119case of British World markets, much work remains to be done to uncover what these traditions and practices actually were.

We begin with Britain’s trade statistics, introducing new comparative data on the proportion of income spent on British products by ­colonial, American and Argentine consumers. This data reveals how ­‘non-market’ advantages can help to explain why such large volumes of British products were typically absorbed by the settler colonies, while making it clear that much of the increase in the proportion of British exports going to these markets was the result of their mounting affluence, and not simply of their (growing) fondness for the wares of British producers. With the quantitative groundwork laid, the chapter then moves on to explore the more qualitative underpinnings of the British exporter’s engagement with the settler colonies. What were the main sources of the advantages that Britain enjoyed there? The analysis is conducted under three headings:  commercial policy and structures, international trade networks, and cultures of consumption. In each case it is shown how it was the social and institutional consequences of demographic expansion that struck most decisively at the roots of economic activity within the British World, albeit in ways more subtle and complex than has often been appreciated.

Exports and empire

An important aspect of Britain’s trade history of the later nineteenth and early twentieth centuries is the rise of Britain’s settler colonies as a major outlet for its exports. Table 4.1 neatly illustrates this ‘imperial

6 K. O’Rourke and J. G. Williamson, Globalization and History: The Evolution of a Nineteenth-

Century Atlantic Economy (Cambridge, MA: Harvard University Press, 1999).

7 M. Bevir and F. Trentmann (eds.), Markets in Historical Contexts: Ideas and Politics in the

Modern World (Cambridge: Cambridge University Press, 2004).

120Table 4.1. British exports by regions, 1871–1913 (quinquennial

average percentages).

1871–5

1881–5

1896–1900

1909–13

British settlement colonies

12.0

16.2

16.7

17.5

British India

8.9

12.9

11.8

11.9

Rest of the empire

5.9

5.9

5.6

5.6

Developed countries

47.2

39.4

39.3

35.9

Rest of the world

26.0

25.6

26.6

29.1

Source: P. J. Cain and A. G. Hopkins, British Imperialism, 1688–2000

(London: Pearson Education, 2001), pp. 153, 432.

drift’. Between 1871 and 1913, the proportion of all British exports going to the empire rose from 26.8 per cent to 35 per cent, a rise in stark contrast to the shrinking share taken by the developed countries of industrial Europe and the United States. Not all parts of the empire, however, shared equally in this growth. In fact, the leading recipients of the increased flow of British exports to the empire were the settler colonies – Australia, New Zealand, Canada and South Africa.

Why did these particular markets prove so accessible to the British manufacturer? Attempts to answer this question go back to the end of the nineteenth century, when the trend first became apparent.8 Since then a wide variety of factors have been adduced, the most common of which are shared language, currencies, tastes, institutions and expect­ations; the use of preferential tariffs; their governments’ practice of buying British first where possible; dependence on British investment for continued development; and the density of their transport and communication links with Britain.9 Taken separately or together, such considerations are thought to

8 For a contemporary view, see A. W. Flux, ‘The Flag and Trade: A Summary Review of

the Trade of the Chief Colonial Empires’, Journal of the Royal Statistical Society 62:3

(1899–46), 489–533, esp. pp.  522–33; for subsequent scholarly assessments see P.

J. Cain, ‘The Economic Philosophy of Constructive Imperialism’, in C. Navari (ed.),

British Politics and the Spirit of the Age: Political Concepts in Action (Keele: Keele University

Press, 1996), pp. 41–65; F. Coetzee, For Party or Country: Nationalism and the Dilemmas

of Popular Conservatism in Edwardian England (Oxford: Oxford University Press, 1990),

pp.  42–8, 61–70, 85–98, 117–25; A. L. Frieberg, The Weary Titan:  Britain and the

Experience of Relative Decline, 1895–1905 (Princeton: Princeton University Press, 1988),

pp. 24–79; E. H. H. Green, ‘The Political Economy of Empire, 1880–1914’, in A. Porter

(ed.), The Oxford History of the British Empire, 5 vols., Vol. III: The Nineteenth Century

(Oxford:  Oxford University Press, 1999), pp.  346–70; and A. S. Thompson, Imperial

Britain: The Empire in British Politics, c. 1880–1932 (Harlow: Pearson Education, 2000),

pp. 85–9, 104–9.

