Export of capital from Britain : 1870-1914

As the international economy grinds its way through the twentieth century the experience of the generations before 1914 can be seen for what it really was the most explosive phase in the world's economic development to date. It is like moving away from a mountain range: the foothills fade in the perspective given by distance, revealing the peaks in their true scale. Such expansion came in response to a unique combina tion of historical circumstances - how much so we have cause to ponder upon at the present time - and many of its facets were as unique individually as was the process as a whole. The present volume is concerned only with one aspect of this process, the export of capital, but later contributions will cover related themes.

Empty continents awaiting settlement, with virgin lands able to pour out an unprecedented stream of primary products, foodstuffs, minerals, and other raw materials, set the context. The great migration from Europe to these population-hungry countries, the ocean shipping and the railways to open up the interiors of great land masses gave the necessary flows of people and materials. Foreign investment, and its interaction with the surges of economic activity in the home country, provides the theme for this book, but such capital flows themselves fitted into a complex set of interactions which can be seen as underpinning the whole process of expanding the international economy. Some links were one-to-one, with the provision of the capital goods embodied in the export of capital - over 40 per cent of capital exported from Britain financed railway investment overseas - and directly stimulated British export industries supplying these products, particu larly up to the 1870s. Even where direct links to the export industries are not traceable, capital exports joined a complicated sequence of relationships which, as surely if less directly, served the expansion of the international economy.