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The "de-industrialization" of India has been a topic of extensive debate in the literature of political economy. Officials of the East India Company warned against it in the early days of the 18th century.' That the growth of the Lancashire cotton mills came at the expense of Indian handicraft production has been widely accepted, especially among certain nationalist economic historians, led by Dutt (1956).' A focal point in the recent academic discussion has been Morris's (1963) article, reprinted, along with comments from other scholars, in the March 1968 issue of the Indiasl Economic and Social History Review, and in Morris et al. (1969), in which he declared "there is a strong likelihood that the traditional sector, generally speaking, did not decline absolutely in economic significance and therefore did not constitute a depressing element in the performance of the nineteenth century economy. It is even possible that absolute growth occurred, "3 Among other comments, critics painted to the weak statistical basis of Morris's position. One important study he did cite is the Thorner (1962) analysis of the Indian census data of 1881 and 193 1) * The author thanks members of the UM-Ann Arbor Economic History Seminar, D. A. Farnie, Don Anderson, and Richard Roehl. for comments on earlier drafts. ' See Dutt (1956), Chap. XIV. Humanitarian considerations were probably less important to them than was the protection of their own near monopoly in the trade of Indian pi ece goods. ' A good presentation of the different subcurrents of the nationalist position is Ganguli (1977). As another example. Maddison (1971, p. 54) comments "There is a good deal of truth to the de-industrialization argument." Baran (1957, p. 149) states, "(Britain's) commercial policy destroyed the Indian artisan and created the infamous slums of the Indian cities. .. Its economic policy broke down whatever beginrtings there were of an indigenous industrial development.. ." It might be noted that Baran's treatment of the "Roots of Backwardness" of India gives more emphasis to the "drain" of resources from India than to de-industrialization per se. As noted by Morris (1963) and Chaudhuri (1968). that is another thorny issue of Indian economic history. 3 Morris (1963, p. 613). Immediately above this quotation, another phrase refers specifically to handloom weavers. We shall return to this distinction at the end of the paper. There are many other stimulating hypotheses in Morris's paper which we shall not consider here.

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The Depression of the 1930s continues to command attention; some urge wholesale revocation of the policy responses it engendered, while many predict its imminent return. An important trend in recent academic studies of the Depression is the broadening of the geographical range of countries analyzed, while adopting a more consciously comparative perspective.' This paper2 extends that work by analyzing selected experiences in Latin America, providing and commenting on comparisons with both Europe and North America. Its goal is to deepen our analytical understanding of the factors determining changes in prices and output during the period. The basic framework of discussion is simple aggregate supply and demand curves, various aspects of which are investigated below in the different parts of the paper, leading finally to some broad conclusions,

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