The Great Depression and the Third World with special reference to India

Abstract

During the Great Depression of 1873-96 the only real industrialized countries were Great Britain and the Netherlands. While the share of Britain in the imports of Canada declined from 49.9% to 33% between 1867-71 and 1892-6 the share in the imports of India increased between the 2 dates from 69.2% to 71.9%. While Britains share in Canadian exports increased from 31.4% to 54.9% her share in Indian exports declined from 52.5% to 33.2%. Britains position worsened in the affluent white colonies but improved in the poorer colonies. Generating an export surplus with colonial dependencies through tribute and trade was an important means of transferring capital from Britain to the colonies of European settlement. The long-drawn-out process of demonetization of silver also contributed to extracting a surplus out of India and China. Indias exports became more diversified and made Indias external balance important to the stability of Britains imperial balance and of the gold standard. Food grains became an important Indian export from 1870 onwards. India had to bear the brunt of residual adjustments when industrial capitalism was being consolidated at the center. Much of the transfer was in the explicit form of a tribute. With capital going to the industrialized countries and migrants going to the Third World countries severe shocks in the form of famines resulted in the overtaxed economies of the less industrialized nations.