From Plassey to PRSP: The anatomy of poverty creation

In recent forums on poverty reduction, there seems to be a lack of awareness about the process which created this abject poverty; ironically enough these forums attempt to reverse the consequence of this process.

Wealth of Bengal was legendary and was widely known. "A wonderful land, whose richness and abundance neither war, pestilence nor oppression could destroy" remarked an early English visitor. (Hartman and Boyce, Quiet Violence, Ch. 1). To the well-known traveller of much earlier time, Ibn Battuta, Bengal was a "country of great extent, and one in which rice is extremely abundant. Indeed I have seen no region of the earth in which provisions are so plentiful." At the time of European arrival, Indian industrial development was "not inferior to that of the more advanced European Nations", a British Royal Commission of 1916-1918 reminisced. (Noam Chomsky, Year 501: The Conquest Continues, p13). Fredrick Clairmonte cites British Studies to infer that "the industries of India were far more advanced than those of the West up to the advent of the Industrial revolution."(Frederick Clairmonte, Economic Liberalism and Underdevelopment (Asia Publishing House), 1960, 73, 87.)

During the seventeenth century, Bengal was the textile hub of India; Bengal produced various types and qualities of cotton textiles, particularly calico which when introduced by EIC in 1623 in European markets, caught the imagination of European Nobility and common people alike. An English pamphleteer, Pollexfen, thus expressed the need for protection for English industry in 1681: "As ill weeds grow apace, so these manufactured goods from India met with such a kind reception that from the greatest gallants to the meanest cook maids, nothing was sought so fit to adorn their persons as the fabric from India (italics added)" (Quoted by Prakash in Dutch East India Company, 201). France banned calicoes in 1686 and England in 1700.

Until the middle of eighteenth century, Europeans had no territorial possessions in India, though they had built a few factories and forts with the permission of the local Kings. EIC gained ascendancy in Bengal by bribing Mir Jafar, the then commander-in-chief of Bengal by defeating the Nawab in the infamous Battle of Plassey. This was a turning point for the history of not only Bengal but the mankind, because the "wealth beyond dream of avarice" of Bengal proved to be the vital force behind England's ascendancy to global hegemony.

What followed next in Bengal was a policy of planned de-industrialisation; In 1783, House of Commons Select Committee on Administration of Justice in India observed: "This letter contains a perfect plan of policy, both of compulsion and encouragement which must in a very considerable degree operate destructively to the manufactures of Bengal. Its effects must be to change the whole face of the industrial country, in order to render it a field for the produce of crude materials subservient to the manufactures of Great Britain". (Ninth report of the House of Commons Select Committee on Administration of Justice in India, 1783, 64.). The same was repeated all over India, as EIC took over control of one kingdom after another. The process of greatest catastrophe to mankind started; England started to walk the path toward industrialisation by brutally destroying industries of India. As it expanded its territories, it repeated the same experiment, thus in 200 years of domination, England, and other lesser European powers left their colonies devastated, morally bankrupt, economically depleted and dependent.

Bengal "was destabilized and impoverished by a disastrous experiment in sponsored government." [John Keay, The Honorable Company: A History of the English East India Company (Harper-Collins, 1991)]. Dacca (Dhaka) in 1757 was described by Robert Clive of East India Company as "extensive, populous, and rich as the city of London". By 1840, its population had fallen from 150,000 to thirty thousand. Sir Charles Trevelyan testified before the House of Lords, "jungle and malaria are fast encroaching -- Dacca, the Manchester of India, has fallen from a very flourishing town to a very poor and small town."

