At the beginning of the nineteenth century, GDP per head in Western Europe and on the North American seaboard was perhaps twice that of South Asia and roughly on a par with Japan and the southern and eastern seaboard of China. By 1900, income per head in Western Europe and the North American seaboard dwarfed that of China by a margin of at least ten times. China was to pay dearly for its inability to overcome the economic constraints that began to bear down on it during the late eighteenth century; in contrast, Europe luxuriated in its good fortune. The key to Europe ’s transformation was the Industrial Revolution. Britain ’s was well under way before 1800; by the second half of the nineteenth century, it had been joined by much of Western Europe. Previously economic growth was of a glacial speed; now compound rates of growth ensured that Western Europe far outdistanced every other part of the world, the United States being the most important exception. Apart from North America, the old white settler colonies [99] and Japan after 1868, Europe enjoyed a more or less total monopoly of industrialization during the nineteenth century, a scenario with profound consequences for everyone else.
The economic chasm that opened up between Europe and nearly everywhere else greatly enhanced its ability to dominate the world. [100] The colonial era had started in the seventeenth century, but from the middle of the eighteenth century onwards, with the progressive acquisition of India, it rapidly expanded. In the name of Christianity, civilization and racial superiority, and possessed of armies and navies without peer, the European nations, led by Britain and France, subjugated large swathes of the world, culminating in the scramble for Africa in the decades immediately prior to 1914. [101] Savage wars took place between whites and non-whites as Chinese, Indians and native peoples in North America, Australasia and southern Africa made their last stand against European assaults on their religions, rulers, land and resources. [102] Niall Ferguson writes:
Western hegemony was one of the great asymmetries of world history. Taken together, the metropoles of all the Western empires – the American, Belgian, British, Dutch, French, German, Italian, Portuguese, and Spanish – accounted for 7% of the world’s land surface and just 18% of its population. Their possessions, however, amounted to 37% of global territory and 28% of mankind. And if we regard the Russian empire as effectively another European empire extending into Asia, the total share of these Western empires rises to more than half the world’s area and population. [103]
As the world’s leading power, Britain sought to shape the new global trading system according to its interests. Its national wealth depended on exporting its manufacturing products to as many markets as possible while importing food and raw materials at the lowest possible prices. Laissez-faire was not simply an abstract principle or a disinterested policy. It was the means by which Britain tried to take advantage of its overwhelming advantage in manufacturing and prevent others from seeking to erect tariffs to protect their nascent industries. The international free trade regime championed by Britain had a stifling effect on much of the rest of the world outside north-west Europe and North America. Industrial development in the colonial world was for the most part to prove desperately slow, or non-existent, as the European powers tried to prevent or forestall direct competition for their domestic producers. ‘Whatever the official rhetoric,’ writes Eric Hobsbawm, ‘the function of colonies and informal dependencies was to complement metropolitan economies and not to compete with them.’ [104] The urban population – a key measure of industrialization – in the British and French empires in Asia and North Africa remained stuck at around 10 per cent of the total in 1900, which was barely different from the pre-colonial period, while standards of living may even have fallen over the course of the nineteenth century. [105] India – by far Britain ’s most important colony (it was colonized by the East India Company from the mid eighteenth century, and formally annexed by Britain in 1857) [106] – had a per capita GDP of $550 in 1700, $533 in 1820, and $533 in 1870. In other words, it was lower in 1870 than it had been in 1700, or even 1600. It then rose to $673 in 1914 but fell back to $619 in 1950. Over a period of 250 years, most of it under some form of British rule, India’s per capita GDP increased by a mere 5.5 per cent. Compare that with India ’s fortunes after independence: by 1973 its per capita GDP had risen to $853 and by 2001 to $1,957. [107]
Map 3. The Overseas Empires of the European Powers, 1914
