Books
INDIA IN THE SHADOWS OF EMPIRE: A Legal and Political History 1774-1950
by Mithi Mukherjee. Oxford India Paperbacks, 2010.WHEN John Kenneth Galbraith termed India a ‘functioning anarchy’ little did he know that the charming contradiction in terms would for scholars of post-colonial India become a starting point of investigation into its paradoxes. That it was chaotic was one thing, that it seemed to come to breakdown levels seemed imminent; but, it held together fragilely, tentatively. And for most educated middle class Indians passing through the portals of universities with degrees in political science or economics, the paradox of functioning anarchy seemed to encompass all the messy arrangements of post-Independence India – the volatile ambitions and contesting claims of its heterogeneous fractious population.
Behind this trope of working chaos was an unstated assumption that India had experienced a decisive break in 1947 with Independence, that the ‘Transfer of Power’ had enabled a shift from an imperial to a democratic state premised on a Constitution, six years in the making, which adorned the new state and society with the vestments of democratic traditions. This appeared to be the case even if the Partition holocaust seemed a cruel curtain raiser to new democratic possibilities. What seemed clear was the birth of a nation, baptized in its own blood perhaps, but one that called up an entirely new discipline of scholarship to investigate its functioning.
The ‘rupture’ of 1947 gave birth to political science, the study of India’s journey into modernity or more specifically into modern statecraft. History was to stop at 1947. If the period before that date encompassed the colonial past, the one after was naturally the post-colonial one. But Galbraith gave us the most apposite handle on the messy turbulence of the new nation in the making with greater acuity and, in view of contemporary events, with precision.
How much of the past does live with us? For Marxist historians it lives in the form of class domination, of a state power that continues to represent the hegemony of capitalists, of post-colonial domination. For the ‘nationalist’ historian, the past has been buried, except perhaps in some archaic laws. But for both Marxist and nationalist scholarship the nation’s polity marks a decisive break with colonialism’s imperial foundations (even if it exists in the lal batti and in the lingering whiffs of grandeur in Rashtrapati Bhavan). The study of its legal and political bases, originating in a home-drafted constitution, requires the tools of political science.
Mithi Mukherjee begs to differ. Stepping away from the ‘functioning anarchy’ rubric, she informs us that the Indian polity is in fact as coherent as any other modern polity because its structure has ‘precise historical origins.’ By putting forward this hypothesis that she examines with stunning originality in her book, India in the Shadows of Empire, the historian attempts to tie together the new Indian state after 1947 as a continuity of an imperial past. Her contention is that the political philosophy of the new state is no different than the philosophy of the imperial power that ruled over India since 1857.
If this is the first radical break from extant scholarship that viewed the new state as an experiment in fragmented modernity, the second is that the imperial epistemology itself grew out of a long struggle with what she calls the colonial philosophy of the East India Company, a discourse held by the likes of Warren Hastings that eventually led to the 1857 uprising. In a fascinating blow-by-blow account, Mukherjee traces the dialectics of that struggle for epistemological supremacy that eventually led to the assertion of the monarchy and a new imperial discourse of rule determined to ensure that 1857 would never happen again. Her distinction between the colonial and imperial discourses is crucial to the understanding of the foundational profile of India’s post-1947 statehood. For her, the colonial discourse epitomized by the East India Company, and elaborated by Warren Hastings at his trial, underlined territorial expansion, subjugation by force of the colonized for the principal objective of commercial gain. The discourse of the ‘imperial’ was positioned as a critique of the colonial discourse’s narrow goals by reference to justice based on a de-territorialized notion of natural law that was supposed to speak on behalf of the peoples of India.
Mukherjee traces the origins of this imperial discourse by a fascinating examination of three ‘moments’ in British Indian history. The first is the impeachment trial of Warren Hastings in the last two decades of the eighteenth century that she claims Indian historians have ignored. For her the trial offered Edmund Burke the platform for the most lucid expression of what would become an imperial discourse on sovereignty. The second moment in the development of the imperial discourse comes with the establishment of the Supreme Court in India in 1774 and the third, the uprising of 1857.
