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India, Modernity and the Great Divergence: Mysore and Gujarat (17th to 19th C.)

Author(s):Yazdani, Kaveh
Reviewer(s):Wolcott, Susan

Published by EH.Net (July 2018)

Kaveh Yazdani, India, Modernity and the Great Divergence: Mysore and Gujarat (17th to 19th C.). Leiden: Brill, 2017. xxxi + 669 pp. $179 (hardcover), ISBN: 978-90-04-33078-8.

Reviewed for EH.Net by Susan Wolcott, Department of Economics, Binghamton University.

In India, Modernity and the Great Divergence, Kaveh Yazdani, currently at the Center for Indian Studies in Africa at the University of the Witwatersrand, attempts to find middle ground in the debate over India’s potential to industrialize in the late eighteenth century. In sketching out the opposite positions in the debate, Yazdani characterizes one group, a prominent member being Prasannan Parthasarathi (2011) as giving a “more or less exaggerated picture” of India’s comparability to Europe, and states that those of the other side “rather undervalue the sprouts of capitalist and industrial development” (p. 560). Tirthankar Roy (2013) is an exemplar of the second group. In contrast to these two poles, Yazdani finds significant “sprouts,” but also recognizes the limits facing early capitalist initiatives. His book details both the sprouts and the limits.

The book begins with an extensive review of the overall literature on India’s socio-economic potential before the British occupation, and then delves deeply into the literature on two of India’s most advanced precolonial areas, Gujarat and Mysore. Gujarat was under Mughal control for most of the period considered, until it became part of the Maratha Empire late in the eighteenth century. The Kingdom of Mysore was ruled independently first by Hyder Ali and then by his son, Tipu Sultan, until the latter was defeated and killed by British forces allied with the Nizam of Hyderabad in 1799.

This is an ambitious work. In addition to the thorough discussion of secondary sources, the author reviewed material in European archives, and the very limited remaining material from the Mysore Kingdom. At over 600 pages, it is also daunting. However, it is organized by subsections, such as: Military Establishment, Education, Foreign Relations, Caste, and the Status of Women. Thus it would be easy to read just the sections of interest. That is one potential use of the book, as Yazdani has produced a thorough, critical review of the literature organized thematically.

I enjoyed the book. The individuals populating Mysore and Gujarat in these years are fascinating characters, which makes good reading. The book is also a nice corrective to anyone who persists in believing that India before the British was ruled by uninformed despots, and populated by other-worldly spiritualists. Tipu Sultan in particular was very curious about his world, including the Europeans who were in India, and all things mechanical. The merchants of Gujarat were both as capable and as greedy as any in Europe.

Yazdani takes great effort to present both sides of every argument and attempts to keep a balance. I would still argue, however, that he presents too optimistic a view of India’s economic standing. Because of the lack of data, scholars examining this period either use European statistics, which largely pertain to European trade, or must argue through the evidence of anecdotes. The presence of actual data has a disciplining effect. There are multiple occasions where it appears Yazdani’s enthusiasm for his argument makes him willing to make too strong inferences based on limited information. Thus, to argue yields were as high in Mysore as in “advanced areas of Europe,” Yazdani relies on a few European travelers and soldiers who comment that the land is as prosperous as any they have seen in Europe. In a more extreme case, Yazdani notes Tipu Sultan invited European workmen to his kingdom to expand industry. The ruler later kept them there by force. He also forced prisoners of war to share technology. By the time he was killed, the factories were still run by Europeans. If this is “a path of semi-modernization,” it did not appear to be a propitious one. To take a final example, Yazdani argues that women were treated differently, but no worse in India than in Europe. His support for this is that women could hold property separately from their husbands in India, but not in England, as well as some comments of a Muslim traveler to Europe on European women requiring chaperones. I am uncomfortable with Yazdani’s conclusion. From the earliest available statistics in the mid-nineteenth century, it appears that marriage for women in India was universal and their age at the birth of their first child was about fifteen. Women left the house of their father and entered the house of their husband. Women were not employed outside of the house unless they worked alongside their husbands. Many married women were employed as spinners, as Yazdani writes, but there is no evidence they controlled the income from that activity. If so, it would be unlike the modern period. Women in England faced shocking legal restrictions. But many lived separate lives and controlled their own incomes. When we have data, those data indicate virtually no women in India did the same.

The question of India’s readiness for industrial development at the end of the eighteenth century cannot be fully resolved because there are almost no data. There are population data for 1600 for the immediate Moghul regions from the one volume of information on economic issues left from the empire, the Ain-I-Akbari, and no other data until the first British census. Wage data are limited to a few tiny scraps from either the Ain-i-Akbari, or the records of European factories. I believe all trade data come from either the British East India Company, Dutch East India Company (VOC), or Portuguese records. Price data are best, but are also limited to a few randomly left records, again, many from European sources. The lack of organized records must say something about the culture, which failed to keep an account of itself. Yazdani wants to argue that the policies of Haidar Ali and his son Tipu Sultan “manifest a historical juncture that was neither dominantly traditional nor modern, but resided in a transitory phase” (p. 286). He makes similar arguments for Gujarat. This is appealing. India was not England or Holland, but the most economically dynamic regions of India were, the argument goes, roughly similar to the less dynamic parts of Europe. Yazdani writes that a German missionary “compared Haidar Ali favorably to the Prussian King Fredrick the Great (1712-86)” (p. 176). Given that we believe that living standards were more similar before the Great Divergence than they are today, that comparison has some plausibility. But consider. There are a lot of data to assess the living standards of common people in Frederick’s Prussia. There are court records. Records left by landlords. There are letters, some dictated, left by the individuals themselves. It was not just central governments. European town governments, churches, firms, and individuals all made and kept detailed records (Hagen 2002). Despite guesswork in all other areas, we can be certain that early modern Europe was unlike early modern India in that characteristic. Yazdani allows himself to speculate at one point about what would have happened if the various Indian powers had acted cohesively and forced the British to leave India. Would any of the resulting Indian states have industrialized? More than anything else, the lack of systematic record keeping is what makes me doubt that India was as prepared as Europe to industrialize in 1800.


William W. Hagen, Ordinary Prussians: Brandenburg Junkers and Villagers, 1500-1840. Cambridge: Cambridge University Press, 2002.

Prasannan Parthasarathi, Why Europe Grew Rich and Asia Did Not: Global Economic Divergence, 1600-1850. Cambridge: Cambridge University Press. 2011.

Tirthankar Roy, An Economic History of Early Modern India. London: Routledge, 2013.

Susan Wolcott is Associate Professor of Economics at Binghamton University, Binghamton, NY. She researches the development of India. Previous work focused on labor markets before Independence. Current research focuses on the transition to formal banking post-Independence.

Copyright (c) 2018 by EH.Net. All rights reserved. This work may be copied for non-profit educational uses if proper credit is given to the author and the list. For other permission, please contact the EH.Net Administrator ( Published by EH.Net (July 2018). All EH.Net reviews are archived at

Subject(s):Economywide Country Studies and Comparative History
Geographic Area(s):Asia
Time Period(s):17th Century
18th Century
19th Century

The Anarchy: The East India Company, Corporate Violence, and the Pillage of an Empire

Author(s):Dalrymple, William
Reviewer(s):Tabarrok, Alex

Published by EH.Net (November 2019)

William Dalrymple, The Anarchy: The East India Company, Corporate Violence, and the Pillage of an Empire. London: Bloomsbury Publishing, 2019. 528 pp. £27 (hardcover), ISBN: 978-1635573954.

Reviewed for EH.Net by Alex Tabarrok, Department of Economics, George Mason University.

In The Anarchy, historian William Dalrymple recounts the remarkable rise of the East India Company from its founding in 1599 to 1803 when it commanded an army twice the size of the British Army and ruled over the Indian subcontinent. It’s an amazing story and Dalrymple tells it with verve and style drawing, as in his previous books, on underused Indian, Persian and French sources. Dalrymple has a wonderful eye for detail. After the Company’s charter is approved in 1600 the merchant adventures scout for ships to undertake the India voyage: “They have been to Deptford to ‘view severall shippes,’ one of which, the May Flowre, was later famous for a voyage heading in the opposite direction” (p. 10).

So how was a humble group of British merchants able to take over one of the great empires of history? The answer is found in the title. The Anarchy refers not to the period of British rule but to the period before that time. Under Aurangzeb, the fanatic and ruthless Mughal emperor (1658-1707), the empire grew to its largest geographic extent but only because of decades of continuous warfare and attendant taxing, pillaging, famine, misery and mass death. It was a classic case of the eventual fall of a great power through military over-extension. At Aurangzeb’s death in 1707, a power struggle ensued but none could command. “Mughal succession disputes and a string of weak and powerless emperors exacerbated the sense of imperial crisis: three emperors were murdered (one was, in addition, first blinded with a hot needle); the mother of one ruler was strangled and the father of another forced off a precipice on his elephant. In the worst year of all, 1719, four different Emperors occupied the Peacock Throne in rapid succession. According to the Mughal historian Khair ud-Din Illahabadi … ‘Disorder and corruption no longer sought to hide themselves and the once peaceful realm of India became a lair of Anarchy’” (pp. 31-32).

Seeing the chaos at the top, local rulers stopped paying tribute and tried to establish their own power bases. The result was more warfare and a decline in trade as banditry made it unsafe to travel. The Empire appeared ripe to fall. “Delhi in 1737 had around 2 million inhabitants. Larger than London and Paris combined, it was still the most prosperous and magnificent city between Ottoman Istanbul and Imperial Edo (Tokyo). As the Empire fell apart around it, it hung like an overripe mango, huge and inviting, yet clearly in decay, ready to fall and disintegrate” (pp. 36-37).

