Published by EH.NET (March 2002)
Tirthankar Roy, The Economic History of India 1857-1947. Delhi: Oxford
University Press, 2000. xiv + 318pp. Rs. 595 or $24.95 (cloth), ISBN:
0-19-565154-5.
Reviewed for EH.NET by Santhi Hejeebu, Department of Economics and History,
University of Iowa.
Teachers of Indian economic history will welcome Tirthankar Roy’s Economic
History of India 1857-1957. Roy provides a chronological survey of the
colonial economy by economic sector — agriculture, small-scale industry,
large-scale industry, plantations, mines, banking, and the public sector. The
book also provides separate chapters on “the macroeconomy” and “population and
labour force.” In a heterodox field in which historical economists often find
themselves defensive about their methods and struggling with a paucity of
records, Roy offers a serious attempt to place the tools of economic analysis
in the service of Indian history. The goal of his Economic History of
India is to convey to budding historians and economists how this might be
done.
Despite the fact that the survey covers the colonial period, Roy does not view
the government of British India as the prime mover of the economy. This is most
evident in his lucid discussion of the de-industrialization debate. He writes,
“De-industrialization means a decline in traditional small scale industry that
(a) derived from technological obsolescence against British goods, (b) was
sustained by colonial policies, and (c) remained uncompensated by new
enterprise. The term makes explicit contrast between Britain which experienced
industrialization, and her major colony India, which experienced
de-industrialization, at the same time and due to the same set of causes,
namely trade and technological change” (p. 124). The debate surrounding
de-industrialization is as central to Indian economic history as that of
slavery is to American economic history. Enormous intellectual effort was put
to the issue in the 1960s and 1970s and to a lesser extent in the 1980s. After
two major monographs on traditional industry during the colonial period, Roy is
well placed to provide an alternative perspective, which he calls
“commercialization.” Roy maintains that “products of British mechanized
industry replacing Indian hand-made goods [in India] was more exceptional than
the rule” (p. 128). Machine-made cloth was a poor substitute for handloom cloth
in important market segments of the textile industry. Market segmentation
implied that large and small-scale industry did not directly compete leaving
open the possibility of survival and expansion of the latter. His
commercialization thesis also provides evidence of mechanization and
organizational innovation in traditional industries. Thus if Roy does not see
the British government as the prime mover, it’s because he knows better. Roy’s
own contribution to the research literature has led him to fresh insights on
what happened in the bazaar.
Pedagogically Roy’s handling of de-industrialization offers a brilliant
illustration of the delights of Indian economic history. It offers students an
intellectual feast with all the elements for exciting classroom exchange: the
performance of the economy and nationalist discourse, Marxist vs. neo-classical
principles, complex social norms in a commercializing economy, implicit
theorizing, institutional change, alternative hypotheses and tests of evidence,
disputes over evidentiary standards. De-industrialization is certainly one of
the livelier segments in my course and I am grateful for a teaching tool that
organizes many strands of the debate.
Roy’s book is not without its drawbacks however. Money and banking are barely
touched upon. The banking sector illustrates well what Rajat Ray called the
imperial “division of economic space” and thus lends itself well to a full
discussion of how colonialism interacted with commercialization. Instead
banking is anachronistically placed in the same chapter with plantations and
mines, while monetary policy (i.e. exchange rate stabilization) is tucked
inside the chapter on macroeconomy. The index does not even contain entries for
either shroffs (moneychangers) or hundis (bills of exchange). What institutions
operated in the informal banking sector and how did they operate? How did
monetary policy affect the opportunities available to or choices made by
indigenous entrepreneurs? The book does not provide clear answers.
One might find other points worth taking issue with. Roy at times skims too
lightly over opposing views. For example, in chapter one he describes the
“world systems school” as the most famous school to have expounded views of
underdevelopment. Yet Roy does not cite Wallerstein’s work explicitly and
within a sentence or two, world systems theory becomes indistinguishable from
Marxist theory. For good reason Roy does not share many of the specific views
of what he calls the “left-nationalist paradigm.” His terse treatment of such
positions is however more than compensated by the focused and systematic
treatment his provides overall.
Indeed Roy’s clear and organized handling of complex issues (such as the
economics of common property rights in agriculture) surpasses the treatment
found in other textbooks. Dietmar Rothermund’s Economic History of India
from Pre-colonial Times to 1991 (Routledge, 1993) provides a drive-thru
version of Indian history. It is a competent chronological overview that does
not enter into any substantive historiographic or economic issues. However I
would discourage exposing the young to such gems of economic analysis as
“Compelled always to have an export surplus, India could not import too much”
(Rothermund, p. 37). A more refined alternative is B.R. Tomlinson’s Economy
of Modern India, 1860-1970 (Cambridge University Press, 1996). The three
core chapters of this work are masterpieces of synthesis but not easy to
disaggregate into a sequence of coherent class lectures and exercises. Roy’s
work by contrast is neither too diluted nor too condensed. He keeps the
narrative flowing and at the same time ably describes the economic issues at
stake, the possible counterfactuals, and the evidence supporting competing
positions. It should be noted that none of the available surveys of Indian
economic history contain the photo essays or graphical expositions typical in
textbooks on American economic history.
While the inner flap bills this as a textbook, the work will interest a wider
audience. Roy’s up-to-date overview of the historical research makes the field
accessible to anyone interested in the development of the global economy and
its national parts. It’s a pity it ends at 1947.
Santhi Hejeebu researches the East India Company in the eighteenth century.
She is currently writing an article called “Mechanism Design in the English
East India Company” (joint with Pablo Casas-Arce). She is also interested in
the organization of Indian merchant groups in the early modern period and is
working on an article called “South Asian Firms: Competing Theories in an
Emerging Field” (joint with Scott Levi). She teaches several courses in Asian
economic and business history.