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Studying a Colonial Economy—Without Perceiving Colonialism

Published online by Cambridge University Press:  28 November 2008

Irfan Habib
Aligarh Muslim University


From the size of India's population alone the economic history of India constitutes an important segment of the economic history of mankind. But with the middle of the eighteenth century, it assumed a further, special significance: subjugated by the first industrial nation of the world, it offered the classic case of the colonial remoulding of a pre-modern economy. Not surprisingly, the changing nature and consequences of this process and all its surrounding conditions have formed the constant theme of a long and continuing debate.

Copyright © Cambridge University Press 1985

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1 Characteristic of the editors' outlook is their avoidance in their preface of any reference to colonialism or Britain's exploitative relationship with India. The closest they come to it is in their allusion to literature on ‘underdevelopment and development policies’.

2 CEHI, II, 668–76.

3 Gallagher, John and Robinson, Ronald, ‘The Imperialism of Free Trade’, Economic History Review, 2nd series, VI (1953), 115CrossRefGoogle Scholar, and the large body of subsequent writing on the theme.

4 Grant, James in The Fifth Report, &c., ed. Firminger, W. K. (Calcutta, 1917), II, p. 276Google Scholar, and Shore in ibid., pp. 27–8.

5 Furber, Holden, John Company at Work (Cambridge, Mass., 1951), esp. pp. 112–16.Google Scholar One searches in vain for any reference to this work in CEHI.

6 Mitchell, B. R. and Deane, Phyllis, Abstract of British Historical Statistics (Cambridge, 1962), esp. pp. 309ff.Google Scholar (col. for trade with Asia). The statistics have been used for calculating the drain by Habib, Sayera I., Proceedings of the Indian History Congress, Aligarh Session, 1975, section IV, pp. xxii–xxiv.Google Scholar

7 CEHI, II, 806 (emphasis ours).

8 Seewhat S. Bhattacharya says, CEHI, II, 289. From Chaudhuri's own Table 10.2 B on p. 819 it can be seen that the Company's export of silver to India ceased after 1757–58.Google Scholar

9 CEHI, II, 814. One recalls how in his Trading World of Asia and the English East India Company, 1660–1760 (Cambridge, 1978), p. 462Google Scholar, Chaudhuri attributed ‘industrializing’ qualities to the influx of bullion under the aegis of the Dutch and English Companies; the ‘coastal provinces of India’ were turned into ‘major industrial regions’.

10 Even here Chaudhuri's argument needs qualification. Since the English Company purchased cotton textiles out of the revenues of Bengal, Bihar and Orissa, it did not put more currency into circulation; it only diverted it. Thus the ‘inflation’ was nothing but a rise in prices of goods in which it ‘invested’ of other goods no longer in demand the prices should have fallen. Moreover, export of silver to China should have had a deflationary effect.

11 Ghulām Husain Tabātabāī, Siyaru-l Mutākhirīn, pub. Nawal Kishore, II, 836–7, 840–1; Cornwallis, in Fifth Report, ed. Firminger, , II, 542.Google Scholar

12 CEHI, II, 289.

13 Marx's articles bearing on India are best collected in Marx, Karl, On Colonialism and Modernisation, ed. Avineri, Shlomo (Anchor Books, New York, 1969).Google ScholarI have summarized his views in The Marxist, 1 (Delhi, 1983), pp. 116–33.Google Scholar

14 CEHI, II, 269 (emphasis ours).

14a Population of India and Pakistan (Princeton, 1951), pp. 25–6.Google Scholar

15 CEHI, II, 668–76.Google Scholar

16 IESHR, V (1), 116, and V (4), 319–88.Google Scholar

17 CEHI, II, 668.Google Scholar

18 Essays in Honour of Prof. S. C. Sarkar (People's Publishing House, New Delhi, 1976), pp. 439522.Google Scholar A subsequent controversy between him and Vicziany, Marika in IESHR, XVI, 2 (04-06, 1979), 107–62Google Scholar, enabled Bagchi further to defend his evidence.

