Summary:
Capitalism owes its present day ubiquity to the ability of European states to form modern nation states allowing them to rain violence, in the form of Imperialism, Slavery and forced expropriation of land (collectively dubbed War Capitalism), upon the world. This book shows how much War Capitalism in support for national industries mattered and how short sighted present day libertarians and economic conservatives are, when they talk about Laissez-faire economics. It also provides a possible reason why Industrial revolution happened in Britain and not in India or China.
In 1750's, India occupied a preeminent position in the cotton trade. The cotton goods that Indian farmers, spinners, weavers and printers manufactured were famous for their quality and design. When it was still at the top of the cotton trade, it took 50000 spinner hours to spin 100 pounds of raw cotton in India. By 1790, Britain took only 1000 hours for spinning the same amount of raw cotton using a 100 spindle mule. With further productivity increases, that went down to 300 hours in 1795 and to 135 hours in 1825. Between 1830 - 1860, 2 - 6 million cotton manufacturing jobs were lost in India and it went through a significant period of de-industrialization as British used it to source raw cotton while at the same time treating it as a dumping ground for finished cotton goods from Britain. Currently, Cotton trade looks more like what it was in pre-1750's era with China and India accounting for close to 50% of raw cotton and cotton manufacturing predominantly being located in Asia.
In the interregnum, the devastation of cotton industry in India, Egypt and Brazil served to fuel Europe's divergence from rest of the world, as the rightful inheritors of the bountiful effects of Industrial Revolution. This book details how, starting with the Portuguese, Europeans used force of violence, first through private enterprise and then through the state, to disrupt the successful cotton trade that was centered in India. That included enshrining the insidious system of slavery that shipped out millions of Africans out of their homes in chains to the Americas. To be sure, the present prosperity of the world owes a huge debt to financial instruments like credit and the explosion of technological innovation that happened during the Industrial revolution. To ignore the ravages visited by Europe on the rest of the world while claiming credit for Industrial revolution (and justifying it as a corollary of Enlightenment) is an one sided revision of history some Western commentators engage in. Imperialism and Slavery shaped Industrial Revolution (while at the same time being shaped by it) and resulted in the capitalism that we see today across the world.
European nations (and all of them are complicit in it) reshaped the world to their benefit and built a globalized system of exchange that was undergirded by the cotton trade. This system crashed and burned in the fields of Europe after First and Second World Wars. What Europeans did to the inhabitants of the present day Third World (or Global South) countries between 1600's - 1900's, they proceeded to turn it inward, onto themselves, in the 2 world wars they fought thereby contributing to the rise of American superpower.
Throughout this period, India suffered the most as it was the center of cotton trade when the marauding Europeans' world domination started. While Egypt and Brazil also suffered the downsides of Imperialism in their respective cotton industries, India had much farther to fall because it was the leading producer of cotton to start with. China was impacted as well but because it did not come under colonial yoke the impact was much lesser. When Europeans (political systems and media) argue for free trade, it pays well to keep in mind the hypocritical and brazen nature of their stance. While protectionism for its own sake causes untold misery, using it judiciously can ensure the prosperity of a nation and the rise of Europe to developed world status is a shining example of it.
Synopsis:
The opening ceremony of London Olympics in 2012 featured an elaborate tableau that focused on things that were unique to Britain. It included an extended ode to Industrial revolution (starts at 16:20 mark and goes on for 8 minutes) and Britain's singular responsibility in creating it and dispersing it throughout the world. Industrial revolution resulted in turbocharging the wealth of European nations while sucking Asian and Africans nations dry. Industrial revolution was driven by Europeans' drive to dominate the cotton trade (to be joined later by US, Russia and Japan) and use the proceeds to expand their respective economies.
Historically, Cotton was grown across all continents with different varieties occupying their ecological niche (Gossypium Hirsutum in Mesoamerica, Gossypium Barbadense
in South America, Gossypium Herbaceum in Africa and Gossypium Arboretum in Asia). Currently, most of the cotton grown today is G hirsutum, also called as American Upland cotton. Cotton was originally grown in what is now modern day Peru and North India and both the cultures came to it, independent of each other.
