Skip to main content
×
×
Home

Financial property rights under colonialism: some counterfactual possibilities

  • ABHISHEK CHATTERJEE (a1)
Abstract
Abstract

This article seeks to explain the lack of the development of contemporaneously ‘modern’ money and credit markets in the 18th to 19th century economy of India. Borrowing from the literature on property rights, it demonstrates that the emergence of ‘modern’, and state-connected money markets was the result of a certain kind of power relationship between rulers and financial capital holders where the two were forced to mutually cooperate; financial systems represented the institutionalization of this mutual cooperation. Specific kinds of ‘colonialism’ represent just one special case of a relationship where the latter did not obtain. The article thus proposes a mechanism though which the spread of European capital could have retarded financial market formation in now-developing areas with otherwise considerable concentration of ‘native’ mercantile capital.

Copyright
Corresponding author
*Email: Abhishek.chatterjee@umontana.edu
References
Hide All
Acemoglu D., Johnson S., and Robinson J. A. (2001), ‘The Colonial Origins of Comparative Development: An Empirical Investigation’, The American Economic Review, 91 (5): 13691401.
Acemoglu D., Johnson S., and Robinson J. A. (2002), ‘Reversal of Fortune: Geography and Institutions in the Making of the Modern World Income Distribution’, The Quarterly Journal of Economics, 117 (4): 12311294.
Acemoglu D., Johnson S., and Robinson J. A. (2005), ‘Institutions As a Fundamental Cause of Long-Run Growth’, in Aghion P. and Durlauf S. N. (eds.), Handbook of Economic Growth, vol. IA, Amsterdam: North Holland.
Andrew A. P. (1901), ‘Indian Currency Problems of the Last Decade’, The Quarterly Journal of Economics, 15 (4): 483516.
Bagchi A. K. (1985), ‘Transition from Indian to British Indian Systems of Money and Banking, 1800–1850’, Modern Asian Studies, 19 (3): 501519.
Bagchi A. K. (1987), The Evolution of the State Bank of India; The Roots, 1806–1876, Part I: The Early Years, 1806–1860, Bombay: Oxford University Press.
Banerji A. (1995), Finances in the Early Raj: Investments and the External Sector, New Delhi: Sage.
Bayly C. A. (1973), ‘Patrons and Politics in Northern India’, Modern Asian Studies, 7 (3): 349388.
Bayly C. A. (1983), Rulers, Townsmen and Bazaars: North Indian Society in the Age of British Expansion, 1770–1870, Delhi: Oxford University Press.
Bayly C. (2000), ‘Ireland, India and the Empire: 1780–1914’, Transactions of the Royal Historical Society, 6 (10): 377397.
Bhattacharya S. (1969), The East India Company and the Economy of Bengal From 1704 to 1740, Calcutta: Firma K.L. Mukhopadhyay.
Bhattacharya S. (1983), ‘Eastern India’, in Kumar D., (ed.), The Cambridge Economic History of India, vol. 2: c. 17571970. Cambridge, UK: Cambridge University Press.
Bowen H. V. (2006), The Business of Empire: The East India Company and Imperial Britain, 1756–1833, Cambridge, UK: Cambridge University Press.
Chandavarkar A. G. (1983), ‘Money and Credit, 1858–1947’, in Kumar D. (ed.), Cambridge Economic History of India, Volume II. Cambridge, UK: Cambridge University Press.
Chang H.-J. (2011), ‘Institutions and Economic Development: Theory, Policy and History,’ Journal of Institutional Economics, doi: 10.1017/S1744137410000378.
Chang H.-J. (2002), Kicking Away the Ladder: Development Strategy in Historical Perspective, London: Anthem.
Chatterjee K. (1996), Merchants, Politics, and Society in Early Modern India, Bihar: 1733–1820, Leiden: E.J. Brill.
Chaudhuri S. (1975), Trade and Commercial Organization in Bengal, 1650–1720, Calcutta: Firma K.L. Mukhopadhyay.
Chaudhuri K. N. (1978), The Trading World of Asia and the English East India Company, 1660–1760, Cambridge, UK: Cambridge University Press.
Chaudhuri K. N. (1985), Trade and Civilization in the Indian Ocean: An Economic History from the Rise of Islam to 1750, Cambridge UK: Cambridge University Press.
Chaudhury S. (1988), ‘Merchants, Companies and Rulers: Bengal in the Eighteenth Century’, Journal of the Economic and Social History of the Orient, 31 (1): 74109.
Chibber V. (2003), Locked in Place: State Building and Late Industrialization in India, Princeton, NJ: Princeton University Press.
Esteban J. C. (2001), ‘The British Balance of Payments, 1772–1820: India Transfers and War Finance’, The Economic History Review, 54 (1): 5886.
