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Empire, Law and Economic Growth

This article explores three concepts in global history - empire, law and economic growth - and their coming closer together to form a new discourse. Two recent tendencies contribute to the making of the discourse. Imperial history moves away from a view of empires as extractive machines towards a view of empires as legislating states. Economic history, on the other hand, underscores the role of legislation as a foundation for modern economic growth. Law, then, is the new bridge between empire and economic growth. Does this idea help us understand Indian history?


Empire, Law and Economic Growth

Tirthankar Roy

This article explores three concepts in global history

– empire, law and economic growth – and their coming closer together to form a new discourse. Two recent tendencies contribute to the making of the discourse. Imperial history moves away from a view of empires as extractive machines towards a view of empires as legislating states. Economic history, on the other hand, underscores the role of legislation as a foundation for modern economic growth. Law, then, is the new bridge between empire and economic growth. Does this idea help us understand Indian history?

This is the text of the Twelfth Pranab Sen Memorial Lecture, held at Jadavpur University, Kolkata, on 18 June 2011. I wish to thank the participants, especially Binay Chaudhuri and Lakshmi Subramanian, for useful questions, comments and suggestions, and the organisers of the lecture series for giving me a chance to honour the memory of one of the most distinguished philosophers of contemporary India.

Tirthankar Roy ( is with the economic history department, London School of Economics and Political Science, London.

n recent years, interest has revived in the history of the European empires that ruled much of the non-European world for the last 500 years. The new scholarship is in part about culture – how empires forged new identities, and how they ruled by means of cultural domination, that is, by manipulating education, ideas about governance, and the writing of history in the colonies. In this meaning, the phrase “new” imperial history has established itself as a brand in some schools of history. While accommodating considerable diversity within itself, the cultural history agenda maintains a distance from the economic history of empires.1 There is another strand in the new research, however, that revisits the subject of the economic origins and effects more explicitly. The present essay is interested in this second strand of research, one that is capable of speaking to the economic historian.

Although the interest in the economic history of empires is quite old, the new writing on the subject is somewhat novel in its orientation, as we shall see. The trend was set with the five volume Oxford History of the British Empire published in 1998-99. This was followed by C A Bayly’s Birth of the Modern World, Niall Ferguson’s Empire: How Britain Made the Modern World, John Darwin’s After Tamerlane: The Global History of Empire, Ronald Findlay and Kevin O’Rourke’s Power and Plenty, shorter treatments, edited anthologies, and numerous articles and review articles besides.2 These works sometimes overlap in their arguments, but they do not necessarily follow a single train of thought. For example, both Bayly’s Birth of the Modern World and Ferguson’s Empire share an interest in market integration led by empires, but the point of emphasis in the former is the transformation of states, whereas the latter is more interested in the role of British private enterprise in forging empires.

Many of these works are written by historians. Independently, economists have also developed an interest in empires. The institutional approach to economic history introduced by the American economist Douglass North suggests that the origins of economic growth in the modern world can be traced to institutions, that is, man-made rules that keep the costs of conducting market exchange within reasonable limits. The usual examples of institutions are property rights and contract law. The school of thought that developed around the idea was more at home with the west than the non-western world. In North’s own application, the idea seemed to explain the “riseof-the-west”, namely, the economic development of the western Europe from the enlightenment to the industrial revolution. With such one-sided evidence, the institutionalists claim to having found a theory of economic growth took on a tautological

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character. After all, a theory of success cannot be validated with reference to examples of success alone. It should explain the failures of growth as well. In the last 10 years, a group of economists have been making amends to this deficiency.3 A part of the enterprise involves rethinking the concept of empire. Economists contributing to the scholarship read the European empires as agents in institutional change in the nonwestern world. They recognise that the modern empires recast property rights and contract laws in the non-western world, and investigate the quality of the property and contract law that emerged from the imperial project in order to explain the relatively poor growth record in the tropics.

It should be clear that the new imperial history (in the sense in which I use the label) cannot be defined as a single movement because these writings on the subject do not adhere to a common set of ideas and assumptions. Historians rewriting the empire and economists rethinking the empire are doing so for different reasons, and there are differences also in the points of emphasis of individual writers. Why, then, is there an outburst of interest in the same subject?

Why a Rethinking?