The different stages from a cotton crop to a finished cotton product are as follows:
1. Raw Cotton - This is picked from the cotton plant.
2. Ginning - Raw cotton picked from the plant needs to be separated from its hard exterior and cleaned of impurities. In pre colonial times, this was usually done outdoors using simple tools in India and Peru.
3. Spinning - Once the raw cotton was cleaned, it was spun into yarn using spindles. The spindles were usually operated manually in India and Peru and were primarily done by women.
4. Weaving - The cotton yarn from spinning was woven into cloth by weavers using looms that were operated manually.
5. Printing - The woven cloth was then printed with patterns and designs and prepared for delivery.
The different stages of cotton trade in India involved large numbers of people in the countryside. The cotton trade before 1750's was dominated by traders from Gujarat (Banias) who gathered the specifications for the cloth from their customers (primarily, East African, Chinese and European) 8 - 10 months before delivery of the final product. The Banias then provided the specifications to middle men and brokers and paid them a fixed amount for meeting their requirements. The brokers and middlemen spread out across the countryside and advanced cash to farmers for them to buy supplies and seeds in return for agreeing to deliver the cotton. Once the farmers harvested the cotton, it traveled back through the same chain back to East Africa, Europe and China. Because cotton was one among the many crops that farmers planted and Banias and the middlemen were part of the same society, any failure of the crop was governed by the societal relations among the farmer, the broker and the Bania.
While the vagaries of the weather determined a good crop, failure to deliver on agreed upon cotton output set the farmers back but the lower proportion of cotton in their overall crop portfolio cushioned the impact. Because they also planted food crops, they were able to put food on their plate and not be beholden to their creditors for their next meal.
Europeans first came to know of cottons during the Crusades. Because Europeans primarily knew about sheep wool, fantastical stories spread about how the cotton plant was actually tree wool - that sheeps grew on tree branches and they drank water at night by lowering themselves from the branches. As cotton made its way from India across Africa and Mediterranean and then to Europe through trade, the demand for cotton steadily grew. In 1492, Christopher Columbus discovered the Americas and 5 years later, in 1497, Vasco Da Gama discovered the sea route to India around Cape of Good Hope. These 2 events transformed the European conception of the world and put them on a path that led to the great divergence - European countries amassed wealth through violence, forced expropriation and slavery while the previously wealthy regions of India, China, East Africa and Mesoamerica slid down farther on the wealth scale, with its attendant horrors. While Spanish focused on violent and brutal robbing of the gold and silver of the Aztecs, Portuguese decided to do the same along the Eastern coast of India. Their armed interventions broke the web of cotton trading networks that had worked for millenia and led to disruptions that would pave the way for complete European takeover of trade. Portuguese (and later, Dutch, British and French, each through their versions of East India Companies) would force the Banias into onerous contracts that limited their leverage in negotiations and left them in a precarious financial position. Sensing an advantage, European merchants moved in to take over the cotton trade in India. However, at this early stage, it did not affect the cotton farmers in the Indian countryside whose interactions remained primarily with with the middlemen and brokers.
In 1500's, Spanish occupiers of Americas shipped the gold and silver to their court that were in turn used for purchasing cotton goods sent from India. Europeans did engage in planting and harvesting of raw cotton within their countries' borders but were unable to match the quantity and quality of the crop that India delivered. They also learnt crucial lessons about state support from short lived cotton trading centers of Augsburg in Germany and Venice in Italy. Those centers folded when they could not match the quantity and quality of the cotton cloth from India. With the 1648 Treaty of Westphalia, European nation states coalesced into a form that we know today. Parallel to Europeans becoming enmeshed in the cotton trade in India, they were also knee deep in occupying wide swath of lands in the Americas and remaking those lands as slavery plantations for tobacco, rice and sugar.
