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The Economy of British India – with Angus Maddison

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Angus Maddison is a world-renowned economic historian who is famous for his work on estimating the past GDPs of modern economies by different measures. I won’t go much details into his original work, but the pieces he wrote about Indian subcontinent are worth-reading. In this post, I will try to delve into his assessment of British rule in India (read the Mughal one also). Just to remind you, I am an Indian and Angus Maddison is a British national – so a difference in narratives (bias?) could be present in my write-up.

The Elitist British

The biggest change the British made in the social structure was to replace the warlord aristocracy by an efficient bureaucracy and army. In the first generation, British tried to Westernize India – introduced English education, tried out a few Social efforts and tried to modernize infrastructure. But soon they changed their course. Having failed to Westernize India, the British established themselves as a separate ruling  caste. They did not inter-marry, their kids grew up in separate schools and they socialized with separate clubs where “native” population was absent. Maddison compares –

“The British ruled India in much the same way as the Roman consuls had ruled in Africa 2,000 years earlier, and were very conscious of the Roman paradigm.

One of the positive sides of the whole thing was that the British never tried to settle down in India and remained low in number. This resulted in low taxation but Maddison described that it benefited the middle class and land-lords but not the bottom-of-the-pyramid peasants.

“There were only 31,000 British in India in 1805 … In 1911, there were 164,000 British … In 1931, there were 168,000. … The British had inherited the Moghul tax system which provided a land revenue equal to 15 per cent of national income, but by the end of the colonial period land tax was only 1 per cent of national income and the total tax burden was only 6 per cent. … Most of the benefits of the lower fiscal burden were felt by landlords, and were not passed on to the mass of the population. In urban areas new classes emerged  under British rule, i.e. industrial capitalists and a new bourgeoisie of bureaucrats, lawyers, doctors, teachers and journalists whose social position was due to education and training rather than heredity. In the princely states, the remnants of the Moghul aristocracy continued their extravagances – large palaces, harems, hordes of retainers, miniature armies, ceremonial elephants, tiger hunts, and stables full of Rolls Royces.”

The System of Exploitation

The main aim of British exploitation was to remit money to Britain. Again, as per Maddison, there were two phases of it. The British East India company had nothing but a short-term-profit-maker attitude while the British Kingdom had a long-term-rent-seeking approach. For example, Robert Clive, the East India Company General took quarter of a million pounds for himself as well as a jagir worth £27,000 a year. (worth mention comment from Maddison – British did not pillage on the scale of Nadir Shah, who probably took as much from India in one year as the East India Company did in the twenty years following the battle of Plassey.)

Comparatively, later on, the remittances became more smooth and systematic –

“the Viceroy received £25,000 a year, and governors £10,000. The starting salary in the engineering service was £420 a year or about sixty times the average income of the Indian labour force … Under the rule of the East India Company, official transfers to the UK rose gradually until they reached about £3.5 million in 18566, the year before the mutiny. In addition, there were private remittances … By the 1930s these home charges (i.e. remittances) were in the range of £40 to £50 million a year …  (also) About a third of the private profit remittances should therefore be treated as the profits of colonialism. “

Moreover, the Govt of India, which always ran fiscal surplus over the British Kingdom, ran into debts due to spurious reasons. Further, during the World Wars, Govt of India “gifted” (joke!!?) millions of pounds from its reserves to the British Govt. Maddison describes –

“In spite of its constant favourable balance of trade, India acquired substantial debts. By 1939 foreign assets in India amounted to $2.8 billion, of which about $1.5 billion was government bonded debt … (during World Wars) there were two ‘voluntary’ war gifts to the UK amounting to £150 million ($730 million). India also contributed one-and-a-quarter million troops, which were financed from the Indian budget.”

