This Afterword provides reflections on individual chapters and the broader project that centres imperialism and its legacies for understanding both international and global inequalities. In particular, it draws out the significance of critical analysis of the violence of colonial capitalism more generally, within which taxation was a strategy of extraction and exploitation. While the method of analysis resonates with critical historical approaches of imperialism and its lasting legacies, the rich and empirically substantiated discussions of institutional arrangements that served to uphold extraction, often through brutal violence, are acknowledged. Another theme the chapter draws attention to is that of resistance to the imperial project. It concludes by offering some observations on how imperial extraction becomes disarticulated from the post-1945 international development framework. It also raises the question of how a just reparation may be effected without reproducing the logics of colonial violence.
Political economic governance and inequality in Indonesia
This chapter investigates the colonial tax system in Indonesia under Dutch rule. It demonstrates how in contemporary colonial logic, taxation, socio-economic development, and equality were seen as intrinsically connected. Taxation, and integrated systems of coerced labour, were presented as important pillars in colonial ‘civilisational’ projects of state formation, governance, and bureaucratisation. Far from simple extractive instruments deployed to fund empire, taxes were seen as integral administrative and disciplinary instruments to enhance economic centralisation, equality, capitalisation, monetisation, and the political transformation and reorganisation of colonised societies. The monetary tax system was designed to curtail the exploitative character of previous systems of labour exploitation and distribute the tax burden more equally among colonised populations across the archipelago. However, the limited capacity and considerable dependence of the Dutch administration on local rulers obstructed the supposed transformative power of taxation. Tensions between colonial policy and practice were resolved on the spot through negotiation, rendering a weak institutional infrastructure and preventing the emergence of a transparent and just bureaucracy, which ultimately only enhanced political and fiscal inequality.
The politics of ‘financial autonomy’ in the French colonial empire, 1900–14
This chapter charts the evolution of French colonial finance at the turn of the twentieth century and draws the lineaments of the French imperial state’s fiscal hierarchy. It focuses specifically on political debates about the ‘cost’ of empire at a time of resurgent imperial protectionism and how they led to the voting of a series of laws in 1900 imposing ‘financial autonomy’ on French colonies and Algeria. From this moment onwards, French colonies were increasingly asked to draw on their own fiscal resources, but this did not equate to financial self-determination for the millions of French colonial subjects living in the empire. Instead, ‘autonomy’ served as a disciplining device which gave the metropole greater control over imperial expenditures. Like other imperial powers at the time, France sought to govern its empire ‘on the cheap’. In practice, this meant that locally levied taxes became the main revenue source for French colonial states. This chapter argues that this policy emerged out of the necessity to preserve a precarious metropolitan fiscal bargain in a context of extreme inequality and alleviate fears of colonial ‘profligacy’ in the aftermath of massive territorial conquest. The political fallout of this policy was immediate and generated a flurry of tax revolts, prompting several reformist colonial officials to rethink colonial financial relations in the aftermath of the First World War.
Imperial extraction and development’s ‘private sector turn’
Paul Robert Gilbert
This chapter examines two UK-based development bodies, the Crown Agents and the CDC Group, focusing on moments of controversy surrounding these organisations’ impacts on public finances, in the UK and in its former colonies. It highlights the role these ‘development’ organisations played in managing colonial currencies and supply chains to ensure the expansion of Britain’s nascent welfare state in the immediate post-war period. Both organisations have undergone significant restructuring and repositioning since the formal end of empire, and now take centre stage in the retro-liberal aid regime under which the state exists to sponsor and facilitate the private sector. Donor states are increasingly entangled with private, for-profit agencies through a range of state–capital hybrids that may benefit donor states in the Global North and development professionals more than they do ‘beneficiaries’ in the Global South. This retro-liberal aid regime is also a ‘re-colonial’ one: development bodies established during the colonial period find success through new arrangements, but much like their colonial antecedents, do so as bearers of expertise that can address development challenges while demonstrating ‘value for money’ for the UK taxpayer and chipping away at the tax base in ‘beneficiary’ countries. The chapter thus foregrounds the colonial durabilities which are so deeply embedded within aid flows, government by contract, and even ‘value for money’ models of accountability that structure the retro-liberal aid regime.
British fiscal policies in a colonial island world
By 1906, the Pacific had been partitioned between key colonial powers – United Kingdom, France, and Germany. Colonial rule had to be financed and funded. Metropolitan grants-in-aid were either entirely absent, set at minimal levels, or varied between colonial regimes. Colonial officials were responsible for plural communities, including indigenous majorities, settlers, and merchants, each of them having their own fiscal potentials for taxation. This chapter examines taxation in two neighbouring countries, the British Solomon Islands Protectorate, and the jointly governed Anglo-French Condominium of the New Hebrides (Vanuatu). Taxation was imposed with violence in the first three decades of British rule in Solomon Islands and met with indigenous resistance and protest. However, as decolonisation unfolded in the 1960s and 1970s, indigenous Solomon Islanders took control of taxation to fund independence. In the New Hebrides, by contrast, British and French officials could not agree on fiscal policy and taxation. Given the inability to levy effective taxes in the New Hebrides, decisions were made in the early 1970s to convert the country into a tax haven and offshore finance centre. However, while expatriates, investors, and settlers were freed of the need to pay most taxes, indigenous ni-Vanuatu continued to do so. As a result of British rule, Solomon Islands inherited the orthodox metrics of a conventional taxing state during the country’s decolonisation, whereas in the New Hebrides the politics of compromise, deferral, and cancellation between British and French officials meant that Vanuatu achieved independence as a prominent tax haven and offshore finance centre.
