Britain's Informal Empire

The Victorian age is sometimes called  Pax Britannica, or British Peace. This century did not mark the empire's territorial peak, but the time in which it was most powerful on the global stage. During this century the United Kingdom was not challenged by any other power with the exception of the Crimean War. This period of unchallenged British dominance was not achieved through a vast military or through the might of the formidable royal navy. It was actually accomplished by Britain's globally unchallenged economic influence throughout the century. Their influence was so absolute that no other empire dared challenge them, for fear of being cut off from global trade. Britain’s economic dominance would only come to an end after the horrors of The First World War, which along with destroying it’s economic dominance marked the start of Britain’s decline as an empire.

During the late 18th and early 19th century Napoleonic France conquered most of Europe. Through revolutionary military tactics, incompetent foes, and a little luck Napoleon Bonaparte had gone from being minor Corsican nobility, to being one of the most powerful men on earth. Despite his successes he had made too many enemies, and in 1815 it all came crashing down after his defeat at Waterloo. The following Congress of Vienna saw the powers who had defeated Napoleon work together to decide the fate of Europe. The main goal of the congress was to restore the balance of power in Europe, so that no state would become too powerful. However, beyond keeping the balance of power, England was largely uninterested in continental affairs: “On October I4, Liverpool, the British Prime Minister, Henry A Kissinger, wrote Castlereagh that the ‘less Britain had to do with [Poland] ... the better'’” . This sums up the general British attitude towards continental territories beyond containing France. Although the English did annex some strategic colonies they took almost no original French territory to avoid the risk of France seeking revenge. With France and most of continental Europe weakened by the Napoleonic wars, Britain was left with a free hand to grow its economy and begin Pax Britannica.

Britain’s economic growth actually began during the Napoleonic Wars.War time expenses alongside the fact that Britain was using huge amounts of resources to fund its continental allies against Napoleon led to Resource shortages and prices increasing across The Empire. Seeing an opportunity, British investors began investing heavily in further parts of The Empire and in other foreign nations. This increase in foreign investment led to an increase in foreign trade. Because most of the European countries they were trading with owed war debts to London or other entities and were in need of the economic boost, Britain was able to control much of its trade from a strong position. The increase of trade was further built upon by England's relatively recent adoption of free trade with the fact they were among the first nations to do so. All of this grew the British economy significantly. From 1816, immediately after the war, to 1839 just 23 years later the GDP (Gross Domestic Product) of the United Kingdom grew by 137,000,000 Pounds. This powerful economy would drive the next century of British foreign policy and lead to the beginnings of England’s informal empire.

Britain really began its policy of heavy foreign investment with its investment in foreign railways. The industrial revolution gave the English a huge manufacturing capacity, and cities like Birmingham were frequently visited by foreign industrialists seeking to copy its success. This industrial capacity allowed for London to not only industrialize and build railroads in their own empire but also for British companies to invest in foreign railroads. For example from 1830 to 1907  British companies built around 13,600miles of railroads in Mexico. But how does this large amount of foreign investment translate to influence in these regions? Countries like Mexico would not always pay for these railroads up front, so a lot of the time debt would be used as payment for them. Debt leads to interest rates and with Britain controlling the interest rates in many already poor countries, they were able to influence them to follow England.

In the 1830s British traders from India were growing and selling large amounts of opium in China. This trade was so popular that a large percentage of the Chinese  population started getting addicted to the opium and it began to strain the Chinese economy. To combat this the Chinese government started to ban opium. Britain was making a lot of money from the opium trade and was against this new policy. The opium trade and China’s new reliance on the drug had also given Britain considerable influence in China. Britain and China ended up going to war over this and Britain won. The terms of the peace were that Britain got to keep selling opium and they were given a trading port, the city of Hong Kong. China had lost money from fighting the war and there are widespread protests throughout the country. All of this led to Britain's informal empire expanding into China, because British loans to China during this rocky time grew their influence into parts of China.

