Tirthankar Roy has a good essay here titled 'The Permanent Settlement and the Emergence of a British State in Late-eighteenth-century India'
He mentions the theory that the East India Company 'transplanted' European ideas about property ownership to a country where no such thing existed. I suppose it is true that the idea that killing your father or uncle to inherit his property- after a suitable bribe to the Governor had been paid- was an indigenous idea. It is also true that the Brits did not enshrine it in law. But that was also why many people came to prefer British rule. Your nephew- or, indeed, your son- had no great incentive to stab you or poison you save for wholly unmercenary motives.
In a book published in 1963, Ranajit Guha took the transplant theory to another level. The Permanent Settlement
a consequence of Pitt's India Act of 1784, which separated the political activities of the Company- which were to be under direct control of the British Government- from its commercial operations. This militated for a 'satisficing' rather than profit-maximizing strategy when it came to Land Revenue. In brief, this meant that, where possible, the assessment should be enough to satisfy the State's need for money in a predictable manner. This was better done by fixing it at a sustainable level rather than constantly assessing output and imposing higher taxes in good times and granting rebates in bad times. There were two reasons for this. The English were few in number in India. They would have to rely on an indigenous class of assessors. But the same problem arose when it came to London's control over Europeans in India. Only a few individuals, connected to Westminster, could afford to focus entirely on the affairs of a distant territory which they may never have visited. Thus, predictability and ease (and thus reduced cost) of monitoring was more important than maximizing profit.
reflected a doctrine –
that of 'minimizing regret' or 'satisficing' so that one could justify, on grounds of prudence or practicality, one's decisions to those charged with oversight by Parliament
making it highly likely that it entailed a misreading of Indian prehistory.
Indian prehistory didn't matter. It couldn't have been that great. Otherwise the place would not have been taken over by Turks and, later on, Europeans.
The book does not see it as a copy of English precedence
The word 'farmer' in English originally meant a guy who rents a piece of land, hires labour, borrows money for working capital (seed, fertilizer, etc.) and seeks to produce agricultural produce for a profit. Obviously, you could farm your own land- i.e. hope to cover your 'imputed rent' after paying for labour etc.
The State, to defray its own expenses, would need to levy a tax on land. The person with the duty to pay that tax on particular territory might rent it out to tenants. They pay him and he pays the government.
India was no different from Europe in this respect. The 'zamindar' is the guy who pays the State the land tax while his tenants are 'farmers' or 'ryots'. If they themselves rent out land they were called jotedars in Bengal.
In parts of India where large quantities of wage labour could not be brought in, there would be something like tenant farming for money rents or else share-cropping. Even where a landlord preferred to bring in immigrant workers to work on his own land, he might rent out the rest of his holdings. The central government had a choice between fixing its own revenue demand and letting the landlords sell or buy land or else spending more on collection and charging a whole bunch of small proprietors a higher rate.
All this has nothing to do with ideology or history or politics. It is economic geography.
but as a particular legacy of the European Enlightenment working upon the minds of some of the key contributors to the discourse in Bengal.
The European Enlightenment accepted that different places would have different types of tenure. In some place you need a Marcher Lord who lives in a castle and who is backed by his own mounted retainers to ensure that farmers and townsfolk are protected from predation. Otherwise they won't be able to pay their rent or taxes. The Marcher Lord won't be able to pay tribute or provide troops to his liege lord.
In peaceful districts, the Prince might maintain a civil service able to assess and collect taxes directly from peasant proprietors and independent tradesmen and artisans. Part of the revenue could be used to provide 'club goods' of various kinds to enhance productivity.
The European Enlightenment encompassed Catherine the Great's Russia as much as it did the tobacco fields of Virginia. It was obvious to all that different terrains would have different fiscal arrangements.
The French physiocrats
were shitheads. Still, it was true that if you raised agricultural productivity then your people would have more food. The population would rise. You would have more soldiers and thus be more secure. Just getting your hands on a lot of Mexican Silver or Peruvian Gold while agriculture decayed and your population plummeted would cause your nation's decline. But this is common sense. Nobody needs to read a book about it.
regarded land as the source of the wealth of nations, and some of them saw capital invested in land as a risk-taking enterprise, thus combining capitalism (virtuous investment) with landed society (land as the ultimate source of economic, military, and legislative power).
Make your land more productive. Your population will rise. Your Army will be stronger. You can send out colonies to distant parts of the world.
Don't neglect your land or turn it into a hunting preserve. Don't let the peasant starve. You won't have enough soldiers to defend your country.
These ideas had sway over three Bengal debaters (Francis, Henry Patullo, and Thomas Law).
Only one idea held sway over them- viz. how to get very fucking rich by getting rid of their rivals in the company.
Seen in this way, the Permanent Settlement was a colonial experiment to create capitalism in landed property.
No. India wasn't a colony. The Brits hated the climate. Even if some could tolerate it, the Brits didn't want a 'country-bottled' European or Eurasian class to come into existence because, like the Americans, it would want independence.
Guha’s work was path-breaking because it broke the spell James Mill had cast upon generations of writers.
Guha was a Communist. He was saying 'Capitalism is bad. It was invented by Whitey. Whitey is very evil. Now India has got rid of Whitey, it should also get rid of Capitalism. ' Guha emigrated to UK in 1959. He was merely stupid, not mad.
Most reviewers found the attempt to connect Bengal with Europe, where new thinking on land was taking shape and landlords represented a progressive force,
Roy is thinking of 'improving landlords' like 'Turnip' Townshend. But then 'Farmer' George was the King at the time of the American Revolution.
refreshing in an otherwise too region-bound historiography.
