TheBritish Empire has been the foremosteconomic power for most of the 19th century. As a result of theIndustrial Revolution which began in the United Kingdom, Britain became thewealthiest country in the world by the late 18th century, and was a leadingtrading nation andmanufacturing power.
Soon after the defeat of France in theRevolutionary andNapoleonic Wars (1792–1815), theBritish Empire emerged as theprincipal naval and imperial power of the 19th century.[1]Unchallenged at sea, British dominance was later described asPax Britannica ("British Peace"), a period of relative peace in Europe and the world (1815–1914) during which the British Empire became the globalhegemon and adopted the role ofglobal policeman.[2][3][4][5] It was the foremosteconomic power for the majority of the 19th century, a position supported byits agricultural prosperity, its role as a dominanttrading nation, the ability to profit economically from its colonial possessions[6] through trade, a massive industrial capacity,significant technological achievements, and the rise of19th-century London as the world's leadingfinancial centre.[7]
TheIndustrial Revolution began in the United Kingdom in the mid-18th century, during which the country rapidly transitioned from anagrarian economy to anindustrialized one.Productivity vastly increased throughnew inventions and technologies such as thesteam engine, thespinning mule, and thepower loom, which increasedmanufacturing output and reducedproduction costs, laying the foundation for the growth of multiple industries such as textiles, steel, and coal.
Britain became thewealthiest country in the world by the end of the 18th century.[8] In the early 19th century, the Industrial Revolution began to transform Britain; by the time of theGreat Exhibition in 1851 the country was described as the "workshop of the world".[9] There was relatively free trade within the Empire, though theImperial Preference was not as comprehensive as some preference systems such as the GermanZollverein. The British Empire became the world'slargest economy by nominal GDP in 1870[6][10] and was responsible for approximately a quarter ofglobal trade at that time,[10] with trade accounting for about one third of its GDP.[11] At the turn of the century, however, Britain's industrial dominance became challenged by theGerman Empire and the United States.[12] Its economy was eventually surpassed by the United States in 1916.[13] TheUnited Kingdom's involvement in the First World War andthe Second World War damaged Britain's economic power, and a global wave ofdecolonisation led to the independence of most British colonies.
The following table givesgross domestic product (GDP) estimates of theBritish Empire and its territories in 1870 and 1913, as a percentage of theworld economy and the empire's economy, along with comparisons to theUnited States andRussian Empire. The British imperial territory with the largest economy in 1870 wasBritish India (including what are nowPakistan andBangladesh), followed by theUnited Kingdom. The territory with the largest economy in 1913 was the United Kingdom, followed by British India.[14] The table does not include GDP estimates forBritish African territories other thanBritish Egypt.
| British Empire territory | % of world GDP (1870) | % of empire GDP (1870) | % of world GDP (1913) | % of empire GDP (1913) |
|---|---|---|---|---|
| United Kingdom | 9.03 | 37.19 | 9.26 | 47.04 |
| British India | 12.15 | 50.04 | 8.27 | 42.33 |
| Ireland | 0.87 | 3.58 | 0.44 | 1.20 |
| Canada | 0.58 | 2.39 | 1.28 | 3.50 |
| Australia | 0.52 | 2.14 | 0.91 | 2.49 |
| Egypt | 0.41 | 1.69 | 0.4 | 1.09 |
| Ceylon | 0.21 | 0.87 | 0.22 | 0.62 |
| Burma | 0.19 | 0.78 | 0.31 | 0.84 |
| New Zealand | 0.08 | 0.33 | 0.21 | 0.57 |
| Malaya | 0.05 | 0.21 | 0.1 | 0.27 |
| Hong Kong | 0.01 | 0.04 | 0.02 | 0.05 |
| Singapore | 0.01 | 0.04 | 0.02 | 0.05 |
| Total British Empire | 24.28 | 100 | 19.70 | 100 |
| United States | 8.87 | 36.53 | 18.93 | 96.09 |
| Russian Empire | 7.54 | 31.05 | 8.5 | 43.13 |