Q: Critically evaluate the ideas of Dada Bhai Naoroji on the basis of the following readings:
- The Poverty Of India
- Representations to The Royal Commission on Expenditure
(Both from Poverty and Un-British Rule in India)
Nationalism in late nineteenth-century India has generally been understood in terms of the slow growth of ‘moderate’ politics, and its replacement, towards the end of this period, by ‘extremism’. In other words, the tradition of Ranade, Pherozeshah Mehta, and Dadabhai Naoroji ( whose ideas are the subject of this essay ) gave way to the energies of Tilak, Aurobindo and others, who experimented, for the first time, with the mobilization of mass discontent in the cause of nationalism. This synoptic outline, acceptable in itself, has often gone hand in hand with a characterization of moderate nationalists as ‘petitioners’ and ‘mendicants’ that derives largely from the polemics of the extremists themselves. This commonsense constructs nationalism as a teleological movement towards full independence, and measures all its historical articulations in the light of their eventual ‘contribution’ to this cause. Viewed by this standard, it becomes easy to divide the history of Indian nationalism into easy ‘stages’, each one more radical – and hence more nationalist – than the last. If nationalism is constituted in this way, dismissals and exaltations become easier than sustained analysis.
Matters are complicated considerably, however, when one turns to an examination of the substance of early nationalism. Intellectually – and the strengths of the moderates were essentially intellectual – it represented something that is all too easily ignored: one of the earliest and most coherent economic critiques of imperialism. The writings of Ranade, Joshi, Naoroji and Dutt on the economic mechanisms of British colonial control provided, in outline, the basis upon which later attacks on imperialist exploitation were founded. The main points in this critique – excessive taxation, racist discrimination in the services, the drain of wealth, and de-industrialization – were major components of the intellectual apparatus with which all subsequent critics of British imperialism – including, to a substantial degree, Marxists – worked, and these also found their way into later academic discourse on the subject of India’s colonial experience.
In this light, the writings of Dadabhai Naoroji are interesting and revealing, both of the structure of Indian economic nationalism, and of its strengths and weaknesses. Naoroji, who lived from 1825 till 1917, was an important public figure in both India and in England, being a social reformer ( contributing to the debate on Parsi marriage law ), a journalist ( he published a Parsi journal called Rast Goftar ), a member of the British Parliament from 1892 to 1895, a founder of several early nationalist associations, and a three-time President of the Congress. To understand the politics of Naoroji, it is important to grapple with something that retrospectively seems ambiguous: through most of his life, he considered himself both a patriotic Indian and a loyal British subject. His nationalism – and his bitter denunciation of imperialism – were, to his mind, harnessed to the cause of the creation of just relations between India and Britain within the context of imperialism. To dismiss this as an inadequate or incomplete nationalism is not really very helpful, since it must be kept in mind that, between the 1870s and the 1900s, this was the dominant trajectory of nationalist politics. The changes in nationalism do find reflection in Naoroji’s writings. The second of the texts reviewed in this essay, his submissions to the Royal Commission On The Adminstration of Expenditure in India in the 1890s, contains much more scathing polemic against British rule than do his notes on the ‘Poverty Of India’, assembled between 1873 and 1876. But this apparent radicalization is in itself ambiguous, and it is arguable that in certain key respects the structure of argument between 1895 and 1900 represented a step back from that in the 1870s.
In one of the statements he submitted to the Royal Commission on Expenditure, Naoroji wrote:
In reality there are two Indias – one the prosperous, the other the poverty-stricken. The prosperous India is the India of the British and other foreigners. They exploit India as officials, non-officials, capitalists, in a variety of ways, and carry away enormous wealth to their own country…………..The second India is the India of the Indians – the poverty-stricken India.
It is necessary, for a moment, to step away from the obvious truth contained in this passage – that Britain was exploiting India, that wealth was being drained away, and that one country was gaining and another losing from the colonial relationship. Instead, if one examines that revealing and strange statement: ‘The other is the India of the Indians’, it is possible to sense a crucial silence there. Naoroji’s ‘Indians’ include indebted peasants and merchant-moneylenders, early industrial workers and indigenous capitalists, untouchables and Brahmins, wealthy barristers with intermediate tenures and landless labourers. Many passages in Poverty And Un-British Rule In India ( where the chapters reviewed in this essay come from ) reveal an awareness of these internal tensions. But at the points where one would expect Naoroji to raise them and discuss them, he shows an evident discomfort, moving away almost inevitably to the subject nearest his heart –the employment of Indians in the upper rungs of the imperial services. The tension, however, remains, and colours his rhetoric, which thunders with denunciations of poverty that it refuses to describe. Poverty is an object of study insofar as the British impose it upon Indians: that Indians can themselves be the agents and perpetrators of social injustice is an analytical insight available to Naoroji, but is consistently refused. It is around this organizing principle that the arguments of the chapters selected for review here can be understood.
