The rise of nationalism in Europe is associated with the birth of nation-states. In some countries, it contributed to the formation of states after the unification of territories having a shared culture such as in Italy and Germany whereas; in some, it was due to the resistance against imperial powers governing multicultural empires such as in the Russian and Ottoman empires. The most important influence for this profound transformation was the French Revolution,  which had shaken the foundations of an absolute monarchy and paved the way for a state where sovereignty lay in the hands of the people. The ultimate consequence of this nationalism culminated in the two world wars.

Idea of Nationalism in Europe

In 1848, Frédéric Sorrieu, a French artist, created a series of four prints, named La République Universelle Démocratique et Sociale (The universal democratic and social republic) illustrating his vision of a world consisting of democratic and social republics.

• Utopian Vision of Unity: The first of the 4 prints portrays people from Europe and America, representing diverse social classes and ages, marching together and honouring the Statue of Liberty.
  • Liberty is depicted as a female figure holding the torch of Enlightenment and the Charter of the Rights of Man. The foreground of the image shows the remnants of absolutist institutions, symbolising their demise.
  • Sorrieu’s utopian vision presents distinct nations, identified by their flags and national costumes.
  • The United States and Switzerland established nation-states at the time and led the procession beyond the Statue of Liberty.
  • France, with its revolutionary tricolour flag, has just reached the statue. 
  • The German peoples, though not yet unified, carry the black, red, and gold flag, representing the desire to unite German-speaking principalities under a democratic nation-state.
  • Other nations such as Austria, the Kingdom of the Two Sicilies, Lombardy, Poland, England, Ireland, Hungary, and Russia follow.
  • Above the scene, Christ, saints, and angels symbolise fraternity among nations.

Europe in the 19th Century

The map of Europe in the 19th Century did not consist of nation-states as we understand them today.

• Fragmented Divisions: Regions such as Germany, Italy, and Switzerland were divided into kingdoms, duchies, and cantons, each with its autonomous ruler.
• Habsburg Empire: The Habsburg Empire, which ruled over Austria-Hungary, was a patchwork of various regions and peoples.
  • It encompassed territories such as the Tyrol, Austria, the Sudetenland, Bohemia (with a predominantly German-speaking aristocracy), as well as Lombardy and Venetia, where Italian was spoken.
• Diverse Populations: Eastern and Central Europe were governed by autocratic monarchies, housing diverse populations that did not perceive themselves as sharing a collective identity or common culture.
  • These populations often spoke different languages and belonged to distinct ethnic groups.
  • Three major racial/ethnic groups of the Indo-European languages were there – Germanic, Romance and Slavic.
  • Consequently, language and race became the determining factors of nationalism in Europe.
• Challenges to Political Unity: The existence of such linguistic, ethnic, and cultural differences hindered the development of a strong sense of political unity. The primary bond among these diverse groups was their allegiance to the emperor, serving as the only cohesive factor within the empire.

Major Events Regarding the Rise of Nationalism in Europe

The rise of nationalism in Europe was Influenced by some of the major events in Europe in the 19th century. These were – the spread of ideas of the French Revolution and the liberal revolutions of 1830 and 1848, etc. which resulted in the rise in the nation-states.

Key Events	Years
– Napoleon invades Italy; Napoleonic wars begin.	1797
– Fall of Napoleon and the Vienna Peace Settlement.	1814-1815
– The Greek struggle for independence begins against the Ottoman Empire.	1821
– Liberal Revolutions in Europe and Rise in the demands of nation-states. Artisans, industrial workers and peasants revolt against economic hardships; Middle classes demand constitutions and representative governments; Italians, Germans, Magyars, Poles, Czechs, etc. demanded nation-states.	1848
– Unification of Italy	1859-1870
– Unification of Germany	1866-1871
– Slav nationalism in the Habsburg and Ottoman Empires	1905
– World War I	1914-1919

French Revolution and the Idea of the Nation

The French Revolution in 1789 marked the first significant expression of nationalism. It transformed France from an absolute monarchy to a state where sovereignty resided in the people.

• Promoting Collective Identity in France: The revolutionaries introduced measures to foster a collective identity among the French citizens.
• Cultural Expressions of Nationalism: The revolutionaries composed new hymns, took oaths, and commemorated martyrs in the name of the nation.
• Centralisation and Uniformity: The Revolution also brought about uniform laws and the abolition of internal customs duties and regional dialects. 
  • French became the common language, and a mission to liberate other European peoples from despotism was declared.
• Spread of Nationalism: The events in France inspired the formation of Jacobin clubs in other European cities, and the French armies began spreading the idea of nationalism as they moved into neighbouring countries.
• Reforms under Napoleon: Under Napoleon’s rule, many reforms were implemented in the territories under French control.
  • The Napoleonic Code established equality before the law, secured property rights, and abolished privileges based on birth.

Congress of Vienna

It was a series of international diplomatic meetings in 1814–1815 to discuss and agree upon a possible path of the European political and constitutional order after the defeat of Napoleon Bonaparte.

• The Restoration of Monarchy:
• Former ruling families, seeking to regain their lost power, were reinstated. In doing so, they often ignored the lessons learned from the French Revolution, aiming for absolute power once again.
• The rulers’ pursuit of absolute authority and the reinstatement of unfair privileges that had been abolished during the revolution created resentment and discontent among the populace.
• The Unworkable System of Boundaries:
• The diplomats at the Congress of Vienna in 1815, tasked with reshaping Europe after the Napoleonic era, drew boundaries without adequately considering the principle of nationality.
• The boundaries were often arbitrary, disregarding the diverse ethnic, cultural, and linguistic identities of various regions and populations.
• This lack of attention to the principle of nationality created tensions and conflicts, as different ethnic groups found themselves under the rule of states that did not align with their cultural or national identities.

