HISTORY OF ECONOMIES

Economic History of India and Brazil

Economic History of India and Brazil

Introduction

It is hard to critic development theory of nay country and policies for the majority of world's economies, who suffer from economic stagnation and under-development in their economic histories. Therefore, it is important to study their past social and economic histories, which resulted in their present economic state. It is ironic, that most of economic developers or theorists study the economies of a developed nation and formulate economic theories based on the experience or strategies of a developed nation and then try to implement these strategies to underdeveloped nations. The attention given to underdeveloped and colonial lands is very rare.

The historical perspectives of underdeveloped and colonial countries are quite dissimilar. The existing theories are not able to reflect in the past realities of underdeveloped nations, and the reflection is based on the part of the world as a whole. This approach, to study economies of the world, has led to assumptions that the problems faced by underdeveloped world today were faced by the developed nations in the early history of their development (Andre, 1966). This assumption and ignorance leads to fallacy about current development and underdevelopment. The studies regarding underdevelopment and development do not take in to account the relation between economies and their colonial history, as well as, development in the rest of the world. Subsequently, most theories do not explain the development and structure of capitalized system, and the simultaneous underdevelopment it generated in other parts of the world.

Discussion

Brazil and India, both the countries went through the colonial eras. Then why, despite diverse colonial or early post-colonial experiences, did the two countries end up with very similar outcomes?

The prevailing thinking is that economic development takes place in sequence of capitalist stages and the underdeveloped economies are still going through earlier stages of capitalist development. It is asserted that the developed countries also went through these early stages in their respective histories. However, it is very apparent that economic realities of many underdeveloped or developing economies do not resemble economic histories of the developed world. Therefore, it is important to study each country in its own context and focus should be given on the factors, which are relevant to that country.

Economic Development of India

The colonial era began with the establishment of company rule in India, which brought major change in the agricultural and taxation policies, which focused towards agricultural commercialization. This resulted in mass impoverishment, decreased production and destitution of farmers. It also led to various famines. The polices implemented by British rule resulted in shortage of handloom and handicraft sectors, due to reduced employment, as well as demand. In 1813, the international restrictions were removed through a Charter, which resulted in expansion of Indian trade and continued growth with the increasing trend. There was significant capital transfer to England from India. This caused massive drain of revenues due to British policies instead of focus towards modernization of Indian Economy (Sankaran, ...