The Labour Monthly

Marx and Engels on India

(Pt. III)

Source: The Labour Monthly, Vol. 15, August 1933, No. 8, pp. 512-517, (2,811 words)
Transcriptionp: Ted Crawford
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[With this issue is concluded the symposium begun two months ago of some of the views of Marx and Engels on the economic, social and political condition of India before and after the British invasion. This section deals with the methods that the precursors of fully-developed capitalism employed to build up their wealth on the basis of looting, enslavement and murder, particular in the Far East; it also exposes the various cheating devices which early imperialist capitalism employed still further to increase that wealth.

Next month, as will be seen from the detailed announcement elsewhere in this issue, it is intended to commence a most important and invaluable series of extracts from the hitherto untranslated correspondence of Marx and Engels, illustrating their attitude towards the developments in the British working class movement in the later half of last century.]

The discovery of gold and silver in America, the extirpation, enslavement and entombment in mines of the aboriginal population, the beginning of the conquest and looting of the East Indies, the turning of Africa into a warren for the commercial hunting of black-skins, signalised the rosy dawn of the era of capitalist production. These idyllic proceedings are the chief momenta of primitive accumulation. On their heels treads the commercial war of the European nations, with the globe for a theatre. It begins with the revolt of the Netherlands from Spain, assumes giant dimensions in England’s anti-Jacobin war, and is still going on in the opium wars against China, &c.

The different momenta of primitive accumulation distribute themselves now, more or less in chronological order, particularly over Spain, Portugal, Holland, France, and England. In England at the end of the 17th century, they arrived at a systematical combination, embracing the colonies, the national debt, the modern mode of taxation, and the protectionist system. These methods depend in part on brute force; e.g., the colonial system. But they all employ the power of the state, the concentrated and organised force of society, to hasten, hothouse fashion, the process of transformation of the feudal mode of production into the capitalist mode, and to shorten the transition. Force is the midwife of every old society pregnant with a new one. It is itself an economic power.

Of the Christian colonial system, W. Howitt, a man who makes a speciality of Christianity, says: “The barbarities and desperate outrages of the so-called Christian race, throughout every region of the world, and upon every people they have been able to subdue, are not to be paralleled by those of any other race, however fierce, however untaught, and however reckless of mercy and of shame in any age of the earth.”1 The history of the colonial administration of Holland—and Holland was the head capitalistic nation of the 17th century—“is one of the most extraordinary relations of treachery, bribery, massacre, and meanness.”2 Nothing is more characteristic than their system of stealing men, to get slaves for Java. The men stealers were trained for this purpose. The thief, the interpreter, and the seller, were the chief agents in this trade, native princes the chief sellers. The young people stolen were thrown into the secret dungeons of Celebes, until they were ready for sending to the slave ships. An official report says: “This one town of Macassar, e.g., is full of secret prisons, one more horrible than the other, crammed with unfortunates, victims of greed and tyranny fettered in chains, forcibly torn from their families.” To secure Malacca, the Dutch corrupted the Portugese governor. He let them into the town in 1641. They hurried at once to his house and assassinated him, to “abstain” from the payment of 21,875, the price of his treason. Wherever they set foot, devastation and depopulation followed. Banjuwangi, a province of Java, in 1750, numbered over 80,000 inhabitants, in 1811 only 18,000. Sweet commerce!

The English East India Company, as is well known, obtained, besides the political rule in India the exclusive monopoly of the tea trade, as well as of the Chinese trade in general, and of the transport of goods to and from Europe. But the coasting trade of India, and between the islands, as well as the internal trade of India, were the monopoly of the higher employees of the company. The monopolies of salt, opium, betel and other commodities, were inexhaustible mines of wealth. The employees themselves fixed the price and plundered at will the unhappy Hindus. The Governor-General took part in this private traffic. His favourites received contracts under conditions whereby they, cleverer than the alchemists, made gold out of nothing. Great fortunes sprang up like mushrooms in a day; primitive accumulation went on without the advance of a shilling. The trial of Warren Hastings swarms with such cases. Here is an instance. A contract for opium was given to a certain Sullivan at the moment of his departure on an official mission to a part of India far removed from the opium district. Sullivan sold his contract to one Binn for 40,000; Binn sold it the same day for 60,000, and the ultimate purchaser who carried out the contract declared that after all he realised an enormous gain. According to one of the lists laid before Parliament, the Company and its employees from 1757-1766 got 6,000,000 from the Indians as gifts. Between 1769 and 1770 the English manufactured a famine by buying up all the rice and refusing to sell it again, except at fabulous prices.3

