Loot, Boot and Nigel Farage. Britain in India.

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The English language is full of loan words from Hindi and other languages from the Indian sub-continent. Shampoo, Veranda, Bungalow, Pyjamas, Bangle, Dinghy, Dungaree, Thug. Anyone who has Indian relatives will have this pointed out to them regularly. 

One of the most commonly used Hindi loan words in English is loot.   Derived from the Hindi lūṭ, which is turn is derived from the Sanskrit luṇṭh- ‘to rob’. It entered the English language in the early C19th, meaning to steal or plunder wholesale, as well as the proceeds of plunder.

Loot is a pretty good word to describe the British in India. 

A new YouGov survey finds that more Brits think the British Empire is something to be proud of (59%) rather than ashamed of (19%).   A third of British people (34%) also say they would like it if Britain still had an empire.  This is despite the fact that people in the UK are largely ignorant about Empire and always have been.  Every survey ever conducted about British History and Empire reveals that most Brits have only the vaguest grasp of events, including the niche belief that Gandalf defeated the Spanish Armada.   

The Foreign Office regularly polled British attitudes Empire in the 1940s and 1950s as the sun was setting on the thing on which the sun would never set.   Even then knowledge was poor.  In the 1947 Survey respondents were asked to name a British Territory in the Far East.   Lincolnshire was a popular answer.

That would be British East Lincolnshire no doubt.   

I don’t intend to dwell at length at the awfulness of British rule in India, but I thought it was worth giving just one example to illustrate how terrible it was.   

In 1903 British Army Officer Captain Stanley de Vere Julius published “Notes on Striking Natives” his textbook on administering violence in the service of the Empire.   While the book had applications across all of Britains’ Territories it was primarily aimed at India, where de Vere Julius was stationed.   

India under British rule at the start of C20th suffered from famines and epidemic illnesses, which had left many Indians weakened and less able to withstand beatings.   There had been a number of incidents where British Soldiers or Colonial Administrators while dishing out thrashsings had inadvertently killed people by rupturing their internal organs.  Obviously no Brit was ever punished for this, but it was embarrassing and expensive.   

It is a testament to the thoroughness of the British when brutalising the people they were looting that we produced a text book so we could be precise and economical about the amount of violence we dished out.   Brutality austerity.

British rule in India was a purely financial undertaking – the systematic looting of a continent.  Most European Empires were founded with at least a semblance of a moral mission – spreading Christianity, ending slavery, or promoting the spice trade.   

To borrow liberally from Hannah Arendt when looking at Imperial or Colonial relationships we can observe 3 characteristics:

  1. A set of unequal economic relationships which transfer money from the Colonised/Imperialised to the boss nation
  2. An ideological framework which provides a positive explanation for the public back home why it was right to transfer the money, and to justify the sacrifices of the Imperial Vanguard
  3. An Imperial Vanguard, who are prepared to endure hardship in the expectation of financial gain and Imperial glory; Clive, Jameson, Rhodes, Livingstone.

Britain in India made no attempt to bring Christianity, or end unfree labour.  While the Mughuls built Mosques and Mahals, and the Portuguese built Churches, the British Empire’s main contribution to Indian architecture was Lutyen’s New Delhi – an impressive set of Government Offices. The one thing that Britain did give to India – the English legal system –  was imposed to form the basis for British property rights. Like all such endeavours it was deeply and profoundly bureaucratic in a country which already had it’s own obsession with bureaucracy.  We get the word Palaver from India too.   

Britain’s slim ideological justification for ruling India was that we were so much better at it than the Indians themselves would be. There was no attempt at an ideological higher purpose, just simple pragmatic administrative efficiency, enforced by beatings.  Even at the time some Brits knew this was wrong – Edmund Burke spent 7 years trying to impeach Warren Hastings and the British East India Company for economic mismanagement of India.   

