Empire Meets Globalisation: Explaining Historical Patterns of Inequity in South Asia

by David Ludden
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Empire Meets Globalisation: Explaining Historical Patterns of Inequity in South Asia
Author:
David Ludden
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2012
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Economic & Political Weekly
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xlviI
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30
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213
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221
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Empire Meets Globalisation

Explaining Historical Patterns of Inequity in South Asia

David Ludden

Recent decades of globalisation provide a new starting point for the study of south Asia by highlighting critical human issues that force history into the present and generate new productive conversations between history and social science. One fundamental issue is the increasing inequality in wealth and control over human resources, globally and in south Asia. Economic policy regimes in the contemporary world resemble those of laissez-faire imperalism of a century ago more than national state planning regimes that prevailed from the 1950s into the 1980s. It is argued that the long histories of imperial modernity have organised the world of capitalism in which nationalism has carried the inequity of empire into the heart and soul of south Asia.

David Ludden (david.ludden@nyu.edu) is at the department of history, New York University, New York, USA.

Modernity took shape in a world of empire that was more spatially complex than we imagine based on classical social theory. The imperial territories that structured inequality under emergent global capitalism were not only of the modern, western kind, as theorists since Karl Marx have led us to believe, assuming that world capitalism spread out from Europe, propelled unilaterally by western imperialism. Now it is apparent however that capitalism evolved from the beginning inside transcontinental networks of power and mobility spanning many kinds of imperial territories. In the 19th century, industrial capitalism became physically visible only in Europe and America however, so that intellectuals imagined the west as the motor for capitalist development. I nside Asian imperial territories, however, distinctively Asian imperial forms of power and authority also fed markets and structured circuits of capital accumulation that formed foundations for imperial modernity. Modern capitalist imperialism crowned Europeans with supreme status, and Asian nationalists fought European imperialists to make their nations independent. But Asian forms of imperial inequity also shaped world capitalism and transitions from empire to nation; they continue to shape patterns of global inequality today.

Inequality in the world of globalisation is thus increasing in Asia today at intersections of two imperial histories: one is global and emanates from the west, now most powerfully from the United States; the other operates inside Asia and refl ects the articulation of Asian and western imperial forms.1 It is certainly true that today’s increasing global inequality results from a very recent technology-assisted surge of globalisation inside a neo-liberal policy regime devised and enforced by western powers, but it is not true that the imperial dimensions of this process are formed only by western supremacy. Technologies and policies of neo-liberal globalisation have been developed by national elites in many countries, who form a new kind of multinational, imperial ruling class, whose global dominion is emerging from long intersecting histories of im perial territorialism, on all continents. In these histories we can better understand how social, political, and spatial i n equity produce increasing inequality at various levels of scale under globalisation.

Imperial Territory…

Three features of imperial territory are most critical for this kind of history: ranking, mobility and unevenness. First, and most visibly, in contrast to the formal equivalence of people and places in national territory, imperial space consists of

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e xplicit cultural ranks of authority and privilege. It is supported by coercive power in which horizontal and voluntary social transactions appear – notably market transactions. These always entail coercive potential in ranks above, and subordinate response and adaptation in ranks below, in vertically structured relationships among unequal actors whose everyday interactions dramatise inequality and dynamics of power.In imperial territory, spatial and social relations are pervasively vertical: each place, person, and group occupies a rank. National rankings based on global scales of economic d evelopment indicators now represent condensed symbols of a global imperial ranking system. In this context, geographical mobility, which appears horizontal on maps, also travels vertically up and down ranks of wealth, power, status, and authority. Upward social mobility typically involves physically moving from lower to higher status locations; this constant moving up the social scale is now driving global urbanisation at u nprecedented speed, and along with it, the concentration of affl uence and cross-border immigration, as poor people move in millions from poorer villages to richer cities, creating a planet of slums and borderlands of conflict over territorial rights (Davis 2006; Schendel 2005).

Second, imperial territory is inherently mobile. Imperial power and authority move constantly in networks of mobility to inscribe ranks in the realm, and resulting imperial boundaries are never fi rmly fixed: they form moving frontiers. In contrast to the static, fi xed boundaries of a national state, imperial territories typically overlap as entangled boundaries move and mobile authorities struggle for space and supremacy. Imperial territory is dynamic, expansive, working to incorporate new regions and locations, forming ever more complex layered domains, a many layered cake of ranked people and places. Elites rise above the rest as imperial authority incorporates more e xpansive domains with more layers of vertical ranks and subordinate power relations, which secure the accumulation of capital flowing up the ranks, in many forms. The mobility of imperial power outward from metropolitan centres, down the ranks of central places, into frontiers of imperial authority, thus secures the reciprocal flow of assets up the ranks, into elite hands, at every level.

Third – and once again in contrast to national states, which ideally spread their legal authority comprehensively from boundary to boundary – many gaps and grey areas characterise legal regimes in imperial territory, at all levels, not only because rebellion and resistance counteract and negate top-down imperial power and authority, but also because imperial incorporation produces layered domains of legal authority (Benton 2010), while some places simply do not warrant the effort to integrate fully into the imperial ranks. Imperial territory is unevenly controlled by people at higher ranks: it always contains dynamic struggles in its many layered cake, shifting power up and down the ranks, producing various outcomes in space and time; and it typically includes people and places so lowly and marginal as to be left out of the status ranks entirely. Strategic places and people working in networks of imperial mobility secure the flow of power and assets that feed and e xpress imperial authority. Imperial territory is therefore not defined spatially by geographical boundaries on maps as much as by active connections among powerful people in critical sites who work in networks of imperial mobility connecting ranked people and places ranging from the highest to the l owest status, from the richest imperial metropolitan core to the poorest rustic frontiers.

