The Online Library of Liberty

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• The Liberty Fund Library of the Works of Ludwig Von Mises
• Foreword to the Liberty Fund Edition
• Preface
• Omnipotent Government
• Introduction
• Part I: The Collapse of German Liberalism
• I: German Liberalism
• 1.: The Ancien Régime and Liberalism
• 2.: The Weakness of German Liberalism
• 3.: The Prussian Army
• 4.: The Constitutional Conflict In Prussia
• 5.: The “little German” Program
• 6.: The Lassalle Episode
• II: The Triumph of Militarism
• 1.: The Prussian Army In the New German Empire
• 2.: German Militarism
• 3.: The Liberals and Militarism
• 4.: The Current Explanation of the Success of Militarism
• Part II: Nationalism
• III: Etatism
• 1.: The New Mentality
• 2.: The State
• 3.: The Political and Social Doctrines of Liberalism
• 4.: Socialism
• 5.: Socialism In Russia and In Germany
• 6.: Interventionism
• 7.: Etatism and Protectionism
• 8.: Economic Nationalism and Domestic Monopoly Prices
• 9.: Autarky
• 10.: German Protectionism
• IV: Etatism and Nationalism
• 1.: The Principle of Nationality
• 2.: The Linguistic Group
• 3.: Liberalism and the Principle of Nationality
• 4.: Aggressive Nationalism
• 5.: Colonial Imperialism
• 6.: Foreign Investment and Foreign Loans
• 7.: Total War
• 8.: Socialism and War
• V: Refutation of Some Fallacious Explanations
• 1.: The Shortcomings of Current Explanations
• 2.: The Alleged Irrationality of Nationalism
• 3.: The Aristocratic Doctrine
• 4.: Misapprehended Darwinism
• 5.: The Role of Chauvinism
• 6.: The Role of Myths
• Part III: German Nazism
• VI: The Peculiar Characteristics of German Nationalism
• 1.: The Awakening
• 2.: The Ascendancy of Pan-germanism
• 3.: German Nationalism Within an Etatist World
• 4.: A Critique of German Nationalism
• 5.: Nazism and German Philosophy
• 6.: Polylogism
• 7.: Pan-germanism and Nazism
• VII: The Social Democrats In Imperial Germany
• 1.: The Legend
• 2.: Marxism and the Labor Movement
• 3.: The German Workers and the German State
• 4.: The Social Democrats Within the German Caste System
• 5.: The Social Democrats and War
• VIII: Anti-semitism and Racism
• 1.: The Role of Racism
• 2.: The Struggle Against the Jewish Mind
• 3.: Interventionism and Legal Discrimination Against Jews
• 4.: The “stab In the Back”
• 5.: Anti-semitism As a Factor In International Politics
• IX: The Weimar Republic and Its Collapse
• 1.: The Weimar Constitution
• 2.: The Abortive Socialization
• 3.: The Armed Parties
• 4.: The Treaty of Versailles
• 5.: The Economic Depression
• 6.: Nazism and German Labor
• 7.: The Foreign Critics of Nazism
• X: Nazism As a World Problem
• 1.: The Scope and Limitations of History
• 2.: The Fallacy of the Concept of “national Character”
• 3.: Germany’s Rubicon
• 4.: The Alternative
• Part IV: The Future of Western Civilization
• XI: The Delusions of World Planning
• 1.: The Term “planning”
• 2.: The Dictatorship Complex
• 3.: A World Government
• 4.: Planned Production
• 5.: Foreign Trade Agreements
• 6.: Monet Ary Planning
• 7.: Planning International Capital Transactions
• XII: Peace Schemes
• 1.: Armament Control
• 2.: A Critique of Some Other Schemes Proposed
• 3.: The Union of the Western Democracies
• 4.: Peace In Eastern Europe
• 5.: The Problems of Asia
• 6.: The Role of the League of Nations
• Conclusion

5.

Colonial Imperialism

In the fifteenth century the Western nations began to occupy territories in non-European countries peopled by non-Christian populations. They were eager to obtain precious metals and raw materials that could not be produced in Europe. To explain this colonial expansion as a search for markets is to misrepresent the facts. These traders wanted to get colonial products. They had to pay for them; but the profit they sought was the acquisition of commodities that could not be bought elsewhere. As businessmen they were not so foolish as to believe in the absurd teaching of Mercantilism—old and new—that the advantage derived from foreign trade lies in exporting and not in importing. They were so little concerned about exporting that they were glad when they could obtain the goods they wanted without any payment at all. They were often more pirates and slavers than merchants. They had no moral inhibitions in their dealings with the heathen.

