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The Alleged $45 Trillion Theft

I've spent half a century (yikes) writing for radio and print—mostly print. I hope to be still tapping the keys as I take my last breath.

Utsa Patnaik is an Indian economist. In 2018, she caused quite a stir when Columbia University Press published her essay in which she alleged that Britain drained the equivalent of $45 trillion from India while it was under colonial government.

Ms. Patnaik approaches economics from a Marxist viewpoint so she is not likely see anything positive about capitalism. In the same way, a red meat capitalist will dismiss her work as biased propaganda. As usual, the truth may lie somewhere between the two extremes.

King George V and his wife Queen Mary (deferentially a step behind the monarch) in India in 1912. No doubt the Indian people were greatly impressed.

King George V and his wife Queen Mary (deferentially a step behind the monarch) in India in 1912. No doubt the Indian people were greatly impressed.

India Under British Rule

The story of British rule begins with the East India Company (EIC). In 1600, the British Crown granted the company exclusive rights to trade in Asia, although there was nothing in international law that conferred such powers on English monarchs.

Legal niceties did not concern the company's directors; there was wealth to be made from trading. The East India Company maintained its own military forces so might became right.

Writing for The Guardian, William Dalrymple comments that “We still talk about the British conquering India, but that phrase disguises a more sinister reality. It was not the British government that seized India at the end of the 18th century, but a dangerously unregulated private company headquartered in one small office, five windows wide, in London, and managed in India by an unstable sociopath—[Robert] Clive.”

The EIC broke treaties, cheated traders, stole land, and plundered the country of thousands of priceless artifacts. As Dalrymple notes, “It almost certainly remains the supreme act of corporate violence in world history.”

In 1857, the Indian Army mutinied. The fighting and the chaos surrounding it led to the dissolution of the East India Company whose rule was replaced by the British government. Queen Victoria was given the title of Empress of India although about half the sub-continent remained under the rule rajahs, nawabs, and princes. The system was often referred to as the British Raj.

The East India Company made a lot of money out of the opium trade causing impoverishment among the Indian farmers who grew poppies and death among the Chinese consumers.

The East India Company made a lot of money out of the opium trade causing impoverishment among the Indian farmers who grew poppies and death among the Chinese consumers.

A Massive Robbery?

“There is a story that is commonly told in Britain that the colonisation of India—as horrible as it may have been—was not of any major economic benefit to Britain itself. If anything, the administration of India was a cost to Britain. So the fact that the empire was sustained for so long—the story goes—was a gesture of Britain’s benevolence.”

This quote currently appears in dozens of places on the internet as an introduction to analyses of Utsa Patnaik's claim that Britain robbed India of a vast fortune. Britain governed India under capitalist principles, so if benign intent motivated the Raj this would be the first, and so far only, occasion on which capitalism put the public good ahead of profit.

Dr. Jason Hickel is an economic anthropologist at the University of London. In an article for Al Jazeera he explains that the East India Company began levying taxes on Indian people. Then they used about a third of the tax revenue to buy goods for British use. “In other words,” writes Hickel, “instead of paying for Indian goods out of their own pocket, British traders acquired them for free, 'buying' from peasants and weavers using money that had just been taken from them.”

“India's share of the world economy when Britain arrived on it's shores was 23 percent, by the time the British left it was down to below four percent. Why? Simply because India had been governed for the benefit of Britain.”

Former Member of the Indian Parliament, Shashi Tharoor.

Even after the EIC was removed from the commerce, the colonial administrators found a way of channelling payments for sales made by Indians through London. Through complex exchanges, Indian manufacturers were still paid with money collected from Indians in taxes. It was the same system as that of the EIC, just not quite so blatant.

According to Professor Hickel “This corrupt system meant that even while India was running an impressive trade surplus with the rest of the world—a surplus that lasted for three decades in the early 20th century—it showed up as a deficit in the national accounts because the real income from India’s exports was appropriated in its entirety by Britain.”

Professor Patnaik poured over accounts, documents, and balance sheets to calculate the amount of money she believes India was cheated out of. Adjusted for inflation she says the total adds up to $44.6 trillion, and she says this is a conservative estimate.

The Positive View of Empire

The narrative in British establishment circles is different. In February 2013, then-British Prime Minister David Cameron (Conservative) was on a trip to India and he was asked what he thought about his country's treatment of India. He replied by saying “I think there’s an enormous amount to be proud of in what the British Empire did and was responsible for, but of course there were bad events as well as good events.”