9 D. K. Fieldhouse, ‘The Metropolitan Economics of Empire’, in J. M. Brown and W.

R. Louis (eds.), The Oxford History of the British Empire, 5 vols., Vol. IV: The Twentieth

121Markets and consumer cultures have afforded British exporters unique advantages in the markets of both Britain’s formal and informal empire. While many contemporaries clearly saw these advantages as a godsend that, if properly built upon, could secure the future for British industry in troubled times,10 later commentators have been more inclined to regard them as temptations that in the long run promised – and indeed delivered – ruination.11 Yet how reasonable is it to draw such a strong and

Century (Oxford: Oxford University Press, 1999), pp. 88–113; D. K. Fieldhouse, ‘For

Richer, for Poorer?’, in P. J. Marshall (ed.), Cambridge Illustrated History of the British

Empire (Cambridge: Cambridge University Press, 1996), pp. 110–12; F. Capie, ‘Britain

and Empire Trade in the Second Half of the Nineteenth Century’, in D. Alexander and

R. Ommer (eds.), Volumes not Values: Canadian Sailing Ships and World Trades (Memorial

University Newfoundland: Maritime History Group, 1979), pp. 3–29; F. Crouzet, ‘Trade

and Empire: The British Experience from the Establishment of Free Trade until the First

World War’, in B. M. Ratcliffe (ed.), Great Britain and Her World, 1750–1914: Essays in

Honour of W. O. Henderson (Manchester: Manchester University Press, 1975), pp. 209–35;

F. L. McDougall, Sheltered Markets: A Study of the Value of Empire Trade (London: J. Murray,

1925); D. C. M. Platt, ‘Trade Competition in the Regions of Recent Settlement’, in D.

C. M. Platt with A. J. H. Latham and R. Michie (eds.), Decline and Recovery in Britain’s

Overseas Trade, 1873–1914 (London: Macmillan, 1993), pp. 91–138; and S. B. Saul, Studies

in British Overseas Trade, 1870–1914 (Liverpool: Liverpool University Press, 1960).

10 A. J. Sargent, British Industries and Empire Markets (London: HMSO, 1930); F. L. McDougall,

The Growing Dependence of British Industry upon Empire Markets (London: HMSO, 1929).

11 As Feinstein noted, ‘those who foresaw a grim prospect of increasing foreign competi-

tion and declining sales, looked for a solution in the expansion of Britain’s exports to

the empire’; C. H. Feinstein, ‘The End of Empire and the Golden Age’, in P. Clarke and

C. Trebilcock (eds.), Understanding Decline: Perceptions and Realities of British Economic

Performance (Cambridge: Cambridge University Press, 1997), p. 218. To many, however,

it was to prove no more than a short-term fix, because, by isolating itself from the vivifying

effects of competition, dependence on the ‘soft’ markets of the empire ‘dulled the senses

of many exporters’ and ensured the continued decline of British industry. For similar

statements and sentiments, see E. J. Hobsbawm, Industry and Empire (London: Pantheon

Books, 1969), pp. 191–2; W. A. Lewis, Growth and Fluctuations, 1870–1913 (London: Allen

and Unwin, 1978), p. 121; Saul, British Overseas Trade, p. 229 (from which the ‘dulled

the senses’ quotation comes); C. P. Kindleberger, ‘Foreign Trade and Economic

Growth: Lessons from Britain and France, 1850–1913’, EcHR 14:2 (1961), 295–300;

F. Crouzet, The Victorian Economy (London: Routledge, 1992), p. 357; C. Barnett, The

Lost Victory:  British Dreams, British Realities, 1945–1950 (London:  Macmillan, 1995),

p. 12; and G. Owen, From Empire to Europe: The Decline and Revival of British Industry

since the Second World War (London: HarperCollins, 1999), pp. 185–7. For researchers

who have cast doubt on the assumption that Empire markets were necessarily ‘soft’,

see S. Pollard, Britain’s Prime and Britain’s Decline: The British Economy, 1870–1914

(London: E. Arnold, 1989), pp. xii, 37, 268; B. W. E. Alford, Britain in the World Economy

since 1880 (London: Longman, 1996), pp. 53–4; C. R. Schenk, Britain and the Sterling

Area: From Devaluation to Convertibility in the 1950s (London: Routledge, 1994), p. 81;

S. J. Nicholas, ‘The Overseas Marketing Performance of British Industry, 1870–1914’,

EcHR 37:4 (1984), 489–506 (p. 491); S. J. Nicholas, ‘Locational Choice, Performance

and the Growth of British Multinational Firms’, Business History 31:3 (1989), 122–41;

B. R. Tomlinson, The Economy of Modern India, 1860–1970 (Cambridge:  Cambridge

University Press, 1993), pp. 99–100; and A. S. Thompson and G. Magee, ‘A Soft Touch?

British Industry, Empire Markets, and the Self-Governing Dominions, c. 1870–1914’,

EcHR 56 (2003), 689–717.

