Between 1765 and 1900, the richest 10% in Britain extracted an estimated $33.8 trillion from India — enough to carpet London in £50 notes nearly four times over. This staggering figure represents just half of the $64.82 trillion drained from India. This occurred during over two centuries of colonial rulewealth extraction. Oxfam reports this in its latest report “Takers Not Makers”.
Colonialism left a legacy of inequality that endures today, from economic disparities to systemic exploitation. A closer look at British colonialism in India illustrates the monumental impact of colonial wealth extraction on global inequality.
THE EAST INDIA COMPANY: A COLONIAL BEHEMOTH
The East India Company was a prototype of the modern multinational corporation, wielding unchecked power in India.
- 260,000 soldiers: Its army was twice the size of Britain’s peacetime military.
- Land dispossession and violence: It drove globalization through force and economic domination.
- Financial markets in London played a crucial role. They supported and profited from the East India Company’s exploits. This created the world’s first global financial system, which heavily benefited from colonial wealth extraction.
INDUSTRIAL DECLINE AND ECONOMIC DRAIN
In 1750, India accounted for 25% of global industrial output. By 1900, that figure had plummeted to 2%, primarily due to British protectionist policies that crushed India’s thriving textile industry.
Over 200 years, Britain drained $64.82 trillion from India, perpetuating poverty while enriching elites. This is a striking example of colonial wealth extraction. During World War I, disruptions in colonial trade inadvertently spurred industrial growth in some colonies. This growth showcased the suppressive impact of British rule.
COLONIAL INEQUALITY: A LASTING LEGACY
Independence often replaced European elites with local ones, maintaining inequality. In India:
- 1875: Top earners were European military and administrative officers.
- 1940: Wealth shifted to local traders, bankers, and industrialists.
Today, wealth disparities in the Global South mirror colonial-era inequalities, with poverty and wealth starkly separated by barriers such as golf courses and gated communities.
Colonial education systems prioritized European values, marginalizing local languages and knowledge. For instance, only 0.14% of India’s mother tongues are used in instruction today, reflecting the legacy of colonial wealth extraction and exclusion.
THE HUMAN COST OF COLONIALISM
Colonial policies exacerbated famines and suffering:
- 30–60 million deaths occurred due to famines in the late 19th century, worsened by laissez-faire policies.
- Bengal Famine of 1943: British-imposed grain restrictions during World War II caused 3 million deaths in India and Bangladesh.
Under East India Company rule, 75% of expenditures went to military operations, while just 3% supported public works, crippling infrastructure and agriculture.
Modern Echoes of Colonialism
Even after formal independence, global powers continued exploiting nations under the guise of geopolitical strategies. During the Cold War, the U.S. attempted to change governments 72 times, supporting authoritarian regimes in Guatemala, Chile, and beyond.
Today, the Global North controls disproportionate wealth and power, with roots in colonial systems. Historical exploitation has entrenched inequalities that shape modern economic and political realities, a clear continuation of colonial wealth extraction practices.
ADDRESSING THE COLONIAL LEGACY
Former colonial powers must confront their history, offering formal apologies and reparations to affected communities.
To address enduring inequalities, global systems need restructuring:
- Fair representation for the Global South in organizations like the World Bank and UN.
- Redistribution of resources to prioritize development in former colonies, reversing the effects of colonial wealth extraction.