Ritu Birla. Stages of Capital: Law, Culture, and Market Governance in Late Colonial India. Durham: Duke University Press, 2009. 360 S. $84.95 (cloth), ISBN 978-0-8223-4245-8; $23.95 (paper), ISBN 978-0-8223-4268-7.
Reviewed by Prasannan Parthasarathi
Published on H-Asia (May, 2010)
Commissioned by Sumit Guha (The University of Texas at Austin)
Parthasarathi on Stages of Capital
Ritu Birla’s Stages of Capital is a challenging exploration of law and economy in colonial India. It moves away from a perspective that sees the law as inhibiting economic activity and producing deviant colonial outcomes, most forcefully expressed in a classic article by David Washbrook. It also rejects as inadequate influential writings that see colonial law as ineffectual in regulating mercantile activity, which was governed under an indigenous private sphere and personal law, such as the work of David Rudner on the Nattukottai Chettiars. Instead, Birla’s purpose is to investigate “the operation, rather than just intention, of colonial law: its production of subjects and parameters of legality and legitimacy” (p. 38).
Birla divides this study into five chapters. Chapter 1 examines commercial and financial legislation of the 1880s. Inspired in part by legal developments in Britain, colonial authorities implemented the Indian Companies Act of 1882, the Indian Income Tax Act of 1886, and the Negotiable Instruments Act of 1881. These measures introduced the concept of limited liability to India, sought to increase the fiscal base of the state, and attempted to standardize the currency. They “represented novel strategies for the regulation and assessment of vernacular merchant capitalists and the promotion of contractual models for trade and association” (p. 34). Birla notes that the Companies and Income Tax acts are notable for articulating contradictory visions of the Indian family firm. While the former permitted the existence of a private sphere of activity, the latter sought to gain access to it in order to tax a portion of the gains.
Chapter 2 examines the law on charitable trusts. British rule wrought a far-reaching transformation in the status of charitable endowments and mercantile gifting. First, customary Hindu endowments were redefined as modern legal trusts, a shift Birla labels “a masterful turn of legal idolatry” (p.72). Second, the British introduced new categories of trusts in which such entities could only be created in perpetuity for charitable and public purposes. Third, the law placed restrictions on the merchant use of earnings from trusts for mercantile activities, the profits of which would then revert to the gifted property. Finally, the category of charitable trust was narrowed to “religio-cultural ritual, divesting the vernacular production of status of its ethical and political claims and rendering it subject to taxation” (p. 72).
Chapter 3 continues the discussion of the trust and the permutations of customary mercantile endowments under British rule. The intervention of British colonial authority in this realm led to profound reorderings of both mercantile activity and merchant charitable giving. Birla writes, “The standardization of trust procedure saw attempts to align the family firm and other forms of customary association with contractual models. Case law that had coded the endowment as a trust opened new possibilities for governing custom as analogous with the social relations of the market” (p. 105).
Chapter 4 is a fascinating exploration of the colonial state’s crackdown on speculation and gambling. The chief target was the Marwari merchants of Calcutta, who engaged in both futures trading as well as rain gambling, that is, betting on whether or not it would rain, a practice which the Marwaris had brought to Bengal from Rajasthan. Birla treats these two phenomena together, but it would have been interesting to examine the issue of rain gambling separately and in greater detail. While futures trading can be seen as serving the mercantile function of reducing risk, rain gambling was simply gambling. Why did the British oppose gambling at this moment? Birla does place the problems that speculation and gambling created in the late nineteenth century in a comparative frame, but it would have been fruitful to expand the discussion and include provocative works such as Jackson Lears’s Something for Nothing: Luck in America (2003).
Chapter 5 moves to issues of gender among the Marwaris and looks at the “culturalist call to protect the joint family, which expertly deployed the colonial public/private distinction, [and] evinced an active appropriation of capitalist modernity’s valorization of market value” (p. 200). The chapter examines Marwari reaction to social reforms around the age of consent, the redefinition of marriage as a civil contract, and child marriage in the 1920s. Marwaris successfully drew upon both orthodox and nationalist thinking to defend patriarchy and the joint family as an autonomous and private realm of culture.
Birla offers a stimulating tour of colonial capitalist modernity in India and Stages of Capital deserves a wide readership among both historians of colonial India and others interested in the issues of law and capitalism. The review will close with an examination of three elements of Birla’s argument and approach.
Stages of Capital is inspired by the work of Michel Foucault and takes as its starting point the creativity and productivity of the operation of power. Therefore, the law in colonial India did not repress or distort, but created capitalist subjects. Birla draws upon Foucault’s work on governmentality to support her analysis, but to this reviewer, this body of writing represents some of weakest in the Foucauldian corpus. It appears that Foucault turned to the state after realizing some of the limits of his micro-techniques of power, but much of what he said had been covered already more cogently and systematically by Max Weber (see, for example, Economy and Society [1922]), whose writings Birla also draws upon.
Birla also draws upon binaries such as embedded and disembedded markets, status and contract, and gemeinschaft and gesellschaft. While she recognizes the limits of these binaries (see her discussion of Karl Polanyi in note 9, pp. 240-41), her discussion continues to operate with them at a number of moments. The neoliberal project has sought to efface the operation of status and gemeinschaft and the embeddedness of markets, which recent writings in both economic history and economic theory are seeking to restore.[1] For these reasons, the doubled nature of colonial capitalist subjectivity, between public and private, may have wider resonance.
Finally, Birla devotes a great deal of attention to discourses, but she is reticent when it comes to Marwari practices. The discussion of chapter 4, in which Marwaris come alive as gamblers and speculators, soars. Aside from this moment, however, the ways in which Marwari practices intersected with the law and discourses is largely absent. There are occasional and intriguing suggestions of Marwari commercial life, however, and these suggest that more than notions of liberal economy and governmentality motivated the actions of the colonial state. For example, the growing crisis of government revenues in the inflationary final decades of the nineteenth century led to the creation of an income tax and the clamping down on Marwari speculation, and gambling appears to have been a response to the threat that Marwaris posed to European commercial houses. These suggest that a broader canvas may be needed to make sense of the complex issues of law and economy in colonial India.
Note
[1]. See S. R. Epstein, Freedom and Growth: The Rise of States and Markets in Europe, 1300-1750 (London: Routledge, 2006); and Samuel Bowles and Herbert Gintis, “Walrasian Economics in Retrospect,” Quarterly Journal of Economics, 115 (2000): 1411-39.
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Citation:
Prasannan Parthasarathi. Review of Birla, Ritu, Stages of Capital: Law, Culture, and Market Governance in Late Colonial India.
H-Asia, H-Net Reviews.
May, 2010.
URL: http://www.h-net.org/reviews/showrev.php?id=25318
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