Many economic historians start from the premise that India's 'underdevelopment' on independence was the direct result of British imperialism.

In support of this contention factors such as discriminatory tariffs, the subjugation of India's economic needs to Britain's, the drain of invisible capital in the form of salaries and superannuation, are pointed to as inhibiting India's evolution as a mature economy. Essentially a client state India was denied a competitive base.

It was not permitted to develop industrially and its agricultural production, based on cash crops, made it vulnerable to fluctuations in world demand.

But is the picture as one sided as this suggests?

Morris D. Morris, in a very contentious article, pointed to India's social structure as the underlying inhibitor of modernisation.

And apologists for the raj tend to highlight its qualitative, if nonetheless economically significant, features such as the provision of stable government, sound law and a modern communications and institutional infrastructure.

Could India have become a Japan writ large if spared the 'insecticide of imperialism'?

In order to help us answer these questions we will attempt to draw up a Balance Sheet of Empire, in one column listing those items that represent a gain for India, and in the other, those items that represent a loss.

Synoptic Lecture Notes

LECTURE 9:

BALANCE SHEET OF EMPIRE (1757-1900)

Peninsular and Orient steamship travel poster From: Medici Gallery

* A number of untestable assumptions permeate debate about British Imperialism and the Indian Economy.

i) First concerns nature and health of Indian economy on eve of British incursion

- Irfan Habib argues the case that Indian economy was flourishing and primed for development

There was capitalist potential and capital accumulation sufficient to promote industrial and commercial transformation.

This capital and commercial base, however, was undermined by European imperialism.

- Many historians question this. They point to the dislocation of the economy prior to conquest and argue that the Mughal Economic system lacked the mechanisms not only for growth, but also for adaptation.

So question is - was India C1700 either

a) poised for economic development?

or b) incapable of it without dramatic reform?

Do we have a resplendent India about to be knocked down by British rule?

OR

Do we have a backward India about to be exposed to modernisation and modernised despite itself?

Difficult to determine : for no concrete statistical evidence exists.

ii) Second Assumption treats Japanese Experience as Normative in the absence of Imperial interference.

Thus the argument is put that since Indian Economy did not take-off like Japan's, it must have been held-back.

Historiography in General:

i) Pro-Imperial Case : lays stress on non-tangible, but nonetheless significant aspects of British rule.

Qualitative features = peace, stability, law and order, good government, transport infrastructure necessary building blocks for development.

ii) Nationalist Case : some of these things conceded, but ultimate conclusion remains

viz: Price of British Rule too dear. Costs too high. Indian development never Britain's priority. Happened in spite of British where it happened.

Quantitatively = Britain's 'civilising mission' does not add up.

Karl Marx's Analysis:

Hypothesis : If imperialism fulfilled 'double mission' in India.

- one destructive

- the other regenerative

then : Raj = a good thing

for : Destruction of Asiatic feudal despotism would lead to modern Socialist State.

But What Happens?

Certainly Indian economic structure disturbed, if not also destroyed

but - insufficient regeneration occurs.

Marx's Asiatic Society [read 'Asian Despotism'] consists of 3 Ministries

1. Ministry of War

2. Ministry of 'internal plunder' [Taxation]

3. Ministry of 'internal welfare' [Public Works]

Whenever factor 3 emphasised [equivalent of governmental 'pump priming'] you find prosperity.

But in period 1757-1857 British largely ignore factor 3, except belatedly with Dalhousie.

Result: neglect of Public Works for almost 100 years.

* How serious was this neglect?

Barbara Ward's Hypothesis:

British begin the process of modernisation. But they fail to complete it.

Result = Partial Modernisation

Case Studies

a) Railway Development

b) Textiles

- Industrialisation in Europe fuelled by surplus from Agriculture.

But in India no surplus, because of the "Drain".

Naoroji's Drain theory - still the cause of lively debate.

Planning Models:

1. European : Productivity - Consumption = Investment

2. Soviet : Productivity - Investment = Consumption.

3. Imperial : Productivity - Profit (Drain) = Investment

- Consumption

Tutorial Questions to be Addressed

1. The Nationalist Case:
To what extent can 'underdevelopment' be directly attributed to British rule?

3. The Examples of either the Indian Railway System or the Indian Cotton Industry.
Examine each's development in the light of issues 1 & 2.

Core Reading

N.Charlesworth, British rule and the Indian Economy 1800-1914

M.D. Morris, 'Towards a Reinterpretation of 19th century Indian Economic History', Journal of Economic History, 23, 1963 [ BOOK 3]

B.R. Tomlinson, 'India and the British Empire, 1880-1935', Indian Economic Journal History Review, 12, 1975

Additional Reading

Cambridge Economic History of India, Ch. by J. Hurd on Railways; Ch. by E. Whitcombe on Irrigation

B. Chandra, "British and Indian Ideas on Indian Economic Development, 1858-1905" in B. Nanda and V. Joshi, Studies in Modern Indian History, Bombay, 1972

D. K. Fieldhouse, Economics and Empire 1830-1914

M. D. Lewis (ed), The British in India : Imperialism or Trusteeship? (good for range of viewpoints)

D. Rothermund, The Indian Economy under British Rule

S. B. Saul, Studies in British Overseas Trade 1870-1914

B.R. Tomlinson, The Political Economy of the Raj 1914-1947

B. Ward, India and the West

Articles

I. Habib, 'Potentialities of Capitalistic Development in the economy of Mughal India', Journal of Economic History, Vol. XXIX

I. Klein, 'English Free Traders and Indian Tariffs 1874-1896', Modern Asian Studies, Vol. 4, 1970

W. J. Macpherson, 'Investment in Indian Railways, 1845-1875', Economic History Review, 8, 1955-6

M.S. Rajan, 'The Impact of British Rule in India', Journal of Contemporary History, 4, 1969

H. T. Rider, 'Tariff Policy of the Government of India, Industrial Development 1894-1934', Journal of Economic History, 30, 1970

E. Stokes, 'The First century of British colonial rule in India: social revolution or social stagnation?', Past and Present, 58, 1975