Figure 1.--India has a long tragic history of famines. Some particularly deadly famines occured after the establishment of the Raj in the late-19th century. The same 'lassieze faire' attitudes that turned Ireland into a death trap meant that millions of Indians died in the late-19th century. After the turn of the 20th century the British began addressing the food situation so as to prevent famine. The only other important famine was the tragic Bengal Famine during World War II. The photo shows the poorhouse of Bhavnagar, Gujarat (late-19th century). Gujarat is the northern-most Arabian Gulf coastal state, today bordering Pakistan. Note the flat terraine. The poor house was under the authority of the local Maharaja. As far as we know, poor houses were a British institutio, We do not yet know nuch avout how famines were managed before the arrival of the British.

It should be understood that the British did not create poverty. The very idea is absurd. Poverty in India was nothing new. It became more of a problem in the modern era because of the growth of population. It was basically due to inefficent agricultural methods resulting in low crop yields, This was not such a problem with a small population, nut as population increased and fsmily plots declined, it became an inreasing problem. Along with ibcreasing population, agricultural technology did not improve. Many Indians also blame the British for destoying India's handicraft industry. This was another factor in growing poverty. This was Ghandhi's view. It is why he insisted on spinning his own thread and the spinning wheel is at the center of the Indian flag. Because the trends occurred at the same time that the British sezed control of India, many Indians, especially the nationlits, believe that Britain impoverished India. What was at play here, however, was not the British but the growth of population and technology--an early example of globlization. Given the low yields of traditional agriculture and inefficency of handicraft industry, they and not the British assigned India to perpetual poverty. It was modernity that destoyed India's handicraft industries. The British were the agent, but it was inevitable. Now the British can reasonbly be criticized for not ending abject poverty or at least substantially reducing it. Self rightous Indian nationalists making such charges ignore the difficulties that Indian Government have had in ending abject poverty. They admitedly have made an real effort which the British did not. But their efforts have been very disappointing, largely because of the failure of the Socilist economics which they adopted. And even today in modern India, poverty continues to be a major problem. Actually the most important advances have been the American Green Revolution which increased crop yields. India's dynamic economy as aesult of mrket reforms have also had an impact. But here the impact has been indirect and actually much of the resistance to mrket reforms has come from the poor rural population.

Historical Poverty

It should be understood that the British did not create poverty. The very idea is absurd. Poverty in India was nothing new. Assessing poverty levels before the moder era is difficult. THe Muguls were known for their great wealth. More difficult to know, however, is the condition of the common people and poverty levels.

Nationalist Charge

We have had extensive discussions with Indians on internet discussion boards. As India and South Asia in general has not bee an area we have focused on, we were surprised by the intensity of the anti-British feeling. English is an official language and widely spoken in India. It is actually used as a lengua franca to allow maby Indians to speak with each other. In addirion to Hindi, Indians speak a large number of different lanuages, Without English there is no common language. We are thus able to discuss the issue with a wide swath of Indian society. We expected there to be understandably be some criticism of the British. We were unprepared for the extent and vehemence of that criticism. The nationlists not only reject the idea that the British had any positive impact, but that the British took a rich country with a happy and prosperous peasantry and impoversished while extracting billions of dollars in wealth. Nationalist historians blame the British for India's poverty and charge that it was a purely colonial phenomenon. While not presenting the needed data to substantiate this charge, it is today a widely held point of view throughout India. Nationalist charge that India was rich before the arrival of the British. This is an easy to prove point give the wealth of information about the Muguals, but the nationlists gloss over the necessary discussion of how much of that wealth filtered through to the average rural Indian peasant. The nationalit argument is that the British both undermined the strenhth of Indian agrculture and and 'deindustrialized' India, estroying the jobs of millions of artisans. They also charge that Britain's trade policies promoted the importation of cheap manufactured goods and the the export of raw materials to supply foreign factories. Nationlists also charge that the British siphoned off Indian wealth nd transferred vast sums of capital to Britain. This case was all inaccord with anti-British and anti-colonial thinking that accompanied independence. And was a major support for Nethru's socialist program that guided independent India for several decades.

