Amiya Bagchi

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Colonialism and the Nature of 'Capitalist' Enterprise in IndiaAuthor(s): Amiya Kumar BagchiReviewed work(s):Source: Economic and Political Weekly, Vol. 23, No. 31 (Jul. 30, 1988), pp. PE38-PE50Published by: Economic and Political WeeklyStable URL: http://www.jstor.org/stable/4378819 .Accessed: 12/01/2012 18:03

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Colonialism a n d t h e N a t u r e o f 'Capitalist'Enterprise i n I n d i a

Amiya Kumar BagehiThis article is an attempt to analyse the nature of 'capitalist' enterprise in colonial India. Thefocus is on thenature of the labour processes used within the enterprises, the means of control exercised over the workers andthe political relations of the owners or managers with the state apparatus. Specific cases of the retardation ofthe productive forces and the adoption of regressive labour processes are presented. The paper may be looked

upon as an agenda for research as well as a contribution to the debate on the nature of colonial society.I

IntroductionCOLONIALISMn the senseof exploitationand ruleover the people of one countrybythe ruling class of another produces adistinctgap betweenthe forces of produc-tion and relations of production in thedependent country.Such a gap leads to astraightforward onfrontationbetweenthecontrollersof the means of productionandof coercion and the classes or groups towhichthe control and the coercivemecha-nismis applied.However,n a capitalistcol-onialsituation uch a confrontationdoesnotleadimmediatelyo a change n the relationsof production o as to be consistentwiththesuperiordevelopment f the globalforcesofproduction.For,someof the basic transmis-sionmechanisms or the implantation f thesuperiormeans of production continue tobe controlledbythe metropolitan ower.Thepolitical and social system sustained bycolonialism acts as a particularmode ofregulation of economic activities, andfavourscertainprocessesof transmissionofinformation, apital, abourand technology,and either rules out or discouragesothermodesof transmissionof these inputs.Thecontinual ensionproducedby the irruptionof new knowledge, technology and newmodes of organisation,very often throughtheinstrumentalityf competing mperialistpowersis sought to be resolved by rulinggroupsof the metropolitanpowerthroughthe coercivecontrolof the relationsof pro-ductionso as to make them consistentwiththe repressed orcesof production. This isone reasonwhy coercionplays such an im-portant role in metropolitan-colonialrelationships.)Thuscolonialismalmostinevitably esultsin the retardationof the forces of produc-tionbyinhibiting echnicalchange,routinis-ing coerciveand brutalising (and not justdehumanising)labour processes, and sus-tainir:ga social process that requirestheregularwaste of a considerableamount ofhuman and non-human resources. Thesystemrequiresa 'slack' at severaldifferentlevels,' and the maintenance of a greatsocial distance betweenthe rulersand theruled. By the existenceof 'slack' is meanthere the ability of the rulersto generateasurplusover he disposalof whichtheyhavea considerabledegree of discretion. Thus

theycan use it to extend he territorial ron-tier, o subsidise he operationof firmsfromthe metropolitancotintry or to keep thesubordinateor collaboratingstratahappy.It is not a straightforwardonflict betweenthe forces of productionand relations ofproduction hat provides he motivepowerbehindthe movementagainst colonialism.It normally akesthe wider ormof politicalstruggleagainstthe colonial power.But thesocial forcesthat sustainthe wasteof colo-nialism generally survive after its formalabolition.This constitutesan addedreasonto understandbetterthe numerouswaysinwhichcolonialismpromotes lackandretar-dation n society.Ontheotherside,theslackpermitted to the metropolitan countrybecause of the existence of a substantialsurplusextracted romthe coloniescan leadto a slowingdown of technicalchangeandstructural ransformation n that country.The relativeslowness of change in Britishindustry n the period1870-1914mayat leastpartly be attributed to the existence ofrelativelyclosed colonial markets. Britaincouldsell not only cottonmanufacturesvenafter these manufactureshad ceased to beglobally competitive but also relativelybackward capital goods such as mulespindles.2But in this paperthe reactionofthe forcesof productionof the metropolitancountry to the continuedexistenceof pro-fitable colonies is not the central heme:weconcentrate n the experience f onecolonis-ed country,viz, India.In the literature n thedevelopment f so-calledcapitalist nterprisesn colonialcoun-tries, including India, the dominating in-fluence of mercantilecapitalhas been longrecognised.But there s little n the literatureabout what sort of 'capitalist'enterprisesthese were.The natureof labour processesusedwithin he enterprise,he meansof con-trol exercised ver the workers, he politicalrelations f the ownersor managerswith thestateapparatusare rarelybrought into the'economicanalysis'of their characteristicsand their evolution.WhatI wantto do hereis to focuson these questions,but the treat-ment is illustrativeratherthan exhaustive.Most colonialenterpriseswereestablishedby merchantsfrom metropolitancountriesor by the few indigenousmerchantgroupswhichsurvived he onslaughtof foreign on-questor whichmanaged o carveout a nichefor themselves as collaborators of the

metropolitanpower.3Merchants n the col-onial countries had to adapt to the socialand politicalenvironmentcreated by colo-nial rule. Indigenous merchants had toreckonwith the operation of landlords-often a group favouredby colonial autho-rities because of their role as collectorsoftributeandas representativesf the colonialpower n the villages,undergovariouskindsof discriminationat the hands of Colonialauthorities,and suffer from povertyof ac-cessto informationabotitexternal radeandtechnicalchange in the advanced colonialcountries.Their investment n industrywasoften conditional on their being able torealiseat least as higha rateof profitin in-dustry as in trade.4But in some cases, asfor example,n the case of Indianmerchantsin Bombay in the latter half of the nine-teenth century, they were pushed intomanufacturebecause metropolitancapitalwas takingover muchof their trade. n someother cases, Indians were forced to takegreater risks and enter relatively untriedfields of manufactureand trade, becauseforeign capital had monopolised the morecertainandmpreprofitable venuesof tradeandmanufacture.The Indianglassindustrybeforethe FirstWorldWar s illustrativeofthiskind of adventurousness n the partofIndianentrepreneurs.The generalsocial and political environ-ment conditioned the behaviourof metro-politancapitalists n a colony as well as thatof incdigenousmerchantsand financiers nthe sensethat the former'sportfoliochoiceswere also biase4 in favour of trade andspeculative ctivities. n thosecases i} whicha close connection with external marketsconferred an advantage, metropolitancapitalistswere foundpreferentiallyo enterindustrial activities whose markets layabroad. But such activities were normallyconfinedto a crudeprocessingof cheaprawmaterialsproduced in the colonies. Theywould also be foundperhaps as pioneers nindustriesrequiringmore modern techno-logy, but not when they involved a highdegreeof risk.Colonialism biased the choices of bothmetropolitan and indigenous capitaliststowards activities where the gestationandfruitionlags were relatively hort. Further-more, it acted as a kind of screen betweenbothmetropolitan nd indigenous apitalistsoperating n India and the moving frontier

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of technology in the advanced capitalistcountries. The privileged position of themetropolitan capitalists rendered themrather sluggish in respondingto technicalchange. And since in many cases the indi-genouscapitalistsderived heir ead fromthemetropolitancapitalists or from the metro-politan country, any technological ag fromwhich the metropolitan capitalists in thecolony or the metropolitan country itselfsuffered ransmitted tselfto the indigenouscapitalists in the colony.Generally speaking, the lack of en-couragementof sophisticated ndustrialac-tivityin thecolony bythe alien government,the general prevalenceof privilegednichescarvedout by metropolitanproductsand bymetropolitan capitalists, the influence ofcoercive modes of social organisation andthe lack of literacyeither among the com-mon people or among the elite groups ledto stagnation of endogenous technicaldevelopmentin the colony. Even in thosecases, where trial and error methods inspecific areas of production led to im-provements n productivity (as in the caseof tea in India or sugar in Indonesia), theiethods could not begeneralised rdiffusedto other areas of economic and social ac-tivity.5 One reason for this was that thecolonial plantersor manufacturers njoyedboth first-moveradvantagesandeconomiesof such through privileged access toresourcesthroughout the colonial period.There s indeed ittleevidence o support heclaim that Britishor Dutchstylecolonialismin any way promoted the generalgrowthofproductive orces along capitalistlines andeven less to sustain the further claim thatlong-termproductivitygrowthcouldbe sus-tained in a colony through an indigenousgrowth process.6The macroeconomic and macrosocialroots of retardationof colonial productiveforces wereclosely linkedto the mechanismand extent of extraction and transfer ofsurpluses from colonial to metropolitancountries.or to coloniesof white settlementand they have been analysed elsewhere[Baran,1962and Bagchi,1982].WhatI willtryto do here s presentsome specificcasesof ratardation of productive forces andrelatedly,heembeddingof regressiveabourprocesses,hrough heworking f colonialism.Dissatisfactionwithsuperficial eneralisa-tionsperpetrated y 'radical' ocialscientistssuch as many (thoughnot all) membersofthe world-systemschool, and members ofthe neo-imperialist neo-Marxist schoolassociated with the names of Geoffrey Kay[1975]and the late Bill Warren 1980],7hasimpelled other social scientists [such asLipietz, 1986] o call for theanalysisof con-crete historical situations. But they find itverydifficutto get away rom a Euro-centricview from the ivorytower n whichthe hun-dredsof millionsof people n the thirdworldappear to servenewgods (or old gods withnew names) such as 'peripheral ordism'or'modes of capitalistregulation'.Neitherthe

analysisof internalsocialstructuresnorthedelineation of international networks ofdominationnor the depiction of processesor transmissionof essential elements thatmakeup the structureof capitalismfind aplace in such radicalgeneralisations.Theaim of this paper againis to carryforwardthe analysis jf actual developments in aspecific country Withina broadly Marxistframeworkof Bagchi,1972,1976and 1982,for some earlierefforts]. History does nothave to be a series of tales told by an idiot,or an eternal spinning of dreams by araconteurwho is content to tell otherswhatthey ought to be while he relaxes and pon-tificates in his ivory tower.

