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We would like to give special thanks to Alan Dye, Steve Haber, Aldo Musacchio, and Kris Mitchener for their willingness to read and extensively comment on earlier versions of this article. We would also like to thank Eric Hilt, Claudia Goldin, Jonathan Liebowitz, Bill Summerhill, Peter Temin, Jeff Williamson, and the other participants in Harvard University's Economic History Workshop for their comments and criticisms. In addition, special thanks are due to Phil Hoffman and two anonymous referees from this JOURNAL. Their comments and suggestions went far above and beyond the norm, and this article is immeasurably improved for them. Any and all remaining errors are, of course, fully our own.
Did imperialism pay? Many modern economic historians have been skeptical of this claim. Edward Fitzgerald, for example, argued that France's colonial empire provided no net economic benefit to the mother country, even absent the cost of the colonial wars of the 1940s and 1950s.1 Lance Davis and Robert Huttenback argued that Britain gained little from its colonial empire--private returns from Imperial investments declined substantially after 1880--and were in any case dwarfed by the subsidies that U.K. taxpayers paid to administer and defend the colonies.2 Michael Edelstein found much the same in his analyses of British imperialism.3
The economic benefits to the United States of American imperialism have not been exempt from similar skepticism. Even the most canonical case of economically motivated imperialism--the U.S. intervention to secure Panama's independence and construct a canal under American sovereignty--has come under doubt. Stanley Lebergott, for example, noted that the canal "gave equal advantage to any nation that chose to use the Canal," and the benefits to shipping accrued "in the same proportion as American railroads were injured."4 A 1929 analyst agreed with Lebergott's assessment, pointing out that, "Transcontinental railroads, intermountain jobbers, manufacturers and distributors of the Middle West, exporters on the Pacific coast, and others are positive in pointing out serious losses which they have incurred because of Canal competition," arguing that any gains derived from large implicit subsidies to the canal.5 Earlier observers concurred. A British engineer working for Colombia, J. T. Ford, wrote in 1903, "For the United States [the Panama Canal] is a paying...