Dasgupta A. (1982), ‘Indian Merchants and the Trade in the Indian Ocean’ in Raychaudhuri T. and Habib I. (eds.), The Cambridge Economic History of India, Volume I: c. 1200-c. 1750, Cambridge, UK: Cambridge University Press.
Dickson P. G. M. (1967), The Financial Revolution in England: A Study in the Development of Public Credit, 1688–1756, New York: St Martin's Press.
Dutt R. C. (1956), The Economic History of India in the Victorian Age: From the Accession of Queen Victoria in 1837 to the Commencement of the Twentieth Century, London: Routledge and Keegan Paul.
Elliot H. M. (1877), The History of India as Told by its own Historians: The Muhammadan Period, Volume VII, in Dowson J. (ed.), London: Trubner and Company.
Emerson R. (1962), ‘Power-Dependence Relations,’ American Sociological Review, 27 (1): 3141.
Fazl A. (1891 [1590?]), A'in I Akbari, vol. II, Jarrett H. S. (ed.), Calcutta: Asiatic Society of Bengal.
Fligstein N. (2002), The Architecture of Markets: An Economic Sociology of Twenty First Century Capitalist Societies, Princeton: Princeton University Press.
Furber H. (ed.) (1933), The Private Record of an Indian Governor-Generalship: The Correspondence of Sir John Shore, Governor General, with Henry Dundas, President of the Board of Control, 1793–1798, Cambridge, MA: Harvard University Press.
Furber H. (1948), John Company at Work: A Study of European Expansion in India in the Late Eighteenth Century, Cambridge, MA: Harvard University Press.
Goldsmith R. W. (1983), The Financial Development of India, 1860–1977, New Haven: Yale University Press.
Haber S., North D. C., and Weingast B. (eds.) (2008), Political Institutions and Financial Development, Stanford: Stanford University Press.
Habib I. (1969), ‘Potentialities of Capitalistic Development in the Economy of Mughal India’, The Journal of Economic History, 29 (1): 3278.
Habib I. (1982), ‘Agrarian Economy’, in Raychaudhuri T. and Habib I. (eds.), The Cambridge Economic History of India, Volume I: c. 1200-c. 1750, Cambridge, UK: Cambridge University Press.
Hardin R. (1997), One For All: The Logic of Group Conflict, Princeton: Princeton University Press.
Hill S. C. (ed.) (1968[1905]), Bengal in 1756–1757: A Selection of Public and Private Papers Dealing with the Affairs of the British in Bengal During the reign of Siraj-Uddaula, (3 Volumes), New York: AMS Press.
Hurd J. M. (1983), ‘Irrigation and Railways’, in Kumar D. (ed.), Cambridge Economic History of India, Volume II. Cambridge, UK: Cambridge University Press.
Ingram E. (ed.) (1970), Two Views of British India: The Private Correspondence of Mr. Dundas and Lord Wellesley, Bath: Adams & Dart.
Keynes J. M. (1913), Indian Currency and Finance, London: Macmillan.
Khan G. H. (1789), Seir Mutaqharin Or A View of Modern Times, vol. 1, Calcutta: James White.
Knight J. (1992), Institutions and Social Conflict, New York: Cambridge University Press.
Kumar D. (1983), ‘The Fiscal System’, The Cambridge Economic History of India Vol. II. Cambridge, UK: Cambridge University Press.
LaPorta R., Lopez-de-Silanes F., and Shleifer A. (2008), ‘The Economic Consequences of Legal Origins,’ Journal of Economic Literature, 46 (2): 285332.
Marshall P. J. (1976), East Indian Fortunes: The British in Bengal in the Eighteenth Century, Oxford: Clarendon Press.
Marshall P. J. (1987), Bengal: the British Bridgehead: Eastern India, 1740–1828, The New Cambridge History of India, Cambridge, UK: Cambridge University Press.
Mitra D. B. (1991), Monetary System in the Bengal Presidency, 1757–1835, Calcutta: K.P. Bagchi and Company.
Moe T. (2005), ‘Power and Political Institutions’, Perspectives on Politics, 3 (2): 215233.
North D. C. (1990), Institutions, Institutional Change, and Economic Performance, New York: Cambridge University Press.
North D. C. and Thomas R. P. (1976), The Rise of the Western World, New York: Cambridge University Press.
North D. C. and Weingast B. R. (1989), ‘Constitutions and Commitment: The Evolution of Institutions Governing Public Choice in Seventeenth-Century England’, Journal of Economic History, 49 (4): 803832.
North D. C., Wallis J. J., and Weingast B. R. (2009), Violence and Social Orders: A Conceptual Framework for Interpreting Recorded Human History, New York: Cambridge University Press.
Pearson M. N. (1976), Merchants and Rulers in Gujarat: The Response to the Portuguese in th Sixteenth Century, Berkeley: The University of California Press.
