Political reforms of the period focus mainly on the development of self-government within the colonies of settlement. The granting of self-government was sparked by an armed rebellion in Canada in 1837 following the failure of the British Governor to grant greater democracy, and the resulting emergence of an oppressed minority of French settlers of Lower Canada. The Canadian rebellion was a catalyst for political reforms, stemming from the 1839 Durham Report which reprimanded the British administration and called for the uniting of Upper and Lower Canada to form a single province with a truly representative system of government. While Britain would retain overall control, locally elected government would decide on domestic policy. The Durham Report became the blueprint for the introduction of self-government to most of the other colonies of settlement, including New Zealand, Cape Colony, and the Australian colonies. Therefore, political factors, focusing on discontent about British administration of colonies and the lack of democracy, dominated the introduction of self-governing colonies, which were a unique new development in the history of the Empire, representing a genuine devolution of political power. However, underlying economic factors also helped to stimulate the reforms. The defence costs for colonies were running high and there were clear economic benefits linked to the granting of self-government, as the colonies of settlement became much more dependent on British investment and British defence after the reforms. Therefore, while the reforms were motivated primarily by political factors, underlying economic benefits of the reforms contributed greatly to their implementation.
However, while there was a reduction of the role of the British government in settlement colonies through the introduction of self-government, at the same time there was also a greater involvement of the British government in India, resulting from the Indian Mutiny. While the immediate cause of the mutiny was a revolt by Sepoys in the Indian army in 1857 owing to a dispute about loading the Enfield rifle in a manner against their religious beliefs, the underlying causes focus on political and economic grievances.
Territorial expansion in the Punjab, Sind, Berar and Oudh, and the resulting ‘westernisation’ policy caused widespread social and political discontent. The Indian people felt that they were being forced to accept and ‘alien’ culture and that they lacked political power within their own country. This discontent was exacerbated by economic grievances following the end of the East India Company’s monopoly on business in 1813, which opened India up to competition by Britain’s industrialists and merchants. This led to India being flooded with cheap British goods, and high rent being introduced by British property developers, leading to the devaluation of Indian products and economic decline.
The Mutiny was a fundamental turning point in the history of British rule in India, and led to reforms which introduced total British rule. The reforms focus on the replacement of the Governor-General by a Viceroy; the re-organisation of the British Indian Army through the strengthening of the European element; the reduction of power of the sepoys; the end to the involvement of the EIC in the machinery of British rule; as well as the restoration of prestige to the Indian rulers of the ‘princely states’ with all social, religious and cultural matters left in their hands.
The reforms in India, the ‘Jewel in the Crown’ and the most important part of the British Empire, could be viewed as stimulated primarily by social and political factors. However, there were underlying long-term economic factors which also propagated the reforms. There were considerable economic costs of doing nothing to intervene in the EIC’s monopoly on India, as the economic potential of India was high and India was important to the British ruling class and the British economy. Furthermore, while the mutiny is generally viewed as catalysed by social discontent, economic factors were also involved, and the mutiny can be viewed as a reaction of a traditional agricultural society forced to accept the ‘alien disciplines of capitalism. Therefore, economic factors can be seen as contributing to the mutiny, which was in turn the catalyst for reforms in India. While the reforms started with a political action in the form of a rebellion, behind it were underlying economic factors.
Nevertheless, while economic factors are seen as secondary to social and political factors in influencing the aforementioned reforms, they played a primary role in the drive towards free trade and the resulting scrapping of protectionism. The end of the old colonial and slave systems was accompanied by the adoption of , culminating in the repeal of the and in the .
Free trade opened the British market to unfettered competition, stimulating reciprocal action by other countries during the middle quarters of the 19th century. While the at home gave Britain an unrivalled economic leadership, the dominated the seas. The distraction of rival powers by European matters enabled Britain to pursue a phase of expansion of her economic and political influence through "" underpinned by and strategic pre-eminence. Britain became the world's sole industrialised power, with over 30% of the global industrial output in 1870, and could produce manufactured products so efficiently and cheaply that they could undersell comparable locally produced goods in foreign markets. Given stable political conditions in particular overseas markets, Britain could prosper through free trade alone without having to resort to formal rule. Overseas markets offered a higher return on investments owing to their cheap labor, limited competition, and abundant raw materials. As the first country to industrialise, Britain had been able to draw on most of the accessible world for raw materials and markets. Therefore, Britain had little to fear from the fact that self-governing colonies were free to impose tariffs, as British goods were always seen as the cheaper and better alternative. Moreover, there were economic advantages of the settlement colonies developing their own industries, as they were seen as a source of new investment. In addition, there were economic advantages to the British economy of Britain denying the dependent colonies the right to impose protective tariffs, as this destroyed the development of industry, affecting India most severely as it became a huge captive market for British goods. Therefore, free trade couple with having colonies was economically beneficial.
The economic reforms which characterised the period of “New Imperialism” can thus be seen as motivated primarily by the need to protect existing trade links and to prevent the absorption of overseas markets into the increasingly closed imperial trading blocs of rival powers. Owing to her superior position in industry and trade, Britain tended to benefit from the introduction of free trade and end of protectionism. Thus, these reforms were stimulated chiefly by economic advantages.
Therefore, all forms of imperial reform in the 19th century were influenced by economic factors to an extent. Underlying economic factors contributed to social and political change which resulted in the abolition of slavery and the granting of self-government to settlement colonies. Moreover, economic benefits of the free trade reforms directly stimulated them. Thus, while not all of the reforms were a direct result of economic factors, underlying economic reasons influenced all the reforms to a certain extent, often producing the social and political factors which eventually stimulated reform.
