Costs of Colonialism

In a polarized India, several people in India wonder how much British colonialism hurt India and helped Britain. (To clarify, such people are not denying that colonialism was beneficial to the colonizer – why else would they be doing it? Their question is about the extent of damage to the colony, whether it is exaggerated or not). Quantifying that damage is hard, if not impossible. After all, there were no formal ways of tracking the purchasing power of money across countries, or metrics like GDP or per-capita income. How can you arrive at a numerical value of damage?

 

But other counterfactual ways of looking at the question help understand the extent of the damage, even if not numerically. Take two such examples.

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Take China’s solar panels industry. The Chinese government doesn’t necessarily pick or back specific companies within a sector, but it does pick sectors which it considers important – for employment, for national security etc. For such sectors, the government makes things easy – land acquisition, tax rebates, low interest loans, you get the idea. The solar industry was such a sector for a lot of good reasons. It was green. It reduced the usage of oil, which was also a source of pollution and global warming. And if China emerged as the high tech hub of solar, it would be good for the country.

 

But demand within China for these solar panels has fallen sharply. Companies tried cutting prices, leading to increasing losses in the industry. This is not just a threat for individual companies anymore. Remember those cheap bank loans the Chinese government facilitated for the sector? Well, if companies collapse, the banking sector is at risk next with all the bad/un-repayable loans.

 

So Chinese companies have switched to exporting solar panels to the West. Since the West has not spent any significant effort in switching to green, well, Chinese imports were the only option. Western leaders worried that China was “dumping” its excess solar panels on the West to save itself. That is true, as we just saw.

 

Ok, you say, but what’s this got to do with the topic of the blog – how much did British colonialism hurt India? Aha, in this solar panel topic, the Western countries are independent countries that can decide to ban the import of Chinese solar panels, if they feel that is in their best interest. But colonies had no such choice. If Britain decided its textiles would be dumped on India and the local textile industry would be banned, well, that was happened. British textile companies would keep making money while Indian expertise and skills would gradually fade away with time. And as Britain’s textile industry did this for centuries, they would develop new tech and methods, so that by the time the colonies finally got independence, the gap in several industries would be too vast to bridge.

 

Such damages are very real. And it wasn’t just the one textile sector in which such a thing happened.

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Another easy counterfactual is slavery, though not applicable to India, but definitely to Africa. Imagine today, that entire generations of able bodies white men are enslaved and shipped away to toil and die in far off lands. And the practice is repeated for generations to come. Does anyone really believe the West would not collapse soon? Even the whites left will not have incentives to learn or build much – after all, they could be invaded and enslaved and shipped away anytime, anything they build or develop will be stolen by their conquerors, so why even bother? Soon enough, any focus on science, technology and other advancements would die in the West. The costs would extend to the loss of all the benefits in the future, of things that could have been built on top of that base of the present day.

 

Just because one can’t quantify damages in a precise, objective way doesn’t mean the damage isn’t enormous.