The Southern Colonies and Political Economy

The Southern Colonies and Political Economy

For economic critics of empire, the cost of acquiring and maintaining colonies far exceeded their benefits. An emphasis on the priority of the domestic over the foreign market, for example, is central not only to Adam Smith’s Wealth of Nations (1776), but also to Josiah Tucker’s The Case for Going to War for the Sake of Trade (1763) and James Anderson’s The Interest of Great Britain with Regard to her American Colonies Considered (1782), all of which were influential on Jeremy Bentham’s version of anti-imperialism. Bentham’s 1792 pamphlet Emancipate your Colonies! (pub. 1830) took these earlier critiques of empire to their logical conclusion when arguing for the ‘uselessness and mischieviousness of distant dependencies to an European State’, essentially suggesting that colonial dependency was morally and commercially unproductive both to the coloniser and the colonised, and that free trade was more profitable than dependence (Bentham 1792: t.p.).

But while Bentham rejected a colonialism associated with exploitation, war, and plunder, all of which he perceived as disastrous to domestic economic growth, his emphasis on the priority of domestic markets did not lead him categorically to dismiss the value of foreign trade: he and Smith were both receptive to international labour markets as long as they resulted in ‘productive labour’ rather than dependency (Smith 1976: 372). Between 1800 and 1804 Bentham even saw colonization as a possible solution for Britain’s excesses of capital and population, promoting a version of Smith’s idea of ‘vent for surplus’ and eventually supporting Edward Wakefield’s plans for assisted emigration to South Australia (Bentham 1801: 299-302). Writings such as the Institute of Political Economy (1801-4), The True Alarm (1801), and Defence of a Maximum (1801) all indulge in patriotic sentimentalism and ‘benign’ paternalism when considering the interests of the oppressed in Asia and Africa (although between 1818 and 1830, during which time Bentham wrote Rid Yourselves of Ultramaria, he returned to his previous anti-imperial position) (Boralevi 1984: 120).

Arguing against David Ricardo’s view that any amount of accumulation of capital within Britain was desirable, Wakefield also drew on Smith’s ‘vent for surplus’ argument to suggest in A Letter from Sydney (1829) that the colonies could absorb any excesses, financial or social, that threated the British nation (Steer 2014: 147). Imaginatively positioning himself among and within the colonial settler communities (‘a letter from Sydney’), Wakefield further claimed that the Australian colonies were suffering from the chaotic granting of free land as well as a shortage of labour and a consequent dependence on convicts. He advocated instead a more systematic form of colonization on scientific principles, and land prices that were cheap enough to encourage emigration but at the same time high enough to finance the growth of the colony.

As Karl Marx pointed out in Das Kapital (1867), Wakefield’s great triumph was his discovery ‘that capital is not a thing, but a social relation between persons, established by the instrumentality of things’ (Marx 1887: n.p.). Consequently, where land is too cheap and there is no indentured form of labour, it is not only difficult to find cheap labour but to find labour at any price. As Marx noted, ‘so long, therefore, as the labourer can accumulate for himself—and this he can do so long as he remains possessor of his means of production—capitalist accumulation and the capitalistic mode of production are impossible’ (Marx 1887: n.p.).

Wakefield saw the colonies primarily as an investment opportunity, noting in England and America (1833) that the point of settement was ‘an enlargement of the field for employing capital and labour’ (Wakefield 1833: 84, cited in Steer 2014: 148); in other words, the value of a colony was the strength of the capital and labour flows that united it with Britain. Although Wakefield later went on to justify the social and moral aspects of settlement in The Art of Colonization (1849), his view of the colonies as part of an invisible financial chain linked all the way to the heart of metropole (London) was highly influential in theory and in practice, as were his plans for assisted emigration. In 1831 the principles of systematic colonization popularised by Wakefield were introduced in New South Wales, for example, with the substitution of land sales for grants in order to encourage and finance emigration. Yet Wakefield was also in favour of colonial self-determination, publishing a view of the colonies that is of great interest to the SouthHem project, The Southern Colonies: Their Municpal Annexation, or Their National Independence (1849), in which he encouraged the colonists at the Cape, Australia, and New Zealand to work together and agitate in favour of the colonial reformers’ bill for increased colonial self-governance.

Donald Winch has noted the unresolved contradictions that exist in the ostensibly anti-colonial writings of Smith, Burke, and Bentham, all of whom were at least prepared to envisage a future in which population growth would make Britain’s colonies cost-effective (Winch 1965), as well as in Wakefield’s simultaneous advocacy of colonial dependence and colonial self-governance. Similarly, Burke, Southey, and Coleridge all opposed the slave-trade while favouring colonial expansion and thus, inevitably, new forms of labour exploitation (Davis 1975: 455-56; Coleman 2005: 5-7, 28). These contradictions notwithstanding, Bentham approached empire not as a monolithic whole but rather as a set of particular cases, each with their own set of unique problems: for example, English, Spanish, and French colonies in America; penal colonies in Australia; and the case of British India (Boralevi 1984: 121). Colonization in New South Wales, for instance, involved (apparently) uncultivated and uninhabited land but the nature of the settlers (penal convicts) meant that Bentham thought the long-term maintenance of such a colony would be ineffective: in The Rational of Punishment (1830) he argued that its ‘embryo stock’ mainly consisted of a ‘set of men of stigmatized character and dissolute habits of life’ rather than those of ‘sobriety, industry, fortitude, intelligence’ (Bentham 1830: 349, cited in Boralevi 1984: 130).