Why are historians so fucking stupid?
Guha showed himself to be ‘.. as much at home in the European world of the Enlightenment as he is in the tumult and confusion of mid-eighteenth century India,’ Holden Furber wrote.
He was too stupid to understand the first thing about either. The cunt must have noticed that plenty of Marwaris who left school at 14 had become big capitalists. Did he really think they had been influenced by the works of Marshall & Samuelson?
There is a third version of the transplant theory. The Permanent Settlement was later extended to estates in Andhra and Tamil Nadu.
Some estates were given a permanent assessment because the incumbent was strong and well-regarded locally. But 'ryotwari' was the rule rather than the exception.
Some historians think South India copied Bengal. There was, however, a significant difference between Bengal and South India. The zamindars in the north were the legacy of a Mughal fiscal system.
i.e. the Brits first took over Diwani & then a pre-existing Nizami (tax administration).
In South India, no one knew what their counterparts were a legacy of.
Polygars- i.e. local chieftains. But some were rebellious. Others were sensible. There had to be 'discovery'.
It made no sense for the officers to cite ancient tradition.
Which was ir-fucking-relevant. Nobody cared about history. Were the operations of the Company profitable? Was the profit sustainable? That's all that mattered. One peculiarity of the South was the tendency to over-bid on auctions and then default.
The historian, in turn, must reconstruct tradition based on little serious data.
Not if she belongs to the subaltern school.
The foremost work along these lines is that of Nicholas Dirks.
A cretin.
Dirks says that in precolonial south India, the king’s power was based on a notion of exchange of entitlements with the cultivators and cemented by gifts exchange.
Not to mention hugs and kisses. Sadly, power based on gifts or hugs melts away the moment some Muslim General or British Major shows up.
Land rights were a part of this exchange system. Inam, or tax-free land, was both symbolic and practical in this exchange system.
As were kissing and hugs. That is why the Brits were never able to conquer South India.
This partnership was broken as the British introduced private property that eliminated the kings from the scene.
Because once people had 'private property' they became very hard hearted. Kings would knock on the door saying 'could we please exchange some nice inams and hugs and kisses?' but the peasants would say 'fuck off! We iz British now. No hugs or kisses will be given. Instead we will play cricket and read books written by P.G. Woodhouse.'
Important as Dirks’ work is, parts of it merely voice a widely shared illusion among historians that the British misunderstood something of precolonial India.
For example, they didn't understand that all Indians were homosexuals. Not only were they hugging and kissing each other, they were also fisting each other with great assiduity. Sadly, the Brits put an end to this charming practice
No one can show what it was the British misunderstood in this case.
Their rule was not secure. Should they just loot the place or try to build something enduring? What they had to offer was a new rule for, not property, but inheritance. You can keep, sell, or bequeath your property. If your nephew kills you, he won't get it. We will hang him.
That was a good deal. More and more Indians would take it. The ones who didn't would be either easily vanquished (because their allies could be bribed to abandon them) or else could be left independent- till a nephew killed them.
The evidence does not exist. In the rich scholarship on the economic transition in Bengal, the debate on land policy has yet to be discussed with the attention it deserves.
How did Roy or Guha's own ancestors gain wealth? Most would have been educated people who rose as 'jotedars'. The stronger and smarter of these could get a lower assessment in return for ensuring the weak paid more. Some such even became zamindars.
One of the earliest systematic histories skips the episode.
That of S.C. Ray in 1915.
Narendra Krishna Sinha’s authoritative Economic History of Bengal offers a blow-by-blow account of the actions of the government leading up to the Permanent Settlement but does not pay much attention to the policy debate.
These were guys who were getting very fucking rich. They didn't go in for 'policy debate'. Intrigue- sure. Polemics- no problem. But debates are for losers.
Two subsequent studies of eighteenth-century Bengal concentrate on the peasants and their conditions.13 Marshall mentions the debate. In this account, Francis and Charles Cornwallis were ‘doctrinaires,’ Hastings was engaged with administrative matters
He wanted to get the whip-hand over the Hindu 'banyans'. Hastings, at 17 had been one such himself. The judicial murder of Nundcoomar sent a powerful signal. Since the fellow had cheated plenty of his caste-fellows, the Hindus took the matter in their stride. The Brits may be brutal, they may eat beef, but they aren't as crooked as our own people. As masters, they were harsh but had some basic sense of fair play. They wouldn't fuck you up just for the fun of it.
more than doctrinal debates. The delayed implementation of the action plan had owed to Hastings’ resistance to the plan. This is correct but too dependent on personalities. It does not say where the resistance came from.
Why permanently settle with dudes who might disappear as quickly as they appeared? England really wasn't as safe as its people liked to pretend. Indian banyans had contact with French and Dutch merchants who had their own tales to tell. Did you know Cornwallis was defeated by a dude named George Washingaton? I hear he is sailing for Calcutta to finish the job.
A short article compiling citations illustrates the struggle to understand ancient rights but does not offer an interpretation.
There is nothing to understand. Some shithead say that in ancient times King came and gave everybody hugs and kisses. Viceroy may kindly take note.
Sirajul Islam deals with the aftermath of the settlement. Robert Travers discusses the debate in greater detail but does not offer a new reading of it.
There was a power-play, nothing more. Whatever arrangement was made, some people were bound to say the Governor gave too much away or else was too greedy and thus was bound to cause a rebellion or a famine.
It is fair to say that Guha’s A Rule of Property has remained a kind of last word on the origin question, which is remarkable considering that it was published sixty years ago.