…Fluid and Flexible

Its ranks, mobility, and unevenness – thus spatially adaptive qualities3 – make imperial territory impossible to map accurately on the static horizontal plane of modern cartography. Firmly fixed boundaries of the national sort do not exist in i mperial space, where places and regions are not equivalent, but rather ranked as superior and inferior, central and peripheral. Some people and places represent imperial order more than others. People live on various cultural planes, higher and lower, the higher being more advanced, more civilised, authorised to lead, in charge of the future for people lower down the ranks. These people in the lower ranks must follow, adapt, learn the rules, and adjust, but often resist, fight back, and contest power held at higher ranks, by exerting force to alter vertical transactions, to produce more wealth, power, and a uthority in lower ranks, while some people and places elude or escape inclusion entirely. Unlike the nation, empire is a d ynamic, shifting, and ever-changing territorial form, deeply invested in its own capacities for mobility.

The articulation of mobile market space with mobile imperial territorialism is a central dynamic force in globalisation. In that context, it is important to note that temporal boundaries of empire are as elusive as spatial boundaries. Imperial expansion, integration, and ranking operate in changing patterns over time. Imperial forms of power and authority assume various guises, sometimes appearing as massively coercive and domineering, and sometimes being composed primarily of rituals and symbols. All elements of imperial order can be combined, separated, dispersed and recombined variously over time, creating kaleidoscopic possibilities, impossible to chart with chronological or geographical precision.

Historians nevertheless typically treat empire as a unitary political form whose shifting geographies and fl uid temporalities can be crammed into flat maps and rigid timelines, which describe the “rise and fall” of each empire as a separate institutional entity (Burbank and Cooper 2010). This kind of enclosed regime history provides an orderly chronology of imperial succession and creates a logical endpoint for imperial history in the mid-20th century, but obscures the processes through which imperial forms of power and authority have structured human space over millennia. Stepping out of conventional i mperial historiography, we can shift our attention to histories of imperial territoriality and their structuration of modern c ulture and political economy. In this kind of history, we see that imperial forms of power and authority reproduce themselves repeatedly, in new guises, across regime transitions, i ncluding the global transition to national state hegemony in the mid-20th century. Instead of framing histories of empire with chronicles of rising and falling regimes, we can look

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across times and spaces occupied by empires and nations to find histories of imperial territoriality forming dynamic cycles of construction, expansion, integration, fracture, disruption, fragmentation, dispersion and reorganisation. The times and spaces of imperial modernity appear afresh in this light.

Imperial Inequity

Asian history is a composite of many imperial cycles, and modern cycles have occurred in the embrace of imperial territories built on a global scale (Ludden 2003: 1057-78). In 18th century south Asia, regional authorities, enriched by European trade, broke the Mughal Empire into constituent domains that shifted imperial power down territorial ranks into regions where elites became more independent and Mughal authority became increasingly symbolic. Then, in one region after the other, the East India Company imperialists altered Mughal i mperial forms, added the force of emerging industrial capitalism, and built a new imperial order. British India expanded Indian imperial territory into new frontiers across the 19th century. Early in the 20th century, the British built a new capital for imperial India around the old Mughal capital in Delhi, as Indian nationalists mobilised middling ranks of imperial authority against the British. At the same time, upward mobility in the wider world of empire generated conflict as imperial upstarts – including the US and Japan – rose to challenge E urope, and nationalists fought to bring more power over the fl ow of assets into the lower imperial ranks in Asia. In British India, nationalists undermined British authority as war among global imperialists produced two world wars, which weakened all the imperial nations, except the US, which moved up the global ranks. After 1945, British imperial territory fractured into national state territories; a new world came into b eing, covered by independent, sovereign national states; and in this world, as well as in south Asia, imperial forms of power and authority acquired new life. The United Nations embodied international ranks of power and authority that formed the s o-called developed and developing world, ranked as the fi rst, second, third, and later even fourth worlds. Recent globalisation has occurred inside this new international formation of imperial order, in which the UN has now discovered what it calls the “inequality predicament”.

This predicament – described in the 2005 UNDP Report on the World Social Situation – results from a persistent imperial tendency to channel wealth up the ranks and concentrate it there. This upward mobility of wealth provides capital for elites to spend and invest, which can spur economic growth, but also reduces the proportion of new wealth available to people in lower echelons. The resulting tendency for inequality to increase aggravates a range of endemic imperial problems; the UN stresses one in particular: the increasing diffi culty that people in the lowest echelons have moving out of poverty and up the ranks, to benefit from – and thus acquire good reasons for loyalty to – imperial order.4

Martin Ravallion (1997) succinctly states the relevant economic axiom: “At any positive rate of growth, the higher the initial inequality, the lower the rate at which income-poverty

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falls”. This means that increasing inequality reduces the rate at which people can move out of poverty, as it channels more wealth into richer hands, disadvantaging the poor,5 even though this trend might also stimulate growth, at least for a time, and benefit a majority, each person according to their rank, in a capitalist economy where markets reward investors in proportion to investments.6 Thus, imperial inequity operates under capitalism to generate productive power and to d istribute profits in imperial ranks described by statistics on economic i nequality. In economic terms, we can say that imperial inequity at work in capitalism has a poverty effect and a growth effect, and as Robert Wade (2011: 513-20) has argued, we can expect elites logically to prefer policies that stress growth by channelling wealth up the imperial ranks, even though this aggravates the poverty effect, which matters less for policymakers because its impact concentrates in lower i mperial echelons and on p eripheries among groups low on elite priorities.

