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An Economic History of Early Modern India

Author(s):Roy, Tirthankar
Reviewer(s):Chaudhary, Latika

Published by EH.Net (December 2015)

Tirthankar Roy, An Economic History of Early Modern India. New York: Routledge, 2013. x + 174 pp. $53 (paperback), ISBN: 978-0-415-69064-5.

Reviewed for EH.Net by Latika Chaudhary, Graduate School of Business and Public Policy, Naval Postgraduate School.

The literature on Early Modern India is characterized by debates surrounding the decline of the Mughal Empire, the rise of the East India Company and the timing of when India fell behind Europe. Despite strong claims on each side, the evidence underlying the arguments is often weak because of insufficient or unreliable economic data. Against this backdrop Tirthankar Roy’s book is a welcome addition to the field. It offers a measured assessment of the salient transitions in this important period of Indian history beginning with the death of the Mughal Emperor Aurangzeb in 1707 and ending in the early 1800s as the English East India Company came to control large territories including most of coastal India.

Drawing on an impressive reading of the primary sources and secondary literature, Roy’s analysis moves away from traditional debates surrounding colonialism and draws cautious conclusions about urbanization, living standards and agrarian conditions. His main argument is that political turmoil at the top between the different warring factions led to a general decline in public goods but did not substantially weaken peasant property rights. In India, many people could claim the final agricultural output ranging from military nobles and tax collectors at the top to landlords in the middle and finally peasants cultivating the land at the bottom. While states needed more public money to fund wars, Roy argues they were limited in their ability to coerce peasants because land was abundant and labor was scarce in the eighteenth century. In support he points to qualitative evidence of peasant communities moving and clearing forest for cultivation across many Indian regions. The available evidence on living standards also matches this account of peasant property rights. Based on a careful reading of the economic trends, Roy argues that agricultural production, crop yields and standards of living did not fundamentally change over the long eighteenth century.

Roy begins by describing the process of state formation as new successor states wrestled power from the Mughal Empire in the first half of the eighteenth century. Success was contingent on the ability of these states to improvise old, or devise, new fiscal structures that could extract necessary revenues to support the military campaigns. By the end of the eighteenth entry, the English East India Company emerged victorious signaling a fundamental break. Unlike former states, the Company employed its own standing army relying less on earlier forms of military-agriculture relationships with landlords and tax collectors. By eliminating such middlemen, the Company made tax collection more efficient.

As a successor state, the East India Company was also special because of its strong naval presence. This contributed to the coastal shift in business as the Company transitioned to a colonial state. Overland trade within India declined over this period as maritime trade increased.  That said, maritime trade accounted for only a tiny share of the economy. Some groups with inland interests lost, while others that successfully transitioned to working with European firms gained. Roy argues that this change in orientation is also reflected in urbanization patterns. Agra, Delhi and Lahore among other interior towns of the Mughal Empire declined as the coastal towns of Bombay, Calcutta and Madras came to dominate the urban landscape. The latter were new industry hubs, which was as important in accounting for their rise as their status as colonial company towns. That said, there was no long run urbanization trend. Old centers of production tied to the Mughal Empire experienced decline but, this was balanced by the rise of Bombay, Calcutta and Madras.

This book has much to recommend itself. A newcomer to Indian economic history will appreciate the military-political history of the eighteenth century successor states, the nature of military-agriculture interactions and the organization of agricultural production.  The chapters on urbanization and living standards are among the best I have read on the topic. They summarize the existing debates, describe the data and then draw sensible conclusions while acknowledging gaps in the literature. While general histories may overlook regional patterns, Roy gives the regional stories their due importance. My only quibble is the book shortchanges the story of the East India Company despite its presence in many chapters. The rise of the Company and its transition to colonial power deserves more attention. This book tells the story up to the early nineteenth century, by when it is clear that the East India Company will be dominant. Roy takes up the rest of the story in The East India Company: The World’s Most Powerful Corporation (New Delhi: Allen Lane, 2012).

Latika Chaudhary is an Associate Professor of Economics at the Graduate School of Business and Public Policy at the Naval Postgraduate School. She has studied the provision of primary education and railways in colonial India. Her articles include “Determinants of Primary Schooling in British India” published in Journal of Economic History and “Regulation, Ownership and Costs: A Historical Perspective from Indian Railways” (with Dan Bogart) published in American Economic Journal: Economic Policy.

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Subject(s):Economywide Country Studies and Comparative History
Geographic Area(s):Asia
Time Period(s):18th Century
19th Century