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

Pilar Nogues-Marco

No 15431, CEPR Discussion Papers from C.E.P.R. Discussion Papers

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.

Keywords: India; Colonialism; Drain of wealth; East india company; Marxism (search for similar items in EconPapers)
JEL-codes: B14 F54 N45 (search for similar items in EconPapers)
Date: 2020-11
New Economics Papers: this item is included in nep-his and nep-pke
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