Twentieth Century British History Advance Access originally published online on September 18, 2008
Twentieth Century British History 2008 19(3):376-380; doi:10.1093/tcbh/hwn026
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Managing British Colonial and Post-Colonial Development: The Crown Agents, 1914–74. By David Sunderland.
Managing British Colonial and Post-Colonial Development: The Crown Agents, 1914–74. By David Sunderland. Boydell and Brewer, Woodbridge, 2007. 312 pp. ISBN 978-1843833017, $85.00.The Crown Agents were established in 1833 to handle colonial governments’ purchases and payments in Britain. After the institution's near fatal misadventure as a secondary bank during the era of decolonization, it was reinvented as today's private company trading in services and expertise for international development. Managing British Colonial and Post-Colonial Development is economic historian David Sunderland's second book on the Agents, covering their twentieth-century career. Appearing just as government bailouts of quasi-governmental lending institutions are once again stirring headline controversy, the book is an eye-opening investigation of a unique early hybrid of the financial and public sectors that, by Sunderland's measure, was the main force in the unfolding of colonial development. Without an appreciation of its work, he says, there is no grasping the ‘nuts and bolts’ of development—just how colonial and post-colonial administrations obtained and managed finance, materials and technical expertise in the United Kingdom (p. 1).
This ought to be palate-cleansing fare for a discipline nearly gagging on its staples of ‘ideas’, ‘visions’ and ‘perceptions’ of development. Having sunk their teeth into the at once forbidding and temptingly meaty topics of finance and economics, cultural historians have skillfully exposed the messy insides of development in its evolution from an imperial prerogative to a high-minded international enterprise. But the ‘nuts and bolts’ do indeed seem to have been hidden under the research plate like so many healthful but zestless green peas. Sunderland's work rightly puts them back on the table. Institutions, he demonstrates, have their own momentum, interests and idiosyncratic histories, whatever the dominant discourse.
The book comprises four parts: how the Agency raised funds; how it managed those funds; its non-financial activities (procurement, expertise, etc.); and, finally, its secondary banking venture, where Sunderland rests his defence of the Agency's good faith and restores an image tarnished by two flawed official enquiries into its failure in the banking crisis of 1973/4. He concludes that the Agency was ultimately beneficial to both the UK economy and client economies, despite the dogged obstruction of the Bank of England, the Treasury and the Colonial Office. Certainly, its own survival instinct at times limited its effectiveness but on nowhere near the scale presumed in the enquiries, which mistakenly judged this only quasi-public institution by the ethical standards of the British public sector rather than by those of the financial world in which it was enmeshed.
All this is explained with meticulous care and nuance and a wealth of difficult archival materials. This is unquestionably sound scholarship. But the detail comes at a hefty price. The book is hard to read, and needlessly so. The significance of the rehabilitation is somewhat lost on an academy that, by Sunderland's own account, has so far failed even to appreciate the Agency's centrality in the history of development. Indeed, some might even reasonably quibble with his claims for its importance: the Agents handled the affairs of only a largish group of small colonies mainly in Africa and the Caribbean, and there too only when public authorities were involved. Still, the subject is certainly important, but it is not self-evidently interesting. Sunderland needed to do more to motivate such a level of detail. The book is also marred by overuse of acronyms and the passive voice and numerous printing errors.
These stylistic concerns shrink before the larger difficulties posed by Sunderland's analysis, which is grounded in principal-agent theory. This methodology enables him to convincingly demonstrate the Agents’ limited ... agency in the face of other institutions’ efforts to redirect their energies to benefit only the UK economy, but one wishes he might have speculated on the significance of this finding—what it reveals about the possibility of development institutions that truly serve their client above any other party. If anything, his description of the vulnerabilities of an institution acting in good faith presents a rather dismal picture of the prospects of international development.
It is hard to say definitively, since one of the main difficulties with this book is its total disengagement from the growing literature on the history of colonial development—and on empire more generally. Indeed, it is so hermetic in its determined use of principal-agent theory and dutiful translation of the Agency's esoteric archive that it takes for granted the most controversial aspects of the story: exactly what was ‘development’ in the Agents’ eyes? And how did that concept evolve during a period ruptured repeatedly by economic crises, epistemological revolutions, technical innovation and radical reorganizations of international relations? There is but one brief mention of post-colonial armed conflict, next to no reference to either world war, and nary a word about the Cold War (the Arab–Israeli standoff appears as an eternal political given). Racism raises its hoary head but once, in the context of Agency hiring.
All this history is left on the wayside as Sunderland rushes headlong to defend the Agents’ actions during the financial crisis of 1973/4. Thus, each of the first seven chapters bounds through 1920–74, taking up a different facet of the Agency's work; there is no coherent narrative of its evolving role and practices. The question of who subscribed to colonial loans is hastily dispensed with by exemplary reference to the subscribers of a single 1959 loan. Changes—new legislation, new methods of issuing loans, etc.—occur without explanation. Likewise, shifts in the Agency's ‘Miscellaneous Roles’, the utterly alienating title of Chapter 7, were apparently the result of whimsy. An odd section on aid makes an empty promise of comparison. In short, Sunderland does not offer a story about colonial development. He is the pioneering navigator circling but failing to spot the great continent of Causality. Its tedious approach makes the book feel more like an extremely thorough reference work than a historical monograph. This is unfortunate since its subject naturally touches on so many central themes of twentieth-century British history: decline, gentlemanly capitalism, decolonization and the welfare state.
