> Those numbers also show why the “wealth transfer from India” is mostly fake. India and China were both at a subsistence level. There was no meaningful wealth to transfer.
Can you expand? What was the EIC doing in India?
Can you expand? What was the EIC doing in India?
Say a shipment of tea is worth 100 pounds in India, but 400 pounds to the British. EIC has a monopoly on the transaction. They pay the Indian producer slightly over 100 pounds, and charge the British consumer slightly below 400 pounds. They collect the surplus of 300 pounds. But money isn’t being taken from India! Instead, India’s loss is the lost opportunity to get an higher price for their goods. But British consumers also lost—they were overcharged. The EIC captured the value created by the Britain-India transaction.
When the EIC became a government, they got into the business of wealth extraction. They usurped the Mughals prerogative to levy taxes. But this wasn’t profitable! Within less than 20 years of the Battle of Plessay, the East India Company was in dire financial straights. It couldn’t make royalty payments to England and owed large sums of money to the Bank of England. That’s what precipitated the government takeover of the EIC.