Wanted: A new Theory of Colonialism

During the Independence movement, our leaders castigated colonial exploitation fore impoverishing India India. Before the British came, India was one of the greatest industrial and trading powers in the world. When the British left, India was poor and relatively backward. Indians blamed this on the British, and were certain India would become rich with the end of colonial rule.

Hong Kong remained a colony in 1947. Indian leaders pitied the territory that still groaned under the imperial yoke.

Fifty years on, this sounds comic. India remains one of the poorest countries in the world with a per capita income of $320. But Hong Kong has a per capita income of $23,000. The country that gained independence stayed poor, the country that remained a colony became immensely rich. Indeed, Hong Kong became far richer than its colonial master (Britain’s per capita income today is only $18,700).

This apparent paradox cries out for an explanation. But I am afraid nobody seems interested in tackling a subject that sounds so politically incorrect. The contrast between India and Hong Kong shows that the old theory of colonial exploitation needs serious revision if not scrapping. But doing so would make the venerated leaders of our independence movement look foolish. So nobody seems interested in tackling what should logically be one of the hottest topics of debate on the 50th anniversary of independence.

I was in Hong Kong earlier this year, ad raised this issue with a three Indian journalist on the staff of the Far Eastern Economic Review. Let us start, I said, with the incontrovertible fact that the British plundered, looted and raped like all conquerors before them. Let us also grant that, unlike many previous conquerors, the British brought in modern systems of law, justice, administration and industrial organisation. Despite these plus points, I said, we in the Third World, regarded colonial exploitation as obviously evil. How, then, did this system permit Hong Kong to become richer than Britain.

The Hong Kong journalists could not come up with any good answers. They said the nature of colonialism had certainly changed over the years and ceased to be exploitative. But they were unable to point to any specific laws or directives from Britain to change the system. Things had become radically different, but they could not put their fingers on reasons.

Let me now switch to another tale. At a seminar organised by RIS in New Delhi several months ago, Prof Ajit Singh of Cambridge University reviewed the post-war history of the world. He said the 1950s and 1960s were the golden years, when the whole world grew at record rates and prosperity increased in both developed and developing countries. But world growth slowed down from the 1970s onwards, hw said, because of floating currencies, open capital markets, and the decline of government controls.

Many other speakers had different views. Dr Man Mohan Singh pointed out that it was now commonplace to describe the 1950s and 1960s as the years of golden prosperity, the bemoan what followed. But during the 1950s and 1960s, he reminded the audience, many developing countries (especially in Africa) were still colonies, and complained that they were being looted by their colonial masters. The economies of these colonies grew quite rapidly in the 1950s and 1960s (many had GDP growth of 5-6 per cent), but they still regarded themselves as impoverished by colonialism.

Virtually all these colonies became independent by the 1970s. In place of the original extraction of wealth, these countries experienced an enormous inflow of foreign aid (sometimes half or more of GNP). Aid initially sparked some prosperity. But it soon became clear that the money was being wasted, aid decreased, and the countries plunged into crisis. Despite two decades of independence and financial inflows unparalleled in history, many African countries today are as poor as at independence.

Dr Man Mohan Singh expressed the view that a fresh look needed to be taken at the nature and history of colonialism. I agree. The story is simply not as straightforward as if once seemed. India’s performance after independence may have been disappoint ion, but Africa’s has been disastrous. Meanwhile, countries that continued to be colonies (like Hong Kong and Bermuda) as well as those we reviled as puppets of imperialism (Korea, Taiwan, Singapore) become super-rich. Calling colonialism a great saviour would be as silly as calling it unmitigated loot. Historians need to strip of it of the rhetoric of nationalist movements as well as the racism of Blimps, and produce a new version of what really happened.

I was still in school when India became independent. I remember the older boys say in that India would now become rich and England would become poor. As Britain shed more and more colonies, I expected it to become progressively poorer. Instead, to my astonishment, Britain experienced unparalleled economic prosperity in the 1950s and 1960s, at the very time when it was losing all its colonies. I later found this tale solidly documented in \”The End of |Empire\” by the British Marxist, John Strachey. This book provided ample data to disprove the old thesis that Britain’s was founded on colonial exploitation, and showed how the country was doing much better in the era of decolonisation.

A comparison of the per capita income of colonial and non-colonial powers in Europe confirms this. The richest countries in Europe are Switzerland ($40,630), Norway ($31,250), Denmark ($29,980) and Germany ($27,510), all non-colonial powers like France ($24,990) Italy ($19,020 and Britain ($18,700) Spain ($13,580) and Portugal ($9740), two of the biggest colonial powers, were always among the poorest in Western Europe. Indeed, Portugal was regarded as a developing country till the 1960s and used to received large sums of assistance from the World Spain and Portugal were the last countries to shed their empires, and both prospered greatly afterwards. There were many reasons for this, and we must not jump to the other extreme and claim that colonialism, and showing that it yielded the imperial powers much less money than was earlier imagined.

One person who radically reassessed colonialism was Deng Xiaoping. His nationalist credentials are impeccable. Yet he made sure that when Britain handed back Hong Kong to mainland China, the economic system of the colony would continue. This would have outraged Mao, who regarded Hong Kong as colonial excrement. But Deng could see the, far from being exploitative, Hong Kong was a successful economic model worthy of incorporation even into a communist state. That constitutes the highest praise ever bestowed on colonialism as an economic system. For that reason alone, it deserves a new history. I will attempt a few new answers in this column next week.

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