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Course 803: Theorizing Indigenous Capital

We meet at a time when India, of all places, seeks economic superpower status. Such a claim was, as recently as ten years ago, inconceivable. What has changed in the past decade? Has there been any objective change in the actual situation of India’s economy, or has there been a change in the definition of economic reality, the ‘rules’ by which countries like India and China have, suddenly and overnight, been transformed from overpopulated ‘third world’ countries with crippling poverty into a financial superpowers? There has been growing recognition that the answer, if any, is to be found only through a longer, perhaps millennial, time-span – covering the centuries, rather than decades – and it may not be found within the discipline of macroeconomics alone. The course being offered tracks the historical definition of the term ‘indigenous capital’ over approximately a three-hundred year period.

Brought into modern historical debate by Lakshmi Subramanian’s influential book Indigenous Capital and Imperial Expansion: Bombay, Surat and the West Coast (1996), the concept of indigenous capital has been used to account for at least three key stages in the history of Indian capitalism as world-historical events.

First, the decline of the Mughals and the rise of the British with the support of what Subramanyan has called the ‘Anglo-Bania alliance’, or an alignment between an indigenous credit system with Imperial strategy that became the dominating factor in the economic rise of Bombay city and the rise of Western Indian capitalism.

Second, the mid-nineteenth century rise of new industrial competitors to the British: the USA, Germany and East Asia. The role of the Indian economy in making London the ‘world’s banker’, and the growth British finance-capitalism at the cost of both industrialization in Britain as well as in India, made direct links between India’s economy and emerging global capitalism.

Third, the rise of Western Indian capitalism, specifically focused around Bombay, between the Wars. There is a great deal of recent theory around what British historian Tom Nairn has called a ‘new imperialism’ that coincides with the ‘twilight of the British state’. India’s role in propping up a declining British economy, under the tariff regimes of the inter-war years, had direct consequences especially on industrialism in Bombay city. The question of whether Bombay-based industrial capitalism was at all industrial, or merely a variant of (or compromise with) merchant capitalism – and exactly when the era of industrialization in the city came to an end (was it the 1984 textile strike, or did industrialization end as far back as the early 1930s?) – remained important questions for the economy that independent India would inherit.

Fourth: the ‘globalized’ present.

The course travels backward in time. We begin with the present and go back over three hundred years.

Session 1:
Various Routes to Globalization, or, Markets Versus Industry: Introduction to the Course

Does classical economic theory have anything to say to the present? The first two sessions of our course revisit two of the founding texts of modern economics to ask this question: can we re-read them in the light of the changes in recent years in the world system?

Smith, Adam: An Inquiry into the Nature And Causes of the Wealth of Nations, 1776
Book 1
Chapters 1-8: 'On the Division of Labour', 'Of the Principle Which Gives Occasion to the Division of Labour', 'That The Division of Labour is Limited by the Extent of the Market', 'Of the Origin and Uses of Money', 'Of the Real and Nominal Price of Commodities', 'Of the Component Parts of the Price of Commodities', 'Of the Natural and Market Price of Commodities', 'Of the Wages of Labour'
Book 4: Of Systems Of Political Economy
Chapter 1: 'Of the Principle of the Commercial, or Mercantile, System', Chapter 2: 'Of Systems of Political Economy', and Chapter 7: 'Of Colonies' (Part 1: Of the Motives for Establishing Colonies, Part 2: Causes of the Prosperity of New Colonies, Part 3: of the Advantages Which Europe Has Derived from the Discovery of America)
(Full texts to the above here:

Session 2:


Karl Marx Capital Vol 1 (1867) Chapter 1-3: 'The Commodity', 'The Process of Exchange', and 'Money, or the Circulation of Commodities'.
(Full texts to the above here:

Session 3:
Asian Capitalism: How Far Back in Time? How Wide in Space?

What are the Asian challenges to classical economic theory? What are the key issues?

