915 (Northamptonshire, 2007) p.67
7
Brewer, Marxist Theories of Imperialism (1990) pp.60-64
8
Callinicos, Imperialism and Global Political Economy (London, 2009) pp.34-5, 42-3
It is necessary to discuss Bukharin and Lenin’s work at once. Written during the same year,
together they provide the clearest exposition yet of the classical Marxist theory of imperialism.
Drawing strongly on the previous four thinkers, Bukharin’s Imperialism and World Economy
insisted that state capitalist trusts begin to emerge because of the process of concentration and
centralization of capital that Hilferding points out, leading to a new process, the
internationalization and nationalization of capital. This new and unprecedented situation
witnessed the birth of inter-imperialist rivalry, when British colonialism began to be replicated by
several other major nation-states simultaneously. Bukharin locates the drive toward expansion in
this period as a direct result of the finance-capital Hilferding describes, where oligopolistic
industries hold undue sway over the state and enter into a qualitatively new relationship of
influence with it. 9 He unfortunately extends this notion a little far in rejecting even the notion of
any competition between firms based in the same national capital – but his point is clear enough:
to a certain extent, national firm-based competition has been replaced by international state
competition. The most important and original contribution Lenin’s pamphlet Imperialism – The
Highest Stage of Capitalism made to the debate was implicit in its title, insisting against previous
thinkers that imperialism was not merely the preferred policy of the new finance-capitalists, but
represented a new stage of capitalist development. While Bukharin and others had often referred
to imperialism as an optional policy, Lenin understood war to be as natural now as purely
economic competition had been under free trade.10
Economic historians have sought to grapple more empirically with empire, and here I will
attempt to engage with their work on both a theoretical and empirical level, in order to justify a
Marxist reading of an economic drive to imperialism – one which suggests imperialism as a
representation British capitalist interests as a whole.
Gallagher and Robinson’s 1953 thesis suggests a continuity of British imperial policy throughout
the 19th century: that of informal economic domination where possible, and formal colonial rule
where economically necessary – all driven by British free trade. They make the historical point
that British imperialism must be perceived as more than the system of 'formal empire'
characterised by direct political control. Britain succeeded in pulling large swathes of the globe,
in particular Latin America, China, and Australasia, into a network of informal empire in
addition to its colonies. This analysis suggests a peripheral (rather than metropolitan) drive
toward imperialism; if Britain was unwilling to pursue an activist foreign policy, it did so only
because political developments in the periphery necessitated a defence of its business interests –
Egypt, for example, was conquered during the 1882 unrest in order to defend the vital trade route
through Suez to India.11 The Anglo-Portuguese Treaty of 1884 and the Anglo-German
Agreement over East Africa in 1886 are cited as some examples of a Britain desperate to
compromise rather than confront during the ‘scramble for Africa’. Specific circumstances are
highlighted which made British military intervention in a polity more likely: high investment
value, weak political structures, an unwillingness to accommodate British interests, lacking the
will or capital to modernise, and the availability of the British Army, being the most important
determining factors.
If we cast aside both the notion of a peripheral drive toward imperialism (and it is a matter of
dispute whether they even subscribed to this view)12 and their insistence that although
“imperialism is a function of economic expansion... it is not a necessary one,”13 Gallagher and
Robinson’s argument suggests a powerful expansionary drive in the free trade capitalism that
9
Brewer, Marxist Theories of Imperialim (London, 1990) p,112-13
10
Vladimir Lenin, Imperialism, The Highest Stage of Capitalism (Moscow, 1975)
11
John Gallagher and Ronald Robinson , ‘The Imperialism of Free Trade’ in The Economic History Review 6:1 (1953) pp.10-12
12
P.J. Cain and A.G. Hopkins, British Imperialism, 1688-2000 (Harlow, 2002) p.12
13
Gallagher and Robinson , ‘The Imperialism of Free Trade’ p.5
existed prior to the monopoly capitalism. This fills in a useful gap in the Marxist argument,
which deals with the period of inter-imperialist rivalry from 1879 onwards. However, while the
Bukharin-Lenin thesis identifies the structural mechanism by which monopoly capitalists drive
the state toward imperial expansion, Gallagher and Robinson’s work on free trade imperialism
does not explicitly do so. Knowing that free trade did drive imperialist expansion, we can
speculate that a relationship between the state and the powerful industrial staple exports of cotton
and coal in particular provided a strong industrial interest in securing markets, alongside the
autonomous interest of the British state in maintaining “free trade and the pre-eminence of
sterling”. By applying Block’s method of understanding the state’s interests as being those of
'capital on average', combined with Callinicos' notion of both geopolitical and economic
competition driving imperialism,14 the British state can be seen to perceive its interests in both
securing and expanding the export markets its firms had come to rely on in order to strengthen
the state and uphold British economic and political hegemony. Gallagher and Robinson’s
argument can in this sense be used to incorporate the period of free trade into a Marxist theory of
imperialism, pointing to its economic drive and to its representation of industrial interests, rather
than purely financial ones.
