Summary

The chapter opens with a brief overview of progress in advancing longevity and reducing ill health since the nineteenth century. The contributions of public measures for prophylaxis, sanitation, women and childcare, and improving the built environment, along with those of medication, are discussed briefly. The very recent incursion of big private drug companies and their associate providers of health, and their contribution in slowing down improvements in the period of neo-liberal reforms, especially in developing countries, are analyzed. The interrelationship of state failure and market failure in societies ruled by landlords and speculative capital in alliance with international corporate capital is brought out. The ironical situation of poor states training doctors who then serve badly financed health care systems of developed countries is scrutinized. The pollution of traditional knowledge through the agency of mercenary practitioners in an atmosphere of mass illiteracy, mass poverty and exclusion from their legitimate claims on the public sector is discussed. The social and political requirements for substantially abating the state failures and enabling the state to govern the market in the interest of the poor are discussed.

The axial ages of survival chances

For most of the history of humankind, the basic determinants of human health had little to do with any separable health care sector. Those determinants included the standards of nutrition, the environment of work and daily living, and the prevalence of pathogens in the environment and their rise or sudden eruption.

The aim of the present book is to provide a statistical framework for the determinants of private investment in India during the period 1900–39 and to provide an analysis of the data contained within that framework. Some readers may feel that in my impatience to arrive at meaningful conclusions I have not pushed on to perfect statistical series as much as I could have done. The apology I would offer is that selection of the data and their arrangement made sense to me only in reference to the questions I was asking. Hence I stopped refining the series at the point at which further refinement did not seem to have any bearing on the answers to those questions. There was also the danger that the book would not have been finished at all if it had not been finished now.

Like all authors of such an enterprise, I have accumulated a very large, tangible debt to other workers in the field, and to a wide circle of friends and critics. I have given references to the work of other people that I have drawn upon in different places of the book and so perhaps it is unnecessary and invidious to mention a selected few here. My biggest intellectual debt is to Professor Joan Robinson who carefully read the penultimate version and had very valuable comments to make on the theoretical framework.

The aim of the present chapter is to trace the broad history of private investment in manufacturing industries in India and relate it to broad movements of national product and external factors. Investment in mining and plantation industries is entirely excluded. Furthermore, the discussion is centred on movements of investment in large-scale rather than in small-scale industries. But no rigid distinction is drawn between large-scale and small-scale industries because the data do not allow such discrimination in every case.

In the beginning of the period only two large-scale manufacturing industries, viz., cotton and jute mills, employed more than 20,000 people. At the end of the period, several others, notably iron and steel, sugar and cement had been added to the list. But up to the end of the twenties the cotton and jute mills dominated the industrial field as indeed they did, although less completely, even in 1950. But at least public attention had been shifted to other fields by the latter date.

Even when data regarding manufacturing concerns are systematically collected, the measurement of investment is a tricky affair. The problems arise out of changes in prices of the different constituents of the capital stocks of companies, which determine the correct level of depreciation, changes in the price levels of commodities in general and changes in rates of interest. For India during the period under review, the problems are even more difficult.

In 1900, India, ‘the brightest jewel in the British Crown’, was one of the poorest nations of the world. Lord Curzon, the then Viceroy, and imperial proconsul par excellence, in answer to the critics of British rule, during the debate on the budget for 1901–2, proclaimed India prosperous at Rs. 30 or £2, of income per head per year.

The viceregal statement did not go unchallenged: William Digby produced a massively documented indictment claiming that the average Indian was even less prosperous than Lord Curzon had made him out to be, and that he was getting poorer every year, directly as a result of British rule. F. J. Atkinson, in an attempt to vindicate Curzon's estimate, produced a detailed calculation showing that the income per head of an average subject of British India was Rs. 39·5, or about £2. 13s. od. per year in 1895. The best available estimate for Great Britain in 1901, by contrast, puts the income per head at £52 per year.

Atkinson's estimate for 1895 has been confirmed by Sivasubramonian, who found that the income per head in India (including native states) at current prices was Rs. 42·1 in 1900–1 and Rs. 41·5 in 1901–2. Atkinson also claimed that there was a sizeable improvement in the standard of living of an ordinary Indian between 1875 and 1895: the income per capita had increased from Rs. 30·5 in 1875 to Rs. 39·5 in 1895. This claim was, however, based on questionable assumptions.

It was in the past considered by most writers on Indian economic affairs that Indian labour was immobile, difficult to discipline, and often scarce in a country with abundant population. By implication or explicitly, therefore, the supply of labour was supposed to have been a serious constraint on the growth of industry in India in the recent past. Some of these ideas about the irrationality and intractability of the Indian labourer have fared no better than crude ideas about the irrationality of the Indian peasant, when faced with detailed research.

But there is a danger that the myth of the agriculturist factory-worker of India may be replaced by the myth of the rootless Indian labourer, whose ‘natural’ supply price is the subsistence wage and whose condition is entirely governed by the high rate of population growth. The fact of the matter is that just as in other fields, so in the field of labour relations the laissez faire practised by the Government of India was a policy rather than the absence of one. Just as in the field of industrial production it ‘naturally’ led to the favouring of British or, rather, European traders and industrialists, so in the field of labour supply it led to a policy of increasing the mobility of Indian labour with a view to pushing it into British-managed plantations and factories.

The earliest engineering firms in India, such as Jessop and Company and Burn and Company, seem to have grown up in response to the demand for construction of houses, boats and various other structures as the British consolidated their position in India. With the growth of the jute industry in Bengal and the cotton industry in Bombay, the demand of the mills for various types of structure naturally spurred the growth of engineering. But the general engineering firms came to depend mainly on public works such as roads, bridges and irrigation channels, and on the railways – public and private – for sustenance, particularly when famine or trade depression affected the level of private demand.

Practically all of the more important engineering firms were owned and controlled by Europeans. But they by no means had easy access to the work on the various public works projects and railways. When the East Indian Railway was due to start, the carriages for the railway were lost at the Sand-heads in the Hooghly estuary; John Hodgson, the enterprising Locomotive Chief Engineer of the East Indian Railway, then set about building the carriages with the help of two local coach-building firms, and it was with carriages made in India that the first trip from Howrah to Pundooah was made in 1854.

HANDICRAFTS AND MILL PRODUCTION IN THE COTTON INDUSTRY

The textbook story of development of capitalist industry goes as follows: Given a blue-print of techniques, with a rise in wages a more capital-intensive technique than the one hitherto in use becomes profitable. Hence if a weaver was operating by hand only one loom it becomes profitable to add some device to speed up the production on the loom, thus increasing the amount of capital per weaver; the logical culmination becomes the displacement of the handloom by a powerloom. The speed of the change is not, however, dictated by the extent of rise in wages; it is determined by the rate of investment which in turn is dictated by the capitalists' share in income and their propensity to save.

One can adapt this story to the Indian case and argue that there occurred a rise in the standard of living of the Indian worker at the end of the nineteenth century; this was induced by the increase in the prosperity of the peasant through the greatly increased exports of primary products. The rise in the wages of workers combined with the removal of the barriers to free competition imposed by an inefficient transport system, to bring about a situation in which the powerloom became a more profitable implement than the handloom.