Thursday 28th March 2024,
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Britain took more out of India than it put in – could China do the same to Britain?

Britain took more out of India than it put in – could China do the same to Britain?

Large parts of India’s economy were destroyed by British technology in the 1800s, and by deals that favoured British shareholders. Today, it’s China that holds that kind of power

According to an editorial published in China‘s Global Times to coincide with this week’s London visit of premier Li Keqiang, the British live in “an old, declining empire” that, like some drooling elderly relative, needs the patience and understanding of rising nations such as China. Last year, during David Cameron’s trip to Beijing, the same paper announced that Britain was “just an old European country apt [that is, suitable] for travel and study”. As the Global Times is an offshoot of the Chinese Communist party’s official newspaper, the People’s Daily, we can assume its blunt diagnosis reflects the governmental view. The present tense – “declining” rather than “former” or “sunken” – suggests an overestimate of Britain’s status on the part of the writer, but perhaps only in the negative sense that its downward journey isn’t yet quite complete.

We have been preparing for such moments for more than a century, since that July morning in 1897, at the height of Queen Victoria’s diamond jubilee, when readers of the Times found on its leader page Rudyard Kipling’s admonitory poem Recessional, which called for British humility and God’s mercy in the light of the fact that no empire lasts for ever. “Lo, all our pomp of yesterday/ Is one with Nineveh and Tyre!” And yet for most of its postwar history Britain managed to compensate for – even to disguise – its downward global trajectory by spreading its wealth more equally, putting on magnificent royal pageants and, arguably more than any other nation, embracing the cult of youth. An inquisitive teenager in the 1960s might fret with his parents over the shedding of fleets and factories, but he was much more likely to be lost in Tolkien, CND or the Beatles’ new LP. It has taken 50 years of economic impotence and political wrong-headedness for the eventual consequence to emerge in the landscape: the rundown post-industrial settlements that have had their public funding cut, where town halls, shops, courts, police stations, post offices and local newspapers are closed or closing, stripping the place (as the Labour MP Jamie Reed wrote this week) of every symbol of permanence, community strength and civic identity, and forcing the more able individuals to up sticks and get out.

But the fate of Nineveh and Tyre, the ancient cities of the Assyrians and Phoenicians, doesn’t seem quite the right historical precedent for towns such as Burnley and Paisley. A closer parallel is Bengal, the Indian province whose economy was destroyed by the technological strength of northern Britain in what the writer Jeremy Seabrook has called “the first great de-industrialisation of the modern world”.

For at least two centuries the handloom weavers of Bengal produced some of the world’s most desirable fabrics, especially the fine muslins, light as “woven air”, that were in such demand for dressmaking and so cheap that Britain’s own cloth manufacturers conspired to cut off the fingers of Bengali weavers and break their looms. Their import was ended, however, by the imposition of duties and a flood of cheap fabric – cheaper even than poorly paid Bengali artisans could provide – from the new steam mills of northern England and lowland Scotland that conquered the Indian as well the British market. India still grew cotton, but Bengal no longer spun or wove much of it. Weavers became beggars, while the population of Dhaka, which was once the great centre of muslin production, fell from several hundred thousand in 1760 to about 50,000 by the 1820s.

Tigers and leopards roamed the streets. Seabrook gives a memorable picture of dereliction: “The city of men had become a city of animals. Weavers’ dwellings were overgrown, the thatch alive with birds, snakes and insects, while roussettes – bats small and multi-coloured as butterflies – flew in and out of earth-mounds that had been homes; hunched vultures surveyed tracts of land in which the human voice was stilled. People lost the skill of their fingers, and only the roughest-made country cloth still found a market among the poorest.”

Subsequently, India became the exporter of raw materials and foodstuffs – raw cotton and jute, coal, opium, rice, spice and tea – rather than manufactured goods. British shareholders could also make money by investing in Indian infrastructure, principally the railways, where the Indian government attracted funds by guaranteeing returns on capital of 5% net per year. If the railway company couldn’t achieve that return on its own, then the government made up the shortfall from its revenues, which came from Indian and not British taxes. In the event, it was 20 years before the first lines earned more than 5% of their capital outlay, but that did nothing to inhibit their extravagant spending: a mile of Indian railway cost double the same distance in the equally difficult terrain of Canada and Australia.

