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HIS311 Oct 10 The Nature of the Empire Economic, 1815-1860

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Robert Bothwell

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October 10, 2013 Key Words Notes  Taxes - Tariffs - Subsides  Mercantilism - Protection  Free Trade  Staples  Corn laws  Navigations  Territorial Britain did really well of the war. It lost territory of course, but also gained territory from the Dutch, the Spanish. It acquired a colony at the bottom of Africa, at Cape Hope it acquired more territory around India. Moved into the East Indies, Malaya. There is also Australia, which starting in 1788 British had begun to settle. Then they’re as New Zealand, which was also acquired in the aftermath of the war. There were also the West Indian islands. The British had made gains fro the French  If you were looking at the empire with the kind of economic prism over your eyes, Canada would be very small. The West Indies would be very large, and so would India be large as well. When we talk about Canada we should bear in mind that Canada is economically, relatively small part of the empire. India in particular is becoming a much more important part of the British Empire. While in the 1780s Canada could concentrate British attentions, because it really is an important colony, after 1815 this is less the case.  We should also remember what the economic experience of the war was. It is important in order to understand the economics of the period that follow it.  During the Great War at times Britain and Ireland were isolated as against the continent of Europe. There were times when the British did not have single ally. Napoleon, who was in France, forbade all his subjects to trade with Great Britain. The Great War is a period of economic warfare. - Napoleon is trying to starve the British out and cut out the trade. Also at the same time to cut off the British from necessary supplies. - Also though the French navy did not have the ships to blockade British ports he tried to do so simply by forbidding the British to sell the necessary goods.  The British population is increasing very fast. The British found it essential to import food. So if you are going to keep your growing population fed and economy fueled you will have to import. However you cannot import from Europe.  The was answer has to be the America’s which Canada is a large and important part. What we (the Canadian) had was what the British wanted- Timber and fish - Fish from Newfoundland - Timber from New Brunswick and upper and Lower Canada. That goes into building ships for the navy, because the ships were wooden in this period.  The Royal navy is able to keep its ships supplied and so when we are thinking of this economic fact, we realize that it is a strategic and political fact that it matters to the British that they actually own the territory that produced necessary goods for their war and economy. - They are also worried about food. The greatest staple is wheat. Canada in 1800 is not a huge wheat producing area. Instead the British instead concentrate on encouraging the farmers in the British Isles in produce food. a. Wheat in British English is called Corn. b. Corn laws encourage British farmers to grow grains. c. What the Corn Laws do is encourage British farmers to grow grain. To do it they subsidized them. d. You can do it in two ways. i. Tariffs: you can give tariffs- keep out foreign competition, that might be cheaper ii. Subsidies: they are a direct fight to the producers. e. What you are doing is jacking up the local price and you are doing so for political reasons. What you are doing is jacking up the local price and you are doing so for political reasons - You are doing so because of local people and there is poltical advantage and economic reasons. It is also a strategy of war. It is a response to the enforce shortage of food courtesy of napoleon.  The professor really stresses this because the actual origins of the Corn Laws are often forgotten. The Corn Laws also apply to the British Empire. Timber provided in upper and Lower Canada and New Brunswick gets a preferences in the British market. Even after 1815 as British gets timber from Norway, Sweden and Russia, all f which have similar climate and equally good at producing timber as Canada was. Plus they were a lot closer.  The prof believes for political reasons the Corn Laws stay in being. - There is the usual explanations, which is correct. That if you have a tariff you create a constituency that is dependent on the tariffs. You encourage local people to put their money into the farm, or grow their own food. Build a local industry and you promise them that you will protect them and subside them. That I the classic analysis of the tariff, or the effects of a tariff. It is not incorrect. - However it is also a response to a world political situation. The view here is called mercantilism. It is a theory. It is an attempt to design any empire. So that the various components will trade with each other and mutually support one another. - It usually means he metropolitan centers will get a profit out of it. th Even in the 19 century that was though to be rather doubtful. - So mercantilism encourages you to trade within the empire. It also defines international trade as a zero sum game, which you are competing with other similar powers. - It also involves protection that means forbidding certain products from aboard or placing tariffs when those products are imported in the country. a. If you really want to protect your industry you will jack those taxes up sky high so theoretically trade might be permitted, however when it actually comes in it is so expensive that you do not want to buy it. b. However it is important to remember that tariff is a subsidy and a tariff transfers money from the pocket of that who buys the good to the local enterer, farmer, manufacture etc. - Tariffs subsides local industries; weather it is wheat, lumber paper or what not. This has not changed till now. For example recently there was a column in the Globe and Mail, which discuss the Free trade negations in the EU. The issue of Trade and tariffs never goes away. It is a constant in Canadian history. The thing about tariffs is that it is just about the easiest tax to collect. - Usually taxes have to be more regular in order to sustain government. A tariff is collected at port of entry. It is hard to evade if you are trying to trade in bulk. If you have restricted modes of transport and if you have few ports and if you put a custom office there you will be able to tax all the traffic that goes up the st. Lawrence. - That is why the British campaign against eh American in 1814 was so effective. Because the Americans only had a limited number of places where they collected taxes. And the British blockage took that.  It is very simply and easy to understand and it is one of the huge optical issues in US, Britain, and Canada (almost everywhere) in the early 19 century.  The British economy is much more sophisticated society and economy than the US and Canada. The British are effective in being able to impose other taxes. - By 1815 the British also have an income tax, which government in the colonies, and in the United States would not dare to try. That was because the social mechanisms in society, the means of exhorting the society are simply not present. To impose an income tax would be the same as setting fire to your house. - The British are better off by being able to mobile more resources in their society. - They said it at the time the British were able to do this because their political system manufactured consent. Representative parliamentary government had it its heart that you are consenting and so those taxes are not illegimate. - So the British have a great advantage over something like tyrant Napoleon.  Canada is attached to a country that is not only rich, and the GDP is increasing by 50% every decade, but also a place that is able to tax its economy in such a way that the central government has a great advantage in terms of revenue. The British are RICH. The best period in British.  The Declaratory act of 1778- tax the colony act or not tax the colony act. In which the British promised that they will not tax the colonies again. So the British parliament had agreed that it would not exercise and deny that it has any longer the right to tax the colonies.  How do the colonies survive?  The way the prof sees it British North American colonies remained dependent of Great Britain. They required British help every year in order to stay in existence. In other ways the Colonies are not self- suffiencet and do not have a tax base. For government to function in Upper Canada it required the British government to steadily subside the colonial government.  That changes roughly in the 1840s. The 1840s are usually talked of in terms of responsible government- it is almost always described in political terms - The prof believes that it also has an economy base. Responsible government occurs when the colonies discover they can support themselves. - Their economies have grown to the point where they can mange to pay for their own government. - Until then t
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