In 1739 the mango was plucked by the Persian warlord Nader Shah. Using the latest military technology, horse-mounted cannon, Shah devastated a much larger force of Mughal troops and “managed to capture the Emperor himself by the simple ruse of inviting him to dinner, then refusing to let him leave.” In Delhi, Nader Shah massacred a hundred thousand people and then, after 57 days of pillaging and plundering, left with two hundred years’ worth of Mughal treasure carried on “700 elephants, 4,000 camels and 12,000 horses carrying wagons all laden with gold, silver and precious stones” (p. 44).

At this time, the East India Company would have probably preferred a stable India but through a series of unforeseen events it gained in relative power as the rest of India crumbled. With the decline of the Mughals, the biggest military power in India was the Marathas and they attacked Bengal, the richest Indian province, looting, plundering, raping and killing as many as 400,000 civilians. Fearing the Maratha hordes, Bengalis fled to the only safe area in the region, the company stronghold in Calcutta. “What was a nightmare for Bengal turned out to be a major opportunity for the Company. Against artillery and cities defended by the trained musketeers of the European powers, the Maratha cavalry was ineffective. Calcutta in particular was protected by a deep defensive ditch especially dug by the Company to keep the Maratha cavalry at bay, and displaced Bengalis now poured over it into the town that they believed offered better protection than any other in the region, more than tripling the size of Calcutta in a decade. … But it was not just the protection of a fortification that was the attraction. Already Calcutta had become a haven of private enterprise, drawing in not just Bengali textile merchants and moneylenders, but also Parsis, Gujaratis and Marwari entrepreneurs and business houses who found it a safe and sheltered environment in which to make their fortunes” (pp. 73-74). In an early example of what might be called a “charter city,” English commercial law also attracted entrepreneurs to Calcutta. The “city’s legal system and the availability of a framework of English commercial law and formal commercial contracts, enforceable by the state, all contributed to making it increasingly the destination of choice for merchants and bankers from across Asia” (p. 74).

The Company benefited by another unforeseen circumstance, Siraj ud-Daula, the Nawab (ruler) of Bengal, was a psychotic rapist who got his kicks from sinking ferry boats in the Ganges and watching the travelers drown. Siraj was uniformly hated by everyone who knew him. “Not one of the many sources for the period — Persian, Bengali, Mughal, French, Dutch or English — has a good word to say about Siraj” (p. 82). Despite his flaws, Siraj might have stayed in power had he not made the fatal mistake of striking his banker. The Jagat Seth bankers took their revenge when Siraj ud-Daula came into conflict with the Company under Robert Clive. Conspiring with Clive, the Seths arranged for the Nawab’s general to abandon him and thus the Battle of Plassey was won and the stage set for the East India Company. Many further battles and adventures would ensue before the British were firmly ensconced by 1803 but the general outline of the story remained the same. The EIC prospered due to a combination of luck, disarray among the Company’s rivals and good financing.

The Mughal emperor Shah Alam, for example, had been forced to flee Delhi leaving it to be ruled by a succession of Persian, Afghani and Maratha warlords. But after wandering across eastern India for many years, he regathered his army, retook Delhi and almost restored Mughal power. At a key moment, however, he invited into the Red Fort with open arms his “adopted” son, Ghulam Qadir. Ghulam was the actual son of Zabita Khan who had been defeated by Shah Alam sixteen years earlier. Ghulam, at that time a young boy, had been taken hostage by Shah Alam and raised like a son, albeit a son whom Alam probably used as a catamite. Expecting gratitude, Shah Alam instead found Ghulam driven mad. Ghulam took over the Red Fort and cut out the eyes of the Mughal emperor, immediately calling for a painter to immortalize the event.

As late as 1803, the Marathas too might have defeated the British but rivalry between Tukoji Holkar and Daulat Rao Scindia prevented an alliance. “Here Wellesley’s masterstroke was to send Holkar a captured letter from Scindia in which the latter plotted with Peshwa Baji Rao to overthrow Holkar … ‘After the war is over, we shall both wreak our full vengeance upon him.’ … After receiving this, Holkar, who had just made the first two days march towards Scindia, turned back and firmly declined to join the coalition” (p. 367).

Overlaid on top of luck and disorder, was the simple fact that the Company paid its bills. Indeed, the Company paid its sepoys (Indian troops) considerably more than did any of its rivals and it paid them on time. It was able to do so because Indian bankers and moneylenders trusted the Company. “In the end it was this access to unlimited reserves of credit, partly through stable flows of land revenues, and partly through collaboration of Indian moneylenders and financiers, that in this period finally gave the Company its edge over their Indian rivals. It was no longer superior European military technology, nor powers of administration that made the difference. It was the ability to mobilize and transfer massive financial resources that enabled the Company to put the largest and best-trained army in the eastern world into the field” (p. 329).

Dalrymple has written a history with only the occasional implicit analysis. He seems particularly incensed at “corporate violence” and in a (mercifully short) final chapter alludes to Exxon and the United Fruit Company. It is an interesting question to ask: How might the actions of these corporate raiders have differed from those of a state? It’s not clear, for example, that the EIC was any worse than the average Indian ruler and surely these stationary bandits were better than roving bandits like Nader Shah. (See Mancur Olson 1993 on the distinction.) The EIC may have looted India but economic historian Tirthankar Roy (2012, p. 215) explains that: “Much of the money that Clive and his henchmen looted from India came from the treasury of the nawab. The Indian princes, ‘walking jeweler’s shops’ as an American merchant called them, spent more money on pearls and diamonds than on infrastructural developments or welfare measures for the poor. If the Company transferred taxpayers’ money from the pockets of an Indian nobleman to its own pockets, the transfer might have bankrupted pearl merchants and reduced the number of people in the harem, but would make little difference to the ordinary Indian.”

Moreover, although it began as a private-firm, the EIC became so regulated by Parliament that Hejeebu (2016) concludes, “After 1773, little of the Company’s commercial ethos survived in India.” Certainly, by the time the brothers Wellesley were making their final push for territorial acquisition, the company directors back in London were pulling out their hair and begging for fewer expensive wars and more trading profits.

Although short on analysis, economic historians and readers will find in The Anarchy a page-turning history of the rise of the East India Company with plenty of raw material to enjoy and to think about.


Santhi Hejeebu. 2016. “The Colonial Transition and the Decline of the East India Company, c. 1746-1784.” In A New Economic History of Colonial India, edited by Latika Chaudhary, Bishnupriya Gupta, Tirthankar Roy, and Anand V. Swamy. Routledge.

Mancur Olson. 1993. “Dictatorship, Democracy, and Development.” American Political Science Review 87 (3): 567–76.

Tirthankar Roy. 2012. The East India Company: The World’s Most Powerful Corporation. Penguin Books India.

Alex Tabarrok is Bartley J. Madden Chair in Economics at the Mercatus Center at George Mason University. He is the author (with Shruti Rajagopalan) of “Premature Imitation and India’s Flailing State,” The Independent Review (Fall 2019).

Copyright (c) 2019 by EH.Net. All rights reserved. This work may be copied for non-profit educational uses if proper credit is given to the author and the list. For other permission, please contact the EH.Net Administrator ( Published by EH.Net (November 2019). All EH.Net reviews are archived at

Subject(s):Business History
Economywide Country Studies and Comparative History
Military and War
Geographic Area(s):Asia
Time Period(s):17th Century
18th Century
19th Century

Symbols of Trade: Roman and Pseudo-Roman Objects Found in India

Author(s):Suresh, S.
Reviewer(s):Ray, Himanshu Prabha

Published by EH.NET (May 2005)

S. Suresh, Symbols of Trade: Roman and Pseudo-Roman Objects Found in India. New Delhi: Manohar, 2004. 206 pp. Rupees 525 (hardback), ISBN: 81-7304-552-6.

Reviewed for EH.NET by Himanshu Prabha Ray, Centre for Historical Studies, Jawaharlal Nehru University.

This book presents a survey of Roman and “pseudo-Roman” antiquities found in India, such as coins, ceramics, jewels, glassware, etc. with the objective of re-evaluating Indo-Roman contacts. The author, S. Suresh, is a post-doctoral fellow at the Sudharsanam Centre for Arts, Pudukkottai, Tamilnadu and the volume under review draws from his doctoral thesis on which he worked from 1987 to 1991. The three main chapters focus on what the author implicitly accepts, though does not clearly define, as symbols of trade, i.e. Coins, Ceramics and Other Objects and these chapters are preceded and followed by a Prologue and Epilogue. In addition, three appendices list Roman coin finds in India, Rouletted Ware finds in India and Amphorae finds in India. Thus the book is visualized primarily as a catalogue of Roman coins and supposed Roman ceramics, but even within these selective indicators of trade, the scope of the book is further restricted to India and precludes Sri Lanka and Southeast Asia or sites such as Berenike on the Red Sea coast from its ambit. Nor does the author explain the reasons for his choice of material artifacts as ‘Symbols of Trade,’ with the result that the meager database fails to address issues relating to maritime trade or Indo-Roman trade as the author defines it.

Roman coins found in India date from second/first centuries BC to the fifth century AD and there are nearly 170 recorded finds spread over 130 sites, with a concentration in the Krishna valley in Andhra and the Coimbatore region in Tamilnadu. Counter-marking with local symbols and the slashing or defacement of coins characterize Roman coins found in peninsular India and marks them apart from those found elsewhere in the world. The distribution pattern of these coins is significant, as few have been found in archaeological excavations. In contrast, Roman coins occur as hoards in peninsular India, but differently in the Pakistan-Afghanistan region, where they are found in ritual Buddhist stupa deposits.

Starting with a paper by Robert Sewell in 1904, these coins have been used as indicators of Roman trade with India and the work under review is no exception. It re-states the position that Roman coins could only have reached India as a result of Roman trade and that recent finds of Republican coins indicate that this trade commenced in the late second century BC. In the first century AD the volume of trade was large and in precious goods, while from the end of first century AD it was confined to non-luxury items — hence finds of late Roman copper coins in India. There is no explanation for the concentration of Roman coins in Andhra, a region which finds only superficial mention in the first century AD Greek text, the Periplus Maris Erythraei, or the reasons for the unique distribution pattern in India. How is the presence of Roman coins in the ritual context of the Buddhist stupas to be explained?

