Year 501 (4 page)

Bengal was known for its fine cotton, now extinct, and for the excellence of its textiles, now imported. After the British takeover, British traders, using “every conceivable form of roguery,” “acquired the weavers' cloth for a fraction of its value,” English merchant William Bolts wrote in 1772: “Various and innumerable are the methods of oppressing the poor weavers...such as by fines, imprisonments, floggings, forcing bonds from them, etc.” “The oppression and monopolies” imposed by the English “have been the causes of the decline of trade, the decrease of the revenues, and the present ruinous condition of affairs in Bengal.”

Perhaps relying on Bolts, whose book was in his library, Adam Smith wrote four years later that in the underpopulated and “fertile country” of Bengal, “three or four hundred thousand people die of hunger in one year.” These are consequences of the “improper regulations” and “injudicious restraints” imposed by the ruling Company upon the rice trade, which turn “dearth into a famine.” “It has not been uncommon” for Company officials, “when the chief foresaw that extraordinary profit was likely to be made by opium,” to plough up “a rich field of rice or other grain...in order to make room for a plantation of poppies.” The miserable state of Bengal “and of some other of the English settlements” is the fault of the policies of “the mercantile company which oppresses and domineers in the East Indies.” These should be contrasted, Smith urges, with “the genius of the British constitution which protects and governs North America”—protects, that is, the English colonists, not the “mere savages,” he fails to add.

The protection of the English colonists was actually a rather devious instrument. As Smith notes elsewhere, Britain “imposes an absolute prohibition upon the erection of slit-mills in any of her American plantations,” and closely regulates internal commerce “of the produce of America; a regulation which effectually prevents the establishment of any manufacture of [hats, wools, woollen goods] for distant sale, and confines the industry of her colonists in this way to such coarse and household manufactures, as a private family commonly makes for its own use” or for its close neighbors. This is “a manifest violation of the most sacred rights of mankind,” standard in the colonial domains.

Under Britain's Permanent Settlement of 1793 in India, land was privatized, yielding wealth to local clients and taxes for the British rulers, while “The settlement fashioned with great care and deliberation has to our painful knowledge subjected almost the whole of the lower classes to most grievous oppression,” a British enquiry commission concluded in 1832, commenting on yet another facet of the experiment. Three years later, the director of the Company reported that “The misery hardly finds a parallel in the history of commerce. The bones of the cotton-weavers are bleaching the plains of India.” The experiment was not a total failure, however. “If security was wanting against extensive popular tumult or revolution,” the Governor-General of India, Lord Bentinck, observed, “I should say that the ‘Permanent Settlement,' though a failure in many other respects and in most important essentials, has this great advantage, at least, of having created a vast body of rich landed proprietors deeply interested in the continuance of the British Dominion and having complete command over the mass of the people,” whose growing misery is therefore less of a problem than it might have been. As local industry declined, Bengal was converted to export agriculture, first indigo, then jute; Bangladesh produced over half the world's crop by 1900, but not a single mill for processing was ever built there under British rule.
13

While Bengal was despoiled, Britain's textile industry was protected from Indian competition; a matter of importance, because Indian producers enjoyed a comparative advantage in printed cotton textile fabrics for the expanding market in England. A British Royal Industrial Commission of 1916-1918 recalled that Indian industrial development was “not inferior to that of the more advanced European nations” when “merchant adventurers from the West” arrived; it may even be “that the industries of lndia were far more advanced than those of the West up to the advent of the industrial revolution,” Frederick Clairmonte observes,” citing British studies. Parliamentary Acts of 1700 and 1720 forbade the import of printed fabrics from India, Persia, and China; all goods seized in contravention of this edict were to be confiscated, sold by auction, and re-exported. Indian calicoes were barred, including “any garment or apparel whatsoever...in or about any bed, chair cushion, window curtain, or any other sort of household stuff or furniture.” Later, British taxes also discriminated against local cloth within India, which was forced to take inferior British textiles.

