Karl Marx and the Drain Theory

The thesis that the wealth of British India was being systematically drained out through a process of unilateral transfer of purchasing power via the regularly persistent export surplus is generally associated, in the minds of students of economic history, with the name of Dadabhai Naoroji (1825-1917). Borrowing the theme from an old lineage of 18th-century British liberals, he used it as a conceptual tool to explain the lack or retardation of economic growth in a colonial country like India. It is the skilful use of elaborate statistics that distinguished him and his successor Romesh Dutt (1848-1909) amongst the 19th-century drain theorists.