It definitely is the reason why. Part of what sets compensation in London is the cost of real estate, and those prices have their origins in the stolen wealth.
If you think the UK has an advanced economy due to 19th century colonialism you then need to explain the development of countries like Taiwan, Japan and South Korea. Japan went from feudal backwater to major global power in 80 years, and it completed that transformation 80 years ago. If you don't believe the UK did anything worthwhile in the last century to earn it's way and is free riding on the profits from stolen Zimbabwean tobacco from 1910, ok fine, now explain Japan.
For example, if not for India, Britain would be absolutely destroyed after WW2 and would be far from their current position in the 21st century (assuming allies still somehow win, big if). India was Britain's cash cow and is the reason why it survived the war.
Germany put the lie to imperial supremacy in 1940 when they comprehensively but-kicked France and Britain. They proved that industrialisation is what mattered and by then imperial mercantilism was a distraction. We were only saved by the English channel, and yes thanks to India. The fact we had India undoubtedly saved us, but in a last ditch final card up our sleeve that kept us in the game kind of way. Not in a trump card that meant Germany never had a chance from the start kind of way.
By the 20th century, I think you could say colonialism didn't pay off. But it was also the seed capital for a lot of europe's industrialization. The same thing happened with Japan - their defeat of China in the Sino-Japanese war resulted in an indemnity that underwrote the Mejji restoration.
As for Japan, they did do well out of the war, but they were already rapidly industrialising at a much faster pace than their neighbours. That's why the won the war in the first place. The scale of the reparations might optimistically have paid for a few years of industrialisation and investment, but over the 4 decades between then and the next Sino-Japanese war that's basically a marginal difference. The second Sino-Japanese war merged right into WW2 so was too late to have any major effects on overall national development.
Not really. The japanese ships were, iirc, mostly built in britain and germany. Plus, the chinese had many more ships. I've read that corruption and morale were important factors, but I don't think relative levels of industrialization mattered that much. Bear in mind, Japan did not build things like engines domestically until the 20th century.
Further, the indemnity was nearly four times the annual national budget, and paid in pound sterling. That's more than a 'few years'. That's absolutely transformative. Not to mention the capture of chinese naval vessels, territorial concessions, etc.
> Most exports of industrial goods went to other developed countries.
Depends on the era. The basic point I'm making is that early industrialization, i.e. the wool trade, then the cotton trade, were generally export-driven, and export-driven to west africa. The cotton industry was also underwritten by colonialism insofar as it was predicated on slavery.
Pointing to countries that did not have direct roles in colonialism (although a surprising number of countries you wouldn't think of actually did - i.e. demmark in the slave trade) ignores the fact that colonialism basically amounted to a massive and sustained cash infusion into western europe. The spanish conquests of the new world, for example, brought so much gold and silver into europe they crashed the spanish economy, but I think it's obvious that this gold would have quickly escaped national borders and funded colonial and industrial ventures across western europe.
Looking at Britain, most of the imperial revenue flowed to the gentrified classes and into their estates. The industrialisers were mainly middle class domestic manufacturers and it's the growing friction between these two sides of the economy that drove political conflict and reform in Britain.
Most of Europe had no third world empire. As I pointed out, Germany proved conclusively that Empire was irrelevant. Spain and Portugal had huge Empires and just fizzled out because they didn't industrialise. France also failed to capitalise on Empire in ways that mattered long term.
China also has industrialised rapidly over several decades, and their imperial assets in Tibet and Xinjiang played no significant role in this. What matters is policy and economic culture. This is what distinguishes say Israel from it's neighbours. They're similar sizes, similar resources but night and day in terms of development.
I feel like I'm understating them. I'm getting my overview of the amounts from this paper[0], but in principle, even getting paid a part of the costs of a war is a very good deal, because that money usually goes entirely to your own economy (since they are supplying your military), you get essentially free training for your military, you get prestige, and you get the actual war aims (in this case, control over Korea, which is in itself lucrative).
If you consider another colonial war, the second opium war, the chinese government indemnity in this case didn't cover the costs of the expedition (iirc). However, it's still a really great deal, because you get access to the chinese market, which is worth a ton, and the state finances themselves aren't negatively impacted because the indemnity is enough to cover costs.
I think it's probably true that by the time Germany reunified, empires weren't always that worthwhile.
I don't totally disagree with your culture idea. I just think there's nothing worse for a nation's political culture than being colonized, and it's also terrible for the economy, so it's unsurprising that almost every first world nation was either never colonized, or if it was, is currently ruled by a seceeding group of the colonizers themselves (e.g. the USA).
[0]: https://eprints.lib.hokudai.ac.jp/dspace/bitstream/2115/3069...
Japan achieved this by looking to countries like England as an example and becoming an imperialist and colonizing parts of Southeast Asia - kicking out some of the European countries who held those colonies in the process.
So yea they did the same thing to get wealthy - stealing resources.
Look at Germany, they never had any significant empire, but they still brought rest of Europe including the imperial powers to their knees in 1940. That conflict showed that the imperial mercantilism of the previous centuries just wasn't relevant anymore.
If imperialism was so great, there's no way Germany should have conceivably been able to roll over the imperial superpowers of France and Britain. The only thing that saved the UK was the English Channel. What mattered was industrialisation, along with economic and financial liberalisation. Every country that has done well in the last 100 years, except a few resource states like those in OPEC, has done so this way.
It the value literally came from somewhere else (geographically), funneled through the financial district and spread to the local economy. London is the bay area, but for bankers.
The City of London has been laundering money for centuries. Lately, there's a lot of Russian/former soviet oligarch money sloshing about, and the Square Mile doesn't ask too many questions about source of funds. Not too long ago, HSBC was slapped on the wrist for laundering cartel money.
This keeps getting brought up but it's inconsequential at the scale of the total economy. As I pointed out elsewhere already on this thread, total Russian inward flows to this country accounts for about 1% of foreign investment. Now yes absolutely, foreign investment is a significant factor in the UK economy, about 20%. That makes a big difference, but Russian oligarch funds are not a significant part of that, they're just a politically and socially highly visible one that gets talked about a lot.
The reason London is a centre for laundering money is that it's a massive mainstream finance centre. So yes, you're on the right track, but you're obsessing over a small forest footpath and missing the mainstream economic motorway right next to it.
US FDI into the UK is more than 30x that from Russia. That from the EU is even bigger. This is the stuff that moves the needle.