By late 1600's and early 1700's, Europeans were using cotton as a medium of exchange in East Africa for slaves - Europeans shipped cotton cloth from India and exchanged it with East Africans to fill European ships with millions of slaves needed for their plantations in the Americas. When British East India Company came into possession of Bengal in 1770's, Britain wasted no time in using that province as the source of their raw cotton. British government also erected steep tariffs to keep out finished Indian cotton from Britain thereby allowing the nascent domestic cotton Industry to survive. Other European countries followed suit as a result of which the share of Indian cotton being used in cloth steadily decreased. The ability to, (1) force spinners and weavers into wage workers, (2) put in place policies to encourage development of domestic cotton mills and (3) erect protectionist measures to protect that domestic cotton industry, required state intervention that every European government was happy to provide. In contrast, the colonial government in India put in place policies that privileged British cotton traders in India. Within Britain, mechanically inclined inventors came up with breakthroughs that dramatically improved the productivity of different stages of cotton manufacturing. In ginning, spinning and weaving, British came up with inventions that allowed them to far outpace productivity of Indian spinners and weavers (who were mostly women and for whom cotton spinning and weaving was a way to augment their earnings). Weaving productivity improved by leaps and bounds with John Kay's Flying Shuttle in 1733 and Edmund Cartwright's Water powered loom in 1785. Spinning productivity improved through inventions such as James Hargreaves' Spinning Jenny in 1760, Richard Arkwright's Water Frame in 1769 and Samuel Compton's Mule in 1779. As productivity improved, it compensated for the higher labor costs in Britain and British financiers saw an opportunity in cornering the export market for cotton by mechanizing the different phases of cotton manufacturing. Indian printers still held a monopoly on techniques for dazzling designs and intricate patterns on cotton cloths. British East India Company (and other European East India Companies) stole the technologies that then allowed printers in England to achieve the same results.
In late 1700's and early 1800's, British capitalists stood up new factories that used the new inventions and converted erstwhile cotton planters in Britain into wage workers. Cotton planters in Britain were reliant on money lenders because the lack of land to grow cotton on a massive scale forced them to arrange for outside sources for raw cotton. That reliance transformed into dependence with the increasing mechanization of cotton manufacturing. This represented the onset and inexorable advance of Industrial revolution with its noisy machines, choking air and burning smokestacks. The lure of profit drove British capitalists to employ children as young as 8 years old on a large scale and keep them disciplined at the factory with corporal punishment (whipping, spanking, walking with iron weights around their necks). Parents of these children were only happy to have them working and bringing home additional money so when the children ran away from factories unable to cope up with the work and the beatings, the parents brought them back. With the profits from cotton trade, British capitalists developed railways and other technologies that have come to represent the Industrial revolution. With American Independence in 1776, cotton trade and Industrial revolution spread to America as well. In the American South, cotton was king as slavery allowed planters to keep labor costs extremely low and undercut supplies from India. Britain and other European nations became dependent on the cheap cotton from American South underwritten by slavery. Britain's magnanimity in outlawing slavery within its borders in the 1830's only came about after realizing that the decision would not impact supplies of raw cotton to its cotton manufacturing industry. By 1850's, the globalization wrought by cotton trade was humming along - European powers used war capitalism to supply raw cotton to the roaring factories within Europe. They used the proceeds of the cotton trade to invest in infrastructure within their countries, develop their economies and build their military. In their colonial possessions, they developed rail infrastructure between places they needed to ship raw cotton to Europe.
The outbreak of American Civil War in 1861 shook Europeans out of their complacency sending them off on a search to diversify their source for raw cotton. Throughout the American Civil War, Abraham Lincoln was acutely aware of the need to get on the good graces of European powers in terms of supplying raw cotton (which had slowed to a trickle because of the blockade of Confederacy ports by the Union Navy). On the other hand, leaders of the Confederacy relied on 'Cotton is King' mantra and deluded themselves into thinking that official recognition would be forthcoming from European nations. European nations discussed formal recognition of Confederacy but did not move forward with it. One reason for the hesitancy of European countries to grant official recognition to Confederacy was that they had settled on India and Egypt, in the meantime, as their alternate sources of raw cotton. Because both these countries were under colonial occupation, Britain could push through laws mandating cotton cultivation on a massive scale without being held responsible for the painful dislocation (including mass deaths due to famine) that flowed from their measures. The networks that cotton farmers depended on for their cotton planting still worked in substantially the same way but it became unforgiving when the cotton crop failed. Whereas failure of cotton crop before the arrival of British would result in farmers negotiating with the middlemen to bring down their debt (because they were part of the same society), the new laws ensured that they would go to prison for not delivering their share of the cotton crop. In addition, British forced peasants to move away from planting cotton as a rotational crop, to planting it as a primary crop on their lands. As time went on, European companies also shifted their operations to India to be near the source of cotton instead of relying on brokers and middlemen. British also pushed for property rights to be clearly defined in India to enable them to track cotton output. They sold parcels of land to khatedars who borrowed from moneylenders to finance their purchase. In turn the khatedars provided credit to cotton farmers to plant and harvest raw cotton while forcing them to rent the land, in effect turning the farmers into sharecroppers.