Population Growth

A major factor in poverty is population growth. Rising population does not necesarily create poverty if there are improvements in agriculture that improve crop yields. India did not adopt potato farming like the Europens who in doing so significantly increased food production.European farmers also adopted new technologies that alloweed them to feed a growing population This did not occur in India during the British era. Thus poverty became an increasing problem as aesult of population growth during he British era, The British did not improve agricultural methods and tecjnology. Public health programs in the 19th centurym however, did led to population growth. And poverty becane more of a problem in the modern era because of the growth of population. It was basically due to inefficent agricultural methods resulting in low crop yields, This was not such a problem with a small population, but as population increased and the area of family plots declined, it became an inreasing problem. Along with ibcreasing population, agricultural technology did not improve.

British Rule

Because the trends occurred at the same time that the British sezed control of India, many Indians, especially the nationlits, believe that Britain impoverished India. What was at play here, however, was not the British but the growth of population and technology--an early example of globlization. Given the low yields of traditional agriculture and inefficency of handicraft industry, they and not the British assigned India to perpetual poverty. It was modernity that destoyed India's handicraft industries. The British were the agent, but it was inevitable. Now the British can reasonbly be criticized for not ending abject poverty or at least substantially reducing it. Some historians and economists in recent years have challenged the widely held nationalist view. One of their most important rguments is that the decline of manufacturing in India was the result of technological advnces and not British colonial policy. It was the mechanization of the Industrial Revolution that made Indian hand wovem textiles uncompetive. This was a process that occurred not only only in British India, but in countries all over the world.

Handicraft industry

Many Indians also blame the British for destoying India's handicraft industry. Nationalists call it 'deimndustrialization'. This is a misnomer. India was never industrilized. It had a substantial manufacturing secor, but this is not the same as industry. Words are important, as using the term deindustrializayion suggests the British destroyed something that never really existed. The nationalists claim is that the Lancashire's and other British textile mills obliterared India's handloom textile manufactured sector, which rendered millions of handloom weavers jobless. This is actually true. One contemprary British observer wrote, "The bones of the cotton weavers were bleaching the plains of India.� [Bentinck] But the demise of handlooms in India is no different than what happened in Britain itself. Using handlooms, weavers could eke out an existence, but hardly a prosperous existence because usinbg handlooms there were fixed limits on production and profitability was very small. Blaming Britain for this is really an attack on industrialization and globelization. It is not unlike the Ludites and would condemn mankind to a medievil standard of existence. Of course the British seized control of India just as the Industrial Revolution was gaining steam in Britain and the first sector to industrialize was textiles. So what the nationalists are objecting to is not British colonialism, but industrialization itself. British colonial policies appear to have accelerated the process, but it is a process that ould have occured any wy in a very short period of time. nd if not by Lcntershore mill, by Indian mills. In short Indian handloom readers were the victims of technological advances that have made our modern world. [Tomlinson, p. 15.] This surely was a factor in growing poverty. India unlike Britain, however, did not adjust by creating jobs by insustrializing. This resistance to industrialiing certainly was Ghandhi's view. It is why he insisted on spinning his own thread and weaving his own cloth. And this ethos is why the spinning wheel and not an industrial factory is at the center of the Indian flag. Notably as much as Nehru and Congress loved Ghandi, a handicfrft based economy is nit what they wanted. They wanted to build a new industrialized economy.

