British imperialism played a destructive role in the field of Indian industries more than in any other field. It broke the age old unity between agricultural and manufacturing industries in India.
According to historian H.H. Wilson, the British manufacturers employed the arm of political injustice to keep down and ultimately strangle a competitor with whom it could not contend on equal terms. The story of this decline has been narrated by innumerable historians and writers like Rajani Palme Dutt, R.C. Dutt, Bipan Chandra etc.
According to the nationalist economic historians India in the 18th century was a great manufacturing as well as agricultural country supplying her products to the vast markets of Asia and Europe. However, the East India Company and the British parliament in order to suppress the Indian producers and encourage British manufacturers employed various unfair means. Thus, with the advent of British industrial capitalism India became a mere exporter of raw materials and importer of British goods and in the process not only lost her external markets but also her internal markets disappeared. Thus, the most important reason for her growing poverty was that India’s indigenous industries virtually collapsed.
The most impressive analytical work of this period is perhaps R.C. Dutt’s ‘Economic History of India’. In this book he writes that before the advent of English the Indian economy was self-sufficient and balanced, and then came the shattering influence of the market forces represented by western commercial and industrial conceptions. The consequence was a swift destruction of handicrafts, dislocation of industries and enfeeblement of agriculture causing widespread misery. The displaced industrial workers were forced to turn to agriculture as it was the only remaining source of income. But the population was much more than agriculture itself could support and this according to M.G. Ranade led to increasing pauperization.
The U.S. scholar Morris D Morris has however severely criticized the views put forward by Indian writers in his paper, “Towards an interpretation of 19th century Indian Economic History” published in the Journal of Economic History (1963). According to him, deindustrialization itself was a myth. He is of the view that the great amount of work put forward by Indian nationalists tend to be purely descriptive, uncritical of its sources and avoiding the simple tools of economic analysis. He further states that traditional Indian society was characterized by instability, low agricultural productivity and insignificant trade and commerce.
It was British rule that stabilized the society and as a result there was an increase in the amount of land under agriculture and per acre agricultural output also increased. The Indian handicrafts far from being wiped out and showed a steady growth. Morris also adds that the handloom weavers were not the least affected by British cloth export to India but on the contrary they benefitted from the import of cheap cotton yarn which placed them in a better competitive position.
The theory of Morris has been severely criticized by Indian historians by Bipan Chandra as according to them Morris fails to present a clear picture of the 19th century economic history. He merely gives an imperialistic view of the whole phenomenon with modern economic terms. Moreover, Morris does not only ridicule and repudiate the issues put forward by anti-imperialist writers but also discards them due to lack of empirical evidence. It is true that quantitative evidences are much better than qualitative evidence put forward by R.C. Dutt and others but since Morris does not give any satisfactory evidence in support of his theory it is wrong for him to question the evidence of Indian writers. Finally, Morris’ assumption that India had unstable political conditions and no unity and insignificant commerce leads him to wrong conclusions like under British rule Indian society became stable; a sense of unity was born
whose results were reflected in the economic field. Amiya Bagchi entered the debate in 1976 when he contributed two important articles on the subject in the Journal of Development Studies. Morris D Morris had concluded by stating that the distribution of Indian industrial workforce had stood still between 1881 and 1931 as shown by Indian Census. Bagchi contradicted this view by stating that Indian Census could not alone prove that the de-industrialization had not occurred during this particular period. According to the British view the decline of Indian handicrafts was not a phenomenon peculiar to her but part of a worldwide development where the coming of Industrial Revolution ruined old craftsmen. Bagchi is critical of this view and says that the statement tends to ignore the difference between the impact of Industrial Revolution on the metropolis and the colonies.
Amiya Bagchi observes that the process of industrialization is usually attended by three
- A large portion of a country’s national income is generated from the secondary and
the services sector.
- There is an increase in population dependent on the secondary sector.
- There is a rapid mechanization in industries both old and new.
If any of these factors is absent non-industrialization is said to have occurred but if they are reversed the resultant effect is de-industrialization. He then proceeds to prove that the first two conditions were reversed in case of India. In fact, through a case study of Gangetic Bihar between 1809 and 1901, he concluded by stating that there was a clear evidence of decline of percentage of population dependent on industries from 18% to 8% and a massive fall in the number of cotton spinners and weavers.
Marika Vicziany has severely criticized the theory of Bagchi in her work “Economic Development of India under British Crown 1858-1947”. She says lack of occupational specialization makes it impossible to calculate employment in agricultural sector from employment in industrial sector. Moreover Bagchi has used two different sources of informationone is the survey by Buchannan-Hamilton and the other is the Indian Census. These two sources are very different from each other and moreover Hamilton’s source is not very reliable. Therefore according to Vicziany, Bagchi has attempted a very difficult task of comparing between two widely spread time periods and his attempt to quantify the rate of deindustrialization has severe limitations. Amiya Bagchi replied to Vicziany’s criticism by stating
that it is not true that just because in hard times everybody fell back on agriculture there was no
division of labour. In fact, it was with the coming of the British that the professions became more
undifferentiated than before.
However, Ranjan Gupta’s thesis on the District of Birbhum between 1775 and 1875 has confirmed Bagchi’s generalizations and so has the descriptions of the Famine Commission Reports. The conclusions of Bagchi have also been confirmed by Ruma Chatterjee and Amalendu Guha in their paper on the “Decline of Cotton Industries in Bengal”. Chatterjee has pointed out that Morris’ assertion that import of cheap cotton yarn from Lancashire had improved the competitive position of the weavers is not correct. She says that the import of yarn did increase but by then the dislocation of indigenous industries was nearly complete. Hamida Hussain in her study ‘Alienation of Weavers’ (1700-1800) has shown that the position of the weavers became increasingly weak as they were becoming more and more dependent on the middle men and were getting isolated from markets during the Company’s rule.
Even after such lengthy debates the question as to whether de-industrialization was a myth or a reality remains yet to be answered. According to the nationalist view deindustrialization had occurred in India and British rule was solely responsible for it. On the other hand, the British authors feel that the accusations put forward by the Indian economists and historians are untrue and unjustified. However, on the face of evidence it is hard to disbelieve the nationalist view of de-industrialization. The frequent famines and natural calamities along with mass poverty stand as a testimony to the harm caused by the British rule. Although scarcity of data forms a serious problem we however cannot discard this theory as a mere illusion or myth.
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