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Indian Economics' Contribution to Development Discourse, 1870-1905

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Indian Economics' Contribution to Development Discourse, 1870-1905 Redefining universal development from and at the margins: Indian Economics’ contribution to development discourse, 1870-1905 By Maria Bach This thesis is submitted to King’s College London for the degree of Doctor of Philosophy in International Political Economy 31 July 2018 1 Abstract The late 19th century Indian Economics redefined development. This thesis examines what shaped the idea of development in Indian Economics from 1870 to 1905, using discourse analysis to explore the interaction between and effect of the multidiscursive and multispatial contexts. Although recent International Political Economy scholarship has started to encourage a global perspective, historical research in the field is still centred on European and American contributions. The research aims to fill that gap by analysing Indian Economics development discourse that emerged in a period of political conflict and poor socio-economic conditions which brought into question the legitimacy of British imperial rule. Indian Economics subsequently attempted to prove India’s ability to progress and conceptualise an appropriate and effective development plan. Additionally, the research complements recent research in social history and history of political and economic thought that attempts to contextualise Indian intellectuals’ conceptualisation of nationalism at the turn of the 19th century. I show how the position of Indian Economics at the margins of discursive space offered a unique perspective that enabled Indian Economics to discursively innovate at the margins of development discourse. The analysis concludes that Indian Economics redefined the concept of universality in the existing idea of development in the 19th century by rejecting the widely accepted international division of labour and the dominant assertion that progress originated in Europe. India, according to Indian Economics, could and should industrialise like all other nations, because the idea of universal development in Indian Economics adopted a world view that saw universal progress or positive societal change as beneficial to all, rather than a zero-sum game involving necessary winners and losers. 2 Acknowledgements Fearlessness is a funny thing. My fearlessness has proved to be productive, rewarding, and exhilarating, but also a lot of stress and hard work. Fearlessness got me to start my PhD with little understanding of what it would actually entail to write a thesis. Would I have started the PhD if I had known what it entailed? I am not sure. I will never be sure. But I do know that I have changed. The PhD has pushed me to grow and learn in ways I could not have imagined. I have been able to grow and write my thesis thanks to a wonderfully supportive group of individuals that guided and listened to me. I would like to thank my supervisors, Valbona Muzaka, Jon Wilson and Alex Callinicos. I am especially grateful to my first supervisor, Valbona Muzaka. I could not have completed my thesis without her. Her constant support – emotional, academic and practical – has been extraordinary throughout the process. I owe a debt of gratitude to the London Arts and Humanities Partnership supported by the Arts and Humanities Research Council, INET’s Young Scholar’s Initiative and the Faculty of Social Science and Public Policy Research Fund from King’s College London. Their financial support was invaluable. I would like to thank the following people for consoling me when I was down and for being my very own cheerleaders: Oscar Dahl, Emilie Mendes de Leon, Susanne Spahn, Michael Karner, Mathilde Toulemonde, Rosie Brand, Ashley Acker, Elena Bordarier, Meg Gagnard, Lacy Audry, Alice Hertz, and so many more. A brief but noteworthy mention must be made of Anne and Manuel Bénétreau. They managed to make the end so much less stressful and far more enjoyable when I was juggling my teaching load in Paris and finishing my thesis in London. Thank you to the PhD students in my department at King’s College London and in the LSE Economic History department, as well as the brilliant group of scholars in the INET YSI Working Group on the History of Economic Thought and the wider History of Economics community. Thank you especially to Cléo Chassonnery-Zaïgouche, Francois Allisson, Reinhard Schumacher, Camila Orozco Espinel, Christina Laskaridis, Sharmin Khodaiji and Mary Morgan. To everyone who saw me present and discussed my thesis with me, thank you for listening and giving me thought-provoking comments. Last, but by far not the least, I hope to adequately acknowledge my greatest support of all, my husband Pierre. His gracious encouragement and constant help is nothing short of a wonder. Pierre, I dedicate