The British joined the European race to build overseas empires relatively late. The English looked jealously at the empires of Spain and Portugal. Proponents of war with Spain saw him as an English religious duty to build a Protestant empire rivaling Catholic empires.
Beginning in 1576, England began deep sea research expeditions to the Americas. However, they founded colonies in North America and the Caribbean due to the absolute dominance of Spain and Portugal in South America. Spain was rich in gold and silver, while the Portuguese were rich in sugar, spices and slaves.
The English were conducting pirate activities, because they had nothing of extraordinary value in their overseas colonies. In particular, they attacked and robbed Spanish ships on key communication lines between both sides of the Atlantic.
From 1585, Queen Elizabeth I supported the revolt in the United Provinces of the Netherlands with military and capital, so that she could become independent of the Spanish Empire. The Spaniards in 1588 sent a Great Armada to subordinate England to their rule.
Very unfavorable winds and weather conditions, which significantly influenced the strategy of the Spaniards, was used by the English fleet with an unexpected victory over Spain. This led to a significant weakening of the rule of the Spanish Empire on world seas and oceans, financial problems.
With the fall of the Great Armada, Spain plunged into a financial crisis and then all of Europe followed. The only stable financial system was the Bank of Amsterdam. By defeating the Great Armada, the English opened to themselves and the United Provinces of the Netherlands the way to found Deep Sea Companies, and therefore to colonial conquests.
The situation of the seventeenth century Europe was characterized by a constant struggle between many political entities, and none of them was strong enough to dominate the others and impose their will. The emergence of an international system based on a set of codified legal principles and norms is to be seen in the Peace of Westphalia concluded on October 24, 1648. It is also the peace that was built for the foundations of a diplomatic ceremony. They have pledged to refrain from interfering in the internal affairs of the opponent and, thanks to alliances, balance their ambitions.
From that moment, the state became a sovereign abstract entity more important than family interests or religious dogmas. On its basis, a national interest arose derived from the reason of state, which became the basis of the European order. The sovereignty of states was based on codified domestic law, and in the international arena on mutual recognition of power with other states.
Countries developed internal bureaucracy to collect taxes more efficiently than feudal lords did. The process of centralization of power has begun. The territories of countries were (like France) divided into administrative regions, limiting the powers of the old aristocracy. From that moment on, the state had an exclusive monopoly of power and use of force. By guaranteeing security within the country, the sovereign agreed to transfer these exclusive powers to an „abstract being.”
Capitalism developed in the strongest countries because they had legal norms that guaranteed legal protection and effectively enforced the law. Sellers strive to ensure that goods cross national borders without customs obstacles and without taxation. Strong countries strive for other countries to open their markets and borders to them to gain access to new markets, but they practice some protectionism themselves, so that cheaper import goods do not erode the production base of the world core system country.
The increase in productive power and labor depends on the degree of social development, specialization in division of labor, and both on the extent of the market. For this reason, in order to maximize their profits from final production, companies always wanted to minimize costs by extending costs. The concept of international order became a principle of balance of power and implementation of national interests.
Cardinal Richelieu already recognized that Central Europe must be fragmented, because a united Europe is able to dominate Europe. For this reason, France’s overarching goal was to maintain the division of Central Europe, therefore becoming the dominant power in continental Europe.
Competition in the world’s seas and oceans
Due to independence from the Spanish Empire in the seas and oceans of the world, the United Provinces of the Netherlands gained a hegemonic position. They dominated in the areas of trade of bulk goods in the Baltic to Western Europe, and thanks to winning trade rivalry with Portugal, they gained the trade monopoly in Asia.
The Dutch became advocates of freedom of navigation and trade. The concept of „freedom of navigation in the seas and oceans” was formulated in the work of the Dutch lawyer Hugo Grotius Mare liberum from 1609, in which he argued that „large seas” should be free from the law for countries passing through, and therefore, he proposed that sea routes should be internationalized and not subject to the jurisdiction of coastal countries.
The Netherlands evolved into a financial center of the world thanks to developed banking, commodity exchanges, the largest volume of ore money (payments) and geographical location. The Dutch have created capitalism structures based on a public debt system that allows borrowing to the government based on the tax system (excise duty on goods) of their citizens. Stability was guaranteed by the Bank of Amsterdam, which kept a 100% cash reserve (issue of banknotes, the so-called notes having a real equivalent in the Bank’s treasury). The long term interest rate at the Bank of Amsterdam was 3-4% per year (1668) to fall to 1.75-2% per annum later. As a result, the Dutch Guilder (which replaced the ore coins), from 1680, became one of the leading currencies on the world.
Anglo-Saxon economic order system
In the 17th century, the English led four wars with the United Provinces of the Netherlands. The goal of these wars was to free the Dutch from the most important sea routes from Western Europe towards Asia, the Baltic Sea, the Mediterranean, North America and West Africa.
Cromwell, in order to achieve primacy in the seas and oceans, began building a great merchant fleet, starting in 1649. He wanted to create a great political union based on the Protestant alliance between England, the Netherlands, Sweden, Denmark, Switzerland and Protestant German principalities. The English mission encountered opposition from the Netherlands because they were afraid that the union with England would lead to the absorption of the Dutch provinces within the English country.
In 1651, Cromwell’s revolutionary parliament established Navigation Acts. Navigation Acts had a direct impact on the economy of the United Provinces of the Netherlands. The goal of the Navigational Acts was to eliminate Dutch mediation in trade between colonies to increase colony production and thereby develop metropolises on the home islands in England. This created friendly conditions for dynamic expansion of the fleet and gaining a dominant position in international maritime trade.