In Chapter III the author refers to the two imported ceramics, viz. terra sigillata and amphorae, but accepts that the Rouletted and the Red Polished Wares were of local manufacture, though in the 1950s these had also been regarded as imports. Rouletted Ware shards have been found at more than one hundred sites in India and forty-six of these sites are in Andhra. This distribution pattern of the Rouletted Ware needs explanation especially since it coincides with the concentration of Roman coin finds at sites in the Krishna valley in Andhra. But no explanation is forthcoming in the book nor is the distribution pattern analyzed. Instead the discussion continues to treat Rouletted Ware as an import indicating “Romans apparently traveled in India, from the coast to the interior, crossing the rivers in canoes” (p. 93).

The interpretation of material artifacts, such as coins or ceramics, as indicators of the ethnicity of trading groups, with little discussion of either their context or changes in their use over time is problematic. Several objects found in Gujarat have been cited as evidence for Roman trade – such as amphorae fragments from several sites, Roman coins, a bronze handle from Akota now in the Baroda Museum dating to 50 -100 AD and ceramics such as the Red Polished Ware. It is significant that of the fifty-five sites where fragments of Dressel 2-4 amphorae have been found, twenty-five are in Gujarat and thirteen of these are clustered around Junagarh.

The area around Junagarh provides a fertile stretch and formed a core region for economic activity in the early period, but was also the location for royal inscriptions and religious shrines. Other find-spots of amphorae shards include coastal centers such as Dwarka, Somnathapattana, Nagara and Valabhi, among others. Sites such as Valabhi developed into political centers by the middle of the first millennium AD. In contrast, others like Somnathpattana and Dwarka were sacred pilgrim centers of great sanctity. At Somnathpattana archaeological evidence of historical settlement dates to the fourth century BC, but religious structures, such as the Hindu temple, emerge in the fifth or sixth centuries AD. Thus, clearly, ‘imports’ need to be contextualized within the parameters of patterns of distribution and consumption.

Writing in 1954, Mortimer Wheeler made a distinction between terminal trade and transit trade between India and the West based on data from Arikamedu in Tamilnadu and Begram in Afghanistan (R.E.M. Wheeler, Rome beyond the Imperial Frontiers, London: G. Bell & Sons). In the case of Arikamedu, the conclusions were based on his excavations at the site, while the information from Begram was derived from valuable articles, such as Chinese lacquer boxes, Graeco-Roman statuettes in bronze, collection of fine Roman glass, Graeco-Roman vessels of porphyry and alabaster and an extraordinary collection of plaster casts taken from metalwork discovered in two storerooms at the site. Found together with these was a hoard of superb Indian ivories, now distributed between the museums of Kabul (?) and the Guimet in Paris and extensively studied by several scholars. Thus it is intriguing that without any discussion on the nature of trade, Suresh concludes “The origin of trade coincided with the emergence, for the first time ever in south India, of a series of ‘states’ or ‘kingdoms’ each with its own distinct administrative and judicial systems” (p. 155).

In view of the discriminatory use of secondary sources, the author’s repeated statement that he is the first to catalogue coins, ceramics or other objects and that no such work has been done earlier (pages 19, 123) can at best be termed inexplicable. Contrary to assertions made in the Prologue, the objective of the book seems less to present an alternative hypothesis based on analysis of available material, but more to somehow fit the data into the current model of Indo-Roman trade as ushering in social change in south India propounded by Mortimer Wheeler in 1946 and accepted by historians. Another curious aspect is the choice of the theme itself and the author’s attempt at re-examining archaeological data with little or no training in archaeology, as a result, even the basic principle of archaeology, such as using a scale while photographing antiquities is not followed. In conclusion, when doctoral dissertations are turned into books especially after more than a decade, as is the case with the volume under review, care should be taken not only to revise the data, but also to bring it up to date with current writings.

Himanshu Prabha Ray has degrees in Archaeology, Sanskrit and Ancient Indian History and teaches at the Centre for Historical Studies, Jawaharlal Nehru University, New Delhi. Her books include The Winds of Change: Buddhism and the Maritime Links of Early South Asia, New Delhi: Oxford University Press, 1994; Tradition and Archaeology: Early Maritime Contacts in the Indian Ocean (edited with J.-F. Salles), New Delhi: Manohar Publishers, 1996; The Archaeology of Seafaring in Ancient South Asia, Cambridge: Cambridge University Press, 2003; and Archaeology as History in Early South Asia, (edited with Carla Sinopoli) New Delhi: Aryan Books International, 2004.

Subject(s):International and Domestic Trade and Relations
Geographic Area(s):Asia
Time Period(s):Ancient

On the Border of Economic Theory and History

Author(s):Bhaduri, Amit
Reviewer(s):Frost, Marcia J.

Published by EH.NET (May 2001)

Amit Bhaduri, On the Border of Economic Theory and History. New Delhi:

Oxford University Press, 1999. 197 pp. $27.50 (cloth), ISBN: 0-19-564901-X.

Reviewed for EH.NET by Marcia J. Frost, Department of Economics, Grinnell


Amit Bhaduri, Professor of Economic Studies and Planning, Jawaharlal Nehru

University (New Delhi), is a prolific author whose work may be familiar to

readers of the Cambridge Journal of Economics, the Economic

Journal, and the Indian Economic and Social History Review. On

the Border of Economic Theory and History is a compilation of ten essays

organized into two sections. All but one of the five “Essays on Traditional

Agriculture” were previously published in English between 1986 and 1993. Three

of the “Essays on Capitalism” were written for this book; two were previously

published in unidentified French and Turkish journals. Most essays are

followed by a short bibliography, and there is a seven-page keyword and person


The five “Essays on Traditional Agriculture” all share a common ideology,

theme and method. The former is clearly indicated by the essay titles: “A

Study in Agricultural Backwardness under Semi-Feudalism,” “The Evolution of

Land Relations in Eastern India under British Rule,” “Class Relations and the

Pattern of Accumulation in an Agrarian Economy,” “Forced Commerce and Agrarian

Growth,” and “Economic Power and Productive Efficiency in Traditional

Agriculture.” Bhaduri’s common theme focuses on what he alternatively terms

semi-feudal, underdeveloped or traditional agriculture which he characterizes

by the exploitation of agricultural workers (who hold little or no land) by

the landed class through sharecropping and usurious credit arrangements.

According to Bhaduri, because the landlord-cum-moneylender earns income

(extracts surplus) both from his share of the agricultural output and the high

interest on consumption loans he extends his sharecroppers, the landlord has a

reduced incentive to encourage the adoption of technological improvements in

agriculture. Technological innovation, by increasing the income of

sharecroppers, reduces borrowing to meet consumption needs and thus reduces

the landlord-cum-moneylender’s income from his credit extension activities. If

the reduction in interest income exceeds the increase in crop share income,

the landlord-cum-moneylender will not innovate, and agricultural progress

will be stymied. In addition Bhaduri argues there are no gains from trade for

the exploited, since sharecroppers are coerced by their usurious credit

agreements to sell their share at harvest when prices are low and then buy

months later when prices are high and credit must again be sought.

Bhaduri’s theoretical exercises are thorough and, given his assumptions, his

conclusions are reasonable. What’s lacking, however, is empirical backing of

his basic assumptions, empirical testing of his models and concreteness in

time and space. Why is it that only landlords are agents and sharecroppers are

precluded from innovation in his model? Where is the empirical evidence of the

reasonableness of this fundamental assumption of his models? Who comprises the

landlord class and is class an appropriate characterization of post-zamindari

agrarian relations in Bengal, let alone elsewhere in India?

The second set of “Essays on Capitalism” shares no common theme beyond

Bhaduri’s concluding statement “Lying on the border of ‘theory’ and ‘history’,

economic analysis cannot escape the influence of the arbitrary initial

conditions inherited from history” (p. 189). The first of these essays “Why

Factories?” examines the tension of cooperation and conflict between modes of

production as labor productivity enhancing investments shifted production from

home to factory. It’s an interesting essay and reminds us of the

interdependence of both modes of production for long periods of time. In “Some

Lessons from the Two Economic Systems” Bhaduri explores why socialist systems

collapsed at the end of the twentieth century, and tells a now common story of

the failure of labor productivity to rise in the long run and the rigidity of

a system without political and economic mechanisms to self-correct. In “The

Political Economy of Social Democracy” his goal is to explain the evolution of

economic ideology as political institutions have changed through the expansion

of universal suffrage, the adoption of full-employment and welfare

Keynesianism, and open trade has made “the autonomous conduct of economic

policies by the nation-state, not only difficult, but also exceptionally

risky” (p. 157). “Dangers and Opportunity of Globalization for Developing

Countries” briefly traces the dismantling of regulations on international

capital flows and argues for IMF flexibility as developing nations face acute

difficulty in meeting international payment obligations. His final essay

“Reflections on the Economic Role of the Transformational State” reflects on

the important role the state played in the evolution of market economies and

must play in transition economies in defining rules and providing public


Marcia Frost is Assistant Professor of Economics at Grinnell College and

author of “Coping with Scarcity: Wild Foods and Common Lands: Kheda District

(Gujarat, India), 1824/5,” The Indian Economic and Social History

Review 37:3 (2000).

Subject(s):Economywide Country Studies and Comparative History
Geographic Area(s):Asia
Time Period(s):General or Comparative

The Trading World of Asia and the English East India Company, 1660-1760

Author(s):Chaudhuri, K. N.
Reviewer(s):Hejeebu, Santhi

Project 2000: Significant Works in Twentieth-Century Economic History

K. N. Chaudhuri, The Trading World of Asia and the English East India Company, 1660-1760. Cambridge: Cambridge University Press, 1978.

Review essay by Santhi Hejeebu, Department of Economics, University of Iowa.

