Writing on the eve of one of the major transformations in the British Empire, Adam Smith more or less repeated the remark made by the Abbé Raynal several years earlier that «the discovery of America, and that of passage to the East Indies by the Cape of Good Hope, are the two greatest and most important events recorded in the history of mankind»l. Both of these great events of the 1490's, Columbus's discovery of the Americas and the sailing to India, a few years later, by Vasco de Gama, had no immediate impact on the British economy, but the opening up of this wider world for colonization and trading would soon have profound impacts on Britain and the other nations of Western Europe. In the same decade Britain, however, did make its first claim to New World territory, when John Cabot landed on Newfoundland in 1497, but it was to be about a century before title was clear and setdement begun. Not the first to establish an empire, the British rose to world-wide dominance over the course of the next three centuries.

From the independence of Brazil in 1822 down to the independence of the African colonies in 1975, successive Portuguese governments became engaged in maintaining, enlarging, developing and, ultimately, in defending an empire in Africa. The literature on the Portuguese African empire is largely concerned with discussing the economic and political motives behind imperial policy1. Thus, the evaluation of the costs and benefits of the empire for the metropolitan economy —or, for that matter, the colonial economies— has not received much attention. This paper attempts to provide some of the evidence necessary to conduct such an evaluation2.

Two interrelated ideas are developed in this essay: first, that the consequences for the Spanish economy of loosing the last colonies —Cuba, Puerto Rico, and the Philippines— at the end of the nineteenth century were relatively small, and that it hardly can be regarded, as many historians have done as the Disaster of 1898. Second, that despite its small overall direct impact on the Spanish economy, the independence wars fought with the colonies, and the defeat at the hands of the Americans in 1898, started a process of intense political nationalism that resulted in the adoption of western Europe's most stringent autarchy at the beginning of the twentieth century. The colonial Disaster was therefore, an indirect one. Its economic consequences were first felt by Bentham's «ruling few» —in Spain's case, the wheat, flour, and textile traders of Castile and Catalonia— and later reached the «subject many» by way of their influence on the adoption of extreme protective measures («integral protection», as it became known by Spanish nationalists) facilitated by the general climate caused by the colonial loss.

Studies of the economic relations between Great Britain and its colonies, such as Hopkins (1988) and O'Brien (1988), have revitalised controversy about the relevance of economic factors in the history of imperialism. Some have denigrated the relevance of the Hobson-Lenin thesis that capitalists required new overseas investment opportunities to postpone the collapse of capitalism, and the argument that colonies were a paying proposition. This article assesses the economic relations between the Netherlands and its colony Indonesia. It aims to raise the profile of this connexion in the controversy mentioned above, and to explore whether and to what extent the economic relationship may be crucial to explaining «metropolitan» economic development and «peripheral» underdevelopment.

In May 1940, among panic-stricken ministers and politicians, General de Gaulle was virtually alone to reflect and proclaim that France was not vanquished as long as it retained its colonial empire, which would serve as the springboard for France's future liberation and status as a world power. Not many of his contemporaries shared his conviction, and his loneliness testifies to the detachment of public opinion and politicians vis-a-vis an empire which in extent ranked second only to the British. In spite of the headlines, newsreels, slogans, colonial exhibitions and propaganda, most Frenchmen would have probably agreed that, over the years, the mother country had spent more on its colonies than it had received.

The question of whether the possession of an empire under a regime of free trade was beneficial or not to Britain has become a serious matter of dispute in recent years amongst British and American economic historians. Nonetheless, as some of them recognise, the question they are asking is hardly a novel one: they are often consciously reviving, in a more sophisticated form, a controversy which was already dividing contemporaries in Britain at the time the Corn Laws and the Navigation Acts were repealed in the late 1840s and which only lost its relevance when decolonisation began in earnest in the late 1950s. O'Brien and Davis and Huttenback are on the side of those who traditionally disparaged the economic value of empire and saw it as the preserve of special interests: Edelstein and Offer, though careful not to justify empire, are more willing to accept that the nation as a whole might have benefited materially from its possession even if the benefits were very unevenly spread. The discussion, though ingenious and highly informative has, however, been somewhat narrowly focused. So, in the latter part of the paper, it is suggested that a full assessment of the value of the empire to Britain depends upon taking account of a wider set of circumstances than has usually been evident in the current debate. In this respect, present day historians may have something to learn from the contemporary controversy where the question of the material costs and benefits of empire was always considered in the context of the social and political trajectory of the British nation.

Italy's colonial history is better known for its failures (notably the battle of Adwa, the major defeat of a Western power by an African army in the 19th century) than for its achievements. Italy succeeded in conquering a substantial «empire» only in the 20th century, when the traditional colonial powers were already in retreat1. But this has not always been the case. The Venetian republic successfully ruled for many centuries the first «colonial» empire in Western Europe 2.