De Tocqueville also saw through the fraud: “[Britons’] perpetual attempts to prove that they act in the interest of a principle, or for the good of the natives, or even for the advantage of the sovereigns they subjugate; it is their frank indignation toward those who resist them; these are the procedures with which they almost always surround violence.” 

Like al Bureaucrats the Administrators of the British Empire hated being thought of as b

bureaucrats, preferring to see themselves as Merchants, or Soldiers or Explorers.  Much like the Bureaucrats of Imperial China saw themselves as Philosophers and the Bureaucrats of contemporary Capitalism prefer to be thought of as Business people or Entrepreneurs.

This is why Gandhi was able to have such an impact on British rule with his campaign, by pointing out that lack of moral purpose at the heart of the Empire he revealed it’s true purpose – looting. I would however wonder how much moral purpose or authority was left to the Raj after the Jallianwala Bagh massacre in Amritsar in 1919.

Up until the formalisation of Imperial rule in 1857 the British rule in India was outsourced to the British East India Company.  This wasn’t the first time Imperial rule had been organised like this – the Vatican had awarded franchises for the Imperial conquest of Latin America under the Padroado Real system.  For anyone visiting the Holy See is no coincidence that many of the brightest shiniest things decorating the Vatican date from this period, just as it is no co-incidence that the brightest shiniest bits of the British Crown Jewels date from the Raj era.

We think of outsourcing as a quintessentially modern neo-Liberal phenomenon, however in the era before mass production and vertical integration most businesses, particularly craft businesses, outsourced.  The idea of one big company doing everything is a modern, probably temporary, state, and the idea of one big Government doing everything itself an equally recent concept.

The East India Company was established in 1600 by Queen Elizabeth I. For most of it’s first century of operation it was a trading enterprise competing against French and Portuguese rivals.    By 1700 Britain had been through long period of political change – the Civil War, Commonwealth, Restoration, Glorious Revolution, while Moghul India was at it’s peak.

In 1700 Moghul India had 24.2% of the Worlds GDP, 24.2% of the World’s Trade, and 25% of it’s manufacturing output.   The UK had 2.9%.   By the end of the Empire India had 4.2% of the Worlds GDP, 2% of the World’s Trade while Britain had more than a quarter, including 26% of the world’s manufacturing exports.   Moghul India had a larger GDP, and a higher per capita GDP than Britain too.   Joanna Lumley’s TV show shows how the East India Company turned Calcutta and Bombay into great trading ports, ignoring that India was a World trading power long before the British arrived. 

From 1700 onwards Britain replaces the Netherlands as the fastest growing economy in Europe. Some of this improvement was driven by changes in banking, financial and fiscal institutions on Dutch lines.  Later on Britain was the first nation to go through an industrial revolution leading to a surge in industrial productivity.   

But fiscal reform and industrialisation aren’t enough to explain the timing and the extent of the growth in UK GDP.  From the C18th British economic growth is at driven partly, if not largely by slavery and the Colonies. Unequal economic relationships and the exploitation of non-European labour and resources are the common factor throughout this period.

Table 1: Share of World GDP (% of world total)

Year                             1500     1700     1820    1870    1913   1950   1973   2001

United Kingdom        1.1         2.9        5.2       9.0       8.2       6.5       4.2      3.2

Western Europe1      17.8       21.9      23.0     33.0    33.0      26.2    25.6    20.3

United States              0.3         0.1        1.8         8.8     18.9      27.3    22.1    21.4

China                           24.9       22.3      32.9      17.1     8.8       4.5       4.6      12.3

India                            24.4         24.4     16.0       12.1   7.5      4.2        3.1      5.4

Asia2                            61.9        57.7      56.4      36.1    22.3   15.4      16.4   30.9

1 includes UK

2 Excludes Japan

Some of the decline in India’s share of GDP is relative – it’s economy stagnated under British rule while other countries grew – however there is a real terms decline in Indian GDP, both in total and per capita between 1757 and 1857.