There are, in fact, three underlying intellectual currents behind the rethinking. First, there has been a move away from what we may call the old imperial history, namely, the neo-Marxist paradigms that ruled the historiography of the empire until the 1980s. Marxist theories of underdevelopment read the European expansion eventually leading to colonial rule as a process that involved extraction of resources from the tropical world, leaving the tropics poorer, and in possession of a distorted-exploitative class structure. The scholarship exploring the relationship between empires, dependency, “backwardness” and underdevelopment from a Marxist perspective is very large. Formative writings by Paul Baran, Walter Rodney, and especially, André Gunder Frank considered imperialism to be the main cause of poverty and underdevelopment in the 20th century world.4 Interpretations of the mechanism, however, emphasised either trade (i e, exchange relations) or class (i e, production relations). Much of the analysis had little in common with classical Marxism except a shared interest in surplus appropriation. Karl Marx himself, as we know, was upbeat about the British Empire in India, and expressed the hope that the entrepreneurial Britons of his time would eventually beat the “vegetative” Indians into useful shape.

Examples of extractive and exploitative empires can be found. One example commonly cited is Congo under the Belgian king Leopold II, who made no secret of his intention to strip Congo of its commercially valuable natural resources for personal enrichment. But as a general theory of empires, extraction and exploitation pose too many problems. It is not easy to define the 19th century European empires in Asia and Africa as a common bundle of intentions, strategies and effects. As the maverick Marxist Bill Warren pointed out long ago, the belief that the empire underdeveloped the tropical world overlooked a number of positive changes in the third world that had owed their origin to the imperial connection.5

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The beginning of factory industrialisation in India serves as an example of Warren’s point. Putting the burden of underdevelopment upon empire raises the question, what about China, which was not colonised; and what about the New World territories in Australia, New Zealand and North America, which were colonised but still developed?

A second universal tendency is a renewed interest in the history of globalisation. After a 60-year gap, dating from the Great Depression in 1930 to the collapse of socialism in eastern Europe, end of cold war, and economic reforms in the third world in the 1980s, restrictions on trade in the world have fallen away. The world today trades more than it did in the recent past, and in that respect, the world today resembles the 19th century more than the world of the 1960s or the 1970s. This apparent resemblance induces historians to look at the empires of the last two centuries in a different light, rather less as an extractive machine, and rather more as an agent in “globalisation”, or a worldwide market integration. In the ancient and medieval times, the aim of empires was to maintain the flow of taxes and tributes between regions. Protecting private enterprise and integration of markets were at best by-products of the enterprise. In the 19th century, the empires were capitalistic in aim. They wanted to create and maintain a crossborder market for goods, capital, labour and technologies, and cemented these markets with a compatible, if not a common, institutional framework between the colonist and the colonies.

A third change in global history motivating a fresh look at empires is a revised understanding of states, especially the emergence of large fiscal states in Europe through the process of sustained military conflict. That the empires were causally linked to the transformation of European politics has long been known, but the transformation itself and its repercussions upon the extension of military power became major fields of study only recently. The European literature on the emergence of fiscal states is very large – associated with the works of, among others, Charles Tilly, Martin Wolfe, Patrick O’Brien, Michael Mann and C A Bayly.6

Taken together, then, the new imperial history can be defined by two characteristics: an interest in economic globalisation, and an interest in a new kind of state trying to sustain the process. But how did the new kind of state sustain the process of capitalistic globalisation? Attempts to answer that question take us closer to the economists’ interest in empire as an agent, an imperfect one no doubt, in institutional modernisation.

Capitalism cannot function without laws protecting private property and impersonal contracts. The new imperial history reminds us that the states that pursued capitalist integration were not only militarily strong, but institutionally different from their predecessors and contemporaries. Doffing our hat to institutional economic history, then, we can say that the modern empires were legislating states. A signal distinction between the old neo-Marxist imperial history and the new imperial history is that in the former the state was an agent of resource extraction, whereas in the latter, the state was a legislator. Simply stated, modern empires were states that made laws necessary for world capitalism to function.


How useful is this idea – that empires were a particular kind of legislators – to the study of Indian history?