19 CEHI, II, 290–1.Google Scholar

20 IESHR, VIII (4), 354.Google Scholar

21 CEHI, II, 669.Google Scholar

22 Report of Select Committee on East India Company's Affairs, 1831–2, British Parliamentary Papers (I.U.P.): Colonies, East India, 5, General Appendix, pp. 275–6.Google Scholar It is especially worth referring to, because Morris and a ‘distinguished Bentinck scholar’ could not trace a quotation given by Marx from Bentinck (IESHR, V (4), 383 n.). Here Bentinck says the same thing in the same vigorous language.

23 Economic Development of India under The East India Company, ed. Chaudhuri, K. N. (Cambridge, 1971), pp. 239–42.Google Scholar

24 This is calculated on the basis of data provided by Kumar, Dharma in CEHI, II, 369 and n.Google Scholar

25 Ibid., 669.

26 Bipan Chandra in IESHR, V (1), 55–7; Morris's reply, IESHR, 380 n.

27 CEHI, II, 669.

28 The 1847 reference is in The Poverty of Philosophy, English tr. (Foreign Languages Publishing House, Moscow, n.d.), p. 113; and the 1853 statements in articles in New York Daily Tribune, for which see Avineri (see note 13).

29 Report of the Select Committee (see note 22), 275–6.

30 In New York Daily Tribune, 22 June 1853, Marx said of a speech by Bright that his ‘picture of India ruined by the fiscal exertions of the Company and Government did not, of course, receive the supplement of India ruined by Manchester and Free Trade.’ (Avineri, p. 79).

31 IESHR, V (1), 9.

32 CEHI, II, 669.

33 Ellison, Thomas, The Cotton Trade of Great Britain (orig. published, 1886; London, 1968), pp. 62–3.Google Scholar

34 IESHR, XI (2–3), 311.

35 CEHI, II, 369.

36 Ibid., 370.

37 Ibid., 369–70 (and 369 n).

38 Ibid., 349. Unluckily, in his survey of Eastern India S. Bhattacharya does not give data for either real earnings of weavers or numbers of looms, though he says that weaving ‘showed surprising survival capacity’ (Ibid., 292). Kessinger does not seem to have come to grips with the question in his survey of Northern India, though he does give interesting data on the disappearance of the supply of piece-goods from the Upper Provinces to Calcutta between 1812–13, when they composed 41% of the total trade, and 1835–36, when their share had dwindled to 2% (Ibid., 253–4).

39 Paper (cyclostyled), presented at a seminar on the Transformation from Medieval to Colonial Economy, Aligarh, 1972. Amalendu Guha's conclusion can also be supported from the figures of India's raw cotton exports to Britain. From 145 million lbs in 1855 these climbed to 443 million lbs in 1872, constituting 16% of total British raw cotton imports in 1855, and 31% in 1872. (Harnetty, Peter, Imperialism and Free Trade; Lancashire and India in the Mid-19th Century (Manchester, 1972), p. 49Google Scholar). Unless the Indian per capita cotton production also increased on such a dramatically high scale, the per capita availability of cotton within the country must have undergone an enormous decline. The force of M. B. McAlpin's studies has been to deny such an increase in per capita cotton acreage during this period (JEH, XXXIV, 1974, pp. 662–84; and IESHR, XII (1), pp. 43–60).

40 See IESHR, V (4), 378, where Morris takes as his starting point the existence of 3.1 million handlooms in India and Pakistan in 1950–51.

41 Gadgil, D. R., The Industrial Evolution of India in Recent Times, 1860–1939 (5th edn, Delhi, 1971), p. 180.Google Scholar

42 Bagchi, Amiya K., Private Investment in India, 1900–1939 (Cambridge, 1972), pp. 220–8.CrossRefGoogle Scholar

43 Gadgil, , Industrial Evolution of India, pp. 144ff.Google Scholar

44 CEHI, II, 519–20, But see Gadgil, , Industrial Evolution of India, pp. 142–3.Google Scholar

45 CEHI, II, 275–7.

46 Ibid., 265–6.

47 Tenant, Indian Recreations, II, 404, quoted in Nevill, H. R., Lucknow: a Gazetteer (Lucknow, 1922), p. 149.Google Scholar In 1824, Heber ‘guessed’ that the population was 300,000 (Heber, R., Narrative of a Journey throughout the Upper Provinces of India (London, 1828), p. 90).Google Scholar