B. R. Tomlinson, ‘Writing History Sideways: Lessons for Indian Economic Historians from Meiji Japan’, Modern Asian Studies, Vol. 19, No. 3 (External link here)
Leo Ching, ‘Globalizing the Regional, Regionalizing the Global: Mass Culture and Asianism in the Age of Late Capital’, Public Culture 12(1): 233–257 (Link found here)
Partha Chatterjee, ‘Empire After Globalization’, Economic and Political Weekly, September 11, 2004 (Link found here)
Kenneth Pomeranz, 'Is There an East Asian Development Path? Long-Term Comparisons, Constraints, andContinuities', Journal of the Economic and Social History of the Orient, Vol. 44, No. 3, (2001), pp.322-362 (External link here)
Kenneth Pomeranz, ''Beyond the East-West Binary: Resituating Development Paths in the Eighteenth-Century', The Journal of Asian Studies, Vol. 61, No. 2, (May, 2002), pp. 539-590 (External link here)
P.J. O’Brien, ‘The Deconstruction Of Myths And Reconstruction Of Metanarratives In Global Histories Of Material Progress’ (Link found here).

Session 4:
The European Industrial Revolution versus the Asian ‘Bazaar’: The Right of Way?

Visiting old and recent Indian debates on the Indian and Asian market.

C.P. Chandrasekhar and Jayati Ghosh, The Market That Failed (2002) Link found here
Prabhat Patnaik, ‘The Accumulation Process in the Period of Globalization’, Economic & Political Weekly, June 28, 2008 Link found here
Rajat Kanta Ray, ‘Asian Capital in the Age of European Domination: The Rise of the Bazaar,1800-1914’, Modern Asian Studies, Vol. 29, No. 3. (Jul., 1995), pp. 449-554 (External link here).
Hsiao-hung Chang, ‘Fake logos, fake theory, fake globalization’, Inter-Asia Cultural Studies, Volume 5, Number 2, 2004 (Link found here)

Session 5:
Theorizing Giovanni Arrighi

Introducing the Comparative Perspective.

Giovanni Arrighi, 'The Social and Political Economy of Global Turbulence', New Left Review 20, March-April 2003 Link found here
Giovanni Arrighi, 'Hegemony Unravelling - 1', New Left Review 32, March-April 2005, Link found here
Giovanni Arrighi, ''Hegemony Unravelling - 2', New Left Review 33, May-June 2005 Link found here
Frederic Jameson, ‘Culture and Finance Capital’, Critical Inquiry Volume 24, Number 1, Autumn 1997 (external link here)
Andre Gunter Frank, ReOrient: Global Economy in the Asian Age (excerpts)

Session 6:
Bombay: Between the Wars

We move to Part II of the course: the city of Bombay, and the career of industrial capital in this time.

B.R. Tomlinson, ‘The Political Economy of the Raj: The Decline of Colonialism’, The Journal of Economic History, Vol. 42, No. 1, The Tasks of Economic History (Mar, 1982), pp. 133-137 (External link here)
P. J. Cain and A. G. Hopkins, 'Gentlemanly Capitalism and British Expansion Overseas II: New Imperialism, 1850-1945', The Economic History Review, New Series, Vol. 40, No. 1 (Feb., 1987), pp. 1-26 (External link here)
P. J. Cain and A. G. Hopkins, 'Gentlemanly Capitalism and British Expansion Overseas I. The Old Colonial System, 1688-1850', The Economic History Review Volume 39 Issue 4, Pages 501 - 525 (External link here)
A.D.D. Gordon, ‘The Assault of Modern Capitalism on the Traditional Markets: 1914-30, in Businessmen and Politics: Rising Nationalism and a Modernizing Economy in Bombay: 1918-1933 (New Delhi: Manohar, 1978) (Link found here)
Rajnarayan Chandavarkar, 'Industrialization in India before 1947: Conventional Approaches and Alternative Perspectives', Modern Asian Studies 19, 3 (External Link here)
C. Simmons,' "De-industrialization", Industrialization and the Indian Economy, c. I850-I 947', Modern Asian Studies 19, 3 (External link here)
C. Simmons, ' The Great Depression and Indian Industry: Changing Interpretations and Changing Perceptions', Modern Asian Studies 21, 3 (1987), pp. 585-623 (External link here)
C. A. Bayly, 'State and Economy in India over Seven Hundred Years', Economic History Review 38, 4. (External link here)

Screening of Raj Kapoor’s Shri 420.