British India as a Legislating State

Our impression of the British rule in India tends to be coloured by the elaborate display of power and pomp in which the colonial ruling order liked to surround itself. The display itself was quite a complex thing, as it drew images and inspiration from a variety of roots. There was at one level an English penchant for recreating an aristocracy in whichever part of the world they ruled. But in implementing that drive in India, the English also borrowed ideas and symbolisms current in the world of the princely states. At times the real orient and the oriental trappings became indistinct. Be that as it may, from an economic history angle, the display of power was only an illusion. Although it was a militarily strong state, in fiscal terms, British India was one of the poorest states in the contemporary world.

In the 1820s, average tax per person in the three “presidencies” of India was less than one-tenth of that in England, and half or less in relation to almost all the other British colonies, whether located in the temperate or the tropical regions. In terms of tax per person or tax-gross domestic product (GDP) ratio, the relative position of British India worsened in the early 20th century when compared with the other emerging economies of the time, chiefly Japan and Russia. Why was the record of tax collection so poor in British India? Taxing the rich and the powerful is always risky for a ruler. A policy of limited interference in local political structures, also known as “indirect rule”, made it doubly difficult in India to raise revenues by almost any other means than the land tax imposed on the peasants. But then, geography and climate reduced the productivity of land to exceedingly low levels, and depressed tax collection in turn. However powerful the raj might pretend to be, its reach as a state was as severely constrained by these factors as that of any pre-European state in India.

To the same extent, that its capacity to spend on capitalintensive development projects was limited, the regime focused energies upon indirect and low-cost, if labour-intensive, development projects that involved supplying law and knowledge to private enterprise. According to one reading of colonial policy proposed by the late Morris David Morris, the empire adapted to its own small size by taking a “night-watchman” stance.7 It saw itself as the means to create enabling conditions for private enterprise to flourish, by offering a single umbrella of law, one official language, and uniform channels of transaction in scientific and technological knowledge. The British India represented a different and a more modern kind of state insofar as it created the economic institutions necessary for global capitalism to function.

An economic historian would immediately object, did not capitalism already exist in India before the empire? After all, the whole reason that the East India Company was present in India was to take a share of Indian business. This is absolutely right. And because it is right, we cannot understand the British Indian institutions without reference to the Indian business world of the 18th century. In effect, the new capitalistic rule of law was a joint product of the Indian business organisation and the European merchants’ reading of the Indian business organisation.

The question, then, is the following: what did the English East India Company think it was doing when it decided to create new laws for the acquired territories? Attempts to answer this question meet with a significant problem. Cultural historians and economic historians tend to approach the question of the origin of colonial law from radically opposed angles.

Economists, especially new institutional economic history, would see in law an instrument to address transaction costs. In a colonial setting these costs and their remedies may arise from particular sources, but law is still a solution to inefficient forms of market exchange. Historians, especially “postcolonial” historians, would treat law as a tool of governance and control. In a colonial setting, governance and citizenship are defined differently from a free society. But law is not a benign solution to an efficiency problem; it is an instrument of imperialism. These two views on colonial law do not meet; in fact, they are contradictory. Any suggestion that colonial law could be a solution to a societal problem is likely to be readily dismissed by the postcolonial historians, for whom discourses on “rule of law” are a cover for imperialism. If we take the economists’ road, the British were trying to strengthen the institutional basis for market exchange, where the pre-existing basis fell short in a number of ways. If we take the historians’ road, the British were trying to appropriate means of regulation and control of Indian society.8

I find it difficult to follow either of these two roads. The postcolonial writers assume, without good reason, that the profit motive of merchants had little role to play in the making of modern laws. Law, in this view, was a top-down phenomenon, rather than being a response to the demand by economic agents for more efficient and risk-free rules. A pure governance theory of law cannot be convincing to an economic historian for what it omits from its vision, namely, the demand for law by businesses that faced particular forms of transaction cost, and the role of economic actors in making rather than simply adapting to colonial law. Cultural historians of India, inspired by Edward Said’s book about the European perceptions of north Africa and west Asia, suggest that the British in the 18th century had their actions guided by a conception of Indian society and about themselves as a superior power.9 This story does not work for 18th century Bengal, where colonial law began. The British in the 18th century did not come from the governing classes in England, but were petty merchants, sailors and soldiers trading a little on the side. Their actions were instead guided by a conception of the Indian mercantile world, and this conception had been in the making during the preceding 150 years of doing business with the Indians. Imperial law had economic roots, not political roots. On the other hand, the economic theory that suggests that colonial law was a response to the failings of indigenous institutions, needs to first describe the indigenous institutions and make a convincing case that these were really not good enough to address modern forms of transaction. Institutional economists tend to

