Empire of Free Trade: The East India Company and the Making of the Colonial Marketplace

226 Pages·1997·8.644 MB·English

by  Sudipta Sen

Empire of Free Trade
The East India Company
and the Making of the
Colonial Marketplace
Sudipta Sen
PENN
University of Pennsylvania Press
Philadelphia
For Gautam Bhadra
Copyright © 1998 Sudipta Sen
All rights reserved
Printed in the United States of America on acid-free paper
IO 9 8 7 6 5 4 3 2 I
Published by
University of Pennsylvania Press
Philadelphia, Pennsylvania 19104-40!!
Library of Congress Cataloging-in-Publication Data
Sen, Sudipta.
Empire of free trade : the East India Company and the making
of the colonial marketplace/ Sudipta Sen.
p. cm. - (Critical histories)
Includes bibliographical references and index.
ISBN 0-8122-3426-X( alk. paper)
1. East India Company. 2. Bengal (lndia)-Commerce.
3. Free trade-Great Britain. I. Title. II. Series.
HF3789.B4S46 1998
382'.0954'14042-dc21 97-39615
CIP
Contents
Introduction l
r. Passages of Authority 19
2. The Phirmaund and the Charter 60
3. The Making of a Colonial Terrain 89
4. A Permanent Settlement of Marketplaces 120
s.
Remains of an Order 144
Notes
Glossary 201
Bibliography 207
Acknowledgments 217
Index 219
Introduction
ONE OF THE AIMSO F THIS BOOK is to present eighteenth-century north
India as a society of marketplaces as much as one driven by land and its
cultivation. The wealth of north Indian polities on the eve of English con
quest, especially in the eyes of tlie people who had wrested a fair measure
of political autonomy from the Mughal empire in decline, was reflected
not only in their ability to muster revenue from land but also in the pros
perity of their markets. How did the establishment of colonial rule appro
priate, refashion, or disrupt relationships that had grown among places of
exchange, places of worship, and places of authority?
Answers to this question, raised throughout this work, depend on
how we view markets and marketplaces in premodern societies such as
India's. Why markets continued to multiply in later medieval northern
India during the period of the dissolution of Mughal rule might not be
readily explained by economic laws that work in the context of market
dominated societies,,w here commercial exchange motivated by measurable
profit is used as an enduring template for acquisitive behavior. While it
may be argued that north Indian society was certainly not subject to a
market-driven economy or capitalist development along the lines of pri
vate property and contract, one could hardly be surprised by the abun
dance of marketplaces that flourished in the greater Bengal and Banaras
regions during this period. These regional networks of artisanal produc
tion, mercantile interest, and aristocratic consumption and movements of
commercial capital were tied not only to the domestic material culture of
the semi-independent landed regimes of late Mughal India but also to the
wider world of seaborne and coastal commerce of the Indian Ocean in gen
eral, a world that had seen times of great abundance of trade ever since the
middle of the thirteenth century. Recent long-term histories of the com
mercial culture of Asia before the entry of Iberian Europeans have shown
beyond doubt the tremendous vibrancy and resilience of trading zones in
2 Introduction
greater Asia that linked China and Southeast Asian littorals to India, India
to the Near East, and the world of the Mediterranean.1 According to Janet
Abu-Lughod, it was precisely the existence of such trading links of an
tiquity that sustained the economies of Europe in the Middle Ages and
made it possible for them to reach out to the rest of the trading world;
moreover, their eventual exploitation set the stage for a new "world sys
tem" with Europe at its core.2
During the mid-eighteenth century, when the great French and En
glish rival trading companies were vying for privilege and control in the
coastal markets and inland manufactories of India, textiles, cotton and silk,
metal, and porcelain (what K. N. Chaudhuri calls the "three great crafts"
of Asia) dominated the European markets and drained Europe of Ameri
can silver.3 In eastern India the Dutch, the French, and the English fol
lowed the Portuguese in seeking out the coastal and provincial entrepots
of trade and commerce to establish factories for textiles, silk, and saltpeter
throughout the seventeenth and eighteenth centuries. Far-flung commer
cial circuits of greater Bengal connected the old Mughal city of Dacca and
the rising provincial capital at Maqsudabad (later Murshidabad) developed
by the astute Mughal deputy Murshid Kuli Khan, who had secured the
administration of Bengal, Bihar, and Orissa in the first decade of the eigh
teenth century, to the flourishing commercial cities of Patna and Banaras
through the great waterways of the Gangetic plain.4 These centers of trade
and administration were also linked directly to such maritime outlets as
Hugli, Satgaon, and the English _settlement of Calcutta; further westward
by river or over land they were connected to the imperial cities of Agra
and Delhi. Other prominent land routes connected Patna to Agra, Banaras
to Lucknow, Maldah in Bengal to the hinterlands of Patna and northern
Bihar and Jaunpur in Awadh. This broad sweep of the alluvial lower Gan
getic plains connected the revenue-rich territories of the Nawabs of Bengal
and the Rajas of Banaras, nominally dependent on the ruling house of the
Nawabs of Awadh. These territories, newly endowed with agricultural and
commercial potential emerging from the confusion and decay of Mughal
administration, provide the immediate geographical and political setting
for this book.
