Foreign investment and imperial exploitation: balance of payments reconstruction for nineteenth-century Britain and India
British economic development in the nineteenth century was closely linked to the international economy. It was also inseparable from the naval and military strength which tied economic relations to both formal and informal empire. By far the largest trading nation and overseas investor, Britain by I9oi ruled a formal empire of 11.2 million square miles, with a population of almost 400 million spread over the whole world. What economic benefits she acquired and conferred through these relationships has remained an emotive issue in world politics to this day. As the largest and economically most important colony, an empire within an empire, India had the most to gain or lose from imperial exploitation or benevolence.2 British economic and political influence was not confined to the formal empire but extended to a large number of countries which were susceptible to the tenets of economic liberalism or which were closely tied to the British market.3 A statement of the transactions between a country and the rest of the world, the balance of payments, should measure at least some of the flows responsible for the transformations wrought by imperial relations, both formal and informal. Precisely what was the nature of those relationships has remained controversial, although Davis and Huttenback's study has