IIIndigo Production as 'Capitalist'

EnterpriseInhisDevelopmentof CapitalisticEnter-prise in India[1934]D H Buchanandevotedpracticallya whole chapterto indigo as anexample of European enterprise. He wascareful to point out how peculiar a capita-listic enterprise his was. The materials forappreciating he peculiarity involved, hadbeenavailable rom theReportof theIndigoCommission(1861),the evidencecollectedbythe IndigoCommission,the official tro-ceedingsof the Britishgovernment n Indiasince the very inceptionof cultivation andmanufacture of indigo under Europeansupervision.and, of course, he literature fprotestarising out of the habitual oppres-sion by the indigo planters.8The developmentof capitalistenterprisein Indiahasbeen discussed lsewhere lmostas if whathappenedwiththe indigo ndustrywas very much an exception and could berelegated o the dim past, since it has hadno discernibleinfluence on later develop-ments. In fact, indigo cultivation andmanufacture pitomised the peculiarlycol-onial character of British exploitation ofIndia. The Europeanindigo planters wereadventurers n search of profit. But themeansby whichthey sought to makeprofitwasthecreationof 'localindigo seigniories'in theapt phrase usedby John PeterGrant;lieutenant governor of Bengal during theperiod of the so-called Neel Bidroha orIndigo Revolt.9Moreover, ndigo cultiva-tion for the benefit of Europeanenterpriseinvolveda significantsection of the peasan-try of northern and eastern India.Fromthe beginningthe European ndigoplanters n Bengal and Bihar, proved o bea law unto themselves,and the East IndiaCompany'sgovernmenthad to promulgateorders ime and againto barthem from cer-tain areasor to restrict heiroperations.Theindigoplantersoperated systemwhichusedboth land and labour of the peasants,whethercultivatingor non-cultivating, n acoercive manner.The planters treatedthepeasants not as the other party in a com-mercial ransactionbut as subjects ,prajas),vassalsorconqueredpeoples romwhomthe

norms of ordinary commercial discoursecould be suspended.It may be said that inthis the indigo planterswere merely follow-ing the custom of the land whereeverypettyzamindarwas a malik or evena rajain theeyesof their tenants. However, he plantersadditionally roughtwith them the mystiqueof the all-powerfulsahib with the superor-dinate force of the company bahadur toback it up where necessary. The IndigoCommissionof 1861recognised hat indigocultivation was not profitablefor peasantsin Bengal proper. It is indeed doubtfulwhether indigo cultivation produced any-thing but a loss for the vast majority ofcultivatorseither in Bengal or Bihar. Thisis why compulsion was necessary in orderto get the peasant to use their labour andland to grow indigo.The plantersgenerally njoyed heexplicitor implicit support of the British govern-mentor their ocal representatives ho turn-ed a blind eye to their operations. For anurmber f years after the collapse of han-dicraftexportsfromBengal, indigobecameone of the major export crops and a prin-cipal means of remitting he tributeandear-nings of individual Europeanofficials andtraders o England. Hence the governmentof Indiaby and largecould not go againstthe interestsof the indigo planters,howevermuchindividualcollectorsor judges mightloathe a system which replacedthe publiclaw of the governmentwith the private awof the planters,often in collusion with thezamindars (especially in such districts asMuzaffarpur, Champaran, Saran andPurnea). This implicit support sometimestook an explicit form. For example, n 1830,a special law (Regulation V) was passed,which converteda civil offence, viz, breachof contractby thepeasantsandpartiesabet-ting or instigating hem, into a criminaloneand madethem liable to imprisonment orthis offence. As was pointed out by theBritishadministrators, his was also a bla-tant case of class legislation, sinceplanterswerenot made liable to penal consequencesfor the breach of the same contract. Thisregulationwas abolished n 1835 on explieitinstruction,from the Court of Directorsofthe EastIndia Company. Grant'sMinute nBuckland, 901;Chowdhury, 964,pp 147-65;Banerjee,1984,Vol2, pp 104-105].However,the plantersand their assistants continuedto subjectthe peasantsto physical punish-mentandimprisonment,whenever he latterrefused to plant indigo under the planters'direction or proved to be otherwiserecalcitrant.Theplantersnot onlywanted hepeasants'land for cultivation of indigo. Theywantedtheirlabour,their bullocksand theirearts,very often at times when the peasants'needfor theimplementsand fortheirown labourforcultivatingandmarketing rainor othersubsistencecrops or more profitable cashcropswas the most pressing [Fisher, 1978].The labourprocessemployedn theindigoindustrywas nrimitivenot only on the fields

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of the ryots but also on the planters'so-callednij or zeratcultivationin the rare n-stances n whichthe plantersactually culti-vated the crop by hiring labour and usingother inputs on land owned or leased bythem. The manufacturingprocess also in-volvedhard abourunderhighlyuncongenialconditions. Planterstried to recruit abourfrom tribal or other relativelyuncommer-cialisedareasat cheap ratesand settlethemon land leased or owned by them, so as toget a laboursupplywhichwas cheaperandevenmore bonded than that of the peasan-try among whom they set up operations.Even such devices failed in manycases andthe planters hen resorted o nakedforce toget their way.'0It was recognised that planters wouldalmost never be able to-cultivate the cropprofitability f they paid marketprices forthe inputs. For manyryots, even when thecropwasgrownwithfamily abour or otherlabourfor which full imputation of marketwage was not ptovided for, its cultivationwas both relativelyand absolutely unpro-fitable almost from the beginning." Therise of prices in the 1840sand 1850s, theemergence f jute as an alternative ashcropandthegradualexhaustionof the char andled to major peasant uprisings in Bengalproper, and virtual cessation of indigocultivation n manydistrictsof Bengal[Palit,1975J.The survival and even growth of in-digo plantationsntheBiharandsome UttarPradeshdistrictsdoes not, however,provethat indigo cultivationremainedprofitablefor the Biharryots,'2even less does it provethat the Biharplanters who extended theirzerat cultivation actually or nominally intheirso-calleddehat ands(whichweremoreakin to feudalterritorial laims thanto landwhich planters could be said to own) suc-ceeded ftmaking zeratcultivationcommer-cially profitable. One reason why indigocultivationwas carriedon by tenants andzamindars n Uttar Pradesh is that the ad-vances given by the indigo manufacturersweregivenexactlyat thetimewhenthe kistsof the tenantto the malikand of the malikto the government ell due [see in this con-nection, Whitcombe, 1972, pp 172-174].When peasant and zamindar resistancemadeit more difficult for indigo planters ocarryon in-Bengalproper, heyshiftedtheiroperations to Bihar. Among the mainreasons for this shift wasthe possibilitytheplantershad of leasing in large areasfromthe great zamindars of Bihar, such as theDarbhangaraj, or the Bettiahraj,on thikaand mukarrari tenure [Buchanan, 1934,pp 42-47;Mishra,1978,pp97-109].Oncetheplantershad obtained the leases froni thezamindars, heyarrogated o themselvesallthe legal and illegal powers of the latter.Since indigo cultivationwas often in con-flict with the cultivationof opium, whosegrowerswere treated as sarkari tenants, itmightbe supposedthat the Britishgovern-mentwould provide omekindof protectionfor those tenants. In actual fact, however,thegovernmenttself kept he priceof opium

lowand left traditional r the upstart amin-dars alone so long as theiractions did notlead to widespread agrarian disturbance.Nor did the operationsof the planterskeepthe peasants from the clutches of themoneylenders,as was sometimes claimed.The planterssimply wanted their exactionto be the firstchargeon thepeasants' abourand land, and the moneylenderswould becoerced into the position of subordinateexploiters.3Nor did the factories run by the indigoplanters raise wages in the locality. Theygenerally paid lower wages to the personsoperating hevats than obtained n the area[Mishra,1978,p 106].Wehavealreadynotedthatthe workershadt9 becoerced nvariousways to induce them lo work in indigofactories.Thus the indigo plantationsand factorieswhich weresome of the earliestexamplesofEuropean capitalist enterprise in BritishIndiaworkedundera jointlycoercive ystem,inwhich the Britishgovernment, hezamin-dars, plantersand moneylendersall playedtheirpart.The relative olesof ideology, lansystemsand naked forcein maintaining hepowerof the zamindars,and of racialismand the threatof the superordinate orce ofthe sahibs in sustainingthe coercionof theplantershaveyet to be properly nvestigated.There s littledoubt that thejointly coercivesystem and the destruction of alternativeemployment opportunities through theworking of capitalist colonialism had adepressive effect on the forces of pro-duction'4 and on the reserve price oflabour.The fact thatBiharprovideda largecatchmentarea for the recruitmentof low-paid labour in the factories,mines and teaplantationsof easternIndia had as much todo with this jointly coercivesystemof ex-ploitation as with any putative ecologicalconditions. The activities of the indigoplanters, amindarsandmoneylenderswererepeatedlyopposed by peasantuprisings nBengal and Bihar. The strength of theseuprisingsand theireffectivenessmust havebeen influenced not only by the patternofconsciousness of the peasantrybut also bythe strengthof the zamindarsvis-a-vistheplanters,the coercive power of the zamin-darsvis-a-vis he peasantsand thedegreeofhegemony exercised by the zamindar'sideology. It would appearthat throughoutnorthern nd centralBiharand a majorpartof modern Uttar Pradesh, individualRajp-utsndBhumihars, ften withthehelpof theirkinsmen,established hemselvesassuperiorright-holdersover the original in-habitantswho weregenerallydegraded o alower-caste tatus.(Manyof theoriginal n-habitantswereof tribaloriginand wereout-sidethe castehierarchy).Sometimesa rulerfrom outside the caste hierarchyor low instatus n thathierarchywould assumeuppercaste status and ideology in order to legiti-mise his rule. [See, in this connection,Hunter 1877a, pp 368-70 and 1877b,pp 208-214; Cohn, 1987a and 1987b]. Ineverycase,of course,the ideologyhadto be

backedby physical orce,when the authoritywas challenged.Was the racialistideologyof the white men opposed by the ideologyof theRajputsandBrahmins?Was he latterthensubordinated o the former?A full ex-plication of the conditions of existence ofthe kind of capitalistenterprisecreated bythe Europeannot only in the denselysettledruralareas but also in the factoryenclaves,the mines and the teaplantationswould re-quirean explorationof theconsciousnessofthe workersemployed in the latter.'5III

