- Most significant historical contribution of moderates was that they offered an economic critique of colonialism.
- This economic nationalism, as it is often referred to, became a major theme that developed further during the subsequent period of nationalist movement and to a large extent influenced the economic policies of the Congress government in independent India.
- The early nationalists took note of all three forms of contemporary colonial economic exploitation, namely, through trade, industry and finance. They grasped that the essence of British economic imperialism lay in the subordination of the Indian economy to the British economy.
- Names important to remember in this respect:
- Dinshaw Wacha, Dadabhai Naoroji, a successful businessman,
- Justice M.G. Ranade (Essays in Indian Economics, 1898) and
- R.C Dutt, a retired ICS officer, who published The Economic History of India in two volumes (1901-1903).
- Early nationalists complained of India’s growing poverty and economic backwardness, the failure of modern industry and agriculture to grow and put blame on British economic exploitation.
- Main thrust of this economic nationalism was on Indian poverty created by the application of the classical economic theory of free trade their main argument was that British colonialism had transformed itself in the 19th century by jettisoning the older and direct modes of extraction through plunder, tribute and mercantilism in favour of more sophisticated and less visible methods of exploitation through free trade and foreign capital investment.
- Dadabhai Naoroji in his ‘Indian Poverty and Un-British Rule in India’ laid his Drain of Wealth Theory. He showed how India’s wealth was going away to England in the form of salaries, savings, pensions, payments to British troops in India and, profits from British companies.