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assume that the European colonists transplanted the European institutions on to an otherwise lawless Asia or Africa. In fact, the Europeans transplanted institutions piecemeal, depending on a conception of indigenous laws. This suggestion makes for a very important revision in institutional economic history. Unfortunately, contributors to the comparative economic history of institutions are not yet well-read enough on Asia or Africa to meet the task.

So, what did the Company think it was doing in the matter of legislation in the late 18th or the early 19th century Bengal?

What Did the Company Think It Was Doing?

The key ingredient in the early European conception of Indian business was the notion of a group, the members of which shared a profession, restricted the exchange of property and trade secrets within the group, and maintained the cohesion of the group by restricting marriages within it. That group was sometimes identified with a caste, a community, or an extended family. Almost always, the equation was supported with reference to religion.

Where did this idea come from? The Europeans had been grappling with caste and community, which they experienced as business institutions established among merchants, bankers and artisans, for two centuries before formal colonialism began in 1857. Their impression of the Indian society as a collection of endogamous guilds first arose in the context of doing business with Indian merchants and skilled artisans. European visitors to Indian port towns in the 17th century observed that in India, significant social interaction with other communities was forbidden to merchants, bankers, and skilled artisans. Merchantslived in an insular social world, and mercantile law existed as social conventions of endogamous guilds. Members of the group not only shared a trade, but also married within the trade and had food with people who belonged in the same trade. Social insularity was not peculiar to Indian merchants. Even in Europe, marriage ties were carefully arranged. But in India, such rules were accompanied with a powerful moral force, any act of breach being deemed a sin, inviting unusually severe punishment, excommunication and disgrace. Books of law associated with religious codes could be found that sanctioned such actions against those who broke traditional rules.

In the presence of these insular yet wealthy communities, any state that was capitalistic in aim and familiar with the principles of common law would be caught between two contradictory goals, to establish a modern, universal, and capitalistic legal infrastructure that would override the community and privilege the individual, and to recognise mercantile customs as common law, which would amount to strengthening the community. Legislation in the British India formed in interaction between these two goals. In the beginning, the dominant goal was the second one, namely, to protect the group. I will argue later that the step led to too many problems, and was to be slowly given up in the 19th and 20th centuries.

The East India Company came into possession of the revenues of Bengal between 1757 and 1765, but it was not before

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1772 and a devastating famine in 1770, that the Company became serious about taking the reins of civil administration. In the 1770s, when a serious discussion began about the principles by which the newly acquired territories in India should be governed, Warren Hastings, the first governor general, represented a lobby that believed that India should be governed by the Indian law. The foundation of business practices was seen to be religious, because Hindu and Islamic code books were full of injunctions about the superiority of caste, community, family, notions of purity and the importance of being virtuous by maintaining the rules of the caste or the collective order. The Hastings project, therefore, led to an attempt to understand, reconstruct, and preserve indigenous religious codes; gave employment to scores of orientalist legal scholars, i e, pandits and ulemas; and saw the start of schools of Hindu and Islamic traditions in Benares and Calcutta. The concrete effect of that project in Bengal was that property right was delivered to a joint family, something in between a unitary family and a kinship group. The precise definition of the joint family was left open. Its boundaries were fluid. The understanding was that under Indian tradition, property was usually held in common between descendants of an original ancestor, and therefore, property should be held in common. This was the principle of impartible inheritance, and it worked in conjunction with a flexible concept of the joint family.

India, however, was a plural society, with not one but many religious codes. The codes existed as ethos rather than as positive law. In this scenario, the government could only accord all religious law equal status. And in order to maintain strict equality, it instituted universal procedures and a universal system of courts. The legal regime that Hastings had set in motion was neither a completely new order nor a completely traditional one. It was traditional in modelling law after religious codes; it was modern in creating a single “due process of law” valid for all. Colonial law followed the English common law precedence in two qualified senses: (a) upholding Indian business practices about how property should be held, buttressing the interpretation of that system with reference to religious codes, and (b) creating a single due process of law. One referee and uniform procedures would arbitrate many players.