this thesis to you. 3 Table of Contents ABSTRACT 2 INTRODUCTION – DEVELOPMENT DISCOURSE AT THE MARGINS 7 THE PROBLEMATIC OF DEVELOPMENT DISCOURSE 14 EXPLAINING THE SCOPE: THREE KEY INDIAN ECONOMISTS BETWEEN 1870 AND 1905 18 IDENTIFYING THE THEORETICAL APPROACH: DIALOGIC DEFINITIONS, THEORIES AND THINKING 26 THESIS OVERVIEW 28 CHAPTER 1 – RESEARCH DESIGN: THEORISING AND OPERATIONALISING POSITIVE DISCOURSE ANALYSIS 32 THEORETICAL FRAMEWORK: DIALOGISM 33 METHODOLOGY: POSITIVE DISCOURSE ANALYSIS (PDA) 40 PRIMARY MATERIALS 55 CHAPTER 2 – THE BEGINNINGS OF INDIAN ECONOMICS: SITUATING THE INDIAN ECONOMISTS WITHIN THEIR MULTISPATIAL AND MULTIDISCURSIVE CONTEXT, 1858-1905 58 THE LONG DEPRESSION: THE MULTISPATIAL CONTEXT, 1858-1905 62 DEINDUSTRIALISATION IN SMALL-SCALE INDUSTRIES 62 SLOW INDUSTRIAL GROWTH IN LARGE-SCALE INDUSTRIES 70 AGRICULTURAL COMMERCIALISATION 74 SEVERE FAMINES 78 MORAL AND MATERIAL PROGRESS: THE MULTIDISCURSIVE CONTEXT, 1858-1905 81 THE BEGINNINGS OF INDIAN ECONOMICS 97 THE DIFFERENT STRANDS OF INDIAN ECONOMICS 100 ASSIGNING AGENCY TO THE INDIAN ECONOMISTS 107 CHAPTER 3 – REGRESS AND PROGRESS: THE UNDERSTANDING OF SOCIETAL CHANGE IN INDIAN ECONOMICS, 1870-1905 111 THE STADIAL THEORY OF SOCIETAL CHANGE IN INDIAN ECONOMICS 112 BIDIRECTIONAL SOCIETAL CHANGE IN INDIAN ECONOMICS 120 REGRESS IN INDIAN ECONOMICS 120 PROGRESS IN INDIAN ECONOMICS 132 THE USE OF NATURAL ANALOGIES IN INDIAN ECONOMICS 135 IS SOCIETAL CHANGE UNIVERSAL? 145 CHAPTER 4 – THE IDEA OF DEVELOPMENT IN INDIAN ECONOMICS: THE INTENTIONAL PLAN TO HARNESS PROGRESS, 1870-1905 153 4 ELEMENTS OF DEVELOPMENT IN INDIAN ECONOMICS 155 ORDER 155 INDUSTRIAL POLICIES 165 AGRICULTURAL POLICIES 178 PUBLIC SPENDING ON INFRASTRUCTURE 185 SOCIAL REFORM 187 REINVESTMENT OR DRAIN REDUCTION 195 THE INSTITUTIONAL ARCHITECTURE TO HARNESS BALANCED GROWTH IN INDIAN ECONOMICS 197 CHAPTER 5 – INDIAN ECONOMICS’ DISCURSIVE CONTRIBUTION: TOWARDS A UNIVERSAL IDEA OF DEVELOPMENT 201 RECONCILING NATIONALISM AND UNIVERSALISM 203 TOWARDS A UNIVERSAL IDEA OF DEVELOPMENT 213 STEP ONE: INDIAN ECONOMICS’ DENATURALISATION OF THE DOMINANT VERSION OF GLOBAL HISTORY 214 STEP TWO: INDIAN ECONOMICS’ CONCEPT OF A DEPENDENT IMPERIAL ECONOMY 217 STEP THREE: INDIAN ECONOMICS’ CONCEPTUALISATION OF A WIN-WIN GLOBAL DEVELOPMENT FRAMEWORK 227 CONCLUSION – MULTIPLE DEFINITIONS OF PROGRESS AND DEVELOPMENT 233 REDEFINING PROGRESS AND DEVELOPMENT FROM AND AT THE MARGINS 235 INDIAN ECONOMICS’ DECONSTRUCTION OF UNIVERSAL DEVELOPMENT AS A CONTEMPORARY TOOL 237 TOWARDS A NEW DEFINITION OF UNIVERSAL PROGRESS AND DEVELOPMENT 242 APPENDIX I 245 REFERENCES 246 5 Abbreviations INC Indian National Congress IPE International Political Economy PDA Positive Discourse Analysis CDA Critical Discourse Analysis List of Figures Figure 1: Small-scale industry ........................................................................................................ 65 Figure 2: Indian Economics’ Four Stage Theory and Bidirectional Societal Change .................. 116 List of Tables Table 1: Dialogism’s compatibility with Positive Discourse Analysis ........................................... 46 Table 2: Specific Contexts to be Analysed ..................................................................................... 50 Table 3: The Indian Economists, their works and key life events ................................................ 101 Table 4: Naoroji’s national income accounting compared to costs of living for years 1867-1870 ....................................................................................................................................................... 124 6 Introduction – Development Discourse at the Margins It occurred to me at the time that if the ‘Law of Relativity and Correspondence’ holds good in Politics and Social Science generally, it ought to hold good equally in all kinded subjects, including, among others, the Science of National Wealth, or, as it is more popularly described, Political Economy. As a matter of fact, however, what do we see about us? The same Teachers and Statesmen, who warn us against certain tendencies in our Political aspirations, forget this salutary caution when the question at issue is one of Indian Economics. They seem to hold that the Truths of Economic Science, as they have been expounded in our most popular English Text-books, are absolutely and demonstrably true, and must be accepted as guides of conduct for all time and place whatever might be the stage of National advance. Ethnical, Social, Justice, Ethical, or Economical differences in the environments are not regarded as having any influence in modifying the practical application of these Truths.1 Mahadev Govind Ranade “Indian Economics” conceptualised an idea of development that explained India’s distinct socio- economic and political changes and constructed an intentional plan that would
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