Year 501 Copyright © 1993 by Noam Chomsky. Published by South End Press.
Chapter 1: The Great Work of Subjugation and Conquest Segment 5/12
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Such measures were unavoidable, Horace Wilson wrote in his History of British India in 1826: "Had this not been the case, the mills of Paisley and Manchester would have been stopped in their outset, and could scarcely have been again set in motion, even by the power of steam. They were created by the sacrifice of Indian manufacturers." Economic historian J.H. Clapham concluded that "this restrictive act gave an important, and it may be argued a useful, stimulus to textile printing in Britain," a leading sector of the industrial revolution. By the 19th century, India was financing more than two-fifths of Britain's trade deficit, providing a market for British manufactures as well as troops for its colonial conquests and the opium that was the staple of its trade with China.14

"A significant fact which stands out is that those parts of India which have been longest under British rule are the poorest today," Jawaharlal Nehru wrote: "Indeed some kind of chart might be drawn up to indicate the close connection between length of British rule and progressive growth of poverty." In the mid-18th century, India was developed by comparative standards, not only in textiles. "The ship building industry was flourishing and one of the flagships of an English admiral during the Napoleonic wars had been built by an Indian firm in India." Not only textiles, but other well-established industries such as "ship-building, metal working, glass, paper, and many crafts," declined under British rule, as India's development was arrested and the growth of new industry blocked, and India became "an agricultural colony of industrial England." While Europe urbanized, India "became progressively ruralized," with a rapid increase in the proportion of the population dependent on agriculture, "the real, the fundamental cause of the appalling poverty of the Indian people," Nehru writes. In 1840, a British historian testifying before a Parliamentary Inquiry Committee could still say: "India is as much a manufacturing country as an agriculturalist; and he who would seek to reduce her to the position of an agricultural country, seeks to lower her in the scale of civilization," exactly what happened under Britain's "despotic sway," Nehru observes.15

Discussing "colonies as mercantile investments," Brazilian economic historian José J. de A. Arruda, concludes that the investments were indeed highly profitable, for some: the Dutch, French, and particularly the British, who also gained the advantages of Portugal's colonial assets; the slave traders, the merchants, the manufacturers; and the New England colonies whose development was spurred by triangular trade with Britain and the sugar colonies of the West Indies. "The colonial world...fulfilled its chief function as a link providing growth for the early accumulation of capital." It promoted "a transfer of colonial riches to the metropoles, which then fought for the appropriation of colonial surplus," contributing substantially to the economic growth of Europe. "THESE COLONIES DID PAY," he concludes. But, he adds, the calculations miss the main point: "profits went to individuals and costs were socialized." The "essence of the system" is "social losses" along with "the possibility of constant advance for capitalism" and for "the private coffers of the mercantilist bourgeoisie." In short, public subsidy, private profit; the expected thrust of policy when its architects are those who can expect to gain the profit.

As for those who lapsed into underdevelopment, Pearson raises but does not pursue the question whether there was "an alternative path to a status that could meet the European challenge," so that China, India, and others subjected to the European conquest might have been able to avoid "being incorporated as peripheries in the world economy, avoid being underdeveloped, avoid suffering as merchant empires turned into much more ominous territorial empires backed by an economically dominant Western Europe."16

In his classic condemnation of monopoly power and colonization, Adam Smith has useful commentary on Britain's policies, making some of the same points as Arruda. He describes these policies with some ambivalence, arguing finally that despite the great advantages that England gained from the colonies and its monopoly of their trade, in the long run the practices did not pay, either in Asia or North America. The argument is largely theoretical; adequate data were not available.

But however convincing the argument may be, Smith's discussion also explains why it is not to the point. Abandoning the colonies would be "more advantageous to the great body of the people" of England, he concludes, "though less so to the merchants, than the monopoly which she at present enjoys." The monopoly, "though a very grievous tax upon the colonies, and though it may increase the revenue of a particular order of men in Great Britain, diminishes instead of increasing that of the great body of the people." The military costs alone are a severe burden, apart from the distortions of investment and trade.

For the great body of people of England, the East India monopoly and the North American colonies may indeed have been the "absurdity" Smith claims, and "grievous" as well in their impact on the English colonists. But for "the contrivers of this whole mercantile system," they were not absurd at all. "Our merchants and manufacturers have been by far the principal architects," and their interests have "been most peculiarly attended to" by the system, though not the interests of consumers and working people. The interests of the owners of the gilt-edged securities of the Company, and others who gained wealth beyond the dreams of avarice, were also "most peculiarly attended to." The costs were socialized, the profits poured into the coffers of the "principal architects." The policies they contrived were reasonable enough in terms of narrow self-interest, however others may have been harmed, including the general population of England.17

Smith's conclusion that "Under the present system of management, therefore, Great Britain derives nothing but loss from the dominion which she assumes over her colonies" is highly misleading. From the point of view of policy choices, Great Britain was not an entity. "The wealth of nations" is no concern of the "architects of policy," who, as Smith insists, seek private gain. The fate of the common people is no more their concern than that of the "mere savages" who stand in the way. If an "invisible hand" sometimes provided others with benefits, that is merely incidental. The basic focus on "wealth of nations" and what "Great Britain derives" is faulty from the start, undermined by illegitimate idealization, though at least it is qualified and corrected in Smith's fuller discussion.


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14 De Schweinitz, Rise and Fall, 120-1, citing economic historian Paul Mantoux (on the Acts) and Clapham's "cautious" economic history of Britain. Clairmonte, Economic Liberalism, 73, 87 (Wilson). Jeremy Seabrook, Race & Class, July-Sept. 1992. Hewlett, Cruel Dilemmas, 7.

15 Nehru, Discovery, 296-9, 284. See Clairmonte, Economic Liberalism, ch. 2, for much confirming evidence.

16 Arruda, Pearson, in Tracy, Merchant Empires.

17 Smith, Wealth, Bk. IV, Ch. VII, Pt. III (ii, 131-3, 147); Bk. IV, Ch. VIII (ii, 180-1).