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	How Britain stole $45 trillion from India by Dr Jason Hickel, Shashi Tharoor University of London, agencies   There is a story that is commonly told in Britain that the colonisation of India - as horrible as it may have been - was not of any major economic benefit to Britain itself. If anything, the administration of India was a cost to Britain. So the fact that the empire was sustained for so long - the story goes - was a gesture of Britain''s benevolence.   New research by the renowned economist Utsa Patnaik deals a crushing blow to this narrative. Drawing on nearly two centuries of detailed data on tax and trade, Patnaik calculated that Britain drained a total of nearly $45 trillion from India during the period 1765 to 1938.   It''s a staggering sum. For perspective, $45 trillion is 17 times more than the total annual gross domestic product of the United Kingdom today.   How did this come about? It happened through the trade system. Prior to the colonial period, Britain bought goods like textiles and rice from Indian producers and paid for them in the normal way - mostly with silver - as they did with any other country. But something changed in 1765, shortly after the East India Company took control of the subcontinent and established a monopoly over Indian trade.   Here''s how it worked. The East India Company began collecting taxes in India, and then cleverly used a portion of those revenues (about a third) to fund the purchase of Indian goods for British use. In other words, instead of paying for Indian goods out of their own pocket, British traders acquired them for free, "buying" from peasants and weavers using money that had just been taken from them.   It was a scam - theft on a grand scale. Yet most Indians were unaware of what was going on because the agent who collected the taxes was not the same as the one who showed up to buy their goods. Had it been the same person, they surely would have smelled a rat.   Some of the stolen goods were consumed in Britain, and the rest were re-exported elsewhere. The re-export system allowed Britain to finance a flow of imports from Europe, including strategic materials like iron, tar and timber, which were essential to Britain''s industrialisation. Indeed, the Industrial Revolution depended in large part on this systematic theft from India.   On top of this, the British were able to sell the stolen goods to other countries for much more than they "bought" them for in the first place, pocketing not only 100 percent of the original value of the goods but also the markup.   After the British Raj took over in 1858, colonisers added a special new twist to the tax-and-buy system. As the East India Company''s monopoly broke down, Indian producers were allowed to export their goods directly to other countries. But Britain made sure that the payments for those goods nonetheless ended up in London.   How did this work? Basically, anyone who wanted to buy goods from India would do so using special Council Bills - a unique paper currency issued only by the British Crown. And the only way to get those bills was to buy them from London with gold or silver. So traders would pay London in gold to get the bills, and then use the bills to pay Indian producers.   When Indians cashed the bills in at the local colonial office, they were "paid" in rupees out of tax revenues - money that had just been collected from them. So, once again, they were not in fact paid at all; they were defrauded.   Meanwhile, London ended up with all of the gold and silver that should have gone directly to the Indians in exchange for their exports.   This corrupt system meant that even while India was running an impressive trade surplus with the rest of the world - a surplus that lasted for three decades in the early 20th century - it showed up as a deficit in the national accounts because the real income from India''s exports was appropriated in its entirety by Britain.   Some point to this fictional "deficit" as evidence that India was a liability to Britain. But exactly the opposite is true. Britain intercepted enormous quantities of income that rightly belonged to Indian producers. India was the goose that laid the golden egg.   Meanwhile, the "deficit" meant that India had no option but to borrow from Britain to finance its imports. So the entire Indian population was forced into completely unnecessary debt to their colonial overlords, further cementing British control.   Britain used the windfall from this fraudulent system to fuel the engines of imperial violence - funding the invasion of China in the 1840s and the suppression of the Indian Rebellion in 1857. And this was on top of what the Crown took directly from Indian taxpayers to pay for its wars.   As Patnaik points out, "the cost of all Britain''s wars of conquest outside Indian borders were charged always wholly or mainly to Indian revenues."   