It was not in the plans of the kings and royal merchants who inaugurated European overseas expansion to settle European farmers in the occupied territories. They misprized the vast forests and prairies of North America from which they expected neither precious metals nor spices. The rulers of Great Britain were much less enthusiastic about founding settlements in continental America than about their enterprises in the Caribbean, in Africa, and the East Indies, and their participation in the slave trade. The colonists, not the British Government, built up the English-speaking communities in America, and later in Canada, in Australia, New Zealand, and South Africa.

The colonial expansion of the nineteenth century was very different from that of the preceding centuries. It was motivated solely by considerations of national glory and pride. The French officers, poets, and after-dinner speakers—not the rest of the nation—suffered deeply from the inferiority complex which the battles of Leipzig and Waterloo, and later those of Metz and Sedan, left with them. They thirsted for glory and fame; and they could quench their thirst neither in liberal Europe nor in an America sheltered by the Monroe Doctrine. It was the great comfort of Louis Philippe that his sons and his generals could reap laurels in Algeria. The Third Republic conquered Tunis, Morocco, Madagascar, and Tonking in order to reëstablish the moral equilibrium of its army and navy. The inferiority complex of Custozza and Lissa drove Italy to Abyssinia, and the inferiority complex of Aduwa to Tripoli. One of the important motives that made Germany embark on colonial conquests was the turbulent ambition of shabby adventurers like Dr. Karl Peters.

There were other cases too. King Leopold II of Belgium and Cecil Rhodes were belated conquistadors. But the main incentive of modern colonial conquest was the desire for military glory. The defenselessness of the poor aborigines, whose main weapons were the dreariness and impassableness of their countries, was too tempting. It was easy and not dangerous to defeat them and to return home a hero.

The modern world’s paramount colonial power was Great Britain. Its East Indian Empire surpassed by far the colonial possessions of all other European nations. In the 1820’s it was virtually the only colonial power. Spain and Portugal had lost almost their entire overseas territories. The French and the Dutch retained at the end of the Napoleonic Wars as much as the British were willing to leave them; their colonial rule was at the mercy of the British Navy. But British liberalism has fundamentally reformed the meaning of colonial imperialism. It granted autonomy—dominion status—to the British settlers, and ran the East Indies and the remaining Crown colonies on free-trade principles. Long before the Covenant of the League of Nations created the concept of mandates, Great Britain acted virtually as mandatory of European civilization in countries whose population was, as the Britons believed, not qualified for independence. The main blame which can be laid on British East Indian policies is that they respected too much some native customs—that, for example, they were slow to improve the lot of the untouchables. But for the English there would be no India today, only a conglomeration of tyrannically misruled petty principalities fighting each other on various pretexts; there would be anarchy, famines, epidemics.2

The men who represented Europe in the colonies were seldom proof against the specific moral dangers of the exalted positions they occupied among backward populations. Their snobbishness poisoned their personal contact with the natives. The marvelous achievements of the British administration in India were overshadowed by the vain arrogance and stupid race pride of the white man. Asia is in open revolt against the gentlemen for whom socially there was but little difference between a dog and a native. India is, for the first time in its history, unanimous on one issue—its hatred for the British. This resentment is so strong that it has blinded for some time even those parts of the population who know very well that Indian independence will bring them disaster and oppression: the 80 millions of Moslems, the 40 millions of untouchables, the many millions of Sikhs, Buddhists, and Indian Christians. It is a tragic situation and a menace to the cause of the United Nations. But it is at the same time the manifest failure of the greatest experiment in benevolent absolutism ever put to work.

Great Britain did not in the last decades seriously oppose the step-by-step liberation of India. It did not hinder the establishment of an Indian protectionist system whose foremost aim is to lock out British manufactures. It connived at the development of an Indian monetary and fiscal system which soon or late will result in a virtual annulment of British investments and other claims. The only task of the British administration in India in these last years has been to prevent the various political parties, religious groups, races, linguistic groups, and castes from fighting one another. But the Hindus do not long for British benefits.