The scramble for Africa marked the beginning of the end of the British economic empire and their empire as a whole. During this time the British gained control over a large portion of Africa however, unlike most previous British expansion, which had typically been for economic reasons and very controlled, The British colonization of Africa was relatively quick and was an attempt to stop other powers from controlling Africa. Most of the colonies Britain gained out of the scramble for Africa cost more to hold on to and maintain than they were actually worth to the British economy. With notable exceptions being the Cape Colony and some of the British colonies on the Gold Coast. This new economic strain as well as the rise of Germany and the World Wars would lead to Britain's status as the sole world power to disappear.

The World Wars were the nail in the coffin for the aging British Empire. Although Britain won both of them, the cost of fighting these two wars would cause Britain to lose its status as a great power. Britain's efforts in The First World War were heavily financed by American creditors. The Empire partially used its wartime policy of financing continental allies to fight Germany and Austria. However, it also had expanded its standing land army which had normally been small compared to other European Powers. This was all very expensive because London was now paying for the world's largest navy, a formidable army, and they were helping pay for the armies of France, Italy, and Russia. Even Britain, one of the richest empires in the world, could not handle this on its own. So they took out extensive loans from a country sympathetic to the Entente and who would eventually join the war on their side, America. “This was an enormous amount of borrowing, as much as the entire British foreign capital stock before the war. The United States was the largest wartime creditor, lending a total of $7 billion, of which $3.7 billion went to Britain.” Wrote Nicolas Mulder in his article “War Finance”. This huge amount of debt would take around ten years for Britain to repay.

The Second World War was the death of the British Empire economically and territorially despite the fact that they won. Britain lost its empire when America and the U.S.S.R enforced decolonization on the European powers. But why could Britain not fight against this? During WWII Britain was once again forced to take out huge loans from the U.S. However, this time the cost of the war was even higher. This is because for two years after the fall of France, Britain was fighting Italy and Germany alone on multiple fronts. Even after America joined, Britain took a string of defeats to Japan in some of the most profitable parts of the Empire. This led to Britain having a huge debt to the United States after the war and their economy was destroyed. This ended the Informal Empire. And when America and The Soviet Union enforced decolonization they were in no state to resist militarily or economically. This ended the Formal Empire.

British power in this time period was unlike anything seen before in history. Never before had an empire so completely dominated the entire globe for so long. Even today, although the British Empire is a shadow of its former self, wealth from its past glory is still present in the modern United Kingdom making  it one of the wealthiest nations in the world. While it is likely that this era of British dominance was most likely caused by the effective economic policies used by Britain at this time. There is evidence to suggest that there were other factors just as or more important than the Economy. For  example, many would argue that it was England's diplomatic strategy that allowed it to place itself in a scenario where it could thrive. That being said, there is much stronger evidence supporting the claim that the economy is what really made the United Kingdom a global power in the Victorian Era and a wealthy nation today.

Sources Cited

Baker, Ken. “What Did the Congress of Vienna Mean to Britain?” Schools-History.com, 19 Nov. 2008, https://kenbaker.wordpress.com/2008/11/18/what-did-the-congress-of-vienna-mean-to-britain/.

Drummond, Dianne K. “Sustained British Investment in Overseas Railways, 1830–1914:” Across the Borders, 2017, pp. 245–262., https://doi.org/10.4324/9781315263427-27.

Kissinger, Henry A. “The Congress of Vienna: A Reappraisal.” World Politics, vol. 8, no. 2, 1956, pp. 264–280., https://doi.org/10.2307/2008974.

Mulder, Nicholas. “War Finance.” New Articles RSS, 2018, https://encyclopedia.1914-1918-online.net/article/war_finance#:~:text=This%20was%20an%20enormous%20amount,and%20%241%20billion%20to%20Italy.

“United Kingdom UK: Gross Domestic Product GDP History.” UK Public Spending - Numbers Charts Analysis History, https://www.ukpublicspending.co.uk/rev/google_vis.php?title=UK+Gross+Domestic+Product+GDP+History&year=1810_1840&sname=United_Kingdom&units=b&bar=0&stack=1&size=800_600&col=c&spending0=0.465_0.445_0.452_0.486_0.465_0.479_0.426_0.442_0.459_0.429_0.435_0.417_0.397_0.415_0.446_0.493_0.432_0.45_0.45_0.435_0.451_0.444_0.443_0.434_0.461_0.487_0.528_0.514_0.541_0.563_0.542 .