What is economic imperialism? A complete explanation

Economic imperialism represents a form of imperialism. To address this concept we will first begin with the explanation of imperialism as a process of control or domination of an entity over other populations or territories.

What is imperialism?

Imperialism refers to the notion of Empire, a form of political organization born in Antiquity.

Historically, imperialism refers in particular to the policy of military expansion of European states through colonial conquest.

In fact, the notion of imperialism was developed by economist John Atkinson Hobson, who in his book Imperialism. One study (1902) criticized the British version. This imperialism is no longer based on territorial continuity, accentuating the difference between metropolis and colonies.

But several phases of imperialism can be distinguished. After the great discoveries of the 16th century, we can remember the expansion of the 1880s that led to the Berlin Conference of 1885 that organized territorial claims in Africa, or the attribution of mandates by the League of Nations to distribute the territories of the Empire. The Ottomans defeated at the end of the First World War.

Often justified in the name of a civilizing mission and promoters of a certain universalization of values, empires in fact lead policies of predation and exploitation of resources and are a tool of prestige on the international scene. As such, they were fought by nationalisms that led to independence.

Today, imperialism has a pejorative connotation at the same time that it seems to have been diluted: it is no longer just territorial, but would designate hegemony in the fields of economy, technology or culture.

What is economic imperialism?

Economic imperialism represents the exercise of economic power to control countries, people and regions. It takes many forms, such as control of natural resources, investment and manipulation of trade, exploitation of markets and labor forces. Economic imperialism also refers to the use of financial assistance such as loans and economic aid as a means of control and influence.

How does it work?

Economic imperialism involves a foreign power dominating the economy of another country or territory to extract resources, markets and profits. This domination can be achieved through various means:

• Establish settlements and administrative control, impose tariffs and trade regulations, control resources and labor, and extract wealth.
• Exercise economic influence through trade agreements, investments, without the need for formal colonization.
• Master important locations such as ports and transportation routes to gain economic advantages.
• Use the resources and labor of a country for the benefit of the foreign power.
• Gain control over a country's markets by owning or controlling key industries or by manipulating trade agreements and tariffs.

Objective of economic imperialism

The objective of economic imperialism can be different depending on the historical context, the actors involved and the methods applied. In general, the goal is to control natural resources, labor, markets, and people in other countries or regions. And this is done for various reasons.

The first would be access to natural resources such as minerals, oil, agricultural land or water to provide supplies to their own countries/economies.

Additionally, countries may attempt to dominate and control other markets to sell their own products, goods, and services. In this way their exports increase.

Furthermore, investment opportunities, strategic advantages and political dominance are some of the reasons. Obtaining strategic advantages such as naval ports, military bases and access to navigable waterways.

Finally, there are ideological reasons to control people and countries and the spending of the people who live in those countries. It is a cause of great concern today, given the imbalance of global economic power and the growing inequality between developed and developing countries.

Informal Formal vs. Formal economic imperialism

Formal and informal economic imperialism are two different ways of exercising imperial power over the economies of other countries.

Formal economic imperialism is a direct way of controlling a territory or colony by establishing an economic and political system. It generally involves colonizing a country, controlling resources, labor, and imposing trade regulations and tariffs. Typical example of formal economic imperialism during the 19th century.

Informal economic imperialism involves indirect control over a country's economy through trade and investment agreements. In this case there is no formal colonization. Typical examples are the economic influence of the United States in Latin America during the 19th and 20th centuries, or the influence of China in some African countries.

Examples of economic imperialism Opium wars

The British and Chinese fought two wars in the mid-19th century, known as the Opium Wars, over the opium trade. The First Opium War occurred between 1839 and 1842, and the Second Opium War occurred between 1856 and 1860. China wanted to prevent British traders from trading in opium, which led to these wars.

For a long time, British traders, mainly from the British East India Company, sold opium grown in India to China, where many people wanted it. The Chinese government considered this trade harmful and tried to stop it. In 1839, after China confiscated and destroyed a large amount of opium from the British, the First Opium War began. The British won using their powerful navy and made China sign the Treaty of Nanking in 1842. This treaty opened several Chinese ports to British trade, forced China to hand over Hong Kong to Britain, and made China pay the British.

Even after the first war, the opium trade did not stop and China continued to try to put an end to it. These efforts led to the Second Opium War in 1856. This time, Britain and France fought together against China and won, causing China to sign the Treaty of Tientsin in 1858. This treaty opened more Chinese ports to foreign trade, legalized the opium trade and demanded that China pay Britain and France.

The causes

The Opium Wars began because Britain wanted to sell opium to China to fix its trade deficit with the country. China tried to stop this because opium was addictive and harmful. The second war also involved disputes over the rights of foreign diplomats and merchants in China.

The effects of the opium wars

The wars had great effects. They forced China to open up to foreign trade, hand over Hong Kong to Britain, and allow foreign diplomats and merchants more freedom in China. These changes weakened China and made it more open to foreign control. The opium trade also greatly harmed Chinese society, causing an increase in addiction and crime. These wars helped Western powers dominate China economically and politically for many years.

Treaty of Nanjing (1842)

The Treaty of Nanjing of 1842 ended the First Opium War between the British and Chinese. The British won and made China agree to several demands. This treaty opened five Chinese ports to British trade, including Shanghai and Guangzhou. China also had to hand over Hong Kong to Britain and pay them a large sum of money. This agreement marked the beginning of an era in which China had to grant special privileges to European powers.

Treaty of Tientsin (1860)

The Treaty of Tientsin of 1860 ended the Second Opium War. This time, both Britain and France fought against China and won. The treaty caused China to legalize the opium trade, open more ports to foreign trade, and allow foreigners to travel and do business in China more freely. China also had to pay a lot of money to Britain and France and allow them to have embassies in Beijing. This treaty further weakened China's control over its own affairs and increased foreign influence.

The Port of Argentina and the foreign investment debt trap

During the second half of the 19th century, Great Britain exclusively exercised economic restrictions on Asia and America. Let's take the example of Argentina. Her commercial links with Great Britain were very important. This represented more than 50% of Argentine trade, while Argentina only contributed 10% of British trade. Britain was also the largest investor in Argentina. Argentina tried to diversify its partners and reduce its dependence by seeking capital in New York, Paris and Berlin, but without success. Britain could say to the Argentine government: “Either you adopt this policy or we strangle your economy.” » In 1876, Great Britain had applied terrible sanctions to Peru, thus persuading Argentina to become a client state of the British empire. Today, these measures are called “structural adjustment”: they are strictly economic interventions that international institutions, dominated by the United States, exercise on peripheral economies.

This is a borderline case of imperialism. The peripheral State is “free” to refuse, but the deterrent force is formidable with the prohibition of foreign investments and, sometimes, even foreign trade. Sanctions can be applied, but without the intervention of military force.