Age of Revolutions 1830-1848

During the consolidation of conservative regimes, liberalism and nationalism became increasingly associated with revolutionary movements in various European regions, including the Italian and German states and provinces of the Ottoman Empire, Ireland, and Poland.

July Revolution

In July 1830, King Charles X of the Bourbon Monarchy of France implemented a series of conservative and authoritarian policies that set the stage for the July Revolution.

• Background of the July Revolution:
  • Suppression of Liberties: Dissolving the Chamber of Deputies, suspending press freedom, and altering electoral laws fueled discontent among the French population.
  • Mass Protests: The oppressive ordinances led to widespread protests in Paris and beyond, as citizens demanded political change.
• Major Developments:
  • Masses Take to the Streets: In response to the oppressive ordinances, the people of Paris staged a massive protest. The protests gained momentum, and the royal forces struggled to contain the insurrection.
  • The overthrow of Charles X: Faced with the escalating unrest, King Charles X was advised to abdicate and go into exile.
  • Louis Philip of Orleans: In his place, Louis Philip of Orleans was installed as the new ruler. Louis Philip had the support of the middle class, which played a crucial role in his ascension to power. This marked the establishment of a constitutional monarchy in France under Louis Philip.
• Influence and Consequences:
  • The July Revolution had significant repercussions beyond France. It inspired uprisings in other parts of Europe.
  • The Netherlands, under Dutch rule, achieved independence as Belgium separated to form an independent state.
  • The Greek struggle for independence from Turkish rule also gained momentum, and with the support of the Great Powers, Greece secured its independence in 1832.
  • However, the Polish uprising against the Russian Tsar faced a different outcome. Despite their efforts, the Polish rebels were suppressed by the Russian forces, and their quest for independence was thwarted.

Revolutions of 1848

Revolutions of 1848 were a series of liberal revolts against European monarchies to form independent nation-states. Beginning in Sicily (Italy), it spread to almost the entire Europe.

• Sicily: The revolts started locally in Sicily in January 1848 against the Bourbon Kingdom to achieve freedom.
  • The revolt was a failure, but it was reversed 12 years later when the Bourbon Kingdom of the Two Sicilies collapsed in 1860–61 resulting in the unification of Italy.
  • The revolt inspired almost all the European liberals and nationalists against the European monarchies.
• France:
  • In February 1848, a spontaneous uprising took place in Paris, leading to the abdication and flight of King Louis Philippe from France.
  • The opposition to Louis Philippe rallied behind the French revolutionary poet Lamartine, joined by Louis Blanc later.
  • The Constituent Assembly drafted a new constitution that laid the foundation for subsequent elections.
  • In December 1848, Louis Napoleon, the nephew of Napoleon Bonaparte, was elected President of France.
  • Thus, the second republic was established in 1848 until January 1852, when Napoleon crowned himself Emperor through a plebiscite, assuming the title “Napoleon III”.
• Other regions:
  • In Prussia, King Frederick William IV led the movement for the unification of Germany.
  • In Austria, the new ministers promised to grant constitutions.
  • In Italy, the king of Sardinia rose against Austria.
  • Metternich, the influential figure opposing national identity, was forced to leave Vienna in disguise.
  • Hungary and Bohemia both asserted claims for national independence, while Milan expelled the Austrians, and Venice became an independent republic.

Unification of Italy and Germany

The unification of Italy and Germany stands out as the most significant development under the rise of nationalism in 19th-century Europe.

• Unification of Italy: The unification of Italy, also known as the Risorgimento (meaning “resurgence”), was a 19th-century political and social movement that resulted in the consolidation of various states of the Italian Peninsula into a single state, the Kingdom of Italy.
• Driven by nationalism, liberalism, and the desire to weaken Austrian influence, the process began with rebellions in the 1820s and 1830s against the outcome of the Congress of Vienna, precipitated by the Revolutions of 1848 and culminated in 1871.
• The key figures of the unification were Count Camillo Benso di Cavour, King Victor Emmanuel II and Giuseppe Garibaldi. The movement was inspired by Giuseppe Mazzini, who advocated for unity and independence through the Young Italy movement.
• Unification of Germany: The unification of Germany was an important political movement that consolidated numerous German states into a powerful nation culminating in the proclamation of the German Empire in 1871, under the Prussian leadership. 
  • In 1834, the Zollverein or German Customs Union was formed, helping facilitate economic integration among the German states. This laid some groundwork for political unification.
  • The Prime Minister of Prussia, Otto von Bismarck, became the dominant force and architect behind German unification through a series of wars in the 1860s and 1870s.
  • In 1871, the German Empire (Deutsches Reich) was officially proclaimed, with the Prussian King Wilhelm I becoming its first emperor.

The growth of capitalism in Europe in the 19th century was a critical phase in the economic history of the world, marked by a profound transformation of production, trade, labor, and social structures. It was a period when capitalism evolved from a largely mercantile system into a fully developed industrial capitalist economy, fundamentally reshaping Europe’s societies and laying the groundwork for the global economic order that emerged in the 20th century. This growth was driven by several interrelated factors, including the Industrial Revolution, the expansion of global trade, urbanization, technological innovations, and the increasing dominance of laissez-faire economic policies.