 Where Maddison differs

Maddison differs quite a bit on the topic of Industry. He countered arguments of R.C. Dutt, R Palme Dutt and Nehru on de-industrialization (i.e. the decline of the old handicraft industry without the compensating advance of modern industry) of India with his set of facts. He accepted the facts that the Mughals did have a large industrial base and with British rule and policies it died. But added an important quote –

“Oversimplified explanations, which exaggerate the role of British commercial policy and ignore the role of changes in demand and technology, have been very common and have had some adverse impact on post-independence economic policy”

Maddison argued that the Mogul Indian industry were to produce luxury goods for aristocrats. But after British rule begun, the higher echelons of Indian society were flipped upside down. The British officers and native “copycat” Zaminders had little attraction on the traditional Indian handicrafts. Instead they developed taste of British merchandise. Furthermore, with social changes in Europe, there were a decline in demand of handicrafts overall (not only Indian but also other European ones as well).  Along with that, cheap and better quality textile from Britain occupied Indian market. Maddison agreed that the above incidents probably threw a lot of Indians out of job but he adds that the per-capita textile consumption doubled due to cheap British imports. He explains –

“the displacement effect on hand-loom weavers would have been smaller than at first appears. The hand-loom weavers who produced a third of output in 1940 would have been producing two-thirds if there had been no increase in per capita consumption.”

But he, in the end, agreed that India was the net loser on textile industry due to long term colonial effects –

“In time, India built up her own textile manufacturing industry which displaced British imports. India could probably have copied Lancashire’s technology more quickly if she had been allowed to impose a protective tariff in the way that was done in the USA and France in the first few decades of the nineteenth century, but the British imposed a policy of free trade. British imports entered India duty free, and when a small tariff was required for revenue purposes Lancashire pressure led to the imposition of a corresponding excise duty on Indian products to prevent them gaining a competitive advantage.  … If India had been politically independent, her tax structure would probably have been different. In the 1880s, Indian customs revenues were only 2.2 per cent of the trade turnover, i.e. the lowest ratio in any country. In Brazil, by contrast, import duties at that period were 21 per cent of trade turnover.”

So the fundamental issue was on the “free-trade” without preparedness but not the British policies.

In fact Maddison threw light into a few different aspects of Indian industries. Britain used India as their Asian export Hub and that resulted in Indian industrial gain.

“By the time of independence, large-scale factory industry in India employed less than 3 million people as compared with 12 1/4 million in small-scale industry and handicrafts, and a labour force of 160 million.56 This may appear meagre, but India’s per capita industrial output at independence was higher than elsewhere in Asia outside Japan, and more than half of India’s exports were manufactures.”

So, even though Indian industry was small, it was better off most of its Asian counterparts. However, the industry relied on mostly British skilled workers to fill in the upper ranks and that (along with protective policies) led to a demise of Indian industries post-Independence.


Overall, as per Maddison, British urban economy was better off the Moghul one. It was more productive, modern and focused on  entrepreneurship. On the other hand, the condition of villages worsened because of “extractive” Zaminders, population increase and reduced per-capita land availability. The book overall is a fascinating read and I will probably write up another post to follow up on my evaluations and criticisms of Angus Maddison.

The primary resource – Class Structure and Economic Growth: India & Pakistan since the Moghuls (1971) by Angus Maddison.


Written by Diganta

February 7, 2013 at 12:40 am

Dawkins in USA

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Ultimately Dawkins is in USA and I am not there. It’s so sad to hear that he’s not coming to Seattle. Anyway, best of luck for Dawkins and here’s the schedule of his tour :

Arizona State University 03/03

UC Berkley – 03/08

Stanford University – 03/09

University of Wisconsin – 03/11

Columbia and NY University – 03/15

University of Texas Austin – 03/19

I hope I will be able to post a few youtube videos from the conferences.

Written by Diganta

March 11, 2008 at 1:54 am

Dawkins’ interview on The God Delusion

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I am charmed once more by the latest interview by Richard Dawkins in promoting his book “The God Delusion”. He answered all three central points of the book. Here’s the abridged version of the same.

I think it’s an very important and interesting question since majority people believe in God though different in different parts of the world. I think it is a mistake. Historically it havs been very important to people. I expressied in the book that there is no supreme being and belief in such a being can under some circumstances become a bad thing.