The British government back home learnt the lessons of 1857 well. They learnt that Indians were capable of uniting even under a weakened Mughal Emperor against the firangi, that force alone would not help sustain their hegemony. All sources of national unity and cohesiveness had to be dismantled and the foreignness of British rule sublimated in a new overarching concept of sovereignty by a de-nationalized, de-territorialized monarch who would stand above all law in the dispensation of justice to all the peoples of India. That was the imperial project. That dispensation was to come through the twin discourses of justice: justice as equity and justice as liberty.
Mukherjee disinters a staggering irony in this discourse: justice as equity and liberty was used to define the struggle against monarchies – think of the French and American Revolutions. In India they were deployed to justify and legitimize the sovereignty of a foreign monarch over Indians! And it served the rulers well. The imperial discourse on justice was deployed to transmit two messages: that India was essentially an amalgam of warring communities requiring the firm hand of a monarch standing above sectarian interests to maintain the peace between those fractious communities. Justice as equity did not mean, as it did elsewhere even in England’s common law courts, that Indians would be subject to a common law standing above all. It meant that equity was represented in the figure of the monarch that stood above all law.
Mukherjee follows this up with a clear exposition of the ways the justice-as-equity principle was used to assert what was clearly an unethical legitimacy. That could come only by portraying India as a people grounded in divisiveness – caste, class – effete and barbaric cultures and practices, religions whose civilizational glory had long faded. British rule invested India – a meaningless entity by itself – with a cohesive idea of itself. The hegemonizing principle worked well. It worked even when the Indian National Congress was established in the late nineteenth century. Mukherjee’s implicit assumption is that the INC came into being precisely as a response to the justice as equity principle. If justice as equity meant referrals to the conscience of a monarch, petitions for righting perceived grievances/lapses, could the lawyer be far behind? The imperial discourse had to lead up to the age of the petition and who better to do that than the lawyer on behalf of the subjects?
So the ‘Vakil Raj’ and the INC were born with the lawyer as sole political representative. It is no accident that almost all the intellectuals and nationalists were lawyers, including Gandhi. It was not a quirk of petite bourgeois sycophancy that led Madan Mohan Malaviya, pleading for elected representation to the Legislative Council in 1906 to round off his plea thus: ‘…Why then should it be denied to the loyal and intelligent subjects of her Gracious Majesty?’ (p. 105). There was method in such seeming unctuousness. Mukherjee reminds us that, ‘In light of the arbitrary nature of the colonial executive, the discourse of the Congress had necessarily to be addressed to a higher imperial judge…’ (p. 123). And who higher than the monarch? The lawyer, defendant, plaintiff and judge: India’s nationalist ambitions were confined to and constricted by the courtroom and its lead players. Then along came Gandhi.
In South Africa, Gandhi, a lawyer, played the imperial game fighting – in the courts – for Indians there. When he came to India and began a non-violent cooperation movement against the British in 1921, the first call he gave was to boycott all British courts and to ban ‘lawyers from participating in and leading the struggle for national independence’ (p. 150).
In Mukherjee’s phrasing, the renunciative persona of Gandhi was about to replace the ‘enunciative persona’ of the lawyer. The account of how this persona arrived to redefine and reshape India’s freedom struggle is riveting in its detail, fascinating in its novelty and freshness of approach. One knows one is retracing a period of India’s complex history never before examined in this fashion; as a clash of ideas of discourses as the location for what can only be called the ‘epistemological break’ in India’s long march to freedom. Gandhi did not invent the ‘renunciative discourse’ of freedom or the sanyasin as the proponent of freedom. His discourse of the renouncer was ‘genealogically connected’ with traditional Indian (Hindu, Buddhist and Jain) discourses on transcendental or renunciative freedom: mukti, moksha, nirvana. He blended these into a political slogan of swaraj like no other renouncer in the nineteenth century had.