Such an imperial framing helps to make sense of the UN’s contemporary “inequality predicament”, which is this: in r ecent decades, total wealth has been increasing globally u nder free-market-oriented economic policies and a surge of globalisation, but asset inequality has also been increasing in and among countries. More wealth is available for reducing poverty, globally, but smaller proportions of new wealth are serving that purpose. This upward mobility of wealth is in general producing a trend of relative impoverishment among people in lower echelons, and overall rates of poverty reduction are bound to be declining. Statistics to reveal this picture became available in the 1990s,7 when the landmark 1996 H uman Development Report showed that “The poorest 20% of the world’s people saw their share of global wealth decline from 2.3% to 1.4% in the [preceding] 30 years … [as] the share of the richest 20% rose from 70% to 80%.”8 This trend is also visible inside the imperial nation most influential in setting global economic policy, the United States, where during two decades following “the Reagan revolution”, in 1980, the richest 20% increased their share of national income from 44% to 50%, and the richest 1% increased theirs proportionately six times more, from 7% to 13%.9 Twenty per cent of the US population owns 84% of private assets, and today, the US is more unequal

– the rich and poor are separated by a wealth gap more expansive – than at any time since the start of the Great Depression.10

Amidst these trends, absolute poverty is decreasing in some parts of the world, stagnating in others, and increasing in

o thers,11 while overall poverty reduction must be slowing down, making future poverty more intractable. In the 1990s, the World Bank began to see increasing inequality as a hindrance to sustainable growth and poverty reduction, but alarm bells became louder in 2005, when the UNDP Report warned that inequality trends not only threaten economic growth by d epressing demand, reducing labour productivity, and degrading human and natural environments, but also fosters social and political conflicts that undermine governance and encourage nations to seek stability by drawing back from globalisation. The Arab Spring, many conflicts in south Asia, and policy trends in Latin America, appear to validate this warning.

We can usefully locate this present-day scene in a long historic cycle, stretching back to the 19th century, during which imperial forms of power and authority have been challenged but also reproduced at various levels of scale. At the global level, in the aftermath of the second world war, old imperial elites convened on the UN Security Council, met at Bretton Woods, in the North Atlantic Treaty Organisation, at Davos, and elsewhere, to refashion their imperial position in a new world of nations, where the Cold War expressed a new kind of inter-imperial struggle. In the 1970s, a new phase of globalisation began, when a long post-war economic boom ended, and a new global development regime took shape – led by the r ichest countries, the World Bank, and the International Monetary Fund – which gained increasing influence, mostly by financial means, over economic policies in most poor countries. This global development regime supported competitive capitalist strategies in the post-boom decades by enforcing structural adjustment policies, which composed an unprecedented global uniformity of free-market-oriented state policy regimes, inducing poor country exports, promoting imports, and opening up states to global investors.12 After 1980, rapid technological change also lowered transport and communication costs, most rapidly after 1989, when the end of the Soviet Union inspired the American regime to proclaim the US “the world’s only superpower”.

Echoes of imperial history reverberate across the 19th and 20th centuries. The aggressive hubris of imperial America echoes imperial Britain, to which America is now frequently compared. And long-term trends in international wealth inequality also suggest a century-long imperial cycle, which connects the present to the late 19th century. Lant Pritchett has famously shown that between 1870 and 1985, ratios of per c apita income between rich and poor countries increased over sixfold, as income levels dispersed over an ever-widening range, with rich and poor countries clustering more and more on opposite ends of a widening spectrum.13 In that global context, development efforts in poor postcolonial countries after 1950 were an uphill struggle against the tide of modern history, for new wealth produced by economic development around the world has tended since the late 19th century to augment the wealth of already richer countries disproportionately.

And yet, in neo-liberal public culture, the imperial implications of such trends have been rendered largely invisible, by analysts who agree with NY Times columnist David Brookes that “today’s rich don’t exploit the poor; they just outcompete them”.14 In this view, the UN’s inequality predicament is simply that more competitive, productive people earn more by merit, and inequality increases because markets do not provide uncompetitive, unproductive people what they need to compete successfully. This logic has induced all major development agencies to promote what they call “pro-poor growth” policies, which rely on governments, NGOs, and business to provide loans, education, health, housing, jobs, and other things poor people need to compete more successfully.15 Despite pro-poor initiatives, however, inequality is increasing in the world and in most countries; faster, it seems, with each passing year.

Imperial India

It is tempting to see Asia as a collection of poor postcolonial countries where recent economic policy trends are having the same kinds of growth and poverty effects that we see in many countries and in the world as a whole. But that appearance is deceptive. It is true that Asia’s recent surge in economic growth under neo-liberal policy influence has spawned increasing inequality, but globalisation in Asia also has temporal, spatial, and social patterns that derive from imperial histories in Asia. Focusing on India, Tirthankar Roy (2002: 109-30) evokes one such history by saying insightfully that the Government of I ndia has returned to the free-market policy framework that prevailed in queen Victoria’s day. We can see this recent “return”, however, as a moment in a long dynamic process of imperial transformation, which can be outlined briefly as follows.

