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DOI: 10.1177/001946461104800202
2011 48: 177Indian Economic Social History ReviewRahul Govind
)inter se (differentia specificasearch for a profit? Early British imperialism1, political economy and the…Revenue, rent
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Revenue, rent...profit? Early British
imperialism1, political economy and the
search for a differentia specifica (inter se)
Rahul Govind
University of Delhi
This article argues that in the mid to late eighteenth century, political economy, through writers
such as Francois Quesnay, David Hume and Adam Smith, saw a discussion of ‘despotism’,
which stood for thinking through the political arrangement within which economic productivity
was formulated; even as the distinction between the two was not always self-evident. This
theoretical function of despotism disappears in the ‘mature’ phase of political economy (David
Ricardo), precisely when it was taking shape—in institutional and conceptual-lexical terms—
in the subcontinent through Britain’s conquest of India via the East India Company. We argue
that the disappearance of despotism at the conceptual level in this phase in Britain is not only
questionable from a theoretical standpoint but also played its historical role as a decoy in
occluding attention toward imperialism in India wherein the distinction between the political
and the economic was becoming more and more difficult to make. Through such an investigation
we thus hope to examine the emergence of the economy (and by implication the state-political)
as an independent analytic site as well as evaluate its categories and historical significance.
We base our argument on a reading of the canonical texts of figures such as Adam Smith,
William Blackstone and David Ricardo, Land Revenue Settlement sources in India and the
hitherto neglected economic writings of W.H. Sleeman.
Keywords: British imperialism, political economy, colonialism, enlightenment, modernity
The Indian Economic and Social History Review, 48, 2 (2011): 177–213
SAGE Los Angeles/London/New Delhi/Singapore/Washington DC
DOI: 10.1177/001946461104800202
1 I use the term imperialism for the period before 1857 because it foregrounds the politico-legal
nature of East India Company rule, and the question of the arrangement of power, from London to
Delhi, in a way that colonialism cannot, the latter having in the main an association with settler
colonialism. It is also to emphasise the fact that the Company was given its status, rights and authority
by the Crown in England, which it had to continuously ratify and therefore there can be no analytic
Acknowledgements: I thank the two anonymous referees for their comments.
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The Indian Economic and Social History Review, 48, 2 (2011): 177–213
If there is one image which binds the economic and cultural historian of modern
India it is that of the Oriental Despot. Long before Edward Said, students of
eighteenth century India confronted in the minutia of land settlement archives the
claims of East India Company administrators about oriental despotism and the
need to institute property.2 With Said the desire of the European conqueror to
introduce property—and its doppelganger, liberty—was a mere instantiation of
an age old and flawed perspective on what constituted the defining difference
between the two. The image of the despot—‘in a fit of absence of mind’—was to
beget the different trajectories of the economic historian and the cultural critic.
This article argues that at the intersection of these crossed paths lies the theor-
etical function of despotism at the birth of political economy (whether in Francoise
Quesnay or Adam Smith) only to be wilfully forgotten in its ‘mature’ phase (David
Ricardo) all the while being realised, as it were, in practice: Britain in India via
the East India Company. It will show that such amnesia is not simply a telling
index of the conceptual questionability of the newly emerging science of political
economy and its minted categories, such as rent, profits, revenues and wages, but
in fact plays its historical role serving as a decoy in occluding the workings of
British imperialism in India. In such a task it will enlist, in the concluding sec-
tions, the almost unknown economic writings of William H. Sleeman who took it
upon himself to critique Ricardo and the East India Company simultaneously.
Imperialism, which integrates England and the ‘Indian frontier’ as a single body-
politic, allows us to see at the heart of the new economic science the repression of
despotism dissimulated as obsolete; a symbol-sympton of which is the goings-on
in the subcontinent.
We use despotism as the signature of a kind of thinking until the eighteenth
century which recognised violence in political foundation. This operated para-
doxically because the fact of violence and injustice necessitated the state and
quarantining of the Company in the subcontinent: the so called shift to Crown rule in 1857 is therefore
red herring. This article is based on one line of inquiry in my dissertation, The Antinomies of Political-
Economy within the Dialectic of Imperialism: The East India Company as Perspective, submitted
and defended at Columbia University in the spring of 2008.2 This anticipation was concrete: After spending time reading figures as diverse as Bernier, Milton,
Locke and Montesquieu, Guha remarks, ‘The end product of all this was the making of a western
myth about an undifferentiated Orient characterized by the rectilinear simplicity of its social structure,
the immutability of its laws and customs, the primitive innocence of its people: a myth taken over
from the philosophes and imaginatively enriched by the nineteenth century romantics, and uncritically
absorbed into much later oriental research in the form of nostalgic nonsense about the glory that
was.’ See Ranajit Guha’s Rule of Property for Bengal, p. 18. Guha refrains from generalising, providing
evidence of those with contrary views. On the other hand, A. Embree also argues that he suspects a
long lineage to the notion of despotism in the Orient. See his ‘Land holding in India and British
institutions’ in R. Frykenberg, ed., Land and Social Control. In fact Anquetil-Duperron using indi-
genous sources had argued in the eighteenth century—specifically against Montesquieu—that not
only was there property in India but that the lack of property was an argument used by Europeans in
justification of their illegitimate conquests.
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The Indian Economic and Social History Review, 48, 2 (2011): 177–213
therefore was its ontological and temporal horizon; the past was rendered perpetual
possibility. Political Economy indexed at its intention the nexus, which was justice
and property, it was not (yet) a language which subsumed as a fact of nature and
an operation of logic the behaviour of men through the exchange of things: what
occurs in Ricardo. Here we wish to contribute to, even while we are critical of, a
range of rich inter-disciplinary work at whose intersection converge Hannah
Arendt, Michel Foucault and Karl Polanyi. Arendt speaks of a tendency in the
late eighteenth to early nineteenth century—‘the rise of society’—in which she
locates the disappearance of the distinction between the necessary/organic (earlier
subsumed under the oikos) and the free/agonal world (the polis/public). In fact,
the ‘social’ occurs when the first term ingests the second, thereby changing its
own nature; and labour, that is, working for survival (the necessary/organic) occu-
pies centre stage, becoming the primary value (or non value) ousting the singularity
of action and speech. The centring of labouring-for-survival is symptomatic of
society being thought of in terms of large aggregates, itself forming a sort of
‘natural collectivity’, whose ‘rationalizing’ correlate is found in the rising human
sciences of economics and statistics. Foucault notes this shift in terms of ‘bio-
power’, supple-menting the disciplinary mode where the retreat of death and its
juridical theatre (the sovereign prerogative over life) as subject-oriented is re-
wired in a ‘natural’ idiom of man-as-species. Here, death is not endowed with a
politico-juridical status but codified as a natural disease; as a threat to be sanitised.
For Polanyi too the rise of market society unmoors man from his human location—
for to be human is to be rooted in a complex that the ‘pre-modern’ thought of as
property—degrading him in treating him as if he/his labour were a commodity,
requiring at every moment protective legislation; what is named ‘double move-
ment’. Passing through all three lies the increasing difficulty in locating ‘political
will’ or effectivity, which will with time be demanded with greater urgency, in
the midst of that which is treated as ‘natural’; and deciphering the signature of
violence at different levels until the catastrophes of the twentieth century. All
three take this general history of the reconfiguration of the market/society as crucial
to understanding the possibility—which has little to distinguish itself in this context
from the success—of Nazism; for Foucault and Arendt, Soviet communism too is
thereby investigated.
While supremely rich and insightful, these studies have not detailed the singular
symmetry between the abstracting of a human science (the Ricardian idiom, for
instance, which is here examined) and the debris (the violence of imperialism as
no longer legible) being left in its wake. Britain and India as integrated by the
deployment of imperialism as an analytical category across the eighteenth and
nineteenth centuries allows a reconfiguration of the above narrative, which con-
trapuntally re-situates Europe and specifically Western Europe as a viable and
stable category, treating the nineteenth century as ‘generally’ peaceful from a
politico-military standpoint; but an imperial caesura... perhaps before catastrophe.
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The Indian Economic and Social History Review, 48, 2 (2011): 177–213
The cogence—whether as territory or transposed lexicon—as conflated with such
peace, which Polanyi calls a hundred years peace, requires close scrutiny. Tracking
imperialism prevents such a conflation of state and territory, for it is their spuri-
ous coincidence that is the stuff of modernity as the ‘West’ with its characteristic
progeny, the nation-state, its reality realised all the more through supersession.3
Even as the imperial footprint lies covered beneath an emerging analytic voca-
bulary, this vocabulary was being minted in the nexus of utilitarian political theory,
itself defining happiness with the abstraction of numbers precisely when the real
numbers being affected are left unaccounted for. 4 This was simultaneously
Ricardian classical political economy where the fertility of land (nature) is the
determinant in the last instance. It is the latter as symptom that will be principally
investigated in this article.
Towards this end we will first examine the conceptual role of despotism in the
emerging field of political economy. Then we move on to relate the changing
nature of its categories and the East India Company in its interrelations, to re-
consider the nature of imperialism, concluding with a study of Sleeman’s critique.
Political Economy and Despotism
A certain degree of familiarity with the history of ideas in Europe is of almost
indispensible assistance in the study of British imperialism in India. And this not
only because many of the foremost policy makers of the Company cited and framed
their arguments in the name of contemporary authorities of political economy
and law, be they Montesquieu, Adam Smith, Quesnay or Blackstone.5 What seems
to be the empiricist argument that ‘facts’ on the ground dictated compromises of
a sort which were wholly distinct from intellectual debates in the ‘metropolis’
assumes that the facts speak for themselves outside any framing category, refus-
ing to concede that its own presentation might very well be the un-reflexive and
dogmatic representation of a particular theoretical lexicon. That is to say, economic
histories still use the categories of rent, revenue, profits and wages, refusing to
allow for the fact that this may well be but a particular intellectual sieve with
3 Thus the recent literature on the decline of the nation-state and ever new globalisation, con-
trapuntally accepts its reality as though historical, thereby being deceived by the ploy of imperialism.4 My dissertation traced to Bentham the abstract model that a ‘human science’ would take, as he
moves away, I argued from both a recalcitrant natural law tradition (still surviving in Blackstone
where a theological orientation is still crucial) as well as a historicism in which sentiment-psychology
is the crucial epistemological lever (in Hume and Smith for instance). This paper focuses however—
as is evident—on Ricardo and the emergence of a new economic science. Political representation
that alleged characteristic of the modern was thought of—Bentham and the importance of number—
precisely when the counting for those requiring representation and the accounting of the so called
representative became indeterminate.5 For instance in the writings of Philip Francis, Harry Verelest, Thomas Law amongst others we
find the constant invocation of Montesquieu, Quesnay, Blackstone, Turgot and Smith.
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which ‘raw information’ is rendered legible. The following article in the main
attempts to establish the fact that such a use of these very categories owe their
intelligibility to classical political economy—in a way that has sedimented to
common sense today in conventional language use—and should neither be taken
as natural nor self-evident.6 To do so specifically obscures imperialism and what
is at hand. British imperialism serves as an allegory and origin of present mis-
conception. To thereby reflect on and understand these categories, we will attempt
to get behind them, locating them at their point of emergence: historical as well as
conceptual. And here we will see a suspicious and therefore all the more fascinating
kinship that political economy enjoys with despotism.
Scholarly discourse on the question of despotism was slightly, or perhaps
notoriously, ambivalent. Koebner has brilliantly excavated strands of its history.7
It would be well to recall that Hobbes deliberately reiterated its Aristotelian lineage
making, in a sense scare distinction between legitimate and illegitimate power.
However, Koebner has not focused on the function of ‘despotism’ in writers such
as David Hume and Adam Smith on the one hand, and Francis Quesnay and William
Blackstone on the other, especially in as much as their work impinges on questions
of political economy and its elaboration. Blackstone, Smith and Hume deal with
despotism in their histories of Britain and for the latter two it occupies a singularly
paradoxical position. Henry the VIII and Queen Elizabeth are described in no
uncertain terms as ‘despotic’ and (yet) they are said to have laid the foundations
of modern English liberty.8 A rigorous and sustained distinction between
6 As we will see the theoretical problematic we are investigating can be found to (re)appear in
contemporary debates around Company law. How is one to understand the share in a joint stock
Company as an ‘income right’ and the share holder as a ‘rentier’ and thereby under contract law gen-
erally when the historical and institutional context has been one of a movement away from ‘partnership’
towards the increasing role of law through limited liability? How is the share holder who at one level
is not a provider of capital but one who is interested in trading for profit to be reconciled with the fact
that such a situation has been instituted though law thereby entailing the contrary category of property?
