peterike,
The Colonial powers did not give up their empires out of a sense of misplaced guilt, although some polemicists certainly advocated for that reason. The vacuous fools of sixty year ago were no smarter but possibly less influential than self important blowhards like Frank Rich or the tenured radicals of today. They gave up and withdrew because they were bankrupt after two world wars and America did not want to pay for their imperial adventures while we were facing the looming Cold War. In 1847 India was seen as an asset to England but in the world of fixed Bretton Woods exchange rates and free trade that was taking shape in 1947 the Raj was considered a net loss. Without India, the Dominions having been spun off in 1931, there was no reason for the British to hold on to all of the colonies. Similar conditions pushed for the withdrawal of the French and the Dutch. Some wanted to hang on, for prestige or for control of resources, but few argued that it was more economically beneficial to garrison and govern than to allow the bankers to work their magic and simply buy whatever the places produced.

Remember how the Arabs raised the price of oil 35 years ago? After a short sharp shock the Western banks absorbed the transfered money. What else could the oil sheiks do with it? A passing inflationary episode ensured that little real wealth was seen as sticking to the Arabs and the real losers turned out to be the poor countries of sub-saharan Africa. The rise in petroleum prices killed the Green Revolution. Unfortunately the Arabs and the Chinese learned the lesson and spent the last few decades learning how to handle money. The growth of Sovereign Wealth Funds is a way that they have transfered real wealth and power away from the West.

Would Britain be better off if she had tried to hold on to India? Maybe but India is probably wealthier and more likely to be our friend now as an independent country. Maybe we would have been better off if when the Move On crowd had chanted “It’s a war for oil” we had replied, “Hell yes” and broken OPEC. Remember the locals who live where the oil is found are almost never the same ethnic and religious groups that control the governments and profit from the oil trade.