This volume is a study of marketing communities in an age of social
and political upheaval in eighteenth-century India, a period in which colo
nial rule was being established by the English East India Company char
tered by the British Parliament. The book shows how marketplaces became
the site of conflict between the Company and traditional rulers of Bengal
Introduction
3
and Banaras, and how extensive reorganization in revenue and customs af
fected the substance and hierarchy of long-established rights to market ex
change. It is a study of the relationship among rulers, traders, and markets
in precolonial India (Chapters rand 2) as well as a history of the rise and
expansion of colonial rule from the standpoint of its political economic
agenda (Chapters 3, 4, ands).
In a broader context, this book argues that trade and conquest in the
eighteenth century implied from the very beginning an attempt by the East
India Company to build a powerful and intrusive state in India. The estab
lishment of a far-flung customs and police network and the "settlement"
of marketplaces indicate an early and significant gain in the power and
stature of the colonial state. The Company during the period of so-called
indirect rule has often been seen as a trading corporation drawn unpre
pared into the exigencies of warfare and administration. This book shows,
however, th.at the first decades of colonial rule entailed much more than
just the preservation of trade and commerce in the colonies. The ideology
and objectives of the colonial state in India derived from reigning notions
of eighteenth-century European political economy and shared some cru
cial aspects of nation-state formation in Georgian England (see Chapter 4 ).
These had a profound effect on how the English viewed Indian society and
its commercial culture and on how they attempted to reform the Indian
economy by overhauling the inland trade and markets of Bengal.
This book seeks to contribute to the growing debate on the history of
the global expansion of European mercantile capital, in this case the rela
tionship between Britain and India. My central thesis suggests that, rather
than being just a mechanistic structure of inevitable economic dominance
and subservience between the industrializing core and the undeveloped
periphery, the results of this expansion can be seen legitimately in the light
of political and cultural confrontation, conflict, and compromise that set
the context for such economic change. Colonial India provides an early
historical instance where the East India Company's demands for commerce
and markets came face to face with a different organization of trade, mar
ket exchange, and authority. This difference was crucial in determining
the nature and outcome of the conflict of economic interests. The experi
ence of early colonial rule in the greater Bengal region provides one of the
first examples of this encounter, which set the tone for the expansion of
British and European colonies and economic interests in Asia and the rest
of the world.5
Not much has been written on the history of marketplaces in pre-
4 Introduction
colonial India other than traditional economic histories concerned with
phenomena such as price behavior or the demand and supply of commodi
ties. This study undertakes a detailed exploration of the cultural meanings
inherent in market exchange, tributes, and gifts under the auspices of tra
ditional political regimes in late eighteenth-century India. In investigating
how such meanings were threatened or disrupted under the administration
of the East India Company, this study debates some of the interpretations
offered thus far of the conflict between the Company and the regional
rulers. It also calls into question the standard historical rendition of the
Company state as a relatively weak polity swayed by local power elites and
the internal dynamic of regional power struggle.