It is remarkable that a sensible enough Economist doesn't get that Guha had goo for brains.
The long shelf-life is also surprising
till you remember that Bengali buddhijivis have zero common sense.
because A Rule of Property is seriously limited in its method.
The rule when it comes to raising revenue is to maximize the Present Value of net collection. Britain couldn't send out an army of clerks. Its population was small relative to its new possessions in East India.
It is an intellectual history, which is the book’s strength and weakness.
Weakness. Fiscal policy has shit to do with intellectual history.
It is naïve to think that a large-scale institutional change can primarily result from doctrines.
It can, but the thing won't last. The reason the Permanent Settlement lasted is that 'control rights' could be redistributed while there was enough scope for a gradual increase in beneficial rights. The thing wasn't optimal, but it worked well enough. I suppose historians can point to continuities with the system established by Akbar. Bengal relied more on estimates than measurement- which is why the 1943 food availability deficit wasn't reflected in the official figures.
This point is echoed in some of the critical reviews. Reviewing A Rule of Property, Marshall says that ‘nearly everyone else in the Company’s service was reaching the same conclusion, if on practical rather than theoretical ground.’ 18 ‘Mr Guha,’ said Ashin Das Gupta in a review of the book, ‘shies off from administrators because he cannot fit them in within the pattern of European thought …’ 19 The reviews do not say what practical problems the administrators were trying to solve.
They don't need to. The District Collector was the administrator. He collected money. His practical problem was to remit the expected amount without triggering a rent-strike or rebellion of some sort.
The political agency of doctrinaires in Guha, and the intellectual agency of administrators in the reviews, both remain obscure.
Better obscure than obscene.
An incomplete version of a theory did exist in the late nineteenth century. ‘[T]he conferment of a landlord title,’ wrote B.H. Baden-Powell,
He joined the ICS in 1860. At the time it was fashionable to say the Brits ruled India according to its own ancient laws. People like A.O Hume saw the need to end the Permanent Settlement. Sadly, the Indians weren't enthused.
‘was solely or chiefly the result of inquiries and conclusions as to the Indian laws.’
It was supported by affidavits of this sort- that's true enough. But such things are easily come by.
Baden-Powell was the most systematic chronicler of land rights in British India. The quotation did not express his views on the origin of the Permanent Settlement but cited the opinion of the historian of Bengal, William Hunter. The statement raises more questions than it answers. What are ‘Indian laws’?
Quranic, Shastric or laws promulgated by Indian rulers. This is how title is proved in any jurisdiction. You show such and such property vested in x and that by such and such law you are the legal heir to x.
What are ‘inquiries’? Why the inquiries? Despite the openness, Hunter was right to suggest that key players (like Hastings) believed that the Company needed information of a specific type to strengthen its hand in any bargain it struck with the taxpayer.
It needed to put the fear of God into the Hindu. After that it could rely on the babu to do the donkey-work.
Looking for that data caused a delay. Without disregarding doctrinal influence, it is possible to say that two other things were needed for an action plan to emerge.
The Brits in India depended on the British Navy and Army. Whatever action plan they made had to be one which both would endorse. Ultimately, the Directors of the Company, back in London, had to persuade Parliament the plan was in the public interest.
An action plan needs theory, information (on practice, precedence), and a contextual justification to take action. If data is weak or missing, action may still happen if the context demands action, but the result may not follow the doctrinal blueprint.
It is fair to say that 'administrators' of all types in India had a military doctrine. This had to do with kill ratios. The Brits could probably fight an indigenous force five times their size and win with few White casualties. But for larger combinations, alliances would be required.
The historiography I have discussed above overplays just one of these axes. Context is underplayed, and information is overlooked completely. What is ‘context’? All versions of transplant theory, from Guha to Dirks, left the role of conflicts, fiscal conditions, and the challenge of making a state with a permanent army out of account.
Because they were paranoid shite about how Whitey invented Capitalism and Heterosexuality. Prior to the Battle of Plassey, all Indians were Socialist sodomites- the way nature intended.
What is ‘information’?
Stuff you'd be willing to pay money for because it could make you a larger sum of money.
A permanent army needed the state’s income to be stable,
Siraj ud-Daulah had 50,000 professional soldiers. But they were shit at fighting. Genghis Khan's Mongolia didn't have much in the way of income. But his army was great at fighting.
which needed a permanent contract between the state and the taxpayer,
Genghis was a superb contract lawyer. He persuaded lots of taxpayers to sign very nice social contracts with him.
and to negotiate that contract from a position of strength, the state needed to know the taxpayer’s ability to pay.
Or, if the taxpayer was shitty, his ability to die. Some other guy, using the same resources, might be more productive.
The accent on information reconnects this story with state formation in Europe and the emergence of industrial capitalism, where, as recent studies have shown, access to information plays a critical role.
Even more recent studies have shown that access to recent studies plays a critical role in deciding they are shit.
The European roots of the state in India did matter in this way.
There are European states in Australia and New Zealand and America. There are none in the sub-continent. Why? Europeans didn't settle there. One may certainly say that Brits introduced various institutions- e.g. Parliament- into India. But they didn't work in an European way. For a start, the daughter of the PM didn't become PM nor did her son succeed her in that office.
Let us look at context next. I suggest below that ‘permanency’ had a precise meaning in Bengal, the permanency of British power.
Don't be silly! Bengal couldn't be held if Madras was lost and Madras was mainly ryotwari.
Directly or indirectly aiming for it would need working on the fiscal system.