After Union's victory in American Civil War, freed people in the South looked forward to an improvement in their rights. However, the lax Reconstruction policy provided enough support to the pre-Civil War landed gentry in the South to take back political power and consign freed people to their pre-Civil war situation, as a result of which they ended up becoming sharecroppers in massive numbers in the American South.
China was also subjected to pressure to open its domestic markets from Japan as part of the Treaty of Shimonoseki but they were able to hold onto their industrial base because they were not under colonial subjugation. Chinese government passed tariff measures to provide a modicum of protection to domestic cotton industry which showed in the steady improvement in market share. The colonial British administration looked at India and Egypt as producers of raw cotton and consumers of finished cotton goods from Britain. Given the productivity improvements in cotton mills across the world, the cost advantage that spinners and weavers in India had, prior to Industrial revolution, vanished. It resulted in massive de-industrialization that pushed a significant proportion of them into wage work. The increasing reliance of European cotton industry on national power served as a double edged sword. While it allowed European powers to treat their colonial possessions as source of raw cotton and dumping ground for their finished cotton goods, within each European country, cotton industry workers started to press for expanded rights through unions that ultimately served to increase labor costs. On the other hand, in their colonial possessions, European powers sided with workers because of pressure from cotton magnates in their respective countries not to allow competition from Indian and Egyptian cotton merchants. As a result, wage workers in India did not have to go through the hellish experience European workers went through at the peak of Industrial revolution. The increase in labor costs made Indian industrialists unhappy and their representations to British government in India to rectify it fell on deaf ears.
The transformation of Congress into a broad based political movement fighting for India's Independence had deep support from Indian Industrialists who suffered at the hands of British cotton industry. The emphasis placed by Congress on Swadeshi goods helped the Indian industrialists with their bottom line as well so they backed the Indian independence movement heartily. The wheel at the center of Indian Tricolor symbolizes the Charkha popularized by Gandhi. Gandhi's promotion of spinning cotton cloth using charkha acknowledged the contributions of the wage workers and importance of cotton in Indian society. I always thought Gandhi's obsession with spinning his own yarn was a political stunt that came off as wildly successful for him and Congress. After reading this book, I realize Gandhi may have had excellent reasons to take to the spinning wheel.
With the end of Second World War and emergence of newly independent nation states, cotton industry in Europe declined as European powers focused mainly on rebuilding their shattered economies, further serving up evidence of the importance of state power in the massive growth of cotton industry during Industrial revolution. US decided to subsidize its cotton industry in spite of its lack of competitiveness (this shows up every year in the subsidies through the Farm bill). India chose to go with centralized planning and an import substitution approach to building its economy post independence, predicated on heavy industry. There are a large number of critics who fault Nehru for building these Temples of Modern India instead of following an export oriented model (followed by Japan, Asian Tigers and subsequently, China to economic prosperity). While Nehru's rosy view of socialism was a prime mover behind that choice, the situation of Indian Industry after Independence was different from other countries that followed the export model to build up their economies. The industrial base of India had been decimated by the colonial policies (in spite of second world war's salutary effect on industrialization of India) leaving it as primarily an agricultural country. In addition, export oriented growth would have required investment from the same Western powers that had bled India dry till 1947. As a result, I am willing to provide the benefit of doubt for Nehru's choice of import substitution for post independence India. In recent years, the cotton trade has reverted to what it was before 1750's with India and China accounting for bulk of raw cotton production (close to 50% between the 2 of them) and most of Asia cornering the cotton manufacturing, showing once again the importance of state patronage for a successful cotton Industry.