Session 7:
London: Between the Wars

Basudev Chatterji, ‘Britain, India and the World Economy: 1919-1939’, from Trade, Tariffs and Empire (Delhi and New York: Oxford University Press. 1992). Link found here
Tom Nairn, ‘The Twilight of the British State’, New Left Review 101-102 (1977) (Link found here)
Krishan Kumar, ‘Nation and Empire: English and British National Identity in Comparative Perspective’ Theory and Society, Vol. 29, No. 5. (Oct., 2000), pp. 575-608. (External link here)
Bernard Cohn, ‘The Command of Language and the Language of Command’, Colonialism and its Forms of Knowledge: the British in India.
Dewey, Clive. "The Government of India's 'New Industrial Policy', 1900-1925: Formation and Failure." In Economy and Society: Essays in Indian Economic and Social History, edited by K.N. Chaudhuri and Clive Dewey. Delhi: Oxford University Press, 1979. (Link found here)

Session 8:
Reconsidering the Mode of Production Debate

Selected essays from Patnaik, Utsa, ed. Agrarian Relations and Accumulation: The 'Mode of Production' Debate in India. Bombay: Sameeksha Trust/OUP, 1990.
Utsa Patnaik, 'Introduction', Link found here
Hamza Alawi, 'India and the Colonial Mode of Production', Link found here
Amiya Bagchi, ‘The Other Side of Foreign Investment by Imperial Powers: Transfer of Surplus from Colonies’, Economic and Political Weekly, June 8, 2002 (Link found here)
Amiya Bagchi, 'Transition from Indian to British Indian Systems of Money and Banking 1800-1850', Modern Asian Studies, Vol. 19, No. 3, Special Issue: Papers Presented at the Conference on Indian Economic and Social History, Cambridge University, April 1984 (1985), pp. 501-519 (External link here)
K. Balagopal, 'Rich Peasant, Poor Peasant'. Seminar, n. 352, Farmer Power (December 1988) (Link found here)
K. Balagopal, 'Agrarian Struggles'. Economic & Political Weekly v. xxi, n. 32 (Aug 9 1986): 1401-1405.
Smith, Sheila, 'Fortune and Failure: The Survival of Family Firms in Eighteenth Century India’, in Family Capitalism edited by Geoffrey Jones and Mary Rose. Routledge, 1993.

Session 8 and part of Session 9:
Theorizing Indigenous Capital/Reconsidering the Mode of Production debate

This session will attempt to situate the problematic of capitalism in South Asia within a larger theoretical literature on development and underdevelopment and on the specificities of the history of capital itself. It will primarily focus on the eighteenth and early nineteenth centuries and through a close study of western Indian economic experience also raise larger questions of the mode of production debate and of multiple ways of interpreting the history of capitalism.

Required reading :
Lakshmi Subramanian, ‘Banias and the British: The Role of Indigenous Credit in the Process of Imperial Expansion in Western India in the Second Half of the Eighteenth Century’, Modern Asian Studies, Vol. 21, No. 3. (1987), pp. 473-510. (Link found here)
Michelguglielmo Torri, ‘Trapped inside the Colonial Order: The Hindu Bankers of Surat and Their Business World during the Second Half of the Eighteenth Century’, Modern Asian Studies, Vol. 25, No. 2. (May, 1991), pp. 367-401. (Link found here)
Lakshmi Subramanian, ‘Imperial negotiations: The dynamics of British-Indian social networks in early colonial Bombay’ (Link found here)
David Washbrook, 'From Comparative Sociology to Global History: Britain and India in the Pre-History of Modernity', Journal of the Economic and Social History of the Orient, Vol. 40, No. 4 (1997), pp. 410-443 (External link here)
Sugata Bose, ‘Introduction’ in Sugata Bose (ed.) South Asia and World Capitalism (Delhi: OUP, 1990) (Link found here)
Sugata Bose, ‘The World Economy and Regional Economies in South Asia: Some Comments on Linkages’, in Sugata Bose (ed.) South Asia and World Capitalism (Delhi: OUP, 1990) pg 1-20 (Link found here)

Amar Farooqui, Opium City: The Making of Early Victorian Bombay. New Delhi: Three Essays Collective, 2006 (Link found here)
Amar Farooqui, 'Opium Enterprise and Colonial Intervention in Malwa and Western India, 1800-1824', Indian Economic Social History Review.1995; 32: 447-473
C.A. Bayly, 'Indian Merchants in a Traditional Setting', The Imperial Impact, Studies in the Economic History of Africa and India (ed. Clive Dewey and A.G. Hopkins), London 1978
C.A. Bayly, ‘Beating the Boundaries: South Asian History’, in Sugata Bose (ed.) South Asia and World Capitalism (Delhi: OUP, 1990) pg 27-39 (Link found here)

Session 9
This module will reconsider the historiography on Indian capital flows and on the nature of the diaspora these supported, on a global understanding of dispersed communities and of their commercial practices. The recent works of Markovits and Enseng Ho, from very different vantage points has introduced new shifts in ways of looking at regimes of circulation.

