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Monday, April 8, 2013

The bitter truth of Indian economic history


The new Indian express carried an interesting article on its Saturday edition dated April 6th 2013. The article was titled “Boss, read the true history before speaking”, and was penned by S Gurumurty, an eminent columnist and commentator on political and economic issues. In his passionate or rather jingoistic analysis of Indian and world economic history, Gurumurthy concludes “Hindu rate of growth had made India super power. Colonialism did India down to poverty. Nehruvian socialism made it stagnate even after freedom”.

Gurumurthy quotes three interesting  figures  that would astonish any Indian ; first, the findings of a Belgian Economist Paul Bairoch, “in 1750 India’s share of world GDP was 24.5 per cent, China’s 33 per cent, but the combined share of Britain and the US was just two per cent”, “in middle 19th century, the West had a lower standard of living than Asians”, “India’s share fell to 20 per cent in 1800; to 18 per cent in 1830; and finally crashed to 1.7 per cent in 1900, while China’s crashed to 6.2 per cent from 33 per cent. In these 150 years, the combined share of Britain and the US rose to from 2 per cent to over 41 per cent” . Second, findings of economic historian, Angus Maddisson, “India was the leading economic power of the world from the 1st year of the first millennium till 1700 - with 32 per cent share of world’s GDP in the first 1000 years and 28 per cent to 24 per cent in the second millennium till 1700”. Third, a study conducted by Jamia Milia Islamia University, “two thousand years ago India was bankrupting Roman Egypt of its gold reserves by its export surplus”, “Indian merchant navy had a fleet strength of 40,000 ships in Akbar’s time and as many as 34,000 ships before the British arrived”, “between 1493 and 1930 India absorbed 14 per cent of world gold production”.

The facts presented are quite informative; the economic history of India seems rosier than the political one. The figures presented may be correct or reasonably unchallengeable, but has some inconsistencies and anomalies. Continuing with Prof.Sen’s, Indian tradition of arguments, some arguments are made here contradicting Gurumurthy. The arguments include various factors like geographical spread, forced labor, population, distribution of wealth and the role of religion in economic development.

India as a nation is the creation of the British; for most part of its history, stretching over a period of two thousand years, India remained a subcontinent of many independent nation states. Indian history has passed through many a phases; each phase had diverse official religions, languages and borders. Accordingly the country could be referred as Bharath, Hindustan, Indica and India. Bharath, the land of the ancients stretched until modern Afghanistan. It could be evidenced from Mahabharata that, Gandhar or modern Kandahar was a Hindu state; the Bamiyan Buddha was a part of Bharath. For until twelfth century South Asia was India. With ever increasing Islamic raids from the North West, most part north India was an annexed to Afghanistan, barring some southern lands Hindustan constituted South Asia and Afghanistan. India, Bangladesh and Pakistan were integral parts of Indica Britannia.

Ancient India was colonized by many foreigners, foreign religion was imposed on her people nevertheless the majority remained Hindus. Hinduism, a word of Arabic roots is neither a religion of the Book (Bible or Quran) nor a religion of the Prophets. Though written records like Vedas, Upanishads, Shastras and Sutras do exist and are considered divine, they play minimum or no role in practice of Hindu religion. The authors of most of these texts are unknown and are considered to be written record of ancient knowledge and society. The official constitution of the Aryans/Hindus, the Manushastra, created a rigid hierarchical society. A vast majority of manual labor was kept in the lower strata of society under the servitude of a small minority, which had the religious rights to amass wealth. The system encouraged labor exploitation and sustained the exponential growth of the wealthy few. The Mughal rulers never challenged the ways and practices of the Hindu agrarian society; rather they imitated the Hindu practices along with slavery. The remnant of this system still prevails in Pakistan. The feudal system of Zamindars resulted in  exploitation of labor in India. Concurrently, Chinese dynasties ruled over their lands with iron fists, Slavery and forced labor. Exploitation of the citizenry was rampant in ancient china. The Chinese wall was built with bones and blood of the enslaved citizenry. Slaves were sacrificed upon the demise of their masters; upon on their deaths, the cruel emperors took all their slaves with them to the next world.   

The wealth generated by cheap labor of Asia was amassed by a few aristocratic feudals ; the wealth generated had no public expenditure. The assets were deployed only for the construction of luxurious palaces, forts of harems and religious institutions. Knowledge was the preserve of the few, no educational institute were established. A Nalanda and Taxila were more or  less Buddhist Sangas . In summary the rich remained rich and the poor remained poor with in rigid lines, a middle class never existed in ancient days.
Another important anomaly in the analysis is the, world population. Until the fourteenth century the known world excluded the Americas and Australia. It’s doubtful whether the aboriginals were ever considered as members of the civilized world. The world population at the time of Christ was 170 million and increased to 750 million by 1750, a 220% increase in 17.5 centuries. On the hand the world population figure of 2012 was 7 billion, a 460% percent increase in 2.5 centuries.

Madison’s Analysis of Asia can never be claimed as an achievement of modern India or China. Maddisson’s India analysis, in strict sense considered whole of South Asia and Afghanistan. Ancient Asia had an Institutionalized system of free or forced labor; exploitation of a large majority by the Aristocratic minority was the order of the day, the region never had a welfare state model of governance. The world had a small population and that magnified Asia’s contribution to the world economy. Bairoch’s research era not only coincides with colonialism and Imperialism, but also with Industrial revolution. Hindustan missed the Industrial age, her 30,000 odd ships never sailed on the high seas, and her vessels never forayed on any adventure nor discovered any new lands. A decrease in India share in world economy during this period could be accredited to her illiteracy and her ignorance of Industrialization. The British reformed the Land Revenue and Governance system. Establishment of three universities was the one of first acts the Raj. These universities produced the native Judges, Lawyers, Civil Servants, Reformers and all our revered Freedom fighters.  Nehru strengthened and nurtured the roots of democracy in India; unlike Pakistan, a security state, Nehru created a welfare state. Democracy coupled with Liberalism saw a decent distribution of wealth among the Indian masses.

Religion may not be a contributing factor in economic development in a Modern Liberal economy, but religion does influence the society and economic development depends on society. Religion imposes many a mundane rules which most often conflicts business or entrepreneurial interest. However credit for economic success or censure for its failure can be attributed to religion only in a mono-religious society not in multi-religious secular society like India. A Hindu rate of growth is a sham one; a notional figure to which no pride or humility should be attributed to.

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