In India, I am sometimes asked to discuss the colonial era with non-historians. It isn't easy. The British Empire isn’t taught well in schools. Most interested people rely on trashy popular history, which holds that the only worthwhile question to ask is, how evil the Empire was. One question often helps me begin: What is the most visible living legacy of the British Empire in South Asia now? Can we draw a line connecting the late 18th c to the present? Light-heartedly, I can say, drinking tea. More seriously, institutions. But that term needs explaining.

For well over a century, India’s nationalists and leftist political activists claimed that British-ruled India made excessive payments to Britain, calling it ‘drain’ or wasted/lost national savings. The word ‘drain’ had a long pedigree. Edmund Burke, a fierce critic of the East India Company, first used it. Burke’s drain persisted in assessments of public finance. In 1859, W.H. Sykes called military heads of expenditure ‘the chief drain upon the Indian Exchequer’.

Read recently: Bishnupriya Gupta’s An Economic History of India: Growth, Income and Inequalities from the Mughals to the 21st Century (CUP 2025). A major new book by a major scholar. With careful data analysis, the book explores key questions in economic history, what drives growth, how inequality develops, and how living standards have changed over time. The book reveals patterns of change that need a serious look. Three examples below.

Can anyone measure colonial drain, the tribute the British Empire extracted from India? There is nothing wrong with the concept of drain (payment without return). But there is no credible measure. There are no numbers to show the drain was large, as some people claim. The measure commonly used starts from the balance of payments and follows Holden Furber: The ‘drain .. was the excess of exports from India for which there was no equivalent import.’ Trade surplus = extraction. This definition is wildly wrong.

Read recently: A.R. Venkatachalapathy’s Swadeshi Steam (Allen Lane 2023). The book tells the fascinating and under-researched story of an Indian shipping company around 1900 within the larger context of global maritime trade, international shipping, and colonialism. Shipping was crucial to the first wave of globalization. Indian firms struggled against British monopolies due to high capital costs and limited state support. The book is about one such enterprise, V.O. Chidambaram Pillai's (VOC) Swadeshi Steam Navigation (SSN), started in 1906.

In the 1980s, historians of 19th c India were primarily interested in the British Empire. But they were also interested in economic history. The question was: Could economic change derive mainly from the intentions and capacities of the British Empire and the imperial state? Many thought the question had no easy or sensible answer. The Empire did not follow a blueprint, an announced aim, and its capacity was constrained by political alignments, geography, limited tax, indigenous businesses, and local society, which it did not want to meddle with.

Oxfam joins the display of mindless illiteracy with which leftist activists discuss impact of the British Raj. In a report called “Takers not Makers”, they claim that imperialist Britain “extracted” 85 tr $ from India, adding for drama, “enough to carpet London with 50£ notes”. The core of the claim of extraction is a net flow of money from India to Britain from the late-18th century (decades before most of India was colonized) to the 1920s. This outflow is blown up by activists posing as scholars using dishonest tools posing as “methods”.

Britain’s drain of India, which inspires outlandish claims by leftist historians, is a concept based on flawed method. Only one definition of drain in international transactions is possible: country pays more (or receives lower price) for a transaction due to its colonial status. This is the price-gap definition of exploitation. In a 2018 paper in European Review of Econ. History, Federico Tadei applied it to measure ‘extraction’ in colonial West Africa. There can be no other sensible definition of ‘extraction,’ ‘drain,’ ‘loot’ or ‘unilateral transfer’.

One morning in 1988, I accompanied my musician uncle to a friend of his in Kolkata. I did not know the person but casually offered to go with my uncle. On the way, he explained that the friend was an accomplished sitar player but had stopped playing. Why? He realized that no matter how hard he practised, he could never play as well as Vilayat Khan. What was the use of trying? At the time, I laughed. Later, the bizarre logic set me thinking. What do we want to happen when we listen to or play classical music?

2024 is the birth centenary of K.N. Raj, an economist who established the Centre for Development Studies (CDS) in Kerala, India, in the 1970s (where I did a doctorate). Raj, his friends, and CDS hold a special place in the history of social science education in India. Why? In the 1950s and 1960s, Indians with a doctorate (or just any degree) from Oxford or Cambridge easily got a top university teaching job if they returned to their country. The famous case was Amartya Sen, who joined Jadavpur University, Calcutta, as a full professor at 22.