The Industrial Revolution and the Rise of Capitalism

One of the most important catalysts for the growth of capitalism in the 19th century was the Industrial Revolution, which began in Britain in the late 18th century and spread to other parts of Europe in the early 19th century. The Industrial Revolution marked a shift from agrarian, handcraft-based economies to economies dominated by large-scale machine production. It brought about significant increases in productivity and the creation of new industries, such as textiles, iron and steel production, and coal mining.

Factories became the new centers of production, replacing small workshops and domestic systems of production. The rise of factories, which employed large numbers of workers, allowed for the mass production of goods at lower costs, thus increasing profitability. This new industrial model was highly compatible with the capitalist system, where the means of production were owned by private individuals or corporations who sought to maximize profits by investing in technological advancements and minimizing production costs.

The British textile industry was among the first to experience these transformations. With inventions like James Hargreaves’ spinning jenny (1764) and Richard Arkwright’s water frame (1769), the textile industry became mechanized, significantly increasing output and reducing the labor needed for production. As Britain’s textile production soared, it became the world’s leading exporter of cotton textiles, setting the stage for its economic dominance in the 19th century. Cotton became the centerpiece of industrial capitalism, with the British Empire relying heavily on raw cotton from its colonies, particularly India and the American South.

Growth of Urbanization and the Capitalist Labor Force

As industrial production expanded, so too did the urban population. The 19th century saw rapid urbanization across Europe, driven by the need for labor in industrial centers. Millions of people moved from rural areas to cities in search of work, transforming the demographic landscape of Europe. In Britain, the population of cities like Manchester, Birmingham, and London exploded as they became hubs of industrial activity. By 1850, over half of Britain’s population lived in cities, a sharp contrast to the largely rural societies of previous centuries.

This urbanization facilitated the growth of a wage labor force, which became a hallmark of the capitalist system. Workers in the new industrial economy were paid wages in exchange for their labor, a fundamental shift from the traditional systems of feudalism or agrarian subsistence. In the factory system, workers were subjected to long hours, low pay, and often dangerous working conditions. While industrialists and capitalists profited from the increased efficiency and scale of production, workers faced exploitation and economic insecurity, leading to the emergence of a distinct working class.

The rise of capitalism also fostered social stratification. The factory owners and industrialists, often referred to as the bourgeoisie, accumulated wealth and power, while the working class, or proletariat, lived in poverty. This social disparity became a source of tension and conflict throughout the century, contributing to the rise of labor movements and socialist ideologies that opposed capitalist exploitation.

Laissez-Faire Economic Policies and the Expansion of Capitalism

The 19th century saw the widespread adoption of laissez-faire economic policies, which played a crucial role in the growth of capitalism in Europe. Laissez-faire economics, championed by thinkers like Adam Smith and David Ricardo, advocated for minimal government intervention in the economy. The underlying belief was that free markets, driven by competition and individual self-interest, would naturally regulate themselves and lead to the most efficient allocation of resources.

The British government, in particular, embraced laissez-faire principles, repealing protectionist laws and allowing free trade to flourish. The most famous example of this was the repeal of the Corn Laws in 1846, which had previously imposed tariffs on imported grain to protect domestic agriculture. The repeal of these tariffs allowed for cheaper grain imports, lowering the cost of food for the urban working class and increasing the profitability of industrial capitalists who relied on cheap labor.

The shift towards free trade policies also accelerated the expansion of global trade. European capitalist powers, particularly Britain, sought new markets for their manufactured goods, leading to an era of imperial expansion. Colonialism and capitalism were deeply intertwined, as European powers exploited the resources and labor of their colonies to fuel industrial production and economic growth. Raw materials like cotton, rubber, coal, and minerals were extracted from colonies in Africa, Asia, and the Americas and brought back to Europe to feed its industries.

Moreover, the gold standard, which linked national currencies to a fixed quantity of gold, became widely adopted in the second half of the 19th century. This provided stability to international trade and facilitated the growth of a global capitalist economy by making cross-border transactions more predictable. As European economies became more integrated into global markets, capitalists invested in new industries, technologies, and infrastructure.

Technological Innovations and Capitalist Growth

Technological innovation was another driving force behind the growth of capitalism in the 19th century. The period witnessed the invention of steam engines, railways, telegraphs, and steel production techniques, all of which revolutionized industries and transformed economic activities. The introduction of railways had a particularly profound impact on European economies. Railroads facilitated the faster movement of goods and people, significantly lowering transportation costs and enabling the rapid expansion of markets. By 1850, Britain had established an extensive railway network, and other European countries soon followed suit. This allowed industrialists to transport raw materials and finished goods over long distances, creating a truly national and international economy.

The growth of iron and steel production, made possible by innovations like Henry Bessemer’s steel-making process (1856), was crucial for the development of heavy industries such as shipbuilding, construction, and machinery manufacturing. The use of steel in building infrastructure, machinery, and weapons not only boosted capitalist growth but also strengthened Europe’s military and industrial might, enabling further colonial expansion and the conquest of new markets.

The banking sector also underwent significant development during this period. The rise of joint-stock banks allowed for the pooling of large amounts of capital, which could be invested in industrial ventures and infrastructure projects. These banks facilitated the flow of capital within Europe and between Europe and its colonies, providing the financial backing needed for industrial expansion.

Industrial Capitalism and the Rise of Consumerism

As capitalism grew in the 19th century, it also gave rise to consumerism. Mass production techniques allowed for the creation of affordable goods on a scale never before seen, making products like textiles, furniture, and household items accessible to a broader segment of the population. In Britain, by the mid-19th century, the rise of the middle class—composed of professionals, merchants, and factory owners—created a new demand for goods and services. This consumer culture, coupled with the growth of advertising, department stores, and standardized products, became a significant aspect of capitalist economies.