It was a splendid racket for everyone, apart from the Indian taxpayer. In terms of a secure return, Indian railway shares offered twice as much as the British government’s own stock. Guaranteed railway shares absorbed up to a fifth of British portfolio investment in the 20 years to 1870 – the first line opened in 1853 – but only 1% of it originated in India. Most of the rest came from small shareholders with addresses in southern England: from bankers, barristers, spinsters, retired army officers and people known simply as “gentlemen”. Their holdings averaged only £1,500, but the total invested meant that India’s railways represented one of the 19th century’s largest flows of money between continents. India got an expansive railway system far in advance of any other Asian nation, but Britain retained its grip on the technology as the supplier of all its equipment, which meant once again that the profits were repatriated. The English economist William Thomas Thornton, who was secretary of public works at the India Office, described the guaranteed scheme in a phrase that became well known. It was, he said, “private enterprise at public risk”. When arguments began to be made for Indian independence, it was also evidence for the idea that Britain took more out of its most magnificent colony than it put in.

Colonialism no longer flies a flag or sends gunboats, but its underlying economic facts may not have changed very much. China is on its way to becoming the world’s most industrially powerful country, the position that Britain enjoyed when it crushed Bengal’s textile industry and built India’s railways. According to the trade deals announced this week between China and the UK, China will now build and operate Britain’s forthcoming high-speed railway. It will also build, own and operate the first in a new series of nuclear power stations. China needs ever-increasing supplies of food and raw material, and markets for its manufactures. Britain can’t supply the first, but it can supply titbits for China’s new rich – whisky, salmon, Jaguars – and allow Chinese engineers and technology to have charge of Britain’s most important new infrastructure.

David Cameron sees these developments in an interesting way – that Britain is “playing a part in the rise of China” by helping economic growth to lift millions of its citizens out of poverty. Perhaps this is his altruism coming out. Certainly no impoverished weaver in Bengal would have taken a similar view in 1800. “How pleased we are to have helped the British Empire by pointing thousands of England’s rural labourers towards the smoke of Manchester, where their power looms have made us redundant.” No, that doesn’t work.

Jeremy Seabrook’s The Song of the Shirt – Cheap Garments Across Centuries and Countries is published by Navayana in New Delhi next month.

According to an editorial published in China‘s Global Times to coincide with this week’s London visit of premier Li Keqiang, the British live in “an old, declining empire” that, like some drooling elderly relative, needs the patience and understanding of rising nations such as China. Last year, during David Cameron’s trip to Beijing, the same paper announced that Britain was “just an old European country apt [that is, suitable] for travel and study”. As the Global Times is an offshoot of the Chinese Communist party’s official newspaper, the People’s Daily, we can assume its blunt diagnosis reflects the governmental view. The present tense – “declining” rather than “former” or “sunken” – suggests an overestimate of Britain’s status on the part of the writer, but perhaps only in the negative sense that its downward journey isn’t yet quite complete.

We have been preparing for such moments for more than a century, since that July morning in 1897, at the height of Queen Victoria’s diamond jubilee, when readers of the Times found on its leader page Rudyard Kipling’s admonitory poem Recessional, which called for British humility and God’s mercy in the light of the fact that no empire lasts for ever. “Lo, all our pomp of yesterday/ Is one with Nineveh and Tyre!” And yet for most of its postwar history Britain managed to compensate for – even to disguise – its downward global trajectory by spreading its wealth more equally, putting on magnificent royal pageants and, arguably more than any other nation, embracing the cult of youth. An inquisitive teenager in the 1960s might fret with his parents over the shedding of fleets and factories, but he was much more likely to be lost in Tolkien, CND or the Beatles’ new LP. It has taken 50 years of economic impotence and political wrong-headedness for the eventual consequence to emerge in the landscape: the rundown post-industrial settlements that have had their public funding cut, where town halls, shops, courts, police stations, post offices and local newspapers are closed or closing, stripping the place (as the Labour MP Jamie Reed wrote this week) of every symbol of permanence, community strength and civic identity, and forcing the more able individuals to up sticks and get out.