Polanyi K. (1957), The Great Transformation: The Political and Economic Origins of Our Time, Boston: Beacon Press.
Ray R. K. (1992), ‘Introduction’, in Ray R. K. (ed.), Entrepreneurship and Industry in India, 1800–1947, Delhi: Oxford University Press.
Ray R. K. (2003), The Felt Community: Commonalty and Mentality Before the Emergence of Indian Nationalism, Delhi: Oxford University Press.
Raychaudhuri T. (1982), ‘The State and the Economy’, in Raychaudhuri T. and Habib I. (eds.), The Cambridge Economic History of India, Volume I: c. 1200-c. 1750, Cambridge UK: Cambridge University Press.
Richards J. F. (1981), ‘Mughal State Finance and the Premodern World Economy’, Comparative Studies in Society and History, 23 (2): 285308.
Schumpeter J. A. (1939), Business Cycles: A Theoretical, Historical and Statistical Analysis of the Capitalist Process, Volume 1, New York: McGraw-Hill.
Sen A. K. (1992), ‘The Pattern of British Enterprise in India 1854–1914: A Causal Analysis’, in Ray R. K. (ed.), Entrepreneurship and Industry in India, 1800–1947, Delhi: Oxford University Press.
Sinha J. C. (1925), ‘Economic Theorists Among the Servants of John Company (1766-1806)’, The Economic Journal, 35 (137): 4759.
Sinha N. K. (1961), The Economic History of Bengal: From Plassey to the Permanent Settlement, Volume I, Calcutta: Firma K.L. Mukhopadhyay.
Sinha N. K. (1962), The Economic History of Bengal: From Plassey to the Permanent Settlement, Volume II, Calcutta: Firma K.L. Mukhopadhyay.
Stasavage D. (2002), ‘Credible Commitment in Early Modern Europe: North and Weingast Revisited’, Journal of Law, Economics, and Organization, 18 (1): 155186.
Stasavage D. (2007), ‘Partisan politics and public debt: The importance of the “Whig Supremacy” for Britain's Financial Revolution’, European Review of Economic History, 11 (1): 123153.
Steuart J. (1772), The Principles of Money Applied to the Present State of the Coin of Bengal: Being an Inquiry into the Methods to be Used for Correcting the Defects of the Present Currency; for Stopping the Drains which carry off the Coin; and for extending Circulation by means of Paper Credit, East India Company.
Subrahmanyam S. (2001), ‘Introduction: The Indian Ocean World and Ashin Das Gupta’, in Das Gupta A. (ed.), The World of the Indian Ocean Merchant 1500–1800: Collected Essays of Ashin Das Gupta, New Delhi: Oxford University Press.
Subramanian L. (1996), Indigenous Capital and Imperial Expansion: Bombay, Surat, and the West Coast. Bombay: Oxford University Press.
Subramanian L. and Ray R. K. (1991), ‘Merchants and Politics: From the Great Mughals to the East India Company’, in Tripathi D. (ed.), Business and Politics in India: A Historical Perspective, Delhi: Manohar.
Sylla R., Tilly R., and Tortella G. (eds.) (1999), The State, the Financial System and Economic Modernization, Cambridge: Cambridge University Press.
Tilly C. (1992), Coercion, Capital and the European State, AD 990–1999, Cambridge UK: Blackwell.
Tripathi A. (1979), Trade and Finance in the Bengal Presidency, 1793–1833, Calcutta: Oxford University Press.
Vansittart H. (1976[1766]), A Narrative of the Transactions in Bengal, 1760–1764, in Banerjee A. C. and Ghosh B. K. (eds.), Calcutta: K. P. Bagchi, Indian reprint.
Verelst H. (1772), A View of the Rise, Progress, and the Present State of the English Government in Bengal: Including a Reply to the Misrepresentations of Mr. Bolts, and Other Writers, London: J. Nourse.
Waldner D. (1999), State Building and Late Development, Ithaca: Cornell University Press.
Watson I. B. (1980), Foundation for Empire: English private Trade in India, 1659–1760, New Delhi: Vikas Publications.
Watson B. (1987), ‘Indian Merchants and English Private Interests: 1659–1760’, in Das Gupta A. and Pearson M. N. (eds.), India and the Indian Ocean, 1500–1800, Calcutta: Oxford University Press.
Recommend this journal

Email your librarian or administrator to recommend adding this journal to your organisation's collection.

Journal of Institutional Economics
  • ISSN: 1744-1374
  • EISSN: 1744-1382
  • URL: /core/journals/journal-of-institutional-economics
Please enter your name
Please enter a valid email address
Who would you like to send this to? *
×

Metrics

Full text views

Total number of HTML views: 16
Total number of PDF views: 71 *
Loading metrics...

Abstract views

Total abstract views: 592 *
Loading metrics...

* Views captured on Cambridge Core between September 2016 - 17th December 2017. This data will be updated every 24 hours.