Depending on one’s position, the relation and interrelation between politics (law as what institutes)
and economics (the transaction) would be illumined. The difficulty in placing law and the state in
relation to the distinction and distinguishing between the conceptual formulation of categories such
as rent and profit and their relation with productive activity will be a key motif in this article.7 See Koebner, ‘Despot and Despotism: Vicissitudes of a Political Term’. For a fine reading of the
constitutive role of despotism within the Greek political see Hannah Arendt, The Human Condition.
All relevent references to Aristotole’s Ethics and the Politics can be found above.8 ‘We see accordingly that those which are most favorable to liberty are those of martial, conquering,
military kings. Edward the 1st and Henry the 4th, the two most warlike of the English kings, granted
greater immunities to the people than many others’, Adam Smith, Lectures on Jurisprudence p. 260.
‘Another article which secures the liberty of the subjects is the power which the Commons have of
impeaching the king’s ministers of mal-administration ad that tho it had not visibly encroached on
liberty. This power still remains, tho it has not been exercised since the time of William IIIrd. This
privilege as well as many others favorable to liberty we owe to that tyrannical prince, Henry VIIIth.
The ordinary method which they took to get free of any of his ministers of whom he had become
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The Indian Economic and Social History Review, 48, 2 (2011): 177–213
Absolutism and Despotism is rarely maintained; and as a ‘skeptical whig’, for
Hume, the Absolutism of neighbouring France is rarely condemned and often ad-
mired.9 Just as history may reveal violence at the origins of the contemporary,
thinkers as diverse as Blackstone, Hume and Steuart also located the potential for
specific, and arguably more virulent, forms of despotism within the character-
istically modern.10 The very conceptualisation of sovereignty is absolute11 and
(therefore) distinguishing it from despotism required the nimbleness of an
origiamist. Such despotism as treated in historical terms and seen as leading to
the modern political, in the minds of ‘British’ thinkers, turns into something else
in the hands of Quesnay: it becomes a contemporary injunction. And of all places,
jealous was to get him impeached by his servile House of Commons, and from this time they have
still retained it’, ibid., p. 272. ‘Monarchies are the prevailing government; they set the fashion and
give the tone to the custom of all the others’, ibid, p. 292. See also Blackstone, Commentaries on the
Laws of England. Vol. IV, ‘The king, moreover, is not only incapable of doing wrong, but even incap-
able of thinking wrong: he can never mean to do an improper thing: in him is no folly or weakness’,
p. 239.9 For Hume as a ‘skeptical whig’ see Duncan Forbes’s classic study, Hume’s Philosophical Politics.
10 Steuart for instance argued ‘So powerful an influence over the operations of a whole people,
vests an authority in a modern statesman, which in former ages, even under the most absolute govern-
ments, were utterly unknown’ p. 278. And earlier, ‘So far as a power of dispensing with, restraining
or extending general laws, is left in the hands of any governor, so far I consider public liberty precarious.
I do not say it is thereby hurt; this will depend upon the use made of such prerogatives. According to
this definition of liberty, a people may be found to enjoy freedom under the most despotic forms of
government; and perpetual service itself, where the masters power is limited according to natural
equity, is not altogether incompatible with liberty in the servant’ p. 207. Prudent plans for political
economy are thus required to combat the potential for despotism. Hirschman misses out on the links
between the characteristic potential of this ‘modern’ despotism. One sign of this was ‘public credit’,
that Hume had famously warned against; elsewhere of course the contemporary condition as leading
to absolutism in Britain. This line of inquiry is traced in my dissertation and cannot be followed here.
It is however especially pertinent for a history of imperialism because the East India Company was
closely linked to the public debt in England historically, and public debt was used as a ‘mechanism’
in conquests in the subcontinent too. This is another ‘angle’ that historians of eighteenth century
intellectual history have failed to note. Here the specifically Marxist argument of merchant capital
preceding financial capital or the Leninist argument that sees in the late nineteenth century the char-
acteristic nexus between financial capitalism and conquest, does not hold true historically (since this
can be traced back to at least the seventeenth–eighteenth centuries via the East India Company) as
well as conceptually (since monetary transactions have a credit—and therein political, i.e., that which
gives monetary media currency—dimension).11 ‘However they began or by what right so ever they subsist there, there is and must be in all of
them a supreme, irresistible, absolute, uncontrolled authority in which the jura summi imperii, or
rights of sovereignty, reside’ William Blackstone, Commentaries on the Laws of England, Vol. I,
p. 49. See also Adam Smith’s Lectures on Jurisprudence where it is argued, ‘In whatever place there
is a sovereign , from the very nature of things the power must be absolute; and no power regularly
established for calling the sovereign to account, as the sovereign has an undoubted title to the obedience
of the subjects’, p. 315.
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counter-intuitive as it may seem, China is cited as exemplary model. Needless to
say, the physiocratic doctrine of ‘legal despotism’ was not without its own contro-
versy,12 the detailing of which, however, is not germane to our present enterprise.
When put to such use, the very meaning of despotism becomes elusive. This
whole conceptual terrain, not without irony, is ignored by the otherwise rich
scholarship on eighteenth century European intellectual history, whether it be
John Pocock, Albert Hirschman or Donald Winch,13 who read a purported equi-
valence between commerce and sociality at face value without scrutinising the
politico-military operationalisation under its sign; for instance in the Crown’s
conquests through the East India Company in the subcontinent. Adam Smith
had, it is not always remembered, explicitly supported the Crown’s conquests—
and thereby the legibility of conquest as a juridical category in the interest of
‘prosperity’—such that it is not allowed to sully the gifts of a ‘commercial soci-
ety’.14 Notwithstanding the complexity of even the theoretical deployment of
‘despotism’, preliminarily one might suggest that a despot was one whose source
of legitimacy shielded itself from scrutiny at whichever level it functioned within
the body-politic. That is to say, the possibility of violence behind the founding
of power was recognised whether in the form of conquest or otherwise, 15 while it
was inherently impervious to analytic probing. The Aristotelian genealogy had
allowed for a convenient passage between the household (oikos) and the despot
who ran it, and the despot in Persia, at the same time recognising conquest as a
12 See Maverick who has translated Quesnay, China As A Model for Europe. ‘Despotism’—crushing
the ‘nobility’s’ rights—is simultaneously coded though and ‘economic’ idiom; an argument for the
benefits of circulation (negating toll rights that the ‘nobility’ had).13 See Donald Winch’s Riches and Poverty, J.G.A Pocock’s Virtue, Commerce, and History and
Albert Hirshman’s The Passions and the Interests as representative samples.14 Adam Smith had argued in the Wealth of Nations, p. 1026: ‘The territorial acquisitions of the
East India Company are the undoubted right of the Crown, that is of the state and the people of Great
Britain, might be rendered another source of revenue more abundant, perhaps, than all those already
mentioned’. That ‘acquisitions’ were in fact conquests were well recognised by Smith as was well
known that the Company was given the right to engage in war by the Crown. Smith’s critique of
Company policies can never be conflated with a general critique, or even cognition of imperialism.
Recently this has been sought to be done in Jennifer Pitts’ work, Turn to Empire. It is revealing that
while she notes, ‘Smith did not categorically reject European rule over non-European territory, arguing,
for instance, against the East India Company’s exclusive territorial claim, that the ‘territorial acquis-
itions of the East India Company [are] the undoubted right of the Crown, that is of the state and the
people of Great Britain’ p. 56, [Smith’s language is certainly more robust that the appellation ‘did not
categorically reject’ would have it] she fails to note the last clause in Smith’s sentence which had
argued that ‘they might be rendered another source of revenue more abundant perhaps, than all those
already mentioned’, thereby misrepresenting both the conceptual interplay cum in-determinacy
between the political and the economic Smith’s stance on imperial conquest.15 Hume could argue that ‘the right of conquest may be considered as a third source of the title of
sovereigns’ (emphasis mine). The others that he recognised were long possession, present possession,
succession and positive law. See his Treatise on Human Nature, pp. 604–17.
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source of authority. The inscrutability of origins, nonetheless, underlined the active
and responsible function of authority and it is this set of duties or functions that
all writers chose to emphasise. This inscrutability underwrites Blackstone’s under-
standing of ‘rent’ (revenue) when he says that rent was paid as an acknowledgement
of authority.16 This also marks Adam Smith’s work, which gives a history of
political appropriation in the Lectures on Jurisprudence and then in the Wealth of
Nations speaks of the landlord as one who extracted as rent what the farmer could
afford to give.17 Signifying authority, it could not be fully subsumed under the
market/price; ‘naturally a monopoly price...not at all proportioned to what the
landlord may have laid out upon the improvement of land, or to what he can
afford to take; but to what the farmer can afford to give’.18 Yet, there is a complica-
tion, since rent is defined as that which has to be calculated; it is arrived at after
profits and wages have been deducted from the price of a commodity.19 Now, rent
is dependent on profit and wages and thus does not have the seeming inscrutability
of its former origins in (political) authority, having now come under the
calculability of the market. While rent was thus explained, profits in turn desi-
gnated that which was acquired in exchange for the use of stock and wages that
were given for the use of one’s labour. Together rent, profits and wages constitute
sources and funds for revenue.
In the Wealth of Nations, taxes are historically traced to charges on goods by
political overlords in their circulation. They signified political power in a realm
16 ‘Almost all the real property of this kingdom is by the policy of our laws supposed to be granted
by, dependent upon, and holden to some superior or lord, by and in consideration of certain services
to be rendered to the lord by the tenant or possessor of this property. This thing holden is therefore
stiled tenenement, the possessers thereof tenants, and the manner of their possession tenure. Thus all
land in the kingdom is supposed to be holden, mediately or immediately, of the king who is styled
lord paramount, or above all’ William Blackstone, Commentaries on the Laws of England. Vol. II,
p. 59. Surely, this ownership of land, is the historico-conceptual horizon in which we can locate the
whole question of ‘resumptions’ in the subcontinent as well as subsequent land acquisition acts
(including 1894) down to the contemporary.17 ‘Rent, considered as the price paid for the use of the land is naturally the highest which the
tenant can afford to pay in the actual circumstances of the land ... it is naturally a monopoly price not
at all proportioned to what the landlord may have laid out for the improvement of the land, or what
he can afford to take: but to what the farmer can afford to give’. See Adam Smith, Wealth of Nations,
pp. 166, 167. There is a tension between the formulation of rent and the market. Although akin to
profit, Smith says it cannot be so called because it is demanded even for unimproved land. The ‘how’
of the ownership is not discussed. In the Lectures on Jurisprudence tenure is traced differently: ‘Our
phraseology of tenure etc came about at that time along with the feudal law properly so called, when
everyone held either mediately or immediately of the king who had dominion direct of the whole,
and his tenants of whatever sort, noble or ignoble, the dominion utile’, Lectures on Jurisprudence,
p. 251.18 Ibid. p. 167.19 Ibid. 168: ‘Rent, it is to be observed therefore enters into the composition of the price of com-
modities in a different way from wages and profit. High or low wages and profit, are the causes of
high or low price; high or low rent is the effect of it’.
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much like rent, signifying it in something as ‘firm’ as land. A land tax stood for a
certain political charge/impost on rents. This could either be fixed, as was the
case in eighteenth century England, or it could vary with varying rents, thereby
factoring in changes in cultivation, the latter a policy recommendation of the
physiocrats. However, for Smith, the prosperity of Britain was not due to the
nature of the constant evaluation of the tax, but ‘principally owing to some circum-
stances altogether extraneous’.20 When public revenue is let out to farm, the farmer
collects the revenue for which he gets a ‘rent’; once again rent is here revealed in
its monopoly character. It is suggested that there is some link between property
and ‘monopoly character’, although as we will see such a link cannot be designated
in either axiomatic or abstract fashion, because this linkage in one instance may
itself be a function of another. That is to say, the rent of the revenue farmer is rent
in the sense that it is a monopoly, but is also not so in that it depends on both what
can be extracted from the cultivator and what is being demanded by the sovereign.
