If it isn't considered hijacking, I'd like to take this a little further and ask this: What colonial empires were most profitable relative to the money invested in them?

Colonizing a region gives the colonizer access to vast raw materials (a big one being cotton, in the case of India) that otherwise wouldn't be available. These raw materials are available at very low prices and are sent directly to the homeland of the colonizer, making them available only to domestic industry. This gives a huge advantage to domestic industry to outcompete rival developed nations on the global market.

When British textile exports are so cheap that they're putting local manufacturers out of business in France and Germany, imagine how powerful that is. Combined with advantages in other industries, it creates a massive trade imbalance that siphons huge amounts of wealth into Britain, which the crown certainly got benefit from in the form of taxes and tariffs.

To get a definite answer on the benefits of colonization, you'd need to know how the British economy would have performed without a colonial empire. That's impossible to know for sure, but we can say that colonizing nations certainly tended to show profound economic growth during their colonial periods, at least before the 20th century. The United States is something of an exception, but the US had similar benefits to colonial nations due to huge amounts of undeveloped territory inside its borders.

That doesn't even take into consideration the intangible benefits, like the prestige that having control over huge swaths of land gives you during peacetime negotiations. Britain didn't head every single coalition against Napoleonic France for no reason.

And another follow up: It may cost the state a lot, but is there a comparison in figures of the cost for the State / Crown and the wealth it gave the English people? Not only the trade but also the industry for the infrastructure maintaining the trade with the colonies made some people very rich. The merchants, shipbuilders, cloth makers...

If Friedman made that assertion, did he had any facts? I would love to see a conversion table in todays currency what the East India Company imported. Or how many jobs were created.

Disclaimer: I'm definitely no expert on economic history. But since the relevant historiography has not been mentioned for 16 hours now, I feel the need to post.

I think Friedman is alluding to Mammon and the Pursuit of Empire (1988) by Davis/Huttenback which concluded that the British Empire was not profitable from a empiricist point of view. This study was in response to Marxist/economic analysis of European Empires that were especially popular during the preceding decades. More recent scholarship has pointed out that the solely economic analysis of the profitability of the British Empire is insufficient. You can't put a number on being the global centre for finance, the easy access to raw materials through the colonies, or the opportunities for emigrants who would otherwise present a social burden at home, etc. The Empire could also provide invaluable prestinge on the international stage or on the individual level ("consuming the Empire"). Furthermore, a lot of individual businesses and economic branches did profit from the Empire, so a blanket statement like "the Empire was not profitable" is not useful at this level of analysis.