In the 19th century, the British regime refashioned India’s old imperial ranks into a modern entitlement system that channelled wealth upward through state institutions and markets. Imperial capitalism was deeply embedded in India during a great surge of globalisation before the first world war, when the proportion of world GDP travelling the world as trade grew faster than during any decade thereafter until the 1990s. In 1914, the US consul at Bombay described British India as “one of the few large countries of the world where there is an ‘open door’ for the trade of all countries”.16 In 1914, most goods arriving at south Asian ports were for export. British India was then the world’s fourth largest industrial cotton textile producer, and manufactured goods comprised 20% of exports, a figure never since surpassed. In the next two decades, industrial output grew faster in India than in the UK and Germany (Morris 1983), as trade with the UK at India’s fi ve major ports fell to less than one-third,17 and Indian labour also went global. By 1921, Indian emigration exceeded immigration and what we now call Diaspora began moving people to Ceylon, Malaya, East and South Africa, Fiji and West Indies, all in the embrace of the British Empire (Schwartzberg 1978: 115).

Following typically imperial trajectories, capitalism in British India channelled wealth upward to benefit people of superior status in all layers of the empire’s many layered cake, from top to bottom, benefiting most of all the top British 0.0001% in the highest ranks, but also Indian professional, business, and landowning elites, in lower ranks, all the way down to the v illage. Wealth moving upward enriched the empire more than either India or Britain.18 Imperial priorities dampened i ncentives for investment, so rates of growth were low and rates of poverty, high. Extremes of inequality in India appeared during famines that killed many millions, the last several million during the second world war in Bengal, where imperial priorities focused on feeding Calcutta and left lowly villagers on the outskirts of empire to starve.19

By 1880, the upward mobility of wealth in the empire had become apparent to Indian nationalists, led by Dadabhai Naoroji, and staunching the flow of wealth out of India to increase wealth inside national territory became a central goal for Indian nationalism. The results were stunning, especially when we compare trends in India to the world trend of steadily

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increasing inequality between the rich and poor countries, measured by Lant Pritchett, all across the 20th century. By contrast, data compiled by Gregory Clark20 show that Indian per capita GDP relative to the UK and US declined sharply and steadily after 1870, but only until 1947, when India’s long trend of increasing impoverishment compared to the two great i mperial nations stopped abruptly. The reason is simple. Under the British, India’s development regime channelled wealth up the ranks, out of India, but after Independence, in 1947, n ational regimes in India (and then Pakistan and Bangladesh) kept and created more wealth inside national territory (Ludden 1992: 247-87, 2005a, 2006). National independence accomplished a radical shift of wealth and power downward in the world’s imperial ranks by increasing the power of people to control economic resources inside their national territory. I ndia remained comparatively poor, with per capita GDP hovering since 1947 around 10% of the US-UK average. India is still the poorest of the world’s five largest national economies but its relative impoverishment trend stopped dead at Independence (Milanovic 2005).

Today, most analysts point to 1991 as the year of great economic change in India, but 1947 was a much bigger watershed, when the end of the empire shifted India’s comparative n ational wealth trend from negative to positive for the fi rst time in modern history. The same trend holds for China, though details differ, and the weight of combined populations of India and China help to explain the slowdown of increasing world inequality in the early decades after 1950 (Bourguignon and Morrisson 2002: 727-44).

India’s comparative wealth trend accelerated after 1980, and then again after 1991.21 And the same trend holds for China, so if we weigh national wealth by population, rapid growth in India and China today is reducing the rate of increase in inequality among nations.22 But inequality has also been increasing and poverty reduction slowing down in India and China, as freeing up markets has aggravated the imperial tendency for wealth to move up the ranks. A decline in intra-country inequality which had occurred around the world d uring the three decades after 1950 reversed itself in the 1980s, when inequality began increasing in 48 countries representing over half the world’s population (Cornia and Kiiski 2001).

India’s imperial dynamics help to explain how it is getting richer faster today, for in India, as well as in China, a substantial part of explanation lies in a downward territorial shift and increase of regional power over economic resources devolving into territories where growing wealth has concentrated in m ajor urban centres. An analogous downward shift in economic power underlay an upsurge in growth in coastal regions in the late 18th century India, when independence from the Mughal empire accompanied increasing overseas trade, enriching coastal regions, and centring on port cities that became capitals of British India. In 1947, India likewise seceded from the British Empire, and Indian nationalists built a new state to hold and concentrate dividends from public and private investment. Nationalists produced a new India by extracting territorial layers from the many layered cake of British Empire and

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by welding them into a much more tightly integrated national territory. Freed from global empire, India instituted a state r egime that forcefully integrated old frontiers and erstwhile native states,23 invested heavily in infrastructure, increased growth, eliminated famine, kept Gini coefficients of income inequality stable for 50 years, and lowered inequality with land reforms, food and public goods provisioning, and subsidies for productive inputs like water, electricity, fertiliser, and high yielding varieties of wheat and rice.24 The reorganisation of states after 1956 delivered growth benefits to regions that gained increasing power over economic resources. Nation-building in India, as in China, can thus be usefully understood as a new round of imperial incorporation, in which regions and peoples on the margins of British Indian territorialism, in mountains, jungles, and native states were aggressively subordinated to a centralising Indian state. That process of imperial incorporation continues today, along with constituent struggles, notably in Kashmir and north-east India.

