INDIAN ECONOMY UNDER EARLY BRITISH RULE: 1757-1857
Irfan Habib
Tulika Books
126 pages; Rs 280
This slim volume contains the distilled wisdom of a reputed historian who has a distinct approach to the study of the past and contemporary societies. Irfan Habib employs the materialistic interpretation of history and social dialectics to draw connections between seemingly unconnected and complex facts.
The burden of this book is that the period from 1757 to 1857 marks a clear "transformation of colonialism from a mercantilist system into 'free trade' imperialism". There are two distinct phases of British involvement with India. In the first, "the drive for tribute was of overriding significance". In the second, India also became "a captive market for Britain" and the impact proved economically and socially disastrous.
But first, and importantly, the author refutes the claim of colonisers and colonial historians that Indian agriculture was either "stagnant" or "stationary" in 1700. As an essentially agricultural economy, India was producing not only food crops but also cash crops such as maize, tobacco, et al. Also, "in Bengal, peasants had taken to sericulture since the fifteenth century, and in the seventeenth, Bengal became one of the great silk producing regions in the world". Further, the "Indian textile industry was unique in the world for its sheer size and the variety of its products...."
Second, towns and manufacturers also played an important role. From 1600 onwards, Professor Habib says, important towns like Delhi, Agra, Surat and Murshidabad had emerged. In short, between 1700 and 1757, India had flourishing towns, a shipping industry, a thriving trade, both within the country and overseas (British, Portuguese and French).
Professor Habib devotes some attention to countering the arguments of colonial historians like C A Bayly, author of The New Cambridge History of India volume II.1, who, contrary to the evidence Professor Habib provides, asserted that "British conquests accommodated the interests of the India's upper class and also maintained the previous conditions of trade".
The author argues that if the East India Company had not been making profits by exploiting India's rich resources, the British would not have felt the "temptation" to "make use of its military and naval power to secure financial gain". Profit-making through the use of force became the norm, and the watershed was the Battle of Plassey, 1757.
In Chapter 2, which covers the mercantilist phase of British rule (1757-1813), the author says Company servants in India fully seized "the opportunity of enrichment", the most notable being Robert Clive and his associates (the "nabobs"), who "ransacked the treasury of Murshidabad" and transferred their wealth to England.
The post-Plassey phase of expansion of British rule through conquests of different regions created an anomalous situation in which different revenue collection systems were instituted, such as the permanent settlement in Bengal, the ryotwari system in Madras, and the mahalwari system in Uttar Pradesh, north-west and central India, areas linked only by British conquest. These systems were essentially extractive.
By the 1770s, the English cotton textile industry had begun to be mechanised and "nurtured by a century of strictest protection, now began driving out Indian textiles from all markets of the world". In other words, Britain's industrial development directly led to the underdevelopment of India.
The third and final chapter, "Indian economy under free trade, 1813-1857", is devoted to the story of the colonial relationship between Britain and India when the Charter Act of 1813 abolished the East India Company's two-century-old monopoly over Britain's trade with India. The real meaning of this development was that the British colonisers' continuing conquests in India created the "imperialism of free trade", but the system worked for British industrial interests. Professor Habib's rich data show that even after the regime of free trade formally began, "colonial tribute still remained a sacrosanct economic institution for industrial Britain".
In sum, as Britain's expansionist policies in India brought region after region under its direct rule and English textiles invaded India, the country's thriving textile industry collapsed. Professor Habib observes, "While the destruction of a large part of Indian textile production was the most striking feature of de-industrialisation under free trade ... the process extended to iron, iron tools, glassware, brass, metal manufacturers ." The process of de-industrialisation had "its natural corollary, rural proletarianisation, as weavers and other artisans were forced into becoming landless labourers".
This brings Professor Habib to the heart of the debate on the adverse impact of colonial rule in Asia, Africa and Latin America. Historians of these colonised continents have grappled with the thesis of "development versus underdevelopment" and "industrialisation versus de-industrialisation"
Of course, this story has been written before, but Professor Habib's objective is to cleanse the minds of those Indians who never tire of writing about the "beneficial" consequences of British rule in India. Nikolai Bukharin had described imperialism as a "robber state" and the best evidence of this robbery of Indian resources is provided by British rule in India.
To be sure, Professor Habib's historiography has been contested. But that could be considered a testimony to his solid scholarship. After all, it is better to be challenged than to be ignored by fellow professionals and academics.
