India and the World Economy, 1850-1950 (review)

This opus edited by Balachandran is a part of the Oxford University Press series Debates in Indian History and Society. The general editors of this series are Sabyasachi Bhattacharya, B. D. Chattopadhyaya, and Richard M. Eaton. This book, as its title indicates, deals with the problem of situating India in the world economy during the period 1850–1950. This was a period of political and economic transformations and transitions both in India in particular and the world in general. The work consists of significant and interesting papers by G. Balachandran, K. N. Chaudhuri, John Mclane, Amiya K. Bagchi, and others. The major concern of this book is regarding India's interactions with the world economy, and the ways in which that economy was transformed during the nineteenth and early twentieth centuries. It was the great questioning of this process that led to the Indian intelligentsia's critical appraisal of British rule.

This process also had an impact on historiography of colonialism. The work deals with India's subsidiary colonial standing and the construction and ordering of a set of markets, institutions, relations, and ideas that constituted what is called the world economy. The most important contribution of this work is the questioning and investigation of preconceived notions regarding, for example, the drain theory, which is central to the theme of critique of British colonialism. However, another point of view of the "drain" argues that British colonial rule led to the sacrifice of Britain's finest and brightest young men for lifelong service in a faraway colony.

In the middle of the nineteenth century there were well developed local, regional, and Asian trade networks. There is a discussion regarding the depreciation of silver and its impact on the Indian economy. It is argued that the depreciation of currency had some encouraging impact on the economy of the region. In fact, the depreciating rupee benefited Indian manufacturers and exporters. At the same time, it hurt Lancashire cotton manufacturers, English wheat farmers, and English civil servants in India. Thus, one should not lose sight of other side of the coin or, in other words, the impact of changes in the Indian economy on Britain.

K. N. Chaudhuri questions the very concept of drain. He attempted a survey of India's nineteenth-century external economy from a global perspective. Chaudhuri contends that scholars of the Indian economy exhibit a lack of understanding regarding the terminology of international trade theory. He reviews some recognized notions of India's nineteenth-century external economy and suggests some alternative lines of investigation.

Essays by John Mclane and Sunanda Sen also deal with the problem of drain. Mclane points out that in no other country in the world were civil servants paid so liberally. The main thesis of Sunanda Sen is that expropriation and transfer of surplus in an empire-colony set-up was an ongoing process.

Another aspect discussed by the scholars is India's experience as an open economy. Amiya Bagchi's essay entitled "The Great Depression (1873–96) and the Third World with Special Reference to India" deals with interactions between the late nineteenth-century world economy and colonial economy. Bagchi shows that during this period, the silver-using countries had to bear an increasing burden in terms of foreign exchange. Omkar Goswami in his essay, "Agriculture in Slump: The Peasant Economy of East and North Bengal in the 1930s," studies the impact of the Great Depression on the peasant jute economy. B. R. Tomlinson in his contribution, "Britain and the Indian Currency Crisis, 1930–2," discusses India's currency crisis in the interwar depression.

The book also deals with nineteenth-century India's external economic links with the world economy. G. Balachandran argues that understanding empire involves placing it in the context of the greater world economy. This work dealing with old arguments and new data and perspectives is a welcome addition to the study of India during the colonial era...