Nationalism in India As you have seen, modern nationalism in Europe came to be associated with the formation of nation-states. It also meant a change in people’s understanding of who they were, and what defined their identity and sense of belonging. New symbols and icons, new songs and ideas forged new links and redefined the boundaries of communities. In most countries the making of this new national identity was a long process. How did this consciousness emerge in India? In India, as in Vietnam and many other colonies, the growth of modern nationalism is intimately connected to the anti-colonial movement. People began discovering their unity in the process of their struggle with colonialism. The sense of being oppressed under colonialism provided a shared bond that tied many different groups together. But each class and group felt the effects of colonialism differently, their experiences were varied, and their notions of freedom were not always the same. The Congress under Mahatma Gandhi tried to forge these groups together within one movement. But the unity did not emerge without conflict. In an earlier textbook you have read about the growth of nationalism in India up to the first decade of the twentieth century. In this chapter we will pick up the story from the 1920s and study the Non-Cooperation and Civil Disobedience Movements. We will explore how the Congress sought to develop the national movement, how different social groups participated in the movement, and how nationalism captured the imagination of people. Fig. 1 – 6 April 1919. Mass processions on the streets became a common feature during the national movement. Nationalism in India Chapter III 1 The First World War, Khilafat and Non-Cooperation In the years after 1919, we see the national movement spreading to new areas, incorporating new social groups, and developing new modes of struggle. How do we understand these developments? What implications did they have? First of all, the war created a new economic and political situation. It led to a huge increase in defence expenditure which was financed by war loans and increasing taxes: customs duties were raised and income tax introduced. Through the war years prices increased – doubling between 1913 and 1918 – leading to extreme hardship for the common people. Villages were called upon to supply soldiers, and the forced recruitment in rural areas caused widespread anger. Then in 1918-19 and 1920-21, crops failed in many parts of India, New words resulting in acute shortages of food. This was accompanied by an Forced recruitment – A process by which the influenza epidemic. According to the census of 1921, 12 to 13 million colonial state forced people to join the army people perished as a result of famines and the epidemic. People hoped that their hardships would end after the war was over. But that did not happen. At this stage a new leader appeared and suggested a new mode of struggle. 1.1 The Idea of Satyagraha Mahatma Gandhi returned to India in January 1915. As you know, he had come from South Africa where he had successfully fought Fig. 2 – Indian workers in South Africa march through Volksrust, 6 November 1913. Mahatma Gandhi was leading the workers from Newcastle to Transvaal. When the marchers were stopped and Gandhiji arrested, thousands of more workers joined the satyagraha against racist laws that denied rights to non-whites. the racist regime with a novel method of mass agitation, which he called satyagraha. The idea of satyagraha emphasised the power of truth and the need to search for truth. It suggested that if the cause was true, if the struggle was against injustice, then physical force was not necessary to fight the oppressor. Without seeking vengeance or being aggressive, a satyagrahi could win the battle through nonviolence. This could be done by appealing to the conscience of the oppressor. People – including the oppressors – had to be persuaded to see the truth, instead of being forced to accept truth through the use of violence. By this struggle, truth was bound to ultimately triumph. Mahatma Gandhi believed that this dharma of non-violence could unite all Indians. After arriving in India, Mahatma Gandhi successfully organised satyagraha movements in various places. In 1916 he travelled to Champaran in Bihar to inspire the peasants to struggle against the oppressive plantation system. Then in 1917, he organised a satyagraha to support the peasants of the Kheda district of Gujarat. Affected by crop failure and a plague epidemic, the peasants of Kheda could not pay the revenue, and were demanding that revenue collection be relaxed. In 1918, Mahatma Gandhi went to Ahmedabad to organise a satyagraha movement amongst cotton mill workers. 1.2 The Rowlatt Act Emboldened with this success, Gandhiji in 1919 decided to launch a nationwide satyagraha against the proposed Rowlatt Act (1919). This Act had been hurriedly passed through the Imperial Legislative Council despite the united opposition of the Indian members. It gave the government enormous powers to repress political activities, and allowed detention of political prisoners without trial for two years. Mahatma Gandhi wanted non-violent civil disobedience against such unjust laws, which would start with a hartal on 6 April. Rallies were organised in various cities, workers went on strike in railway workshops, and shops closed down. Alarmed by the popular upsurge, and scared that lines of communication such as the railways and telegraph would be disrupted, the British administration decided to clamp down on nationalists. Local leaders were picked up from Amritsar, and Mahatma Gandhi was barred from entering Delhi. On 10 April, the police in Amritsar fired upon a peaceful procession, provoking widespread attacks on banks, post offices and railway stations. Martial law was imposed and General Dyer took command. Source A Mahatma Gandhi on Satyagraha ‘It is said of “passive resistance” that it is the weapon of the weak, but the power which is the subject of this article can be used only by the strong. This power is not passive resistance; indeed it calls for intense activity. The movement in South Africa was not passive but active … ‘ Satyagraha is not physical force. A satyagrahi does not inflict pain on the adversary; he does not seek his destruction … In the use of satyagraha, there is no ill-will whatever. ‘ Satyagraha is pure soul-force. Truth is the very substance of the soul. That is why this force is called satyagraha. The soul is informed with knowledge. In it burns the flame of love. … Nonviolence is the supreme dharma … ‘It is certain that India cannot rival Britain or Europe in force of arms. The British worship the war-god and they can all of them become, as they are becoming, bearers of arms. The hundreds of millions in India can never carry arms. They have made the religion of non-violence their own ...’ Source Activity Read the text carefully. What did Mahatma Gandhi mean when he said satyagraha is active resistance? On 13 April the infamous Jallianwalla Bagh incident took place. On that day a large crowd gathered in the enclosed ground of Jallianwalla Bagh. Some came to protest against the government’s new repressive measures. Others had come to attend the annual Baisakhi fair. Being from outside the city, many villagers were unaware of the martial law that had been imposed. Dyer entered the area, blocked the exit points, and opened fire on the crowd, killing hundreds. His object, as he declared later, was to ‘produce a moral effect’, to create in the minds of satyagrahis a feeling of terror and awe. As the news of Jallianwalla Bagh spread, crowds took to the streets in many north Indian towns. There were strikes, clashes with the police and attacks on government buildings. The government responded with brutal repression, seeking to humiliate and terrorise people: satyagrahis were forced to rub their noses on the ground, crawl on the streets, and do salaam (salute) to all sahibs; people were flogged and villages (around Gujranwala in Punjab, now in Pakistan) were bombed. Seeing violence spread, Mahatma Gandhi called off the movement. While the Rowlatt satyagraha had been a widespread movement, it was still limited mostly to cities and towns. Mahatma Gandhi now felt the need to launch a more broad-based movement in India. But he was certain that no such movement could be organised without bringing the Hindus and Muslims closer together. One way of doing this, he felt, was to take up the Khilafat issue. The First World War had ended with the defeat of Ottoman Turkey. And there were rumours that a harsh peace treaty was going to be imposed on the Ottoman emperor – the spiritual head of the Islamic world (the Khalifa). To defend the Khalifa’s temporal powers, a Khilafat Committee was formed in Bombay in March 1919. A young generation of Muslim leaders like the brothers Muhammad Ali and Shaukat Ali, began discussing with Mahatma Gandhi about the possibility of a united mass action on the issue. Gandhiji saw this as an opportunity to bring Muslims under the umbrella of a unified national movement. At the Calcutta session of the Congress in September 1920, he convinced other leaders of the need to start a non-cooperation movement in support of Khilafat as well as for swaraj. 1.3 Why Non-cooperation? In his famous book Hind Swaraj (1909) Mahatma Gandhi declared that British rule was established in India with the cooperation of Indians, and had survived only because of this cooperation. If Indians refused to cooperate, British rule in India would collapse within a year, and swaraj would come. How could non-cooperation become a movement? Gandhiji proposed that the movement should unfold in stages. It should begin with the surrender of titles that the government awarded, and a boycott of civil services, army, police, courts and legislative councils, schools, and foreign goods. Then, in case the government used repression, a full civil disobedience campaign would be launched. Through the summer of 1920 Mahatma Gandhi and Shaukat Ali toured extensively, mobilising popular support for the movement. Many within the Congress were, however, concerned about the proposals. They were reluctant to boycott the council elections scheduled for November 1920, and they feared that the movement might lead to popular violence. In the months between September and December there was an intense tussle within the Congress. For a while there seemed no meeting point between the supporters and the opponents of the movement. Finally, at the Congress session at Nagpur in December 1920, a compromise was worked out and the Non-Cooperation programme was adopted. How did the movement unfold? Who participated in it? How did different social groups conceive of the idea of Non-Cooperation? New words Boycott – The refusal to deal and associate with people, or participate in activities, or buy and use things; usually a form of protest Fig. 4 – The boycott of foreign cloth, July 1922. Foreign cloth was seen as the symbol of Western economic and cultural domination. 2 Differing Strands within the Movement The Non-Cooperation-Khilafat Movement began in January 1921. Various social groups participated in this movement, each with its own specific aspiration. All of them responded to the call of Swaraj, but the term meant different things to different people. 2.1 The Movement in the Towns The movement started with middle-class participation in the cities. Thousands of students left government-controlled schools and colleges, headmasters and teachers resigned, and lawyers gave up their legal practices. The council elections were boycotted in most provinces except Madras, where the Justice Party, the party of the non-Brahmans, felt that entering the council was one way of gaining some power – something that usually only Brahmans had access to. The effects of non-cooperation on the economic front were more dramatic. Foreign goods were boycotted, liquor shops picketed, and foreign cloth burnt in huge bonfires. The import of foreign cloth halved between 1921 and 1922, its value dropping from Rs 102 crore to Rs 57 crore. In many places merchants and traders refused to trade in foreign goods or finance foreign trade. As the boycott movement spread, and people began discarding imported clothes and wearing only Indian ones, production of Indian textile mills and handlooms went up. New words Picket – A form of demonstration or protest by which people block the entrance to a shop, factory or office But this movement in the cities gradually slowed down for a variety of reasons. Khadi cloth was often more expensive than mass-produced mill cloth and poor people could not afford to buy it. How then could they boycott mill cloth for too long? Similarly the boycott of British institutions posed a problem. For the movement to be successful, alternative Indian institutions had to be set up so that they could be used in place of the British ones. These were slow to come up. So students and teachers began trickling back to government schools and lawyers joined back work in The year is 1921. You are a student in a government-controlled school. Design a poster urging school students to answer Gandhiji’s call to join the Non-Cooperation Movement. Activity government courts. 2.2 Rebellion in the Countryside From the cities, the Non-Cooperation Movement spread to the countryside. It drew into its fold the struggles of peasants and tribals which were developing in different parts of India in the years after the war. In Awadh, peasants were led by Baba Ramchandra – a sanyasi who New wordshad earlier been to Fiji as an indentured labourer. The movement here was against talukdars and landlords who demanded from Begar – Labour that villagers were forced to peasants exorbitantly high rents and a variety of other cesses. Peasants contribute without any payment had to do begar and work at landlords’ farms without any payment. As tenants they had no security of tenure, being regularly evicted so that they could acquire no right over the leased land. The peasant movement demanded reduction of revenue, abolition of begar, and social boycott of oppressive landlords. In many places nai – dhobi Activity bandhs were organised by panchayats to deprive landlords of the If you were a peasant in Uttar Pradesh in 1920, how would you have responded to Gandhiji’sservices of even barbers and washermen. In June 1920, Jawaharlal call for Swaraj? Give reasons for your response.Nehru began going around the villages in Awadh, talking to the villagers, and trying to understand their grievances. By October, the Oudh Kisan Sabha was set up headed by Jawaharlal Nehru, Baba Ramchandra and a few others. Within a month, over 300 branches had been set up in the villages around the region. So when the Non-Cooperation Movement began the following year, the effort of the Congress was to integrate the Awadh peasant struggle into the wider struggle. The peasant movement, however, developed in forms that the Congress leadership was unhappy with. As the movement spread in 1921, the houses of talukdars and merchants were attacked, bazaars were looted, and grain hoards were taken over. In many places local leaders told peasants that Gandhiji had declared that no taxes were to be paid and land was to be redistributed among the poor. The name of the Mahatma was being invoked to sanction all action and aspirations. Source B On 6 January 1921, the police in United Provinces fired at peasants near Rae Bareli. Jawaharlal Nehru wanted to go to the place of firing, but was stopped by the police. Agitated and angry, Nehru addressed the peasants who gathered around him. This is how he later described the meeting: ‘They behaved as brave men, calm and unruffled in the face of danger. I do not know how they felt but I know what my feelings were. For a moment my blood was up, non-violence was almost forgotten – but for a moment only. The thought of the great leader, who by God’s goodness has been sent to lead us to victory, came to me, and I saw the kisans seated and standing near me, less excited, more peaceful than I was – and the moment of weakness passed, I spoke to them in all humility on non-violence – I needed the lesson more than they – and they heeded me and peacefully dispersed.’ Quoted in Sarvapalli Gopal, Jawaharlal Nehru: A Biography, Vol. I. Source Tribal peasants interpreted the message of Mahatma Gandhi and the idea of swaraj in yet another way. In the Gudem Hills of Andhra Pradesh, for instance, a militant guerrilla movement spread in the early 1920s – not a form of struggle that the Congress could approve. Here, as in other forest regions, the colonial government had closed large forest areas, preventing people from entering the forests to graze their cattle, or to collect fuelwood and fruits. This enraged the hill people. Not only were their livelihoods affected but they felt that their traditional rights were being denied. When the government began forcing them to contribute begar for road building, the hill people revolted. The person who came to lead them was an interesting figure. Alluri Sitaram Raju claimed that he had a variety of special powers: he could make correct astrological predictions and heal people, and he could survive even bullet shots. Captivated by Raju, the rebels proclaimed that he was an incarnation of God. Raju talked of the greatness of Mahatma Gandhi, said he was inspired by the Non-Cooperation Movement, and persuaded people to wear khadi and give up drinking. But at the same time he asserted that India could be liberated only by the use of force, not non-violence. The Gudem rebels attacked police stations, attempted to kill British officials and carried on guerrilla warfare for achieving swaraj. Raju was captured and executed in 1924, and over time became a folk hero. 2.3 Swaraj in the Plantations Workers too had their own understanding of Mahatma Gandhi and the notion of swaraj. For plantation workers in Assam, freedom meant the right to move freely in and out of the confined space in which they were enclosed, and it meant retaining a link with the village from which they had come. Under the Inland Emigration Act of 1859, plantation workers were not permitted to leave the tea gardens without permission, and in fact they were rarely given such permission. When they heard of the Non-Cooperation Movement, thousands of workers defied the authorities, left the plantations and headed home. They believed that Gandhi Raj was coming and everyone would be given land in their own villages. They, however, never reached their destination. Stranded on the way by a railway and steamer strike, they were caught by the police and brutally beaten up. Activity Find out about other participants in the National Movement who were captured and put to death by the British. Can you think of a similar example from the national movement in Indo-China (Chapter 2)? The visions of these movements were not defined by the Congress programme. They interpreted the term swaraj in their own ways, imagining it to be a time when all suffering and all troubles would be over. Yet, when the tribals chanted Gandhiji’s name and raised slogans demanding ‘Swatantra Bharat’, they were also emotionally relating to an all-India agitation. When they acted in the name of Mahatma Gandhi, or linked their movement to that of the Congress, they were identifying with a movement which went beyond the limits of their immediate locality. 3 Towards Civil Disobedience In February 1922, Mahatma Gandhi decided to withdraw the Non-Cooperation Movement. He felt the movement was turning violent in many places and satyagrahis needed to be properly trained before they would be ready for mass struggles. Within the Congress, some leaders were by now tired of mass struggles and wanted to participate in elections to the provincial councils that had been set up by the Government of India Act of 1919. They felt that it was important to oppose British policies within the councils, argue for reform and also demonstrate that these councils were not truly democratic. C. R. Das and Motilal Nehru formed the Swaraj Party within the Congress to argue for a return to council politics. But younger leaders like Jawaharlal Nehru and Subhas Chandra Bose pressed for more radical mass agitation and for full independence. In such a situation of internal debate and dissension two factors again shaped Indian politics towards the late 1920s. The first was the effect of the worldwide economic depression. Agricultural prices began to fall from 1926 and collapsed after 1930. As the demand for agricultural goods fell and exports declined, peasants found it difficult to sell their harvests and pay their revenue. By 1930, the countryside was in turmoil. Against this background the new Tory government in Britain constituted a Statutory Commission under Sir John Simon. Set up in response to the nationalist movement, the commission was to look into the functioning of the constitutional system in India and suggest changes. The problem was that the commission did not have a single Indian member. They were all British. When the Simon Commission arrived in India in 1928, it was greeted with the slogan ‘Go back Simon’. All parties, including the Congress and the Muslim League, participated in the demonstrations. In an effort to win them over, the viceroy, Lord Irwin, announced in October 1929, a vague offer of ‘dominion status’ for India in an unspecified future, and a Round Table Conference to discuss a future constitution. This did not satisfy the Congress leaders. The radicals within the Congress, led by Jawaharlal Nehru and Subhas Chandra Bose, became more assertive. The liberals and moderates, who were proposing a constitutional system within the framework of British dominion, gradually lost their influence. In December 1929, under the presidency of Jawaharlal Nehru, the Lahore Congress formalised the demand of ‘Purna Swaraj’ or full independence for India. It was declared that 26 January 1930, would be celebrated as the Independence Day when people were to take a pledge to struggle for complete independence. But the celebrations attracted very little attention. So Mahatma Gandhi had to find a way to relate this abstract idea of freedom to more concrete issues of everyday life. 3.1 The Salt March and the Civil Disobedience Movement Mahatma Gandhi found in salt a powerful symbol that could unite the nation. On 31 January 1930, he sent a letter to Viceroy Irwin stating eleven demands. Some of these were of general interest; others were specific demands of different classes, from industrialists to peasants. The idea was to make the demands wide-ranging, so that all classes within Indian society could identify with them and everyone could be brought together in a united campaign. The most stirring of all was the demand to abolish the salt tax. Salt was something consumed by the rich and the poor alike, and it was one of the most essential items of food. The tax on salt and the government monopoly over its production, Mahatma Gandhi declared, revealed the most oppressive face of British rule. Mahatma Gandhi’s letter was, in a way, an ultimatum. If the demands were not fulfilled by 11 March, the letter stated, the Congress would launch a civil disobedience campaign. Irwin was unwilling to negotiate. So Mahatma Gandhi started his famous salt march accompanied by 78 of his trusted volunteers. The march was over 240 miles, from Gandhiji’s ashram in Sabarmati to the Gujarati coastal town of Dandi. The volunteers walked for 24 days, about 10 miles a day. Thousands came to hear Mahatma Gandhi wherever he stopped, and he told them what he meant by swaraj and urged them to peacefully defy the British. On 6 April he reached Dandi, and ceremonially violated the law, manufacturing salt by boiling sea water. This marked the beginning of the Civil Disobedience Movement. How was this movement different from the Non-Cooperation Movement? People were now asked not only to refuse cooperation Source C The Independence Day Pledge, 26 January 1930 ‘We believe that it is the inalienable right of the Indian people, as of any other people, to have freedom and to enjoy the fruits of their toil and have the necessities of life, so that they may have full opportunities of growth. We believe also that if any government deprives a people of these rights and oppresses them, the people have a further right to alter it or to abolish it. The British Government in India has not only deprived the Indian people of their freedom but has based itself on the exploitation of the masses, and has ruined India economically, politically, culturally, and spiritually. We believe, therefore, that India must sever the British connection and attain Purna Swaraj or Complete Independence.’ Source Fig. 7 – The Dandi march. During the salt march Mahatma Gandhi was accompanied by 78 volunteers. On the way they were joined by thousands. with the British, as they had done in 1921-22, but also to break colonial laws. Thousands in different parts of the country broke the salt law, manufactured salt and demonstrated in front of government salt factories. As the movement spread, foreign cloth was boycotted, and liquor shops were picketed. Peasants refused to pay revenue and chaukidari taxes, village officials resigned, and in many places forest people violated forest laws – going into Reserved Forests to collect wood and graze cattle. Worried by the developments, the colonial government began arresting the Congress leaders one by one. This led to violent clashes in many palaces. When Abdul Ghaffar Khan, a devout disciple of Mahatma Gandhi, was arrested in April 1930, angry crowds demonstrated in the streets of Peshawar, facing armoured cars and police firing. Many were killed. A month later, when Mahatma Gandhi himself was arrested, industrial workers in Sholapur attacked police posts, municipal buildings, lawcourts and railway stations – all structures that symbolised British rule. A frightened government responded with a policy of brutal repression. Peaceful satyagrahis were attacked, women and children were beaten, and about 100,000 people were arrested. In such a situation, Mahatma Gandhi once again decided to call off the movement and entered into a pact with Irwin on 5 March 1931. By this Gandhi-Irwin Pact, Gandhiji consented to participate in a Round Table Conference (the Congress had boycotted the first Round Table Conference) in London and the government agreed to release the political prisoners. In December 1931, Gandhiji went to London for the conference, but the negotiations broke down and he returned disappointed. Back in India, he discovered that the government had begun a new cycle of repression. Ghaffar Khan and Jawaharlal Nehru were both in jail, the Congress had been declared illegal, and a series of measures had been imposed to prevent meetings, demonstrations and boycotts. With great apprehension, Mahatma Gandhi relaunched the Civil Disobedience Movement. For over a year, the movement continued, but by 1934 it lost its momentum. 3.2 How Participants saw the Movement Let us now look at the different social groups that participated in the Civil Disobedience Movement. Why did they join the movement? What were their ideals? What did swaraj mean to them? In the countryside, rich peasant communities – like the Patidars of Gujarat and the Jats of Uttar Pradesh – were active in the movement. Being producers of commercial crops, they were very hard hit by the trade depression and falling prices. As their cash income disappeared, they found it impossible to pay the government’s revenue demand. And the refusal of the government to reduce the revenue demand led to widespread resentment. These rich peasants became enthusiastic supporters of the Civil Disobedience Movement, organising their communities, and at times forcing reluctant members, to participate in the boycott programmes. For them the fight for swaraj was a struggle against high revenues. But they were deeply disappointed when the movement was called off in 1931 without the revenue rates being revised. So when the movement was restarted in 1932, many of them refused to participate. The poorer peasantry were not just interested in the lowering of the revenue demand. Many of them were small tenants cultivating land they had rented from landlords. As the Depression continued and cash incomes dwindled, the small tenants found it difficult to pay their rent. They wanted the unpaid rent to the landlord to be remitted. They joined a variety of radical movements, often led by Socialists and Communists. Apprehensive of raising issues that might upset the rich peasants and landlords, the Congress was unwilling to support ‘no rent’ campaigns in most places. So the relationship between the poor peasants and the Congress remained uncertain. Box 1 ‘To the altar of this revolution we have brought our youth as incense’ Many nationalists thought that the struggle against the British could not be won through non-violence. In 1928, the Hindustan Socialist Republican Army (HSRA) was founded at a meeting in Ferozeshah Kotla ground in Delhi. Amongst its leaders were Bhagat Singh, Jatin Das and Ajoy Ghosh. In a series of dramatic actions in different parts of India, the HSRA targeted some of the symbols of British power. In April 1929, Bhagat Singh and Batukeswar Dutta threw a bomb in the Legislative Assembly. In the same year there was an attempt to blow up the train that Lord Irwin was travelling in. Bhagat Singh was 23 when he was tried and executed by the colonial government. During his trial, Bhagat Singh stated that he did not wish to glorify ‘the cult of the bomb and pistol’ but wanted a revolution in society: ‘Revolution is the inalienable right of mankind. Freedom is the imprescriptible birthright of all. The labourer is the real sustainer of society … To the altar of this revolution we have brought our youth as incense, for no sacrifice is too great for so magnificent a cause. We are content. We await the advent of revolution. Inquilab Zindabad!’ What about the business classes? How did they relate to the Civil Disobedience Movement? During the First World War, Indian merchants and industrialists had made huge profits and become powerful (see Chapter 5). Keen on expanding their business, they now reacted against colonial policies that restricted business activities. They wanted protection against imports of foreign goods, and a rupee-sterling foreign exchange ratio that would discourage imports. To organise business interests, they formed the Indian Industrial and Commercial Congress in 1920 and the Federation of the Indian Chamber of Commerce and Industries (FICCI) in 1927. Led by prominent industrialists like Purshottamdas Thakurdas and G. D. Birla, the industrialists attacked colonial control over the Indian economy, and supported the Civil Disobedience Movement when it was first launched. They gave financial assistance and refused to buy or sell imported goods. Most businessmen came to see swaraj as a time when colonial restrictions on business would no longer exist and trade and industry would flourish without constraints. But after the failure of the Round Table Conference, business groups were no longer uniformly enthusiastic. They were apprehensive of the spread of militant activities, and worried about prolonged disruption of business, as well as of the growing influence of socialism amongst the younger members of the Congress. The industrial working classes did not participate in the Civil Disobedience Movement in large numbers, except in the Nagpur region. As the industrialists came closer to the Congress, workers stayed aloof. But in spite of that, some workers did participate in the Civil Disobedience Movement, selectively adopting some of the ideas of the Gandhian programme, like boycott of foreign goods, as part of their own movements against low wages and poor working conditions. There were strikes by railway workers in 1930 and dockworkers in 1932. In 1930 thousands of workers in Chotanagpur tin mines wore Gandhi caps and participated in protest rallies and boycott campaigns. But the Congress was reluctant to include workers’ demands as part of its programme of struggle. It felt that this would alienate industrialists and divide the anti-imperial forces. Another important feature of the Civil Disobedience Movement was the large-scale participation of women. During Gandhiji’s salt march, thousands of women came out of their homes to listen to him. They participated in protest marches, manufactured salt, and Some important dates 1918-19 Distressed UP peasants organised by Baba Ramchandra. April 1919 Gandhian hartal against Rowlatt Act; Jallianwala Bagh massacre. January 1921 Non-Cooperation and Khilafat movement launched. February 1922 Chauri Chaura; Gandhiji withdraws Non-Cooperation movement. May 1924 Alluri Sitarama Raju arrested ending a two-year armed tribal struggle. December 1929 Lahore Congress; Congress adopts the demand for ‘Purna Swaraj’. 