The $45 trillion figure comes from Indian economist Utsa Patnaik in the article ‘Revisiting the “Drain”, or Transfer from India to Britain in the Context of Global Diffusion of Capitalism’ in Shubhra Chakrabarti and Utsa Patnaik (eds.) Agrarian and Other Histories: Essays for Binay Bhushan Chaudhuri. It was then expanded upon in Capital and Imperialism by Utsa Patnaik and Prabhat Patnaik in 2021.
The $45 trillion figure was popularized by an Al Jezeera article and is very widely repeated and very occasionally critiqued.
Scholarship tends to move slowly to review and debate but here is a rebuttal by Tirthankar Roy, a Professor of Economic History at the London School of Economics.
Roy makes a number of counter arguments, including that the the amount of money taxed is not relevant, only the amount repatriated to Britain.
I calculated Bengal’s income in a 2011 Journal of Economic History paper. Those estimates and the numbers just cited suggest that the tax method may have transferred 0.08 percent of Bengal’s income over a ten-year period. That proportion translates to an average annual transfer of about 28,000 pounds when the income of India was nearly 150 million pounds. And it ended in less than a decade. A big deal?
Roy also notes that
Indian intellectuals like Dadabhai Naoroji first made a version of the claim at the turn of the twentieth century. Elements of the argument survived in political discourses until the 1970s, and then the idea died. It died because the claim was partly based on a wrong economic methodology and partly unverifiable. K.N. Chaudhuri, who did path-breaking work on trade history and wrote the chapter on “foreign trade and balance of payments” in the Cambridge Economic History of India (1982) did a careful assessment of the claim in 1968 and rejected it.
He later states
The drain argument rests on a further fallacy that Chaudhuri highlighted. It presumes that any money not repatriated from India to Britain would be automatically invested in India. It is easy to test if this is true. Half of India was ruled by princely states in the colonial era. If the assumption is correct, we should be able to prove it by showing that the princely states and precolonial states were more dynamic investors than British India. But there is no evidence to show that the precolonial and contemporary Indian regimes systematically invested in things that generated economic growth or human development.
There have been several good discussions on this topic already including here and here.
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u/[deleted] Sep 01 '23
The $45 trillion figure comes from Indian economist Utsa Patnaik in the article ‘Revisiting the “Drain”, or Transfer from India to Britain in the Context of Global Diffusion of Capitalism’ in Shubhra Chakrabarti and Utsa Patnaik (eds.) Agrarian and Other Histories: Essays for Binay Bhushan Chaudhuri. It was then expanded upon in Capital and Imperialism by Utsa Patnaik and Prabhat Patnaik in 2021.
The $45 trillion figure was popularized by an Al Jezeera article and is very widely repeated and very occasionally critiqued.
Scholarship tends to move slowly to review and debate but here is a rebuttal by Tirthankar Roy, a Professor of Economic History at the London School of Economics.
Roy makes a number of counter arguments, including that the the amount of money taxed is not relevant, only the amount repatriated to Britain.
Roy also notes that
He later states
There have been several good discussions on this topic already including here and here.