Liberalisation in India, after 1991, and in China, after 1979, also included political processes that typify dynamic cycles of imperial territorialism, as devolutions of power down vertical ranks have composed what Yongnian Zheng calls a “state transformation” (Zheng 2004). As a result, national political systems have changed drastically, and in India, where the Congress once ruled the whole country without rivals, increasingly extensive coalitions of regional parties came to control the central government (Ludden 2005b). Currently high growth rates in India and China derive significantly from economic and political devolution; and in that context, domestic and international businesses seek new opportunities in both countries by focusing on particular regions of high growth and political support around fast-growing cities,25 as European trading companies also did during the analogous periods of imperial devolution in 18th century India.

Imperial Inequity in India

India’s imperial dynamics also help to explain internal p atterns and trends in inequality. For a half-century after 1930s onward, nationalism in India stood for a commitment to develop the country and reduce inequality. These national e fforts scored major successes, but did not eliminate India’s imperial ranks and political dynamics. In agrarian regions where Mughal and British empires had privileged landlord property owners, private and public investment in agriculture and human development (health and education) remained comparatively low.26 India’s national development regime a ctually accentuated wealth accumulation by people and in places already privileged at various levels in 1947. National d evelopment policy – to quote its critics – “bet on the rich” to secure economic growth. In the 1980s, this wager focused more aggressively on alliances between political leaders and big business, as upwardly mobile social strata which had benefited most from British imperial status and India’s national d evelopment propelled government’s return to a free-market regime that was by then no longer identified with empire but rather with being progressively and proudly Indian.27

In 1991, after a decade of national debt-driven growth, India joined a global trend by returning to the free-market policy orientation that prevailed a century before. Inequality was not only the outcome, but also an input, propelling this policy shift. Inequality among Indian states had been increasing along inherited lines since the 1960s, during decades when it was not seen as a policy problem (Kishore 2002). Today, though, it is seen as “a serious problem”, having remained entrenched “in spite of planning”, and increasing notably after 1991.28 India’s devolution of political power and return to free-market policies accelerated growth and spatial inequality, as richer cities and more urbanised regions got steadily richer compared to poorer rural areas, and the political infl uence of urban high growth regions increased with their attractiveness for investors (Milanovic 2005, 2006).

Faster growth has accelerated inequality by all measures. Relevant data are complex and contentious, but convincing. Gini coefficients of income inequality rose after 1999. In 2004, National Sample Survey data indicated that after 1991, new wealth went mostly to wealthier classes with privileged access to government and new market opportunities. The urban rich benefited most: the top quintile of income groups in cities increased their per capita consumption by 40%, but in rural areas, by 20%. The rural rich got much richer but got poorer compared to the urban rich. This was a comparison that politicians took seriously and helps to explain the change in the Indian government in 2004, when the new prime minister had to face the fact that 600 million Indians in the bottom 80% of rural income groups had suffered a steady decline in per capita consumption under reforms he introduced as fi nance minister in 1991. Manmohan Singh could however feel good that 300 million Indian citizens did get richer under liberalisation, after 1991, and that the richest among them became media stars for his aggressive ad campaign promoting India as “the world’s fastest growing free-market democracy”.29 Today, “India has a 20 million ton buffer stock of grain and more than 200 million undernourished citizens” (Boyce 2012) and a rapid decline in average foodgrain absorption occurred after 1991 reaching “the low level of 151 kg per head in rural areas in 2001, a level not seen for fifty years” (Patnaik 2004).

The Four Inequalities

Patterns of inequality and its increase in India today are not haphazard. Neither are they new. They can be understood as products of a unitary world capitalist system,30 or as symptoms of India’s unique political economy, with its distinctive culture of inequality (Assayag 1995). But viewing them as features of a dynamic, changing imperial order helps to explain them better, because these patterns arise over and over again in various geographical frames and historical contexts, and are not unique to India. They are also not the same in all countries across the capitalist world. They represent what we can usefully call generic patterns of imperial inequity, reproduced across centuries and across modes of production, and structuring inequality in India today during a general increase in i nequality worldwide.

Four prominent generic forms of imperial inequity operate in India, as in China and elsewhere, according to ranks defi ned by location, gender, ethnicity, and class, all tightly entangled in ranks of state power and authority. Imperial landscapes d efine spatial inequality in core locations that form privileged sites for capital accumulation, and in both China and India, urban-rural and regional disparities institutionalised long b efore 1980 have become rapidly worse since 1990.31 For India, Deaton and Dreze (2002) have showed that recent growth f avours states in the south and west, distressing states in the north and north-east, which had been previously disadvantaged by public and private investment decisions.32 The poverty of regions in the eastern Gangetic basin compared to the west and Punjab goes back to the 19th century, when the east-west divergence in north India became a feature of imperial politics that moved the capital to New Delhi. That same spatial divergence continued after Independence with disproportionate state and private investments in the west. Regions more dependent upon agriculture had declining economic r eturns in the 1990s, as annual growth in agriculture and allied service dipped to less half (3.2%) the rate of growth in India’s aggregate per capita GDP (6.7%), and the ratio of rural-to- urban poverty rapidly increased (Datt and Ravallion 2002: 97-98).

