ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

A+| A| A-

Two Power Networks in History

Business and Polity: Dynamics of a Changing Relationship by D N Ghosh (Sage Publications, New Delhi), 2011; pp XLIV+422, Rs 795.

amassing personal wealth which eventu-

Two Power Networks in History

ally led the empire to ruin.

Trade as Source of Wealth

Dwijendra Tripathi Continuing his journey through the past,

ndian bureaucrats, with a few distinguished exceptions, do not write books. Fewer still can claim research based scholarly works to their credit. D N Ghosh belongs to that small tribe of bureaucrats. Though a visiting professor at the prestigious Indian Institute of Management Calcutta he, having held some high-power positions in government, and also the chairmanship of the State Bank of India, is primarily identified with the world of bureaucracy. And, yet, the work under review can be regarded as that produced by an academician. Bearing the unmistakable imprint of wide reading and deep reflection, Business and Polity is a virtual tour de force of world history from the ancient times to the present.

Ghosh’s purpose in doing so is to demonstrate that business and polity have always had an impact on each other every time and clime. While business is concerned with wealth generating activity, polity refers to the levers of political power. The “two power networks”, using Ghosh’s picturesque phrase, have always influenced historical change. He, however, cautions against looking at the whole process as the interplay of an immutable law. This should rather be seen as a series of feedbacks, enriching our understanding of the nexus between the two power networks. Ghosh’s narrative, nevertheless, suggests a pattern that no reader can miss, even as none can miss the erudition informing his analysis.

Land as Source of Wealth

The starting point of this analysis is what the author calls the “empires of antiquity” where land was the principal source and the farming community the main generator of wealth. The governing classes of the city states in ancient Greece were conscious of this reality and therefore created an equitable landholding pattern through appropriate land reforms. So did the successive dynasties in ancient China,

Economic & Political Weekly

september 24, 2011

book review

Business and Polity: Dynamics of a Changing Relationship by D N Ghosh (Sage Publications, New Delhi), 2011; pp XLIV+422, Rs 795.

which were far ahead of their times in devising suitable fiscal and bureaucratic systems within the state to minimise the possibility of injustice and arbitrariness against the peasant community, the principal suppliers of resources to the state. This, according to the author, explains a much longer run for the ancient dynasties in China.

However, the same pattern could not be replicated in ancient India where the Mauryan empire, despite an efficient and equitable land revenue policy, lasted for a mere 100 years or so. The author refers to this phenomenon, but does not explain it. An attempt to seek too neat a pattern in history is bound to occasionally come face-to-face with uncomfortable data that is not amenable to easy generalisation.

If the governing classes in ancient Greece and China safeguarded their political interests by adopting a sagacious policy towards the primary generators of wealth, the Roman and Arab empires did just the opposite. In utter disregard of the interests of the farming community on which depended the continued prosperity and stability of the empire, the Roman rulers fell pray to self-aggrandising tendencies. And this eventually turned out to be a principal factor in the decline of the Roman empire. A similar thing happened to the Arab empire that rose like a colossus with lightning speed in the mid-17th century. In contrast to most empires of ancient times, trade was the main source of wealth in the Arab empire. For almost three centuries, the Caliphs did everything possible to safeguard the interests of the trading community. But the later generations developed an insatiable desire for

vol xlvi no 39

the author moves closure to our own times when land-based polities in gradual stages yielded place to trade as the prime generator of wealth. The Arab empire, in fact, seems to have been some kind of a bridge between the ancient regimes and the relatively more modern dispensation. By the beginning of the second millennium, an intricate network of trade developed, extending from the Atlantic in the west to the Pacific in the east, encompassing the African coasts, Islamic regimes in west Asia, the Indian subcontinent, the Far East, and China. As Europe was at the vanguard of developing this commercial network, European society and polity witnessed profound changes, reflected among other things in what according to the author were five revolutions. The first three of these related to radical changes in warfare technology in the 16th century that enabled the European princes to reduce their dependence on business for funds. This led to the rise of nation states with a great deal of fiscal-military autonomy and a new relationship between business and the state represented by 17th century mercantilism. This eventually made it necessary for the European powers to embark upon overseas exploration in search of commercial opportunities and the consequent territorial expansion in Asia and Africa through trickery and deceipt wherever possible and through aggressive warfare if necessary. This paved the ground for profound commercial and industrial changes in the 18th century, leading to the present-day globalised economy and polity.

US Hegemony

American hegemony is a natural consequence of these complex developments. Paraphrasing Antonio Gramsci, the celebrated Italian thinker, the author defines hegemony as “power that accrues to dominant group by virtue of the capacity to lead the society in a direction that not only serves the dominant group’s interests


but is also perceived by the subordinate groups as serving a more general inter est” (p 372). Representing an amalgam of state and business power, American hegemony, while serving the intrinsic interests of the United States (US), political as well as economic, has been seen by a large section of the global community as a necessary instrument to ensure political and economic stability in the world. The US role as the protector of the “public good” in the post-second world war era has been of late coming under a great deal of stress. Increasingly unable to fund its global commitments out of its own savings, the US may not be able to continue delivering “the public good” for long.

What then does the future hold? The author predicts the emergence of a new configuration in which the US will have to work along with the other nations to ensure global stability. With its enormous scientific, technological, and economic



--strength, the US cannot be simply wished away, but it should not be misled by a belief in its professed commitment to the value of liberty, democracy, equality, and private property, and that the market would be sufficient to carry the world along with it and ensure its present-day global hegemony. The world has changed since the US established its dominance after the second world war. Some of the countries that were at the bottom have now emerged or are emerging as the new loci of political-economic power, and the people are no more carried away by political-economic ideologies either of the Left or of the Right.

New Direction?

These realities may give a new direction to the polity-business relationship. It may no more revolve around the interests of the political regimes and wealth creating elite. Political-economic stability may




demand that the aspirations of other stakeholders in society are adequately addressed in the new scheme of things, with a view to creating a harmonious balance between diverse interests groups. The growing accent on corporate social responsibility in the business schemes of the wealth creators may be a pointer to the direction in which the world is moving – an indicator, howsoever feeble, of things to come.

One may or may not agree with Ghosh’s prognosis – the course of history is often unpredictable – but none can ignore the masterly analysis that has led him to his prognosis. And it is far more agreeable to be grateful to an author for his intrinsic contribution than to fault him for his peripheral views.

Dwijendra Tripathi ( has written many books on business history and retired from IIM-Ahmedabad.



september 24, 2011 vol xlvi no 39

Economic & Political Weekly

Dear Reader,

To continue reading, become a subscriber.

Explore our attractive subscription offers.

Click here

Back to Top