As so often in the past, a ghostly British empire is summoned up in moments of crisis. Remainers blame what they see as the imperialism of the Brexiters – and of the electorate – for Brexit itself. They often complain that the empire also thoroughly distorted the British economy of the past.

Why this story? Brexit has opened up arguments about Britain’s place in the world – and its former position. There is a lot of talk of Empire nostalgia and Commonwealth ambition. I asked David, the foremost economic historian of Britain, to explain why so much of this misses the point about the UK used to be. Chris Cook, Editor Read more Read less

Some Brexiteer ideologues claim that selected former white dominions (“CANZUK”, they call it – Canada, New Zealand and Australia) are itching to reconnect with the mother country. They also believe that the British economy was once profoundly imperial.

That both sides of the argument can agree about the role of the British Empire in British economic life is, in truth, a tribute to the propagandistic power of the imperialists of the past.

From the beginning of the 20th century, propaganda was put out by imperialists, and later by imperialist governments, showing that the empire was, and should be, an integrated economic whole. In this image, the United Kingdom specialised in manufactured goods, from cottons to ships, while the empire grew food and extracted raw materials.

Tobacco from Virginia in a warehouse in the Port of London, 1939

Meat and dairy products came from Australia and New Zealand, good bread-making wheat from Canada, tobacco from southern Africa, tea from India and Ceylon, sugar from the Caribbean. And then there were gold and diamonds from South Africa, teak from Burma, copper from southern Africa, iron ore from Sierra Leone, rubber and tin from Malaya, wool from Australia.

The imperial economy was a world economy in miniature, trading in sterling, shipping in British hulls. It all made perfect sense – an ordered, self-sufficient British world.

So powerful was the propaganda that some historians have come to believe it. A certain species of right-wing historian gingerly put forward the argument that in 1940 Britain should have left Europe to Hitler and carried on its cosy imperial life uninterrupted. Others argued that the British betrayed that economic system by joining the Common Market and breaking its deep historical relations with empire.

In a more critical vein, from both left and right, historians have held that captive imperial markets made British industry flabby. British exporters could sell any old rubbish to the empire and get paid good money for it. This argument is often part of a wider story which suggested that running the empire was a more attractive career for public school boys and Oxbridge graduates than domestic industry, with the consequence, again, that industry was weakened. Britain was imperial and as a result got stuck in a Victorian or Edwardian industrial rut.

The problem with all these views was that an imperial economic system was essentially an aspiration of imperialists – but it was not the reality. They never succeeded in making a self-sufficient British empire, nor creating a system of imperial free trade. They were thwarted by the realities of geography, of raw material availability, and markets, by the protectionism of parts of the empire and by the objections of the British politicians and people.

What, then, was the reality of British trade? The United Kingdom was, in truth, distinguished by its policy of radical free trade, at least before 1914. It left its economy open to all, indiscriminately. Not surprisingly its greatest trading partners were in Europe.

Wagons of coal at Birkenhead Docks, Merseyside, ready for export, 1924. Britain was the largest exporter of energy on earth until 1939

And of course, the British imported from non-British Africa and from non-British Asia, too. In fact, in the early 20th century, imports from foreign countries were nearly always more important that those from “British countries”.

Exports were also European and global, more than imperial. The largest export by bulk was coal. Britain was the Saudi Arabia of 1900 – the largest exporter of energy on earth till 1939. Its coal, being close to the sea, was transported cheaply not only to the whole Baltic and Mediterranean, but further afield, too. Uruguay and Argentina were powered by British coal. The British Empire, on the whole, was not.

Much the same applied to British manufactures. British cotton goods went all over the world, as did British railway equipment.

The reality of trade is much understated in most accounts. The fact that Britons stood on the edge of the European continent and had huge volumes of easily extractable coal under their feet mattered much more than is usually recognised – either now or at the time – than any policy decision.

In the Edwardian years the Conservative Party became the party of “tariff reform” – of protection, arguing that the UK should follow the global norm. In short, to break the bounds of mere geography and geology.

The idea was to put up tariffs around the British economy, to protect it, to create a negotiating lever to force others to reduce tariffs and, crucially, to allow reduced tariffs for imperial producers (“imperial preference”) to help create an imperial economy. For British exports (unlike imports) typically faced import tariffs, in both British and foreign countries.

However, in 1906 and in 1910, and in some later elections, the British electorate voted for the free trade candidates. They backed the Liberals, who celebrated free, global trade. The public were against tariffs, and thus against economic imperialism.

Indeed, the UK only cast clear votes for a protectionist policy – for policies that would make the boundaries of empire more important in defining British trade – in 1931. Even then, Empire Free Trade (the policy of the hard right of the day) did not stand a chance. Even in its pomp the mother country could not force its imperial territories to fully open themselves to British trade. No one, whether British or Australian or Canadian, or even the government of India, put empire before nation.