In the latter sense it moves close to profit depending on ‘rent’/revenue as well as
wages.
For Quesnay, agriculture was the only productive activity and political revenue
must therefore be based upon rents, since the latter was what constituted real sur-
plus. This definitively marked it as superior to all other forms of industry. The
production of food is construed as a necessary condition for whatever value manu-
facturing and commerce might give rise to; agriculture was essentially and not
derivatively productive. While agricultural activity reproduced itself in terms of
a value to which (added) revenue was generated, enabling the possibility of industry
and commerce, the latter was capable of only reproducing itself, requiring in turn
a point of origin. This is not to say that the physiocratic school was uninterested
in industrial and commercial activity. In fact, one of their main policy suggestions
was to decrease imposts and encourage the free circulation of grain. The regulation
of imposts was not only an economic but also a political decision because it meant
perpetuating royal absolutism—what in effect, Smith had called the ‘uniformity
of taxation in England’—in relation to the seigniors who held such powers as
political and economic right equally. The very distinction would not have been
perceived and such authority was traced in many of the writings of the period,
whether by the nobles or the ‘third estate,’ to conquest and (therefore) foreign ori-
gin. This is especially clear in Abbe Sieyes’s famous pamphlet, ‘What is the Third
Estate’ which simultaneously underlines the productiveness of the common man
and his daily labours and combines in one blow the parasitic (in economic terms)
and foreign nature (in political terms) of the nobles.21 What we see here are two
20 Ibid. p. 892.21 Ibid. While scholars as diverse as Arendt and Furet have noted the ‘racial’ dimension of Sieyes’s
critique, they have failed to fuse it with the newly emerging ‘utilitarian’ argument of them being at
the same time ‘parasites’, i.e., unproductive. Furthermore Furet’s thesis in Interpreting the French
Revolution, that conquest as a source of political authority dies out, can be questioned if one
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strands—at the levels of arguments at play—which are integrated in their de-
nunciation of the nobility, whether from the perspective of the Absolutist King or
the Third Estate.
While in Quesnay and Blackstone the link between rent and political authority
remain visible, in Smith it becomes tenuous with the alternative definition proposed
above, wherein it is tied to commodity price; as is inevitable when it becomes a
matter of calculation. Focusing on rent and its conceptualisation becomes a window
into scrutinising the political theorisation of the Enlightenment. If rent referred to
ownership; and the Crown—whether in France or Britain—demanded dues of
any kind in the occupation of land, then this would mean that the Crown owned
all the lands. Blackstone affirms this explicitly,22 but elsewhere calls it a ‘feudal
fiction’ although fiction cannot be taken to mean that which is construed as false
or illusory. 23 What such nomination does to the dictum, ‘the King owns all the
lands’ is obscure. The exemplary image of the one who owned all the lands was
the ‘Oriental Despot’ who in fact finds his strongest illustration in Montesquieu,
a figure quite absent in all the other writers we have mentioned; not surprisingly
this is arguably a specifically French concoction. To what extent the argument in
Montesquieu is a record of the doings of an Eastern Price rather than a prudent
warning to what may/has become of France is impossible to discern. However
these philosophers well understood the thin line dividing the (just) ruler from the
incorporates the ‘imperial frontier’ into one’s analysis; this continues unabated if one incorporates
the ‘imperial frontier’ into one’s site of analysis. When in the Napoleonic era Benjamin Constant
spoke of Ancient Liberty as a thing of the past replaced by Modern Liberty, in fact the Ancient was
contemporaneous and running into the future: something that the history of imperialism teaches us
well in so far as it is a prominent site of displace-ment, where conquest existed as a source of authority
into Victor Alexander John Hope, 2nd Marquess of Linlithgow. On this see also the much neglected
last books of the Spirit of the Laws, and the debates over the historical origins of sovereignty.22 See above footnote 8. Blackstone also believes in the dictum that the King can no longer even
think any wrong, and Smith furnishes the rationale behind even imagining the King’s death as war-
ranting capital punishment. See Lectures on Jurisprudence: ‘the 1rst article of the Act of Treason
therefore provides that it is treason any way to compass or imagine the death of the king, and that not
only when really accomplished bit when it is declared by any overt act, as forming a conspiracy
against him or providing arms against him’ p. 294.23 Fiction, especially in the sense of the juridical fiction. William Blackstone, Commentaries on
the Laws of England Vol. III , p. 45: ‘The King’s bench to correct all crimes and misdemeanors that
amount to a breach of peace, the king being then plaintiff, as such offences are in open derogation of
the jura regalia of his crown. And the exchequer to adjust and recover his revenue, wherein the king
also is plaintiff, as the withholding and non-payment thereof is an injury to his jura fiscalia. But, as
by a fiction almost all sorts of civil actions are now allowed to be brought in the king’s bench, in like
manner by another fiction all kinds of personal suits may be prosecuted in the court of exchequer’.
We cannot go into here details on the notion of a ‘juridical fiction’ but the classic study on its ‘pre-
modern’ form perhaps still remains that of Ernst Kantorowicz, The King’s Two Bodies.
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despot, perhaps precisely because such a line could never be axiomatically specified
or definitively proposed.24 Such distinction lay not in the mere act of ownership
but rather in the fact that while the ruler ruled according to laws, the despot ruled
according to whims, which he could afford to do since he commanded the very
subsistence and sustenance of his subjects.
No doubt, the image of ‘oriental despotism’ regularly appeared in the writings
of Europeans in India in general as well as the officers of the East India Company.25
But such a view was combated from the towering heights of an Edmund Burke
and Voltaire,26 as well as from lesser known stations, such as those of Philips
Francis and Charles Boughton-Rouse. This should not be surprising since this
debate concerned the very nature of the Mughal polity as that which legitimised,
as well as provided a model for, future British governance. As we have noted,
Company officials not only read writers such as Smith, Quesnay and Montesquieu
but also cited them liberally in their policy documents. Rather than have the issue
of the use and/or misuse of the letter of European political economy in its funda-
mental categories, what interests us here is whether and to what extent these
categories—as they were being developed and deployed from Britain to Berar—
illuminate (or obscure) the workings of British imperialism. A caveat is perhaps
in order here: I use the phrase British imperialism to even designate this period
which is often reserved for the post 1857 Crown Rule, because there was never
any doubt in anyone’s mind at this time—whether in legal, institutional or finan-
cial terms—that the East India Company ruled India as a medium of the British
Crown. That it also did so in the name of the Mughal emperor complicates this
situation considerably, but this in no way is an argument for treating Company
rule as legally and institutionally quarantined from Britain (or ‘future’ British
‘responsibility’, that is, history).
British Imperialism and the Changing
Categories of Political Economy
The primary significance of 1757 or 1765 lay in the fact that the East India
Company became involved through the force of its arms in the collection of ter-
ritorial revenue. This was by no means a new set of responsibilities. Assuming
24 Therefore Rousseau has to argue against the homology between (despotic) rule and household
(management), politics and political economy in his ‘Discourse on Political Economy’; See Social
Contract and the Discourses.25 Again the classic is Bernier the epicurean physician. See also James Grant, ‘Historical and
Comparative Analysis of the Finances of Bengal’ The Fifth Report from the Select Committee of the
House of Commons on the Affairs of the East India Company, 28th July, 1812.26 This argument is forcefully put forward by Edmund Burke in his attack on Warren Hastings,
where he argues that ‘oriental’ sovereigns were in no way despotic. See Speeches on the Impeachment
on Warren Hastings, pp. 104–26. For Voltaire’s views see Ranajit Guha, A Rule of Property for
Bengal; Dupperon is still key.
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the real distinction between trade and revenue collection, the historical literature
tends to place more emphasis on the rights to custom-free commerce rather
than the rights to zamindari that Faruksiyar had granted in 1717. But certainly
Buxar indicated a massive surge in scale; and equally importantly, in ‘brand value’.
Per se, the activity of revenue collection is specifically denominated as political
in spite of the fact that the Company had always conducted its trade through
armed enclaves and armed ships and mercantile activity was itself undertaken via
political patronage. Right to trade without dues and other such preferential treat-
ment whether in Britain or in India was itself inherently a political issue in that it
was always a matter or right—and portrayed as such—either given or taken. Thus,
on the one hand, the conventional shift from ‘trade’ to ‘politics’ howsoever modi-
fied is inaccurate and obfuscatory. On the other hand, the rights thereby acquired
and bestowed regarding territorial collection is not the terminal point in the circuit.
The money gained through territorial collection is necessarily immediately ‘con-
verted’ into ‘investment’ that is, the ‘trade’ in commodities. While the right to
collect territorial revenue is usually the right given to an inferior who then is to
give revenue to the sovereign, in this case, as with the ‘governors’ of the Mughal
Emperor, rights of collection were conflated with ‘acquisition’. In the immediate
aftermath of Buxar, the Company does give tribute to the Mughal Emperor, rec-
ognising his sovereignty and this is one of the series of ‘drains’ mentioned by
contemporary accounts.27
If at the level of the Company itself there is the bedevilling issue of rights to
collect revenue and right to revenue, this is reiterated in the debates on the status
and nature of the zamindar; the well documented debates leading to the Permanent
Settlement of 1793.28 The first series of debates in the aftermath of Buxar are
simultaneously about the legal status of the Company as well as the calamitous
27 For an early statement see James Steuart’s, The principles of money applied to the present state
of the coin of Bengal.28 The classic study of Francis as setting in some measure the groundwork for the Permanent
Settlement remains that of Guha. See A Rule of Property for Bengal. More recently, however Robert
Travers has argued that a significant distinction between Francis and Cornwallis lay in the fact that
Francis used the language of the ‘ancient constitution’ and was speaking of a return—something that
Guha had well understood—thereby revealing a ‘sympathy’ to the Indian situation and its traditions
which was absent during the time of Cornwallis. Interestingly however Travers doesn’t dwell on the
importance and understanding of conquest as a source of authority, and this is especially intriguing,
not only because such a source was well recognised at the time, but also because this was the conceptual
antonym of ‘ancient constitution’ in the classic work on the subject: Pocock’s Ancient Constitution
and Feudal Law. While Travers’s work is detailed and insightful in locating and contextualising the
goings-on in Bengal through the conceptual language of Britain, this is not enough since in so far as
such contextualising is not realised as one which interrogates the very coherence of metropolitan
language, it is also obfuscatory. Put bluntly the implication is that understanding the conquest of
Bengal requires an understanding of the language of the metropolis, but this language is itself per se
impervious to and unthreatened by the unfolding of imperialism. See Ideology and Empire in
Eighteenth Century India.
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downturn in its financial solvency, for which it required Parliament’s aid.29 The
latter is itself a function of the devastation in Bengal leading up to the famine of
1769–71. Thus the debates around the nature of the zamindar have to be located
at this moment of crisis. The so called novel contributions of ‘property’ and English
law are in fact desperate attempts to rejuvenate an economy that had been de-
vastated under the (mis)administration of the Company.30
From the first section it is hopefully evident that the nature of property and its
relationship with sovereignty is anything but clear, even in the conceptual lexicon
of political economy, let alone the so-called realities of the times. In legal terms,
Blackstone spoke of the King owning all the lands as a ‘juridical fiction’ and ex-
plicitly read rent as a function of fealty and subordination on the part of the ‘tenant’.