The discourse, of course, was a radical opposition to the epistemologies of imperial rule. It was not based on western notions of rights, of state guaranteed duties and responsibilities. Most importantly, it did not acknowledge the distinction between the self and ‘other’. Gandhi tapped into India’s most profoundly different worldview of freedom that presupposes the erasure of identity, of the gap between the self and other that was the cornerstone of the western idea of freedom grounded in individual rights.
The first task of the competing discourse, Mukherjee also calls it the Indic discourse, was ‘to overcome the fragmentation of Indian society’ that had been an essential part of the colonial-imperial discourse and had so far prevented a national mass movement. The Gandhian discourse ‘provided a way out of the labyrinth of the politics of identity and made possible a large-scale mass movement based on non-violence, an essential pillar of the discourse of renunciative freedom’ (p. 152). As a political activist turned renouncer, Gandhi infused the freedom movement with a politics that in hindsight few understood beyond the realm of practicalities. For him, the fight for independence was a struggle for moksha, for non-attachment. It did not aim for the seizure of power; it was directed at the extinction of power, of all power itself through the erasure of identity. Political freedom then had to become transcendental liberation that negates all institutions premised on identity. The renouncer renounces all; the state has to wither away.
It is not surprising that Gandhi asked Nehru to dissolve the Congress and turn it into a social service organization. But the most tragic irony lay here. Had India really followed Gandhi? He had followed his renunciation to the hilt; he withdrew to spend his last years in drenching the fires of Partition with the healing voice of peace and harmony. He withdrew from active politics and the making of the new nation state. Could Gandhi have done anything else? Not likely, for the logic of his discourse demanded anasakti or non-attachment. Should the rest be silence? Nehru and the Congress felt the job had just begun; a new state had to be created. Gandhi had no answer; he had become irrelevant. He was perhaps saved from providing any solutions by the bullet that claimed his life.
So a search for the defining principles of the new state began. But it began on an ominous tone that almost presaged the future. Mukherjee asks the question: Why was the end of British rule described as a ‘Transfer of Power’? Why is the freedom movement not seen as the Indian revolution in the same way that the Americans see their own liberation from the British two hundred-odd years earlier? Her answer may shock the reader but it is spellbinding nevertheless and it lies at the core of her work.
A search for the foundational principles of the new state begins at the moment of certainty that the British were leaving. It is at that moment when the Congress began its irrevocable slide into a legislative political party, a process that placed it exactly on the opposite side of Gandhi’s non-legislative renunciative discourse.
The Constitution that finally emerged after six years of deliberation pulled the nation away even further from the Gandhian discourse and right into the old imperial discourse that the freedom struggle had so successfully battled, but not overthrown or upturned. The ‘Transfer of Power’ stretched the long shadow of empire over the framers of the Constitution; not surprisingly its essential principles were reminiscent of the old imperial discourse.
Mukherjee draws our attention to The Preamble. It lists justice in economic, social and political domains as the primary function for the national good followed by liberty, not in the above domains but in thought, expression, belief, faith and worship. The Preamble thus ‘clearly constitutes justice rather than freedom as its foundational or over-determining category, bringing the social, the economic and political domains within its jurisdiction’ (p. 186).
The foundational principle of justice as the pivot on which Indian democracy turns owes its origins to the imperial discourse of justice as equity, says Mukherjee in a breathtakingly bold departure from extant scholarship. It gets even bolder, almost like a leap into the dark. Her penultimate chapter captioned with a question, ‘An Imperial Constitution?’ answers in the affirmative. ‘What one sees in the Indian Constitution is the ultimate triumph of the juridico-epistemological framework of empire’ grounded in the idea of justice as equity with ‘its accompanying figure of the monarch as judge’ (p. 181).
Who could this judge be in a new avatar of the old discourse? A judge who stands above the law, who precedes the law as the embodiment of justice – in other words a monarch or sovereign exterior to the people? Mukherjee leaps. Why, the state itself!
