Academic economists, for reasons of mathematical tractability, often prefer to deal with a 'one period economy' with perfect information. The result is that their models bear no relation to reality. In contrast, historians are concerned with 'dynamics'- i.e. how things change over time. They understand that information is never perfect. It waxes and wanes.
What happens when an economist gets into a spat with a historian? The greater stupidity and mendacity of the economist prevails. Why? History doesn't matter. It is, as Henry Ford said, bunk. We resent the historian's attempts to confine the past to a straitjacket of facts and objective truths. We prefer the myths of the economists. The 'historical school of economics' disappeared long ago. However various different economic theories of history continue to flourish.
As a case in point, consider Amartya Sen's, 2008, reply to Niall Ferguson's criticism of an essay of his titled 'Imperial illusions'.
The following paragraph is typical-
It has taken India some time to recover even the lost self-respect--and the respect of others--that are hard to sustain for a subjugated population.
Sen's people were subjugated to Muslims of Turkic or Afghan heritage. They, quite naturally, preferred British rule because their self-respect, not to mention safety, rose somewhat. This is something which, as historians know, they themselves said-that too, in the case of Sen's particular Hindu sect, in quite eloquent Victorian English. At a later point, they may also have backed the Independence movement- believing that Hindus could rise yet further, but were ethnically cleansed from their ancestral homes in Muslim majority East Bengal.
Had Sen's people remained subjugated to Muslim rulers they would have had little interest in overthrowing British paramountcy unless- as in Hyderabad- there was a chance they could establish their own hegemony.
This is the record of history. Sen's people's self-respect rose under the British but fell when they were ethnically cleansed. It may have revived once they managed to rebuild their lives in Hindu India or after they managed to emigrate to England or America. This is not to say that the self-respect of Sen's people never stood high. It may have done so before Turkic or Afghan Muslims subjugated and ruled over them. But that happened a long time before the first West Europeans appeared in India.
Sen says-
Gandhi had to establish his voice through non-violent protest, arrest and imprisonment, not through the benefaction of what Ferguson calls the "liberal empire."
Gandhi was a loyal subject of the Empire when his voice was first established. He was awarded the kaisar-e-hind medal in 1915. He was first jailed in India after calling off the Non Cooperation Movement and admitting that India was not ready for self-government. Appearing before a Court, he said some of his people had gone mad. He was deeply sorry for it and thus accepted the severest penalty of the law. He pleaded guilty to all charges of having instigated disaffection against the Government. In consequence of his candour, he was not transported to the Andamans and made to suffer the harsh fate of those who were convicted of encouraging violence against the Government. Though jailed for 6 years, he was released after two. This was certainly a 'benefaction' though it is equally true that Gandhi remained quiet for the next six years and thus could not be said to have taken advantage of British clemency.
Sen writes-
If an Indian industrial family finds it easy enough to buy the bulk of the British steel industry today,
It is because some Indians know a lot about the steel industry. India produces more than ten times as much steel as Britain. However, one of the biggest Indian origin steel barons- Laxmi Mittal- established his mills outside India. He remains one of the richest people in the UK.
that does contrast with the inability of the same industrial family (the Tatas) to borrow small funds from the London money market in 1906 to start even a single steel mill in India.
This was because, at that time, they had no experience of making steel. The first steel they produced was in 1912. Sen doesn't seem to understand that people with experience of running a particular type of business find it easier to raise investment funds than people who have never done the thing before. Ignorance of 'knowledge effects' may explain his being a shitty Economist. To be fair, academic economists of his vintage may not have understood that 'one period economies' with perfect information don't exist in reality. But, equally, it must be admitted that it was the duty of such economists to slowly and painfully make this discovery and to shut the fuck up on discovering that they had been babbling nonsense for many years. However, since this might have entailed a diminution in their income, it made economic sense for economists to remain imbeciles. It must be said, Amartya Sen went further then most of his profession in matching his stupidity with glaring and gratuitous displays of ignorance.
Thus Sen writes-
The depiction of the natives as having "a general disposition to deceit and perfidy," as J.S. Mill put it in his classic imperial book on India, would not have been particularly encouraging.
J.S Mill did not write any imperial book on India. His father did. Sadly, Sen's deceit and perfidy in this article gives colour to James Mill's charge that 'under the glosing exterior of the Hindu, lies a general disposition to deceit and perfidy'
It is not encouraging at all that a Professor who is supposed to know a lot about Utilitarianism does not even know the difference between James Mill and John Stuart Mill.
Mill's book, by the way, was standard reading of all British officers going to India in what Ferguson sees as the "benign" phase of the empire.
It was published in 1818. This cretin thinks the son wrote the book forty years later.
In his response Sen
asked whether Ferguson should be so sure that India could have done little of the kind that Japan did. His comparisons with "Qing China" and "Ottoman Turkey" are certainly worth considering, but does he not overlook here the extent to which there were early industrial and financial developments, as well as global affiliations, already in India?
Just as there were in Turkey and Timbuctoo and Indonesia and the Philippines.
I commented on this in my essay: "When the East India Company undertook the battle of Plassey and defeated the Nawab of Bengal, there were businessmen, traders, and other professionals from a number of different European nations already in that very locality. Their primary involvement was in exporting textiles and other industrial products from India, and the river Ganges ... on which the East India Company had its settlement, also had (further upstream) trading centers and settled communities from Portugal, the Netherlands, France, Denmark, Prussia, and other European nations."
You can always find a few merchants of various nationalities in any remote locality which can export something with high value to weight. This does not mean development is going to spontaneously arise.
Despite the early history of industrial and financial developments in India, we cannot, of course, be sure what would have happened there in the absence of British conquest, but Ferguson's ridicule of what he calls "Meiji India" avoids the important issues involved.
We know that the Japanese started to build ships and to go in for export led growth. South Korea and now China are doing the same. India was well placed to take that path but 'export pessimism' prevailed. Sen should know this. Plenty of his pals worked for the Planning Commission. Sen's one service to India is that he emigrated rather than join that bunch of jokers.
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