In the fifth part pf our exclusive serialisation of a new book on the history of class struggles in India, written by a long-time supporter of the Workers’ International Network, the birth of an indigenous capitalist class is and its symbiotic relationship with the ruling British imperialist power is explained.
The Indian National Congress soon came to represent the national aspirations of the emerging Indian capitalist class. This is not to say that it was the instrument of a revolutionary liberation struggle against imperialism; that is the fundamental mistake of the official theoreticians of the left parties in India – principally the CPI and CPI(M), who have glossed over the real nature of Indian capitalism.
Congress was far from a classic bourgeois-democratic nationalist party, in the model of Robespierre, Jefferson, or Garibaldi. If it had been ready to mobilise the masses behind the banner of national liberation, no force on Earth could have stood in its way – as was to be demonstrated by the events of 1946. What is the explanation for its failure to do this? Why could it not follow in the glorious footsteps of the American or French Revolutions?
It is necessary first to define the nature of Indian capitalism. Unlike in most colonial countries, in India there was already under British imperial rule a substantial development of an indigenous capitalist class. This is in spite of the fact that an early priority of British imperialism had been the ruin of the local handicraft manufacture by the imposition of free trade and by discriminatory tariffs against imports from India into Britain – so much so that agents of the British administration physically smashed not only the weavers’ handlooms, but (as Marx pointed out) their very hands.
But the slow global decline of British imperialism partially altered its traditional policies in India. An local capitalist class came into being in India, not fundamentally in conflict with imperialism, but under its patronage. The founders of most of the existing big Indian monopolies – including the huge industrial houses which ended up competing with the imperialist multi-nationals – started as brokers, banias, contractors to the raj, intermediaries for the joint stock banks, traders, and plain gamblers and speculators.
Suniti Kumar Ghosh summed it up in the journal Economic and Political Weekly in November 1988: “The founders of the Tata house, the Wadias, Lalji Naranjis, Thackerseys, Khimjees, Morarjees, Goenkas, Kanorias, Jatias, Jalans, Bajorias, and so on amassed fortunes by serving the imperialist bourgeoisie in such capacities…. Among the princes of gamblers or speculators who afterwards became leading industrialists were the Birlas, Bangurs, Dalmias, Surajmall Nagarmulls, Kesoram Poddars, Hukumchands, Chamarias.“
These were not at all examples of the classic productive textbook “national bourgeoisie ” constricted by imperialist domination. It was only later, and in collusion with the imperial power, that the most prominent Indian entrepreneurs invested the vast sums of cash accumulated in such parasitic activities into productive enterprises – steel plants, cotton and sugar mills, etc.
Already by the early years of the twentieth century, British imperialism was beginning to slip back in competition with its newer rivals in America, Germany, Japan, etc. It considered that the best protection of its Indian market against such competition lay in a limited development of Indian capital – in a strictly secondary role and in collaboration with the dominant British imperialist capital. It hoped that if Indian resources were developed by British capital, with Indian capital playing just a subordinate role, this would deter imperialist poachers from intruding on Britain’s preserves.
Already in 1900 the Secretary of State had insisted that Jamsetji Tata should be encouraged to build a steel plant, and the Indian government gave all help to the Tatas to see it through.
By the time of the First World War, as Ghosh explains, “the hobbled British giant felt the need for some guided industrialisation in India to prevent imperialist rivals from trespassing upon the Indian market.“
In a despatch to the Secretary of State for India in November 1915, Lord Hardinge’s government wrote: “It is becoming increasingly clear that a definite and self-conscious policy of improving the industrial capabilities of India will have to be pursued after the war, unless she is to become more and more a dumping ground for the manufactures of foreign nations.“
There was thus a rapid growth and strengthening of the native capitalist class during 1914-1917. Any hesitation regarding the wisdom of this policy was quickly dispelled at the end of the war. The revolutionary ferment stirred up by the war and by the cataclysmic effects throughout Asia of the Russian Revolution introduced crucial and compelling arguments in its favour.
To quote Ghosh once again: “To strengthen their social base within the colony when the First World War had created an explosive situation and when the proletarian revolution in Russia had set an example before all oppressed peoples, the British imperialists extended some concessions to that section of the Indian bourgeoisie which was quite willing to ‘put the interests of the imperial power above those of India’ and to ’play a part in the imperialist system’… The concessions were granted ‘to contain growing public discontent and to attract collaborators who would form a stable foundation for their rule’.“
The relentless decline of British imperial power enabled the native capitalists to wrest gradual concessions and make increasing inroads. By 1947, indigenous enterprise had cornered 73% of the domestic market and over 80% of bank deposits. The transfer of political power was simply an inevitable formal ratification of the change in the balance of economic forces, which came about in spite of the loyalist and conservative traditions of Indian capitalism. The role of Congress can only be understood within this context.
The role of the Indian National Congress
It is plainly not the case that the struggle for national independence was led by the indigenous bourgeoisie. Chandra comments that “though by the late 1920s the dominant section of the Indian capitalist class began to support Congress, the Indian national movement was not created, led or in any decisive way influenced by this class”.