Capitalism owes its present day ubiquity to the ability of European states to form modern nation states allowing them to rain violence, in the form of Imperialism, Slavery and forced expropriation of land (collectively dubbed War Capitalism), upon the world. This book shows how much War Capitalism in support for national industries mattered and how short sighted present day libertarians and economic conservatives are, when they talk about Laissez-faire economics. It also provides a possible reason why Industrial revolution happened in Britain and not in India or China.
In 1750's, India occupied a preeminent position in the cotton trade. The cotton goods that Indian farmers, spinners, weavers and printers manufactured were famous for their quality and design. When it was still at the top of the cotton trade, it took 50000 spinner hours to spin 100 pounds of raw cotton in India. By 1790, Britain took only 1000 hours for spinning the same amount of raw cotton using a 100 spindle mule. With further productivity increases, that went down to 300 hours in 1795 and to 135 hours in 1825. Between 1830 - 1860, 2 - 6 million cotton manufacturing jobs were lost in India and it went through a significant period of de-industrialization as British used it to source raw cotton while at the same time treating it as a dumping ground for finished cotton goods from Britain. Currently, Cotton trade looks more like what it was in pre-1750's era with China and India accounting for close to 50% of raw cotton and cotton manufacturing predominantly being located in Asia.
In the interregnum, the devastation of cotton industry in India, Egypt and Brazil served to fuel Europe's divergence from rest of the world, as the rightful inheritors of the bountiful effects of Industrial Revolution. This book details how, starting with the Portuguese, Europeans used force of violence, first through private enterprise and then through the state, to disrupt the successful cotton trade that was centered in India. That included enshrining the insidious system of slavery that shipped out millions of Africans out of their homes in chains to the Americas. To be sure, the present prosperity of the world owes a huge debt to financial instruments like credit and the explosion of technological innovation that happened during the Industrial revolution. To ignore the ravages visited by Europe on the rest of the world while claiming credit for Industrial revolution (and justifying it as a corollary of Enlightenment) is an one sided revision of history some Western commentators engage in. Imperialism and Slavery shaped Industrial Revolution (while at the same time being shaped by it) and resulted in the capitalism that we see today across the world.
European nations (and all of them are complicit in it) reshaped the world to their benefit and built a globalized system of exchange that was undergirded by the cotton trade. This system crashed and burned in the fields of Europe after First and Second World Wars. What Europeans did to the inhabitants of the present day Third World (or Global South) countries between 1600's - 1900's, they proceeded to turn it inward, onto themselves, in the 2 world wars they fought thereby contributing to the rise of American superpower.
Throughout this period, India suffered the most as it was the center of cotton trade when the marauding Europeans' world domination started. While Egypt and Brazil also suffered the downsides of Imperialism in their respective cotton industries, India had much farther to fall because it was the leading producer of cotton to start with. China was impacted as well but because it did not come under colonial yoke the impact was much lesser. When Europeans (political systems and media) argue for free trade, it pays well to keep in mind the hypocritical and brazen nature of their stance. While protectionism for its own sake causes untold misery, using it judiciously can ensure the prosperity of a nation and the rise of Europe to developed world status is a shining example of it.
Synopsis:
The opening ceremony of London Olympics in 2012 featured an elaborate tableau that focused on things that were unique to Britain. It included an extended ode to Industrial revolution (starts at 16:20 mark and goes on for 8 minutes) and Britain's singular responsibility in creating it and dispersing it throughout the world. Industrial revolution resulted in turbocharging the wealth of European nations while sucking Asian and Africans nations dry. Industrial revolution was driven by Europeans' drive to dominate the cotton trade (to be joined later by US, Russia and Japan) and use the proceeds to expand their respective economies.
Historically, Cotton was grown across all continents with different varieties occupying their ecological niche (Gossypium Hirsutum in Mesoamerica, Gossypium Barbadense
in South America, Gossypium Herbaceum in Africa and Gossypium Arboretum in Asia). Currently, most of the cotton grown today is G hirsutum, also called as American Upland cotton. Cotton was originally grown in what is now modern day Peru and North India and both the cultures came to it, independent of each other.
