gions of the Empire, however, saw their own economic future as bound with their nationalistic aspirations--escaping from the status of colony was an important means of gaining control of the local economy and of making trade serve the regions involved rather than the colonial power. This tension was not peculiar to the British Empire but was seen in all the colonial powers of Europe. The situation in India can provide a picture of what happened throughout the Empire as Britain was made to see it was too expensive to maintain the Empire and too dangerous politically after World War II. The British in India integrated the Indian people into their economic system, viewing India as a source for goods to be carried to and sold in Europe. However, there was a shift in policy as disgruntled British manufacturers demanded a turnaround so that Indian goods were banned from England and English goods were sold on the Indian market, and as part of this the British policy changed from encouraging Indian manufacturers to crushing them. The classic modern colonial economy developed, with unemployment and poverty marking the Indian system as the British used India as a way of improving their own manufacturing base and increasing exports. British policy made India a more rural country, increased poverty, and made the people more dependent (Reilly, 1988, 126-128). The British had come to govern more and more of India during the centuries the company was in place and the spirit of paternalism was a destructive force that included a strong tinge of racism. What had started out as a trading venture had become a political, colonial rule over most of India, and the shift to open British political rule was the culmination of a long evolutionary process that had changed the nature of the country and in many ways had impoverished it (Iyer, 1990, 123-130).
The British rule in India was largely benign and noted for its efficiency, but it did reduce t...