If this was the ideal, much of the 19th century history of Indian law saw a retreat from the ideal.


From the early 19th century, press, literature, Indians, Europeans and administrators (like the governor John Shore) took a dim view of the British Indian law. Courts and lawyers were unaffordable, served the rich and hurt the poor, were sites where perjury won the day – dark views such as these were expressed by everyone who had seen how things actually worked. By the 1830s, the Hastings model was seen by many to be obsolete. The Benares and Calcutta schools of law that produced Hindu and Muslim legal experts had few backers. The infamous education minute drafted by T B Macaulay (1835), which made the case that traditionalist Indian learning had little practical value and should be given up in favour of a


westernised curriculum in state-aided Indian schools, was partly a reflection of the growing irrelevance of traditional learning in the British Indian law court. There was no immediate change of policy or jurisprudence, but the ideal was cracking under its own weight. What was the problem?

The pursuit of traditionalism in the contents of law and modernism in the process of law created an expensive system, expensive in money, in time, and in terms of disputatious potential. There was an explosion of civil cases on property, and a widely shared suspicion that there were no reliable rules by which these cases might be settled. Opportunistic lawyers and confused judges, staple figures in Bengali satirical writings of the time, made the uncertainty worse. When we read through civil court cases of the early 19th century, we see that these disputes can be classified into three categories – conflict between the private and the public, conflict between the individual and the collective, and conflict between custom and contract. The wording in the last case, custom-versus-contract, is borrowed from Henry Maine, one of the key legislators in colonial India. But I will use the phrase in a different sense from that of Maine.

The conflict between the public and private is a subject much written on. It was introduced by David Washbrook.11 A book on the Calcutta Marwaris by Ritu Birla is a recent attempt to deal with this sort of dichotomy in colonial law.12 Birla has argued that the colonial state legitimised a private space within the economy where personal status ruled, and made it inferior to the public space where “universal models of modern market practice” ruled. In this case, European ideology and Indian ideology are seen to have been so positioned as to underscore the inferiority of one to the other. I do not accept this interpretation on two grounds. First, a European imperial ideology did not exist readymade from the beginning of colonial rule. The “universal models of modern market practice” struggled to establish themselves through an interaction between community practices and corporate and individual enterprise in the sphere of Indo-European business. Second, as I have argued before, ideas about commercial law formed in relation to business history, not in relation to a history of political and colonial power.

There was a public-private conflict present nevertheless. By this phrase I mean a conflict between two incompatible principles – ownership of property held by a private entity called the joint family that could be interpreted by its members in different ways, whereas the settlement of claims over ownership was done by means of a highly public instrument of the state courts. By private, I mean, therefore, a law that defined ownership of property as a legal right, and then delivered that right to a group, the constitution of which was understood only by a few insiders. By public I mean, unlike other contributors to the literature, a universal procedural law, the existence of one platform and one due process of law to settle all possible disputes, in this case, disputes about the precise constitution of the group. This particular cleavage between a right and the mechanism to uphold that right did not exist before, because earlier rights and institutions had both been decentralised into communities. Earlier, communities settled disputes by panchayats following their own rules. No one needed to care about the constitution of these bodies or the legal procedures that they followed. But now there was a divorce of procedures from laws. Now the judges in the British Indian courts settled community disputes by means of common procedures that applied to all. With this shift, the problems began.

The combination of joint rights and universal procedures was an explosive one. The very offer to recognise caste, family and community tradition as legal tender created a moral hazard; it invited some members of castes, families, and communities to reinvent tradition, and equally, it induced other members of the same castes, families and communities to pose a fierce challenge to these attempts by their brethren to capture tradition. A very large number of property disputes in the 1800s concerned one issue – where would the right of the kin to claim a share of a jointly-held property end. An army of pandits advised the judges about which Hindu texts indicated the degrees of relation who could claim shares in a joint family. It shifted the attention of the judges away from the contents of law to the origins of law. And it encouraged young recruits into the system to show off their knowledge of Hindu law to their superiors. One judgment of 1854 observed “that under the Hindu law of inheritance current in Bengal, as laid down in the Daya Bhaga and the Daya Karma Sangraha, the maternal uncle succeeds in preference both to the paternal great grandfather’s brother’s daughter’s son and to the great great great grandfather’s great great grandson…”. Bizarre as these words might sound to us, they merely expressed a judge’s desperate attempt to discover workable formulas out of the maze of religious texts, which he could not read anyway. Such attempts were frequent in this time, and almost always gave rise to fantastic patterns.