Two notable economic historians, Mclean and Darwin, have attempted to criticise and expand on
the free trade imperialism thesis. McLean’s 1976 hypothesis is essentially its opposite: that
empire was maintained largely for geopolitical reasons, not economic ones. His work can be
viewed as something of an extension of Fieldhouse’s argument that imperialism was never
economically necessary or profitable for British capitalism. 15 This focus on geopolitics has its
benefits: we can much better understand British unwillingness to intervene in Turkey, for
example, if it is seen as a bulwark against Russian and German European expansionism.
However, to entirely subordinate capital’s interests to geopolitical state competition and argue
that finance was merely the “instrument through which the [British] Foreign Office worked” in
the 19th century 16 is historically and theoretically unconvincing: first, Gallagher and Robinson
have pointed out that colonisation of countries of little value in themselves can be understood,
even prior to the inter-imperialist rivalries of 1879 onwards, as necessary for defending more
valuable trade routes, to India in particular.17 Secondly, it is particularly difficult to separate
economic and political interests in capitalist society, as the Marxists demonstrated. Complete
subordination of economic interests to political ones would struggle to explain the character of
British colonial investment in the last quarter of the 19th century, which saw “‘over-investment’
in the colonies financed by ‘overly abundant’ British savings”.18 Darwin’s attempt to rehabilitate
the imperialism of free trade comes closer to the Marxist approach in attempting to define the
‘official mind’ used but not explicated by Robinson in his earlier work. However, by locating the
‘official mind’ of government and its imperial drive it in the administrative ‘bridgehead’ in the
colonies, an attempt is made to mediate between a metropolitan and a peripheral expansionist
drive, as well as between the application of economic and social pressure on the state. 19 Besides
from identifying a previously ignored fold of opinion within the British state (the bridgehead),
this takes the construction of a theory of imperialism no further, and collapses into the kind of
‘multi-causality’ Cain and Hopkins are desperate to avoid in their work.

14
Callinicos Imperialism and Global Political Economy pp.85-86
15
D.K. Fieldhouse, Economics and empire 1830-1914 (London, 1984) p.476
16
David Mclean, ‘Finance and "informal empire" before the First World War’ in The Economic History Review 29:2 (1976) p.305
17
Gallagher and Robinson , ‘The Imperialism of Free Trade’ (1953) pp.12-14
18
16 A.G. Cain, ‘Imperialism: The Metropolitan Context’ in The Oxford History of the British Empire: Volume III: The Nineteenth
Century (ed. Andrew Porter) (Oxford, 2001) p.49
19
John Darwin ‘Imperialism and the Victorians: The Dynamics of Territorial Expansion’ in The English Historical Review 112:47
(1997) p.401
Indeed, Cain and Hopkins have probably become the most influential of modern historians and
theorists of imperialism. Seeking to return the imperialist impulse to the metropolitan centre, they
place the imperial drive at the behest of a homogenous class of ‘gentleman capitalists’ – a
coherent, organised body of men which emerged from the remnants of the old aristocracy, but
grew to encompass service sector capitalists and financiers. These gentlemen capitalists, in
regular social contact with government officials around London and the South East, used their
finance abroad almost conspiratorially; they promoted “economic development [which]
generated development crises which in turn led to British intervention.”20Further, Cain and
Hopkins seek to revise the entire historiography of the Industrial Revolution, claiming that
services were the most dynamic and innovative sector of the economy throughout the 19th
century, to the extent that gains made in industry were bound to accrue in “non-industrial forms
of property”.21 Ideology plays a deeply important role in this analysis; economics is not the sole
driving force of empire. This cultural unity of gentleman capitalists and aristocratic remnants led
them to see the empire as an “arena for gentlemanly endeavour… for responsible progress, for
the battle against evil, for the performance of duty, and for the achievement of honour”.22 As
such, the drive to imperialism is identified as being due neither to a certain stage of capitalism,
nor to the state’s obligation to open export markets for export industries, but to “a particular
pattern of economic development, centred upon financial and commercial services, which was set in train
at the close of the seventeenth century and survived to the end of empire”.23 Indeed, the exact
mechanism by which finance influenced government is highly covert, by “a small circle of
[financial] institutions which were thought to have an “intuitive understanding” of the national
interest” – this clique explains the lack of explicit empirical evidence for their case.24

As developed and comprehensive as this thesis is, it again remains flawed on both historical and
theoretical grounds. Most importantly, the existence of a homogeneous class of gentlemen
capitalists has been deeply disputed. Unfortunately, the cornerstone of their entire theory rests
upon this spurious creation – heavily criticised by Chapman, who insists there is little evidence of
relationships between merchant banking houses, and that most of their financial networks were
international rather than national.25 Secondly, the arrangement of elite opinion has been shown
not to have adhered to this finance and services versus industry view, but rather to have provided
a “kaleidoscopic variation” amongst the groups, such as in the 1880s discussions on bimetallism.