‘The Poverty Of India’ begins with an investigative exercise that is methodologically of great interest, since it demonstrates Naoroji’s persistence in collecting statistics, his skill and innovation in analysing them even when they are scarce, and the systematic reasoning he applies in building an argument from them. The argument concerns the computation of national income in India. The bulk of statistical information about production and prices in different provinces came, naturally, from the agricultural sector. Naoroji critiques the methods used by the provincial Governments in their compilation of statistics: he points out that in the Central Provinces, for instance, the prices of crops in the different districts are added up and the total is divided by the number of districts, ignoring completely the quantities of produce sold at the different prices and the extent of land yielding different quantities of produce. Naoroji offers revised estimates, taking account of the largest one or two kinds of produce of a province as a representative measure of the total produce. The components of his statistical analysis include the whole cultivated area of each district, the produce per acre and the price of the produce. On this basis, he works out estimates of annual production and price for the principal crops in the Central Provinces, Punjab, the North-West Provinces, Bengal, Madras, Bombay and Oudh. This comes to around £ 277,000,000 for a population of about 170,000,000. To this he adds the annual produce of stock for consumption, the annual value of manufacturing industry, the net opium revenue, the cost of production of salt, coal, mines and the profits of foreign commerce. Taking all this together, he arrives at an estimate of annual production to the value of £ 340,000,000 for the country, and an income per head of 40 s or £ 2. This corresponds to the value of Rs. 20. Naoroji deliberately ignores income generated in the service sector, through merchandising, banking, insurance profits, moneylending interest and sales, basing his analysis entirely on physical production, since in his view intangibles do not create any fresh income, and only transfer already generated incomes.
Naoroji only had very scattered and provisional clues as to the average cost of living, and his use of the statistics he could gather is extremely innovative. Having gathered together information about necessary consumption from medical reports about the diet of emigrant coolies on ships, the estimated cost of subsistence – at the lowest scale – of a Bombay agricultural labourer, and other sundry sources, he arrives at a figure of Rs. 45 ( after several provisional deductions ) that would furnish the bare necessities of life for the average Indian. Then, in what is methodologically an extremely intelligent use of scarce material, Naoroji examines the expenditure per head in Indian jails, which involves the amount spent by the Government on feeding and clothing prisoners. He finds that the amount varies from Rs. 22 to Rs. 53 per head from province to province, and arrives thus at the extremely damaging conclusion that the per capita income of the average free Indian is less than the average amount spent to keep prisoners alive, which would presumably correspond to the barest minimum necessary for subsistence. Whether Naoroji’s estimates are entirely sound or not ( and he makes no claims for absolute accuracy ), this establishes the average per capita income in the country at either below or just above the minimum subsistence level.
Although Naoroji is best known for that aspect of his economic analysis that was immediately to follow ( the drain of wealth ), this close statistical argument is perhaps the most insightful and damaging part of his whole analysis. He seems to have realized this himself, and it might be speculated that he was hesitant to polemicize on the basis of these computations. There is very little place for income analysis elsewhere in Poverty And Un-British Rule. This cannot be explained simply by the limitations of statistical material, since an elaboration simply of the conclusions he reached about income would have furnished the basis for a devastating critique of imperialism. Much more than the drain of wealth from an abstract ‘national’ totality, the computations of average income and cost of living provides a picture of a country where the bulk of the inhabitants were terminally crippled by destitution. This could have provided a window into some qualitative analysis ( Naoroji’s remains quantitative throughout ) involving concrete descriptions of poverty, accounts of urban and rural living conditions for the bulk of Indians, and so on. Two constraints seem to intersect in Naoroji’s refusal to take this analysis to its logical conclusion. First, and more charitably, the economist’s reluctance to engage with data that is difficult to quantify. Second – and perhaps more vital – the recognition that any elaboration on this theme would necessarily involve an examination of disparity. Naoroji knew that an annual income of Rs. 20 hardly corresponded to the actual living conditions of the upper and middle strata of Indian society. But studying in detail the conditions of life of those who presumably lived below even this poverty line would have meant reorienting his whole enquiry, and throwing up very uncomfortable questions, impossible to resolve within the poor Indian India/rich British India antinomy. It is significant that subsequent to this section, Naoroji only employs the argument from per capita income when rebutting offical justifications of the taxation policy of British India.