1930 Ambedkar establishes Depressed Classes Association. March 1930 Gandhiji begins Civil Disobedience Movement by breaking salt law at Dandi. March 1931 Gandhiji ends Civil Disobedience Movement. December 1931 Second Round Table Conference. 1932 Civil Disobedience re-launched. Fig. 9 – Women join nationalist processions. During the national movement, many women, for the first time in their lives, moved out of their homes on to a public arena. Amongst the marchers you can see many old women, and mothers with children in their arms. picketed foreign cloth and liquor shops. Many went to jail. In urban areas these women were from high-caste families; in rural areas they came from rich peasant households. Moved by Gandhiji’s call, they began to see service to the nation as a sacred duty of women. Yet, this increased public role did not necessarily mean any radical change in the way the position of women was visualised. Gandhiji was convinced that it was the duty of women to look after home and hearth, be good mothers and good wives. And for a long time the Congress was reluctant to allow women to hold any position of authority within the organisation. It was keen only on their symbolic presence. 3.3 The Limits of Civil Disobedience Not all social groups were moved by the abstract concept of swaraj. One such group was the nation’s ‘untouchables’, who from around the 1930s had begun to call themselves dalit or oppressed. For long the Congress had ignored the dalits, for fear of offending the sanatanis, the conservative high-caste Hindus. But Mahatma Gandhi declared that swaraj would not come for a hundred years if untouchability was not eliminated. He called the ‘untouchables’ harijan, Discuss Why did various classes and groups of Indians participate in the Civil Disobedience Movement? or the children of God, organised satyagraha to secure them entry into temples, and access to public wells, tanks, roads and schools. He himself cleaned toilets to dignify the work of the bhangi (the sweepers), and persuaded upper castes to change their heart and give up ‘the sin of untouchability’. But many dalit leaders were keen on a different political solution to the problems of the community. They began organising themselves, demanding reserved seats in educational institutions, and a separate electorate that would choose dalit members for legislative councils. Political empowerment, they believed, would resolve the problems of their social disabilities. Dalit participation in the Civil Disobedience Movement was therefore limited, particularly in the Maharashtra and Nagpur region where their organisation was quite strong. Dr B.R. Ambedkar, who organised the dalits into the Depressed Classes Association in 1930, clashed with Mahatma Gandhi at the second Round Table Conference by demanding separate electorates for dalits. When the British government conceded Ambedkar’s demand, Gandhiji began a fast unto death. He believed that separate electorates for dalits would slow down the process of their integration into society. Ambedkar ultimately accepted Gandhiji’s position and the result was the Poona Pact of September 1932. It gave the Depressed Classes (later to be known as the Schedule Castes) reserved seats in provincial and central legislative councils, but they were to be voted in by the general electorate. The dalit movement, however, continued to be apprehensive of the Congress-led national movement. Some of the Muslim political organisations in India were also lukewarm in their response to the Civil Disobedience Movement. After the decline of the Non-Cooperation-Khilafat movement, a large section of Muslims felt alienated from the Congress. From the mid-1920s the Congress came to be more visibly associated with openly Hindu religious nationalist groups like the Hindu Mahasabha. As relations between Hindus and Muslims worsened, each community organised religious processions with militant fervour, provoking Hindu-Muslim communal clashes and riots in various cities. Every riot deepened the distance between the two communities. The Congress and the Muslim League made efforts to renegotiate an alliance, and in 1927 it appeared that such a unity could be forged. The important differences were over the question of representation in the future assemblies that were to be elected. Muhammad Ali Jinnah, one of the leaders of the Muslim League, was willing to give up the demand for separate electorates, if Muslims were assured reserved seats in the Central Assembly and representation in proportion to population in the Muslim-dominated provinces (Bengal and Punjab). Negotiations over the question of representation continued but all hope of resolving the issue at the All Parties Conference in 1928 disappeared when M.R. Jayakar of the Hindu Mahasabha strongly opposed efforts at compromise. When the Civil Disobedience Movement started there was thus an atmosphere of suspicion and distrust between communities. Alienated from the Congress, large sections of Muslims could not respond to the call for a united struggle. Many Muslim leaders and intellectuals expressed their concern about the status of Muslims as a minority within India. They feared that the culture and identity of minorities would be submerged under the domination of a Hindu majority. Source D In 1930, Sir Muhammad Iqbal, as president of the Muslim League, reiterated the importance of separate electorates for the Muslims as an important safeguard for their minority political interests. His statement is supposed to have provided the intellectual justification for the Pakistan demand that came up in subsequent years. This is what he said: ‘I have no hesitation in declaring that if the principle that the Indian Muslim is entitled to full and free development on the lines of his own culture and tradition in his own Indian home-lands is recognised as the basis of a permanent communal settlement, he will be ready to stake his all for the freedom of India. The principle that each group is entitled to free development on its own lines is not inspired by any feeling of narrow communalism … A community which is inspired by feelings of ill-will towards other communities is low and ignoble. I entertain the highest respect for the customs, laws, religions and social institutions of other communities. Nay, it is my duty according to the teachings of the Quran, even to defend their places of worship, if need be. Yet I love the communal group which is the source of life and behaviour and which has formed me what I am by giving me its religion, its literature, its thought, its culture and thereby its whole past as a living operative factor in my present consciousness … ‘Communalism in its higher aspect, then, is indispensable to the formation of a harmonious whole in a country like India. The units of Indian society are not territorial as in European countries … The principle of European democracy cannot be applied to India without recognising the fact of communal groups. The Muslim demand for the creation of a Muslim India within India is, therefore, perfectly justified… ‘The Hindu thinks that separate electorates are contrary to the spirit of true nationalism, because he understands the word “nation” to mean a kind of universal amalgamation in which no communal entity ought to retain its private individuality. Such a state of things, however, does not exist. India is a land of racial and religious variety. Add to this the general economic inferiority of the Muslims, their enormous debt, especially in the Punjab, and their insufficient majorities in some of the provinces, as at present constituted and you will begin to see clearly the meaning of our anxiety to retain separate electorates.’ Source Discuss Read the Source D carefully. Do you agree with Iqbal’s idea of communalism? Can you define communalism in a different way? 4 The Sense of Collective Belonging Notice how Tilak is surrounded by symbols of unity. The sacred institutions of different faiths (temple, church, masjid) frame the central figure. Nationalism spreads when people begin to believe that they are all part of the same nation, when they discover some unity that binds them together. But how did the nation become a reality in the minds of people? How did people belonging to different communities, regions or language groups develop a sense of collective belonging? This sense of collective belonging came partly through the experience of united struggles. But there were also a variety of cultural processes through which nationalism captured people’s imagination. History and fiction, folklore and songs, popular prints and symbols, all played a part in the making of nationalism. The identity of the nation, as you know (see Chapter 1), is most often symbolised in a figure or image. This helps create an image with which people can identify the nation. It was in the twentieth century, with the growth of nationalism, that the identity of India came to be visually associated with the image of Bharat Mata. The image was first created by Bankim Chandra Chattopadhyay. In the 1870s he wrote ‘Vande Mataram’ as a hymn to the motherland. Later it was included in his novel Anandamath and widely sung during the Swadeshi movement in Bengal. Moved by the Swadeshi movement, Abanindranath Tagore painted his famous image of Bharat Mata (see Fig. 12). In this painting Bharat Mata is portrayed as an ascetic figure; she is calm, composed, divine and spiritual. In subsequent years, the image of Bharat Mata acquired many different forms, as it circulated in popular prints, and was painted by different artists (see Fig. 14). Devotion to this mother figure came to be seen as evidence of one’s nationalism. Ideas of nationalism also developed through a movement to revive Indian folklore. In late-nineteenth-century India, nationalists began recording folk tales sung by bards and they toured villages to gather folk songs and legends. These tales, they believed, gave a true picture of traditional culture that had been corrupted and damaged by outside forces. It was essential to preserve this folk tradition in order to discover one’s national identity and restore a sense of pride in one’s past. In Bengal, Rabindranath Tagore himself began collecting ballads, nursery rhymes and myths, and led the movement for folk Notice that the mother figure here is shown as dispensing learning, food and clothing. The mala in one hand emphasises her ascetic quality. Abanindranath Tagore, like Ravi Varma before him, tried to develop a style of painting that could be seen as truly Indian. Nehru is here shown holding the image of Bharat Mata and the map of India close to his heart. In a lot of popular prints, nationalist leaders are shown offering their heads to Bharat Mata. The idea of sacrifice for the mother was powerful within popular imagination. revival. In Madras, Natesa Sastri published a massive four-volume collection of Tamil folk tales, The Folklore of Southern India. He believed that folklore was national literature; it was ‘the most trustworthy manifestation of people’s real thoughts and characteristics’. As the national movement developed, nationalist leaders became more and more aware of such icons and symbols in unifying people and inspiring in them a feeling of nationalism. During the Swadeshi movement in Bengal, a tricolour flag (red, green and yellow) was designed. It had eight lotuses representing eight provinces of British India, and a crescent moon, representing Hindus and Muslims. By 1921, Gandhiji had designed the Swaraj flag. It was again a tricolour (red, green and white) and had a spinning wheel in the centre, representing the Gandhian ideal of self-help. Carrying the flag, holding it aloft, during marches became a symbol of defiance. Another means of creating a feeling of nationalism was through reinterpretation of history. By the end of the nineteenth century many Indians began feeling that to instill a sense of pride in the nation, Indian history had to be thought about differently. The British saw Indians as backward and primitive, incapable of governing themselves. In response, Indians began looking into the past to discover India’s great achievements. They wrote about the glorious developments in ancient times when art and architecture, science and mathematics, religion and culture, law and philosophy, crafts and trade had flourished. This glorious time, in their view, was followed by a history of decline, when India was colonised. These nationalist histories urged the readers to take pride in India’s great achievements in the past and struggle to change the miserable conditions of life under British rule. These efforts to unify people were not without problems. When the past being glorified was Hindu, when the images celebrated were drawn from Hindu iconography, then people of other communities felt left out. Source E Activity Look at Figs. 12 and 14. Do you think these images will appeal to all castes and communities? Explain your views briefly. ‘In earlier times, foreign travellers in India marvelled at the courage, truthfulness and modesty of the people of the Arya vamsa; now they remark mainly on the absence of those qualities. In those days Hindus would set out on conquest and hoist their flags in Tartar, China and other countries; now a few soldiers from a tiny island far away are lording it over the land of India.’ Tarinicharan Chattopadhyay, Bharatbarsher Itihas (The History of Bharatbarsh), vol. 1, 1858. Source Conclusion A growing anger against the colonial government was thus bringing together various groups and classes of Indians into a common struggle for freedom in the first half of the twentieth century. The Congress under the leadership of Mahatma Gandhi tried to channel people’s grievances into organised movements for independence. Through such movements the nationalists tried to forge a national unity. But as we have seen, diverse groups and classes participated in these movements with varied aspirations and expectations. As their grievances were wide-ranging, freedom from colonial rule also meant different things to different people. The Congress continuously attempted to resolve differences, and ensure that the demands of one group did not alienate another. This is precisely why the unity within the movement often broke down. The high points of Congress activity and nationalist unity were followed by phases of disunity and inner conflict between groups. In other words, what was emerging was a nation with many voices wanting freedom from colonial rule. Write in brief Discuss Project Find out about the anti-colonial movement in Kenya. Compare and contrast India’s national movement with the ways in which Kenya became independent. Project