Regions of Asia generally that are most out of the loop of capital accumulation lie on far peripheries of old empires – of the Mughals, British, Dutch, French, and Chinese – in mountain regions spanning Nepal, north-east India, the Chittagong Hill Tracts, and highland Burma, Thailand, Vietnam, and south China. All these are homelands of tribal minority groups on peripheries of national control.33 In cities, slums can be viewed as internal peripheries, like distant, remote villages from which people come to live in cities to fi nd employment and services they rarely secure fulsomely. Slums are effectively out of the loop of capital accumulation and like the poorest remote villages and highland fringe areas, they are homelands for criminal gangs that often provide basic public services, making them more dangerous, unruly, and marginal.

Gender inequality in patriarchal ranks pervades imperial forms at each level, from the global to the local.34 In 2003, a national study of gender disparities in India concluded in line with earlier research that the poorest Indian states (with about half the total population, mostly in the eastern Gangetic plain) had not improved the condition of women, while the worst gender disparities continued to prevail in richer and faster growing states, above all, Punjab and Haryana. Women’s wages and working conditions, and the social and environmental conditions of their domestic and communal labour, all seem to be worsening under free market globalisation, along lines that indicate a reproduction of old imperial forms of p atriarchy, particularly in agrarian contexts, but also in new urban sites of female industrial work in garment, electronics, and global sweatshops.35

Ethnic inequality hits minority cultural and religious populations. Recent studies have found that India’s Muslim population has become poorer, relatively in most states and absolutely in some, including the fast growing, highly urbanised

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state of Gujarat.36 Ethnic minority and tribal populations in poor I ndian north-eastern states and in the Chittagong Hill Tracts have lost ground, reflecting their location on national peripheries and imperial frontiers (Adnan 2004).

Class inequality divides people with and without proprietary entitlements that people translate into education, business, and employment opportunities. M Atchi Reddy and

o thers have shown that upward trajectories of social mobility into urban elite ranks have typically begun in rich market towns and in irrigated, rice-growing villages, where up-andcomers owned property whose value increased much more than poor dry farmland. Even today, people who own dry land are much less likely to benefit in situ from connections to u rban sites of globalisation,37 and impoverished farmers in dry regions on outskirts of booming cities like Bangalore and H yderabad, always on the verge of famine, now routinely commit suicide under the humiliation of crushing debt.38 Landless workers in villages and cities dominate the lowest income groups who have seen their real income decline in recent times. Jan Breman (1996) and others have shown how deindustrialisation and casualisation of labour under free-market flexible production regimes render urban and rural workers more vulnerable to distress and poverty, while the 2005 UNDP report stresses the poverty effects of being cast into the world’s growing informal economy.39 Exchange entitlements for poor wage workers have been further distressed by inflation and reduced subsidies for basic commodities (Datt and Ravallion 2002). Proportionate wage increases favour more educated workers in settings where education is unavailable to improve the position of poorer workers.

It is important to note that these four generic forms of imperial inequality reflect overall patterns of resource control and political inequity, which all overlap to generate dynamics of increasing inequality along various vectors, as well as violence and upheaval. Health inequalities arise from and compound all others, and conflict zones wracked by violence arise at their intersections, as the 2004 UN report predicted. Today, there is a “Maoist rebel crescent” that runs across poor mountain r egions of primitive capital accumulation running from Nepal and north-east India through Bihar, Orissa and Andhra Pradesh. In north-east India and Gujarat, relative and absolute impoverishment for poor groups has fed violent upheavals in state politics. Caste violence in Tamil Nadu and religious v iolence in Bangladesh (pitting Muslims against Muslims and against minority Hindus) are also incited by struggles sparked by growing disparities in control over critical resources.

History as the Present

In conclusion, we can easily agree with an array of scholars that the globalisation of world capitalism operates in urban-based networks of mobility and capital accumulation, but I also want to add that these networks take shape in historical spaces of imperial power and authority. Markets are embedded not only in societies, as Karl Polanyi theorised, but also in spaces of social power that generate inequitable market outcomes.40 Neoclassical economics arose, in fact, during the

Economic & Political Weekly

july 28, 2012 vol xlviI no 30

h eyday of European imperialism, to theorise the market as a free-standing system of value-making, at the very time when major capitalists began to see empire as a constraint to their further expansion; and low and behold, a century later, neoliberal economic policies became a means to free markets from external constraints imposed by national efforts to restrict the upward mobility of wealth. Imperial inequity in the world of nations then spread neo-liberal policies that once again accelerated the upward mobility of wealth – most notably in financial forms – to foster disproportionate accumulations in the higher echelons. It is critical to remember, however, that demographic expansion in wealthier middling ranks

– that is, the rise of a global middle class, fi red by neo-liberal cultural ideals – made this renewed upward shift in the imperial power structure politically possible. Stepping back to look at this critically important imperial middle class, in a long-term perspective, we can say that economic growth in Asia has been driven by the productive deployment of dividends accruing to people according to status inside e xplicit, well-understood, changing ranks of imperial entitlement. Thus when people deploy their legitimate entitlements in market transactions, they typically secure dividends in systematically recurring patterns of inequity. The neo-liberalism of the global middle class thus emerges inside middling imperial ranks and benefi ts people accordingly, thus becoming an ideology politically invested in imperial inequity, whose worst effects are heaped on lower echelons, most often out of sight.