And that''s not all. Britain used this flow of tribute from India to finance the expansion of capitalism in Europe and regions of European settlement, like Canada and Australia. So not only the industrialisation of Britain but also the industrialisation of much of the Western world was facilitated by extraction from the colonies.   Patnaik identifies four distinct economic periods in colonial India from 1765 to 1938, calculates the extraction for each, and then compounds at a modest rate of interest (about 5 percent, which is lower than the market rate) from the middle of each period to the present.   Adding it all up, she finds that the total drain amounts to $44.6 trillion. This figure is conservative, she says, and does not include the debts that Britain imposed on India during the Raj.   These are enormous sums. But the true costs of this drain cannot be calculated. If India had been able to invest its own tax revenues and foreign exchange earnings in development - as Japan did - there''s no telling how history might have turned out differently. India could very well have become an economic powerhouse. Centuries of poverty and suffering could have been prevented.   All of this is a sobering antidote to the rosy narrative promoted by certain powerful voices in Britain. The conservative historian Niall Ferguson has claimed that British rule helped "develop" India. While he was prime minister, David Cameron asserted that British rule was a net help to India.   This narrative has found considerable traction in the popular imagination: according to a 2014 YouGov poll, 50 percent of people in Britain believe that colonialism was beneficial to the colonies.   Yet during the entire 200-year history of British rule in India, there was almost no increase in per capita income. In fact, during the last half of the 19th century - the heyday of British intervention - income in India collapsed by half. The average life expectancy of Indians dropped by a fifth from 1870 to 1920. Tens of millions died needlessly of policy-induced famine.   Britain didn''t develop India. Quite the contrary - as Patnaik''s work makes clear - India developed Britain.   What does this require of Britain today? An apology? Absolutely. Reparations? Perhaps - although there is not enough money in all of Britain to cover the sums that Patnaik identifies. In the meantime, we can start by setting the story straight. We need to recognise that Britain retained control of India not out of benevolence but for the sake of plunder and that Britain''s industrial rise didn''t emerge sui generis from the steam engine and strong institutions, as our schoolbooks would have it, but depended on violent theft from other lands and other peoples.   * Dr Jason Hickel is an academic at the University of London and a Fellow of the Royal Society of Arts.   Inglorious Empire by Shashi Tharoor. (2017)   ''The process of colonial rule in India meant economic exploitation and ruin to millions, the destruction of thriving industries, the systematic denial of opportunities to compete, the elimination of indigenous institutions of governance, the transformation of lifestyles and patterns of living that had flourished since time immemorial, and the obliteration of the most precious possessions of the colonised, their identities and their self-respect. In 1600, when the East India Company was established, Britain was producing just 1.8% of the world’s GDP, while India was generating some 23% (27% by 1700).   By 1940, after nearly two centuries of the Raj, Britain accounted for nearly 10% of world GDP, while India had been reduced to a poor “third-world” country, destitute and starving, a global poster child of poverty and famine. The British left a society with 16% literacy, a life expectancy of 27, practically no domestic industry and over 90% living below what today we would call the poverty line.   The India the British entered was a wealthy, thriving and commercialising society: that was why the East India Company was interested in it in the first place. Far from being backward or underdeveloped, pre-colonial India exported high quality manufactured goods much sought after by Britain’s fashionable society. The British elite wore Indian linen and silks, decorated their homes with Indian chintz and decorative textiles, and craved Indian spices and seasonings. In the 17th and 18th centuries, British shopkeepers tried to pass off shoddy English-made textiles as Indian in order to charge higher prices for them.   The story of India, at different phases of its several-thousand-year-old civilisational history, is replete with great educational institutions, magnificent cities ahead of any conurbations of their time anywhere in the world, pioneering inventions, world-class manufacturing and industry, and abundant prosperity – in short, all the markers of successful modernity today – and there is no earthly reason why this could not again have been the case, if its resources had not been drained away by the British''.
