Power and dominance in the Colonial and Post-colonial times

By Sunanda Sen (guest blogger)

The recent uprising and protests, in a large number of the White-settled countries in connection with the murder of an unarmed Black-American, George Floyd by a White policeman on duty in Minneapolis has re-opened pages of history relating to unequal power , with state- sanction of White supremacy over ‘others’ having a subordinate status. As history unfolds it, the over-powered included the slaves acquired from Africa, the indentured labour shipped from tropical Asia, while colonies like India providing the flow of unpaid ‘drain’ of surpluses from taxes collected within. The pattern of racial dominance seems to have continued , even today, in the incapacitated George Floyd’s choking to death.

One observes the vehement reactions to the murder on part of the present generation, both Whites and the non-Whites, mostly from Northern America and Britain. This comes not only with the claim that ‘Black Lives Matter’ but with questionings of repressive policies in the past, with oppression of the African slave community in US and elsewhere, and of labour from the tropics. The anger reflects itself in massive protests by the youth in different corners of USA as well as in Canada, followed by the overthrown statues in UK. The dismantling include the statue of Edward Colson in Bristol , the Deputy Governor of the then Royal African Company which had the monopoly in England, from 1662, of trade in precious metals and slaves along the west coast of Africa. Colson. organised transport of 84000 Africans to different parts of the world as slaves. Well- connected to the ruling elite including the Royalty, Colson made a fortune while leaving a mark in Bristol in terms of various buildings which continue to bear his name today.

Protests in England, spread beyond Bristol to Oxford and London, has not been just targeting the symbolic presence of the colonial era in statues of leading statesmen and wealthy traders of Britain in years of Britain’s global supremacy. The voices bring to the fore the need for a re-read of colonial history - the modality of the colonial past engineered by statesmen like Robert Clive, Cecil Rhodes and even Winston Churchill - rewarded for the successful handling of colonial matters. While this may mean further academic research on issues relating to Colonialism , the anti-racist messages, hopefully, will also help in arresting the adversities faced by sections of society identified as the ‘other’ by the White community.

Digging up the historical records of oppression, one recalls , in US, the African slaves in the background of the Civil War, and the Colonial past for the British Empire, details of which may help in excavating further details of the mode of persecution. One comes across the loot of the taxed revenue from Colonial India by Britain, the ruling nation , all in the pretext of meeting the so-called ‘Home charges ’ to meet overseas expenditure.As pointed by Indian nationalists like Dadabhai Naoroji the tribute paid could be characterized as a Drain of resources! One also needs to reckon ,in a similar context, the oligarchy between the Secretary of State for India in London and British silver merchants who collided to keep out Bombay silver traders and banker like Chunilal Saraya from silver trade as needed for coinage in India. Similar instances of coercion, malpractices and misappropriation abound in the history of British domination in Colonial India.

Parallel to the drain of resources which consisted of the unpaid transfers of revenue from colonial India, there ran a parallel drain from India, which was the flow of indentured labour. Those were shipped to the British owned plantation islands in Mauritius, Demerera ( now Guyana) and Jamaica , to work in sub-human conditions , and to fulfil the commercial interests of the British elite owning such estates. The flow was much needed in the plantations as slavery was banned all over the British Empire by an Act passed in the British Parliament in 1938. Incidentally, the legislation, advanced by the slavery abolition lobby in England, was also motivated by their interest in achieving efficiency by having a ‘ free market’ of labour . However, the abotion of slavery, followed by other forms of deploying labour, was far from delivering a free labour market. As for planters, the easiest way to keep the former slaves attached to the estates was to have them as apprentices over a short period. It was virtually a forced scheme of four to six years for the former slaves above age six and a half , thus in effect a form of compensation to the planters. Moreover, the emancipated slaves were forced to provide 40½ hours a week of unpaid labor to their former masters over the six years of apprenticeship. The scheme ended by 1838, largely with reluctance of ex-slaves to continue as plantation workers .