The treatment of the aborigines was, naturally, most frightful in plantation-colonies destined for export trade only, such as the West Indies, and in rich and well populated countries, such as Mexico and India, that were given over to plunder. But even in the colonies properly so-called, the christian character of primitive accumulation did not belie itself. Those sober virtuosi of Protestantism, the Puritans of New England, in 1703, by decrees of their assembly set a premium of 40 on every Indian scalp and every captured Redskin; in 1744, after Massachusetts Bay had proclaimed a certain tribe as rebels, the following prices: for a male scalp of 12 years and upwards 100, for a male prisoner 105, for women and children prisoners 50, for scalps of women and children 50. Some decades later, the colonial system took its revenge on the descendants of the pious Pilgrim Fathers, who had grown seditious in the meantime. At English instigation and for English pay they were tomahawked by redskins. The British Parliament proclaimed bloodhounds and scalping as “means that God and Nature had given into its hand.”

The colonial system ripened, like a hothouse, trade and navigation. The “societies Monopolia” of Luther were powerful levers for concentration of capital. The colonies secured a market for the budding manufacturers, and, through the monopoly of the market, an increased accumulation. The treasure captured outside Europe by undisguised looting, enslavement and murder, floated back to the mother-country and were there turned into capital. Holland, which first fully developed the colonial system, in 1648 stood already in the acme of its commercial greatness. It was, “in almost exclusive possession of the East Indian trade and the commerce between the South-East and North-West of Europe. Its fisheries, marine, manufactures, surpassed those of any other country. The total capital of the Republic was probably more important than that of all the rest of Europe put together.” Gülich forgets to add that by 1648 the people of Holland were more overworked, poorer and more brutally oppressed than those of all the rest of Europe put together.

To-day industrial supremacy implies commercial supremacy. In the period of manufacture properly so-called, it is, on the other hand, the commercial supremacy that gives industrial predominance. Hence the preponderant role that the colonial system plays at that time. It was “the strange God” who perched himself on the altar cheek by jowl with the old Gods of Europe, and one fine day with a shove and a kick chucked them all of a heap. It proclaimed surplus value making as the sole end and aim of humanity. (Marx, Capital, vol. I., pp.823-827.)


On the one hand, the immediate effect of machinery is to increase the supply of raw material in the same way, for example, as the cotton gin augmented the production of cotton. On the other hand, the cheapness of the articles produced by machinery, and the improved means of transport and communication furnish the weapons for conquering foreign markets. By ruining handicraft production in other countries, machinery forcibly converts them into fields for supply of its raw material. In this way East India was compelled to produce cotton, wool, hemp, jute and indigo for Great Britain. By constantly making a part of the hands “supernumerary,” modern industry, in all countries where it has taken root, gives a spur to emigration and to the colonisation of foreign lands, which are thereby converted into settlements for growing the raw material of the mother-country; just as Australia, for example, was converted into a colony for growing wool. A new and international division of labour, a division suited to the requirements of the chief centres of modern industry springs up, and converts one part of the globe into a chiefly agricultural field of production, for supplying the other part which remains a chiefly industrial field. (Marx, Capital, vol. I., pp. 492-3.)


Thus arose the system of mass consignments, by virtue of advances, to India and China, and this soon developed into a system of consignments purely for the sake of getting advances, as described more in length in the following notes. This had to lead inevitably to an overcrowding of the markets and to a crash . . . .