No. Getting paid required working on the fiscal system. Incidentally, the Brits would have been prepared to sell off a Province if the price was high enough or the cost of administering it was too high. They sold Kashmir to Gulab Singh.
In an earlier paper titled 'Rethinking the Origins of British India: State Formation and Military-Fiscal Undertakings in an Eighteenth Century World Region' Tirthankar discussed
'the rise of the East India Company in the contested political world of eighteenth century India, with reference to the manner in which economic power was deployed to enhance military power. It is shown that there was only one model of successful ‘military/fiscalism’ in this time, represented by the Company.
There were other successful polities- e.g. that of the Scindias or Ranjit Singh. The problem was not military/fiscal. It was that a strong, smart, ruler might be succeeded by a stupid, weak, ruler. Also, you nephew might stab you or your general might try to usurp the throne. With the Brits, even if you had a crappy General or Governor, the fellow would be replaced within a few years. Lessons would be learned from past mistakes and young cadets at Haileybury or Woolwich would audit lectures on the topic. It is not that native Princes were incapable of creating a professional army and bureaucracy. It was just that there was little incentive to incrementally improve and institutionalize that professionalism.
The Company’s strategies, however, cannot be understood as a transplantation of European practices into India.
It was a transoceanic commercial enterprise which set up its own training college in 1806 . Did the Asians have anything similar? No. It wasn't till around the middle of the twentieth century that any Indian company created a professional management cadre, though, no doubt, informally, something like it had existed for thirty years.
However, 'control rights' tended to remain dynastic both in politics and business. In India, a family squabble in a fourth, fifth, or even sixth generation conglomerate can cause great disruption. This is unusual in the West. Minority shareholders have more protection. There is less 'pyramiding'. Markets play a much greater role. The problem of a cretin inheriting control and ruining everything is much less severe.
Local factors, such as opportunism and access to the natural resources of the eastern Gangetic were important.
In other words, the East India Company pursued pragmatic policies. But all businesses do so. Indeed so do politicians.
However, institutional choices mattered, and owed in part to the Europeans’ outsider status.
The Company had to keep getting its charter renewed and thus came increasingly under the control of the UK Government. But 'institutional choices' still had to be pragmatic though, no doubt, the language in which these choices were justified to Parliament might pay lip-service to current shibboleths. The 'outside' force that mattered was the Royal Navy. The Empire was entirely a product of its effectiveness in defeating rivals for supremacy on the open seas.
Introduction Comparisons between early modern Europe and Asia in political terms are of abiding interest to global historians.
Europe had monogamy which in turn militated for primogeniture which entailed easier and more predictable inheritance laws. By itself, this increased fungibility of assets because beneficial ownership was easier to establish. This also meant that 'control rights' could be 'farmed out' more easily.
Thus, suppose your father, through thrift, hard work and enterprise, accumulated a goodly estate in land. If you are the sole legitimate heir, you inherit it all. You can easily find tenants to rent out the whole or any part of it. On the other hand, if your father had numerous wives, there may be all sorts of claims on that estate. Till they are resolved, title is unclear and thus the underlying asset is less fungible.
Some Western countries introduced primogeniture or entail to the closest male agnate to prevent the splitting up of estates. Indeed, they might forbid this- as happened to Catholics in Ireland- so as to ensure that big estates belonging to an oppressed community get split up and, by a process of Malthusian involution, they are reduced to penury and powerlessness.
Two types of motivation drive such comparisons. One of these is to explain Europe’s precocious economic growth.
They pioneered and then dominated transoceanic trade. Competition between oceanic powers, by itself drove technological and scientific progress. Consider the Portuguese conquest of Malacca in 1511. In the previous century a Portuguese king had imported German technologists who continually made innovations in artillery such that Portuguese ships ended up outgunning much larger armadas in the Indian Ocean. But then the Dutch proved even more innovative and enterprising. By 1641, they displaced the Portuguese in Malacca.
As ships from all over the world brought exotic produce to West European ports, value adding manufacturing industries could spring up such that new commodities could be sent to markets where they commanded the highest price.
Consider Bengali jute. It was being exported to Europe by the end of the seventeenth century. Around 1790, some entrepreneur in Dundee discovered mixing a bit of jute lowered the cost of flax spinning but pure jute manufacture, which soon commanded a global market, only came into its own in the 1830s. Over the next fifty years, Dundee became the centre of global jute production. The last Jute mill there only closed in the Nineties.
My point is, if people from Dundee are doing the shipping and distribution in ports around the world, it is likely that Dundee can go in for high value adding manufacturing such that it combines raw materials from the four corners of the globe and sells the product in the market which pays the highest price.
If your people are mobile and productive, your economy will be dynamic. If they are lazy and stupid, it won't- unless you have lots of oil or gold under your soil.
And another is to explain colonization and conquest of Asian regions by Europe.
If you are making good money from oceanic trade, you can spend some of that money on securing raw material and markets in anarchic shitholes. The locals may prefer foreign government to endless internecine conflict. Even if they don't, they may be happy to work for the foreign regime in return for a regular pay-check.
The former enquiry has sometimes followed up the contrast between Europe’s competitive state systems and Asia’s empires, and suggested, as Eric Jones does, that political competition led in Europe to sovereign dependence on capital
Capital is dependent on a Sovereign who acts sensibly. A stupid sovereign- e.g. the Tzar or the Kaiser- can fuck up Capital something fierce. One could say that the sovereigns of Spain and Portugal tried to depend on Capital, but because they did stupid things, their countries declined. Phillip II declared bankruptcy three times, approximately once every two decades, in the second half of the Sixteenth century.
and to ‘continual borrowing and .. “stimulus diffusion”’ whereas the ‘despotism’ of the east functioned as ‘a revenue pump’ in the best of times, deteriorating into a chaotic ‘fluctuations without development’ in the eighteenth century.
