New Imperialism

New Imperialism was the expansionist foreign economic policy of the more powerful of the European states, between the Franco-Prussian War and World War I. 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 expansion being the colonization of Africa.

Scholars debate the causes and ramifications of this period of colonialism, dubbed “The New Imperialism” to distinguish it from earlier eras of overseas expansion, such as the mercantilism of the sixteenth to eighteenth centuries or the age of anti-mercantilist ‘free trade’ colonialism of the mid-nineteenth century and most notably, the effect this period might have had in leading to the First World War.

Background, the Age of Pax Britannica

The collapse of the British and Spanish empires in the New World following the American Revolution and revolutions in the viceroyalties of New Spain (to become Mexico) and Peru (to become Gran Colombia) signaled the failure of mercantilism and contributed to the appeal of the classical liberalism of Adam Smith for emerging nation-states. Richard Cobden, a disciple of Smith, who contended that the costs of occupation often exceeded the financial return to the taxpayer. In other words, formal empire afforded no reciprocal economic benefit when trade would continue whether the overseas political entities were nominally sovereign or not.

Roughly between the Congress of Vienna and the Franco-Prussian War, Britain reaped the benefits of being the world’s sole modern, industrial nation. Following the defeat of Napoleon, Britain was the ‘workshop of the world’, meaning that its finished goods were produced so efficiently and cheaply that they could often undersell comparable, locally manufactured goods in almost any other market. If political conditions in a particular overseas markets were stable enough, Britain could control its market for industrial goods through free trade alone without having to resort to formal rule or mercantilism. Britain was even supplying half the needs in manufactured goods of such nations as Germany, France, Belgium, and the United States.

In this sense, the movement toward aggressive national rivalry, the movement toward formal empire and imperial competition, had its roots in the breakdown of Pax Britannica.

Pinning down the causes of the breakdown of Pax Britannica is a bit more complicated.

Causes of New Imperialism, the Breakdown of Bax Britannica

Breakdown of the Concert of Europe

The decline of Pax Britannica, glaring after the Franco-Prussian War, was made possible by recent changes in the European and world economies and in the continental balance of power, such as the breakdown of the Concert of Europe and the consequent establishment of nation-states in Germany and Italy. Continental political developments in the late nineteenth century, as mentioned, relating to the overall breakdown of the Concert of Europe, rendered this imperial competition feasible, in spite of Britain’s centuries of long-established naval and maritime superiority. As unification of Germany by the Prussian ‘Garrison State’ went forward, contending capitalist powers were thus ready to compete with Britain over stakes in overseas markets. The aggressive nationalism of Napoleon III and the relative political stability of France under the liberal Third Republic also rendered France more capable of challenging Britain’s global preeminence. Germany, Italy, and France were simply no longer as embroiled in continental concerns and domestic disputes as they were before the Franco-Prussian War.

Loss of Britain's Comparitive Advantage

Some argue that this push for free trade was merely because of Britain's economic position during the age of Pax Britannica and was unconnected with any true philosophic dedication to free trade.

However, as ther newly industrial powers, such as France, Germany, and the United States, rose to industrial maturity, Britain's comparative advantage in trade of any finished good 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, one-sixth in 1913, and one-eight 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. The nation had lost much of its comparative advantage in the manufacturing sector.

To make matters worse, British manufactures in the staple industries of the Industrial Revolution were beginning to experience real competition abroad. The German textiles and metal industries, for example, had by the beginning of the Franco-Prussian War surpassed those of Britain in organization and technical efficiency and usurped British manufactures in the domestic market. By the turn of the century, the German metals and engineering industries would be producing heavily for the free trade market as well. 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.

Politics

Observing the rise of trade unionism, socialism, and other protest movements during an era of mass society in both Europe and later North America, the elite in particular was able to utilize imperial “jingoism” to co-opt the support of the impoverished industrial working class. 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.