Trade policy

Nationalists also charge that India's textile exports plunged from a lIndia's most important export earner before the arrival of the British. Textile exports declined, adversely affecting domestic weavers and India's balance of trade. This is ineffect true, but what the nationalist economists either do not understand are choose to ignore because it would undermine their anti-British thesis is that with the Industrial Revolution, Indian handloom textiles were uncompetitive. The British could have instututed protective tariffs which would have delayed the inevitable in India itself, but his would not have affected the competiveness of Indian handloom textiles with the production of the Lancashire mills in export markets. And the impact of protective tariffs would have meant that inefficent high-cost manifctured would have been preserved for a time. Would that really have been good for India? If there is any blame to be assigned here, it is the failure of the Indian indigenous elite to modernize production methods. India thus shifted during the British period from being an exporter manufactured textiles to an exporter of raw cotton to supply English mills. [Naoroji and Dutt]

Agriculture

Nationalist economists believe that the British seriously weakened Indian agriculture which of course in a largely agriculture country would have a massive impact on the country's well-being and poverty. Nationalists charge that the British altered the rural land revenue system. Nationlists claim that the changes disadvantaged the peasant farmer. Under the British farmers had to pay whether or not the annual monsoon failed. The monsoon of course was the major deeterminant as to the success of the harvest. The cost of the land tax is a major issue with nationalist eonomists. In recent years, what might be called revisionist historians argue that the land tax had not been as exorbitant as often stated/ One estimate reports tht by 1900 it was only 5 percent of the harvest or about half the average per capita tax burden. [Das] The result according to the nationlosts was a increase in the number and intensity of famines. We do not have the data to substnbtiate or disprove this claim. The British justified the Raj as providing India with a modern efficent government. At first despite the resylts of the Irish Potato Famine (1845-46), Britain was still wed to the Laissez faire doctrine and the generally accepted idea that Government interference only worsebs the impact of natural calamities. [Mishra, p. 115.] Soon after the Raj was established (1858), Richard Baird Smith drew up some plans for famine relief during the Upper Doab famine (1860-61). Smith was a British Army engineer in the East India Company who helped the British withstand the Siege of Delhi (1857). He gained further recognotion for his actions during the famine of 1861, inlusing the estanlishment of poor hpuses and destrintion of cooked food. The British ended up doing quite a bit during the serious famine of 1865-66. British relief efforts actually thus went furthr than they had in Ireland, but efforts proved inadequate. British relief efforts actually thus went furthrr than they had in Ireland, but efforts proved inadequate. Serious famines occurred in Orissa (1865-67) and Rajiputana (1868-70). The Bengal Government prevented loss of life during the Bihar Famine (1873-74), but the Geat Famine on Madras and Bombay may have killed as many as 10 million people. Another terrible famine occurred ocer an expansive area (1896-97, killing somr 5 million people. This ended the multi-million mortality famine as the Raj began to develop effective policies for dealing with famine--until the tragic World war II Bengal Famine (1943-44). The ompact of the Indian rail system is debated. Improved transport imprived the ability of farmers to sell their crops, by nationalist economists claim that the rail system 'sucked' away peasant surplus which had earlier been stored for poor harvest years. We are unsure how to interpret this.

Banking system

Nationalist economists chrge that the British destroyed India's indigenous banking system which was financing the textile and other exports. Now we do not know enough about the domestic banking system to make a firm statement here. We would say, however, that if the domstic banking system was primarily dependent on textile eports, it would have been destoyed where the British seized control of India or not. Because Indian handloom textiles were more expensive that the output of British mills, they were uncompetitive not onbly in the Indian domestic market, but also in export markets. This leads to a further question. Why was the domestic bbking system so fixed on exports. Why were they not involved in financing industrialization in India. Again instead of focusing on the British, why do nationalist economists not focus on India's own bankers and elites.