With reference to the swindle in East Indian business, in which it was no longer a question of making drafts, because commodities had been bought, but rather of buying commodities in order to be able to make out discountable drafts which should be convertible into money, the Manchester Guardian of November 24, 1847, remarks that Mr. A in London instructs a Mr. B to buy from the manufacturer C in Manchester commodities for shipment to a Mr. D in East India. B pays C in six-months drafts to be made by C on B. B secures himself by six-months drafts on A. As soon as the goods are shipped, and the bill of lading mailed, A makes out six-months drafts on D. The buyer and shipper thus gets possession of funds many months before the goods are actually paid for. And it was common custom to renew the drafts when due under the pretence of allowing time for turnover in such a protracted business. Unfortunately the losses in this business did not lead to its restriction, but to its extension. In proportion as the interested parties grew poor their need of making purchases increased, in order to find in new advances a compensation for capital lost in previous speculations. Purchases were then no longer regulated by supply and demand, but became the most important feature in the financial operations of a shaky firm. But this is only one side of the picture. What happened in the export of manufacturing goods here, occurred in the purchase and shipment of goods on the other side. Firms in India, which had credit enough to get their checks discounted, bought sugar, indigo, silk or cotton, not because the purchase prices as compared with the latest London quotations promised a profit, but because previous drafts on a London firm would soon be due and would have to be covered. What was simpler than to buy a cargo of sugar, to pay for it in ten-months drafts on the London firm, and to send the bills of lading by overland mail to London? Less than two months later the bills of lading of these barely shipped goods, and thus the goods themselves, were pawned on Lombard Street, and the London house came into the possession of money eight months before the bills of exchange made out for these goods were due. And all this passed off smoothly, without interruption or difficulties, so long as the discounting firms found enough money to advance on bills of lading and dock warrants, and to discount the drafts of Indian firms on select firms of Mincing Lane to unlimited amounts.

(This fraudulent procedure remained in vogue so long as the goods from and to India had to sail around the Cape. But since they passed through the Suez Canal this method of creating fictitious capital has lost its foundation, thanks to steam navigation and the shortening of the trip. And when the telegraph reported the stand of the Indian market to the English, and that of the English market to the Indian, business man on the same day, this method was completely killed.—F.E.) (Marx, Capital. Vol. III., pp.480-483.)


In more remote countries, where precious metals are not easily obtained, when bills of exchange are scarce and insufficient for the remittances to be made to England, the natural effect is raising of the prices of such products as are generally shipped to England, a greater demand arising for them, in order to send them to England in place of bills of exchange; this is often the case in India.

An unfavourable rate of exchange, or even a drain of gold, may take place, when there is a great abundance of gold in England, a low rate of interest, and a high price of securities.

In the course of 1848 England received large quantities of silver from India, since good bills of exchange were rare and mediocre ones were not easily accepted, in consequence of the crisis of 1847 and the great lack of credit in the Indian business. All this silver, when hardly arrived, quickly found its way to the continent, where the revolution caused a formation of hoards at all points. The same silver largely made the trip back to India in 185o, since the stand of the rates of exchange made this profitable. (Marx, Capital. Vol. III., pp.695-696.)


The trade of Trebizond is also becoming a matter of most serious political consideration, as it has been the means of bringing the interests of Russia and England anew into conflict in inner Asia. The Russians had, up to 1840, an almost exclusive monopoly of the trade in foreign manufactured goods to that region. Russian goods were found to have made their way, and in some instances, even to be preferred to English goods, as far down as the Indus. Up to the time of the Afghan war, the conquest of Sindh and the Punjab, it may be safely asserted that the trade of England with inner Asia was nearly nil. The fact is now different. The supreme necessity of a never-ceasing expansion of trade—this fatum which spectre-like haunts modern England, and, if not appeased at once, brings on these terrible revulsions which vibrate from New York to Canton, and from St. Petersburg to Sydney—this inflexible necessity has caused the interior of Asia to be attacked from two sides by English trade: from the Indus and from the Black Sea; and although we know very little of the exports of Russia to that part of the world, we may safely conclude from the increase of English exports to that quarter that the Russian trade in that direction must have sensibly fallen off. The commercial battle-field between England and Russia has been removed from the Indus to Trebizond, and the Russian trade, formerly venturing out as far as the limits of England’s Eastern Empire, is now reduced to the defensive on the very verge of its own line of custom-houses. The importance of this fact with regard to any future solution of the Eastern question, and to the part which both England and Russia may take in it, is evident. They are, and always must be, antagonists in the East. (Karl Marx, The Eastern Question, p.15.) Article in New York Tribune April 12, 1853: “The Real Issue in Turkey.”



1. William Howitt: “Colonisation and Christianity: A Popular History of the Treatment of the Natives by the Europeans in all their Colonies.” London, 1838, p.9. On the treatment of the Slaves there is a good compilation in Charles Comte: “Traité de la Legislation,” 3me. ed., Bruxelles, 1837. This subject one must study in detail, to see what the bourgeoisie makes of itself and the labourer, wherever it can, without restraint, model the world after its own image.

2. See Sir Stamford Raffles’ “History of Java, 1817.”

3. In the year 1866 more than a million Hindus died of hunger in the province of Orissa alone. Nevertheless, the attempt was made to enrich the Indian treasury by the price at which the necessaries of life were sold to the starving people.