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The Making of a Global World

1. The Pre-modern World




When we talk of ‘globalisation’ we often refer to an economic system that has emerged since the last 50 years or so. But as you will see in this chapter, the making of the global world has a long history – of trade, of migration, of people in search of work, the movement of capital, and much else. As we think about the dramatic and visible signs of global interconnectedness in our lives today, we need to understand the phases through which this world in which we live has emerged.

Fig. 1 – Image of a ship on a memorial stone, Goa Museum, tenth century ce.

From the ninth century, images of ships appear regularly in memorial stones found in the western coast, indicating the significance of oceanic trade.

All through history, human societies have become steadily more interlinked. From ancient times, travellers, traders, priests and pilgrims travelled vast distances for knowledge, opportunity and spiritual fulfilment, or to escape persecution. They carried goods, money, values, skills, ideas, inventions, and even germs and diseases. As early as 3000 bce an active coastal trade linked the Indus valley civilisations with present-day West Asia. For more than a millennia, cowries (the Hindi cowdi or seashells, used as a form of currency) from the Maldives found their way to China and East Africa. The long-distance spread of disease-carrying germs may be traced as far back as the seventh century. By the thirteenth century it had become an unmistakable link.


1.1 Silk Routes Link the World

The silk routes are a good example of vibrant pre-modern trade and cultural links between distant parts of the world. The name ‘silk routes’ points to the importance of West-bound Chinese silk cargoes along this route. Historians have identified several silk routes, over land and by sea, knitting together vast regions of Asia, and linking Asia with Europe and northern Africa. They are known to have existed since before the Christian Era and thrived almost till the fifteenth century. But Chinese pottery also travelled the same route, as did textiles and spices from India and Southeast Asia. In return, precious metals – gold and silver – flowed from Europe to Asia.

Fig. 2 – Silk route trade as depicted in a Chinese cave painting, eighth century, Cave 217, Mogao Grottoes, Gansu, China.

Trade and cultural exchange always went hand in hand. Early Christian missionaries almost certainly travelled this route to Asia, as did early Muslim preachers a few centuries later. Much before all this, Buddhism emerged from eastern India and spread in several directions through intersecting points on the silk routes.


1.2 Food Travels: Spaghetti and Potato

Food offers many examples of long-distance cultural exchange. Traders and travellers introduced new crops to the lands they travelled. Even ‘ready’ foodstuff in distant parts of the world might share common origins. Take spaghetti and noodles. It is believed that noodles travelled west from China to become spaghetti. Or, perhaps Arab traders took pasta to fifth-century Sicily, an island now in Italy. Similar foods were also known in India and Japan, so the truth about their origins may never be known. Yet such guesswork suggests the possibilities of long-distance cultural contact even in the pre-modern world.

Fig. 3 – Merchants from Venice and the Orient exchanging goods, from Marco Polo, Book of Marvels, fifteenth century.