One of the central points I make in the book is that the existence of God is a scientific question because there are people who says that there are nothing to do with science. I think it’s a scientific question because a Universe without a God is an entirely different kind of Universe that is without God. Universe without a God essentially starts from nothing and builds up to the sort of complexity at least we see at this planet by gradual degrees which we can understand reasonably well. The alternative view that there’s a God who designed the Universe is shatteringly different. Because, in that view a complexity, an intelligence or a design was there right from the beginning. The atheistic view is that the design, complexity or intelligence come late in the Universe as a consequence of slow and gradual process.

It is a preposterous suggestion that we need religion to become moral. If you think in that way you will see that there are two ways in which religion can feed into morality. One way is the holy books could tell us what to do. I believe anybody who’s read religious books will not say that because if we follow them to each and every line then we would simply start in a different moral standards from now on. The other way is that we are moral because we are frightened of God. We are moral because we want to go to heaven, we want to please God and we want to avoid going to hell. And that again is a pretty ignoble reason for being good. If I am good despite the fact that I don’t believe in God then isn’t that a more noble reason for being good than somebody who’s good only because he’s afraid of being punished by God.

Written by Diganta

February 14, 2008 at 11:24 am

Articles on Science and Religion by Einstein

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Any Scientific minded person who considers himself as a religious or an atheist, should read thses wonderful articles of Albert Einstein. These are, in a sense, an eye-opener to me, that how beautifully one could express the ways to reconcile religion and science. There are four master-pieces, all of them are worth reading at a stretch. I know there will be many religious people claiming that Einstein was a ‘deeply religious’, but what I found here, that he defined the religion in totally a different way to build himself as ‘deeply religious’. Let’s go through a few excellent quotes.

On how the religion has come :

“With primitive man it is above all fear that evokes religious notions – fear of hunger, wild beasts, sickness, death. Since at this stage of existence understanding of causal connections is usually poorly developed, the human mind creates illusory beings more or less analogous to itself on whose wills and actions these fearful happenings depend. Thus one tries to secure the favor of these beings by carrying out actions and offering sacrifices which, according to the tradition handed down from generation to generation … This, though not created, is in an important degree stabilized by the formation of a special priestly caste which sets itself up as a mediator between the people and the beings they fear …”

Problems in the above definition of religion and his own view :

“Common to all these types is the anthropomorphic character of their conception of God. … I shall call it cosmic religious feeling. It is very difficult to elucidate this feeling to anyone who is entirely without it, especially as there is no anthropomorphic conception of God corresponding to it.  … The individual feels the futility of human desires and aims and the sublimity and marvelous order which reveal themselves both in nature and in the world of thought. Individual existence impresses him as a sort of prison and he wants to experience the universe as a single significant whole. Buddhism, as we have learned especially from the wonderful writings of Schopenhauer, contains a much stronger element of this.

On morality :

“A man’s ethical behavior should be based effectually on sympathy, education, and social ties and needs; no religious basis is necessary. Man would indeed be in a poor way if he had to be restrained by fear of punishment and hopes of reward after death.”

In praise of religion (article 1 and 2):

“The highest principles for our aspirations and judgments are given to us in the Jewish-Christian religious tradition. If one were to take that goal out of its religious form and look merely at its purely human side, one might state it perhaps thus: free and responsible development of the individual, so that he may place his powers freely and gladly in the service of all mankind.”

Defining a religious person and religion (Article 3) :

“a person who is religiously enlightened appears to me to be one who has, to the best of his ability, liberated himself from the fetters of his selfish desires and is preoccupied with thoughts, feelings, and aspirations to which he clings because of their superpersonalvalue. … Religion, on the other hand, deals only with evaluations of human thought and action: it cannot justifiably speak of facts and relationships between facts.”

In support of Science :

“For example, a conflict arises when a religious community insists on the absolute truthfulness of all statements recorded in the Bible. This means an intervention on the part of religion into the sphere of science; this is where the struggle of the Church against the doctrines of Galileo and Darwin belongs.”