Asia in the Making of the K. N. Chaudhuri’s East India Company, 1660-1760

The Trading World of Asia and the English East India Company reveals the monumental importance a single, long-lived organization can have on world history. Between 1600 and 1858 the East India Company operated mostly as a commercial enterprise, but in its last century it also became a territorial ruler. Chaudhuri’s book covers the long era of the Company’s commercial maturity, 1660-1760. The East India Company’s goals were simple: buy low in the East and sell high in the West. At its most basic level the Company was a great shipping concern that rented its fleets and owned its cargos of pepper, textiles, coffee, and tea. The Company straddled the major trading centers of Asia and the British capital, bringing together the talents of artisan-cultivators and the tastes of final consumers.

Mainstream economic history is still coming to grips with the importance of Asia and the history of economic growth outside of European frames of references. Through the lens of a single organization one sees the effects of monetary expansion (American silver) on trade flows and the development of bureaucratic multinational machinery. One also observes the unfolding of colonial conquest and the peculiar results that emerge when market power is wedded with political power. The Honourable Company has beguiled writers since the eighteenth century and the secondary literature alone would constitute a considerable library. But no future investigator of the East India Company or its complicated legacy will be able to progress far without engaging Chaudhuri’s “magisterial” (Raychaudhuri 1980, 433) Trading World of Asia.

Chaudhuri was the first to analyze the Company as a principally commercial enterprise. He first trained as a classicist and commands Sanskrit, Latin, and Greek, plus four European and at least two South Asian languages. His linguistic prowess made accessible to him the records of all the major European groups who traded with South Asia. In shifting to the early modern period, Chaudhuri displayed his distinct mathematical bent and brought a new formalism to the topic.

Trading World of Asia places Chaudhuri in the tradition of W.R. Scott (1910), the distinguished analyst of English chartered companies of the seventeenth century (1). It has been said that Chaudhuri did for the East India Company what Kristoff Glamann did for the Dutch East India Company (VOC), Ralph Davies for the Royal African Company, and E.E. Rich for the Hudson’s Bay Company — that he performed the role of Company historian, defender and critic. Chaudhuri’s authority, like those of the other Company historians, rests on his command of the source material. The sheer magnitude of the East India Company materials makes its comprehensive history extraordinarily difficult to achieve. Furthermore Chaudhuri brings to the subject an intimate knowledge of the regions in which the trade goods were acquired. He understood his Asian input markets — their language, history, and customs — better than historians of other chartered companies understood their overseas markets. His analytic approach, his enormous devotion to the sources, and his understanding of the very different societies joined by trade make the Trading World of Asia a most remarkable achievement.

The book’s objectives are threefold: 1. to reconstruct “the Company’s own history for the period from 1660-1760” 2. to analyze “the economic life of those countries in Asia where the Company had established trading relations” and 3. “to discover through the records and the activities of the East India Company the general problems of long-distance trade in pre-Industrial Revolution societies” (p. xv-xvi).

As Company history, Trading World of Asia provided a fresh perspective. In contrast to earlier treatments that emphasized the Company’s role as a vehicle for British imperial aims (2), Trading World of Asia gazed unflinchingly at the structure of the Company’s organization and its decision-making process — at home and abroad. Using a systems analysis approach, Chaudhuri tells how the firm worked. Tasks were divided among seven committees that reported to the Court of Directors. The Court was made up of 24 directors who were elected annually by the General Court of Proprietors. He explains the specialized duties of the committees in London and the Presidency-factory system in place across Asia.

For each institutional unit within the firm, Chaudhuri identifies its access to information and its generation of specific decision-variables. He also identifies the time lags involved between one “subsystem” of the Company and another. For example, to decide how much bullion was required to fill the current order lists, the Directors would need to know the amount of cash reserves on hand at the Presidencies. Delays in receiving such information would likely result in an over or under allocation of funds, implying less or more reliance on Indian capital markets. The Directors would face this problem year in and year out. The recurrent nature of the problem would over time encourage them to establish decision-rules for minimizing the discrepancy. Institutionally this would link transactions in the Treasure Committee with those in Asian Presidencies and ultimately with those in the Accountant General’s Department. In terms of Chaudhuri’s model, this would illustrate the interaction between subsystem I (London) and subsystem II (Asia) and then between subsystem II (Asia) and subsystem III (London). By mapping decision-variables and information flows to specific units, Chaudhuri formalizes the management structure into a “trading model.” The technique gives him a global view of the Company’s operations and leads him to conclude that “the economic success of the East India Company was in large measure the result of a systematic process of decision-making, communication, and control.” (p. 33).

The Company history extends through a description of the pattern of commercial settlements in Asia as Chaudhuri describes the various methods of acquiring goods. In Bengal a system of brokers and middlemen was used to contract textile production, while in China goods were purchased onboard ships commanded by supercargoes. He provides quantitative analysis on the long-term fluctuations in the volume of imports and exports and in the “terms-of-trade.” He describes the politics of foreign trade in Mughal India, the Company’s pursuit of trading privileges and the private trade of the Company’s servants. The shipping schedule, the export of treasure — nearly every aspect of trade with Asia is addressed. As Company history, the work is “detailed and definitive” (Prakash 1980, 139).

The second objective is more ambitious than the first. Chaudhuri hoped to analyze the economies of Asia that traded with the Company. This would include the “Arab world, the Persian Empire, the Mughal dominions, South East Asia, and China” (p. 55). Given the heterogeneity of these economies and the constraints of space, it is not surprising that his discussion is truncated to the specific markets in which the Company operated. His subsequent works Trade and Civilization in the Indian Ocean (1985) and Asia before Europe (1990) however are not Company-centric and greatly illuminate the study of comparative Asian history.

Still Trading World of Asia makes important contributions in specific areas of Asian economic history, namely in dispelling the van Leur thesis and in the study of the Indian textile industry in the seventeenth and eighteenth centuries. In his 1955 classic Indonesian Trade and Society, J.C. van Leur characterized the Asian merchants as peddlers and Asian trading ports as overburdened with a multiplicity of currency, weights, measures, and customs. The overall picture is one of small-scale traders eking out a living in the face of crippling transactions costs. Van Leur’s thesis went unchallenged for decades and was crucial to Niels Steensgaard’s 1973 study of the decline of the trans-Eurasian caravan trade.

Chaudhuri contextualizes van Leur’s argument. He shows how the peddler characterization depends on a selective use of Dutch sources, the diary of a single Armenian merchant, and a handful of travelers’ accounts. Chaudhuri counters that the type of Indian merchant most often discussed in Dutch and English company sources resembles “the Indian equivalent of the Medici family, or Fuggers, and the Tripps” (p. 138). As for the nature of Asian trade centers, Chaudhuri points out that a multiplicity of weights, measures, and regulations was common in European cities as well. More importantly, Chaudhuri argues that however large the European companies were relative to their Asian counterparts, they were never substantial enough to “command the market” (p. 139) without resort to violence. Later substantiated by empirical research, Chaudhuri’s argument did much to undermine the then prevalent misconceptions about the nature of Asian merchants communities (3).

A second major contribution to Asian economic history is the astute analysis of the Indian textile industry of the period. Chaudhuri describes the four major regions of India (Punjab, Gujarat, Coromandel Coast, and Bengal) that specialized in the production of cloth for export. He explores the organization of the industry, including the very high degree of specialization of labor and the role of merchants in financing the different stages of production and marketing the finished products. He also explains the juridical tradition that gave rise to the system of commercial advances common in the period. After exploring the cost structure of handicraft production he considers the impact of European purchases of textiles on the wages of weavers. The a priori expectation that wages would rise in the face of growing international demand is complicated by the fact the sources speak almost categorically of the impoverished state of the weaver. The discussion of Indian textile producers raises, if not fully answers, many important questions. Finally, he addresses the issue of technological stagnation. Indian textile output increased over the eighteenth century not by process innovation but by the expansion of the labor force (and implicitly the replication of specialized human capital). Chaudhuri argues that workmen in India lacked economic incentives to shift to capital-intensive techniques so long as the appropriation of producer surplus remained acute. He writes, “Specialization had gone so far that it would have required very great incentives to induce such men to change their production methods and habits drastically” (p. 275). Morris Morris described Chaudhuri’s “analysis of production and marketing activities in Asia,” as “by far the best available” (1980, 390).

The third objective of the book is to identify the “general problems of long-distance trade in pre-Industrial Revolution societies” (p. xvi). Chaudhuri does this by exploring the role of the monsoon winds and the techniques used to minimize shipping expenses (pp. 71-4, 193, 201-2, 330) and by examining the persistent communication and control problems within the Company (pp. 32-3, 74-7, 208-213, 298-9, 302). The problem of forecasting future demand and determining which commodities in what quantities should be ordered(pp. 278-81, 299-305, 331-2) would also fall under the rubric of “general problems of long-distance trade.” Unfortunately, Chaudhuri does not bring these and other recurrent challenges under a single heading. They jointly constitute one of the unifying themes of the book, yet the problems are scattered across many chapters, in many differing contexts. This is a weakness in the organization of the theme and not in the sophistication with which Chaudhuri handles it. A careful reader will find all the elements there.

As Chaudhuri admits, his method of analysis can be disorienting. “The methodology adopted was exceptionally complex, though not by itself but because of its combinations. It is easier to say what the book is not than to say what the book is. It is not true narrative history. It is not pure economic analysis, nor is it economic history in the conventional sense” (Chaudhuri 1983, 10). He uses neoclassical economic analysis and yet borrows insights from Polanyi and Marx. The influence of Braudel, quite marked in Chaudhuri’s later works, can be traced here. Trading World of Asia situates the Company primarily in terms of its economic activities (the markets which it engaged). It also emphasizes the physical or geographic space (the Asian littoral) and the cultural space (the language, customs, and mentalit? of the directors, their agents, Asian merchants, and even the Mughal aristocracy) the Company occupied. To this Chaudhuri reiterates the importance of time, investment cycles, monsoon season, harvest season, and the arrival and departure of ships. His ability to discern almost at once the many dimensions of cross-cultural, transcontinental exchange makes the Trading World of Asia a methodological hybrid.