Many of our common foods such as potatoes, soya, groundnuts, maize, tomatoes, chillies, sweet potatoes, and so on were not known to our ancestors until about five centuries ago. These foods were only introduced in Europe and Asia after Christopher Columbus accidentally discovered the vast continent that would later become known as the Americas. (Here we will use ‘America’ to describe North America, South America and the Caribbean.) In fact, many of our common foods came from America’s original inhabitants – the American Indians.

Fig. 4 – The Irish Potato Famine, Illustrated London News, 1849.

Hungry children digging for potatoes in a field that has already been harvested, hoping to discover some leftovers. During the Great Irish Potato Famine (1845 to 1849), around 1,000,000 people died of starvation in Ireland, and double the number emigrated in search of work.

Sometimes the new crops could make the difference between life and death. Europe’s poor began to eat better and live longer with the introduction of the humble potato. Ireland’s poorest peasants became so dependent on potatoes that when disease destroyed the potato crop in the mid-1840s, hundreds of thousands died
of starvation.


1.3 Conquest, Disease and Trade

The pre-modern world shrank greatly in the sixteenth century after European sailors found a sea route to Asia and also successfully crossed the western ocean to America. For centuries before, the Indian Ocean had known a bustling trade, with goods, people, knowledge, customs, etc. criss-crossing its waters. The Indian subcontinent was central to these flows and a crucial point in their networks. The entry of the Europeans helped expand or redirect some of these flows towards Europe.

Before its ‘discovery’, America had been cut off from regular contact with the rest of the world for millions of years. But from the sixteenth century, its vast lands and abundant crops and minerals began to transform trade and lives everywhere.

Precious metals, particularly silver, from mines located in present-day Peru and Mexico also enhanced Europe’s wealth and financed its trade with Asia. Legends spread in seventeenth-century Europe about South America’s fabled wealth. Many expeditions set off in search of El Dorado, the fabled city of gold.

The Portuguese and Spanish conquest and colonisation of America was decisively under way by the mid-sixteenth century. European conquest was not just a result of superior firepower. In fact, the most powerful weapon of the Spanish conquerors was not a conventional military weapon at all. It was the germs such as those of smallpox that they carried on their person. Because of their long isolation, America’s original inhabitants had no immunity against these diseases that came from Europe. Smallpox in particular proved a deadly killer. Once introduced, it spread deep into the continent, ahead even of any Europeans reaching there. It killed and decimated whole communities, paving the way for conquest.

Box 1

‘Biological’ warfare?

John Winthorp, the first governor of the Massachusetts Bay colony in New England, wrote in May 1634 that smallpox signalled God’s blessing for the colonists: ‘… the natives … were neere (near) all dead of small Poxe (pox), so as the Lord hathe (had) cleared our title to what we possess’.

Alfred Crosby, Ecological Imperialism.

Guns could be bought or captured and turned against the invaders. But not diseases such as smallpox to which the conquerors were mostly immune.


New words

Dissenter – One who refuses to accept established beliefs and practices

Until the nineteenth century, poverty and hunger were common in Europe. Cities were crowded and deadly diseases were widespread. Religious conflicts were common, and religious dissenters were persecuted. Thousands therefore fled Europe for America. Here, by the eighteenth century, plantations worked by slaves captured in Africa were growing cotton and sugar for European markets.

Until well into the eighteenth century, China and India were among the world’s richest countries. They were also pre-eminent in Asian trade. However, from the fifteenth century, China is said to have restricted overseas contacts and retreated into isolation. China’s reduced role and the rising importance of the Americas gradually moved the centre of world trade westwards. Europe now emerged as the centre of world trade.

Fig. 5 – Slaves for sale, New Orleans, Illustrated London News, 1851.

A prospective buyer carefully inspecting slaves lined up before the auction. You can see two children along with four women and seven men in top hats and suit waiting to be sold. To attract buyers, slaves were often dressed in their best clothes.


Discuss

Explain what we mean when we say that the world ‘shrank’ in the 1500s.



2. The Nineteenth Century (1815-1914)

The world changed profoundly in the nineteenth century. Economic, political, social, cultural and technological factors interacted in complex ways to transform societies and reshape external relations.

Economists identify three types of movement or ‘flows’ within international economic exchanges. The first is the flow of trade which in the nineteenth century referred largely to trade in goods (e.g., cloth or wheat). The second is the flow of labour – the migration of people in search of employment. The third is the movement of capital for short-term or long-term investments over long distances.

All three flows were closely interwoven and affected peoples’ lives more deeply now than ever before. The interconnections could sometimes be broken – for example, labour migration was often more restricted than goods or capital flows. Yet it helps us understand the nineteenth-century world economy better if we look at the
three flows together.


2.1 A World Economy Takes Shape

A good place to start is the changing pattern of food production and consumption in industrial Europe. Traditionally, countries liked to be self-sufficient in food. But in nineteenth-century Britain, self-sufficiency in food meant lower living standards and social conflict. Why was this so?

Population growth from the late eighteenth century had increased the demand for food grains in Britain. As urban centres expanded and industry grew, the demand for agricultural products went up, pushing up food grain prices. Under pressure from landed groups, the government also restricted the import of corn. The laws allowing the government to do this were commonly known as the ‘Corn Laws’. Unhappy with high food prices, industrialists and urban dwellers forced the abolition of the Corn Laws.

After the Corn Laws were scrapped, food could be imported into Britain more cheaply than it could be produced within the country. British agriculture was unable to compete with imports. Vast areas of land were now left uncultivated, and thousands of men and women were thrown out of work. They flocked to the cities or migrated overseas.

Fig. 6 – Emigrant ship leaving for the US, by M.W. Ridley, 1869.

As food prices fell, consumption in Britain rose. From the mid-nineteenth century, faster industrial growth in Britain also led to higher incomes, and therefore more food imports. Around the world – in Eastern Europe, Russia, America and Australia – lands were cleared and food production expanded to meet the British demand.

Fig. 7 – Irish emigrants waiting to board the ship, by Michael Fitzgerald, 1874.

It was not enough merely to clear lands for agriculture. Railways were needed to link the agricultural regions to the ports. New harbours had to be built and old ones expanded to ship the new cargoes. People had to settle on the lands to bring them under cultivation. This meant building homes and settlements. All these activities in turn required capital and labour. Capital flowed from financial centres such as London. The demand for labour in places where labour was in short supply – as in America and Australia – led to more migration.

Nearly 50 million people emigrated from Europe to America and Australia in the nineteenth century. All over the world some 150 million are estimated to have left their homes, crossed oceans and vast distances over land in search of a better future.

Thus by 1890, a global agricultural economy had taken shape, accompanied by complex changes in labour movement patterns, capital flows, ecologies and technology. Food no longer came from a nearby village or town, but from thousands of miles away. It was not grown by a peasant tilling his own land, but by an agricultural worker, perhaps recently arrived, who was now working on a large farm that only a generation ago had most likely been a forest. It was transported by railway, built for that very purpose, and by ships which were increasingly manned in these decades by low-paid workers from southern Europe, Asia, Africa and the Caribbean.

Some of this dramatic change, though on a smaller scale, occurred closer home in west Punjab. Here the British Indian government built a network of irrigation canals to transform semi-desert wastes into fertile agricultural lands that could grow wheat and cotton for export. The Canal Colonies, as the areas irrigated by the new canals were called, were settled by peasants from other parts of Punjab.

Activity

Imagine that you are an agricultural worker who has arrived in America from Ireland. Write a paragraph on why you chose to come and how you are earning your living.

Of course, food is merely an example. A similar story can be told for cotton, the cultivation of which expanded worldwide to feed
British textile mills. Or rubber. Indeed, so rapidly did regional specialisation in the production of commodities develop, that between 1820 and 1914 world trade is estimated to have multiplied 25 to 40 times. Nearly 60 per cent of this trade comprised ‘primary products’ – that is, agricultural products such as wheat and cotton, and minerals such as coal.

Activity

Prepare a flow chart to show how Britain’s decision to import food led to increased migration to America and Australia.


2.2 Role of Technology

What was the role of technology in all this? The railways, steamships, the telegraph, for example, were important inventions without which we cannot imagine the transformed nineteenth-century world. But technological advances were often the result of larger social, political and economic factors. For example, colonisation stimulated new investments and improvements in transport: faster railways, lighter wagons and larger ships helped move food more cheaply and quickly from faraway farms to final markets.

Fig. 8 — The Smithfield Club Cattle Show, Illustrated London News, 1851.

Cattle were traded at fairs, brought by farmers for sale. One of the oldest livestock markets in London was at Smithfield. In the mid-nineteenth century a huge poultry and meat market was established near the railway line connecting Smithfield to all the meat-supplying centres of the country.

The trade in meat offers a good example of this connected process. Till the 1870s, animals were shipped live from America to Europe and then slaughtered when they arrived there. But live animals took up a lot of ship space. Many also died in voyage, fell ill, lost weight, or became unfit to eat. Meat was hence an expensive luxury beyond the reach of the European poor. High prices in turn kept demand and production down until the development of a new technology, namely, refrigerated ships, which enabled the transport of perishable foods over long distances.

Fig. 9 – Meat being loaded on to the ship, Alexandra, Illustrated London News, 1878.

Export of meat was possible only after ships were refrigerated.

Now animals were slaughtered for food at the starting point – in America, Australia or New Zealand – and then transported to Europe as frozen meat. This reduced shipping costs and lowered meat prices in Europe. The poor in Europe could now consume a more varied diet. To the earlier monotony of bread and potatoes many, though not all, could now add meat (and butter and eggs) to their diet. Better living conditions promoted social peace within the country and support for imperialism abroad.


2.3 Late nineteenth-century Colonialism

Trade flourished and markets expanded in the late nineteenth century. But this was not only a period of expanding trade and increased prosperity. It is important to realise that there was a darker side to this process. In many parts of the world, the expansion of trade and a closer relationship with the world economy also meant a loss of freedoms and livelihoods. Late-nineteenth-century European conquests produced many painful economic, social and ecological changes through which the colonised societies were brought into the world economy.

Look at a map of Africa (Fig. 10). You will see some countries’ borders run straight, as if they were drawn using a ruler. Well, in fact this was almost how rival European powers in Africa drew up the borders demarcating their respective territories. In 1885 the big European powers met in Berlin to complete the carving up of Africa between them.

Britain and France made vast additions to their overseas territories in the late nineteenth century. Belgium and Germany became new colonial powers. The US also became a colonial power in the late 1890s by taking over some colonies earlier held by Spain.

