McKinnon believed that the island of Zanzibar had enormous economic potential. He set up the Imperial British East Africa Company to attract investments in that area. This showed that economic factors drove ‘men on the spot’ McKinnon to establish an informal empire in East Africa. However, that did not last long after the arrival of German Karl Peters who founded the rival German East Africa Company in 1884. He signed local treaties with local chiefs in Tanganyika and was backed by the German government. This posed threats to McKinnon’s interest in East Africa and turned to the British government for aid. Through diplomatic agreement, Britain gained new territories such as Uganda, Kenya, Zanzibar, Pemba and Britain Somaliland. By 1895, the affairs of East Africa were shifted from the British East Africa Company to the British government. The formal control of areas largely of economic redundancy in East Africa highlighted that the expansion of empire there is due to the growing threats of other European powers rather than for economic reasons.
In 1869, diamond reserves were discovered in Kimberley and gold mining in Southern Africa. This triggered interest from the locals and the foreign powers. Britain’s main motive was to get physical control of the gold fields in order to secure British economic interests and boost British gold reserves. The Zulus in Transvaal wanted a share in diamond mining and threatened the Boers. The British government was called in to protect Transvaal. The Zulu war was fought in 1879 in order to protect Britain’s trading interest in South Africa. Cecil Rhodes, the infamous ‘men on the spot’ explicitly stated that he wanted to expand the British empire by taking over as much land as possible. However, the discovery of gold and diamond in Cape Colony attracted the Germans to South Africa. In 1884, they declared a protectorate over South West Africa in which Britain responded by declaring a protectorate on Bechuanaland. The establishing of formal control of Bechuanaland was to protect Britain’s economic interest in Southern Africa. Yet, if it wasn’t for the arrival of the Germans Britain would gladly settle for an informal empire as it would spare her from economic distress. Also, Southern Africa has yet to prove to be lucrative to Britain. Export trade with south Africa worth 15 million pounds per year but this was not enough to justify the 200 million pounds war fought. Economics was a driving factor for these ‘men on the spot’ to explore Africa for raw materials and trading opportunities. Arguably, the British government only stepped in and took formal control to protect the interest of these ‘men on the spot’ (inherently keeping the British economy alive) against other powers such as Germany and France.
India was important to Britain in more ways than one. India was progressively swamped by cheap British goods and export goods such as tea, indigo and spices at fairly low prices. Lord Curzon, viceroy of India claimed that ‘as long as we rule India, we are the greatest power in the world’. In seventeenth century, the East India Company was set up and under this establishment was the expansion of British rule in India. The annexation of Bengal was a clear extension of the empire. Robert Clive was appointed to bring Benghal and Calcutta – the largest part of the Mughal Empire – negotiated important trade agreements with numerous independent regional princes. This was to keep the French out of India in order to gain trading rights to the East India Company – a clear example of great power politics at play. Philip Lawson also believed that the reason the British government intervened through East India Company was to protect the business interest of ‘men on the spots’ who saw the Indian market as a vital area for their own expansion. Economics gave a reason for Britain to be there but did not dictate the actions of British government to annex territories.
During the interwar period the Indian market for cotton cloth was noticeably decreasing. This was the start of decolonization of British empire in India. After the first world war was fought, the British government owed 1,300 million pounds to India for their military assistance. The government of India imposed cotton tariffs from 11% in 1921, 15% in 1930 and 20% in 1931. Congress-led boycotts of British goods and uncompetitive price sales of British cloth in India slump from 1,248 million yards in 1929 to only 376 million yards in 1931. The chronic erosion of India’s economic value to Britain was enough reason to leave. However, it wasn’t until the rise of nationalist such as Jinnah and the break out of riots that had led to Britain’s eventual disintegration of empire in regards with India. Britain’s resources were exhausted during the war therefore it became increasingly difficult and expensive to maintain order in a state that wasn’t profitable anymore. India was eventually let go in 1947. This showed that economic was the main factor in decolonization of India but it was nationalism that prompted the disintegration of the empire.
After the interwar periods, Britain was looking to concentrate all her resources on developing Africa. Schemes such as Ground nut and Creech-Jones – Cohen schemes were proven to be unsuccessful in areas such as the Gold Coast. It failed because Britain was not economically viable to provide investments. However, the rise of nationalism in Ghana overshadows economic difficulties in Ghana. Nkrumah’s Convention People’s party won by a landslide and pressured the British government to grant them independence. Kenya was soon to follow the footsteps of Ghana. Mau Mau, a nationalist group in Kenya adopted violence and murders to drive the British out. The riots and rebellions were costing the empire; 10,000 pounds to catch one out of thousands of Mau Mau followers. Britain was seen overstretching her resources here. The aftermath of the war left Britain financially crippled, at the same time uprisings in the middle east, the Suez crisis and Malaya strained Britain’s financial muscles. The empire could no longer sustained the Kenya uprisings and grant her independence in 1963. The process of dismantling the empire in Africa was already underway; Tanganyika gained independence in 1961, as did Uganda in 1963. As shown, economics alone was not enough reason to disintegrate Africa from the British empire. If nationalists such as Kenyatta and Nhkrumah took a backseat, Britain would not have been put under economic pressure to sustain riots and uprisings. Yes, economics was the reason why the British gave in to nationalism but if it wasn’t for the uprisings and riots, the British arguably would take a longer time to grant independence to Africa.
The role of economics was more significant in the expansion of the British empire in Africa and India in the sense that it is more consequential rather than a direct causal role; economics interests what drove men on the spot to expand, and to protect economics interest from other rising powers. The same rule could be applied to the contraction of the empire. Although nationalism was the key factor in the eventual decolonization of the empire in Africa and India, it is the lack of finance that prevented the British government from fighting against nationalism.