She hits the ground running. In the Indian Constitution, justice as equity is the sovereign legislative principle. Being so, it allows the legislature or state to resolve ‘a conflict between the legislative imperatives of universal law and discretionary equity’ in favour of the latter (emphasis added). In this scheme of statehood, the state comes before the law. ‘The state is the source of all laws not the people. The state – not the people – is therefore also the source of the Constitution’ (p. 191).
Where does that leave freedom? Mukherjee hastens to point out that the Indian Constitution does mention freedom as a Fundamental Right but it stays subordinated to the principle of justice. And since the state is the arbiter of that principle of justice as equity, it also has the right ‘to suspend or override freedom when (it is) deemed to be coming in the way of justice’ (p. 192).
So that’s where the Indian Constitution differs from other modern democratic ones: ‘the logic of exception embedded in it’ that can shuffle around ‘otherwise universally acknowledged rules’ (p. 192).
Ramifications follow from the legislative sovereignty of justice as equity and the subordination of individual freedom especially for the judiciary in relation to the executive. The Supreme Court’s power to examine parliamentary legislation in terms of its constitutionality was drastically reduced, ‘if not altogether removed by the framers of the Indian Constitution’ (p. 194). More surprises follow. The framers further undermined the Supreme Court by rejecting the ‘due process’ clause as a ‘fundamental procedural element in the constitution despite ‘overwhelming public demand for it’ (p. 195).
Mukherjee cites Nehru’s presumption that the ‘Constitution is a creature of Parliament’, as evidence that Parliament and by implication the dominant party in power was indeed the sovereign charged with the dispensation of justice as equity, answerable to no one – just like the monarch of the Empire supposedly overthrown.
At the end of a reading of ‘India in the Shadows…’ one gets the sense that it is not the shadows of empire that spread over Indian statehood; in the modern Indian polity you see the empire. It has struck back because the freedom struggle did not vindicate or ensure its epistemological demise. At the end of the story what we learn is that the ‘imperialism of categories’, to use Ashis Nandy’s memorable phrase, is alive and throbbing in the pages of our Constitution, in the assertion of the legislative sovereignty of justice as equity, in the subservience of individual rights and freedom to justice – as seen by its supreme arbiter, Parliament and, of course, the party in power.
India in the Shadows of Empire is a seminal work for various reasons, not the least because of the importance it gives to discourses, to the so-called ‘superstructure’ of ideas, not as derivatives of the material ‘base’ but as potent weapons of subjugation and liberation.
Colonialism, according to the glittering lights of Mukherjee’s finely argued exegesis of texts and speeches, was not guaranteed by force, political or economic might, by material appropriation and dispossession alone; it was legitimized in the hearts and minds of the subject through persuasion, by convincing a civilization that had endured and assimilated innumerable conquerors that its moment of glory had passed, that it was dysfunctional, malcontented, its communities at war with each other. It needed to welcome the supremacy of a foreign monarch and his/her categories of imperial rule to hold it together.
Mukherjee’s book is outstanding not just because it attempts to answer puzzling riddles long ignored – for instance, why ‘Transfer of Power’? It casts fresh light on our knowledge of the Constitution-in-the-making that goes below the brittle surface of hagiography to look at the sources of its own philosophy. But its brilliance lies in raising more questions than it sets out to answer: The paradox of the renunciative discourse’s rapid disappearance from the political and psychological landscape of modern India so soon after its strategic role as a rival discourse; the extent of acceptance or even comprehension of its emancipatory powers by a mass movement spawned by its rhetoric. Most of all, Gandhi’s project, perhaps preordained like a Greek tragedy to an inevitable fate of failure. Now one knows why disparate aspects of his practice and precepts, so ridiculed and made ludicrous, such as prohibition, the village economy, the loin cloth, his call to the Congress to disband, his experiments in celibacy make sense; seen discretely they appear as simulacra. Their truth lies in the wholeness of the renunciative discourse that gave India freedom and failed free India in its finest hour.
