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India Was So Rich!

Monday, February 1, 2010

I have written the title this time, quite skeptically. We are always told that India was very rich in the medieval times. Please note the claim, ‘medieval times’, not the ‘ancient times’. Many exaggerations of the same are also spread, like ‘pots of gold used to exist in every home’, etc. and etc. In the ancient times, I am quite sure India along with many other nations of the present – day was super rich. But, as far as the medieval times go, most people would amalgamate the medieval era with the ancient era.

There remains a basic difference between the two. In ancient time, India was rich along with its people. In medieval era, India, and even China, for that matter, might be rich as compared to other then-existing world nations. But, were its people rich as compared to other nations of the time? The answer remains no.

In India, it is a common thought in the minds of the people that in the medieval era, the present day developed nations were all poor. That would include the United States, Canada, Oceania (Aus and NZ) and the whole of Europe, while same would have a favorable view on China’s prosperity. USA and Australia were definitely unheard places then but what can we say the same in case of Europe?

There was this interesting piece of read that I found in ‘The Post – American World’ by Fareed Zakaria. I am pasting the relevant passage here. The statistics that are cited are in turn taken from Angus Madison’s book, ‘The World Economy: A Millennial Perspective’. It reads:

We

have lived in a Western world for over half a millennium. Despite the rise of other nations and continents, the shadows of the West will be long and its legacies deep for decades to come, perhaps longer. It has become commonplace to say that actually China and India were as rich as the West right up until the 1800s. The dominance of the West, according to this perspective, has been a 200-year blip, and we are now returning to a more normal balance. This statement also implies that the West’s advantages may be largely accidental—the result of “coal and colonies,” that is, the discovery of a cheap energy source and the domination of the rich lands of Asia, Africa, and the Americas. This view, which embraces a multicultural sensibility that denies any special status to the West, has its political advantages. But while it may be politically correct, it is historically incorrect.

One reason for this misinterpretation is that analysts often focus solely on the total size of the Chinese and Indian economies. Historically, this has been a misleading statistic.

Until the modern age, a country’s economy could not be mobilized, extracted, or put to use in any meaningful sense. The fact that in, say, the seventeenth century, millions of peasants in remote and unconnected corners of China were working the land in grinding poverty did not really contribute to the nation’s usable wealth or power, even though their output added up to a large number. Population was the main ingredient of GDP, and production was largely agricultural. Since China and India had four times the population of Western Europe in 1600, their GDP was, of course, larger. Even in 1913, when Britain was the world’s leading power, with cutting-edge technology and industrial production and trade many times larger than all of Asia’s, China could claim a greater total GDP. In studying the preindustrial age, before big government, communications, transport, and broad-based taxation, aggregate GDP alone tells us little about national power or a country’s level of advancement. It doesn’t say anything about the dynamism of the society or its ability to make new discoveries and inventions. And it was mastery in these areas that gave a country new ways to create wealth and its government power.

We get a much clearer picture of the real standing of countries if we consider economic growth and GDP per capita. Western European GDP per capita was higher than that of both China and India by 1500; by 1600, it was 50 percent higher than China’s. From there, the gap kept growing. Between 1350 and 1950—six hundred years—GDP per capita remained roughly constant in China and India (hovering around $600 for China and $550 for India). In the same period, Western European GDP per capita went from $662 to $4,594, a 594 percent increase.*

European travelers in the seventeenth century routinely pointed out that Chinese and Indian living conditions were well below those in northwestern Europe. The economist Gregory Clark calculates that in the eighteenth century the average daily wage of a laborer in Amsterdam could buy him 21 pounds of wheat, in London 16 pounds, and in Paris 10. In China, a day’s wages would buy about 6.6 pounds of wheat (or its equivalent). Clark has also examined records to determine differences in the number of famines, which points in the same direction. The West, in short, was more prosperous than the East long before the eighteenth century.

So, there are enough stats and facts kept out there in the passage to enlighten us on the same. The education, innovation, research what the Western countries produced ensured that they would stay ahead of the rest far easily. Even today, the same continues and I do not see India and China turning out the research centers anywhere remotely! That would require an altogether different post, as there was some interesting read on the same in ‘India Unbound’ by Gurucharan Das. Answer lies in education and innovation again though.

On an interesting note, China and India still do stand as the world’s 2nd and 4th largest economies of the world. One of my earlier posts is written on the same.

That was an interesting eye opener!

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8 Comments leave one →
  1. Tuesday, February 23, 2010 6:00 pm

    Its been a while Ameya, but I am so impressed that regardless time, this site still offers the best in information and education, I am always fulfilled anytime I read your blog.

    Keep it going mate.

    Thumbs up

  2. Sid permalink
    Monday, June 14, 2010 6:29 pm

    Wealth and GDP are not the same thing. GDP is more like the measure of productivity. Wealth is not a measure of productivity, it is a qualitative term to indicate the fruits of past productivity.

    By 1500, western European nations solved the problem of internal struggle and were willing to look past their small boundary. Few nations like Britain or Spain were busy in re-building the nation. So apparently their productivity slowly exceeded that of India and China. For both India and China, those times were filled with deep internal struggle and that is not very favorable to improvement in productivity.

    Come to think of it, if India/China was not wealthy enough by 1700, would anybody in their right mind spend man-power and effort to establish superiority in that region? Would any super-power today spend a lot of effort to colonize the sun-saharan Africa?

    Read a bit of Vincent Smith if you really want to know the kind of loot British initiated and destroyed all indigenous industries for their profit (for example, textiles in Bengal). Maddison appears to be one of those apologist Eurocentric historians whose opinion about colonization does not extend beyond the myth of “civilizing mission”.

  3. Sunday, May 29, 2011 2:38 am

    I would suggest the writer to get educated first and understand the difference of Wealth and GDP measures.
    Before 1700 both India and China were much WEALTHY than any Europe countries. Yes agriculture was major but they were producing excellent quality of other goods which were great in demand in Europe. And if i agree to your argument for a sec the point which i have to consider “Why entire Europe – Portuguese then French then Dutch, Danis and finally British looted China and India for so many years? The truth is Europe always had worst economic crisis untill they found China and India. The industrial revolution of Europe was eventually financed by the looted money from India and China.
    PS: Don,t BS until you have facts, and if you copy mention the source.

  4. Sunday, May 29, 2011 2:47 am

    Not to mention that the Europe and America are built using slave labor from Africa.

  5. Saturday, August 13, 2011 12:56 pm

    I used to be suggested this web site by my cousin. I am not positive whether or not this put up is written by means of him as no one else realize such exact approximately my trouble. You are wonderful! Thank you!

  6. ajay permalink
    Friday, July 20, 2012 9:48 pm

    yes india was he richest nation on the earth till british invasion in 15th century

  7. Dr Nat permalink
    Thursday, April 10, 2014 12:08 am

    From the information viewed on the internet it seems there is no doubt that India was the richest country in the world. The wealth in India attracted plunderers from the middle east and further afield, including Europeans, culminating with British colonisation that drained India of its wealth. M.G. Gandhi wrote a long letter to the British Viceroy in 1930 stating among other things that the British were a “curse” in India. India became a very poor country on account of British rule.

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