	Why does the European Union fear a binding human rights treaty on transnational corporations by The Treaty Alliance, agencies   Sep. 2018   The Treaty Alliance has learned that the European Union and some allied states may try to undermine efforts to develop an international treaty on business and human rights at the UN Human Rights Council (HRC) in Geneva this Wednesday, September 19.   We reject this action to alter norms and rules of the HRC and consider it a craven and desperate attempt to frustrate a legitimate UN Intergovernmental Working Group (IGWG) process to establish a binding instrument on Transnational Corporations and Other Business Enterprises (TNCs and OBEs). It is the will of affected people everywhere that this process be able to proceed until the international instrument is drafted and adopted. The Treaty Alliance notes also this action also threatens other UN processes to strengthen international human rights law, such as the process toward an international instrument on the rights of peasants.   We call on the EU and its allied states to cease with this action and instead engage constructively in the process to develop a powerful binding instrument that protects affected people everywhere. We also call on all civil society allies to demand that their UN representatives in Geneva speak out and condemn attempts by any other state or states to frustrate the UN IGWG process toward a binding instrument on TNCs and OBEs.   http://www.escr-net.org/corporateaccountability/hrbusinesstreaty   July 2018   Why does the European Union fear a binding human rights treaty on transnational corporations, ask Lúcia Ortiz and Anne van Schaik.   In 2015 a United Nations intergovernmental working group began work on a treaty to regulate, in international human rights law, the activities of transnational corporations and other business enterprises. Despite 11 European countries voting against the resolution in the UN Human Rights Council in 2014, it is receiving widespread support and negotiations are progressing towards a fourth session in October, when a Zero Draft will start to be negotiated. The EU operates as a block in Geneva, which means that it coordinates the position of all the individual member states.   Calls for a legal mechanism to prevent corporate human rights abuses and attacks on democratically-elected governments have been repeated since Salvador Allende’s remarkable 1972 speech to the UN General Assembly. Corporate crimes against the environment and peoples rights have continued unabated since then, while violence against defenders of territories and collective rights have reached alarming levels. Companies are rarely, if ever, held to account.   Many countries have been developing concrete proposals regarding the content and implementation of a binding treaty to close gaps in international human rights law and improve affected peoples access to justice. This includes national legislation within European states establishing legal obligations for transnational corporations to prevent human rights abuses and environmental damages along their whole supply chains. Huge developments pushed by organized civil society and parliaments are happening in countries like France and Switzerland.   But the EU remains obstructive. Representatives failed to show up to opening negotiations at the UN in 2015, and only engaged in 2016 and 2017 after pressure from civil society organizations. During the most recent informal consultations, in May and June, the EU continued to impede negotiations by calling for a new resolution to reduce the working group''s mandate. That would mean the reversal of four years of progress, and give the EU a chance to change the scope of the treaty, or water it down to a mere amendment of the voluntary Guiding Principles on Business and Human Rights.   The Zero Draft to be elaborated this month is the result of three sessions of fruitful debates involving states, civil society, experts, and affected communities’ representatives, as well as opposing business associations, and it must be based on the elements paper discussed in the final session last year.   For Friends of the Earth International, the key elements to make the new legally binding instrument effective include obligations for transnational corporations to respect human rights, corporate liability in case of violations, transparency in supply chains to pierce the corporate veil that allows companies to avoid responsibility, and an international human rights court that affected people can turn to if their national courts fail to provide access to justice. The Zero Draft must establish the primacy of human rights over trade agreements, provide paths for reparations for affected communities, and protect defenders of territories from future abuses. This requires regulations to prevent international financial institutions from acting with impunity when financing destructive projects or supporting policies that undermine people’s rights to public services.   All the voluntary mechanisms in the world will not secure the lives of defenders of territories from systemic threats and attacks by corporations on the environment, livelihoods, and people’s rights. It would be an historical failure for universal human rights law if, after more than 45 years of fighting for accountability of transnational corporations, the UN working group, with Ecuador as chair supported by more than 100 UN member states, yielded to the EU’s obstructive tactics.   It cannot be the EU’s intention to openly abandon human rights defenders across the world. European citizens do not want to go down in history as the region that blocked this historic opportunity to provide justice to the millions of people who have suffered at the hands of transnational corporations. The EU should not ignore the more than 400 civil society organizations worldwide urging governments to constructively engage with the Zero Draft negotiations in October. The EU must not stand against the growing number of resolutions from regional and national parliaments, including the European Parliament, to hold transnational corporations to account.   Today, the fourth informal negotiations on the UN treaty will be held in Geneva. Rather than arguing against the process for procedural reasons, and seeking consultations out of sight of civil society, we call on the EU to finally start supporting the process. It is time for the European Union to stand with its constituents and global human rights defenders, to end corporate impunity. http://bit.ly/2QHD2x1 Visit the related web page
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