Saturday, September 19, 2009

Colonial History of India

History in general and Economic History in particular fascinate me. I enjoy reading historical narratives, especially Indian Economic Historical narratives. However, every time I read these I also end up being frustrated at the contradictions, lack of triangulated evidence and statements that do not make economic sense. The most common story I read is that the British followed Laissez-faire policy and did nothing towards protecting against adverse trade in India, and that is why India is so poor. The second common story is that the British exploited India, forced raw material export from, and manufactured goods import into India. Here are some questions I have with these claims:
  • If the British followed laissez-faire policy and did nothing to protect trade, then it should have affected Britain also. To the contrary, if they had policies that ensured that british merchants who traded with India had subsidies and special privileges then that is not laissez-faire policy. That is domestic industry protection!!
  • Secondly, how can they force Indian merchants to sell abroad or export? After all if these traders were getting a better price domestically they would have sold it domestically right? Even if there were middle-men that bought cheap from domestic traders and arbitraged it higher to the export market, the domestic traders would not have traded at a price lower than what they would have received for it domestically right!! How is that forcing them or making them worse off? What am I missing in this line of thought?
  • Thirdly, the other side of the export argument which is the forced to import manufactured material from England and that forced local hand loom sector to die. Again, I would imagine industrial manufactured items have a higher value added that the textile manufactured by the local weaver with his hand loom. So, imported textile would be more expensive that the local textile. If the population was poor how could they afford it, except for the few elite who had the money to do so? Besides, how can someone force me to buy anything except at gun point? To the best of my knowledge the British did not do that. They may have imposed taxes on all kinds of things like salt and what not, but I do not think they made people buy textiles at gun point!!
These are the most important things that have jumped at me at my current reading. I think a lot of colonial history in India is marred with nationalist attitudes. It is inevitable that the economics and politics are entwined in such a way, because when personal freedoms were at stake, individuals were willing to over-look the economic in the fight for freedom. I would do the same as well. However, when we study economic history, I think it is important to at least make the concession that part of the logic used against manufactured goods from abroad a century ago in India was nationalistic and not purely economic. There is no denying that the Indian freedom struggle deserves its place in history. But, I do think that economic historians of India should be careful about parsing out the economic and the historical/political reasons, and be able to substantiate with evidence.


Aaren said...

"I would imagine industrial manufactured items have a higher value added that the textile manufactured by the local weaver with his hand loom". Why would that be?

The way I see it, the manufacturer would be able to make a significantly larger amount of cloth than the local weaver. Also, the manufacturer is able to make the cloth for cheaper, and hence can sell the cloth for cheaper. If anything, imported textile would be cheaper than the local textile.

Pramod Biligiri said...

Argh, tell me about it. Currently my understanding of Indian history is close to Nil due to the lack of economic perspective.

Do you know of any good economic histories of colonial India?

Chandra said...

i have one very strong Indian economist late Professor S. Ambirajan who wrote “Classical Political Economy And British Policy In India” this book was published as Series of Cambridge South Asian Studies.
It is a great work which i read recently and i going to reread it.
i have also posted many other his writings see my blog below

Richard said...

Good observations. Great questions, Triya.

Dsylexic said...

trade policy is one thing.monetary policy is something altogether different. montagu norman single handedly caused the currency crisis of the 30s and the bengal famine was a result.u need is to control the monetary via a need not hold a gun -all yothough nationalist historians can tend to go overboard,it would be naive to think that the western versions (supplemented by current marxist indians) is holy gospel.history is lots of propaganda.and there are grains of truth everywhere.your outlook determines what you may desire to make of it.

Jayant said...

You seem to be quite right. Very likely nationalism trumped the truth when the post-independence government came into existence. And, British wanted to wash their hands off India, so they did not argue when Indian historians wanted to take a higher moral position.