48 Russell, William Howard, My Indian Diary, ed. Edwardes, Michael (London, 1957), p. 59.Google Scholar

49 CEHI, II, 266.

50 J. Nevill, Lucknow Dist. Gazetteer, 63.

51 Butter, Donald, Outlines of the Topography and Statistics of the Southern Districts of Oud'h, 1839, reprint (photo reprod.), ed. Ahmad, Safi (Delhi, 1982), pp. 114–43; also pp. 100–16.Google Scholar

52 Bhattacharya, D., Report on the Population Estimates of India, vol. III, 1811–20Google Scholar, pt A. Eastern Region (Census of India 1961), pp. xviixviii.Google Scholar

53 I have checked these figures with the volumes of Hunter's Statistical Account of Bengal; they diverge slightly, in the case of the 1872 Census, from the figures given by D. Bhattacharya, op. cit.

54 CEHI, II, 278, quoting Rennel.

55 Buchanan, Francis, An Account of the Districts of Bihar and Patna in 1811–1812 (The Patna-Gaya Report) (Patna, n.d.), p. 61.Google Scholar Buchanan fixed a ratio of 6 persons to a house on the basis of trial enumerations; the houses were estimated to number 52,000.

56 CEHI, II, 376–462.

57 CEHI, II, 379.

58 IESHR, X, 4 (December 1973), pp. 303–32;Google Scholar XV, 2 (April–June 1978), pp. 173–86.

59 IESHR, XV (2), pp. 173–86.Google Scholar

60 CEHI, II, 880–4.

62 IESHR, XII (1), pp. 55–7.Google Scholar

63 CEHI, II, 390.

64 See Heston's table 4.3A in CEHI, II, 397, and A. Maddison, ‘What did Heston do?’, unpublished note circulated at conference on the CEHI, Cambridge, 1984, where the original version of this paper was also presented. Maddison puts the income from crops substantially above the estimates of both Sivasubramonian and Heston for good enough reasons (Table 6 in the note). For Maddison's own original estimates, which Heston seems to dismiss rather too casually, see his Class Structure and Economic Growth: India and Pakistan since the Moguls (London, 1971), pp. 166–7.Google Scholar

65 Heston explicitly assumes a 57% increase, but the figures he conjectures show one of 58.7%: the discrepancy is left unexplained (CEHI, II, 397, 440). To convert this into increase per capita, I have used the population tables constructed by Morris, Morris D. in IESHR XI (2–3), 312.Google Scholar

66 Report of the Royal Commission on Indian Agriculture (London, 1928), pp. 198200Google Scholar. See also Moreland, W. H., Agricultural Conditions of the United Provinces and Districts (Allahabad, 1913), pp. 2631Google Scholar; and Anstey, Vera, The Economic Development of India (4th edn, London, 1952), p. 172.Google Scholar

67 CEHI, II, 440.

69 CEHI, II, 438–9. Atkinson counted 101.6 million heads of cattle in British India in 1895; the official Agricultural Statistics reported only 76.7 million in 1896–97, implying the disappearance of a quarter of the cattle population within a year. For the whole of India Sivasubramonian estimates 153 million heads in 1900–01. A comparison with the Agricultural Statistics would make one infer that over half the cattle were to be found in the princely states!

70 CEHI, II, 439–40.

71 For converting the increase in value of exports of hides and skins into 1946–47 prices, I have used Moni Mukherjee's table on price levels in Economic History of India, 1857–1956, ed. Singh, V. B. (Bombay, 1965), p. 685.Google Scholar

72 CEHI, II, 396, 451.

73 CEHI, II, 451.

74 Cf. Sivasubramonian in CEHI, II, 538–41, esp. table on p. 534.Google Scholar

75 Heston gives a table (4A. 11) on p. 445 (where the column headings are a little misleading), which he describes on p. 450. This consists of Moni Mukherjee's real-wage indices for agriculture and industry (as recalculated by Heston) and his own indices of productivity per worker for agriculture and large-scale industry, and an index of output per worker in railways. The real-wage series of Radhakamal Mukerjee, Kuczynski and K. Mukerji (all of which show declines in real-wages) are ignored. It is this table which forms the basis for Heston's supposition of an increase in craft productivity (ibid., 451).

