The Conceptual Basis of the Estimation of Transfers from Colonies of Conquest in Asia to the Industrializing North

This article discusses the conceptual basis of transfers to metropolitan centers from their colonies of conquest and identifies three neglected areas for further research. First, correctly estimated metropolitan trade and trade to GDP ratios are required, which have been seriously underestimated in the case of Britain; a similar problem may exist with other metropolitan countries. Second, the relation between visible trade and administered invisible liabilities on colonies is important. Time series of budgetary revenues, trade, investment, and debt need to be built up to obtain a rigorously defined estimate of transfer. India under British rule illustrates an important mechanism of transfer that used an international bill of exchange to link the budget to trade. Third, the impact of prolonged transfers from the global South in permitting large capital flows for the diffusion of industrial capitalism to the North, and the network of global trade flows require further research. JEL Classification: F54, F21