Imperial forms of power and authority have a changing c umulative impact, which we can trace over centuries. Decolonisation produced a dramatic downward shift in imperial power during decades after 1945, and for several decades, v irtually every national state regime strove to reduce inequality. This policy trend produced a serious reduction of world inequality, which was temporary, because, in the same decades, a reproduction and transformation of imperial forms of power and authority also occurred. New imperial formations emerged that now engage one another in the globalisation of territorial structures devoted to the marketisation of all h uman resources. Government and big business have formed an imperial partnership to enforce structural adjustment policies and devolution of political authority that has shifted power down the ranks, into regions of urban expansion linked to one another by competitive liberalisation. This increases economic growth, and also inequality, by allocating more wealth through markets and producing more wealth by channelling more of it, more productively, into privileged sites i nside increasingly unequal big city-centred regions, networked with one another globally.

History indicates therefore that inequality and the infl uence of the top 1% will not be reduced seriously without dismantling the infrastructure of imperial inequity, because, made free to do as they will, in the world as it is, markets can be relied upon to strengthen imperial forms of entitlement and thus aggravate inequality. Focusing history in this way on present-day problems, I now find to my great surprise that old European imperialists do not seem the bad guys they once seemed to be, when national independence seemed be engaged in moving more wealth up the food chain. Solving to pave the way to social justice. For as Tirthankar Roy says, the inequality predicament requires sustained downward it did not matter so much that imperialists were foreigners: shifts in power over all forms of wealth, globally, which in what mattered was how they ruled. And now we can see turn calls for many studies of operative imperial regimes, to that rulers who imagine that national independence will inform anti-imperial struggles in every nook and cranny necessarily eliminate imperial power and authority may also of globalisation.41

Notes 13 Lant Pritchett, “Divergence, Big Time”, Wash-others: “credit market imperfections and greatington DC: World Bank, 1995. Policy Research er initial inequality of assets (particularly of

1 For a compelling account of this intersection as Working Paper 1522. Background Paper for the land)”, “low educational attainment”, urban-it appears to a perceptive activist author in World Development Report, 1995. Available on rural sector divisions in “dualistic” labour mar-I ndia, see Roy (2004).

the web with other papers at http://ideas.re-kets. They reiterate their earlier conclusion 2 Focusing on these dynamics in India was the

pec.org/e/ppr27.html that some conditions in Indian states, in 1960 – great initial contribution of Subaltern Studies,

14 New York Times, OpEd section, 9 March 2006, average farm yield, ratio of urban to rural which interestingly, began its career at the on-p A23, on Annette Lareau,Unequal Childhoods: a verage consumption, proportion of the state’s set of contemporary trends in globalisation and Class, Race, and Family Life, Berkeley: Califor-landless population, literacy rate, and mortaliinequality, and then diverted attention from nia University Press, 2003, which analyses ty rate – “are signifi cant predictors of the elasthose trends with its “cultural turn” in the mid-child rearing practices in rich and poor Ameri-ticity of poverty with respect to growth”. They 1980s. See Ludden (2002).

can families. fi nd that poor initial conditions in rural devel3 See Miller and Reiber (2004), Burbank et al opment “inhibited the prospects of the poor

15 World Bank, World Development Report 2000/1.

(2007), and Cain and Hopkins (2001).

participating in growth of the nonagricultural

UNDP, Choices for the Poor: Lessons from Na

4 For the implications, see Hirschman (1970). sector” (p 104). They (Ravallion and Datt

tional Poverty Strategies, March 2001, http://

5 A good account is Stanley L Engerman and 2002) particularly emphasise “the role played

www.undp.org/dpa/publications/choicesfor-

Kenneth L Sokoloff, “Factor Endowments, Ine- by initial literacy”, noting “India’s relatively

poor/ENGLISH/

quality, and Paths of Development among New poor performance in expanding literacy”, and

16 US Department of Commerce, Special Consu-

World Economies”, NBER Working Paper 9259, the fact that Kerala’s high literacy rate largely

lar Reports, No 72, British India, with Notes on

which demonstrates “systematic patterns by explains its success in poverty reduction.

Ceylon, Afghanistan, and Tibet, Washington:

which societies in the Americas that began 31 For China, a large proportion of inter-regional

Government Printing Office, 1915, p 9.

with more extreme inequality or heterogeneity inequality can be explained by urban-rural dis

17 Annual Statement of the Sea-Borne Trade of

in the population were more likely to develop parities (Bhalla et al 2003) and Ravi Kanbur

British India with the British Empire and For-

institutional structures that greatly advan- and Xiaobo Zhang, “Fifty Years of Regional In

eign Countries for the Fiscal Year Ending 31st

taged members of elite classes (and disadvan- equality in China: A Journey through Central

March 1926, Calcutta: Government of India,

taging the bulk of the population) by providing Planning, Reform, and Openness” (http://peo

1926, Table 10.

them with more political influence and access ple.cornell.edu/pages/sk145/papers/Halfcen

18 See Balachandran (2003), Peers (1995), Wash-

to economic opportunities”, http://www.nber. tury81.pdf). Cited in Milanovic (2005).

brook (1996, 2005, forthcoming).

org/papers/w9259 32 Datt and Ravallion (2002) notes that the

19 Sen (1981), a recent account of the famine’s im

6 This is a basic characteristic of capitalism, two richest states in the 1980s (Punjab and

perial dimensions, Mukerjee, Churchill’s Secret

which the American Heritage Dictionary defi nes Haryana) hit a low-growth trend in the 1990s,

