Pramod Biligiri's Blog

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The Rediscovery of India by Meghnad Desai - 3
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Chapter 2 - The English Turn (contd.)

In the book Desai briskly covers the battles of Plassey (1757) and Buxar (1764), and the subsequent collection of land revenue in Bengal by the British (which is one long, saad story).

He closes the chapter with a lengthy section on the attempted impeachment of Governor General Warren Hastings. This is clearly a case of historians settling scores with each other, as he says nationalist historians cite the charges against Hastings as an indicator of how bad his regime was when it actually was not. Whatever :)

Battle of Plassey (1757)
Militarily the battle is not so interesting since it was a big betrayal that sealed the loser's fate. Siraj-ud-Daula was the Moghul emperor's Nawab in Bengal. Mir Jaffar, his Chief of Army Staff (high treason, eh?) was looking to depose him. He had the backing of a large number of merchants.

As Desai says, "behind Mir Jaffar was the emerging commercial class - the traders and the bankers who had prospered during the last 150 years off exports matched by imports of silver and gold. Jagat Seth, for instance, had an international banking network which made him a powerful man. The old Nawab had been respectful..the new Nawab was haughty and arrogant".

(That only makes sense as a childrens' bed time story)

He says the defeat at Plassey is regarded by many Indian (esp. Marxist) historians as a major event, an epic confrontation between the forces of feudalism and capitalism where capitalism won. He quotes one of them called Biplab Dasgupta: It was "the improbable takeover of a country as big as India, by a mere trading company". Desai argues that Plassey was none of that. It was a localized affair. In fact the English got inducted into it only because Mir Jaffar used them as a tool to enthrone himself.

Plassey in more detail
Digging deeper, I see that 18th Century India is much more complex, confusing and controversial than I thought. While nationalist historians have stressed the Company's intention to dominate, English historians say that this business enterprise was just unwillingly drawn into local political intrigue.

Dipping into the Oxford History book, there's this essay which offers better insight, "Reassesments of the role of the British in the first half of the 18th century have risen primarily from what is called 'private' trade. The Company's trade might be set into a relatively static pattern, but the trade of the Company was only a small part of British activities in Asia; there was a dynamic private sector as well."

As he explains in that essay (which you ought to read), many employees of the Company, along with their official work, conducted their own "side-business" which was very lucrative personally. Under the Mughal emperor the Company had been granted exemption from all customs duties. Now these individuals used that as a loophole to avoid paying taxes for their extra-curricular activities also. (Elsewhere it has been called insider trading).

Remember that the overall business picture was extremely positive at this time. For my future reference I will note down this important para from earlier in that essay:

"At the beginning of the 18th century about 90% of the Company's cargoes were obtained from India. In Western India the English operated out of the great Mughal port of Surat and from their own settlement granted to the Crown by the Portuguese at Bombay. The cargoes consisted mainly of the cotton textiles of the province of Gujarat. Pepper obtained from settlements on the south-west coast was also shipped from Bombay. Madras, held outright on a grant from a local chief, was the major English settlement on the south-east or Coromandel coast. Coromandel textiles were in high demand in Europe early in he 18th Century.

"In Bengal, Calcutta, a town largely founded by the English, was growing very rapidly indeed. On the strength of grants from the local ruler, the English had built a fort and exercised authority over the town. Bengal was a rich province, producing silk and cotton cloth for export in great quantities. Early in the 18th century it became the major source of British textile exports. From the 1720s shipments through Calcutta usually amounted to at least half of the Indian cargoes (emphasis mine). To purchase their textiles, the Company's agents set up factories in several inland weaving centres, accessible from Calcutta along Bengal's river system."

(Note that above description is w.r.t to the Company's official trade and not private trade)
Since this "private trade" was carried on by individual employees of the Company, they had to rely on capital from native merchants/bankers - who were able to use the Englishmen as fronts/shell companies to gain the tax benefit. This resulted in many strong relationships between the local merchant class and Company employees. The essay admits there is not enough quantitative evidence to estimate its impact, but the phenomenal growth of Calcutta is a pointer. "Calcutta totally eclipsed its rivals in Bengal during the first half of the 18th century. Its growth was meteoric as Indian merchants, artisans and labouring people moved into the area under British jurisdiction in large numbers."

The lines that follow remind me of SEZs:
"The dissemination of wealth among their subjects through dealings with Europeans was of course welcome, but if that wealth lay beyond the reach of the ruler within what amounted to a foreign enclave, if that enclave was growing very rapidly, and if some of the Europeans within that enclave seemed to be extending their range of activities, the challenge to the ruler's authority was unmistakeable. Calcutta in particular constituted such a challenge to the rulers of Bengal."

