What Remains After the Sun Sets?

The sun may finally be setting on the British Empire, but the economic lessons it left behind are still shaping our world today.

Oct 14, 2024

On March 21st, 2025, a quiet but monumental change will take place: the United Kingdom will hand over sovereignty of the British Indian Ocean Territory to Mauritius. When the sun sets that day, it will mark the first time in over two centuries that the sun no longer shines on any part of the British Empire. That’s right—the phrase "the sun never sets on the British Empire," once a symbol of Britain’s global reach, will finally become obsolete.

From the Caribbean and North America to India, Africa, and the Pacific islands, Britain’s colonies had once stretched across nearly every time zone. Most headlines are focusing on the long-overdue justice for the Chagossians—people forcibly removed from their homes in the 1960s and 1970s to make way for a military base. But let’s zoom out for a bit. The end of British rule in this corner of the world is an opportunity to reflect on the ways the British Empire shaped the global economy we live in today. What can we learn from the rise and fall of such a historical economic force?

We’ll explore three key economic concepts that emerged from Britain’s centuries of imperial rule: how the empire perfected the art of mercantilism, laid the foundations for modern globalization, and revealed the costs—both economic and moral—of resource exploitation in colonies. These lessons aren’t merely historical footnotes, but instead highlight the continued influence the British Empire has on today’s global economy today.

Mercantilism and the Rise of Trade Monopolies

One of the most important economic concepts to come from the British Empire is mercantilism. In the 16th and 17th centuries, mercantilist policies shaped European economic thinking, with the central idea being that a nation’s wealth and power were measured by its stock of gold and silver. The goal was to maintain a favorable trade balance—exporting more than importing—to accumulate that wealth.

Britain applied mercantilist principles through its colonies, treating them as sources of raw materials and captive markets for British goods. To enforce this, Britain passed a series of laws that restricted colonial trade to benefit the mother country. Colonies couldn’t trade freely with other nations, and this system funneled wealth directly to British manufacturers and merchants, often at the expense of colonial economies.

Editorial cartoon illustrating mercantilism [Source: **Bill of Rights Institute**]

A prime example of this strategy in action was the East India Company, a private enterprise with a royal charter that granted it monopoly rights over trade in India. With the full backing of the British government, the company not only controlled trade but also governed large parts of India. This monopoly allowed Britain to extract immense wealth, but it also fueled resentment among those exploited by the system.

Monopolies can be a double-edged sword. On one hand, they can drive innovation and create economies of scale, which can benefit consumers by offering lower prices or unique products. But monopolies can also stifle competition, inflate prices, and lead to inefficient markets. But what happens when the government itself protects a monopoly—like the East India Company—with the explicit intent of maximizing profit? Unfortunately, there’s no check on monopolistic behavior. The protection wasn’t to encourage competition or serve the public interest, but to extract as much wealth as possible, regardless of the costs to local economies or societies.

Connecting Markets and Cultures Through Globalization

The British Empire was one of the first truly global economic networks, laying the foundations for modern globalization. By connecting territories across continents, Britain created vast supply chains that moved goods, people, and ideas worldwide. Cities like London, Bombay (now Mumbai), and Hong Kong became commercial hubs where cultures and markets intersected.

The most prominent example is Britain’s role in global trade with India. Indian cotton was exported to British factories, transformed into textiles, and then shipped to markets around the globe—including back to India. Infrastructure like railways, ports, and telegraphs helped make this flow of goods possible, creating what was, in essence, an early version of an interconnected global economy.

However, while Britain reaped the benefits of these connections, the colonies often paid the price. Local industries, like India’s textile sector, were decimated by the influx of cheaper British goods. It left the colonies locked into producing raw materials rather than building diverse, self-sustaining economies. This lopsided arrangement highlights a key caution about globalization: when driven by unequal power dynamics, it can make economic disparities worse.

A 1927 pictorial map with all the dominions and trade routes, issued by the British Empire Marketing Board [Source: **Library and Archives Canada**]

Resource Exploitation and the Cost of Empire

Another critical lesson from the British Empire is the role of resource extraction in building wealth—primarily for the empire, and often at great cost to the colonies. Britain’s control over resource-rich territories provided raw materials like cotton, tea, rubber, and precious metals, which fueled the industrial revolution and enriched British companies. However, this extractive process placed a heavy economic toll on the colonies, contributing to what we now recognize as the resource curse.

While rich in natural resources, many colonies became economically dependent on raw material exports, preventing the development of diverse, self-sustaining economies. While resource extraction fueled the British Empire’s economic success, it left many former colonies with legacies of economic inequality and underdevelopment—challenges that mirror the struggles faced by resource-rich countries today.

Cover of a seamen's hospital booklet, c. early 1900s, displaying the crests of British colonies and emblazoned with the phrase “An Empire on Which the Sun Never Sets.” [Source: **Encyclopædia Britannica]**

Final Thoughts

As the sun begins to set on the British Empire, what remains is a complicated economic legacy that continues to influence the world today. From the rise of mercantilism and monopolies to the early stages of globalization and the pitfalls of resource extraction, the empire shaped the global economy in ways that are still felt. But alongside its contributions are cautionary lessons—about the dangers of unchecked monopolistic power, the unequal benefits of globalization, and the lasting harm of economies built on resource dependency. We should remember that power and wealth can also come with deep inequalities and exploitation. It’s a lesson that should inform how we approach economic systems and policies moving forward.