Classical liberalism, with its core tenets of individual liberty, limited government, and free markets, is often presented as a philosophy inherently opposed to state-led coercion and aggression.

However, what's often left out is how these very principles were used to justify and facilitate the brutal realities of empire and economic exploitation.

Liberal thinkers and politicians believed that free trade and colonial expansion were not contradictory but were, in fact, complementary tools for civilizing "backward" nations and ensuring global prosperity, with the spoils of this system flowing overwhelmingly to the imperial power.

Free Trade as a Tool for Imperial Domination

The concept of free trade, a cornerstone of classical liberal thought championed by figures like Adam Smith and David Ricardo, was argued to be a universal good that would lead to peace and mutual prosperity. The theory held that if nations specialized in what they could produce most efficiently and traded freely, everyone would benefit. In practice, however, this doctrine was used to open up new markets for British manufactured goods and to secure access to raw materials from colonized territories on highly unequal terms.

Colonial powers, particularly Britain, would often use a combination of military force and economic pressure to dismantle local industries in their colonies. India, for example, had a thriving textile industry before British rule. The British East India Company, and later the British government, used policies that effectively flooded the Indian market with cheap, machine-made British textiles, while simultaneously imposing tariffs on Indian goods. This process, often referred to as de-industrialization, destroyed local livelihoods and turned India into a raw materials supplier for British factories and a captive market for their finished products.

While liberals advocated for free trade, it was a "free trade" that was enforced by gunboats and backed by imperial power, ensuring that the rules of the game always favored the metropole.

The "Civilizing Mission" and Liberal Justifications for Empire

Many classical liberal thinkers, despite their theoretical commitment to individual rights and anti-slavery, saw no contradiction in supporting empire. They developed a justification for colonial rule based on the idea that certain societies were not "ready" for self-government. John Stuart Mill, a key figure in classical liberalism, argued in On Liberty that his principles only applied to societies "in the maturity of their faculties." For what he termed "backward states of society," a "vigorous despotism" was a legitimate form of government if it was exercised for the benefit of the ruled.

This paternalistic view framed colonialism not as an act of conquest and exploitation, but as a benevolent "civilizing mission." The goal, in this view, was to guide and uplift "primitive" peoples, preparing them for a future of liberal governance. This ideology gave imperialists a moral license to rule, justifying the suppression of local customs, legal systems, and political structures.

The pursuit of this "mission" often resulted in the violent suppression of indigenous resistance. The Opium Wars in China, for example, were a direct result of Britain's liberal insistence on the "right" of free trade, in this case, the right to sell opium. The British government, under liberal leadership, used military force to compel China to open its ports to the drug trade, a clear example of how the principle of free trade was used to exploit and subjugate another nation.

The Exploitative Nature of Colonial Economies

The wealth generated by empires was not an incidental byproduct of free trade; it was the result of a system built on systemic exploitation. Colonial economies were designed to extract wealth and resources for the benefit of the imperial power. The British East India Company, a private corporation acting as a de facto government, is a prime example. It extracted revenue from Indian lands and used it to purchase goods for export, effectively paying for its imports with Indian money rather than with British goods. This practice, known as the "drain of wealth," impoverished India while enriching Britain.

The system was also built on forced labor, often disguised under different names after the official abolition of slavery. Indentured servitude, where workers were transported from one part of the empire to another under long-term contracts, often devolved into conditions little better than slavery. This labor system fueled the production of commodities like sugar, tea, and rubber, which were then sold on the global market, with profits flowing to British and European companies.

In conclusion, the history of classical liberalism and its relationship with empire reveals a significant paradox. The same philosophy that espoused liberty and limited government at home often rationalized illiberal and despotic rule abroad.

The principles of free trade and individualism, while powerful engines of progress, were weaponized to dismantle local economies, justify violence, and create a global economic order that was anything but free or equal. Understanding this history is crucial to grasping how a philosophy that promised liberation was simultaneously a powerful tool for global domination.