Systems analysis receives prominent attention. He writes of the Company as a trading system, one in which the decision-rules employed by management can be mapped to a sequence of physical inputs and outputs, suggesting the Company operated like an engine. Systems analysis enables him to test statistically a series of hypotheses, such as “average costs are a decreasing function of the volume of trade, the cost price of goods, and of time, with an associated level of fixed costs” (p. 486).

The approach looks rather alien to those who learned industrial organization from Tirole (1989) or Stigler (1968) a generation earlier. It is not typically taught in economics or in history departments though it is widely used in information systems management and environmental engineering. System analysis requires the investigator to redefine structural and functional relationships on a firm-by-firm basis. What surprises (and annoys) the economist is the absence of a theory of the firm. The cost functions in Appendix 3 are hypotheses relating costs to accounting and physical variables. They do not imbibe the idea that costs functions arise from production functions and must include opportunity costs.

Can systems theory be useful to economic history? Certainly. It requires a much lower level of abstraction than conventional microeconomics and can be particularly useful when a researcher needs to make a detailed plan of a complex organization. This is precisely the sense in which computing professionals in the business world use the theory. The emphasis on information flows and functional relations across different subsystems can help organize data-gathering efforts. And this is precisely how the theory was useful to Chaudhuri. Chaudhuri (1983, 14) writes, “The historical material was collected and analysed with very strict adherence to the concept of the model. The exposition was then ‘translated’ into the idiom of historians.” The gargantuan task of synthesizing the thousands of volumes of records pertaining to the Company over the period indeed required a coherent approach embedded in a structural model of the Company’s various operations.

The drawback to systems theory is that it is a static model of the organization and it therefore offers no guidance on how to ask the deeper questions about efficiency or organizational change. Writes Chaudhuri, “For a model cannot without destroying itself take account of the passage of time which affects its structural boundaries and parameters” (p. 41). Theories of institutional change are of fundamental concern and those that are not amenable to changes over time appear to have little explanatory power. Thus while useful as an organizing heuristic, systems analysis seems rather unlikely to yield insights regarding organizational change.

Beyond systems analysis and econometric estimation, much of the book uses a traditional narrative approach. His presentation of the Company’s overall financial position, for example, is alive with illustrative examples, contextualized by contemporary opinion, and balanced by principles of modern accounting. One reviewer considered such treatment as “a model of how “Old” and “New” methods of economic history can be fruitfully combined” (Ambirajan 1981, 79). Chaudhuri’s six chapters on individual commodities also move smoothly between general and specific, between theory and evidence. One of the book’s “special virtues,” as Curtin (1980, 508) rightly says is “the way in which [Chaudhuri] maintains a counterpoint between central aggregates and the intimate detail.”

The most long-lasting contribution of the book is the stunning amount of quantitative data on commodities and specie flows between Britain and Asia. Appendix 5 provides the annual time series for nearly a dozen commodities originating from six locations — representing a fraction of the 400 tables originally produced. Chaudhuri’s research involved tracking more than 91 different textiles, 7 types of tea, and 30 other commodities imported into London. On the export side, he followed the course of 12 products plus treasure. By following the order lists and invoices of literally every Company ship between 1660 and 1760, he and his assistants made available data that had been scattered across hundreds of volumes of financial records and thousands of volumes of correspondence. Clive Dewey wrote that Trading World of Asia “represented the work of a lifetime, not only — or even mainly — in the sense that it took a significant proportion of [the author’s] working life to write, but in the sense that such a book is only likely to be written once in a lifetime” (Chaudhuri 1983, 11). Ten productive years of archival work (involving English, French, Dutch, Belgain sources) went in to the production of Trading World of Asia and that staggering effort alone will ensure its longevity.

The book influenced numerous literatures within economics and history. Chaudhuri’s emphasis on the efficiency of the East India Company resonates in the literature on the origins of the multinational organization and on the character of the English chartered companies. While Chaudhuri used systems theory, others (Anderson et. al. 1983 and Carlos and Nicholas, 1988) have employed transactions cost analysis, agency theory, and Chandlerian analysis of firm structure to argue that the East India Company was an organizational innovation on par with a modern multinational firm such as General Motors. They emphasize the efficacy of the firm’s internal operations as its main commercial legacy. They de-emphasize the firm’s imperial legacy. Other studies by contrast have highlighted the significance of “merchant empires” to European expansion. These works have also drawn on Chaudhuri’s insights.

The contribution of Trading World of Asia to the study of the foreign impact on the Indian economy has also been fruitful. Most notably, Chaudhuri’s argument that India’s, and in particular Bengal’s, textile production increased through an expansion of employment has resulted in several important monographs. Om Prakash (1985) builds directly on the claim by asking how much did Bengal’s employment rise as a result of European demand for textiles. His qualified answer: about 10%. Numerous studies have focused on the economic dislocation experienced by weavers and other groups connected with the Company’s trade. From the perspective of the Mughal ruling classes it was certainly difficult, if not impossible, to separate the Company’s commercial purposes from its political ones. For example, in dealing with Asian powers, the Company, Chaudhuri explains, had every incentive to present itself as having the delegated power of the British Crown. In the Indian economy, the East India Company employees insisted on special treatment and trading privileges.

This brings us back to indigenous commerce. Chaudhuri effectively utilizes European archival sources to discern the contours of Asian trades and traders. In this way Trading World of Asia contributed to the growth of Indian Ocean studies such as Das Gupta and Pearson (1987) in which the European chartered companies are viewed as one among many participants in the emporia trade. Chaudhuri’s later books (Trade and Civilization and Asia before Europe) take a long view of the structure of Indian Ocean commerce and the merchants involved. These works have helped replace Van Leur’s peddler paradigm with a fuller identification and appreciation of diasporic communities, about the ways community norms mitigate problems of long-distance trade, and about the comparative advantage of family firms (Levi, forthcoming). Rather than an ill-informed, itinerant peddler, the early Asian trader is now recognized as a “portfolio capitalist” (Subrahmanyam, 1990) enjoying political and social along with spatial mobility. By bringing to the foreground the Asian commercial milieu Chaudhuri helped initiate new literatures in Asian history.

For the range and importance of its findings, its unique method, and its empirical bounty, Trading World of Asia deserved the unanimous praise it received upon publication in 1978. For those same reasons and for its lasting impact on economic history, Trading World of Asia certainly deserves its present distinction — one of the most significant works of the twentieth century (4).


1. Philip Curtin (1980, 507) remarked, “Chaudhuri intended from the beginning to present a case study of a large, bureaucratic, pre-industrial trading firm as a contribution to the history of European business institutions in general.”

2. See for example The Cambridge History of India, Volume V (1922), Bal Krishna, Commercial Relations between India and England (1924), and S. Bhattacharya, The East India Company and the Economy of Bengal (1954).

3. My “Market Power and the English East India Company in Bengal” presented at the 1995 SSHA Conference estimates the residual supply curves faced by the Company in the cotton textile, raw silk, and saltpeter markets. In the first two markets, the firm faced high elasticities of supply suggesting little price-setting ability. The findings are consistent with Chaudhuri’s position that the East India Company was not large enough to determine input prices.

4. Before his recent retirement, Chaudhuri was affiliated with the European University Institute. The bulk of his career, however, was at the School of Oriental and Asian Studies, University of London.


Gary Anderson, Robert McCormick and Robert Tollison. 1983. “The Economic Organization of the English East India Company,” Journal of Economic Behavior and Organization. 4 (4): 221-238.

Ann Carlos and Nicholas, Stephen. 1988. “‘Giants of an Earlier Capitalism’: The Chartered Trading Companies as Modern Multinationals,” Business History Review. 62 (Autumn): 398-419.

K. N. Chaudhuri. 1978. The Trading World of Asia and the English East India Company, 1660-1760. Cambridge: Cambridge University Press. K. N. Chaudhuri. 1983. “The Trading World of Asia and the English East India Company, 1660-1760: A review of reviews.” South Asia Research (London) 3 (1) (May): 10-17.

K. N. Chaudhuri. 1985. Trade and Civilization in the Indian Ocean: An Economic History from the Rise of Islam to 1750. Cambridge: Cambridge University Press.

K. N. Chaudhuri. 1989/90. “Indian History and the Indian Ocean (Professor K. N. Chaudhuri Interviewed by Ranabir Chakrabarti).” Calcutta Historical Journal. 14 (1-2) (Jul 1989-Jun 1990): 78-83.

K. N. Chaudhuri. 1990. Asia before Europe: Economy and civilisation of the Indian Ocean from the Rise of Islam to 1750. Cambridge: Cambridge University Press.

Ashin Das Gupta and M. N. Pearson, editors. 1987. India and the Indian Ocean. Calcutta: Oxford University Press.

J. C. van Leur. 1955. Indonesian Trade and Society: Essays in Asian Social and Economic History. The Hague: W. Van Hoeve.

Scott Levi. Forthcoming. The Indian Diaspora in Central Asia and its Trade, 1550-1900. Leiden: E.J. Brill.

Om Prakash. 1985. Dutch East India Company and the Economy of Bengal, 1630-1720. Princeton: Princeton University Press.

W. R. Scott. 1910. Constitution and Finance of English, Scottish and Irish Joint-Stock Companies to 1720, 3 vols. Cambridge: Cambridge University Press.

Niels Steensgaard. 1973. Carracks, Caravans and Companies: the Structural Crisis in the European-Asian Trade in the Early Seventeenth Century. Lund: Studentlitteratur.

George Stigler. 1968. Organization of Industry. Chicago: University of Chicago Press.

Sanjay Subrahmanyam. 1990. Merchants, Markets, and the State in Early Modern India. Delhi: Oxford University Press.

Jean Tirole. 1989. Theory of Industrial Organization. Cambridge: MIT Press.