Colonial rule in India has often been studied from the perspective
of the British Raj of the nineteenth century, but there are relatively few
studies that treat the period of Company rule as the initial and perhaps
crucial phase of colonial expansion. And lastly, rather than accepting with
out reservation the existence of a precolonial or colonial "economy" or
attempting to reconstruct a workable model of the indigenous economic
or social structure, I have tried to be faithful to the prevalent articulations
of material life from the points of view of historical agents: peasants, pil
grims, traders, landlords, rulers, and the officials of the East India Com
pany. This is thus a search for a much broader definition of wealth and
power that medieval Indian society shared with other parts of the pre
modern world: rights, family honor, possession, ritual well-being, and the
power to withdraw and redistribute objects of value. Such considerations
were crucial for the social life as well as the moral economy of the market
in the age of British expansion in India.
The Market and the Marketplace
Marketplaces and fairs in this part of India had always been the sites by
which regions and localities are known and remembered. Glimpses of this
historical topography have made their way into some of the literary imagi
nations of our own times, especially where the precolonial Indian past is
recounted as a bygone era of affluence. I have in mind here the novel Radha
by the Bengali author Tarashankar Bandopadhyaya, himself a descendant of
a prominent family of landlords; he describes the religious and commercial
communities that, around the year 1726 during the rule of Nawab Shujaud
din, had grown along the banks of the river Ajay in the Birbhum district of
Introduction 5
western Bengal, in the markets of Ilambazar, Janubazar, and Sukhbazar.6
Ilambazar, in particular, was the hub of this busy site of commerce and pil
grimage, renowned for its cotton, silk, and lacquer. Lacquer was sent from
there to Delhi and Murshidabad to be used as wax for sealing secret and
official dispatches. It was also used by local craftsmen, who made bangles
for women in the houses of the Nawab, the Rajas, and the Zamindars, as
well as the courtesans and prostitutes of Murshidabad. At the same time,
Ilambazar was known for its proximity to the great fair of Kenduli held
in remembrance of the great Vaishnava poet and lyricist Jayadeva. The fair
was a gathering spot for various religious orders and organizations, devo
tional singers, soothsayers, almsgivers, mendicants, and pilgrims, includ
ing predatory and militant nagiis:a scetic wanderers and fighting men, mer
cenaries for local armies, unclothed, with their bodies smeared in ash. Such
extended networks of exchange, such resident and itinerant communities
around the marketplaces of greater Bengal, are the subject of this book.
There were also various kinds of markets, permanent and temporary:
markets specific to products, markets of rice, markets of vegetables, tem
porary markets afloat on boats on the rivers of eastern Bengal during the
height of monsoon, markets secured to temples, mosques, and hospices.
Marketplaces of late medieval India have not been studied in any great
depth. Research has been done on agricultural production, on trade and
commerce in the countryside, but not much on the social and cultural
underpinnings of market transactions.
This is also a detailed study of the early colonial intervention in the
running of markets, which gathered momentum after the East India Com
pany's acquisition of the revenues of Bengal, Bihar, and Orissa in 1764. I
show how the new regime went about trying to facilitate access to sites of
production and distribution, minimizing the agency of indigenous rulers
and their emissaries often at the cost of direct conflict. Precapitalist political
regimes in India were not easy prey to the demands of overseas trade and
interests of European capital. I have generally argued against the idea that
societies on the margins of Western capitalist expansion offered little effec
tive resistance to the forces of economic change. I have also argued against
the interpretation that, under the surface of administrative and commercial
expansion, Indian society moved along at its own intrinsic pace, relatively
unaffected by the colonial rule to which it was being subjected.
Histories of colonial expansion have too often rested on an image of
the capillaries of a worldwide market economy spreading outward from
the cities of industrializing Europe and drawing the rest of the world in-
6 Introduction
exorably into its fold. This image has been reinforced by the work of de
pendency theorists who have built on Andre Gunder Frank's Capitalism
and Underdevelopment in Latin America (1969) and economic historians
who have followed Immanuel Wallerstein's The Capitalist World Econmny
( 1969 ), The Modern World System: Capitalist Agriculture and the Origins of
the European World-Economy in the Sixteenth Century (1974), and The Mod
ern World System II: Mercantilism and the Consolidation of the Euro-pean
World-Economy, r600-r7so (1980).