This is exactly where he sounds like an absolute Atheist :

“Nobody, certainly, will deny that the idea of the existence of an omnipotent, just, and omnibeneficent personal God is able to accord man solace, help, and guidance; also, by virtue of its simplicity it is accessible to the most undeveloped mind. But, on the other hand, there are decisive weaknesses attached to this idea in itself, which have been painfully felt since the beginning of history. That is, if this being is omnipotent, then every occurrence, including every human action, every human thought, and every human feeling and aspiration is also His work; how is it possible to think of holding men responsible for their deeds and thoughts before such an almighty Being? In giving out punishment and rewards He would to a certain extent be passing judgment on Himself. How can this be combined with the goodness and righteousness ascribed to Him?  … The main source of the present-day conflicts between the spheres of religion and of science lies in this concept of a personal God. “

How religions with ‘personal God’ will play around Science :

“To be sure, the doctrine of a personal God interfering with natural events could never be refuted, in the real sense, by science, for this doctrine can always take refuge in those domains in which scientific knowledge has not yet been able to set foot. “

A request to religious leaders to modify their approach to religion :

“In their struggle for the ethical good, teachers of religion must have the stature to give up the doctrine of a personal God, that is, give up that source of fear and hope which in the past placed such vast power in the hands of priests.”

Again restricting religion in the domain of idealism and attitude :

“As regards religion, on the other hand, one is generally agreed that it deals with goals and evaluations and, in general, with the emotional foundation of human thinking and acting, as far as these are not predetermined by the inalterable hereditary disposition of the human species. Religion is concerned with man’s attitude toward nature at large, with the establishing of ideals for the individual and communal life, and with mutual human relationship.”

On in-community brotherly love :

“For while religion prescribes brotherly love in the relations among the individuals and groups, the actual spectacle more resembles a battlefield than an orchestra. “

Overall, I feel the articles are really great. The gist is – Science and Religion are friends is they stay in their own ground. Science should not try to guide what is worthy and what is worthless, what we should do and what we should not. At the same time, Religion should not try to describe how the nature works, neither should it insist anything to be ‘created’ by God as a person. He condemned the idea of ‘religion of fear’, that is, the idea to tell people to be good only because some Omnipotent God will punish them otherwise after death. Overall, these come under one of the best read articles of my life time – they sound very strong.

Links once more.

Written by Diganta

July 31, 2007 at 8:52 am

How the Religion has Evolved

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I have written a new article in Mukto-mona on the roots of the religion. The article is basically adapted from The God Delusion – chapter 5 (The Roots of the Religion), where Dawkins discusses about the evolutionary roots of the religion. I liked this particular chapter the most while reading the book and I am happy to contribute something on this. I also added the comments of David Wilson on Group Selection since I did not want to put one sided view.

Mukto-mona is now unicoded. So, no need to download the pdfs for reading my article.

Next, I am writing on Creationism and how evolution is refuting all the claims by creationists. I am willing to cover ancient and modern day creation myths and show with analytical and experimental analysis of the same. I will update the blog once I am done.

Written by Diganta

July 16, 2007 at 7:54 am

Phantoms in the Brain

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Man is made by his belief. As he believes, so he is.” – Bhagavad Gita.

Have you ever heard of Bill Marshal, an ex-Air Force Pilot, who met a stroke and lost some of his brain functionality? Since then, his capability of dealing with numbers was lost. He could explain you the fighter planes and share his experience of flying with them. But once you ask him about what is the value of one hundred minus three, he fails to answer. Not only that he can’t deal with numbers at all.

Did you hear the story of Mirabelle Kumar, a cheerful young lady, who was born without her hands? But she used to feel the existence of her hands from her childhood. Philip Martinez, who lost his arm in a motorcycle accident in San-Diego freeway, feels pain in his non-existing elbow and fingers.

