The Political Economy of Empire

The relationship of capitalism to modern empire is of paramount importance, but unclear significance. For some, like Hobson and Lenin, empire is the apotheosis of capitalism, its logical and inevitable product and endpoint. For others, like the economist Joseph Schumpeter, capitalism is antithetical to empire, its free markets a solvent of empire’s inherent tyranny. Capitalism is undoubtedly a crucial component of early modern empires, including the Spanish, Dutch, French, and British empires. But vital and dynamic empires existed long before capitalism as we know it. We will continue to explore in detail the relationship between capital and empire, especially in the modern context. For now, let’s register a few broad points about the political economy of empire.

Accounting for the full range of economic activities, throughout history, and especially given modern corporate arrangements with their multi-national identities and complicated public-private relationships, is beyond the scope of one blog post. But we can note two stable dimensions of every empire’s political economy: their essential balance-sheet raison d'être and their differentiated social base.
 
Empires often appear to be enterprises of military conquest, and their broad catalog of violence rightfully attracts condemnation. But in fact empires are, at heart, economic activities. Their primary function is to produce economic benefits that flow into the metropolitan core. Empires exist to enhance, increase, or accelerate access to goods and services for imperial citizens. There are multiple means to accomplish this end including conquest and theft, political incorporation of one sort or another (e.g., colonization), or imposed or negotiated trade, rent, or arbitrage arrangements.
 
Like any well-run business, an empire seeks to maximize profits and minimize costs. The cost of war and military excursions are extraordinarily high. Thus, and contrary to what many critics of empire assert, empires do not habitually and casually engage in military adventurism. They can miscalculate, of course, and in many circumstances may deploy military force with murderous intent. But such deployments are very often the last resort, not the first. British forces were often as not sent in force to a region as a contingent response to a deteriorating imperial situation, not as an advance guard; read about Gordon in Khartoum, for instance. American military advisers in Vietnam were not the initial deployments of an inevitable military escalation. They were deployed in the hopes that they would be the last military intervention needed. The subjugation of Native Americans took many decades not because it wasn’t ruthless (indeed, it was) but because it was haphazard; policymakers first pursued the less costly alternatives (so it was thought) of relocation or cultural subjugation. When full-on military conquest was pursued, even that was piecemeal. We misunderstand empires (and their domestic support) when we suppose that their primary calling card in the world is military conquest. On the contrary, empires are always done on the cheap.
 
To achieve the economies of scale empires seek, a primary goal of imperial economics is to displace or dilute costs, to offload the bearing of costs to others. Hence empire always requires a subservient class, perhaps domestically and certainly internationally. Hence the near-universal reliance on some sort of slave or quasi-slave laboring class at home and abroad: Athenian helots, Roman slaves, Ottoman Janissaries, Spain’s New World “Indians,” colonized plantation workers across time and space. The domestic underclass will generally be typed and understood as foreign regardless of its location, as not quite the human measure of the dominant class, or as connected to the foreign periphery rather than to the nation. This has implications for imperial citizenship and the production of belonging which is one of the empire’s primary benefits. A subjugated class so defined in law and culture displaces costs to the periphery and concentrates benefits at the metropole. Subjugated classes usually have little or no political voice. The social structure of empire thus works to proliferate support for empire.
 
Another way to lower costs is to pursue economies of scale. Increasing the scope of the empire’s range and interests will generally lower unit costs: more sugar plantations means lower sugar costs for coffee drinkers back home. But economies of scale are also achieved within imperial society. That is, all empires rest on a foundation of a highly differentiated, specialized, and expert social base at home. Whether capitalist or not, a necessary foundation for empire is a dynamic and differentiated metropolitan society.
 
Diversification of function is crucial, because only an array of competencies can provide both the interest and the administrative functionality on which all imperial activity rests. Michael Doyle has made the crucial observation that an empire is the transnational extension of domestic life. For this extension to occur, agents and interlocutors, commercial and military actors, administrative and legal functionaries, and much more, are necessary. These are the commercial and trading people that forge overseas political and commercial links, and the lawyers, accountants, middlemen, shippers, insurance agents, and so forth, that structure those connections. This is as true of ancient Athens as it was true of the modern British empire. States that are largely or exclusively agricultural are unlikely to have the array of expertise and interest on which empire rests, and unlikely as well to provide the governing apparatus necessary to imperial activity.
 
The differentiated social base is a part of the political economy of empire and does several important things for it. First, a differentiated social base means lots of different economic interests are at stake in any given foreign policy question, increasing the potential scope of support for imperial activity. Think of the merchants, shipbuilders, sailors, slave traders, insurance agents, plantation owners, middlemen, warehouse operators, retailers, and consumers, and their associated political representation, to name only a few groups involved in the British sugar industry alone. This wide diversity of interest also provides enormous problem-solving and creative leverage potential. As we will see later, the seemingly infinite range of private American interests has given the American empire unrivaled scope to address the endless challenges it faces abroad.
 
Because many types of labor are displaced by the empire to the periphery, intellectual and administrative talent can develop within the metropole. More functionality is achieved at lower cost. Hence specialization at the metropole is crucially important. A kind of virtuous cycle sets in motion, with a differentiated social base giving rise to imperial expansion, which then necessitates further refinement of function and expertise. Circuits of knowledge and practice are established, requiring yet further administrative and managerial attention. This further differentiation offers additional interest and pathways for expansion, and so on. Doyle refers to this, in a nod to the historical development of Roman administrative efficiency, as the “Augustan threshold,” when the interest group penetration of the state has proceeded far enough that the economic interests of the state become institutionalized, regularized, and extended throughout the empire so that imperial administration becomes self-sustaining across the empire--for a time.
 
The search for a positive balance-sheet and the diverse social basis of empire: we’ll get a lot of mileage out of those two basic political-economic facts of empire. To maximize benefits along a stratified social hierarchy that generates the interest, produces the expertise, and conducts the work of empire, this is the basic political economy of empire. The tactics of empire-–how benefits are to be won and costs displaced-–is a topic for subsequent posts, and these tactics constitute a realm of particular genius for the American people. More coming.
 
Further reading: Michael W. Doyle, Empires (Cornell, 1986)