But the fate of Nineveh and Tyre, the ancient cities of the Assyrians and Phoenicians, doesn’t seem quite the right historical precedent for towns such as Burnley and Paisley. A closer parallel is Bengal, the Indian province whose economy was destroyed by the technological strength of northern Britain in what the writer Jeremy Seabrook has called “the first great de-industrialisation of the modern world”.

For at least two centuries the handloom weavers of Bengal produced some of the world’s most desirable fabrics, especially the fine muslins, light as “woven air”, that were in such demand for dressmaking and so cheap that Britain’s own cloth manufacturers conspired to cut off the fingers of Bengali weavers and break their looms. Their import was ended, however, by the imposition of duties and a flood of cheap fabric – cheaper even than poorly paid Bengali artisans could provide – from the new steam mills of northern England and lowland Scotland that conquered the Indian as well the British market. India still grew cotton, but Bengal no longer spun or wove much of it. Weavers became beggars, while the population of Dhaka, which was once the great centre of muslin production, fell from several hundred thousand in 1760 to about 50,000 by the 1820s.

Tigers and leopards roamed the streets. Seabrook gives a memorable picture of dereliction: “The city of men had become a city of animals. Weavers’ dwellings were overgrown, the thatch alive with birds, snakes and insects, while roussettes – bats small and multi-coloured as butterflies – flew in and out of earth-mounds that had been homes; hunched vultures surveyed tracts of land in which the human voice was stilled. People lost the skill of their fingers, and only the roughest-made country cloth still found a market among the poorest.”

Subsequently, India became the exporter of raw materials and foodstuffs – raw cotton and jute, coal, opium, rice, spice and tea – rather than manufactured goods. British shareholders could also make money by investing in Indian infrastructure, principally the railways, where the Indian government attracted funds by guaranteeing returns on capital of 5% net per year. If the railway company couldn’t achieve that return on its own, then the government made up the shortfall from its revenues, which came from Indian and not British taxes. In the event, it was 20 years before the first lines earned more than 5% of their capital outlay, but that did nothing to inhibit their extravagant spending: a mile of Indian railway cost double the same distance in the equally difficult terrain of Canada and Australia.

It was a splendid racket for everyone, apart from the Indian taxpayer. In terms of a secure return, Indian railway shares offered twice as much as the British government’s own stock. Guaranteed railway shares absorbed up to a fifth of British portfolio investment in the 20 years to 1870 – the first line opened in 1853 – but only 1% of it originated in India. Most of the rest came from small shareholders with addresses in southern England: from bankers, barristers, spinsters, retired army officers and people known simply as “gentlemen”. Their holdings averaged only £1,500, but the total invested meant that India’s railways represented one of the 19th century’s largest flows of money between continents. India got an expansive railway system far in advance of any other Asian nation, but Britain retained its grip on the technology as the supplier of all its equipment, which meant once again that the profits were repatriated. The English economist William Thomas Thornton, who was secretary of public works at the India Office, described the guaranteed scheme in a phrase that became well known. It was, he said, “private enterprise at public risk”. When arguments began to be made for Indian independence, it was also evidence for the idea that Britain took more out of its most magnificent colony than it put in.

Colonialism no longer flies a flag or sends gunboats, but its underlying economic facts may not have changed very much. China is on its way to becoming the world’s most industrially powerful country, the position that Britain enjoyed when it crushed Bengal’s textile industry and built India’s railways. According to the trade deals announced this week between China and the UK, China will now build and operate Britain’s forthcoming high-speed railway. It will also build, own and operate the first in a new series of nuclear power stations. China needs ever-increasing supplies of food and raw material, and markets for its manufactures. Britain can’t supply the first, but it can supply titbits for China’s new rich – whisky, salmon, Jaguars – and allow Chinese engineers and technology to have charge of Britain’s most important new infrastructure.

David Cameron sees these developments in an interesting way – that Britain is “playing a part in the rise of China” by helping economic growth to lift millions of its citizens out of poverty. Perhaps this is his altruism coming out. Certainly no impoverished weaver in Bengal would have taken a similar view in 1800. “How pleased we are to have helped the British Empire by pointing thousands of England’s rural labourers towards the smoke of Manchester, where their power looms have made us redundant.” No, that doesn’t work.

Jeremy Seabrook’s The Song of the Shirt – Cheap Garments Across Centuries and Countries is published by Navayana in New Delhi next month.

Source the Guardian

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