Conlusion: Summary of findings

Chapter 4 discusses the origins of India’s service sector advantage. Although modern industries developed in the colonial period and the policy of public sector led industrialization after independence led to the development of industries producing consumer, capital and intermediate goods, the share of the sector in employment has remained low. Industry in India did not place the same role in structural transformation as it did in the context of European industrializers and in China today. The service sector in India has been the most productive sector historically. Labour productivity in services in early twentieth century was higher than in industry. Labour productivity in industry grew faster until the 1980s, thereafter service sector has led productivity growth. The service sector today has a concentration of workers with secondary and tertiary education. But this was also the case historically. The education policies in colonial India prioritized secondary and tertiary education for a few at the cost of universal primary education. This continued after independence. The service sector led growth in India today has historical origins.

Chapter 1 provides a long view of the living standards and economic growth from the Mughal Empire to the end of British rule, followed by economic changes in independent India. Living standards are measured in terms of income categories such as average wages and estimates of per capita incomes. I show that Indian per capita GDP was 60 percent of British level in 1600. But Indian per capita GDP began to decline from the seventeenth century, well before the conquest of Bengal by the East India Company. It stabilized in the nineteenth century and stagnated until the end of colonial rule. The economy moved from stagnation to positive economic growth after independence until the policies of regulation and import substitution. Although the rate of growth was low compared to recent decades, it marked a structural break with its historical trend and set India on the path of modern economic growth.

Chapter 5 focuses on four different aspects of economic and social inequality. There were historical differences in level of economic development across provinces and there is persistence. The Bombay Presidency was one of the richest parts of colonial India. Maharashtra and Gujarat today are among the richest provinces in India. The poorer regions in colonial India, such as the United Provinces and the Central Provinces rank among the poorer regions today. Income inequality was high in the 1930s and 1940s. The first decades after independence saw a decline in inequality following the policies of public sector led development. Since the economic reforms of 1980, income inequality has increased, but it is not as high as in the colonial period. There is continuity in caste inequality in many dimensions, but also changes. Upper castes were heather and more literate in colonial India. Today lower castes have better access to education and jobs due policies of affirmative action, big differences remain. Finally, one aspect of gender inequality that is specific to India is sons preference. The regional variation in male biased sex ratio continues today.

The economic history of colonization of India is a contested field. Nationalist historiography emphasized the drain of wealth and deindustrialization. Imperialist historiography point to the globalization of the economy, construction of the railway network and access to the international capital market. This book brings together empirical evidence over four centuries to assess India’s long run development from 1600 and emphasizes the decline and stagnation in agriculture and the failure of colonial policy to increase productivity in this sector.

This chapter details the increasingly indispensable part German big business played in expelling German Jews from economic life and dispossessing them, including in the annexed regions of Austria and the Czech lands. Avarice and self-defense were the principal motivators, with the latter becoming increasingly important as time passed.

The chapter traces the process by which German corporations largely, though still partially, abandoned their Jewish colleagues in the first eighteen months of Nazi rule and simultaneously shed their earlier, recurrent demands for a “state-free” economy in favor of accepting the Nazi statist one. The account places more than customary emphasis on the role of intimidation.

The chapter argues that prior to Hitler’s accession, Germany’s corporate elite was fatefully ambivalent toward Jews: sympathetic to those who were part of it, suspicious of those who were critical of it or newly arrived in the country. This ambivalence meant that corporate executives were generally neither antisemites nor anti-antisemites or that they were simultaneously both.

This chapter demonstrates the routine prevalence of forced labor in Germany prior to World War II, its expansion during the early years of the fighting, the slow introduction of concentration camp slave labor to the German economy, and the reasons for its adoption by nearly every major German enterprise. Contrary to common belief, the chief motivation driving both processes was the shortage of German workers, thanks to conscription and wartime demand for output, not the cost of the forced and slave laborers. But the great growth of German industrial capacity during the war owed much to these labor inputs.