Was the economic potential of European colonies underexploited?

[ray245]

Traditionally, the view on the various Euroepan empires such as the Dutch, British and French Empires has been about how they exploited their colonies for economic gain. Although there seems to be less disucssion about how efficient they were, particularly in the late 19th century onwards. Yet the old European empires were very quickly challenged by heavily industrialised nations such as Germany and the US from the early 20th century onwards.

By using their colonies merely for the sake of resource extraction, is it reasonable to see these empires as failing to exploit the resources they had at their disposal? In other words, did the British Empire for example collasped because of they were never able to get enough value from their colonies to properly run such a massive empire in the long run?

It's just seems weird that an empire that had a much greater access to population, raw materials and size struggled to compete against Germany, Soviets and the US, espeically during the second world war.

[K. A. Pital]

It does not seem weird: Britain chose not to develop for example heavy industry in the colonies, which leads to underutilization of the human potential in terms of economic output. All the nations you mention developed heavy industry in their core territories.

One could also argue that the edge massive colonies provided was lost precisely because Britain succeeded in forcing free-trade on the rest of the world at gunpoint, but through that it destroyed its own exclusive position as the only manufacturing center for complex industrial goods (machinery), allowing other nations to capture greater markets even if not direct colonies. South America in case of the US was utterly dependent in the late XIX and early XX century on US industrial production, lacking their own heavy industry.

[Elheru Aran]

Consider the position of the European powers. They don't want their colonies to develop heavy industry because that gives them the potential for being self-reliant should they successfully revolt. In the case of uprising, they WANT scarcity to be an issue for the native people. To a certain degree, I have to conclude that any under-exploitation was somewhat deliberate with that in mind.

[Simon_Jester]

Plus, when you are running a country with an 'extraction' mindset of "what can I take from this country," the idea of investing in it and building up industrial infrastructure does not come naturally. Instead, you think in terms of taking what is already there- minerals, timber, the labor of peasant farmers to grow crops.

Even if you're not actively trying to sabotage the colony's ability to rebel, the fact that you think in extractive terms will prevent you from building it up into a serious economic powerhouse comparable to your core territory.

[ray245]

It does not seem weird: Britain chose not to develop for example heavy industry in the colonies, which leads to underutilization of the human potential in terms of economic output. All the nations you mention developed heavy industry in their core territories.

That I am aware of. The question is were they aware that they were under-utilising the resources they have on hand?

One could also argue that the edge massive colonies provided was lost precisely because Britain succeeded in forcing free-trade on the rest of the world at gunpoint, but through that it destroyed its own exclusive position as the only manufacturing center for complex industrial goods (machinery), allowing other nations to capture greater markets even if not direct colonies. South America in case of the US was utterly dependent in the late XIX and early XX century on US industrial production, lacking their own heavy industry.

Even before the expansion of industrialisation, it is not as if many of its colonies were extremely productive either. Without opium for example, the British were already finding difficulties in exporting much of their products from its colonies as well.

[K. A. Pital]

I think Simon's comment above explains the reason why many European colonial powers were not fully industrializing and developing all their territories. And I am pretty sure they were aware of the fact the agricultural and semi-automated manufacture labour of colonies is not the most productive application of labour. You can't control a place for hundreds of years and be unaware of that.

[Simon_Jester]

To be fair, such applications of labor were the most productive ones in existence anywhere in the world until the 1800s.

Industrial development in the Victorian/Edwardian era was not seen as a universal norm and standard towards which all cultures would be moving in the near future, I suspect. It was seen as a sign that Victorian/Edwardian civilization had attained some unique pinnacle of advancement. One that even the legendary ancient civilizations like Rome had never reached. So the idea that this advancement should be made all-pervasive and acquired by everyone as a universal birthright of humanity... didn't really catch on until rather later.

[PainRack]

Consider the position of the European powers. They don't want their colonies to develop heavy industry because that gives them the potential for being self-reliant should they successfully revolt. In the case of uprising, they WANT scarcity to be an issue for the native people. To a certain degree, I have to conclude that any under-exploitation was somewhat deliberate with that in mind.

Is there any evidence of that on the British front? The salt tax and other moves on India and other colonies simply doesn't suggest this as a motive.
An effect perhaps but not a motive.

One should note that economics was a major problem in industrialisation, as seen in the colonies. As long as Canada and Australia had a small population density, industrialisation without connecting to the world markets didn't kick off as trade required a high value density due to the tyranny of distance. WW2 created the demand that made industrialisation during the war possible.

For the OP, the British did bemoan the costs of the colonies and etc, but consider that one of the main problems with many colonies were the shortage of Labour and pre ww2, labour shortages were perennial in most British colonies.

India certainly could had more heavy industry, but any attempts to cripple this appeared to be a means to protect British profits as opposed to rebellion.

[K. A. Pital]

http://en.wikipedia.org/wiki/Iron_Act

I mean, the profits were important, but I think it did start out as a deliberate attempt to cripple advanced colonial manufacturing (which was always, and remains until now, linked to weapons).

[Micro-Balrog]

For a variety of reasons - some of them wanting to protect industry from competition, others, like people stated, wanting to keep the colonies subservient, and partly as a natural outgrowth of their efforts in the colonies, the British often actually held back developement in the colonies.

Herbert Spencer warned at the time that this was a very costly effort, and ws actually holding Britain itself back economically, but by and large this wasn't listened to.

[Rhadamantus]

Balrog, please read the thread necro rules.

[Jub]

Balrog, please read the thread necro rules.

Or you could just use the report button...