Key Moderate Leaders and Their Economic Critique of British Imperialism (1885-1905)

The era of moderate nationalism in India, spanning from 1885 to 1905, was marked by the contributions of several key figures. Their advocacy for reforms under British rule laid the groundwork for future movements towards complete independence. Each of these leaders brought their unique perspectives, intellectual prowess, and literary expressions to the early phase of nationalist movement. Their writings, speeches, and involvement in various organizations set the stage for political discourse and inspired many to join the cause for India’s independence. They were instrumental in shaping public opinion, both in India and abroad, by elucidating the economic, social, and political impacts of British rule in India. Though their approaches and methods were varied, their combined efforts were pivotal in building a foundation for the future struggle for freedom.

Economic Critique of British Imperialism

Early Critique of British Economic Policies: The economic critique of British imperialism, spearheaded by the early nationalists in India, was a foundational aspect of the anti-colonial movement. 

• The moderate leaders of the Indian National Congress (INC) between 1885 and 1905 were particularly vocal about the detrimental economic impact of British policies in India. 
• Foundations of Argument: Their criticisms laid the groundwork for a structured economic argument against colonial rule, which was later taken up more vehemently by subsequent generations of nationalists.
• Economic nationalism i.e. economic critique of colonialism at this historical juncture had its own political and ethical significance. 
  • This economic theory by linking Indian poverty to colonialism was trying to corrode the moral authority of colonial rule, and also perhaps by implication challenging the whole concept of paternalistic imperialism or British benevolence. 
• Political and Ethical Dimensions: In this way, the moderate politicians generated anger against British rule, though they could not convert it into an effective agitation for its overthrow.

Drain of Wealth Theory

Key proponents: Dadabhai Naoroji, Justice M.G. Ranade, and R.C. Dutt (A retired ICS officer, who published The Economic History of India in two volumes ( 1901-03)).

• Economic Impact of British Rule: This theory was the cornerstone of the economic criticism of British rule. Naoroji argued that the British were systematically draining India of its wealth and transferring it to Britain, leading to the impoverishment and underdevelopment of India.
• Mechanisms of Economic Exploitation: The forms of this economic drain included the unilateral transfer of Indian revenues to England for expenses not incurred for India; the excess of exports over imports, or the unfavourable trade terms for India; and the burden of British civil and military administration in India paid for by Indian revenues.
• The shift in Colonial Exploitation Methods: Their main argument was that British colonialism had transformed itself in the nineteenth century by jettisoning the older and direct modes of extraction through plunder, tribute, and mercantilism, in favour of more sophisticated and less visible methods of exploitation through free trade and foreign capital investment. This turned India into a supplier of agricultural raw materials and foodstuffs and a consumer of manufactured goods from the mother country. 
  • India was thus reduced to the status of a dependent agrarian economy and a field for British capital investment
• The drain theory garnered significant attention and sympathy towards the Indian cause, both domestically and internationally.

Deindustrialization and Decay of Traditional Indian Industries

Key proponents: Dadabhai Naoroji, R.C. Dutt, and Mahatma Gandhi (later period)

• Economic Impact of British Policies: Early nationalists highlighted the decline of traditional Indian industries under British rule. The influx of cheap British manufactured goods, high taxes on Indian artisans, and the neglect of domestic industries led to deindustrialization.
• Social Consequences: This critique pointed out that policies favouring British manufacturers devastated Indian handicrafts. The decline wasn’t merely an economic loss but also resulted in social problems, including unemployment and urban poverty.
  • This formed a significant part of the Swadeshi movement’s rationale, which emerged as a response to this critique.

Agrarian Distress and Zamindari System

Key proponents: Gopal Krishna Gokhale, Romesh Chunder Dutt

• The nationalists criticized the oppressive land revenue system imposed by the British, leading to excessive land rents and taxes for peasants.
• The Permanent Settlement of 1793 forced peasants to pay high rents, often leading to indebtedness and famines. The Zamindari system, introduced by the British, gave undue power to Zamindars (landlords), further exploiting the peasantry.
• The plight of the peasants under this system became a major rallying point for future agrarian movements and reforms.

Neglect of Welfare Infrastructure

• Key proponents: Gopal Krishna Gokhale, Mahadev Govind Ranade
• Despite constructing railways, ports, and telegraph systems, early nationalists argued that these projects primarily served British economic interests rather than Indian development.
• Infrastructure projects in India facilitated the extraction of raw materials from the hinterland to the ports, enhancing colonial exploitation. The neglect was particularly evident in the scant investment in areas crucial for public welfare, such as irrigation, education, and health.
  • This critique formed a comprehensive argument demanding more significant investment in infrastructure beneficial for India’s social and economic growth.

Fiscal Policy and Taxation

• Key proponents: Dadabhai Naoroji, Feroz Shah Mehta, Gopal Krishna Gokhale
• The fiscal policies of the British were criticized for heavy taxation on the common people and the lavish expenditure on civil and military charges.
• Nationalists argued that these policies restricted India’s economic growth, maintaining it as a market for British goods and a source of raw materials. 
• The Fowler Commission artificially fixed the exchange rate of the rupee at a high rate of 1 shilling and 4 pence.
• Moderates contested the heavy duties on locally manufactured goods and the simultaneous encouragement of British imports through minimal duties, leading to the collapse of local industries.
  • This led to calls for fiscal autonomy and formed the basis for the demand for swaraj (self-rule).

Conclusion

The economic critique of British imperialism by early Indian nationalists presented a multi-faceted argument against colonial rule. This comprehensive economic argument formed the intellectual underpinning for the growing demand for self-rule. It painted a clear picture of exploitation that rallied many to the nationalist cause and was instrumental in creating a broad consensus against the British Raj, ultimately contributing to its downfall. This economic understanding was a monumental step forward, moving the struggle from mere grievances to a structured critique of colonialism.

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