What was actually being traded in this private trade? How did the frictions play out? I shall have to resume some other time.

(This narrative relies too much on the Moghul tax exemption firman. Need to check if other factors were in play.)
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Textbook trouble
pramod kde
A few days ago there was a news report saying the NCERT had sent a warning letter to the founder of His crime being that he had uploaded many of their school textbooks (which are available for download from the govt. site itself), and built a community of users who read it, discuss topics etc.

The letter says, "you are hereby notified that your actions of uploading NCERT books on your site, is without permission from us and is a clear copyright violation. You may at best maintain a link to the books on the NCERT website after written permission."

In an interview in May, the founder Prashanth Ellina admits that the legality of his effort was not clear but he hopes things would work out with the educational bodies.

A few months back even I was thinking such a service ought to be built in India. Having a more liberal license for textbooks is a must. In Karnataka this year a severe mess up in textbook production has caused much trouble for school kids - the reason being government has banned private selling and instituted its own body to supply textbooks. I have heard of cases where students have written the first couple of tests without getting textbooks at all. Currently the High Court is looking into the issue:

"The schools said the State Government this year had constituted the Textbook Authority and decided to distribute textbooks to students from first to tenth standard through the authority. The State, it said, had decided against allowing sale of textbooks by private book-sellers."

Naturally many of these issues are being addressed in the US too. An old but good NYT op-ed says textbook prices rise at twice the inflation rate! Over there the problem is again copyright ownership but by various private publishers.

If the government is going to set the syllabus and provide education till secondary schools, can't they at least go for a Creative Commons kind of license? I am actually optimistic that this will happen soon.
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The Rediscovery of India by Meghnad Desai - 2
pramod kde
Chapter 2 - The English Turn

A big negative outcome of British control was how India's economy got hitched to Britain - they were the monopoly buyers of many Indian products. He says this was a repeat of what the Portuguese did to spice growers in the Malabar region, but on a larger scale. So I decided to read up on the spice trade.

The Spice Trade
I didn't know that the Spice Trade was such a big thing. Found this must read article which says the spice trade existed even during the ancient Egyptian civilization. It consisted of transporting clove, pepper, nutmeg, mace (read up more on these items) from Indonesia and South West India to Europe, via land and sea routes passing through Arabia.

When this spice route got blocked due to the Ottoman Empire, this spurred Italians (Venice) and Portuguese to find new routes.

[quote] far as spice went, (Vasco) Da Gama and his crew were right on the money. Then, as now, Calicut was a gateway to the world’s greatest pepper-growing region—indeed this was why the Syrians had moved there in the first place. As such it was at the heart of the spice trade, a network of sea routes and entrepôts in the making for millennia: the world economy’s oldest, deepest, most aromatic roots.

In the Middle Ages, spices were of great use to preserve meat, and cover up stale food. They were extremely expensive.

a German price table from the 14th century sets the value of a pound of nutmeg at seven fat oxen. At the same time “peppercorn rents” were a serious way of doing business. When the Mary Rose, an English ship that sank in 1545, was raised from the ocean floor in the 1980s, nearly every sailor was found with a bunch of peppercorns on his person—the most portable store of value available.

The Dutch had great success in this spice trade:
By 1670 the Dutch East India Company was the richest corporation in the world, paying its shareholders an annual dividend of 40% on their investment despite financing 50,000 employees, 30,000 fighting men and 200 ships, many of them armed. The secret of this success was simple. They had no scruples whatsoever.

(Wow..the article describes how ruthless the Dutch were)

Why England defeated the European rivals
He says one of the main reasons England defeated other European nations, esp. France, is because the King's powers were bound by law. He could not tax arbitrarily and use it to fund wars, which made him use resources more prudently. He also attributes it to luck and having capable commanders like Robert Clive.
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The Rediscovery of India by Meghnad Desai - 1
pramod kde
For a while now I've been trying to make sense of the British Empire in India - though in piecemeal fashion - as my posts about Bombay show. Looking back, all the history I learned in school seems to be a long series of video games where people with strange names keep fighting and killing each other for no apparent reason. So I'm trying to correct that.