Conflicts between the individual and the group stemmed from differential strength of claims over ownership of property. Even though the legal claim to property vested in a whole group, the moral claim differed between the head and the branches, and most distinctively in India, between women and men. Admission of impartible inheritance of property opened a floodgate of conflict between individual and collective interests. For example, impartible inheritance worked on condition that women who married into the joint family had restricted claims on property. Otherwise, remarried widows threatened a division of the estate. Widows had a right to maintenance, but not a share in property. This was plainly unjust when the deceased husband was the one who had created the wealth in the first place. In a society where many women married at 12 or 13 and life expectancy was 25 years, early widowhood was common enough. Women had two escape routes from this law, a bequest from the deceased husband, or adoption of a son. Bequests were not easy when property was jointly held. And a woman was required to produce documentary evidence showing her husband’s consent to adoption. The Sudder Dewany Adawlut between 1800 and 1850 decided a large number of cases where a young girl produced a document purportedly signed by her dying husband sanctioning adoption, which

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document was challenged by the husband’s family. In the 1830s and 1840s, such claims had a reasonable hope to succeed; in the 1890s, these challenges were routinely dismissed. In the new bustling capitalistic world of the port cities, the privileged claim of distant male relatives over the wife was not only seen as iniquitous, but also inefficient because they interfered with the spirit of private enterprise.

Third, there was a conflict between custom and contract, by which I mean the failure of the group or family to secure impersonal contracts for the sale of goods and services. To any observer of business in 19th century India, the indigenous institutions would have seemed to be more a hindrance than a help in settling disputes over sale, either because customary laws were not specified in enough detail to meet the needs of modern forms of business or because informal-personal contract enforcement systems did not succeed in the sphere of transactions between parties who did not know each other well enough. Think of a game of chess being played between a European and an Indian. The European moves a pawn two places and declares checkmate. The Indian objects to the move by saying that according to Indian rules, moving the pawn two places is invalid. The game will never end. Similarly, in business, the transacting parties must agree to play by the same rules to conduct any business at all. If buying and selling are done by the most elementary rules such as auction, identity of the buyers and sellers matters little. But if buying and selling are done by complex rules such as long-period contract that admit of many contingencies, it is impossible to function smoothly if any one party can claim recourse to ethnic or religious laws. It was not as if laws of contract did not exist in India. The problem was that impersonal and secular laws of business could not be found written down anywhere, whereas at the same time, the scope of business transactions between parties that did not share either the same custom or an intimate knowledge of each other expanded enormously from the 18th century.

Sanskrit, Arabic and Persian codes that the British Indian courts made use of were almost never successful in settling trade disputes that came to these courts. In practice, businesses exporting agricultural or craft goods from India tended to rely on middlemen. The middlemen carried social power, that is, they were sufficiently stronger than the peasants or the artisans to be able to coerce or persuade the latter to fulfil the contracts. The middlemen also carried knowledge power, that is, they were better-informed than the contracting merchants, often Europeans, about the peasants and the artisans. They, therefore, took advantage of the weakness of the one and the ignorance of the other to cause serious trouble to both. Agents and middlemen, in short, were part of the problem rather than the solution. As a result of the reliance on such agents, contractual disputes exploded in the Indo-European trade and often took on violent character. Transactions in cotton, wheat, textiles, silk, opium and indigo involved serious disagreements that turned political in the indigo case.13

The system responded to these disputes in two ways, by adopting the common law principle of elevating court rulings

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into law and by legislation overriding tradition. In property rights, case judgments tended to uphold individual rights over collective rights. In the sphere of exchange, legislation disassociated itself from Indian tradition altogether and looked westward.

In short, an initial drive to empower the community as an embodiment of common law on property or contract had to be slowly abandoned. In its place, there emerged two other principles – new laws and case laws. Judges were free to choose between religious codes or ethical/moral imperatives in settling disputes between family members over property. Increasingly, they chose the latter.


