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An interdependent world economy developed with Europe at its center. Colonies provided necessary raw materials for the advanced industrial production in European factory centers such as London, Manchester, and Berlin. Capital flowed out of the wealthy nations of Western Europe and into colonial areas to support projects that required heavy capital investment and promised strong returns, such as railroad construction, industrial development, et cetera. London became the financial center of the world, serving as a clearing-house for billions of dollars worth of world-wide investment. Capital became fluid throughout the world, loans were extended for the long run, domestic stock markets skyrocketed and, depending upon the extent of empire, remained somewhat insulated from the boom and bust cycles of late nineteenth century capitalism.
Barely a handful of countries, outside of the western hemisphere, remained independent. Ethiopia, Siam, and Liberia were three conspicuously colorless locations on a world map tinted with imperial ink. Europe was at the epicenter of political domination of the world due to its imperial successes. It could leverage trade, strategic bases, and access to necessary waterways in order to achieve diplomatic success.
The dark side of imperialism, the arguments for cultural and racial superiority of the European peoples, were common throughout the imperial world. Rudyard Kipling, writing about the American imperial venture in the Philippines, spoke of a "White Man's burden" to civilize, improve, and educate the native populations that was in large part based on the social Darwinism advanced by Herbert Spencer's Social Statics.
The ecological effects of imperialism were mixed throughout the world. Imperialism led to the dislocation of thousands of small societies--especially in Africa--when the Europeans drew haphazard and illogical lines on the colonial maps. Industrial development disturbed the pristine environment of previously undamaged territories, the traditional societies were replaced by European businessmen and investors. While slavery had gone out of favor some time ago, African and Asian men and women were viewed as cheap labor for European factories; therefore, slavery conditions persisted.
On an intellectual level, the rapid proliferation of empire in the late nineteenth century contributed to a growing critique of capitalism from the Marxist left. In, 1916, Vladimir I. Lenin, the revolutionary communist leader in Russia, argued in his pamphlet Imperialism, the Highest Stage of Capitalism that capitalist states required vast empires to maintain enough markets with whom to trade. This, in turn, contributed to the exploitation of native populations and, as capitalist investors brought industry to the empire, the awakening of the native workers to their destiny under the Marxist scheme of economic development. With workers of the world--from Europe to the farthest reaches of the empire--then united against capitalism, socialism will follow after imperialism.
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