Utilitarian Free Trade killed millions in China and India

According to a briefing paper by a UK advocacy group, nearly 50 million people in India and China died at the end of the 19th century as a result of these countries being forcibly incorporated into the economic and political structures of the modern world system of that era.

By Chakravarthi Raghavan

GENEVA: The famines and deaths of 50 million people in India and China at the end of the 19th century, turning these economics into peripheries of Europe and North America, were the result of the forced opening of these economies to “modernity” and forcible incorporation of their subsistence farmers into the economic and political structures of that era under utilitarian free trade principles and laissez faire.

A briefing paper by a UK advocacy group, The Corner House, says that while worldwide climate phenomena (the ENSO, El Nino and Southern Oscillation effects) that created droughts across a swathe of the tropics played a role, the Malthusian explanations, of that time or by some later political economists, are not borne out.

The briefing paper, “The Origins of the Third World: Markets, States and Climate”, is an edited abstract and based on a book by Mike Davis (2001), Late Victorian Holocausts: El Nino, Famines and the Making of the Third World.

It comes at a time when the integration of developing countries and their agriculture and other “non-modern” sectors into global markets through neo-mercantilist “free trade” in goods, services and investments is pursued as an end in itself — at the World Trade Organisation as well as the policies pushed by the International Monetary Fund, World Bank and many parts of the UN system purportedly promoting multilateralism.

The late 19th century, famines in India and China, the briefing paper brings out, were the result of the imperial policies. The crucial role of these imperial policies in tackling the extensive climate-caused droughts is contrasted with similar extreme climate events in both countries some 200 years earlier, when the state policies (of the feudal regimes) ensured that far fewer people died.

The briefing paper also explains how Europe and North America created China and India into “peripheries” in the world economy by forcibly imposing trade deficits, promoting exports that diminished food security, levying excessive taxes and introducing predatory merchant capital taking control of key revenues and resources, waging war, and decreeing a monetary system (the Gold Standard) that picked the pockets of Asian peasants.

Some of the equivalents of these policies in the contemporary world, where international organisations are being induced to provide (through extra-budgetary resources) technical assistance in various areas to advise developing countries on how to make use of opportunities to get benefits out of globalisation, are striking.

The famine and subsistence crisis, from 1876 to 1879, was a disaster of planetary magnitude — drought and famine were reported in Asia, Brazil, Southern Africa, Algeria and Morocco. There was no historical record till then of famine afflicting so many far-flung lands — the million dead in the Irish famine of 1845-47 had been multiplied 10-fold.

However, even before the failure of the monsoons and drought across India was turned into a famine by decisions taken in the palaces of the rajas (propped by the British raj) and the Viceroys, the semi-arid interior of India had been primed for disaster by the worst recession in world trade in the 19th century, beginning 1873.

Commodity prices had collapsed then, and economic depression had spread misery and ignited discontent across cotton-exporting districts of the Deccan peninsula — where forest enclosures and displacement of gram (pulse crops harvested in spring) by cotton had reduced local food security. The traditional food security system of household and village grain reserves had been supplanted by British Crown rule.

When the famines took place and local (British) administrators in the provinces recommended deferment of the land tax, the British Viceroy Lord Lytton rejected them out of hand, and insisted there should be no interference with the market. A contemporary British historian visiting the areas in 1878 bluntly described the official famine policy as “murder”.

However, Lytton’s laissez faire approach was endorsed by all the political parties in Britain and subsequently by the Famine Commission, which said that the doctrine that the poor are entitled to relief in times of famine might lead to the doctrine that they are entitled to relief at all times.

In northwest China at that time (under the dying Qing dynasty), the independent peasant economy and small-holder agriculture, and exchanges within local markets, had been supplanted under imperial bankruptcy and British aggressions (Britain claimed the right to sell opium, produced by British planters from Colonial India, to pay for silk and other Chinese goods, and enforced it through gun-boat diplomacy and two wars, and when Britain established the right forcibly, the Europeans, as well as Americans, claimed equal rights in China).

The British aggressions engineered the fiscal crisis in China of that day, and the exactions of Qing rulers, and their use of the army to turn back and massacre peasants fleeing from the famine-stricken countryside to the towns.

The British official line, and that of the British and European historians writing about that period, was that the famines of the 1870s and 1890s were caused by E1 Nino acting on traditional agrarian misery in India, and the corruption of the Qing rulers in China.

However, when the experience of the late 19th century is compared with events of 1743-44 (where the impact of climate failure in north China is documented in detail) and the highly efficient famine-relief efforts of the rulers at that time, it is evident what a state undertaking famine welfare and maintaining granaries and irrigation well-systems could achieve; the inability to do so created the famines and deaths of millions in the 19th century.

Were Malthusian views and population growth in India responsible for the millions of deaths?

India under the Moghul rule was generally free of famines until the 1770s. Before British rule and the railways laid and the “national markets” in grain created by it, village food reserves and patrimonial welfare in villages were widespread. Grain prices in surplus areas were insulated from speculation.

The state under Moghul rule regarded the protection of peasants as an important and essential obligation. The Moghuls, like the Chinese, relied on embargoes on food exports, antispeculative price regulation, tax relief and distribution of free food without forced labour — a policy which was anathema to British Utilitarianism.

Though the British claimed they had rescued India from famines and had laid out infrastructures (including railways and telegraphs), an 1878 study in the Journal of the Statistical Society, cited by contemporary Indian historians and which shocked British administrators, brought out that there were 31 serious famines in 120 years of British rule (company rule, followed by the Crown rule), as against only 17 famines in the entire two previous millennia.

Malthusian views embraced even by economists like Arthur Lewis, studies now show, were wrong. Although population grew rapidly in India between the 1850s and 1860s, this came to an abrupt halt with the famine catastrophe of 1876. Between 1879  and 1920, there was not a single decade of significant population growth. South Asia’s percentage of world population declined during 1750 to 1900, from 23% to 20%, while that of Europe rose from 17 to 21%.

“Millions died not outside the modern world system, but in the very process of being forcibly incorporated into its economic and political structures. They died in the golden age of liberal capitalism, many murdered by application of utilitarian free trade principles. The route to this ‘new world order’ is paved with the bodies of the rural poor.” — Third World Network Features