I've missed reading John Keay's much recommended India: A History, but on a recent trip with Vinay to Penguin's new bookshop on MG's, picked up something called The Rediscovery of India by Lord Meghnad Desai - who is a long time econ prof at LSE, but has also edited Cambridge's An Economic History of India (which I wish I had). When at Oxford last year I made sure to buy 2 volumes of their History of the British Empire so I'll cross-refer it where I can. Also I thought of making notes as I go along (which I have never tried before). So here I go, hoping that I actually finish the book...

Chapter 1 - The Vasco Da Gama Moment

Overall state of India at this time

In 1500, the population of (composite) India was just 100 million (1/10th of current)..there was no need to reclaim land or clear forests. There was a luxury market for manufactured items due to royalty and nobility. These products attracted invaders (though elsewhere he mentions that India was actually a poor country going by per capita income and tales of an extremely rich India are myths).

South India was linked to South East Asia, Gulf and Bengal via maritime trade (Did they oppress S.E.Asian countries? Need to check). North India was economically and politically linked to Central Asia and the trade routes leading to China.

Spain and Portugal set out to find sea route to India for spices and textiles. A sea route would mean they could avoid the Central Asian route which was logistically inefficient and involved paying middlemen. First they found South America and over there destroyed urban civilizations, mining horrors etc (read up).

The idea of India as a country did not exist. Trade within India was also not cheap because of bad roads, taxes to be paid to many local chieftains, threat of robbery etc (wonder if it was different elsewhere. Also, I'd guess under such circumstances no entrepreneur would get into long distance trade?).

If you got an exemption from these local taxes, say under the rule of a bigger empire like the Moghuls, your profitability would be much higher. The British East India Company made great efforts to get that privilege. It's a cool story. He cites John Keay's The Honourable Company. Found another very interesting link to the same, which says their efforts began in mid 1600s and finallly succeeded in 1717. Slightly polemical link though.(Need to read up full details of these firman fights - the Company correspondence and also what local merchants must be feeling when a bunch of foreigners were given this privilege.).

Spain and Portual in the South

The Portuguese reached Cochin in 1498 and started buying pepper, cinnamon, indigo. (What were they paying? Silver from the New World?). They soon blocked native merchants from the sea route using their superior naval power and became a monopsony. And soon they stopped trading themselves and collected taxes for other merchants to use the sea route (Meh, government). The navies of Indian kings were too weak to resist this. He cites Om Prakash's book as very good for this era.

Spain & Portugal stopped being a force because their governments became weak in their own country. They focussed only on S.America and Africa. The Dutch got more into Indonesia than India - mainly spices.

Impact of all this trade

Ok, now he mentions that silver from the New World did indeed play a big role in being able to pay for spices and textiles. He cites Keynes (nice!) who called the period 1550-1650 as "the century of inflation". He gives tonnage of silver being shipped. Elsewhere in the book he says people have systematically studied how silver from Americas ended up in India.

All this money (bullion to be precise I guess) coming in stimulated the Indian economy. Textile and spice industries got a boost. By 1700, European producers were agitating for protective tariffs against Indian products and banning Indian textiles but these bans were circumvented in the usual sneaky ways. (Again, he cites and I need to read Om Prakash's book for all this).

So Indian money supply (the silver rupiyah) tripled between 1591 and 1639. By Bernanke! Silver bullion quickly got minted into coins. Gold went into hoard. By Gresham! (not really :P).

Cites an essay by Irfan Habib (who is one of India's foremost historians) regarding the inflation rate of 2% during that time. Found it. The part there about free coinage is cool (Had read elsewhere about the smart monetary aspects of Moghul mints until Aurangzeb messed with them). Page 364 there is pure gold!.

Early 18th Century
During this time England and France were constantly fighting each other (The Hundred Years War it is called. I know nothing of this). Some of this spilled over to their trading outposts in India, and in one of the skirmishes the French under Dupleix defeated the Nawab of Carnatic.

But overall the period of 1500-1750 was largely peaceful trade between India and Europe, and this is often forgotten by us due to the colonization which followed. India (not as a nation but a geographical entity) exported spices, textiles and even food grains (wow!). The collapse of Mughal empire, and the emergence of England over France (not to mention the Dutch) as a dominant force in the European power struggles set the stage for English rule throughout India.
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I attended BJP's Anti Cow Slaughter rally today
pramod kde
The Karnataka government's desperate efforts to ban cow slaughter now rests on what President Pratibha Patil will say, because the Governor has refused to give his customary nod to the Bill saying it has cross-State implications.