The narrative of the concentration of power in royal hands through conquest and
(subsequent) despotism played a significant role in Smith’s Lectures on Juris-
prudence; however, the Wealth of Nations begins to provide a different ‘spin’ on
the constitution and function of rent. There was an unmistakable trauma in the
English psyche even in the eighteenth century with regard to the Norman Conquest,
even while such a lineage in time had to be credited with the institutional precon-
ditions of modern liberty.31 This was exorcised only through the conquest of India,
for it is indeed telling that the place of violence in political constitution slowly
begins to die out in the mainstream conceptual lexicon which is emerging at this
29 For details of the monetary transactions between the Company and the English State during this
period see H V Bowen’s Revenue and Reform; this builds on classic works such as those of Lucy
Sutherland’s The East India Company in eighteenth-century politics.30 Eric Stokes in his otherwise stolid study speaks of the Permanent Settlement being about
the, ‘determination to introduce private property rights in land and uphold them through a Western
type of law system’, p. 5. And later, ‘Even at its best, tradition provided no model to follow for it
gave rights no specific definition and certainly supplied no safeguard against the Company’s revenue
officials. The British mind [!] found incomprehensible a society based on unwritten custom and on
government by personal discretion; and it knew only of one sure method marking off public from
private rights – the introduction of a system of legality, under which rights were defined by a body of
formal law equally binding upon the state as upon its subjects’ p. 82. This is not an accurate description
on the state of affairs in late eighteenth century Britain where even Benthamite notions of codifica-
tion were suspect. See his classic Eric Stokes, English Utilitarians and India. Recently Jon Wilson,
Domination of Strangers, has argued contrary to Stokes that rather than intellectual influence—it is
the alien and alienating situation in India which has to be seen as the reason behind and the context
for the British legislative practices. However Wilson’s underestimation of statutory law in Britain in
the eighteenth century seriously hampers his larger narrative about the birth of modern law via
‘colonialism’.31 See the Commentaries, which often take the shape of a history of the monarchs who ruled
England post-Norman Conquest. However critical Blackstone is of the Norman Conquest and not-
withstanding the rhetoric about the recovery of Saxon liberties, the institutional history actually
documented by him underline the roles of the monarchs in the institutional formation of the con-
temporary state of affairs.
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very moment; one does not see it and certainly it is without the same prominence
in Bentham and post-Benthamite politico-legal theory. According to the physio-
crats, revenue—and here the ‘uniformity’ of revenue was an argument for mon-
archical absolutism—was to be based on the rents of the landlords because the
latter is what constituted sur-plus. Thus revenue was a sort of ‘rent’ on ‘rent’; or
rather the rent of the landlord now could be construed as ‘profit’ with land (rights)
being treated as stock (due to its) alienability.
When the Company was debating the status of the zamindar, it was argued that
since the subcontinent only witnessed oriental despotism, it was impossible to
treat the zamindar as having proprietary right, such a right not having even existed
earlier.32 Proprietary right, in such a view—which was then conventional—was
what guaranteed liberty and freedom against possible despotism. Such a language
of liberty however, could never confront head-on the fact that the sovereign,
whether in Britain or France, determined taxes on the basis of its requirement;
that is, the conceptualisation of sovereignty was absolute. In Britain, however,
this was still a sensitive issue and therefore a direct survey of the land was always
resisted on the grounds that this would be an invasion of proprietary right. We
may remind ourselves here that the only survey that Britain had was still the
Domesday Book survey (in the aftermath of the Norman Conquest identified with
the feudal) and the Down survey in Ireland on the basis of its conquests. When it
came to the zamindar in the specific aftermath of conquest, Philip Francis had
made the argument for the restoration of proprietary right. In the later debates,
the question of whether the rights that zamindars had on markets could be stripped
was brought up. John Shore wondered what kind of ‘proprietary right’ was one
restoring if many of the rights that the zamindars possessed were in fact being
alienated so unilaterally in the name of the introduction of proprietary right.33
What one might take from these discussions is that the notion of ‘property’ was
always linked with a certain set of rights and there existed no simple direct relation
32 This image of the Mughal despotism can of course be traced to Bernier, which is conjoint with
an old perception of the Oriental-and-then-Islamic world. However, in so far as ‘Oriental despotism’
seems also a particularly French construction from the seventeenth century (one sees it prominently
in Bayle for instance also and especially during and after the time of Louis XIV) there is a pressing
ambivalence about whether it is description of a state of affairs in the Orient, or a warning to what
could become of France. This is there in Montesquieu, Spirit of the Laws, and continues with Helvetius
who replaces geography/climate with history/culture. It also has a theoretical function is scientific
cum theological debates; see for instance, the Leibniz-Clarke correspondence.33 See Shores responses to the 4th resolution: ‘that the gunges, bazaars, haits and other sayer col-
lections, be not included in any settlement with an zamindar; but that the present remain under the
exclusive jurisdiction of an officer appointed by the collector, who is to propose regulations as he
may think best calculated for regulating and collecting duties’. Shore responds by saying that ‘Amongst
the objections raised to the proposition I find only one stated against it as an invasion of the zamindary
proprietary rights’. W.K. Firminger Ed. The Fifth Report from the Select Committee of the House of
Commons on the Affairs of the East India Company, 28th July, 1812. Vol II, pp. 491–93.
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between such a right and land/ land produce; and this was why rights to com-
modities could be read off the same category. In effect, the so called emergence
of ‘proprietary’ right in fact was the fixing of accountability to the sovereign
power, an accountability unilaterally determined by the former.
If the Permanent settlement fixed revenue based on calculated rentals and
amounted to (according to some estimates) 90 per cent of the rentals on the basis
of wholly questionable calculations,34 the Raiyatwari Settlement, as initially pro-
posed by Thomas Munro, in the conquered (or ‘ceded and conquered’) territories
of the South, envisioned a contract with the individual cultivator. This was not
something that emerged out of a solitary concept, but rather emerged from the
fact that zamindaris of the kind that existed in Bengal did not exist in the South.35
This was in part said to be a result of Tipu Sultan’s conquests; conquest and the
centralisation of power always breaking down powers that were once entrenched.
Here revenue and rent seemed to have become truly indistinguishable. This was
later conceptually justified in term of Ricardo’s theory of rent. Quesnay and Ricardo
come together for a moment in their respective evaluations of rent; the very issue
from which they deduced radically opposing conclusions. For both, rent was a
kind of surplus,36 but whereas this quality allowed agricultural activity the status
of being uniquely productive and thereby the source of revenue (physiocrats being
associated with direct revenue/taxes), for Ricardo this was in essence an unpro-
ductive revenue with no influence on value (determined by profits and wages)
and should therefore be taxed. It should therefore not come as a surprise that this
understanding was used by James Mill to justify the Raiyatwari settlement.
Whereas revenue can at once be ‘rent’ in relation to the cultivator or landlord,
it can be denominated as ‘profit‘ when being used to ‘trade’.37 The revenue from
land was being used to buy not only commodities from India, but was also being
34 See the Dharma Kumar ed., Cambridge Economic History of India Vol. 2. pp. 134–35. The gen-
eral point can be seen in the contributions as in the writings by Bayly, historians who have been most
at pains to speak about historical continuities into the British colonial/imperial period.35 W. K. Firminger, ed., The Fifth Report from the Select Committee Vol. III, p. 305. ‘Hyder had no
sooner completed the conquest of the Canara, then he ordered an investigation to be made into ever
source of revenue for the purpose of augmenting it, wherever it could be done’. The Report con-
tinues, ‘The greatest addition made to the land rent went under Tippoo, was by the total resumption
of all enaums’, p. 306. But soon enough it says, ‘However much I disapprove of the numerous add-
itions made o the ancient land rent by Hyder and Tippoo, I did not think myself at liberty to depart
widely from the system which I found established as it is the same that which exists in all the provinces
which the Company have acquired, in the last and former war’ p. 307.36 Needless to say this cannot be the right place to venture into the literature surrounding Ricardo,
even if it is not exactly a flourishing industry. Ajit Sinha’s recent Theories of Value from Adam Smith
to Piero Sraffa, has a useful discussion on the important commentators on Ricardo, from nineteenth
century writers to more recent authors such as Samuel Hollander.37 Ranajit Guha in his detailed studies well recognised the ‘convertibility’ of categories such as
rent in produce and rent in price being as much a market function or rent in its investment in the
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used to finance the increasingly lucrative Chinese ‘trade’.38 This was well rec-
ognised by contemporaries in the arguments regarding the ‘drain’, and the savings
thereby assured were naturally to have an enormous value. Furthermore, internal
trades within the subcontinent were monopolised by the Company with their own
toll centres being set up,39 the revenue of which could once again not only be used
to acquire commodities (and thereby give custom revenue to the British govern-
ment), but also re-exported to the rest of Europe, showing the value of the Com-
pany’s East India possessions. A recent commentator has underlined the great
advantages this would have allowed during the Napoleonic wars reiterating an
argument made as far back as the seventeenth century in Thomas Mun’s replies to
criticisms of the East India trade, and cited from then on ever since, well into the
eighteenth century.40 While revenue could thus be transformed and valourised
in varied ways, unilateral subtraction of specie (cessation of imports and its sub-
stitution by revenue) had its own adverse effects on agrarian productivity as
intertwined with commercial practices in the subcontinent, as argued by contem-
poraries such as Steuart.
Economic historians largely tend to agree about the increased burden of revenue
and the ‘rigour’ of its collections in relation to previous political regimes.41 How-
ever, the rationale for such policy, especially when it seemed to be oppressive in
means of agricultural production being ‘capitalistic’ even though in this theoretical extrapolation of
the same he sees this as the immaturity of a pre-Ricardian theoretical lexicon. It is the latter claim
that is being contested here for such immaturity captured the power-relations at play with a great
deal of accuracy which was subsequently occluded by Ricardo. Once again it’s the theoretical claim—
registering the ‘irony’ of an modern looking physiocracy being used to entrench feudal elements in
the Permanent Settlement rather than mobilising such ‘use’ to complicate the conceptual formulations
and growing institutionalisation of imperial power in Europe in their interrelations—that is being
questioned however rich and compelling the specific studies. In recognising that as early as the
1770s the Company was trying to redress a situation of its own making, Guha’s study underlines a
critical aspect of even early British imperialism which Stokes misses out on. See ‘Rent in Kind and
Money Rent in Eastern India Under Early British Rule’ in Small Voice of History and Rule of Property
for Bengal. In a slightly different context in what has been called the interlinked markets theme,
Krishna Bhardwaj has also argued for the relationship between rents, markets and price-formation.
See her ‘Note on the Commercialization of Agriculture’ in K.N. Raj, et al. eds, Commercialization of
Indian Agriculture Delhi.38 This has been well documented in the historical literature.39 See ‘The Impact of the Transit Duty System in British India’ by Jitendra G. Borpujari in Asiya
Siddiqui, ed., Trade and Finance in Colonial India 1750–1860.40 Javier Cuenca Esteban, ‘The British balance of payments, 1772–1820’. The substantive-theoretic
arguments made by Esteban, apart from the specific one about the use of the balance of trade during
the Napoleonic Wars, on the place of the East India ‘trade’ in the imperial system can be seen in the
writings of James Steuart and Philip Francis.41 This is present even in the contributions to the Dharma Kumar ed., Cambridge Economic History
of India, which has otherwise been at pains to emphasise continuities. One this question of continu-
ity it is difficult not to express surprise at such a thesis in the face of a joint-stock company given
monopolistic rights by the Crown ruling and conquering millions.
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the extreme, is rarely queried except among the much maligned ‘nationalists’. At
one level, revenue was like rent in the Smithian definition of it being based on
what the farmer can give; in the case of India this amounted to little more than
subsistence, if that; and there was no question of profits. On the other hand, ‘trade’
(and ‘profits’) the outlet for rent/revenue was potentially infinite, unlike say the
‘upkeep’ of the landlord (or a government); precisely the worry of Francis. This
literally meant that the Company in such an operation actualised in institutional
terms the image of the oriental despot who owned all the lands to a perfect degree.
But as trader and joint-stock company, ‘rental’ property was profit for invest-
ment and dividend. In this sense also the subcontinent was treated as ‘stock’ as
‘property’—the basis on which the Company answered critics who accused it of
simply being a monopoly: reiterating its despotic character in the Aristotelian
sense. In arguments that once again stretched back to the seventeenth century,
Company officials argued that the infrastructure that they had created in the sub-
continent in the course of their ‘trading’ practices were their property—that in
which their labour was invested—and so a simple opening of the ‘trade’ would in
fact be a grievous violation of property right.42 This same argument and its signi-
ficance did not change when it was used in the early nineteenth century in the
debates of the charter renewal of 1813.