The different stages from a cotton crop to a finished cotton product are as follows:
1. Raw Cotton - This is picked from the cotton plant.
2. Ginning - Raw cotton picked from the plant needs to be separated from its hard exterior and cleaned of impurities. In pre colonial times, this was usually done outdoors using simple tools in India and Peru.
3. Spinning - Once the raw cotton was cleaned, it was spun into yarn using spindles. The spindles were usually operated manually in India and Peru and were primarily done by women.
4. Weaving - The cotton yarn from spinning was woven into cloth by weavers using looms that were operated manually.
5. Printing - The woven cloth was then printed with patterns and designs and prepared for delivery.
The different stages of cotton trade in India involved large numbers of people in the countryside. The cotton trade before 1750's was dominated by traders from Gujarat (Banias) who gathered the specifications for the cloth from their customers (primarily, East African, Chinese and European) 8 - 10 months before delivery of the final product. The Banias then provided the specifications to middle men and brokers and paid them a fixed amount for meeting their requirements. The brokers and middlemen spread out across the countryside and advanced cash to farmers for them to buy supplies and seeds in return for agreeing to deliver the cotton. Once the farmers harvested the cotton, it traveled back through the same chain back to East Africa, Europe and China. Because cotton was one among the many crops that farmers planted and Banias and the middlemen were part of the same society, any failure of the crop was governed by the societal relations among the farmer, the broker and the Bania.
While the vagaries of the weather determined a good crop, failure to deliver on agreed upon cotton output set the farmers back but the lower proportion of cotton in their overall crop portfolio cushioned the impact. Because they also planted food crops, they were able to put food on their plate and not be beholden to their creditors for their next meal.
Europeans first came to know of cottons during the Crusades. Because Europeans primarily knew about sheep wool, fantastical stories spread about how the cotton plant was actually tree wool - that sheeps grew on tree branches and they drank water at night by lowering themselves from the branches. As cotton made its way from India across Africa and Mediterranean and then to Europe through trade, the demand for cotton steadily grew. In 1492, Christopher Columbus discovered the Americas and 5 years later, in 1497, Vasco Da Gama discovered the sea route to India around Cape of Good Hope. These 2 events transformed the European conception of the world and put them on a path that led to the great divergence - European countries amassed wealth through violence, forced expropriation and slavery while the previously wealthy regions of India, China, East Africa and Mesoamerica slid down farther on the wealth scale, with its attendant horrors. While Spanish focused on violent and brutal robbing of the gold and silver of the Aztecs, Portuguese decided to do the same along the Eastern coast of India. Their armed interventions broke the web of cotton trading networks that had worked for millenia and led to disruptions that would pave the way for complete European takeover of trade. Portuguese (and later, Dutch, British and French, each through their versions of East India Companies) would force the Banias into onerous contracts that limited their leverage in negotiations and left them in a precarious financial position. Sensing an advantage, European merchants moved in to take over the cotton trade in India. However, at this early stage, it did not affect the cotton farmers in the Indian countryside whose interactions remained primarily with with the middlemen and brokers.
In 1500's, Spanish occupiers of Americas shipped the gold and silver to their court that were in turn used for purchasing cotton goods sent from India. Europeans did engage in planting and harvesting of raw cotton within their countries' borders but were unable to match the quantity and quality of the crop that India delivered. They also learnt crucial lessons about state support from short lived cotton trading centers of Augsburg in Germany and Venice in Italy. Those centers folded when they could not match the quantity and quality of the cotton cloth from India. With the 1648 Treaty of Westphalia, European nation states coalesced into a form that we know today. Parallel to Europeans becoming enmeshed in the cotton trade in India, they were also knee deep in occupying wide swath of lands in the Americas and remaking those lands as slavery plantations for tobacco, rice and sugar.