War.

nicely as “an economic system in which the but that leaving these two states out, “there is a

20 Gregory Clark, “The Great Divergence – World

means of production and distribution are pri-strong positive relationship between level of Economic Growth since 1800” at http://www.

vately or corporately owned and development GDP in the mid-1980s and growth rate in the is proportionate to the accumulation and rein-1990s; that is, there is divergence between per

econ.ucdavis.edu/faculty/gclark/GlobalHistovestment of profits gained in a free market”.capita GDP among all but the richest states in

ry/Global%20History-12.pdf, and “One Polity, Many Countries: Economic Growth in India,

7 United Nations, Human Development Report, India” (p 97).

1873-2000” http://www.econ.ucdavis.edu/fac-

Baltimore: Johns Hopkins Press, 1992. UNDP 33 Being out of the globalisation loop may not be

ulty/gclark/210a/readings/One%20Polity.pdf

Human Development Report, Baltimore: Johns so bad, as incorporation is exceptionally de-Hopkins Press, 1999. UN Report on the World structive for livelihoods and environments on

21 Gregory Clark, “The Great Divergence – World Social Situation, The Inequality Predicament, these far peripheries and frontiers of imperial

Economic Growth since 1800”, at http://www. New York: United Nations, 2005, p 18.nations based in the lowlands. For a wider view

econ.ucdavis.edu/faculty/gclark/GlobalHistory/ Global%20History-12.pdf

8 http://hdr.undp.org/reports/global/1996/en/ of economies on the margins, see Schendel and

22 Special Report on Global Economic Inequality, Abraham (2004).

pdf/hdr_1996_overview.pdf

The Economist, “More or Less Equal?” 11 March

34 Mercedez Gonzales de la Rocha and Alejandro 2004, http://www.economist.com/displaysto

9 Congressional Budget Offi ce data, analysed by

Grinspun, “Private Adjustments: Households, ry.cfm?story_id=2498851

Centre on Budget and Policy Priorities, report-

Crisis, and Work”, Chapter Three, UNDP 2001, 23 For Pakistan, see Sokefeld (2005). Choices for the Poor: Lessons from National ed in the New York Times, 5 September 1999.

10 The Wealth Inequality Reader, edited by Dol

24 Besley and Burgess (2002: 289-340) for a des- P overty Strategies (http://www.undp.org/dpa/

lars and Sense and United for a Fair Economy.

criptive account of policy trends, see Frankel publications/choicesforpoor/ENGLISH/ New York: Economic Affairs Bureau, intro

(2005). CHAP03.PDF)

duction, p 1. 25 See for a recent example, “The Men Who 35 “Disparities in Inequality”, http://www.india

11 The worst absolute poverty trend is in sub-Would Conquer China”, a First Run Icarus fi lm together.org/2003/mar/wom-states.htm,

Saharan Africa, where the average household about how a US-Hong Kong business partner-Siddiqui (2000).

consumed 20% less in 1998 than 25 years earliship bought state-owned Chinese companies. 36 Imran Ali and Yoginder Sikand, “Survey of

er (UNDP, 1998 Human Development Report, New York: Oxford University Press, 1998), but

26 Banerjee and Iyer (2004). I thank Yuthika S ocio-Economic Conditions of Muslims in Sharma for this reference. I ndia”, http://www.countercurrents.org/comm

the most dramatic relative poverty trend is in Latin America, where the number of poor fell 27 For concurrent trends in cultural politics, see sikand090206.htm. The Sachar Committee Report, Government of India, Ministry for Minor-

in the 1970s, then nearly doubled in the 1980s, Ludden (2005b).

ity Affairs, Delhi, 2006. On Muslim Women, and was 33% of the total population, in 1997, 28 See Bhattacharya and Sakthivel (2004). Also see Hasan and Menon (2004).

and not falling despite renewed economic Kurian (2000).

37 Reddy (1996), Ludden (1989).

growth. Also see Birdsallm and Londono (1997). 29 See Deaton and Dreze (2002), Jayati Ghosh, 38 For a broad view of regional disparities, see

12 Structural Adjustment: The SAPRIN Report. Th“Income Inequality in India”, http://pd.cpim.

Ludden (1989).

Policy Roots of Economic Crisis, Poverty, and org/2004/0215/02152004_eco.htm; and Dea-Nequality, by the Structural Adjustment Par-ton and Kozel (2005). 39 For the US, see Uchitelle (2006). ticipatory Review International Network 30 Datt and Ravallion (2002) say that cross-coun-40 For updated readings of Polanyi, see Bugra and (SAPRIN). London: Zed Books, 2004. Online at try regressions support the idea that several Agartan (2007). http://www.eurodad.org/articles/default. factors explain why growth reduces poverty in 41 The effectiveness of egalitarian state policies that aspx?id=192 some places, for some people, more than shift power over resources down the class ranks

22july 28, 2012 vol xlviI no 30

in reducing poverty is well demonstrated by the Indian state of Kerala, where the poverty rate was as high as India’s poorest state, Bihar, in 1960, but less than half by 1990 (Datt and Ravallion 2002, p 98). Thus for promoting poverty reduction, Datt and Ravallion (2002) conclude that in addition to economic growth, “The sectoral and geographic composition of growth is also important, as is the need to redress existing inequalities in human resource development and between urban and rural areas” (p 106).

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