30 September, 2020

A Screw Turns Back In Time

A brilliantly-researched book says that free trade under colonialism served India’s economic interests wonderfully. Nehruvian socialism did not.

Photograph by Alamy
A Screw Turns Back In Time

What a delight to find a history of Indian capitalism pac­ked with enough econometric and statistical data to sat­­isfy academics, but still accessible to lay readers. Roy, based at the London School of Economics, is a quiet, scholarly figure and no polemicist. Yet his book exp­lodes deeply held nationalist myths.

First to go is the notion that pre-colonial India was a land of economic milk and honey, just waiting to be plundered by the wicked East India Company. We learn instead that trade and capital costs were exorbitant, with monopolistic Indian bankers charging interest rates as high as 40 per cent, compared with only 6 per cent in England. There were no indigenous machines or machine tools, and lab­our was tied to the land. The “great divergence” between India and the West, with its scientific and industrial revolution, would have happened anyway.

What the colonial impact did bring about was migration of businesses from declining inland centres to the flourishing new port cities founded by the East India Company. These became...



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