Reviews of The Trading World of Asia:

S. Ambirajan. 1981. Australian Economic History Review. XXI (1) (March): 77-79.

Philip D. Curtin. 1980. Journal of Modern History. 52 (3) (September): 506-508.

Morris D. Morris. 1980. Journal of Asian Studies. 39 (2) (February): 388-390.

Om Prakash. 1980. Indian Economic and Social History Review. XVII (I) (January-March):139-142.

T. Raychaudhuri. 1980. Economic Journal. 90 (358) (June): 433-435.

Henry G. Roseveare. 1980. “The East India Trade.” Journal of Imperial and Commonwealth History. VIII (2) (January): 131-134.


Subject(s):International and Domestic Trade and Relations
Geographic Area(s):Asia
Time Period(s):18th Century

Asian Merchants and Businessmen in the Indian Ocean and the China Sea

Author(s):Lombard, Denys
Aubin, Jean
Reviewer(s):Giraldez, Arturo

Published by EH.NET (November 2000)

Denys Lombard and Jean Aubin, editors, Asian Merchants and Businessmen in the Indian Ocean and the China Sea. New Delhi: Oxford University Press, 2000. iii + 375 pp. $35.00 (cloth), ISBN: 0195641094.

Reviewed for EH.NET by Arturo Giraldez, Modern Languages and Literatures Department, University of the Pacific.


This collection of essays was edited in 1988 by two professors of the L’Ecole des Hautes Etudes en Sciences Sociales in Paris and was published originally in French by the institution’s publishing house. The volume was produced after a conference on the same topic organized by these two eminent historians some years before. As Sanjay Subrahmanyam points out in the “Foreword,” it was a response to the perspective taken by Dutch historians of the Early Modern Period who considered the trading world of Asia in terms of the European Companies and the reaction of ‘non-Western’ societies. The economic dynamism was perceived as coming from Europe and acting upon backward economies. Denys Lombard and Jean Aubin tried to promote a contrary view of an Asian history “that was largely controlled by its internal rhythms, even if related in complex ways after 1500 to various forms of European commercial and political presence” (Subrahmanyam, p. i). This historical debate is not new; it follows controversies involving specialists in Indian, Chinese and African histories. Despite the twelve-year lapse between the French version and the current translation, these essays come at a time when the debate between Eurocentric paradigms and new historiographic perspectives is taking on a new life. The work of Andre Gunder Frank, Ken Pomeranz and R. Bin Wong, among others, place China and the ‘rise of the West’ in a different light, showing the importance of China in world history before the beginnings in Britain of the so called ‘Industrial Revolution.’ (See Andre Gunder Frank (1998) ReORIENT: Global Economy in the Asian Age, Berkeley: University of California Press; Kenneth Pomeranz (2000) The Great Divergence: China, Europe, and the Making of the Modern World Economy, Princeton: Princeton University Press; and R. Bin Wong (1997) China Transformed. Historical Change and the Limits of European Experience, Ithaca and London: Cornell University Press. A recent exposition of the ‘Eurocentric’ paradigm is David Landes (1998) The Wealth and Poverty of Nations: Why Some Are So Rich and Some So Poor, New York: Norton. For a criticism of these ideas, see James M. Blaut (2000) Eight Eurocentric Historians, New York and London: Guilford Press.)

Despite inherent theoretical problems related to the meaning of the term ‘Europe,’ with even greater confusion in the case of the term ‘West,’ those intellectual constructs form the basis of historical interpretations of wide acceptance. This set of ideas considers past developments in the “European West” as essentially endogenous processes that produced economic and social institutions whose rationality and efficiency renders them the paradigm of economic modernization. Eurocentric views have the common trait of creating an intellectual template to be applied to the transformations of other societies and ranking them accordingly to the similarities and differences from an ideal historical development. To counteract this view, Denys Lombard and Jean Aubin have collected a vast array of articles dealing with the dense network of exchanges from the Persian Gulf, the Red Sea and the African East Coast to the shores of China and Japan. The Europeans — Portuguese, Spaniards, English and Dutch — took advantage of pre-existing dense economic networks but their disruptions did not essentially upset their control by Asian powers until the nineteenth century.

Four main themes structure the authors’ historiographical perspective: 1) “Harbor Towns” as centers of economic stimulation; 2) The role of Islam in developing merchant networks since the ninth century; 3) The study of merchant ‘diasporas’; and 4) The ‘Continuity’ of business in Asia.

Chronologically, the collection begins with Chen Dasheng and D. Lombard’s “Foreign Merchants in Maritime Trade in ‘Quanzhou’ (‘Zaitun’): Thirteenth and Fourteenth Centuries” and ends with “The Major Japanese Groups of Enterprises (Kigyoshudan), Heirs to the Zaibatsus” by Bertrand Cheng. This time span was chosen to avoid an Asian economic history “in which all exchanges are seen through the prism of a periodization, whose pulse is to be found in Lisbon, London or Amsterdam” (Lombard, p.3).

Cities were crucial to trade in Asian waters. Denys Lombard distinguishes between the ‘hydraulic’ city connected to an agricultural space and merchant cities, which depended, in fact, on the maritime nexus and its links with foreign land (p.114). An early case was Quanzhou in China: “a precursor of the merchant cities that we shall later see at different points of the Indian Ocean.” (Dasheng and Lombard, p.20). Luis Filipi F.R. Thomaz studies Melaka in the sixteenth century. Genevieve Bouchon places Calicut in relationship with the Arab world, Ceylon, the Moluccas and the trade with China. Studying the city-port of Surat, Ashin Das Gupta discovers how the arrival of the Dutch and English and the Portuguese departure opened a window of opportunity for Indian merchants to became ship-owners (pp.105-112). This is a good example of how Asian entrepreneurs were able to take advantage of changes produced by the European presence.

Islam played a great role in merchant networks after the ninth century. We find Muslim communities in Quanzhou in the eleventh century; by the sixteenth century they were present in Hurmuz, Malacca, Mindanao and Manila. “As late as the 19th and 20th centuries, Islam continued to animate a whole series of intermediate networks from one end to the Indian Ocean to the other” (Lombard, pp. 5-6). Several authors study these Muslim merchants: Hadramis, Gujaratis, Ismailis, Bohras, Kashmiris, Panthay, and so on.

One of the most intriguing aspects illustrated by these essays is the “continuity” of merchant family networks and how they took advantage of the opportunities provided by different social contexts. When “Saudi Arabia developed into a petro-economy state, it attracted a flood of Hadrami emigrants; two Hadrami multi-millionaires were known everywhere, Bin Mahfuz and Bin Laden” (R.B. Serjeant, p.149). Hadrami origins come from Yemen. Claude Markovits studies other industrial groups in India like the Kasturbhais family of Gujarati merchants whose ancestor, Shantidas Zaveri, was ‘jeweler’ to the Mughal Imperial Court. The family owned textile factories but during the 1960s the group expanded into the chemical industry in collaboration with European companies, ICI and CIBA. They passed from traditional merchants to modern industrialists: “This adaptation has been achieved without any basic modification in the working methods or in the forms of organization” (Markovits, p.318). Similar cases can be found among the Chinese Hakka studied by Claudine Salmon. In 1862 Aw Chi Ching, a Hakka doctor from Fujien settled in Rangoon where he practiced traditional medicine and sold medicinal herbs. His descendents marketed a remedy called “Tiger Balm” of great mass appeal. They began advertising in Chinese newspapers in Hong-Kong, Macao and Northern China. To fight competitors in the balm business they bought newspapers in Guandong, Amoy, Singapore, Hong-Kong and Penang. Despite losing their properties in China after the Revolution, the family overcame the post World War crisis. A successor, Sally Aw, bought newspapers in Hong-Kong and Australia and also invested in a variety of businesses. The Hakka network was a great contributor to family success. After World War II one family member founded the first Hakka Bank in Singapore, the Chong Qiao Yinhang.

The vicissitudes of business development in Japan are well exemplified by one prominent conglomerate of the country: “The Iwasaki family had created the Mitsubishi company, which was the result of a commercial enterprise installed in Nagasaki and financed by the Tosa fief. It had closely collaborated with the earlier Meiji administrations” (Akamatsu, p.365). Before World War II Mitsubishi was one of the ‘Big Four’ Zaibatsus — the others being Mitsui, Sumitomo, and Yasuda. “However, as early as the 1950s, a new type of structure called kigyoshudan emerged to regroup the erstwhile zaibatsus” (Chung, p.367). Mitsubishi is one of them. The previous cases go beyond mere anecdote, implying large theoretical issues. In the words of Lombard (p. 7): “The question still remains whether the recent development of Asian capitalism is a reproduction of Western capitalist systems or an outgrowth of an independent stand taken with regard to them.”

Asian merchants were not always able to develop into industrialists. Another completely different role was the symbiotic relationships between Chettiars and Kalangs with European powers. The Chettiar studied by Hans-Dieter Evers were a Tamil caste of South India. Initially they were moneylenders whose activities expanded to South Africa, Mauritius, Ceylon, Burma, Malaya, South Vietnam and Indochina at the end of the late nineteenth century. The Chettiar expansion coincided with development in South-East Asia of the corporate plantation system and the mining and logging industries. “The Chettiar money-lenders played a major role in the transformation of the remaining peasant subsistence economy and connecting it with the export crop-producing sectors” (Evers, p. 206). They also provided capital to Chinese, Burmese, Pathan and Sinhalese moneylenders, but at the same time were connected with European banking institutions. “Chettiar agents had turned peasants into ‘capillaries of a network of financial arteries leading to the banks of London and Paris'” (Evers, p. 208). The Kalangs are a group of Javanese merchants studied by Claude Guillot. Fatimah, a Kalang woman, involved herself in money lending, like her mother, and in buying and selling gold. The gold was melted down and made “into pure gold ingots that Fatimah personally took to sell to the Javasche Bank in Batavia.” After World War I, this bank “introduced Fatimah to diamond merchants from Antwerp.” The family became the most prominent diamond merchants of the Dutch East Indies (Envers, pp. 272-73).