Claude Markovits, 'Indian Merchant Networks outside India in the Nineteenth and Twentieth Centuries: A Preliminary Survey', Modern Asian Studies, Vol. 33, No. 4 (Oct., 1999), pp. 883-911 (External link here)
Claude Markovits, 'Introduction', The Global World of the Indian Merchants 1750-1947 Traders of Sind from Bukhara to Panama (London: CUP, 2000), pg 1-9 Link found here
Markovits, ibid, 'The Business of the Sind Merchants', Link found here
Markovits, ibid., 'The Politics of Merchant Networks', Link found here
Patnaik, Utsa, ed. Agrarian Relations and Accumulation: The 'Mode of Production' Debate in India. Bombay: Sameeksha Trust/OUP, 1990. ‘Introduction’, pg 1-10
Hamza Alawi, ‘India and the Colonial Mode of Production’, from Patnaik, Utsa, ed. Agrarian Relations and Accumulation: The 'Mode of Production' Debate in India. Bombay: Sameeksha Trust/OUP, 1990 pg 132-155
David Rudner. (1989). "Banker's Trust and the culture of banking among the Nattukottai Chettiars of colonial South India". Modern Asian Studies 23(3), (External link here)
Enseng Ho, "Empire Through Diasporic Eyes: A View from the Other Boat," Comparative Studies of Society and History, 46:2 (2004): 210–246 (Link found here)
Thomas R.Metcalf, ‘Imperial Connections India in the Indian Ocean arena 1860-1920’. Berkeley, University of California Press

Session 10
Towards an Understanding of the Mughal economy: potentialities of capitalist development in pre-colonial India and Theories on Asian European Relations 1500-1750
This session forms the background to the debates on ‘growth’ of the eighteenth century and will addresses both familiar perspectives on the Mughal economy and will also consider the possibilities of examining European theories of dependency and world system in relation to the Indian historical experience. Pax Mughalica is seen by historians as an important period for capital accumulation and monetization of the economy. The latter was arguably an important consequence of the Mughal policy of revenue collection in cash that accelerated the processes of monetization even as it produced a degree of peasant immisiration. At the same time, the development of trade and the deployment of credit institutions for both revenue transfers and commercial remittances ensured the expansion of a credit system based on hundis or indigenous financial instruments. The period also saw an expansion of bullion imports into the economy that ahd important implications for prices, wages and employment. Whether there was a price revolution or not is an important debate in this period and even though statistical evidence is fragmented it is nonetheless an important question that we may consider.

Irfan Habib, 'Potentialities of Capitalistic Development in the Economy of Mughal India’, The Journal of Economic History, Vol. 29, No. 1, The Tasks of Economic History. (Mar., 1969), pp. 32-78. (External link here)
J. F. Richards, 'Mughal State Finance and the Premodern World Economy', in Comparative Studies in Society and History, Vol. 23, No. 2 (Apr., 1981), pp. 285-308 (External link here)
Om Prakash, ‘Bullion for Goods: International Trade and the Economy of Early Eighteenth Century Bengal, in Bullion For Goods, European and Indian Merchants in the Indian Ocean Trade, 1500-1800, Delhi: Manohar, 2004. pg 262-292 Link found here
M. N. Pearson, ‘The Modern World System Theory’, in Before Colonialism: Theories of Asian-European Relations, Delhi: OUP, 1988, pg 1-31 Link found here
Irfan Habib, ‘Merchant Communities in Pre-Colonial India’, in James D. Tracy (ed), The Rise of Merchant Empires: Long Distance Trade in the Early Modern World: 1350-1750. Cambridge: CUP, 1990. Pg 371-399 Link found here

Session 11
The Great Divergence (Revisiting Pomeranz)
Ken Pomeranz, China, Europe and the making of the World Economy
Vries, P.H. ‘Are coal and colonies really crucial? Kenneth Pomeranz and the Great Divergence’ Journal of World History Vol.12, No.2, 2001 pp 407-44

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