Each of Europe’s major elites also found some advantages in formal, overseas expansion: mammoth monopolies wanted imperial support to secure overseas investments against competition and domestic political tensions abroad; bureaucrats wanted more occupations, military officers desired promotion, and the traditional but waning landed gentry wanted formal titles.

Theories of Imperialism

Accumulation Theory

This theory, conceived largely by Hobson and later Lenin, centers on the accumulation of surplus capital during the Second Industrial Revolution.

J.A. Hobson and later Lenin linked the problem of shrinking continental markets driving European capital overseas to an inequitable distribution of wealth in industrial Europe. Lenin and that bourgeois economist to his liking contended that the wages of workers did not represent enough purchasing power to absorb the vast amount of capital accumulated during the Second Industrial Revolution. This charge was not baseless, and some have argued that its logic is even evident in the causes of the interwar Great Depression beginning in the US, which had garnered the coveted center of the world’s capitalist economy following the Great War, not just the Long Depression of 1873-96. For instance, a fundamental misdistribution of purchasing power during the great industrial expansion of the post-World War I era might have been the Second Great Depression’s main contributing factor.

J.A. Hobson, a British liberal writing at the time of the fierce debate on imperialism during the Boer War, observed the spectacle of the ‘Scramble for Africa’ and emphasized changes in European social structures and attitudes as well as capital flow, though his emphasis on the latter seems to have been the most influential and provocative. His so-called accumulation theory suggested that that capitalism suffered from under-consumption due the rise of monopoly capitalism and the resultant concentration of wealth in fewer hands, which apparently gave rise to a misdistribution of purchasing power. Logically, this argument is sound, given the huge impoverished industrial working class then often far too poor to consume the goods produced by an industrialized economy. His analysis of capital flight and the rise of mammoth cartels later influenced Lenin in his Imperialism: The Highest Stage of Capitalism, which has become a basis for the modern neo-Marxist analysis of imperialism. Thus some have argued that the New Imperialism was caused essentially a flight of foreign capital.

New Imperialism was one way of capturing new overseas markets. By the eve of World War I, Europe, for instance, represented the largest share (27 percent) of the global ‘zones of investment’, followed by North America (24 percent), Latin America (19 percent), Asia (16 percent), Africa (9 percent), and Oceania (5 percent) for all industrial powers. Britain, the forerunner of Europe’s capitalist powers, however, was clearly the chief world investor, though the direction of its investments underwent a striking change, becoming oriented less toward Europe, the United States, and India, and more toward the rest of the Commonwealth and Latin America.

During the post 1870 period the amount of foreign trade increased. For western European nations in 1840, 7.7 million pounds of its export and 9.2 million pounds of its import trade was done outside Europe; in 1880 the figures were 38.4 million and 73 million. Europe’s economic contacts with the wider world were multiplying, much as Britain’s had been doing for years. In these non-industrial regions (such as the Russian and Ottoman empires), which were the principal sources of surplus French capital, and other overseas territories that lacked both the knowledge and the power to direct the capital flow, served to colonize rather than develop them, destroying native industries and creating dangerous political and economic pressures which would, in time, produce the so-called ‘north/south divide’. The contemporary Dependency Theory, devised largely by Latin American academics, draws on this inference.

Some have criticized J.A. Hobson’s analysis of over-accumulation and under-consumption, arguing it does not explain why less developed nations with little surplus capital, such as Italy, participated in colonial expansion. Nor does it fully explain the expansionism of the great powers of the next century—the United States and Russia, which were in fact, net borrowers of foreign capital. Opponents of his accumulation theory also point to many instances in which foreign rulers needed and requested Western capital, such as the hapless modernizer Khedive Ismail Pasha.

World Systems Theory

Contemporary World-Systems theorist Immanuel Wallerstein addresses these counterarguments without degrading Hobson’s underlying inferences.

Hobson’s theory is thus useful in explaining the role of over-accumulation in overseas economic and colonial expansionism while Wallerstein perhaps better explains the dynamic of inter-capitalist geopolitical competition.