British colonial expansion did not stop in the last sixty years. But it was an expansion forced upon Great Britain by other nations’ lust of conquest. Every annexation of a piece of land by France, Germany, or Italy curtailed the market for the products of all other nations. The British were committed to the principles of free trade and had no desire to exclude other people. But they had to take over large blocks of territory if only to prevent them from falling into the hands of exclusive rivals. It was not their fault that under the conditions brought about by French, German, Italian, and Russian colonial methods only political control could adequately safeguard trade.*

It is a Marxian invention that the nineteenth-century colonial expansion of the European powers was engendered by the economic interests of the pressure groups of finance and business. There have been some cases where governments acted on behalf of their citizens who had made foreign investments; the purpose was to protect them against expropriation or default. But historical research has brought evidence that the initiative for the great colonial projects came not from finance and business but from the governments. The alleged economic interest was a mere blind. The root cause of the Russo-Japanese War of 1904 was not the desire of the Russian Government to safeguard the interests of a group of investors who wanted to exploit the Yalu timber estates. On the contrary, because the government needed a pretext for intervention, it deployed “a fighting vanguard disguised as lumbermen.” The Italian Government did not conquer Tripoli on behalf of the Banco di Roma. The bank went to Tripoli because the government wanted it to pave the way for conquest. The bank’s decision to invest in Tripoli was the result of an incentive offered by the Italian Government—the privilege of rediscount facilities at the Bank of Italy, and further compensation in the form of a subsidy to its navigation service. The Banco di Roma did not like the risky investment from which at best but very poor returns could be expected. The German Reich did not care a whit for the interests of the Mannesmanns in Morocco. It used the case of this unimportant German firm as a lame excuse for its aspirations. German big business and finance were not at all interested. The Foreign Office tried in vain to induce them to invest in Morocco. “As soon as you mention Morocco,” said the German Secretary for Foreign Affairs, Herr von Richthofen, “the banks all go on strike, every last one of them.”*

At the outbreak of the first World War a total of less than 25,000 Germans, most of them soldiers and civil servants and their families, lived in the German colonies. The trade of the mother country with its colonies was negligible; it was less than .5 per cent of Germany’s total foreign trade. Italy, the most aggressive colonial power, lacked the capital to develop its domestic resources; its investments in Tripoli and in Ethiopia perceptibly increased the capital shortage at home.

The most modern pretense for colonial conquest is condensed in the slogan “raw materials.” Hitler and Mussolini tried to justify their plans by pointing out that the natural resources of the earth were not fairly distributed. As have-nots they were eager to get their fair share from those nations which had more than they should have had. How could they be branded aggressors when they wanted nothing but what was—in virtue of natural and divine right—their own?

In the world of capitalism raw materials can be bought and sold like all other commodities. It does not matter whether they have to be imported from abroad or bought at home. It is of no advantage for an English buyer of Australian wool that Australia is a part of the British Empire; he must pay the same price that his Italian or German competitor pays.

The countries producing the raw materials that cannot be produced in Germany or in Italy are not empty. There are people living in them; and these inhabitants are not ready to become subjects of the European dictators. The citizens of Texas and Louisiana are eager to sell their cotton crops to anyone who wants to pay for them; but they do not long for German or Italian domination. It is the same with other countries and other raw materials. The Brazilians do not consider themselves an appurtenance of their coffee plantations. The Swedes do not believe that their supply of iron ore justifies Germany’s aspirations. The Italians would themselves consider the Danes lunatics if they were to ask for an Italian province in order to get their fair share of citrus fruits, red wine, and olive oil.

It would be reasonable if Germany and Italy were to ask for a general return to free trade and laissez passer and for an abandonment of the—up to now unsuccessful—endeavors of many governments to raise the price of raw materials by a compulsory restriction of output. But such ideas are strange to the dictators, who do not want freedom but Zwangswirtschaft and self-sufficiency.

Modern colonial imperialism is a phenomenon by itself. It should not be confused with European nationalism. The great wars of our age did not originate from colonial conflicts but from nationalist aspirations in Europe. Colonial antagonisms kindled colonial campaigns without disturbing the peace between the Western nations. For all the saber rattling, neither Fashoda nor Morocco nor Ethiopia resulted in European war. In the complex of German, Italian, and French foreign affairs, colonial plans were mere byplay. Colonial aspirations were not much more than a peacetime outdoor sport, the colonies a tilting ground for ambitious young officers.

[2. ][The truth of Mises’s remark that it was the British who held India together was borne out after World War II. India and Pakistan were declared to be separate sovereign states in 1947, and Bangladesh seceded from Pakistan in 1971.—Ed.]

[* ]W. L. Langer, The Diplomacy of Imperialism (New York, 1935), I, pp. 75, 95; L. Robbins, The Economic Causes of War (London, 1939), pp. 81, 82.

[* ]Staley, War and the Private Investor (New York, 1935); Robbins, op. cit.; Sulzbach, “Capitalist Warmongers,” A Modern Superstition (Chicago, 1942). Charles Beard (A Foreign Policy for America, New York, 1930, p. 72) says with regard to America: “Loyalty to the facts of historical record must ascribe the idea of imperialist expansion mainly to naval officers and politicians rather than to business men.” That is valid for all other nations too.