Too much can be made of this self-imposed constraint, were it not for its congruence with the structure of Naoroji’s argument and also with the structure of nationalist economic thinking in general. However, this need not undermine the significance of what has rightly come to be known as Naoroji’s major contribution to the economic critique of imperialism. This, naturally, was the theory of the drain of wealth.
As B.N Ganguli points out, the concept of economic drain did not originate with Naoroji: rather, he absorbed a pre-existing tradition of thought on the drain and made it his own. This tradition began with the mercantilists, who promulgated a crude theory whereby the outflow of gold and silver from a country was intrinsically harmful. This yielded eventually to a sounder analysis, whereby the movement of bullion took its place as one balancing item among others in the composition of the balance of payments. In India, however, a real ‘drain’ in the classic mercantilist sense was noted shortly after Plassey, as gold and silver flowed out of the country in large quantities. This came to be replaced by a general net unilateral transfer of purchasing power, eventually taking the form of an export surplus of commodities not necessarily liquidated by the inflow of gold and silver. This was noted by Sir John Shore in 1787, when he pointed to the dual role of the East India Company as ‘merchants as well as sovereigns’ of India, engrossing both the trade and the revenues of the country, and using the revenues to finance the trade. In other words, the transfer of wealth – both in treasure ( for instance, in the remittances of large private fortunes made by Company officials ) and in commodities – from India to England was unrequited. Cornwallis also pointed to this, as did Raja Rammohun Roy in the 1830s. Rammohun estimated the salaries and allowances of Europeans employed in civil establishments in India, these constituting wealth that was remitted abroad and not spent or invested in India. In the interests of economic development, he argued, such persons should be allowed to settle down and invest in India.
When Naoroji wrote, in the 1870s, there had been no visible tribute flowing from India to England since the 1830s. The dominant forms of the drain were now different. According to him, the most important constituent is the remittance to Britain of a significant portion of the incomes, salaries and savings made by English civil and military employees and professionals like doctors and lawyers, and the pensions and leave allowances of officials. This organically ties in with Naoroji’s other great theme: the inordinate and discriminatory employment of Europeans in the Indian civil administration and army. The second major component of the drain – again, this argument had been anticipated by Rammohun – is that of the Home Charges of the Government of India, which includes payment of interest on the Indian public debt and on the guarantees for the railways, the payment of pensions and allowances to European government officials, the cost of military and other stores provided to India ( mainly for the benefit of Europeans employed there ), and the civil and military charges paid in England on account of India. Finally, the profits of private European capital invested in industry and trade in India also make up part of the drain. Naoroji, however, does not concentrate much of his attention on this – his argument being directed, on the contrary, to furnishing a rationale for ‘genuine’ free trade in India that would, if anything, expand such capitalist profit. In 1876, Naoroji computes the drain between 1870 and 1872 at £ 27,400,000 annually, which was five times more than it had been between 1835 and 1839. Thus, the magnitude of the drain was actually increasing with time.
Naoroji works out the implications of the drain in some detail. First, and obviously, a part of the national product is being exported to Britain without adequate return, and this unilateral transfer takes the form of an excess of exports over imports. This does not represent a ‘balance of trade’ in any sense, since the transfer is unilateral. Second, it is this drain that, in ‘bleeding’ India of her wealth ( a favourite phrase of his, derived from Lord Salisbury ) causes poverty and famine. Not uncharacteristically, the exact mechanism of this relation is not worked out by Naoroji. Further, the drain clearly reduces the national product that could have circulated as distribution and expenditure within the country, and this means a significant loss of employment and secondary income generation. Most significantly, though, the drain implies a loss of capital, since a significant portion of the wealth raised within India would not come back in the form of investments. Thanks to the structure of the colonial relationship, India is a net importer of capital. Naoroji points out that since the drain prevents India herself from making any capital, the British could bring back the capital they had drained from India and use it to secure a monopoly of all important trade and industrial production. This would not represent an investment of capital, since the profits would be drawn by the British investor and not by India. Incidentally, Naoroji’s critique of forced export surplus has a significance that has outlasted its own times. In our own times, the fetish of export-led growth underpins the Panglossian commonsense of a hegemonic neo-liberal economics. In this context, the refusal of an easy, automatic correlation between exports and prosperity ( and Naoroji furnishes many arguments besides the drain against such an equation ) is extremely valuable.