One might criticize the editors’ decision to “set aside all that we know of the European networks” (Lombard, p.4). Ignoring the presence of the Europeans in Asian waters implies ignoring the substantial links developed between Asian economies, America and other colonial powers. For instance, the Chinese tributary system used Japanese and American silver as one of its main monetary substances; and in the nineteenth century the Atlantic economy, Australian gold, Chinese tea and Indian opium formed a network of exchanges with the British playing a pivotal role. This observation does not detract from the quality of the collection. The essays are full of information and their findings should be carefully incorporated into current historical narratives.

Denys Lombard and Jean Aubin were much aware of the difficulties of studying Asian economies. Whereas European companies and countries contain rich sources amenable to statistical treatment, that is not the case for many economies in the Indian Ocean and China Sea. That explains why many of the essays’ authors use biographical sources and anthropological research to fortify their cases. However, to dismiss their findings because of lack of statistical information would be a serious mistake. In so-called western societies many economic activities are not reported in a reliable numerical form, such as the drug trade that forms part of the, non-reported, “submerged economy.”

Sanjay Subrahmanym’s “Foreword” finishes with the following thoughts that express very well the book’s theoretical relevance. “It is a timely reminder, at the end of the twentieth century, that the family firm, the merchant community, and the networks of capital-raising and investment based on kinship, affinity, and sociability, are still a reality that one needs to contend with, in Asia, but also perhaps in Europe and even in America” (p.ix).

Overall, this is an excellent collection that is tremendously useful for the historian and social scientist willing to get acquainted with aspects of economic and social history usually known only to specialists. It is a deep loss that both Jean Aubin and Denys Lombard are no longer with us. Both were great examples of an excellent French tradition in social sciences. Also two other contributors to the volume, Ashin Das Gupta and R.B.Serjeant died in the last decade of the twentieth century. The book is a great occasion to get acquainted with their work.

Arturo Giraldez has published several articles (in collaboration with D. O. Flynn) on precious metals in the modern era and has edited Metals and Monies in a Global Economy (Aldershot: Varioum, 1997). Also he is a general co-editor of the Variorum collection The Pacific World: Lands, Peoples and History of the Pacific, 1500-1900.


Subject(s):Business History
Geographic Area(s):Asia
Time Period(s):General or Comparative

An Agrarian History of South Asia

Author(s):Ludden, David
Reviewer(s):Frost, Marcia J.

Published by EH.NET (June 1, 2000)


David Ludden, An Agrarian History of South Asia. Cambridge: Cambridge University Press, 1999. xiii + 261 pp. $64.95 (cloth), ISBN 0-521-36424-8

Reviewed for EH.NET by Marcia Frost.

David Ludden’s An Agrarian History of South Asia is the fourth volume in The New Cambridge History of India, Part IV: The Evolution of Contemporary South Asia. Ludden is Professor of History and member of the graduate group in South Asia Regional Studies at the University of Pennsylvania, and perhaps the foremost contemporary authority on the historical development of agrarian institutions of the South Asian subcontinent. While his primary inscriptional and documentary research has focused on the southern Indian region of the Tamils, his publications range widely across time, the sub-continent and disciplines to explore the development of societies that have been and largely remain intimately tied to the land.

In this volume Ludden brings together research from historians, economists, anthropologists, geographers, political scientist and, rural sociologists to create “a comprehensive framework” for an understanding of the forces which have created the contemporary “patchwork of agrarian regions” which extend from Afghanistan to Myanmar, and Nepal to Sri Lanka. Although agrarian life in this large geographic area connecting arid west Asia to wet southeast Asia was in the past and continues today to be hugely diverse, Ludden seeks the common experiences that make South Asia a distinct region in world history and agrarian development.

There is little in this volume to satisfy a lust for numerical facts — beyond a few estimates of the expansion of the area under cultivation in the 16th, 19th and 20th centuries there are none. What is here, however, is a rich, dense and wonderfully multi-disciplinary exploration of the evolution of agrarian society from the 3rd millennium BC to the present, and the way in which agrarian history has been perceived by historians, politicians and social reformers. Throughout there is an emphasis on the cultural context of agrarian life. Farming and agricultural institutions have a cultural context that cannot be ignored, and Ludden observes, “Modern mentalities may assign prayer, worship, myth, marriage and pilgrimage to the realm of religion; genetics, hydrology, engineering, medicine, meteorology, astrology, and alchemy to the realm of science; metal working, carpentry, spinning, weaving, and pot making to the realm of manufacturing; and trade, banking, war, herding, migration, politics, poetry, drama, adjudication, administration, and policing each to their separate realms of social activity. But all these are parts of agriculture. They contain essential agricultural activity” [p. 31].

Although the development of the text does in fact follow the historical periodicity to which we are accustomed, the chapter titles do not reveal this, but rather reinforce the importance of words, concepts and territoriality that Ludden explores. Chapter 1, “Agriculture,” begins with a discussion of the historiography of the agrarian experience, and emphasizes that “rulers and farmers, state power and agrarian social forces interact historically and shape one another” [p. 6]. This is a common theme that runs throughout the text, as Ludden traces the increasing role the state, its power and rules exerted on agrarian institutions and development. In the subsection entitled “Seasons,” the fundamental environmental resources and constraints of the subcontinent are described, and themes (which continue throughout the text) of conflict and competition, negotiation and exchange are introduced. In the final two sections of this chapter, “Maps and Landscape,” we read of “interlaced trajectories, networks, circuits, zones and regions of mobility,” and of territories — all repeatedly reappearing throughout the text. Ludden’s agrarian landscape is like a multi-layered GIS map with variables, institutions, peoples, etc. overlapping boundaries in both time and space.

Chapter 2, “Territory,” explores the evolution of agriculture and agrarian institutions from the first evidence of farming ca. 7500 BC through the 13th century AD. These millennia saw the expansion of social — not state — power over the agro-pastoral peoples who spread east and south from the Indus River (in modern day Pakistan) across the Gangetic plains to Bengal/Bangladesh and down the peninsula to its very tip at Kanya Kumari. These centuries were (as were those that followed) ones in which i) cultures met, mixed and competed, ii) land use intensified with new methods of metalworking and assuring water supplies, and new seeds and farming techniques, iii) pastoralists, nomads and forest cultivators were pushed to the margins, up the mountains and into the jungles, away from the routes of trade and conquest that linked more sedentary agrarian territories, and iv) both ritual and war played central roles in the negotiation and exchange that mediated conflict and competition. From the middle of the 1st millennium AD Brahmanical influence increased, kings enforced their religious duty (dharma) by upholding the right of first possession to those who cleared the land, patriarchal authority and social rankings into caste were extended and formed the basis of alliances and transaction networks, and conquest colonization began. In Ludden’s view ca. 550-1250 was the formative period of South Asia’s agrarian history and its agrarian regions. To the north, west and in the high mountains, warrior lineages joined local leaders, pastoralists and hunters “by imitation, alliance, genealogical invention [and] intermarriage” [p. 89] to form Rajput clans whose power was based on martial might and whose dharma did not include the act of farming. In contrast south of the Vindhya Mountains down the peninsula warrior lineages joined with agricultural communities and new castes of dominant warrior-cultivators arose. These broad divisions were reflected in kinship practices, women’s land rights and agrarian alliances that continue to the present.

Chapter 3, “Regions,” focuses on the late medieval, early modern centuries (14th-19th) as agrarian institutions and landscapes evolved towards those we recognize today. As world trade across Eurasia by land and sea became more closely integrated from the 14th century onwards, “new technology, ideas, habits, language, people and needs came into farming communities” [p. 113], agriculture further intensified, and states through their institutions of money and taxation encouraged the cultivation of crops for sale and penetrated more intimately than before into agrarian life. Across the subcontinent i) transportation networks expanded, ii) urbanization (measured by both number and size of towns and cities) speeded up, iii) new and more intrusive accounts of people, production and trade evolved, iv) agrarian taxation was systematized and its burden increased, and v) entitlements to land use and power shifted from social to financial obligations. Under the East India Company discontinuities were introduced: land was no longer the property of its clearer and user, but of the state; hereditary property rights to cultivated land were converted into use rights subject to payment of land taxes; bureaucratic regulation replaced negotiation, exchange and dharma; and caste rank, status, entitlements and income were both codified and threatened. The final chapter, “Modernity,” explores the role of the state in agrarian life and struggles against the state and its interruption of old patterns of agrarian intercourse. The armed rebellions of 1857, the partitions of British India in 1947 and of Pakistan in 1971, the post-independence struggles for regional sovereignty, the social movements for the rights of the marginalized, and the political power of warrior-cultivator descendants are all shown to have historic roots in the agrarian structures and identities formed over the previous centuries.

The rhetoric of historical knowledge, the evolution of agrarian social, political and economic institutions, the interplay of sedentary peoples and those on the move, the tension of conflict and negotiation are all themes which run throughout this book. There are, as the secondary literature allows, discussions of particular regions and regimes, of the intellectual tradition of discourse and policy debates, and of the organization of agrarian life — its farming, manufactures and trade. This is, however, a book that focuses on the forest, not its individual trees; its purpose is to describe and analyze the whole of the agrarian experience of South Asia, not to focus on the particulars of any one or few specific regions. For those wishing to use this text as a reference for specific events or regimes, the index is detailed and exhaustive.

The “Bibliographical Essay” runs 18 pages of citations organized into five sections: intellectual history, approaches to agriculture, long-term history, early modern themes and modern issues. An updated bibliography can be found at Ludden’s homepage The bibliography includes only English language books, monographs, articles and a few Ph.D. dissertations, and excludes work that has been superseded by more recent scholarship; a number of citations appear as footnotes but not in the bibliographic essay.

