There's a debate out there about imperialism. Did it pay? The consensus answer is: no, it did not. The British spent far more in defense than they earned from imperial investments; in fact, by the 1880s, the profitability of imperial investments had fallen below domestic and non-imperial ones. The French believed that their empire after WW2 helped them maintain their balance-of-payments; the numbers don't support that idea either. The big counterexamples involve the Nazi conquest of France, and the Soviet occupation of Eastern Europe after 1945 ... but after 1970 or so the balance on the Soviet empire hinges on how much you believe control of the Warsaw Pact armies was worth to Moscow.
But there is a case of imperialism paying, and paying quite well: Panama in 1903.
Here's the simple story. A French company, see, had tried and failed to build a canal across Panama. In 1904, as per the terms of its concession, the assets of that French company would revert to the government of Colombia, which could then sell them to (say) the United States, which wanted to build a canal. Those assets included a whole lot of big ditches, and a working railroad, and were worth around $40 million — $21.3 billion as an equivalent share of national income today. So when the U.S. comes sniffing around to strike up a canal agreement, the Colombians rather intelligently decide to stall.
The shareholders in that French company, though, want a deal quickly. So does the United States, run by, you know, Teddy Roosevelt. (Any resemblance to a current postulant for the Oval Office is entirely coincidental.) Of course, the U.S. isn't a dictatorship, Congress matters, so it kinda helped that the shareholders of that French company had made rather large donations to the GOP and hired all the best lobbyists of the time, including a Brooklynite named William Cromwell.
So one of the shareholders of the French company cuts a guy named Manuel Amador a personal check for $100,000 in a New York City hotel room ($53 million) to make sure that a revolt gets organized on schedule. It does, and coincidentally enough American ships are right offshore to make sure that Colombia can't intervene. The new government then appoints the French dude who cut the personal check to be its foreign minister, and he negotiates a canal treaty with the United States. When the people in Panama City see the agreement they balk, but their foreign minister (and, uh, the U.S. secretary of state) warn them that if they don't sign then the half-life of their new republic is going to be significantly less than its two-month history, and poof, Panama signs. Without a Spanish translation.
So far, so sordid, but honestly, that tells you nothing. After all, there was competition between the Panama and Nicaragua routes. I don't care that there was skullduggery in the dealings, and I don't care that Colombia got screwed. What I want to know is whether the U.S. got a better deal because it used military force than it would have gotten in the absence of force.
Fortunately, we have indeed got six existing deals struck with either Colombia or Nicaragua which did not involve force or the threat of force. (Well, one of them involved the implicit threat of force.) All of them incorporated the fear of competition from another route. And all of them gave the owner of the Isthmus a hella lot more squeeze than the deal Panama actually received.
Here's a table showing the net present value of how much less the U.S. would have received under various other agreements compared to the one it foisted on Panama in 1903:
|% of U.S. GDP||2007 dollar equivalent||% of Canal cost||% of Panama GDP|
|Hay-Herrán treaty||0.07%||$10.1 bn||4.3%||117%|
|Concha memorandum||0.10%||$13.4 bn||5.7%||155%|
|MCC-Nicargua contract||0.10%||$13.6 bn||5.8%||157%|
|French-Colombia concession||0.10%||$13.8 bn||5.8%||159%|
|Senate counteroffer||0.17%||$22.9 bn||9.7%||265%|
|Nicaragua-U.S. treaty||0.23%||$31.7 bn||13.4%||366%|
So, yes, sometimes imperialism does pay.