At this stage in the argument, Naoroji’s text breaks into a trope that is entirely characteristic, and can only be described as the attempt to construct a lineage. This is a practice that recurs in his writing: whenever he makes a substantive argument, he needs to buttress it with an enormous mass of quoted authority. Here, after briefly outlining the main components of the drain, he takes ten pages to provide lengthy quotes from John Shore (1787), Cornwallis (1790), Montgomery Martin (1816), F.J Shore (1837) and Colonel Marriott (1875) for Bengal, Saville Marriott (1836), Giberne (1848), Robert Knight (1868), Lieutenant Nash (1838) for Bombay, J.B Norton (1854) and George Campbell (1869) for Madras, Sir J. Lawrence (1858) for Punjab, Baird Smith (1862) and Halsey (1872) for the North-West Provinces, W.G Pedder (1873) for the Central Provinces, and Lords Lawrence and Mayo for India as a whole. The quotes are fascinating in themselves, but apparently needlessly lengthy, since they only furnish arguments made over the period of a century in support of Naoroji’s present position. Superfically, the exercise seems unnecessary.
Reading between the lines, though, certain purposes do exhibit themselves. First, and quite clearly, Naoroji is knitting together a wide range of respectable official opinions in support of his position ( the fact that many of the names cited have attached peerages, military titles or knighthoods clearly helps ). Thus, he is establishing an identity of interest between official British opinion and his own nationalist analysis of economic processes. The harshness of the tone in which these officials and observers condemn the rule of their own government outweighs Naoroji’s own, and helps minimize any contradictions that may have been perceived between his nationalism and his loyalty to the British Empire, both of which were perfectly genuine. Second, and more subtly, Naoroji is admitting into his analysis, through quotation, themes that are otherwise marginal to the structure of his argument in this particular text. The authorities cited by Naoroji draw attention to or hint at several economic processes bound up with the larger question of the exploitation of India by England: they speak of the destruction of the cotton industry, the indebtedness of the peasantry, the low wages of unskilled labour, and other debilitating circumstances that Naoroji prefers not to analyse at length himself.
Naoroji’s analysis of the mechanism of drain in ‘The Poverty Of India’ also involves a qualification that turns out not to be a qualification after all. After endorsing and praising the investment of British capital in railways and other public works in India, he points out that the benefits of railway construction do not accrue to Indians as they should: a large amount of the loan is spent on the payment of Europeans, and the interest of the loan also goes out of the country. ‘Demand for commodities is not demand for labour’ ( Naoroji here quotes Mill ), and thus the railways open up a market for commodities but do not by that logic automatically enhance production.
Naoroji’s economic analysis proper in this chapter concludes with a polemical section in which he persuasively refutes official arguments that claim that the poverty of India is exaggerated. Lord Mayo had argued that India was undertaxed, since the tax upon Indians was only 1s.10d. per head. Naoroji points out that in reality the rate of taxation in India approximates to 6s. per head, and this is, in proportional terms, a much more crushing amount than people elsewhere pay ( it represents 15% of the average individual income, while in Britain taxation, which approximates to £2 10s. per head, represents only 8% of a very much larger income ( about £30 per head ). Naoroji also argues against the imposition of free trade through the proposed abolition of cotton duties: despite his subjective liking for the principle of free trade, he recognizes that the removal of constraints would generate competition on what is anything but a level playing field – ‘ a race between a starving, exhausted invalid, and a strong man with a horse to ride on.’ He also refutes arguments about India’s prosperity that flow from a perceived rise in prices. He outlines three possible contexts for a rise in prices: first, from a healthy development of foreign commerce; second, from money invested in the country for non-commercial purposes ( like the construction of public works ); and third, from the scarcity of food and other necessities. Using the price statistics available to him, Naoroji demonstrates that the only commodity that witnessed a dramatic price inflation for the first reason was cotton, for the limited period of the American Civil War and the concomitant boom ( after which prices slumped again ). In Madras, Punjab, the North-West Provinces and Bombay, a temporary rise in prices was occasioned by the construction of the railway, and that too only in parts located near railway lines, on account of the diversion of production from foodgrains to non-foodgrains ( since agricultural labour was diminished with increased employment in railway construction ), and the employment of reasonably well-paid wage labour. Apart from this, argues Naoroji, a great deal of the limited inflation that did take place has been the result of famine and drought, and certainly does not represent a ‘healthy’ rise in prices. Naoroji also argues that the rise in wages, cited by administrators and commentators who spoke of India’s prosperity, is also largely mythical, and wages in reality are extremely low, except, again, in areas where labour is being applied to public works. It is revealing that the bulk of Naoroji’s argument in ‘The Poverty Of India’ contains very little about labour, except in this polemical section.