The BJP has pledged to hold many rallies promoting their cause beginning September. I read about one such event happening at Town Hall today, and being unemployed, was drawn to it like flies to dung. Took a quick detour from wherever I was officially headed and spent some time there.

There were around 500 people, split between sloganeering on the Town Hall footsteps and listening to speeches by various BJP bigwigs. I was wondering if the crowd would be all villagers paid for by the hour, but it was mostly urban - many middle aged and older folks, a few youngsters. On the dais were state BJP president K S Eshwarappa, Venkaiah Naidu and also Ananth Kumar, who represents Bangalore South up in New Delhi. I couldn't stay for long, so here are a few pictures and videos I took.

Here is a video of the slogan shouting:

Here's one person starting his speech:

Deccan Herald covered the Bill and its constitutional implications in depth a few Sundays ago. A recent Hindu article claims 2 lakh people could be negatively impacted. Deve Gowda has been actively opposing the Bill.

Kaayo Kalpa - short and minimalist play
pramod kde
Caught this simple Kannada play called Kaayo Kalpa at K H Kala Soudha. It's a one act play and features a lonely and ageing widower who lives alone with a servant. His sons live in far away America and Mumbai. So this sentimental man keeps having imaginary conversations with his deceased wife at odd times of the day.

These conversations are lively and project the bittersweet aspect of the story very well. But the script never ventures any further and ends abruptly with a monologue by the main character. The acting and music were good, but I wish there was more pathos to the storyline.


UP government robbing people at gun point
pramod kde
I was in still in college when I read of an issue where the UP government under Mayawati wanted to enhance the area around Taj Mahal with better facilities for tourists. But the plan was aborted as her scheme got mired in corruption. Rediff has an index of news reports from that era.

What I didn't know was that around the same time, there was a larger plan afoot to build an "expressway" between Noida and Agra, with townships around it. Mayawati's life long opponent Mulayam Singh was already calling it "the biggest land scam in UP". He sounds exactly like Deve Gowda and our NICE corridor in Bangalore.

This scheme (now renamed Yamuna Expressway, official site) suddenly started making front page news last week, when the farmers in that area launched big protests against aspects of the land acquisition process. While some want a bigger compensation, others do not want to sell. And of course, they are receiving support from some politicians. On Independence Day three people were killed by police firing.

After that, thousands of farmers descended on Delhi to protest. Check out this beautiful Zee News report.

Since this was a public-private partnership, the UP government was given the responsibility of land acquisition and private companies doing the construction. That has been recognized as unseemly, and none other than Rahul Gandhi has been asking the Prime Minister to consider revising the Land Acquistion Act. To understand all the machinations, read the analysis from the latest issue of Frontline.

The private company in this project is called JP Infra. They went public in May, and expect to double their income by 2012. You can either invest in them, or buy any one of their thousands of residential plots already available for sale at YamunaExpressway.Net. But their blurb could make you retch.

My Reminiscences - by Rabindranath Tagore
pramod kde

Just read this small book called "My Reminiscences". It is Rabindranath Tagore's desultory account of the first 20 odd years of his life, told with wry humour and great literary skill. There's a nice online version here.

My interest in Tagore was mainly due to some articles I'd read by historian Ramachandra Guha (like this one) where he praises his transnational outlook. In fact Guha has written the foreword to a new compilation of Tagore's lectures titled Nationalism. But I chose Reminiscences as I felt the author's own account of his formative years would be more gripping.

I was struck by what an extremely rich and highly literary household he grew up in. The children were always tended by a coterie of servants, and as they grew up they had the luxury to throw themselves into every artistic pursuit you can think of. Read this chapter called My Home Environment and be amazed.

After his Upanayanam his father took him along wherever his work took him (I never figured out what his occupation was). At one time they spent a few months in Dalhousie, where the young Tagore was taught by his father on a wide range of subjects - from Upanishads to astronomy. Again, you ought to read At the Himalayas to know what a charmed existence he led. The pattern continues into adulthood as he stayed with his brother in England, Karwar so on.

After finishing the book, I read up on his father. Debendranath was one of the founders of "Brahmo Samaj" and also extremely renowned for his spirituality. But the Wiki article doesn't explain the source of his wealth.

So on you move to his grandfather Dwarkanath (1796 - 1846), whose life is utterly fascinating. Though he inherited some estates after his father's death, he increased his wealth manifold.