Irfan Habib
Tulika Books
126 pages; Rs 280
This slim volume contains the distilled wisdom of a reputed historian who has a distinct approach to the study of the past and contemporary societies. Irfan Habib employs the materialistic interpretation of history and social dialectics to draw connections between seemingly unconnected and complex facts.
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The burden of this book is that the period from 1757 to 1857 marks a clear "transformation of colonialism from a mercantilist system into 'free trade' imperialism". There are two distinct phases of British involvement with India. In the first, "the drive for tribute was of overriding significance". In the second, India also became "a captive market for Britain" and the impact proved economically and socially disastrous.
But first, and importantly, the author refutes the claim of colonisers and colonial historians that Indian agriculture was either "stagnant" or "stationary" in 1700. As an essentially agricultural economy, India was producing not only food crops but also cash crops such as maize, tobacco, et al. Also, "in Bengal, peasants had taken to sericulture since the fifteenth century, and in the seventeenth, Bengal became one of the great silk producing regions in the world". Further, the "Indian textile industry was unique in the world for its sheer size and the variety of its products...."
Second, towns and manufacturers also played an important role. From 1600 onwards, Professor Habib says, important towns like Delhi, Agra, Surat and Murshidabad had emerged. In short, between 1700 and 1757, India had flourishing towns, a shipping industry, a thriving trade, both within the country and overseas (British, Portuguese and French).
Professor Habib devotes some attention to countering the arguments of colonial historians like C A Bayly, author of The New Cambridge History of India volume II.1, who, contrary to the evidence Professor Habib provides, asserted that "British conquests accommodated the interests of the India's upper class and also maintained the previous conditions of trade".
The author argues that if the East India Company had not been making profits by exploiting India's rich resources, the British would not have felt the "temptation" to "make use of its military and naval power to secure financial gain". Profit-making through the use of force became the norm, and the watershed was the Battle of Plassey, 1757.
In Chapter 2, which covers the mercantilist phase of British rule (1757-1813), the author says Company servants in India fully seized "the opportunity of enrichment", the most notable being Robert Clive and his associates (the "nabobs"), who "ransacked the treasury of Murshidabad" and transferred their wealth to England.
The post-Plassey phase of expansion of British rule through conquests of different regions created an anomalous situation in which different revenue collection systems were instituted, such as the permanent settlement in Bengal, the ryotwari system in Madras, and the mahalwari system in Uttar Pradesh, north-west and central India, areas linked only by British conquest. These systems were essentially extractive.
By the 1770s, the English cotton textile industry had begun to be mechanised and "nurtured by a century of strictest protection, now began driving out Indian textiles from all markets of the world". In other words, Britain's industrial development directly led to the underdevelopment of India.
The third and final chapter, "Indian economy under free trade, 1813-1857", is devoted to the story of the colonial relationship between Britain and India when the Charter Act of 1813 abolished the East India Company's two-century-old monopoly over Britain's trade with India. The real meaning of this development was that the British colonisers' continuing conquests in India created the "imperialism of free trade", but the system worked for British industrial interests. Professor Habib's rich data show that even after the regime of free trade formally began, "colonial tribute still remained a sacrosanct economic institution for industrial Britain".
In sum, as Britain's expansionist policies in India brought region after region under its direct rule and English textiles invaded India, the country's thriving textile industry collapsed. Professor Habib observes, "While the destruction of a large part of Indian textile production was the most striking feature of de-industrialisation under free trade ... the process extended to iron, iron tools, glassware, brass, metal manufacturers ." The process of de-industrialisation had "its natural corollary, rural proletarianisation, as weavers and other artisans were forced into becoming landless labourers".
This brings Professor Habib to the heart of the debate on the adverse impact of colonial rule in Asia, Africa and Latin America. Historians of these colonised continents have grappled with the thesis of "development versus underdevelopment" and "industrialisation versus de-industrialisation"
Of course, this story has been written before, but Professor Habib's objective is to cleanse the minds of those Indians who never tire of writing about the "beneficial" consequences of British rule in India. Nikolai Bukharin had described imperialism as a "robber state" and the best evidence of this robbery of Indian resources is provided by British rule in India.
To be sure, Professor Habib's historiography has been contested. But that could be considered a testimony to his solid scholarship. After all, it is better to be challenged than to be ignored by fellow professionals and academics.