Such measures were unavoidable, Horace Wilson wrote in his
History of British India
in 1826: “Had this not been the case, the mills of Paisley and Manchester would have been stopped in their outset, and could scarcely have been again set in motion, even by the power of steam. They were created by the sacrifice of Indian manufacturers.” Economic historian J.H. Clapham concluded that “this restrictive act gave an important, and it may be argued a useful, stimulus to textile printing in Britain,” a leading sector of the industrial revolution. By the 19th century, India was financing more than two-fifths of Britain's trade deficit, providing a market for British manufactures as well as troops for its colonial conquests and the opium that was the staple of its trade with China.
14

“A significant fact which stands out is that those parts of India which have been longest under British rule are the poorest today,” Jawaharlal Nehru wrote: “Indeed some kind of chart might be drawn up to indicate the close connection between length of British rule and progressive growth of poverty.” In the mid-18th century, India was developed by comparative standards, not only in textiles. “The ship building industry was flourishing and one of the flagships of an English admiral during the Napoleonic wars had been built by an Indian firm in India.” Not only textiles, but other well-established industries such as “ship-building, metal working, glass, paper, and many crafts,” declined under British rule, as India's development was arrested and the growth of new industry blocked, and India became “an agricultural colony of industrial England.” While Europe urbanized, India “became progressively ruralized,” with a rapid increase in the proportion of the population dependent on agriculture, “the real, the fundamental cause of the appalling poverty of the Indian people,” Nehru writes. In 1840, a British historian testifying before a Parliamentary Inquiry Committee could still say: “India is as much a manufacturing country as an agriculturalist; and he who would seek to reduce her to the position of an agricultural country, seeks to lower her in the scale of civilization,” exactly what happened under Britain's “despotic sway,” Nehru observes.
15

Discussing “colonies as mercantile investments,” Brazilian economic historian José J. de A. Arruda, concludes that the investments were indeed highly profitable, for some: the Dutch, French, and particularly the British, who also gained the advantages of Portugal's colonial assets; the slave traders, the merchants, the manufacturers; and the New England colonies whose development was spurred by triangular trade with Britain and the sugar colonies of the West Indies. “The colonial world...fulfilled its chief function as a link providing growth for the early accumulation of capital.” It promoted “a transfer of colonial riches to the metropoles, which then fought for the appropriation of colonial surplus,” contributing substantially to the economic growth of Europe. “THESE COLONIES DID PAY,” he concludes. But, he adds, the calculations miss the main point: “profits went to individuals and costs were socialized.” The “essence of the system” is “social losses” along with “the possibility of constant advance for capitalism” and for “the private coffers of the mercantilist bourgeoisie.” In short, public subsidy, private profit; the expected thrust of policy when its architects are those who can expect to gain the profit.

As for those who lapsed into underdevelopment, Pearson raises but does not pursue the question whether there was “an alternative path to a status that could meet the European challenge,” so that China, India, and others subjected to the European conquest might have been able to avoid “being incorporated as peripheries in the world economy, avoid being underdeveloped, avoid suffering as merchant empires turned into much more ominous territorial empires backed by an economically dominant Western Europe.”
16

In his classic condemnation of monopoly power and colonization, Adam Smith has useful commentary on Britain's policies, making some of the same points as Arruda. He describes these policies with some ambivalence, arguing finally that despite the great advantages that England gained from the colonies and its monopoly of their trade, in the long run the practices did not pay, either in Asia or North America. The argument is largely theoretical; adequate data were not available.

But however convincing the argument may be, Smith's discussion also explains why it is not to the point. Abandoning the colonies would be “more advantageous to the great body of the people” of England, he concludes, “though less so to the merchants, than the monopoly which she at present enjoys.” The monopoly, “though a very grievous tax upon the colonies, and though it may increase the revenue of a particular order of men in Great Britain, diminishes instead of increasing that of the great body of the people.” The military costs alone are a severe burden, apart from the distortions of investment and trade.