At this moment a discussion of the Ricardian theory of rent is in order, not
only because of its deployment in arguments for land revenue settlement in India,
but also to signal the reconfiguration of the conceptual lexicon of political economy
in Britain. In Ricardo’s definition ‘rent is that proportion of the produce of the
earth which is paid to the landlord for the use of the original and indestructible
powers of the soil. It is always the difference between the produce obtained by
the employment of two equal quantities of capital and labour.’43 Unlike the history
of rent as political appropriation that was available in Smith’s Lectures on
Jurisprudence as well as Blackstone’s Commentaries—which had crucial implica-
tions for what we would call state-formation—in Ricardo there exists a certain
‘logical historicity’ inscribed within the category of rent. According to this
‘fablesque’ history, in the beginning there would have been no rent. With the rise
and growth of the population an expansion would have taken place into poorer
soils. Since the rate of profit is assumed constant, the first location would yield a
surplus and this is denominated as rent. The third or last location—that which is
the worst soil being cultivated—would not yield rent. Assuming a single price—
that is, a single rate of profit—the produce of this final, ‘marginal’ land determines
the rate of profit, which in turn determines rent.44
42 This was an old argument of the Company used even in the seventeenth century, prominently in
the debates around the dissolution of its first avatar in the 1690s.43 David Ricardo, Principles of Political Economy and Taxation, p. 45.44 ‘In such cases capital will be preferably employed on the old land, and will equally create a
rent; for rent is always the difference between the produce obtained by the employment of two equal
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This is where the difficulty lies. For the rate of profit to be determined from the
marginal land, one assumes the presence of a market—including the produce
from previous lands—for the produce, since this is the last land that is cultivated.
So fixing this ‘moment’ when the produce of this land is brought to the market
and sold is vulnerable to a ‘recursive’ contradiction: 1) other lands yielding rent
having acquired a surplus from/over the market price/rate of profit (before their
determination) when their produce is brought to the market/sold; 2) other lands
are not yielding rent since they are awaiting such a determination, hence they
cannot bring produce to the market and therefore neither can the ‘last land’ do so.
How is the rate of profit of the marginal land itself determined and what is the
temporal/logical medium through which it can be determined? In other words,
how does it ‘become’ the singular rate of profit/price. This requires a miracle and
thus we have the immaculate conception of the market, allowing its primitive
differentiation from the state, since nature (land) and not human institution/con-
quest is the real determinant.
The theoretical problem arises in part because land as an object is treated as
discrete from its ‘use’ for production/marketing and only thus can Ricardo speak
of the ‘original and indestructible powers of the soil’ in abstraction from capital
and labour. On the other hand, Ricardo requires the independent existence of the
latter two categories to formulate and give shape to the ‘use’ that is all the same
(putatively) originally derived from land-as-object. Mutual determination is cir-
cuitously established in this knotted fashion—that is, equal quantities of labour
and capital determine the price, determining rent alongside expansion based on
the existent differential soil quality as constituting factor. The conceptual role of
land-as-object lies in the fact that if this were not the case, rent—or that which
arises from the possession of what is original and indestructible and therefore
necessary for production and subsistence—would have no analytic independence;
no differentia specifica. It would be indistinguishable from profits and wages.
What is ‘naturalised’ as the ‘property’ of land, the sin qua non enabling production,
quantities of capital and labor. If with a capital of 1000 a tenant obtain 100 quarters of wheat from his
land, and by the employment of a second capital of 1000 he obtain a further return of 85, his land lord
would have the power, at the expiration of his lease, of obliging him to pay 14 quarters or an equivalent
value for the additional rent; for there cannot be two rates of profit’. (emphasis mine), Ricardo,
Principles of Political Economy and Taxation, p. 48. When examining Smith, Ricardo argues, ‘If the
comprehensive mind of Adam Smith had been directed to this fact, he would not have maintained
that rent forms one of the component parts of the price of raw produce; for price is everywhere regu-
lated by the return obtained in the last portion of capital, for which no rent whatever is paid’, ibid,
p. 228. This is reiterated in the context of a critique of Malthus, ‘Rent being the effect and not the
cause of high price, and there being always one quality of land in cultivation which pays no rent
whatever, the corn from which replaces by its price only wages and profits’, ibid, p. 285. See David
Ricardo, Principles of Political Economy and Taxation. Smith had in fact argued, in the Wealth of
Nations, p. 909, that ground rents were a species of revenue which could best ‘bear to have a peculiar
tax imposed on them’.
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was in the hands of earlier writers the political dimension, which is the function
of despotism in Smith, Quesnay and Blackstone. This is why in their writings
strict analogies were drawn between the authority of the landlord in demanding
what the subject/cultivator could give. For Ricardo, on the other hand, this is the
narratological strategy: land is freely available (first cultivation yields no rent); it
is a continuous gradation moving in the ‘direction’ of poorer and poorer soils;
essential extinction (last piece pays no rent); that allows for its ‘use’ as differential
rent. The tensions burst forth in causality being inscribed within a matrix that is
‘simultaneously’ diachronic and synchronic.
Only unproductive use (rents in the Ricardian sense) or pure consumption can
support the ‘existent reality’ of the land as discrete from its ‘use’. They are Sieyes’s
parasites, who have forgotten their broadswords. If rents could determine price
directly, then the very distinction between capital/profits and land/rent would fall
through. Such an understanding of rent/land is abstracted away to understand
profits/capitalists and wages/labour in their intimacy but at the same time returns
as function because even the ‘stock’ on which the profits depend is in fact ‘past
labour’ and so one might say that the workers’ (living) labour is the marginal
aspect of stock that determines profits. The desperate logic of rent is repeated
here, with the workers (present) body labour as the marginal land, in the tired and
broken landscape of stocked/past labour. This would on the one hand realise itself
in questioning the ‘class of capitalists’ and documenting the ‘unearned increments’
that form the bed rock of stock, allowing for its absorption into labour and the
destruction thereby of the whole analytic framework. The ensuing theoretical
anarchy could only find its correlate in the field of the political.
Even so, such an understanding of land gives rises to a series of paradoxes. If
there are indeed gradations of soil how does one speak of the interval between
which one expands from one grade to the next; the later ‘movement’ is the only
way to give shape or reality to the former. How would such an interval ever be
traversed—in so far as it is always discerned ‘post-festum’—and what is the com-
modity price now: in the meanwhile? The price of the produce of the marginal
land both determines as well as is the singular rate of profit. This at once extin-
guishes the gradations lapsing back into the first land, where too no rent was paid.
Land would have to be assumed as continuous in which gradations are possible,
but gradations are themselves rendered actual from the point at which the land as
value extinguishes itself, the point at which no rent is yielded; itself ultimately
indistinguishable from the first land. Such a definition of land—like the definition
of any object—is suicidal because it derives its shape from the point at which it
ends. Its definition is the simultaneous exhibition of its evanescence. The law of
diminishing returns here realises itself because in epistemological terms every
act of illumination is an act of limitation releasing the poison of (self) cancellation
revealing but a vanishing. What is taken as a homogenous addition of one factor—
say expansion (where total produce is the productive function/output) and/or
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greater use—is equally well the expression of ‘internal’ heterogeneity, the medium
by which the so called constant is itself hollowed out, leading to the diminishing
in the rate of the output. Thus, the distinction between variable (use/expansion)
and constant (land/object) is no longer valid since in the emerging output one
factor cannot, in principle, be distinguished from the other. That is, we cannot
separate use, the latter having as its defining feature something which can only be
extracted from the former. In the case of Ricardo the differential grades of soil
can only be yielded by the expansion/further use—the limitation/limitability
whereby it is defined and whereby it yields rent—and so the fiction of the original
land (no rent) as well as the marginal land (no rent) turn out to be just that: mere
fictions. Equally, labour and capital cannot be treated together in the same analytic
breadth because either 1) the definition of one would have to include the other or
2) they are merely distinct and cannot be therefore compared (incommensurable).
Neither of this is possible. But what we earlier alluded to as mere fiction serves to
actually obscure what is in fact an eminently political question: Why did only
some people have to move to poorer soil? Why not get ‘equal’ compensation for
such movement? This distinction in the people is rendered as a ‘natural movement’
requiring no redressal, whereas the movement in fact signals a break in the
community of the ‘people’. That fact of hierarchy and power requires resolution,
which is what was captured by the theoretical function of despotism.
As in land, the natural reappears as a natural existent in the form of a ‘tax’, de-
fined as that which is left at the disposal of the government and country and either
falls on capital or revenue.45 A land-tax ideally would be proportioned to rent and
variations in rent rather than being charged on all cultivated land. In the former
case it would essentially be a tax on rent, and in Ricardo’s analysis this would
have no real effect on capital and value because rent is simply a surplus discrete
from the production of value (profits and wages). Taxes in such a perspective
have the function of discouraging the activity on which it is targeted and there-
fore rent is its ideal fund because rent is that which would otherwise lead to
unproductive consumption. Such taxes on rent have to be carefully distinguished
from taxes on produce—a conflation which Ricardo accuses Smith of—because
a tax on produce would increase the price whereas a tax on rent would not: reiterat-
ing the axiomatic distinction between market and governance. The overall treat-
ment of taxes and rent indicates a certain picture of governance in terms of a
balance sheet. Analysis takes place as if it were possible, or enough to place on
one side the expenditures and consumption of government and on the other side
the productions of the peoples and then calculate discrepancies and propose policy.
It is in this context that taxes are considered, for if additional taxes were added
45 ‘Taxes are a portion of the produce of the land and labor of a country placed at the disposal of
the government; and are always ultimately paid either from the capital or from the revenue of the
country’. David Ricardo, Principles of Political Economy and Taxation, p. 105.
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without a concomitant increase in production or a decrease in consumption of the
people, then it would fall on capital, as opposed to revenue. A diminishing of cap-
ital is a diminishing of ‘productive consumption’, of production and ultimately
leads to the ruin of the people, in the Ricardian perspective.
We see how different this line of reasoning is from that of Ricardo’s eighteenth
century predecessors. The purpose of the above detailed examination of Ricardian
categories was to distil in its logic the building of the primitive differentiation
between the market (price/nature) and the political (tax/revenue). There is here
no serious consideration of the powers of government;46 the difficulty is merely
one of pinpointing its role and effect in a prefabricated balance sheet. Students of
Indian history have noted the influence of the Ricardian theory of rent on policy
formation via of James Mill. It was on this basis that Mill criticised the Permanent
Settlement and supported the Raiyatwari Settlement. In the Ricardian idiom, the
‘tax’ of the Company did not fall exclusively on ‘rental pro-perty’ in the Permanent
Settlement; and while on the one hand this would therefore encourage ‘unpro-
ductive consumption’ by zamindars (which is what ‘rents’ do) it at the same time
squanders the chances of increasing revenue by having already fixed it.47 The
Raiyatwari Settlement in so far as it was a direct engagement with the cultivator,
allowed the government to increase revenue with increased cultivation; and in so
far as rent was per se a surplus, it would and could not affect production, price or
value. Mill characterises the cultivator literally as the ‘tenant’, as do the policy
documents.48 Therefore it cannot be but an irony that one of the great denigrators
of Indic civilisation had here realised in all its ripened luminosity the shadowy
figure of ‘Oriental Despotism’ wherein the sovereign owned all the lands. This
was no ‘feudal fiction’, for rent was precisely that which is paid for in exchange
for the use of the ‘original and indestructible powers’ of the soil and therefore
charging rent in the way Mill defended the Raiyatwari Settlement was following
the definition of Oriental despotism beyond the letter.
46 Smith in the Wealth of Nations on the other hand had defined political economy as the science
of the legislator.47 Interestingly, Ricardo precisely when discussing the land taxes, displays a full awareness of the
difficulty in having a criterion for making the distinction between profits and rents, but nonetheless
treats it as ‘real’. ‘Rent is the sum paid to the landlord for the use of the land, and for the use of the
land only. The further sum that is paid to him under the name of rent is for the use of buildings etc.,
and is really the profits of the landlords stock. In taxing rent, as no distinction would be made between
that part paid for the use of the land, and that part paid for the use of the landlord’s stock, a portion of
the tax would therefore discourage cultivation unless the price of raw produce rose...whether dis-
tinguished or not there is a real difference between the nature of the compensations which the landlord
receives for these different objects, and it is certain that a tax on the real rent of the land falls wholly
on the landlord, but that a tax on the use of this stock expended on the farm, falls, in a progressive
country, on the consumer or raw produce’. David Ricardo, Principles of Political Economy and
Taxation, p. 122.48 While this is simply noted in the classic works of Stokes and Barber, British Economic Thought,
its significance has been left fallow.