The works of many historians and anthropologists have taken into
account what is now familiar as the "world systems" approach and have ac
cepted and debated global historical dimensions of the divisions of labor
and the massive, glacial movements of production and consumption be
tween the cores and peripheries of this world. In the specific context of
India, Wallerstein has argued that India was incorporated into the modern
world system through two kinds of qualitative change: the reorganization
of the structure of production reflected in the social division of labor and
the reorganization of the political structures such that they make possible a
new kind of economic participation.7 His holistic approach makes it seem
that the Indian subcontinent as well as the commercial world of the Indian
Ocean were drawn into the European world system in one bold stroke of
capitalist expansion. One of the implications of this kind of history is that
it makes Indian credit and commercial networks appear either too fragile
or too malleable in the face of European challenge.
Among the historians who have taken exception to this view is Frank
Perlin, who has tried to show that merchant capitalism or "proto-capital
ism" flourished in Asia independently of Europe, and indeed the Euro
pean domination of overseas trade thwarted further developments in that
direction.8 Without going further into the tangled debate over the exact
nature of commercial development in India and the question of whether it
marked a significant change in the mode of production in Indian society,
Perlin's findings leave us with considerable doubt as to the rise of European
hegemony in Asian commerce simply as the triumph of a more advanced
economic system.
The other, and perhaps more important, implication of the world sys
tem's analysis from the perspective of this book is that not only are political
structures seen as being swept away by the tide of economic change, but
social and cultural aspects of trade and commerce are seen as epiphenom
ena. Wallerstein's theory has been subjected to criticism on this score, par
_ticularlyi n a rejoinder from M. N. Pearson, who points out the centrality
Introduction 7
of religion, especially Islam and Islamic pilgrimage, in the trade of the
Indian Ocean.9 My task here is to go much farther in exploring the inter
face between political economy and culture in the precolonial and early
colonial period in northern India, reasserting the need to define the politi
cal agency of Indian regimes as well as the Company Raj. This history is
crucial to qualifying the larger and perhaps too familiar story of capitalist
transformation: the eventual absorption of Indian labor and Indian prod
ucts into the world market.
In this context, I trace how the regional polities of northern India
conceived their material culture on the threshold of an overseas market
for commodities dominated by Europe. While the principleso f market ex
change in a world of emerging European hegemony had revolutionary
consequences for British India, they might not have been shared in the
same way when the two societies came face to face. I am particularly
concerned here with historical writing that offers economic explanations
for the transformation of Indian society through the lens of individualist
monetary gain and loss, without considering how the market with a capi
tal M, viewed solely as an economic phenomenon, masks important social
and political relationships.10 My goal here is to name and place the mar
ket, its patrons, claimants, and clientele, and, above all, to mark its site and
genealogy. In the study of the market as an epicenter in the battle for colo
nial conquest, and the attempts at a colonial account of that victory, which
is part and parcel of the surviving documentation, only the particularities
of place and person in the market may provide the clues to the rich and
many valences of the encounters between (at least two) widely differing
political and material conceptions.
The economic imperatives of East India Company's rule in India, to
be sure, were based upon a certain vision of the domestic and export mar
kets, first along the rules of monetary and mercantile political economy
and then reconsidered in the light of liberal economics. Yet throughout
the age of colonization, one of the principal issues of conflict with local
Indian rulers was not the economy of Indian principalities but the actual
sites for the display and passage of wealth, indices of social and political
eminence. Much of this conflict arose from the colonial desire to promote
a self-regulated market economy in a society where marketplaces and their
patrons were part of an extended social and political landscape.
Insofar as the English adventurers and subsequent rulers of greater
Bengal encountered a wide and differentiated array of marketplaces while
they sought to expand their own investment and profit in private and cor-