Wallerstein’s conception of imperialism as a part of a general, gradual extension of capital investment from the “center” of the industrial countries to an overseas “periphery” thus coincides with Hobson’s. According to Wallerstein, “Mercantilism… became the major tool of (newly industrializing, increasingly competitive) semi-peripheral countries (i.e, Germany, France, Italy, Belgium, etc) seeking to become core countries. Wallerstein hence perceives formal empire as performing a function “analogous to that of the mercantilist drives of the late seventeenth and eighteenth centuries in England and France.” The expansion of the Industrial Revolution hence contributed to the emergence of an era of aggressive national rivalry, leading to the late nineteenth century ‘scramble for Africa’ and formal empire. Hobson’s theory is thus useful in explaining the role of over-accumulation in overseas economic and colonial expansionism while Wallerstein perhaps better explains the dynamic of inter-capitalist geopolitical competition.

Since the “Scramble for Africa’ was the predominate feature of New Imperialism and formal empire, opponents of Hobson’s accumulation theory often point to frequent cases when military and bureaucratic costs of occupation exceeded financial returns. In Africa (exclusive of South Africa) the amount of capital investment by Europeans was relatively small before and after the 1885 Congress of Berlin, and the companies involved in tropical African commerce were small and politically insignificant, exerting only a tiny influence on domestic politics.

First, this observation might detract from the pro-imperialist arguments of King Leopold II of Belgium, Francesco Crispi, and Jules Ferry, but Hobson argued against imperialism from a slightly different standpoint. He concluded that finance was manipulating events to its own profit, but often against broader national interests.

Second, any such statistics only obscure the fact that African formal control of tropical Africa had strategic implications in an era of feasible inter-capitalist competition, particularly for Britain, which was under intense economic and thus political pressure to secure lucrative markets such as India, China, and Latin America. In Britain’s case this process of capitalist diffusion had in many regions led it to acquire colonies in the interests of commercial security; France and Germany would later follow suit. For example, although the then inconspicuously moribund Czarist Empire proved to be little treat to Great Britain following its stunning defeat in the 1905 Russo-Japanese War, British Conservatives in particular feared that Russia would continue to usurp Ottoman territory and acquire a port on the Mediterranean or even Constantinople—a long touted goal of Orthodoxy.

These fears became especially pronounced following the 1869 completion of the near-by Suez Canal, prompting the official rationale behind Benjamin Disraeli’s purchase of the waterway. The close proximity of the Czar’s (territorially) expanding empire in Central Asia to India also terrified Lord Curzon, thus triggering the Afghan Wars. Rhodes and Milner also advocated the prospect of a “Cape to Cairo” empire, which would link by rail the extrinsically important canal to the intrinsically mineral and diamond rich South, from a strategic standpoint. Though hampered by German conquest of Tanganyika until the end of World War I, Cecil Rhodes successfully lobbied on behalf of such a sprawling East African empire.

Interpretations of Bernard Porter, P.J Cain, and A.J. Hopkins

In this sense, contemporary imperial historian Bernard Porter argues that formal imperialism for Britain was a symptom and an effect of its relative decline in the world, and not of strength. Symbolic overtures, in fact, such as Queen Victoria’s grandiose title of “Empress of India”, celebrated during Disraeli’s second premiership in the 1870s, helped to obscure this fact. Joseph Chamberlain thus argued 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.

Porter, however, notes that Britain, “Struck with outmoded physical plants and outmoded forms of business organization… now felt the less favorable effects of being the first to modernize.” He contends that “a kind of vicious circle had been set up, with domestic industry lagging because capital was going elsewhere because industry was lagging.” Unlike J.A. Hobson, however, who links under-consumption to a misdistribution of purchasing power, Porter argues that “the best thing that Britain could have done to correct [its balance of payments] would have been to make her export industry more competitive—improve her methods of manufacturing and marketing in order to sell more abroad.”

As mentioned, 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.