Why? If brother couldn't trust brother and the King could not trust his general, life became more and more unpredictable. Economic development would get concentrated in foreign controlled enclaves.
The case for a contrast between dependent and despotic kings
e.g. the last Mughal who was wholly dependent on the Brits and some of the allies of the Brits in 1857 who were as despotic as hell within their own domains
is undermined by the post-1980 scholarship on Indian empires,
all of which is shit
which projects a negotiation rather than hierarchical relationship between sovereigns and communities in this region.
One can negotiate with superiors and inferiors. It is foolish to think that evidence of negotiation is evidence of equality. It is not the case that if Trump agrees to pay an extra ten dollars for a golden shower he becomes equal in dignity to a Russian hooker.
That criticism still leaves us with the question, how do we think about conquest and colonization in comparative terms?
If your King lives in a foreign country and is a different race and religion from you, chances are you have been conquered. If you have been evicted from your ancestral land and now perform menial labour for people of a different race, chances are your country has been colonized.
Again eighteenth century India presents a problem for global history.
No. It is a clear case where superior technology and management skill and practices led to more and more of the sub-continent getting integrated, on increasingly unequal terms, into a global economic and geopolitical order. Britain's rise relative to France was memorialized by victories of British arms against French commanders.
In Europe, the outcome of political competition was states that grew in size and capacity, as the kings tried to take control of the economic means of financing wars, eventually redefining the role of the state in relation to the society.
Holland rose without a King. Philipp II's Spain fell. A century later, the English glorious revolution confirmed that Finance would have the upper hand over Crowned heads.
The European states in the eighteenth century had been moving towards sovereign control of the fiscal and the military apparatus, away from dependence on mercenaries, creditors, and contractors.
France under the Sun King may be said to have done so. But that didn't end well.
The phrase, military-fiscalism, coined by Martin Wolfe in the context of Renaissance France, is frequently used to suggest a coevolution of fiscal capacity and military capacity.
But the thing ended in disaster long long ago. France realized it needed to become a bourgeois constitutional monarchy, or else, a Republic drawing support from the redoubtable French notary and the thrifty petit bourgeoisie.
The attendant growth of ‘social power’ through a process of conflict brought about the nation state and the state structures that defined European modernization.
No. Modernization was a function of the Guttenberg revolution which was itself part and parcel of rising general purpose productivity based on geographical, occupational and social mobility. This was driven by 'Tardean mimetics'- imitating the more successful- rather than top down policies. True, this was not always apparent. In Germany, the doctrines of Adam Smith were promoted by a bureaucratic class which thought the Prince could sponsor 'catch-up growth' and thus create a 'special path' for their demesne. I suppose one could say that the 'total wars' of the Twentieth Century gave a greatly expanded role for the State in selecting and promoting a particular economic development path. But such was not the case in the eighteenth century.
In India too the dominant trend in this time was increasing contest between regimes that had succeeded the Mughal Empire. The break-up of the empire, and the struggle for revenue among contenders, unleashed much potential for violence. Rulers, noblemen, commanders, and underneath them, dominant peasant clans more or less lived in a state of war especially in western and northern India.
Which also meant a lot of them would prefer to become clients of a powerful hegemon
- i.e. pay tribute in return for protection.
All of them were desperately seeking money and the means to acquire more money to finance warfare. And yet, the outcome of that contest was not collective empowerment of the states after the pattern of Western Europe, but something quite the opposite, a collective disempowerment and collapse. In keeping up the military enterprise, almost all of these political actors ran into fiscal crisis and the states that they tried to erect even shrank in size.
In other words, a hegemonic power which reduced 'rent contestation' would gain economies of scope and scale in monopolizing legitimate powers of coercion. Anarchy in India laid the foundation for the Pax Britannica provided by the British Raj. But this was predicated on supremacy at sea. When that was lost or became too expensive, Britain's Empire in India ended.
There was one large exception to this picture, and that was the English East India Company.
Which could easily replace the incompetent or the corrupt. The problem of a weak ruler inheriting the throne did not exist. The English did intrigue against each other but didn't kill each other. As time went on, they had more and more esprit de corps. Moreover, their finances were sound. The 'hoondi' of John Company maintained its value across the sub-continent. Pensions were punctually paid. Employment with the Company was secure- save in case of malfeasance or treachery.
The contest ended with the hegemony of the Company. One way of approaching the subject, therefore, would be to try to explain the final outcome of the competition. How did a company of foreign merchants triumph over powerful and militaristic Indian kings?
By having sounder finances, superior soldiers and administrators and by raising productivity or finding new cash crops to grow and new markets to tap.
Did military-fiscal strategies contribute to the rise of the Company?
No. Sensible policies enabled it to consolidate its gains.
Did the European origin of the Company have any role to play in their military /fiscal enterprise?
Yes. Europeans, on average, were more productive, innovative and had superior esprit de corps.
The paper is an attempt to answer these three questions. Most answers to the first question now available can be grouped under two heads, and called the fall-of-the-Indians and the rise-of-the west stories.
Since the fall-of-the-Indians narrative was similar to the fall-of-the-other-non-European narratives, there is little need to focus on it. Moreover, since the West continued to rise (though China may now be a challenger), more can be said on that topic.