Although Charles I and Oliver Cromwell had little in common, they had both promised to give away hundreds of thousands of acres of land confiscated from Irish Catholics. For Charles, the land was promised to financial speculators in London who gambled on the conquest of Ireland and sought to drive the Irish from their homelands. Cromwell, who conquered Ireland militarily in 1650, proposed to reward his soldiers with land instead of cash and encouraged colonisation by defaulting on his soldiers’ pay. In 1660, a restored Charles II promised to uphold both of these pledges and Ireland’s land was given away to soldiers and speculators for a fraction of its value. Much of this land was promptly mortgaged for its full value, a ‘gage’ with which to leverage further colonial development. The confiscated land was also taxed, promising a huge cash windfall for the English exchequer with the prospect of a perennial colonial surplus. This tax, the Quit Rent, was also mortgaged, or ‘farmed’, together with most other forms of taxation raised in Ireland. Between 1660 and 1670, vast sums of money were borrowed against Irish land, or the tax on Irish land. The exchequer, however, never received the windfall it had been expecting. The Irish exchequer ran out of money in 1670, and the English exchequer ‘stopped’ the following year. The money had disappeared. This chapter examines where it went.
Taxation was an important feature of European colonisation and extraction, and remains central to the extractive processes of economic and financial globalisation that have replaced formal empire. The global inequalities in taxing rights extant today are directly related to the economic governance of previous European empires – and of the British Empire above all. Three distinct, imperial ages of illicit financial flows can be identified. The first is one of violent dispossession, with tax used in various supporting roles. The second aimed to deny newly independent states the ability to reclaim stolen assets and income streams, while simultaneously preventing effective taxation by the metropolis. This gave way to the third phase in which cross-border tax abuse drives global inequalities. The key actor in the tax havenry that facilitates this is shown, by a variety of measures, to be the United Kingdom with its ‘spider’s web’ of dependent territories. The damage done is substantial, and the UK’s responsibility is clear. The importance of tax – not only for revenues but also for responsive governance – is such that former colonies continue to see their prospects of effective statehood eroded by these imperial legacies. The dependent territories that remain, meanwhile, suffer a more intense version of the finance curse to which the UK too is exposed, leaving them more unequal and prone to corruption, with citizens often denied any benefits of havenry. Full reparations may be beyond the UK’s economic capacity, but approaches should be considered while immediate steps are taken to end the harms.
Imperial Inequalities takes Western European empires, and their legacies, as the explicit starting point for discussion. It addresses the institutional and fiscal processes involved in the modes of extraction, that is, taxation, and hierarchies of welfare distribution across Europe’s global empires. It looks at the ways in which particularities of economic governance across European empires have shaped forms of inequality in the present and their ongoing implications for contemporary political economy. Specifically, it examines the ways in which European empires mobilised forms of taxation across the territories they governed and addresses how this was understood, both in the metropole and the imperial hinterlands. The volume further addresses the different forms of welfare provided within the imperial polity in terms of who contributed, who had access, and how this was differentiated across its broader reaches. The relationship between taxation and welfare can be regarded as central to the dynamics of modern nation-states, yet the role of imperialism has rarely been addressed. Nor has the relationship been discussed within the literature addressing issues of economic governance across imperial domains. The volume culminates by looking at the various taxation regimes in operation in different European empires and how their postcolonial legacies continue to shape our world. In sum, the volume provides historical insights into the shaping of structures of inequality through an examination of the complex interplay between forms of extraction and differential redistribution which continue to have repercussions in the present.
The consolidation of the British welfare state in the mid-twentieth century did not only coincide with the systematic dismantling of the British Empire but was significantly shaped by the empire that preceded it. The story that tends to be told about the welfare state, however, situates it firmly within the national context. Such understandings go on to shape contemporary political debates centred on questions of entitlement and concerns over legitimacy. This chapter reassesses the standard accounts of taxation and welfare that are claimed to be central to the construction of the nation to demonstrate how taking the Empire into account offers the possibility of a different political response to the challenges we are faced with today.
Taxpayers, taxation, and expenditure in Sierra Leone, c. 1890s to 1937
This chapter examines the relationship of colonial taxation and inequalities in the British Empire in West Africa, specifically Sierra Leone. The imperial tendency to create and maintain distinctions between their colonial subjects, even within a single colony, was reflected in taxation, and taxpayer categories developed that reflected and further entrenched inequalities in the ways in which subjects were governed and incorporated into empire. The chapter asks how these categories were established and developed, and how interacted with one another. It argues that internal inequalities led to a pluralistic tax system and asymmetrical spending patterns before 1937.