The capital market institutions developed along with the development of the increasingly powerful Deep Sea Companies. For this reason, the first war with the Netherlands broke out (1652-1654), a similar situation occurred after the establishment of the new Navigation Act in 1660. After the victorious third war in 1674, the English gained an advantage over the Dutch, but their finances were severely damaged.
In 1688, the so called, glorious revolution in England took place and to the English throne parliament was appointed Prince William III of Orange. The English and Dutch companies were merged. In addition, the English have adopted modern Dutch financial solutions. The Anglo-Dutch Union introduced the English to many important institutional financial solutions, in which the Dutch were pioneers (management of government loans, creation of the national currency and Central Bank, adoption of the Dutch public debt system (financing through the stock exchange). The Asian market was also divided.
The Dutch kept their spice trade interests, and the British captured the textile market, which surpassed the spice market at the beginning of the 18th century. This situation increased the dominance of the British, who were dynamically seeking global hegemony by breaking the balance system of continental Europe, wanting to subordinate it to their interests
European primacy in the world: a continental power against a maritime power
At the source of the Anglo Dutch conflict was commercial (economic) competition for participation in global markets. The English gained a commercial first, then a financial advantage, and then thanks to industrial domination increased the dynamism of economic development and benefited from it. However, in continental Europe, there was the French Colonial Empire, which wanted new territories – not only market share, and for this reason in 1731 ended the alliance (lasting since 1714) with the British Empire. There was a struggle in every region of the globe about who would rule the world. In the war for Spanish succession (1701–1714) the British captured Gibraltar and Port Mahon in Majorca, which gave it military and commercial control of the Mediterranean.
The Seven Years' War (1756-1763) contributed to the growing importance of the Russian Empire in Europe, the strengthening of Prussia in Central and Eastern Europe, and above all the establishment of worldwide hegemony of the British Empire by defeating the French Colonial Empire.
The British win was caused, among other things, main advantage over France: it had the possibility of financing the war with loans (1/3 of British war expenses came from loans). The final sealing of his status took place during the Napoleonic Wars in 1805 during the Battle of Trafalgar, when the fleet of the British Empire completely destroyed the fleet of the Franco-Spanish alliance and completely dominated the world’s seas and oceans.
In 1815 the Congress of Vienna took place, which sketched the balance of power of continental European powers, while the British Empire only looked at European events in such a way that it did not face any threat in order to be able to focus on building a colonial power. London has become the commercial and financial center of the world.
The British Empire, due to its hegemonic position based on dominance over the world’s oceans and oceans, controlling trade routes and capital turnover, had to control the mouth of the Skalda River, over which the port of Antwerp was separated only by the English Channel. This river is also key in intermodal transport today.
This junction connects the Danube-Rhine-Seine and Sklada rivers, thanks to which inland navigation trade can develop. Being such a strategic entry-exit point for trade in continental Europe and geographical proximity to the home islands, the British Empire protected its neutral Kingdom of Belgium by the London Protocol of 1839 and had formal grounds to enter European war theater if Belgium or the Netherlands were threatened military aggression.
The security guarantee of the Strait of Dover area is key to ensuring military and commercial connections between France and the British Isles. Similarly to the Netherlands, it was crucial for the British Empire, as was the case with the oceanic trade routes of the, so called, Imperial lines, a violation of which led to the British Empire’s military involvement in armed conflict. In the Mediterranean, the British fleet had to control the route leading through Gibraltar-Malta-Cyprus-Suez-Gulf of Aden and further to India and the Far East.
The British Empire dominated the world’s seas and oceans, but it did not have sufficient opportunities to achieve supremacy in Europe alone. The status of the actual sea hegemon allowed the British Empire to choose convenient moments and the extent of its forces' involvement in any land area acting as a global arbitrator / guarantor of the systemic balance of power.
This strategy consisted of antagonizing the parties (supporting the weaker against the stronger), not to let one power dominate the European area, so the British Empire was the, so called, balancing force thanks to the use of sophisticated diplomacy in Europe. Thanks to the policy of Splendid Isolation and reserving the right to intervene in Europe, so that a dominant power would not arise, the British Empire gained, so called, strategic time to calculate which side of the conflict is best to take.
A stable, harmoniously developing continental Europe is a prerequisite for international domination. Chaos in Europe leads to the end of the sea hegemon. Economic dynamism is an absolutely required condition for maintaining hegemon status.
The British Empire achieved this status thanks to the industrial revolution and technological advantage. With the beginning of the industrial age and the British promoting their banking system based on the fractional reserve system, business cycles began to appear very regularly. International domination is achieved by control of ports and trade routes, which the British gained by imposing Navigation Acts. The factor that ensures the continuity of global primacy is a highly organized army and cultural attractiveness.
Empires strive to spread the features that make its native society stand out so that the periphery can identify with it. The British became a free trade empire imposing common law, English banking, British land ownership, investor protection, and imposed free trade by limiting state interventionism. In addition, on cultural issues, they disseminated English (which became an international language replacing lingua franca), spread Protestantism, instilled the idea of freedom (individuals) and representative assemblies. Interestingly, they disseminated team sports. The British Empire created the first globalization system.
Colonies are the least developed structure of the world’s system, subordinated to better organized unit. The colonies can then be annexed (assignment of sovereignty) to undergo internal political and administrative reorganization in the colony.
Imperial policy of colonialism is to ensure control over production processes and to ensure that no other power will have access to colonial resources or its market (as little as possible). Colonizers, in order to minimize production costs and maximize resource extraction, brought to the colony the innovations achieved thanks to the industrial revolution.
The main geostrategic goals of the hegemon should be: counteracting vassal conspiracies (dependent countries) and maintaining their military dependence, providing security guarantees for their allies at the same time making them submissive to their own strength (not allowing independent expansive policy), preventing from creation of balancing coalition against the hegemon.
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