Magazine article The Spectator

The London Globe

Magazine article The Spectator

The London Globe

Article excerpt

THE great trading cities have always been global in their reach. We talk, rightly, of the Athenian Empire, the Roman Empire, the Venetian Empire, the Byzantine Empire, but refer to our own historic world power as the British Empire. It would be more accurate to call it the London Empire.

All the main institutions of the so-called British Empire were London-based: the Westminster Parliament, the Crown, the armed forces, the great trading companies, the City as a source of investment. How did the British come to rule India? Because of the conquest, for purposes of trade, by the London-based East India Company. Who financed the first successful colonisation of New England? The Massachusetts Company, founded in London, under the management of the company's governor, John Winthrop. London merchants founded Boston.

Of course, other parts of England and of the United Kingdom made their contributions, of which Scotland's is the most conspicuous. But without London the enterprise would not have been started, would not have continued, and would not have succeeded. British history, from 1600 to 1900, the noontide of imperial power, is that of a great city expanding and developing its hinterland, just as Rome was growing in a similar period at the end of the Republic and the beginning of the Empire.

The great city-states divide into two groups: the traders and the conquerors. The traders obviously include Venice, and the conquerors, Rome. London has belonged to both categories, but it started with trade, and has gone back to trade.

The trading city, whether it is London, Singapore or New York, regards world trade as a unity, but world politics as diverse. One can see this in the USA. Washington is a political city, with a political hinterland on a continental scale; New York is a trading city. Washington is an expression of national power and imposes the uniformity of its power where it can. New York is pluralist and diverse, for some people the most exciting city on earth, for some the most bewildering.

Washington is one of the most inwardlooking cities of the USA, despite its world power. New York is far and away the most outward-looking, just as London is the most outward-looking city of Europe.

The great European debate, which has been going on in Britain for most of my lifetime, is essentially a debate between political power and global trade. The large continental powers, like the USA or the European Union, only need the outside world as a marginal relationship. Their internal trade is a very high proportion of their total funds. Their external trade has to be subordinated to the supposed needs of their domestic economy. Continentalists are natural dirigistes.

A city-state, or a great trading city like London, is in the opposite situation. It exists to trade with outsiders and must indeed be willing to welcome outsiders into its own inner circle. The names of the London merchant banks were almost all the names of foreigners: Morgan, Schroder, Hambro, Warburg, Lazard, Kleinwort, even before most of them were taken over by other foreigners, mainly Swiss and German banks. Because the great trading cities live from trading with outsiders they come to be very good at it, better than the foreign traders of the large continental states. Foreign trade is the highest priority of a city-state, and offers the highest rewards to a large proportion of the ablest people.

The question that now confronts Britain is whether to follow the continental or the global model. There are advantages in both. The continental model has an advantage of scale. It has a huge domestic market and can have a certain weighty stability. It can either generate or borrow funds on a large scale. But it has a tendency to become too uniform, too bureaucratic, and to be overregulated. …

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