Finally, Naoroji refutes the popular argument about the enrichment of India by the import of bullion ( from 1801 onwards ). He argues that Indian silver is being imported not as profits on exports but because of commercial and financial necessities: the collection of revenue in coin, the expansion of foreign trade, and so on. The actual amount of bullion in circulation in British India from 1801 to 1869, after deducting wear and tear, is calculated by Naoroji at only 13s.6d. per head, as compared to about 30s. per head retained by the United Kingdom between 1857 and 1869. Thus, the silver actually circulating in India has remarkably little purchasing power, since ‘we forget how minutely and widely a large proportion of it must be distributed in India to be of any use for national purposes.’ Apart from this, Naoroji argues that the amount of specie re-imported into India from 1801 is negligible compared to the ( uncalculable ) amount exported before this period: in other words, bullion was drained out in vast quantities in the eighteenth century, and it was the exhaustion of specie within the Indian economy that compelled re-importation.
A careful reading of this section of ‘The Poverty Of India’ will bring to light a number of points where Naoroji moves towards several key insights and then instantly recoils from them and their possible consequences. First, he returns to the question of Indian national income, and one would have thought that the question of the distribution of that income is absolutely crucial to an understanding of the question of Indian poverty. But the issue is elided. Further, he admits that labourers are being paid low wages. An examination of the reasons for this would certainly have been in order, but once again, the argument slips away. Finally, and perhaps most significantly, there is the statement about the quantity of bullion circulating in India: `we forget how…..widely a large proportion of it must be distributed….to be of any use for national purposes’. An obvious question here: clearly it is not being evenly distributed. Who is gaining, then, and who is losing? Once again, Rs.20 is clearly not the average income of a significant number of Indians. Where do these Indians come from, and what do they do? Is British rule a pure externality, and is it unaided in its exploitation of the Indian masses?
It is at this point that the text moves, almost leaps, into a different orbit. Hard economic analysis gives way to a very different sort of analysis, and one that bears upon the fortunes and misfortunes of a social spectrum that is much more limited than the real and potential subjects of economic analysis. Naoroji now enters into a discussion of what he calls the ‘moral drain’; in other words, discriminatory practices against Indians. The section entitled ‘Non-Fulfilment Of Solemn Promises’ hinges on an Act of the British Parliament promulgated in 1833: ‘And be it enacted that no Native of the said territories, nor any natural-born subject of His Majesty resident therein, shall, by reason only of his religion, place of birth, descent, colour, or any of them, be disabled from holding any place, office or employment under the said Company.’ If ‘government’ or ‘administration’ is substituted for ‘Company’, we have here the cornerstone of early nationalist political agitation, the issue that exercised all the major activists from the 1860s to the 1890s and constituted the major part of their campaigning: the employment of Indians in the upper rungs of civil and military administration.
The originary point of the investigation of this history of ‘betrayed promises’ is Macaulay’s defence of the Charter Bill on behalf of Government in 1833, where he eloquently praised the clause quoted above, ‘in words worthy of an English gentleman’, to use Naoroji’s uncharacteristically effusive description. Naoroji points also to the Proclamation of 1858, where the principle that allowed Indians into government service was unambiguously affirmed. These two public declarations constitute the benchmark for the subsequent history of ‘non-fulfilment of solemn promises’. In concrete terms, what these proclamations would have meant would have been the simultaneous holding of competitive examinations for a part of the appointments to the Indian Civil Service in India rather than in Britain. It was this demand that occupied nationalist energies for many years, and was denied in practice by the colonial administration.
Naoroji cites correspondence between the East India Association and the India Office, and quotes at length ( and frequently ) Sir Stafford Northcote’s admission of the non-implementation of the clause of 1833. Northcote had also criticised Sir John Lawrence’s suggestion that nine token scholarships for Indians ( out of a population of 180,000,000 ) should be introduced as a sufficient measure of ‘Native’ representation. Naoroji anatomizes the process whereby even this extremely token concession was stifled by the India Office. Further, he draws attention to the non-employment of Indians even in the higher rungs of the Uncovenanted Service. Similar practices of discrimination against Indians in the engineering, medical, Telegraph and Forest Services are mentioned by Naoroji, who points out that they occupy lower ranks and are paid less than Europeans with inferior qualifications.
