Financial Resource

Mike Davis and his ideas of the effect of Western contact with the Third World varies greatly from that of P. T. Bauer.  Bauer, in his essay entitled “Western Guilt and Third World Poverty”, claims, “Since the middle of the 19th century commercial contacts established by the West have improved material conditions out of all recognition over much of the Third World… Roads, railways and man-made ports; the application of science and technology to economic activity; towns with substantial buildings, clean water and sewage facilities; public health care, hospitals and the control of endemic and epidemic diseases; formal education.  These advances have resulted from peaceful commercial contacts.”

Davis expounds his theory of the interaction between El Nino droughts and the British colonization of India in his book Late Victorian Holocausts.  According to Davis, India had been highly capable of managing many demanding ecological circumstances before the imperial incursion of British rule, yet during “The Great Drought” of 1876-1878, famine was widespread.  It should be noted that Davis refers to famine not as simply food shortages, but “complex economic crises induced by the market impacts of drought and crop failure.” The purpose of this essay is to extrapolate a hypothetical response from Davis to Bauer based on Davis’ text.  It is proposed that Davis would argue against Bauer’s position through discussion of the following topics: the laws of leather versus iron, three causes for increased vulnerability to ecological disasters (including forced incorporation of small holder production into larger overseas systems, deterioration of power in terms of trade, and the confiscation of the local fiscal economy and impediment of contingency plans), the extortion of India and rise of Britain, the gold standard and world economy, irrigation deficit, and the causal relationship between ecological poverty, household poverty, and state decapitation.

The common idea that the British liberated an emaciated India from depravity, poverty, and famine is incorrect.  This was performed by the tightening of what journalist Vaughan Nash referred to during the famine of 1899 as India’s “laws of leather.”  These laws were comprised of four fundamental policies – “embargos on food exports, antispeculative price regulation, tax relief and distribution of free food without a forced-labor counterpart.”  The British Famine Comission Report of 1880 admittedly communicates how the emperor gave generous portions of money from the national treasury, imported corn, sold it at reduced prices, and distributed freely amongst the most poor, and relieved cultivators of taxes and rent.  Forcing the poor to perform labor in exchange for relief and assistance began in 1866 under the influence of the Victorian Poor Law, which was the antithesis of the Bengali (where the practice began) idea that one should give freely as a father gives to his child. This is one example of how the laws of leather became the “laws of iron.”  To sum up the consequences concisely, Davis writes, “Although the British insist that they had rescued India from ‘timeless hunger,’ more than one official was jolted when Indian nationalists quoted from an 1878 study published in the prestigious Journal of the Statistical Society that contrasted thirty-one serious famines in 120 years of British rule against only seventeen recorded famines in the entire previous two millennia.”

In addition to the conversion of leather into iron, the local economies were forcibly integrated into the world economy.  Davis presents three facets of this integration in relation to the manufacture of famine in India.  Firstly, this incorporation into the world economy undermined the traditional food security.  It was not some grand entrepreneurial opportunity that the British sought in India, but the exportation of their own predicament, which created subsistence adversity for the Indians.  High taxes, chronic indebtedness, enclosure of common resources, inadequate acreage, and more promoted the parasitic cash-crop cultivation.  Furthermore, subsistence producers’ goods were not stored for emergencies, but devoured by the market.  Secondly, due to the sudden insertion into the world economy, peasants had very little power in terms of trade in comparison to purchasers and creditors, leading to less income acquired.  In addition, the real value of their goods including indigo, cotton, opium, and grain began to steadily decrease.  Lastly, the local fiscal autonomy no longer had such rule under the pressure of the supranational automatism of the gold standard and force of the British imperialists.  This hindered state-level contingency plans for drought and famine, such as irrigation and water conservancy.  It can be comprehended from the three elements of the integration discussed above that contact with the West did not benefit the Third World in the way Bauer would have it understood.

It is often believed that when the Western empires made contact with the so-called Third World that they found an undernourished and “backwards” people.  Evidence contradicts this belief and states that between India and Britain, circa 1700, India had lower rates of unemployment, higher earnings, greater financial security, and enjoyed better diets.  Data presented in the Late Victorian Holocausts tells of the shares of gross domestic product for Europe and India in the years 1700, 1820, 1890, and 1952.  For India this was 22.6, 15.7, 11.0, and 3.8 percent, respectively.  For Europe, this was 23.3, 26.6, 40.3, and 29.7 percent, respectively.  These trends, in relation to the previous discussion, make clear the fallacy of Bauer’s argument.  Any attempt to deviate from the trends were met with military opposition and economic response from the competing imperial capitals.  The large surpluses from Third World countries such as India and China allowed Britain to maintain equally large deficits with other imperial countries such as the United States and Germany.

The ecological bottleneck to economic growth in India was water.  Water was the main constraint of agricultural output during the British colonial period of India due to high land-tax rates (in addition to population pressures and displacement by export crops) leaving little surplus to be allocated to the maintenance of irrigation systems.  Two of the three reasons are directly related to contact with Western imperialists.

Finally, Davis argues that ecological poverty, household poverty, and state decapitation from a causal triangle in the manufacture and vulnerability of the Third World.  Ecological poverty refers to “the depletion or loss of entitlement to the natural resource base of traditional agriculture.”  India’s per capita income did not increase, and in fact decreased by more than 50 percent, from 1757 to 1947.  In Bellary, the driest of districts in India, without irrigation, a family needed 15-20 acres of average-quality land to produce its subsistence and pay taxes, but in most cases farmed no more than 7 acres.  This is the ecological poverty and the household poverty.  For a typical village in Bombay, the British rule would collect nearly 19,000 rupees annually in taxes, and spend only 2,000 in expenditures, mainly on governmental salaries.  Gains on loans were made at absurd interest rates.  This difference in British legal theory versus Indian is referred to as state decapitation, in which the traditional state rule is removed in exchange for servitude of the world market.  Land enclosures served to only further instigate all three corners of this causal triangle.  These causes give rise to the vulnerability to drought and El Nino cycles.  The causation may be traced to contact with the West, which negates Bauer’s claims.

While some of Bauer’s claims may hold true, his conclusion drawn from them does not.  Davis clearly explains how contact with the West did not result in the improvement of material conditions in the Third World.  Western incursion and “intervention” led to the vulnerability of a people who had previously been able to cope with the natural cycles of the environment.

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