76 CEHI, II, 451.

77 IESHR, X (4), 330 n.

78 From Mukherjee's, M. chapter on ‘National Income’ in Singh, V. B. (ed.), Economic History of India, 1857–1956 (Bombay, 1965), p. 703Google Scholar; quoted in CEHI, II, 404.Google Scholar

79 Table IV in ibid., 672. This results when Atkinson's fig. for 1895 has been scaled down by 20% (following R. K. V. Rao) and the 1875 figure by 15%. There is little justification for the latter, except that ‘a smaller scaling down would entail a drop in real per-capita income between 1875 and 1895, an unlikely contingency’ (ibid.)

81 Ibid., 686–7, et passim.

82 Ibid., 689.

83 Ibid., 701–2. Cf. also col. 5 in Table 4A. I. in CEHI, II, 422Google Scholar, and Heston's text, ibid., 418.

84 CEHI, II, 384, 418–20.Google Scholar

85 See Mukherjee's table in Singh, V. B. (ed.), Economic History of India, 689–90Google Scholar: There is an actual decline from 202 in 1875 (and 210 in 1876) to 188 in 1900. The words in inverted commas are from Heston's comment in CEHI, II, 418.Google Scholar

86 IESHR, V (1), 14 and n.Google Scholar

87 Davis, Kingsley, The Population of India and Pakistan (Princeton, 1951), p. 62.Google Scholar

88 As Heston puts it: ‘Up to 1920, per-capita income and perhaps food availability are rising, while mortality experience is not improving[!] at all.’ (CEHI, II, 414).Google Scholar

90 CEHI, II, 402Google Scholar: Table 4.5, cols. 10 and 11.

91 Singh, V. B. (ed.), Economic History of India, 611.Google Scholar

92 CEHI, II, 238.Google Scholar Cf. also the same author's Land and Caste in South India (Cambridge, 1965), pp. 163–7.Google Scholar The decline is all the more remarkable since the wage rates tended to be under-reported until 1887, whereafter the understatement was ‘somewhat less’ (M. Atchi Reddy in IESHR, XV (4), 466).

93 Cf. Heston, : ‘…we again seem to find for the nineteenth century divergent trends in the per-capita income and real wages, which is not a tidy result’ (CEHI, II, 408).Google Scholar A divergence between the two is, of course, possible if there is a radical change in the distribution of national income, as in periods of rapid growth of industrial capitalism. Within the Indian economy the landlords apparently gained considerably in the latter half of the 19th century, but essentially the process was one of ‘the slow impoverishment of the mass [rather] than the enrichment of the few’ (Stokes, in CEHI, II, 65Google Scholar).

94 CEHI, II, Table 4A.11, cols. 2 and 5 and text, p. 450.Google Scholar

95 CEHI, II, 397 (Table 4.3 A).

96 Ibid., 452–3. This is surely an area where ‘hunches’ of this kind have the least justification, for the quantitative evidence is so rich. For the latest survey of that evidence see Banerji, A. K., Aspects of Indo-British Economic Relations (Bombay, 1982).Google Scholar

97 Ibid., 873. A. K. Banerji, op. cit., 18–19, argues that Saul underestimates the extent of India's net payments to Britain in 1880–81.

98 Singh, V. B. (ed.), Economic History of India, 685.Google Scholar

99 See table in CEHI, II, 873Google Scholar, for figures in current prices. By ‘net drain’ I mean the total payments made to Britain less British capital exports to India (cf. CEHI, II, 873–4Google Scholar).

100 CEHI, II, 874.Google Scholar

101 Digby, William, Prosperous British India; A Revelation from Official Records (London, 1901, reprint, New Delhi, 1969), pp. 217–18.Google Scholar

102 It may be remembered that the total capital formation at the end of British rule was no more than 5 or 6% of the NDP (Angus Maddison, Class Structure and Economic Growth, 65; CEHI, II, 948Google Scholar).

