Patriotism, Self-Interest and the ‘Empire Effect’: Britishness and British Decisions to Invest in Canada, 1867–1914

Abstract

This paper builds on the growing body of literature on the British World, which has shown that people in the dominions had a strong British identity and their claims to Britishness were recognised by people in the British Isles. It attempts to gauge the extent to which this British World identity influenced the global allocation of British capital. Much of the existing literature on British investment in the dominions dismisses the possibility that the pattern in Britain's capital exports was significantly affected by imperial patriotism. This article will suggest that imperial sentiment did indeed influence the destination of British capital exports. Imperialist sentiment influenced the legal and political institutions of the dominions in ways that encouraged British investment. Moreover, imperial ideology may have influenced investors' decisions in ways that the existing historiography does not adequately explore: at least some British investors may have been willing to accept a lower anticipated rate of return because they valued the psychological satisfaction of investing in territories that happened to be part of the British Empire. This article compares the experience of British investment in the United States, which has an ambiguous relationship with the British World, with that of investment in Canada with a view to understanding the impact of the British World identity on investment patterns.