The capitalist system encouraged innovation and entrepreneurship, as individuals and companies sought to outcompete one another by producing better goods at lower costs. Inventions like sewing machines, agricultural equipment, and steam-powered locomotives revolutionized everyday life, contributing to a new era of prosperity for some, while also creating new challenges, such as labor unrest and economic inequality.

Labor Movements and Responses to Capitalist Growth

While capitalism brought unprecedented economic growth, it also led to significant social problems, particularly for the working class. The harsh conditions of industrial labor—long hours, unsafe working environments, and low wages—led to widespread dissatisfaction among workers. The rise of trade unions and socialist movements was, in part, a response to the inequalities created by the capitalist system. Workers organized strikes and labor unions to demand better working conditions, higher wages, and shorter hours.

The emergence of Marxist thought during this period also provided a powerful critique of capitalism. Karl Marx and Friedrich Engels, in their work The Communist Manifesto (1848), argued that capitalism was inherently exploitative, with the bourgeoisie (the capitalist class) benefiting from the labor of the proletariat (working class). Marx predicted that the contradictions of capitalism would eventually lead to its collapse and be replaced by a classless, socialist society. While this revolution did not occur in the 19th century, Marxist ideas gained traction, particularly among workers and intellectuals, and would later play a significant role in the political developments of the 20th century.

Conclusion

The growth of capitalism in Europe during the 19th century was a multifaceted and dynamic process that transformed economies, societies, and global relations. Industrialization, driven by technological innovation and the expansion of global trade, was at the heart of this transformation. The capitalist system fostered significant economic growth, creating new industries, technologies, and consumer markets. However, it also led to social stratification, labor unrest, and the exploitation of both European workers and colonial populations. The 19th century laid the foundations for modern capitalism, which would continue to evolve and shape the global economic system in the decades to come.

Imperialism is maintaining or extending power over foreign nations, particularly through expansionism, employing both hard power (military and economic power) and soft power (diplomatic power and cultural imperialism). Imperialism focuses on establishing or maintaining hegemony and a more or less formal empire. While related to the concepts of colonialism, imperialism is a distinct concept that can apply to other forms of expansion and many forms of government.

DEFINITIONS OF IMPERIALISM

There is no one standard definition of imperialism. Let us look at some often used ones. Imperialism refers to the process of capitalist development which leads the capitalist countries to conquer and dominate pre-capitalist countries of the world.

Imperialism is the system of political control exercised by the metropolis over the domestic and foreign policy and over the domestic politics of another polity, which we shall call the periphery (countries at the margins of the economic hierarchy).

The term imperialism is used to designate the international practices and relations of the capitalist world during the distinct stage of mature capitalism that begins in the last quarter of the 19th 26 century.

All these definitions, their differences notwithstanding, firmly establish imperialism as a modern phenomenon and distinctly different from pre-modern forms of conquests and political domination. In this context four important characteristic features of imperialism are:  

• Sharp increase in international flow of commodities, men and capital, 
• Interdependent set of relations between countries at different levels of industrial development, 
• Advanced and superior technology in imperialist countries, and 
• Competition between advanced capitalist countries

Empire Versus Imperialism

It is important to distinguish between empires and imperialism. There were many empires in history but empire in the era of capitalism is imperialism.

What was new about imperialism in the modern era? What made it different from earlier expansions of empire? In earlier eras the motive was exaction of tribute. Under capitalism the economies and societies of the conquered or dominated areas were transformed, adapted and manipulated to serve the imperatives of capital accumulation in the imperialist countries placed at the centre of the economic hierarchy.

Imperialism Versus Colonialism

The distinction between imperialism and colonialism is equally important. The history of imperialism is different from the history of particular colonies. Imperialism is a specifically European phenomenon whereas colonialism is the system prevalent in the colonies. It can also be argued that since European imperial history had a basic unity – therefore to study an empire in isolation would be pointless.

When we study imperialism we examine the impact of empire on the metropolis, whereas colonialism refers to the impact on the colony. The advantages of the empire to the mother country ranged from the colonial wealth which financed the industrial revolution to the evolution of superior military technology, mechanisms of control such as the army and bureaucracy and disciplines such as anthropology.

MODES OF IMPERIALISM

Imperialism can be both formal and informal. Formal imperialism involves annexation and direct rule while informal empire means indirect rule by local elites who are independent legally but politically dependent on the metropolis. Similarly, there are three broad types of empires which have either existed in a linear chronology, one succeeding the other, or also co-existed with each other at a particular historical juncture. These types are: 

1) trading empires which took the initiative in early conquests but eventually lost out in the era of industrial capitalism, such as Portugal and Spain 

2) industrial empires with full-fledged colonies, such as Britain and France 

3) industrial empires without, or with few, formal colonies, such as Germany

At the same time, it is important to remember different historical stages through which capitalist expansion took place leading to the formation of empires. The changing nature of imperialism was dependent upon the stages of capitalist development. Broadly speaking capitalism may be said to have gone through five stages, mentioned below: 

1) end of 15th to mid 17th Century — rise of commercial capital and rapid growth of world commerce 

2) mid 17th to latter 18th Century — commercial capital ripens into a dominant economic force 

3) late 18th Century to 1870s — the era of industrial capital 

4) 1880 to World War I — rise of monopoly capital, division of globe, etc. 