Naoroji ends ‘The Poverty Of India’ with a few remedial suggestions. He suggests the limiting of expenditure ( pay, pensions and allowances ) for the European portion of the services, and also the limiting and rationalization of those posts in the civil and military administration that are to be reserved for Europeans. He also calls for a reduction of the interest on India’s public debt, and demands that Britain pay her proper share for the maintenance of British rule, instead of foisting the expenses on to India. Such a ‘judicious arrangement’ would generate healthier commercial relations between India and Britain, the eventual consequences being as favourable to the metropolis as to the colony. Not surprisingly, ‘The Poverty Of India’ ends with a quote from Macaulay: ‘we shall not keep a hundred millions of men from being our customers, in order that they might continue to be our slaves’.
The ten extended statements that constitute Naoroji’s submissions before the Royal Commission on ‘Indian Expenditure And Apportionment Of Charge’, between 1895 and 1900, represent a further elaboration and development of his views. At one level, that of nationalist language, there seems to be a clear radicalization of Naoroji’s stand. The tone of these statements is one of considerable anger; the polemic is biting, and sometimes threatening. At another level, however, that of potential social radicalism, this very nationalism represents something of a regression from the writings of the 1870s. There is little that is new in his concrete analysis of Indian poverty, except a sophisticated discussion of Indian currency, and the drain theory is elaborated and repeated several times over. The analytical focus seems to have shifted almost entirely to Naoroji’s other theme – the discrimination against Indians in matters of employment in civil and military administrative posts. The conviction of Naoroji’s nationalism has intensified in twenty years ( at the 1906 Congress Session he was to articulate a demand for Swaraj, although in very ambiguous terms ), but its scope and its horizons have narrowed.
It would be tedious to examine the entirety of Naoroji’s submissions to the Commission as a text; further, these do not constitute a coherent text as ‘The Poverty Of India’ clearly does. More helpful would be a brief examination of some of the major themes and thrusts in this compilation. The tone is set by a quote from the Duke of Devonshire: ‘The Government Of India cannot afford to spend more than they do on the administration of the country, and if the country is to be better governed, that can only be done by the employment of the best and most intelligent of the Natives in the Service.’ This particular quotation neatly yokes together the demand for a reform of British expenditure and the specific administrative reform – the inclusion of Indians in the services – sought by nationalist writers. Naoroji elaborates on the link, making the point that if such were the practice, then the salaries drawn by ( Indian ) government servants would stay in the country and hence check the drain of wealth. He also repeats the points made in ‘The Poverty Of India’ about the pressure of taxation upon Indians, in the context of a hopelessly small per capita income, and inveighs against the practice of making the Indian taxpayer bear the burden of the maintenance and extension of British rule ( the Afghan wars being an instance of this ). He also computes the magnitude of the drain between 1883 and 1892 in the third of his submissions, and comes up with the figure of Rs. 24,000,000. To this he adds a statistical refutation of the argument that the 1890s growth in export surplus derived from a fall in exchange rates, showing that there was a similar rise between 1850 and 1870, when there was no such fall in exchange. There are thinly veiled warnings about the consequences of colonial exploitaition – turbulence and possible insurrection – scattered through these writings, and Naoroji seems to have developed a real though still unclear sense of the latent force of mass unrest. Colonial exploitation is referred to as a ‘helot system of administration, organized for the exclusive advantage of a privileged minority’. There is also the by now obligatory quote from Macaulay: ‘the heaviest yoke of all is the yoke of the stranger’. The tone and context of quotation, however, has changed, and is much less conciliatory. Interspersed with paeans to the ‘justice and righteousness’ of the British public ( who were, after all, by now Naoroji’s major constituency ) are warnings about the possible consequences should Britain fail to secure effective Indian loyalty. In this context, he demands a ‘fair apportioning’ of the costs of military action on the north-west frontier, financed at present almost entirely by the Indian taxpayer.
