The deindustrialisation of India by the British and the myth of a stagnant Pre-Industrial society by u/RajaRajaC

I have often observed this ( a popular opinion, both on Reddit and on other forms of social media) that the British colonialism lead to the Industrial revolution in India and,

  • There was this sudden period of enlightenment and scientific progress

This theory, while logical, is simplistic in the extreme and precludes a lot of factors, some of which I will touch upon in brief.

  • Technological Advancements — Despite what the narrative states, for nearly 2,000 years, the cotton producing countries, chief amongst these being India, were at the cutting edge of innovating and refining cotton growing, refining and production techniques. This tech from India flowed both East & West (China and the Islamic countries) from whence on it flowed to Europe by the 16th century. Venice took a lot of the techniques from the Islamic Empires, and set up the first Cotton manufacturing units sometime in the 16th century. Yet, the demand for European cottons paled in front of the vastly more refined, superior quality Indian cottons and this was to be the case till the early 1800’s. Quite a few key innovations, right from domesticating wild cotton to the Cotton Gin (discovered as early as 500 AD), though we attribute this almost entirely to Eli Whitney (he did mechanise the Gin) to horizontal looms which vastly increased the output of the loom all were invented in India and over time diffused around the world. It is important to note that you had centres of production in South America, West Africa and India running parallely (but isolated from one another), but the quality and quantity of Indian cotton exports was far ahead of the smaller production outputs of South American and African cotton.

Things all started to change in the 17th century. What changed?

  • The colonial powers had by now gained access to cotton growing regions in the Americas. This enabled them to start procuring raw cotton and setting up their own nascent manufacturing industries.

The policy of Import and Export substitution (reversing the process of importing finished goods to importing raw material at cheap rates thanks to controlling the sources of production and exporting finished products to a captive market — chiefly India) was now paying off.

How did the Colonial Powers, chiefly the British pull this off?

Simple, through a process called War Capitalism, starting the 15th century and ending in the mid 17th century, these powers gained access to the three levers of production — Labour, Land and Credit.

Now interestingly, the great “enlightenment” which was basically a society based on laws which is held as a cornerstone of the development of the modern European states was only for the “inside” — that is, only for the mother countries. Those on the “outside”- that is, the occupied powers, there was no rule of law and this is exemplified by how the slave trade worked.

One of the three pillars as I have mentioned was labour. Now, labour was exceedingly expensive in the Colonial countries, and hence they turned to slave labour to produce the raw cotton needed to churn the giant factories. The payment for the slaves was made in…Indian cotton, and at the height of the slave trade (when an estimated 3–4 million of slaves were being traded), it was not money, but Indian cotton exports into Europe that was acting as the global currency to procure said slaves, who were then shipped across to the Americas where they were then worked, quite literally to the death to increase cotton output to feed the factories back in the mother countries, who then used this competitive advantage (and the tariffs and regulatory system to choke Indian Cotton) to slowly overwhelm the native Indian system of manufacturing.

  • This also brought in great socio economic changes. The Indian producer, for millenia held great control on the levers of production (a Marxian dream), he decided who to sell to, at what rates and the volumes he sold. By 1800 though, British East India Company agents were overwhelming this system with brute force, including setting up of monitors in production centres (a loose slave labour type system) and took away the power of the Indian producer. By 1820, the Indian cotton centres, and consequently the earning potential of the labour had collapsed entirely.

As you can see above, the root of the “industrial revolution” and the great divergence lay not in some scientific superiority and human enlightenment, but on sheer repression — tariffs, gunboat diplomacy , cutting access to markets and creating artificial scarcity, slave labour that powered the giant cotton farms and finally outright colonial exploitation. Sure, great advances were made in the mid 1800’s in manufacturing tech, but even till 1800 (when the “revolution” was supposedly well underway) the European nations could not even compete, nay even touch Indian Cotton production in any aspect and needed huge state intervention and slavery to even begin to compete.

I would also wish to touch upon the hoary old “what about the railways” argument and prove that the railways were built at a prohibitive cost and were seen as a solid moneyspinner for investors from Britain.

This worked almost like a protection racket — the British Imperial Govt attracted capital by offering a fixed return of 5% (sometimes more) on the funds invested. Now, when the Govt fell short of funds to pay back the investors (as they often did), the money was still paid back, but from Indian taxes, not from the Railway companies. By 1870, a good 20% of the British bourses came from railway infra shares.

It is also interesting to note that the cost of the railway construction was twice that of what it cost to build them in Canada or Australia (given the same terrain).

It is interesting to note some of the observations from that period,

The guarantee system has not served any purpose whatsoever, the undertakers of the railway are deprived of one of the greatest inducements of to economy, they know that whatever blunders they make, those blunders will not prevent their getting full interest on their expenditure.

  • William Thornton.

All the money came from British Capitalists and so long as he was guaranteed five percent of the revenues it was immaterial to him if the funds he lent were thrown into the Hoogly or converted into brick and mortar.

  • William Masey, Finance Minister of the Raj. He also was the one who felt that the costs were exorbitant and twice that of what it would cost to make elsewhere.

A commission report submitted to the House of Commons in 1872 established the following costs per mile,

  • India 18,000 pounds per mile,

Now throw in the fact that all the equipment was imported from Britain (at a ruinous cost) and really, one begins to wonder, was the one supposed benefit of British rule even a benefit or was it just outright robbery under the guise of legitimate investments.

Some of my key sources are,

Steven Beckert’s Empire of Cotton.

Eric Hobsbam’s ‘Age of” trilogy,

http://www.iisg.nl/hpw/papers/broadberry-gupta.pdf for the data,

Traditional Industry in Colonial India by Tirthankar Roy,

Foreign Trade and Commerce in Ancient India by P C Prasad,

Source : https://www.reddit.com/r/IndiaSpeaks/comments/aclayv/the_deindustrialisation_of_india_by_the_british/

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