Let us look at one example of the destructive impact of colonialism on the economy and livelihoods of colonised people.


Chap-31

Fig. 10 – Map of colonial Africa at the end of the nineteenth century.

Box 2

Sir Henry Morton Stanley in Central Africa

Stanley was a journalist and explorer sent by the New York Herald to find Livingston, a missionary and explorer who had been in Africa for several years. Like other European and American explorers of the time, Stanley went with arms, mobilised local hunters, warriors and labourers to help him, fought with local tribes, investigated African terrains, and mapped different regions. These explorations helped the conquest of Africa. Geographical explorations were not driven by an innocent search for scientific information. They were directly linked to imperial projects.

Fig. 11 – Sir Henry Morton Stanley and his retinue in Central AfricaIllustrated London News, 1871.


2.4 Rinderpest, or the Cattle Plague

In Africa, in the 1890s, a fast-spreading disease of cattle plague or rinderpest had a terrifying impact on people’s livelihoods and the local economy. This is a good example of the widespread European imperial impact on colonised societies. It shows how in this era of conquest even a disease affecting cattle reshaped the lives and fortunes of thousands of people and their relations with the rest of the world.

Fig. 12 – Transport to the Transvaal gold mines, The Graphic, 1887.

Crossing the Wilge river was the quickest method of transport to the gold fields of Transvaal. After the discovery of gold in Witwatersrand, Europeans rushed to the region despite their fear of disease and death, and the difficulties of the journey. By the 1890s, South Africa contributed over 20 per cent of the world gold production.

Historically, Africa had abundant land and a relatively small population. For centuries, land and livestock sustained African livelihoods and people rarely worked for a wage. In late-nineteenth-century Africa there were few consumer goods that wages could buy. If you had been an African possessing land and livestock – and there was plenty of both – you too would have seen little reason to work for a wage.

In the late nineteenth century, Europeans were attracted to Africa due to its vast resources of land and minerals. Europeans came to Africa hoping to establish plantations and mines to produce crops and minerals for export to Europe. But there was an unexpected problem – a shortage of labour willing to work for wages.

Employers used many methods to recruit and retain labour. Heavy taxes were imposed which could be paid only by working for wages on plantations and mines. Inheritance laws were changed so that peasants were displaced from land: only one member of a family was allowed to inherit land, as a result of which the others were pushed into the labour market. Mineworkers were also confined in compounds and not allowed to move about freely.

Fig. 13Diggers at work in the Transvaal gold fields in South Africa, The Graphic, 1875.

Then came rinderpest, a devastating cattle disease.

Rinderpest arrived in Africa in the late 1880s. It was carried by infected cattle imported from British Asia to feed the Italian soldiers invading Eritrea in East Africa. Entering Africa in the east, rinderpest moved west ‘like forest fire’, reaching Africa’s Atlantic coast in 1892. It reached the Cape (Africa’s southernmost tip) five years later. Along the way rinderpest killed 90 per cent of the cattle.

The loss of cattle destroyed African livelihoods. Planters, mine owners and colonial governments now successfully monopolised what scarce cattle resources remained, to strengthen their power and to force Africans into the labour market. Control over the scarce resource of cattle enabled European colonisers to conquer and subdue Africa.

Similar stories can be told about the impact of Western conquest on other parts of the nineteenth-century world.


2.5 Indentured Labour Migration from India

The example of indentured labour migration from India also illustrates the two-sided nature of the nineteenth-century world.
It was a world of faster economic growth as well as great misery, higher incomes for some and poverty for others, technological advances in some areas and new forms of coercion in others.


New words

Indentured labour – A bonded labourer under contract to work for an employer for a specific amount of time, to pay off his passage to a new country or home

In the nineteenth century, hundreds of thousands of Indian and Chinese labourers went to work on plantations, in mines, and in road and railway construction projects around the world. In India, indentured labourers were hired under contracts which promised return travel to India after they had worked five years on their employer’s plantation.

Most Indian indentured workers came from the present-day regions of eastern Uttar Pradesh, Bihar, central India and the dry districts of Tamil Nadu. In the mid-nineteenth century these regions experienced many changes – cottage industries declined, land rents rose, lands were cleared for mines and plantations. All this affected the lives of the poor: they failed to pay their rents, became deeply indebted and were forced to migrate in search of work.

Fig. 14 Indian indentured labourers in a cocoa plantation in Trinidad, early nineteenth century.

The main destinations of Indian indentured migrants were the Caribbean islands (mainly Trinidad, Guyana and Surinam), Mauritius and Fiji. Closer home, Tamil migrants went to Ceylon and Malaya. Indentured workers were also recruited for tea plantations in Assam.

Recruitment was done by agents engaged by employers and paid a small commission. Many migrants agreed to take up work hoping to escape poverty or oppression in their home villages. Agents also tempted the prospective migrants by providing false information about final destinations, modes of travel, the nature of the work, and living and working conditions. Often migrants were not even told that they were to embark on a long sea voyage. Sometimes agents even forcibly abducted less willing migrants.

Nineteenth-century indenture has been described as a ‘new system of slavery’. On arrival at the plantations, labourers found conditions to be different from what they had imagined. Living and working conditions were harsh, and there were few legal rights.


Discuss

Discuss the importance of language and popular traditions in the creation of national identity.


But workers discovered their own ways of surviving. Many of them escaped into the wilds, though if caught they faced severe punishment. Others developed new forms of individual and collective self-expression, blending different cultural forms, old and new. In Trinidad the annual Muharram procession was transformed into a riotous carnival called ‘Hosay’ (for Imam Hussain) in which workers of all races and religions joined. Similarly, the protest religion of Rastafarianism (made famous by the Jamaican reggae star Bob Marley) is also said to reflect social and cultural links with Indian migrants to the Caribbean. ‘Chutney music’, popular in Trinidad and Guyana, is another creative contemporary expression of the post-indenture experience. These forms of cultural fusion are part of the making of the global world, where things from different places get mixed, lose their original characteristics and become something entirely new.

Fig. 15  Indentured laboureres photographed for identification.

For the employers, the numbers and not the names mattered.

Most indentured workers stayed on after their contracts ended, or returned to their new homes after a short spell in India. Consequently, there are large communities of people of Indian descent in these countries. Have you heard of the Nobel Prize-winning writer V.S. Naipaul? Some of you may have followed the exploits of West Indies cricketers Shivnarine Chanderpaul and Ramnaresh Sarwan. If you have wondered why their names sound vaguely Indian, the answer is that they are descended from indentured labour migrants from India.

From the 1900s India’s nationalist leaders began opposing the system of indentured labour migration as abusive and cruel. It was abolished in 1921. Yet for a number of decades afterwards, descendants of Indian indentured workers, often thought of as ‘coolies’, remained an uneasy minority in the Caribbean islands. Some of Naipaul’s early novels capture their sense of loss and alienation.

Fig. 16  A contract form of an indentured labourer.

2.6 Indian Entrepreneurs Abroad

Growing food and other crops for the world market required capital. Large plantations could borrow it from banks and markets. But what about the humble peasant?

Enter the Indian banker. Do you know of the Shikaripuri shroffs and Nattukottai Chettiars? They were amongst the many groups of bankers and traders who financed export agriculture in Central and Southeast Asia, using either their own funds or those borrowed from European banks. They had a sophisticated system to transfer money over large distances, and even developed indigenous forms of corporate organisation.

Indian traders and moneylenders also followed European colonisers into Africa. Hyderabadi Sindhi traders, however, ventured beyond European colonies. From the 1860s they established flourishing emporia at busy ports worldwide, selling local and imported curios to tourists whose numbers were beginning to swell, thanks to the development of safe and comfortable passenger vessels.

Source A_______________________________________________________________________

The testimony of an indentured labourer

Extract from the testimony of Ram Narain Tewary, an indentured labourer who spent ten years on Demerara in the early twentieth century.

‘… in spite of my best efforts, I could not properly do the works that were allotted to me ... In a few days I got my hands bruised all over and I could not go to work for a week for which I was prosecuted and sent to jail for 14 days. ... new emigrants find the tasks allotted to them extremely heavy and cannot complete them in a day. ... Deductions are also made from wages if the work is considered to have been done unsatisfactorily. Many people cannot therefore earn their full wages and are punished in various ways. In fact, the labourers have to spend their period of indenture in great trouble …’

Source: Department of Commerce and Industry, Emigration Branch. 1916


2.7 Indian Trade, Colonialism and the Global System

Historically, fine cottons produced in India were exported to Europe. With industrialisation, British cotton manufacture began to expand, and industrialists pressurised the government to restrict cotton imports and protect local industries. Tariffs were imposed on cloth imports into Britain. Consequently, the inflow of fine Indian cotton began to decline.

Fig. 17 – East India Company House, London.

This was the nerve centre of the worldwide operations of the East India Company.

From the early nineteenth century, British manufacturers also began to seek overseas markets for their cloth. Excluded from the British market by tariff barriers, Indian textiles now faced stiff competition in other international markets. If we look at the figures of exports from India, we see a steady decline of the share of cotton textiles: from some 30 per cent around 1800 to 15 per cent by 1815. By the 1870s this proportion had dropped to below 3 per cent.

Fig. 18 – A distant view of Surat and its river.

All through the seventeenth and early eighteenth centuries, Surat remained the main centre of overseas trade in the western Indian Ocean.

What, then, did India export? The figures again tell a dramatic story. While exports of manufactures declined rapidly, export of raw materials increased equally fast. Between 1812 and 1871, the share of raw cotton exports rose from 5 per cent to 35 per cent. Indigo used for dyeing cloth was another important export for many decades. And, as you have read last year, opium shipments to China grew rapidly from the 1820s to become for a while India’s single largest export. Britain grew opium in India and exported it to China and, with the money earned through this sale, it financed its tea and other imports from China.

Over the nineteenth century, British manufactures flooded the Indian market. Food grain and raw material exports from India to Britain and the rest of the world increased. But the value of British exports to India was much higher than the value of British imports from India. Thus Britain had a ‘trade surplus’ with India. Britain used this surplus to balance its trade deficits with other countries – that is, with countries from which Britain was importing more than it was selling to. This is how a multilateral settlement system works – it allows one country’s deficit with another country to be settled by its surplus with a third country. By helping Britain balance its deficits, India played a crucial role in the late-nineteenth-century world economy.