By late 1600's and early 1700's, Europeans were using cotton as a medium of exchange in East Africa for slaves - Europeans shipped cotton cloth from India and exchanged it with East Africans to fill European ships with millions of slaves needed for their plantations in the Americas. When British East India Company came into possession of Bengal in 1770's, Britain wasted no time in using that province as the source of their raw cotton. British government also erected steep tariffs to keep out finished Indian cotton from Britain thereby allowing the nascent domestic cotton Industry to survive. Other European countries followed suit as a result of which the share of Indian cotton being used in cloth steadily decreased. The ability to, (1) force spinners and weavers into wage workers, (2) put in place policies to encourage development of domestic cotton mills and (3) erect protectionist measures to protect that domestic cotton industry, required state intervention that every European government was happy to provide. In contrast, the colonial government in India put in place policies that privileged British cotton traders in India. Within Britain, mechanically inclined inventors came up with breakthroughs that dramatically improved the productivity of different stages of cotton manufacturing. In ginning, spinning and weaving, British came up with inventions that allowed them to far outpace productivity of Indian spinners and weavers (who were mostly women and for whom cotton spinning and weaving was a way to augment their earnings). Weaving productivity improved by leaps and bounds with John Kay's Flying Shuttle in 1733 and Edmund Cartwright's Water powered loom in 1785. Spinning productivity improved through inventions such as James Hargreaves' Spinning Jenny in 1760, Richard Arkwright's Water Frame in 1769 and Samuel Compton's Mule in 1779. As productivity improved, it compensated for the higher labor costs in Britain and British financiers saw an opportunity in cornering the export market for cotton by mechanizing the different phases of cotton manufacturing. Indian printers still held a monopoly on techniques for dazzling designs and intricate patterns on cotton cloths. British East India Company (and other European East India Companies) stole the technologies that then allowed printers in England to achieve the same results.
In late 1700's and early 1800's, British capitalists stood up new factories that used the new inventions and converted erstwhile cotton planters in Britain into wage workers. Cotton planters in Britain were reliant on money lenders because the lack of land to grow cotton on a massive scale forced them to arrange for outside sources for raw cotton. That reliance transformed into dependence with the increasing mechanization of cotton manufacturing. This represented the onset and inexorable advance of Industrial revolution with its noisy machines, choking air and burning smokestacks. The lure of profit drove British capitalists to employ children as young as 8 years old on a large scale and keep them disciplined at the factory with corporal punishment (whipping, spanking, walking with iron weights around their necks). Parents of these children were only happy to have them working and bringing home additional money so when the children ran away from factories unable to cope up with the work and the beatings, the parents brought them back. With the profits from cotton trade, British capitalists developed railways and other technologies that have come to represent the Industrial revolution. With American Independence in 1776, cotton trade and Industrial revolution spread to America as well. In the American South, cotton was king as slavery allowed planters to keep labor costs extremely low and undercut supplies from India. Britain and other European nations became dependent on the cheap cotton from American South underwritten by slavery. Britain's magnanimity in outlawing slavery within its borders in the 1830's only came about after realizing that the decision would not impact supplies of raw cotton to its cotton manufacturing industry. By 1850's, the globalization wrought by cotton trade was humming along - European powers used war capitalism to supply raw cotton to the roaring factories within Europe. They used the proceeds of the cotton trade to invest in infrastructure within their countries, develop their economies and build their military. In their colonial possessions, they developed rail infrastructure between places they needed to ship raw cotton to Europe.
The outbreak of American Civil War in 1861 shook Europeans out of their complacency sending them off on a search to diversify their source for raw cotton. Throughout the American Civil War, Abraham Lincoln was acutely aware of the need to get on the good graces of European powers in terms of supplying raw cotton (which had slowed to a trickle because of the blockade of Confederacy ports by the Union Navy). On the other hand, leaders of the Confederacy relied on 'Cotton is King' mantra and deluded themselves into thinking that official recognition would be forthcoming from European nations. European nations discussed formal recognition of Confederacy but did not move forward with it. One reason for the hesitancy of European countries to grant official recognition to Confederacy was that they had settled on India and Egypt, in the meantime, as their alternate sources of raw cotton. Because both these countries were under colonial occupation, Britain could push through laws mandating cotton cultivation on a massive scale without being held responsible for the painful dislocation (including mass deaths due to famine) that flowed from their measures. The networks that cotton farmers depended on for their cotton planting still worked in substantially the same way but it became unforgiving when the cotton crop failed. Whereas failure of cotton crop before the arrival of British would result in farmers negotiating with the middlemen to bring down their debt (because they were part of the same society), the new laws ensured that they would go to prison for not delivering their share of the cotton crop. In addition, British forced peasants to move away from planting cotton as a rotational crop, to planting it as a primary crop on their lands. As time went on, European companies also shifted their operations to India to be near the source of cotton instead of relying on brokers and middlemen. British also pushed for property rights to be clearly defined in India to enable them to track cotton output. They sold parcels of land to khatedars who borrowed from moneylenders to finance their purchase. In turn the khatedars provided credit to cotton farmers to plant and harvest raw cotton while forcing them to rent the land, in effect turning the farmers into sharecroppers.
