Thread by @DebajyotiBis

#EconTwitter #History
#thread 1/n
Let’s address Marxist Utsha Pattnaik’s so called $45 trillions theory which also promoted by self declared anti-capitalist Jason Hickel. Read :

1/n UP uses 5% at some point in the paper and also inflation. So she is suggesting 5% real interest rate who is the risk-free & that is ludicrous. Also she uses a ₹’s interest rate but applied it to a £ of $ sum which is just silly. If you use ₹’s interest rate, then you must+

2/n consider the currency’s weakness which she did not. The total aggregate GDP of UK from 1840-1950 = £24.45 trillions( per decade averages then summation) In 1870 Empire’s contribution to UK’s GDP was 1.1% & in 1913 it was 3.3%. So how ridiculous the number $45 trillions is =

3/n at 1.1% of £24.45 trillions = £268.9 Billions & at 3.3% of £24.45 trillions = £806 Billions. So there is zero possibility that it would reach her 45 number. Dr Patrick K OBrien also gave the estimate that 33% of UK’s tax receipts were being spent on Empire India,Africa +

4/n taking 1870 as benchmark here public spending by UK was £67.1 millions. If we convert that into 2015 it becomes £7.6 billions. Now consider 33% of it being spent in India,Africa etc. that becomes £2.6 Billions. Now since contribution to Empire was 1.1%, it becomes £1.3 bill+

5/n so even converting into 2015 currency UK was spending more on Empire than earning. How much problematic of this estimation as Dr Clive Dewey put, “She consistently adopts statistical assumptions (such as compound interest at a rate of 5% per annum over centuries)+

6/n that exaggerate the magnitude of the drain; and she consistently ignores research that would tend to cut the economic impact of the drain down to size, such as the work on the sources of investment during the industrial revolution (+

7/n which shows that industrialisation was financed by the ploughed-back profits of industrialists) or the costs of empire school (which stresses the high price of imperial defence).” It can be explained also here 🥴
x.com/hhmaharajasawa… x.com/HHMaharajaSawa…