(Online Course) GS Concepts : Mordern Indian History - Economic Nationalism

Topic: Economic Nationalism

Question :   Discuss in brief the economic Nationalism?

Answer :

The economic criticism of colonialism is one of the most important lines of thought in the history of Indian freedom movement. The Indian freedom movement did not start as an anti-colonial movement. It was through the development of the economic critique of colonial policies that the true exploitative nature of British colonialism was discovered and gradually this criticism evolved into political criticism of the British.

Main Proponents of Economic Nationalism- The leaders who developed this economic criticism were known as the moderates and are also popularly clubbed as the economic nationalists - Dadabhai Naoroji the Grand Old Man of India wrote (1867) Poverty and Un-British Rule in India; and he is also known as the ‘high priest’ of the drain theory; Justice Mahadev Govind Ranade; Romesh Chandra Dutt wrote ‘Economic History of India’s (1901) G.V. Joshi; G. Subramanya Iyer; G.K. Gokhale; Prithwis Chandra Ray; R.C. Dutt wrote Indian Today.

These early leaders, who were in essence intellectuals of India, were from the sections of the society that had benefited from western education, and the job opportunities thrown up by the colonial rule, law, Indian Civil Services, doctors, and so on. They in fact had an implicit faith in the goodness and practicality of the British Government. They believed that the colonial government would help India on her path to modernisation along the lines of Britain in all spheres of economy. This does not imply that they were blind to the negative aspects of being under the rule of a foreign government. They simply believed that India was yet not ready to stand on her own legs and needed British rule which would guide and develop India.

The place of Dadabhai Naoroji is unique in that he was a businessman and a publicist settled in England. The early leaders-intellectuals were deeply influenced by Naoroji and they all came to know each other during the 1860s and 1870s while they were either studying for ICS or law. They sought to make the British Indian government aware of the true economic conditions of India and suggest changes to the government which Would work as the framework for India s development but under the aegis of the British. The early leaders were primarily concerned with fostering better understanding of the Indian situation amongst the British so as to help them in governing India better. However, deeper they studied they observed that the positive steps in the direction of building Indian economy were too slow and too mild and that Indian economy was in reality under-developing and regressing. The lack of economic development was evident in the frequency of famines and the widespread poverty.

Naorojis paper ‘The Poverty and Un-British Rule’ in India printed in 1867 was one of the most important books in the literature of economic nationalism. The book made a case that the policies of colonial Government were destructive and despotic to the Indians and UN-British and suicidal to Britain. On the other hand, a truly British course could and would certainly be vastly beneficial both to Britain and India and that the British were falling short of applying the nobler British ideals in India. The truly British course was to transform India’s-economy and develop it along the lines of modernisation. The economic nationalist praised and acknowledged the non-material consequences of the British rule-liberation from superstition, and education, etc but as far as the material consequences were concerned British had a lot to fulfill. The debates led to questioning of the moral basis of British rule in India. It was advocated that a government could enjoy a long political rule only as long as it enjoyed the confidence of the people in the morality of the state and failure to do so was suicidal to the continuation of British rule. And this confidence exists when people believe that the state is responsible, in a constructive way, for the welfare of the people. It was accepted that the British rule had done much good for India but the economic nationalists opined the British were not fulfilling their moral responsibility. The school of thought that emerged from the writings of these figures is called ‘Economic Nationalism’.

Due to the efforts of the economic nationalists poverty became the central theme of critique. They asserted that India was poor not because poverty was inherent and natural to India nor was it inherited from the past but that it was recent; and in fact, the result of the colonial policies. India which was in essence a manufacturing industry was transformed into a raw-material producing industry by the colonial economic policies.

The economic nationalists made popular the notion that the interest of British imperialism lay in keeping the economy of India subordinate to that of the British. They discovered that exploitation of India took place not through the simpler forms of outright plunder but by more disguised forms like- foreign investment, discriminatory protective tariffs, free trade and so on. For them India’s poverty exemplified the lack of national development. According to RC. Dutt if the taxes paid by the Indians are spent within the country then the money would circulate within her boundary and give boost to trade, industries and agriculture. The money would also then reach the people of India in some form or the other. Bit if, like in the drain, the taxes paid by the Indiana were being unilaterally taken out of India and spent abroad then Indian economy would suffer. The economic nationalists thus, came to believe that India’s salvation lay in developing its economy which meant developing modern industries based on modern technology and capitalist enterprise. Another very important line of thought that they developed was that Indian industries had to be developed by using Indian capital and not foreign capital as foreign capital replaced and suppressed Indian capital and became a tool for further exploitation of India.

The drain of wealth theory was the fundamental critique of colonialism developed by the economic nationalists. In course of debates, researches and printing, other aspects of colonial economic policies in foreign trade, railways, tariffs, currency and exchange, finance and labour legislation came under scrutiny for their role in exploitation of India. They studied the decline of the handicraft industries and identified the deliberate policy of the British of discouraging indigenous industries in order to help the British manufacturers. The criticism that grew out of the economic policies of the colonial government eroded the moral confidence of the people in the Government. They exposed the explosive character of the Government’s policy Economic criticism was just the first step towards political critique of the British Government. The economic nationalists created a situation in which the antagonism between the rulers and the ruled went on developing As it continued and when combined with other issues (early demands of Indian National Congress) struggle for political power became inevitable.

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