The oldest view was articulated in nineteenth century imperialist history and carried over into Indian nationalistic narratives of colonization. The point of emphasis was the exceptional features of the Indian state.
The sub-continent has dynastic political and business leaders to a far greater extent than the West. Under the carapace of the modern nation state lies a 'segmentary society' where kinship ties and client-patron relationships retain importance.
Autocratic regimes collapsed under the weight of their own contradictions.
Marxist garbage. Autocratic regimes collapse only when the autocrat is killed and his minions are rounded up and incarcerated. In India, British power tended to increase precisely because autocratic rule by indigenous Princes increased uncertainty and reduced resistance to foreign influence.
Roy's own
four connected theses on the colonization of India (are)
First, there was only one model of successful military fiscalism in eighteenth century India, and it was represented by the East India Company.
But if the French and their allies had beaten the Brits at sea, John Company would have collapsed. Even if the Brits weren't defeated at sea but had to maintain a lot of troops in the Home Islands for fear of invasion or insurrection, John Company would have been confined to littoral enclaves under the protection of the local Prince. In other words, 'military fiscalism' didn't matter in the slightest.
Second, the Company’s success in this respect cannot be understood as a transplantation of European practices into India.
Joint Stock Companies didn't exist in India. Nor did the Parliament to which John Company had to answer. The Company was a European 'transplant' though, no doubt, it adapted to local conditions. Similarly, the English District Collector was a transplant even if he had learned to speak in Hindi. He would return home after he retired.
In the middle of the eighteenth century, the political game being played by the Company was quite similar to that being played by its principal rivals.
Clive tried to make his son the Nawab of Bengal. Cornwallis rebelled against Mad King George. He married several Muslim and Hindu wives. He appointed his sons by these women as Rajahs or Nawabs.
Third, geography mattered.
The Brits were prepared to incur a loss holding revenue poor but strategically important regions and thus seal weak spots in India's 'natural frontiers'.
Fourth, geography alone cannot explain the divergence; institutional choices mattered too.
Such choices are a matter of religion, upbringing, and incentive structures. The English could not adopt Chinese Imperial institutions because they did not have 2000 years of Mandarin literary culture. But the Chinese didn't turn into an American style Republic just by holding elections and calling their new leader 'President'.
The Indian states, which could sustain the military enterprise only by offering fiscal concessions and tenures to commanders, saw their power wither away in the presence of sustained conflict.
In Europe, the younger brothers of the King were his most fervent supporters. The General was loyal because he knew he would never be accepted as the new ruler if he sought to usurp the throne. The Church and the Law Courts represented 'countervailing power'. The merchant class was related by blood and marriage to priests, lawyers, country gentry, Army and Navy officers as well as the senior Civil Servants responsible for the administration. True, conservative elements could impose a repressive 'Throne & Altar' regime. But, capital and accumulated faster and technological innovation was more rapid where there was Religious toleration and greater freedom of expression.
The Company on the other hand recast the relationship between the state and the intermediate order of agents engaged in taxation, by making use of an unprecedented instrument, offer of marketable property rights to the landlords in exchange for compliance to the new military/fiscal order.
It wasn't unprecedented. The British had themselves bought territory or acquired it by inheritance or marriage (e.g. Charles II got Bombay as part of his wife's dowry. He leased it to the Company for ten pounds a year.)
There was nothing unusual in paying a guy to take-over his claim to property. But possession is nine tenths of the law. Moreover, even if you get a court decision awarding it to you, you still have to pay bailiffs etc. to enforce your title.
What the Company was doing was renouncing its own claim to revenue enhancement. This made the land titles it recognized valuable only in proportion to the Company's own power. If that collapsed, the title was worthless. Weak or stupid landlords would not be able to collect enough rent to pay the Company. They would be sold up. Ultimately the land would pass to those strong and smart enough to make a profit. As the years went by, they would see that it was in their interest for the Company to remain strong. Under a new dispensation, there would be a new settlement which might be very unfavourable to them.
How do we understand this institutional difference?
We understand that it is a 'distinction without a difference'. Coase's theorem applies. How Property rights are assigned matter less and less if transaction costs fall and those rights become better defined (i.e. who owns what beneficial or control right is clear and unambiguous). But transaction costs only fall if uncertainty falls and there is more trust. But this also means there is greater clarity as to who owns what. If current arrangements have held for a long time and appear likely to hold for the foreseeable future, it doesn't matter if property is allodial or not. Scotland officially abolished feudalism in 2004. All land there is now allodial. This changed nothing but it showed the new Scottish Parliament was shaking off some imaginary feudal yoke imposed by Southron bastids.
Under the rubric of 'post-colonial theory' some stupid shitheads liked saying 'Whitey invented Capitalism and Private Property and Heterosexuality. Colonialism spread these pernicious practices to India. To recover from Colonialism we must all sodomize each other in a Socialistic manner.'
I submit that global (ideological) and local (geographical) factors need equal consideration, and in mutual relation. The Company did not originate in an indigenous community, and therefore had no military heritage to defend,
No. It had the British military heritage to defend. If a regiment suffered a reverse, it was anxious to take revenge.
nor an interest in maintaining sectarian property rights.
The Church is the second biggest landowner in India after the Ministry of Defence. The Brits were Christians.
The fact that it came from a world which had been adapting to constant wars by means of centralization of finances and conscriptions,
The UK didn't have conscription till 1916. Finance wasn't centralized till 1914 with the end of gold convertibility.
made it readier than any Indian state of the time to try to consolidate sovereignty.
