How profitable were colonies?

Dec 2012
446
So on average were colonies profitable ? What colonies were profiable? Because I often read that colonies are often cost more to run then in tax monies they bring in, does it have to do with the massive amount of infrastructure that colonial powers?

By colonies I mean territories that are far away from the home country that are exploited and unequal in legal status
 

Jake10

Ad Honoris
Oct 2010
11,960
Canada
This comes down to management. Jamaica, for instance, was not very profitable for Spain because what they wanted was gold, but Britain did better with it because they used it to farm sugar.
 
Dec 2012
446
This comes down to management. Jamaica, for instance, was not very profitable for Spain because what they wanted was gold, but Britain did better with it because they used it to farm sugar.
well I guess a lot of colonies even "crown jewels" like French Indo China were mismanaged
 

Ichon

Ad Honorem
Mar 2013
3,722
Colonies nearly universally cost their host states more money to maintain than their tax revenue paid in (early Spanish metals extraction the only known exception).

That does not mean that many colonies weren't profitable- just that only people in the host state who owned or operated businesses in the colonies profited while the taxpayers whose money supported the state derived very little material benefits though maybe some type of status or patriotic feelings not that different than when a city's sports team does consistently well.
 

Chlodio

Forum Staff
Aug 2016
4,631
Dispargum
In the 17th and 18th centuries the main economic theory was Mercantilism which said that the key to national wealth was a positive trade balance. With every European country trying to export more than they import, it wasn't working for anyone. That's what colonies were for - places where the mother countries could sell their exports. Colonies did not produce wealth through taxes. They produced wealth through trade by providing markets where manufacturers and merchants could sell their goods.
 
Dec 2012
446
Colonies nearly universally cost their host states more money to maintain than their tax revenue paid in (early Spanish metals extraction the only known exception).

That does not mean that many colonies weren't profitable- just that only people in the host state who owned or operated businesses in the colonies profited while the taxpayers whose money supported the state derived very little material benefits though maybe some type of status or patriotic feelings not that different than when a city's sports team does consistently well.
So did Mexico and Peru cost more money to maintain later on, then they did in the16th century to the point of costing more to mantain then it gave in taxes?
 

Ighayere

Ad Honorem
Jul 2012
2,641
Benin City, Nigeria
Colonies nearly universally cost their host states more money to maintain than their tax revenue paid in (early Spanish metals extraction the only known exception).
The profit from colonies wasn't usually from taxes.

To answer the thread starter's question, they could be hugely profitable depending on what they were used for.

The colony of Saint-Domingue was hugely profitable for France, for example.
 

sparky

Ad Honorem
Jan 2017
5,258
Sydney
.
Both the Dutch East Indian company and the British India company suffered losses once they got into the business of administrating large territories .

Eventually those concern turned to their government for help and made the home taxpayer pay for the infrastructure and governance , then private companies did flourish

it follows the classic economic model of nationalizing losses and privatizing profits
 
Dec 2012
446
The profit from colonies wasn't usually from taxes.

To answer the thread starter's question, they could be hugely profitable depending on what they were used for.

The colony of Saint-Domingue was hugely profitable for France, for example.
Yes apparently they considered it to be worth more than all of Canada. It seems to me sugar islands are the most profitable in the long term