Further, even if gentleman capitalists did exist, the implications of social connections with the
state are overexaggerated: both the economic and social pressure industrial capitalists exert on a
state by the act of accumulating capital alone provides them with leverage. As such, we may just
as well apply the Marxist structural argument for imperialism. A major argument presented
against this argument is the role of ideology and culture in creating imperialism, but Marxist
theory can easily accommodate such an explanation, as Callinicos has demonstrated.26 The
destabilising effect of finance they describe may well be accurate, but it does not validate the
notion that military intervention was then due to the state being dragged into defending financial
interests. An equally valid interpretation would be that destabilising investment sometimes
provided the spark for British intervention, which was nonetheless primarily motivated by a
strong desire in the capitalist class in general favour of the forceful expansion of markets. In fact,
20
P.J. Cain and A.G. Hopkins, ‘Gentlemanly Capitalism and the British Expansion Overseas II: New Imperialism, 1850-1945’ in The
History Economic Review 40:1 (1987) p.5
21
Cain and Hopkins, British Imperialism, 1688-2000 (Harlow, 2002) p.3
22
Cain and Hopkins, British Imperialism, 1688-2000 (Harlow, 2002) pp.34-35
23
Cain and Hopkins, British Imperialism, 1688-2000 (Harlow, 2002) p.302
24
Cain and Hopkins, ‘Gentlemanly Capitalism and the British Expansion Overseas II’, p.12
25
Stanley Chapman, The Rise of Merchant Banking (London, 2006) pp.67-68
26
Callinicos, Imperialism and Global Political Economy (London, 2009) pp.94-95
the state frequently resisted financiers’ pressure – no amount of protestations from the
Corporation of Foreign Bondholders could produce military intervention in debt-defaulting Latin
American countries in this period.27 Finally, the continuation of imperial policy during the
decline of empire during the turn of the 20th century doesn’t necessarily mean that industrialists
could not have still have required it. A stronger case can be made that investment abroad and
imperialism were encouraged by a weakening position in the international economy and the
greater foreign military competition which were both important characteristics of this period.28
In summary, it seems that the empirical work of economic historians – at least that which has not
been decisively refuted – goes some way towards suggesting a Marxist reading of British
imperialism in the long 19th century. Although Marxists were sometimes empirically off the mark
in the original, modern revivalists such as Brewer, Callinicos, and David Harvey, have succeeded
somewhat in crafting a coherent theory from the classical legacy which stays true to its stated
aim: that of providing an exposition of the economic basis of imperialism. Attempts by economic
historians such as Cain and Hopkins to highlight the non-economic elements in the imperial drive
have been partly successful; however, none have decisively shown that imperialism did not
constitute a vital lifeline for struggling capitalist interests in the period and beyond. Finally,
perhaps the greatest evidence of the strength of the Bukharin-Lenin thesis is the continuing
participation of Britain in imperialist ventures today – while capitalist hegemons continue to
involve themselves in militarily competition and occupation, adherents of this theory are unlikely
to disappear.
.

27
Hobsbawm, The Age of Empire (Northamptonshire, 2007) pp.74-75
28
Hobsbawm, The Age of Empire (Northamptonshire, 2007) pp.75-77