Decline and Fall of the British Empire

Just finished The Decline and Fall of the British Empire, 1781-1997, by Piers Brendon, an English historian.  The book includes some interesting tidbits:

p120: Even in normal years Ireland hovered on the brink of starvation.  By 1845 its population had risen to over eight million… [it is less than six million today] A Frenchman exclaimed, “I have seen the Indian in his forests and the negro in his irons, and I believed, in pitying their plight, that I saw the lowest ebb of human misery; but I did not then know the degree of poverty to be found in Ireland.” … By 1851, [end of the potato famine] perhaps a million had died and another 1.5 million had emigrated.

p169: In 1870, the U.S. and British economies were roughly equal in size; by 1914 the U.S. economy was three times larger.  The British, however, maintained a leadership position in financial services.  They’d lost their lead in manufacturing, but were doing a lot of banking.

p201: Africa was a continent “created to be a burden to Foreign Offices” according to Prime Minister Salisbury.

p319: “Because of the Russian pogroms, Jews all over the world tended to favour the Central Powers.  By [supporting the creation of Israel], the Allies hoped to win their support [in World War I].”

p480: The British complained that the U.S. supported Jewish immigration to Palestine because Americans “do not want too many Jews in New York.”

The book is sprawling as was the Empire.  One common thread is the incompetence and arbitrary power of colonial governors and staff.  England’s best and brightest did not want to go out to India, Malta, Nigeria, or Burma.  Civil servants devoted to adultery, alcohol, and accepting bribes, however, were willing to go.  Usually the results were disastrous as arbitrary decisions were made with little deliberation or oversight from London, i.e., not too different from the U.S. occupation of Iraq (see my review of Imperial Life in the Emerald City).

Britain held sway over almost every type of people and terrain.  Consequently, every type of independence process was tried by England and at least one colony.  In some cases, the English nurtured local elites and gradually withdrew.  In some cases, the English brutally suppressed local insurgents, torturing detainees and rounding up hundreds of thousands of sympathizers into concentration camps (e.g., Malaya).  In others, the English simply packed up and left.  With the exception of colonies that were primarily populated by European settlers, e.g., the U.S., Australia, Canada, and New Zealand, the results were similar.  There would be violence between religious, ethnic, or political groups, and ultimately some sort of dictator would seize power.  We Americans might study these examples as we prepare to shed some of our colonies, notably Iraq.  It may not matter what we do or how and when we leave.

Much of the book is devoted to Britain’s most important colony: India.  The presentation is a bit different than what you’d get reading a standard history of India as it includes much more about what was happening back in London and how India fit into the overall British imperial scheme.  The failure of Gandhi’s attempt to keep India in one piece is covered thoroughly, including the violence started by Muslims anxious to have their own state (modern day Pakistan), but ultimately reciprocated by Hindus to the point that formerly congenial neighbors were killing each other by the thousands.

One take-away from the book is that it probably isn’t profitable to have an empire.  It would be better to be a China, Japan, or Brazil than to be the U.S.  Industrial competitiveness is more important than whatever temporary domination one can exert over a poorly developed and organized country.

[Note: This would be a good book to read on a Kindle due to its lack of relevant illustrations and maps and preponderance of 25-cent words that many folks will want to look up in the Kindle’s built-in dictionary.]

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Good simple explanation of the A.I.G. money pit

“A.I.G., Where Taxpayers’ Dollars Go to Die” by Gretchen Morgenson is a good three-page explanation of how  taxpayer dollars are disappearing in the A.I.G. bailout.  Due to secrecy, she could not follow the money all the way through to the ultimate destination (it might be mostly foreign banks, which would probably truly upset American taxpayers), but the article shows us where at least $50 billion has already gone and where another $100 billion or so is likely to go (hint: none will go into factories that hire American workers; none will go into infrastructure that will make it easier to do business in America; my ideas for economic recovery seem to be receding ever further into the distance).

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Will turning the U.S. into Europe save our economy?

Let’s look at what the U.S. government has been proposing to do in response to the collapse of 2008…

  • extend unemployment benefits and other payments to people who don’t work
  • expand government spending as a percentage of GDP
  • increase taxes, starting with folks who have higher incomes
  • offer universal government-paid health care
  • make it easier for workers to unionize

Will this work?  Let’s consider the Western European countries.  They all have lavish unemployment benefits, high government spending, higher taxes on high earners, taxpayer-funded universal health care, and powerful trade unions.  They long ago achieved everything that our current president and Congress are trying to achieve.  How are the Europeans doing?  The S&P 500 is down 48.76% from a year ago; the FTSE Eurofirst 300 is down 49.11% (source).  Our unemployment rate is 8.1%; France and its overseas departments have an unemployment rate of 8.2% (source).  France is supposedly the healthiest of the European economies.

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How business guys see our new planned economy

I was talking to one of my pilot friends yesterday.  He was the CEO of a public company for 20 years and now serves on the Boards of several big firms.  I asked him whether he thought there was any prospect of an economic recovery.  “I think we’re more likely to see a Politburo down in Washington and all of those guys wearing fur hats.”

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Stock market down 4.25 percent; not a front-page story

This evening’s New York Times was worrisome.  An inset box showed that the S&P 500 had fallen 4.25 percent for the day, wiping out roughly a year of investment returns.  A few months ago this would have been the top story.  Today, however, it did not even make the front page.  There were no articles talking about the collapse of the stock market unless you clicked into the “business” section.  Investors in the U.S. economy being destroyed isn’t news anymore.

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Thank God the government spent $2 trillion

I thought it would be nice to take a moment to thank God and our government for spending nearly $2 trillion of our tax dollars on TARP, auto industry rescue, and stimulus.  Imagine if our politicians had not acted decisively.  We might have seen the following:

Whew!

[One could, of course, argue that without the expansion of Big Government, the stock market would have fallen 98 percent and one guy in Saudi Arabia plus the Chinese government could have scooped up 100 percent ownership of America’s 5000 publicly traded companies, but that doesn’t seem entirely plausible as most of these companies are still profitable.]

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Stimulus bill is creating jobs

A friend works at a wind energy company.  I asked him if he was getting his share of the money from our new planned economy.  His response:  “We are stimulated!   There is some good stuff in there for renewable.  We may need to open a DC office just to chase the $$.”

As long as we think that we can grow GDP by having an ever-larger proportion of our best citizens working as full-time lobbyists, it would seem that the stimulus bill is working as advertised.

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Can we dig ourselves out of this hole by taxing the rich?

Barack Obama proposes to dig the Federal government out of its deficit hole with higher taxes on the 2 percent of Americans with the highest income.  Today’s Wall Street Journal carries an analysis of what would happen if the government could confiscate 100 percent of those folks’ earnings.  The depressing conclusion is that it wouldn’t be enough money.

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