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The question at stake is not the accuracy of theoretical terms in approximating
to a historical situation at hand. Rather, at the broadest and most ambitious sense,
it is the scrutiny of contemporaneous categories and understanding their internal
contradictions—the ideal shoulders for ideological load—by an exposure which
is necessarily both theoretical and historical. With the contemporaneous com-
plexities of the East India Company at hand, how could such a theoretical lexicon
emerge in all its durability and even condition our present use of terms? While
fascinating and intricate in its ‘inner’ architecture and consistency, it bears little
relation to economic and institutional change at hand; in fact its historical func-
tion was to obscure. Such obfuscation is not of the colonial space—as though the
latter is up for analytic sequestration—but rather, ‘imperial’. Ricardian science as
a science of economic value took as naturally self-evident the existence of the
state and the ‘facts,’ rather than ‘rights,’ of revenue, rent, profit and wages. Their
characteristic as fact or category—here a theoretical empirical binary breaks
down—take their distinction for real. What is being proposed is not simply the
philosophical problem that facts themselves are oriented by an understanding and
play a strategic and not-natural role within given situations. The point is that such
a ‘theoretical’ proposition is itself meaningful and compelling precisely when it
resonates in a manner that can only be historical.
The East India Company was given the right to collect revenue—in essence
precisely one of the definition/functions of the zamindar—at various points of
time before Buxar, but now this took place on a vaster and grander scale. This
right to collect revenue was soon enough conflated into the right to the revenue
itself. It was in terms of the latter that a Permanent Settlement was fixed. However,
as discussed already, other infringements into ‘rights’ over market duties were
undertaken essentially by force since no legal framework existed which could
even begin to locate the status and function of the Company. The Raiyatwari
Settlement in a not too dissimilar manner engaged directly with the cultivator and
extracted what could either be construed as revenue or rent. Now in the Ricardian
science the benefit of the tax is measured in terms of whether it interferences in
capital accumulation. As we can see, here is a conceptual origin of the distinction
between state and market where the required metrics of such a problem lay in the
fact that it is rendered cardinal that there is a single rate of profit. The rate of pro-
fit at the margin—the poorest soil which does not therefore yield surplus/rent—is
the single rate of profit across the spectrum of lands. The assumption of such a
single rate of profit allows differential rents that therefore in no way can now
interfere with capital formation, since they arise only after the market has equili-
brated itself as assumption of a single price/rate of profit. Since they themselves
are not factored into market calculations they cannot have an influence on the
same and are therefore essentially unproductive. It is this that allows Mill to argue
that in effect the whole of the rental property can be absorbed as revenue.
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Eric Stokes’s fine work in political economy and rent is vitiated by the fact
that he doesn’t sufficiently distinguish the Ricardian doctrine of rent from the
Malthusian one.49 While Ricardo indeed recorded his debt to Malthus—and West
who was himself an East India Company official—they had fundamentally different
conceptions of the value of rent and its function in political economy. This took
the well known ‘political’ shape in their attitude to landlords, with Ricardo seeing
them as simply parasites and Malthus allowing them an important function in the
formulation of demand.50 Stokes also continuously adopts the implicit idiom of
the archive he studies, speaking of the Company as state in a completely unself-
conscious way just as he speaks of the anarchy of India as though the Company
was a mere witness to, and not agent in, such anarchy.51 He is therefore less sensitive
to the ironies, paradoxes, complexities and the essential status of the India in the
complex workings of Empire. The ‘revenue’ that the Company, coercively assum-
ing the status of government as it did through conquest, demanded was itself
being ‘invested’ in trade. The Ricardian theory of rent, which at the level of his
analysis was a mere description of a deduction after (normal) profits and (normal)
wages had been accounted for, in the hands of Company administrators, becomes
a discretionary power over the cultivator, which would have been legible to
eighteenth century commentators. If the landlord’s rent could indeed be absorbed
fully in real terms this meant only one thing: the disappearance of the landlord, or
his steady transformation into the ‘immediate cultivator’.52
The landlord was of course critiqued because of his ‘parasitic’ nature; that is to
say, he did not produce. When revenue itself is being ‘invested’ as was the case
with the Company, it becomes impossible to distinguish rent from profit and
thereby the whole analytic framework is rendered fragile. Ironically ‘parasitic’
49 Stokes doesn’t explicate the difference between Malthus and Ricardo on rent in English
Utilitarians and India.50 ‘That an efficient taste for luxuries, that is, such a taste as will properly stimulate industry,
instead of being ready to appear at the moment it is required, us a plant of slow growth, the history of
human society sufficiently shows’, p. 314. ‘In a country, where the necessary food is equal or nearly
equal to the produce, it is perhaps impossible that the time not devoted to the production of food
should create a proportionate quantity of wealth, without a very decided taste for conveniences and
luxuries among the lower classes of society, and such a power o purchasing as would occasion an
effective demand for them..in general it may be said that demand is quite as necessary to the increase
of capital as the increase of capital is to demand’, p. 348. See Ricardo, Principles of Political Economy
and Taxation, pp. 331–50. I have used the edition used in volume II [Notes on Malthus] of Sraffa,
Works And Correspondence of David Ricardo, to simultaneously read his notes.51 See above, note 25.52 Detailed studies such as those of Asiya Siddiqui, Agrarian Change in a Northern Indian State,
have documented this. She argues that ‘there is thus overwhelming evidence of the way in which
indebtedness, stemming directly from the weight of revenue and the methods used for exacting it,
downgraded a great many of the landholders of our area’, p. 132.
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consumption can have a limit, but investment (trade and that too trade for dividend)
is theoretically unlimited, which allows for the insatiable demand of the Company
for rent/profit/revenue. The lack of a principle or ‘ratio’ within profit led Ricardo
to locate it in land whose finitude allowed a ‘principled’ determination of profit
and wages. Now the in-distinction of profit and rent drastically transform their
function. In the context of the Company these dimensions are immediately brought
to bear on this circumstance: the numerous wars being fought, the monopolisa-
tion of trades, financing transnational commerce, the deep debts in England and
India, the revenues to the British State through customs and the dividend that was
required to be paid to the stock holders of the Company in London, and other less
visible transactions. Thus, ‘revenue’ which was to substitute for rent—the fund of
discretionary unproductive expenditure—was itself being valorised in ways im-
possible to account for, but all the same impinged in ‘profit’ and ‘wages’ in funda-
mental ways. Agrarian relations and land structure was drastically affected in
India with the protracted war against ‘superior’ right holders.
It is not always noted in the literature that the famous ‘annexations’ of Dalhousie
had their origins in land and property legislation that can at least be traced back to
the Permanent Settlement where those with hereditary rights were confined to a
narrow compass.53 In this we see a strict continuation between the zamindar and
the raja as they had been construed as well as treated by the Company. The various
nodal points in the continuous gradation of rights served to create centres of demand
which was itself tied to urbanisation. Political economists up to Ricardo, of whom
the best known are perhaps Cantillion and Smith,54 had underlined the role of
consumption and cities in the development and progress of nations. Such demand,
even for what was construed as mere luxuries, in fact played an important role in
the encouragement of industry and employment, and cannot be easily measured
in quantitative terms. These centres of consumption were what encouraged manu-
facturing as well as trade—regional as well as long-distance—and thereby the
prosperity of a country. These very centres were destroyed in the course of the
‘pacification’ campaigns against numerous zamindars/taluqdars. The historical
role of cities and demand took on a sharp expression in Malthus’s underlining of
the role of demand in the workings of political economy and its modus operandi,
such a set of arguments resisted what would become the analytic separation of
state and market. Here it may also be noted that for Malthus rent was not only a
53 This could sit well with ‘utilitarianism’. See for instance Bentham’s writings on escheat in
Economic Writings.54 See Richard Cantillon, Essay on the Nature of Commerce. Steuart’s Inquiry printed for A. Millar,
and T. Cadell, 1767 and Smith’s Wealth of Nations as well as his Lectures on Jurisprudence. Werner
Sombart, Luxury and Capitalism, is also crucial in his theorisation of the court as a center of con-
sumption as well as the capital involved in long distance trade.
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function of the expansion into poorer soils, but also the location of market as a
seat of demand.55 It is the latter that gets increasingly emphasised in his work.
This is one of the reasons why for Malthus rent is not a mere ‘monopoly price’
and consumption of luxuries was not unproductive.
W.H. Sleeman’s Critique of Classical Political
Economy from the Ground of British Imperialism
Now might be the opportune time to introduce the writings of W.H. Sleeman, and
his explicit frontal critique of what he calls the Ricardo school.56 According to
Sleeman, the faults with the Ricardians not only lay in impracticability and con-
tradiction by facts and history, but this was simultaneously an expression of errors
in reasoning. Ricardo and his school followed the categories used by Smith (rent,
profit and wages as the sources and funds that composed value/price) but for
Ricardo only profits and wages composed/determined price or exchange value.
While Smith was fully aware that rents entered into prices differently, for Ricardo
rents did not enter into price at all. In fact, changes in wages also did not affect
price, which was only determined by the rate of profit from the marginal land.
Since there could only be a single rate of profit across branches of industry it was
this that determined and was identical with exchange value. Diminishing returns
from lands thus diminished profits.
Sleeman begins by questioning this three-class division of the populace
as well as the argument that such profits and wages actually employed determined
55 Malthus, Principles of Political Economy: ‘in early periods of society, more remarkable, when
the knowledge and capital of an old society are employed upon fresh and fertile land, the surplus
produce of the soil shows itself chiefly in extraordinary high profits, and extraordinarily high wages,
and appears but little in the shape of rent. While fertile land is in abundance, and ma e had by
whoever asks for it, nobody of course will pay rent to a landlord. But it is not consistent with the laws
of nature ad the limits and quality of the earth, that this state of things should continue. Diversities of
soil and situation must naturally exist in all countries. All land cannot be the most fertile: all situations
cannot be the nearest to navigable rivers and markets but the accumulation of capital beyond the
means of employing it only land of the greatest natural fertility and the most advantageously situated
must necessarily lower profits while the tendency of population to increase beyond the means of
subsistence, after a certain time, lower the wages of labor’, p. 120. See, more generally, pp. 120–33.56 Sleeman needs no introduction to the student of Indian history. The writings being examined,
that as far as I know haven’t received attention, are Analysis and Review of the Peculiar Doctrines of
Ricardo or the New School of political economy (1837) and On taxes, or public revenue, the ultimate
incidence of their payment, their disbursement, and the seats of their ultimate consumption (1829,
incomplete manuscript). This section is based on these texts. Here contrary to Singha’s otherwise
rich and compelling argument in, A Despotism of Law, one can see an analysis of the cause (and even
necessity) of phenomena akin to ‘Thugee’ which had politico-economic rather than cultic origins.
Interestingly many of the arguments that Singha makes in this context with regard to the economic
effects in terms of unemployment as a result of ‘paramountcy’, can be seen in Sleeman.
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price. The large number of people who are not involved in such activities—
essentially those that provide services, whether the doctor or the military man—
are left unaccounted for in Ricardo’s system, where direct value is not being gen-
erated. Furthermore, Sleeman more than once argues for the importance of those
who have lent to the state (and the politico-economic function of public debt)
who make money on interest and therefore do not take a direct ‘part’ in wages or
profits. He emphasises the fact that taxes also play a role and are exerted at every
stage in a commodity’s generation—from its production to its sale—and this too
is ignored by Ricardo. By attempting to explain commodity price simply by profits
and wages, Ricardo is thereby simply ignoring the very complex historical situation
at hand.
Importantly and almost without irony, Sleeman argues that Ricardo may well
be right for a primitive barbaric condition, a time before the rise of civilisation.
For what Ricardo speaks about does not take into account the progress of the arts,
the cultivation of taste and the increase in the number of services that do not have
anything directly to do with labour, stock or land. Yet, these very people have a
claim on these ‘entities’ and the workings of such a society can only be understood
by, on the one hand, understanding the nature of demand and on the other hand,
the peculiar position and role of the government in creating such demand. We had
seen earlier the importance of the marginal land thesis in the way Ricardo con-
figured value. Moreover, according to Sleeman by contrast, it is demand that con-
ditions the expansion into poorer lands in the first place and he therefore accuses
Ricardo of taking for a cause what is in fact an effect. Demand increases price and
therefore the expansion. Furthermore, the role of the market (including the foreign
market) is emphasised, where it is argued that it might very well be the case that
rather than expand into poorer land, food grain could well be imported. Even a
land with poor soil would greatly benefit if it were near a seat of demand and hav-
ing rich soil would not help if great expenditure had to be undertaken on taking
the commodity a long distance (transportation costs) towards a market.