Ashoak Upadhyay
Writes for ‘The Hindu Business Line’, Mumbai
DOMINANT FINANCE AND STAGNANT ECONOMIES by Sunanda Sen. Oxford University Press, Delhi, 2014.
CAPITAL IN THE TWENTY-FIRST CENTURY by Thomas Piketty. Harvard University Press, Cambridge, 2014.
THE globalized world is a case of a long and bushy tail wagging a virtually strangulated dog, the tail wrapping and gnarling itself around the latter, restricting any possibility of free movement, while itself indulging in an extravagant dance. The tail represents the increasingly bloated financial sector, while the dog is the ‘real’ economy, including the massive working population. More accurately, picture a pack of such dogs (and puppies) – led by a pack leader. Imagine that in each case their growth is led by the long, twisting tails, inextricably tied together. The dogs gyrate helplessly each time the tail get excited or depressed.
It is evident from the outcomes where the centre of gravity of economic policy lies today. The real economy dances to the tune that global finance sets. Two excellent new volumes ask fundamental questions about the insane manner in which a hyper-financialized capitalism is working today. In doing so, they raise serious doubts about the stability – and claims to ‘common utility’ – of the system. I review each of the books in turn, before drawing some salient conclusions.
Sunanda Sen’s volume marks the dedicated work of a lifetime. It is an impressive collection of 17 interconnected essays on global finance written over almost half a century. The book offers a theoretically rich tour through the history of global finance since just before the breakdown of the Bretton-Woods system in 1971, examining the key patterns in its evolution. The remorseless deregulation of finance – after the dollar was made inconvertible into gold in 1971, allowing currencies to float against each other – is the core narrative. Stagnant economies are its consequence, the cumulative result of policies promoted by international institutions and national governments, both shaped profoundly by the interests of global finance. The returns in the real economy are low and slow in comparison with financial markets, prompting businesses everywhere to shift their portfolios towards the latter. Real industrial investment and employment have suffered as a result. Also important here is the impact (in countries like India) on public welfare spending of tight fiscal standards put in place to ease the concerns of foreign investors.
Systemic risk and crises are inevitable in a deregulated, financialized capitalism. Sen provides, in separate essays, persuasive interpretations of India’s 1991 balance of payments crisis which set off the reforms, the 1997 Asian financial crisis, and the Great Crash of 2007-08. What is common to each of the three accounts is the (ir)responsibility of footloose finance, and the acquiescence of state policies.
In relation to advanced economies, Sen offers a withering critique of the famed ‘efficient markets hypothesis’ which has been the abiding justification for deregulation since the 1970s. In a world in which the beneficiaries of risk taking in capital markets are rarely the same as the carriers of the risk, and in which the future is not a mere ‘statistical shadow of the past’, there can be no grounds for such a belief.
Instead, seeing how we have come to dwell in a world of radical uncertainty, Sen justly leans on the post-Keynesian economist Hyman Minsky’s financial instability hypothesis. She closely examines the stages of the credit cycle, arguing that a financial boom can only be sustained under conditions of a deceleration in the real economy as long as Ponzi schemes – which continue to be funded by deregulated banks in the wake of a ‘euphoric economy’ – remain unexposed. Excessive financialization means that banks and financial institutions, unconstrained by orthodox regulations, can liberally ‘originate and distribute’ credit by repackaging assets. This happened most prominently in the run-up to the Great Crash of 2007-08, abetted strongly by the high leverage ratios made possible by the dismantling of protective banking legislation like the Glass-Steagull Act. Shifting of risks to counterparties generated huge profits. The inevitable followed when reality hit home.
The second half of the book is even more absorbing and is devoted exclusively to the problems being faced by emerging economies in Asia – especially China and India – as a consequence of being integrated into a world run by global finance. Most significant among the problems is the infamous ‘trilemma’ that confronts vulnerable open economies in an uncertain world. This consists of the fact that such economies have the impossible task of keeping their exchange rates stable, while keeping the capital account open (as per today’s internationally imposed norms for free capital mobility), and also being in a position to freely use monetary policy to target domestic inflation, growth and other policy goals using instruments like interest rates and bond sales.