The great debate in economic history for 20 years is almost dead, and it is instructive to ask why. The Great Divergence debate (phrased after a book title) re-examined Douglass North and R.P. Thomas's question in the 1970s: why are some countries rich and others poor? They were not the first. In another form, the question has existed since Karl Marx's time. 19th-century thinkers like Marx and Weber explored the origin of “capitalism” by asking why it emerged in Europe and not in Asia. Their facts were wrong, and answers obsolete by 1980.

Most social media discussions on the history of European colonialism in Asia and Africa are not about real history but about legends. A ‘legend’ is not history. It is a ‘normative definition’ of history (Bill Ellis), a statement about what the past must have been. A legend is not verifiable by facts. It draws its power from selective use of facts, not admitting contradictory facts and a belief about the past.

The root of the South Asian Miracle. Check these graphs, and note that an U-shaped path in relative performance was present across South Asia Most India experts think the economic growth resurgence in India since the 1990s happened because of policy shifts. In fact, a resurgence happened across South Asia and all countries, and these countries followed very different economic policies when it happened.

Reading now, Melvin Moses Knight’s classic article “Water and Empire in North Africa” (Quarterly Journal of Economics 1925). Melvin Knight, sometimes referred to as the economist Frank Knight’s brother, taught economic history at the University of California. With experience of the world thanks to service during World Wars, he specialized on the French Empire in Africa publishing a magnificent 50-page article in QJE. This was a time when econ journal editors could see the economics that really mattered to understanding material life.

The opinion that European imperialism was an evil political system imposed on Asia and Africa to exploit the people living there is a dangerous distortion of history. It is dangerous not because it is wrong but because it devalues the worth of honest historical research. How does it devalue scholarship? Friedrich von Hayek said in a speech to LSE students (1944) how economics in his time perverted discourses with ‘very strong views about subjects we do not understand.’

Who caused the Bengal Famine of 1770? British tax policy – say authors of best-selling history books. None in that set of writers is a serious historian or has reliable knowledge of Bengal’s history. Some passively recycle the anti-EIC rhetoric popular in the 1770s. Those who say a government caused the disaster have a primitive idea of why disasters happen. With a few exceptions, disasters do not happen because of the evil intentions of governments but (as in Covid), governments do not have the data, knowledge, and infrastructure to cope.

Published in India by Penguin The book shows how, vast quantities of monsoon rainwater were recycled in India in the last 150 years, reducing deaths from diseases and famines and sustaining agricultural and urban growth, at a significant cost to the environment.

Reading now: Maanik Nath, Capital Shortage: Credit and Indian Economic Development, 1920–1960 (Cambridge UP 2023). Answers why, despite the best efforts of the state to make credit cheap, peasants could make only limited investments in land improvement. From the nineteenth century, credit institutions changed in the Indian countryside in response to agricultural commercialization. For some, the changes were disturbing, and credit became a field of legislation and regulation.

Read Maxine Berg and Pat Hudson’s Slavery, Capitalism, and the Industrial Revolution (Polity, 2023). Two top historians tackle a fundamental and much-debated question in economic history: Did slavery contribute to the British Industrial Revolution? What is the debate about? On one side stand scholars who answer with a ‘yes’. The classic is the Trinidadian writer Eric Williams’s Capitalism and Slavery. Williams made two points. First, economic calculations were overriding behind political (imperial) support for slavery in the British West Indies.

Finished Trevor Burnard’s magnificent Planters, Merchants, and Slaves (Princeton 2015). Most works in this crowded field study regions. The book sees the plantation system in the Atlantic ‘as a coherent whole, with close connections and structural similarities’ between regions. The British Empire in the Atlantic was committed to maintaining the slave trade since the mid-17th century. The American Revolution weakened the commitment while distancing Americans from increasingly negative British views on the trade.

Tamoghna Halder criticized one of my writings on 19th c Indian famines. (see developingeconomics.org). Halder’s text that distorts the debate on Indian famines, misreads data, wrongly implies I suppressed data, and does not cite earlier research. It demands a response. What is the famine debate about? There is a theory, call it A, that British colonial rule caused famines via its indifferent attitude to Indian suffering. Left-nationalist historians believe that story, some calling these events genocide. The story does not fit two facts.