122damning conclusion of British economic performance from the type of data presented in Table 3.1?12 A closer examination of the problems of using movements in the share of British exports to a particular location as a gauge of Britain’s non-market advantages there is instructive.

The first thing to note is that shifts in the dominions’ share of British exports across time tell us relatively little about the nature or extent of the advantages enjoyed there by British manufacturers. Such data cannot distinguish between the different factors that may cause the proportion of a nation’s exports to a particular market to vary. In addition to what we might call ‘imperial advantages’, growth in an exporter’s reliance on and penetration of a colonial market may have resulted from a variety of other considerations including greater price competitiveness, income growth, population expansion, better after-sales service and advertising. Given the various factors at play, it would be misleading to take the movements of export or import shares in the British World as a sure sign that Britain’s demographic connection to these societies had in itself (positive) repercussions for British trade.

A further difficulty with using export shares to assess the extent of the commercial advantages enjoyed by Britain in the settler colonies is that such an approach looks at these markets, whether as a group or independently, in isolation. Yet ‘imperial advantage’ was relative rather than absolute. What determined the attractiveness of dominion markets was not just their pro-British tastes, institutions and policies, but the fact that these attributes were not shared to the same extent in other markets. Consequently, the advantages that British exporters enjoyed, say, in New Zealand, were influenced by the nature of Britain’s relations not just with New Zealand itself but with consumers, producers and governments in other potential markets, both inside and outside the British World. If governments in these other markets had decided to impose hefty tariffs on British exports, then, ceteris paribus, the New Zealand market would have become more open than before to British manufacturers, even though nothing had actually changed in New Zealand. In a world of growing international trade, the benefits of imperial advantage cannot therefore be determined in isolation. Fortunately, there is an alternative way of examining the nature of British markets in the colonies and elsewhere that addresses these problems. This method considers the habits of typical consumers in those

12 For other cases, where raw exports shares are used, see for example S. B. Saul, ‘The

Export Economy, 1970–1914’, Yorkshire Bulletin of Economic and Social Research 17:1

(1965), 5–18 (pp. 5–6); Nicholas, ‘Overseas Marketing’, p. 491; Schenk, Sterling Area,

p. 81; and Capie, ‘Empire Trade’, p. 11.

123Markets and consumer cultures Table 4.2. Index of Britain’s revealed advantage in selected countries, 1870–1913 (quinquennial average).

Period

Australia

NZ

Canada

South Africa

Argentina

USA

1870–4

2.78

3.48

2.17

1.85

0.51

1875–9

3.43

4.20

2.12

0.31

1880–4

3.66

3.82

2.13

0.41

1885–9

3.87

3.80

2.20

0.47

1890–4

3.27

3.74

1.90

2.74

0.47

1895–9

3.95

4.24

1.70

0.39

1900–4

3.93

5.14

2.04

1.66

0.35

1905–9

3.16

4.59

1.90

2.13

0.32

1910–13

3.43

4.57

2.07

6.09

1.85

0.30

Notes: Before 1900 the Argentine figure is based on 1870 and 1890 data alone.

Similarly, the South African figure for 1910–13 is based on data from 1913 only. The

gaps in the South African and Argentine data that this causes arise because there are

no continuous GDP series for those countries for the period between 1870 and 1913.

Source: G. B. Magee, ‘The Importance of Being British? Imperial Factors and the

Growth of British Imports, 1870–1960’, Journal of Interdisciplinary History 37 (2007),

341–51 (p. 352).

locations, asking specifically whether those consumers purchased disproportionately large volumes of British wares. It is a germane question, for if ‘imperial advantages’ mattered at all, they must have done so because they actively induced, conditioned or perhaps compelled colonial consumers to spend more of their income on British products than they otherwise would have. Such an approach has the merit of targeting more precisely the commercial benefits of colonial markets than does the mere movement of export shares. Table 4.2 examines whether this was indeed the case in some of the British manufacturers’ most important export markets during the late Victorian and Edwardian era. It reports the share of each of these markets’ income devoted to the purchase of British goods relative to the proportion spent on average in western European markets (Germany, France, Belgium and the Netherlands) where the British are perceived to have had no special advantage. The resulting figure is called the ‘index of revealed advantage’. One could also express this index in per capita terms as the proportion of the average individual’s income that was spent on British exports in one market relative to the proportion expended in the ‘neutral’ markets of western Europe. Either way, the index of ­revealed advantage – by introducing comparability of consumption and by focusing on the importance of British products in the consumer’s overall expenditure – captures the effects of advantage exhibited in any market more precisely than measures based purely on export shares. Moreover, it enables the scale of non-market advantages to be gauged and compared across place and time. The further the index rises above 1, the greater the advantage for British products in the market; at 1 that market’s consumption would be identical to the western European.13