Britain’s trade surplus in India also helped pay the so-called ‘home charges’ that included private remittances home by British officials and traders, interest payments on India’s external debt, and pensions of British officials in India.

Chap-32

Fig. 19 – The trade routes that linked India to the world at the end of the seventeenth century.


The Inter-war Economy

The First World War (1914-18) was mainly fought in Europe. But its impact was felt around the world. Notably for our concerns in this chapter, it plunged the first half of the twentieth century into a crisis that took over three decades to overcome. During this period the world experienced widespread economic and political instability, and another catastrophic war.


3.1 Wartime Transformations

The First World War, as you know, was fought between two power blocs. On the one side were the Allies – Britain, France and Russia (later joined by the US); and on the opposite side were the Central Powers – Germany, Austria-Hungary and Ottoman Turkey. When the war began in August 1914, many governments thought it would be over by Christmas. It lasted more than four years.

The First World War was a war like no other before. The fighting involved the world’s leading industrial nations which now harnessed the vast powers of modern industry to inflict the greatest possible destruction on their enemies.

This war was thus the first modern industrial war. It saw the use of machine guns, tanks, aircraft, chemical weapons, etc. on a massive scale. These were all increasingly products of modern large-scale industry. To fight the war, millions of soldiers had to be recruited from around the world and moved to the frontlines on large ships and trains. The scale of death and destruction – 9 million dead and 20 million injured – was unthinkable before the industrial age, without the use of industrial arms.

Fig. 20 – Workers in a munition factory during the First World War.

Production of armaments increased rapidly to meet war demands.

Most of the killed and maimed were men of working age. These deaths and injuries reduced the able-bodied workforce in Europe. With fewer numbers within the family, household incomes declined after the war.

During the war, industries were restructured to produce war-related goods. Entire societies were also reorganised for war – as men went to battle, women stepped in to undertake jobs that earlier only men were expected to do.

The war led to the snapping of economic links between some of the world’s largest economic powers which were now fighting each other to pay for them. So Britain borrowed large sums of money from US banks as well as the US public. Thus the war transformed the US from being an international debtor to an international creditor. In other words, at the war’s end, the US and its citizens owned more overseas assets than foreign governments and citizens owned in the US.


3.2 Post-war Recovery

Post-war economic recovery proved difficult. Britain, which was the world’s leading economy in the pre-war period, in particular faced a prolonged crisis. While Britain was preoccupied with war, industries had developed in India and Japan. After the war Britain found it difficult to recapture its earlier position of dominance in the Indian market, and to compete with Japan internationally. Moreover, to finance war expenditures Britain had borrowed liberally from the US. This meant that at the end of the war Britain was burdened with huge external debts.

The war had led to an economic boom, that is, to a large increase in demand, production and employment. When the war boom ended, production contracted and unemployment increased. At the same time the government reduced bloated war expenditures to bring them into line with peacetime revenues. These developments led to huge job losses – in 1921 one in every five British workers was out of work. Indeed, anxiety and uncertainty about work became an enduring part of the post-war scenario.

Many agricultural economies were also in crisis. Consider the case of wheat producers. Before the war, eastern Europe was a major supplier of wheat in the world market. When this supply was disrupted during the war, wheat production in Canada, America and Australia expanded dramatically. But once the war was over, production in eastern Europe revived and created a glut in wheat output. Grain prices fell, rural incomes declined, and farmers fell deeper into debt.


3.3 Rise of Mass Production and Consumption

In the US, recovery was quicker. We have already seen how the war helped boost the US economy. After a short period of economic trouble in the years after the war, the US economy resumed its strong growth in the early 1920s.

Fig. 21 – T-Model automobiles lined up outside the factory.

One important feature of the US economy of the 1920s was mass production. The move towards mass production had begun in the late nineteenth century, but in the 1920s it became a characteristic feature of industrial production in the US. A well-known pioneer of mass production was the car manufacturer Henry Ford. He adapted the assembly line of a Chicago slaughterhouse (in which slaughtered animals were picked apart by butchers as they came down a conveyor belt) to his new car plant in Detroit. He realised that the ‘assembly line’ method would allow a faster and cheaper way of producing vehicles. The assembly line forced workers to repeat a single task mechanically and continuously – such as fitting a particular part to the car – at a pace dictated by the conveyor belt. This was a way of increasing the output per worker by speeding up the pace of work. Standing in front of a conveyor belt no worker could afford to delay the motions, take a break, or even have a friendly word with a workmate. As a result, Henry Ford’s cars came off the assembly line at three-minute intervals, a speed much faster than that achieved by previous methods. The T-Model Ford was the world’s first mass-produced car.

At first workers at the Ford factory were unable to cope with the stress of working on assembly lines in which they could not control the pace of work. So they quit in large numbers. In desperation Ford doubled the daily wage to $5 in January 1914. At the same time he banned trade unions from operating in his plants.

Henry Ford recovered the high wage by repeatedly speeding up the production line and forcing workers to work ever harder. So much so, he would soon describe his decision to double the daily wage as the ‘best cost-cutting decision’ he had ever made.

Fordist industrial practices soon spread in the US. They were also widely copied in Europe in the 1920s. Mass production lowered costs and prices of engineered goods. Thanks to higher wages, more workers could now afford to purchase durable consumer goods such as cars. Car production in the US rose from 2 million in 1919 to more than 5 million in 1929. Similarly, there was a spurt in the purchase of refrigerators, washing machines, radios, gramophone players, all through a system of ‘hire purchase’ (i.e., on credit repaid in weekly or monthly instalments). The demand for refrigerators, washing machines, etc. was also fuelled by a boom in house construction and home ownership, financed once again by loans.

Box 3

Fig. 22 – Migrant agricultural worker’s family, homeless and hungry, during the Great Depression, 1936. Courtesy: Library of Congress, Prints and Photographs Division.

Many years later, Dorothea Lange, the photographer who shot this picture, recollected the moment of her encounter with the 
hungry mother:

‘I saw and approached the hungry and desperate mother, as if drawn by a magnet … I did not ask her name or her history. She told me her age, that she was thirty-two. She said that they (i.e., she and her seven children) had been living on frozen vegetables from the surrounding fields, and birds that the children killed … There she sat … with her children huddled around her, and seemed to know that my pictures might help her, and so she helped me …’ 

From: Popular Photography, February 1960.


The housing and consumer boom of the 1920s created the basis of prosperity in the US. Large investments in housing and household goods seemed to create a cycle of higher employment and incomes, rising consumption demand, more investment, and yet more employment and incomes.

In 1923, the US resumed exporting capital to the rest of the world and became the largest overseas lender. US imports and capital exports also boosted European recovery and world trade and income growth over the next six years.

All this, however, proved too good to last. By 1929 the world would be plunged into a depression such as it had never
experienced before.


3.4 The Great Depression

The Great Depression began around 1929 and lasted till the mid-1930s. During this period most parts of the world experienced catastrophic declines in production, employment, incomes and trade. The exact timing and impact of the depression varied across countries. But in general, agricultural regions and communities were the worst affected. This was because the fall in agricultural prices was greater and more prolonged than that in the prices of industrial goods.

The depression was caused by a combination of several factors. We have already seen how fragile the post-war world economy was. First: agricultural overproduction remained a problem. This was made worse by falling agricultural prices. As prices slumped and agricultural incomes declined, farmers tried to expand production and bring a larger volume of produce to the market to maintain their overall income. This worsened the glut in the market, pushing down prices even further. Farm produce rotted for a lack of buyers.

Second: in the mid-1920s, many countries financed their investments through loans from the US. While it was often extremely easy to raise loans in the US when the going was good, US overseas lenders panicked at the first sign of trouble. In the first half of 1928, US overseas loans amounted to over $ 1 billion. A year later it was one quarter of that amount. Countries that depended crucially on US loans now faced an acute crisis.

Fig. 23 – People lining up for unemployment benefits, US, photograph by Dorothea Lange, 1938. Courtesy: Library of Congress, Prints and Photographs Division.

When an unemployment census showed
10 million people out of work, the local government in many US states began making small allowances to the unemployed. These long queues came to symbolise the poverty and unemployment of the depression years.

The withdrawal of US loans affected much of the rest of the world, though in different ways. In Europe it led to the failure of some major banks and the collapse of currencies such as the British pound sterling. In Latin America and elsewhere it intensified the slump in agricultural and raw material prices. The US attempt to protect its economy in the depression by doubling import duties also dealt another severe blow to world trade.

The US was also the industrial country most severely affected by the depression. With the fall in prices and the prospect of a depression, US banks had also slashed domestic lending and called back loans. Farms could not sell their harvests, households were ruined, and businesses collapsed. Faced with falling incomes, many households in the US could not repay what they had borrowed, and were forced to give up their homes, cars and other consumer durables. The consumerist prosperity of the 1920s now disappeared in a puff of dust. As unemployment soared, people trudged long distances looking for any work they could find. Ultimately, the US banking system itself collapsed. Unable to recover investments, collect loans and repay depositors, thousands of banks went bankrupt and were forced to close. The numbers are phenomenal: by 1933 over 4,000 banks had closed and between 1929 and 1932 about 110, 000 companies had collapsed.

By 1935, a modest economic recovery was under way in most industrial countries. But the Great Depression’s wider effects on society, politics and international relations, and on peoples’ minds, proved more enduring.


3.5 India and the Great Depression

If we look at the impact of the depression on India we realise how integrated the global economy had become by the early twentieth century. The tremors of a crisis in one part of the world were quickly relayed to other parts, affecting lives, economies and societies worldwide.

In the nineteenth century, as you have seen, colonial India had become an exporter of agricultural goods and importer of manufactures. The depression immediately affected Indian trade. India’s exports and imports nearly halved between 1928 and 1934. As international prices crashed, prices in India also plunged. Between 1928 and 1934, wheat prices in India fell by 50 per cent.

Peasants and farmers suffered more than urban dwellers. Though agricultural prices fell sharply, the colonial government refused to reduce revenue demands. Peasants producing for the world market were the worst hit.

