In a recent paper, Dr Pilar Nogues-Marco has reaffirmed longstanding orthodoxy of the nationalist-Marxist wing of Indian economic history. Briefly, that the colonial process involved an unrequited transfer of real resources from the colony to the metropole. Marco has used a novel approach to quantify the order of magnitude of the drain, mainly by using the commercial debt of the East India Company, which was (apparently) transferred to the Indian taxpayer via the Saint Helena Act 1833 (53 Geo III, c. 155), hereby quantifying a drain of resources from India to England. Sadly, the paper suffers from some not insignificant methodological factual errors. We shall at this time, deal only with the most egregious of these and Marco's thesis, leaving aside the rest for a separate post.
Flaws in Definition and Figures
The first error that catches the eye is the mistaken definition Marco has used for ‘commercial debts’ of the East India Company (hereafter "EIC"). Marco uses Cuenca-Esteban’s estimate of India's entire export surplus, to Britain as the total ‘commercial debt’ figure for 1815, her benchmark year (pg. 184). This is, of course, mind boggling. Commercial debt was the debt incurred by the commercial branch of the Company. To equate it with the total export surplus India had with Britain is baseless. Marco's figures are also highly suspect.
From years 1818 to 1853, her figure (Figure 4, pg. 185) shows negative territorial debt value (which apart from being a tongue twister is a contradiction!) but one can easily confirm that for a random year, say 1828, the territorial figure was in fact not negative, but instead it was as high as £43 million (Report From Select Committee: East India Company, 1852-3, 42).
Similar faults can be found in the figures for commercial debt. For instance, in the same year, i.e. 1828, the commercial debt is shown at nearly £50 million, when the actual figure by the correct definition was as small as £1,284,533 (O' Brien, 1830, 39). Marco’s debt time series suffer from the most disconcerting of methodological errors.
In consequence, Marco's conclusions about an unrequited commercial debt transfer cannot be accepted due to the fact that it is derived via demonstrably unsound and egregiously flawed methods. We shall refrain from commenting on the very validity of the existence of this so-called "drain".
Miscellaneous Errors
Marco states (emphasis ours): "Following the Bengal famine of 1769–1770, which claimed the lives of 30 percent of the local population of 10 million inhabitants," This again is just untenable and outdated. 10 million did NOT die due to the the Bengal famine of 1770, nor did 30% of Bengal perish and Bengal's population was some 30 million. (See this post wherein we refute a similar claim made by Mrs Satia).
Once again quoting Marco pp 177: "For instance, the Doji bara famine of 1791–1792 caused the deaths of about 11 million inhabitants in Madras Presidency." Marco's own source (Grove, 2006, 83) puts 11 million as the death toll for the ENTIRE subcontinent. Remember, Tipu reigned in parts of the future Madras Presidency at this time too. There are issues with Grove, his figures and his thesis, however that shall be the subject of a separate post.
Marco mistakenly assumes that commercial debt was an “unrequited export”, since it was apparently “registered” under “exports not paid for”. On checking Marco's source however, one discovers the category ‘Debts increased in the articles of customs on goods unsold, and exports not paid for, &c.’. This merely refers to unpaid goods at the time of accounting, which obviously will be paid for later on by the EIC [the buyer] to the seller (Anderson, 1792, 51). In fact, it seems to imply “exports not paid for” for all intents and purposes probably refers to exports not paid for, in England! Furthermore, the “exports not paid for” is one component of the commercial debt according to Anderson’s table, and not a categorisation for commercial debt as a whole.
Bibliography
Anderson, G. (1792). A General View of the Variations Which Have Been Made In the Affairs of the East India Company, Since the Conclusion of the War, In India, In 1784.
Datta, R. (2000). Society, Economy and the Market: Commercialization in Rural Bengal c.1760-1800. Manohar.
Grove, R. H. (2006, October 1). The Medieval History Journal, 10(1-2), 24.
O' Brien, W. S. (1830). Considerations Relative to the Renewal of the East India Company's Charter.
The Sessional Papers Printed by Order of the House of Lords or Presented by Royal Command in the Session 1852-3, Arranged in Volumes (Vol. 32) [Affair of the East India Company. - Report and General Appendix]. (1852-3). Referred to as Report From Select Committee: East India Company.
Addendum
Marco relies heavily on the Bengali civil servant, intellectual and novelist Romesh Chunder Dutt (1848–1909). ‘The Naoroji-Dutt version of nationalism [school of economic history] is unreliable, being ‘coloured by political feelings’’ (Roy 2019, 17). Dutt ‘did not advocate an end of British rule. But those who did fight for an end of colonialism late in the interwar period, found their [Dutt and Naoroji] writings useful as weapons. In the process, there emerged a key tenet of Indian nationalism, which is “economic nationalism” or the belief that India needed to be free because foreigners had ruined its economy. Economic nationalism, in this way, joined the study of history with a political battle, an equation that served politics well, but history rather badly’ (Roy, 2015, 52). ‘The nationalist narrative has not stood up to test all that well’ (Roy, 2016, 228).
We'll tackle the subject of drain in a separate post. It is necessary to point out Marco's unfortunate reliance on a frankly unsound source.
Bibliography
Roy, T. (2015, October 3). Economic Legacy of Colonial Rule Revisited. Economic and Political Weekly, 50(40), 4.
Roy, T. (2016, September). The British Empire and the Economic Development of India (1858-1947). Revista de Historia Economica - Journal of Iberian and Latin American Economic History, 34(2), 28.
Roy, T. (2019). How British Rule Changed India’s Economy: The Paradox of the Raj. Palgrave Pivot.
