India Was So Rich!

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 2^nd and 4^th largest economies of the world. One of my earlier posts is written on the same.

That was an interesting eye opener!