While India has been easing its capital account since 1993, China had wisely desisted from financial liberalization till 2005. However, it too is now moving in the direction of full capital account convertibility, with all the attendant risks that follow. With rapid deregulation and financialization, both China and India have been facing high volatility in markets for financial assets, real estate, currencies and commodities. An example is the impact felt on the rupee in the summer of 2013, when the US Federal Reserve was briefly tapering off its policy of quantitative easing, prompting funds to recede from emerging markets.
National sovereignty over economic policy under such trying conditions can be little other than an illusion, since both monetary and fiscal policy options are severely constrained by free capital mobility which increases the possibility of financial vicissitudes impacting the real economy. For instance, should governments under such conditions use the sale of bonds to ‘sterilize’ a large influx of capital (and thereby control inflation), let interest charges accumulate, putting pressure on the government budget, which then has less room for development spending? Similarly, if capital starts exiting the country in a moment of panic, the central bank must once again, using its foreign currency reserves, intervene in exchange markets to restore the value of the domestic currency, stabilize the external account, but in the process lose control of the interest rate. Such problems are endemic to today’s integrated economies and threaten them with pathological consequences.
One elementary difference between India and China does not appear in the text. While Chinese reserves are their own, earned the hard way through exports over decades, Indian reserves are not. India has been running a trade deficit since the mid-1970s, while the Chinese have been running a trade surplus since then! So India’s deficits are being routinely financed by speculative, volatile portfolio investments which are temporarily parked in Indian assets. They are thus susceptible to withdrawal in a moment of crisis, exposing the economy in a way far more dangerous than what could happen in China. One may also recall that while the Chinese economy is five times larger than India’s, its reserves are about 10-12 times greater, offering it a cushion India does not have.
It is rare enough for a mainstream economist to devote his career to the study of inequality. It is rarer still to find one who not only includes within his ambit of concerns inequalities of income, but also of wealth, and does so by examining closely the evidence on top incomes and wealth. Normally, given the low status accorded in the profession to studies of distribution, inequality is considered to be an interest of social scientists concerned particularly about the condition of the poor. (What could this possibly have to do with the way the rich live?)
It is to the rare credit of Thomas Piketty that he has done just this. Drawing on an enormous and unique database (‘World Top Incomes Database’, available at http://www.parisschoolofeconomics.eu/en/expertise-dissemination/wtid-world-top-incomes-database/), which he has helped to build, in addition to accessing data on tax returns and inheritances, he offers a commanding view of inequalities of wealth and income across space and time. His book, almost 700 pages, has serious theoretical problems, but is empirically meticulous and rich. It includes data from the OECD nations, China, India and some other parts of the developing world. (As an important digression, it is worth noting that some income tax data ‘sources have deteriorated since the advent of the information age… A case in point is India, which ceased publishing detailed income tax data in the early 2000s, even though such data had been published without interruption since 1922. As a result, it is harder to study the evolution of top incomes in India since 2000 than over the course of the twentieth century.’ Is a truly rigorous social science really possible when so much relevant information is consciously hidden by authorities, that too in the information age?!)
Piketty is the rightful successor to Simon Kuznets, who received a Nobel Prize for his pioneering research on national incomes and inequality in the 1950s and 1960s. One of Kuznets’ salient contributions is the famed, bell-shaped Kuznets curve, showing that income inequality tends to first rise and then fall with the growth in per capita income.
Piketty takes issue with this virtually universally accepted, and seemingly innocent, conclusion which has been the basis of trickle-down economics around the world since the Thatcher-Reagan era. Kuznets’ data-set is all too limited (the USA, 1913-48). Piketty marshals data from the western world on inequality over longer periods (income inequalities 1910-2010 and wealth inequalities 1810-2010). It turns out that the Kuznets curve begins to reverse itself after the 1970s, even in the US, which sees ‘vertiginous growth’ in the incomes of the top 10%, just like in the previous Gilded age before World War I (see graph).