There is one significant addition to Naoroji’s economic thinking contained in these submissions, though it is extremely complex, and to explain it adequately is beyond the competence of this paper. This concerns his views on currency reform, expressed in articles and submissions to the Indian Currency Committee in 1898. The context for this was the growing worry about the fall in the price of silver from about 1870, and a concomitant fall in the rupee-sterling ratio. The Government of India sought to counteract this by fixing the value of the rupee at 1s.4d. and to maintain this artificial rate by restricting the supply of rupees, closing the Indian mints to the free coinage of silver. In other words, the link of the rupee with silver was cut off. At the same time, no economies in expenditure were attempted, and for this the GOI incurred the criticism of both the British Treasury and of Indian nationalist critics. Naoroji critiqued this experiment in managed currency ( which, incidentally, was the first of its kind ). Besides the likelihood of such management becoming a functional part of the drain, Naoroji also argued that it exposed the Government to ‘serious difficulties and temptations’. Further, an artifical restriction of rupee supply would hamper internal trade, which required abundant currency for its financing. The ‘false rupee’ ( as Naoroji called it ), with its artifically enhanced purchasing power, represented a concealed form of taxation, since the price for a specific commodity on the false rupee would be a forced surplus over that on the ‘true’ rupee. Naoroji also opposed the proposed adoption of the gold currency standard, since, he argued, the introduction of gold currency would mean the liquidation of innumerable small assets in the form of uncoined silver or silver rupees, since silver would be thrown on to the market and its value would depreciate. The famished ryot would have to pay.
Naoroji’s polemical edge is at its sharpest, unsurprisingly, when it comes to the question of ‘Native representation’ in the Imperial administration. Again unsurprisingly, his comments on this question are prefaced by an interminable series of quotations from assorted luminaries. Here, however, the sequence of quotation is more structured. Their purpose now is to provide nothing less than an anatomy of the debates in British official circles around the question of Indian representation, leading up to the two high watermarks of the relevant clause in the Act of 1833, and the Proclamation of 1858, which both proclaimed the removal of barriers of birth and race to admission into administrative circles. The Act of 1870 partially affirmed this principle, seeking to reserve a proportion of appointments to the covenanted service for Indians every year. In gross violation of this, a Government despatch of May 1878 proposed to set up a segregated, ‘close Native Service’, thereby re-articulating the principle of racial exclusion. Thanks to Sir Stafford Northcote, the Duke Of Argyll, Lord Cranbook and Sir Erskine Perry, the clause of 1870 was carried out, and the resentment this caused among Anglo-Indians, according to Naoroji, fed into the Ilbert Bill agitation. Naoroji traces the shifts in and pressures upon government policy in this regard in some detail, and his account culminates with a description of the way in which the resolution of 1893 passed by the House of Commons, which authorized the simultaneous holding of examinations in India and in England, was scotched by the India Office.
Two of the more interesting sections of Naoroji’s representations to the Royal Commission consist of copies of his correspondence with the War Office and the Admiralty respectively. The structure of the sequence of communications is the same. In both cases, Naoroji seems to have persistently pressed – indeed, hounded – the relevant offices for copies of regulations pertaining to the legitimacy of the applications of British Indian subjects to posts in the army and navy. In both cases, after prolonged correspondence, Naoroji was able to establish that there were effective barriers to the employment of Indians, despite the Act of 1833 and the Proclamation of 1858. This, of course, set the tone for some heated polemicizing on his part. In the case of his correspondence with the Admiralty, Naoroji seems to have annoyed the First Lord of the Admiralty, a Rt. Hon. G.J Goschen, sufficiently for the latter to declare, in a letter dated 8 December 1896, that ‘I regret that I cannot undertake to continue the correspondence.’ Naoroji seems to have been undeterred by this, and continued bombarding the Admiralty with letters for another couple of weeks.
This correspondence is more significant than it seems. At first glance, the lengthy compilation of queries, replies and polemics seems tedious. However, looked at more carefully, it turns out to be a great deal more exciting. What these raw documents contain is nothing less than a microcosm of one of the processes by which ideas acquire the form of political forces in their own right. Naoroji’s relentless search for information leads him to follow up a particular clue much like a detective. He tracks it down to its source, and establishes what he wants to establish – much like a lawyer. This is the deliberate exclusion of Indians from the imperial armed services. Once established, this equips him with a significant political weapon, no doubt to be subsequently put to use in the form of the limited mobilization the moderates practised. All kinds of questions – many perhaps trivial – strike one upon reading the correspondence. For instance, Naoroji’s communications with the War Office appear to break off between 1897 and 1900, while he seems to have stopped communicating with the Admiralty by 19 December 1896 ( at which point he still hasn’t fully established the measure of Indian exclusion from the army ). Having apparently furnished himself with conclusive evidence by 1897 on both fronts, why does he need to seek corroboration from the War Office again in 1900, after a gap of nearly three years? Or, in other words, what happened between 1897 and 1900? The answer may be perfectly trivial, but not necessarily so. However one reads such micro-shifts, two things seem evident: first, the relentless zeal with which Naoroji collected information; second, his political ear, which seems to have picked up soundings of weakness on the part of the adversary ( most of all the Admiralty, where the brevity of the communication barely conceals the mutual hostility ) most astutely. One can only speculate as to the political capital he might have made out of the Admiralty’s brusqueness, and the impact that the disclosure of these communications might have had upon the Royal Commission.
