{"id":140,"date":"2004-10-09T14:25:10","date_gmt":"2004-10-09T19:25:10","guid":{"rendered":"http:\/\/server97.snhdns.com\/~ravik\/wp\/?p=140"},"modified":"2004-10-09T14:25:10","modified_gmt":"2004-10-09T19:25:10","slug":"yes-the-british-deindustrialised-india","status":"publish","type":"post","link":"https:\/\/www.ravikiran.com\/blog\/classic\/200410\/yes-the-british-deindustrialised-india\/","title":{"rendered":"Yes the British deindustrialised India"},"content":{"rendered":"

That is half<\/a> the story. In the nineteenth century, imports from Britain killed off Indian industry, especially the textile industry. But then, towards the end of the nineteenth century, something interesting started happening. Indian industrialists started setting up industries in India. An entire textile industry came into being. And, this is the most interesting part – the industrialists started off their lives as traders,<\/i> more specifically as importers.<\/i> See here<\/a> for a detailed description of how that happened. Actually, go ahead and read the whole book<\/a>. The traders found that cheap imports had created a market which made it feasible for them to set up here.
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\nNow I am sure the British did not “encourage” this process. I am also sure that they did not like it. Free trade, throughout its history has grown inspite of government hindrance (and government help). But I want to ask about a counterfactual. Suppose that the British hadn’t conquered us. Suppose that, by some magic, we had got a liberal democratic government by the end of the eighteenth century (the period when, in the real world, the British were taking us over) <\/p>\n

What policies should it have followed if it were committed to India’s development? Yes, British imports destroyed India’s traditional industry, but British manufacture destroyed Britain’s<\/i> traditional industry too. The British developed the steam engine and its industrial base before us. This fact is not a result of imperialism. So tell me, should the hypothetical liberal democratic government of India have allowed free import of textiles from Britain or not? If it had allowed, we are talking of exactly the same policies that the British followed. If it had followed protectionism and tried to “encourage” Indian industry, well we know how well Nehru’s policies worked. We also know for a fact that India’s car industry did not manage to come out with a decent car for fifty years when it was protected, but has come out with the Indica within years of being faced with competition.<\/p>\n

Don’t come back to me saying that things would have been different if Nehru had done things in a slightly different <\/i> way. (Such as for example, if we had remained an autarky<\/a>, but gone in for inernal liberalization.) I have no way of disproving your pet theory, (because, as you will point out, your particular combination of policies has never been tried, hence irrefutable by experiment) but I just want to point out that no one<\/i> can predict precisely how markets will respond to government intervention. The only thing I can say with any real confidence is that Markets treat government intervention as damage and route around it.<\/i><\/p>\n","protected":false},"excerpt":{"rendered":"

That is half the story. In the nineteenth century, imports from Britain killed off Indian industry, especially the textile industry. But then, towards the end of the nineteenth century, something interesting started happening. Indian industrialists started setting up industries in India. An entire textile industry came into being. And, this is the most interesting part […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"","sticky":false,"template":"","format":"standard","meta":[],"categories":[2],"tags":[],"_links":{"self":[{"href":"https:\/\/www.ravikiran.com\/blog\/wp-json\/wp\/v2\/posts\/140"}],"collection":[{"href":"https:\/\/www.ravikiran.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.ravikiran.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.ravikiran.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.ravikiran.com\/blog\/wp-json\/wp\/v2\/comments?post=140"}],"version-history":[{"count":0,"href":"https:\/\/www.ravikiran.com\/blog\/wp-json\/wp\/v2\/posts\/140\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.ravikiran.com\/blog\/wp-json\/wp\/v2\/media?parent=140"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.ravikiran.com\/blog\/wp-json\/wp\/v2\/categories?post=140"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.ravikiran.com\/blog\/wp-json\/wp\/v2\/tags?post=140"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}