Empire: How Britain Made the Modern World
by Niall Ferguson 392pp, Allen Lane, £25

Empire, it seems, is coming out of the closet. For decades, it has mainly provoked condemnation or at best discreet nostalgia. But no longer. At one level, there is now a new Museum of the British Empire in Bristol and a welter of new books on the subject. At another, politicians and pundits in Washington and London are talking openly about the desirability of reordering the less fortunate parts of the world, by force if necessary. And now we have Niall Ferguson's new television series, of which this is the book, arguing in 1066 and All That fashion that Britain's version of empire was more a "good thing" than a bad, an essential engine of modernity.

As history (and as television), Empire exhibits all of Ferguson's customary virtues. It is clever. It is audacious and pacily written. It surveys a broad span of time and is characterised throughout by a strong understanding of economics. But is it right?

Certainly the organisation is a miracle of concision. Ferguson divides his near 400-year story into six chapters/programmes. He starts with Britain's own commerce and consumerism, its lust for sugar drawing it to the Caribbean, its taste for fine fabrics, spices and tea enticing it into India. He then looks at the role of voluntary and involuntary emigration, among blacks and whites, and at missionaries and reformers. Chapters four and five deal with the hardworking bureaucrats and patrician proconsuls, and with the quantum rise in military coercive capacity in the late 19th century; how the Maxim gun and later the aeroplane scattered rebellious, ill-equipped colonial subjects across red-soaked battlefields like "dirty bits of newspaper".

The final chapter tells how the European powers became caught up and consumed after 1914 by the same kinds of hi-tech violence they had previously launched against other continents. It was this crisis, Ferguson argues, and the emergence of other, newer empires, Japan, Germany, and the United States - rather than the actions and aspirations of colonial nationalists - that terminally undermined Britain's own brand of global supremacy. Empire itself, however, endured: and this, he concludes, is all to the good.

Throughout, Ferguson offers a bracing corrective to those cruder critics who persist in analysing the empire only in terms of racism, violence and exploitation. He draws attention, as others have done, to its episodes of idealism, creativity and administrative integrity, to its many examples of overlap and collaborations between different peoples, and above all to its historical context. He is almost certainly correct in arguing that the alternative to Britain's global inroads would not have been a pure, unsullied world, but rather the emergence of other empires that might have been worse.

Yet this kind of balance-sheet approach to empire has its limitations. Enquiring whether this or any other empire was a "good" or a "bad" thing is historically bogus, because answers to this question vary so much according to when, what and who you choose to look at, and, critically, according to who you are. Focus, for example, on Britain's role in the slave trade in the 18th century, and its empire seems an early holocaust. But concentrate instead on how Royal Navy seamen sacrificed their time and lives hunting down other countries' slavers in the 19th century, and one can feel proud of Pax Britannica. Look at how the British covered India with railroads, and it is easy to view them as modernisers. Look, however, at the abysmal levels of mass illiteracy in the subcontinent they left behind in 1947, and they appear rather differently. Ferguson knows this, of course, and is too good a historian to omit the dark sides of his subject: but he does stack the deck.

He devotes very limited space to the empire's earlier, more amoral centuries, preferring to focus on the Victorians and their successors. So while the destruction of native Americans by English colonists' germs and guns in the 17th century gets two paragraphs, heroic David Livingstone receives more than a dozen pages. Ferguson also exaggerates the degree to which British imperialism was distinctive and better. The idea, for instance, that it was the Victorians who invented the notion that overseas initiatives should be for God not gain would have astounded those French, Portuguese and Spanish Catholic Fathers who had earlier devoted far more care to the indigenous peoples of the Americas than many of their Anglo, Protestant competitors.

The most problematic issue raised but not resolved here, however, is the question of what criteria are to be invoked when assessing empire. Doubtless many of the Normans who invaded England in 1066 were decent chaps and they arguably made it a more efficient state, but the English themselves still referred for centuries to the "Norman yoke". By the same token, those who were once on the receiving end of British imperial invasions are less likely than us to view them in a positive light. Ferguson argues this is short-sighted because, whatever its faults, British empire fostered globalisation, overseas investment and free trade and - in the long run - this raised levels of prosperity all round. Possibly so: but individual human beings do not live by the free market alone and nor do they live in the long run. The immediate impact of British imperial free-trading was often the collapse of local indigenous industries which were in no position to compete, and a consequent destruction of livelihoods and communities.

This points to the tension at the heart of empire. Its exponents may seek (as many Britons genuinely did) to make the world a better place, but they also want to dominate. The Victorians wanted to spread the gospel of free trade, but they also wanted to continue being the premier workshop of the world. In much the same way, contemporary America wants (often with the best of intentions) the world to be wide open to its ideas, exports and technologies, but not if this means third-world nations developing weapons of mass destruction or the Europeans competing in space.

One of the reasons why we all need to stop approaching empire in simple "good" or "bad" thing terms, and instead think intelligently and enquiringly about its many and intrinsic paradoxes, is that versions of the phenomenon are still with us. Ferguson argues that the United States should cease being in denial about its imperial status and face up to its global responsibilities. The rest of us could also profitably cease being in denial. The British especially have no excuse for forgetting that empire is a most complex and persistent beast. And it has claws.

· Linda Colley's Captives: Britain, Empire and the World 1600-1850 is published by Cape.