I conclude by drawing out three theses – about empire, law and development. The empire thesis is the easiest one to state. I have tried to rethink the empire, not as an extractive agent as in Marxist historiography, but as a legislative agent as hinted at in new imperial history. The shift in perspective is not driven by a desire to “whitewash” the sordid history of many empires. Rather, the intent is to move away from the onedimensional narrative of power projected by the neo-Marxist and the postcolonial writers, towards the possibility of multiple narratives on empires.

The British Empire in India was a legislating state. And yet, as the preceding paragraph would suggest, not all empires and all legislating states were similar. Where would the British India figure in the spectrum of legislating states? Modern European empires pursued a more or less explicitly capitalistic aim – they wanted to aid private enterprise. But what kind of private enterprise would they aid with law? From the slave-owning plantation in America to the jute mill of Calcutta, there is a very large shift in the character of private enterprise. In keeping with this diversity, modern empires pursued three types of legislative strategy, which I call “appropriation”, “incorporation”, and “standardisation”. Appropriation means taking outright possession of indigenous land and labour by the European settlers with the aid of property rights on land and labour. If this was the default strategy in the settler colonies of the New World, it had little relevance for colonial India, where the imperialists were merchants and bankers foremost rather than sugar or cotton planters. Here another principle, incorporation, took over. Incorporation would mean offering juridical autonomy to professional groups in return for their loyalty. Many historians have shown that this practice was widespread, not only in the tropical world, but also as Dominic Lieven has shown in a recent book, in the Russian Empire.14 The idea that “collaboration” was the foundation of imperial rule was, in fact, first popularised by the so-called “Cambridge school” of Indian political history. I have shown in this essay that incorporation was indeed the policy of choice, but that it was a failure because of the contradictions that it entailed. These contradictions resulted from the way indigenous law was interpreted, rightly or wrongly, identifying property ownership with a loosely defined community. By contrast with both appropriation and incorporation, standardisation would


mean allowing one law for all, the principle of one law for one colonies.15 It should be obvious that I do not believe in this nation or one state, or lex loci. The thesis on law is that the story. The problem in India was not how much good western British India began with incorporation, and moved clumsily law was imported, but how much Indian law was preserved. towards standardisation. My argument is that the attempt to fit religious, communal,

The third thesis is on economic growth. Recent research and personal codes of conduct into the common law framedone in the institutional economics tradition tells us that the work – where all codes were subject to contestation – created imperial legislative project did not work well in the tropical huge potentials for contestation. There were far too many colonies because the colonist powers were not sufficiently court cases. And too many court cases are not good for ecomotivated to transplant good European laws in the tropical nomic growth. This is the third thesis.


1 6HHIRUH[DPSOHKathleen Wilson (ed.), A New Imperial History: Culture, Identity and Modernity in Britain and the Empire, 1660-1840, New York: Cambridge University Press, 2000; and Stephen Howe (ed.) The New Imperial Histories Reader, London: Routledge, 2009. The editorial introduction in the latter volume lists 11 themes that define modern scholarship, none dealing with economics. The terms “economy” and “law” are missing from the index of the book. The only essay in the collection that cites the economic literature is a polemical piece by Nicholas Dirks, whose reading of economic history consists of one paper published in the 1970s presenting a cocktail of neo-Marxist dependency theory and economic nationalism.

2 $%D\O\The Birth of the Modern World 17801914, Cambridge: Cambridge University Press, 2004; Niall Ferguson, Empire: How Britain Made the Modern World, London: Allen Lane, 2003; John Darwin, After Tamerlane: The Global History of Empires, London: Bloomsbury, 2008; Ronald Findlay and Kevin O’Rourke, Power and Plenty: Trade, War, and the World Economy in the Second Millennium, Princeton: Princeton University Press, 2007; Stephen Howe, Empire: A Very Short Introduction, Oxford: Oxford University Press, 2002. For an example of a long review, Frederick Cooper, “Empire Multiplied: A Review Essay”, Comparative Studies in Society and History, 46(2), 2004, pp 247-72.