124Turning to Table 4.2 itself, we can see that, right up to the First World War, British producers did enjoy a commercial ‘advantage’ in the dominions – an advantage that translated itself into a demand for their products, and that was felt most strongly in New Zealand, South Africa and Australia.14 The advantage grew deeper over time in New Zealand and South Africa, and to a lesser extent in Australia. In 1870, for example, New Zealanders on average allocated about 10 per cent of their income to the purchase of British products (around three-and-a-half times more than a western European consumer did), rising to just over 13 per cent (or just over four-and-a-half times more than a European) by 1913. Canada was also favourably disposed to British exporters in this period, albeit less so than the other dominions. Its rate of consumption remained fairly stable throughout at a level approximately comparable to Argentina’s; that is, both Canadians and Argentines on average spent about twice the western European proportion of income on British exports. By contrast, continuous and intensifying struggle for the US consumer’s dollar, especially from the 1890s, epitomises the experience of British producers attempting to export to America. Table 3.2 indicates that US consumers on average devoted to British exports between a third and a half of the proportion of income that western Europeans did. Thus, despite its demographic links to Britain and common language and traditions, America remained a comparatively tough market for the British to penetrate. In this regard, Britain was no different from other European exporters wishing to establish a market in the protectionist United States. Taken together, the figures in Table 4.2 suggest that international markets prior to the First World War were not completely ‘neutral’. They

13 Therefore, an index reading of 2.0 literally means that that market’s consumers spend

twice as much of their income on British exports as a weighted average of western

European consumers. By contrast, a reading of less than 1 denotes that consumers in that

market use relatively less of their income on British goods than those in western Europe.

Such a market might be described as relatively disadvantageous for British exporters.

Given space limitations, no attempt is made here to discuss the background to the index

of revealed advantage. Readers are referred to G. B. Magee, ‘The Importance of Being

British? Imperial Factors and the Growth of British Imports, 1870–1960’, Journal of

Interdisciplinary History 37 (2007), 341–51, where a full discussion of the meaning and

construction of the index, and the logic underpinning it, is given.

14 See for example Platt, ‘Trade Competition’, pp. 110–17.

125Markets and consumer cultures confirm the view of contemporaries and some later scholars that dominion markets did indeed devote a disproportionately large portion of their incomes to British imports, and indicate a role for non-market factors in Britain’s nineteenth- and twentieth-century trade history.

Such a finding needs to be interpreted with care, however. That pro- British advantages existed, does not in itself, for instance, prove the common allegation that dominion markets were ‘soft’ or ‘featherbedded’. Indeed, as work elsewhere has demonstrated, despite these advantages, British World markets still proved challenging for many British exporters. By any reasonable criteria, they were certainly no easy escape from competition.15 To understand the nature of dominion markets, it is necessary to grasp that British manufacturers’ turn towards them during the late Victorian and Edwardian era was strongly governed by the rapidly rising wealth of these societies.16 Here there is a crucial distinction between levels of consumption and what caused those levels to change over time. Level and change are separate phenomena, a distinction not always appreciated in the literature on Britain’s colonial trade. A simple analogy may help make the point. Imagine that your neighbour likes to eat out at her local Chinese restaurant. Last year, she spent $250 there, but this year her accountant observes that she has spent $500. If the accountant therefore concludes that your neighbour’s love of eating at the local Chinese has obviously grown in the last twelve months, he would have in essence assumed that her expenditure patterns have been driven entirely by changed preferences. Yet, before we can accept such a view, we must rule out other possible explanations. Has your neighbour’s income increased? Or has the restaurant dropped its prices? If we investigate further and find that your neighbour’s income has doubled over the last year, while prices at the restaurant have remained unchanged, then it is reasonable to conclude that her preference for eating out has probably not altered at all, since she would be actually spending the same proportion of her income at the Chinese. In other words, while our neighbour’s liking for Chinese food certainly induced her to frequent the restaurant in the first place, in this instance it did not cause her to spend more of her money there. The moral of this story is that, like the accountant above, we must be wary of committing the fallacy of post hoc, ergo propter hoc when examining commercial activity in the British World. What promoted the high

15 Thompson and Magee, ‘A Soft Touch?’.

16 Recent econometric analysis of colonial demand for British products, for example,

provides clear quantitative evidence of the influence of income growth. See Magee,

‘Importance of Being British?’, pp. 355–67.