By this time indenturing of labour from India started almost immediately with a fresh stream of involuntary workforce procured from there. Given the arduousness of the work and the sub subsistence wages the planters were ready to pay, it soon became apparent that it was only those who were too poor to pay their own passage to the islands would accept such employment . Thus the planters' targeted the denser populations of Asia which included those in the poverty and famine-stricken India. “Importation of East Indian Coolies", as pointed out by the Royal Commission of Labor ( 1892), “did much to rescue the sugar industry from bankruptcy”.

Details are available on the miserable state those workers faced in the distant islands, having been recruited with no knowledge of the destination or the terms of the make-believe contract. On reaching the workplace, their movements were under strict control with penalties including the whipping by cat-o-nine tails to inflict severe punishments. On the whole, the flow of the recruited Indians as above signified a parallel process of drain from the subcontinent, of people often ‘ignorant’ of the destination or the life waiting there.

Voyages to carry labour were organised ,among others, by the well connected Liverpool merchant, John Gladstone, familiar with the earlier slave trade. Owning estates in plantations and a shipping company he was responsible for initiating shipments of indentured labour from India by using the contact of Gillanders, Arbuthnot and Company in India with a request for the “… supply of 100 young, active, able-bodied” laborers on contract for his estates.” That he was powerful enough to stall a temporary ban on such shipping was evident with his success in persuading Robert Peel. British administration was very much supportive of the indenturing project which helped both investments on those estates by rich people in London City and the mercantile trade in processing raw sugar from there.

Power, based on proximity to ruling authorities, has been responsible for using race as a tool for subordination. This is evident in the continuing pattern of oppression, from the colonial era down to the current episodes of brutality in the most advanced regions . Refusal and disapprovals, on part of the current generation, to accept the past, will hopefully help to shape a future which conforms to humanity.

Stop bashing GDP!

So everybody hates the Gross Domestic Product! The New York Times and the Financial Times have recently published articles criticizing the main measure of production in the economy. This is certainly not new, and criticism of the value of GDP for certain purposes, as a measure of well-being, for example, have led in the past to the creation of other variables like the United Nations Development Programme's Human Development Index, which includes GDP per capita (actually Gross National Income per capita), life expectancy at birth and average years of schooling for adults.

In fact, the NYTimes article basis for the supposedly dramatic "Rise and Fall of the GDP" is it's inability to measure well-being, and in it the author emphasizes its disadvantages when compared to the HDI. The NYTimes piece quotes Sen, the godfather of HDI, complaining about the "silliness about identifying growth with development." Of course, since GDP is only about the material growth of the economy, it would be an incomplete measure of development.

The most common type of critique is that GDP does not count many things, like environmental degradation, or happiness (yep, I know; check Putnam's ideas in the NYTimes piece; talk about silliness), or almost all non-market transactions for that matter, or is slow to adjust to new products and services introduced in the market, and that it's not particularly good for understanding inequality (Robert Reich's complaint in FT's piece; check the full list of complaints in both articles linked above). The best defense is provided by William Nordhaus, who argues compellingly that: “if you want to know why GDP matters, you can just put yourself back in the 1930 period, where we had no idea what was happening to our economy.”

First, GDP is not a measure of everything, and it certainly has limitations. But it does measure relatively well the material production in a given year, and provides the basis for understanding the process of accumulation, which is central for understanding the dynamics of capitalism. And actually, if you look at functional distribution of income in the National Income and Product Accounts (NIPA), which are used to calculate GDP, you do have one of the best measures of income inequality! Yes growth of the flow of goods and services produced in a country in a year is not tantamount to development, but without growth developing countries cannot achieve the levels of well-being of advanced economies, so growth is kind of a pre-requiste (and yes, growth involves environmental degradation, and we should try to minimize it). Further, with GDP one can obtain a fairly good measure of productivity (labor productivity), which is the basis for the Wealth of Nations, if you believe that dude Adam Smith.

