Historians of economics have always been attracted to the political economy of empire because it tells us so much about how serious economic thinking has been shaped by colonial themes. In this lecture, Donald Winch explores this importance of colonies, arguing that whilst the political economy of empire was eventually a theory of capitalist imperialism, it still owed a great deal to those who formulated a case for colonisation as a remedy to some of Britain’s problems as a mature economy in the 1820s and 1830s.