5) Post World War I — socialism, decolonization, rise of multinational corporations

In this sense stages of imperialism coincide with stages of capitalism 

Stage of capitalism  –   Imperial Powers 

1) Merchant capitalism – Portugal and Spain 

2) Industrial capitalism – Britain, France and Netherlands 

3) Finance capitalism  – Britain, USA and Germany 

The history of the European colonial empires falls into two overlapping cycles. The first began in the 15th Century and ended soon after 1800, the second in the late 18th Century lasting into the twentieth. During the first cycle America was important as a colony—in the second Africa and Asia.

THEORIES OF IMPERIALISM

The theories of imperialism can be grouped into two broad types, economic (J.A. Hobson, Hilferding, Rosa Luxembourg and Lenin) and political (Schumpeter, Fieldhouse, Gallagher and Robinson). They can also be distinguished as metrocentric (Schumpeter, Lenin, Hobson) and pericentric (Gallagher and Robinson, Fieldhouse). Let us look at these separately.

The Economic Explanations

The economic explanations offered by Hobson, Hilferding, Rosa Luxembourg and Lenin had a common feature — a political agenda.

Hobson’s purpose was to alert the British public to “the new plutocratic phenomenon that was hijacking British foreign policy” — to the expansionist agenda that was extracting a heavy price from the ordinary people merely to satisfy the financial capitalists who cared for nothing except maximizing returns on their investments. Hilferding was a German Social Democrat who was Finance Minister and paid with his life for being anti Nazi. Rosa Luxembourg, born in Poland, was a fiery revolutionary Social Democrat leader in Germany. Vladimir Lenin, the prominent Bolshevik leader and maker of the Revolution in Russia in 1917, wished to convince the Russian people that World War I was an imperialist war which they would do best to stay out of.

In Imperialism (1902) Hobson explains imperialism as an outcome of the capitalist system. The key concept used is underconsumption. Industry looked for foreign markets as it cannot find domestic markets for its goods, wages being low. With major industrial powers competing for foreign markets there was a race for colonies which would serve as captive markets. Underconsumption also leads to oversaving as domestic investment does not make sound economic sense when there is little purchasing power.

Here again colonies serve as channels for investment.

Thus Hobson concluded that “..the dominant directive motive” behind imperialism “was the demand for markets and for profitable investment by the exporting and financial classes within each imperialist regime.” He dismissed other motives as secondary, be it power, pride and prestige or “trade follows the flag” or the mission of civilizing the natives.

Rudolf Hilferding, in his work, Das Finanzkapital, (Finance Capital) published in 1910, demonstrated how big banks and financial institutions in fact control industrial houses in this last stage of capitalism, better known as finance capitalism. Monopoly capitalists looked to imperialist expansion as a way of ensuring secure supplies of raw materials, markets for industrial goods and avenues for investment. As each big European power was a monopoly capitalist, economic competition soon became political rivalry, which in turn escalated into war.

Rosa Luxembourg’s study titled Accumulation of Capital (1913) highlighted the unequal relationship between the imperial powers and the colonies. The European powers gained captive markets and secured profitable avenues for investment. In contrast, the colonies were merely suppliers of raw materials and foodstuffs.

In Imperialism, The Highest Stage of Capitalism (1916) Lenin argued that advanced capitalist countries invest in backward countries because the limits of profitable domestic investment have been reached. To invest at home would require development of the economy and better standard of living for workers, neither of which was in the interest of the capitalists. Lenin’s argument was that imperialist interests lay behind the rivalries between European powers that culminated in World War I. His intention was overtly political – to expose the capitalist designs and convince the people of Russia that they should not participate in the War.

Non-economic explanations

Schumpeter’s Imperialism and the Social Classes (1931) broke away from the leftist paradigm which located imperialism and capitalism on the same grid. In his scheme, imperialism and capitalism were seen as clearly separate phenomena. Imperialism was atavistic, generated by pre-capitalist forces (pre-modern in essence). In contrast, capitalism was modern, innovative and productive and did not need control on a territory in order to prosper.

Whereas the writers on the left saw imperialism as an economic system, for Schumpeter, “Imperialism is the objectless disposition on the part of a state to unlimited forcible expansion.” However, the problem with the usage of a conceptual attribute like ‘disposition’ is that it can not be empirically tested and can, therefore, never be proved or disproved. Gallagher and Robinson (Africa and the Victorians) questioned the common interpretations of modern imperialism on two counts. They understood the distinction between pre 1870 and post 1870 imperialism to be invalid. Also, imperialism of free trade or informal imperialism was seen to be as important as formal imperialism. Political expansion was a function of commercial expansion – “trade with informal control if possible; trade with rule when necessary.”

Gallagher and Robinson’s explanation of imperialism was pericentric. In their view imperialism was a process driven by pressures from the peripheries – Asia, Africa and Latin Africa. The scramble for colonies was a preemptive move by European powers to occupy whatever territory they could in Asia and Africa so as to keep out rival nations. This view questioned the traditional Eurocentric explanation of the scramble for colonies in terms of the great conflicts of European diplomacy or the great thrusts of expansionary financial capitalism.

Fieldhouse advanced a political explanation for imperialism. The new imperialism was the extension into the periphery of the political struggle in Europe. At the centre the balance was so nicely adjusted that no major change in the status or territory of any side was possible. Colonies became a means out of this impasse. For the British this “impulse” meant protecting the route to India through Egypt and the Suez Canal which necessitated control over the headwaters of the Nile and a predominant position in North Africa. For the French and Germans the impulse meant acquiring “places in the sun” to demonstrate national prestige. Fieldhouse concluded: “In short, the modern empires lacked rationality and purpose: they were the chance products of complex historical forces operating over several centuries and more particularly during the period after 1815.”