103 In her section on South Indian economy before 1857 Dharma Kumar does recognize that ‘the “economic drain” was large’, but urges that it ‘is not clear that [this was] … accompanied by the impoverishment of the people’ (CEHI, II, 360, 375Google Scholar).

104 CEHI, II, 762803.Google Scholar

105 Ibid., 878–904.

106 See the useful appendix to the chapter on population which tabulates famines, 1750–1947, CEHI, II, 528–31.Google Scholar The most deadly famine was that of 1896–97, with 96.9 millions affected and 5.1 million deaths.

107 Cf. McAlpin, Michelle Burge, ‘Railroads, Cultivation Patterns and Foodgrain Availability: India 1860–90’, IESHR, XII (1) (0103 1975), 4360, the quoted words being from her conclusion (p. 58).Google Scholar Also see her earlier essay in JEH, XXXIV, (1974), pp. 662–84Google Scholar, where too she disputes the effects of railways on foodgrain availability. She ought, perhaps, to have treated acreage under wheat separately from other foodgrains; for it was really the coarse-grain availability which was in question. Nor should one be so dogmatic about the fall in foodgrain availability. Even a ‘small decline in the share of land planted with grain’, plus foodgrain exports, could have had a devastating effect on a very large population permanently hovering upon the verge of starvation.

108 CEHI, II, 894.Google Scholar

109 CEHI, II, 63.Google Scholar What Stokes appears to be saying is that large numbers of agricultural labourers held small bits of land and were not totally landless. This would not be seriously disputed by any one.

110 Land and Caste in South India, 168–82.

111 CEHI, II, 553676.Google Scholar

112 Ibid., 553–4.

113 Cf. Angus Maddison, Class Structure and Economic Growth, 56, for a recent statement.

114 Ibid., 555. Among scholars who share his outlook on tariffs Morris might have in mind Tomlinson, B. R.. In his Political Economy of the Raj, 1914–47 (London, 1979), p. 13 (also pp. 1516)CrossRefGoogle Scholar, Tomlinson argues that for India's industrial development protective tariffs would have been less important than the transformation of ‘the traditional institutions of the internal economy.’ He refers us in turn to Rider's, T. D. unpublished Ph.D. thesis on ‘The Tariff Policy of the Government of India and its Development Strategy, 1894–1926’. I suppose if one can see an official development strategy in that period, one can see anything.Google Scholar

115 CEHI, II, 578.Google Scholar

116 ‘Given the widespread impression that industrial development was impossible because of implacable British hostility to Indian competition, the career of the cotton mill industry seems particularly paradoxical.’ (CEHI, II, 573Google Scholar).

117 Ibid., 577. Morris surely means the agitation in India over the countervailing excise, not over the tariff imposed on imports.

118 Ibid., 868.

119 This step is commended by Chaudhuri: ‘the adoption of the gold exchange standard provided India with a really modern and automatic mechanism regulating the supply and demand for foreign exchange’. (CEHI, II, 874–5Google Scholar).

120 Ibid., 770.

121 Poverty and Un-British Rule in India (London, 1901), Government of India reprint (Delhi, 1962), pp. 495–8.Google ScholarCf. Chandra, Bipan, The Rise and Growth of Economic Nationalism in India (New Delhi, 1966), pp. 279ff.Google Scholar

122 India in the Victorian Age, 2nd edn (London, 1906), Government of India reprint (Delhi, 1976), p. 433.Google Scholar

123 See for a fall in the share of cotton goods in Indian exports between 1890–91 and 1900–01, CEHI, II, 844Google Scholar (Table 10.11).

124 CEHI, II, 749.Google Scholar

125 Ibid.

126 ‘Railway workshops were important centres of large-scale production, but unfortunately this is an activity about which it is not yet possible to say much’. (CEHI, II, 566 n.Google Scholar)

127 CEHI, II, 749.Google Scholar

128 Ibid., 587.

129 Ibid., 586.

130 Ibid., 587–8.

131 CEHI, II, 601n.Google Scholar

132 Ibid., 415.