One of the book's strengths, on the other hand, is its revelation of the extent to which the empire—at least the subset of colonies considered here—was made into a ‘self-financing collective’ to compensate for falls in metropolitan demand for colonial stock (p. 248). But principal-agent theory bridles Sunderland from exploring how much of this was the result of local innovation or, even more generally, what exactly the Agents built from all the nuts and bolts at their disposal and what political–economic notions guided their investments. Even the nuts and bolts offered do not quite fit: we are told little about the decision-making process about loans and projects or the extent to which it varied across time and space. In short, his story does not leave us any wiser about the creation of a body of development knowledge and expertise.
The book becomes more engaging in the final chapters on the banking crisis when the Agency was saved from insolvency by a controversial government bailout—partly because Sunderland finally indulges the reader's appetite for some individuals with names to chew on. The Agency did not behave particularly incompetently, irresponsibly or unethically, he argues convincingly, in a manner that might satisfy a judge but exhaust a jury—and frustrate a historian, for the ethics of the financial world are themselves historically evolving and varying. What do we learn about the past by pronouncing the Agency innocent by today's ethical standards? Indeed, the Agents’ own defence was that the 1960s were an ‘era of risks’ (p. 219); they felt compelled to speculate. There is rich material here for a cultural history of international finance—something that might make more of the fact that premium bonds were first floated in the colonies to appeal to ‘the gambling element prevalent in certain colonial peoples’ (p. 54) or of the weird nexus of business and government created as colonies shifted to an independent financial status. Frequent oblique reference to ‘perceptions’—of particular colonies, independence, the UK economy and the Agency itself—suggests that the ‘rationality’ that guides the post-colonial financial marketplace is buttressed by old colonial representations.
If colonial representations are not Sunderland's cup of tea, the representation of the Agency certainly is. Lurking in this balanced and lawyerly account is a belief in a particular kind of empire and development: if the Crown Agents had only been given the space, they might have proved how successful development could be in the hands of private agencies unfettered by necessarily selfish government. The drive for profit at home can underwrite generosity towards the right kind of projects abroad. Hence was the failure of the ill-starred and misunderstood secondary banking venture a ‘tragedy’ for his quaintly termed ‘Third World’ (p. 219). Whatever the practical merit of this vision today, it produces a rather nostalgic view of the empire: Sunderland repeatedly regrets colonial independence as a major financial liability that doomed development (without noting that decades of imperial control had not done much in that direction either). The Agency, martyr-like, ‘possessed’ by a ‘desire to do good’, was driven to acquire the double-edged powers of a secondary bank to fight the demon of moral hazard (p. 218). (That post-1932 Iraq appears as a non-colonial client of the Agency reveals the narrowness of his definition of colonialism.) Queer politics for the twenty-first century. When a methodology leads you to such an old door, it is time to strike out on a new path. If colonial independence turned metropolitan investors off, surely that says more about the conservatism built into the marketplace—and the need for an innovative cultural history of finance—than about the practical value of independence itself?
Nevertheless, Sunderland is merciless on the post-colonials, without distinguishing across time or space: they ‘behaved irresponsibly, investing in grandiose capital projects’, he complains, uncritically reproducing the Crown Agents’ contemporary assessment (p. 52). But the historian's job is arguably to explain the complex political and economic circumstances—and state of technological understanding—that motivated some post-colonial governments (which were also, we must remember, post-war and Cold War governments) to invest in spectacular projects (leaving aside the faulty presumption that colonial-era projects were less grandiose, more successful, environmentally sound or socially just).
Thus, despite his interest in assessing ethical breaches, Sunderland remains deaf to the reverberations of the central ethical question of colonial development itself. Monopolistic practices, pragmatism, profits from poverty, arms-dealing—nothing shakes his faith in the desirability of the particular mode of development that evolved around the Agency. If knowledge of the Bank of England's use of the Agency's funds to prop up the British financial system was worth suppressing in the enquiries of the 1970s and 1980s, it was precisely because by then the very notion of development as anything but a trust had become unsavoury. There is an ethical minefield here that Sunderland clumsily sidesteps, unwittingly setting off some mines himself.
Its insights and research notwithstanding, this book—and many of its placid reviews from the economics side—demonstrates that those considering economic problems from a purely technical point of view have lost sight of their political–economic valence (and mistake their own technical scholarship as apolitical). The obligations to demonstrate progress, reward supporters and provide employment that appear as obstacles to sound capital projects in Sunderland's post-colonial world are the real context in which any development institution must work. They are the economy—as the Victorians of the original Crown Agents would have understood. The loss of government procurement orders to local merchants and colonial rage at high procurement prices were not merely incidental political distractions that do not reflect the true nature of the metropolitan endeavour.
For Sunderland, the question is not whether development can occur by any other means than as an international financial project, only whether such institutions do it ethically, competently and efficiently. For all his interest in the past, he is ultimately thinking and writing as an economist in this book. His book proves the need for greater cohesion and dialogue between cultural and economic history. Asking economic questions about the past without taking into account the recent deconstruction of the abstract categories in which we think about the economy is as counterproductive as dispelling the myth of ‘development’ without casting a glance upon the agency that was at its heart. Sunderland's is an institutional history that will satisfy neither economists looking for truly rigorous application of principal-agent theory and unmoved by the foibles of particular managers nor historians possessing the vaguest notions of debentures and gilts but a crystal clear sense of context. But his book should be warmly welcomed nonetheless for its original contribution to an important topic and, in fact, should be richly consulted by all those interested in imperialism, finance, the British economy and, of course, development. It illuminates the complex and close relations both between the domestic and colonial economies and between the financial and governmental institutions of the empire. Sunderland has helped us understand something of how the Crown Agents worked—and how well—if not how their practices evolved over time. Now that he has helped to rehabilitate their historical image, the task of writing their history has become that much easier.
Stanford University
psatia{at}stanford.edu
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