History of New Imperialism

Following the lead of Britain under Disraeli, even the once hesitantly imperialistic Bismarck was eventually brought to realize the value of colonies for securing (in his words) “new markets for German industry, the expansion of trade, and a new field for German, activity, civilization, and capital”. Examples of strategic competition following the passing of the scene of Bismarck, the era’s premier diplomat, that would intensify the drive to consolidate existing spheres of influence and grab new colonies, include the Moroccan Crisis of 1905, the Tangier Crisis resulting from Kaiser Wilhelm’s recognition of Moroccan independence, an the second Moroccan Crisis, in which Germany sent its navy to Morocco, thereby testing the precarious Anglo-French Entente. The Entente Cordiale, in fact, was a gentleman’s agreement between Britain and France to curtail further German expansion. The Entente Cordiale and the Franco-Russian alliances were also made because of a common interest.

The absolutist Central Powers, led by a newly unified, dynamically industrializing Germany, with its expanding navy—doubling in size between the Franco-Prussian War and the Great War—were a strategic threat to the markets of these relatively declining empires that would one day consist of the Great War Allies. British policymakers feared the prospect of another German military victory over France, which could have reasonably resulted in a German take-over of France’s formal colonies, a sort of reversal of the actual outcome of the Great War, after which Britain occupied the vast majority of German and Ottoman colonies as “protectorates”. This prospect was especially frightening considering that French colonies tended to be closely situated to Britain’s; Nigeria, for instance, was surrounded by French territory, India was near French Indochina, and so forth.

But those who disagree that imperialism was sort of a symptom of a gradual movement of surplus capital from a center to an overseas periphery, who contend that export of capital seems to have little direct connection with territorial expansion, point to the United States. Historian and imperial critic William L. Langer, for instance, who emphasized the roles of nationalism and mass psychology in the rise of New Imperialism’s empire for empire’s sake notes, “At that time [of American expansionism] the United States was still a debtor nation, importing rather than exporting capital.” They also point to the expansionism of Crispi’s Italy and Meiji Japan, which were, in many respects, following Britain’s lead although their economies had not yet grown so intrinsically dependent on overseas financial returns. The liberal nationalism Italian figures such as Mazzini, Cavour, and Garibaldi strongly favored modernization, which was associated with the British. Italian, and to a lesser extent French imperialism was often motivated by the desire to ‘catch up’ with Britain economically and culturally.

American expansionism, of course, had roots in domestic concerns and economics, as in other newly industrializing nations. Therefore, Hobson’s conclusions, which were drawn predominately from analysis of the British economy, might not automatically pertain to the unique circumstances of the US. The United States was a newly industrializing nation, like Germany, where investments overall assisted and accelerated economic progress, aiding the creation of costly infrastructure, such as railways and other public works. The findings of the 1890 Census, however, popularized by historian Frederick Jackson Turner in his paper entitled The Significance of the Frontier in American History, contributed to fears of dwindling natural resources . The Panic of 1893 and the ensuing depression also led some businessmen and politicians to come to the same conclusion as Leopold II, Ferry, Disraeli, Chamberlain, and Crispi had formulated nearly a generation earlier —that industry had apparently over-expanded, producing more goods than domestic consumers could buy.

Like the Long Depression in Europe, which bred doubts regarding growing strength of political resistance of world capitalism, the main features of this depression included deflation, rural decline, and unemployment (indicative of under-consumption), which aggravated the bitter social protests of the Gilded Age—the Populist movement, the free-silver crusade, and violent labor disputes such as the Pullman Strike. Similarly, the post-1873 in Europe period saw a reemergence of far more militant working-class organization and cycles of large strikes. In fact, the rapid turn to imperialism in the late nineteenth century can be correlated with cyclically spaced economic depressions that adversely affected many elite groups. Like the Long Depression, an era of increasing unemployment and deflated prices for manufactured goods, the Panic of 1893 contributed to fierce competition over markets in the growing ‘spheres of influence’ of the United States, which tended to overlap with Britain’s—especially in the Pacific and South America.

