J.R. Johnson

What India Means to the American Working Class

A Brief Outline of Indian Economy

(28 December 1942)

From Labor Action, Vol. 6 No. 52, 28 December 1942, p. 3.
Transcribed & marked up by Einde O’Callaghan for the Marxists’ Internet Archive.

(Continued from the issue of Dec. 7) [1]

It is easy to say that the great majority of the people of India live in poverty and misery. It is easy to say that Gandhi, Nehru and the Indian nationalists whom they represent are treacherous and ready to betray the Cause at any moment. The question is: Why?

Early Indian Economy

Here it is necessary, even though in barest outline, to restate the historical development of capitalist society. Three or four hundred years ago production all over the world was overwhelmingly agricultural. This took various forms. There was serfdom, in which the agricultural producer had certain rights on the land but was compelled to hand over the surplus produce to the landlord, or work for him for nothing. There was peasant production in which the peasant owned the land but paid rent in money. There was also the agricultural commune in which the agricultural producers owned the land in common and divided it up periodically among themselves, but paid taxes in money or in kind to the state or an individual overlord. There was a vast variety and intermingling of these forms – but the basic feature of production was production of AGRICULTURAL products.

Such industrial products as he used, the agricultural producer often made himself. In other areas, the Indian village, for example, one villager would be a smith, another a goldsmith and another a cobbler, all producing for the village as a whole. In a few big towns, production of industrial goods was carried on, but these for the most part occupied a small share of the total economy. The general level of production was very low.

Native Industry Destroyed

Now the distinguishing feature of capitalist production is a tremendous development of machine-made industry, which has grown continually until, today, in advanced countries, people use far more industrial products than they use the direct products of agriculture. This has revolutionized the lives of the large majority of the people. Generation after generation the peasants have been turned from the land and compelled by one means or another to work as wage laborers in factories. As agriculture declined in relation to industry the worker gained a rough compensation for the loss of his capacity to live on the land by the possibility of earning a living in a factory. Furthermore, the development of industrial production meant an increasing number of the products circulating in the community as a whole and, for long periods, a general increase in the possibilities of acquiring more and more of the elements of existence.

The whole secret of India is that only half of this process has taken place, and the worse half. The British went into India. They destroyed Indian industries by the export of British goods. They brought India into the circle of modern countries, which result in enormous taxation upon the country as a whole both for modern armies, modern administration, modern transportation (railways, etc.) and for interest on British loans. These huge expenses in an industrialized country could be paid because of the tremendous development of industrial production. But India, without industrial production, has been compelled to carry these burdens on the basis of a production which is mainly agricultural, and a very backward agriculture at that.

Increased Misery of Masses

Without industry, agriculture is no longer able even to give the peasant a respectable living. His condition gets worse and worse because, as the population grows, the land is less and less able to satisfy even the needs of the peasant’s own subsistence, far less the enormous burden which modern India requires of him. In a short article like this we can only give outstanding examples.

In a village in Poona in 1771, the average holding of the peasant was forty acres. In 1818 it was 17½ acres. In 1915 it was seven acres. Yet modern India needs more from the seven-acre peasant than India in 1771 required from the forty-acre peasant. In Bengal the average holding is about two acres. Between 1921 and 1931 the number of landless laborers increased from 291 per thousand to 407 per thousand. The debts owed by the peasants in 1921 amounted to roughly two billion dollars. By 1931 it was three billion dollars. That is the economic movement in India. Nothing that Churchill, Roosevelt, Gandhi or Nehru can do will stop it.

On. the basis of this misery, this INCREASING poverty, there must develop a small group of land-owners and money-lenders who fatten upon the increasing difficulties of the peasants.

Commenting on this, Engels, Marx’s great collaborator, wrote as follows: “When the time approaches for the taxes to fall due, the usurer appears, the kulak – frequently a rich peasant of the same village – and offers his ready cash. The peasant must have the money at all costs and must accept the conditions of the usurer without demur. In that way he gets into difficulty, needs more and more ready cash. At harvest the grain dealer arrives; the need for money forces the peasant to sell a part of the grain he and his family require for food.”

A process essentially the same takes place in India. It must. On this account there flourishes a substantial number of landlords and rich peasants who not only draw rent but, directly or indirectly, act as money-lenders. These are Indians. They, as well as the British, depend upon the exploitation of the Indian peasant.

In the United Provinces, in one village, out of 27,000 rupees paid in rent and taxes, 17,000 goes to the landlord and 10,000 to the government. It would be, easy to give an overwhelming mass of figures, all showing this relation between the surplus produced by the peasant and division between the Indian landlord, the Indian moneylender and the British government. When the peasant revolts, it is the British government which suppresses him and guarantees the revenue to the Indian exploiters.

Such a situation in the countryside is not only catastrophic in itself but has drastic effects on the industrial development of India. India has undoubtedly, especially within the last few years, been developing industrially. But with such a tremendous reserve army of labor in the countryside to draw from, the Indian capitalist has some of the cheapest labor in the world. A favorite phrase of economists and investigators of Indian capitalism is “the mobility of Indian labor.” All that this means is that the workers work in the factories for a period and when they can’t take it any more they wander back to the country.

One investigator states that the number of people who are unable to earn a livelihood in the villages and can find no employment in the cities is over 100 million! Under these conditions many Indian capitalists find that they do not need to employ the most advanced machinery simply because labor is so cheap that they can still make a profit while using old-fashioned technical methods. In addition they lack a market for goods. Thus the lack of a compensating industry does not only crucify the peasant millions. It is in a thousand ways a drag upon such industry as does exist.

(To be continued next week)

Note by MIA

1. Actually from the issue of December 14th.

Last updated on 30 September 2014