The Raj extracted $65 trillion from us: Fact or fiction?

Oxfam's huge estimate does not withstand scrutiny as it makes too many flimsy assumptions

- TIRTHANKAR ROY

xfam, in its report Takers not Makers, claims Imperial Britain "extracted" $65 trillion from India between 1765 and 1900 in today's money, "enough to carpet London with £50 notes" four times over, taking these numbers from calculations others have done before. The origins go back to Dadabhai Naoroji, who, writing 125 years ago, called the outflow a "drain." Oxfam uses the number to support a modern-day movement: a case for reparations Britain should pay India.

Such numbers are more than a criticism of Raj policies. There are plenty of grounds to criticize these. For example, it spent too little on welfare and infrastructure and too much on the army. But extraction data doesn't just put public policy but the entire colonial system to critical scrutiny. It is a case against the combination of colonialism and globalization that made the 19th century special.

Private capital worldwide made heavy use of the open economy protected by the British Empire, with goods, capital, labour and knowledge transacted more freely than in the mid-20th century, when barriers of all kinds went up. In the 20th century, Marxist intellectuals and nationalists said this capitalism had impoverished India by draining India's surplus to Britain. As global Marxist movements declined in the 1980s and 90s, the drain receded into academic obscurity. Historian Kirti Chaudhuri called the drain theory "confused" economics, "coloured by political feelings." I have criticized it too.