Former Conservative Party cabinet minister Liam Fox opined in 2016 that “The United Kingdom, is one of the few countries in the European Union that does not need to bury its 20th century history.”

This view is echoed in the wider British public. The polling group YouGov quizzed Brits on their nostalgic view of the Empire: “By three to one, British people think the British Empire is something to be proud of rather than ashamed of—they also tend to think it left its colonies better off, and a third would like it to still exist.”

As a product of a British education in the 1950s, the writer fully understands those sentiments. World maps in classrooms showed the British Empire coloured in red marching across the globe. The story from the teachers and textbooks was that the Empire was a force for good, spreading democracy, education, and good governance to the Indigenous peoples of the world. No mention was made of economic exploitation and suppression of local customs.

So, it comes as no surprise that British people have a positive impression of the country's colonialist past. However, a more balanced perspective needs to be developed and an acknowledgement made of what Shashi Tharoor calls “oppression.”

Bonus Factoids

  • While Britain allegedly made off with much of India's wealth it also lifted some of its language; “loot” is a Hindi word meaning “plunder.”
  • There are more Indian restaurants in London, England than there are in New Delhi or Mumbai.
  • At the 1928 Olympics in Amsterdam, the Indian field hockey team was so good that the British team withdrew from the competition to avoid what they saw might be an embarrassing defeat at the hands of a colony.
  • The Koh-i-Noor, at 108.9 carats, is one of the world's largest diamonds. In 1849, the British defeated the Sikhs in a war and part of the peace treaty required that the Maharajah of Lahore “surrender” the Koh-i-Noor diamond to the Queen of England. The British interpret the word “surrender” to mean “gifted,” to most Indians the word means “stolen.” The diamond, with an estimated value of $200 million, is part of the British Crown Jewels and is mounted on The Queen Mother's Crown.
The Koh-i-Noor diamond on the front is one of 2,800 other diamonds on the Queen Mother's Crown.

The Koh-i-Noor diamond on the front is one of 2,800 other diamonds on the Queen Mother's Crown.

Sources

  • “The East India Company: The Original Corporate Raiders.” William Dalrymple, The Guardian, March 4, 2015.
  • “British India to 1857: The Rise and Fall of the East India Company.” Tom Williams, English Historical Fiction Authors, October 1, 2013.
  • “How Britain Stole $45 Trillion from India.” Jason Hickel, Al Jazeera, December 19, 2018.
  • “Press Briefing Given by Prime Minister David Cameron in Amritsar.” U.K. Government, February 21, 2013.
  • “The Great Loot: How Britain Stole $45 Trillion from India.” Aroonim Bhuyan and Capt. Krishnan Sharma, India Post News Service, October 30, 2019.
  • “The British Empire Is 'Something to Be Proud of.' ” Will Dahlgreen, YouGov, July 26, 2014.

This content is accurate and true to the best of the author’s knowledge and is not meant to substitute for formal and individualized advice from a qualified professional.

© 2021 Rupert Taylor

Comments

Miebakagh Fiberesima from Port Harcourt, Rivers State, NIGERIA. on July 15, 2021:

Rupert, it's the government of the day that is held responsible. Be at peace.

Rupert Taylor (author) from Waterloo, Ontario, Canada on July 15, 2021:

Miebakagh - I was taught in school in England that the British Empire did nothing but good in the world. Later in life I have learned that it was cover for the plundering of resources everywhere.

I was not personally responsible for any of the brigandage but it troubles me that I come from a race of people who committed many atrocities in the name of bringing "civilization to backward peoples."

Miebakagh Fiberesima from Port Harcourt, Rivers State, NIGERIA. on July 15, 2021:

Actually, British rule in India, is like any of her rule in all her other cnlonies. For instance, in Nigeria, Britain also found a ready market. Her Royal Niger Company along with the African Technical Company exploit the country more than anything else in carting away forest products. And then converting these raw materials into consumeable goods for sale to the locals at high prices. In all these, Britain just stole the land and her people.

Peggy Woods from Houston, Texas on July 15, 2021:

Thanks for this informative article regarding British rule over India. I enjoyed learning new (to me) facts.

Miebakagh Fiberesima from Port Harcourt, Rivers State, NIGERIA. on July 14, 2021:

Rupert, in trading or business, people or country that hold the ace will always cheat. Since the law was favouring the big corporation at the initial stage, it's those who have no knowledge that pays. But time comes when the table is turn upside down. The loot of the Koh-i-...diamond is unfortunate, but understandable. The article is informative and interesting. Thanks.

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