This is a fine source for anyone interested in the evolution of South Asia’s agrarian systems and institutions. Its multi-disciplinary approach should be familiar to anyone with knowledge of other predominately agrarian societies, particularly those where religious ideas and practices are intimately interwoven with all aspects of human activity. For those without a knowledge of South Asian geography or political history, however, an historical atlas will be a useful supplement; there are no maps in this volume and little background information on many of the referenced pre-modern regimes.

Marcia Frost, recently returned from a Fulbright research grant in India, is currently working on a project “Coping with Scarcity: Kheda District (Gujarat, India), 1824/5,” and will resume teaching economics in the fall at Grinnell College.


Subject(s):Economywide Country Studies and Comparative History
Geographic Area(s):Asia
Time Period(s):General or Comparative

European Commercial Enterprise in Pre-Colonial India

Author(s):Prakash, Om
Reviewer(s):Adams, John

Published by EH.NET (February 2000)

Om Prakash, European Commercial Enterprise in Pre-Colonial India, New

York and Cambridge: Cambridge University Press, 1998. 396 pp. $59.95

(cloth), ISBN: 0-521-25758-1.

Reviewed for EH.NET by John Adams, Visiting Scholar, Center for South Asian

Studies, University of Virginia.

This is volume II.5 of The New Cambridge History of India which will

eventually comprise 31 separately authored titles. The New Cambridge History

contributions cover four overlapping temporal and thematic areas:

I. The Mughals and Their Contemporaries, II. Indian States and the Transition

to Colonialism, III. The Indian Empire and the Beginnings of Modern Society,

and IV. The Evolution of Contemporary South Asia. This stud by Om Prakash Om

Prakash (Professor of Economic History at the Delhi School of Economics) is the

fifth component of the second cluster. Each of the contributions to the New

Cambridge History that this reviewer has read speaks with the distinctive voice

of its author and represents an original and definitive work. There is no

requisition from the general editorship

(Gordon Johnson, C. A. Bayly, John F. Richards) to write to formula or format.

At the same time, there is the desire that the volumes connect to one another

and be firmly grounded in the best current knowledge and scholarly

interpretations. Over one-half

of these are now available and without exception fully realize the principles

of the publisher and the editorial team. If you are interested in the modern

history of the subcontinent this is the place to begin.

Two caveats are issued to the membership of EH.NET. First, the series and this

volume aim at treating economic affairs within the context of society,

culture, and politics. This diminution of the material realm to secondary

status fairly characterizes the state of human affairs in the Indian

subcontinent up to the recent present, but naturally affronts our presumed

professional preeminence. Forewarned is forearmed. Second, even the

contributions to the series that center on commerce, industry, and finance are

historical and descriptive and do not

attempt to use newly discovered or freshly catalogued evidence to advance or

debunk modernistic economic premises in the familiar mannerisms of cliometry.

Prakash, as the immediate example, re-creates historical economies for

inspection and does not strive to validate allegedly universal principles

derived distally from Lenin or Ricardo.

Those who know the bias of the present reviewer will now make the assured

prediction that he will strongly side with Prakash and forthwith utilize the

review to argue with incisiveness and wit against overly formalized economic

history, particularly in the Indian timescape where he has for so long labored.

This would be wrong. He in fact thinks that the most useful thing he can do for

that tiny group of readers that has

gotten this far into what has been a most esoteric introduction to a book

review about a most obscure subject, and are willing to continue further, is to

identify the substantial merits of Prakash’s book and to suggest where it

points towards arenas where the focused application of economic investigation

could yield big dividends. The reviewer further admits that ploughing through

factual avoirdupois in search of a bone structure at times tried his Jobian


Three fields of inquiry will adequately illustrate how Prakash’s masterly and

comprehensive volume can be approached by the intrepid economic historian.

After 1498, the Portuguese, the Dutch, the French, and the English vied

sequentially for domination of the trade between South Asia

and Europe.

Importantly, India was a geographical link to East Asia: Japan, China, and the

East Indies. Their India goods trade and balances of payments were managed by

the Europeans with an eye towards to the Europe-East Asia trade and payments


Broadly, from the European side, merchant groups; the newly formed trading

companies such as the Dutch East India Company, the French East India Company,

and the British East India Company, and others of less salience; and traders on

private account, frequently but inconstantly affiliated with the trading

companies, were the key players.

Prakash’s central accomplishment is to provide a rich account of the formation

and operations of each of these organizational instrumentalities of commerce.

He provides vibrant details about key individuals and of the ebb and flow of

on-going operations in the novel trading enterprises. No one has done it better

or more comprehensively or with superior command of the comparative motives,

structures, and results of these harbingers of the modern corporation.

What does the modest and overwhelmed reviewer hope for? A dash of Coase and

Williamson, please. Can we stand back a bit and ask exactly why these new

formations emerged, why they were a timely creation, why their boundaries were

drawn as they were vis-a-vis the melange of external contractual and customary

arrangements that guided Asian commerce? Were they indeed essential before the

Europeans could successfully engage well-established and often politically


indigenous Asian business clans and transactional networks along which goods

and finance moved? Why did the Asians not create countervailing private


Prakash provides a good deal of data on the “triangular” trade among centers in

Europe, South Asia, and East Asia. Exports of textiles from Coromandel and

Gujarat enabled the Dutch East India Company to recruit spices in Indonesia,

while raw silk was the chief export to Japan, for example. Later, opium was

important in the British Company

‘s China trade.

Very generally, the European companies sought a profit when annual accounts

were cleared. There was the irrefragable need for the British to effect

transfers of wealth to London on the Company’s accounts as well as those of

private agents,

who were often Company employees. For most of the pre-colonial period Indians

were quite successful in sending commodities and handicraft manufactures east

and west, while absorbing large net influxes of precious metals, preeminently

silver. Prakash does

an exceptionally able job of delineating these complicated flows and balances

and depicting how they changed over time as opportunities and imperatives


The abashed reviewer wants to know more about the macroeconomic and financial

implications of

these flows. It is almost certainly wrong to argue as Prakash does in his

conclusion that the “bullion for goods”

character of India’s trade, contrasted with a “goods for goods” pattern,

“implied that the positive implications of the growth in trade for

the level of income, output, and employment in the economy were considerably

more substantial . . . .” (p. 350). This represents a peculiar affection for

simple Mercantilism as opposed to endorsing a Smithian pursuit of the wealth of

nations. One may reasonably ask about this, and other dimensions of Prakash’s

arguments (ch. 8), if India was so well-poised in the

“triangular” system of trade and payments, and the beneficiary of such positive

income, employment, and price benefits, why then was the subsequ ent income

divergence of India and Britain not the reverse of that which precipitated?

European Commercial Enterprise contains many well-designed tables,

figures, and maps. The text is replete with bounties of numbers gleaned from

company records

and other sources. Table 6.1, for instance, gives us the composition of Dutch

exports from Bengal in percentages, 1675-1785, for five benchmark years of the

111 in question. Table 3.6 shows the English East India Company’s total exports

by value to Asia,

1601-1760, and the percentage of treasure. Many of the series go up but some

go down. The profusion of numbers is impressive but less clear is their overall

pattern or meaning.

The bemused reviewer has the sense of being confronted with a 2,000 piece

jigsaw puzzle. What is impossible to find out (and this is not Prakash’s fault


responsibility) is how largely trade affected economic activities and people’s

lives. We know that from the middle point of the eighteenth century on, up

until the present, In dia’s trade has never amounted to more than about ten

percent of total product, and was more likely six percent or less for the past

400 years, which is what one would expect in a large,

inward-looking nation. We know that household and village subsistence

economies were predominant in India until at least the early years of the

independence era. It is very hard to sort out, and Prakash certainly

overdramatizes rather than understates, the scope and scale of commercial and

trading-sector activities in the

total picture. There is the risk of erring on the side of making the Indian

subcontinent seem altogether non-commercial and unready for encounter with the

agencies of European commerce, but it is equally misleading to exaggerate the

importance of selected commercial crops relative to the major subsistence food

grains, or to extol the small coastal enclaves and their merchant families and

castes at the expense of the much more numerous interior villages and the

multitudes of farmers and agrarian workers who had little or no contact with

the world “out there.”

These days we are correctly aware of the

fallacy of overstating the role of

Europe in the post-Columbus era of exploration, commercialization, and may one

dare say, post-Seattle, globalization. At the same time, may not the pendulum

swing too far in the other direction? Vide Prakash asserting that India was,

circa-1498, the “. . . ‘industrial hub’ of the region surrounded by west Asia

on one side and southeast Asia on the other” (p. 154). Did India

at that moment (actually India didn’t exist at that moment) possess a

“sophisticated infrastructure” whose ingredients were ” . . . a high degree of

labor mobility and the existence of a labor market, merchant groups capable of

collective defense and good

organization, development of accountancy skills, highly developed and

price-responsive marketing systems, and a sophisticated monetary and credit

structure (ibid.)?” The unprepossessing reviewer would assert that the

subcontinent did not exhibit these features but to avoid confusion would

evenhandedly aver that no other place did either.

On the whole: this is an amazingly erudite and encompassing book, which ably

serves its primary function of offering a survey of the first three centuries

of Indo-European commerce, as defined within the ambit of the New Cambridge

History program, but it does not cope effectively with topics of keen interest

to modern economic historians of any sort: the microeconomics of incentives and

agents, the macroeconomic and developmental effects of trade and financial

flows, and the nature of proto-corporate structures looked at through the

eyeglasses of transactions costs and organizational theory.

Now retired, John Adams is Visiting Scholar at the Center for South Asian

Studies, University of Virginia. He is affiliated with the Center for Middle

Eastern Studies at Harvard University; Professor Emeritus,

Northeastern University; and, President and Chief Economist, Sawhill

Associates, Chancellor, Virginia. His chief current activity is composing

financial sector reforms for Nepal under the aegis of the Asian Development

Bank and the IRIS Center, University of Maryland, College Park. He may be found


Subject(s):Economywide Country Studies and Comparative History
Geographic Area(s):Asia
Time Period(s):General or Comparative