Naoroji’s submissions to the Royal Commission contain a more directly nationalist intervention, entitled ‘Some Further Opinions On The Subject Of Native Rulers And British Rule’. This is preceded by a strange but interesting essay published in 1853 by the London-based India Reform Society. The connections of Naoroji with this are not quite clear. The mode of the essay is one of self-denunciation, comparing British rule in India unfavourably with earlier traditions of ‘Native’ rule, which, despite their despotism, could claim a legitimate link with their subjects. The other object of the essay is to, in a sense, rescue the Sultanate, the Mughals and the other rulers of pre-British Indian territories from the condemnation to which they found themselves all too frequently consigned. Naoroji appends to this his own comments on the subject of ‘Native rulers’, using as ever a plethora of quotations. The exploitative nature of the colonial relationship is described in the terms suggested by the India Reform Society’s pamphlet, and Naoroji’s comments come perilously close to a rejection of British rule. There is a laudatory account of the Mysore government’s overcoming of a severe economic crisis in the 1880s and 1890s, and this is contrasted very favourably to the management of expenditure in British India. The section ends with the words: ‘The existing system of British rule is an un-British debasing, despotic, and impoverishing Rule. A righteous Rule based on true British principles will be a great blessing both to England and India.’ For once, this last statement sounds rather lukewarm, and lacks the conviction of similar pronouncements in ‘The Poverty Of India’.
Naoroji’s views in the 1890s bore fairly clearly the imprint of what we have come to recognize as nationalism. He seems to have moved closer, over the years, to an understanding of the real and irreconciliable oppositions between colonial rule and Indian society. However, the price paid for this is that the central tension that can be discerned in ‘The Poverty Of India’, flowing from an awareness of the disparities and injustices within Indian society, and expressed in Naoroji’s inability to articulate these injustices, seems to have been all too unproblematically resolved – through silence – by the 1890s. The main planks of Naoroji’s critique of British rule remain what they were – the drain of wealth and the discrimination against Indians in the matter of native employment. Both arguments are articulated with greater eloquence and clarity than they were in the 1870s, and Naoroji speaks with the authority of one who is now, well into his seventies, an iconic figure in public life, and a voice that commands respect. However, the economic argument remains substantially what it had been earlier, barring the contextually conditioned critique of currency reform. There is next to nothing on the relations between capital and labour ( even when exploitation was entirely European in nature ), and there is no real analysis of agricultural trends and rural poverty. The issue of employment in the services has by now acquired a much greater significance than before in Naoroji’s argument, and the best and most analytically rigorous sections of the representations before the Commission ( barring the small section on currency ) are concerned with this. There is something unsatisfactory about this shift in emphasis, and a sense that Naoroji may deliberately have been refusing to make connections and pronouncements that he had the capacity to analyse – pronouncements basically concerned with extra-colonial structures of oppression and exploitation.
To make too much of this as a limitation in Naoroji’s thinking, however, would sound uncannily like a statement to the effect that his analysis is incomplete because he was not a socialist. Such a statement might be true, but it is hardly very profound, nor does it cast any light upon the structure of Naoroji’s thought as it actually stood. As it stood, it represented one of the cornerstones of nationalist economic interpretation, and remained intellectually central to later and more radical phases of the national movement. Naoroji’s anatomization of the poverty of India in aggregate terms ( expressed in his computation of national income ), his sharp methodological critiques of British compilations of statistics, his critique of currency reform, and, above all, his exposition of the mechanism whereby purchasing power was unilaterally transferred out of India, represent major intellectual achievements. His main merit was to have formulated and popularized a coherent analysis of the colonial relationship, and this relationship was comprehended unambiguously in terms of exploitation. Whatever his protestations of loyalty to the Empire – and they were as genuine as his nationalism – this interpretation was a central part of a critique of imperialism that was to become increasingly hard to answer as the century turned.