Sugar ManufactureOurresumeof European nterprise n in-digo manufactureshowed how thie enter-prisenot only did notpromoteanything ikea freemarket n labour, andor other nputs,but, on the contrary,was predicateduponthe reduction of nominally free peasantryto a condition of abject dependence onzamindars and Europeanplanters. Wherethe Indian zamindars themselves turnedplanters, the situation only differedto theextent hat the formercould not arrogate othemselves the special privileges of themembers of the occupying race. Indigomanufactureended before Indians wouldtakeover as the majorentrepreneurs romthe Europeans.Wenow turn to sugarmanufacture. mallscalesugar.manufacture ad long predatedEuropeanintervention, and refined sugarhad long formed an item of long-distanceinternalandoverseas rade;unrefined ugar(gur)had been a peasant produceand hadcirculatedocallyandovermiddledistancesevenmoreactively. n thenineteenth entury,refinedsugarwentthroughseveralcyclesasan item of tradein Europeanhands,and asan item of European manufacture.'6Themanufacture f crystalline ugarvery ofter.wasonlythefinishing tageor a process,andit wasonly at the finishing' tage that manyof the Europeanenterpriseswere nvolved.Moreover,he rawsugar (gur, aggery, raab,etc)could be obtained romeithersugarcane,palmor date-palm.Inthe case of the latter,the productionandgenerallyalso the refin-ing remainedwith the Indians."' But thecrushingof sugarcane n a centralised ugarfactoryand the refiningof the juice by thecentrifugalprocesswerecarried out in fac-

tories underEuropeancontrol in the nine-teenth century [Bagchi, 1972, chapter12].The Chart llustratesthe structureof thesugar ndustry, tarting romthegrowingofsugarcane.The differentpartsof the sugarindustryhad different rh,ythms,and theserhythmsvaried n character rom district odistrict.There wasno unilinearprogressionduring he nineteenthcenturyfrompeasantproductiono large-scale lantations r fromproduction f gurto theproduction f whitesugaror fromtheproduction f gurorsugarby artisanalmethods or in small refineriesto the refiningof sugar n large actorieswithassociatedproduction of molasses, rumorD Anl Economic and Political Weekly July 30, 1988


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other spirits. The evidence suggests thatwhen the East IndiaCompanytook a keeninterestn theexportof sugarfrom Indiaforits ownreasons, t tended o encourageEuro-pean planters to set up plantations andrefineries for producingcrystallinesugar.Suchexportdrivesalsohad a stimulating f-fect on peasantproduction f sugarcane ndon refining activitiesby Indians. 8Butpea-sant productionsurvived,primarilyon thebasis of demand for gur for self-consumption and for sale within India.In many parts of Bihar and UttarPradesh,planters hiftedback and forthbet-ween indigo and sugarplantations as theyexperiencedunfavourablemarkets n one orthe other product, or they faced peasantresistance o coercedproduction Watt,1893,VolVI, PartII, p 94)]. As in the case of thecultivation of tea, so also in the case of thecultivationof sugarcane, he BritishIndiangovernment ave landto Europeanplanterson specially favourable terms. However,many of those grants passed out of Euro-peanhandsor were'convertedntoEuropeanzamindaris, and production of sugarcanerevertedmostly to the peasants: therewere,of course, many areas where Europeanplanters had not penetrated at all.Whilethe production of whitesugar wasinfluencedby the ebb and flow of interna-tionaltrade,and developmentof therailwaynetworkwhich made t cheaper o export heIndianproductor importforeignsugar, heproduction of gur o- jaggery from sugar-cane, date-palm or palm largely followedtheir own course: at the margin,and in thecase of guras an inputintosugarrefineries,the priceof whitesugarcertainly nfluencedtheoutputof gur.Butthe bulk of the latterproduct was destinedfor self-consumptionor for trade within India. Gur and whitesugar wereat best imperfect substitutes nconsumption, productionand trade.When n the 1930swhitesugarproductionbecame greatly profitable because of thehighimportduties, the ownersof the sugarfactorieschose to locatethemselves n areasof densepeasant productionof sugarcane.Thepeasantsproducing he sugarcanewereusually subject to the control of themoneylender nd the landlord.Even houghtheprovincialgovernments oon stepped nto fix minimum prices of sugarcane, thepeasantshad to accept various deductionsat thefactorygate.Onthe other side,khand-sariownerswereallowed o obtainsugarcaneat lowerprices, and often used their localpower o furthercut into the earningsof thepeasantsandthe seasonalworkersworkingin them [Bagchi, 1963,chapter 6 and 1972,chapter 12]. A 'freemarket' n sugarcaneorfactory labour was ruledour by the socialstructureand the productionprocess.Thisled soon to trouble and complaints ofregionalmal-distribution f sugarfactories.For,sugarcaneas an inputinto peasantgurproductionhad a largelydifferentrationalein termsof costs and benefits from sugar-cane as an input into centralisedsugarfac-tories.19 n the 1930s,the cost of produc-

CHART

Peasant producers of sugarcane

Cane-crushers Central factories(including Khandsaris)I

Gur Refined sugarfor markets

Market Self Smallconsumption refineriesRefined sugarfor markets

2 Plantations of sugarcane and date-palmCentral factories

Refined sugar for markets

3 Peasant producers of date-palm or palm juiceJaggery for Jaggerymarkets or self-consumption Central refineries

Refined sugarfor markets

tion in Biharand UttarPradeshwiththeex-isting state of repressionof peasant coststhroughmarketand non-market owerexer-cised by landlords,millownersand money-lenders werelowerthan in other provinces[Bagchi, 1972,section 12.6]. But thecentralsugar factories in those states had no wayof reaping ull economiesof scale,once their'catchmentareas' for gatheringsugarcaneweresaturatedhrough helocationof othercentralsugar factories and khandsarisandthecompetition rompeasant-producedur.Governmental policy and inertia allowedmany of the inefficient sugar factories tosurvive but there was a tendency for sugarproduction to be shifted towardsMaharashtra,Andhra Pradesh and othersouthernprovinces.2)Sugarmillswhich wereusedto rigging hemarket n sugarcane ndfactory abouralsotriedto rig the market n sugar (whichwasalready protectedagainst foreigncompeti-tion) feather heir nests further. ndian ugarmills tried to organise a cartel as soon astherewas a threatof a glut of white sugarin theinternalmarket Bagchi,1963,section6.4 and Bagchi, 1972, p 381]. The govern-ment, whichhadrecognised he Indian ugarsyndicate as a representativebody with

powers to all of quotas of output to in-dividual factories, had to step in andwithdrawrecognition from the syndicatewhen the latter used its powers to restrictsalesand raise prices [Bagchi, 1972,section12.5]. This was one of the occasions onwhich it became clear that an atmosphereof competitiveness ould not be ensuredbyuncontrolled rivateaction f therewerecon-ditions favouring the organisation of acartel.Therehad been some innovationsin thecrushingof sugarcaneby peasants such asthe introductionof the Behea iron mill byThomsonand Mylneor the experimentsnthe small-scalerefiningof sugarconductedby S M Hadi and others in Uttar Pradesh;therewerealso attemptsby Begg,Sutherlandand Co to improve he manufacturingpro-cess. However, he majorinnovationaffec-tingthe sugar ndustrywas the introductionof superior arieties f sugarcanewhichrais-ed outputsper acrefrom the late 1920son-wards.But this rise n prod oetivityhadceas-ed bythe end of the 1930sand byandlarge,the techniquesof refininghad becomestaticbythe sametime.Peasantproductionof theraw material, coercion of nmany f thepeasantsbyplanters, andlordsandmoney-Economic and Political Weekly July 30, 1988


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lenders, and the working of a process ofcompetition n which the primaryqualifica-tion for entering the sugar industry waspossessionof a stock of capitalrather hantechnicalknowledgeof anypartof the pro-cessof manufacture r cultivation f therawmaterialkept the industryratherstagnant,except when it was stimulatedby externalforces. Peasantsproved o be betteradaptedto takeadvantageof innovation hantheso-called capitalist entrepreneurs.IV

Manufacture of Cotton TextilesIf the productionof sugar was influenc-ed by peasantactivities n cultivatingsugar-cane, palmand date-palmand the activitiesof tradersor substantialfarmersand land-lords in running refineries alongside the'modern'sugarfactories, he productionofcotton textiles in mills was even more in-fluencedby peasant productionof the rawcotton, heconditionsof creditandmarketinggoverning hegrowingof cotton, ancthe ac-tivities of artisansand merchantsdealing ncloth at the stagewhere he cotton wasspuninto yarnor woven into. cloth. The repres-sion of artisansand masterweavers o thepointwhere heybecamevirtual serfsof the(British)EastIndiaCompanyand the elimi-nation of Indian middlemen between theweaversand the East India Company (solong as the latterremained he dominantex-porterof cotton textiles rom India)arewellknown, and need not be recapituatedhere[See,e g, Hossain, 1979].So is the storyofthe disastrousdeclineof handloom exportsand the loss of livelihood by hundredsofthousands weaversin mnost arts of Indiabetweenthe 1820s and at least the 1860s.The growthof the Indiancotton mill in-dustry in the initial phases, paradoxicallyenough, owed moreto the remnantsof thehandloom weaversin India and in Chinathan to the home market n mill cloth thathad been conquered by the Britishcottonmills.For,Indianmills at firstcateredmainlyto the demandfor yarn-especially yarnoflowercounts-emanatingfrom hehandloomweavers.Both the Indiancotton mills andIndian handlooms had to make their wayagainstcompetitionfromLancashire loth.Theprogressof thecottonmill industrywashaltingbetween he timeJamesLandonandCowasjeeDavarsetuptheirmills at Broachand Bombay respectively,and the time thefirstWorldWardisruptedhe supplyof Lan-cashire cloth. This can be adequatelyex-plained by the dominance the latter hadachieved n most Indian cloth martsandbythe resistanceput up by a handloom sectorbenefitingfrom a wideningcost advantageas against he Britishproduce n thecoarservarieties of cloth. The failure of thehandloom industryto adopt the flyshuttleloom until the beginningof the twentiethcentury and the slow progressmade by itamongthe weaverscan be exilained by theweavers'povertyandl he relativecostlinessof the flyshuttle oom on the one handand

