But the mechanization of textiles led to a situation in which South Asia became a net importer for Europe.
I would say the combination of mechanization in Britain and british suppression of indigenous textile production and indigenous trade in India, made possible the transfer of the production.
I am not sure I agree on the overstretch. As I see it the expansion was made possible in part through 1) the classic mean of conquering resources and armies and commiting them to further conquest 2) expansion of ecological footprint. The expansion of ecological footprint gave the empire more resources to use, and soe invested in weaponry (for example the Maxim gun) and communications (the brittish did not only rule the waves but also the telegraphy lines) were crucial to expanding and keeping territory.
The common overstretch of the empire either consists of keping territory costing to much, disintegration due to lack of communication and cohesion, or a combination thereof. I would say the brittish empire evaded those fates for a long time, except for the loss of some of the north american colonies. The thing that did it in was that the expansion of ecological footprint could be and was copied. The rise of Continental Economies of the US and Germany was then expanding their ecological footprint, digging up fossile fuels and turning it to goods and sustaining larger populations. Eventually the required tech also had permeated the colonies (communications, weapons, people) and the empire crumbled. But this happened in the mid 20th century, and I would say that the empire was financially benefical to the core for a long time, at least throughout the 19th century. A vote for PES is a vote for EPP! A vote for EPP is a vote for PES! Support the coalition, vote EPP-PES in 2009!
Certainly under the Imperial Overstretch argument, the British were not suffering Imperial Overstretch under the "First" Empire, or else they would not have been in a position to establish the Raj.
(On the establishment of the Raj, the financial impact is part of the conquest, and not just a consequence, as the conquest of India was primarily with Indian soldiers with the British able to field larger armies because they were in a stronger financial position.)
... the thesis of the Imperial Overstretch argument wrt the British Empire is not that the British never enjoyed a net benefit, but that balance between benefit of the empire and cost of maintaining the empire was tilting toward the cost.
The question of whether the British Empire was passed because it had become overstretched, or became overstretched as a consequence of coping with being passed, is the kind of question I would love to jump into, but I am not sure that it yields any lessons for the current US Overstretch. I'm observing the current Overstretch, rather than inferring it from some pattern of past periods of Imperial Overstretch. I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.