It is in the crucial role of demand that the importance of both the landlords as
well as the government is underlined. The rents that are acquired by the landlords
are themselves spent on commodities and thereby will have an effect on the for-
mulation of prices. Similarly, taxes would have a role in increasing the price of a
certain commodity. But at the same time, the government can play an inverse role
by either creating public works which would make it easier for the production of
crops or its transport to the market. This role of the government in expending
towards the market has an undoubted role in the formation of prices, just as regu-
lations on trade whether internal or foreign would have a similar influence. From
such a perspective, taxation and rents cannot be simply seen as discrete from
capital formation. In this context, Sleeman’s historical excursions in his economic
writings are of importance because he argues that the civilisation of a country can
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be measured by the proportion of its people engaged in non-agricultural activities.
The involvement of government in making food grains more available allows a
proportion of the population to involve itself in industries and the production of
commodities which could then be exchanged with the food grains being produced.
In this understanding the Ricardian theory of wages being basically subsistence57
and its implication that any increase in the cost of production—inevitable because
of decreasing fertility and increasing expansion due to population—would result
in a decrease in the rate of profits thereby is also questioned. For in Sleeman’s
argument, in an advanced country a proportion of (even) wages is expended on
non subsistence goods (commodities) and therefore changes in wages will cause
a change in price through affecting profits.
The hinge on which Sleeman’s argument rests is the refusal to abstract price
(or what he sometimes calls exchange value) and thereby the institution of the
market from appropriation, or what we might call the institutionalisation of
the political. It is obviously not the case that appropriation per se causes a change
in value. That is to say, to use his examples, the un-appropriated and the appro-
priated sea, the un-appropriated and the appropriated land will not per se be dif-
ferent in value. However, only through appropriation is price or exchange value
created. Sleeman does not spend more time on the logic or the nature of this dis-
tinction. But going by the general tenor and other arguments used in the essays
one might venture to suggest that only the (political) institutionalisation of the
market can create price or a site wherein a regularity of exchange takes place,
from which one can inductively infer price. Mere discrete acts of exchange, which
would assume an un-appropriated site, would be no more than barter and therefore
cannot give rise to the category of price. Appropriation is thus a dimension of the
exchange relation which enables the categories of profits and wages. However
unlike Malthus, Sleeman does not privilege land in any sense and sees the appro-
priative dimension in all ‘economic’ transactions. It is this that renders it productive.
He also calls this a ‘monopolistic’ dimension and therefore revenue farming or
monopolistic privilege would need to be treated as strictly analogous to rent and
the appropriation/appropriated nature of land.
Germane to Sleeman’s method and critique of Ricardo and contemporaneous
political economy is the historical dimension which has an intense bearing on
present policy making. Speaking about a global past and moving from Peru and
Mexico to Greece and Ancient India, one can all the same derive a thread that is
57 In Ricardo, Principles of Political Economy and Taxation, pp. 65–66, subsistence is defined as
‘natural price’. ‘The natural price of labor is that price which is essential to enable the laborers, on
with another, to subsist and to perpetuate their race, without increase or diminution’. ‘However
much the market price of labor may deviate from its natural price, it has, like commodities a tendency
to conform to it’, pp. 65–66.
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familiar to us from the histories of the Scottish Enlightenment.58 Property which
was earlier insecure (or un-institutionalised)—‘insecurity’ was closely linked with
liberty because it meant one was not in any way subject to a ‘public’—slowly
with time became monopolised by sovereign power. However, such monopolisation
may very well have benefited the common man because while the smaller feudal
chiefs kept a close eye on their serfs and treated them more or less as slaves, pre-
cisely because the sovereign state could not indulge in such scrutiny, it was happy
to merely stake claim to a produce and have the cultivator retain a similar, even if
inferior, claim. Rather than departing from the standard narratives that located an
antinomy between commerce and the feudal, or saw the former ‘normally’ emerg-
ing out of the cocoon of the latter, Sleeman’s historical examples allow for the
growth of commerce and urbanisation which does not have to depend on its own
hinterland.59 A great trading centre can very well procure its agricultural needs
from distant lands rather than from lands which might be geographically closer
but with whom no real relations exist. Here again there is a reconfiguration of the
relations between agricultural produce and commerce and a disruption of the linear
narrative that assumes a single geo-political site. Territory is the function of a set
of politico-economic forces and does not repose in self-evidence land, in the way
it operated in Ricardo.
Such an argument is not merely historical and is yet another assault on Ricardo’s
theory of differential rent and its dismal predictions. If commerce can directly
procure agricultural produce then taxes/customs immediately come to play once
again, questioning the ‘discrete’ nature of rent in Ricardian price formation. A Few
workers working for manufacturing goods might acquire in exchange from distant
lands agricultural produce which had required the labour of hundreds. Here sur-
plus takes the form of the excess numbers in the first country being free to produce
further refinements or have the government spend on public works and establish-
ments, increasing production and demand. Once again, taxes come to play an im-
portant role, and citing examples closer to home Sleeman reminds his readers
that import duties were what encouraged cultivation, rather than there being a
‘natural’ movement to poorer and poorer soils. Demand increase causes a price
increase, drawing capital and encouraging cultivation through the governmental
medium of taxes. In this context if rents are not reduced capital will be diverted
back to other branches of industry. Having a proportion of the populace not in-
volved in agriculture; and having an independent set of claims on the land beyond
58 This is not only the case for the Scottish enlightenment but also in Turgot and Rousseau. The
best treatment remains that of Meek, Social Science and the Ignoble Savage, though in the case of
the later Meek fails to note the paradoxical formulation of temporality (theoretical perfectibility and
historical degradation).59 This could well have been the case for Bombay. See for instance, Amar Farooqi Opium City:
The Making of Early Victorian Bombay.
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subsistence is also what provides the crucial funds for a ‘successful’ taxation.
Such extraction can afford to, and naturally does take place through, the increased
prices of these enjoyments. Although this is one way in which the government
extracts funds, it is analogous to rents extracted which also require an ‘appro-
priative’ structure in the institutionalisation of the market. The other crucial char-
acteristic of an ‘advanced country’ is its ‘national debt’ which provides a source
for ‘investment’ without directly affecting prices and thereby preventing an outflow
of ‘tribute’. The complexity of modern countries with the judicial, administrative
and financial sectors are indicative of the number of people not directly involved
with agriculture and their relationship to agricultural activity cannot be reduced
to the schema provided by Ricardian marginal land.
Such reasoning had a crucial bearing on policy in India because demand was
not encouraged, in a merchant-state which had ex-filtrated any such responsibil-
ity. Rising demand and prices only lead to greater extractions in the form of (land)
revenue rather than being remitted or ‘returned’ through public works. The conquest
of native territories—other than resulting in ‘immediate’ death and destruction—
also destroyed native establishments and urban centres where a large proportion
of the population was non-agricultural and therefore consumers of such produce.
These people were given no employment by the Company and revenue rates fixed
in terms of the ‘past’ wherein it was assumed that demand was high; precisely
because there was an ‘erstwhile existence’ of a non-agricultural population: This
was a classic argument, at times repeated uncritically in the historical literature,
where the Company’s multiple roles in changing the ‘nature’ of sub-continental
polities is retracted, after which comparison to previous or contemporaneous
regimes, which are themselves changing in this context, are made. Destruction of
local establishments and therefore decrease in demand is all the more pernicious
in the context of increased (land) revenue demands. This leads to a reduction
in price and over-all depression across the sectors of agriculture and revenue.
Defaulters are jailed and further land is thrown out of cultivation, after which
the government has no choice but to reduce revenue. Rather than reduce revenue,
Sleeman repeats once again the great advantages to public expenditure to create
demand and increase produce. This refers even to employment where he expresses
his shock at what he perceives to be the orthodoxy of political economy, accord-
ing to which revenue is not linked to employment. Such an analysis was not only
pernicious in economic terms; it had similar political consequences if such a dis-
tinction was even viable. Public works, apart from creating demand, increasing
production and playing the role for an outlay for capital also bridged the gap be-
tween the rulers and the natives. Palpable constructions allowed the people to
identify the government as their benefactors in concrete ways, enabling a sympathy
which would otherwise be doubly alienating in politico-economic terms. Such a
presence of government according to Sleeman was keenly needed especially in a
situation where the aftermath of conquest had deprived many of employment; the
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more violent aspects of coercion necessarily entailed here do not need to be
explicitly invoked. If conquest led to ‘governance’ or the establishment of an
infrastructure, this might have played a small role in the amelioration of such
alienation.
In a country such as England which had as its appendage ‘India’ and whose
condition was guaranteed by such a function, it could be nothing less than absurd
to argue that taxes on public parks, profits on national debt and wages for
government service did not enter into ‘price’ as they were allegedly unproductive.
On the other hand, in India it was the ‘wages’ of government servants that
conditioned revenue requirements and rents. The very category of profit as a
universal was suspect since profits from the market were significantly different
from profits from debt and the wages of a soldier were similarly different from
those of a labourer. Different locations within a system also gave a specific function
to certain operational categories: for instance in the price of tea in Britain one
pays (or saves) from the rents of the land from which it was derived. The historical
literature on the Company supported plantations—which were virtual fiefdoms
with forced labour and planters given sovereign-juridical authority60—is immense
and supports the specific density given to otherwise universally (mis)applied
categories such as profits, labour, rents and taxes (duties applied on imports and
exports). Rather than use these terms, Sleeman emphasises what he calls the
instruments of production (which include human beings) and floating capital. For
such employment a demand has to be created which ‘drains’ capital and includes:
1) immediate enjoyment at home 2) the exchange for equivalents from abroad
3) investment at home and 4) a tribute (where no equivalents are given/returned).
Demand is not dependent on the ‘immediate’—the actually employed—but rather,
is based on claims already made (the past) or those anticipated (the future). The
lack of such drains would cause a general glut; we see what Sleeman has imbibed
from Malthus.61
In India 1) was retrenched for the sake of 4). The analogue to this practice was
the absentee landlord; which ironically for Sleeman was also the fulfillment of its
functioning as merchant. The merchant worked with the account book comparing
gains and losses through a balance sheet and the Company simply aimed to reduce
expenditure (‘enjoyment’/consumption at ‘home’) and increase revenue (tribute):
a distinctly Ricardian echo is herein audible. Decreasing expenditure in India
decreased demand for produce leading to an inability to pay revenue. While the
orthodoxy would blame this pattern on the want of capital, in fact the further
retrenchment in expenditure for local establishments only exacerbates the
involutionary spiral. On the other hand, capital is lent on interest—merely that
60 This has been examined recently by Elizabeth Kolsky’s Colonial Justice in British India.61 The difference between Ricardo and Malthus on the ‘general glut’ is well known, with the for-
mer refusing to concede its possibility.
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which was taken as revenue—furthering production and depressing prices
increasing the burden of both the interest of arrears as well as the revenue demand.
Once again instruments or technology are completely irrelevant if there is no
effective demand. Using a hypothetical example, Sleeman argues that if ten men
supplied the cotton of the world, soon they would get in exchange the value of the
wages only of the ten men because of the competition over the instruments of
production. In this context taxes are required for counteracting the depreciating
affects of internal competition in the context of international trade. These taxes
are forms of ‘savings’ that can (then) be the nodal point for redistribution.
Increasing the proportion of inanimate instruments in production in the ‘organic
composition of capital’ allowed such a function. Increasing efficiency does not
lead to a decrease in the cost of production at the same rate, and to the same
extent, and it is this gap that a tax can occupy, almost militarily.
The emphasis on demand is once again aimed at the ‘orthodoxy’ which
encourages saving and accumulation for profit. This would assume that an outlet
for investment can always be found at the same rate of profit, in another branch of
industry, which will remain undiminished. But even the latter will have to assume
consumption at some point, which only further underlines its importance. The
confusion between means and ends only succeeds in fetishising the means, wherein
the miser is the ideal-type and his ‘savings’ become an end in itself. The
requirement for the consumption of luxuries is all the more important in an
‘advanced state’ wherein most are not involved in providing (self) subsistence.