Dockworkers in London, 1935

For example, the British government of India gave Lancashire preferences over the Japanese textile industry, but it still protected the Indian industry against the mother country with tariffs. Nor did the UK get it all its own way in trade agreements with nations that depended on British markets. The UK had leverage as the largest food importer in the world but, even so, countries like Argentina successfully imposed tariffs against British manufactures.

The Second World War had a dramatic and long-term effect on British trade. The German armies threw the British out of the continental economy – there was no longer European iron ore or timber or food coming to the UK. There was no longer a European market for British coal. The UK did not, as national mythology suggests, turn inward and dig for victory. Rather it was forced to turn further away. It continued to be supplied from overseas foreign and British countries, and now on a very large scale from the United States as well. Spam replaced Danish bacon.

In the years after the war, however, the British economy did turn inward. This protected national economy sought to import as little as possible. It also sought to buy in sterling rather than the very expensive and difficult-to-obtain dollar. This made UK trade more imperial than ever before, if we take empire to include the white dominions. These rich countries, which supplied the UK with food, were far more important (as they had long been) to British trade than the remaining African, Asian and Caribbean colonies.

"Stop this": Conservative propaganda in favour of protectionism

This uniquely imperial moment in British economic history was not one the British were comfortable with. As Alan Milward made clear in his magisterial official history of British attempts to enter the Common Market, the UK wanted to return to global free trade, and to break free from the new national and imperial orientation.

This was not easy – it meant opening up the USA and Europe to British trade. The USA remained deeply protectionist, but Europe was more promising. The UK proposed a giant western European Free Trade Area (Efta). This proposal got nowhere with the six members of the nascent Common Market. The UK did manage to create a tiny Efta in 1960 – but in 1961 it asked to leave it to join the European Economic Community.

Entering the EEC was seen as – and was – a liberalising, not a protectionist, move. It was also not necessarily an anti-imperial move, either, since many imperialists wanted to strengthen what little remained of the British Empire by linking it to the European economy. French, not British, resistance kept the UK outside the EEC until 1973.

By the time it joined, the United Kingdom was no longer a distinctively different nation from the continental norm. No longer free trading, it had already pulled back from the small remaining bits of empire. It had moved towards becoming self-sufficient in food, which meant less trade with Australia, New Zealand and Canada. The idea that the UK was part of an essentially imperial, or global, economy until it was forced into the EEC is quite wrong.

After 40 years in the EEC/EU the economy has changed radically again. To assume that in some deep sense the UK that is leaving the EU is the UK of 1914 or 1950 or even 1973 is bonkers. Once the UK was the world’s largest coal exporter, today it imports coal.

Today the UK is a net importer of manufactures, on a huge scale, whereas in 1973 it was still a net exporter.

Today it is a service economy, with a net surplus of services (though they account for less than one half of exports).

Once the world’s largest food importer, it is a country which exports beef, lamb, and wheat and barley.

Once the greatest exporter of capital, it now depends on the capital of others.

London today is the hub of Britain's largely service economy

It is, as it was bound to be, not only changed, but relatively diminished as a world player – a large Canada, not a small United States.

But why is it that the UK appears to remember an imagined overwhelmingly imperial past? It is partly a leftover from Tory imperial aspirations. But the belief in the centrality of empire to the British past is also characteristic of much of the anti-imperialist centre-left.

A long line of anti-imperialists blamed empire for all sorts of economic, social and ideological ills, from British militarism to domestic racism to economic decline and now Brexit. It has proved very much more difficult to criticise the native sources of these problems. Blaming the empire, as much as harking back to it, is a form of escapism.

It has led to a serious misreading of Brexit as imperialism. In fact most Brexiter thought is radical liberal, dreaming of a return to unilateral free trade. Boris Johnson and others pepper speeches with references to cheap imported food, clothes and shoes for British workers. On the other hand, much of the campaign for Brexit recalled the nationalism of the 1960s and 1970s: take back national control, fund the National Health Service, keep out immigrants – Europeans as well as non-Europeans – a time when Labour was the anti-EEC party.

Brexiter fantasies about British power are evidently important, but they are not about empire. They focus on delusions of a global champion of free trade, an innovation superpower, a tier-one global military power, which will lead the world into the fourth industrial revolution, as it led it into the first.

That the empire and its domestic consequences are now firmly part of our understanding of British history is only to be welcomed. But empire did not exhaust the UK’s relations with the rest of the world, not least in trade, nor can it explain everything we might not like. Our present problems are due to very much more recent and more powerful factors than nostalgia for a world that never existed.

The author is the Hans Rausing Professor of the History of Science and Technology and Professor of Modern British History at Kings College London