the apathydisplayedby the government othe task of raisingthe productivityof theweaverson the other. In these matterscol-.onialism can be seen to play its part withits policyof "one-way reetrade"and its at-tendantconsequence n the impoverishmentof the weavers. ronically,he povertyof thetypicalconsumerof coarsehandloom pro-ducts explains the survival of the latter.However, l{ere s anotherdirection n whichcolonialismseems to haveplayeda more n-sidious role.The adoptionin the firstplacebythe Indianmills of many techniquesandpracticeswhich wereconsideredto be ob-solete n mostother advancedcentresof tex-tile production and the falling behind ofIndian mills in technical change, globallyspeakingmay both be laid at the door ofthe distortions of perception and supplychannelsproducedby colonialism, and itsassociatedphenomenaof dominationof thecountrysideby landlordsand moneylenders[Bagchi, 1972, chapter7; Kiyokawa,1983;and Chandavarkar, 985].The influence of colonialism was felt ina complexmanner. t started romthe nexusbetween he traderandthe cultivator.Up tothe beginningof this century a large frac-tion of the cotton crop was exported.TheIndian traderwas only the first in a chainof middlemen,and he wasunwillingto paythe cultivators more than the absoluteminimum, for he could not be sure that hewould get a better price for better cotton.During he yearsof theAmericana ivil War,Indiancotton acquireda bad nameabroad,sincealmost anything esembling ottonwasshippedat a high price.The tradersat dif-ferent tages andalsomanyproducers) dd-ed water and dirt to the cotton in order toincrease he weight.The buyersalso tendedto judge the quality of cotton by the ratioof ginnedcotton to the total weightof cot-ton, including seeds. This led to the prac-tice of mixing differenttypes of cotton inorder o get a betterresultat the time of gin-ning and pressing rodd, 1924, p 30].OnceIndian cottonacquireda reputationfor poor quality,a completelydecentralisedsystemof productionand collection for ex-port failed to provideany incentiveto thegood traderand the good producer,whoweresubjected o whathasbeencalled'pro-babilisticdiscrimination'Schatz,1972,also,Akerlof, 1970; Bagchi, 1982, pp 189-90].Howevermuchthe Britishgovernmentandthe Europeantradersdecried the practice,the former were unable to suppress itthroughlegislation and the latter found itunprofitable o stop suchpractices hroughcollective action.21A Cotton Frauds Actwas passed n 1863bytheLegislativeCouncilof Bombayto penalisethe adulterationofcottonandthis wasfollowedup withanotherActin 1869,whichproposedto applyfundsobtainedfromthe tax leviedunder the firstAct to the improvementof cotton cultiva--tion.However, s a resultof agitationbythemerchants of Bombay (including theBombayChamberof Commerce) ll legisla-tion relating o cotton fraudswasabolished

in 1882. A new effort for improvingthequality of Indian cotton at the stage of giid-ning and pressingwas made by the (native)stateof Hyderabad,whichrequired licencefor settingup ginningandpressing actories,and rendered he licencecancellable on theground of malpractice [Pearse, 1930,pp 32-34]. It was only with the setting upof the Indian CentralCotton Committee n1921 hat a systematic ffortwas madeunderBritishofficial auspices o improve hequali-ty of Indian cotton.One reason why-measures o improve hequality of cotton failed was the refusal ofthe government to spend any substantialsums on either research or extension.22While exotic varietieswere ntroduced romtime to time, or individual administratorstried to introduce improved varietiesfromother parts of India, therewere few govern-ment farmsand practically o extension er-vice for propagatinghe bettervarieties.Themixed cotton with short staple was goodenough or spinning he lowercountsof yarnand weaving the coarser varieties of cloththat were heproductsof most Indianmills.So long as producersandmills abroadwereseparatedby a long chain of traders, herewas no way the latter could make'theirdemandsfelt to the producers;his waspar-ticularlyso when the mills in the UK or onthe European ontinentcouldget long-staplecottonfrom the US or Egypt by payingonlya relatively mallpremium.It maybe askedwhy the British governmentachievedbettersuccessin encouraging he long-staplecot-ton in Egyptthan in Indiain the nineteenthcentury.One answeris that the assured r-rigation in the Nile delta provided betterconditions for growinglong-staple cottonuntil the major irrigationworks of Punjaband Sind werecompleted.The secondreasonseems to be that export of cotton was themajor vehicle of imperial tribute transferfrom Egypt whereasin India therewere anumberof otherproductswhoseexportper-formed he same function,23o thatthe col-onialgovernmentdidnot spendas much ef-fort for improvingthe Indian fibre.At least two conditionswerenecessary orraising hequalityof Indiancotton.One wasthe provisionof a controlled upplyof waterthroughpublic,andcomplementary rivate,irrigation acilities. Manyof the small-scalepublicandprivate acilities or irrigation adbeen badly damaged by the innovationsbroughtabout by the Britishin the systemof land revenue nd ruraladministrationndjustice.)Thus in Punjaband Sind,the moveof thegrowers romshort- o long-staple ot-ton had to waiton theconstructionof large-scale rrigationworks whichhad to passtheBritish Indian government'stest of being'productive',hat is, financially profitable).Where rrigationfacilitiesWere ot amajorbottleneck, it required he interest of localmills (generally reflected in higher pricespaidto the tradersand producers or bettervarieties f cotton)for theproducerso raisethe qualities of cotton24: the producerscould afford to pay betterprices for better-

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quality cotton only when they wereshiftingtheir product-mix owards he finer countsof yarnandbetter varietiesof cloth. Infact,there s some evidence hatIndianmills werepayingbetterpricesfor local cotton n upperIndia than exportersas early as 1889[RTB,1890, p 17].The somewhat belated growth of thesouthernIndian cottonmill industryand itspioneeringby Britishproducers anbe usedto illustrate the following propositions:(a) the existence and growth of a homemarket or yarnor cloth playeda privilegedrole in allowing a cotton mill industryto'developand to transmit ome growth-induc-ing effects on the cotton crop and its quali-ty;and (b) the freedomof the metropolitancapitalists operating in India was cir-cumscribed by colonial conditions almost(butnot quite)to the same extentas that ofthe Indiancapitalists.In southern India thehandloom industry catering to the localmarketseems to have survived to a greaterextent han n mostotherpartsof India.Sup-plying yarn to these handloom producersbeckonedas a profitableprospect o Indianas well as European capitalists. But forvarious reasons to do with their better,andracially privileged, command over capitaland easier access to external markets,!ntcluding the China marketfor yarn, it wastheEuropeanmillsunder he controlof Bin-nys, Harveysand Stanes that succeededb.et-ter until the First WorldWar,with two orthree Indian mills coming up as poor reja-tions [Bhogendranath, 957, pp 9-19;Baker;1984, pp 339-42]. On the other side, oniereasonwhy large Britishtradingfirmswentinto the cotton textile industry;ina big wayin south India was probably their relativelack of alternative nvestment outlets suchas mines and plantations,in contrast o theEuropean (mostly British) firms operatingfromCalcuttaas their headquarters.A kindof informal division of territorywasput inoperation by large India-basedEuropcanfirmsin the different partsof India.WhileUK-based transnational banks, shippingcompanies and even the old transnationalconglomerate such as James Finally,andCompany regardedthe whole of India astheir bailiwick, the Anglo-Indian firms-,those which had grown up on the spoils oftrade and government monopolies inIndia-were mostlyconfined in their actualoperations to their respective territories[Bagchi, 1972, Chapter6]. The carvingoutof government-backedpexbanking n Indiabetween he Banks of Bengal, BombayandMadras both symbolishedand formalisedthis territorialdivision,andin 1867a battleroyalwas fought on this issue betwpen he*Bankof Bengal on the one hand arfdthe.Bankof Madrasand the shareholders f themoribundBank of Bombay (to be reincar-nated soon as the New Bankof Bombay)onthe other; the latteremerged as clear win-ners, and the control of particulargroupsof large Europeanfirms on their respectivePresidencyBanks was confirmed offically[Bagchi, 1987, Chapter27 and 30]. This ter-

ritorialdivisionwenthand in hand with theexerciseof local monopoly power by theleading firms in each of the main centres.The south Indian textile firms providedan expanding local market for the bettervarieties of local cotton, and the rapidgrowthof the so-calledCambodiacottonsowedmuchto that growth n demand.Theinfluence of expandinglocal mill demandfor bettervarietiesof cotton on the qualityof cottongrown n otherpartsof India,wasless discerniblebeforethe First WorldWar.But when protectionand thedeclineof Lan-cashire dominancein the supply of cottoncloth provideda more assuredmarket forlocally produced cloth, the quality of cot-ton began to improveand its average taplelengthincreased n pnostpartsof the coun-try [Bagchi, 1972, pp1iO8-111].The influenceof colonialismand landlor-dism was also felt in the labour controlmethods,the behaviourof labour,choiceoftechniquesand the speed of adoption anddiffusion of technical change. We havealreadyreferred o the coercivemethods oflabourcontrol used in the indigo industry.Whenworkerswent to work in textilemills,especiallythose whichwere ocatedin suchceentress Calcutta, Kanpuror Madras, hecoerciveapparatusof landlordismwas evi-dent in the labour controlmethods. Chan-davarkar nd othersare right n emphasisingthe role of labour resistance (which oftentook a passive form) in slowing down theadoption of sophisticated labour-savingtechniques such as automatic looms[Chandavarkar,985,pp 659-69]. However,theverymfethods f labour control-physi-cal coercion, ntermediation y jobbers,andthe ascriptionof superior powers in everyway to the colour of the skin-militatedagainst many needed changes, such as theinductionof technicallyqualifiedIndians nsupervisorypositions [Cf Kiyokawa,1983,pp 129-30].Caste hierarchiesprobablyalso interfer-red with upgradationof skills and techni-quesin many ndustries cf Jothi, 1985].Butpractices ssociatedwithcaseor communitydistinctionssurvivedbecause the rateof in-dustrialgrowthremained luggishconmparedwith the growth n the resere arimiyof labourand because the chances of wvorkerseingrewardedwith promotion o superiorgradeswas practicallynil in European-controlledfirms. The extreme poverty of Indianworkersand their lack of education stoodin the way of their assuming the workersprevalent n, say, Japanesefactories.WhenArno Pearsecomparedthe performanceofJapaneseand Indian abourin cotton millsunfavourably,he put the 'frail constitutionof operatives',unsound eeding'and 'livingunder insanitary conditions' and lack ofwelfarenorm and education among the im-portantcauses of the differences n perfor-mancq[Pearse, 1930, p 11].Kiyokawa as provided valuableanalysisof the influenceof Britishmill managers ndBritish suppliersof machinery n retardingtechnical change in the cotton textile in-