For the great body of people of England, the East India monopoly and the North American colonies may indeed have been the “absurdity” Smith claims, and “grievous” as well in their impact on the English colonists. But for “the contrivers of this whole mercantile system,” they were not absurd at all. “Our merchants and manufacturers have been by far the principal architects,” and their interests have “been most peculiarly attended to” by the system, though not the interests of consumers and working people. The interests of the owners of the gilt-edged securities of the Company, and others who gained wealth beyond the dreams of avarice, were also “most peculiarly attended to.” The costs were socialized, the profits poured into the coffers of the “principal architects.” The policies they contrived were reasonable enough in terms of narrow self-interest, however others may have been harmed, including the general population of England.
17

Smith's conclusion that “Under the present system of management, therefore, Great Britain derives nothing but loss from the dominion which she assumes over her colonies” is highly misleading. From the point of view of policy choices, Great Britain was not an entity. “The wealth of nations” is no concern of the “architects of policy,” who, as Smith insists, seek private gain. The fate of the common people is no more their concern than that of the “mere savages” who stand in the way. If an “invisible hand” sometimes provided others with benefits, that is merely incidental. The basic focus on “wealth of nations” and what “Great Britain derives” is faulty from the start, undermined by illegitimate idealization, though at least it is qualified and corrected in Smith's fuller discussion.

The crucial qualifications have commonly been dropped, however, as they enter contemporary ideology in the hands of Smith's latter-day disciples. Thus in introducing the Chicago bicentennial edition of Smith's classic, George Stigler writes that “Americans will find his views on the American colonies especially instructive. He believed that there was, indeed, exploitation—but of the English by the colonists.” What he actually believed was that there was exploitation of the English by the “particular order of men” in England who were the architects of policy in their own interest, and a “grievous tax” upon the colonies as well. By removing Smith's emphasis on the basic class conflict, and its crucial impact on policy, we falsify his views, and grossly misrepresent the facts, though constructing a useful instrument to mislead in the service of wealth and power. These are common features of contemporary discussion of international affairs. And of much else: condemnation of the harmful effects of the Pentagon system on the economy, for example, is at best extremely misleading if it does not emphasize that for the architects of policy and the interests they represent (notably, advanced sectors of industry), the effects have hardly been harmful.

Not surprisingly, social policy regularly turns out to be a welfare project for the rich and powerful. Imperial systems, in particular, are one of the many devices by which the poor at home subsidize their masters. And while studies of the cost effectiveness of empire and domination for “the nation” may have academic interest, they are only marginally relevant to the study of policy formation in societies in which the general public is expected to stand aside—that is, all existing societies.

The conclusions, however, are far more general. As indicated by the example of the Pentagon system, the same considerations apply to domestic as to international policy. State power has not only been exercised to enable some to reap wealth beyond the dreams of avarice while devastating subject societies abroad, but has also played a critical role in entrenching private privilege at home. In early modern Holland and England, the government provided the infrastructure for capitalist development, protected vulnerable and crucial production (wool, fisheries) and subjected them to close regulation, and used its monopoly of violence to impose wage labor conditions on formerly independent farmers. Centuries ago, “European societies were also colonized and plundered, less catastrophically than the Americas but more so than most of Asia” (Thomas Brady): “The rapid economic development yielded by the English path proved extremely destructive, both of traditional property rights at home and of institutions and cultures throughout the world.” A process of “rural pacification” took place in the developing countries of Europe. “The massive expropriation of the peasantry, which happened in the fullest sense only in England,” may well have been the basis for its more rapid economic development as peasants were deprived of property rights they managed to retain in France, and forced into the labor market; “it was precisely the absence of [freedom and property rights] that facilitated the onset of real economic development” in England, Robert Brenner argues in his penetrating inquiry into the origins of European capitalism. The common people had ample reasons to resist “the march of progress,” or to seek to deflect it to a different path that sought to preserve and extend other values: “ideas of community, of togetherness, of the whole superseding the parts, and of the common good that transcends ever particular good” (Brady).