Colonialism, according to AJP Taylor, became a “move” in the European game of balance of power. Doyle uses the term ‘colonialization of the diplomatic system’ to describe the developments between 1879 and 1890. Bismarck acquired colonies in the early 1880s in the hope that a colonial quarrel with England would establish German credibility in France. France had to be compensated with colonies and overseas adventures in lieu of her loss of Alsace Lorraine. Competition for colonies led to a rift between England and Italy and Italy went over to the side of Germany.

To sum up this section, a whole range of theories and explanations have been offered for imperialism and are now available with us. These can broadly be classified into economic and non-economic explanations. The economic explanation includes the factors pertaining to overproduction and underconsumption (Hobson), requirements of finance capitalism (Hilferding ), unequal exchange between the imperial powers and the colonies (Rosa Luxembourg), and the highest stage of capitalism (Lenin). The non-economic explanations have looked at imperialism as a pre-modern atavistic force (Schumpeter); or have offered a pericentric view concentrating on the developments in the colonies rather than the metropolis (Gallaghar and Robinson); or have seen it merely as an expression of political struggles within Europe (Fieldhouse).

STAGES OF IMPERALISM

The previous section was a discussion of the different ways in which imperialism has been understood and defined by scholars. In this section let us examine its development through various stages.

Mercantilism and Early Trading Empires

What enobled Europe to become the world leader? If we looked at the world in 1500 Europe’s dominant position could not be taken for granted. The Ottoman Empire, China under the Mings and India under the Mughals were at the same stage of development. They suffered from one major drawback, however, and that was their domination by a centralized authority which did not provide conditions conducive to intellectual growth. In contrast, the competition between different European powers encouraged the introduction of new military techniques. For example, the long range armed sailing ship helped the naval powers of the West to control the sea routes. This increased military power combined with economic progress to push Europe forward and ahead of other continents.

The growth of trans – Atlantic trade was spectacular. It increased eightfold between 1510 and 1550 and threefold between 1550 and 1610. Trade was followed by the establishment of the empires and churches and administrative systems. The Spanish and Portuguese clearly intended their empires in America to be permanent. The goods obtained from America were gold, silver, precious metals and spices as well as ordinary goods like oil, sugar, indigo, tobacco, rice, furs, timber and new plants like potato and maize. Shipbuilding industry developed around the major ports of London and Bristol in Britain, Antwerp in Belgium and Amsterdam in the Netherlands. The Dutch, French and English soon became keen rivals of the Spanish and Portuguese. This competition encouraged the progress of the science of navigation. Improved cartography, navigational tables, the telescope and the barometer made travel by sea safer. This strengthened Europe’s technological advantage further. The story of science and technology enabling European domination in trade with other areas has been told in the previous two Units of this Block.

The discovery of America and of the route to the Indies via the Cape of Good Hope had great consequences for Europe. It liberated Europe from a confined geographic and mental cell. The medieval horizon was widened to include influences from Eastern civilizations and Western peoples. 

Discoveries, trade and conquests, which followed them, had practical consequences. Every colony or trading centre was a new economic stimulus. America was a market and American bullion increased the supply of money circulating in Europe and intensified existing economic and social developments. The volume of trade with America increased. For four centuries America satisfied the hunger for land among Europeans. Gold and silver stimulated exploration and conquest and attracted immigrants, who were followed close on their heels by missionaries. American colonies were set up by individuals; the state, patriotism and missionary impulse played little part.

Before 1815 Spain and Portugal were the pre-eminent imperial powers. Their primacy lay not only in the fact that they were the first discoverers but that they worked out four of the five models for effective colonization which were typical of the first colonial empires. Both made huge profits from their colonies.

Portugal had a huge empire in Asia and then in America and Brazil. Colonial revenues brought in the equivalent of 72,000 pound sterling in 1711. This was almost equal to metropolitan taxes. One special feature of the Portuguese empire was that she made no distinction between her colonies and the metropolis. No separate colonial department was set up till 1604.

France, like Spain and Portugal, carried out expansion in the Americas – in the regions of Canada and Latin America. This was undertaken by individual Frenchmen supported by the Crown with the aim of ensuring supplies of groceries and increasing naval power. The task of setting up the empire was carried out by the chartered companies. This worked to the advantage of the state as it was at a minimum cost. After 1660s the colonies became royal possessions and royal agents headed the government. French colonial government was as authoritarian as that of Spain. France was then an absolute monarchy and ruled colonies without giving them any constitutional rights. Local administration and law in the colonies were modeled on those prevailing in France. Her colonial empire suffered from too much state interference. France made no fiscal profits on her colonies, in sharp contrast to Portugal. This was despite the fact that more than two fifths French exports in 1788 were to colonial governments. By 1789 France lost most of her colonial possessions in America and India to Britain. The crucial weakness was her inferior naval power.

Some of the Western states developed their colonies in the tropics, in India, Africa, Latin America and Australia. The Europeans did not settle in Africa, they were content with slaves, gold dust and ivory. The colonies were crucial to the British economy, they supplied raw materials and were markets for metropolitan products. The French minister, Choiseul, regretted that ‘in the present state of Europe it is colonies, trade and in consequence sea power, which must determine the balance of power upon the continent.”

