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Measuring Colonial Extraction: The East India Company’s Rule and the Drain of Wealth (1757-1858)

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  • Nogues-Marco, Pilar

Abstract

This paper revisits the relationship between capitalism and colonialism by examining the case of British India under East India Company rule (1757-1858). The Marxist-nationalist historiography claims that colonialism generated a steady drain of wealth and that this drain was responsible for Indian famines, poverty, inequality, and economic retardation. I use the East India Company budgets to measure the extent of the wealth that was drained through three direct channels: oppressive land taxes, unproductive expenditures on the imperial army and civil administration, and the unrequited export of commodities from India to Britain. I conclude that available figures lend empirical support to the Marxist interpretation. There was a drain of wealth, and its effect on the underdevelopment of former European colonies deserves further research.

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  • Nogues-Marco, Pilar, 2020. "Measuring Colonial Extraction: The East India Company’s Rule and the Drain of Wealth (1757-1858)," CEPR Discussion Papers 15431, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:15431
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    References listed on IDEAS

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    More about this item

    Keywords

    India; Colonialism; Drain of wealth; East india company; Marxism;
    All these keywords.

    JEL classification:

    • B14 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925 - - - Socialist; Marxist
    • F54 - International Economics - - International Relations, National Security, and International Political Economy - - - Colonialism; Imperialism; Postcolonialism
    • N45 - Economic History - - Government, War, Law, International Relations, and Regulation - - - Asia including Middle East

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