The belief in the impossibility of a general glut and stagnation is a refusal to
recognise this, merely repeating the unfounded assumption that everyone consumes
in proportion to what he has or has produced and flies in the face of contemporary
experience where the farmer-labourer gets nothing in return for ‘rents’ he pays,
but rather begins with debt, which might have well been inherited: the well known
phenomena of debt bondage. What is taken is not taken as an equivalent for
something that is given (at present) but rather is taken in the fulfilment of a claim
already secured on the original sources of land, stock or labour. It is these sources
that can account for the transactions which is not the same as saying that the class
correlates of these categories can act as substitute. Half mockingly Sleeman writes
that while the Physiocrats had argued that all value lay in the land and so land
lords needed to be taxed, and Ricardo had argued that all value came from profits
and so taxation would fall on them, political economy was waiting for the genius
who would claim that all value lay in the labouring class! It is rather, the appro-
priative framework i.e. underlining governance—the claim already secured serves
as a kind of epistemological limit—which returns in his recommendations on
taxation as a redistributive mechanism and the creation of effective demand that
has concrete implications on the nature of politico-economic functioning.
This discussion of Sleeman is certainly not to suggest his ‘theory’ was more
apt or accurate than that of Ricardo. Rather his writings bear testimony to the
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interplay between conceptual operations and historical experience which is no
longer the case with ‘mature’ political economy, and the historical tendency—
and retrospective historicity—of studies of the economy no longer have such
powers of depiction. They do not build up to an analytic sequestering of the state
from the market but rather recognise hierarchical gradations within an imperial
system, which nonetheless have levers that could be used to prevent the kind of
impoverishment that is documented to have taken place in the subcontinent. That
these specific writings of Sleeman’s writings have been forgotten and that he is
remembered for other more exciting things is not accidental; this but betrays the
severing of the politico-military from the economic-structural in historical recol-
lection. Yet the themes and method which he adopts can be traced to early com-
mentators on imperialism, whether Steuart or Francis, even while they will be
picked by the nationalists such as Dadabhai Naoroji. The fact that the latter however
chose to critique what are called the economic policies of the British State while
always qualifying it with heartfelt gratitude for the (alleged) political liberties
bestowed, reveal the transformations in the idiom of justice; unless this were to
be read as (enforced) prudence in the face of savage sedition laws which were
germane to the imperial order. British conquest cannot here be named because a
language no longer exists which allows for an intercourse between what is rent as
the economic and the political, which is the ‘fact’ of imperialism and the muted
silence of economic method.
Conclusion
In emphasising the role of the state and policy Sleeman attempts to recover what
began to be submerged in the treatment of rent as trace of political appropriation.
The telos of the economy lay no more in the nature of land—and in nature generally
which has absorbed reason in the process of expelling the problematic of human
agency—and is configured as ‘management’. For the latter is indeed closely allied
with ‘despotism’; it was the depot who after all ruled/managed the household
(oikos). A trace of the latter meaning and function was not only evident in the
histories of Smith, Hume and Blackstone and the writing of Quesnay, but also in
arguably the most important text of political economy prior to the Wealth of Nations,
that is, James Steuart’s An Inquiry into the Principles of Political Oeconomy.62
Precisely at a time of the actual increase in the activity of the state, through the
62 James Steuart in his An Inquiry into the Principles of Political Oeconomy: Being an Essay on
the Science of Domestic Policy in Free Nations. London, makes an explicit homology between the
household and the kingdom, but at the same time argues that his plan for the economy would be the
most effective bridle for despotism. Hirshman’s argument about this shift from the ‘Montesquieu-
Steuart’ doctrine doesn’t take into account Steuart’s strong, if paradoxical argument about the possi-
bilities for despotism being much greater in modern times. See Hirshman, The Passions and the
Interests.
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medium of the Company in India, signalled its disappearance as an operational
category in the writings of Ricardo and those political economists who acquired
the position of orthodoxy. It is not merely ironical that such a disappearance is
made use of by James Mill to in fact actualise the image of that rare kind of
despotism in which it achieved a degree of perfection: the Oriental.
Emphasising the role of the political power is certainly not to suggest that it
has a clearly defined locus in fact, but rather to suggest that the intelligibility of
the transaction we call economic is dependent on our not taking it to be natural,
self-evident or discrete, free of a politico-legal-institutional formulation. Categories
like rent, profits and revenue meant different things and functioned differently at
the same time across the imperial spectrum: revenue was investment (trade), just
as debt could be getting wages (interest). If this is not kept in mind and care not
taken so as to specify the distinctive features within specific sites—which are
blunted by such categorisation—it would no longer be possible to avoid the im-
mensely abstract and singularly meaningless questions of comparison, whether it
be between Europe and India in the eighteenth century or that between the pre-
colonial and the colonial regimes. The eighteenth century is evidence of entangle-
ments; comparison only serves to strengthen the illusion of discrete distinctions
from each other. Such questions occlude the specificity of the Company regime
taking for granted the self-evidence of categories like ‘Europe’ and ‘India’ or
the ‘colonial’ or the ‘pre-colonial’, even though ironically, the mere presence of
the former casts suspicion on the attempt to identify the latter, or perhaps vice-
versa. The morphing of rent, revenue and profit into one another and their mani-
pulation in the course of governance indicate the definitive dynamic of the situation
that is meant to be captured, impervious as it is to ‘direct description’, warns us
all the more that in fact Ricardo’s invention goes well beyond a certain reorientation
of what we call the study of the economy. The infiltration of a primitive differentia
of the economy (via price and its attempted distinguishing from ideal taxes) allows
for the state to be conceived of in independence: one state which can then be mul-
tiplied into several in their alleged sovereign independence. Such an abstract mode
of study is what paradoxically institutes a certain fact-like quality to the primary
political prisms of ‘Britain’ and ‘India,’ which are not recognised as such.
The division of sectors such as rent/land, money/commerce, labour/wages and
profit/stock is cut through and supported by a ‘logic’ which requires discernment.
What Marx recognised as the signal contribution of the physiocrats—‘primitive
advances’63—if honed into a lens of sufficient theoretic consistency delineates
grammar rather than either morphology or taxonomy. It is not simply the landlord
laying out capital that enables reproduction and surplus but a reiterated ‘logic’
that sustains a whole series of relationships and distinctions which are otherwise
63 See Marx, Capital Vol. II, pp. 435–37. Needless to add this can be linked with the so called
primitive accumulation-presented in Smith and reconfigured in Marx.
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meaningless: merchant-farmer, money-lender-farmer-State, state/local merchants-
Company, merchant-manufacturer. But significance is yielded only if one is atten-
tive to the precise effects at various points in time and if one is aware of the ‘pol-
itical’ nature of this ‘transaction’; to view it not merely as a description of a set of
relations but as indices of the specific and existing un-equal state of affairs within
which a transaction is carried out. Otherwise we may forget that well into the late
nineteenth century the British sought to define revenue as a form of rent because
it could then be left out when calculating the tax burden thereby giving the im-
pression of an exceptionally light one.64
Through the naturalised state of scarcity an axiomatic is developed whereby
the economist succeeds in displacing rather than resolving the specific and concrete
(political) problematic (and existence) of inequality and conflict. This was in fact
what led commentators until and during the eighteenth century to frame the issue
in terms of justice realising its interrelation with property; 65 as an idea it acquired
its raison d’être only from the experiential fact and historical trace of injustice,
requiring the problematic of the political State. The issue of redressal and response
(and responsibility) indistinguishably overlaps with understanding; the gaze not
leaving the object untouched will all too soon become Medusian in the econ-
omist’s hands.66 And it is this in its specific formulation which was designated
under the rubric of ‘despotism’,67 a concern that, as we have tried to argue, vanishes
in the nineteenth century, where a schizophrenia is instituted: disappearance in
the Ricardian text as institutionalisation in the reality of the Company in the same
terms. By claiming to be a science and therefore not located anywhere—the func-
tion of history—it becomes a science of nowhere; in seeking to explain it is unable
to even reveal. The determinant in the last instance is natural fertility; it is nature
that mirrors—reflecting and inverting—what is presented as abstract logical oper-
ation, that is, the stark sovereignty of ‘method’.68 This is why the historical role
64 As Sabyasachi Bhattacharya, Financial Foundations of the British Raj, pp. 50–51, 277, notes,
even in the post 1857 period the British were—might one say opportunistically—unclear about the
distinction between revenue and rent, and in their calculations about tax burdens consistently refused
to include land revenue, which constituted at least 40 per cent of its income, along with opium
coming a second. This was what the nationalists contended when the British claimed that India’s tax
burden was unusually light. Not including revenue as a tax was achieved through treating it as part of
the category of rent, which was itself justified by the questionable claim that from time immemorial
the sovereign in India exercised such rights.65 Thanks to the recent literature one need not belabor the place of justice in the Wealth of Nations
as well as the whole oeuvre of Smith and others.66 Quite literally, i.e., vision is intelligible only by the simultaneously orientation of tactility.67 Interestingly despotism becomes a predicate (even) for democracy and republicanism in its
‘terrorist’ function in Robespierre. See his speech on political morality to the convention in 1794 in
http://chnm.gmu.edu/revolution/d/413/68 While this article has focused on rent I have argued, in the dissertation referred to earlier, that
Ricardo’s theory of foreign trade (comparative advantage) can be treated as a theoretical template for
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and arrangement of political power—one might say human experience—is ab-
andoned as unnecessary. Property is no different. Rather than its purported intro-
duction into India, here one sees an ardent fidelity to an old problem, property
was instituted in the shadow of an overwhelming threat to its existence; forcible
alienation as possibility and fact was the counterintuitive assurance of existence.
In the Company of merchant–conquerors, life and idea had here achieved a rare
harmony, for property was assured only in the assurance that the ‘state’ could
take it away. 69 This continuing and continually executed threat is not captured by
the self-fulfilling operations of the rising economic method, hollowing out as it
did, as a line of inquiry, even the massive famines that were taking place in the
cauldron of imperialism.70
In this sense the place of the Company in a history within the contemporary
lies in negating the very notion of the modern state by revealing a regime where
the political and the economic are not only inseparable, but barely distinguishable
and open to strategic manipulation; or perhaps the distinguishing here lies in an
abstraction without return. For (political) representation, that great gift of modern-
ity is already poisoned by the absence of any heuristic to determine the correlate
site cum community that can legitimately demand such representation, that is, the
occlusion of the operations of political economy qua imperialism. This is also
captured in the impossibility of cleaving off—in the legal, financial and economic
senses—‘Britain’ from ‘India’, diagnosing as still born that twin of the modern
state: the nation-state.
nationalism before the letter, which takes two states as isomorphic in relation to each other (immobility
of capital as national capital, full employment). Such isomorphism would not be found in a study of
the politics in the early nineteenth century. That such a theory emerged in London—the centre of a
vast empire—is the irony that needs unraveling. Even in Britain it is easily forgotten that the Catholic
Emancipation Bill was formulated in 1829, more than half a century after Buxar. The notion of an
independent nation-polity prior to and distinct from (imperial) expansion, and its correlate, i.e.,
representation marking political modernity, cannot be treated as anything more than misleading myth.69 The use of the appellation of state or government to the Company—taking the Company’s as-
piration and self-representation as fact—has done untold harm to the historical enterprise. The func-
tion as a Company cum State problematises, through interrogation, both functions, thereby revealing
‘India’s’ place within the ‘totality’ of an imperial political economy. The same problem applies to
terms such as ‘acquisition’, ‘annexation’, ‘ceded and conquered’ (what was ceded was itself often
the result of conquest), ‘land settlement’ (it is unclear what is being ‘settled’), ‘pacification’, which
are routinely internalised by historical work thereby serving as willing medium to the ventriloquy of
the dissimulating archive.70 The relatively recent works of Mike Davis, Late Victorian Holocausts and Madhushree Mukerjee,
Churchill’s Secret War, deserve special mention in this regard. The significance of the ‘founding’
famine, as it were, of 1769–70, for indexing an imperial-financial nexus has been documented in the
dissertation.
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