ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846
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Transfer of Surplus from Colonies

The Other Side of Foreign Investment by Imperial Powers

In the era of the rise of industrial capitalism and its development in western Europe and the USA the transfer of part of the income from the major colonies played a critical part in boosting investment in western Europe and allowing enormous amounts of investment to be directed towards sustenance of the mass migration of Europeans to overseas colonies such as the USA, Canada, Australia, New Zealand or South Africa. However, the size and even the direction of the flow of surpluses have been obscured by the usual methods of calculating the value of foreign trade from the mercantilist era down to the present. The author's recalculation of the surplus extracted by Britain from India and Burma demystifies the astonishment expressed by most commentators about the very large proportion British foreign investemnt formed of its GDP and the apparently perverse desire of the British to retain an empire which was less profitable than, say, investment in the USA. The realisation of the enormous surplus was an integral part of the mechanism by which the white-settled colonies were populated and equipped and therefore could not be treated as a substitute for that process.

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