That is hardly surprising. The active vanguard of the struggle for democratic rights is always composed of the most courageous and self-sacrificing fighters. Conversely, the richest and most powerful capitalists represent on the contrary the rearguard of the movement, even though it is they who later derive the benefits.
The Indian National Congress is generally regarded as the leadership of the independence struggle; but that too would be a gross exaggeration. The programme of Congress was tailored to the needs of the capitalist class. In 1922 Gandhi characterised Congress as “a movement independent of capital, and yet not antagonistic to it”. Congress’ main role was to exert pressure for more room to be conceded to indigenous business. Secondary conflicts were developing with British imperialism, and Congress was the principal instrument with which to exert pressure for their special interests. Despite their distaste for political agitation, the Tatas and Birlas and other entrepreneurs used Congress to lobby for protection against imperialist competition.
In a letter from Birla to Purshottamdas Thakurdas – perhaps the two richest Indian capitalists of the time, both sponsors of Congress but neither of them members – he wrote “There could be no doubt that what we are being offered at present is entirely due to Gandhiji… If we are to achieve what we desire, the present movement should not be allowed to slacken.” Thakurdas later expressly warned the government of the risks at stake: “Mr Gandhi’s agitation is bad, but it may prove to be better than some other more vicious agitation to follow should the government hold out unduly.“
Local textile mills were being victimised as a result of the dumping of British products. The capitalists wanted greater protection for Indian industry against unfair competition under British rule. Congress succeeded in forcing through certain protective measures – for instance in favour of the Tata Steel Industry. Later, Congress led campaigns against government manipulation of the rupee/sterling exchange rate, and for tariff protection, reduction in military expenditure, prohibition on the importation of foreign cloth, reservation of coastal traffic for Indian vessels, cuts in military expenditure and taxes, Indianisation of the civil service, etc. Later these demands grew over into the Swadeshi campaigns (demanding preferential treatment for local manufacture) and boycotts of British goods.
One major demand was protection for the Indian textile industry (which was itself in competition with traditional handloom production). The scion of a feudal hierarchy, Gandhi at first defended the antiquated techniques of handicraft against modern industry, which he considered “sinful”. But it did not take long for the industrialists who backed Congress to overrule Gandhi’s backward prejudices on the issue.
The class bias of Congress was confirmed by its attitude towards labour questions. It explicitly put the workers’ interests second to those of the capitalists. Chandra states that the nationalists “were unwilling to take up the question of labour versus the indigenous employer… and actively opposed the Factories Acts of 1881 and 1891… Strikes in textile mills were generally not supported.” This was justified by “the desire not to create any divisions in the fledgling anti-imperialist movement.” Congress was especially discreet about its motives for condemning the Bombay textile workers’ strikes in the 1920s; it was receiving funds from the mill owners.
The local capitalists actually opposed labour reforms on the grounds that they served “British manufacturing interests” which, “faced with growing Indian competition and a shrinking market in India“, sought “by reducing the working hours for labour” to blunt “the competitive edge enjoyed by Indian industry“. But, as Chandra shows, “the scenario completely altered when the question was of Indian labour employed in British-owned enterprises. Here the nationalists had no hesitation in giving full support to the workers“. They were even readyto help organise workers in the government press, the railways, and the (British-owned) jute industry.
The Indian capitalists were nevertheless emphatically opposed to any challenge to the fundamental rights of British capital. While there was no shortage of secondary frictions between them, they were seeking not confrontation with imperialist capital, but collaboration with it.
At a meeting with Lord Irwin in 1928, their eminent leader Sir Purshottamdas Thakurdas, who played a strategic role as intermediary between Congress and the government, pleaded for “co-operation between Indian and British commercial interests“, and stated that “Englishmen in India understand that Indian leaders have no predatory intentions, and that in a self-governing India British interests will be as secure as at the present day“.
A Congress committee headed by Motilal Nehru, an eminent Congress leader (and father of the future Indian prime minister) reported in 1928: “As regards European commerce, we cannot see why men who have put great sums of money into India should at all be nervous. It is inconceivable that there can be any discriminating legislation against any community doing business lawfully in India.“
The fact is that Gandhi, Nehru and the rest of Congress were explicitly opposed to Indian independence from British imperial rule. It was not until 1930 that Congress even called for swaraj (home rule), let alone independence. To quote Ghosh: “The Indian business magnates and the Gandhis, their political representatives, were opposed to independence, which would mean coming out of the imperialist orbit, for this meant to them an uncertain future in India.” They understood very clearly how precarious and unstable their own rule would be if power were ever to drop into their hands.