dustry.He has pointedout thattherelativelyslow growthof the cottonmillindustry, fteran initial spurt, inhibited technical changein the older mills. The sluggishness n com-petition permitted, f not actively induced,mills in new locations under the manage-ment of traderswho did not havea local cot-ton textile machinery industry to dependupon to install second hand machinery.andhold on to obsolete equipment. One majorplankof Kiyokawa's rgument s that Indianmills followedLancashiremillsincontinuingto installmule spindles ong aftertheyhadbecomesuperseded y ringspindles n majorcentresof textileproduction, uch as theUS,ContinentalEurope,and Japan. Indiapro-duced mainly yarnof lower counts and forsuch work, ring spindles were distinctlysuperior in terms of productivity peroperator [Sandberg, 1969]. However,ringspindlescost much morein the UK than inthe US, one reasonbeingthat the UK pro-duced so few of them. Since the UK was themajorsourceof textilemachinery or Indiain order to overcome this difficulty, per-manently as Japan did, Indian textilemnachinerymakers, along with other pro-ducers of capital and consumer goods,would have needed considerable statepatronage: his is where colonialism againobtruded as a structural rather than; aperceptualbarrier.There could be two other reasons forBombay-basedndian irmsto stick to mulespindles.Mules wereapparentlybetter forspinning short-stableIndian cotton. Yarnspun on ring spindleswas much more ex-pensiveto transportsince it was woundonheavy wooden bobbins (which had to bereturned)unlikemule-spunyarnwhichwaswound on paper tubes or on bare spindles.Since a large fractionof the yarn spun bymost Bombay basedmillswas destined forexport to the China market, this could bea factor working against ring spindles. (Iwouldexpectcombined spinningand weav-ing mills to adopt ring spindleson a widerscale but this is something that has to betested.)Japanesemills n thisrespect njoyeda distinct locational advantageand wouldfindit advantageous o adopt ringsforyarndestined for the China market, and theycould overcome their other disadvantagesthrough their closer knowledge of theChinese market and better access' to itbecause of both linguisticand cult-iralaf-finity and privilegesobtainedby imp,rialistpolicies.Kiyokawa'sanalysisneeds to be supple-mentedby furtheremphasising he contrastin the macro-economic and macro-socialconditions prevailing n.the Britishcolonyof India and in the burgeqningcapitalismunder hecontrolof anexpandingJapaneseimperialism.The Japanese were in a posi-tion not onlyto adopt technical nnovationsindependently of the influence of millmanagersor technicalpersonnelemanatingfrom a foreign country; hey could also ex-tend protection o the domestic ndustryn-formallyand; ormally,organisethe supply

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of cotton on a collectivebasis, market-theproducts n a co-ordinatedmanner,educatetheir workers and imbue them with anideology of extreme nationalism25 see, in*this onnection, Bagchi, 1972, Chapter7].Even he drive o exportandhenceto remaincompetitiveby adopting ring spindles,andthen automatic looms on a more extensivescale than either India or the lagging im-perialistcountryof Britaincan be traced othe imperialambitionsof Japaneserulingclasses. On the other hand, we have still tofind out how much the confinementof theIndianmill industryfor a long time to thelower-value egment of the yarnand clothmarkets n Indiain a regimeof one-way reetrade and the associated lack of improve-ment of the qualityor staple lengthof cot-ton had to do with the slowadoptionof ringspindlesand lateron, of automatic looms.The structuresand attitudesspawned,bycolonialism did not end with the end of col-onial rule. Our investigationof the reasonsforIndia's lowprogressneedsto be deepen-ed bya betterappreciationof the legal pro-cesses, social hierarchies, labour controlmethods in factories, openness to and ab-sorptionof, usable foreign echnologies,andadoptionof rationalmanagementmethodswill all benefit from a more thoroughgoingenquiry nto the natureof so-calledcapitalistenterpriseset up by Europeansand Indiansin colonial India.V

Colonialism, Capital Accumulation,Ideology and Society

KarlPolanyi put forward he propositionthat undercapitalism, heeconomy s for thefirst time disembedded from society. InPolanyi'swords, "man'seconomy,as a rule,is submergedn his social relationshipsandthe economic system is run onnon-economic motives" [Polanyi, 1957,p 46]. It is only under the 'marketpattern'that society is run as "an adjunct to themarket. Instead of the economy beingembedded n social relations, ocial relationsare embedded in the economic system"(Polanyi,1957,p 57].This hasgenerally eentakenas a reformulation f the Marxianpro-positionthatundercapitalism heownersofthemeansof productionarecompletelydif-ferentiated rom the workers,who becomedoublyfree-free in theirsocial status fromany bondage other than that of the wage-labour nexus, and 'free, in the sense ofbecoming totally separated romthe meansof production. The sale.and purchaseofcommodities for the purpose of earningsurplus value by using labour power as acommodity become the dominant motfbindingandenergising he operationof dif-ferentsegments of a capitalist society.Polanyi's ormulation, however, bstractsfrom most of the elements ot a capitalistsociety exceptthe institution of the market,and the market itself is seen in ratherabstractederms.A capitalist ocietyrequires

a particularset of political institutions, anideological apparatusand an apparatusofcoercion. In particular, nce the workerhassold his labour power,he is for the lurationof the contract of employment,subject tothe political power of the capitalist:he andthecapitalist re willy-nillynvolved n a rela-tion of hierjrchical subjection.The wholeweight of the ideological and political in-stitutions is directed towards themaintenance and legitimisation of thathierarchy.Of course, his relationshipof in-equality is hidden in most advancedcapitalist societies by a formal equality inthe eye of law. But it is often forgotten hatdemocracyn the senseof government n thebasis of universaladult suffragewas a rari-ty among the capitalist societies in theiryouth. Universaladult suffrageas the basisof government n most advanced capitalistcountrieswas attainedonly afterthe SecondWorld War. In earlier periods, unequaldispositionof propertyrights often createda politicalinequalityand inequality n civilstatus,and the workingof the marketwasmodifed accordingly.The market structure tself varies fromcountry to country and over time undercapitalism.This is not only because herearevariations n the natureand degreeof com-petitionbetween irms n differentcountriesand epochs but also because the employer-workerrelationship tself is conditioned bydifferentdegreesof coercion and differentdurations of contact and contract. ThePolanyi-like onceptualisationwouldhave oreduceallsuch variations s departures roman ideal marketeconomy.Marxianconcep-tualisationscan takeaccount of suchvaria-tions. Butmuchwork still needsto be doneon the liature f the variations, and the in-fluencesacting on them.Forexample,partlyunder the stimulus of demonstratedJapanesecompetitive powerwhich is sup-posed_to be partly shaped by intimateworker-managementelations,newworkhasbeen done on how the presenceor absenceof long-term 'implicit contracts' betweenmanagementand workersassuringthe lat-ter of job securityanda share n profitshasshapedthe labour processes n the US andBritain [cf lazonick, 1987].

Both the Marxist and the post-Marxistformulationsof the natureof a capitalistsocietyare idealisations.26The civil societynever achievedthe complete autonomy inrelationto the state even in the first full-blown capitalist country that we knowabout, viz, Britain.The monarchyand theestablished hurchhavecontinued o providelegitimacyo this firstnation of shopkeepers.When n thenineteenth enturyagnosticismand atheism seemedto threaten he ideolo-gical basis of the hierarchical ociety thatEnglandwas, German dealismandfin-de-sie&cle estheticismwerebroughtin to lenda newrespectabilityo the ideas of orderandprogress. More generally, positivism,idealismand a kind of apotheosisof scienceservedas the ideology of the ruling class as

politics became secularised in Europe[Hobsbawm, 1975; and Bagchi, 1986].A purely mercantialist notion ofcapitalisma la Polanyiand Wallersteins in-adequatenot only at the levelof the integra-tion of the state and society. In the core ofthe Marxist conception of the capitalistmode of production ies the labourprocesswhich allows the capitalist to transformlabour power nto exchangevalue and earnsurplusvalue therefrom.Within the firm,however, he marketceases to operate.The'employment elationship' s one of the ma-jor relationshipsn a capitalist conomy,andas we have argued earlier, t is not a short-run, arm's ength relationship Williamson,1975, Chapter 4]. From that point of viewthe jointly coercive, he familially coercive,the feudallycoerciveor the raciallycoercivelabourprocessesarenot necessarilyoutsidethebroadclassof capitalistabourprocesses.However, heir operationaffects social in-teractions outside the firm and extendsbeyondthe binary relations of the workerandthe employer.Theemployer-workerela-tion within the firm is inevitablya relation-shipof powerand subordination.ncolonialsocieties, whole groupsof people are sub-jected to the same type of power-subordi-nation nexus independentlyof whether hesubordinatedare formally incorporated nan employmentrelation or not. Under thesocial structurespreserved,augmentedorspawnedbycolonialsystems,numbers f ac-tual or potentialemployees resubordinatedto theirmasters not just within their work-ing hours,not justas individualworkers utas families, members of a class, caste orcommunity.Of course,workers ndpeasantsstill retain heir autonomousspheresof ac-tion andthought, in spiteof the subordina-tion, and such autonomy is re-asserted nmomentsof conflict with thesuperior trata;moreover,moneylenders,village headmen,labour contractors,mistris act as the in-termediary onduitsof exerciseof powerbythe superiorstrata,and some of them mayturn against their superiors in periods ofconflict.But colonialism as a superordinateforce continues to fix the outer limits ofoperation of such autonomy or such am-biguity in 'normal' times.The developmentof 'capitalistic'enter-prisesundercolonialism nvolvednumerousfacets, many regionalvariations,andmanytemporal changes. In the usual historicalnarrativeshese multi-dimensional pacesofvariation are often syncopated so that itbecomes difficult to identify the processesleading o particular utcomes.On the otherside, many structuralist accounts rideroughshod over certain basic temporalchanges which altered the structures insignificantways. Moreover, he structuralistaccounts slur over variables which theanalysts find it difficult to accommodatewithintheir framework.Conflicts occur notonly between models using idealistic struc-tures (such as the followers of LouisDumont, 1970 or the followersof America-