My beef with the profession is not the use of GDP growth as a measure of material progress, but the fact that a limited, supply-constrained, individual maximizing utility, market-friendly, neoclassical version of the process of growth and development is the dominant one. But GDP is fine. Like price indexes, which also are limited and sometimes inaccurate, is an essential tool for understanding the real world.

Sunanda Sen on financial integration and national autonomy in China and India

Also in the new issue of ROKE. From the abstract:

The narrative as well as the analysis of deregulated finance in the global economy remain incomplete unless one relates to the surges as well as volatility in capital flows which are experienced by the emerging economies. An analysis as above needs to consider the implications of capital flows in those economies, especially in terms of the ‘impossibility’ of adopting monetary policies which benefit growth in the national economy. There is also a need to recognise the role of uncertainty and the related changes in market expectations in the (precautionary) accumulations of the large official reserves as are held by these countries. The consequences are found to affect the fabric of growth and distribution in these economies. Recent experiences of China and India, with their deregulated financial sectors, bear this out. 

Financial integration and free capital mobility, which are supposed to generate growth with stability in terms of the ‘efficient markets’ hypothesis, have failed, and not only in the advanced economies but also in the high-growth developing economies like India and China. Deregulated finance has led these countries to a state of compliance, where domestic goals of stability and development are sacrificed to make way for the globally sanctioned norms relating to free capital flows. 

With the global financial crisis and the spectre of recession haunting most advanced economies, issues as above in the high-growth economies in Asia have drawn much less attention than they deserve. This oversight leaves the analysis incomplete by ignoring the structural changes that result in these developing economies — which are of much relevance to the pattern of financialisation and turbulence in the global economy as a whole.

 Whole paper available here.

Measures of under-development: Dreze and Sen on India

And now for something completely different. Yes, we need a break from the fiscal cliff (do we still use that term?). So how about something that is not depressing (just kidding). Table below comes from Drèze and Sen's recent book on India (see here).

Note that India and South Asia lag considerably with respect to other developing country regions when it comes to child undernourishment and stunting, with 43% and 48% of the children under 5. These provide additional measures of the problems faced by India.

Human Development Index: now and then

The new Human Development Report is out. It compares the 2012 Human Development Index (HDI) with the initial one, from 1990. Norway at the top, and Congo at the bottom of the list. As it turns out, only two countries, Zimbabwe and Lesotho, have seen their index scores fall. The chart below shows several countries (h/t The Economist).

The additional red dot, is the Inequality adjusted HDI (IHDI). Note also that in the case of Western European countries (Norway, Germany, Sweden, France, Italy, Britain) the IHDI is in between the 1990 and the 2012 HDI. So adjusted to inequality the HDI now is better than in 1990. That is not the case for the US. For the methodology for including inequality in the HDI go here.

The largest improvements in the index are Afghnistan (ravaged by a 10 year war with Russia when it started to be measured; and with significant transfers from the US now), China, Iran, India, and Egypt. Left of center countries in Latin America did reasonably well in the last 10 years.

The report suggests that: "the state of affairs in 2013 may appear as a tale of two worlds: a resurgent South—most visibly countries such as China and India, where there is much human development progress, growth appears to remain robust and the prospects for poverty reduction are encouraging—and a North in crisis—where austerity policies and the absence of economic growth are imposing hardship on millions of unemployed people and people deprived of benefits as social compacts come under intense pressure." Further, it argues that the number one driver of improvement in the Global South is a: "strong, proactive and responsible state [that] develops policies for both public and private sectors", since "governments can nurture industries that would not otherwise emerge."

PS: The HDI was developed by Amartya Sen, who also got the Sveriges Riksbank Prize. His work on the capabilities approach is based on social welfare theory and, while critical of the idea of rationality, in some aspects it remains founded in mainstream analysis. For a discussion of his critique of the mainstream and its relation to the one based on the surplus approach see the references provided by Robert Vienneau here. I remain skeptical about the compatibility of Sen's analysis with the old and forgotten classical tradition.