The easiest way to understand the changes in GDP are as a flow of funds form India and China to the UK and Western Europe, particularly in the period 1700-1870,; then the eclipse of Europe by the US from 1870 to 1950; and finally a shift back to India and China in the post Imperial era. 

From 1700 (or slightly earlier) Britain starts to get a large flow of funds from Asia, mainly India, which by the start of the C19th are providing Britain with a big trade surplus, and making Britain richer.  The capital which created British capitalism came from high savings rates at home, but also from exploiting the labour and resources of it’s Colonies.  This is the reason why British capitalists in the C19th have more capital to invest in technology and growing markets than their foreign competitors. 

Essentially while Britain might have done lots of exciting technological innovation it was the relationship with  the Empire, particularly India which provided markets for the new machines, capital for investment, and profits to put in the bank.   From 1950 these financial flows start to reverse and Britain experiences a growing trade deficit and much slower rate of economic growth. 

Since the end of Empire the UK has had an almost permanent balance of payments crisis, most recently the fall in the Pound post the Brexit vote.  Money flows out of the UK, and the books are only balanced by sloshing lots of the worlds money through the City of London and bits of the UK property market no questions asked. 

This picture from the latest ONS data set shows how the UK balance of trade has declined sharply in the years since Empire.

Screen Shot 2017-08-22 at 18.33.28

One of the most surprising parts of the GDP share data is the declining US position. This is a relative decline, rather than an absolute one, but for lots of ordinary Americans whose incomes have stagnated and whose purchasing power has fallen it feels like absolute decline. The US also has endemic balance of payments problems, just like the UK, and has a similar solution – it allows the Worlds hot money to flow in and out of Wall Street and the Manhattan property market to disguise it’s terrible record on exports

Screen Shot 2017-08-22 at 18.35.13

The data for China isn’t so complete but shows how it’s trade balances have improved as the West declines.  India would show a similar set of figures if it wasn’t for it’s massive trade deficit with China, driven largely by it’s obsession with cheap mobile phones.  And taking selfies. 

Screen Shot 2017-08-22 at 18.37.01

One of the most common foreign policy opinions that the British Left has is that America is somehow a kind of Imperial or Colonial power forcing it’s will on the world.  If we compare the flow of funds from the British Empire to the flow of funds in and out of modern America it is hard to see how America is any kind of Empire, or if it is it is a totally hopeless one which gives money away instead of looting it.   

It is possible that the American numbers are wrong.  The USA has an unusual Tax regime which Taxes US Corporations on Global earnings rather than domestic-only taxation, which is the system the rest of the World uses.   The USA has known for decades that it needs to reform the way it taxes Businesses, but the fractious state of American politics has made that impossible.

As a consequence US Companies have huge stacks of cash, earned abroad, which are stashed overseas, somewhere between $1.4-1.7trn.   I like filling my blog with stacks of numbers, but even I am impressed by a Trillion.  Apple has $246bn, Microsoft has $116bn, Cisco $62bn, Google $52bn.  This is just cash, and doesn’t include physical assets outside the US purchased by US Corporations to avoid repatriating their cash.  In addition there are US Companies operating tax Inversion deals moving their tax address to countries like Ireland to reduce their tax liability. 

It is hard to work out how big the US trade deficit would be if these funds were brought home, although the size of the trade gap is big enough that even with this money the USA would be still be exporting money.  It would be easy to draw a comparison between the US tech giants following their own economic agenda and the East India Company, although there is one huge difference – the East India Company at it’s peak had 250,000 mercenaries fighting for it – in an era when the British standing army was the biggest in the world at only 120,000.

If American is an Imperial or Colonial nation it isn’t a very good one. 

That doesn’t mean that the USA has none of the characteristics of an Imperial nation that Arendt identifies.  For many years it’s Cold War ideology and it’s willingness to involve itself in Parkistan, Iran and the Congo had an Imperialish flavour.   The CIA and the legion of Private Sector contractors who have followed American engagements have the look and feel of an Imperial Vanguard, particularly the Olly North variety who were willing to operate like Jameson or Gordon at the fringes of legitimate authority.  Just as Britain sent teams of experts, archeologists, professors to study and write about the countries that we had taken over so the USA likes to send their own experts but in more prosaic subjects like financial services dergulation.