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nised Weberianism)and those using somevariantof materialistanalysis, but also bet-ween analysts who agree on the fundamen-tal relations to be incorporated in theanalysis. For example,what importance sto be attached to the legal innovations bythe British n India ndifferentphases?Howmuch of the stultification of capitalistdevelopmentso earnestly desiredby manyBritish administratorsand politicians is tobe attributed o the conflict betweenpublicand private law adduced, for instance, byWashbrook 1981]?What role did ideologyplay in strengtheningor underminingex-isting power relations and relationsof pro-ductionin general n the countryside n dif-ferent regions of India?Did the institutional nnovationseffectedduring he Britishperiod help or hinder hecapitalist ransformation f Indiansociety?For example, t has long been held by manyeconomistsand historians hat the managingagency system was a means of mobilisingcapital n a backward ociety,utilising carcemanagerial killsovera larger ield of opera-tion, and infusingthe technologyneeded orexploiting the available resources of thecountry [Lokanathan, 1935; Basu, 1940;Kling, 1966]. Of course, there were severecritics of the system ranging from theBombay Shareholders' Association [ITB,1934] o Hazari [1966], but these tendedtoshowupthe limitationsof the system n par-ticular ontextsrather hanquestion tsplacein the developmentof the capitalist systemin Indian ndustry. Recently,Rungta[1987]has assailed t as primarilya systemof con-trol with little demonstrable effect inquickeninghe flow of capitalor technologyor in upgrading hequalityof management.If it was a system of control, and it wasperfected by the British managing agentsthough adroitlyadaptedalso bytheirIndianimitators, he particular ystemof inequalitycreatedby colonialrulehadprobablyan ef-fect in keeping it alive and succouringit.Again, both conceptualclarificationand ex-tensive act-gatheringwillbe needed o pro-ceed furtheralong this line of enquiry.Asin the case of technologyin a narrow ense,in theareaof managementmethodsalso,therelative egression f themetropolitan oun-try mayhave nduceda regressionn the col-onisedcountryas well. It has been claimed[Littler,1982;Urry, 1986] hat in the adop-tion of 'scientific management' systems[such as Taylorismor the Bedaux system]Britain had fallen behind not only the USbut also otheradvanced apitalist conomiessuch as France, Germanyand Japan. It isveryunlikelyhatAnglo-Indian irmsshouldhave adopted any 'scientificmanagerhent'or methods of multi-divisional rganisationof firmsmuchbefore he SecondWorldWar.Firms under Indian control sometimesadoptedmethodsof management in parti-cular family control) which owed littledirectly o Britainmodels.In fact, the reten-tion of non-individualisticaws of rights toproperty and inheritance helped many

Indianbusinessgroups n retaining omein-ches against the onslaught of competitionfrom metropolitan capitalists. But theorganisationof modernfactories probablyremained ied to Anglo-Indianmodels andthus suffered from the inertia characteris-ing theirBritishcounterparts.Again, this isan area which requires further intensiveresearch.The ideologicaland institutionalaspectsof the working of colonialism in tandemwith the residues, ransforms,or surrogatesof the pre-colonialheritagein all relevantareasof humanexistencehaveto be studiedtogetherwith the signal fact of colonialismin India,viz, thatit was a systemof exploita-tion of people of a gVographically efinedarea with definite ethnic and culturalcharacteristics yan alie2nroup which wasethnicallyand culturallydistinctand whichdid not regardIndia as a.home. That thisrule also wasexercised n a periodin whichlarge-scale manufacturing, transport andfinance wereconquering the whole worldadded other characteristics o tlle colonialregime. The thwarting of the growth ofmodern ndustry,he destruction f artisanalindustry, he drainingof the surplus for in-vestmentin other areas of thc globe werepart and parcelof colonial exploitationasa process. The draining of an inivestiblesurplusand the continuous dampingof theincentive o invest n turn hindered apitalistaccumulation and rendered its transfor-matory potentialat best sluggishand inter-mittent.Thecapitalist ransformationf anyone sector was in the long run sloweddownby the failure of other sectors to betransformed. Only when one sector, forsome reason,acquiresan explosivemotionof its own, can it dragother sectorsalongtowards he same fate. This did not happenin any periodover the whole subcontinent.While some regionsfromtime to timegrewfast and seemed to transformtheir socialrelations n the capitalist mage,other forces(including their own past) dragged themback. This is one reasonwhy I haveregard-ed the search for capitalist relations inagriculturen isolation from the rest of thesociety and economy as foredoomed tofailure[Bagchi, 1975;see also, Bharadwaj,1985a, 1985b1.Regional variations whichranged from developed capitalist pocketssuch as thecityof Ahmedabad o thetotallyundevelopedheart of central India (whichacted only as a reservoirof cheap labour)werealso shaped bythe over-allconstraintsimposed by colonialism [Bagchi, 1976].Washbrook 1981]has made much of theconflict between the publiclaws relating oland revenueextraction introducedby theBritishand the private aws that militatedagainstthe implementationof purely ndi-vidualistic,shall we say, bourgeoisproper-ty relations.He has also claimed that themercantilist role of the state ceased after1857andprivate European)enterprisewasestablishedas the dominantformof Britishexploitation. In actual fact, however,the.

stateremained he majorreceiver ndremit-ter'ofthe tributeof India through he fiscalapparatus,and continuedas the patron ofEuropeanprivateenterprise n such areasasplantations, railways,and army supplies.The fiscal extractionof the state assumedenormousproportions n the late nineteenthand early wentieth enturies:his had a verydefiniterolein'retarding'theevelopment ftheproductive orces, he size of the domes-tic market and the base of accumulation.The way n whichevena limiteddomesticinvestment f the surpluscould helpchangeproductionrelations,when combinedwithappropriate nstitutional provisions is ex-emplifiedvery well by the case of Punjab[Bhattacharya,1983, 1985; Fox, 1984]. Incolonial India, Punjab orgedaheadof mostother proVinces n respect of agriculturalgrowth [Blyn, 1966]. Most of this growthwasin turn made possiblebecauseof invest-ment in irrigation facilities linked to theIndus and its tributaries [Bagchi, 1972,Chapter 4, Bagchi, 1976]. However,therewere argeregionalvariationswithinPunjab.Roughly peaking, he pre-partitionPunjabcould be divided into threeregions, south-eastern Punjab which included Hissar,Rohtak, Karnal, Gurgaon,central Punjabwhich included Gurdaspur, Hoshiarpur,Jullundur,Ludhiana,Ferozepur, ahoreandAmritsarand the westernregionwhich in-cluded Shahpur, Montgomery, Lyallpur,Multan,etc [Fox, 1984].The centralregionwas the source of migration, whereas thewestern region was the major absorberofflows of migrants.The south-eastern egionwas the most stagnant in terms of bothlabourmigrationand productivitygrowth.This stagnation in turn was linked to thesmallvalueof investmentn irrigationn thisregion before 1947.In the south-westernand north-westernPunjab,a planneddevelopment f canalcol-onies and the leasingout of land in parcelsof 100 o 500 acres o large armersor 'tradi-tionalgentry' ed to a rapidgrowthof tenan-cy, especially n the formof sharecropping.The lessors were typicallythe largeownersand the lesses weresrmallermen, often socalled owcastepeoplefrom centralPunjab.Behind he government'sdecision to parcelout the landin largeblocks,two conflictingideologies were working:on the one handthere were those who believed, plenty ofevidence o thecontrary,hatcontrolof landby moneyed men would lead to increasedproductivityand growthof capitalistfarm-ing in agriculture.On the otherhand, therewereotherswho wanted o strengthen hosestratawhichwereregarded s beingnaturallyfriendly o Britishrule. Since Punjabwas amajorarea of armyrecr itment, loyaltyofthe Indian soldierandloyaltyof the Indiannobility tended to coalesce into the imageof the respectable nd sturdy yeomanstockin the official mind. In practice,of course,the soldiersoften camefrom poor families,and the*canal oloniesof Punjabbecame hebreeding roundof a new andlordismwhich

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has proved o be a majorbulwarkof armyrule n thePakistaniPunjaband anobstacleagainstrapidagricultural rowth n westernPunjab in the post-independence period[Hamid, 1981,Chapters 12-14].In centralPunjabalso tenancytendedtogrowapace.Bhattacharya 1983]has shownthat this often took the formof large armersleasing in land from the small peasants,whereas ypicalsharecroppingrrangementswhereby ubstantialowners of land tendedto lease out land to smallholderstendedtogrow n thedrysouth-eastern egion. In thecanalcolonies the demandfor labourrais-ed wagesand fed thegrowthof both wage-labour and sharecropping. The develop-ments in Punjab have been viewed in ap-parentlycontrastingwaysby Mishra[1982]on theone handandHamid [1982]andFox[1984] on the other. Hamid and Fox havetended o stress he increaseddifferentiationamong the peasantry and the renewedgrowth of debt bondage and the personaldependence.ofthe small on the large n thePunjabcountryside.Mishrahas stressed hevirtualabsenceof a moneylending, radingclass holdingthe peasantry n thraldomasin mostotherpartsof India(Mishrahas ex-plicitly brought out the contrast with theMaharashtra egion).Bhattacharya1983,1985]has added hreenewdimensions to the picture: he regionalvariations, he link of caste with class, andtheinfluenceof ideologyin maintaining hedominance of self-cultivatingpeasants inmany parts of Punjab. Roughly speaking,the canalcolonies came to be dominatedbylandlords.But intheother two areas, n spiteof the growth of sharecroppingover time,theideologyof khudkashtwithitsemphasison the virtues of work in the field (exceptamongtheRajputs)prevailed.Bhattacharyahas shownthat therewasa close associationbetweenmembership f one of thedepressedcastes(Chamar,or Chuhra)and of theclassof landlessworkers.On the other hand, hehasalso shown that theprocessof differen-tiationamong the peasantryundercolonialrule and its accompanying institutionalchanges (including commercialisationofmanycustomaryrelationsor theirdestruc-tion) was creating new groups of landlesslabourers out of the 'respectable'castes.Finally, while the ideology of khudkashtprevented he growthof absentee landlor-dism and infused an enterprising spiritamong the substantial holders of land, itcould not preventthe growthof a class offarrnerswho also weretradersand money-lendersand whose incomewasderived romusuryandtrade as well as fromexploitationof wage labour or labourerssubjectedtodebtbondage.Nor did it prevent hegrowthof rampant andlordism n westernPunjab.Punjab had a smaller proportion oflandless agriculturallabourers than mostotherpartsof India.Butthis conditionwassustainedas much throughthe opening upof new areasfor cultivation with the aid ofinvestment n canal irrigationas through he

continuance of a pre-existingsituation ofrelative abour shortage.In Punjab, n common with, manyotherpartsof colonialIndia, abour nagriculturewas subjectedto a processof 'formalsub-sumption'whiletheexistingabourprocessesremainedvirtually ntact.27Whenirrigationand growth of ruralindustryprovidedthebaseforhigherproductivity,abourwas alsosubjected to real subsumption: it is in-teresting o note that the growth of formalcontracts studied by Bhalla [1976] inHaryana formerlya groupof south-easterndistrictsof Punjab) can be traced back tothe early twentieth century in Punjab,especiallyn thecase of annual armservants[Bhattacharya,1985, p 126].The backwash effects of stunting ofgrowthunder colonialism in otherparts ofIndia andthe slow paceof industrialisationensured hat the substitutionof formalsub-sumption of labour by real subsumptionwould be neitheruniversalnor would it beanuninterrupted rocess. deologicaland in-stitutionalelements wouldoften strengthenor hinder heprocessesof capitalaccumula-tion, classformation,andpeasant differen-tiation. But these ideological and institu-tional elementswould be derived fromthearsenal of the alien rulers as well as fromthe dominant or subordinatestrataamongthe Indians.VI