England was comparable to India in industrial growth but far poorer than India at the time of British takeover of Bengal. While over the next century England emerged as the most industrialised country in the world, Indian industry was destroyed by British regulations aimed at securing market for products from England and destroying competition from advanced textile sector of Bengal. It was outright destruction through violence. In 1772, English merchant William Bolt wrote: British traders used "every conceivable form of roguery" to acquire "the weavers' cloth for a fraction of its value". Having no respect for any civilized norm of conducting business, the British traders resorted to "various and innumerable ... methods of oppressing the poor weavers … such as by fines, imprisonments, and floggings, forcing bonds from them, etc." He holds responsible "the oppression and monopolies" for "the decline of trade, the decrease of the revenues, and the present ruinous condition of affairs in Bengal." [William Bolts, Considerations of Indian Affairs, 1772, cited by Hartman, Betsy, and James Boyce, Quiet Violence: View From a Bangladesh Village(Zed, 1983)]. That was in 1772, only fifteen years after the Battle of Plassey; this period has been dubbed as "the Plunder of Bengal". Horace Wilson, in History of British India (1826) felt the need for such policies and wrote, "The mills of Paisley and Manchester would have been stopped in their outset, and could scarcely have been again set in motion, even by the power of steam. They were created by sacrifice of the Indian manufactures."(Chomsky, Year 501, 12).

Bengal was described as an example of prosperity by Adam Smith, the author of "Wealth of Nations", the book which laid the philosophical foundation of capitalism. Noam Chomsky of MIT synthesised Adam Smith's remarks from three documents.

"Contemporaries graphically described the vicious 'oppression and monopolies' of the British as they robbed and destroyed Bengal's agricultural and advanced textiles, strewing the land with corpses as they converted wealth to misery, turning 'dearth into famine,' often ploughing up 'a rich field of rice or other grain --- in order to make room for a plantation of poppies' if company officials 'foresaw that extraordinary profit was likely to be made by opium'. The miserable state of Bengal, and of 'some other of English settlements' is the fault of the policies of mercantile company which oppresses and domineers in the East Indies."

A British enquiry commission in 1832 described the effect of sponsored government created through Permanent Settlement Act of British Parliament. The commission found "the settlement fashioned with great care and deliberation has to our painful knowledge subjected almost the whole of the lower classes to most grievous oppression." In the words of Director of East India Company, "The misery hardy finds a parallel in the history of commerce. The bones of cotton weavers are bleaching the plains of India" Nevertheless Governor-General of India, Mr. Bentinck, was unmoved and observed , " The permanent settlement, ... has this great advantage, at least , of having created vast body of rich landed proprietors deeply interested in the continuance of the British Dominion and having complete command over mass of the people."

"As local industry declined, Bengal was converted to export agriculture, first Indigo, then jute, producing over half of world crop by 1900 though not a single mill for processing was ever built there under the British rule (until 1947). Manufacturing industries, which has been comparable to its own at the time of the conquest, as a British government analyst later conceded, not only failed to develop, but were largely eliminated, as India sank into rural misery", observes Chomsky (Chomsky, Year 501, 12).

A new world order developed through the colonial structure of production and exchange; colonies were integrated in a vast global system as producers of agricultural surplus which could be sold in the world market for great profit and/or could be imported to the colonising economies as raw material. The colonies were to serve as the market for the products of the colonial powers and as a safe haven for mercantile investment where profits were ensured through monopoly.

Colonialism is no more, but the institution of production and exchange that it established is still there. The sole purpose of the current economic order is to appropriate economic benefits for the dominant economies, and the perpetuation of this order is ensured through well thought out economic programmes imposed on these economies by the dominant ones through agencies like World Bank, IMF, etc. These programmes are primarily tools for political and economic penetration in these countries, and serve the commercial interests of the dominant economies. Anyone familiar with Bank-IMF "structural-adjustment" experiment in South America knows the kind of havoc it has caused to that region in the area of poverty alleviation. These policies "typically create an economy subordinated to the needs of foreign investors and a two-tiered society, with islands of great privilege in a sea of misery, sometimes called "economic miracles" if investors benefit sufficiently."[Noam Chomsky, World Orders Old and New (Columbia University Press/New York, 1994), 82.]. These policies are incongruent with the policies their proponents used to become economic powers and still using to maintain that position. Until the prevailing global economic order is altered, these PRSPs will not alter the poverty profile in any significant way, other than enticing the local intelligentsia into project seeking intellectual bankrupts.

Abul H Azam, Ph.D is Senior Fellow, Economics Department, North Carolina A&T State University, USA.