While Germany, the United States, Italy, and other more recently industrialized empires were under relatively less pressure to offload surplus capital than Britain, these nations would resort to protectionism and formal empire, once attacked by adherents to laissez-faire, to usurp Britain’s unfair advantages on international markets . Some politicians, such as Henry Cabot Lodge, William McKinley, and Theodore Roosevelt, advocated a more aggressive foreign policy to pull the United States out of the depression of the second Cleveland Administration, known for a laissez-faire domestic (and foreign) policy that in some ways paralleled the policies of the Gladstonian liberals. By World War I, the rise of US imperialism and militarism, however, would, in effect, save the Allies, the older, more established, and more liberal empires, albeit at a huge cost (literally), from the emergent threat of the absolutist and ‘neo-mercantilist’ (Wallerstein) Prussians.

Just as the German Reich reacted to depression with the adoption of protective tariff protection in 1879 , so would the United States with the landslide election victory of William McKinley, who had risen to national prominence six years earlier with the passage of the McKinley Tariff of 1890. Britain’s economic threat from the United States, hence, was (at the time at least) intensified by America’s rise as a great military and political power after the Civil War, its adoption of such protective tariff protection, its acquisition of a colonial empire in 1898, and its building of a powerful navy—the Great White Fleet—under the slain McKinley’s more “big stick”, racist, and militarist successor, Theodore Roosevelt. This course of events, ushered in by the Second Industrial Revolution—paralleled a similar trend in Germany, which emerged as a potential military power after its own unification, its adoption of a tariff in 1879, its acquisition of a colonial empire in 1884-85, and its building of a powerful navy after 1898. On the Pacific, since the Meiji Restoration, Japan’s development followed a similar pattern, following the Western lead in industrialization and militarism, enabling it to gain a foothold or ‘sphere of influence’ in Qing China.

Although US capital investments within the Philippines and Puerto Rico were relatively small (figures that would seemingly detract from the broader economic implications on first glance), these colonies were strategic outposts for expanding trade with Asia, particularly China and Latin America, enabling the United States to reap the benefit of China’s ‘Open Door’ and Dollar Diplomacy under Taft—a sort of US variant of Britain’s informal colonialism. Such developments, whether in Germany, Japan or in the United States, hence disseminated fears that formal imperialism was necessary for Britain because of its relative decline of the British share of the world’s export trade. Imperialism for the United States, however, marked by the reaffirmation of the Monroe Doctrine (formalized by the Roosevelt Corollary to the Monroe Doctrine in 1904), would thus herald the trend of the United States replacing Britain as the predominant ‘investor’ in Latin America—a process largely completed by the end of the Great War.

The Scramble for Africa

Until the dismissal of the aging Chancellor Bismarck by the headstrong Kaiser Wilhelm II, the expropriation of vast, unexplored areas of Asia and Africa by emerging imperial powers such as Italy and Germany and more-established empires such as Britain and France was nevertheless relatively orderly. The 1885 Congress of Berlin, initiated by Bismarck to establish international guidelines for the acquisition of African territory, formalized this new phase in the history of Western imperialism. Between the Franco-Prussian War and the Great War (the age of New Imperialism), Europe added almost 9 million square miles—one-fifth of the land area of the globe—to its overseas colonial possessions.

The late 19th century saw the transition from 'informal empire' of control through economic dominance to direct control, marked by the scramble for further territory in Africa from the late 1870's in areas previously regarded as open to British trade and influence. The Berlin Conference (1884-85) regulated the imperial competition between Britain, France and Germany, defining "effective occupation" as the criterion for international recognition of colonial claims, codifying the imposition of direct rule, accomplished usually through armed force.

While some British colonies were already a century old, Egypt was occupied by British forces in 1882 (although not formally declared a protectorate until 1914); Nigeria, Kenya and Uganda were subjugated in the 1890s and early 1900s; and in the south, the Cape Colony (first acquired in 1795) provided a base for the subjugation of neighbouring African states and the Dutch Afrikaner settlers who had left the Cape to found their own republics (see Boer War).