Transition, Unequal Developmentand UnderdevelopmentOurdiscussionof the peculiarnatureofdevelopment f capitalist nterprisesnIndiafinds a resonance n theclassicaldebatesonthe nature and causes of transition fromfeudali-smto capitalism in Europe andelsewhere,on the phenomenonof unequaldevelopment nd itsextent,andon problemsof underdevelopmentndpossible classandpolitical strategies o break out of retarda-tion or underdevelopment.WithinIndiaherself t is possible o detectthe germs of not one but manytransitions,and of differentkinds of obstaclesagainstan uninterrupted ransition,obstaclesthatare vitally linked on the one hand to pre-colonial social formationsbut also to theconstraintsmposedbycapitalist olonialismand by internationalcapitalism.The debate on the transition fromfeudalism to capitalism is by no meansover.28The debate centres on threegroupsof issues:(a) the natureof the precapitalistsocietyandpolityanditseffects on thespeedand natureof the transition; b) the relativeroles played by internal and externalfactors-in particular, y inherent ontradic-tions of a feudal society and by externaltrade, respectively, in the break up orstrengtheningof the precapitalistsystem;and (c) the relative roles played by classstruggles, deological arndnstitutional fac-tors,and by 'purelyeconomic'factors n thetransition.In the debatebetween Maurice

Dobb, Paul Sweezy and other participantsin the early fifties [Dobb, 1946, Sweezy,Dobb, et al, 1957], issues grouped under(b) playeda centralrole; n the debate park-ed off by Brenner [1976], issues groupedunder (c) and less directly those groupedunder (a) came to play a prominent role.Issuesarisingfrom the alleged phenomenaof 'proto-industrialisation'and rural in-dustrialisation [Tilly and Tilly, 1971,Mendels, 1972; Kriedte, Medick andSchlumbolim1981]have also figured n thetransition debate. All these controversieshavehad theirreverberationsn the writingsof Indian economists and historians in re-cent years [see, for example,JPS, 1985].Mostof thequestions nvolved nthetran-sition debatecan be seento raisetheir.headin the context of the history of colonialIndia. Did the pre-colonialhistoryof Indiapresage he developmentof market forces?Whichregions weremost affected by suchforces? Which were the sectors most af-fected?Didtheylead to peasantdifferentia-tionof a kindthatmighthavedevelopedntoa capitalisttransformationof agriculture?Or did political factors preclude suchtransformation?For example, it has been'claimed hat in theMarathakingdom, argelandlords were alreadyconcentrating andin their hands and land was becoming analienableasset [Perlin, 1978].On the otherhand,Mishra 1982]has contendedthat thetransformation f Maharashtriangriculturethroughthe agencyof a group of thrustinglargefarmers n the late nineteenthcenturyand earlytwentiethcentury s not a fact. Ifso, what was the route from increasedpea-sant differentiation n the early nineteenthcenturyto the failureof capitalisttransfor-mation n thelatenineteenth ndearly wen-tieth centuries?29Such questions indicatethat thecolonialexperiencen Indianhistorycannot be treatedsimplyas a continuationof earlier history. Colonialism created anabsence-the absenceof thrustful ndustrialandagriculturalnvestment n the domesticeconomy; which is a precondition for thegrowth of a self-confidentcapitalist class.But it was also a Procrusteanbed-a bedon which social formations werestretched,crampedand deformed to fit the demandsof a colonial rule whichwasintimatelycon-nected with the dominanttendencies of in-ternationalcapitalism of the time.The 'peripheralisation' of the Indianeconomy under colonial rule has been putforwardas a fact byseveralanalystsbelong-ingto the 'worldsystem' chool [Wallerstein,1986;Palat, Barr, et al 1987]. Many of thearguments hat havecropped up in discuss-ing thequestion of dependentdevelopmentor peripheralisation f India aresimilar tothearguments hatwereused to analysetheso-called secondserfdom' n easternEurope[Braudel, 1982, pp 265-272]. Using thehistoryof Polandas thebasicmatrix,WitoldKulaput forward n 'economic heoryof thefeudalsystem'[Kula,1976].One fundamen-tal problem with Kula's framework s ex-

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emplified by the title itself: there can be noeconomic theory of the feudal system. Atbest one can hope for a theory of theeconomic aspectsof the feudalsystem.Pat-naik [1982]has pointedout inconsistenciesin the framework,and in particular, n theschemataof economic calculationput for-ward by Kula. In the specifically post-colonial Indian context, Pradhan Prasadhas, in many of his writings, pointedto thepolitical aspects of what is often regardedas a semi feudal social formation [see, forexample,Prasad, 1973,1974].Usury or debtbondage is sustainedby non-marketpoweras.well as by the threat of starvationof apeasant or worker who is denied employ-nient or loans. Therecan be thus no purely'economic' heoryof agricultural ackward-ness or the so-called 'interlinkage ofmarkets' (which is another name for themultiplicityof bonds by whichpeasantsareenserfed).Some of the difficulties faced in usingKula'sramew~orko analyseeither he struc-ture of Polish feudalism or its dynamicsshouldbecautionary essonsforsocial scien-tists tryingto understand he structureanddynamics of British Indian colonial socie-ty. In sixteenth century Poland, landlordswereinvolved in marketrelations but onlypartially: hey dependedon serf labourwhowould beemployedat a lower cost than wasincurred ythosewho employed ree abour.The manor was often a multicropenterprisebut directed owardsa single crop,viz, grain[Kula, 1976, p 40] which was the majormarketable nd exportable ommodity.Theinvolvementof a manorial system in bothmarket relations and non-market coerciongave rise to peculiar conflicts: there werecontradictions between those proprietorswho were mainly dependent on the marketandthoseforwhom market nvolvementwasperipheral; nd of course,therewere thosepeasantsand serfs whose freedom could beattained only with the breakdownof thefeudalsystem.The 'huckstering'of landbylandlords, he Janus-faced haracter f mer-cantilecapitalunderfeudalismor the classstrugglewaged bythe peasantryagainstthefeudaHordswouldall have been familiar oMarx-either theyoungMarx or the matureMarx-though in differentdegrees[see,forexample, he extractsprovided n Marx andEngels, 1979]. But the actual developmentin a particular society, for example, inseventeenth-centuryPoland would still re-quire detailed historical investigationandcareful specification of the analyticalcategoriesused [a summaryof the Polishdebate on the question is given inPetrusewics, 1978]. In the Polish case, wewould haveto explainwhy greaterexposure-to the international market should tightenrather han loosenthe feudalbondage.Here,as Brennerpointed out, the inclusionof thepoliticaldimension, ncludingclass. truggle,would be crucial for a convincing analysis[Brenner,1976, 1978and 1982].Coming back to the Indian situation, it

is easy to perceivethat for every epoch ofcolonial history, we need a much morecareful specification of the impact of themarketundercolonialism han is often givenin thehistorical iterature. n colonial India,did land become a fully fungible commodi-ty? Was the legislationreally aimedat thisobjective,or was the objective simply themaximisation of a stablesurplus obtainedby the state in the form of land revenue?How far would the laws be actually imple-mented? Did the formal abolition of pre-colonial slavery really lead to the end ofagresticslavery?Whichclasseshad surplusfor accumulation? n which channelscouldinvestmentlow?Whathappened o displac-ed labour? If a process of de-industriali-sation was let loose in the nineteenth cen-turyin many countries of Europeas wellasthe non-white colonies such as India andChina[Saboland Zeitlin, 1985], what werethecircumstancesavouring he re-industria-lisationof Italy,Austriaor Spain n contrastwith India and China?Is it enough to poinrtto theunilateral, ustained ransfer f a largeportion of the in%.estibleurplus as an ex-planation of the Indian retardation?Thereare many other questions surroun-dingthe so-calledprocessof commercialisa-tion. Did the failure o industrialise lso leadto the permanent stunting of growth ofcapitalist lassesandshortening f their imehorizons, or was it simply a matter of oc-currenceof a favourable onjuncturewhenthe latentstratawouldsurge orward?Whatkind of productivity-raisingmpulseswereoperative n the phaseof proto-industriali-sation if India did witness such a phase?Bagchi [1975] and Bharadwaj [1985b],among others,.have pointed to the role ofindustrialisation n keeping alive a strongprocessof capitalist ransformation f agri-culture.Does a process of growthof urbanindustryplay a similar role in the periodbeforetheadvent of steamor water-power-drivenmachinery?Or does the industryhaveto be located in rural areas in order for itto affect the production relations inagriculture?The debate about the relationbetweenthe extractionof a very largefrac-tion of the land revenueunderMughalruleandthe teimsof exchange etween ownandcountry nMaye enrichedby raising ques-tions about the mutual nteractionbetweenchangesin labourprocesses n artisanal n-dustryand changesin the marketsituation.Similarly,many of the qucsti'onsraisedbyBharadwaj 1985a]and others such as thedifferential nvolvementof differentclassesor fractionsof classes n exchangerelations,the different degrees of subordinationtowhich hese fractionsmaybe subject hroughboth marketand non-marketcoercion canbe raisedalso about the situationprevailingin the Mughal and the immediate post-Mughal period. These may in turn throwlighton the precisenatureof the alterationseffected by colonial rule.We have earlier noted that it is difficultto maintain a strict separation between

