- What was Britain’s economy like in the late 19th century?
- By 1870, Britain was at height of commercial and industrial power.
- Accounted for 1/2 of world’s trade in textiles and industrial goods.
- Gross national product was greater than Russia and China combined.
- Merchant fleet carried 1/2 the world’s sea borne trade.
- The world’s banking and investment system based in London.
- About 40% of British investment went to imperial territories between 1870 and 1914.
- What was protectionism? Why had it been got rid of?
- Protectionism involved raising tariffs on international trade in Empire to benefit Britain. Colonies obliged to send most of produce to Britain, to buy British manufactured goods, and use British ships for imports and exports.
- What was free trade? Why was it preferred?
- Protectionism was dismantled as belief that wealth was indefinitely expandable and freedom was the only way to maximise prosperity grew. Britain being foremost trading nation enjoyed free trade as its economic dominance was sustained by a limited application of force, also known as ‘imperialism of free trade’. Prohibitive tariffs from Germany in 1879 and France in 1881 forced Britain to rely on Empire for trade.
- How important was trade with Empire? Why?
- In 3/4 of the 19th century, 20% of Britain’s imports came from its Empire. Empire provided a market for around 1/3 of Britain’s exports.
- Empire important to Britain’s trade as trading patterns were well established. Empire used common language, currency and shared system of commercial law.
- Growth of free-trade saw development of industrial empire in which colonies supplied raw materials and foodstuffs which Britain converted into finished goods which colonies often bought back.
Free trade was prohibited between colonies as Britain turned it down in the Colonial Conference of 1887, showing how Britain often exploited Empire.