Capital transfrs

major charge made by nationlist economists is that the British government transferred surplus revenues back to England. India in contrast to Bitain exported more then it imported during most of the Raj. The charge is that Britain used India's trade surplus to finance its own persistent trade deficit. Thiswas reportedly a massive drain of India's wealth. e are unsure about the dimensions of this wealth transfer. Estimating theese trnsfer is more complicted thn one might think. There is no one precise calculation. Various authors hace attempted to estimate the amojnts involved. Several authors suggest that it was substabtial, but there are significant differences as to the actual amounts perhaps 4-8 percent. [Baran, p. 148 and Habib, pp. 375-76.] Other authors suggest tht the drain was much less, perhaps only about 1.5 percent annually. [Das] Nationalist economists of then fail to consier the cost to Britin of maintaining the Empire. There were substantil military and civilian services rendered s well as the expense of servicing capital investments. If India had its own military, it may well have spent more. And given the massive state beauracracy that Nehru helped contruct after ndependence, it seems almost certain that an independent Inian state woukd have spent more on administration than the Raj. The overhead cost of the Raj, referred to as the 'home charges' was actually modest. An Indian economist estimates it at was under 2 percent of exports (late-19th century) and and 1 percent of exports (1913). [Chaudhuri, pp. 375-76] This discussion is not meant to suggest that India did not have a balance of payments surplus and Britain did not use it to finance part of its persistent trade deficit. It is mean to point out that Indian nationlit economist tend to use very high estimates of the capitl transfers and ind ignore British expenses that an independent Indian Governmenrt would have had to shoulder. Also almost uniformily ignored bt Indian nationlist economists are the substantial import of gold and silver by individual Indians. .

Historical Question

One of he great questions in history is why modernity was invented in the west and not the Caliphate, China, or India, the great centers of wealth and technology in the medievel world. India invented modern msthgemstics--the critical tool of cience. And like China, India produced a great deal of technology. Indioans were especilly skilled metal workers. But all the critical indicators of modernity, science, capitalism (ecomomic freedom), and democracy (political freedom) all emerged in the West ad not India. This is why the technology to create improved farming methods or efficent matchiery were developed in the west and not India. Why this was is a still hotly debated subject. And historians and economists in our modern PC world do not like discussing it. An important PC thread is cultural relativity. The liberal outlook is to deny that some cultures are better than others. And admitting that the west invented modernity is to admit that the West hs huge achievements beyond those of other activities.

Modern India

Self rightous Indian nationalists making such charges ignore the difficuylties that Indian Government have had in ending abject poverty. They admitedly have made an real effort which the British did not. But their efforts have been very disappointing, largely because of the failure of the Socilist economics which they adopted. And even today in modern India, poverty continues to be a major problem.

Green Revolution

Actually the most important advances have been the American Green Revolution which increased crop yields. India's dynamic economy as a result of market reforms have also had an impact. But here the impact has been indirect and actually much of the resistance to market reforms has come from the poor rural population.

Sources

Bentinck, Sir William. Quoted in Deepak Lall, The Hindu Equilibrium: Cultural Stability and Economic Stagnation, India 1500 B.C.-1980 AD Vol 1 (Oxford: 1984), p.184.

Baran, Paul. The Political Economy of Growth (New York, 1957). Baran's calculation is that 8 percent of India's GNP was transferred to Britain annually. Over the xourse of the Raj, this of course would be an enormous sum.

Chaudhuri, K.N. �India's International Economy in the Nineteenth Century: An Historical Survey�, Modern Asian Studies Vol. 19 No. 3 (1985).

Das, Gurcharan, "India: How a rich nation became poor and will be rich again," Peter Berger and Laurence Harrison, eds. Developing Cultures: Case Studies (Routledge: 2005). For a fuller discussion see Das' book India Unbound (Knopf, New York, 2001).

Dutt, R.C. The Economic History of India in the Victorian Age (London: 1906).

Habib, Irfan. �Studying a colonial economy--Without perceiving colonialism,� Modern Asian Studies Vol. 19, No. 3 (1985). Habib estimates the capital transfers to Britain at 4 percent of Indian national income.

Misra, H.K. Famines and Poverty in India (Ashish Publishing Hoose: New Delhi, 1991).

Naoroji, Dadabhai. Poverty and Un-British Rule (London, 1901).

Tomlinson, B.R. "The Economy of Modern India, 1870-1970," The New Cambridge History of India vol 3, No. 3, (Cambridge University Press: Cambridge 1996).

Created: 1:16 AM 4/27/2016
Last updated: 4:16 AM 4/28/2016