marketor non-marketrelations or between'purelyeconomic' and non-economic rela-tions, especially when we are observingsituations n which capitalist ransformationhasremained eriously ncomplete. n recentyearsconsiderable nteresthas been shownin the ideological aspects of social changein colonial India. However, nvestigationofconsciousness or class strugglewill be butincompletelyeffectiveif it does not includethe questions of existence of workersandpeasantsas producersof use value and ex-changevalue,or material oods andservicesin a broad sense. The structureof controlutilised helegal apparatus t manydifferentlevels.The complexitiesof the change n thelegal system broughtabout by colonialismcannotbe captured implyas a change romstatus to contract. It is ironical that HenryMaine and other jurists should have for-mulated he natureof thedifferencebetweenpre-British, nd British ndia in these terms:in England freedom of contract had hardlywon its decisivebattle overcustom or prece-dentbefore t was circumscribed gain n thecollective nterestof the capitalists [Atiyah,1979,PartsII and III]. Perhapshere againtheconceptualisationof Indiansociety wasusedas a mirror or thetheoreticalmusingson the natureof the Britishsociety ratherthanas a genuine'other' o capture he uni-quenessof the British orEuropean)miracle.Recent celebrants of the latter may havemore ironies in store for them.The full uncovering of the ideologicalfeints of the rulers and the readingof theconsciousness of the peasantsand workerswillrequireboth a fresh nvestigation f theBritishand 'oriental'parentageof the feintsand an investigation of the pre-colonialorigins of the community and class con-sciousness of the Indians. In advancedcapitalist countries,not only is the labourprocesscontinually redesigned n the tusslebetweencapital and labour as mentionedabove, he systemof 'manufacture' f 'con-sent' throughthe labourprocess itself canbe observeddirectly[Burawoy,1979].Howdid the pre-colonialrulingclasses tryto ef-fect suchconsent or establishtheir ideolo-gical hegemony? How did the colonialpower ryto acquirehegemonybothamongtheproperty wningandpropertylesslassesunder ts rule?How was the class-or status-preserving ideology sustained and pro-pagated by the upper class Indians undercolonial rule?Whatstrategies idthe subor-dinate classesadopt to fightsuch inequalis-ing ideologies?.Theprecise nature of the breakbetweencolonialism and post-colonial society hasalso to be theorised afresh. What did thechange in the patureof the rulingclass atthe top signify? How was the structureofcontrolmodified?Whatkindof viscousnessin social relationswas needed to sustainademocraticormalongwithan authoritariansocial structure? How do we set aboutanalysingthe resultingcontradictions?30Attempting o answerall thesequestions

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will requireboth the gatheringof new dataand possibly new analytical techniques forinterpretingthem. Just as there is littlesystematicwork availableon the signs thatindicate the consciousness of illiterateworkersand peasants, so also there is littleanalysis of labour processes used inkarkhanas, artisans' cottages, sweatshopsrun by merchants, and machine-basedmanufacturingenterprises n India. We donot even have a systematic account of thegrosser aspectsof births and deaths, pricesand production movements or most of thenineteenthcentury India against which tosituate the finer analytical schemata. Thecurrentpaper may be looked upon as anagendafor research s wellas a contributionto the debate about the nature of colonialsociety and its changes.Notes

[Non-incriminating hanksare due to Asok Senfor comments on an earlier version of thepaper; I also benefited from comments madeby participants in a seminar at the ANS In-stituteof Social Studies,Patnaheld in February1989.]

1 Forthe concept of 'slack' n social organisa-tion, see Hirschman, 1981, pp 11-13.2 The survival in Britain of older types oflabour processes-characteristic of craftuntonsor of a stagewherephysicalstrengthwas a requirement for operatingmachines-has been explained on the onehand by invoking labour resistance,and onthe other,citing the requirementsof hierar-chy management and the inability of anysmall group of firms to achieveddominance. See Friedman, 1977; Rubery,1978; Lazonick, 1979; and Zeitlin, 1979.However, the role of the existence of col-onies in allowing relatively archaic formsof managerialcontrol and the reciprocal n-fluence of such methods on enterprisesestablished in the colonies by metropolitanentrepreneurs have not been adequatelystudied so far. One of the most widely ac-claimed books on the relative decline of in-dustrial capitalism, Wiener, 1981, makes itscase from a culturalist standpoint. ButWiener completely ignores the fact that oneof the most essential aspects of the educa-tion of an English gentlemanwas the train-ing of a rulerof the workingclasses at homeand of colonies abroad. Benjamin Jowett'spupils training for the ICS expected to getseveral times the average income of theirpriestly peers. The left and the right (witha few honourable exceptions) seem to beequally determined to ignore or slur overthe fact of empire.3 See for example,Guha, 1970; Bagchi, 1972,Chapter 6; Bagchi, 1982. Chapter 4; Bayly,1983 and Bagchi, 1985a.4 The exact conditions determiningthe pointat which the trader behaves as if he wereindifferent to marginal reallocations offurtds as between trade and irfdustrial n-vestmentare yet to be workedout. The timeprofilesof returnsand costs in the two casesare by no means the same. Investment intrading capital has generallya much shorterpay off period than industrral investment.There are other majordifferences,especiallywhere traders operate against a generalbackground of poverty of the mass of thepeople and the control of people's lives bylandlordsthrough theircontrol of the most

important means of production, viz, land.Traderscan try and raise prices of essen-tial goods from time and time, and thusraise their profit: this is not just profit onalienation or redistributionof surplusvalueamong a group of capitalists; for, this canand does lead to the transfer of purchas-ing power from poor peasants or workersto the traders.Where commodities are sub-ject to geat spLculative activity, it is notnecessarily the average return on tradingcapitalbut the highest ratesof return whicha successful speculator can aspire to thatgovernsthe expected profit on industrial n-vestment. Where the landlord is also atrader it is the rate of return to the joint,complementary activities of landlord andtrader that industrial investment has tomatch. The only offsetting possibilityis pro-vided by the fact that industrial investmentcan be a way of raising profit from tradethrough local monopolisation or creatingtemporaryshortages(as, for examplein thecase of sugar mills in India). But then thatkind of industrial investmentwill be foundto have a sharply declining marginal effi-.ciency of investment schedule.5 On the improvement of land productivityin tea plantations in India and coffee plan-tations in Ceylon, primarily through trialand errormethods adopted by the planterssee Misra, 1985, Chapter 5, and Barron,1987.6 The claims of the 'Marxist' neocolonialisischool spearheadedby the late Bill Warren[1980]andGeoffrey Kay[1975]canbe enter-tained seriously only by academics whoseclaim to scholarshipextendsno further hantheir access to some so-called radical jour-nals and publishing houses located in themetropolitan countries. In their world,polemics become a substitute for analysisor inductive generalisation. The con-vergence between this brand of Marxismand neocolonialist ideology is perhaps nothard to understand.7 How the neo-Marxist neocolonialist virusaffects social scientists who should knowbetter s demonstratedby the entryon Leninin the New Palgrave Dictionary ofEconomics,penned by Meghnad Desai[1987].The latter cites Warren[1980]as aneffective critic of Lenin without mention-ing how the experience of a vast majorityof the nations of the third world countriesbelies Warren'soptimism about the pro-gressive nature of colonialism andimperialism.8 The Report of the Indigo Commission, andthe evidence are part of UK ParliamentaryPapers, 1861, Vols XLV and XLIV. Forotherrelevantevidence,see Buckland, 1901;Buchanan, 1934; and Chowdhury, 1964.9 Buckland, 1901, p 241. Thus Chowdhury'sdetailed exposition of how indigo planterstried to create 'local monopolies'[Chowdhury,1964, pp 143-147]misspecifiesthe nature of the social and political en-vironment indigo planters ried to establish.10 Minute by the Lieutenant-Governor ofBengal on the Report of the Indigo Com-mission (henceforth Grant's Minute),reprintedin Buckland, 1901, Vol 1, p 228.For an account of the positiQnof plantersvis-a-vis civil authorities in Champaranaround 1866, see Beames, 1961, ChapterXIII.SeJ Beames, 1961, p 174, for the recordofa case where Baldwin, an indigo planter ofChamparan, 'draggedout three ryots ('hissubjects' as he called them) and sent themoff to the out-factory where they were keptas prisoners until the pressing [of indigo-

pulp into cakes] was finished'.11 In his minute on the Report of the IndigoCommission, Grant pointed out that asystem in which some planters could usebonded labour and underpriced land andother inputs, effectively discriminatedagainst those who tried to cultivatethe cropcommercially. See Buckland, 1901, p 247.By extension, it can be argued that theexistence of the coercive, feudal or semi-feudal method of indigo manufacture,thwarted the incentive for improving themethods of cultivation of the plant andmanufacture of the dye.12 See, for example,Hunter, 1877b, pp 102-103and p 269. Many of the zamindars them-selves were indebted to moneylenders. Oneway in which the planters acquired leasesfrom them for compelling peasantsto growindigo was to meet the dues of the zamin-dars to the moneylenders and the govern-ment. See in this connection, Mitra, 1985,Chapter 5.13 In fact, the planters themselves were oftengreatly indebted to Indian mahajans, anddepended on the latter to control thepeasants nearby through their moneylen-ding and sometimes zamindari operations.In 1873, for example, the Bank of Bengalopened a branch at Muzaffarpur in thehope that the planters of Tirhut couldbecome their constituents. However,it wasfound that the planterswould not leavetheIndianmahajansto whom they 'wereundermany obligations' although the mahajansmight take advantage of the relatively lowrates charged by the Bank of Bengal. SeeBagchi, 1987, Part II, pp 183-5.14 The indigo planters'efforts at researchweregenerally too meagre and came too late tosave theirdye from total destruction withinabout fifteen to twenty years of themarketingof syntheticdyes by the Germanchemical industry.15 Forexplorationof some aspects of the con-sciousness of workers in jute mills ofBengal, see Chakrabarty,1983. One argu-ment that was often given by Europeanenterprisesfor exclusively employing whitemen in managerial positions was that theworkerswould not accept Indians in suchpositions of authority. Since the workerswere ofte

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Amiya Bagchi