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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.



178 / RAHUL GOVIND


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.



British imperialism, political economy and search for a differentia specifica / 179


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.



180 / RAHUL GOVIND


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.





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



182 / RAHUL GOVIND


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.





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.



184 / RAHUL GOVIND


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’.





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



186 / RAHUL GOVIND


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.





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.



188 / RAHUL GOVIND


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.





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.



190 / RAHUL GOVIND


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.





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



192 / RAHUL GOVIND


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.





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



194 / RAHUL GOVIND


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’.





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



196 / RAHUL GOVIND


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.





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.



198 / RAHUL GOVIND


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.





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.



200 / RAHUL GOVIND


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.





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.



202 / RAHUL GOVIND


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





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.



204 / RAHUL GOVIND


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.





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



206 / RAHUL GOVIND


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.





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



208 / RAHUL GOVIND


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.





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.



210 / RAHUL GOVIND


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





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.



212 / RAHUL GOVIND


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