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Colonialism and British Industrialization

The relationship between colonialism and British industrialization was one of the most important and most controversial aspects of the Industrial Revolution. The British Empire provided the raw materials, the markets, and the capital that helped to make British industrialization possible, but it also imposed enormous costs on the colonized peoples, including the destruction of traditional industries, the exploitation of labor, and the disruption of social and political systems. The Empire was both feedstock and consequence of the factory system, and historians still disagree about how much weight to put on each side of that relationship.

The Indian Textile Industry

The most dramatic example of the impact of British colonialism on traditional industry was the decline of the Indian textile industry. Before British rule, India was one of the world’s leading manufacturing economies, with a sophisticated textile industry producing muslins, calicoes, and silks of extraordinary quality. Indian textiles were exported across the world, and the Indian textile industry employed millions of spinners, weavers, dyers, and other workers.

The British conquest of Bengal in the mid-eighteenth century, followed by the gradual extension of British rule across the Indian subcontinent, transformed the Indian economy. The picture is more complex than the older “destruction” narrative. Recent scholarship — Prasannan Parthasarathi, Why Europe Grew Rich and Asia Did Not (Cambridge, 2011); Tirthankar Roy, How Britain Underdeveloped India (Verso, 2019); David Clingingsmith and Jeffrey G. Williamson, “Deindustrialization in 18th and 19th Century India” (NBER WP 2008) — shows that Indian cotton weavers were still the largest single source of cloth consumed in the world as late as 1800, and that the long-term decline of Indian handloom weaving was driven by a combination of Company procurement policy, the cost of British tariffs, the better steam power of Lancashire, and the rising scale of British shipping. By 1900 the deindustrialisation of the Indian handloom sector was a real and measurable phenomenon, but it happened over a century, not as a single act of policy.

The “systematic destruction” claim therefore should be hedged. The British had a strong interest in opening India as a market for British cloth, and used tariff and procurement policy to do so, but the collapse of the Indian textile industry was not a single event and not a single act.

The Cotton Trade and the American South

The British demand for raw cotton was a major stimulus to the expansion of cotton production in the American South, and the resulting cotton economy was one of the most important and most exploitative economic systems of the nineteenth century. The invention of the cotton gin by Eli Whitney in 1793 made short-staple cotton enormously profitable, and the demand from British mills led to a rapid expansion of cotton production in the South.

The expansion of cotton production in the American South was based on the system of plantation slavery, and the British demand for cotton helped to entrench this system. The British textile industry was one of the largest consumers of slave-produced cotton in the world, and the profits from the cotton trade helped to finance the British Industrial Revolution. The article on the cotton gin describes this relationship in more detail.

The British reliance on American cotton was a source of anxiety for British policymakers, and the American Civil War (1861-1865) exposed the risks of this dependence. The Union blockade of the Southern ports and the collapse of the Southern cotton economy cut off the supply of raw cotton to the British mills, and the resulting “cotton famine” threw hundreds of thousands of British textile workers out of work. The article on Cottonopolis and the Manchester cotton industry describes the cotton famine in more detail.

The Triangular Trade

The triangular trade between Britain, Africa, and the Americas was one of the most important and most exploitative economic systems of the early modern period. British merchants traded manufactured goods, particularly textiles and guns, for enslaved Africans, whom they transported to the Americas, where they were sold for sugar, tobacco, and other raw materials. The raw materials were then shipped back to Britain for processing.

The triangular trade was enormously profitable for British merchants, and the profits from the trade helped to finance the early stages of British industrialization. The British manufactured goods that were traded for enslaved people helped to find markets for British industry, and the raw materials that were imported from the Americas provided essential inputs for British industry.

The triangular trade was also one of the most brutal systems of exploitation in modern history. The trade in enslaved people resulted in the forced migration of millions of Africans, many of whom died during the brutal Middle Passage across the Atlantic. The system of plantation slavery in the Americas was built on this trade, and it produced immense wealth for British merchants, American planters, and Caribbean sugar growers, at enormous human cost.