Of the five big European powers, France, Britain, Austria, Russia and Prussia, Britain soon emerged as the leader. She had many advantages — the first was a developed banking and financial system. Her geographical location at the westward flank of Europe helped her to maintain a distance from the continent when she wished. The most important factor, which gave Britain an edge, was that it was the first country to undergo the Industrial Revolution. This enabled it to dominate Europe and to acquire colonies. In Bernard Porter’s words, she was the first frogspawn egg to grow legs, the first tadpole to change into a frog, the first frog to hop out of the pond.

The first empires represented European ambition, determination and ingenuity in using limited resources rather than European predominance throughout the world. “Christendom is also the proper perspective from which to view the religious drive behind the Spanish justification for empire.”(Doyle:110) Doyle further sums up Spanish and British empires: “Spain and Britain focused on trade in the east, on settlement and production in the west, and neither acquired colonies for immediate reasons of national security.”

Decline

The old colonialism had its natural limits. Flow of precious metals declined. By the late 18th Century Spanish and Portuguese power declined and they lost their colonies. Dutch monopoly on shipping ended. Colonial rivalry between France and Britain ended in Britain’s preeminence. Britain was now the world leader in empire, finance and trade. As Eric Hobsbawm put it, “Old colonialism did not grow over into new colonialism. It collapsed and was replaced by it.”

Let us sum up the discussion so far. Europe’s conquest of America, Africa and Asia from the sixteenth century was possible only because of her mastery of the seas. In this the countries on the Atlantic seaboard, Portugal, Spain, France, Britain and Holland, had an obvious advantage because of their geographical location. Europe’s domination was disastrous for other peoples: the indigenous populations in the Americas were wiped out and twelve million Africans were made slaves between 1500 and 1860. Europe benefited vastly in this era when merchant capital controlled the world economy. Institutions such as the modern state and bureaucracy and the scientific revolution in knowledge laid the foundations of the modern world.

Industrial capitalism— Imperialism of Free Trade

Hobsbawm describes the Industrial Revolution in Britain as that unusual moment in world history when the world’s economy was built around Britain; when she was the only world power, the only imperialist, the only importer, exporter and foreign investor. The description of Britain as the workshop of the world was literally true in the middle of the nineteenth century when she produced most of its coal, iron and steel. The Industrial Revolution was followed by the single liberal world economy (in the 1860s possibly because of the monopoly of Britain) and the final penetration of the undeveloped world by capitalism.

The early British industrial economy relied for its expansion on foreign trade. Overseas markets for products and overseas outlets for capital were crucial. The cotton industry exported eighty per cent of its output at the end of the nineteenth century. The iron and steel industry exported forty per cent of its output in the mid nineteenth century. In return Britain bought specialized local products such as cotton from the US, wool from Australia, wheat from Argentina, etc.

Britain’s trade also increasingly became greater with the empire. In cotton Latin America accounted for thirty five percent of British exports in 1840. After 1873 the East absorbed over sixty per cent of British cotton exports. Thus there were sound economic reasons for Britain opposing these areas being opened up to others.

By 1815 Britain had already become the preeminent world power, combining naval mastery, financial credit, commercial enterprise and alliance diplomacy. The following decades of British economic hegemony were accompanied by large-scale improvements in transport and communications, by the increasingly rapid transfer of industrial technology from one region to another, and by an immense increase in manufacturing output, which in turn stimulated the opening of new areas of agricultural land and raw material sources. The age of mercantilism was over and with it tariff barriers stood dismantled. The new watchword was free trade and this brought international harmony rather than great power conflict.

Europe’s military superiority continued. The improvements in the muzzle loading gun, the introduction of the breechloader, the Gatling guns, Maxims and light field artillery constituted a veritable firepower revolution, which the traditional societies could not withstand. The decisive new technology was the gun, the symbol of European superiority in the armament factory. As Hilaire Belloc said, “Whatever happens, we have got the Maxim gun, and they have not.”

In the field of colonial empires, Britain brooked no rivals. The empire grew at an average annual rate of 100,000 square miles between 1815 and 1865. One group of colonies comprised those acquired for strategic and commercial reasons like Singapore, Aden, Falkland Islands, Hong Kong and Lagos. A second group was that of settler colonies, such as South Africa, Canada and Australia.

With the spread of industrial capitalism the need grew for colonies as markets for manufactured goods especially textiles and suppliers of raw materials such as cotton and foodgrains. The colony emerged as a subordinate trading partner whose economic surplus was appropriated through trade based on unequal exchange. This international division of labour condemned the colony to producing goods of low value using backward techniques.

Late industrializers and colonial powers

By the 1860s the other countries like Germany and United States, were catching up with Britain in industrialization. In 1870 the figures for share of world industrial production were 13 percent for Germany and 23 per cent for the United States.

In 1900 Britain was the unquestioned world leader. Her empire extended to twelve million square miles and a quarter of the world’s population.

The race for colonies speeded up from the 1880s with the entry of Germany, Italy, US, Belgium and Japan into the race for colonies. These rivalries between the powers led to a race for new colonies as each power sought to make secure her markets, raw materials and investments. Backward regions were annexed in order to control their raw material supplies. Malaya gave rubber and tin and the Middle East gave oil. Empire was a cushion in a hard world.

These imperialist rivalries which carved up the world into colonies, semi colonies and spheres of influence also divided Europe into blocs armed to the teeth, the logical corollary of which was World War I .

World War I ended in the defeat of Germany and the Ottoman Empire and redivision of colonies among the imperial powers, who were henceforth called trustees. The Depression of 1929 brought a change in the attitude of imperial powers. Gone were the days of Free Trade; protectionism was the new catchword.

