Shortly after the beginning of World War I, the colonial state in Egypt implemented a series of economic policies to strengthen central state control over the country’s resources. This centralized wartime economy was characterized by price ceilings and export bans on essential foodstuffs, capital controls, such as regulating the price of gold and banning its exportation, and the monopolization of shipping routes for the purposes of war, which essentially halted foreign trade in the port city of Alexandria, Egypt. Using trade statistics, petitions, newspapers, and legal records, this paper will show that these colonial state policies weakened large businesses in Alexandria that were dependent on global trade and strengthened small, local businesses, particularly those in the informal economy. The growth of the informal economy was simultaneously accompanied by the informalization of labor and the spread of illicit markets. WWI thus marked a crisis of global capitalism, one that empowered local producers and traders in Alexandria and disempowered the colonial bourgeoisie. After the war, the colonial state in Egypt moved away from a centralized wartime economy by gradually removing price controls and trade restrictions. The reintegration of Alexandria into the world economy in the early interwar era resulted in a sudden influx of foreign goods and populations, a surge in the circulation and price of gold, and rapid inflation. This paper will argue that this trade and economic liberalization empowered large businesses and the colonial bourgeoisie, leading to the growth of the formal economy and harming local producers and traders in Alexandria. The deregulation of the formal economy after the war was further accompanied by state policies designed to regulate the informal economy, including frequent police raids on clandestine brothels, harsher penalties against merchants involved in illicit trade, and new tariffs on local fishermen. This paper will explore the ways in which the colonial state’s attempts to formalize the economy and reintegrate Alexandria into a capitalist world system resulted in the growing exploitation of workers in both the formal and informal economy, leading to large-scale working-class mobilizations against the colonial state after the war during a period of Egyptian nationalist organizing.