The Colonial Labor Systems

The British Empire was built on a variety of labor systems, including slavery, indentured labor, and forced labor. The most brutal of these was the system of plantation slavery in the Caribbean and the American South, but the British Empire also used indentured labor in India, the Malay Peninsula, and other colonies, and forced labor in various parts of Africa.

The labor systems of the British Empire were important for British industrialization. The cheap labor of enslaved people and indentured workers helped to produce the raw materials that British industry needed, and the profits from the labor of these workers helped to finance British investment. The article on the causes of the Industrial Revolution describes the broader context of these developments.

The Costs of Colonialism

The costs of British colonialism for the colonized peoples were enormous. The destruction of traditional industries, the exploitation of labor, the disruption of social and political systems, and the imposition of colonial rule all had devastating effects on the peoples of India, Africa, and other colonies. The Bengal Famine of 1770 — a direct consequence of Company revenue extraction under Warren Hastings and of the failure of monsoon rains — killed an estimated 10 million people, perhaps a third of the population of Bengal. The Great Famine of 1876–78, exacerbated by British export policy and the Viceroy Lord Lytton’s refusal to suspend grain shipments, killed another 5.5 million Indians. Subsequent famines of 1896–97 and 1899–1900 killed a further 19 million. The famines of 1943 — a wartime event in Churchill’s wartime coalition, with different causes and consequences — belong to a later period and should not be conflated with the industrial-era famines caused by colonial economic policy.

The British did introduce some benefits to the colonies, including the railway, the telegraph, the English language, and the British legal system. But the overall effect of British colonialism on the colonized peoples was destructive, and the legacy of colonialism continues to shape the modern world. The article on the causes of the Industrial Revolution describes the broader context of these developments.

The Long-Term Legacy of Colonialism

The long-term legacy of colonialism is still being debated. On the one hand, the British Empire helped to create a global economy that produced unprecedented wealth and helped to spread modern technology and institutions. On the other hand, the British Empire was built on exploitation and violence, and it left a legacy of underdevelopment, inequality, and political instability that continues to affect many parts of the world.

The Continuing Question

The interesting current debate about colonialism and British industrialization is the deindustrialization-of-India debate. The traditional answer, going back to the 19th-century nationalist historians and given its modern form in dependent-development theory, is that the British systematically destroyed the Indian textile industry in order to clear a market for Lancashire cloth. The revisionist answer, developed by Prasannan Parthasarathi in Why Europe Grew Rich and Asia Did Not (2011) and by Tirthankar Roy in How Britain Underdeveloped India (2019), is that the picture is more complicated: Indian weavers were still producing a substantial share of world cloth in 1800, the Lancashire steam advantage took decades to overcome Indian handloom productivity, the East India Company’s procurement policy and the British tariff regime were more important than direct action, and the actual collapse of the Indian handloom sector happened in the 1870s-1900s rather than in the early 19th century. The interesting unresolved question is whether the standard “destruction” narrative and the revisionist “slow erosion” narrative are in fact in conflict, or whether the disagreement is mostly about timing and mechanism. Clingingsmith and Williamson’s “Deindustrialization in 18th and 19th Century India” (NBER WP 13880, 2008) tried to settle the empirical question with new trade data; the answer, complicated by data quality, was that the deindustrialization was real but slower and shallower than the older scholarship had claimed. The Beckert synthesis in Empire of Cotton (2014) accepts most of the revisionist empirical work but keeps the larger argument that the cotton economy was constitutively a war-and-empire economy, in which the British state played a structural role that the older economic-history literature had underestimated.

Selected Sources

  • Sven Beckert, Empire of Cotton: A Global History (Vintage, 2014)
  • Prasannan Parthasarathi, Why Europe Grew Rich and Asia Did Not (Cambridge University Press, 2011)
  • Tirthankar Roy, How Britain Underdeveloped India (Verso, 2019)
  • Kenneth Pomeranz, The Great Divergence (Princeton University Press, 2000)

For more on the relationship between the British Empire and industrialization, see the British Empire and industrialization and the East India Company.