Formal empire in Sub-Saharan Africa, the last vast region of the world largely untouched by ‘informal imperialism’ and “civilization”, was also attractive to Europe’s ruling elites for other potential reasons. First, insofar as the “Dark Continent” was agricultural or extractive, and no longer ‘stagnant’ since its integration with the world’s interdependent capitalist economy, it required more capital for development that it could provide itself . Second, during a time when in nearly every year since the 1813 liberalization of trade onward Britain’s balance of trade showed a deficit, and a time of shrinking and increasingly protectionist continental markets, Africa offered Britain an open market that would garner it a trade surplus—a market that bought more from the metropole than it sold overall . Britain, like most other industrial countries, had long since begun to run an unfavorable balance of trade (which was increasingly offset, however, by the income from overseas investments). As perhaps the world’s first post-industrial nation, financial services became an increasingly more important sector of its economy. Invisible financial exports, as mentioned, kept Britain out of the red, especially capital investments outside Europe, particularly to the developing and open markets in Africa, predominately white ‘settler colonies’, the Middle East, the Indian Subcontinent, Southeast Asia, and the South Pacific.

Control of tropical Africa had strategic implications in an era of feasible inter-capitalist competition, particularly for Britain, which was under intense economic and thus political pressure to secure lucrative markets such as India, China, and Latin America. In Britain’s case this process of capitalist diffusion had in many regions led it to acquire colonies in the interests of commercial security; France and Germany would later follow suit. For example the 1869 completion of the Suez Canal, prompted the strengthening of control of Egypt. Battles over control of the Nile headwaters caused Britain to expand in thh Sudan, and the close proximity of the Russia’s expanding empire in Central Asia to India also terrified Lord Curzon, thus triggering Afghan wars of conquest. Rhodes and Lord Milner (the British colonial minister in South Africa) also advocated the prospect of a “Cape to Cairo” empire, which would link by rail the extrinsically important canal to the intrinsically mineral and diamond rich South, from a strategic standpoint. Though hampered by German conquest of Tanganyika until the end of World War I, Rhodes successfully lobbied on behalf of such a sprawling East African empire. Formal colonies were often, in hindsight, strategic outposts to protect large zones of ‘investment’, such as India, Latin America, and China.

New Imperialism in Africa and Asia

Changes in African Society

Capitalism, an economic system in which capital, or wealth, is put to work to produce more capital, revolutionized traditional economies, inducing social changes and political consequences that revolutionized African and Asian societies. Maximizing production and minimizing cost did not necessarily coincide with traditional, seasonal patterns of agricultural production. The ethic wage productivity was thus, in many respects, a new concept to supposedly ‘idle’ natives merely accustomed to older patterns of production. Balanced, subsistence-based economies shifted to specialization and accumulation of surpluses. Tribal states or empires organized along precarious, unwritten cultural traditions also shifted to a division of labor based on legal protection of land and labor—once inalienable, but now commodities to be bought, sold, or traded.

The Congo Free State

As an aside, it must be noted that the integration of traditional economies in Africa within the framework of the modern, capitalist economy was also particularly exploitative. Leopold’s fortunes, for instance, and the fortunes of the multinational concessionary companies under his auspices were made mainly on the proceeds of Congolese rubber, which had never been mass-produced in surplus quantities.

Exploitation of the Dutch East Indies, French Indochina, German Southwest Africa, Rhodesia, and South Africa paled in comparison to that of the Belgian Congo. The most infamous example of this is the Congo Free State. The fortunes of King Leopold II, for instance, the famed philanthropist, abolitionist, and self-anointed sovereign of Congo Free State (1885)—76 times larger geographically than Belgium itself—and those of the multinational concessionary companies under his auspices, were mainly made on the proceeds of Congolese rubber, which had historically never been mass-produced in surplus quantities. Between 1880 and 1920 the population of Congo thus halved; over 10 million ‘indolent natives’ unaccustomed to the bourgeois ethos of labor productivity, were the victims of murder, starvation, exhaustion induced by over-work, and disease.