Colonialism was catastrophic

“Anti-Colonialism has been economically catastrophic for the Indian People for decades. Why Stop now?”

When I read this tweet by Marc Andreessen, was enraged to no extent. It took me so much time to set aside my emotions and write something factual. This is to explain in detail how India and other nations suffered from Poverty, and economic exploitation.

Colonialism sinks economy and countries

Modus Operandi

“colonization was the obvious route to ‘unfree free trade’”.

The modus operandi is simple:

• sign free trade agreements using force
• kill the infant industries in the colonies
• Export goods from Europe for profit
• Kill the artisans, and provide them with industrial goods

In 1810s, colonialism was used by the British and Europe, to sign unfair trade agreements. They called it Free Trade Agreements (FTAs). They were unfair, because the countries lost their right to set their own tariffs (tariff autonomy). They were unable to protect their infant industries. Meanwhile, in 1820s Britain was the superpower in the world. But why did the other countries sign it? — It is because of force.

Known as Gunboat Diplomacy, following were the some of the countries who were forced to sign it, usually after a defeat in a war

1. Latin American Countries in 1810s
2. Ottoman Empire
3. Persian Empire (Iran)
4. Siam (Thailand)
5. Japan
6. China in 1842 after Opium War

Because of this, exports from Britain increased. The infant industries that the other countries had were destroyed, and they had to depend on Europe for everything. Europe set the price for everything.

Indian Cotton Textiles

To illustrate the above with an example, let us take the calicoes — Indian Cotton Textiles. India was a leading exporter or cotton, and around 1700s, Britain stopped the import of Indian Cotton. A huge protectionist move by Britain.

Around that time, textiles industry started growing in Britain. The industrial revolution had given Britain huge advantage.

Then later in mid 1800s, after most parts of India had been under East India Company, Britain imported the industrial textiles. The Indian Cotton Industry was killed. All the artisans lost their livelihood. India could not impose tariffs (import tax), because it was a colony — Free Trade Agreement. So the market was open for them to exploit it. Lord Bentinck of East India Company, had the following to say about it in 1837

“The bones of the cotton weavers are bleaching the plains of India”

Protectionism or Anti-Colonialism worked

America and Britain are the greatest examples of where protectionism worked. Before they became undisputed in industrial advancement, both of them practiced protectionism. This is something that everyone forgets conveniently.

Britain’s protectionism

1500s — Britain started practicing protectionism from King Henry VII. There were heavy tariffs for imports. Sometimes they stole artisans from other countries to learn the techniques from them. Example is the wool industry in Britain.

1700s (early)— Prime Minister of Britain Sir Robert Walpole started many extreme measures to protect the economy. The export were subsidized and there were tariffs for the import.

1700s(late) — The later part of the century bore the fruits of his policies. Britain became undisputed leader in the industries.

1800s — Britain continued its protectionism policies till 1860s, for almost a century after they got Independence.

1860s — only now Britain embraced the free trade. And mostly because they were unfair to the colonies. At this point, Britain controlled around half of world trade.

American Protectionism — Infant Industry

It was Alexander Hamilton who advocated protectionism in America during late 1700s. However, the south vehemently protested against it claiming that they would not buy inferior products produced by the North(yankees). It was only in 1812, when Britain came as far as the white house and gutted it, they realized the folly of it, and started protectionism policies.

In fact some economists argue that the victory of North, was because of the superior industry north had. The south had not developed those industries.

America followed protectionism religiously , that America until the World War I had the highest average tariff among nations.

Nehruvian is Hamiltonian

Nehru did what Hamilton had advocated, though century and a half later. The protectionism was one of the reasons indigenous industries grew in India. All Nehru did was to take a leaf out of America.

Is Free Basics Digital Colonialism?

Marc Andreessen is advocating more of a free market, without government intervention. He hates that government is moving in to kill something that he thinks will be beneficial for the people. In an ideal free market this will not happen. The other way to get his ideas through is to force India’s hand. Yeah if it is a free market, facebook could have created the free basics in India without the approval of the government. “The unfree free” trade of FTAs

History has showed, how it free trade has not helped infant industries. In fact even the present day has shown that as well. We do not have to look far. Just look at China and Russia.Facebook is not popular in those countries. There is VK and Weiboo in those countries. It is has to do with language, government efforts, and some sort of censor. And in a way that is one reason why India is so important to Facebook.

There has been lot of articles that were written, that showed how free basics was not as beneficial as advertised. Here is one from Hindu. The argument -that accepting this “unfree free” could be unfair - seems to be very true. (This time it is gratis instead of freedom). Facebook argues otherwise. This sounds very much similar to FTAs of colonial era. Heck it is even named similarly!

Though free basics had some elements of the colonial rule, since it could not be forced upon, the comparison is a bit far fetched. Though many argue that Facebook substituted military might with its financial might. The amount spent on advertising, a free product is mind boggling.

TRAI’s stand on Net Neutrality, really shows the power of freedom, and deciding what is best for the India by Indians. It is really akin to a defeat in war for Facebook. If history is true, yes, they would come back again!