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How British Rule Changed India’s Economy
This Palgrave Pivot revisits the topic of how British colonialism moulded work and life in India and what kind of legacy it left behind. Did British rule lead to India’s impoverishment, economic disruption and famine? Under British rule, evidence suggests there were beneficial improvements, with an eventual rise in life expectancy and an increase in wealth for some sectors of the population and economy, notably for much business and industry. Yet many poor people suffered badly, with agricultural stagnation and an underfunded government who were too small to effect general improvements. In this book Roy explains the paradoxical combination of wealth and poverty, looking at both sides of nineteenth century capitalism.
Between 1850 and 1930, India was engaged in a globalization process not unlike the one it has seen since the 1990s. The difference between these two times is that much of the region was under British colonial rule during the first episode, while it was an independent nation state during the second.
Roy's narrative has a contemporary relevance for emerging economies, where again globalization has unleashed extraordinary levels of capitalistic energy while leaving many livelihoods poor, stagnant, and discontented.
Between 1850 and 1930, India was engaged in a globalization process not unlike the one it has seen since the 1990s. The difference between these two times is that much of the region was under British colonial rule during the first episode, while it was an independent nation state during the second.
Roy's narrative has a contemporary relevance for emerging economies, where again globalization has unleashed extraordinary levels of capitalistic energy while leaving many livelihoods poor, stagnant, and discontented.
167 pages, Paperback
Published May 16, 2019
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September 11, 2020
Tirthankar Roy, professor at LSE, offers a balanced report card on the Raj. Famine, poverty and looting are almost all that we hear about the British in India in both the UK and Indian press these days. This book paints a vastly different picture to the half truths, lies and exaggeration provided by the popular view. That said, the book does not shy from pointing out the Raj's significant failures.
Roy contrasts the dynamic and international cities with the almost stagnant countryside. Openness to trade and foreign investment, the market economy, and the spread of modern science and technology all contributed to Indian economic growth and helped to eventually eradicate famine. Roy, rather politely, throws out a hundred and twenty years of Indian nationalist received wisdom. On practically every economic debate, it turns out, the Raj was right. Indeed, I would guess that if you presented each debate out of context, most economists would side with the then government of India. The exception would be during the great depression, but then again what government performed well then? In the end debating points do not rehabilitate the Raj.
As Roy points out, the government was simply too distant from the bulk of the population and too poor to undertake necessary revolutionary change. It even alienated the group that should have been its natural ally, the anglicized Indian middle classes, during the extended and ultimately pointless rearguard action of 1905-1947. Two thousand efficient and incorruptible Indian civil service officers were far too few to transform a country of more than two thousand lakhs. Taxation was ridiculously low by even contemporary Asian standards at around 5% of GDP. Once expenditure on defense and administration was accounted for there was very little left for investment or welfare. History decided to laugh at Acemoglu et al. as the largest colony was not extractive enough!
As Roy briefly concludes, increased control over the population (what economists these days popularize as "state capacity") and higher taxation have been two of the great successes of post-colonial India, even if much of it was wasted on attempted autarky. It would have been nice to have a longer discussion of how Indian history affects the present. It was very good to finally get Roy's views condensed into one small volume. However, at the price posted I think that most people will continue to read scary bed-time stories about the "drain", "man-made famines" and "inglorious empire" rather than this balanced result of years of research.
Roy contrasts the dynamic and international cities with the almost stagnant countryside. Openness to trade and foreign investment, the market economy, and the spread of modern science and technology all contributed to Indian economic growth and helped to eventually eradicate famine. Roy, rather politely, throws out a hundred and twenty years of Indian nationalist received wisdom. On practically every economic debate, it turns out, the Raj was right. Indeed, I would guess that if you presented each debate out of context, most economists would side with the then government of India. The exception would be during the great depression, but then again what government performed well then? In the end debating points do not rehabilitate the Raj.
As Roy points out, the government was simply too distant from the bulk of the population and too poor to undertake necessary revolutionary change. It even alienated the group that should have been its natural ally, the anglicized Indian middle classes, during the extended and ultimately pointless rearguard action of 1905-1947. Two thousand efficient and incorruptible Indian civil service officers were far too few to transform a country of more than two thousand lakhs. Taxation was ridiculously low by even contemporary Asian standards at around 5% of GDP. Once expenditure on defense and administration was accounted for there was very little left for investment or welfare. History decided to laugh at Acemoglu et al. as the largest colony was not extractive enough!
As Roy briefly concludes, increased control over the population (what economists these days popularize as "state capacity") and higher taxation have been two of the great successes of post-colonial India, even if much of it was wasted on attempted autarky. It would have been nice to have a longer discussion of how Indian history affects the present. It was very good to finally get Roy's views condensed into one small volume. However, at the price posted I think that most people will continue to read scary bed-time stories about the "drain", "man-made famines" and "inglorious empire" rather than this balanced result of years of research.
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