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The Economic and Historical Implications of Low-Cost Empire Building: A Study of French Colonization

We invite you to discover an extract from Denis Cogneau’s book, “A cheap empire: history and political economy of French colonization, XIX-XXIe century” published by Éditions du Seuil in the “Eco-histories” collection in January 2023.

Thanks to a long work of archives and statistical analysis, the author describes the colonial States and their functioning – notably through taxation, military recruitment, capital flows and inequalities. It shows that the empire cost the metropolis little until the wars of independence, and that French capital did not trickle down to the colonies. The “civilizing mission” that the French Republic had assigned itself therefore did not lead to the development of the occupied countries, and it was rather a regime that was both violent and ambiguous that was established there. In fact, the colonial regime mainly benefited a small minority of French settlers and capitalists. As for the nationalist elites, they most often maintained an authoritarian and unequal state after independence.

One of the most striking aspects of French colonialism in the 19e and 20e centuries is its low cost for the metropolis. The trusteeship of a group of countries covering an area twenty times greater than that of France has asked little of the metropolitan taxpayer. […]

In total, over more than a century, between 1833 and 1939, colonial domination cost the metropolitan taxpayer only 0.5% of the national income, on average and annually. The functioning of the colonial states was mainly financed by taxes levied on the colonized natives, and on the settlers or European expatriates present there, even if the latter benefited from generous tax treatment.

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After the Second World War, the desire to cling to the colonial empire certainly ended up being expensive. The wars in Indochina and then in Algeria, and the need to increase the armed presence everywhere, led to military spending exceeding 2.5% of GDP on an annual average, over the period 1946-1962. At the same time, the economic and social development plans launched by the metropolis have sought to achieve the same objective peacefully, too little and too late. Civil subsidies then reach an average of 0.5% of GDP, so that the empire costs 3% of its income to the French taxpayer. As a result, independence will lead to a substantial economy.

1% of French GDP

Between 1833 and 1962, the colonies will therefore have cost annually a little more than 1% of French GDP in public money; as we have just seen, this average covers two very contrasting periods: 0.5% before the war, 3% after the war. Colonization did not establish a major transfer of resources between the metropolis and its subjects, who were also denied the essential political rights, until the last moment.

Financed mainly by taxes levied on the spot, the action of the colonial states was strongly constrained by very high operating costs, particularly salaries. As a result, economic and social development has been disappointing. The gaping wealth gap between France and its colonies has not been reduced. […] The least that can be said is that colonization did not make it possible to pull up the colonized regions […]. A similar observation applies to the development of education. […]

He is […] quite possible to think that, throughout its existence [l’empire] generated significant flows of income to France. Before the First World War, during the Belle Époque […] colonial assets have […] been able to bring in at least 0.5% of French income […].

Subsequently, during the crisis of the 1930s and up to post-war reconstruction, certain colonial investments constituted a safe haven, just as trade with the colonies provided a crutch for an impoverished French economy.

Benefits for a French minority

Many investments have been resounding failures, but others have been particularly successful, until the end. Only a small minority of French people benefited from it. It brought together a few entrepreneurs, bankers, and big businessmen, shareholders of companies that didn’t go bankrupt, and highly paid civil servants who accelerated their careers. Finally, it included many settled settlers, sometimes over several generations, who for a long time enjoyed living conditions that they could not have hoped for in mainland France.

From this point of view, the average French taxpayer paid for these privileged categories, by financing the colonial enterprise. The latter was above all rewarded symbolically, with the glory of the “greater France”, and the illusory good conscience of a “civilizing mission”. Nevertheless, for a long time, this cheap empire did not have many opponents, because its cost became heavy only when it was necessary to fight to preserve it. From that moment, the French were overwhelmingly convinced that it was better to pack up. After independence, despite development aid, relations with the former colonies became cheap again, and still profitable for some.

Decolonization still in progress

Since independence, the link between France and its former colonies has undeniably shrunk, whether in terms of development aid, trade or direct investment. […] If it is too early to record its disappearance, the volume of play of “Françafrique” is smaller than before. In France, the persistence of racism and the rebirth of a chauvinistic extreme right owe much to a badly digested colonial past, so society has not yet traveled the path of its decolonization to the end.

On the side of the former colonies, the decolonization of institutions and socio-economic structures is also a long way. The rehabilitation of national and local languages ​​still raises difficulties, even if the progress made allows us to hope that societies will achieve peaceful multilingualism, which will be an asset.

In sub-Saharan Africa, the delimitation of borders resulting from the colonial map has defined political entities that are mostly new, small poor states, some landlocked and far from access to the sea. For several of them, the nation-building process is still proving difficult. Attempts at regional integration have so far failed to repair the “balkanization” of independence. The political elites drawing sovereignty rents from being mistresses in their field, however small it may be, they are not necessarily in favor of pooling.

If the monetary union around the CFA franc constitutes a heritage to be preserved, on the other hand its change of name and mode of operation are ardently desired, even if its enlargement still raises several complicated questions.

Postcolonial states have inherited from the colonial states of the last period: a relatively extractive tax system, but dualistic and unequal structures, as well as a developmentalist orientation, but the absence of relays in society and of checks and balances. […]

unequal societies

In Africa, at the end of independence, most of the elites in power mainly resorted to authoritarian nationalism. They rarely sought, and often failed to democratize their economies and societies. As a result, the capacity for action of postcolonial states remained limited, and their legitimacy eroded. […] A civil service bourgeoisie has emerged, and the dualistic and unequal structure of societies has been reproduced, even if it has lost its racial dimension.

Whatever ideological choices were made, the unbalanced expansion of states led to high deficits and debt levels when the international situation turned around in the 1980s. imposed on most countries the liberalization and privatization of economies, as well as an often drastic financial austerity cure. These shock reforms effectively reduced the financial deficits, on the other hand they changed little the structure of the economies, but destabilized the States and led to new inequalities. […]

Despite the wave of democratization that followed the fall of the Berlin Wall, the renewal of political elites has fizzled. The disappointments of development, the persistence of inequalities, the prevalence of corruption and the intensity of capital flight expose States to recurrent crises of legitimacy, in the face of fairly pressing and fairly unanimous democratic demands.

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