Beautiful! Thanks again for a useful reference. I would note that the distinction Alavi draws here between dadni loans in textile production and the putting-out system corresponds more or less exactly to Marx's distinction between productive usury and merchant capital (Resultate, p. 1023), and thus to the distinction I draw in my recent response to Mike, and for the same reason: in usury capital, the capitalist dictates no aspect of the production process; in the putting-out version of merchant capital, the capitalist dictates it to the extent of specifying (and supplying) the raw materials that are to be transformed by the workers. Gil > From Hamza Alavi at > http://ourworld.compuserve.com/homepages/sangat/Colonial.htm > > >The rapid export-led growth of Indian textile production was brought about >by new weavers entering the trade rather than by changes in technology. >New entrants needed funds for working capital and to buy the necessary >equipment. A system of cash advances, called dadni loans, developed >whereby prospective buyers of cloth would advance the money, in return for >which, in a sellers market, the lender/buyer would pre-empt delivery of >the finished goods from the >weaver. Some scholars have mistakenly taken that system of dadni loans to >be analogous to the English 'putting out system' which was a precursor of >the industrial revolution in England. (e.g. Habib, 1969:67-68). Habib and >other Indian scholars have argued that India was itself on the threshold >of an industrial capitalist revolution that was thwarted by the impact of >colonial rule. (cf. Bipan Chandra et. al., 1969 and Habib, 1969) That >seems to be a mistaken view. > >There is an important difference between the Indian system of dadni loans >and the English putting out system. In the case of dadni loans, the weaver >was given the loan by the prospective buyer of his product which thereby >bound him to deliver the finished goods to that buyer. But, given the >money, the weaver was left to his own devices to procure his raw materials >and work on them. The buyer-moneylender, the dadni-merchant, did not >handle the raw materials or equipment and was not involved in the process >of production in any way. By contrast, in the 'putting out system' the >entrepreneur took the raw materials >round to the weavers, from door to door, and collected the finished cloth. >He soon realised that instead of going from door to door, he could >simplify his task by bringing all his weavers under one roof. That gave >rise to the factory system which, in turn, led to mechanisation and a >transition to the Industrial Revolution. That dynamic was absent given the >financial organisation of production in India. > >After its conquests in India, after 1757, the East India Company, >operating through its agents called goomasthas, transformed the system of >dadni loans in a manner that was designed to subordinate the weaver >totally to the Company's agents. Their object was to pre-empt the weaver's >services at low prices, as against other competitors, including other >European operators who were thus elbowed out. The Company developed a >practice of forcing advances on unwilling weavers. A historian writes that >before domination by the Company 'They (the weavers) used to manufacture >their goods freely and without oppression, restrictions, limitations and >prohibitions. There was no attempt to restrict their goods to the one >market of the East India Company.' (Sinha, 1961: >159). Then it all changed. >
This archive was generated by hypermail 2b30 : Fri Aug 02 2002 - 00:00:04 EDT