After Union's victory in American Civil War, freed people in the South looked forward to an improvement in their rights. However, the lax Reconstruction policy provided enough support to the pre-Civil War landed gentry in the South to take back political power and consign freed people to their pre-Civil war situation, as a result of which they ended up becoming sharecroppers in massive numbers in the American South.
China was also subjected to pressure to open its domestic markets from Japan as part of the Treaty of Shimonoseki but they were able to hold onto their industrial base because they were not under colonial subjugation. Chinese government passed tariff measures to provide a modicum of protection to domestic cotton industry which showed in the steady improvement in market share. The colonial British administration looked at India and Egypt as producers of raw cotton and consumers of finished cotton goods from Britain. Given the productivity improvements in cotton mills across the world, the cost advantage that spinners and weavers in India had, prior to Industrial revolution, vanished. It resulted in massive de-industrialization that pushed a significant proportion of them into wage work. The increasing reliance of European cotton industry on national power served as a double edged sword. While it allowed European powers to treat their colonial possessions as source of raw cotton and dumping ground for their finished cotton goods, within each European country, cotton industry workers started to press for expanded rights through unions that ultimately served to increase labor costs. On the other hand, in their colonial possessions, European powers sided with workers because of pressure from cotton magnates in their respective countries not to allow competition from Indian and Egyptian cotton merchants. As a result, wage workers in India did not have to go through the hellish experience European workers went through at the peak of Industrial revolution. The increase in labor costs made Indian industrialists unhappy and their representations to British government in India to rectify it fell on deaf ears.
The transformation of Congress into a broad based political movement fighting for India's Independence had deep support from Indian Industrialists who suffered at the hands of British cotton industry. The emphasis placed by Congress on Swadeshi goods helped the Indian industrialists with their bottom line as well so they backed the Indian independence movement heartily. The wheel at the center of Indian Tricolor symbolizes the Charkha popularized by Gandhi. Gandhi's promotion of spinning cotton cloth using charkha acknowledged the contributions of the wage workers and importance of cotton in Indian society. I always thought Gandhi's obsession with spinning his own yarn was a political stunt that came off as wildly successful for him and Congress. After reading this book, I realize Gandhi may have had excellent reasons to take to the spinning wheel.
With the end of Second World War and emergence of newly independent nation states, cotton industry in Europe declined as European powers focused mainly on rebuilding their shattered economies, further serving up evidence of the importance of state power in the massive growth of cotton industry during Industrial revolution. US decided to subsidize its cotton industry in spite of its lack of competitiveness (this shows up every year in the subsidies through the Farm bill). India chose to go with centralized planning and an import substitution approach to building its economy post independence, predicated on heavy industry. There are a large number of critics who fault Nehru for building these Temples of Modern India instead of following an export oriented model (followed by Japan, Asian Tigers and subsequently, China to economic prosperity). While Nehru's rosy view of socialism was a prime mover behind that choice, the situation of Indian Industry after Independence was different from other countries that followed the export model to build up their economies. The industrial base of India had been decimated by the colonial policies (in spite of second world war's salutary effect on industrialization of India) leaving it as primarily an agricultural country. In addition, export oriented growth would have required investment from the same Western powers that had bled India dry till 1947. As a result, I am willing to provide the benefit of doubt for Nehru's choice of import substitution for post independence India. In recent years, the cotton trade has reverted to what it was before 1750's with India and China accounting for bulk of raw cotton production (close to 50% between the 2 of them) and most of Asia cornering the cotton manufacturing, showing once again the importance of state patronage for a successful cotton Industry.
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