Nepal 'consolidated sovereignty'. No doubt, this was because of conscription and centralization of finance. It had nothing to do with Gurkhas being as brave as fuck.
The Indian states had a path dependence to live with, namely, shared sovereignty with communities and individuals who supplied useful services, principally military services.
Whereas Nepal didn't.
Conflicts, therefore, led them to give away more powers.
The Ranas in Nepal had plenty of power.
The higher revenue per area
some areas. Strategic territory was held at a loss. This sometimes involved paying subsidies to local Chieftains.
reduced the costs of territorial administration and policing potential rebels in the Company territories. In short, the coasts and flood-plains made military-fiscalism more promising than in the rocky landscape where Tipu Sultan designed his statist reforms.
Tipu Sultan was the son of a usurper. Could he forcibly convert lots of Hindus and become their Caliph? Nope. Hindus didn't like him. Professors of stupid shite have to pretend that he was a great hero.
In the arid Deccan plateau and forested central India, devoid of good roads, much commerce, and large towns, it was considerably harder for the kings to shed their dependence on local bosses possessing adequate knowledge of the land and the means to coerce peasant headmen.
Lots of that territory ended up under the Nizam. Coercing peasants isn't difficult if you import troops from Yemen. Sadly, they were no match for the Indian Army in 1948.
England's rivalry with France meant that investors in the UK were prepared to finance the expansion of the Company's domains even when it wasn't profitable in the short term. The aim was to push out France. After all, if France prevailed, British investors stood to lose everything, including their freedom. The Brits believed they could prevail and then, because they could raise money to pay Continental allies, they did prevail. They reaped a considerable reward through the rest of the Nineteenth century.
The Company could not finance wars from its income. The proportion of interest-bearing-debt-to-revenue ratio rose from 120 per cent in 1793 to over 300 in 1809, declining to 200 per cent in 1833.33 90 per cent of the war finance was raised in India. Although the cost of credit was about half (5 per cent) in England of that in India, the share of the English money market did not rise until after the territorial wars were over. In other words, all major rival states in the late-eighteenth century competed for money in the same money market. Credit was also critical to the other states. Possibly a quarter of the aggregate Maratha revenues in 1763-5 came from loans. Rs. 10 million were taken from the bankers, according to one estimate for the 1760s.34 Where then was a difference between British territories and their Indian rivals? In Peshwa’s territory, debt service in the 1760s took away about a third of the net income of the state. There is reason to believe that Panipat left a permanent effect upon sovereign debt. In British India, in the decade of the third Anglo-Maratha wars, debt service as a percentage of revenue fell from nearer 20 per cent to 12 per cent.
Even Mahatma Gandhi was aware that his ancestors had financed British expansion. But he also said that the Princes they had served were greedy lechers. They would send troops to break down your door to abduct your pretty daughter and carry off any gold or silver you might have. Pax Britannica involved a slow but steady improvement in the behaviour of such Princes who now feared losing their throne if they devoted all their time to rape.
Between 1770 and 1793, landlord asset was made more marketable, and increased in value as collateral.
Why? The 'market makers' included Company 'banyans'- in other words, those who knew the Brits best were bullish on their continued rise. It is when 'insiders' engage in capital flight that you start getting margin calls.
The Company was beginning to
establish its own Nizamat or administration.
overhaul the legal infrastructure by instituting a set of courts and uniform procedural law. The claim to landed property became
fungible. That's what mattered. Previously, one could say title must remain within a specific family or members of a particular faith. There were places where such arguments had merit. The solution was to treat those territories as Principalities where right of succession was restricted while turning other land into fungible 'zamindaris'. However, Princes or Pontiffs too could rent out land on long leases.
verifiable in the courts of common law rather than the courts of Islamic law, courts of the royalty, or courts of the peasant communities as before.
Who will have confidence in an infidel respecting the decisions of an Islamic court? Subjects of King George are bound by the decisions of that King's Courts. They may defy those of a Mughal Emperor whom they had already defeated in battle.
Further, the state made the state landlord relationship a contractual one,
a commercial one. Some contracts aren't commercial- e.g. a marriage contract.
meaning that the failure to pay revenues led to resumption and sale of estate to the highest bidder.
No. It might lead to an action in law towards that end. But then again it might not. The military or political situation might militate for leniency.
The truth is nobody knew whether the 'Permanent Settlement' would be permanent. New policies were slow to be implemented. What may appear, from the perspective of the historian, to have been a once and for all change of a radical type was more evolutionary than revolutionary. Coase's theorem or incomplete contract theory is the correct lens through which to view what happened. It really isn't the case that Whitey suddenly imposed 'Enlightenment values' on Socialistic Sodomites.
I conclude by returning to a global history question that this paper started with. Why did political competition empower states in early modern Europe,
It didn't. The Polish-Lithuanian Commonwealth was a big power in early modern Europe. Spain remained quite a big player into the eighteenth century. Sweden was once very important but shrank in importance. Catholic Ireland looked as though it might rise at the time of James II. My point is that some states lost, others gained. But gains could be reversed. France began the nineteenth century as a threat to its neighbours. After 1870, it was clearly inferior to Germany which had been weak and divided for centuries.
and disempower states in early modern India?
Those who went in for oceanic trade rose. Those who didn't tended to fall behind.
Perhaps we need to understand the goals of competition and the means of competition differently in the Indian example.
Lineages which supported the Brits did well. There were plenty of very wealthy Maharajahs and Zamindars.
Initially, the goal was judicious predation,
Piracy? The Brits outgrew this approach over the course of the Seventeenth century. Don't forget, there is no point looting a far away country if your treasure ships are captured by a rival power.
and the means militarism rather than governance.