One might not even heard of Diane Fletcher, a lady who survived an accident from carbon-monoxide fumes, could not recognize or count any object – largest letters on an eye-chart or number of fingers shown. Literally, she was a blind – would have failed all standard tests of blindness. But, she could pick up things or walk or even place a letter in the letter box with dexterity – without any help or even without touching the slit of the letter box.

A more interesting case was that of Ingrid, a Swiss woman, who suffered a brain damage to lose the visibility of continuity of motion. She could perfectly read books or cook in the kitchen but if she looked at a person running, she could only have seen a succession of static snapshots of the continuous motion.

The history of James Thurber sounds more common to us. He lost one of his eyes at the age of six, and later lost the vision of the other eye in a gradual process. At the time he became blind, he claimed that he could see a fantastic world full of surrealistic images. He could see bridges rise lazily into air, like balloons. He used his ‘vision’ creatively and drew a lot of whimsical cartoons and pictures, those became very popular.

There is a story of one-hand clapping also. Mrs. Dodds, who was paralyzed on her left side of the body after a stroke, knew that it was working very well. When she was asked to clap, she just made clapping movement with her right hand and was confident of her action.

Last, but not the least, the amazing story of Arthur, the son of a diplomat from Venezuela, who met a near-fatal accident and went to coma. Once he’s back from coma, he could recall all the past and seemed to be normal with respect to outward appearances. But he had one credible delusion about his parents – that they were imposters, posing as his parents – and nothing could convince him. He even recognized the facial similarity with his ‘actual’ parents, but never agreed that they are his parents – even he conjured up some imaginary reasons as justification as why would they pose as his parent.

All these and much more are the topics in the book I am going through – Phantoms in the Brain by V. S. Ramachandran, an eminent neuroscientist. He explains all these cases in depth without using much of jargons in Neuroscience. He starts with an assumption of our brain as a set of black boxes and then gradually goes onto describe each one’s functionality and how they interact with each other and the limbs. More importantly, other than the above mentioned and many more case studies, he devises a few simple experiments those let us understand his point of view properly. In one of his later chapters, he explains the relationship between our brain and the image of God from the angle of Neuroscience as well as Evolutionary Psychology. In his concluding chapter, he deals with the apparent philosophical question – what is a self and what is consciousness – and how these are closely linked with our brain.

The book I would recommend for the readers who like to explore new fields and want to know about a vaguely understood area of science – neuroscience. As a deeply scientific-minded reader, I enjoyed the book from beginning to the end. It gives me the feel that how correct Newton was when he said :”I seem to have been only like a boy playing on the seashore, and diverting myself in now and then finding a smoother pebble or a prettier shell than ordinary, whilst the great ocean of truth lay all undiscovered before me.

Written by Diganta

July 6, 2007 at 8:16 pm

My Bengali Article on Dawkins’ Letter

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My third bengali article also got published at Mukto-Mona yesterday. The topic was the Dawkins’ letter to his daughter, that I have discussed previously. There are a few good Bengali Articles present in the same site. I would recommend one to read Avijit Roy’s “Amader Kajer Swikriti” (Recognition of our work), that covers a brief history of atheism along with a history of struggles those Mukto-mona had gone through. The context of the article is the receipt of Jahanara Imam Memorial award, that is given for encouraging free thinking in society. Congatulations to Mukto-mona!!

Coming back to the article, I tried to change the context of the letter so that it becomes acceptable to the public in general, especially to the people of South Asia. I have mentioned the examples (castes and dogmas) to suit South Asian readers.

My next assignment is foing to be a translation of one of my all time favourites – The God Delusion. The first chapter of the same book has already been translated and kept in the mukto-mona site. I am trusted with the translation of at least one chapter from the same. I am planning to take the same route – replace the original examples with the South Asian ones. Given that a Bengali reader is going to be most probably from this region, it’s my responsibility to make the translation smooth to him. An overdose of references to the Catholic Church and their activities might not get a warm welcome from people here.

Once I am done, I will definitely come up with the same in my blog.

Written by Diganta

July 4, 2007 at 5:19 am

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