Quoting from Wikipedia:
"Dwarkanath looked upon his investment in land as investment in any other business or enterprise and claimed what he deemed a fair return. In later years Dwarkanath would appoint European managers for his estates at Sahajadpur and Behrampore. He knew that the ryots were more amenable to the disciplinary control of British managers than their Bengali counterparts. In time Dwarkanath would convert his estates to integrated commercial-industrial complexes with indigo, silk and sugar factories. In the cut throat world of zamindari politics Dwarkanath took no nonsense and gave no quarter to either European or native.
played a pioneering role in setting up a string of commercial ventures -- banking, insurance and shipping companies -- in partnership with British traders
Tagore's company managed huge zamindary estates spread across today's West Bengal and Orissa states in India, and in Bangladesh, besides holding large stakes in new enterprises that were tapping the rich coal seams of Bengal, running tug services between Calcutta and the mouth of the river Hooghly and transplanting Chinese tea crop to the plains of Upper Assam. This company was one of those Indian private companies engaged in the Opium Trade with China. Production of opium was in India and it was sold in China. When the Chinese protested, the East India company shifted the business to the proxy of certain selected Indian companies of which this was one. Very large schooners were engaged in shipments. This made Dwarkanath extremely rich. And there are legends about the extent of it."

So there's our good friend the opium trade again.

In fact, another Wiki article on the Tagore family claims that "Rabindranath Tagore’s creative multiplicity or Debendranath Tagore’s spiritual pursuits were, to a considerable extent, made possible because of the foundations of leisure provided by Dwarakanath Tagore’s wealth."

Lazy People - play that needs more work ;)
pramod kde
Watched a play called Lazy People at K H Kala Soudha earlier today, staged by Pratikriyaa. It was an uneven performance - ranging from awfully stilted to very funny. I wasn't too let down because my friend Bharath and I had just walked into it on a whim.

The story is set in Bangalore and recession is in the air. Most of the protagonists are stupid and incompetent - the "lazy people" - but not without fanciful dreams of success. There's a young and unsuccessful author living off the help from his rich girlfriend and richer younger brother, but with only one chapter to show for three years of attempting a novel! Then a failed businessman pleading his financial analyst wife to fund his newest business venture, even as she keeps yelling at her house-husband for not being able to complete even the simplest of tasks correctly. A crooked chartered accountant is taken to task by his sincere sub-ordinate in the audit division of a bank...

Basically it's not hard to relate to the lifestyle and woes of these people, like when the girlfriend and her "gang" decide to try out this new restaurant on Church Street or two friends catch up at "Where else! Tirumala Bar daa". And that's what carries the audience along. The denouement comes via three bumbling bank robbers who easily make the last act the funniest, but otherwise the play is a tad too long with a running length of 2 hours.

The plot is novel enough (it's their first original production) and there are bright sparks of wit and chemistry. But these are badly hurt by many unnatural sounding dialogues acted out with great effort. For example in the first act I felt I was sitting in class and a teacher reading off lines from a textbook trying to mimic the effect of a play! Ironically, the most authentic portrayal of the city was the stylized speech of the RJ's on the radio in the background, a phenomenon that's notorious for being unnatural :)

Milking us for all we're worth :)
pramod kde
This story is another funny economics gem from today's Hindu - the chairman of the "Karnataka Milk Federation" shows how the federation always works against the interest of milk consumers.

Start with the tell tale headline: Reddy wants import of milk powder stopped. Take a second to grasp that G. Somashekara Reddy is actually one of the mining dons of Bellary, so he's not exactly bereft of business sense. And then admire his chutzpah: "Addressing presspersons here on Sunday, Mr. Reddy said that imported milk powder was being sold for Rs. 135 a kg as against Rs. 153 a kg of powder produced by local milk federations....He said that he would request the Chief Minister to write to the Union Government, explaining about the adverse impact of import of milk powder on the federations."

He doesn't even want to play nice with puny Goa: "Mr. Reddy said that he would discuss the issue of imposing tax on retail sale of milk from outside the State here. Goa had imposed tax on milk from KMF entering that State. According to him, imposition of tax would prevent sale of milk from other States in Karnataka."

Another nugget:"Procurement of milk, which was around 26 lakh litres a day in the State, had gone up to 41 lakh litres after the Chief Minister announced a subsidy of Rs. 2 per litre, he said."

Direct cash transfer of tax money to his constituents: "Mr. Reddy, on behalf of the Raichur, Bellary and Koppal (RBK) Milk Producers' Union, announced enhancement of 50 paise per litre of milk being procured. This will be effective from Monday."

But still this cartel is so profitable! "Yet, the union would make profits to the tune of Rs. 3 lakh a month, he said."


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