This was 'rent contestation' and related to the 'price of anarchy'. An Emperor can solve this problem. The British King could be a better Indian Emperor than any Indian Prince. Why?
1) Succession was by primogeniture- not brothers killing each other or generals usurping power. The exception was if the King changed religion or sought to rule without calling Parliament.
2) Parliament alone could raise new taxes. It sought to ensure Government spending raised total factor productivity thus creating a virtuous circle whereby Income rose as fast, or faster, than tax payable.
3) British naval hegemony. This was the most important factor
These means were unsustainable when conflicts became long-term.
Or short-term and result in defeat. In the Second World War, France gave up rather than risk losing another 1.3 million men.
The Company succeeded in adapting the means by wresting control of the fiscal order from former commanders and nobles, even as its Indian rivals persisted with the tradition of rewarding commanders and nobles with fiscal powers.
In other words, the Company did what Akbar did. Except it didn't really. Akbar was aiming at revenue maximization. The Brits were content to 'satisfice'. Why? The Brits were answerable to Parliament. By showing they had done enough to secure the territory but no so much as to rouse rebellious sentiment, they would be acquitted by both sides. After all, greedy people will never accept that you squeezed out as much money as was possible. Indeed, they will accuse you of pocketing some of that money. Conversely, the bleeding hearts will never accept that you did enough for the poor suffering natives. Thus, you say you took a middle course. Parliament is welcome to send some one more greedy or someone more compassionate. You were a good enough steward- nothing more.
As the divergence in means continued to grow, the goal before the Company changed from predation to imperialism.
No. The Brits gave up piracy for trade. Long term, the latter is more profitable. As Britain industrialized, India became a big market for cheap textiles. In 1913 India absorbed almost half of the total cotton yardage exported from Britain. This wasn't because evil Viceroys had chopped off the thumbs of Indian weavers. It was because burning coal is much much cheaper than burning human calories in order to weave cloth.
Japan followed the British example. It built ships and dug coal and smelted iron. It got rural girls into giant factory dormitories. Sadly, it also followed the German example. It was able to go on the Gold Standard after getting reparations from China in precisely the manner that Germany went on Gold after getting French reparations. But this encouraged a predatory Imperialism which led to Japan's defeat. Fortunately, thanks to the Korean War, the US was happy for it to rise and rise as a manufacturing power.
Roy & Guha are from Bengal. It is likely both are descended from zamindars or jotedars (intermediaries) and thus have a special interest in the 'Permanent Settlement'. But the thing had no importance in the larger scheme of things. Indeed, Bengal didn't greatly matter- save to Bengalis who, after Independence, found they had to run away from increasing portions of it.
permanent Settlement was a project to create a strong state,
No. It created a nightwatchman state- literally so, as evidenced by the 1870 Bengal chowkidar Act. Bengal wasn't strong. Its people were considered feeble. Still, the moment they began to grow restive, plans were made to move the Imperial Capital. But, already, there were questions as to whether India- like the settler colonies- should become self-administering and self-governing. The Imperial game was not worth the candle. Sadly internecine conflict in India delayed the transfer of power- or rather the emergence of a class of Indians who could act cohesively to solve collective action problems. In Bengal this type of conflict- to which the stupidity and solipsism of the intellectuals greatly contributed- intensified in the Sixties and Seventies. Consider the case of Nirupam Sen, a teacher, who later became Minister of Industries in the Left Front Government. He is the main accused in the Sainbari case. It is alleged that he killed two brothers belonging to the Congress Party, mixed their blood with rice and forced their mother to eat it. She went mad.
To be fair, there were plenty of French philosophers who praised such examples of 'revolutionary justice'. As Amartya Sen might say, this was 'nyaya' not morality based 'niti' and thus greatly to be praised.
Tirthankar Roy is by no means ideologically aligned with Amartya or Ranajit, but there are commonalities in their thinking deriving from their common origin as bhadralok buddhijivis- i.e. upper class Bengali savants.
In particular, they don't understand that 'uncorrelated asymmetries' must pick out one and only agent, if they are to dictate eusocial bourgeois strategies.
concentrating authority to tax, govern, legislate, and fight wars
which are always concentrated in the state whether or not it is strong or weak. Sadly, more than one state may claim authority. The 'uncorrelated asymmetry' here only arises if only one party exercises that authority- i.e. punishes those who refuse to obey.
– constrained by a lack of data on precedence, practice, and taxable capacity.
This is not a constraint on authority. It is a constraint on what can be done with that authority.
The choice of zamindars as owners acknowledged that the magnates and not the state had more local data.
Nonsense! The magnate might be a baby with no data whatsoever. Indeed, may estates did better when the owner was a minor and the State took over the administration.
But the added checks and the design of the deal tilted the balance for the state.
Only because it remained in power and if it was profitable for it to get involved in the matter.
In the short run, the project delivered more revenue, demilitarized landlords,
militarization is a cost. It will only be incurred if there is a military threat.
and broke up estates.
The rise of 'market makers'- including people who worked for the British who had access to native capital- meant that fragmentation was averted. It is likely that bigger jotedars gained lower assessments in return for supporting higher assessments on the small fry. Thus the income distribution was dictated by 'Shapley values'- i.e. the more powerful gained more.
It also possibly led to underinvestment in the long run. But that is another story.
It is the same story. Capital sought to turn itself into rent rather than embody itself as a factor of production. Intellectuals too preferred to score off each other's interpretation of the same old texts rather than try to add to the body of alethic knowledge.
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