Far from demanding independence, from the beginning Congress leaders deferred to all the totems of British imperialism. The first Congress conference began with a rousing “three cheers for the English Queen”. During the First World War, Congress fully co-operated with the British, their representatives in the Imperial Council voting for contributions to the war effort. Even Tilak – only recently released from jail – “assured the Government of his loyalty to the Crown and urged all Indians to assist the British Government in its hour of crisis“. Sir Satyendra Sinha, presiding over the 1915 session of the Indian National Congress, proclaimed that “at this critical hour in world history it is for India to prove to the great British nation her gratitude for peace and the blessings of civilisation secured for her under its aegis for the last 150 years and more.“
There were cheers for the British Governors who graciously attended the 1915 and 1916 sessions. Congress even wrote to the Secretary of State promising that “the princes and people of India will readily and willingly co-operate… by placing the resources of their country at His Majesty’s disposal, for a speedy victory of the Empire“. The Delhi session of Congress in 1918 passed a resolution expressing loyalty to the King.
As the political voice of a weak and dependent capitalist class, it could articulate little more than a whimpering and respectful plea to imperialism for secondary economic and political concessions: hence its far from heroic tone as it clung sycophantically to the British jackboot.
Congress even acquiesced in the hangings of rebel freedom fighters: members of the Ghadar party, for instance, which had tried to organise an army mutiny. The Ghadar rebellion in 1915 was a glorious adventure, a heroic exploit which tragically lacked solid social roots or a historical perspective. As with the Easter Rebellion in Ireland in 1916, if the Ghadarites had waited just four or five years, their attempt to incite mutinies in the Army could have dovetailed with the growing mass movement in society, and the outcome could have been very different. But their tactical mistakes notwithstanding, the betrayal by Congress of the Ghadar martyrs remains a shameful stain.
Even in 1946, when British imperialism itself had to acknowledge that the national uprising had settled the issue once and for all, Gandhi was even then still arguing that dominion status was preferable, for that meant “independence plus the British connection“.
How then are we to explain the left tinge that increasingly came to characterise at least certain factions of Congress? It reflected a consciousness on the part of the most intelligent elements of the Indian capitalist class that if concessions were to be won from the British, it would be politically necessary, at least on limited occasions, to mobilise a carefully contained mass movement. This represented an implicit tribute to the growing specific weight and radicalisation of the working class.
Birla frankly stated on one occasion: “I have not the least doubt in my mind that a purely capitalist organisation is the last body to put up an effective fight against communism“.
Lajpat Rai appealed for a spirit of conciliation between the classes: “India has been bled white by the forces of organised capital. The antidote is organised labour… We are often told that in order successfully to compete with Manchester and Japan, capital in India should be allowed a high rate of profit and cheap labour is a necessity for that purpose… Surely, the way to develop Indian industries is to be not at the expense of labour alone. The Indian capitalist must meet labour halfway, and must come to an understanding with it on the basis of sharing the profits in a reasonable and just proportion.”
Fearing social revolution, Congress squirmed a tortuous middle path between the needs of imperialism, to which it swore loyalty, and the aspirations of the masses for freedom, in the interests of levering a more favourable bargaining position for its sponsors. It devised the tactic of “non-violence” as a means of syphoning off the fury of the masses while still exploiting them as a bargaining counter. Gandhian non-violence reduced all mass actions to symbolic and impotent protests. At all costs the downtrodden hordes must be kept in a subordinate and passive role. They must be pacified – hence, quite literally, the “pacifism” of Congress… which once in power established as ruthless a regime of capitalist repression as any.
To quote from Chandra once again on the policy of Indian capitalism: “It was apprehensive that the path chosen should not be one which… would threaten its own existence, i.e. undermine capitalism itself. There was the fear that mass civil disobedience… would unleash forces which could turn the movement revolutionary in a social sense, i.e. threaten capitalism itself… Private property could itself be threatened and the disregard for authority created could have disastrous aftereffects even for the future government of swaraj.“
The Indian capitalists dared not risk letting loose the pent-up popular fury, for fear that they too might be swept aside – just as in the nineteenth century, the German capitalists were already more frightened of the new working class than of the repressive feudal princedoms which were restricting their growth; and all the more so in the case of the capitalists of Tsarist Russia. The Indian bourgeoisie was unwilling to wage a full-blooded struggle against either imperialism or landlordism.
Unfortunately, even the left theoreticians of India were confused on this question. For instance, in his book The Independence Struggle and After, B.T. Ranadive tried to reconcile the struggle of the Indian national bourgeoisie against imperialism with the failure of Congress to rouse the peasants against the feudal landlords – an elementary precondition for a national-liberation struggle. Acknowledging the “opposition to agrarian revolution of the Indian intelligentsia and the national bourgeoisie“, he commented: “The Indian bourgeoisie had no urgent need to free the peasant from landlordism; in fact, they feared an agrarian revolution. In their fight against imperialism, they relied on the support of the landlords.“
Actually, the British had actively promoted the zamindars and landlords and incorporated them into their administrative structure. Ranadive’s argument does nothing to explain the refusal of the national bourgeoisie to mobilise the mass forces that alone could assure it of victory. He only ends up confirming that the national bourgeoisie was paralysed by fear of the peasants, let alone the workers. Congress was not even prepared to fight for the elementary democratic demand to break feudal serfdom.
The next section of our series is Part 6: THE GIANT AWAKENS.