America does have an Orientalist world view, maybe some people deep in Government and Business might have a Colonial one too.   But it is increasingly an ideology divorced from economic reality.   Steve Bannon, recently defenestrated as Trumps Chief Ideologue claims that the next big battle for hegemony is between the US and China.  Looking at shifts in GDP and share of world trade that battle happened years ago and the US lost.

Rex Tillerson is this week angrily telling the Pakistani Government that if it doesn’t do what the USA wants it will end it’s support.  All of which looks daft given that Pakistan and China are diplomatic BFFs, and the USA is geopolitical sideshow.  If anyone was thinking of coming on the protest march to protest about the lack of protest marches protesting USA interference in Pakistan it is probably too late. Sorry.

In my last blog some readers felt that I was uncharitable to Jeremy Corbyn,  In truth his jumble of ideas about Gandhi, Hamas, Hezbollah, pacifism and the developing world are pure Orientalism.  A white man’s fantasy of the East where he can project his own hobby horses and pet peeves.   

An acceptable way to embrace anti-imperliaism without having to engage with thinking about the violence of imperialism or it’s modern variants.   

But Corbyn isn’t the only British politician with a daft jumble of ideas shaping his word view.     Brexiters have their own jumble of ideas around Empire, Leadership, Brexit, Sovereignty and Exceptionalism.  I don’t think it is a clear identifiable ideology, but a passionately held set of ideas none the less.  The Empire fuels a sense of exceptionalism, a belief that we don’t have to play by the same rules as everyone else, and Brexit is an expression of that.  The lack of curiosity about Empire and it’s details are matched by a lack of interest in the detail of Brexit, and a willingness to substitute patriotic slogans for carefully planning.

Brexit isn’t for most people a kind of imperial nostalgia but a recognition that once upon a time we were able to impose unequal trading relationships upon the World in a way which protected our own domestic industries and gave us favourable access to other markets around the world.    These deals were much more better than our current deals as EU members. 

UK share of world manufactured exports (%)

I Imports Exports

1937 21.3

1950 25.5

1960 16.5

1970 10.8

1979 9.1

1990 5.3 6.2

1995 4.7 5.1

2000 4.4 5.1

But these unequal trading relationships dated from an era of British economic dominance, and their demise has nothing to do with the EU. The decline stared well before then.  British industry was protected by unequal trading relationships with it’s Empire. With the empire gone British manufacturing struggled and in most cases never recovered.  India was a captive market for trains and steel, manufactured goods of all kinds.  Outside of the EU we will no longer be the economically dominant power setting the terms of trade. We will be in the opposite position.

But there is more to the Orientalist fantasy of the Brexiters than trade deals.  The Empire gave more to Britain than just cash and prestige. It provided gainful employment for large numbers of under talented bossy Brits, who relished having someone they could feel superior too.   The end of Empire and the shrinking of the state has given Britain a surplus of public school educated, self important under achievers.  Well connected but without the talent for Business, the diligence for Law or Medicine or the sense of Public Service for Charity.  In the first half of the C20th Nigel Farage, Dan Hannon and Douglas Carswell would have been happily employed drinking warm G&Ts and moaning about the natives in one of the less prestigious colonial outposts.  Boris would have been a blundering Governor of some obscure province with a lop sided Pith Helmet. Instead they play out their petty intrigues at home, too many egos chasing too few top jobs.

We tend to fall too easily for the myth that the British in India were competent Administrators ruling a continent out of duty.  In fact they were ham fisted chancers. Idiots out to line their pocket. Second raters, racists and bullies. People too dim to make it at home who had been sent out to India so that they could mess up where no one could see them.

The Brexit boys would fit right in. 

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