Nature's Evil

Empire was a social practice. Its political economy had many practitioners, and there were also critics; theoreticians were few. Political thinkers taught about valour and glory, war and peace; they didn’t discuss where the government would find the money for the upkeep of its army. Mercenaries were the crown’s main expense, and they did not forgive debts, so the crown had to borrow. Using banks to finance debt, rulers needed revenue from which they could repay their loans. Governments increased taxes on the peasants, but they had always lived on the breadline. Only ‘industry’, ‘commerce’ and ‘colonies’ could improve the state finances. Waged for the sake of colonies, wars created debts which were secured by future revenue from those colonies. All three elements of this system – colonial profits, bank credits and mercenary armies – depended on the expected resources in the newly conquered territories. But these profits fell disappointingly short, and vanguard theories developed on the ruins of failed practices.

Robinson Crusoe on the British Isles

Daniel Defoe was perhaps the first theoretician of the new system of imperial economy. A prolific writer and skilful spy, Defoe is remembered for his Robinson Crusoe

, but he also wrote hundreds of analytical briefs for both the Whigs and the Tories. In one of his early texts, An Essay upon Projects

(1697), Defoe compared fashionable world-shaking schemes – the new specialty of the educated elite – to the Tower of Babel, ‘too big to be manag’d, and therefore likely enough to come to nothing’. 1 Many such projects were connected to the new colonies. Some worked, others failed, and the only proof of the pudding was in the eating.

Together with his Scots friend William Paterson, Defoe worked on creating the Bank of England; a little less ambitious than the Tower of Babel, this project met with success. Incorporated by an Act of Parliament in 1694, the new bank would finance the crown’s war efforts by selling its own shares at 8 per cent annual interest. It would cover this debt from taxes on the tonnage of ships, and also from duty on wine and beer. In this balanced way, the Bank of England brought the colonial and domestic influx of revenue to one place. In a pamphlet concerning standing armies (1698), Defoe wrote that wealth would win wars, while the idea of military valour was archaic, ‘Gothic’. A truly modern thinker, Defoe despised the Gothic past – the realm of brute force, subsistence farming and chivalric romances. What the country needed was a standing army that would be supported by Parliament and financed by regular taxes and tariffs.

A worldwide best-seller, Defoe’s Robinson Crusoe

(1719) was a refutation of Don Quixote

, written a hundred years earlier. A seafarer, sugar planter and slave trader, Robinson embodied the image of early capitalism just as Don Quixote symbolised the vanished Middle Ages. After crossing two oceans, Robinson returns to England overland, through China and Russia, with a consignment of Russian fur – a strangely archaic product of his adventures. But in his work of 1728, A Plan of the English Commerce , Defoe called for the factory processing of English wool to supply Europe and the colonies with ready-made products. A nonconformist, Defoe admired Holland and despised Spain. An enthusiast of industry, he was a consistent mercantilist. In 1706, Defoe set off for Scotland to secure its merger with England; his partner was again William Paterson, the Scottish trader who had made a fortune in the West Indies. Defoe was then working for Robert Harley, who prepared the Union with Scotland Act (1706) and concluded the Treaty of Utrecht (1713). State finances were a perennial headache for this restless statesman. In 1711 he created the South Sea Company, whose task was to convert state debt into shares and secure them by future colonies. A royal charter granted this company a monopoly on trade with South America. By buying shares in the new company, Englishmen were investing in anticipated revenue from the silver mines, sugar plantations and fishing grounds which still belonged to the Spanish enemy. The alchemy of stock markets would solve the problems of financing wars much more effectively than a tax inspector.