Monopoly Trade and Plunder Colonialism

• The first stage had two basic objectives. First, in order to make trade more profitable, indigenously manufactured goods were to be bought cheaply.
• For this competitors were to be kept out, whether local or European.
• Territorial conquest kept local traders out of the lucrative trade while rival European companies were defeated in war. Thus the characteristic of the first stage was monopoly of trade.
• Secondly, the political conquest of the colony enabled plunder and seizure of surplus. For example, the drain of wealth from India to Britain during the first stage was considerable.
• It amounted to two to three per cent of the national income of Britain at that time.
• Colonialism was superimposed on the traditional systems of economy and polity. No basic changes were introduced in the first stage.

Era of Free Trade

• The interest of the industrial bourgeoisie of the metropolis in the colony was in the markets available for manufactured goods.
• For this it was necessary to increase exports from the colony to pay for purchase of manufactured imports.
• The metropolitan bourgeoisie also wanted to develop the colony as a producer of raw materials to lessen dependence on non-empire sources.
• Increase of exports from the colony would also enable it to pay for the high salaries and profits of merchants.
• The industrial bourgeoisie opposed plunder as a form of appropriation of surplus on the ground that it would destroy the goose that laid the golden eggs.
• Trade was the mechanism by which the social surplus was to be appropriated in this stage.
• In this stage changes in the economy, polity, administration, social, cultural and ideological structure were initiated to enable exploitation in the new way.
• The slogan was development and modernization. The colony was to be integrated with the world capitalist economy and the mother country.
• Capitalists were allowed to develop plantations, trade, transport, mining and industries.
• The system of transport and communications was developed to facilitate the movement of massive quantities of raw materials to the ports for export.
• Liberal imperialism was the new political ideology. The rhetoric of the rulers was to train the people in self-government.

Era of Finance Capital

• The third stage saw intense struggle for markets and sources of raw materials and food grains.
• Large scale accumulation of capital in the metropolis necessitated search for avenues for investment abroad. These interests were best served where the imperial powers had colonies.
• This led to more intensive control over the colony in order to protect the interests of the imperial power.
• The need for intensive control increased. There was no more talk of self-government instead benevolent despotism was the new ideology according to which the colonial people were seen as children who would need guardians forever.
• A major contradiction in this stage was that the colony was not able to absorb metropolitan capital or increase its exports of raw materials because of overexploitation in the earlier stages.
• A strategy of limited modernization was implemented to take care of this problem but the logic of colonialism could not be subverted.
• Underdevelopment became a constraint on further exploitation of the colony.
• In many colonies the older forms of exploitation continued. For example, In India, the earlier two forms continued, even in the third stage.