Consider the jute producers of Bengal. They grew raw jute that was processed in factories for export in the form of gunny bags. But as gunny exports collapsed, the price of raw jute crashed more than 60 per cent. Peasants who borrowed in the hope of better times or to increase output in the hope of higher incomes faced ever lower prices, and fell deeper and deeper into debt. Thus the Bengal jute growers’ lament:

grow more jute, brothers, with the hope of greater cash.

Costs and debts of jute will make your hopes get dashed.

When you have spent all your money and got the crop off the ground,

… traders, sitting at home, will pay only Rs 5 a maund.

Across India, peasants’ indebtedness increased. They used up their savings, mortgaged lands, and sold whatever jewellery and precious metals they had to meet their expenses. In these depression years, India became an exporter of precious metals, notably gold. The famous economist John Maynard Keynes thought that Indian gold exports promoted global economic recovery. They certainly helped speed up Britain’s recovery, but did little for the Indian peasant. Rural India was thus seething with unrest when Mahatma Gandhi launched the civil disobedience movement at the height of the depression in 1931.


Discuss

Who profits from jute cultivation according to the jute growers’ lament? Explain.


The depression proved less grim for urban India. Because of falling prices, those with fixed incomes – say town-dwelling landowners who received rents and middle-class salaried employees – now found themselves better off. Everything cost less. Industrial investment also grew as the government extended tariff protection to industries, under the pressure of nationalist opinion.



4. Rebuilding a World Economy: The Post-war Era

The Second World War broke out a mere two decades after the end of the First World War. It was fought between the Axis powers (mainly Nazi Germany, Japan and Italy) and the Allies (Britain, France, the Soviet Union and the US). It was a war waged for six years on many fronts, in many places, over land, on sea, in the air.

Fig. 24 – German forces attack Russia, July 1941.

Hitler’s attempt to invade Russia was a turning point in the war.

Once again death and destruction was enormous. At least 60 million people, or about 3 per cent of the world’s 1939 population, are believed to have been killed, directly or indirectly, as a result of the war. Millions more were injured.

Unlike in earlier wars, most of these deaths took place outside the battlefields. Many more civilians than soldiers died from war-related causes. Vast parts of Europe and Asia were devastated, and several cities were destroyed by aerial bombardment or relentless
artillery attacks. The war caused an immense amount of economic devastation and social disruption. Reconstruction promised to
be long and difficult.

Fig. 25 – Stalingrad in Soviet Russia devastated by the war.

Two crucial influences shaped post-war reconstruction. The first was the US’s emergence as the dominant economic, political and military power in the Western world. The second was the dominance of the Soviet Union. It had made huge sacrifices to defeat Nazi Germany, and transformed itself from a backward agricultural country into a world power during the very years when the capitalist world was trapped in the Great Depression.


4.1 Post-war Settlement and the Bretton Woods Institutions

Economists and politicians drew two key lessons from inter-war economic experiences. First, an industrial society based on mass production cannot be sustained without mass consumption. But to ensure mass consumption, there was a need for high and stable incomes. Incomes could not be stable if employment was unstable. Thus stable incomes also required steady, full employment.

But markets alone could not guarantee full employment. Therefore governments would have to step in to minimise fluctuations of price, output and employment. Economic stability could be ensured only through the intervention of the government.

Fig. 26 – Mount Washington Hotel situated in Bretton Woods, US.

This is the place where the famous conference was held.

The second lesson related to a country’s economic links with the outside world. The goal of full employment could only be achieved if governments had power to control flows of goods, capital and labour.

Thus in brief, the main aim of the post-war international economic system was to preserve economic stability and full employment in the industrial world. Its framework was agreed upon at the United Nations Monetary and Financial Conference held in July 1944 at Bretton Woods in New Hampshire, USA.

The Bretton Woods conference established the International Monetary Fund (IMF) to deal with external surpluses and deficits of its member nations. The International Bank for Reconstruction and Development (popularly known as the World Bank) was set up to finance post-war reconstruction. The IMF and the World Bank are referred to as the Bretton Woods institutions or sometimes the Bretton Woods twins. The post-war international economic system is also often described as the Bretton Woods system.


Discuss

Briefly summarise the two lessons learnt by economists and politicians from the inter-war economic experience?


The IMF and the World Bank commenced financial operations in 1947. Decision-making in these institutions is controlled by the Western industrial powers. The US has an effective right of veto over key IMF and World Bank decisions.

The international monetary system is the system linking national currencies and monetary system. The Bretton Woods system was based on fixed exchange rates. In this system, national currencies, for example the Indian rupee, were pegged to the dollar at a fixed exchange rate. The dollar itself was anchored to gold at a fixed price of $35 per ounce of gold.


4.2 The Early Post-war Years

The Bretton Woods system inaugurated an era of unprecedented growth of trade and incomes for the Western industrial nations and Japan. World trade grew annually at over 8 per cent between 1950 and 1970 and incomes at nearly 5 per cent. The growth was also mostly stable, without large fluctuations. For much of this period the unemployment rate, for example, averaged less than 5 per cent in most industrial countries.

Box 4 ____________________________________________________________________

What are MNCs?

Multinational corporations (MNCs) are large companies that operate in several countries at the same time. The first MNCs were established in the 1920s. Many more came up in the 1950s and 1960s as US businesses expanded worldwide and Western Europe and Japan also recovered to become powerful industrial economies. The worldwide spread of MNCs was a notable feature of the 1950s and 1960s. This was partly because high import tariffs imposed by different governments forced MNCs to locate their manufacturing operations and become ‘domestic producers’ in as many countries as possible.


These decades also saw the worldwide spread of technology and enterprise. Developing countries were in a hurry to catch up with the advanced industrial countries. Therefore, they invested vast amounts of capital, importing industrial plant and equipment featuring modern technology.


New words

Tariff – Tax imposed on a country’s imports from the rest of the world. Tariffs are levied at the point of entry, i.e., at the border or the airport.


4.3 Decolonisation and Independence

When the Second World War ended, large parts of the world were still under European colonial rule. Over the next two decades most colonies in Asia and Africa emerged as free, independent nations. They were, however, overburdened by poverty and a lack of resources, and their economies and societies were handicapped by long periods of colonial rule.

The IMF and the World Bank were designed to meet the financial needs of the industrial countries. They were not equipped to cope with the challenge of poverty and lack of development in the former colonies. But as Europe and Japan rapidly rebuilt their economies, they grew less dependent on the IMF and the World Bank. Thus from the late 1950s the Bretton Woods institutions began to shift their attention more towards developing countries.

As colonies, many of the less developed regions of the world had been part of Western empires. Now, ironically, as newly independent countries facing urgent pressures to lift their populations out of poverty, they came under the guidance of international agencies dominated by the former colonial powers. Even after many years of decolonisation, the former colonial powers still controlled vital resources such as minerals and land in many of their former colonies.

Large corporations of other powerful countries, for example the US, also often managed to secure rights to exploit developing countries’ natural resources very cheaply.

At the same time, most developing countries did not benefit from the fast growth the Western economies experienced in the 1950s and 1960s. Therefore they organised themselves as a group – the Group of 77 (or G-77) – to demand a new international economic order (NIEO). By the NIEO they meant a system that would give them real control over their natural resources, more development assistance, fairer prices for raw materials, and better access for their manufactured goods in developed countries’ markets.


4.4 End of Bretton Woods and the Beginning of ‘Globalisation’

Despite years of stable and rapid growth, not all was well in this post-war world. From the 1960s the rising costs of its overseas involvements weakened the US’s finances and competitive strength. The US dollar now no longer commanded confidence as the world’s principal currency. It could not maintain its value in relation to gold. This eventually led to the collapse of the system of fixed exchange rates and the introduction of a system of floating exchange rates.


New words

Exchange rates They link national currencies for purposes of international trade. There are broadly two kinds of exchange rates: fixed exchange rate and floating exchange rate

Fixed exchange ratesWhen exchange rates are fixed and governments intervene to prevent movements in them

Flexible or floating exchange rates These rates fluctuate depending on demand and supply of currencies in foreign exchange markets, in principle without interference by governments


From the mid-1970s the international financial system also changed in important ways. Earlier, developing countries could turn to international institutions for loans and development assistance. But now they were forced to borrow from Western commercial banks and private lending institutions. This led to periodic debt crises in the developing world, and lower incomes and increased poverty, especially in Africa and Latin America.

The industrial world was also hit by unemployment that began
rising from the mid-1970s and remained high until the early 1990s. From the late 1970s MNCs also began to shift production operations to low-wage Asian countries.

China had been cut off from the post-war world economy since its revolution in 1949. But new economic policies in China and the collapse of the Soviet Union and Soviet-style communism in Eastern Europe brought many countries back into the fold of the world economy.

Wages were relatively low in countries like China. Thus they became attractive destinations for investment by foreign MNCs competing to capture world markets. Have you noticed that most of the TVs, mobile phones, and toys we see in the shops seem to be made in China? This is because of the low-cost structure of the Chinese economy, most importantly its low wages.

The relocation of industry to low-wage countries stimulated world trade and capital flows. In the last two decades the world’s economic geography has been transformed as countries such as India, China and Brazil have undergone rapid economic transformation.


Write in brief

1. Give two examples of different types of global exchanges which took place before the seventeenth century, choosing one example from Asia and one from the Americas.

2. Explain how the global transfer of disease in the pre-modern world helped in the colonisation of the Americas.

3. Write a note to explain the effects of the following:

a) The British government’s decision to abolish the Corn Laws.

b) The coming of rinderpest to Africa.

c) The death of men of working-age in Europe because of the World War.

d) The Great Depression on the Indian economy.

e) The decision of MNCs to relocate production to Asian countries.

4. Give two examples from history to show the impact of technology on food availability.

5. What is meant by the Bretton Woods Agreement?

Discuss

1. Imagine that you are an indentured Indian labourer in the Caribbean. Drawing from the details in this chapter, write a letter to your familydescribing your life and feelings.

2. Explain the three types of movements or flows within international economic exchange. Find one example of each type of flow which involved India and Indians, and write a short account of it.

3. Explain the causes of the Great Depression.

4. Explain what is referred to as the G-77 countries. In what ways can G-77 be seen as a reaction to the activities of the Bretton Woods twins?


Project

Find out more about gold and diamond mining in South Africa in the nineteenth century. Who controlled the gold and diamond companies? Who were the miners and what were their lives like?


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