Finance Capitalism

Stages of capitalism and imperialism could overlap, as in the case of industrial capitalism and financial capitalism, where one did not replace the other, it was superimposed on it. The informal empire of trade and finance was added to the empire of industrial capital.

Many major changes took place in the world economy after 1860. Industrialization spread to several countries of Europe, the US and Japan with the result that Britain’s industrial supremacy in the world came to an end. For Britain this was a setback. She exchanged the informal empire over most of the underdeveloped world for the formal empire of a quarter of it, plus the older satellite economies.

The application of scientific knowledge to industries led to an intensification of industrialization. Modern chemical industries, the use of petroleum as fuel for the internal combustion engine and the use of electricity for industrial purposes developed during this period. Moreover, there was further unification of the world market because of revolution in the means of international transport.

Capital accumulation on a large scale took place because of the development of trade and industry at home and extended exploitation of colonies and semicolonies. This capital was concentrated in a few hands. Trusts and cartels emerged and banking capital merged with industrial capital. Outlets had to be found for this capital abroad.

Significant export of capital had been there even before the stage of predominance of finance capital. By 1850 Britain’s capital exports were 30 million pounds a year. In 1870-75 this was 75 million pounds. The income from this came to 50 million pounds, which was reinvested overseas. This financed the trade with the colonies, wherein huge quantities of raw materials were procured and equally vast quantities of industrial goods sent out. As Paul Kennedy puts it so evocatively, the world was the City of London’s oyster.

The stranglehold of monopoly capital can be gauged from the statistic that by 1914 European nations controlled over 84.4 per cent of the world. Capital was concentrated in and channeled through first, the City of London and then New York, the centres of the international network of trade and finance.

The metropolitan country also used empire for political and ideological ends. Jingoistic nationalism and glorification of empire acted to reduce social divisions in the metropolis. Bipan Chandra notes that the slogan —‘the sun never sets on the British empire’ –generated pride among British workers on whose hovels the sun seldom shone in real life. Each country justified its empire in different ways – for example, the “civilizing mission” of the French and the pan – Asianism of Japan.

Between 1870 and 1913 London was the financial and trading hub of the world. By 1913 Britain had 4000 million pounds worth abroad. Most international trade was routed through British ships at the turn of the twentieth century. After World War I Britain lost this position to the US. The US became the major dominant capitalist economy. She was now the world’s largest manufacturer, foreign investor, trader and banker and the US $ became the standard international currency.

From the mid-twentieth century onwards, decolonization gathered pace, as did the rise of multinational companies, international donor agencies and the entire gamut of mechanisms of international economic influence. This process is generally known as neo-colonialism.

THE EMPIRE ON WHICH THE SUN NEVER SET

Let us take Britain and her empire, especially India, as a case study to assess the advantages accruing to the mother country from her imperial possessions.

Bipan Chandra draws our attention to the simultaneity of birth of the Industrial Revolution and the British Empire in India, which, interestingly, was not merely coincidental. The conquest of Bengal in 1757 enabled the systematic plunder of India and the Industrial Revolution took off around 1750. The drain of wealth or the unilateral transfer of capital from India after 1765 amounted to two to three per cent of the British national income at a time when only about five per cent of the British national income was being invested.

In the 19th Century India emerged as a major market for British manufactures and supplied foodgrains and raw materials. Opium from India was sold in China, enabling Britain’s triangular trade with China. Railways were a major area of investment of capital. Britain’s international balance of payments deficit was handled by the foreign exchange got from Indian exports. British shipping grew in leaps and bounds on the back of its control over India’s coastal and international trade.

India played a crucial role in the development of British capitalism during this stage. British industries especially textiles were heavily dependent on exports. India absorbed 10 to 12 per cent of British exports and nearly 20 per cent of Britain’s textile exports during 1860-1880. After 1850 India was also a major importer of engine coaches, rail lines and other railway stores. Moreover, the Indian army played an important role in extending British colonialism in Asia and Africa. Throughout this stage the drain of wealth and capital to Britain continued.

England was particularly keen on the Indian empire as it provided a market for cotton goods; it controlled the trade of the Far East with her export surplus (opium) with China. The Home Charges (India’s payments for receiving “good” administration from Britain) and the interest payments on the Indian Public Debt were important in financing Britain’s balance of payments deficit.

India strengthened Britain’s position as an international financial centre. India’s trade surplus with the rest of the world and her trade deficit with England allowed England to square her international settlements on current account. Also India’s monetary reserves helped Britain. Hence in India even the free traders wanted formal control.

The projection of India as the brightest jewel in the British crown played an important role in the ideology of imperialism. The British ruling classes were able to keep their political power intact even when it was being riven with class conflict. Thus the pride and glory underlying the slogan of the sun never sets on the British empire were used to keep workers contented on whose slum dwellings the sun seldom shone in real life. India also played a crucial role in one other, often ignored, aspect. India bore the entire cost of its own conquest. India paid for the railways, education, a modern legal system, development of irrigation and detailed penetration of administration into the countryside.

Lastly once the struggle for the division of the world became intense after 1870 India was the chief gendarme of British imperialism. She provided both the material and the human resources for its expansion and maintenance. Afghanistan, Central Asia, Tibet, the Persian Gulf area, Eastern Africa, Egypt, Sudan, Burma, China and to some extent even South Africa were brought or kept within the British sphere of influence by virtue of Indian men and money. The British Indian army was the only large scale army contingent available to Britain. It is therefore not a surprise that the British empire in Asia and Africa collapsed once Britain lost control over the Indian army and finances.