In the colonies themselves commerce was seen as vital to progress and long-term success. While the emergence of Western capitalist systems were complicated by the colonies’ participation in older indigenous bazaar trading systems, many colonies evinced a remarkably intense condensation of the various stages of capitalism: from harnessing the energies of convict labour, indigenous workers, slaves, and intermediaries, to the development of commodity cultures based on export production, bio-prospecting, and extraction, to the expansion of an urban economy based on investment, industrialisation, and trade. In Australia, a steady stream of British capital made its way into organisations such as the Australian Agricultural Company founded in 1824; and from the 1830s British banks and mortgage companies opened branches in the colonies.

Australia’s transition in the nineteenth century from a penal colony with a small landed grazier class, to an economy oriented towards export production (wool, meat, minerals etc.), to a financial or merchant capitalist colony with a burgeoning industrial economy was relatively swift, and assisted by the discovery of gold—in particular, by the glut of cheap labour associated with gold—in 1851.

Gold prospecting in New South Wales and central Victoria saw a flood of overseas migrants and gold-seekers from Britain but also from China, America, Germany, and Poland. In 1852 alone 370,000 immigrants arrived in Victoria. The total population of all the Australian colonies trebled from 430,000 in 1851 to 1.7 million in 1871. Gold-digging was therefore both feverish and speculative, and strangely stabilising. As Geoffrey Blainey has pointed out in his popular but (economically) rationalist The Rush That Never Ended (1963), before the discovery of gold graziers were at the mercy of fluctuating overseas prices for their exports (such as wool) but the new population by the gold fields meant that they profited from a local demand for meat, hides, coaches, and work-horses (Blainey 1963).

As Marx noted, the discovery of gold and its attendant labour market allowed capitalist accumulation and capitalist modes of production to begin in earnest:

The shameless lavishing of uncultivated colonial land on aristocrats and capitalists by the Government, so loudly denounced even by Wakefield, has produced, especially in Australia, in conjunction with the stream of men that the gold diggings attract, and with the competition that the importation of English-commodities causes even to the smallest artisan, an ample “relative surplus labouring population,” so that almost every mail brings the Job’s news of a “glut of the Australia labour-market,” and the prostitution in some places flourishes as wantonly as in the London Haymarket. (Marx 1887: n.p.)

For Marx, the ‘New World’ had begun to replicate the old, from the glut or excesses of the Australian labour-market (ironically, the colonies were originally to be a ‘vent for surplus’ for Britain’s own labour excesses), to the anti-protectionist and competitive importation of English commodities, to the transactions of money and flesh that characterized the London Haymarket. By the 1880s, the haphazardness of colonial land grants and the lack of coordination between the economic policies of various colonial governments and departments had indeed begun to bring Australia’s burgeoning capitalist system to a point of early exhaustion, as had disputes between the interests of various economic classes and even within the capitalist classes themselves (local versus transcontinental or European capital, free traders versus protectionists etc.).

From the 1890s onwards, such problems were largely resolved by increased economic self-determination and, of course, by Federation in 1901. By the 1860s, Victoria was the colony with the most advanced manufacturing industry, while the oldest colony, New South Wales, was less economically developed. Nonetheless, in 1888 Augusto Lorenzini, an Italian artist and decorator who emigrated from London to Sydney in 1883, could represent the colony of New South Wales through the draped figure of Commerce, seated in a dark wood and surrounded by her treasures (gold vases, plates, and a crown), while Cupid attempts, unsuccessfully, to provoke, distract, entice, or lure her away.It is, perhaps, in the Old World decorative excesses and allegorical representations that marked Lorenzini’s style that the capitalist transformation of the Australian colonies is most aesthetically explicit.

Works Cited

Bentham, Jeremy. Defence of a Maximum (1801). Jeremy Bentham’s Economic Writings.

Ed. W. Stark. 3 vols. London: Allen & Unwin, 1954. III. 299-302.

— The Rationale of Punishment. London: 1830.

—England and America. London: 1833.

Blainey, Geoffrey. The Rush That Never Ended: A History of Australian Mining. Parkville: University of Melbourne Press, 1963.

Boralevi, Lea Campos. Bentham and the Oppressed. Berlin and New York: Walter de Guyter, 1984.

Coleman, Deirdre. Romantic Colonization and British Anti-Slavery. Cambridge: Cambridge University Press, 2005.

Davis, David Brion. The Problem of Slavery in the Age of Revolution, 1770-1832. Ithaca: Cornell University Press, 1975.

Marx, Karl. ‘The Modern Theory of Colonisation’. Capital. Ed. Frederick Engels. Trans. Samuel Moore and Richard Aveling. Moscow: Project Publishers, 1887.

Smith, Adam. An Inquiry into the Nature and Causes of the Wealth of Nations. Ed. R. H. Campbell, A.S. Skinner and W. B. Todd. Oxford: Clarendon Press, 1976.

Steer, Philip. ‘Antipodal Home Economics: International Debt and Settler Domesticity in Clara Cheesman’s A Rolling Stone’. Domestic Fiction in Colonial Australia and New Zealand. Ed. Tamara S.Wagner. Abingdon: Pickering & Chatto, 2014. 145-160.

Winch, Donald. Classical Political Economy and Colonies. Cambridge, MA: Harvard University Press, 1965.

Porscha Fermanis is Professor of Romantic Literature at University College Dublin. Her research interests include global Romanticisms and colonial book history; Romantic historicism and the philosophy of history; the relationship between Enlightenment and Romanticism; and the work of John Keats. Her current research for the SouthHem project focuses on literary appreciation and the history of reading in the Straits Settlements. 

Image: Allegorical figure of Commerce symbolising the colony of New South Wales, c1888. Watercolour painted by Augusto Lorenzini. Courtesy of the Caroline Simpson Library & Research Collection.


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