3 For example, Daron Acemoglu, Simon Johnson, and James A Robinson, “The Colonial Origins of Comparative Development: An Empirical Investigation”, American Economic Review, 91(5), 2001, pp 1369-401; Stanley L Engerman and Kenneth L Sokoloff, “Factor Endowments, Institutions, and Differential Paths of Growth among New World Economies” in Stephen Haber (ed.), How Latin America Fell Behind, Stanford, CA: Stanford University Press, 1997, pp 260-304; R La Porta, F Lopez-de-Silanes, A Shleifer, R Vishny, “The Quality of Government”, The Journal of Law, Economics Organisation, 15(1), 1999, pp 222-79. For a useful survey, see Ross Levine, “Law, Endowments, and Property Rights”, Working Paper 11502, National Bureau of Economic Research, Cambridge, MA, 2005.

4 Paul Baran, The Political Economy of Growth, New York: Monthly Review, 1957; Walter Rodney, How Europe Underdeveloped Africa, Washington DC: Howard University Press, 1974. A great deal of Frank’s early writings dealt with contemporary Latin America. Perhaps, the best statement of his historical thesis can be found in World Accumulation, 1492-1789, New York: Monthly Review Press, 1978. The thesis argued in this book is that historically trade has been the mechanism behind an unequal distribution of income and wealth in the world.

5 “Imperialism and Capitalist Industrialisation”, New Left Review, 81, 1980, pp 3-44.

6 For a fuller discussion of the relevant scholarship, see Tirthankar Roy, “Rethinking the Origins of British India: State Formation and Military-Fiscal Undertakings in an Eighteenth Century World Region”, Modern Asian Studies, forthcoming. The term “military-fiscal” is employed in discussions on state formation in India, see P J Marshall (ed.), Eighteenth Century in Indian History: Evolution or Revolution?, Delhi: Oxford University Press, 2003, pp 1-30; and Seema Alavi (ed.), Eighteenth Century in India, Delhi: Oxford University Press, 2002, pp 1-56.

7 “Towards a Reinterpretation of Nineteenth Century Indian Economic History”, Journal of Economic History, 23(4), 1963, pp 606-18.

8 For two recent works on law within this broad framework, see Ritu Birla, Stages of Capital: Law, Culture, and Market Governance in Late Colonial India, Durham: Duke University Press, 2009, and Mithi Mukherjee, India in the Shadows of Empire: A Legal and Political History 1774-1950, New Delhi: Oxford University Press, 2010.

9 Orientalism, New York: Vintage Books, 1978.

10 This section draws on Tirthankar Roy, Company of Kinsmen: Enterprise and Community in South Asian History 1600-1940, Delhi: Oxford University Press, 2009. For a shorter statement, see Tirthankar Roy, “Law and the Economy of Early Modern India” in Debin Ma and Jan Luiten van Zanden (ed.), Law and Long-term Economic Change: A Eurasian Perspective, Stanford: Stanford University Press, 2011.

11 “Law, State and Agrarian Society in Colonial India”, Modern Asian Studies, 15(3), 1981, pp 649-721; see also Peter Robb, “Law and Agrarian Society in India: The Case of Bihar and the Nineteenth Century Tenancy Debate”, Modern Asian Studies, 22(2), 1988, pp 319-54.

12 Stages of Capital.

13 Tirthankar Roy, “Indigo and Law in Colonial India”, Economic History Review, 64(S1), 2011, pp 60-75.

14 Empire: The Russian Empire and Its Rivals, New Haven: Yale University Press, 2002.

15 For example, Acemoglu, Johnson, and Robinson, “Colonial Origins”.


China after 1978: Craters on the Moon

The breathtakingly rapid economic growth in China since 1978 has attracted world-wide attention. But the condition of more than 350 million workers is abysmal, especially that of the migrants among them. Why do the migrants put up with so much hardship in the urban factories? Has post-reform China forsaken the earlier goal of “socialist equality”? What has been the contribution of rural industries to regional development, alleviation of poverty and spatial inequality, and in relieving the grim employment situation? How has the meltdown in the global economy in the second half of 2008 affected the domestic economy? What of the current leadership’s call for a “harmonious society”? Does it signal an important “course correction”? A collection of essays from the Economic Political Weekly seeks to find tentative answers to these questions, and more.

Pp viii + 318 ISBN 978-81-250-3953-2 2010 Rs 350

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february 25, 2012 vol xlviI no 8

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