Abstract: Investors, Information and the British World, 1860-1913

Gary Magee

Abstract

This paper concerns itself with the export of British capital between 1860 and 1913. It seeks to lay bare key financial relationships and mechanisms that made such a massive movement of money possible. On what basis did British investors make their decisions? More particularly, in what ways did the ties of social interaction predispose them to provide greater support to investment projects within the "British world" than outside it? This paper examines these questions in two ways: by studying the coverage of investment opportunities as reported by the press and by exploring some of the rich social and financial networks that underpinned Britain's capital markets. The exceptionalism of the "British world" in these regards stemmed from the way its institutions, press, and transnational networks gave rise to an informational asymmetry within the UK capital markets. As a consequence, British investors found themselves making choices on the basis of a stock of knowledge that was heavily biased in favor of opportunities that existed in the "British World." This state of affairs was in many ways the natural by-product of the global expansion of British human and social capital in the nineteenth century.